Important Bills

7/24/2019 Important Bills

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Bills

1) Insurance Bill, 2015

Q write important provision of insurance bill.

A The amendment raised the composite cap for FII + FDI to 4! from 2"! #ut the

o$nership of the compan% $ill #e in Indian hands& The 'F(D #ill, 201* lined pension

sector cap to insurance and hence pension sector is also #enefitted& The o-ernment

o$ned companies can no$ raise capital from capital maret $ith o-ernment stae

cannot o do$n #elo$ 51!& This $ill help these companies to e.pand in rural and social

sector #% impro-in sol-enc% and competiti-eness& The insurance companies can raise

capital throuh ne$ and inno-ati-e routes $hich $ill help in e.pansion, inno-ati-e

products and impro-ed ser-ice deli-er% throuh impro-ed technolo%& This $ill also

#oost infrastructure sector as onl% insurance capital can fund lon/term proects& ih

penalties are le-ied on companies for mis/sellin #% aents& It also disallo$ed the multi

le-el maretin to discourae mis/sellin& The insurance aents $ill #e reulated and

appointed #% I(DI no$& 'roperties in india can no$ #e insured #% forein insurers $ith

permission #% I(DI $hich pre-iousl% $as done i-en #% central o-ernment& ct

defines health insurance as separate cateor% includin tra-el and personal accident co-er&

The minimum cap is of 100 crore to discourae non/serious pla%ers& The #ill allo$ed

forein re/insurer to set up #ranches& The re/insurer can insure part of a proect instead of

100!& B% spreadin ris the oriinal insurer can increase its scope #ecause of larer ris

tain capacit%& I3 and I3 are empo$ered to create their #%/la$s for elections,

representation of self/help roups and insurance co/operati-e societies in insurancecouncil& Insurer ara-ated #% an% order of I(DI can appeal to securities appellate

tri#unal&

Q The act can be a game changer. Examine.

A The domestic insurance sector comprises of 1) ife insurance 2) 6on/life insurance

*) re/insurance& The penetration is -er% poor at less than 5! for life and less than 1! for

non/life& The forein companies in 78 can no$ raise their in-estment due to increase in

forein in-estment limit& This $ould help in reater penetration and also o# creation& The

I(D is empo$ered to decide aenc% commission $hich $ill cur# the attrition rateamon aents& The openin up of sector to forein re/insurers $ill help india in ainin

necessar% technolo% and e.pertise& Increased capital infusion $ill lead to inno-ati-e

products, hiher penalties $ill discourae mis/sellin, enerate confidence amon

customers and help ro$th of the sector& I(D is also empo$ered to mae reulations on

a num#er of su#ects $hich pre-iousl% $ere in leislati-e domain& 9ore po$ers to

I(DI $ill deter consumer harassment&

:ne retrorade pro-ision is that the onus to pro-e that the $ron statement made in

polic% is on polic%holder and not insurer& It is also pro-ided that the polic% cannot #e

challened after three %ears& This means insurer compan% has to pa% if the fraud isdetected after three %ears&


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Q Importance of insurance bill.

A- The #ill $ill pro-ide much needed capital re;uirements of industr%& It $ill also help in

infrastructure sector since onl% insurance sector corpse can fund lon/estation proects&

Insurance is capital intensi-e as companies ha-e to satisf% future claims& Bill has i-en

assurance of capital inflo$ $hich $ill help in ro$th of insurance sector in india& I(D

has ot more po$er in terms of decidin commission and penalisin companies for

malpractices& The #ill also holds companies responsi#le for $rondoin of their aents& It

also opens possi#ilit% of I': as $ell as capital for ac;uisition $hich $ill allo$

consolidation in the industr%& Better capital a-aila#ilit% $ill ensure, inno-ation in product

desin to penetrate in the maret, #etter ris manaement $ith imported technolo%

transfer $ith capital and impro-ed sol-enc% standards& Forein re/insurer ha-e to et

reistered $ith I(D $ith minimum corpse of 5000 crore $hich $ill increase maret

competition& (e/insurers $ho tae up all or a part of proect are important for co-erin

lare riss in capital/intensi-e sectors lie refineries, airlines etc& (e/insurer has #eendefined as part of ris taer of insurance compan% and #e paid mutuall% accepted

premium #% insurance compan%& I3 and other can no$ raise fund from maret

maintainin 51! o-t& stae&

Mines an Minerals !"evelopment an #egulations$% Bill

It $ill reulate the minin sector in india and specifies re;uirements for o#tainin and

rantin leases for minin operations& Fourth schedule is added $hich includes #au.ite,

iron ore, limestone and mananese are defined as notified minerals& It creates a ne$

cateor% of license i&e&, license/cum/minin lease& This in-ol-es t$o stae concessionsfor undertain e.plorations and then minin operations& tate o-ernment shall rant license for minin as $ell as prospect/

cum/license minin lease for #oth notified and other minerals& In case of later t%pe of

lease central appro-al is needed& ll leases shall #e ranted #% auction& The holder of an%

ind of lease can transfer it $ith appro-al of state o-ernment and as specified #% central

o-ernment& If state o-ernment does not con-e% its decision in 0 da%s it is taen as

appro-ed& :nl% mineral concession ranted throuh auction can #e transferred& The #ill

calls for creatin district mineral foundation and national mineral e.ploration trust& D9F

to #e esta#lished #% state o-ernment for the #enefit of persons in district affected #%

minin related operations& 69?T $ill #e esta#lished #% central o-ernment for reional

and detailed mine e.ploration& icensee and lease holder shall pa% 1@* of ro%alt% as

prescri#ed #% central o-ernment and 69?T 2! of ro%alt%&


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Q &ut an Bolts of MM"#A Bill '()*.

A It does not address the rihts of people o$nin the land under $hich minerals are to

#e e.plored most of $hich are adi-asis& The act pro-ides for no consultation or consent

$ith > #efore minin operations& :ccupiers are entitled to compensation #ut if the% do

not aree to the minin plan or amount of compensation then state o-ernment shall order

the occupier to allo$ for minin operations& It is under this pro-ision that adi-asis are

displaced turnin them into la#ourer into mines and others #% destro%in their forests,

land and $ater& di-asi oranisation $ere demandin that their informed consent and

share is profit #e made a pro-ision& >3 udement in smatha case 1Ahas upheld the

adi-asi rihts of informed consent and share in profit& >3 said under 5thand "thschedule

adi-asi lands cannot #e transferred to non/adi-asis and hence minin operations should

in-ol-e tri#al themsel-es& '?>, F( and ildlife 'rotection ct ha-e impro-ed the

rihts of adi-asis& >3 in 8edanta case stuc do$n the contract as consent $as not taen&

The de-elopment strate% of o-ernment is that profit for corporate o-er sustaina#le ande;uita#le use of minerals in partnership $ith local communities& In pre-ious -ersion of

#ill, calls for state o-ernment to secure all permission from o$ners for maor minerals

and for minor consult $ith > under 5 thand "thschedule& It also mandated to tae all

clearances under F( and $ildlife protection act #efore a lease $as i-en& It also made

tri#al co/operati-es elii#le for minin minor mineral& The present #ill neither mentions

tri#al co/operati-es and consultation, consent of > in name of speed% clearances& D9F,

no$ companies instead of full ro%alt% as to state o-ernment ha-e to pa% onl% 1@*&

+histleblower Bill% '()(.

,eatures of the Bill1) It pro-ides a mechanism to recei-e complaints of corruption or

$ilful misuse of discretion aainst a pu#lic ser-ant and also pro-ide safeuards aainst

-ictimiCation& 2) n% pu#lic ser-ant or 6: ma% mae a pu#lic interest disclosure to a 383

or >83& *) ?ach disclosure in $ritin or electronic form shall #e accompanied #% full

particulars and supportin documents& uthorit% shall not tae an% action if identit% is not

included or is found to #e false& 4) It is mandated to conceal the identit% of the complainant

unless the complainant has re-ealed his identit% to an% other authorit%& 5) fter conductin

the in;uir%, if the 383 or >83 feels that the complaint is fri-olous, it shall close the matter&

If alleation of corruption or misuses of po$er are found, it shall recommend certain

measures to the pu#lic authorit%& ") The 3ompetent uthorit% shall not entertain an% matter if

it has #een decided #% a 3ourt or Tri#unal, or the complaint is on an action that too placefi-e %ears from the date of the complaint& A) ?-er% pu#lic authorit% shall create a machiner%

to deal $ith in;uir% into disclosures& The machiner% shall #e super-ised #% the 383 or >83&

) There shall #e no initiation of proceedins aainst such person merel% on the rounds that

the person has made a disclosure& The 383 directions $ill #e #indin in this reard& ) The

Bill la%s do$n penalties for -arious offences such as not furnishin reports to the 3ompetent

uthorit%, re-ealin identit% of complainant, for false or fri-olous disclosure, etc& 10) n%

person arie-ed #% an order of the 3ompetent uthorit% relatin to imposition of penalt%

ma% file an appeal to the ih 3ourt $ithin "0 da%s& 11) The Bill prescri#es penalties for

no$inl% main false complaints& 12) The 8iilance 3ommission shall not disclose the

identit% of the complainant e.cept to the head of the department if he deems it necessar%& The

Bill penalises an% person $ho has disclosed the identit% of the complainant& 1*) First, the


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8iilance 3ommission has to -erif% the identit% of the complainant, and then conceal his

identit% Eunless the complainant has re-ealed it to an% other authorit%)& The 8iilance

3ommission shall not re-eal the identit% of the complainant to the head of the oranisation

unless it is of the opinion that it is necessar% to do so for in-estiation& The head of the

oranisation cannot re-eal the identit% of the complainant& 14) The 8iilance 3ommission

ma% tae the assistance of the 3entral Bureau of In-estiation or police authorities to maein;uiries or to o#tain information& 15) The Bill e.empts disclosure of proceedins of the

3a#inet if it is liel% to affect the so-ereint% of India, securit% of the state, friendl% relations

$ith forein states, pu#lic order, decenc% or moralit%& >uch an e.emption has to #e certified

#% the >ecretar% to the central or state o-ernment& 1") If the 8iilance 3ommission decides

that a complainant or a $itness or a person assistin an in;uir% needs protection, it shall issue

directions to the concerned o-ernment authorities to protect such persons&

Issues 1) The Bill aims to #alance the need to protect honest officials from undue

harassment $ith protectin persons main a pu#lic interest disclosure& It punishes an%

person main false complaints& o$e-er, it does not pro-ide an% penalt% for -ictimisin a

complainant& 2) The 383 $as desinated to recei-e pu#lic interest disclosures since 2004throuh a o-ernment resolution& There ha-e #een onl% a fe$ hundred complaints e-er% %ear&

The pro-isions of the Bill are similar to that of the resolution& Therefore, it is unliel% that the

num#er of complaints $ill differ sinificantl%& *) The po$er of the 383 is limited to main

recommendations& lso it does not ha-e an% po$er to impose penalties& 4) The Bill has a

limited definition of disclosure and does not define -ictimisation& :ther countries such as ,


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mone% $ill #e pared -ia shell companies and hence not counted as Indian mone%& ) There

is no mechanism to detect the income oin a#road& It has #een arued that DT $ill

contain the information $hich is disclosed #% the indi-idual and not the undisclosed ones& )

Documents

Important Bills