Archives March 2012

Make parties accountable

The only reference to political parties in the Indian Constitution is in the Tenth Schedule of the Constitution incorporated, which deals with the disqualification of a person for being a member of either House of Parliament or the Legislative Assembly/Council on grounds of defection. The Representation of People Act (RPA), 1951, makes it mandatory for any association or body of individuals calling itself a political party to make an application to the Election Commission of India (ECI) for its registration within 30 days following the date of its formation. The application must be accompanied by a copy of the memorandum or rules and regulations of the association or body, affirming true faith and allegiance to the Constitution of India.

As regards accountability related to the reporting on regular functioning, expenditure and income of registered political parties, Section 29C of the RPA compulsorily directs all registered political parties to submit an annual report to the ECI on all contributions in excess of `20,000, without which no political party would be eligible for any tax relief provided under the RPA. The ‘Guidelines and Application Format for Registration of Political Parties’ issued by the ECI under section 29A of the RPA lay down the mandatory requirement to submit audited annual financial statement to the ECI. Section 29A(6) provides that the ECI may call for such other particulars as it deem fit from the association or the body making the application for registration.

Information obtained by the Public Interest Foundation (PIF) from the ECI under the RTI Act reveals that till now only 98 of the 1,196 registered political parties have submitted their annual report. Thus compliance is mere 8 per cent. Further, the ECI has not recommended for any action to the income tax department against the defaulting political parties and only the copies of the contribution report received from the political parties have been referred to department.

Through another RTI application the PIF sought the information specifically on the compliance of the mandatory guidelines issued by the ECI for submission of annual audited financial statement by all registered political parties within six months of the end of each financial year. As a reply to this RTI application the ECI noted that out of a total of 1,196 registered political parties only 174 have actually submitted the annual audited financial statement for the year 2010-’11, 85 per cent of the registered political parties are not in compliance of the mandatory guidelines.

In the absence any provision for penalising the defaulters, the efficacy of these powers granted to the ECI in regards to accountability and reporting on regular functioning of political parties is seriously compromised. And a routine practice where repeated defaulters go unnoticed and unpunished gives rise to a culture of blatant disobedience amongst political parties. The ECI while exercising its power to register a political party under Section 29A, acts quasi-judicially but once a political party is registered the ECI has no power to review the order registering a party for having violated the provisions of the Constitution or for having breached the undertaking given to the ECI. The only conditions wherein the Commission can de-register a party are when it is found that a party has obtained its registration through fraudulent means, or it was declared by the government as unlawful, or when a party itself intimated the ECI that it had ceased to function or had changed its party constitution, or would not function in accordance with the provisions of the law. Moreover, the sanctity of the provision is all the more diluted by the fact that the parties which do not subscribe to secularism, socialism and democracy may be denied registration by the ECI, but they are still not barred from contesting elections.

Aggrieved over these mere symbolic powers, the ECI sent a proposal in July 1998 to enable it to issue orders regulating registration and de-registration of parties. This vital power is yet to be granted by the Union government. In the absence of a law stating what parties can and cannot do, nations risk ruthless politics with little or no public accountability.

The draft ‘Political Parties (Registration and Regulation of Affairs, etc) Act, 2011’, prepared by Centre for Standards in Public Life (CSPL) under the esteemed guidance of former Chief Justice of India M N Venkatachaliah, attempts to address a wide spectrum of issues ranging from formation of political parties to registration, governance, accountability, regulation of political parties, functions of the parties and their discipline. It lays down the condition for maintenance and reporting on all accounts and contributions, making it clear that compliance with the provisions of the Act and the declaration submitted by it at the time of registration would be a legal binding on all political parties on a continual basis. Strict norms have been put together for the observance of internal democracy and periodic free and fair elections for selecting various office bearers within a political party. It calls for registration with the ECI as a necessary criterion for contesting elections. The ECI is empowered to direct a special audit of the accounts of any year of a party or of any local unit. The draft provides for penalties that can be imposed on parties in case of deviance from the provisions by way of fine of Rs 10,000 per day of non-compliance, imprisonment up to three years, as well as withdrawal of registration. Other significant grounds for de-registration include non-contesting of more than one general elections, not securing a prescribed minimum percentage of votes polled, or not taking part in mainstream political activities.

The Law Commission’s 170th Report on Electoral Reforms (1999), the National Commission for the Review of the Working of the Constitution report on electoral reforms (2002) and the ECI’s recommendation on electoral reforms (2004) strongly advocate the regulation of all political parties through law.

The minimum that citizens can be promised is the provision that seeks to regulate the regular functioning of political parties in terms of maintenance of accounts and contributions along with a clause for legal punitive action in case of non-compliance. Moreover, there should be a mandatory requirement for the appropriate authority to generate public information regarding defaults of political parties on binding disclosures so that the truthful public image of the political party may be constructed in the minds of the common citizenry. Perhaps, the ECI can deliver this gift to the nation without waiting for major legislative changes in electoral laws.

(This article was published in the New Indian Express on 30th March, 2012)

Suggestions on the Rights of Citizens for Time Bound Delivery of Goods and Services and Redressal of Their Grievances Bill, 2011

1. In the Statement of Objects and Reasons enclosed with the Bill presently under the consideration of the Parliament, it has been stated that an over-arching structure is necessary as the impact of various legislations by the State Governments has been diffused and limited.  It is difficult to appreciate that the Rights based approach as enacted by the State Governments has been considered inadequate without proper evaluation.

2. The present draft militates against the federal character of the Indian polity and seeks to enforce cutting edge public services being implemented by the States through a Central diktat.  During the debate on the Lokpal Bill certain clarifications were given from the establishment for the inclusion of Lokyuktas in the draft Bill.  One of the stated reasons was the international commitment.  Even this reason is not applicable in the case of present Bill.

3. The Bill should be confined to the Centre as the cutting edge services due to a common man from the level of the State Government are different from the delivery of services by the Central Government.  Therefore, the Central bill should not lay down rules and norms for the delivery of services which fall within the purview of the State Governments.

4. The draft Bill has defined public authority under clause 2(n).  It is too wide with inclusion of panchayats, municipal bodies, licensed organizations which may have come into existence through State Acts and Rules and even NGOs.  Even the monitoring of compliance would appear to be an impossible task in the proposed dispensation.

5. The definition of complaint under clause 2(f) goes beyond the delivery of goods and services as it seeks to probe the functioning of a public authority in terms of violation of any law, policy, programme, order or scheme.  It will only end up generating more complaints than any relief to the citizens.

6. Indian Institute of Public Administration and also the Public Interest Foundation have separately outlined the features to be incorporated in the laws concerning Rights to Services and Redressal of Grievances.  A model advisory outlining the essential characters to be a part of all State laws guaranteeing the delivery of public services may be issued by the Centre which could act as a guideline for all States to enact/amend their State bills in the light of the same.  This would ensure that there are no conflicts between the Centre and the State on the subject matter specified.  The present draft has many clauses which could end up in a conflict situation with the States Act.

7. The States while legislating a similar bill will have a sense of ownership as well as the assurance for the administrative and financial obligations entailed.  This learning has flowed out of initial failure to successfully take-off of many commendable welfare intended bills in the recent past like the RTE Act, 2009, where many states have still not come out with their state specific model acts, and the issue of generating the state-share of the fund towards implementing this act has become a big bone of contention between the state and the central government.  Yet another example of laudable act failing due to an element of imposition by the centre whereas lack of ownership by the state governments is the Building and Other Construction Workers Welfare Cess Act of 1996, where major defaulters on significant features were some very prominent states like Karnataka, Kerala, Uttar Pradesh. The pace of implementation of this Construction Workers’ Cess Act was indeed so slow that even the Ministry of Labour and Employment also acknowledged its sluggish implementation through a reply to a RTI application.

8. There are 15 States which have either enacted Right to Services or the Bill is at the proposal stage.  Madhya Pradesh, Uttar Pradesh, Delhi, Jammu & Kashmir, Bihar, Rajasthan, Uttarakhand, Himachal Pradesh, Punjab and Jharkhand have already notified the effectiveness of their respective Acts.  The States of Kerala, Karnataka, Chhattisgarh, Haryana, Orissa have also presented their bill for final enactment.  Therefore, there is no justification for an overarching bill at the Central level.  The acts already adopted by the States need to be respected.  However, the State acts could be further revamped by including provisions on grievance redressal.  This should be included as an essential features of the State act for it is important to remember that if the right to service encompasses only provision of timely service delivery and penalty for its non-compliance, then it leaves out a significant aspect for citizens’ welfare – a provision for approaching appropriate authority about the quality of service received.

9. There are positive features in various States laws which could be appropriately legislated in the Bill under consideration.  The salient points are:-

(i) Given that e-governance is the way forward, the draft bill should contain provisions for the electronic delivery of public services and goods to citizens, one which is direct and easy-to-access.

Taking cue from The Delhi (Right of Citizen to Time Bound Delivery of Services) Act, 2011, the draft bill can set out for the establishment of a dedicated e-portal along the lines of the e-SLA Monitoring system, whereby citizens can track, check and monitor the status of their applications. This would help in cutting out the role of intermediary officials in the entire process of service provisioning.

Further, learning from The ‘Maharashtra Mandatory Electronic Delivery of Public Services Act, 2010 the draft bill can introduce enabling provisions for time-bound and online delivery of services that require a limited public interface.

(ii) The draft bill must also contain provisions for human resource management especially towards creating a culture of excellence in public services. Creating a results-oriented work culture in government offices should be an avowed policy goal.

The Delhi model has made the provisions of the Act a part of the service conditions for government servants. In other words, it has made responsive and accountable governance as the benchmark for service delivery and administrative action.

(iii) In addition, many state laws enshrining the right to public services including the pioneering Madhya Pradesh and Bihar legislations have certain progressive provisions that check official dilly-dallying, improve administrative efficiency and remove inordinate delays caused by government officials. These include: offering financial compensation to aggrieved citizens from the lump-sum penalty or fine amount charged per day on non-complaint officials responsible for delay or failure in the delivery of services, fixing administrative accountability by fining and penalising non-compliant and negligent officials through a deduction in their salary, and linking performance under case disposal with overall performance audit initiating disciplinary action against erring officials. These could be appropriately reflected in the Draft Bill.

(iv) Given that separate Commissions at the level of states and the centre is being proposed as an essential feature by this bill, it is important to learn from the Punjab Right to Services Ordinance, 2011, which envisages not only an appellate role for the Commissions but a much broader recommendatory role wherein the commission can also advise on the other procedural and functional improvisation for the better delivery of these cutting edge services.

10. It is important to regulate the coverage in terms of the defined services and also in terms of the tiers of grievance that it covers.  Firstly, it is important to clearly notify and restrict the extent of services which would qualify for redressal under this mechanism.  As stated earlier, it needs to be implemented and tasted for Central level functions.  Over burdening the system from the very beginning both in terms of too many complaints due to excessive service coverage, or in terms of complications involved as a result of spreading out the system to cover all levels of governance all at the same time through one integrated act would retard the system and impact its efficiency and transparency, the very goals that we have set out to achieve through this mechanism.

11. Even the state governments taking this model upto the level of panchayats and municipalities  should take appropriate care to test the system for efficiency as well implementation glitches before spreading it out too wide. In fact Lokseva Kendra models of Madhya Pradesh or the Integrated Citizens’ Service Centres of Goa can provide an important learning and insights if this system has to be extended uptil the block level by the respective state governments.

12. Too much emphasis on procedural and functional uniformity at all levels threatens to take away the efficacy and the dynamism which is one of the very important end-goal of this institutional reform. The organic link of all tiers of governance differs greatly in nature and thus flexibility in terms of determining the finer procedural and implementation details should be allowed for each level of governance separately. This flexibility will also facilitate in curbing costs both in terms of systemic requirements as well as man-power allocation. Like for example in case of change of Grievance Redressal Officer or any related such change it need not necessarily be advertised in a Hindi or English newspaper in addition to a regional newspaper; or the need for essential setting up of call/information-facilitation centre should be waivered depending on a real ground level reality analysis. This discretion of the choice of the best mechanisms for generation of public information regarding citizens’ charter, grievance redressal is best left to the discretion of the Head of the Department relevant to that level of governance.

13. Rather than forming a parallel detailed bulky system of grievance we should strive increasingly towards strengthening the already present post of Head of the Department. Fixing the final accountability with the Head of Department of each public office, as well as backing it up with additional clause of penalty in case of   non-compliance will prove to be an important catalyst for this system to function efficiently, and to not succumb to various complications and snail-paced activity due to increasing number of appeals flowing onto separate higher regulating institutions like Commissions and Lokpal/Lokayukta. Head of Department is most equipped with the know-how of the procedural details as well as the maximum time required for addressing of any grievance, thus if the position of the Head of the Department is sufficiently empowered, along with obligatory punishments in cases of failure, than only the rarest of the rare cases would be required to be sent out as appeals to other appellate bodies outside the department. This ways the need for creating a bulky parallel set-up for grievance redressal may be avoided thereby accounting for a lot of saving in terms of cost, time as well as man-power.

14. The organic linkage with the Lokpal/Lokayukta is absolutely unnecessary and would wily-nilly burden the office of Lokpal/Lokayukta with very poor returns.  The inter-mixing  of the roles of the Lokpal/Lokayukta with  delivery of public services listed out in the citizens charter would create avoidable jurisdictional conflict as well as may lead to over-burdening of both parallel arrangements distinctly created for corruption cases and redressal of grievances born out of non-delivery of citizen public services.  In cases where corruption is suspected it may be referred to Chief Vigilance Commissioner.

15. The public service commission at the level of centre/state should be empowered separately with the highest appellate jurisdiction in the rarest of the rare case where the resolution and redressal of grievance could not be achieved within the department with Head of the Department being the highest authority.

16. The definition of complaints needs to be more specific in context of this central act. The fact that it encompasses in its purview everything ranging from complaints against compliance to the citizens’ charter to the functioning of a public authority, or any violation of any law, policy, programme, order or scheme, takes away the specificity and introduces a lot of ambiguity to the definition of complaints related to non-delivery of public services. If specificity in the definition of complaints is not brought about then there is very high probability that the nature of these complaints being too wide would lead to a situation of overflow of unwarranted number of complaints which cannot be handled at this level of governance thereby leading to high pendency rate of unresolved complaints which may ultimately adversely affect the overall functioning and the efficiency of the institution/legislation

17. The Definition of public authority needs to be more demarcated in terms of the fact that it is not necessary to cover NGOs substantially funded by government under this act, but what this act should very clearly spell out is the inclusion of those private companies which are in any ways involved in the delivery of essential public services for example BSES involved in provision of power supply.

18. This act at the level of the centre or state should restrict its jurisdiction only to delivery of public services and not to public goods. The parameters for the qualitative as well as the quantitative delivery of public goods would differ a lot from that of delivery of public services. Keeping this act specifically linked to the delivery and grievance redressal of public services only, would ensure that the institution does not get over-burdened from the very start and thus would enable its smooth and efficacious pick-up as well as functioning on a continual basis.

19. Within the coverage of this act, besides citizens, there should also be a provision for the time bound delivery as well as grievance redressal for NRIs/foreigners who have been residing in India/state for a minimum specified period of time. NRIs/foreigners living at a particular place are also entitled to an assured delivery of specific number of public services, thus this institutional set-up being made for assured delivery of public services should compulsorily provide for the inclusion of those NRIs/foreigners residing in a particular area for a specified minimal period of time.

20. In the appointment or filling up of vacancies regarding the post of Central Public Grivance Redress Commissioners the final decision making power needs to remain in the hands of a single appointing authority. A close reading of this draft act shows that two appointing authorities in the form of President of India/ Governor of the state, as well as Chief Central Public Grivance Redress Commissioner have been empowered with the decision-making power as regards the appointment or filling up of vacancies regarding the post of Central Public Grivance Redress Commissioners. This conflicting position needs to be resolved in favour of single empowered final appointing authority, for otherwise it would lead to unnecessary confusion and thus interfere with the smooth function of the act both at the level of the centre.

21. In light of the fact that certain government departments and programmes like the health ministry or NREGA, already has an elaborate well-worked in-built mechanism for complaints disposal and grievance redressal, in these cases this draft act for grievance redressal should not be superimposed on those systems which are already well-functioning oriented towards the same end-goal of grievance-redressal. Infact from the very beginning these elaborate systems being worked out separately at the level of the centre and the state should take extra care to not interfere with those government departments/programmes which already have a well-functioning grievance-redressal mechanism of their own. This system of public service delivery and complaints resolution should act as a binding only there where exists a vacuum in terms of no or a very tardy functioning mechanism for grievance redressal.

22. Online monitoring facility for delivery of services and grievance redressal would go a long way in increasing the accountability and accessibility of the service delivery system for the aggrieved common man and will also facilitate greatly in decreasing the work load on the public authority coming in the form of follow-up queries. Thus the Head of Department through the powers vested in him by this bill should strive towards providing for online monitoring facility towards the delivery of notified goods/services as well as the grievance online status-check provision for citizens to the extent possible. Online monitoring of services and grievance redressal will give a positive boost to the overall functioning and efficiency of the delivery system of public services aimed at through this bill.

23. The focus of this central bill should not limit itself to specifically reporting cases under the Prevention of Corruption Act 1988 but should be able to make reference in light of any serious negligence/deviation of duties enlisted in the citizens charter. This act as it lays down in Section 9 (1) (d), should rather than focussing specifically on identifying and reporting cases under the Prevention of Corruption Act 1988, should take a note and report all cases which involve any serious dereliction of duties including any offence committed under the Prevention of Corruption Act 1988. And a reference/report on the same deviation from duties may be brought to the notice of the Head of the Department. In light of this reference made, then the Head of the Department would be authorized to make further reference on the same to the appropriate authority competent to take cognizance of such genuine grave offence for further action.

The Head of the Department of every Public Authority does not have the sanctioned executive powers and the required administrative machinery to look into or to initiate proceedings in cases involving serious corrupt practices for further action. Therefore it is important that the powers of the Head of the Department in these cases of offense under the Prevention of Corruption Act 1988, are restricted only to referring such cases of corrupt practices to appropriate bodies already in existence which are competent to take cognizance of such corrupt practice. Moreover there already exists specialized machineries at both central and state level to oversee, try and penalize such grave acts of corruption. Therefore in order to avoid confusion and to introduce specificity, simplicity and efficiency in the functioning of the system it is advisable to limit the role and the power of the Head of Department of Public Authority to only referring such cases of corrupt practices to appropriate bodies for further action on the matter.

24. Establishment of empowered Commissions separately at the level of centre and states vested with appropriate powers of oversight can go a long way in transforming the modus operandi of public service delivery. The central as well as the state grievance redressal commissions should be vested with suo-moto powers of cognizance and investigation on any matter arising out of the Act’s provisions and in the discharge of its powers and functions. The power of these Commissions should be broad based to include within its ambit the jurisdiction to recommend binding additional notifications bringing more government departments and ministries under the ambit of this law and can propose changes in the procedures for service delivery to make them more transparent and citizen-friendly.

25. There already exists the National/State Consumer Disputes Redressal Commission, with which there has been no attempt to build linkages through this draft act. For a long term smooth dispute-free existence it is important to clarify both at the level of the state as well as that of the centre the possible connections/continuity as well as the exclusivity of the role of the Central/State Public Grievance Redressal Commissions with that of the already existing  National/State Consumer Disputes Redressal Commission.

26. This Act is constructed around the idea of the Citizens’ Charter, where the Citizens’ Charter defines the quality of public services, while the Public Service Guarantee Acts take this idea forward in the sense of making a citizens’ right to public services within the stipulated time legally binding, failing which the concerned officials can be penalized.

But it is important to take care that the central as well as the acts enacted on the same subject matter at the level of states are more motivation-oriented rather than penalty-oriented. Motivation-orientation created through a culture of performance related incentives, rewards and promotion, as has been attempted in the Delhi (Right of Citizen to Time Bound Delivery of Services) Act, 2011, will create an environment facilitating attitudinal change which thereby would ensure sustained reforms.

27. The financial viability of operations and its sustainability over time both at the level of the centre and the states needs to be accounted for separately, as these are going to be important factors impacting the administrative workability as well as the efficacy of this entire machinery being set-up.

Telcos deserve a better deal

The telecom sector is the most significant and visible success story of economic liberalisation in the country. However, its sustainability and continued growth can only be ensured with firm but soft-touch regulatory measures. This writer recently had the opportunity to interact with major fund managers of asset management companies likeFidelity, Blackrock, Capital World, UAB, RCM and HSBC.

The concerns expressed by the asset management groups on regulatory uncertainties in telecom sector were genuine and any future foreign investment in the sector would be largely determined by the manner we address the present upheaval.

Unlike many developed countries, the regulatory function in India is performed both in the government, ie, department of telecom, and the regulator, Telecom Regulatory Authority of India (Trai). Given present functional jurisdiction, the answers to most regulatory issues lie with the government.

The paramount need for functional efficiency and financial health of telecom service companies is the process of consolidation. The international experience says that 5-6 licences are adequate for both quality of services and also competition in the sector.

Even if we account for the population of the country, there is no viable case for having a dozen licences in each service area. The truth is that many licence-seekers in 2007-08 were in the queue for unearned gains. This became evident when some foreign companies invested on hugely-appreciated script value of newly-licensed companies.

By 2012, there is already a clamour for incentivised merger and acquisition policy and friendly exit policy. Fortunately, the issue got partly addressed by the recent judgment of the Hon’ble Supreme Court. However, the government would be repeating the mistake if the number of licences are not rationalised.

It is imperative that the need and timing for new licences should be considered by the regulatory authority on reference from the government. No one is making a case for pre-determined numbers or any form of capping of licences. However, the process of granting licences can be initiated in phases to assess the felt need.

The government has announced the draft National Telecom Policy, 2011. The finalisation and its announcement deserve highest priority to dispel regulatory misgivings. There are important recommendations from Trai that deserve to be accepted by the government and incorporated in the NTP 2011.

The most critical structural recommendation is regarding unified service licence with freedom to use any technology and separation of spectrum. The acceptance of this policy would also require a defined path for the migration of present unified access services licence-holders. This should be addressed along with the licence-renewal policy as many of the incumbents would be completing 20 years beginning year 2014. It also entails determination of renewal fee.

There is another pending issue bothering investors in the telecom sector. It is regarding the determination of spectrum price beyond 6.2 MHz presently with the major telecom service providers. Trai has made certain recommendations on this subject.

However, the government would soon auction 2G spectrum band as per the orders of the Supreme Court. Therefore, a balanced view needs to be taken so as to avoid any situation of litigation and irrational bid conclusions.

Another recommendation of Trai is about reframing spectrum in 900 MHz band. It may be desirable to consider the monetisation of the spectrum value in 900 MHz band among the possible solutions to resolve this issue.

There are also technology and interconnect issues. Trai has already recommended permitting voice on internet protocol. In future, LTE technology will be a major challenge to the existing telecom service providers. The issue of interconnection within and outside the service area in different spectrum bands is already before the appellate court. There are official announcements of one India circle and consequent abolition of roaming charges.

This deserves serious consideration on grounds of technology, tariff and resolution of national long distance licences. Lastly, the rationalisation of tariff must remain with the telecom service providers. The need of the hour is to seek the view of telecom service providers and evolve regulatory policies in the larger national interest without any tag of winners and losers.

(This article was published in the Economic Times on 15th March, 2012, and in Business Standard on 11th March, 2012)