Legality of Electoral Bonds

Reading time: 6-8 minutes.

To win an election the most important thing any political party needs is, money. Right from printing pamphlets to the various advertisements of the political candidates, money is something which will keep their aspirations alive in this battle. This inevitably leads to the search for donations and eventually leads to the corruption in the system. Almost three years ago, the ruling Bhartiya Janata Party introduced an Electoral Bond Scheme, apparently to get rid of the black money system. The questions which arise are; whether this scheme really is effective, and what was the purpose intended by it? The Electoral Bond Scheme has several loopholes and has been challenged by a number of political parties and even the Reserve Bank of India and the Election Commission objected to it.

Electoral bonds are promissory notes, which any Indian citizen or company incorporated in India can purchase and then donate, to any political party he wishes to support. The catch in the entire transaction is that the donor’s name will be kept anonymous to the political party. The notification notifying the Scheme was published on 2nd January 2018. It was marketed as a cash alternative that could be purchased, individually or jointly, through selected branches of the State Bank of India, which will be further issued in multiple values of only Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore. Political parties that have received at least 1 per cent of the votes in the recent parliamentary or assembly polls are entitled to collect such bonds only through a bank account with the approved bank, and they are ought to encash the bonds within the 15 days of its issue date.

When we discuss the legality of Electoral Bonds, it becomes pertinent to observe in what context we discuss it; whether it is the legality of its existence that is in question or is it their origin itself. The Vidhi Centre for Legal Policy, in its Report of March 2018 stated that, “The introduction of the electoral bond scheme is part of what appears to be a growing trend away from transparency and accountability, two values which were already sparse in relation to Indian political parties”. The way in which the electoral bonds were brought into existence was not at all democratic.

The allegations against the government is how they dismissed the recommendations of Reserve Bank of India and Election Commission, to the effect that these Electoral Bonds Scheme will lead to increased flow in black money through shell companies and will reduce the faith in bank issued currency notes. The other severe criticisms also include the Law Ministry’s assent to the Centre to pass the Electoral Bond Scheme, bypassing the Rajya Sabha, which is apparently illegal and unconstitutional on the face of it, as was also stated by Huffington Post India. This series of events also revealed that the Prime Minister’s Office put a lot of pressure and influence on the Finance Ministry to break its own rule, for the sale of bonds and accordingly the Ministry gave a green signal for the special opening of sales on two different occasions, aside from the scheduled dates. Also, few documents obtained as a reply under the Right to Information Act clearly show that the Finance Ministry had been ‘advised’ by the PMO to open a special 10-day window for issuing Electoral Bonds, to which the Finance Ministry argued that the illegal selling was a “one-off exception”. The Government has, just to fulfil its objective and to bring Electoral bonds into existence, amended the Finance Act 2017, the Income Tax Act, the Reserve Bank of India Act, and the Representation of People Act. 

There has been an ongoing conflict between the people who support this move and those who do not. Those against the Scheme have not only criticized that the identity of the purchaser of electoral bond being kept anonymous, may lead to an influx of black money; they are also asserting that the scheme is intended to help large corporate houses donate money to the political parties without their identity being exposed. The supporters of the Scheme on the other hand, defend it by arguing that the idea of electoral bonds was never to incentivise major corporate houses to make political contributions without being named, infact the Scheme was intended for the individual donor, and to keep tabs on these scrupulous donations that might have been made without any checks and balances. It is well known that funding election campaigns of political parties is not a ‘voluntary’ activity. Corporate organizations need swift decisions and government officials need to look the other way. There are scores of ‘law-breakers’ in the vast web of laws and notifications.

When this issue went to the Supreme Court to adjudicate whether the application of the Scheme should be stayed, the Court turned down the plea for issuing an interim stay. The Apex Court said that the Indian Election Commission should keep a record of the money earned by the political parties through electoral bonds and the specifics of the donation received by the political parties must be given in a sealed form. The Court also indicated that it would review in depth the amendments made to the law to bring electoral bonds into existence to ensure that the balance would not tip in favour of either faction. Although experts are divided on whether the order offers a response to the question of transparency posed by the petitioners, they agree that the interim solution should ensure that there is some transparency. It will be important to see what stance the Election Commission is going to take when the final hearings on the matter begin.

The Electoral Bond Scheme implemented by the Government has so far not produced any desirable outcome; instead, it has further obscured the mechanism of political funding and its source, which was the most fundamental bit of information that voters ought to know, compromising their free will and violating the principles of free and fair elections. Finally, this Scheme cannot be rationalized until and unless substantial reforms have been made, with the support of both the executive and the associated organisations.

Author: Aryan Raj Kashyap, NALSAR University of Law.

Editor: Astha Garg, Junior Editor, Lexlife India.

Analysis: Plea for renaming ‘India’ as ‘Bharat’

Reading time: 8-10 minutes.

To ‘instill a sense of pride in our own Nationality’ was the sole purpose behind a plea filed by a Delhi- based man, Namah to replace the word ‘India’ with ‘Bharat’. The hearing was taken through a video- conferencing method on 3rd June, 2020 (Wednesday) with a bench headed by Chief Justice of India, S.A Bobde along with two other judges namely A.S Bopanna and Hrishikesh Roy.

The petitioner contended that the time is mature enough to recognize the country by manifesting its original and authentic name i.e., Bharat, especially when the cities have been renamed in accordance with Indian philosophies. The clear intention of the petitioner was to convey a patriotic sagacity in front of the Judiciary to realize them that every visible aspect of the country should preside with the values and ethics that has been a part from centuries. By naming the country with its official language, it would look more appropriate so as to give a vague idea to the people who belong from other countries. The plea had contended that the rationale of the amendment to Article 1 will ensure ‘the citizens of this country to get over the colonial past.’

Arguments made and legal provision of the plea

The petitioner, Namah, through his counsel argued that the name of the country, ‘India’ resides from a foreign origin and can be traced backwards to the Greek idiom ‘Indica’.  In the words of the petitioner, the Amendment in Article 1 of the Constitution which provides that ‘India, that is, Bharat, shall be a Union of States….’, has been made under the delusional influence of modernization of the colonial rule and the reformation of the name to and Indian origin‘will ensure citizens of this country to get over the colonial past and instill a sense of pride in our nationality and will also justify the hard fought freedom by our freedom fighter.’

In reference to a 1948 Constituent Assembly debate on Article 1 of the then Model Constitution, the petitioner also asserted that even at that time, there was a ‘strong wave’ in favor of designating the country as ‘Bharat’ or ‘Hindustan’.  Dr B R Ambedkar, who outlined the constitution, at that time, argued that the country was known throughout the whole world as ‘India’ and that should be preserved. Finally, a middle path was embraced and Article 1(1) of the Constitution declared both ‘India’ and ‘Bharat’.  With this argument, the petitioner in query coveted just ‘Bharat’ to be retained.

After several minutes, another plea was made to substitute ‘Bombay’ in Bombay High Court with ‘Maharashtra’ and was filed by V P Patil, a retired judicial bureaucrat. As a response to the plea, he cited Clause 4(1) of Maharashtra (Adaptation of Laws-State and Concerned Subjects) Order, 1960, which surrogates ‘High Court of Bombay’ with ‘High Court of Maharashtra’. He contended that, ‘The word Maharashtra denotes special significance in life of citizens of Maharashtra and that its usage must also find expression in the name of the HC as an expression of culture and right to heritage as protected under Articles 19, 21 and 29 of the Constitution.’

Supreme Court’s judgment

The three judge bench refused to interfere in this plea by contending the same Article of the Constitution that the petitioner has raised in his argument and pointed out that the residing Article 1 already contains Indian origin name which is ‘Bharat’ along with ‘India’. Though any sort of amendments were refuted to be made by the Supreme Court as the bench was not convinced but has nonetheless asked the pertinent ministry to treat the writ petition as a representation to the Centre to initiate a call on it and further reflect its own contemplation. As for the second plea which concerned the replacement of ‘Bombay’ in Bombay High Court to ‘Maharashtra’, the court announced another notice to the Centre for a rejoinder on the subject matter.

Social impact of this plea

It is a valid articulation to point that since this petition was filed in a COVID-19 pandemic, it was unnecessary to take this issue on both the parts. The society within these conditions contains more intense and serious issues than deciding the mere name of the country. It is the fault of both the petitioner whose concentration can be put to a productive aspect and the Supreme Court who can give their assistance to a more societal contentions and decisions which can make the circumstances of those in danger better. Therefore, it is clearly pertinent to state that the societal needs cannot be fulfilled by this plea and the court needs to recognize the current issues that the minorities are facing and make developments and amendments in accordance with that.

Previous pleas

Along with the dilemma from the side of B.R Ambedkar about the names ‘Bharat’ and ‘Hindustan’ at the time of the framing of the constitution which resulted in adopting ‘Bharat’ as well as ‘India’, another plea like this was taken in the year 2016 which as a result was dismissed by the Apex Court of Law.

The judgment was headed by the then Chief Justice of India, T.S. Thakur who orally remarked that every citizen of India has the right to choose between entitling his country ‘Bharat’ or ‘India’ and the Supreme Court had no business to neither dictate nor decide for any Indian as to how he should identify his country with.

Conclusion

As from the above analysis, it is clear that filing of this petition was an overall waste of time of both the sides that is the Supreme Court and Petitioner given the current state of the society and that this time could have been channelized in a productive way. Although as far as the petition is concerned, the precedent 2016 judgment has unambiguously dissolved every present contention of the petitioner by referring that the along with the Freedom of Speech and Expression provided to citizen to identify the country with their preferable name, the Constitution of India has mentioned both the origins of the name in both the languages. The matter which is further taken to the appropriate ministry should also conclude with this but only after when the state of the pandemic becomes negligible.

Author: Gayatri Sharma from JIMS, Schools of Law, Indraprastha University.

Editor: Silky Mittal, Junior Editor, Lexlife India.

PM Fasal Bima Yojana

Reading time: 8-10 minutes.

The role of farmers has always been undervalued, but undoubtedly, they are the pillar of the society we live in. In April 2016, the Indian Government launched the Pradhan Mantri Fasal Bima Yojna (PMFBY), which scrapped all the earlier prevailing schemes on yield insurance. It is the flagship scheme of the agricultural insurance which supports the theme of One Nation- One Scheme. The focus of the scheme is to increase the awareness about the crop insurance in India as it covers post-harvest losses, localized risks due to unforeseen calamities etc. But unfortunately, due to multiple problems, the scheme has not been successful in the country. Many states have opted out of this scheme, Jharkhand and Telangana being the recent ones. It is predicted that there may be a 25% decline in the enrolment of PMFBY.

Salient features of the scheme

  • The farmers are required to pay 2% of the total premium for the Kharif crops, 1.5% for the rabi crops and 5% for the cash crops and horticulture crops.
  • For the farmers with availed loans, it is mandatory to be insured as per the provisions of PMFBY.
  • To secure the income of farmers, complete insurance is given to them in case of any unforeseen event. When there is any loss due to natural calamity, the premium rates of the total insured amount to be paid by the farmers are low and the rest of the premium amount is paid by the government.
  • One of the features of PMFBY is the removal of the cap and other reductions so that the farmers can claim full insured sum.
  • Landslide, Hailstorm and even flooding have also been added in the list of localized calamities.
  • Under this scheme, there is no upper limit on Government Subsidy.
  • The use of technology is highly supported by this scheme. For the timely settlement of the insured amount, usage of technological devices like drones, smartphones, remote sensing instruments are promoted.
  • For the effective implementation of this scheme, the cluster approach has been adopted which means a particular insurance company will monitor a group of districts.
  • Under this scheme, prevented sowing will now be eligible for indemnity claims up to 25% of the total sum insured.

How was the scheme introduced?

The Pradhan Mantri Fasal Bima Yojna has made many upgradations and enhancement when compared to the predecessor scheme like the National Agricultural Insurance Scheme (NAIS) and the Modified National Agricultural Insurance Scheme (MNAIS). The objective of this scheme is to help the farmers by providing them with insurance and reducing the burden on their shoulders. The PMFBY includes all Food and Oilseeds crops and Annual Commercial/Horticulture Crops in which previous yield data is available and for which the required number of Crop Cutting Experiments (CCEs) was done. The implementation process of the scheme is done by the general insurance company and their selection is done through bidding by the particular State Government. All the work and process related to the scheme is done in the supervision and direction of the Government of India, Ministry of Agriculture and Farmers Welfare, Department of Agriculture and the concerned state in coordination with the insurance agency. Further, the implementation of the scheme is done on ‘Area Approach Basis’, where the insurance amount is decided demographically based on risk factor for a particular crop.

Progress made under PMFBY

While presenting the budget of the financial year 2020-21, the Finance Minister Nirmala Sitharaman said that in the coming year the central government is committed to double the income of farmers. It is estimated that till now, approximately 6.11 crores framers have availed insurance benefits under this scheme launched by the PM. Among all the farmers insured under this scheme, 58% of them are loanees. In February 2020 the Indian government has approved several changes in PMFBY to make it more successful and plug the loopholes in the scheme. The scheme has been made optional for farmers. The PMFBY was launched by the government after including the best features and effacing the shortcomings of the earlier working schemes.

Why are states withdrawing from the scheme?

It has been witnessed that several states across the country are withdrawing from the PMFBY. There are myriads of reasons for this conundrum starting from the lack of interest shown by the particular state to the reluctancy on the part of insurance companies to invest. The data of last year shows that in the Kharif Season, seven States and four Union Territories were not covered by this scheme. It was estimated that only Rs. 8 crores were spent out of Rs. 1,400 crores earmarked for the north-eastern States under this scheme in 2019. There are some states like West Bengal and Bihar who have opted out of PMFBY to establish their State-level schemes. The goal of PMFBY is to be a transformative scheme, but there some loopholes in the implementation process and multiple complications in its execution at both district and state level. Other negative factors include the paucity of State budgetary resources, exorbitant administrative costs, lack of forecasting infrastructure, high actuarial premium rates etc. Unfortunately, there are some states in which the State governments are itself not interested in promoting the scheme.

Critical analysis

In India, it is estimated that approximately 43.9 % of the population depends on agriculture for their survival and livelihood. Since a few decades’ problems like poor returns, crop failures, indebtedness, have led to the agrarian distress all over the country. The Indian government has come up with multiple schemes and guidelines to support the farmers but some of them have failed immensely and or they have been hobbled by political variance. The PMFBY was launched with an initiative to reverse the risk-averse nature of the farmers, provide them with financial support and be their backbone in case of any debacle.

It is observed that although the scheme is an improved version of the earlier prevailing schemes still it faces some impediments at the structural, financial and logistic level. It is often said that the execution process of this scheme is seriously compromised. There were instances where the insurance company was reluctant to pay claims as they didn’t investigate the losses occurred due to the localized community. There are still farmers in the country who are not aware of this scheme because of the lack of efforts made by the insurance companies and state government in promoting and building awareness about the PMFBY.

A way forward

For the development and progress of the country, a fair, farmer-friendly and transparent agriculture insurance system is crucial. There must be a mechanism which ensures the timely settlement of claims, effective communication between farmers, insurance companies, government and are devoted to enhance and utilize the provisions of scheme to the full extent. If this insurance model is supported by Public-Private Partnership and technological advancements, it will surely do wonders by reaching out to the last farmer. This will not only uplift the economy but also lead to its financialization and formalization.

Conclusion

An efficacious crop insurance system is the need of an hour which can protect farmers from the income losses, escalate agricultural productivity and can finance inputs for agricultural production. Unfortunately, the present scheme has failed in many aspects. The PMBFY is neither helping the farmers in augmenting their income nor effacing the financial debt faced by them. It is now crucial for the Indian government to amend the policy wrinkles and glue the flaws in the scheme so that its objective is achieved.

Author: Shivi Shrivastava from Institute of Law, Nirma University.

Editor: Silky Mittal, 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 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.

Analysis: Prime Minister Employment Generation Plan

Reading time: 8-10 minutes.

Prime Minister’s employment Generation Scheme (PMEGS) is an employment generation programme adopted and implemented by the PM of India to provide employment opportunities in micro-level industries. It is major credit-linked subsidy programme implemented to provide jobs for unemployed youth by generating self-employment opportunities via establishing micro-industries at the non-agricultural sector. Ministry of Micro, Small and Medium Enterprises (MSME) is responsible for implementing this programme that came into effect since the year of 2008.

This programme helps in creating jobs for numerous unemployed people in the non-farming sector. The scheme is being implemented by Khadi and Village Industries Commission (KVIC), State Khadi and Village Industries Board (KVIB) and District Industries centres (DIC). Under this scheme, loans are provided for facilitating self-employment by public sector banks, selected private sector and Cooperative banks by providing subsidies from MSME.  The PMEGP Scheme is being implemented by Khadi and Village Industries Commission (KVIC) at the national level. At the State level, the Scheme is being implemented through State Khadi and Village Industries Commission Directorates, State Khadi and Village Industries Boards and District Industries Centres and banks. PMEGS is a merger of two national schemes, namely, Prime Minister’s Rojgar Yojna and Rural Employment Generation Programme.

Objectives of the Scheme

The main aim of the scheme is to provide opportunity for stable, continuous and sustainable self-employment for the unemployed sector of the urban and the rural areas. Another objective of the act is to provide continuous and stable employment for the large segment of the rural and urban population by providing self-generating businesses at the micro-level. The scheme also facilitates the role of financial institutions and public banks, creating a higher credit flow at the micro-level sector.

Unemployment is one of the major challenges faced by the Indian Government. This scheme gives the opportunity to unemployed youth to receiver loans at a subsidised rate to create small business and micro level industries. The act was implemented with the aim to tackle poverty by giving the power to people to own their own businesses. This loan system also helps create greater credit flow for the registered bank by giving eventful distribution to the beneficiaries in need for the loan.

The Implementing Agencies, namely KVIC, KVIBs and DICs will associate reputed Non-Government Organization (NGOs)/reputed autonomous institutions/Self Help Groups (SHGs) / National Small Industries Corporation (NSIC) / Udyami Mitras empanelled under Rajiv Gandhi Udyami Mitra Yojana (RGUMY), Panchayati Raj institutions and other relevant bodies in the implementation of the Scheme.

Eligibility under the Scheme

Any individual above 18 years of age is eligible for applying under the scheme. General category beneficiaries can avail margin money subsidy of 25 % of the project cost in rural areas and 15% in urban areas. Beneficiaries belonging to Special Categories such as Scheduled Caste/Scheduled Tribe/OBC /Minorities/Women, Ex-serviceman, physically handicapped, NER, Hill and Border areas etc. can avail margin money subsidy of 35% in rural areas and 25% in urban areas. The maximum cost of projects can be Rs. 25 lakhs in the manufacturing sector and Rs. 10 lakhs in the service sector. Benefit can be availed under PMEGP for setting up of new units only.                       

Why was it introduced?

By the year of 2008 in India, unemployment and poverty were major crises in the country. In both urban and rural areas, there was an acute shortage of job availability. This was toppled with a huge and growing population, creating havoc and crises all over the country. The small and medium sector was experiencing a downfall in production and distribution. Crises over poverty and employment led to many unemployed youths. This was also tumbled with lower credit flow rate in the economy.

This programme was implemented by the Ministry of Ministry of Micro, Small and Medium Enterprises to tackle the problem of unemployment. By providing loans to people for business at low rates and careful supervision by the banks, this scheme gave the opportunity for creditors to open small and micro level businesses in the urban and rural areas. Creating of businesses also led to exponential increase in the job availability solving the unemployment crises. It aimed to make the people of India ‘self-sufficient’.  It has generated sustainable and continuous employment availability in both Rural as well as urban areas of the country. This scheme was implemented specifically to provide loans at lower interest rate to people so that they could become business owners in both service and manufacturing sector.

Furthermore, the financial institutions due to higher loan crediting, has shown a big increase in its credit flow system. This scheme has provided stable and sustainable employment to a large segment of prospective and traditional artisans, rural and urban youth in the country through setting up of micro and small enterprises.

Salient features

This act has been under the supervision of by Khadi and Village Industries Commission (KVIC), State Khadi and Village Industries Board (KVIB) and District Industries centres (DIC). Some of salient features are-

  • Individuals with age of 18 years or more must be passing standard 8th can avail loan for their project required above Rs 5 lakh in the service sector and above Rs 10 lakh in the manufacturing sector.
  • These businesses must be registered under the Societies Registration Act of 1860. These are self- help businesses that are form of production bases cooperative societies.
  • The Scheme is implemented through Khadi and Village Industries Commission, State Khadi and Village Industries Commission Directorates, State Khadi and Village Industries Boards and District Industries Centres and banks in Urban and Rural areas in the ratio of 30:30:40 between Khadi and Village Industries Commission / Khadi and Village Industries Boards / DIC respectively.
  • Also, assistance under this scheme is provided to small business owners for development and running.
  • The per capita investment under the scheme shall not be more than Rs 1 lakh in plains and Rs. 1.5 lakhs in elevated areas such as hill and platues.
  • Maximum project cost shall be Rs 10 lakh in the service sector and Rs 25 lakh in the manufacturing sector.
  • There is no income ceiling for setting up projects.

Progress made under it

According to article published in “FINANCIAL EXPRESS” “Prime Minister’s Employment Generation Plan is estimated to have created over 11, 13,000 jobs during the three years till 2017-2018”. According the press release by the Government, this scheme was able to generate 5,87,416 jobs during the year 2018-2019 which was more than it targeted to create. Also, Khadi and Village Industries Commission (KVIC) generated about 36904 jobs till 26th June, 2019. This scheme also succeeded in sick textiles and Khadi industries as well. It has a good reach and has targeted almost all sections of the society based on social background, education background, location etc. Thus, PMEGP till now has performed well and shown a creative pattern of works to the rural areas, but along with the progress made by the scheme, it has also lead to some difficulties, the most important being the delay in the process of sanctioning of loans at different stages because of factors such as asking collaterals for loans, physical verifications and delay in adjustment of margin money.

  • Steps taken to strengthen it

“Ministry of MSME has introduced online Margin Money disbursement directly to financing bank branches so as to enhance transparency and expedite disbursement of Margin Money under the scheme”. It has also provided for financial assistance of up to 1 crore for manufacturing units and up to Rs. 25 lakh for service units with certain subsidies as well for expansion/upgrading the existing PMEGP units. It has also permitted 10% of financial allocations for trading activities in the form of sales outlets in certain districts so as to boost the marketing of KVI product. Awareness camps, workshops, Bankers Meetings and exhibitions at all levels are being organized in order to propagate the PMEGP scheme for the development of micro industries.

Along with this, Coir activities are included under the scheme and Coir Board has been made as an implementing agency. Also, it has permitted 10% of the total financial allocation to the “Retail outlets/business – selling Khadi products, Village Industry products procured from Khadi and Village Industry Institutions certified by KVIC and products manufactured by PMEGP units”. Lastly, the ministry has also initiated the process of Geo-Tagging of all the units.

Critical analysis

The PEMGP has been one of the major employment generation credit linked subsidy programme in the country.  The main aim of the programme was to generate employment for large number of people in the small sector, in the urban and rural areas.  It was a merger of two employment generation schemes that are PMRY and REGP. At the national level, the Scheme is being implemented by Khadi and Village Industries Commission (KVIC), a statutory organization under the administrative control of the Ministry of MSME as the single nodal agency.

At the State level, the Scheme will be implemented through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs) and District Industries Centres (DICs) and banks. It includes small business of rural and urban areas namely-

1. industry or business for sale of meat, tobacco​, etc

2. Industry or business for agriculture, floriculture, horticulture etc

3. Rural Transport (except Auto rickshaw, House boat, tourist boat in A & N Islands and except house boat, Shikara & Tourist Boats in Jammu & Kashmir and Cycle Rickshaw.)

4.CNG Auto Rickshaw

5. Polythene and plastic business, etc

These are at the micro and small level. It is necessary for a country like India to implement such schemes. Eradication of poverty still remains one of the major challenges for the government. Government bodies have worked together to execute this programme successfully. The Implementing Agencies, namely KVIC, KVIBs and DICs will associate reputed Non-Government Organization (NGOs)/reputed autonomous institutions/Self Help Groups (SHGs) / National Small Industries Corporation (NSIC) / Udyami Mitras empanelled under Rajiv Gandhi Udyami Mitra Yojana (RGUMY), Panchayati Raj institutions and other relevant bodies will work together in identification and assistance of businesses. It includes identification of beneficiaries, finding viable projects and providing the required training and education.

Conclusion
To generate continuous, stable, safe and sustainable employment and to help the financial institutions achieve a credit line and flow, this programme has been a success in providing employment to many thousands to unemployed people. Providing subsided rate loans to people and assisting them to make an optimum utilisation of resources received by education and training has been the primary goal of PMEGP. 

The scheme itself is to challenge the problem to poverty head on. It is the duty of the government to keep and regular check at the statistics attached to it, the designated government bodies must ensure that optimum utilisation of resources are being made by the small business owners under this scheme. Creating employment and businesses will help in growth of the economy simultaneously. Manufacturing and distribution at this large scale will have an immense increase in the GDP level by the secondary sector. This programme has been a very thorough and well implemented plan for the unemployed sector as well for the economy and the financial institutions.

Authors: Ridhima Chandani from Manipal University, Jaipur and Tanmay Sinha from Symbiosis Law School, Hyderabad.

Editor: Dhawal Srivastava from Rajiv Gandhi National University of Law, Patiala.

Analysis: Lockdown announced by Prime Minister

Reading time: 6-8 minutes.

As we know our Prime Minister Shri Narendra Modi has announced 21 days lockdown on 24th March 2020 due to the spread of novel coronavirus in our country. Considering the current situation PM has done a great job and a smart move was played by him to control the number of infected persons. As we know cases of coronavirus are increasing every day at a very rapid rate every citizen must cooperate and equally participate in fighting against this pandemic. Globally the confirmed positive cases as crossed half million now hence locking down the nation for 21 days and social distancing is necessary to break the chain of COVID-19. COVID-19 is a new illness that affects the human lungs and airways.

Centre and different states took various measures to protect their state from coronavirus they are as follows:-

States have been told to ensure timely payment of wages to laborers at their place of work during the lockdown. House rent should not be demanded from laborers for this period.

Orissa HC has instructed the state authorities to make apposite arrangements for providing food, shelter and ensure the medical screening for migrants.

  Andhra Pradesh HC directed the state government to ensure that the health workers have necessary personal protective equipment.

Jammu & Kashmir has passed a series of orders to ensure social distancing, to break the transmission cycle of the deadly virus.

A batch of 275 people evacuated from the coronavirus – hit Iran on Sunday, were taken to the Army Wellness Facility set up at Jodhpur.

Salient features of the lockdown

  • Social distancing is one of the major motives of the lockdown to break the chain of COVID-19.
  • The government notified that during 21 days lockdown the availability of essential commodities and things required for basic necessity will remain the same.
  • This lockdown is like curfew even more strict than ‘Janta Curfew’ because legal actions can take place if anyone violates the conditions of lockdown.
  • The facility of transport service- air, rail, and roadways are suspended during this lockdown.
  • Except for the government and private offices involved in essential services all the offices remain close.
  • The lockdown will lead to economic crisis in the country but the priority was given to save lives as rightly said by the respected Prime Minister Narendra Modi “Jaan hai to Jahan hai”

Sanctions against violation

The lockdown announced by the Prime Minister of India in order to control the increasing number of coronavirus patients and to break the chain shall be followed strictly. However, those who are not taking it seriously shall be liable for violating the lockdown orders given by the public servant under the following sections of the Indian Penal Code (IPC):-

Section 269 – Negligent act likely to spread infection of disease dangerous to life shall be punished for imprisonment up to six months, or fine, or both.

Section 270 – Malignant act likely to spread infection of disease dangerous to life shall be liable for imprisonment up to two years, or fine, or both.

Section 188 – Disobedience to order duly promulgated by public servant shall be liable for imprisonment up to six months, and fine up to 1000 Rupees, or both.

While the punishment can vary from fact to fact and case to case, violators could be imprisoned for up to two years and fined up to 1000 rupees.

Legal provisions

19 states had announced complete lockdown. The Government of India is deriving powers to issue such directives and guidelines provided under the Epidemic Diseases Act, 1897 (EDA) and Disaster Management Act, 2005 (DMA). These are the two acts that provide the statutory basis to the Centre and the State to act against the Coronavirus. These acts contain sufficient provisions to act in a manner to protect the country, due to which Centre found no necessity of declaring an emergency in the country.

The Epidemic Disease Act, 1897 is a small but important act containing only four sections giving power to both Central as well as State governments to take special measures and prescribe such regulation to prevent the spread of  ” dangerous epidemic disease”. Under Section 2A of the Act, the Central government has the power to take any measures or prescribe regulations to inspect any ship or vessel leaving or arriving in any port and to detain any person planning to leave or arrive in India. The revised travel advisory issued by a group of ministers, including the Ministry of Health and Family Welfare, is an example of this.

State governments also have the power under Section 2(1) of the Epidemic Act to take measures to prevent the outbreak of dangerous epidemic disease by prescribing regulations to be enforced concerning any person or group of people. An example of this would be the order on March 16 under the Delhi Epidemics Diseases, COVID -19 Regulations, 2020, whereby the Delhi government has restricted gatherings with groups of more than 50 persons till March 31.

The Disaster Management Act, 2005:

The Epidemic Disease Act, 1897 does not provide any such guidelines and infrastructure to deal with such an Epidemic that’s why the Parliament in 2005 enacted the Disaster Management Act. The definition of a “disaster” in Section 2 (d) of the Disaster Management Act states that a disaster means a “catastrophe, mishap, calamity or grave occurrence in any area, arising from natural or man-made causes”.

 To address the current epidemic outbreak, the Central government has included the COVID-19 outbreak as “Notified Disaster” as a “critical medical condition or pandemic situation”. Through this act, the government gets access to the appropriate funds so as provide relief and other facilities in such worst conditions. There are three funds: the National Disaster Response Fund, the State Disaster Response Fund, and the District Disaster Response fund.

Under Section 46 of the act, the National Executive Committee and the National Disaster Management Authority can authorize the use of such funds for emergency responses, relief, and rehabilitation.

The State Disaster Response Fund is being used for multiple purposes, such as setting up quarantine facilities, establishing additional labs, covering the cost of personal protective equipment for healthcare workers, procuring thermal scanners, ventilators, air purifiers and consumables for government hospitals including food, clothing and medical care to people isolated there. Besides, they are also used to cover the cost of consumables for sample collection, screening and contact tracing of positive persons.

Constitution validity

 As we know, our Constitution is supreme and consider as a grundnorm. Every enacted law derives its validity from the Constitution of India. Any provision or act which is in contravention with the Articles of the constitution is void ab initio.  The lockdown for 21 days announced by the prime minister is valid. As the constitution grants powers to the PM also Article 256 deals with the obligation of state and the union’s executive power and extending the power of Union of giving necessary directions to the State as may appear to the Government of India to be necessary for the purpose.

The pandemic that is affecting every country and India as a whole and the declaration of lockdown was in order to prevent the life of the people. Since there is no internal or external aggression the provision regarding emergency was not activate which means that fundamental rights cannot be suspended.

Here the Centre, the state and the citizens came together and agreed on wilfully waving of their right to movement and bound themselves in certain boundaries to fight against this pandemic disease i.e. Coronavirus collectively and it is completely valid as it is for the welfare of the society.

Conclusion

Corona Virus is pandemic in nature and it is widely spreading all over the world, destroying the economic conditions. The Centre has announced 21 days lockdown to control the disaster which is ready to knock down the country. The lockdown is constitutionally valid and it shall be strictly followed by the people otherwise the person shall be legally liable for his acts under IPC.

Author: Anushika Parashar from Mody University, Lacchamangarh.

Editor: Tamanna Gupta from RGNUL, Patiala.

Effect of COVID-19 on economy

Reading time: 6-8 minutes.

History has witnessed several pandemics over the centuries, but few as widespread and as disruptive as the ongoing 2019-20 coronavirus outbreak. The virus was first identified in Wuhan in Hubei district of China in late December 2019 and has since found its way to nearly 196 countries and territories across the globe. It causes the ‘Coronavirus Disease 2019’ or ‘COVID-19’ which is characterised by acute respiratory infection, particularly fatal for infants, people of advanced years and those with underlying medical conditions.

 Although it is primarily a situation of grave health crisis, the outbreak has caused in its wake major socio- economic disruptions, with far- reaching consequences. According to a United Nations prediction report, the world economy emerging out of the crisis will see 25 million people out of work and dramatically slashed rates of wages for workers. It warned that the world should prepare for a “significant rise in unemployment and underemployment in the wake of the virus”. As these rather worrisome facts and figures keep emerging, let us explore the factors that shed some light on how a common virus has managed to bring large economies to their knees within such a short span of time.

Pandemic status of COVID-19

The coronavirus has a very high rate of transmission as is evident from the fact that as on 25th March 2020, mere 3 months from the first reported case, there have been around 4, 71,300 known cases of infection worldwide and 21,300 deaths. China, which is the epicentre of the disease, and the European countries of Italy and Spain along with the USA have been the worst hit, cumulatively accounting for around 55% of total number of current cases worldwide.  It was declared as a ‘pandemic’ on 11th March, 2020 by the World Health Organization. A pandemic is defined as “an epidemic occurring worldwide, or over a very wide area, crossing international boundaries and usually affecting a large number of people” A number of countries have imposed a state of total lockdown, including travel restrictions, amid efforts to quarantine citizens in order to prevent community transmission. Indian Prime Minister Narendra Modi announced a complete lockdown of the country commencing on 25th March for a period of 21 days, threatening penal consequences for violators. With people forced inside their homes and business activities suspended, a shutdown of the global economy is looming large.

How is it affecting the economy?

Israeli historian Yuval Noah Harari says ‘this storm will pass… but the choices we make now could change our lives for years to come

As nationwide lockdowns and state- imposed curfews continue- major exports are suspended, shopping malls are left deserted and the lights in theatres and cinema halls have gone dark- it comes as no surprise that unemployment is headed for a historic high. Closure of these establishments have, in turn, hit those businesses, big and small, that were engaged in supplying utilities and services to them- developing a vicious cycle of economic inactivity.

The Chinese economy, owing to its prolonged fight against the viral outbreak, has gone down by about 10% in the first quarter. Estimates of the margins by which US and the European economies are likely to go down are of similar magnitudes, i.e. perilous double- digit drops in GDP, that too assuming that the virus would be contained by the end of second quarter and measures would be relaxed.

As far the Indian economic scenario is concerned, Prime Minister Narendra Modi has asked top verticals within the government, including the Niti Aayog, the Economic Advisory Council to the Prime Minister and Finance Ministry to assess the economic impact of the novel coronavirus. The economy is forecast to grow 5% in current fiscal year, the slowest in 11 years. The Economic Survey had forecast 6-6.5% rise in financial year 20-21, but Covid-19 has hurt recovery prospects. Ill- effects of the pandemic have not spared the Forex and Bond markets either.

The first brunt of the blow would be borne by the tourism, transport and hospitality sectors- leading to a gradual stagnation of the supporting industries. Consumption slowdown is obviously followed by drop in production, which is further aided by the fact that the outbreak has caused workers to flee to villages culminating in unavailability of labour.

Entrepreneurs operating small and medium sized enterprises find themselves in particularly deep waters as poor cash- flow and negligible revenues over prolonged periods are slowly pushing them towards a point beyond recovery and possible permanent closure.

 As the health pandemic is slowly unfolding into an economic pandemic, the world is waiting for the governments to respond, as their support is extremely crucial to ensure that this temporary economic shock does not turn into a permanent one. According to former RBI Governor Dr. Raghuram Rajan, the situation must be dealt with in short- term, achievable steps as it is hardly an appropriate time to roll out big, ambitious projects. Available fiscal resources must be channeled into healthcare first- in securing supply of protective gear and hygiene products, expanding available facilities and building quarantine spaces.

The next step would be identification and allocation of resources for providing monetary benefit to the vulnerable sections of the society- such as the impoverished and the immigrants- who are struggling to keep body and soul together during these trying times. Equally important is to ensure the survival of small and viable businesses, which are fast losing their stronghold in the economy, by providing monetary incentives and subsidized loans to create a bridge between now till they manage to overcome the crisis and secure economic momentum. 

Steps being taken by government & critical analysis

The first step towards mitigating any mishap on part of the government is resorting to clear communication and educating the people about the gravity of the situation. The Indian government must put across very clearly to every citizen that this is a period of national emergency and that pro- active role sought from all of them. Comprehensive data must be released to guide actions, as one cannot hope to win a blind fight.

 In terms of policy decisions, the Prime Minister announced on 24th March, 2020 that Rs. 15,000 Crore has been pumped into the healthcare sector for provision of testing kits, protective gears for doctors, nurses and paramedics and also for expanding the available facilities and increasing accommodative capacity. Although the amount allocated seems substantial, it must be weighed against the fact that there is considerable uncertainty over the duration of the pandemic- currently available estimates of adverse effects of the outbreak might have to undergo sizeable revisions. 

India is yet to announce any substantial and far- reaching policy decision to combat the approaching economic slowdown. In this respect, it can take cue from other leading economies that are rolling out counter- measures. For instance, in the US, Federal Reserves has cut its interest rates to near zero to help consumers and businesses to access cheaper loans. Taking into account an upcoming inevitable rise in NPA’s and possible delinquencies, there is a large demand that the RBI slash its rates before announcing next fiscal policies to manage the country’s plummeting risk and investment capacities. It can also offer partial guarantees to commercial banks, so that they remain incentivized to lend to businesses, particularly the smaller ones.

However, every policy must be implemented only after taking into careful consideration all possible consequences, since one must not forget that the country is currently dealing with a financial system that is severely impaired and efforts must be directed towards rebuilding it and avoiding any path that may lead to further collapse.

Conclusion

The coronavirus outbreak is perhaps the biggest crisis that our generation has had to face. Although the situation demands quick and decisive actions on part of authorities as well citizens, one must not forget to weigh the long- term consequences of these actions. The goal today is not merely to overcome the immediate threats to our health, but also lay to the foundation for a safer world, to emerge on the other side stronger than ever.

Every cloud has a silver lining, and in this situation it can be found in the fact that the entire world has been presented with a profound purpose to unite, and exhibit the kind of compassion which was thought to been buried beneath the frenzy of modern, selfish way of life. One can only hope that humanity is able to derive valuable lessons from this ordeal and that each of us hold life and freedom in the highest regard hereon.

Author: Adrita Biswas from ILS Law College, Pune.

Editor: Ismat Hena from Faculty of Law, Jamia Millia Islamia.



Analysis: National Nutrition Mission

Reading time: 6-8 minutes.

The National Nutrition Mission or POSHAN Abhiyaan is Government of India’s flagship program to improve nutritional standards among children and women. In September 2017, NITI Aayog, entrusted with the task of closely monitoring the POSHAN Abhiyaan, released the National Nutrition strategy. The recommendations in the strategy were then incorporated into the nutrition mission.

NITI Aayog has the duty to submit implementation status reports of POSHAN Abhiyaan every six months to the PMO. The first bi-annual report was prepared and presented at third National Nutrition Council on India’s Nutrition Challenges. The National Council has met three times in 2018.

The program was launched by the Prime Minister on 8th March in Rajasthan. The main goal of the program was to induce improvement in children, adolescents and women. The program aimed at preventing and reducing stunting, malnutrition. anemia and low birth weight.

Initially the program was meant to be launched in a phased manner starting with districts, but then opted for a Pan India mission. The meeting of the Executive Committee for POSHAN Abhiyaan was held to deliberate on the working of the program. The Committee declared that the Government of India shall release a detailed annual report on the status of nutrition in the country.

Need for this mission

Even though there were many such nutritional programs in existence, the government decided to roll out another one as they saw a lack of synergy and failure to improve the nutritional standards. The mission decided to converge existing schemes in order to bring about effectiveness.

The program ensured convergence of various schemes such as Anganwadi Services (AS), Pradhan Mantri Matru Vandana Yojana (PMMVY), Scheme for Adolescent Girls (SAGs), Janani Suraksha Yojana (JSY), National Health Mission (NHM) and many others. Convergence at Centre is being achieved through formation of the National Council (NC) for Nutrition and the Executive Committee (EC) for POSHAN Abhiyaan.

Both NC and EC draw members from all the stakeholders of the Abhiyaan. The National Council headed by the vice-chairman of NITI Aayog has been constituted for policy direction, effective review and coordination.

Another body called the Executive Committee (EC) under the Chairmanship of Secretary, MoWCD has been constituted to provide direction, policy and guidance for implementation of various programmes/schemes under POSHAN Abhiyaan.

A Convergence Action Plan at State, District and Block level for better implementation of the programme were also implemented. Convergence Meetings are held every quarter to review and take forward the implementation as per the Plan.

Financial outlay

An amount of Rs. 9046.17 crores was set aside to be expended for three years commencing from 2017-18. The 50 percent of the mission will be supported by Government Budgetary Support and the other 50 percent by IBRD or other MDB.

Government budgetary support would be in the ratio 60:40 between Centre and States/Union Territories with legislature, 90:10 for North Eastern Regions and Himalayan States and 100% for Union Territories without legislature. The estimated share of the Government of India over a period of three years would be Rs. 2849.54 crores.

NNM: Features

The main features of the proposal include introducing

  • A robust convergence mechanism,
  • Social Audits,
  • setting-up Nutrition Resource Centres,
  • involving masses through Jan Andolan for their participation on nutrition through various activities, among others and much more.

 The program was aimed to reach an approximate ten crore people and all districts were to be covered by 2020. According to the Food and Agriculture Organization report on State of Food Security and Nutrition in the World, it is estimated that 190.7 million (14.5%) people were undernourished in India during 2014-2016.

UNICEF statistics indicate that 20 percent of Indian children under five years of age suffer from wasting due to acute undernutrition and undernutrition is more common for children of mothers who are undernourished themselves (i.e. body mass index below 18.5) than for children whose mothers are not undernourished.

The latest National Family Health Survey (NFHS4) carried out by the Ministry of Health and Family Welfare reported the prevalence of anaemia as 58.6, 50.4 and 22.7 per cent, respectively, among children aged 6-59 months, pregnant women aged 15-49 yr and men aged 15-49 yr.

NNA: Achievements

This flagship program has not been able to achieve its objectives 3 years into the mission. According to the information given by Minister for Women and Child Development Smriti Irani, a total of ₹4,283 crores was disbursed by the Centre to different States and Union Territories.

During 2019-20, even though funds were released for 19 States, only 12 of them had used less than a third of the funds released in the previous two years. The best performers were Mizoram, Lakshadweep, Bihar, Himachal Pradesh and Meghalaya. The worst performers were Punjab, Karnataka, Kerala, Jharkhand and Assam.

With only less than 30 percent of the allocated funds being put to use, the program still has a long way to go in order to achieve its objectives. The Program which came into being for better delivery and implementation of schemes for improving nutritional intake has not made any significant developments.

Conclusion

The Central Government and the State Governments have to ensure better strategy and make sure that these services reach the poorest of the poor. Lack of accountability and no proper supervision has led this flagship mission to falter. The initial targets set forth when the program was implemented is yet to be achieved.

The Government must also seek the help of various Non -Governmental organisations and policy institutes and approach the epidemic of malnutrition in a data driven manner. Women and children form the backbone of our society and their adverse health can affect the country’s growth and economic standards.

Therefore, it is absolutely essential that the government ensures proper implementation of this nutrition mission.

Author: Shamila Jibin from National University of Advanced Legal Studies, Ernakulam.

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