General Elections: old order changeth yielding place to new

As netapedia goes into into its upgraded version, we the netapedia team, are here with our feature on the version 16.0 of the most important team in this country-the Lok Sabha.

16th May, 2014 produced an unprecedented if not an unexpected election result with the Bharatiya Janata Party emerging as a single largest party with the National Democratic Alliance winning 333 seats out of the 543. Leading a successful, US presidential style campaign, Narendrabhai Damodardas Modi became the 15th Prime Minister of India. The incumbent Indian National Congress managed to win only 44 seats which is its most abysmal performance ever. Although INC is technically the runner-up in these elections, it has less than 10% of the house and its stake to the claim of Leader of Opposition is being contested.

The 16th Lok Sabha(LS) elections and their results became one of the most followed across the country and the world and went on to become an election of many firsts. As we explore the same, let’s look into the important events that occurred in these elections.
BJP swept all the contested seats in Andaman and Nicobar Islands, Dadra and Nagar Haveli, Daman and Diu, National Capital Territory of Delhi, Himachal Pradesh, Goa, Gujarat, Rajasthan and Uttarakhand. The cleansweep results combined with their performance across all states led to the loss of the minimum security deposit of 85% of the candidates who contested.

It is the first time in 30 years, a party has received a clear majority enough to form a stable government without any allies and support. In the year 1984, Indian National Congress went to win 414 seats after Indira Gandhi was assassinated. Interestingly, it was in 1984 when BJP contested its first LS polls and won only 2 seats and have improved their personal record by whopping 140 times since then by winning 282 seats. This extraordinary feat is primarily attributed to the state of Uttar Pradesh which has the maximum number of LS constituencies. The BJP won 71 seats and its ally Apna Dal won 2 seats giving the National Democratic Alliance(NDA) 73 out of 80 seats-clear example of the anti-incumbency wave that marked the elections. Of the remaining 7 seats, 2 were the traditionally Congress supporting Amethi and Rae Bareli constituencies won by Rahul Gandhi and Sonia Gandhi respectively. Mulayam Singh Yadav won 2 seats of which he resigned from his Manipuri seat. The bypolls will be held later to determine the final MP from the constituency while his nephews and daughter-in-law won the other 3 seats from UP. With the total tally, in another first, UP is not sending any muslim candidate to the lower house of parliament.

A similar trend was also observed in the state of Madhya Pradesh with 29 LS constituencies. BJP won 27 seats and the remaining 2 seats, Guna and Chhindwara, were won by Jyotiraditya Scindia and Kamal Nath respectively, from the Indian Nation Congress. Chhindwara happens to have voted for Congress for the last 15 years.

It was somewhat a mixed result for the regional parties. On the upside, West Bengal and Tamil Nadu were completely swept by the respective regional parties, All India Trinamool Congress(AITC) and All India Anna Dravida Munnetra Kazhagam(AIADMK). While AITC won 34 out of the 42 LS seats, AIADMK went to the next level by winning 37 seats thereby making it the party with 3rd highest number seats in LS after BJP and INC. On the down side, Bahujan Samaj Party(BSP) suffered in ignominy after failing to get a single seat in its home turf of Uttar Pradesh. Similarly, the Rashtriya Janata Dal(RJD) and Janata Dal (united) (JD (U)) performed dismally by clinching only 4 and 2 seats respectively.

In terms of choices available to the voters, these general elections saw the introduction of the “none of the above” (NOTA) option in the electronic voting machines. This option was to be exercised by the voter when he/she felt no candidate was fit to be elected. With the idea of being more inclusive, transgenders could fill in the option “others” in the electoral rolls, which was not available during the 2009 elections.

Overall, the people of India have given a clear mandate after three decades. With the promise of “acchche din”, we the people, continue to hope that our choice brings what we need and what we deserve.

We would like to hear what you have to say about the General Elections 2014! Please leave your comments here or mail us at

Srinidhi Govindarajan
Team Netapedia

Game Changer-Delhi Elections 2013

This time around Delhi election results will be awaited by as many enthusiasts as were seen on Sachin Tendulkar’s final match. In the recent past, State and municipal elections used to be an intensely local affair. But in this hyper-connected age, they have found a way out of the provincial cocoon, spreading the anxiety across the entire nation. Social media has become the favorite channel where people come together to share their views and openly discuss/argue on politics. The political parties too have embraced social media to target people of all age groups where they are extensively advertising, putting information of their party, agenda, manifestos, and campaigns, all of this, online.
Apart from the awareness factor, there are more fascinating reasons which are keeping people yearning for the elections.
After 15 years of Congress rule and a weak opposition in the form of BJP, the Aam Aadmi Party has been an exciting new effort in Indian politics. The media calls the Delhi elections a three way race between Congress, BJP and AAP. The emergence of Aam Aadmi Party (AAP) from a transmuted movement led by Anna Hazare into an aspiring political formation, has given a relieving alternative to the people of Delhi, who seem to leaning on it slowly.

The advent of the AAP was followed by a directive from the Supreme Court to allow voters to register discontent, not just by abstaining from voting but by marking a ‘None of the Above’ (NOTA) choice on the ballot paper. This will make it possible to assess what percentage of the electorate feels disenfranchised by the choice of parties and candidates on offer. The ‘None Of The Above’ (NOTA) option will be printed in pink on EVMs/ballot papers for the upcoming Assembly polls in five states although for the Lok Sabha elections next year, it will appear in white (The reason being that the ballot paper for Lok Sabha polls is also printed in white). Making the NOTA symbol public, Election Commission said its depiction was approved as a rectangle with rounded corners on a black background on which NOTA is written in capital letters in English. EC has already clarified that the candidate securing the highest number of votes would be declared elected even if the number of electors going for the NOTA option surpassed the votes polled by the contestants.
A total of 11 crore voters in Delhi, Madhya Pradesh, Chhattisgarh, Rajasthan and Mizoram will use the option of “None of the Above” for the first time ever in the December elections.

Since it is election time in Delhi, all political parties have of course, decided to target voters on the issues that matter most. But election manifestos are arguably more interesting this time since they have less headline-making promises in them. Lets take a look at who are the three main contenders and what promises each of them have to make.

Candidate Name: Harsh Vardhan
Political party: BJP
Born: December 13, 1954
Son of: Second child of late Om Prakash Goel and Snehlata Devi,
Constituency: Krishna Nagar constituency in east Delhi
Education: Anglo-Sanskrit Victoria Jubilee Senior Secondary School in Daryaganj,
MBBS and MS with specialisation in ENT from GSVM Medical College, Kanpur
Profession: ENT surgeon, joined the Indian Medical Association’s Delhi Chapter
Political Tenure:
Fondly called ‘Dr Sahab’, Harsh Vardhan is Bharatiya Janata Party’s Delhi Chief Ministerial candidate. An ear, nose and throat (ENT) specialist by profession, Vardhan entered the political circles in 1993 and was elected from Krishna Nagar constituency in east Delhi. The charismatic leader continued to hold on to that seat in the 1998, 2003 and 2008 Assembly Elections. A modest leader, Vardhan held various portfolios, including education, law and health in the BJP government.

BJP Manifesto:

1. Set up cold storages to ensure timely and adequate availability of fruits and vegetables.
2. Introduce a common smart card for use across all modes of public transport.
3. Ensure lifelong availability of essential drugs.
4. Introduce a private OPD service in all government hospitals by specialists (government doctors).
5. 85% seats in Delhi colleges reserved for Delhiites. Alternatively, Delhiites to be given 4% concession in marks. Applicable to all those who (irrespective of origin) pass senior secondary exams in Delhi.
6. Introduce a parking master plan.
7. Facilitate working capital from the Delhi Finance Corporation to help women entrepreneurs.
8. Introduce special provisions for students from north-east states: a 24- hour helpline and special arrangements at police stations. Encourage local guardianship for them.
9. Extend public library system to far flung areas of Delhi.
10. Implement a mono-rail system in Delhi and expand coaches in the Delhi Metro.
11. Have single-window clearance to set up any new business.
12. Take steps to expand availability of domestic help and reduce their exploitation by introducing special training centres. Similar centres to be introduced for drivers too.

Candidate Name: Sheila Dikshit
Political party: Indian National Congress
Born: 31 March 1938
Spouse of : Late Vinod Dikshit from Unnao District (Unnao)
Constituency: New Delhi constituency
Education: Convent of Jesus and Mary School in New Delhi
Master of Arts degree in history from the Miranda House at the University of Delhi.
Post held: Chief Minister of Delhi since 1998
Political Tenure:
During the period between 1984 and 1989, she represented Kannauj Parliamentary Constituency of Uttar Pradesh. She represented India at United Nations Commission on Status of Women for five years (1984–1989). She was shortlisted for the 2008 World Mayor award. As Chief Minister of Delhi, Dikshit was awarded the Best Chief Minister of India, by Journalist Association of India on 12 July 2008. In 2009, she was awarded Politician of the Year by NDTV.Chief Minister of Delhi Smt.Sheila Dikshit also Awarded for Delhi Women of the Decade Achievers Awards 2013, ASSOCHAM Ladies League for Outstanding Public Service. Dikshit is the longest serving Chief Minister of Delhi having been elected for three consecutive terms starting in 1998. As of Nov 2013, she has served for nearly 15 years as the Chief Minister of Delhi.

Congress Manifesto:

1. Recommend expanding the number of seats in evening colleges in Delhi university by 30%.
2. Set up a University of Health Sciences with five medical colleges.
3. Extend Ladli Scheme for college girls by providing additional financial assistance of Rs 50,000.
4. Open creches for children of working women.
5. Set up exclusive child-friendly courts.
6. Expand coverage to provide sanitary napkins to under-privileged women at an affordable cost.
7. Build more toilets for women — initial target of 20 per Vidhan Sabha constituency.
8. Provide eye testing and spectacles to senior citizens and orthopaedic support equipment at subsidised rates.
9. Construct over 10 old-age homes.
10. Grant an option to private schools to operate second shifts, thus creating 25% more seats in first three years.
11. Set up a central parking authority.
12. Open Dilli Haat at Janakpuri and Mayur Vihar.

Candidate Name: Arvind Kejriwal
Political party: Aam Aadmi Party
Born: 16 August 1968
Son of: Gobind Ram Kejriwal and Gita Devi
Constituency: New Delhi Constituency
Education: Mechanical engineering at IIT Kharagpur; Indian Revenue Service later in 1995 after qualifying through the Civil Services Examination
Profession: From 1989-1992 he worked for Tata Steel; Joint Commissioner in the Income Tax Department till February 2006
Political Tenure:
Kejriwal established the Aam Aadmi Party in November 2012. The party name — Aam Aadmi Party — reflects the phrase Aam Aadmi, or “common man”, whose interests Kejriwal proposed to represent. The party was formally launched in Delhi on 26 November 2012.The party’s first electoral test is the Delhi legislative assembly elections on 4 December 2013. He has also become one of the five most mentioned Indian politician on social networking sites such as Facebook and Twitter.
On 16 November 2013, Kejriwal filed his nomination papers from the New Delhi Assembly constituency under the Aam Aadmi Party banner. Among those contesting the seat is Sheila Dikshit, a three-time Chief Minister of Delhi

AAP Manifesto:

1. Create special mohalla sabhas in each neighbourhood. The sabhas will have greater say over public improvement works, upkeep of parks and waste management
2. Introduce open access in electricity distribution for Delhi residents — consumers can choose which distribution company to buy power from.
3. Special force to be set up for security of women, children and old across all municipal wards.
4. Introduce laws regulating pay and working hours and conditions of domestic workers.
5. To set up a unified transport authority for all modes of public transport.
6. To take steps to end construction and encroachment in the Delhi ridge.
7. To open a public library in each Assembly constituency.
8. To set up a special cell in chief minister’s office to track implementation of the party’s promises.
9. Urdu and Punjabi to get status of second language in Delhi.
10. Make government buildings disabled friendly.
11. Give greater power to the animal welfare board to take care of strays.
12. To encourage adoption of solar power.
Having listed the agendas of the three dominant parties contesting for the Delhi Assembly elections 2013, let’s wait to see who could capture the Delhi-ites needs the most and whose claims stand the tallest!

Now we take a look into the polling trend of the last Delhi Assembly elections held in 2008. Over 60% of 1.5 crore electorate exercised their franchise in a keenly fought Delhi Assembly elections which saw stray incidents of violence but remained by and large peaceful. Preliminary information suggests that the highest and lowest turnouts were in two constituencies of south-west Delhi with 63% and 55% respectively. There was a quantum jump in the polling percentage in the year 2008 compared to that of 53.4% in 2003 and 49% in 1998. In 1993 when Delhi faced the first elections, the polling percentage was 61.8%. With the kind of interest that 2013’s Delhi assembly elections have generated and the rising polling percentages in assembly elections across the country over the past few years, it is expected that this year’s polling will prove to be landmark day in the history of Delhi, as far as voter turnout is concerned.

Its important to realize that each one of our vote is important- to build a kind of state that we want and which would determine what our lives would be like. If you think that you would have surely voted if there were better choices to vote for, then this time you have the option of marking a NOTA. The simple act of casting vote will guarantee you are someone who takes the responsibility of making our country a better nation, the kind of nation which India deserves to be.

We would like to hear what you have to say about the Delhi elections 2013! Please leave your comments here or mail us at

Kriti Sarda
Team Netapedia

The Journey of Indian Democracy through the slogans

Wishing all the citizens of our country a very Happy 67th Independence Day!! :)

Elections are a time when the party members are in full swing to promote their candidates. And this is precisely when you get to hear the catchy one-liners called Slogan; used to advertise and promote their candidates, capturing their agenda of the campaign. A slogan provides shorthand for the entire campaign, capturing the mood of the country, quality of the candidate, a promise to the electorate or even tainting the opposition sometimes. Slogans while used during the political campaigns in India have always been able to enthuse masses and if we take an account of the past, these political slogans played a key role in defining the political history of India. Team Netapedia has gathered some effervescent slogans that have been used over the time; some that are remembered and some that are forgotten.

#Jai Jawan Jai Kisan :
Translation: It means “hail the soldier and hail the farmer”
By Whom: Lal Bahadur Shastri in 1965 (Then Prime Minister of India)

Lal Bahadur Shastri was made the Prime Minister of India as an obvious choice (owing to his adherence to Nehruvian socialism) after Nehru’s sudden death. He was immediately confronted with the burning situation of India where it faced the Indo- Pakistani War of 1965 which was fought over the disputed region of Kashmir and also at the same time there was scarcity of food grains in the country. He then fabricated the slogan of Jai Jawan, Jai Kisan to encourage and enthuse the soldiers to defend India and cheering the farmers to put their best efforts to increase production of food grains to reduce dependence on import. This slogan reverberates even today, wide and large.

#Jai Jawan Jai Kisan Jai Vigyan
Translation: It means “hail the soldier, hail the farmer and hail knowledge”
By Whom: Atal Bihari Vajpayee in 1998

Atal Bihari Vajpayee declared on 25 February, 1998 that his government would “take back that part of Kashmir that is under Pakistan’s control. Before this declaration, the BJP platform had clear intention to exercise the option to induct nuclear weapons and India should become an open nuclear power to garner the respect on the world stage that India deserved. By 18 March 1998, Vajpayee had publicly begun his lobbying for nuclear explosion and declared that there is no compromise on national security; all options including the nuclear options will be exercised to protect security and sovereignty.
Following this on 11 May,1998 Pokhran-II (also called the Operation Shakti), the second nuclear test of India was initiated. It refers to the series of five nuclear bomb test explosions conducted by India at the Indian Army’s Pokhran Test Range. In these five tests, first was a fusion bomb and the remaining four were fission bombs. On 13 May 1998, two additional fission devices were detonated, and the Indian government led by Prime Minister Atal Bihari Vajpayee shortly convened a press conference to declare India a full-fledged nuclear state. Atal Behari Vajpayee, the then prime minister of India, gave this slogan after the 1998 Nuclear tests in Pokhran. This was to underline the importance of science, technology and knowledge for the growth of the nation.
*The first Pokhran test, code-named Smiling Buddha, had been conducted in May 1974.
**11 May has been officially declared as National Technology Day in India to commemorate the first of the five tests that were carried out on 11 May 1998. The day was officially signed by the then Prime Minister of India. The day is celebrated by giving awards to various individuals and industries in the field of science and industry.

#Garibi Hatao
Translation: It means “Eradicate Poverty”
By Whom: Indira Gandhi in 1971

1971 General elections were the fifth to the Lok Sabha. The Congress was campaigning on the slogan of “Garibi Hatao” which became a powerful weapon designed to give Indira Gandhi an independent national support, based on rural and urban poor. This allowed her to attract votes from both the rural and urban class population. This slogan became the iconic motto of the Indian National Congress and it made her the greatest mass leader of the last century. After the campaigning, she returned in Parliament with 352 seats which was a marked improvement from the party’s poor show of 283 in the previous polls.

#Indira Hatao Desh Bachao
Translation: It means “Remove Indira, Save the nation”
By Whom: Jayaprakash Narayan in 1977

The story goes back to the state of Emergency in India, dated 25th June 1975 to 21st March 1977 (a 21 month period), when President Fakhruddin Ali Ahmed, upon advice by Prime Minister Indira Gandhi, declared a state of emergency under Article 352 of the Constitution of India. Indira Gandhi effectively bestowed on her the power to rule by decree, suspending elections and civil liberties. This was a dramatic turn in the Indian political affairs. The democracy was brought to a grinding halt and all the fundamental rights and legal remedies protected by the Constitution of The Republic of India were suspended. Indira Gandhi tried to defend the emergency on the grounds that she was trying to protect the State and the Indian people. Nevertheless, her emergency rule faced intense criticism when Janata leaders assailed Indira for ruling as a dictator and endangering human rights and democracy in India. Janata’s campaign evoked memories of India’s freedom struggle against British rule. This issue became the leading campaign for the Janata party, drawing great masses of people in rallies across the country. Jayaprakash Narayan coined the slogan “Indira Hatao Desh Bachao” putting his message loud and resonating during the campaign. The 1977 election drew a turnout of 60% from an electorate of more than 320 million. On 23 March, it was announced that the Janata party had won a sweeping victory, securing 43.2% of the popular vote and 271 seats.

#Ek Sherni Sau Langur Chikmagalur Chikmagalur
Translation: It means “One tigress and a hundred monkeys, Chikmagalur it is!”
By Whom: Congressman-poet Srikant Verma in 1978 or Devraj Urs, for Indira Gandhi’s by-election in 1978.

When Janata party defeated Indira Gandhi in 1977 elections, she fought them with aggressive contempt. She even challenged her enemies to imprison her but the same leaders whom she had jailed during the emergency, did not have the courage to jail her for abusing the Constitution. In 1978, she contested the Chikmagalur by election and there was a surprise win. Then the slogan “Ek sherni sau langoor, Chikmagalur bhai Chikmagalur (One tigress and a hundred monkeys, Chikmagalur, brothers, it is!)” which was a creation of Congressman-poet Srikant Verma, did the rounds to mock the opposition.

#Jab Tak Suraj Chand Rahega Indira Tera Naam Rahega
Translation: It means “Indira’s name will live as long as the sun and moon live. Long live Indira Gandhi!”
By Whom: 1984 elections after Mrs Gandhi’s assassination

On October 31, 1984 saw a gruesome incident when Prime Minister Indira Gandhi was assassinated at her residence by her own security personnel. It was in the early morning of October 31 that Indira Gandhi was preparing herself for an interview to a foreign TV channel at her residence at 1 Safdarjang Road and walking towards 1 Akbar Road, her office. As soon as she reached the gates of 1 Akbar Road, the guards at duty, Satwant Singh and Beant Singh, fired on her.
This incident unleashed a tense atmosphere against the Sikh community in India. There was bloodshed on the streets where the Sikh community was made the victim of brutal attacks. Children became orphans, women became widows and parents saw their children being burnt in front of them. Slogans like “Jab Tak Suraj Chand Rahega Indira Tera Naam Rahega” and ‘khoon ka badla khoon se lenge’ was being aired on the radio depicting the people’s mood and what followed was a dark period for the Indian democracy.

#Bari Bari Sabki Bari Abki Bari Atal Behari
Translation: It means “Everybody will get their chance turn by turn. Now this is the time for Atal Behari”
By Whom: This was coined for general elections in 1996 in which BJP came to power for the first time under the leadership of A B Vajpayee

In the 1996 general elections, Atal Behari Vajpayee had contested from the BJP for the prime ministership against PV Narasimha Rao from Congress who had already served as the prime minister of India from 21 June 1991 till 1996. During Rao’s rule the nation saw major scandals breaking, violence had cropped up and ethnic tensions boiled over in Punjab province. As a result of scandals, the Rao government lost the 1996 elections to AB Vajpayee and for the first time, India was led by a BJP leader for a 13 day rule.
The BJP made the 1996 elections as a personality oriented poll campaign and made it as a Vajpayee-Rao election rather than a Congress-BJP election. They promoted Vajpayee by calling out the slogan “Bari Bari Sabki Bari Abki Bari Atal Behari”. This campaign made a deep impact as he was well liked and respected by all leaders across the political spectrum as his name was the only untainted one. Vajpayee with his liberal moderate approach and consensual approach was the best card with which the party could counter the Rao factor, which it did eventually.

#Jancha Parka Khara
Translation: It means “Tried, Tested, Trusted”
By Whom: Coined by BJP which reinstated Atal Bihari Vajpayee as PM for the second time in 1999

Atal Behari Vajpayee ruled for 13 months from 1998 to 1999 and again contested for elections in 1999 against Sonia Gandhi. The BJP led a campaign staging Vajpayee’s giant size photograph with the Slogan “Jancha, Parkha, Khara” “(Tried, Tested, Trusted) to gain votes of the people. The Bharatiya Janata Party, in its enthusiasm had pinned the Congress on corruption issues and had found its way by winning 303 seats out of the 543 seats in the Lok Sabha. On 13 October 1999, Atal Bihari Vajpayee took oath as Prime Minister of India for the third time.

#Congress Ka Haath Aam Aadmi ke Saath
Translation: It means “The hand of congress is with the common man”

Through the 2004 elections, the Congress came out with a manifesto theme of “Congress ka haath aam aadmi ke saath.” Party’s main thrust was on six main points: social harmony, employment, rural development, economic development, women’s empowerment and equal opportunities for all. This motion had given a fresh face to the party and new hopes to the people. Congress said it was not just an election, where one party is pitted against another. It is a clash of sharply competing values, of diametrically opposed ideologies, the manifesto said. One of the main changes in the manifesto is the promise to bring detailed action plan, if the Congress is promoted to power. The manifesto is only the beginning. A detailed note will be released if the Congress is voted to power. This worked wonders for Congress and they won the elections. Suddenly then Congress President Sonia Gandhi surprised observers by declining to become the new prime minister, instead asking former Finance Minister Manmohan Singh, a respected economist, to head the new government. Singh had previously served in the Congress government of Prime Minister Narasimha Rao in the early 1990s, where he was seen as one of the architects of India’s first economic liberalization plan, which staved off an impending national monetary crisis.

#India Shining
Translation: It means “Shining India”
By Whom: Prathap Suthan (Advertising firm Grey Worldwide)

India Shining was a marketing slogan referring to the overall feeling of economic optimism in India in 2004. The slogan was popularized by the then-ruling Bharatiya Janata Party (BJP) for the 2004 Indian general elections.The slogan initially developed as part of an Indian government campaign intended to promote India internationally. Advertising firm Grey Worldwide won the campaign account in 2003; the slogan and the associated campaign was developed by national creative director Prathap Suthan, in consultation with Finance Minister Jaswant Singh. The government spent an estimated $20 million USD of government funds on national television advertisements and newspaper ads featuring the “India Shining” slogan. There has been controversy over the India Shining advertisements as whether the governments, States or Centre are not permitted to use taxpayer’s money to promote any political gain. The BJP government had spent an approximate cost of Rs. 500 crores for the advertisements campaign during 2004 Parliament elections. The slogan was then used as a central theme in the BJP’s campaign for the 2004-05 national elections, a move criticized by the BJP’s political opponents, who felt that public money was being used for partisan purposes.

#Jaat par na pat par, mohar lagegi haath par
Translation: It means “Our vote will not be guided by caste or creed, but will go to on the hand symbol (Indira-ji)”
By Whom: 1996 elections by P V Narasimha Rao

Narasimha Rao’s rally in Rae Bareilly on 20 March 1996 had a remarkable slogan, ‘Jat par na pat par, mohar lagegi haath par.’ This was challenged by the opposition’s A B Vajpayee (BJP) Bari Bari Sab Ki Bari Abki Bari Atal Behari where PV Narasimha Rao was defeated by Vajpayee.

#Jana Sangh ko vote do, bidi peena chod do; Bidi mein tambaku hai, Congress-wala daku hai
Translation: It means “Vote for Jan Sangh, stop smoking and drinking; Bidi has tobacco, Congressmen are dacoits”
By Whom: Coined by Jan Sangh for political campaign during 1967 General elections

It was the fourth general elections of the Lok Sabha and the state assemblies, held in February 1967. Because of the death of two most respected leaders – Jawaharlal Nehru (1964) & Lal Bahadur Shastri (1966), Congress had lost its sheen of good character in the eyes of the general public. More so because of the corrupt and lavish lifestyle of many of the Congress leaders. And the elections of 1967 was an acknowledgement of the changing moods of the population towards Congress. Jana Sangh party was in the opposition and they found a chance to address their strength against the flickering position of the Congress by highlighting the negative side of Congress. They composed the slogan “Jana Sangh ko vote do, bidi peena chod do; Bidi mein tambaku hai, Congress-wala daku hai”.
Resultantly, Congress which till now had never won less than 73 per cent of the seats in Parliament, for the first time, it lost nearly 60 seats in the Lower House, managing to win 283 seats where 261 seats were needed for a majority. Indira Gandhi who was elected to the Lok Sabha from Rai Bareili constituency, was sworn in as the Prime Minister in 1967.

#Ma, Mati Manush
Translation: It means “Mother, Motherland, and People”
By Whom: Mamata Banerjee during 2009 General election

Ma Mati Manush is a Bengali political slogan, coined by All India Trinamool Congress chief and current Chief Minister of West Bengal Mamata Banerjee. During the 2009 General elections, this slogan became very popular in West Bengal and since then it has been widely used by Trinamool Congress in almost all of their political and election campaigns. Later, Mamata Banerjee wrote a book in Bengali with the same title. Multiple Bengali theatre groups produced dramas with this slogan in the title. A song was also recorded, with the same title, to glorify the theme. According to a report published in June 2011, it was one of the six most popular political slogan of India at that time.

Please share in the comments section if you feel any important political slogan of India has been missed out and feel free to share your views either in the comments section or mail us at .

Kriti Sarda
Team Netapedia

The Special Status to States

Orissa, West Bengal, Bihar, Tamil Nadu are racing for the special status as if it were a trophy to felicitate achievements. Ironically, to achieve special status, a state has to show itself in poor light. To demand the special status for his state Bihar chief minister Nitish Kumar went a step ahead and conducted Adhikar rally on 17th March, 2013 in New Delhi. As the race is getting intense among the states to gain special status, the matter has fallen into political entanglements making it vulnerable to be questioned on its credibility.

We at Netapedia will put forward all the possible details to scrutinize through the lens:


The concept of a special category state was first introduced in 1969. The 5th Finance Commission decided to provide certain disadvantaged states with preferential treatment in the form of central assistance and tax breaks. Initially three states Assam, Nagaland and Jammu & Kashmir were granted special status but since then eight more have been included Arunachal Pradesh, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Sikkim, Tripura and Uttarakhand.

Conditions to categorize states for special status :

The special status is given to certain states because of their inherent features; like they might have a low resource base and cannot mobilize resources for development. Some of the features required for special status are:

(i) hilly and difficult terrain;

(ii) low population density or sizable share of tribal population;

(iii) strategic location along borders with neighboring countries;

(iv) economic and infrastructural backwardness; and

(v) non-viable nature of state finances.

Who gets to decide to grant the status:

The decision to grant special category status lies with the National Development Council, composed of the Prime Minister, Union Ministers, Chief Ministers and members of the Planning Commission, who guide and review the work of the Planning Commission. Since this has to deal with funds transfer from Centre to state, the two bodies involved at the core are Planning Commission and Finance Commission. Below is an interesting split up of their respective roles and brief calculations that is done by them.

Planning Commission and Special Category

The Planning Commission allocates funds to states through central assistance for state plans. Central assistance can be broadly split into three components:

Normal Central Assistance (NCA)

Additional Central Assistance (ACA)

Special Central Assistance

NCA, the main assistance for state plans, is split to favour special category states: the 11 states get 30% of the total assistance while the other states share the remaining 70%. The 12th Finance Commission recommended that the Centre give only grants, and leave it to the states to raise loans as they wanted. Since then, the 90% grants: 10% loans formula for special-category states is restricted to centrally-sponsored schemes and external aid. For general category states, external aid is passed on in the exact mixture of loan and grants in which it is received at the Centre. And for them, in the case of centrally-sponsored schemes, only 70% of the central funding is given as grant.

Allocation between non special category states is determined by the Gadgil-Mukherjee formula which was finally revised in 2000. Gadgil formula was formulated with the formulation of the fourth five-year plan for the distribution of plan transfers amongst the states. It was named after the then (1969) deputy chairman of the Planning Commission Dr. D R Gadgil. The central assistance provided for in the first three plans and annual plans of 1966-1969 lacked objectivity in its formulation and did not lead to equal and balanced growth in the states. The National Development Council (NDC) meeting held in October 11, 1990; discussed and approved a New Revised formula. This formula came to be popularly known as Gadgil-Mukherjee formula after the name of the then (1990) deputy chairman of Planning commission Dr. Pranab Mukherjee for determining the allocation of central assistance for state plans in India.The new revised formula as approved by NDC is given in the following table. Criteria for inter-state allocation of Plan Assistance

Criteria Weight (%)
Population 60
Per Capita Income 25
Fiscal Management 7.5
Special Problems 7.5
Total 100

Special category states also receive specific assistance addressing features like hill areas, tribal sub-plans and border areas. Beyond additional plan resources, special category states can enjoy concessions in excise and customs duties, income tax rates and corporate tax rates as determined by the government. The Planning Commission also allocates funds for ACA (assistance for externally aided projects and other specific project) and funds for Centrally Sponsored Schemes (CSS). State-wise allocation of both ACA and CSS funds are prescribed by the centre.

The Finance Commission

The Planning Commission allocations can be important for states, especially for the functioning of certain schemes, but the most significant Centre-state transfer is the distribution of central tax revenues among states and this is done by the Finance Commission. Functions of the Finance Commission can be explicitly stated as: Distribution of net proceeds of taxes between Centre and the States, to be divided as per their respective contributions to the taxes.The Finance Commission decides the actual distribution and the current Finance Commission have set aside 32.5% of central tax revenue for states. In addition, it recommends the principles governing non-plan grants and loans to states. Examples of grants would include funds for disaster relief, maintenance of roads and other state-specific requests. Unlike the Planning Commission, the Finance Commission does not distinguish between special and non special category states in its allocation.

What benefits does a state enjoy on getting the special status:

As per Gadgil formula, a special category state gets:
– Preferential treatment in federal assistance and tax breaks
– Significant excise duty concessions
– Thus, these states attract large number of industrial units to establish manufacturing facilities within their territory leading to their economy flourishing
– The special category states do not have a hard budget constraint as the central transfer is high
– These states avail themselves of the benefit of debt swapping and debt relief schemes (through the enactment of Fiscal Responsibility and Budget Management Act) which facilitate reduction of average annual rate of interest
– Significant 30% of the Centre’s gross budget goes to the Special category states
– In centrally sponsored schemes and external aid special category states get it in the ratio of 90% grants and 10% loans. For the rest of the states as per the recommendations of the 12th Finance Commission, in case of centrally sponsored schemes only 70% central funding is there in the form of grant. The rest of the states receive external aid in the exact ratio (of grants and loans) in which it is received by the Center.

Now let us look at the various perspective of ministers; some of whom are favoring and some of them are against granting special status to Bihar:

Presently the Inter-ministerial panel has been denying special status to Bihar on two grounds- the first is that it is not a hill state and the second its population density is not less.
Chief Minister Nitish Kumar has been fighting for the rights of his state on the grounds of electricity consumption which is lowest in the country. Electricity being the backbone for development of any state and more power consumption indicates more prosperity, then Bihar lags far behind.

On analyzing Bihar’s condition, the state has improved to its true word under Nitish Kumar when he came to power in 2005. The Bihar model of development is now gaining followers. For an instance J&K inspector general of police wanted to know Bihar’s model of police investigation and innovations in criminal investigations. Earlier, the Bihar police with a skeleton staff of largely unmotivated and poorly trained officers lacked the ability to address these challenges and now Bihar’s police force model of scientific investigations and speedy trials are being adopted by india’s top performing states. In Bihar a new crime fighting model was adopted in 2006 and since then the number of murders has dropped by 13 percent, robberies have declined by 46 percent and kidnappings for ransom have dropped by 65 percent, according to government figures. Since 2006, 12,861 criminals have been sentenced to life in prison, while 33,588 others have been sentenced for serious crimes, with a total of 80,199 convictions registered overall. In the years before 2006, conviction rates were never even compiled.

Having fed the audience with such data on criminal cases we intend to drive home the point that the law and order of Bihar has drastically changed. People who once migrated from this state in search of safety and job opportunities are returning home. Earlier because of lack of robust private sector in Bihar, the condition of infrastructure was poor in state. Thanks to high external investment levels and human and financial capital flight that people now are getting to see leading clothing brands and fine restaurant chains in huge malls. In the past five years, Bihar has been on a high growth path, consistently recording double-digit rate: 12% in 2008-09; 11% (2010-11) and 13% (2011-12). The only exception was 2009-10 when the state’s GDP grew by a modest 7.09%.

However, granting special category status to Bihar would mean Nitish Kumar undermining his own achievements. Bihar has improved over the past six years economically due to good governance and proper law and order situation. By rallying for the special state status Nitish Kumar is subverting his own political accomplishments is a sad move to see. Also on taking a broader look, if Bihar translates political power into fiscal benefits, then other state satraps will be similarly empowered. West Bengal’s Mamata Banerjee and Tamil Nadu’s Jayalalithaa have already made similar demands. Clearly, Mr Kumar and the Centre need to meet each other halfway. The Centre must recognise that Bihar has been hard done by in terms of investment, and somehow find the resources to correct that. On the other hand, instead of sticking upto his single-point demand, Mr Kumar could think of carving other ways to ensure that the Centre gives Bihar the assistance it needs and not just focus on the term ‘special status’.

Recently much to Nitish Kumar’s delight, in the Budget speech 2013, Chidambaram proposed to evolve new criteria for granting special status to states and reflect them in future planning and devolution of funds. Mr. Chidambaram is of the view that the present criteria for determining backwardness are based on terrain, density of population and length of international borders. He suggested it may be more relevant to use a measure like the distance of the state from the national average under criteria such as per capita income, literacy and other human development indicators. Kumar who was evidently all praises for the Finance Minister had opened doors for media to speculate about his attraction towards the UPA government and highlighted his sour terms with the NDA on promoting Narendra Modi as the prime ministerial candidate 2014. This has put Kumar in a critical state where JDU’s alliance would matter heavily in which UPA and BJP are on either side of the balance. The final decision is yet to be made and we have to see if the decision will be a victory of political considerations or of righteous judgement.

We would like to hear what you have to say about the Special Status to States in India!! Please leave your comments here or mail us at

Kriti Sarda
Team Netapedia

The Marines Saga and the India-Italy relations

The two Italian marines (Massimilano Latorre and Salvatore Girone), charged with killing 2 Indian fishermen (Ajesh Binki and Valentine), have returned back to India, thus helping in easing the diplomatic relations a bit. The unfortunate incident took place on February 15, 2012 when the marines part of the military detachment protecting the oil tanker MV Enrica Lexie fired at the fishing trawler named St. Antony, in which the fishermen were travelling.
Let us have a look at the India-Italy relations prevalent before the incident, overall chronology of events of the incident and how this has affected India-Italy relations.

India-Italy Relations Over the Years

These two ancient civilizations have known, interacted and traded with each other for over 2000 years. Political relations between the two countries were established in 1947. From then there have been 8 visits by the President / the Prime Minister of India to Italy and 5 visits to India by the Italian President /Prime Minister.
India and Italy enjoy strong economic relations. Italy is among India’s top 5 trading partners in the EU and is the 12th largest investor in India. The total bilateral trade in 2011-12 was worth Rs 702.53 billion (at the current rate of conversion). Several Italian companies and six Italian banks are active in India. Similarly many Indian companies operate in Italy. The Joint Economic Commission is an institutional dialogue chaired by the respective Commerce Ministers of both countries. Under the JEC, there are Joint Working Groups in the following areas: Infrastructure, Tourism, Railways, Food Processing, Renewable Energy, Information Technology and Agriculture.
An agreement for cultural cooperation exists from 1976 and an agreement for science and technology cooperation exists from 1978.

The Chronology

February 15, 2012: The incident took place within the Indian Contiguous Zone (Contiguous Zone is a band from 12 to 24 nautical miles of the coast of a country) around 20.5 nautical miles of the coast of Kerala. Enrica Lexie continued sailing for another 3 hours before it was intercepted by The Indian Coast Guard and forced to proceed and anchor at Kochi. Although it is accepted procedure to report piracy events or suspicious activities immediately to Maritime Rescue Coordination Centre the ship continued sailing on its route to Egypt without informing.

February 16, 2012: The Ministry of External Affairs, India summoned the Italian ambassador (Giacomo Sanfelice di Monteforte) in Delhi and lodged an official protest.

February 21, 2012: The family of the fisherman Valentine filed a petition in the Kerala high court seeking Rs 1 00 00 000 in monetary relief from the Italian shipping company which owns Erica Lexie for the children’s education and future requirements.

February 23, 2012: The two sisters of fisherman Ajesh Binki filed a petition in the Kerala High Court seeking monetary relief of Rs 2 00 00 000.

February 27, 2012: The owner of the fishing trawler St Antony filed a petition in the Kerala high court for Rs 72 00 000 for the damage the boat suffered as a result of the shooting.

May 2, 2012: The Italy Government clarified to the Supreme Court that the settlement it had arrived with the victims’ families on April 24, 2012 was not a monetary compensation but a goodwill gesture and could be set aside by the Court.

May 18, 2012: A charge sheet for murder was filed by the Special Investigation Team against the two Italian Marines before the Kollam Chief Judicial Magistrate Court.

August 30, 2012: The Additional Solicitor General of India told the Supreme Court of India that the two marines did not enjoy and diplomatic immunity and they are liable to be prosecuted as per Indian penal laws.

September 4, 2012: The Supreme Court of India heard a petition filed on behalf of the Italian marines, seeking quashing of court proceedings in Kerala as they were armed personnel and enjoy sovereign immunity. The Supreme Court reserved its verdict.

November, 2012: The Indo-Italian prisoner exchange treaty was ratified allowing sentenced prisoners to serve their sentences in their home countries.

December 14, 2012: The Italian Foreign Ministry summoned the Indian ambassador to express their profound disappointment at the fact that the Supreme Court had reserved its verdict. The Indian envoy explained that the matter is being looked by the Indian judiciary and everyone will have to wait till its verdict comes.

December 15, 2012: The Italian Defense Minister Giampaolo di Paola spoke to the media in Kochi. He acknowledged that they respect the judicial process underway with the Supreme Court of India and he also urged the Kerala High Court to allow the marines to celebrate Christmas in Italy. This was opposed by the local community and the State Government of Kerala.

December 20, 2012: The Kerala High Court relaxed the bail conditions for the two Italian marines and allowed them to travel to Italy for the 2 week Christmas vacation period. The High Court required Italy to pay guarantees before taking the custody of the marines and was responsible for returning them back before January 10, 2013.

January 3, 2013: The marines were interviewed by Prosecutor Cennicola and her colleague Giancalo Capaldo for 5 hours in Italy.

January 4, 2013: The marines flew back to the Kochi airport, appeared in front of the court and surrendered their passports to the court. The court gave directions to release the Rs 6 00 00 000 bail amount and asked the marines to appear before the court on January 15, 2013.

January 18, 2013: The Supreme Court of India dismissed the Italian Government’s plea that India had no jurisdiction of the case. The Supreme Court ordered that the two marines be tried in accordance with Indian maritime laws and UNCLOS (United Nations Convention on the Law of the Sea), 1982 and a special federal court should be setup for this purpose. It also ruled that the marines be accommodated at a place within the control of the Italian embassy in New Delhi.

February 22, 2013: As a good will gesture the Supreme Court allowed the two marines to return to Italy for a period of 4 weeks to be with their families and to cast their votes. The permit was granted after the Italian ambassador to India (Daniele Mancini) submitted a sworn affidavit that the marines would be returned to face the Indian courts.

March 11, 2013: The Italian foreign ministry said that the two marines will not return to India. This was condemned by the Prime Minister of India, Manmohan Singh and he said that Italy will face the consequences. The Government of India initiated the process of downgrading the diplomatic ties with Italy and decided not to post the ambassador designate to Rome following the announcement from the Italian foreign ministry. The Government of India also decided to review the entire relations with Italy (diplomatic, trade and defense).

March 14, 2013: The Supreme Court of India restrained the Italian ambassador Daniele Mancini from leaving India till March 18, 2013.

March 18, 2013: The Supreme Court extended its restraining order issued on March 14, 2013 to April 2, 2013. The Supreme Court also said that by getting involved in the case, the Italian ambassador had forfeited his diplomatic immunity.

March 21, 2013: The Italian Government reversed its decision and sent back the marines to India. The Italian Prime Minister Mario Monti said that their Government decided to honor the commitment which was given at the time the leave was granted to the marines.

March 26, 2013: Giulio Terzi, the foreign minister of the care taker Italy government submitted his resignation, citing his opposition to the Italy Government’s decision of the sending back the marines.

March 27, 2013: The Italian Prime Minister Mario Monti conveyed that the decision to send back the 2 marines was taken keeping in mind the safety and dignity of the 2 marines and the Italians staying in India. He added that Italy could have been isolated in the international community and there was real possibility of collective sanctions from the BRICS nations as the 5 nations were meeting in the BRICS Summit in South Africa. (BRICS is an association of emerging national economies – Brazil, Russia, India, China, and South Africa)

March 30, 2013: The Indian Foreign Minister categorically rejected the claims of subterfuge made by former Italian Foreign Minister Giulio Terzi and Deputy Foreign Minister Staffan de Mistura that Erica Lexie, the Italian ship had been lured into Indian waters by deception and he said no proofs regarding the same have been submitted to the Supreme Court of India.

April 1, 2013: The elite National Investigation Agency was assigned to investigate the killing of the two Indian fishermen by the two Italian marines by the Ministry of Home Affairs, India. The NIA will investigate the case from the very beginning.

Effects on India-Italy relations

This diplomatic tussle between the two countries could have significant impact on the relations between the two.

The investigations going on in the Choppergate scandal (relating to the sale of 12 VVIP AgustaWestland AW101 helicopters by the Italian conglomerate Finmeccanica to the Government of India) could be hampered due to worsening of government to government ties. The Italian economy is going through a turbulent phase and needs economies like India to invest and continue to grow. India’s bilateral trade and investment agreement with the European Union could be affected by the ruptured ties with Italy.

We hope that the ties between the two countries continue to be robust and cordial and that judgment is delivered in a timely manner, in a way that everyone involved feels that the right judgment has been made.

We look forward to your opinions on the whole chain of events. Please mail in to us at or write your comments below.

The Annual Budget of India

It’s February and the Indians are anxiously waiting to hear the Annual Financial Statement – The Budget. Expectations and hopes come from all the corners, be it the salaried individual, the housewife, the student and of course corporate India, each one of whom have something or the other to look forward to as they themselves will bear the consequences. Speculation is rife about the measures to be adopted, policies to be introduced for an economically challenged nation which is facing the heat of inflation, high account deficit, a wobbly GDP growth, tight monetary policy and the mount of external debt. This edition of Netapedia will let out a few basic facts, mostly forgotten, about the Annual Financial statement and what to expect from the Budget 2013-2014.

General Basics

A Budget is a systematic plan for the expenditure of a resource, such as money or time, during a given period. Budget statement is laid before both the Houses of Parliament by the Finance Minister. This statement takes into account a period of one financial year. The financial year commences in India on 1st April each year. The statement embodies the estimated receipts and expenditure of the Government of India for the financial year. In India, the Budget is presented to Parliament on such date as is fixed by the President.


The Budget speech of the Finance Minister is usually in two parts. Part A deals with general economic survey of the country while Part B relates to taxation proposals. General Budget was earlier being presented at 5 P.M. on the last working day of February, i.e. 28th February, but since 1999 the General Budget is being presented at 11 A.M. on the 28th of February, i.e. about a month before the commencement of the financial year except in the year when General Elections to Lok Sabha are held. In an election year, Budget may be presented twice—first to secure Vote on Account for a few months and later in full.

What are the various stages of the Annual Budget ?


Along with the ‘Annual Financial Statement’ Government presents the following documents:
A. Annual Financial Statement (AFS)
B. Demand for Grants (DG)
C. Appropriation Bill
D. Finance Bill
E. Memorandum Explaining the Provisions in the Finance Bill, 2011
F. Macro-economic framework for the relevant financial year
G. Fiscal Policy Strategy Statement for the financial year
H. Medium Term Fiscal Policy Statement
I. Expenditure Budget Volume -1
J. Expenditure Budget Volume -2
K. Receipts Budget


The budget is an extensive project and it becomes a lackluster when delivered at length in the parliament. The ministers make use of varied popular styles to drive home a point which might involve excerpts ranging from Shakespeare prose to Bollywood style.

For instance, Pranab Mukherjee during his tenure in Congress party as Finance Minister has presented the last four budgets. His favorite authority to quote has been of Kautilya, the great Indian pioneer of economics and politics who was the prime minister in the court of King Chandragupta Maurya in the fourth century BC. Mukherjee quoted Kautilya in his first budget speech in 1984 and as recently as in 2010. One of his quotable quotes is:
“Thus, a wise Collector General shall conduct the work of revenue collection … in a manner that production and consumption should not be injuriously affected … financial prosperity depends on public prosperity, abundance of harvest and prosperity of commerce among other things”.
In his last stint as finance minister in 2012, Mukherjee quoted Hamlet:
“I must be cruel only to be kind”.

Also, Finance Minister P. Chidambaram likes to quote from ancient Indian texts, his favorite being the weaver-philosopher Tiruvalluvar who lived in his state of Tamil Nadu some 2,000 years ago.
“As always, I turned to my muse, Saint Tiruvalluvar, for guidance and reassurance. 2,000 years ago he set the benchmark for good governance in the following immortal words: Kodai ali esngol kudi ombal nangum, Udaiyanam vendharkku oli. (Generous grants, compassion, righteous rule and succour to the downtrodden are the hallmarks of good governance)”.

Even the usually quiet Prime Minister Manmohan Singh is known to quote Urdu couplets on important occasions. In 1991, he reaffirmed his faith in a financially strained nation by invoking the poet Iqbal, who chose to live in Pakistan after the partition of India.
“Yunaan-o-Misr-o-Roma, sab mitt gaye jahaan say/Ab tak magar hai baqi, naam-o-nishan hamara (Greece, Egypt, Rome have vanished all/But our name and sign live on)”.

Key Features of Budget 2012-2013

• India’s GDP growth in 2012-13 expected to be 7.6 per cent +/- 0.25 per cent

• Endeavour to scale up and roll out Aadhaar enabled payments for various government schemes in atleast 50 districts within next 6 months

• DTC Bill to be enacted at the earliest after expeditious examination of the report of the Parliamentary Standing Committee

• Government has further evolved its approach to divestment of Central Public Sector Enterprises by allowing them a level playing field vis-à-vis the private sector in respect of practices like buy backs and listing at stock exchanges

• Rajiv Gandhi Equity Saving Scheme to allow for income tax deduction of 50 percent to new retail investors, who invest upto Rs 50,000 directly in equities and whose annual income is below Rs 10 lakh to be introduced. The scheme will have a lock-in period of 3 years

• During Twelfth Plan period, investment in infrastructure to go up to Rs 50 lakh crore with half of this, expected from private sector

Expected Key Features of Budget 2013-2014

Fiscal Consolidation

Fiscal consolidation is a policy intended to reduce deficits and the accumulation of debt. It is expected to remain priority in the budget so as to provide headroom for monetary policy easing, and to provide boost to investment in infrastructure sector to revive the investment cycle in the economy. Mr Chidambaram has promised to achieve a fiscal deficit of 5.3% of GDP this fiscal year and 4.8% in 2013-14, targets he calls ‘red lines’ that cannot be crossed. To achieve this target the FM is planning to cut the public spending target for fiscal 2013-14 by up to 10% from this year’s original target, in what would be the most austere Budget unveiled in recent history as he tries to avert a sovereign credit downgrade.

Tax Structure

The Goods and Services Tax (GST) is a value added tax to be implemented in India, the decision on which is pending. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. It is aimed at being comprehensive for most goods and services. India is a federal republic, and the GST will thus be implemented concurrently by the central and state governments as the Central GST and the State GST respectively. From the year 2005-06 the government announced the implementation of GST in five years but the reform has remained elusive primarily due to lack of unanimity on autonomy, compensation for the loss of revenues on abolition of the CST (Central sales tax) and the GST design. Keeping in view the prime objective of GST — to avoid a cascading effect of taxes — issues relating to artificial restrictions on input/input services credits need to be addressed to bring in consistency with the GST. All major sectors will keenly eye clarity on Goods and Services Tax in the upcoming budget.

Another theme that dominated the pre-budget debate was super rich tax. To augment the tax collection, the government may impose a 10 per cent surcharge on the super-rich which has bracketed individuals earning an income of over Rs 20 lakh, who account for 1 per cent of tax payers, but pay 63 per cent of total income tax. This will likely translate into a 17 per cent year-on-year increase in total personal income tax collections. As the declaration of Budget draws near, the opposition to such a tax is getting louder. These officials have raised concern that such a measure is likely to stymie the already weak business sentiment in the country.

Life insurance policy holders can look forward to more tax concessions in Budget 2013 as the finance ministry is considering a proposal to do away with service tax on first premium and create separate exemption limit for pension schemes.

Former Finance Minister Pranab Mukherjee created a flutter among corporates last year when he introduced the contentious General Anti-Avoidance Rules, or GAAR, which sought to target tax evaders, partly by stopping Indian companies and investors from routing investments through tax havens for the sole purpose of avoiding taxes. Mr Chidambaram, who announced the postponement of GAAR up to 2016 in January, may further clarify the government’s stance in his Budget speech.

Food Security Bill

This budget will be P Chidambaram’s eighth and the United Progressive Alliance government’s last budget before the nation goes to the polls in 2014. Traditionally, an election-eve budget tends to be a please-all accounting exercise, but UPA is in the backdrop of the high fiscal deficit and even higher current account deficit, slowing growth and persistently high retail inflation, there is very little room for populist measures. But the chances of such an eventuality cannot be dismissed. The Congress Chairperson Sonia Gandhi ‘s dream legislation is expected to come up before the parliament in this Budget session is that of Food Security Bill.
Food Security Bill aims at providing subsidized food to 67% of the overall population and excluding the 33% at the gargantuan annual cost of Rs.1.2 lakh crore. Who will constitute the 67% of the overall population is yet to be decided by the Planning Commission. It is yet to give the guidelines on how this inclusion-exclusion to be done. It will be up to the state to decide on the criteria of the beneficiaries. The Bill is expected to be introduced in the last week of the first half of the budget session and to be passed in the second half.
The Congress obviously expects to reap a huge benefit in the next General Elections if the scheme can at all be implemented given its enormous logistical problems of procuring, storing, transporting and distributing such massive amounts of foodgrains.


Understandably, Finance Minister P Chidambaram is a worried man. The fate of India’s economy is at stake as he is about to present UPA’S last full Budget before next General Election. It is the battle for perception and politics that is, however, forcing the agenda for this session. After being accused of inactivity and apathy during the worst of anti-graft agitation and the Delhi gang-rape protests, the government has woken up to feverish activity, spurred on by the fact that the general elections are just a year away. With the implementation of Foreign Direct Investment and Direct Cash Transfer Scheme, the government has struck the right chord at the right time provided it functions smoothly. Again, with the rollout of Budget on 28th February, the government has a crucial and probably the last chance before general elections, to win people’s trust on the economic front. It should be able to hit the bull’s eye. We are watching!

We would like to hear what you have to say about the Annual Budget of India!! Please leave your comments here or mail us at

The 64th Republic Day of India

As we have just set up the New Year calendar of 2013 neatly on the tabletop, it’s already the time of the year when we look forward to celebrate the 64th Republic Day of India. Of course, the routine celebrations at the Rajpath would be the highlight of the day, but a concerned crowd would expect a meaningful speech from the President of India. With the end of an eventful year in the world of finances, business and politics it was also a year full of social turbulences causing resentment and deepening anxieties in the people. This year will seek answers, settlements, overhauling of the system, above all, a clear conscience of the gigantic political establishment.

This feature of Netapedia would take you through the pages of 2012, deduce the implications and gradually forecast 2013 through the binoculars.

The Highlights of 2012:

1. The Triumphs: In the last year, Pranab Mukherjee walked the red carpet to India’s highest office on 25th July, 2012 as he was crowned the 13th President of India. In Uttar Pradesh, Akhilesh Yadav of Samajwadi Party carried the chief ministerial baton in March 2012 who is largely seen as the game changer in UP politics. An exuberant Narendra Modi proved that he rules the hearts of Gujratis by his historical win in the Gujarat election polls for the third time in a row. When Vijay Bahuguna was sworn in as the Chief Minister of Uttarakhand on March 13, 2012 he became the first ex-high court judge to be sworn in as a Chief Minister. Prakash Singh Badal sworn in as the Chief Minister of Punjab and Virbhadra Singh as the Chief Minister of Himachal Pradesh for the fifth time. Manohar Parrikar was sworn in as the Chief Minister of the smallest state of India, Goa.

2. FDI In Retail: The government has managed to successfully navigate the most recent crisis created over allowing foreign direct investment (FDI) in multi-brand retail trade. On 7 December 2012, the Federal Government of India allowed 51% FDI in multi-brand retail subject to approvals by individual states, confronting a massive repercussion from the opposition lawmakers who had kept the Parliament paralyzed for days till the Speaker agreed to admit the motion to discuss the issue, demanding the government to roll back its decision on allowing FDI in retail. Even the Trinamool Congress pulled out of the UPA in September 2012 opposing the decision to give the green signal to FDI in multi-brand retail, reduction of subsidy in cooking gas and rise in diesel prices.

3. Hike in Fuel prices: With pressure from global rating agencies such as Fitch and Moody’s and to tackle the 5.3 percent fiscal deficit which has been looming large the prices of both petrol and diesel were raised significantly over the year. Experts had varied reactions to this move. While some were of the opinion that it will put too much pressure on the economically underprivileged sections of the society others felt that giving subsidies on the non renewable fuels is just not right for the country in the long run. It is still to be seen that whether there would be further rise in fuel prices in 2013 and what impact do these current rises have on the country!!

4. Railways Passenger Fare hikes: The railways witnessed a hike in fares after a decade. Dinesh Trivedi, who presented the railway budget proposing the hike, in March 2012 had to resign following backlash from his party. After the resignation the hike was rolled back for all except for those travelers who travelled in ac compartments. Mr Trivedi’s party finally left the UPA Government in Sep 2012. Subsequently Pawan Bansal, the current railway minister effected the across the board hike in passenger fares in Jan 2013 citing the fiscal condition of the railways as was cited by Mr Trivedi.

5. The Coalgate Scam: CAG alleged that the government should have auctioned the coal blocks to the private and public sector companies, which would have brought more money to the government coffers than the process they actually adopted of constituting a screening committee who would pass or reject proposal on the basis of a set criteria. There were both opinions and counter opinions for the CAG claim. It can be said that though the Government may not have made an actual loss of 1.86 lac crore in the grand scheme of things but there can be no denying the fact that a more transparent and stringent process should have been followed in allocating this important natural resource. (More can be read about this here

6. Aam Aadmi Party: Activist Arvind Kejriwal opened several cans of allegations against Nitin Gadkari, Robert Vadra, Salman Khurshid blaming them of being involved in corrupt malpractices. In his political feat, he launched political party in Delhi naming it Aam Aadmi Party 26 November 2012, a decision which led to a parting of ways with his mentor, Anna Hazare. The party’s vision is to realize a dream of Swaraj that Gandhiji had envisaged for a free India — where the power of governance and rights of democracy will be in the hands of the people of India.

7. Direct Cash Transfer Scheme: The Government of India pushed for its ambitious direct benefits transfer (DBT) scheme throughout 2012 rolled out in 20 districts on January1,2013 is said to be a ‘game-changer’ with regard to governance and the way the government provides subsidy to people. The mandatory pre-requisites for the beneficiaries to avail the cash transfer scheme are to have an Aadhar number and a bank account. However there are still concerns left over the full proof preparedness of the government functionaries for launching this scheme. (The details about the scheme can be read here

8. The Delhi Gang rape: The gang rape that took place in Delhi on 16 December 2012 of a 23-year-old female in a bus, shocked India and lead to public outcry against the convict. This horrific incident galvanized an entire nation into a flurry of protests and demands for justice. The victim succumbed to injuries on 29 December, 2012 in a hospital in Singapore. It has become the wakeup call for the whole society as it has thrown a socio-cultural question, questioning everything from our collective mindsets, law and order situation, safety measures etc. The government is in the process of formulating regulations to make India a safer place for women.

What to look forward to in 2013:

1. Union Budget 2013-14: As the Government begins to prepare for the upcoming elections next year, with formulating the Union budget, the FM has been instilling a lot of confidence in not just the markets but investors as well. Adding that this year’s Budget will be a responsible one, the FM is positive that next year’s fiscal deficit target will be lowered to 4.8%. While keeping a firm focus on economic revival, fiscal consolidation and boosting India’s allure as an attractive investment destination we expect P Chidambaram’s first budget (in the current government) will see a stable tax regime, more reforms, and better fiscal management in the budget for 2013-14. It is also left to be seen that whether UPA’s last budget before the 2014 elections would be a populist budget or will the Government’s primary focus be on continuing with the reforms measures it has initiated. Overall the country will be looking forward to a budget which would be able to achieve the golden double of bringing the economy back on track and being popular with the masses.

2. Assembly Elections 2013: A total of 9 states (Meghalaya, Tripura, Nagaland, Karnataka, Madhya Pradesh, Mizoram, NCT Delhi, Rajasthan, Chhattisgarh) are going to polls in 2013. The parties of these states are toiling hard, as it would be a precursor for the 2014 general elections and whosoever wins these will have stronger chance of winning the 2014 Lok Sabha elections.

3. The Prime Ministerial Candidate for 2014 elections: By the end of 2013 it will be amply clear who all will be vying for the position of the Prime Minister of this great country in the 2014 elections. Will it be the recently appointed vice president of the Congress party, the current leader of the opposition in the Lok Sabha, the current Chief Minister of Bihar, the Chief Minister who won the Gujarat Assembly Elections third time in a row, the current Finance Minister of India or someone else altogether whose name might not be making the rounds as of now, this only time will tell!

One factor which is worth a remark is the way we have stood against the odds wearing different colours of skin, caste and creed. A wave of awareness has touched upon the crowd of the country that shows we are now, a concerned lot. We care for the way we are being treated, having a better understanding of ourselves, we are empowered to make changes and to build on the areas of strength as well as identify areas where we would like to make improvements. But isn’t it for us to think why we need multi billion dollar scams, gruesome incidents to unite and why 6000 year old civilization still need shows like Satyameva Jayate!

The year 2013 will be a significant year where the vital assessment and bold resolutions are expected which would determine the India’s future for the rest of the decade. Keeping the spirits high let’s welcome this year with stronger hearts and hope to have a prosperous economy, fine governance and peaceful times.

Wishing you all a Very Happy Republic Day and let us make the largest Democracy in the world, the Democracy of our dreams!!

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The Direct Cash Transfer Scheme

The implementation of the first phase of direct cash transfer scheme is just 6 days away. The Government of India is going to launch this scheme in 51 districts in 16 states from Jan 1, 2013. It covers five of them in Andhra Pradesh and Maharashtra, four each in Himachal Pradesh and Jharkhand, three each in Karnataka, Madhya Pradesh, Rajasthan and Tripura, and two each in Haryana, Kerala and Sikkim. Electronic cash transfer system would improve targeting, reduce corruption, control expenditure, eliminate waste and facilitate reforms.
Let us go step by step to understand the nuances of direct cash transfer, to identify the attempts made by government to employ the scheme and to explore the possible road blocks to it.

What is direct cash transfer?
As the name suggests that, it is a direct transfer of money (government subsidies and other benefits) to the entitled people usually provided by the government. In India, the government in power is going to introduce the scheme to reach out to poor people directly in order to plug leakages and cut delays in transfer of subsidies to the poor. The areas that would be covered by the program include scholarships, pensions and unemployment allowances and later MNREGA and Public Distribution Schemes. It is assumed that it will help to bypass corrupt middlemen, would help in cutting down wastage, duplication. It is fundamentally being established to ease the burden of subsidies and letting the genuine beneficiaries avail the advantage of the system.

Now comes the big question of how is it being implemented?

The key to put this scheme into action is to identify the legitimate beneficiaries who mandatorily will need to have an Aadhaar and a bank account. The two government bodies responsible for issuing Aadhaar number and bank account are National Population Register (NPR) and Unique Identification Authority of India (UIDAI). The Unique Identity, Aadhaar, has already enlisted 20 crore people in its count and the number is estimated to go up to 60 crore by June 2013. The cash transfer is done directly into the beneficiary’s bank account which makes it necessary for the subject to have a bank account.

The following steps have been taken by the government to guarantee a successful implementation of the scheme:

1) An efficient Electronic Benefit Transfer (EBT) system would require the benefits transfer system compatible with the banking system, transfer of funds to the beneficiaries accounts and facilities for the drawl of the amount by the beneficiaries as per their requirement. This will not only bring in greater efficiency in the transfer of benefits but will also reduce pressure on the bank branches for dealing with these transactions, reduce the requirement of multiple accounts for various schemes and facilitate the process of financial inclusion.

2) To ensure that every beneficiary of the government scheme has a bank account, the banks must map the list of beneficiaries under every scheme, already available with the state government, with bank account details. In case the beneficiary doesn’t have a bank account, a new bank account for the family in the service area branch should be opened. Vice versa, as soon as the bank account gets opened, the beneficiary should get mapped.

3) For those who don’t have access to bank branches, they rely on ‘Banking Correspondents ‘or BC. In May 2012, the Department of Financial Services (DFS) chalked out a plan to split the country into 20 clusters for BCs. Each cluster is to be managed by one BC company, elected by a price-based auction. The function of a BC would be to pay the person who wants to withdraw money from his account in case the person is not able to access an ATM or bank. The authentication by the person would be given by a fingerprint on a micro-ATM.

4) The Central Plan Scheme Monitoring System (CPSMS) is a public financial management reforms initiative of the government of India which monitors programs in the social sector and tracks funds disbursed. It provides real time information exchange with the banks providing greater transparency and accountability to social sector. It provides a platform for schemes for making payments directly in the bank accounts of beneficiaries. Departments using CPSMS should map the details of the bank account of the beneficiary in the scheme database of the CPSMS. This should also be brought to the knowledge of the beneficiary so that she/he is aware that the benefits shall be electronically transferred to the bank account.

5) Aadhaar Payments Bridge (APB) is a repository of Aadhaar number of residents and their primary bank account number used for receiving all social security and entitlement payments from various government agencies. This is the bridge/platform that will be used for the Direct Cash Transfer. APB requires using Aadhaar number as the primary key for all entitlement payments. This would weed out all fakes and ghosts from the system and ensure that the benefits reach the intended beneficiaries. The key steps in posting payments via APB are:
• Service delivery agency that needs to make payments to its beneficiaries (such as MGNREGA wages, scholarships disbursement, old age pension etc.) provides APB File containing details of Aadhaar number, welfare scheme reference number and the amount to be paid to its bank (called sponsor bank)
• Sponsor bank adds bank IIN (Institute Identification Number provided by National Payments Corporation of India ‘NPCI’ to participant banks) to the APB file and uploads onto NPCI server
• NPCI processes uploaded files, prepares beneficiary bank files and generates settlement file. Settlement file is posted to bank accounts with RBI
• Destination banks can download the incoming files for credit processing after the settlement file has been processed

What are the challenges ?

Till now the cash transfer is done through post office and banks. But now it is about to undergo a significant expansion in the scope of direct cash transfer. A change of this magnitude might have challenges which the experts have analyzed and government is yet to find a justifiable solution to it. Some of these are:

1) Will everyone receive their Aadhaar number in time: In three years, the government has issued about 280 million Aadhaars, which leaves 800 million numbers to be issued before April 2014 which seems to be a tall task.
2) Issued a bank account in time: According to the deputy governor of RBI, only 40% of Indians have bank accounts. Talking about villages in particular, about 188,000 villages had banking connectivity in June 2012 whereas India has 700,000 villages. The experience with bank accounts in the 43 stage-I districts may not be an appropriate benchmark for the rest of India.
3) Will banking channel be ready in time: Currently, the banking correspondents cover only 70,000 villages which require a further 10-fold expansion. At present, BC companies are very few and even if the target is achieved it will take time to find people and train them.
4) Who actually should benefit from the Direct Cash Transfer Scheme: The last BPL census was done in 2002 and an overly optimistic estimate of the time by which the new list would be ready is mid 2013, however a realistically optimistic deadline would be Dec 2013. A major question in front of the Indian Government is that whether it should use the 2002 list or wait for the new list. If it uses the old list then money would keep going to a lot of people who should not be getting it and if it waits for the new list by leaving the BPL programs out of the scheme, then a lot of benefits for which it is originally planned will not be getting transferred. A separate issue to be tackled is how to ensure that reasonably affluent families do not make it to the BPL list as has happened in the part due to linkage of various government welfare programs to the BPL list.
5) Possible scam under its way: A September 2008 study by UK’s Overseas Development Institute had found that India has 100 million migrant workers who are mostly away from home. In some other cases, the bank transfers the subsidy to the respective accounts but fraudsters divert it to some fictitious accounts by even forging the signatures. With the entire banking system going on line, a dishonest bank employee can even access the signatures of the poor borrower. This is happening in several states.

The programme is inspired by such successful schemes existing in countries like Brazil and Mexico and cities like New York and Washington. In India too, introducing this new way of physically-delivering subsidies may seem a brilliant technological shot to end the middlemen fraud, but the government still needs to substantiate its foolproof preparedness against the trepidation it has been confronting from the masses and quite a few experts. We would love to hear from you what you feel about the direct cash transfer scheme. Please share your thoughts in the comments section below or drop in a mail to us at

The Motions in the Lok Sabha

The Speaker of the Lok Sabha had admitted the motion for discussing the issue of allowing FDI in multi brand retail last week, under a rule that entails voting. As a result of this the 4 day logjam in the Lok Sabha had ended and the opposition parties had guaranteed smooth functioning of the Winter Session. The discussion on the motion started yesterday (Dec 4th) and the House will vote on Dec 5th after which it will be known whether the motion has been passed or not. This will be the first such trial of strength in the 15th Lok Sabha.
At this juncture let us all have an idea of what is a motion, its categories, the various types of motions and a few historical facts related to motions.

To begin with we must all know what a motion is?

In parliamentary parlance, a motion means any formal proposal made to the House by a member for the purpose of eliciting a decision of the House. It is phrased in such a way that if adopted it will purport to express the judgment or will of the House. Any matter of importance can be the subject matter of a motion. The mover of the motion frames it in a way in which he / she wishes it to be ultimately passed by the house and on which a vote of the House can conveniently be taken.

The motions can be categorized into 3 categories
1. Substantive Motion
2. Substitute Motion
3. Subsidiary Motion

A substantive motion is a self-contained, independent proposal made in reference to a subject which the mover wishes to bring forward. All resolutions, motions for election of the Speaker and Deputy Speaker, and Motion of Thanks on the Address by the President etc are examples of substantive motions.
A substitute motion, as its name suggests, is moved in substitution of the original motion for taking into consideration a policy or situation or statement or any other matter. Amendments to substitute motions are not permissible.
Subsidiary motions depend upon or relate to other motions or follow up on some proceedings in the House. By itself it has no meaning and is not capable of stating the Decision of the House without reference to the original motion or the proceedings of the House.

There are various types of motions which are as under

1. Privilege Motion

The motion will be introduced by the opposition if a minister has mislead the house by providing wrong information.
The members of The Lok Sabha, may raise a question, involving a breach of privilege either of a member or of the Council or of a Committee with the consent of the Chairman.

2. Censure Motion

This motion can be moved only in the Lok Sabha and by the Opposition of the House. It can be moved against the Council of Ministers or an individual Minister or a group of Ministers for their failure to act or not to act or for their policy and may express regret, indignation or surprise of the House at the failure of the Minister or Ministers. The Motion should be specific and self-explanatory so as to record the reasons for the censure, precisely and briefly.

No leave of the House is required to move a Censure Motion. If the Censure Motion is passed, the Council of Ministers is bound to seek the confidence of the Lok Sabha as early as possible.

3. Call – Attention Motion

A member of The Lok Sabha after permission from The Speaker, calls the attention of the minister to any matter of ‘urgent political importance’.

4. Adjournment Motion

Adjournment Motion is the procedure for adjournment of the business of the house for the purpose of discussing a matter of urgent public importance, which can be moved with the consent of the Speaker. The Adjournment Motion, if admitted, leads to setting aside of the normal business of the House for discussing the matter mentioned in the Motion. To be in order, an adjournment motion must raise a matter of sufficient public importance to warrant interruption of normal business of the House and the question of public importance is decided on merit in each individual case. The purpose of an Adjournment Motion is to take the Government to task for a recent act of omission or commission having serious consequences. Its adoption is regarded as a sort of censure of the Government.

5. No-Day-Yet-Named Motion

If the Speaker admits notice of a motion and no date is fixed for its discussion it is called a No-Day-Yet-Named Motion and a copy of the admitted motion is forwarded to the Minister concerned with the subject matter of the motion.
Admitted notices of such motions may be placed before the Business Advisory Committee for selecting the motions for discussion in the House according to the urgency and importance of the subject-matter thereof, and allotting for the same.

6. Cut Motions

The Lok Sabha MPs have a veto power to oppose a demand in the financial bill discussed by the Government. This is an effective tool to test the strength of the government. If a cut motion is adopted by the House and the government does not have the numbers, it is obliged to resign. They are moved in the Lok Sabha only and are a part of the budgetary processes which seeks to reduce the amount of grants.
They can be broadly divided into
• Disapproval of Policy Cut: That the amount of the demand be reduced to Re.1/-representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion should be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy
• Economy Cut: The objective of the motion is to reduce the amount of die expenditure and the form of the motion is “The amount of the demand be reduced by Rupee… (a specified amount)”. Such specified amount may be either a lump sum reduction in the demand or omission or reduction of an item in the demand
• Token Cut: The objective of the motion is to ventilate a specific grievance within the sphere of responsibility of the Government of India and its form is “The amount of the demand be reduced by Rupee 100″

7. No Confidence Motion

The No Confidence Motion can be brought only in the Lok Sabha and by the Opposition. It is different from the Censure Motion in that a No Confidence Motion need not set out any grounds on which it is based. A No Confidence Motion can be moved subject to the following restrictions
– Leave of the House to move the motion has to be asked for by the member when called by the Speaker
(A leave can be granted if atleast 50 members rise in support of granting the bill)
– The member asking for leave has, before the commencement of the sitting for that day, to give to the Secretary General a written notice of the motion which he/she proposes to move

Discussion on a motion of no confidence (after the leave has been granted by the House), is not merely confined to the grounds mentioned in the notice of the motion.
There is no restriction on the moving of more than one no-confidence motion in a session, although this has not been done so far, but the second motion is admissible only if it raises new matters not covered by the discussion on the previous motion.

A motion of no-confidence is required to be taken up within 10 days from the date on which the leave to move is granted by the House. In fixing the date for the discussion of such a motion, the Speaker may ask the Leader of the House to suggest to him/her the date or dates in consultation with the leaders of various Opposition Parties or Groups. Time for discussion of the motion may be allotted by the House on the recommendation of the Business Advisory Committee or the Speaker may, after considering the State of the Business in the House, himself/herself allot a day/days for this purpose.

After the debate on the motion concludes, the Speaker forthwith puts the question necessary to determine the decision of the House on the motion.

Recent developments in the parliamentary system have clearly established that every defeat of the Government in the House does not amount to expression of lack of confidence. Unless a crucial policy issue is involved, the mere fact of a Government sponsored measure not being passed by the House is not regarded as a vote of no-confidence in the Council of Ministers and there is no obligation on the Government to resign. Government can be dismissed only by passing a direct vote of no-confidence and not otherwise.

8. Motion of Confidence

The Motion of Confidence is used by the Government to demonstrate its strength on the floor of the House. The confidence motion gets priority over the no-confidence motion even if the notices are received for both motions basically because under Rule 25, Government business has precedence over other business on days allotted for the transaction of Government business.

A few facts related to motions raised in the Lok Sabha:

In the first 14 Lok Sabhas (1952-2009), 26 motions of no confidence and 12 motions of confidence were admitted.
In the first two Lok Sabhas, no such motion was admitted. While a maximum number of six motions of no-confidence each was debated in the Third and Fourth Lok Sabhas, the maximum number of confidence motions was accounted for in the Eleventh Lok Sabha. The House discussed all the twenty-six motions of no-confidence and eleven of the twelve confidence motions.

Shri Vishwanath Pratap Singh (1990), Shr H D Deve Gowda (1997) and Shri Atal Behari Vajpayee (1999) are the three Indian Prime Ministers who have been defeated by No Confidence Motions.

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The Coal Block Allocation events, their implications and the road ahead

The recent exposure of the supposed coal gate scam by the CAG has left many people speechless and has further questioned the ever decreasing trust of the citizens on the political system since independence. There are a lot of questions in the minds of the our fellow brothers and sisters, some of which are as under
– The CAG estimates the loss to be around 1.86 lac crore which is disagreed by those in the government: Did we really suffer a loss in monetary terms of this magnitude?
– Was an attempt made by the bureaucracy of the country to move towards a process of competitive bidding or not?
– Should only one party be held responsible or was the opposition also involved?
– What are the opinions and counter opinions to this whole saga?
– What can we infer?
As we ponder about these questions, it will be great to know what the CAG report has to say!
The CAG report (released on Aug 17, 2012) on Performance Audit of Allocation of Coal Blocks and Augmentation of Coal Production had the following points to share with the country
– The rate of increase in production of coal by Coal India Limited remained below the target envisioned in the 11th five year plan by the Planning Commission; the main reasons for this were inadequate drilling capacities, backlog in overburden material, mismatch between excavation and transportation capacities
– The de-reservation of 48 blocks of coal and allocating them to captive consumers was done by the Ministry of Coal to increase production but the move did not yield the desired results (till now) as production has not yet started in these blocks
– It was observed in some cases that the captive blocks allocated led to reduction in total mineable reserves for some projects and reduction in project life for some projects of CIL which is divergent from the guidelines for captive coal block allocation which stated that,
“the blocks offered to private sector should be at reasonable distance from existing mines and projects of CIL in order to avoid operational problems”.
– The Screening Committee recommended the allocation of a coal block by way of minutes of the meeting of Screening Committee. The minutes did not give any evidence of a comparative method that would have been used to allot the coal blocks and did not indicate the methodology used to evaluate each of the applicants. Thus the method followed was not transparent.
– Although the concept of competitive bidding for coal blocks was first introduced on June 28, 2004, the exact procedure to be followed for competitive bidding is yet to be finalized.
(the next part of this blog covers what exactly happened in these seven and half years)
– The Honorable Supreme Court in the judgment on 2G spectrum had directed to introduce transparency / competition in allocation of scarce resources. So, the attempts of the Ministry of Coal to introduce transparency/competition in the allocation of coal blocks was in line with that
– The CAG report believes that as a result of the delay in introducing competitive bidding process there has been a loss of INR 1.86 lac crore to the GoI
– Captive coal mining is a mechanism envisaged to encourage private sector participation in coal mining however the production of coal from captive mining has not been encouraging instead of the intended 73.00 mn tonnes from such blocks during 2010-11 only 34.64 mn tonnes of coal could be produced
– To ensure timely production from coal blocks the Ministry of Coal introduced the concept of bank guarantee in March 2005. Upto June 2011, 24 blocks were de-allocated for lack of initiative by the allottees in developing them
It was recommended (in Jan and Feb 2011) that for 15 allottees deduction in Bank Guarantee should be there for lack of initiative in developing the coal blocks, however the MoC could not encash these BGs as the modalities of the encashment were still to be worked out. The amount of lapsed BG worked out to be INR 318.81 crore against the 15 blocks which needed to be renewed.

The CAG recommended that
– There should be an empowered group along the lines of Foreign Investment Promotion Board as a single window mechanism with representatives of Central and State Government ministries to grant the necessary clearances such as mining lease, mining plan, forest clearance, environment management plan and land acquisition for accelerating the procedures for commencement of production.
– The Ministry of Coal should evolve a system of giving incentives to encourage production performance from captive coal blocks & disincentives to discourage non performance and should work out the modalities of competitive bidding soon
– The targets for Coal India Limited should be fixed in line with the targets fixed by the Planning Commission

Now let us have a look at why did it take us so long to move from an opaque process for coal block allocation to competitive bidding.
– The concept of competitive bidding first came into picture on June 28, 2004 and around a fortnight later the then Coal Secretary put up a note in front of the Minister of State in this regard
– Then Coal Minister asked for the preparation of a draft cabinet note for the Cabinet (for consideration and decision)
– The PMO on Sep 11, sent a note detailing the disadvantages of competitive bidding which was rejected by the Coal Secretary
– The Coal Secretary’s view was rejected by the Minister of State on October 4 (saying that competitive bidding will delay the allocation process further and that the steering committee can ensure a transparent allocation process)
– It was decided within a few days that all applicants by June 28, 2004 should be allocated based on the current policy
– In early March 2005 the coal secretary again reminded through the draft cabinet note that if the revised procedure for allocation was not put in place, pressures would again mount on the government for discontinuing the present procedure
– On July 25, the PMO called a meeting where it was decided that the Ministry of Coal would amend the Cabinet note yet again incorporating the concerns of State governments
(State Governments irrespective of political parties had concerns with the competitive bidding process and were not very supportive to get it implemented soon)
– Since the amendments would have taken time it was decided to continue with the existing procedure of allocating blocks for captive mining through the screening procedure
– In January 2006, the Coal Ministry asked permission for continuing with the existing mechanism since it would have taken time to make amendments to the Coal Mines Act
– In March a meeting was held in the PMO wherein it was decided that instead of just coal, all minerals covered in the MMDR (Mines and Minerals, Development and Regulation) Act 1957 should have competitive bidding process applied on them and requisite amendments should be made in the MMDR Act for the same
– Coal Secretary approved the draft note to the Ministry of Mines with a request to obtain the Department of Legal Affairs’ comments on March 20, 2006
– The Coal Minister agreed to MoS’s opinion that the decision taken to make ammendments to the MMDR act needs to be revisited as it involved withdrawing current powers of State governments and could become controversial, citing federal polity. All this happened within a span of 7 days.
– In mid-September, the Coal Ministry conveyed to the PMO and the Cabinet Secretariat that the Law Ministry has advised to initiate suitable measures for amending the MMDR Act — for facilitating competitive bidding. This led to a complete halt in any progress that was being made till October 2008
– The MMDR (Amendment) Bill was introduced in Parliament by the Mines Ministry in October and was referred to the Standing Committee on Coal and Steel on October 31, 2008. The Standing Committee submitted its report with certain recommendations after three and half months after which there was not movement for six months.
– On Feb 18, 2010 during the budget session the Mines Minister moved a motion for passage of the MMDR (Amendment) Bill
– Till September 9 there was no movement when the MMDR Act was notified in the gazette after having being passed in both Houses of Parliament during the monsoon session
– On September 22, 2010, the Coal Secretary chaired a meeting of the representatives of the Ministries of Power, Mines, Petroleum and Natural Gas, Steel, the Department of Industrial Policy and Promotions and Planning Commission to finalize the modalities for competitive bidding.
– Draft bid documents were discussed at the meeting of the committee on January 31, 2011 and six months later, on July 25, a meeting was convened by the Coal Minister with various stakeholders to discuss the issue of competitive bidding. Six months later, the amendment of the MMDR Act, rules for auctions by competitive bidding of coals mines was notified.

Here is an image which illustrates the current status of the coal blocks

What do the ruling coalition and opposition parties have to say about the whole saga?

– The Ministry of Coal has denied that there has been a loss of the amount mentioned by the CAG report to the national exchequer.
It has mentioned in its replies that the process of coal allocation that was being followed was in place since 1993 and the delays in implementing the allocation of coal blocks using the process of competitive bidding was due to several reasons some of which are
* Strong opposition from the coal rich state governments in arriving at a consensus for following the process of competitive bidding
* The Ministry of Power’s viewpoint that this could lead to enhanced cost of producing electricity which might affect the end customer
* The Department of Legal affairs arrived at the conclusion that the process can be achieved by administrative instructions and amendment to the Mines and Minerals (Development & Regulation) Act.
If administrative instructions would have been followed instead of going through the legislative procedure it would have been undemocratic and contrary to the spirit of the functioning of the federal polity.
It has also stated that the allottees were selected on these parameters
* Techno economic feasibility of the end use of project
* Status of preparedness in setting up the end use project
* Past track record in execution of project
* Financial and technical capabilities of the applicants
* Recommendations of the State Governments and the Administrative ministry involved

– The opposition has been extremely forceful in its opinion that the ruling party has received huge kickbacks in this whole exercise and has said that GoI questioning CAG’s methodologies and the points in the CAG report is unconstitutional behavior on the part of the Government and is an attack on both a constitutional authority and the constitution. It has halted the parliament to proceed and has demanded the resignation of the Prime Minister before any discussions can happen in the Parliament.
Some of the state governments which are ruled by opposition parties though have agreed that they recommended firms but said the final decision on the process to be followed was in the hands of the government.

There are both opinions and counter opinions to this whole saga.
Some are of the opinion that since CIL was not able to ensure complete utilization of the coal it made sense for the Government to allow private use of coal and since the process of allocation through competitive bidding was taking time
It made sense for the Government to follow the procedure that was being followed and allot the coal to private applicants.
There is also an opinion that unlike the 2G scam, the coal has not been resold to third parties. And since coal is primarily used to produce power whose price is regulated by the state, therefore the chance of making windfall profits is constrained.
And if coal prices are to be decided by market should not power prices also be de regulated (with immediate effect) which is the backbone of economic development and upliftment.
Counter Opinion:
As is already stated above due to a lack of transparent process in the allocation and the severe delay in implementing the same, many are of the opinion that there has been a huge loss to the citizens and malicious acts on the part of people in power cannot be ruled out.

What can we infer?
We can infer that there has been a lack of transparent process in the allocation of coal blocks and lack of speedy formulation and implementation of a transparent methodology for allocation of coal blocks, but to say that the country has suffered a loss of 1.86 lac crore is yet to be substantiated. 1. 86 lac crore can be the difference in the price at which the blocks have been allocated and the market price of the coal blocks but then it needs to be thought out, should coal blocks be allocated purely at market prices by bringing in a sudden change in the allocation policy?
Or should there be a gradual deviation from the current procedure to a more transparent policy in the future.
1.86 lac crore may not be the loss but there is no denying the fact that the way the current allocation has been done has kept the citizens in the dark and we need to move away from it sooner rather than later.
A more transparent process might have led to greater realization of the actual value of the coal blocks for the Government of India .
Let us hope that we soon have a more robust coal block allocation policy in place which keeps the trust of the citizens of India and at the same time ensures societal upliftment as well. “We also hope that only those allottees who have not lived upto their promises on coal production and do not meet the norms laid out, their allocations should be cancelled so that the loss is minimized (the allocation should not be cancelled for all because it will decrease the industry’s confidence while investing which is very essential for a sound economic growth of the country). We also hope that those blocks on which production has been delayed due to bureaucratic procedures begin production soon and other blocks too begin optimum production soon so that the main objective of allocating these blocks is achieved.”

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