FIRST REPORT: Right to Information: Master Key to Good ...



The full text of the 15 reports of the Second Administrative Reforms CommissionCompiled by Sanjeev Sabhlok, October 2014. For the full set, download here.Note: a number of the reports have not been properly OCRd, so this should not be considered to be a comprehensive and authentic compilation. TOC \o "1-3" \h \z \u FIRST REPORT: Right to Information: Master Key to Good Governance PAGEREF _Toc401254283 \h 2PREFACE PAGEREF _Toc401254284 \h 2INTRODUCTION PAGEREF _Toc401254285 \h 8SECOND REPORT: Unlocking Human Capital: Entitlements and Governance – a case study PAGEREF _Toc401254286 \h 129THIRD REPORT: Crisis Management: From Despair to Hope PAGEREF _Toc401254287 \h 142FOURTH REPORT: Ethics in Governance PAGEREF _Toc401254288 \h 349FIFTH REPORT: Public Order – Justice for All . . . Peace for All PAGEREF _Toc401254289 \h 600SIXTH REPORT: Local Governance – An inspiring journey into the future PAGEREF _Toc401254290 \h 919SEVENTH REPORT: Capacity Building for Conflict Resolution – Friction to Fusion PAGEREF _Toc401254291 \h 1313EIGHTH REPORT: Combating Terrorism PAGEREF _Toc401254292 \h 1576NINTH REPORT: Social Capital – A Shared Destiny PAGEREF _Toc401254293 \h 1754TENTH REPORT: REFURBISHING OF PERSONNEL ADMINISTRATION - Scaling New Heights PAGEREF _Toc401254294 \h 2073ELEVENTH REPORT: PROMOTING e-governance, the SMART Way Forward PAGEREF _Toc401254295 \h 2082TWELFTH REPORT: CITIZEN CENTRIC ADMINISTRATION PAGEREF _Toc401254296 \h 2091THIRTEENTH REPORT: ORGANISATIONAL STRUCTURE OF GOVERNMENT OF INDIA PAGEREF _Toc401254297 \h 2313FOURTEENTH REPORT: STRENGTHENING FINANCIAL MANAGEMENT SYSTEMS PAGEREF _Toc401254298 \h 2470FIFTEENTH REPORT: STATE AND DISTRICT ADMINISTRATION PAGEREF _Toc401254299 \h 2669FIRST REPORT: Right to Information: Master Key to Good GovernanceSECOND ADMISTRATIVE REFORMS COMMISSIONRIGHT TO INFORMATION: Master Key to Good GovernanceSecond Administrative Reforms Commission Government of India2nd Floor, Vigyan Bhawan Annexe, Maulana Azad Road, New Delhi 110 011 e-mail : arcommission@nic.in website : 2006GOVERNMENT OF INDIASECOND ADMINISTRATIVE REFORMS COMMISSIONFIRST REPORTRIGHT TO INFORMATIONMASTER KEY TO GOOD GOVERNANCEJUNE 2006PREFACEThe Second Administrative Reforms Commission has been constituted to prepare a detailed blueprint for revamping the public administration system. The Commission has been given wide terms of reference covering all aspects of public administration. The Commission in its first report decided to analyze and give recommendations on the freedom of information as the Right to Information Act has been enacted recently and is a paradigm shift in administration.The Right to Information Act is a path-breaking legislation which signals the march from darkness of secrecy to dawn of transparency. It lights up the mindset of public authorities, which is clouded by suspicion and secrecy. Openness in the exercise of public power – Executive, Legislative or Judiciary – is a culture, which needs to be nurtured, with privacy and confidentiality being an exception. The right to information will also be a powerful means for fighting corruption. The effective implementation of the Right to Information Act will create an environment of vigilance which will help promote functioning of a more participatory democracy.James Madison once said, “A people who mean to be their own governors must arm themselves with power that knowledge gives”. In India, the Official Secrets Act, 1923 was a convenient smokescreen to deny members of the public access to information. Public functioning has traditionally been shrouded in secrecy. But in a democracy in which people govern themselves, it is necessary to have more openness. In the maturing of our democracy, right to information is a major step forward; it enables citizens to participate fully in the decision-making process that affects their lives so profoundly.It is in this context that the address of the Prime Minister in the Lok Sabha is significant. He said “I would only like to see that everyone, particularly our civil servants, should see the Bill in a positive spirit; not as a draconian law for paralyzing Government, but as an instrument for improving Government citizen interface resulting in a friendly, caring and effective Government functioning for the good of our people”. He further said, “ This is an innovative Bill, where there will be scope to review its functioning as we gain experience. Therefore, this is a piece of legislation, whose working will be kept under constant reviews.”The Commission, in its Report, has dealt with the application of the Right to Information in Executive, Legislature and Judiciary. The Judiciary could be a pioneer in implementing the Act in letter and spirit because much of the work that the Judiciary does is open to public scrutiny. Government of India has sanctioned an e-governance project in the Judiciary for about Rs.700 crore which would bring about systematic classification, standardization and categorization of records. This would help the Judiciary to fulfil its mandate under the Act. Similar capacity building would be required in all other public authorities. The transformation from non-transparency to transparency and public accountability is the responsibility of all three organs of State.The Commission is benefited by the deliberations at the Colloquium organized by the National Judicial Academy and inputs from various stakeholders. The Commission studied various laws on the subject including of other countries; it studied relevant reports of various Commissions and Committees and held several rounds of deliberations with State Governments. This Report, which gives practical recommendations to bring in a regime of freedom of information, is an outcome of the above efforts. I am confident that the implementation of this Report will usher in a new era of accountable and transparent administration.(M. Veerappa Moily)ChairmanGovernment of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reforms and Public GrievancesResolutionNew Delhi, the 31st August, 2005No. K-11022/9/2004-RC. — The President is pleased to set up a Commission of Inquiry to be called the second Administrative Reforms Commission (ARC) to prepare a detailed blueprint for revamping the public administration system.2.The Commission will consist of the following :(i)Shri Veerappa Moily - Chairperson(ii)Shri V. Ramachandran - Member(iii)Dr. A.P. Mukherjee - Member(iv)Dr. A.H. Kalro - Member(v)Dr. Jayaprakash Narayan - Member(vi)Smt. Vineeta Rai - Member-Secretary3.The Commission will suggest measures to achieve a proactive, responsive, accountable,sustainable and efficient administration for the country at all levels of the government. The Commission will, inter alia, consider the following :(i)Organisational structure of the Government of India(ii)Ethics in governance(iii)Refurbishing of Personnel Administration(iv)Strengthening of Financial Management Systems(v)Steps to ensure effective administration at the State level(vi)Steps to ensure effective District Administration(vii)Local Self-Government/Panchayati Raj Institutions(viii)Social Capital, Trust and Participative public service delivery(ix)Citizen-centric administration(x)Promoting e-governance(xi)Issues of Federal Polity(xii)Crisis Management(xiii)Public OrderSome of the issues to be examined under each head are given in the Terms of Reference attached as a Schedule to this Resolution4. The Commission may exclude from its purview the detailed examination of administration of Defence, Railways, External Affairs, Security and Intelligence, as also subjects such as Centre-State relations, judicial reforms etc. which are already being examined by other bodies. The Commission will, however, be free to take the problems of these sectors into account in recommending re-organisation of the machinery of the Government or of any of its service agenciesSome of the issues to be examined under each head are given in the Terms of Reference attached as a Schedule to this Resolution5.The Commission will give due consideration to the need for consultation with theState Governments.6.The Commission will devise its own procedures (including for consultations with theState Government as may be considered appropriate by the Commission), and may appoint committees, consultants/advisers to assist it. The Commission may take into account the existing material and reports available on the subject and consider building upon the same rather than attempting to address all the issues ab initio.7.The Ministries and Departments of the Government of India will furnish suchinformation and documents and provide other assistance as may be required by the Commission. The Government of India trusts that the State Governments and all others concerned will extend their fullest cooperation and assistance to the Commission.8.The Commission will furnish its report(s) to the Ministry of Personnel, PublicGrievances & Pensions, Government of India, within one year of its constitution(P.I. Suvrathan)Additional Secretary to Government of IndiaChapter 1CONTENTS1LIST OF ANNEXURESIntroductionAnnexure-I(1) Annexure-I(2) Annexure-I(3) Annexure-I(4) Annexure-I(5) Annexure-I(6) Annexure-V(1) Annexure-V(2) Annexure-V(3) Annexure-VI(1)List of participants at the National Colloquium70Recommendations of the Colloquium74Questionnaire83Case studies96A Comparative Analysis of the Right to Information Act of different States103A Comparative Analysis of International Laws on Freedom of Information110List of States which have constituted Information Commissions117Number of CPIOs/PIOs appointed by various Ministries/ Departments118Responses of some Ministries/Departments about status of record-keeping119The Inverted Tree concept for maintaining inventory of the public authorities120Part-IOFFICIAL SECRETSChapter 2Official Secrets Act and Other Laws42.1Background42.2The Official Secrets Act52.3Governmental Privilege in Evidence122.4The Oath of Secrecy172.5Exempted Organisations18LIST OF ABBREVIATIONS USEDChapter 3Rules and Procedures20APIOAssistant Public Information Officer3.1The Central Civil Services (Conduct) Rules20BSFBorder Security Force3.2The Manual of Office Procedure21CAGComptroller and Auditor GeneralCICCentral Information CommissionChapter 4Confidentiality Classification23CPIOCentral Public Information OfficerPart-IIIMPLEMENTATION OF THE RIGHT TO INFORMATION ACTCRPFCentral Reserve Police ForceGOIGovernment of IndiaChapter 5Rights and Obligations27NCRWCNational Commission to Review the Working of the Constitution5.1Rights and Obligations Under the Act27NICNational Informatics Centre5.2Building Institutions27NSANational Security Act5.3Designating Information Officers and Appellate Authorities29OSAOfficial Secrets Act5.4Organising Information and Record Keeping30PGCPublic Grievances Commission5.5Capacity Building and Awareness Generation33PIOPublic Information Officer5.6Monitoring Mechanism35PROPublic Records OfficeChapter 6Issues in Implementation38RTIRight to Information6.1Implementation of the Act38SICState Information Commission6.2Facilitating Access386.3Inventory of Public Authorities416.4Single Window Agency at District level416.5Subordinate Field Offices and Public Authorities426.6Application to Non Governmental Bodies436.7Time Limit for Information Beyond 20 Years446.8Mechanism for Redressal of Public Grievances466.9Frivolous and Vexatious Requests47Chapter 7Application of the Right To Information50Act to the Legislature and the JudiciaryChapter 8Removal of Difficulties54Conclusion56Summary of Recommendations571INTRODUCTION“If liberty and equality, as is thought by some are chiefly to be found in democracy, they will be best attained when all persons alike share in the government to the utmost”.Aristotle1.1 Introduction1.1.1 Right to information has been seen as the key to strengthening participatory democracy and ushering in people centred governance. Access to information can empower the poor and the weaker sections of society to demand and get information about public policies and actions, thereby leading to their welfare. Without good governance, no amount of developmental schemes can bring improvements in the quality of life of the citizens. Good governance has four elements- transparency, accountability, predictability and participation. Transparency refers to availability of information to the general public and clarity about functioning of governmental institutions. Right to information opens up government’s records to public scrutiny, thereby arming citizens with a vital tool to inform them about what the government does and how effectively, thus making the government more accountable. Transparency in government organisations makes them function more objectively thereby enhancing predictability. Information about functioning of government also enables citizens to participate in the governance process effectively. In a fundamental sense, right to information is a basic necessity of good governance.1.1.2 In recognition of the need for transparency in public affairs, the Indian Parliament enacted the Right to Information Act (hereinafter referred to as the RTI Act or the Act) in 2005. It is a path breaking legislation empowering people and promoting transparency. While right to information is implicitly guaranteed by the Constitution, the Act sets out the practical regime for citizens to secure access to information on all matters of governance. In the words of the Prime Minister1.“Efficient and effective institutions are the key to rapid economic and social development, institutions which can translate promises into policies and actionable programmes with the least possible cost and with the maximum possible efficiency; institutions which can deliver on the promises made11 Source: PM’s intervention in the Lok Sabha on the Right to Information Bill debate, May, 11 2005Right to Information – Master Key to Good Governanceand convert......, outlays into outcomes. For institutions to be effective they must function in a transparent, responsible and accountable manner.......The Right to Information Bill, will bring into force another right which will empower the citizen in this regard and ensure that our institutions and the functionaries discharge their duties in the desired manner. It will bring into effect a critical right for enforcing other rights and fill a vital gap in a citizen’s framework of rights”.1.1.3 This law is very comprehensive and covers almost all matters of governance and has the widest possible reach, being applicable to government at all levels – Union, State and Local as well as recipients of government grants. Access to information under this Act is extensive with minimum exemptions. Even these exemptions are subject to strict safeguards.1.1.4 As may be expected in a new legislation of this kind, permanently impacting on all agencies of government, there are bound to be implementation issues and problem areas, which need to be addressed. The Commission therefore decided to look at the implementation of this new legislation and make suitable recommendations to fulfil the objectives of the Act. While the Act applies to all branches of government – Executive, Legislative and Judicial, the Commission’s study and recommendations largely pertain to the Executive branch at all levels. However, the Commission has also carefully examined some of the key issues which need to be addressed in the Legislative and Judicial branches for effective implementation of the Act. It is for the competent authorities of the Legislatures and Judiciary to examine these recommendations and adopt them with modifications to suit their requirements.IntroductionDecember 2005. The list of participants in the National Colloquium organized by the Commission on the subject is in Annexure-I(1). The recommendations of the Colloquium are at Annexure-I(2). The questionnaire circulated to various stakeholders is in AnnexureI(3). The case studies conducted or relied on by the Commission are in Annexure-I(4). The comparative study of transparency laws in various States and other countries is in AnnexureI(5) and I(6) respectively.1.1.8 This Report is in two parts: Part I focusses on Official Secrets and confidentiality issues and is divided into three chapters: Official Secrets; Rules and Procedures; and Confidentiality Classification. Part II focuses on the steps required for effective implementation of the Act and is divided into four chapters: Rights and Obligations, Issues in Implementation, Application of the Act to the Legislature and the Judiciary and Removal of Difficulties.1.1.5 One of the terms of reference of the Administrative Reforms Commission pertains to the Freedom of Information, specifically the following aspects:-a.To review the confidentiality classification of government documents specially with reference to the Official Secrets Act.b.To encourage transparency and access to non-classified data.c.Disclosure of information and transparency as a supplement to the Right to Information of the citizens.1.1.6 The Commission has examined the relevant laws, rules and manuals which have an impact on freedom of information. It has specifically examined the Official Secrets Act, the Indian Evidence Act, Manual of Departmental Security Instructions and those pertaining to office procedures and Conduct Rules and made recommendations in respect of these.1.1.7 In order to elicit views from different stakeholders on Freedom of Information the Commission organized a National Colloquium at the National Judicial Academy, Bhopal in23Official Secrets Act and Other Laws2.2 The Official Secrets Act:Part I - OFFICIAL SECRETS2OFFICIAL SECRETS ACT AND OTHER LAWS2.2.1 The Right to Information Act has a non-obstante clause:“Sec. 8(2): Notwithstanding anything in the Official Secrets Act, 1923 nor any of the exemptions permissible in accordance with sub-section (1), a public authority may allow access to information, if public interest in disclosure outweighs the harm to the protected interests”.2.1 Background:2.2.2 The provisions of the Act which allow disclosure of information even where there is a clash with the exemption provisions of Sec.8(1) enjoy a general immunity from other Acts and instruments by virtue of Sec.22 of the Act :“Sec.22 The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in the Official Secrets Act, 1923, and any other law for the time being in force or any instrument having effect by virtue of any law other than this Act”.2.1.1 The most contentious issue in the implementation of the Right to Information Act relates to official secrets. In a democracy, people are sovereign and the elected government and its functionaries are public servants. Therefore by the very nature of things, transparency should be the norm in all matters of governance. However it is well recognised that public interest is best served if certain sensitive matters affecting national security are kept out of public gaze. Similarly, the collective responsibility of the Cabinet demands uninhibited debate on public issues in the Council of Ministers, free from the pulls and pressures of day-to-day politics. People should have the unhindered right to know the decisions of the Cabinet and the reasons for these, but not what actually transpires within the confines of the ‘Cabinet room’. The Act recognizes these confidentiality requirements in matters of State and Section 8 of the Act exempts all such matters from disclosure.2.2.3 Thus OSA would not come in the way of disclosure of information if it is otherwise permissible under the RTI Act. But OSA along with other rules and instructions may impinge on the regime of freedom of information as they historically nurtured a culture of secrecy and non-disclosure, which is against the spirit of the Right to Information Act.2.1.2 The Official Secrets Act, 1923 (hereinafter referred to as OSA), enacted during the colonial era, governs all matters of secrecy and confidentiality in governance. The law largely deals with matters of security and provides a framework for dealing with espionage, sedition and other assaults on the unity and integrity of the nation. However, given the colonial climate of mistrust of people and the primacy of public officials in dealing with the citizens, OSA created a culture of secrecy. Confidentiality became the norm and disclosure the exception. While Section 5 of OSA was obviously intended to deal with potential breaches of national security, the wording of the law and the colonial times in which it was implemented made it into a catch-all legal provision converting practically every issue of governance into a confidential matter. This tendency was buttressed by the Civil Service Conduct Rules, 1964 which prohibit communication of an official document to anyone without authorization. Not surprisingly, Section 123 of the Indian Evidence Act, enacted in 1872, prohibits the giving of evidence from unpublished official records without the permission of the Head of the Department, who has abundant discretion in the matter. Needless to say even the instructions issued for classification of documents for security purposes and the official procedures displayed this tendency of holding back information.2.2.4 Section 5 of OSA, as stated earlier, is the catch all provision. As per this Section, any person having information about a prohibited place, or such information which may help an enemy state, or which has been entrusted to him in confidence, or which he has obtained owing to his official position, commits an offence if (s)he communicates it to an unauthorised person, uses it in a manner prejudicial to the interests of the State, retains it when (s)he has no right to do so, or fails to take reasonable care of such information. Any kind of information is covered by this Section if it is classified as ‘secret’. The word “secret” or the phrase “official secrets” has not been defined in the Act. Therefore, public servants enjoy the discretion to classify anything as “secret”.2.2.5 The Supreme Court in Sama Alana Abdulla vs. State of Gujarat [(1996) 1 SCC 427] has held: (a) that the word ‘secret’ in clause (c) of sub-section (1) of Section 3 qualified official code or password and not any sketch, plan, model, article or note or other document or information and (b) when the accused was found in conscious possession of the material (map in that case) and no plausible explanation has been given for its possession, it has to be presumed as required by Section 3(2) of the Act that the same was obtained or collected by the appellant for a purpose prejudicial to the safety or interests of the State. Therefore, a sketch, plan, model, article, note or document need not necessarily be secret in order to be covered by the Act, provided it is classified45Right to Information – Master Key to Good GovernanceOfficial Secrets Act and Other Lawsas an ‘Official Secret’. Similarly, even information which does not have a bearing on national security cannot be disclosed if the public servant obtained or has access to it by virtue of holding office. Such illiberal and draconian provisions clearly bred a culture of secrecy. Though the RTI Act now overrides these provisions in relation to matters not exempted by the Act itself from disclosure, the fact remains that OSA in its current form in the statute books is an anachronism.2.2.6 The Law Commission in its 43rd Report (1971), summarised the difficulties encountered with the all inclusive nature of Section 5 of OSA, in the absence of a clear and concise definition of ‘official secret’, in the following words:“7.6.1 The wide language of section 5 (1) may lead to some controversy. It penalizes not only the communication of information useful to the enemy or any information which is vital to national security, but also includes the act of communicating in any unauthorized manner any kind of secret information which a Government servant has obtained by virtue of his office. Thus, every noting in the Secretariat file to which an officer of the Secretariat has access is intended to be kept secret. But it is notorious that such information is generally communicated not only to other Government servants but even to some of the non-official public in an unauthorized manner. Every such information will not necessarily be useful to the enemy or prejudicial to national security. A question arises whether the wide scope of section 5(1) should be narrowed down to unauthorized communication only of that class of information which is either useful to the enemy or which may prejudicially affect the national security leaving unauthorized communication of other classes of secret information to be a mere breach of departmental rules justifying disciplinary action. It may, however, be urged that all secret information accessible to a Government servant may have some connection with national security because the maintenance of secrecy in Government functions is essentially for the security of the State. In this view, it may be useful to retain the wide language of this section, leaving it to the Government not to sanction prosecution where leakage of such information is of a comparatively trivial nature not materially affecting the interests of the State7.6.3 The language of sub-section (1) of section 5 is cumbersome and lacks clarity. Hence without any change in substance, we recommend the adoption of a drafting device separately defining “official secret” as including the enumerated classes of documents and information.”2.2.7 The Law Commission also recommended consolidation of all laws dealing with national security and suggested a “National Security Bill”. The observations made by the Law Commission reproduced below are pertinent:“1.6 The various enactments in force in India dealing with offences against the national security are:-(i) chapters 6 and 7 of the Indian Penal Code ;(ii) the Foreign Recruiting Act, 1874;(iii) the Official Secrets Act, 1923;(iv) the Criminal Law Amendment Act, 1938;(v) the Criminal Law Amendment Act, 1961; and(vi) the Unlawful Activities (Prevention) Act, 1967.Of these, chapters 6 and 7 of the Indian Penal Code have been fully considered by us in our Report on that Code. We have recommended therein that the Criminal Law Amendment Act, 1938, should be included in chapter 7 of the Code. A brief summary of the other statutes on the subject will be useful.1.7 The Foreign Recruiting Act, 1874 deals mainly with recruitment in India for service in a foreign state. The definition of “foreign state” is very wide and will include all countries beyond the limits of India, including not only de jure Governments but also de facto Governments. Recruitment for service in such foreign states has an indirect but close bearing on national security and hence should find a place in the proposed law.1.8 Reference should also be made to the Foreign Enlistment Act, 1870, an Act of the British Parliament which, though not formally repealed, is of doubtful application to India since the Constitution. This Act regulates the conduct of British subjects throughout Her Majesty’s dominions during the existence of hostilities between foreign States with which the British Crown is at peace. It is obvious that similar legislation should find place in our statute book. Like recruitment for a foreign State, enlistment for service in a foreign State has also an indirect but close bearing on national security.1.9 The Official Secrets Act, 1923 is the main statute for fighting espionage activities which vitally affect the national security. The main offences created by this Act are as follows:-(i)“spying”, or entry into a prohibited place etc., transmission or collection of secretinformation, and the like ;(ii) wrongful communication of, or receiving secret information of the specified type;(iii) harbouring spies;(iv) unauthorized use of uniforms, falsification of reports etc., in order to enter a prohibited place, or for a purpose prejudicial to the safety of the State ;(v) interference with the police or military, near a prohibited place.1.10 The primary object of the Criminal Law Amendment Act, 1961 is to punish persons who question the territorial integrity or frontiers of India in a manner prejudicial to the safety and security of the country. Though there is undoubtedly necessity for retaining some of these provisions67Right to Information – Master Key to Good GovernanceOfficial Secrets Act and Other Lawswhich have a direct bearing on national security and integrity, in view of the passing of the Unlawful Activities (Prevention) Act, 1967, some of the provisions of the earlier Act may not be necessary. This question will be considered at the appropriate place.1.11 The Unlawful Activities (Prevention) Act, 1967 was passed for the effective prevention of disruptive activities, whether they are in support of secession of a part of the territory of India, or in support of the secession of a part of the territory of India from the Union, or otherwise disclaim, question or disrupt the sovereignty and territorial integrity of India. It deals with such activitiesof individuals and also of associations. Its provisions as to unlawful associations are detailed and elaborate.1.12 That this Act constitutes a vital link in the chain of enactments of importance to national security, cannot be doubted. Activities intended to “detach a part of the territory of a country” (as described in some of the foreign Penal Codes) stand at the apex of treasonable activities. They go much beyond the formation of a parallel Government or acts of overthrowing the Government, which are the subject matter of some of the provisions in Chapter 6 of the Indian Penal Code. Such activities, if successful, would bring into existence a parallel nation with its own “sovereignty and territorial integrity” which will be a rival to the country from which the territory is “detached”.There is, therefore, enough justification for bringing the offences covered by this Act within the fold of legislation on national security.1.13 Apart from the aforesaid statutes, there are provisions in other Acts mainly of a procedural nature which have a bearing on national security and integrity but as they form part of special statues, dealing with other subjects also, we would not recommend their incorporation in the new law.1.14 The first question we have to consider is whether there is a really necessity for a separate consolidated law on the subject, or else whether the aforesaid statutes may be allowed to remain as before. The main advantages of consolidation of statutes are these :-(1) Consolidation diminishes the bulk of the statute book and makes the law easier for those who have to administer it (including Judges, administrators, the Bar and the litigant public); for they have only one document to consult instead of two or more.(2) The consolidated Act speaks from one and the same time, and thus the convenience arising from the interpretations of sections of various Acts speaking from different times is avoided. The art of legislative drafting has altered very much during the last century and the language used, the length of the sentences, the arrangement of the clauses and the sections may have to be drastically altered to conform to modern style of drafting. This applies specially to the Foreign Recruiting Act and the Official Secrets Act which will, in any case, require revision.(3) Some of the provisions of the earlier Acts may have to be omitted as unnecessary.In addition to these advantages, there arises an opportunity of incorporating in the new Act some of the provisions of the foreign codes dealing with national security which may be suited for Indian conditions also. For these reasons, we are of the view that there should be a consolidated statute entitled the National Security Act.1.16 Another question is whether the new law should be a separate enactment, or else, whether it could be inserted as a separate chapter in the revised Indian Penal Code. It is true that crimes affecting national security form an essential part of the criminal law of the country, and we find that in many foreign codes, these crimes are included in a separate chapter in the penal Code. But we consider it desirable to pass separate legislation on the subject, for the following reasons:-(1) A special rule of limitation may have to be provided for some offences affecting national security.(2) The necessity of obtaining sanction from the Government before initiating prosecutions for offences under the new law is a special feature, not found in respect of most of the offences under the Penal Code.(3) In some other respects also, the provisions of the Criminal Procedure Code may have to be modified in their application to offences under the new law.(4) The rules of evidence ordinarily applicable for trial of criminal cases will have to be very much modified in their application for the trial of some of the offences under the new law.These reasons make the new law distinguishable from most of the provisions of the Indian Penal Code and it may, hence, be somewhat incongruous if the new law is introduced as a separate chapter in the Indian Penal Code. We therefore recommend separate legislation on the subject.”2.2.8 The Commission agrees with the recommendation of the Law Commission that all laws relating to national security should be consolidated. The Law Commission’s recommendation was made in 1971. The National Security Act (NSA), subsequently enacted in 1980, essentially replaced the earlier Maintenance of Internal Security Act and deals only with preventive detention. Therefore, a new chapter needs to be added to the NSA incorporating relevant provisions of OSA and other laws dealing with national security.89Right to Information – Master Key to Good GovernanceOfficial Secrets Act and Other Laws2.2.9 The Commission studied the Report of the Working Group constituted under the Chairmanship of Shri H. D. Shourie on “Right to Information and Transparency, 1997” (hereinafter referred to as the ‘Shourie Committee’) which has provided valuable inputs in framing the recommendations on this issue. The Shourie Committee had the following to say about OSA:“ It is the Official Secrets Act that has been regarded in many quarters as being primarily responsible for the excessive secrecy in government. Its “Catch-all” nature has invited sustained criticism and demand for its amendment. Section 5 of this Act provides for punishment for unauthorized disclosure of Official secrets but omits to define secrets”.2.2.10 The Shourie Committee recommended a comprehensive amendment of Section 5(1) to make the penal provisions of OSA applicable only to violations affecting national security. However the Ministry of Home Affairs, on consultation expressed the view that there is no need to amend OSA as the RTI Act has overriding effect. The Ministry, quite understandably, is concerned about the need for a strong legal framework to deal with offences against the state. While recognizing the importance of keeping certain information secret in national interest, the Commission is of the view that the disclosure of information has to be the norm and keeping it secret should be an exception. OSA, in its present form is an obstacle for creation of a regime of freedom of information, and to that extent the provisions of OSA need to be amended. The Commission, on careful consideration agrees with the amendment proposed by the Shourie Committee, as it reconciles harmoniously the need for transparency and the imperatives of national security without in anyway compromising the latter. These can be incorporated in the proposed new chapter in the NSA relating to Official Secrets.2.2.11 When there is more than one law - one old and the other new – on the same subject, there is always some ambiguity and consequent confusion in implementation. This has been the experience with a number of such laws including some constitutional amendments. Such duplication and ambiguity also leads to needless litigation. Despite ‘implied repeal’ and provisions like ‘notwithstanding anything contained in any other law’ the old subordinate legislation, notifications and executive instructions continue unaltered and govern actual implementation. In order to send a strong signal about the change and for the sake of effective implementation, the old law/s should be repealed or modified to the extent necessary. Basic change and lazy legislation do not go together.102.2.12 Recommendations:a.The Official Secrets Act, 1923 should be repealed, and substituted by achapter in the National Security Act, containing provisions relating to official secrets.b. The equivalent of the existing Section 5, in the new law may be on the lines recommended by the Shourie Committee as quoted below.“ 5(1) If any person, having in his possession or control any official secret which has come into his possession or control by virtue of:-b1. his holding or having held an office with or under government, orb2. a contract with the government, orb3. it being entrusted to him in confidence by another person holding or having held an office under or with the government, or in any other manner,municates, without due authority such official secretto another person or uses it for a purpose other than a purpose for which he is permitted to use it under any law for the time being in force; orii.fails to take reasonable care of, or so conducts himselfas to endanger the safety of the official secret; oriii. wilfully fails to return the official secret when it is his duty to return it,shall be guilty of an offence under this section.5(2) Any person voluntarily receiving any official secret knowing or having reasonable ground to believe, at the time he receives it, that the official secret is communicated in contravention of this Act, shall be guilty of an offence under this section.5(3) A person guilty of an offence under this section shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.Explanation: For the purpose of this section, ‘Official Secret’ means any information the disclosure of which is likely to prejudicially11Right to Information – Master Key to Good GovernanceOfficial Secrets Act and Other Laws2.3.1 Public Law in its procedural aspect is of as much interest as substantive law. Although the citizen may sue public bodies and the Government, it does not necessarily follow that the law and procedure applied by the courts in such suits will be the same as is applied in litigation between private citizens. Special procedural advantages and protections are enjoyed by the State. One such protection operates in the field of evidence and is in the nature of a privilege regarding the production of certain documents and disclosure of certain communications2.2.3.2 The term “privilege” as used in Evidence law means freedom from compulsion to give evidence or to discover material, or a right to prevent or bar information from other sources during or in connection with litigation, but on grounds extrinsic to the goals of litigation.32.3.3 Section 123 of the Indian Evidence Act, 1872 prohibits the giving of evidence derived from unpublished official records relating to affairs of State except with the permission of the Head of the Department. This Section reads as follows:“No one shall be permitted to give any evidence derived from un-published official records relating to any affairs of State, except with the permission of the officer at the head of the department concerned, who shall give or withhold such permission as he thinks fit”.2.3.4 Further, Section 124 of the Act stipulates:“No public officer shall be compelled to disclose communications made to him in official confidence when he considers that the public interests would suffer by the disclosure”.2.3.5 The Law Commission in its 69th report (1977) on the Indian Evidence Act suggested that Section 123 should be revised on the following lines:“ (1) No one shall be permitted to give any evidence derived from unpublished official records relating to any affairs of State, unless the officer at the head of the department concerned has given permission for giving such evidence. (This proposition was intended to restate the position, to start with. It would operate primarily as between the witness and his superior. There was no change of substance).(2) Such officer should not withhold such permission unless he is satisfied that the giving of such evidence would be injurious to the public interest. He should make an affidavit also in this regard. The Court, may if it thinks fit, call for a further affidavit from the head of the department. (This proposition was intended to amplify the section, by highlighting the test of “injury to the public interest” – a test discernible from the case law on the subject – and by codifying the procedure that had already been indicated judicially.(3) Where such officer has withheld permission for the giving of such evidence, and the Court, after inspecting the unpublished official records concerned and after considering the affidavit, is of the opinion that the giving of such evidence would not be injurious to the public interest, the court should record its decision to that effect and thereupon the section will not apply to such evidence. [This proposition was intended to modify the existing section, in so far as the textual law was concerned. The change was an important one, as the decision as to injury to the public interest would be with the Court and not with the officer at the head of the Department]”Similarly it was recommended that Section 124 of the Indian Evidence Act should be amended as follows:“(1) No public officer shall be compelled to disclose communications made to him in official confidence, other than communications contained in unpublished official records relating to any affairs of State, when the Court considers that the public interests would suffer by the disclosure.(2) Where a public officer who is a witness is asked a question which might require the disclosure of any such communication, and he objects to answering the question on the ground that the public interests would suffer by its disclosure, the court shall, before rejecting his objection, ascertain from him, in chambers, the nature of his objection and reasons therefor”.2.3.6 The Law Commission once again examined Section 123 and 124 and gave its recommendations in its 88th report.(1983). It recommended that Sections 123 and 124 should be amended in the following manner:“123(1) Subject to the provisions of this section, no one shall be permitted to give any evidence derived from unpublished official records relating to any affairs of State, unless the officer at the head of the department concerned has given permission for giving such evidence.123(2) Such officer shall not withhold such permission, unless he is satisfied that the giving of such evidence would be injurious to the public interest; and where he withholds such permission, he shall make an affidavit containing a statement to that effect and setting forth his reasons therefore:Provided that where the Court is of opinion that the affidavit so made does not state the facts or the reasons fully, the Court may require such officer or, in appropriate cases, the Minister concerned with the subject, to make a further affidavit on the subject.affect the sovereignty and integrity of India, the security of State, friendly relations with foreign states, economic, commercial, scientific and technological matters relating to national security and includes: any secret code, password, sketch plan, model, article, note or document in relation to a prohibited place.”2.3 Governmental Privilege in Evidence:12132 88th Report of Law Commission of India3 Paul F.Rothstein, Evidence : State and Federal Rules (1981), page 407Right to Information – Master Key to Good GovernanceOfficial Secrets Act and Other Laws123(3) where such officer has withheld permission for the giving of such evidence, the court, after considering the affidavit or further affidavit, and if it so thinks fit, after examining such officer or, in appropriate cases, the Minister, orally-(a) shall issue a summons for the production of the unpublished official records concerned, if such summons has not already been issued ;(b) shall inspect the records in chambers ; and(c) shall determine the question whether the giving of such evidence would or would not be injurious to the public interest, recording its reasons therefor.123 (4) Where, under sub section (3), the court decides that the giving of such evidence would not be injurious to the public interest, the provisions of sub-section (1) shall not apply to such evidence”.“124(1) No public officer shall be compelled to disclose communications made to him in official confidence, when the court considers that the public interests would suffer by the disclosure.124(2) Where a public officer who is a witness is asked a question which might require the disclosure of any such communication, and he objects to answering the question on the ground that the public interests would suffer by its disclosure, the court shall, before rejecting his objection, ascertain from him, in chambers, the nature of his objection and reasons therefor.124 (3) Nothing in this section applies to communications contained in un-published official records relating to any affairs of State, which shall be dealt with under section 123".2.3.7 The Shourie Committee also examined these sections of the Indian Evidence Act and recommended amendments as follows:(1) Proposed Sections 123 & 124, Indian Evidence Act.“123.(1) Subject to the provisions of this section, no one shall be permitted to give any evidence derived from unpublished official records relating to any affairs of State, unless the officer at the head of the department concerned has given permission for giving such evidence.(2) Such officer shall not withhold such permission, unless he is reasonably satisfied that the giving of such evidence would be injurious to the public interest ; and where he withholds such permission, he shall make an affidavit containing a statement to that effect and setting forth his reasons therefore:“Provided that where the Court is of opinion that the affidavit so made does not state the facts or the reasons fully, the Court may require such officer or, in appropriate cases, the Minister concerned with the subject, to make a further affidavit on the subject.(3) Where such officer has withheld permission for the giving of such evidence, the Court,after considering the affidavit or further affidavit, and if it so thinks fit, after examining such officer or, in appropriate cases, the Minister, orally:-(a) shall issue a summons for the production of the unpublished official records concerned, if such summons has not already been issued.(b) shall inspect the records in chambers; and(c) shall determine the question whether the giving of such evidence would or would not be injurious to public interest, recording its reasons therefor.(4) Where, under sub-section (3), the Court decides that the giving of such evidence would not be injurious to public interest, the provisions of sub-section (1) shall not apply to such evidence.“124.(1) No public officer shall be compelled to disclose communications made to him in official confidence, when the Court considers that the public interests would suffer by the disclosure.(2) Where a public officer who is a witness is asked a question which might require the disclosure of any such communication, and he objects to answering the question on the ground that the public interests would suffer by its disclosure, the Court shall, before adjudicating upon his objection, ascertain from him, in chambers, the nature of his objection and reasons therefor.(3) Nothing in this section applies to communications contained in unpublished official records relating to any affairs of State, which shall be dealt with under Section 123.”Draft of proposed provision to be inserted at the appropriate place in the Code of Civil Procedure, 1908 and the Code of Criminal Procedure, 1973.“ Any person aggrieved by the decision of any Court subordinate to the High Court rejecting a claim for privilege made under section 123 or section 124 of the Indian Evidence Act, 1872 shall have a right of appeal to the High Court against such decision, and such appeal may be filed notwithstanding the fact that the proceeding in which the decision was pronounced by the court is still pending”The Commission studied all these recommendations and is of the view that the existing provisions need amendment on the lines indicated below:2.3.8 Recommendations:a.Section 123 of the Indian Evidence Act, 1872 should be amended to readas follows:1415Right to Information – Master Key to Good GovernanceOfficial Secrets Act and Other Laws“123.(1)Subject to the provisions of this section, no one shall be permitted to give any evidence derived from official records which are exempt from public disclosure under the RTI Act, 2005.2.4 The Oath of Secrecy:2.4.1 A Union Minister, while assuming office, is administered an oath of secrecy as follows:“I will not directly or indirectly communicate or reveal to any person or persons any matter which shall be brought under my consideration or shall become known to me as a Minister for the Union except as may be required for the due discharge of my duties as such Minister.”(2) Where he withholds such permission, he shall make an affidavit containing a statement to that effect and setting forth his reasons therefor.(3) Where such officer has withheld permission for the giving of such evidence, the Court, after considering the affidavit or further affidavit, and if it so thinks fit, after examining such officer or, in appropriate cases, the Minister, orally:a) shall issue a summons for the production of the unpublished official records concerned, if such summons has not already been issuedb) shall inspect the records in chambers; andc)shall determine the question whether the giving of such evidencewould or would not be injurious to public interest, recording its reasons therefor.(4) Where, under sub-section (3), the Court decides that the giving of such evidence would not be injurious to public interest, the provisions of subsection (1) shall not apply to such evidence.A Minister in the State Government takes a similar oath.2.4.2 The National Commission to Review the Working of the Constitution (NCRWC), while examining the Right to Information had the following to say:“Government procedures and regulations shrouded in a veil of secrecy do not allow the clients to know how their cases are being handled. They shy away from questioning officers handlingtheir cases.In this regard, government must assume a major responsibility and mobilize skillsto ensure flow of information to citizens. The traditional insistence on secrecy should be discarded. In fact, we should have an oath of transparency in place of an oath of secrecy”.Provided that in respect of information classified as Top Secret for reasons of national security, only the High Court shall have the power to order production of the records.”2.4.3 A Minister is a bridge between the people and the Government and owes his primary allegiance to the people who elect him. The existence of this provision of oath of secrecy and its administration along with the oath of office appears to be a legacy of the colonial era where the public was subjugated to the government. However, national security and larger public interest considerations of the country’s integrity and sovereignty may require a Minister or a public servant with sufficient justification not to disclose information. But a very public oath of secrecy at the time of assumption of office is both unnecessary and repugnant to the principles of democratic accountability, representative government and popular sovereignty. Therefore, the obligation not to disclose official secrets may be built in through an appropriate insertion of a clause in the national security law dealing with official secrets. If required, such an undertaking may be taken in writing, thus avoiding public display of propensity to secrecy. The Commission is therefore of the view that the Oath of Secrecy may be dispensed with and substituted by a statutory arrangement and a written undertaking. Further, keeping in view the spirit of the Act to promote transparency and as recommended by the NCRWC it would be appropriate if Ministers on assumption of office are administered an oath of transparency alongwith the oath of office.Section 124 of the Indian Evidence Act will become redundant on account of the above and will have to be repealed.Accordingly, the following will have to be inserted at the appropriate place in the Code of Civil Procedure, 1908 and the Code of Criminal Procedure, 1973:“Any person aggrieved by the decision of any Court subordinate to the High Court rejecting a claim for privilege made under section 123 of the Indian Evidence Act, 1872 shall have a right to appeal to the High Court against such decision, and such appeal may be filed notwithstanding the fact that the proceeding in which the decision was pronounced by the Court is still pending.”2.4.4 Recommendations:a. As an affirmation of the importance of transparency in public affairs, Ministers on assumption of office may take an oath of transparency alongwith the oath of office and the requirement of administering the1617Right to Information – Master Key to Good GovernanceOfficial Secrets Act and Other Lawsoath of secrecy should be dispensed with. Articles 75(4) and 164 (3), and the Third Schedule should be suitably amended.b. Safeguard against disclosure of information against the national interest may be provided through written undertaking by incorporation of a clause in the national security law dealing with official secrets.2.5 Exempted Organizations:2.5.1 Certain categories of organizations have been exempted from the provisions of the Act:“24. (1) Nothing contained in this Act shall apply to the intelligence and security organisations specified in the Second Schedule, being organisations established by the Central Government or any information furnished by such organisations to that Government”.2.5.2 The list of organizations includes Border Security Force (BSF), Central Reserve Police force (CRPF), Assam Rifles etc., but the Armed Forces have been left outside the purview of the Act. When organizations such as BSF, CRPF, Assam Rifles are exempted, there is no rationale for not exempting the Armed Forces as well. The Second schedule needs to be periodically revised to include or exclude organizations in keeping with changing needs.2.5.3 The Commission feels that the Armed Forces should be included in the list of exempted organization (Second Schedule of the Act), because almost all activities of the Armed Forces would be covered under the exemption 8(a) which states that there shall be no obligation to give to any citizen, information which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interestsof the State”. The Commission is mindful of the fact that the Act provides for disclosurewhen allegations of corruption and human rights abuses are made even in respect of the organizations included in the Second Schedule {Section 24 (1)}. Also, Section 8 (2) makes disclosure mandatory in respect of exempted categories, if public interest in disclosure outweighs the harm to the protected interests. Therefore, by including Armed Forces in the Second Schedule, while national security is safeguarded, disclosure is still mandatory when public interest demands it.2.5.4 Section 24 of the Act stipulates:24. (1) Nothing contained in this Act shall apply to the intelligence and security organisations specified in the Second Schedule, being organisations established by the Central Government or any information furnished by such organisations to that Government:Provided that the information pertaining to the allegations of corruption and human rights violations shall not be excluded under this sub-section:2.5.5 The organizations included in the Second Schedule need not appoint PIOs. A question arises that in case of request for information pertaining to allegations of corruption and human rights violation, how should a request be made? The Commission feels that even in cases of organizations listed in Second Schedule, PIO s should be appointed so that requests for applications may be filed with them. A person aggrieved by an order of the PIO may approach the CIC/SIC.2.5.6 Recommendations:a. The Armed Forces should be included in the Second Schedule of the Act.b. The Second Schedule of the Act may be reviewed periodically.c.All organizations listed in the Second Schedule have to appoint PIOs.Appeals against orders of PIOs should lie with CIC/SICs. (This provision can be made by way of removal of difficulties under section 30).1819The Central Civil Services (Conduct) Rules3THE CENTRAL CIVIL SERVICES (CONDUCT) RULES:has amended the Civil Services (Conduct) Rules on these lines in Oct. 2005. However all States need to amend rules in a similar manner in keeping with the letter and spirit of RTI Act.3.1.4 Recommendations:a.Civil Services Rules of all States may be reworded on the following lines:3.1 The Central Civil Services (Conduct) Rules:“Communication of Official Information:Every Government servant shall, in performance of his duties in good faith, communicate to a member of public or any organisation full and accurate information, which can be disclosed under the Right to Information Act, 2005.Explanation – Nothing in this rule shall be construed as permitting communication of classified information in an unauthorised manner or for improper gains to a Government servant or others.”3.1.1 The Central Civil Services (Conduct) Rules prohibit unauthorized communication of information (similar provisions exist for the state government employees under their respective Rules).“11. Unauthorised communication of informationNo Government servant shall, except in accordance with any general or special order of the Government or in the performance in good faith of the duties assigned to him, communicate, directly or indirectly, any official document or any part thereof or information to any Government servant or any other person to whom he is not authorised to communicate such document or information.EXPLANATION- Quotation by a Government servant (in his representation to the Head of Office, or Head of Department or President) of or from any letter, circular or office memorandum or from the notes on any file, to which he is not authorised to have access, or which he is not authorised to keep in his personal custody or for personal purposes, shall amount to unauthorised communication of information within the meaning of this rule”.3.2 The Manual of Office Procedure3.2.1 The relevant portions of the Manual which conflict with the RTI Act are reproduced below:3.1.2 The Shourie Committee examined this issue and stated as follows:“116. Unauthorised communication of official information - Unless authorised by general or specific orders, no official will communicate to another official or a non-official, any information or document(s) (including electronic document(s)) which has come into his possession in the course of his official duties.118. Confidential character of notes/ files (1) The notes portion of a file referred by a department to another will be treated as confidential and will not be referred to any authority outside the secretariat and attached offices without the general or specific consent of the department to which the file belongs. If the information is in the electronic form it will be handled by authorized official only.“ There is a widespread feeling that the Central Civil Services (Conduct) Rules, 1964, and corresponding rules applicable to Railways, Foreign Services and All India Services, inhibit government servants from sharing information with public. The accent in these rules is on denial of information to public. This situation has obviously to change if freedom of Information Act is to serve its purpose and if transparency is to be brought about in the system”.3.1.3 The Commission agrees with the views of the Shourie Committee. The Central Civil Services (Conduct) Rules were formulated when the RTI Act did not exist. The spirit of these Rules is to hold back information. With the emergence of an era of freedom of information, these Rules would have to be recast so that dissemination of information is the rule and holding back information is an exception. The Department of Personnel and Training3.2.2 The Manual of Office Procedure was prepared when the RTI Act was not in existence. These provisions are totally violative of the Act and hence need to be brought in conformity with the Act. The Act also defines “information” to mean any material in any form, including records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, log books, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force. Thus notings and files per se will not2021Right to Information – Master Key to Good GovernanceThe Central Civil Services (Conduct) Rulesbecome confidential and inaccessible unless they are classified as such and are declared to be covered under exemption provisions of Section 8(1) of the Act. To bring it in conformity with the Act, the provisions regarding unauthorized communication of official information and confidential character of notes / files will have to be amended.4CONFIDENTIALITY CLASSIFICATION3.2.3 Recommendations:a. Para 116 of the Manual of Office Procedure needs to be reworded as follows:.4.1 Classification of Information:“Communication of Official Information: Every Government Servant shall, in performance of his duties in good faith, communicate to a member of public or any organization full and accurate information, which can be disclosed under the Right to Information Act. (Nothing stated above shall be construed as permitting communication of classified information in an unauthorized manner or for improper gains to a Government Servant or others).”b.Para 118 (1) should be deleted.c. The State Governments may be advised to carry out similar amendments in their Manuals, if such provisions exist therein.4.1.1. Apart from the somewhat indiscriminate application of OSA to information which was not intended to be secret, a major contributor to the culture of secrecy in the government is the tendency to classify information even where such classification is clearly unwarranted. The Government of India has issued detailed instructions pertaining to safeguarding information in its possession, the unauthorised disclosure of which would cause damage to national security or would cause embarrassment to the Government in its functioning or would be prejudicial to national interest. These instructions, which are contained in the Manual of Departmental Security Instructions and the Manual of Office Procedure, lay down guidelines to give a security classification to a record based on the degree of confidentiality required. They also describe the manner in which each of such classified information should be handled and the persons who can access such information.4.1.2 The Shourie Committee considered the issue of classification of information and noted:“A major contributor to the lack of transparency is the tendency to classify information even where such classification is clearly unjustified. There is also the tendency to accord higher classification than is warranted. The Manual of Departmental Security Instructions, issued by the Ministry of Home Affairs, and the Manual of Office Procedure, which incorporates some of these instructions, do lay down the criteria and guidelines for classification and specify the authorities competent to authorise classification gradings viz. Top Secret, Secret and Confidential.While the criteria for classification have perhaps necessarily to be broad, it is desirable, in the interest of a proper approach to classification that they should be backed up by a suitable illustrative list for guidance of officers. While drawing up such a list, the principle to be adhered to is that ordinarily only such information, as would qualify for exemption under the proposed Freedom of Information Act, should be classified.”4.1.3 The Manual of Departmental Security Instructions deals with classification of documents and records involving national security and sensitive matters. Once information gets a security classification it moves out of the public domain. Even the RTI Act respects the need to keep certain information outside the public domain. Section 8 of the Act lists out the exemptions22123Right to Information – Master Key to Good Governanceunder which the PIO need not give information. However it is necessary to harmonise security classification with the provisions of the Act.4.1.4 The task of classifying a document is vital in the larger national interest, and should be handled with great caution as any security classification denies access of information to public. Therefore only officers of sufficient seniority should be empowered to classify documents. Moreover under the existing instructions, information once classified continues to be so without any time limit. In other countries, even war secrets are brought into public domain after a lapse of a specified period, usually 30 years. It is therefore necessary to review such classified documents after a reasonable period of, say 30 years (the period can be even less in case of some documents). Those which do not merit classification should then be declassified and kept in the public domain.4.1.5 Further, the hierarchy of security classification needs to be rationalised, reflecting the scheme of exemptions under the Act and emerging challenges. The Act has listed 11 categories (section 8 and 9) of exemption wherein information may not be given out. These range from “information, disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign State or lead to incitement of an offence; to “infringement of copyright subsisting in a person”. The Commission feels that the classification system should broadly cover each of these categories of information. It is quite possible that an information falls under two or more categories of exemptions. In that case the information should be given the classification of the higher order among the exemptions.4.1.6 Although the 11 categories of information are fairly exhaustive and cover almost all possible situations for keeping information secret, some situations which demand secrecy seem to remain out of these exemptions like confidential reports of officials, and question papers of examinations. The Commission feels that information in these cases should also be covered by exemptions.4.1.7 The Commission studied the recommendations of the Shourie Committee, and is in broad agreement with the recommendations made by it.4.1.8 Recommendations:a. The GOI should amend the Manual of Departmental Security Instructions in the following manner:rmation Deserving Classification (Para 3)It would be advisable for each Ministry/Department to identifyThe Central Civil Services (Conduct) Rulesthe information which deserves to be given a security classification. Ordinarily, only such information should be given a security classification which would qualify for exemption from disclosure under the Right to Information Act, 2005. The Classification of documents should be done as per the following guidelines.Sl.No.Section of the RTI Act to whichClassificationinformation pertains18(1)(a)Top Secret28(1)(b)Confidential38(1)(c)Confidential48(1)(d)Secret58(1)(e)Confidential68(1)(f)Secret78(1)(g)Top Secret/Secret88(1)(h)Secret/Confidential98(1)(i)Confidential108(1)(j)Confidential/restricted119Confidential/restrictedExplanation: The above mentioned classification should be generally followed. It is quite possible that information may be covered by more than one exemption; in that case the information should be given the classification of the higher category. Also if it is felt by the competent authority that circumstances of a case demand a higher classification than what is indicated above, then the same may be done by an authority, which is empowered to give such a classification.Provision should be made to include annual confidential reports of officers and examination question papers and related matters in2425Right to Information – Master Key to Good Governancethe exemptions under the RTI Act. This may be done by way of removal of difficulties under Section 30.Part-II - IMPLEMENTATION OF THE RIGHT TO INFORMATION ACTii. Upgrading and Downgrading (Para 2.3)Documents once classified as “Top Secret” or “Secret”, should remain so classified as long as required but not exceeding 30 years. Documents classified as confidential and restricted should remain so for a period not exceeding 10 years. However, the competent classifying officer may, for reasons to be recorded in writing, authorise continued classification beyond the period prescribed above if information, the disclosure of which would cause damage to national security or national interest. A recipient officer of appropriate rank in a Ministry or Department may upgrade the security classification of a document received from outside, but this raised classification will be limited only to the Ministry or Department. (S)He will, however, have no authority to downgrade the security classification of a document received, without the concurrence of the originator. Within the same Department, an officer superior to the originator would have the authority to downgrade or upgrade the classification.iii. Officer Authorised to Accord the Grading:Top SecretNot below Joint SecretarySecretNot below Deputy SecretaryConfidentialNot below Under SecretaryThe State Governments may authorise officers of equivalent rank to accord the grading.RIGHTS AND OBLIGATIONS5.1 Rights and Obligations Under the Act:5.1.1 In order to enforce the rights and fulfil the obligations under the Act, building of institutions, organization of information and creation of an enabling environment are critical. Therefore, the Commission has as a first step reviewed the steps taken so far to implement the Act as follows:I. BUILDING INSTITUTIONS:rmation rmation Officers and Appellate Authorities.II. INFORMATION AND RECORD-KEEPING:a.Suo motu declaration under Section 4.b.Public Interest Disclosure.c.Modernizing recordkeeping.III. CAPACITY BUILDING AND AWARENESS GENERATION:IV. CREATION OF MONITORING MECHANISMS:5.2 Building Institutions:5.2.1 Information Commissions: Government of India (GOI) constituted the Central Information Commission (CIC) with a Chief Information Commissioner and four Information Commissioners (Section 12). The CIC has been hearing appeals under the Act. All the decisions of the CIC are being posted on the website (). So far (as on 3-5-06) 21 States constituted the State Information Commissions (SICs) under Section 1(3). The provisions of Section 15 came into force at once, thereby meaning that all the State Governments were required to constitute their respective Commissions immediately on enactment of the RTI Act. This has been accomplished by most of the State Governments as brought out by the table in Annexure-V(1). The Commission also obtained information about the background of the State Chief Information Commissioners so as to ascertain whether all sections of society are being represented. This information is also summarized in Annexure-V(1).265127Right to Information – Master Key to Good GovernanceThe Act provides for selection of CIC and SICs in a bipartisan manner, and involves the Leader of the Opposition in the process. Since the Act is applicable to all three organs of the State, it would be appropriate to include in the selection committee the Chief Justice of the Supreme Court or High Court as the case may be. This will inspire public confidence and enhance the quality of the selection.5.2.2 Despite a legal obligation to constitute Information Commissions, 6 States have failed to do so even 10 months after its enactment. The States, which have not constituted Information Commissions so far ( as on 3-5-06), are Bihar, Jharkhand, Manipur, Sikkim, Arunachal Pradesh and Mizoram. This needs to be rectified immediately.5.2.3 The Act allows for dispersal of Information Commissions to provide easy access to citizens. {Section 12(7), 15(7)}. However neither the CIC nor the SICs have established offices at places other than the Capitals. For an overly citizen friendly law to be effectively implemented it is vital to have easy access in a vast country like ours. The Commission is therefore of the view that the CIC should be dispersed in atleast 4 regions. Similarly the SICs in larger States should be dispersed depending on population density and geographical area.5.2.4 The Act visualizes a Commission wherein the Members represent different sections of the society. The State Governments are still in the process of appointing Information Commissioners, but an analysis of the background of the State Chief Information Commissioners indicates the preponderance of persons with civil service background. Members with civil services background no doubt bring with them wide experience and an intricate knowledge of government functioning; however to inspire public confidence and in the light of the provisions of the Act, it is desirable that the Commissions have a large proportion of members with non civil services background.5.2.5 Recommendations:a.Section 12 of the Act may be amended to constitute the SelectionCommittee of CIC with the Prime Minister, Leader of the Opposition and the Chief Justice of India. Section 15 may be similarly amended to constitute the Selection Committee at the State level with the Chief Minister, Leader of the Opposition and the Chief Justice of the High Court.b. The GOI should ensure the constitution of SICs in all States within 3 months.c. The CIC should establish 4 regional offices of CIC with a Commissioner heading each. Similarly regional offices of SICs should be established in larger States.Rights and Obligations Under the Actd. At least half of the members of the Information Commissions should be drawn from non civil services background. Such a provision may be made in the Rules under the Act, by the Union Government, applicable to both CIC and SICs.5.3 Designating Information Officers and Appellate Authorities:5.3.1 All Union Ministries/Departments have designated PIOs thus complying with the stipulation of designating PIOs. There is however a wide variation in the numbers of PIOs appointed, and the level of officers appointed {Annexure-V(2)}. Where more than one PIO is appointed for an office an applicant is likely to face difficulty in accessing the appropriate PIO. Thus it is desirable to designate a nodal PIO/APIO in such cases.5.3.2 The Commission also noted that in GOI the level of PIOs varied from Joint Secretary to Under Secretary {Annexure-V(2)}. Ideally the PIO should be of a sufficiently senior rank to be able to access information and furnish it in an intelligible and useful manner. At the same time the PIO should be sufficiently accessible to the public. Therefore the Commission is of the view that in GOI there should be a uniform pattern of appointing an officer of the rank of Deputy Secretary/Director as PIO. In respect of attached and subordinate offices of GOI and State Governments, a uniform prescription of this kind is not possible because of wide variation in size and scope of functions. However the principle enunciated above may be adopted while designating PIOs.5.3.3 While Section 19(1) read with Section 7(3) (b) implies designating an appellate authority for each PIO, the law does not specifically provide for designating of appellate authorities as it does in case of PIOs. As a result there is avoidable confusion about the identification of appellate authorities. A perusal of the websites of the Union Ministries/ Departments also shows that while PIOs are invariably notified, this is not the case with appellate authorities. This omission needs to be rectified.5.3.4 Recommendations:(i) All Ministries/ Departments/Agencies/Offices with more than one PIO have to designate a nodal Assistant Public Information Officer with the authority to receive requests for information on behalf of all PIOs. Such a provision should be incorporated in the Rules by appropriate governments.(ii) PIOs in Central Secretariats should be of the level of atleast Deputy Secretary /Director. In State Secretariats, officers of similar rank should2829Right to Information – Master Key to Good Governancebe notified as PIOs. In all subordinate agencies and departments, officers sufficiently senior in rank and yet accessible to public may be designated as PIOs.(iii) All public authorities may be advised by the Government of India that alongwith the Public Information Officers they should also designate the appellate authority and publish both, together.(iv) The designation and notification of Appellate Authorities for each public authority may be made either under Rules or by invoking Section 30 of the Act.5.4 Organising Information and Record Keeping:5.4.1 Pro-active disclosure of important information by governmental agencies constitutes the essence of transparency in governance. Keeping in view this philosophy, the Act emphasises suo motu disclosure {Section 4(1)}, and stipulates publication of prescribed information by all public authorities. Ideally in a vast majority of cases, information sought should be available in these disclosures without recourse to an application under Section 6. A sample study of the disclosures shows that these are often perfunctory and lacking in substance. This underscores the need for devising protocols and effective monitoring of suo motu disclosures.5.4.2 Even when the suo motu disclosure is of an acceptable quality the question of its access still remains. While the present practice of web publication should continue with regular up-dating, there are inherent limitations in electronic communication. The vast majority of people will not have access to computers in the foreseeable future. Also a large number of small public offices and village panchayats are unlikely to be able to use this mode of communication. Therefore, a printed priced publication in the local language, revised periodically (at least once a year) should be available in each public office and supplied on demand. Such a publication should be available for reference, free of charge. In respect of electronic disclosures, it is necessary to provide a single portal through which disclosures of all public authorities under appropriate governments could be accessed, to facilitate easy availability of information.5.4.3 One important class of disclosures not covered under the Act is public interest disclosure. Interestingly, it is recognised in many democracies that an honest and conscientious public servant who is privy to information relating to gross corruption, abuse of authority or grave injustice should be encouraged to disclose it in public interest without fear of retribution. Therefore, confidentiality of the whistle blower in suchRights and Obligations Under the Actcases if s(he) seeks it as well as protection from harassment by superiors should be integral to the transparency regime. The Law Commission, in its 179th report (2001) recommended enactment of Public Interest Disclosure (Protection) Law. This Commission fully endorses the view and recommends a suitable legislation to protect whistle blowers. The Commission will make a detailed study of the subject and make a comprehensive recommendation in its later reports on civil service reforms and ethics in governance.5.4.4 Perhaps the weakest link in our information system is the total neglect of record keeping. The Tenth Finance Commission took note of it and recommended special grants to the States for improving record keeping. Land records are probably the most important public documents in any governance system. A vast number of people need them as a proof of title; dispute resolution relies heavily on records; access to credit is usually dependent on land ownership, and the whole administration hinges on the accuracy and reliability of land records. Naturally, access to land records will constitute bulk of the requests for information under the Act at grass roots level. Unfortunately, land records updating and maintenance has suffered great neglect after Independence. In many states, significant proportions of land records no longer exist; they are often fragile when they exist; and comprehensive land surveys have not been carried out over the past 70 years anywhere in India. This vital area of administration, while it is a part of land management, also forms an important part of transparency in governance. A onetime effort to update all land records, and ensure proper storage and retrieval is necessary.5.4.5 The Commission noted that even in Union Ministries and Departments the status of recordkeeping is a problem area {Annexure-V(3)}. In many subordinate offices/ agencies of GOI and State Governments, record keeping procedures often do not exist. And where they exist, they are rarely followed. In most cases record keeping procedures have not been revised for decades. Most significantly the practice of cataloguing, indexing and orderly storage is singularly absent. Even when records are stored, retrieval of intelligible information is virtually impossible. It is perhaps because of this situation that there is a tendency to give bulk unprocessed information rather than a relevant and intelligible summarization. An example of this was reported by BBC News4 which succinctly puts across the irrelevance of such an exercise. (Box No.1).Box No. 1: BBC News story“When Rakesh Shukla, a poor farmer from the central Indian state of Chhattisgarh, asked local authorities for information on paddy field purchases in his area, he was handed a bill for 182,000 rupees. Authorities told him that the bulk of the expenses-108,000 rupees had been spent photocopying over 90,000 copies of official papers relating to the purchases.The documents filled an entire room.”30314 , published on 13.03.2006Right to Information – Master Key to Good Governance5.4.6 While commendable efforts have been made by a few public authorities to digitize their records and store them in an easily retrievable manner, these are largely pilot projects limited to a few islands of excellence.5.4.7 Right to Information would be honoured only if the information exists and when it exists, it is easily retrievable and intelligible. A combination of measures is required to achieve this: record keeping procedures need to be developed, reviewed and revised; catalouging, indexing and orderly storage should be mandatory; all documents need to be converted into rational, intelligible, retrievable information modules. A road map needs to be made for digitizing of records.5.4.8 Laying down meticulous procedures and creating required infrastructure by themselves would not suffice. A permanent mechanism with sufficient authority, expertise and responsibility needs to be created in each government to coordinate and supervise proper record-keeping. Therefore an independent Public Records Office (PRO) should be established in GOI and in each State Government. Several record keeping agencies already exist in GOI and most states have entrusted record keeping to State Archives, State Gazetteers and State Record Rooms. These could be restructured and integrated to constitute the Public Records Office.5.4.9 The Public Records Office would have responsibility to oversee proper record keeping in all public offices including preparation and up-dating of manuals, modernization and digitization, monitoring, inspections and other relevant functions. The Public Records Office should function under the overall guidance and supervision of CIC or SIC, as the case may be.5.4.10 The Public Records Office would be a repository of technical and professional expertise in management of public records. Adequate funding needs to be assured for these agencies. As a one-time measure, the GOI may allocate one per cent (1%) of funds of the ‘Flagship Programmes’5 for a period of five years for improving the infrastructure, creating manuals, providing technical support and establishing Public Records Offices. GOI may have to separately consider creating a special fund for survey and updating of land records.Rights and Obligations under the Actportal through which disclosures of all public authorities under appropriate governments could be accessed, to facilitate easy availability of information.b. Public Records Offices should be established as an independent authority in GOI and all States within 6 months by integrating and restructuring the multiple agencies currently involved in record keeping. This Office will be a repository of technical and professional expertise in management of public records. It will be responsible for supervision, monitoring, control and inspection of record keeping in all public offices.c.Public Records Office would function under the overall supervision andguidance of CIC/SIC.d. As a one time measure, GOI should earmark 1% of the funds of all Flagship Programmes for a period of five years for updating records, improving infrastructure, creating manuals and establishing the Public Records Offices. (An amount not exceeding 25% of this should be utilized for awareness generation.)e. As a one time measure, GOI may create a Land Records Modernisation Fund for survey and updation of all land records. The quantum of assistance for each State would be based on an assessment of the field situation.f.All organizations, which have jurisdiction over an area equal to orexceeding a district, should be funded and required to complete the process of digitization by the end of 2009. All sub-district level organizations should complete this task by the end of 2011. The controlling Ministries/Departments at Union and State level should lay down a detailed road map for this purpose with well-defined milestones within 6 months, so that this could be implemented as a priority item in the Eleventh Five Year Plan.5.5 Capacity Building and Awareness Generation:5.4.11 Recommendations:5.5.1 Training programmes: The enactment of Right to Information Act is only the first step in promoting transparency in governance. The real challenge lies in ensuring that the information sought is provided expeditiously, and in an intelligible form. The mindset of the government functionaries, wherein secrecy is the norm and disclosure the exception, would require a revolutionary change. Such a change would also be required in the mindseta.Suo motu disclosures should also be available in the form of printed,priced publication in the official language, revised periodically (at least once a year). Such a publication should be available for reference, free of charge. In respect of electronic disclosures, NIC should provide a single33325 Eight flagship programmes are: Sarva Siksha Abhiyan, Mid-day Meal Scheme, Rajiv Gandhi Drinking Water Mission, Total Sanitation Campaign, National Rural Health Mission, Integrated Child Services, National Rural Employment Scheme and Jawarharlal Nehru National Urban Renewal Mission.Right to Information – Master Key to Good Governanceof citizens who traditionaly have been reluctant to seek information. Bringing about this radical change would require sustained training and awareness generation programmes. The Commission’s own experience in seeking information from select public authorities reveals that even some PIOs are not conversant with the key provisions of the Act. The Information Commissioner’s Office in the United Kingdom has published an ‘Awareness Guidance’ series to assist public authorities and, in particular, staff who may not have access to specialist advice about some of the issues, especially exemption provisions. This practice may also be adopted in India.5.5.2 Awareness generation: The enactment of the Right to Information Act has led to an intense debate in the media on various aspects of freedom of information. Despite this, enquiries reveal that level of awareness, particularly at the grass roots level, is surprisingly low. In order to achieve the objectives of the Act it would be necessary that citizens become aware of their entitlements and the processes required to use this right to improve the quality of governance. Awareness generation so far has been largely confined to government advertisement in print media. An effective awareness generation campaign should involve multi media efforts including street plays, television spots, radio jingles, and other mass communication techniques. These campaigns could be effectively implemented at low cost, once committed voluntary organizations and corporates with creativity, passion and professionalism are involved.5.5.3 Section 26 of the Act states that the appropriate government may develop and organize educational programmes to advance the understanding of the public, in particular of disadvantaged communities as to how to exercise the rights contemplated under the Act. It has also been mandated that the appropriate governments shall within 18 months from the commencement of the Act, compile a guide containing such information in a simple and comprehensible manner. The Commission feels that this should be done at the earliest as non availability of such guide is proving to be a hurdle in generation of awareness about the Act.5.5.4 The Commission sent a questionnaire to various Union Ministries and Departments seeking information on the arrangements/efforts made by them to create awareness among citizens. The responses of the Ministries range from “information has been posted on the website” to “issues will be examined and necessary instructions issued”. Some departments have conceded that no arrangements have been made so far. During field visits conducted by the Commission it was noted that awareness level about this Act among both members of the public and public authorities, particularly at the sub-district and panchayat levels is very low.Rights and Obligations Under the Act5.5.5 Recommendations:a. Training programmes should not be confined to merely PIOs and APIOs. All government functionaries should be imparted atleast one day training on Right to Information within a year. These training programmes have to be organized in a decentralized manner in every block. A cascading model could be adopted with a batch of master trainers in each district.b. In all general or specialized training programmes, of more than 3 days duration, a half-day module on Right to Information should be compulsory.c. Awareness campaigns may be entrusted to credible non profit organizations at the State level. They should design a multi media campaign best suited to the needs, in the local language. The funds earmarked (as mentioned in para 5.4.11.d) could be utilized for this purpose.d. Appropriate governments should bring out guides and comprehensible information material within the prescribed time.e.The CIC and the SICs may issue guidelines for the benefit of publicauthorities and public officials in particular and public in general about key concepts in the Act and approach to be taken in response to information requests on the lines of the Awareness Guidance Series referred to above (para 5.5.1).5.6 Monitoring Mechanism:5.6.1 A strong monitoring mechanism is a basic necessity for ensuring successful implementation of the Act. The monitoring mechanism apart from exercising a supervisory role, should be able to detect problems in the process of implementation and trigger corrective measures. This monitoring should be done at several levels –within the public authority, for a group of authorities in a territory, for a whole state and the country. Normally monitoring is an inhouse function where the implementing authority itself monitors the operations. For each department/agency, the head of the organization will be responsible for monitoring. A question arises as to which agency should be at the apex of the monitoring process. An option could be to assign this task to the nodal department in case of States and the nodal Ministry in case of GOI. However given their existing functions, no Ministry /Department would be able to devote full attention to this complex and onerous task.3435Right to Information – Master Key to Good Governance5.6.2 The Act has created independent institutions of CIC and SICs, which are of high stature. However under the law their functions are largely limited to hearing complaints and appeals, and submitting annual reports. When an independent, full time authority exists under the Act it would be most appropriate to entrust it with the important responsibility of monitoring the implementation of the Act. The authority and public confidence these bodies command, the expertise and insights they acquire, and their propensity to expand citizens rights for better governance make them ideal institutions to discharge this responsibility.5.6.3 Need for a coordination mechanism: Although the Act is applicable to both the Union and state governments, the field situation varies from state to state. Moreover the State Information Commissions are independent of the Central Information Commission. It is likely that many similar issues crop up before various Information Commissions. It would be advisable in public interest if all the Information Commissions can share perspectives and experiences. This would avoid duplication of efforts, minimize litigation and ensure uniform application of the Act throughout the country. Similarly, various public authorities are evolving their own methodology for implementing the Act. Some of the good practices in a state or public authority could be adapted for use in other public authorities/states also. Also, for a nationwide web based information dissemination system to work effectively it is necessary to have a strong coordination mechanism. For the reasons stated above, the CIC would be the ideal institution to head such a coordinating agency.Rights and Obligations Under the Actd. A National Coordination Committee (NCC) may be set up under the chairpersonship of the Chief Information Commissioner with the nodal Union Ministry, the SICs and representatives of States as members. A provision to this effect may be made under Section 30 of the Act by way of removing difficulties. The National Coordination Committee would:i.serve as a national platform for effective implementation of the Act,ii. document and disseminate best practices in India and elsewhere,iii. monitor the creation and functioning of the national portal for Right to Information,iv. review the Rules and Executive orders issued by the appropriate governments under the Act,v.carry out impact evaluation of the implementation of the Act; andvi. perform such other relevant functions as may be deemed necessary.5.6.4 Recommendations:a. The CIC and the SICs may be entrusted with the task of monitoring effective implementation of the Right to Information Act in all public authorities. (An appropriate provision could be made under Section 30 by way of removal of difficulties).b. As a large number of Public Authorities exist at regional, state, district and sub district level, a nodal officer should be identified wherever necessary by the appropriate monitoring authority (CIC/SIC) to monitor implementation of the Act.c. Each public authority should be responsible for compliance of provisions of the Act in its own office as well as that of the subordinate public authorities.3637Issues in Implementation6ISSUES IN IMPLEMENTATION?Difficulties in filing applications by post.?Varying and often higher rates of application fee.?Large number of PIOs.6.1 Implementation of the Act6.1.1 The implementation of the RTI Act is an administrative challenge which has thrown up various structural, procedural and logistical issues and problems, which need to be addressed in the early stages. The Commission has identified some of the problem areas in implementation and these are discussed and recommendations made for their redressal in the following paras.6.2.3 Complicated system of accepting requests : While accepting applications, Departments insist that cash be paid at the accounts office. In Ministries, the accounts office and the PIOs office are different and at times in different locations. The Rules also prescribe that for each extra page of information, Rs. 2 has to be paid, for which the applicant has to go through6.2 Facilitating Access:6.2.1 For seeking information, a process as prescribed under the Act has to be set in motion. The trigger is filing of a request. Once the request is filed the onus of responding to it shifts to the government agency. The steps involved in processing a request for information are given in the chart in Fig.-1.Box-2-Difficulty in filing applicationApplication requesting for information in three parts was made under Right to Information Act 2005 to the Ministry of Water Resources on 20.01.2006 at Shram Shakti Bhawan, New Delhi. The application fee of Rs.10/- (in cash) was enclosed with the application. The CPIO’s Office informed the applicant that there was no arrangement for receipt of cash at his office. He directed the applicant to the Pay and Accounts Office of the Ministry at Shastri Bhawan, New Delhi, where the fee was finally deposited. The CPIO’s Office at Shram Shakti Bhawan accepted the application on the basis of payment of fee (the applicant had an official pass so he had no problem in entering the building).6.2.2 Based on the case studies conducted by the Commission, responses of various Ministries to a questionnaire, and interactions with the stakeholders, a number of difficulties /impediments were noted:Box-3-Cost of a bank draft?Complicated systemofacceptingrequests.?Insistence on demand rmation was sought from Department of Industrial Policy & Promotion. Application was made on 23.1.2006. The applicant went to Udyog Bhawan, which houses this Department. At the Reception, there was a board, which displayed the name of the CPIO. His office informed that the requisite fee is not acceptable in cash and a demand draft in favour of Pay and Accounts Officer, Department of Industrial Policy & Promotion will have to be made. A service charge of Rs.35/ - had to be paid to the bank for issuing a demand draft of Rs.10/-. Thus, for a fee of Rs.10/-, the applicant had to incur a cost of Rs.45/ -. On the basis of the demand draft the Office of the concerned CPIO accepted the applicationFIG. 1 FLOWCHART OF THE PROCESSES INVOLVED IN GIVING INFORMATION UNDER RTI ACT3839Right to Information – Master Key to Good GovernanceIssues in Implementationthe same process. The difficulty would get further pronounced in field offices, many of which do not have provision to collect cash. Moreover, getting a visitor’s pass to enter a government building results in unwarranted wait times (especially, when the PIO responsible might not be available owing to a number of other responsibilities which (s)he handles). Therefore, the process of filing requests for information needs to be simplified.6.2.4 Insistence on demand drafts: Though there is a provision to pay fees through bank drafts, this poses another problem, as the bank charges Rs 35 to prepare a demand draft of Rs 10. Therefore the insistence by some departments to receive fees only through demand drafts and not in cash needs to be dispensed with.6.2.5 Difficulties in filing applications by post: Under the existing dispensation, filing applications by post would necessarily involve payment of the application fee by way of demand draft or Banker’s cheque. Therefore there has to be a mechanism by which requests for information are made possible through post.6.2.6 Varying and often higher rates of application fee: Different States have prescribed different fees in this regard. The Tamil Nadu Right to Information (Fees) Rules provides that an application fee of Rs 50 has to be paid for each request. During its public hearing in Chennai, the Commission was informed that this high rate of fees discouraged filing of applications under the Act. Therefore there is a need to harmonise the fee structure.6.2.7 Recommendations:a. In addition to the existing modes of payment, appropriate governments should amend the Rules to include payment through postal orders.b. States may be required to frame Rules regarding application fee which are in harmony with the Central Rules. It needs to be ensured that the fee itself does not become a disincentive.c. Appropriate governments may restructure the fees (including additional fees) in multiples of Rs 5. {e.g. instead of prescribing a fee of Rs. 2 per additional page it may be desirable to have a fee of Rs. 5 for every 3 pages or part thereof}.d. State Governments may issue appropriate stamps in suitable denominations as a mode of payment of fees. Such stamps would be used for making applications before public authorities coming within the purview of State Governments.e.As all the post offices in the country have already been authorized tofunction as APIOs on behalf of Union Ministries/Departments, they may also be authorized to collect the fees in cash and forward a receipt along with the application.6.3. Inventory of Public Authorities:6.3.1 The Act defines public authorities to include a vast array of institutions and agencies. For people to access information, a catalogued and indexed list of all public authorities is necessary. In a vast and diverse country with a federal structure, listing out all the public authorities is a Herculean task. Therefore an inverted tree concept could be followed to have an inventory of all public authorities. Starting from Ministries of GOI, each Ministry should have details of all public authorities immediately under its control. Similarly each public authority should have an exhaustive list of agencies and offices under its immediate control. This should be followed till the lowest public authority in the hierarchy is reached. This concept is explained in Annexure VI(1).6.3.2 Recommendations:a. At the Government of India level the Department of Personnel and Training has been identified as the nodal department for implementation of the RTI Act. This nodal department should have a complete list of all Union Ministries/ Departments which function as public authorities.b.Each Union Ministry/ Department should also have an exhaustive list ofall public authorities, which come within its purview. The public authorities coming under each ministry/ department should be classified into (i) constitutional bodies, (ii) line agencies, (iii) statutory bodies, (iv) public sector undertakings, (v) bodies created under executive orders, (vi) bodies owned, controlled or substantially financed, and (vii) NGOs substantially financed by government. Within each category an up-to-date list of all public authorities has to be maintained.c.Each public authority should have the details of all public authoritiessubordinate to it at the immediately next level. This should continue till the last level is reached. All these details should be made available on the websites of the respective public authorities, in a hierarchical form.d. A similar system should also be adopted by the States. 6.4 Single Window Agency at District Level:6.4.1 After sufficient awareness generation, it is expected that a large number of requests for information would come to the field level Public Authorities. Presently almost all departments and agencies of the State Government are represented at the District level. All these offices are often dispersed and most citizens would be unaware of their location. Under such circumstances it becomes difficult for an applicant to identify the Public Authority and to locate it. Therefore it is necessary to have a Single Window Agency, which could receive4041Right to Information – Master Key to Good GovernanceIssues in Implementation42requests for information on behalf of the public authorities/PIOs which have jurisdiction over the district and then forward them to the respective public authority/PIO. This, apart from helping the public would also help in keeping track of the applications.6.4.2 Recommendation:a. A Single Window Agency should be set up in each District. This could be achieved by creating a cell in a district-level office, and designating an officer as the Assistant Public Information Officer for all public authorities served by the Single Window Agency. The office of the District Collector/ Deputy Commissioner, or the Zilla Parishad is well suited for location of the cell. This should be completed by all States within 6 months.6.5. Subordinate Field Offices and Public Authorities6.5.1 ‘Public authority’ has been defined as any authority or body or institution of self-government established or constituted by or under the Constitution, by any other law made by Parliament, by State Legislatures, and by any notification issued by the appropriate Government, including institutions substantially funded by the appropriate Government. This would extend the spread of public authorities to the level of panchayats and village patwaris across the country.6.5.2 Under Section 5 of the Act, public authorities have to appoint Public Information Offcers/Assistant Public Information Officers (PIOs/ APIOs). Different public authorities have adopted different approaches towards discharge of these responsibilities. For example, the Central Silk Board has appointed one PIO for the entire organization and a number of APIOs for its Head Quarters as well as various Field Units. The Income Tax Department has appointed a large number of CPIOs, mainly at the level of Commissioners at the field level, leaving the Range offices generally unattended. Similarly, PIOs are often conspicuous by their absence at the Block and Taluka levels in the States. In other words, the experience so far suggests that lower tiers of the Government have neither been considered as Public Authorities nor have PIOs been designated.6.5.3 Even a literal interpretation of the law indicates a considerable overlap between PIOs/ APIOs and public authorities. According to the definition in the Act, lower tiers of field formations should be treated as Public Authorities. While these tiers of administration may be appointed as APIOs by the higher authorities of their respective organizations, these tiers per se would also qualify as Public Authorities for their own internal functioning. This would in turn cast on them the responsibility of making suo motu disclosure of information under Section 4 of the Act. Currently, this is not being done. However, the intention of theAct is to reach a stage where suo motu disclosure of information by institutions in itself takes care of citizens’ need for information. Therefore public authorities at the lower end of the administrative and/or functional hierarchies need to be identified to discharge responsibilities under Section 4 of the Act, as they are closest to the people both physically and functionally.6.5.4 Recommendation:a. The lowest office in any organization which has decision making power or is a custodian of records should be recognized as a public authority.6.6 Application to Non Governmental Bodies:6.6.1 Under the Act, a non-governmental body needs to be substantially financed by government to be categorized as a public authority under the Act. There is however no definition of “substantially financed.”6.6.2 A comparison with laws of other countries reveals interesting facts. Section 5 of the FOI Act (UK) gives the Secretary of State, power to designate private organisations as public authorities if either they appear to him to be performing functions of a public nature; or they are carrying out functions under contract with a public authority which would otherwise be up to the authority to provide. In case of charities, the UK Act applies only when they are set up by the Crown, statute or a government department and have at least one nominee of the Crown or the government department. A small number of ‘wholly publicly-owned’ companies are subject to the Freedom of Information Act in UK but the vast majority of private companies are not.6.6.3 The Promotion of Access to Information Act, South Africa, goes a step further. “Public body” means—(a) any department of state or administration in the national or provincial sphere of government or any municipality in the local sphere of government; or(b) any other functionary or institution when—(i) exercising a power or performing a duty in terms of the Constitution or a provincial constitution; or(ii) exercising a public power or performing a public function in terms of any legislation;6.6.4 Besides, under Section 50 of the South African Act, it is provided that: “50. (1) A requester must be given access to any record of a private body if (a) that record is required for the exercise or protection of any rights;”43Right to Information – Master Key to Good GovernanceIssues in Implementation6.6.5 In the wake of outsourcing of functions which traditionally were performed by government agencies, it is desirable that institutions that enjoy a natural monopoly, or whose functions impinge on citizens’ lives substantially, must come under the provisions of the RTI Act. Also it may be desirable to define what ‘substantially financed’ would mean, otherwise different authorities may interpret this in different ways.6.6.6 Recommendations:a. Organisations which perform functions of a public nature that are ordinarily performed by government or its agencies, and those which enjoy natural monopoly may be brought within the purview of the Act.b. Norms should be laid down that any institution or body that has received 50% of its annual operating costs, or a sum equal to or greater than Rs.1 crore during any of the preceding 3 years should be understood to have obtained ‘substantial funding’ from the government for the period and purpose of such funding.c.Any information which, if it were held by the government, would besubject to disclosure under the law, must remain subject to such disclosure even when it is transferred to a non-government body or institution.d. This could be achieved by way of removal of difficulties under section 30 of the Act.6.7 Time Limit for Information Beyond 20 Years: 6.7.1 RTI Act stipulates that:“(3) Subject to the provisions of clauses (a), (c) and (i) of sub-section (1), any information relating to any occurrence, event or matter which has taken place, occured or happened twenty years before the date on which any request is made under section 6 shall be provided to any person making a request under that section:”6.7.2 A uniform limit of 20 years may on a few occasions pose problems for the Public Authorities as well as the applicants. There is a significant percentage of records which is permanent in nature. These include the records of rights maintained by the State Land Revenue Department, the Registrars and Sub Registrars of Lands, important Court Rulings, important files regarding policy decisions in various Public Authorities, Birth and Death Registrations etc. In such cases requests are received for events which may be well beyond 20 years.6.7.3 On the other hand most public records are not maintained for 20 years. This is prescribed by the Manual of Office Procedure in the Government of India. Similar Manuals also exist in the State Governments.6.7.4 The Manual of Office Procedure of Central Secretariat prescribes that: “111 Record Retention Schedule -(1) To ensure that files are neither prematurely destroyed, nor kept for periods longer than necessary, every department will:(a) in respect of records connected with accounts, observe the instructions contained in Appendix 13 to the General Financial Rules;(b) in respect of records, relating to establishment, personnel and housekeeping matters common to all departments, follow the ‘schedule of periods of retention for records common to all departments’issued by the Department of Administrative Reforms and Public Grievances;(c) in respect of records prescribed in this Manual, observe the retention periods specified in Appendix 28; and(d) in respect of records connected with its substantive functions, issue a departmental retention schedule prescribing the periods for which files dealing with specified subjects should be preserved in consultation with the National Archives of India.(2) The above schedules should be reviewed at least once in 5 years.”Under Appendix 28, retention period has been prescribed ranging from 1 year to permanent retention, for different categories of documents.6.7.5 The need for harmony between the recordkeeping procedures and the stipulations under the Act is obvious.6.7.6 Recommendations:a.The stipulation of making available 20-year old records on request shouldbe applicable only to those public records which need to be preserved for such a period. In respect of all other records, the period of availability will be limited to the period for which they should be preserved under the record keeping procedures.b. If any public authority intends to reduce the period upto which any category of record is to be kept, it shall do so after taking concurrence of the Public Records Office as suggested in para 5.4.11.4445Right to Information – Master Key to Good Governancec.These recommendations could be implemented by way of removal ofdifficulties under Section 30 of the Act.6.8 Mechanism for Redressal of Public Grievances:6.8.1 In a large number of cases information sought to be accessed stems from a grievance against a department/ agency. Information is the starting point in a citizen’s quest for justice and is not an end in itself. Information thus becomes a means to fight corruption and misgovernance or obtain better services.6.8.2 Experience has shown that functionaries/departments tend to be defensive rather than proactive in redressing a grievance (or even in disclosing information) particularly when it directly pertains to their conduct (or misconduct). This proclivity underlines the need for an independent forum to hear complaints into acts of omission and commission, harassment, corruption etc. which emerge either through information collected under the Right to Information Act or otherwise. Such an independent body should hear the citizen and the public authority, come to an early conclusion about how the complaint can be best redressed, and where dereliction of duty is established, recommend initiation of disciplinary actions, and also suggest systemic reforms where required.6.8.3 A successful example of this mechanism is the Public Grievances Commission (PGC) set up by the Delhi Government in 1997. When the Delhi Right to Information Act came into force in 2001, the PGC was made the appellate authority to decide appeals under the Act. Because of this arrangement the PGC has become an effective “single window” authority which facilitates access to information and when required provides a platform for redressing the citizen’s grievances as well. The PGC has also effectively used its statutory status and authority under Delhi RTI Act combined with its non-statutory grievance redressal powers to foster systemic reforms.66.8.4 Taking note of this successful administrative arrangement, the Commission is of the view that similar arrangements could be replicated (with suitable modifications) by other states. A beginning could be made with bigger cities. This can be either a single authority like the PGC or a separate independent public grievance redressal authority, which works in close coordination with SIC or district Single Window Agency.Issues in Implementation6.8.3 Recommendations:(i) States may be advised to set up independent public grievances redressal authorities to deal with complaints of delay, harassment or corruption. These authorities should work in close coordination with the SICs/District Single Window Agencies, and help citizens use information as a tool to fight against corruption and misgovernance, or for better services.6.9 Frivolous and Vexatious Requests:6.9.1 The highlight of the Act is that the information seeker “shall not be required to give any reason for requesting the information ..... or any other personal details....”. This salutary provision is important to ensure that the there is no subjective evaluation of the request, or denial on specious grounds. However certain instances have been brought to the notice of the Commission in which the requests were patently frivolous or vexatious (or mala fide). There are also cases in which public servants under a cloud and facing grave disciplinary charges have repeatedly attempted to use the Act to intimidate, harass or at times even humiliate seniors with requests that have been vexatious. If safeguards are not provided in such situations, there could be three dangers. First, such frivolous or vexatious requests may overwhelm the system and defeat the very purpose of the Act. Second, the even tenor of the administration may be paralysed, seriously undermining delivery of services. Third, if public servants facing serious charges successfully resort to such tactics directly or through proxies it may lead to breakdown of discipline, insubordination and disharmony in public institutions. The Commission therefore feels that adequate safeguards should be provided against vexatious and malicious requests, even as no fetters are imposed on citizens seeking information in accordance with the letter and spirit of section 6(2).The Commission examined the relevant legal provisons and practices in other countries. Section 14 of Freedom of Information Act (UK) reads as follows:“14. (1) Section 1(1) does not oblige a public authority to comply with a request for information if the request is vexatious.(2) Where a public authority has previously complied with a request for information which was made by any person, it is not obliged to comply with a subsequent identical or substantially similar request from that person unless a reasonable interval has elapsed between compliance with the previous request and the making of the current request.”The South African Act also has a similar provision. Section 45 of the Act reads as follows: “45. The information officer of a public body may refuse a request for access to a record of the body if—Box-4—Public Grievances CommissionAn appeal involving a request for information as to why the Registration Department continued to use antiquated rules to register land transactions led to the PGC commissioning an independent report on the working of the Registration Department, with recommendations for its reforms.46476 Based on Reforming Public Services in India-A World Bank ReportRight to Information – Master Key to Good GovernanceIssues in Implementation(a) the request is manifestly frivolous or vexatious: orb.It may be provided that information can be denied if the work involved(b) the work involved in processing the request would substantially and unreasonably divert the resources of the public body.”in processing the request would substantially and unreasonably divert the resources of the public body.After careful examination of these provisions the Commission is of the view that the South African law addresses the problem effectively, even as the citizen’s right to information is fully protected.6.9.4 It has also been brought to the notice of the Commission that there may be cases where the efforts in compiling information may not be commensurate with the results achieved. Even in case of furnishing information to Parliament there is a stipulation that a question which clearly relates to day-to-day administration and asks for collection of facts pertaining to the Ministries entailing prolonged labour and time not commensurate with results achieved is ordinarily disallowed7. The Commission feels that requests for information, the collection and compilation of which would require effort not commensurate with the output may be disallowed.However all precautions must be taken to ensure that genuine requests for information are not branded as ‘frivolous’ or ‘vexatious’. Nor should information be denied casually on the ground that “the work involved in processing the request would substantially and unreasonably divert the resources of the public body”. Therefore a safeguard needs to be inserted in all such cases of refusal, so that there is greater scrutiny by a higher authority and a mandatory reference to CIC/SIC, as the case may be.6.9.5 Recommendations:Provided that such a refusal shall be communicated within 15 days of receipt of application, with the prior approval of the appellate authority.Provided further that all such refusals shall stand transferred to CIC/SIC, as the case may be and the CIC/SIC shall dispose the case as if it is an appeal under section 19(3) of the RTI Act.This may be accomplished by way of removal of difficulties or framing of appropriate Rules.a.Section 7 may be amended to insert sub section (10) as follows:“The PIO may refuse a request for information if the request is manifestly frivolous or vexatious.Provided that such a refusal shall be communicated within 15 days of receipt of application, with the prior approval of the appellate authority.Provided further that all such refusals shall stand transferred to CIC/SIC, as the case may be and the CIC/SIC shall dispose the case as if it is an appeal under section 19(3) of the RTI Act”.49487 Handbook for Members of Lok SabhaApplication of the Act to the Legislature and the JudiciaryAPPLICATION OF THE ACT TO THE LEGISLATURE AND THE JUDICIARY77.1 Most of the observations and recommendations of the Commission in this Report apply largely to the Executive branch of government. The Legislature and Judiciary are also covered by the Act. The definition of public authority {Section2(b)} includes any authority, or body, or institutions of self government, established or constituted by or under the Constitution, or any law made by Parliament or State Legislature, or by a notification or order of the appropriate government. Section 2(e) therefore includes, the presiding officers of the Legislature at the Union and State levels as well as the Chief Justices of the Supreme Court and High Courts. The intent of the Parliament to make the law applicable to all public institutions including the Legislatures and Judiciary is clearly evident.7.4 Legislatures are storehouses of enormous amount of information on public policies and executive actions. However, there are two problems. First the information is disaggregated and not adequately synthesised. Thus, on the same subject there are several separate documents, often chronologically arranged, without sectoral linkages. Second, while information is available to legislators, it is very hard for citizens to access it. In order to address these issues, all information with the legislatures needs to be indexed, catalogued and computerised, with online access to all citizens and supply on demand. This access should be provided as part of the proactive disclosure requirement under Section 4 of the Act.7.5 Apart from law making, the Legislature exercises oversight function over the Executive branch. Parliamentary (Legislative) questions, proceedings of various committees, follow up action on the reports of CAG, action taken reports submitted by the government are a few vital mechanisms for such legislative oversight. However, except through media reports, the citizens rarely have direct access to such information. This lacuna needs to be addressed by making all such information available to the public both online (electronic) and on demand (print).7.2 In the Executive branch, traditionally secrecy has been the norm throughout the world, so also in India. The Legislatures and the Judiciary in India already operate within the public eye to a far greater extent than the Executive. The proceedings of the Legislatures are open to public and media and even telecast live in recent years. The meetings of Legislative Committees, however are generally not open to the public and media. Nevertheless, most of the functioning of the Legislature is in full public gaze. Similarly, all judicial processes are in the public domain and hence totally transparent. But administrative processes within the courts would have to be brought within the ambit of this law, at the same time, without compromising with the independence and the dignity of the courts. There is need to bring uniformity in the information recording systems, introduce standard forms and a better system of classification of cases. The Act may be used as an instrument to build capacity to evolve efficient systems of information dissemination.7.6 Equally important is a computerised tracking mechanism, so that the legislators as well as the general public can trace the sequence of events and compliance by the executive agencies on matters like petitions, CAG reports and action taken on reports of enquiry commissions or House committees.7.3 The Commission carefully studied the application of the Act to the Legislature and the Judiciary. The Commission also interacted with experts and jurists. Most of the recommendations pertaining to the implementation of the Act apply to both the Legislatures and the Judiciary. The respective Competent Authorities may adopt them with appropriate modifications to suit institutional requirements. However, a few issues especially applicable to these two organs of State need to be highlighted.7.7 In most democracies, a major part of the legislative work is conducted in Committees. As Woodrow Wilson once observed, “Congress in session is Congress on exhibition; Congress in Committees is Congress at work”. In India too, most of the important legislative work is conducted in the Committees, away from partisan influences and transient emotions. However, the work of legislative committees in India has generally been away from the public and media gaze. With the regime of transparency being institutionalised, such seclusion of legislative committees is unsustainable. The spirit of democracy as well as the letter of law demands that all work of legislative committees, save on matters exempted from public gaze under the Act for reasons of state or privacy, should be thrown open to public and media. But there are genuine concerns relating to public transaction of legislative committees business. At times, in the full house of a legislature, members tend to play to the galleries to capture media attention, or take a partisan line or extreme position. The debates in legislatures thus tend to be on predictable lines, and often polarise society instead of bringing sobriety and moderation. Such moderation and ability to reconcile conflicting interests are the essential functions of democratic politics. In Committees, away from the heat of passion, legislators usually act with great moderation and bring depth and substance to discussion on public5051Right to Information – Master Key to Good Governancepolicy. Bipartisan consensus and balanced consideration of issues is the hallmark of a Committee’s work. There could be the risk of this advantage being jeopardised by throwing open the Committee’s work to public and media.7.8 The Commission has carefully examined these competing considerations. It is of the considered view that on balance the dictates of democracy and transparency should prevail. The legislative parties should evolve a consensus in order to retain the best features of the Committee system even as the work of Committees is opened to public gaze.7.9 As mentioned earlier the judicial processes are transparent. Even on the administrative front, the last decade has seen major strides made by judiciary in use of information technology for better court management and providing information to the litigants. In the Supreme Court of India and all High Courts, fresh cases are filed only before the computerized filing counters; cause lists are generated automatically by the computer and manual intervention has been eliminated resulting in generation of Cause List in time without any hurdles; a software (COURTNIC)8 provides Supreme Courts’ pending case status information to litigants/advocates on any node of NICNET; The Supreme Court of India and all the 18 High Courts and their Benches are fully computerised, and all these courts generate daily and weekly causelists from the computer servers installed by NIC. The Government of India has approved a proposal for computerisation of the district and subordinate courts.7.10 A prerequisite for making the administrative processes in the district and the subordinate courts totally transparent is their computerisation. This is necessitated because of the sheer volume of records handled. Furthermore, the records of these courts require scientific storage, indexing and cataloguing thereby facilitating easy access.7.11 Recommendations:a.A system of indexing and cataloguing of records of the legislatures, whichfacilitates easy access should be put in place. This could be best achieved by digitising all the records and providing access to citizens with facilities for retrieving records based on intelligible searches.b. A tracking mechanism needs to be developed so that the action taken by the executive branch on various reports like CAG, Commissions of Enquiry and House Committees is available to legislators and public, online.c. The working of the legislative committees should be thrown open to the public. The presiding officer of the committee, if required in the interest of State or privacy, may hold proceedings in camera.Application of the Act to the Legislature and the Judiciaryd. The records at the district court and the subordinate courts should be stored in a scientific way, by adopting uniform norms for indexing and cataloguing.e.The administrative processes in the district and the subordinate courtsshould be computerised in a time bound manner. These processes should be totally in the public domain.53528 of Difficulties8REMOVAL OF DIFFICULTIES8.1 Power to Remove Difficulties:8.1.1 Section 30 of the Act stipulates as follows:“30 (1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removal of the difficulty:Provided that no such order shall be made after the expiry of a period of two years from the date of the commencement of this Act”8.1.2 The implementation of the Act is yet to stabilize and it is perhaps too early to identify difficulties that may be encountered. The Commission however has identified some initial difficulties which could impede smooth implementation of the Act. These have been highlighted in the preceding chapters of this Report. Some of these would require taking recourse to Section 30 of the Act. These are reproduced below for ready reference:(vi) The following norms should be followed for determining applicability of the Act to non governmental organizations.anisations which perform functions that are ordinarilyperformed by government or its agencies, and those which enjoy natural monopoly should be brought within the purview of the Act.b. Norms should be laid that any institution or body that has received 50% of its annual operating costs, or a sum equal to or greater than Rs.1 crore, during any of the preceding 3 years should be understood to have obtained ‘substantial funding’ from the government for the period and purpose of such funding.c. Any information which, if it were held by the government, would be subject to disclosure under the law, must remain subject to such disclosure even when it is transferred to a non-government body or institution. (para 6.6.6. a, b &c)(vii) The stipulation of making available 20-year old records on request should be applicable only to those public records which need to be preserved for such a period. In respect of all other records, the period of availability will be limited to the period for which they should be preserved under the record keeping procedures.(i) All organisations listed in the Second Schedule have to appoint PIOs. Appeals against orders of PIOs should lie with CIC/SICs. (para 2.5.6.c)(ii) Provision should be made to include annual confidential reports, examination question papers and related matters in the exemptions under the RTI Act. (para 4.1.8.a.i)(iii) Provision has to be made for designation and notification of Appellate Authority for each public authority. (para 5.3.4.iv)(iv) The CIC and the SICs should be entrusted with the task of monitoring effective implementation of Right to Information in all public authorities. (para5.6.4.a)(v) A National Coordination Committee (NCC) may be set up under the chairpersonship of the Chief Information Commissioner with the nodal Union Ministry, the SICs and representatives of States as members. A provision to this effect may be made under Section 30 of the Act by way of removing difficulties. (para 5.6.4.d)If any public authority intends to reduce the period upto which any category of record is to be kept, it shall do so after taking concurrence of the CIC/SIC as the case may be. (para 6.7.6.a & b)(viii) It may be provided that information can be denied if the work involved in processing the request would substantially and unreasonably divert the resources of the public authority.Provided that such a refusal shall be communicated within 15 days of receipt of application, with the prior approval of the appellate authority.Provided further that all such refusals shall stand transferred to CIC/SIC, as the case may be and the CIC/SIC shall dispose the case as if it is an appeal under section 19(3) of the RTI Act. (para 6.9.5.b)545510SUMMARY OF RECOMMENDATIONS:9 CONCLUSION9.1 The Right to Information law of 2005 signals a radical shift in our governance culture and permanently impacts all agencies of state. The effective implementation of this law depends on three fundamental shifts: from the prevailing culture of secrecy to a new culture of openness; from personalized despotism to authority coupled with accountability; and from unilateral decision making to participative governance. Obviously one single law cannot change everything. But this fine legislation is an important beginning. Its effective application depends largely on the institutions created, early traditions and practices, attendant changes in laws and procedures, and adequate participation of people and the public servants. The Commission, therefore, focused on two broad categories of issues:1. The Official Secrets Act (Para 2.2.12) :a.The Official Secrets Act, 1923 should be repealed, and substituted by achapter in the National Security Act, containing provisions relating to official secrets.9.2 The first set of issues relates to changes in other laws and practices involving state secrets, civil service conduct rules and classification of documents. The Commission firmly believes that the Official Secrets Act, 1923 in the current form is antiquated and unsuitable to emerging needs. The second set of issues relates to implementation of the RTI Act itself, in particular process engineering, record keeping, disclosures, access and monitoring. In respect of the second category of issues, the Commission’s recommendations are largely within the framework of the present law.b. The equivalent of the existing Section 5, in the new law may be on the lines recommended by the Shourie Committee as quoted below.“ 5(1) If any person, having in his possession or control any official secret which has come into his possession or control by virtue of:-b1. his holding or having held an office with or under government,or9.3 It is well recognized that right to information is necessary, but not sufficient, to improve governance. A lot more needs to be done to usher in accountability in governance, including protection of whistle blowers, decentralization of power and fusion of authority with accountability at all levels. Nevertheless, this law provides us a priceless opportunity to redesign the processes of governance, particularly at the grass roots level where the citizens’ interface is maximum. Now that the romance of the struggle for transparency is over, the tedious process of system-building has to take over. It is in this spirit that the Commission made specific recommendations and attempted to provide a road map for their time-bound implementation.b2. a contract with the government, orb3. it being entrusted to him in confidence by another person holding or having held an office under or with the government, or in any other manner,municates, without due authority such official secretto another person or uses it for a purpose other than a purpose for which he is permitted to use it under any law for the time being in force; orii.fails to take reasonable care of, or so conducts himselfas to endanger the safety of the official secret; oriii. wilfully fails to return the official secret when it is his duty to return it,shall be guilty of an offence under this section.5(2) Any person voluntarily receiving any official secret knowing or having reasonable ground to believe, at the time he receives it, that the official secret is communicated in contravention of this Act, he shall be guilty of an offence under this section.56157Right to Information – Master Key to Good Governance5(3) A person guilty of an offence under this section shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.Explanation: For the purpose of this section, ‘Official Secret’ means any information the disclosure of which is likely to prejudicially affect the sovereignty and integrity of India, the security of State, friendly relations with foreign states, economic, commercial, scientific and technological matters relating to national security and includes: any secret code, password, sketch plan, model, article, note or document in relation to a prohibited place.”2. Governmental Privilege in Evidence (Para 2.3.8) :a.Section 123 of the Indian Evidence Act, 1872 should be amended to readas follows:“123.(1)Subject to the provisions of this section, no one shall be permitted to give any evidence derived from official records which are exempt from public disclosure under the RTI Act, 2005.(2) Where he withholds such permission, he shall make an affidavit containing a statement to that effect and setting forth his reasons therefor.(3) Where such officer has withheld permission for the giving of such evidence, the Court, after considering the affidavit or further affidavit, and if it so thinks fit, after examining such officer or, in appropriate cases, the Minister, orally:a) shall issue a summons for the production of the unpublished official records concerned, if such summons has not already been issuedb) shall inspect the records in chambers; andc)shall determine the question whether the giving of such evidencewould or would not be injurious to public interest, recording its reasons therefor.(4) Where, under sub-section (3), the Court decides that the giving of such evidence would not be injurious to public interest, the provisions of sub- section (1) shall not apply to such evidence.Provided that in respect of information classified as Top Secret for reasons of national security, only the High Court shall have the power to order production of the records.”Summary of RecommendationsSection 124 of the Indian Evidence Act will become redundant onaccount of the above and will have to be repealed.Accordingly, the following will have to be inserted at the appropriate place in the Code of Civil Procedure, 1908 and the Code of Criminal Procedure, 1973:“Any person aggrieved by the decision of any Court subordinate to the High Court rejecting a claim for privilege made under section 123 of the Indian Evidence Act, 1872 shall have a right to appeal to the High Court against such decision, and such appeal may be filed notwithstanding the fact that the proceeding in which the decision was pronounced by the Court is still pending.”3. The Oath of Secrecy (Para 2.4.4):a. As an affirmation of the importance of transparency in public affairs, Ministers on assumption of office may take an oath of transparency alongwith the oath of office and the requirement of administering the oath of secrecy should be dispensed with. Articles 75(4) and 164 (3), and the Third Schedule should be suitably amended.b. Safeguard against disclosure of information against the national interest may be provided through written undertaking by incorporation of a clause in the national security law dealing with official secrets.4. Exempted organizations (Para 2.5.6) :a. The Armed Forces should be included in the Second Schedule of the Act.b. The Second Schedule of the Act may be reviewed periodically.c.All organizations listed in the Second Schedule have to appoint PIOs.Appeals against orders of PIOs should lie with CIC/SICs. (This provision can be made by way of removal of difficulties under section 30)5. The Central Civil Services (Conduct) Rules (Para 3.1.4) :a.Civil Services Rules of all States may be reworded on the following lines:“Communication of Official Information:Every Government servant shall, in performance of his duties in good faith, communicate to a member of public or any organisation full and accurate information, which can be disclosed under the Right to Information Act, 2005.5859Right to Information – Master Key to Good GovernanceExplanation – Nothing in this rule shall be construed as permitting communication of classified information in an unauthorised manner or for improper gains to a Government servant or others.”6. The Manual of Office Procedure (Para 3.2.3) :a. Para 116 of the Manual of Office Procedure needs to be reworded as follows:.“Communication of Official Information: Every Government Servant shall, in performance of his duties in good faith, communicate to a member of public or any organization full and accurate information, which can be disclosed under the Right to Information Act. (Nothing stated above shall be construed as permitting communication of classified information in an unauthorized manner or for improper gains to a Government Servant or others).”b.Para 118 (1) should be deleted.c. The State Governments may be advised to carry out similar amendments in their Manuals, if such provisions exist therein.7. Classification of Information (Para 4.1.8) :a. The GOI should amend the Manual of Departmental Security Instructions in the following manner:rmation Deserving Classification (Para 3)It would be advisable for each Ministry/Department to identify the information which deserves to be given a security classification. Ordinarily, only such information should be given a security classification which would qualify for exemption from disclosure under the Right to Information Act, 2005. The Classification of documents should be done as per the following guidelines.Summary of RecommendationsSl.No.Section of the RTI Act to whichClassificationinformation pertains18(1)(a)Top Secret28(1)(b)Confidential38(1)(c)Confidential48(1)(d)Secret58(1)(e)Confidential68(1)(f)Secret78(1)(g)Top Secret/Secret88(1)(h)Secret/Confidential98(1)(i)Confidential108(1)(j)Confidential/restricted119Confidential/restrictedExplanation: The above mentioned classification should be generally followed. It is quite possible that information may be covered by more than one exemption; in that case the information should be given the classification of the higher category. Also if it is felt by the competent authority that circumstances of a case demand a higher classification than what is indicated above, then the same may be done by an authority, which is empowered to give such a classification.Provision should be made to include annual confidential reports of officers and examination question papers and related matters in the exemptions under the RTI Act. This may be done by way of removal of difficulties under Section 30.ii. Upgrading and Downgrading (Para 2.3) Documents once classified as “Top Secret” or “Secret”, should remain so classified as long as required but not exceeding 30 years. Documents classified as confidential and restricted should remain so for a period not exceeding 10 years. However, the competent classifying officer may, for reasons to be recorded in writing,6061Right to Information – Master Key to Good Governanceauthorise continued classification beyond the period prescribed above if information, the disclosure of which would cause damage to national security or national interest. A recipient officer of appropriate rank in a Ministry or Department may upgrade the security classification of a document received from outside, but this raised classification will be limited only to the Ministry or Department. (S)He will, however, have no authority to downgrade the security classification of a document received, without the concurrence of the originator. Within the same Department, an officer superior to the originator would have the authority to downgrade or upgrade the classification.iii. Officer Authorised to Accord the Grading:Top SecretNot below Joint SecretarySecretNot below Deputy SecretaryConfidentialNot below Under SecretaryThe State Governments may authorise officers of equivalent rank to accord the grading.8. Building Institutions (Para 5.2.5):a.Section 12 of the Act may be amended to constitute the SelectionCommittee of CIC with the Prime Minister, Leader of the Opposition and the Chief Justice of India. Section 15 may be similarly amended to constitute the Selection Committee at the State level with the Chief Minister, Leader of the Opposition and the Chief Justice of the High Court.b. The GOI should ensure the constitution of SICs in all States within 3 months.c. The CIC should establish 4 regional offices of CIC with a Commissioner heading each. Similarly regional offices of SICs should be established in larger States.d. At least half of the members of the Information Commissions should be drawn from non civil services background. Such a provision may be made in the Rules under the Act, by the Union Government, applicable to both CIC and SICs.Summary of Recommendations9. Designating Information Officers and Appellate Authorities (Para 5.3.4) :(i) All Ministries/ Departments/Agencies/Offices with more than one PIO have to designate a nodal Assistant Public Information Officer with the authority to receive requests for information on behalf of all PIOs. Such a provision should be incorporated in the Rules by appropriate governments.(ii) PIOs in Central Secretariats should be of the level of atleast Deputy Secretary /Director. In State Secretariats officers of similar rank should be notified as PIOs. In all subordinate agencies and departments officers sufficiently senior in rank and yet accessible to public may be designated as PIOs.(iii) All public authorities may be advised by the Government of India that alongwith the Public Information Officers they should also designate the appellate authority and publish both, together.(iv) The designation and notification of Appellate Authorities for each public authority may be made either under Rules or by invoking Section 30 of the Act.10. Organising Information and Recordkeeping (Para 5.4.11):a.Suo motu disclosures should also be available in the form of printed,priced publication in the official language, revised periodically (at least once a year). Such a publication should be available for reference, free of charge. In respect of electronic disclosures, NIC should provide a single portal through which disclosures of all public authorities under appropriate governments could be accessed, to facilitate easy availability of information.b. Public Records Offices should be established as an independent authority in GOI and all States within 6 months by integrating and restructuring the multiple agencies currently involved in record keeping. This Office will be a repository of technical and professional expertise in management of public records. It will be responsible for supervision, monitoring, control and inspection of record keeping in all public offices.c. Public Records Office would function under the overall supervision and guidance of CIC/SIC.6263Right to Information – Master Key to Good Governanced. As a one time measure, GOI should earmark 1% of the funds of all Flagship Programmes for a period of five years for updating records, improving infrastructure, creating manuals and establishing the Public Records Offices. (An amount not exceeding 25% of this should be utilized for awareness generation.)e. As a one time measure, GOI may create a Land Records Modernisation Fund for survey and updation of all land records. The quantum of assistance for each State would be based on an assessment of the field situation.f.All organizations, which have jurisdiction over an area equal to orexceeding a district, should be funded and required to complete the process of digitization by the end of 2009. All sub-district level organizations should complete this task by the end of 2011. The controlling Ministries/Departments at Union and State level should lay down a detailed road map for this purpose with well-defined milestones within 6 months, so that this could be implemented as a priority item in the Eleventh Five Year Plan.11. Capacity Building and Awareness Generation (Para 5.5.5.):a. Training programmes should not be confined to merely PIOs and APIOs. All government functionaries should be imparted atleast one day training on Right to Information within a year. These training programmes have to be organized in a decentralized manner in every block. A cascading model could be adopted with a batch of master trainers in each district.b. In all general or specialized training programmes, of more than 3 days duration, a half-day module on Right to Information should be compulsory.c. Awareness campaigns should be entrusted to credible non profit organizations at the State level. They should design a multi media campaign best suited to the needs, in the local language. The funds earmarked (as mentioned in para 5.4.11.d) could be utilized for this purpose.d. Appropriate governments should bring out guides and comprehensible information material within the prescribed time.Summary of Recommendationse.The CIC and the SICs may issue guidelines for the benefit of publicauthorities and public officials in particular and public in general about key concepts in the Act and approach to be taken in response to information requests on the lines of the Awareness Guidance Series referred to above (para 5.5.1).12. Monitoring Mechanism (Para 5.6.4):a. The CIC and the SICs may be entrusted with the task of monitoring effective implementation of Right to Information Act in all public authorities. (An appropriate provision could be made under Section 30 by way of removal of difficulties).b. As a large number of Public Authorities exist at regional, state, district and sub district level, a nodal officer should be identified wherever necessary by the appropriate monitoring authority (CIC/SIC) to monitor implementation of the Act.c.Each public authority should be responsible for compliance of provisionsof the Act in its own office as well as that of the subordinate public authorities.d. A National Coordination Committee (NCC) may be set up under the chairpersonship of the Chief Information Commissioner with the nodal Union Ministry, the SICs and representatives of States as members. A provision to this effect may be made under Section 30 of the Act by way of removing difficulties. The National Coordination Committee would:i.serve as a national platform for effective implementation of theAct,ii. document and disseminate best practices in India and elsewhere,iii. monitor the creation and functioning of the national portal for Right to Information,iv. review the Rules and Executive orders issued by the appropriate governments under the Act,v.carry out impact evaluation of the implementation of the Act andvi. perform such other relevant functions as may be deemed necessary.6465Right to Information – Master Key to Good Governance13. Facilitating Access (Para 6.2.7):a. In addition to the existing modes of payment, appropriate governments should amend the Rules to include payment through postal orders.b. States may be required to frame Rules regarding application fee which are in harmony with the Central Rules. It needs to be ensured that the fee itself does not become a disincentive.c. Appropriate governments may restructure the fees (including additional fees) in multiples of Rs 5. {e.g. instead of prescribing a fee of Rs. 2 per additional page it may be desirable to have a fee of Rs. 5 for every 3 pages or part thereof}.d. State Governments may issue appropriate stamps in suitable denominations as a mode of payment of fees. Such stamps would be used for making applications before public authorities coming within the purview of State Governments.e.As all the post offices in the country have already been authorized tofunction as APIOs on behalf of Union Ministries/Departments, they may also be authorized to collect the fees in cash and forward a receipt along with the application.14. Inventory of Public Authorities (Para 6.3.2):a. At the Government of India level the Department of Personnel and Training has been identified as the nodal department for implementation of the RTI Act. This nodal department should have a complete list of all Union Ministries/Departments which function as public authorities.b. Each Union Ministry/Department should also have an exhaustive list of all public authorities, which come within its purview. The public authorities coming under each ministry/ department should be classified into (i) constitutional bodies, (ii) line agencies, (iii) statutory bodies, (iv) public sector undertakings, (v) bodies created under executive orders, (vi) bodies owned, controlled or substantially financed, and (vii) NGOs substantially financed by government. Within each category an up-to-date list of all public authorities has to be maintained.c.Each public authority should have the details of all public authoritiessubordinate to it at the immediately next level. This should continue tillSummary of Recommendationsthe last level is reached. All these details should be made available on the websites of the respective public authorities, in a hierarchical form.d. A similar system should also be adopted by the States.15. Single Window Agency at District Level (Para 6.4.2):a. A Single Window Agency should be set up in each District. This could be achieved by creating a cell in a district-level office, and designating an officer as the Assistant Public Information Officer for all public authorities served by the Single Window Agency. The office of the District Collector/Deputy Commissioner, or the Zilla Parishad is well suited for location of the cell. This should be completed by all States within 6 months.16. Subordinate Field Offices and Public Authorities (Para 6.5.4):a. The lowest office in any organization which has decision making power or is a custodian of records should be recognized as a public authority.17. Application to Non Governmental Bodies (Para 6.6.6):a. Organisations which perform functions of a public nature that are ordinarily performed by government or its agencies, and those which enjoy natural monopoly may be brought within the purview of the Act.b. Norms should be laid down that any institution or body that has received 50% of its annual operating costs, or a sum equal to or greater than Rs.1 crore during any of the preceding 3 years should be understood to have obtained ‘substantial funding’ from the government for the period and purpose of such funding.c.Any information which, if it were held by the government, would besubject to disclosure under the law, must remain subject to such disclosure even when it is transferred to a non-government body or institution.d. This could be achieved by way of removal of difficulties under section 30 of the Act.18. Time Limit for Information Beyond 20 Years (Para 6.7.6):a.The stipulation of making available 20-year old records on request shouldbe applicable only to those public records which need to be preserved for such a period. In respect of all other records, the period of availability6667Right to Iinformation – Master Key to Good Governancewill be limited to the period for which they should be preserved under the record keeping procedures.b. If any public authority intends to reduce the period upto which any category of record is to be kept, it shall do so after taking concurrence of the Public Records Office as suggested in para 5.4.11.c. These recommendations could be implemented by way of removal of difficulties under Section 30 of the Act.19. Mechanism for Redressal of Public Grievances (Para 6.8.3):a.States may be advised to set up independent public grievances redressalauthorities to deal with complaints of delay, harassment or corruption. These authorities should work in close coordination with the SICs/District Single Window Agencies, and help citizens use information as a tool to fight against corruption and misgovernance, or for better services.20. Frivolous and Vexatious Requests (Para 6.9.5):a.Section 7 may be amended to insert sub section (10) as follows:“The PIO may refuse a request for information if the request is manifestly frivolous or vexatious.Provided that such a refusal shall be communicated within 15 days of receiptof application, with the prior approval of the appellate authority.Provided further that all such refusals shall stand transferred to CIC/SIC, as the case may be and the CIC/SIC shall dispose the case as if it is an appeal under section 19(3) of the RTI Act”.b. It may be provided that information can be denied if the work involved in processing the request would substantially and unreasonably divert the resources of the public body.Provided that such a refusal shall be communicated within 15 days of receipt of application, with the prior approval of the appellate authority.Provided further that all such refusals shall stand transferred to CIC/ SIC, as the case may be and the CIC/SIC shall dispose the case as if it is an appeal under section 19(3) of the RTI Act.Summary of RecommendationsThis may be accomplished by way of removal of difficulties or framing of appropriate Rules.21. Application of the Act to the Legislature and the Judiciary (Para 7.11):a.A system of indexing and cataloguing of records of the legislatures, whichfacilitates easy access should be put in place. This could be best achieved by digitising all the records and providing access to citizens with facilities for retrieving records based on intelligible searches.b. A tracking mechanism needs to be developed so that the action taken by the executive branch on various reports like CAG, Commissions of Enquiry and House Committees is available to legislators and public, online.c.The working of the legislative committees should be thrown open to thepublic. The presiding officer of the committee, if required in the interest of State or privacy, may hold proceedings in camera.d. The records at the district court and the subordinate courts should be stored in a scientific way, by adopting uniform norms for indexing and cataloguing.e.The administrative processes in the district and the subordinate courtsshould be computerized in a time bound manner. These processes should be totally in the public domain.6869Right to Information – Master Key to Good GovernanceAnnexure-I(1)NATIONAL COLLOQUIUM ON RIGHT TO INFORMATION ACTNational Judicial Academy, Bhopal11th & 12th December, 2005.LIST OF PARTICIPANT DIGNITARIESSl.No.NAMEDESIGNATION1. Justice Y.K.SabharwalChief Justice of India2. Justice K.G.BalakrishnanJudge, Supreme Court3. Justice R.C.LahotiFormer Chief Justice of India4. Justice S.Rajendra BabuFormer Chief Justice of India5. Justice N.Santosh HegdeFormer Judge, Supreme Court and present Chairman, Telecom Disputes Settlement Appellate Tribunal (TDSAT)6. Justice Saleem MarsoofJudge of the Supreme Court, Sri Lanka7. Justice A.K.PatnaikChief Justice, Madhya Pradesh High Court8Shri Wajahat HabibullahChief Information Commissioner,Central Information Commission9Shri V.RadhakrishnanMember of Parliament10Mr Justice Sunil AmbwaniAllahabad High Court11Mr Justice Ashok BhushanAllahabad High Court12Mr Justice Arun MishraAllahabad High Court13Mr Justice C.Y.SomayajuluAndhra Pradesh High Court14Mr Justice B.H.MarlapalleBombay High Court15Mrs Justice V.K.TahilramaniBombay High CourtList of Participant DignitariesAnnexure-I(1) Contd.16Mr Justice Jayanta Kr.BiswasCalcutta High Court17Mr Justice Aniruddha BoseCalcutta High Court18Mr Justice Dhirendra MishraChhattisgarh High Court19Mr Justice Satish Kumar AgnihotriChhattisgarh High Court20Mrs Justice Manju GoelDelhi High Court21Mr Justice A.H.SaikiaGauhati High Court22Mr Justice B.J.ShethnaGujarat High Court23Mr Justice A.R.DaveGujarat High Court24Mr Justice N.N.TiwariJharkhand High Court25Mr Justice S.A.NazeerKarnataka High Court26Mr Justice Ram Mohan ReddyKarnataka High Court27Mr Justice K.K.DenesanKerala High Court28Mr Justice K.Balakrishnan NairKerala High Court29Mr Justice K.K.LahotiMadhya Pradesh High Court30Mr Justice Rajendra MenonMadhya Pradesh High Court31Mr Justice R.N.BiswalOrissa High Court32Mr Justice S.K.KatriarPatna High Court33Mr Justice S.Nayer HussainPatna High Court34Mr Justice A.P.SubbaSikkim High Court35Mr Justice P.C.PantUttaranchal High Court36. Smt Shailaja ChandraChairman, Public Grievances Commission, Government of Delhi.37. Shri Parthasarathy ShomeAdvisor to Finance Minister38. Shri P.K.SharmaJoint Secretary, Research & Analysis Wing.39Shri Prashant BhushanAdvocate, Supreme Court of India40. Shri K.K.MisraChief Information Commissioner, Karnataka41. Shri Balwinder SinghAdditional Secretary, Central Vigilance Commission.70717273Right to Information – Master Key to Good GovernanceAnnexure-I(1) Contd.42. Dr C.V.MadhukarParliamentary Research Service, Centre for Policy Research43. Shri T.N.SrivastavaChief Information Commissioner,Government of Madhya Pradesh.44. Shri P.K.MohantyDirector General, Centre for Good Governance, Hyderabad.45. Shri K.A.ThippeswamyInformation Commissioner, Karnataka.46. Shri Vinay KohliPROOF, Bangalore47. Prof Jose VergheseFormer Vice-Chancellor, HNLU48. Shri P.S.BawaVice-Chairman, Transparency India49. Shri Venkatesh NayakCHRI, New Delhi.50. Dr P.K.DasChief Information Commissioner, Gujarat.51. Dr Ashwin MaheshE-Governments Foundation52. Shri Nikhil DeyMember, NCPRI53. Dr B.RajendarDistrict Magistrate, Patna, Bihar.54. Shri Neeraj MandloiCollector, Ujjain, Madhya Pradesh.55. Shri Manish ThakurDistrict Collector, Lakhimpur, Assam.56. Smt Mamta KundraPrincipal Director (Staff), Office of the Comptroller & Auditor General of India57. Smt J.R.ZananeSecretary, MP State Information Commission, Bhopal58. Shri M.K.S.SundaramDistrict Magistrate, Jhansi.59Shri K.N.KeshavanarayanaPrincipal District & Sessions Judge Mysore60.Shri indarajuluPrincipal District & Sessions Judge Mandya61Shri Babu Mathew P.JosephSpecial Additional Sessions Judge (Marad cases), KozhikodeList of Participant DignitariesAnnexure-I(1) Contd.62Shri Manik Mohan SarkarJudge, City Civil Court, Calcutta63Shri R.N.BanerjeeRegistrar (Vigilance & Protocol)High Court of Calcutta64Shri D.Appa RaoChief Judge, City Civil Court,Hyderabad65.Shri P.DevadossSessions Judge, Sessions Court forExclusive Trial of Bomb Blast cases, Chennai.66Shri K.G.ShankerI Addl.Chief Judge, City Civil Court,Secunderabad.ADMINISTRATIVE REFORMS COMMISSION (ARC):No. NAMEDESIGNATION1.Shri M.Veerappa MoilyChairman, ARC and former ChiefMinister of Karnataka2.Shri V.RamachandranMember, ARC3.Dr A.P.MukherjeeMember, ARC4.Dr A.H.KalroMember, ARC5.Dr Jayaprakash NarayanMember, ARC6.Smt Vineeta RaiMember-Secretary, ARCRight to Information – Master Key to Good GovernanceAnnexure-I(2)INTRODUCTION TO THE REPORT ON THE COLLOQUIUM ON RIGHT TO INFORMATION ACTThe enactment of the Right to Information Act, 2005 is indeed one of outstanding legislative accomplishment in the democratic evolution of the Indian Republic. Yes, the transition is not going to be either smooth or simple. An entrenched mindset of denial of information on the part of the bureaucracy coupled with justifiable apprehension of the consequences of such disclosure might tend to distort procedures and delay full implementation of the provisions of the Act. The capacity of the common man to access the information is today very limited because of socio-economic and historical reasons. Therefore, there is no possibility of a discernible change in the quality of governance in the immediate future. Nevertheless, the mandate of the law and the commitment on the part of a section of the intelligentsia to make common cause with the people who for long have been at the receiving end of maladministration and corruption, might increasingly create a climate for transparency and influence a change in the desired direction. In that process of change, the National colloquium at NJA sponsored by the Administrative Reforms Commission is a small, yet important step.The importance of the NJA Colloquium lies in the largest ever participation of sitting and retired judges of the higher judiciary(nearly 50 judges of High Courts and Supreme Court including the present and three former Chief Justices of India) with the Senior Civil Servants in-charge of the implementation of the Act. Judicial proceeding has been the most transparent of the entire functioning of the State apparatus. Furthermore, it is through judicial interpretation of basic rights, that right to information assumed the character and status of a Fundamental Right long before Parliament legislated on the subject. Now since the Legislature and Judiciary are one in the matter of public disclosure of matters relating to governmental functioning, the Executive has no option, but to fall in line to empower the people with information. This is significant for Rule of Law and Constitutional Governance.Outcome of the Colloquium:It is difficult to capture the outcome of deliberations in a few sentences. That is why we decided to compile a summary of the proceedings highlighting the major ideas and perceptions. A few key presentations made at the Colloquium are also included in the Report as part of the Appendix.Introduction to the Report on the Colloquium on Right To Information ActAnnexure-I(2) Contd.Among the key outcomes of the Colloquium, one would highlight, inter alia, the following observations:(a) There is widespread realization at the higher echelons of administration that the implementation of the Act pre-supposes the classification, organization and documentation of information in the various departments under their supervision. The delay in accomplishing this task will impede the discharge of obligations under the Act.(b)An expansive interpretation of obligations under section 4 is the immediate needand they have to be collected and disseminated forthwith which will satisfy a large section of people who are closely watching the response of the bureaucracy.(c) There may be some items of exemptions and exceptions under section 8 still to be settled and perhaps getting advance ruling from the Central Information Commission may be one of the strategies to facilitate uniform implementation of the excluded categories of information. This will avoid inconvenience to the public as well.(d) Dissemination of the rights and entitlements under the Act to the common citizens of the country particularly in the rural sector is a priority for reaching the benefits of good governance to the masses. With the Panchayat Raj system in place, this can make a difference in their life and access to basic needs.(e) The United Kingdom which adopted a similar law in 2000 came out with a series of Awareness Guidance Notes on key steps to be followed by public authorities in order to facilitate its implementation. There is need for such functional tips to be prepared and circulated to get the huge Indian bureaucracy at the Central, State and Local levels operate the new law in letter and spirit.(f) Openness in the exercise of public power is a culture and a mind-set which has to be cultivated among the officials and the citizen for which the civil society has to work with the Government on a planned programme of action. The privacy exception, the confidentiality exception, the national security exception etc. have to be articulated in the socio-political context of our country for the implementation process to succeed according to the intention of the Parliament.(g) There is a role for a whistle blower legislation on the lines suggested by the Law Commission.(h) Finally, there is need for a constant review at different levels to make a success of this extra-ordinarily promising law. The alienation of people from administration and7475Right to Information – Master Key to Good GovernanceAnnexure-I(2) Contd.unchecked corruption in the system are danger signals which the Information Law stands help to be arrested.The Administrative Reforms Commission established by the Government of India under the able leadership of an experienced administrator and statesman has a challenging task in hand. Most of the desirable reform in administration will naturally follow if only the Information Act gets fully implemented. It must therefore be a priority for ARC to put it on mission mode in partnership with the Information Commissioners, the media and the civil society.2nd January, 2006Prof. (Dr.) N.R. Madhava MenonDirector, National Judicial AcademyCo-ordinator, National Colloquium on RTIAIntroduction to the Report on the Colloquium on Right To Information ActAnnexure-I(2) Contd.Recommendations of the Technical Groups formed at the National Colloquium are as under: GROUP IStructure of the Act-Issues.1.Does the Official Secrets Act needs any amendments for proper implementation of RTI Act?Sections 8(2) and 22, RTI Act take care of. There is no need to amend Official Secrets Act.Let the Official Secrets Act stand as it is and let us not meddle with either Act for the present.2.Is it desirable to repeal/amend the State Information Laws? How to harmonise the RTI Act and the State Laws?The state law to the extent it is repugnant to the RTI Act is bad. Therefore it is for the state Government to continue or repeal the State Act.3.What arrangements are required to give protection to the whistleblowers, as a part of RTI Act?Whistle Blower’s Act is said to be under consideration. So far as the RTI act is concerned the question of Whistler Blower does not rise.4.Is it desirable to have a grievance redressal mechanism? If so, what should be the modalities? Should the Information Commission be entrusted with this task?The redressal mechanism under the RTI Act for refusing to give information is elaborate. It needs no change. If information is received and a redressal is needed on the basis of received information general laws and rules apply. (There cannot be two authorities, one under RTI Act and other under general laws.)5.How to address various fiscal, taxation and monetary policy related issues?This is exhaustively covered under RTI Act. Audit reports and CAG reports are already public documents.6.Is there a need to rationalize exemptions? There is no need as the exemptions are quiet rational.7677Right to Information – Master Key to Good GovernanceAnnexure-I(2) Contd.7.Section 30 provides for ‘removal of difficulties’. What steps are required to be taken under this section for effective implementation of the Act?There is no need for considering this issue for the time being.8.Could we have ‘awareness guidance notes’ on the lines of what has been done in U.K.?We shall definitely have guidelines. Appropriate governments and commissions should widely make awareness to the public about the act.9Any other issue?RTI involves fundamental rights, Officials Secrets Act, Law of defamation Law of Contempt etc. Hence, persons who are competent to appreciate the issues addressed should be appointed as Information Officers. RTI Act is silent on this.GROUPS II & IIICreation, Maintenance and Dissemination of InformationThe goal is to ensure that information is available to the citizens in compliance with RTI requirements. To this end, the recommendations deal with-information creation-information maintenance-information dissemination1. CreationAct provides for putting some information in public domain mandatorily. Each department will decide what the suo moto list for itself is.The information in suo moto lists needs to be computerized and standardized to facilitate retrieval by government as well as citizens. Storage and retrieval of data should be in a format that permits national-level aggregation and dissemination for schemes implemented across state boundaries. Suitable systems should be developed to monitor, detect, and respond to information needs across administrative units.Introduction to the Report on the Colloquium on Right To Information ActAnnexure-I(2) Contd.The State and Central ICs will ensure that complete information as required under the Act is provided by the departments. Wherever required, administrative and business processes should be reengineered to collect and provide information in an accessible manner. The ARC may consider priority areas for such reengineering.For example, in PDS, data should be collected to provide disaggregated as well as aggregate information on the procurement, movement and stock of grains, supply-chain management, cost of transport, the list of agencies managing the stocks, stock positions at ration shops, price of commodities, schedule of delivery, timings of shops, details of beneficiaries attached to each shop, etc.Stakeholders will be consulted regarding the nature, extent, and means of dissemination of the information in each area.Data should be created in standards that anticipate future needs for information in addition to current needs. Standards should preferably be open, but where they are not there should be bridge processes to bring non-open-standards into open standards over time.The full life cycle (from birth to death) of citizens’ interface with government should be identified, and information systems specific to each stage should be created.A national database of existing information should be created. As an interim measure, aggregation of district-level data into geographical, functional and hierarchical systems should be taken up. An existing national-level organization like the NIC could be entrusted with this responsibility, or a new organization could be considered.2 MaintenanceAll government resolutions, orders, should be consolidated in specific orders for specific activities, so that no previous orders need be referred to, i.e. each provision of information should be self-contained.Systems and standards should be developed for single-window clearance of citizens’ requests for information.7879Right to Information – Master Key to Good GovernanceAnnexure-I(2) Contd.3 DisseminationThe Information Commissions should have the list of all PIOs in their jurisdictions.Each Information Commission should identify appropriate modes of dissemination of information.Detailed information on the utilization of funds under various schemes of States and Centre should be a part of proactive disclosure in each rmation Commissions should in particular ensure regularity and accuracy of information in the public domain in areas identified as corruption-prone.The potential for private sector/NGO/citizens participation in the dissemination of information in the public domain should be encouraged.All application forms, or other forms which a citizen/business requires for interface with government, shall be available online in a downloadable form. If any fee is to be charged, it should be charged at the time of submission of the ernment departments should maintain answers to frequently asked questions (FAQ) on their websites.All proactively disclosed information should also be in the local rmation that is generally sought from a department, as well as information that is proactively disclosed, should be available in most of the offices of the department.Data should be disseminated in the form most appropriate to meet the information need.For all of the areas, best practices from national and international experiences should be studied and adopted where appropriate. Programs that have proven successful in one jurisdiction should be considered for adoption elsewhere too.A wide-spread training programme for PIOs for effective compliance with RTI legislation should be undertaken, and Central funds may be utilised to sustain the program.GROUP IVApplication of the Act to the Legislature, the Judiciary and the Local Self Governments 1 Legislaturea.standardisation of information relating to legislative business such as questions,committee reports, bills etc. Computerisation of legislative businessIntroduction to the Report on the Colloquium on Right To Information ActAnnexure-I(2) Contd.working of legislative secretariat with secretariat work facilities for legislators, specially Petitions Committees.d.relooking at priviledges vs transparency and right to informatione.CAG recommendations to be put on auto-pilot for implementation by the executive and monitoring by the PAC, other committees and legislaturesf.action taken on the CAG reports by the executive and the legislature to be published as part of section 4 disclosureg.standardisation of public authorities and PIOs across legislaturesh.indexing, cataloging and computerisation of records in common formatsi.developing legislature MIS covering legislative business, committees, information about legislators etc.j.wealth of information through questions, business of proceedings of committees, reports of committees including Estimates Committee, Ethics Committee, Standing Committees on subjects, Privileges Committee etc. to be published as part of disclosure under section 4k.action taking reports to be published from time to time and made available onlinel.reports of Enquiry Commissions, House Committees and Special Committees to be put in the public domain onlinem. capacity building for legislators, PIOs, APIOs, functionaries of public authorities etc. to be given priorityn.virtual deliberations of committees rather than calling a large number of officers using video conferencing facilities and e-enabled repository of informationo.backward and forward linkages for legislatures to be clearly mapped out to facilitate easy flow of information and e-enablementp.awareness campaign on legislative business, privileges, committees, law making procedures and facilities for Right to Information with people and civil society groupsq.restructuring of business rules and legislative secretarial practices to respond to the requirements of RTI Actr.e-legislature as a part of national e-governance action plan8081Right to Information – Master Key to Good GovernanceQuestionnaireAnnexure-I(2) Contd.Annexure-I(3)s.e-enablement of entire legislature management system for classification, storage1. Questionnaire for State Governments which already had a State RTI Actfiltering, retrieval and supply of information822 Judiciarya.standardisation of formats for the purpose of section 4 working between the subordinate courts, tribunals and the high courtc.web-housing of judgements – facilities to district, high courts and supreme courtd.standardisation of public authorities and pios across different levels of judiciarye.standardised formats for indexing and cataloguing of records, cases across superior courts, subordinate courts and puterisation of records and case flow managementg.spate of litigation related to RTI Act – work load in high courts – resources required at all levelsh.e-judiciary as a part of national e–governance action plan3 Local self governmentsa.standardisation of formats for record keeping with appropriate indexing and cataloguing for rural local bodies in three tiers, municipal corporations, municipalities and nagar pancharyats with the involvement of civic groups and local bodiesb.development of local bodies information management system following the national manualc.audio visual publicity at the gramsabha and ward committee level and mass awareness campaignd.grading of local bodies with respect to mandatory discloruee.standardisation of formats for disclosure under section 4f.directory of PIOs, APIOs and appellate officers to be widely disseminatedg.training of councillors, sarpanches, zila parishad presidents etc in right to working of local bodies with information commission1.How is the RTI Act of 2005, an improvement over the State Act? Please highlightthe essential differences between the two.2. When did the State Act come into force?3.After the coming into force of the Central RTI Act what does the State plan to dowith the State Act? {A copy of the State Act may please be furnished}4. Was any evaluation of the impact of the State Act done? What were the major findings? {A copy of the report may be furnished}5. What was the monitoring mechanism under the State Act?6.Have the details of all applications received under the State Act been compiled showingtypes of application received, how they were disposed off, in how many cases the information could not be furnished, and what were the reasons?7.What were the main challenges faced by the State in implementing the State Act?And how were these overcome?8. What are the arrangements made by the State Government under section 4 of the RTI Act, to provide suo-motu information to citizens? Have some guidelines been issued? Would issuing guidelines help in dissemination of information, as there is a tendency to hide unpleasant information? If so what all aspects should these guidelines cover?9.What are the arrangements made in the offices of the State Government functionariesat the District level under section 4 of the RTI Act, to provide suo motu information to citizens?10. Does the State Government think that the state of record-keeping is good enough to provide all the required information as stipulated under the RTI Act? What changes are required?11. Is it possible to identify some offices /departments where it could be said that all the required information, subject to availability, would be provided to the citizens?12. Has the State Government made any arrangements for creating awareness about the enactment of the Act pertaining to Right to Information among the citizens? If yes, does it extend to awareness at the village/ Gram Panchayat level? What are the modes adopted by the State Government for this purpose?83Right to Information – Master Key to Good GovernanceQuestionnaire84Annexure-I(3) Contd.13. What are the arrangements made by the State Government for spreading awareness about the RTI Act among people who are illiterate or in areas where illiteracy is high?14. Has the State Government made any arrangements for storing, disclosure and dissemination of information using electronic means i.e. applying the modes of e-governance? What would be major difficulties in this?15. What are the arrangements made by the State Government for helping people who are illiterate and/or who live below the poverty line to make an application for disclosure of information at all levels?16. Does the State Government think that a separate resource allocation is needed for implementing the RTI Act? Would the existing staff be able to cater to the anticipated demand at all levels?17. What monitoring mechanism has the State Government put in place to keep track of all applications received and how they were disposed off?18. Has the State Government initiated any training programme for the benefit of its officers on norms of disclosure of information and implementation of the RTI Act?19. Does the State Government think that the Official Secrets Act will come in the way of implementation of the RTI Act? If yes, how? Does the State Government recommend any amendment in the Official Secrets Act?20. Is it possible/desirable to have a citizens committee to monitor the implementation of this Act at the District and the State levels?21. What arrangements have been made by the State Government for accepting information requests from remote areas?22. Would it be desirable to have a system of grading of important offices based on their performance in disseminating information?23. Is it possible to involve private sector which can be given the raw data periodically by some offices, it then processes this raw data and makes the desired information available to the public on demand? {The concept of privately operated information kiosks}.24. Which are the areas/sectors/offices where effective implementation of RTI Act could lead to curbing corruption? Should these offices be monitored more closely for effective implementation? {ABC Analysis}25. Would it be possible/desirable to have a Single Window agency at the District/Block levels which receives all information pertaining to the District/Taluka and then processes them further?Annexure-I(3) Contd.26. Many offices especially the District Collectors office, Zilla Panchayat offices have their own web-sites. But the information available is quite generic. How could these web-sites be enriched? Could there be some guidelines on making these website content rich?27. What arrangements have been made for acceptance of fees for seeking information?28. The Act stipulates that there no fees is to be paid by persons living below poverty line? What guidelines have been issued for proper implementation of this provision?29. What should be done to handle frivolous demand for information? 2. Questionnaire for State Governments which did not have State RTI Act1. Before the RTI Act coming into force, what was the mechanism by which the State Government, its agencies and functionaries were providing information to the public? There must have been a system of providing copies of some documents? What were the instructions/guidelines issued by the State Governments in this regard?2.Was there a system for monitoring this system? If a study was done for evaluation ofthis system, a copy of the same may be furnished?3. What are the arrangements made by the State Government under section 4 of the RTI Act, to provide suo-motu information to citizens? Have some guidelines been issued? Would issuing guidelines help in dissemination of information, as there is a tendency to hide unpleasant information? If so what all aspects should these guidelines cover?4.What are the arrangements made in the offices of the State Government functionariesat the District level under section 4 of the RTI Act, to provide suo motu information to citizens?5.Does the State Government think that the state of record-keeping is good enough toprovide all the required information as stipulated under the RTI Act? What changes are required?6.Is it possible to identify some offices /departments where it could be said that all therequired information, subject to availability, would be provided to the citizens?7. Has the State Government made any arrangements for creating awareness about the enactment of the Act pertaining to Right to Information among the citizens? If yes, does it extend to awareness at the village/ Gram Panchayat level? What are the modes adopted by the State Government for this purpose?85Right to Information – Master Key to Good GovernanceAnnexure-I(3) Contd.8. What are the arrangements made by the State Government for spreading awareness about the RTI Act among people who are illiterate or in areas where illiteracy is high?9.Has the State Government made any arrangements for storing, disclosure anddissemination of information using electronic means i.e. applying the modes of e-governance? What would be major difficulties in this?10. What are the arrangements made by the State Government for helping people who are illiterate and/or who live below the poverty line to make an application for disclosure of information at all levels?11. Does the State Government think that a separate resource allocation is needed for implementing the RTI Act? Would the existing staff be able to cater to the anticipated demand at all levels?12. What monitoring mechanism has the State Government put in place to keep track of all applications received and how were they disposed off?13. Has the State Government initiated any training programme for the benefit of its officers on norms of disclosure of information and implementation of the RTI Act?14. Does the State Government think that the Official Secrets Act will come in the way of implementation of the RTI Act? If yes, how? Does the State Government recommend any amendment in the Official Secrets Act?15. Is it possible/desirable to have a citizens committee to monitor the implementation of this Act at the District and the State levels?16. What arrangements have been made by the State Government for accepting information requests from remote areas?17. Would it be desirable to have a system of grading of important offices based on their performance in disseminating information?18. Is it possible to involve private sector which can be given the raw data periodically by some offices, it then processes this raw data and makes the desired information available to the public on demand? {The concept of privately operated information kiosks}.19. Which are the areas/sectors/offices where effective implementation of RTI Act could lead to curbing corruption? Should these offices be monitored more closely for effective implementation? {ABC Analysis}QuestionnaireAnnexure-I(3) Contd.20. Would it be possible/desirable to have a Single Window agency at the District/Block levels which receives all information pertaining to the District/Taluka and then processes them further?21. Many offices especially the District Collectors office, Zilla Panchayat offices have their own web-sites. But the information available is quite generic. How could these web-sites be enriched? Could there be some guidelines on making these website content rich?22. What arrangements have been made for acceptance of fees for seeking information?23. The Act stipulates that there no fees is to be paid by persons living below poverty line? What guidelines have been issued for proper implementation of this provision?24. What should be done to handle frivolous demand for information? 3. Questionnaire for Citizens1.Please indicate the type of settlement where you reside (a)village(b)town having population below one lakh(c)town having population between one and ten lakh(d)city having population above ten lakhs(e)four metros2.Please indicate your occupation(a)farming(b)agricultural labourer(c)craftsman(d)private business(e)industrial labourer(f)Govt. Servant(g)salaried employee in private sector(h)professional3. Have you ever desired to seek information from any Ministry/department/agency of the Central/State Government before the RTI Act coming into force?4.If yes, then did it pertain to (a)status of any application made by you (b)reasons of rejection of any application made by you(c) inadequate delay in processing of any application(d)faulty processing of any application(e)issue pertaining to any public/ community interest5.Did you actually write to the officials concerned for the relevant information?6.If yes, then did you receive any information from the official concerned?7.If yes, then were you satisfied with the information provided to you?8.Are you aware that the Indian Parliament has passed the RTI Act in 2005, providing every citizen with the Right to Information?8687Right to Information – Master Key to Good GovernanceAnnexure-I(3) Contd.9.Are you aware of the provisions of the RTI Act?10. Are you aware that you are not required to disclose any reason for asking the desired information under the RTI Act?11. Are you aware about the fees which are to be charged for the disclosure of information under the RTI Act?12. Are you aware that there are no fees for any citizen who is below the poverty line?13. Are you aware that all Ministries/Departments/agencies of the Central/State Government are statutorily required to provide the requisite information within 30 days of making the application, which can not exceed 40 days in any case?14. Have you made any application under the RTI Act to any Government official?15. If yes, then have you received the information within 30 days of making the application?16. Are you satisfied with the quality of information disclosed to you?17. Do you think the information which has been disclosed to you quite vague, incomplete or evasive in nature ?18. Has the information been provided in the format you had sought?19. Whether the official has used standardized computer generated format for providing the information which was sought for?20. Has the concerned authorities denied you the information which you had sought?21. If yes, has the reason for the same been communicated to you?22. Are you satisfied with the reasons so communicated?23. If no, have you preferred an appeal against the said order?24. Which provision of the RTI Act was invoked by the concerned authority to deny the disclosure of information to you (give the specific provision of the RTI Act).25. What are the arrangements made in the area of your field work by the State Government for helping people who are illiterate and/or who live below the poverty line in making an application for disclosure of information at all levels?26. What should be done to handle frivolous demand of information?QuestionnaireAnnexure-I(3) Contd.4. Questionnaire for NGOs1 Name of the NGO?2Please specify the region/area of your field work (village/taluka/district/state).3Is your organization also carrying out the work of spreading awareness about theprovisions of the RTI Act in the area of your field work?4Whether your organization had tried to elicit information from government officialsprior to the enactment of the RTI Act?5If yes, whether you had received the information you had sought ?6If yes, whether the information provided to you was as per your requirements?7Whether any Government authority has made any attempts to make the peopleaware of the provisions of the RTI Act in your field area?8What will be the nature of information likely to be sought by people residing in yourfield work area?9Do you think that the concerned government authorities have made suitablearrangements for providing such information to citizens?10 Have you made any request for disclosure of information to any Government official under the RTI Act, in the area of your field work?11 If yes, whether the information sought for has been received by you within the stipulated time?12 If yes, then have you received the information within 30 days of making the application?13 Are you satisfied with the quality of information disclosed to you?14 Do you think the information which has been disclosed to you quite vague, incomplete or evasive in nature ?15 Has the information been provided in the format you had sought?16 Has the concerned authorities denied you the information which you had sought?17 What are your suggestions for effective implementation of the RTI Act?18 What in your view would be the major impediments in the effective implementation of the RTI Act?19 What are your suggestions for ensuring that the maximum amount of information8889Right to Information – Master Key to Good GovernanceQuestionnaire90Annexure-I(3) Contd.gets disseminated through voluntary disclosure under section 4 of the Act so that the work of providing information gets reduced?20 Do you think that the Official Secrets Act would come in the way of effective implementation of RTI Act? If yes. Why?21 How to generate awareness among the people? Please give your suggestions.22 How to change the mindset of officialdom which is basically inclined towards maintaining secrecy?23 What would be the easiest mode of payment of fees for seeking information? Should there be stamps of fixed value like the revenue stamps to be circulated through all post offices?24 What should be done to avoid demand for frivolous information?5. Questionnaire for District Collectors1Name of the District?2What was the system of providing information on demand to citizens prior to thecoming into force of the RTI Act? What type of information could be furnished?3What are the arrangements made on part of the District Administration under section4 of the RTI Act, to provide suo motu information to citizens?4What are the arrangements made in the offices at the Taluka/Block level under section4 of the RTI Act, to provide suo motu information to citizens?5Do you think that the state of record-keeping is good enough to provide all therequired information as stipulated under the RTI Act? What needs to be done to improve the standard of record keeping?6Is it possible to identify some offices where it could be said that all the requiredinformation, subject to availability, would be provided to the citizens?7Has the District Administration made any arrangements for creating awareness aboutthe enactment of the Act pertaining to Right to Information among the citizens?8If yes, does it extend to awareness at the village/ Gram Panchayat level?9Has the District Administration made any arrangements for storing, disclosure anddissemination of information using electronic means i.e. applying the modes of e-governance?Annexure-I(3) Contd.10 If yes, then has the District Administration prepared any standard format for storing, disclosure and dissemination of information at various levels?11 What are the arrangements made by the District Administration for spreading awareness about the RTI Act among people who are illiterate or in areas where illiteracy is high?12 What are the arrangements made by the District Administration for helping people who are illiterate and/or who live below the poverty line to make an application for disclosure of information at all levels?13 Has the District Administration initiated any training programme for the benefit of its officers on norms of disclosure of information and implementation of the RTI Act?14 Is the District Administration asking for verification of citizenship status in general and economic status for people lying below the poverty line in particular from persons making applications under the RTI Act?15 Does the District Administration think that the Official Secrets Act will come in the way of implementation of the RTI Act?16 If yes, how?17 Do you think that a citizens’ committee may be useful in implementation of this Act?18 Is it possible/desirable to have a single window agency to receive and then process all applications? If yes what steps are needed to be taken for this?19 What should be done to handle frivolous demand of information?6. Questionnaire for Union Ministries and Departments1. What are the arrangements made by the Ministry/Department under section 4 of the RTI Act, to provide suo-motu information to citizens? Have some guidelines been issued? Would issuing guidelines help in dissemination of information, as there is a tendency to hide unpleasant information? If so what all aspects should these guidelines cover?2.What are the arrangements made in the offices of the Ministry/Department at theDistrict level under section 4 of the RTI Act, to provide suo motu information to citizens?91Right to Information – Master Key to Good GovernanceAnnexure-I(3) Contd.3.Does the Ministry/Department feel that the state of record-keeping is good enoughto provide all the required information as stipulated under the RTI Act? What changes are required?4.Is it possible to identify some offices /departments where it could be said that all therequired information, subject to availability, would be provided to the citizens?5. Has the Ministry/Department made any arrangements for creating awareness about the enactment of the Act pertaining to Right to Information among the citizens? If yes, does it extend to awareness at the village/ Gram Panchayat level? What are the modes adopted by the State Government for this purpose?6. What are the arrangements made by the Ministry/Department for spreading awareness about the RTI Act among people who are illiterate or in areas where illiteracy is high?7.Has the Ministry/Department made any arrangements for storing, disclosure anddissemination of information using electronic means i.e. applying the modes of e-governance? What would be major difficulties in this?8. What are the arrangements made by the Ministry/Department for helping people who are illiterate and/or who live below the poverty line to make an application for disclosure of information at all levels?9.Does the Ministry/Department think that a separate resource allocation is needed forimplementing the RTI Act? Would the existing staff be able to cater to the anticipated demand at all levels?10. What monitoring mechanism has the Ministry/Department put in place to keep track of all applications received and how they were disposed off?11. Has the Ministry/Department initiated any training programme for the benefit of its officers on norms of disclosure of information and implementation of the RTI Act?12. Does the Ministry/Department think that the Official Secrets Act will come in the way of implementation of the RTI Act? If yes, how? Should the Official Secrets Act be amended?13. What arrangements have been made by the Ministry/Department for accepting information requests from remote areas?14. Would it be desirable to have a system of grading of Ministry/Department based on their performance in disseminating information?15. Is it possible to involve private sector which can be given the raw data periodicallyQuestionnaireAnnexure-I(3) Contd.Ministry/Department, it then processes this raw data and makes the desired information available to the public on demand? {The concept of privately operated information kiosks}.16. Which are the areas/sectors/offices where effective implementation of RTI Act could lead to curbing corruption? Should these offices be monitored more closely for effective implementation? {ABC Analysis}17. How many PIOs have been appointed in the Ministry/Department? Is it desirable/ possible to have one PIO in each Ministry/Department at least in Delhi?18. Have arrangements been made to seek information electronically? In such cases how the fees would be paid?19. The Act stipulates that there no fees is to be paid by persons living below poverty line? What guidelines have been issued for proper implementation of this provision?20. What should be done to handle frivolous demand of information?21. What arrangements have been made to give information in the language requested by the applicant?7. Questionaire for the media1.Whether your organization had tried to elicit information from government officials prior to the enactment of the RTI Act?2.If yes, whether you had received the information you had sought?3.If yes, whether the information provided to you was as per your requirements?4.What will be the nature of information likely to be sought by people?5.Do you think that the concerned government authorities have made suitable arrangements for providing such information to citizens?6. Have you made any request for disclosure of information to any Government official under the RTI Act, in the area of your field work?7.If yes, whether the information sought for has been received by you within the stipulated time?8.If yes, then have you received the information within 30 days of making the application?9.Are you satisfied with the quality of information disclosed to you?9293Right to Information – Master Key to Good GovernanceResponse to QuestionnaireAnnexure-I(3) Contd.10. Do you think the information which has been disclosed to you is vague, incomplete or evasive in nature ?11. Have the concerned authorities denied you the information which you had sought?12. What are your suggestions for effective implementation of the RTI Act?13. What in your view would be the major impediments in the effective implementation of the RTI Act?14. What are your suggestions for ensuring that the maximum amount of information gets disseminated through voluntary disclosure under section 4 of the Act so that the work of demanding information gets reduced?15. Do you think that the Official Secrets Act would come in the way of effective implementation of RTI Act? If yes. Why?16. What amendments need to be carried out in the Official Secrets Act to ensure ‘Freedom of Information’?17. How to generate awareness among the people about freedom of information? Please give your suggestions.18. How to change the mindset of officialdom which is basically inclined towards maintaining secrecy?19. What should be done to avoid demand for frivolous information? Annexure-(3)Response to Questionnaire(As on 11.05.2006)Highlights of the responses from Union Ministries and Departments are being given as under:Sl. No.QuestionReplyYesNoNo Comments/(affirmative)(negative)Non Categoricalresponse1. Whether arrangements made for suo motu disclosure?27(100%)2. Whether ‘public authorities have been identified?26(96.3%)1(3.7%)3. Whether protocols and formats have been developed for uniform application in all public authorities for proactive disclosure?8(29.6%)12(44.44%)7(26%)4. Whether state of record-keeping is considered good enough?16(59.25%)7(26%)4(14.8%)5. Whether arrangements have been made for creating awareness about the Act among the citizens?13(48.14%)9(33.33%)5(18.5%)6. Whether electronic means of storing and disseminating of information have been developed?14(51.85%)4(14.8%)9(33.33%)7. Whether separate resource allocation is needed?17(63%)7(26%)3(11%)8. Whether any amendment in the2(7.6%)14(51.85%)11(40.74%)Official Secrets Act is required?9. Whether monitoring mechanism adopted for keeping track of applications?27(100%)10. Whether co-ordination between CIC and SICs is required for sharing of best practices, easy single16(59.25%)4(14.8%)7(26%)window access etc.9495Information was sought from the following five Ministries/Departments under the RTI Act:??Case Study 1: Department of Industrial Policy and PromotionRight to Information – Master Key to Good GovernanceAnnexure-I(4)CASE STUDIES?Date of filing the application: 20.1.2006?Difficulty faced in filing the application: The application fee as per the Act is Rs 10/-. However since DIPP insisted only on Demand Draft, the Draft was prepared at a cost of Rs 35.?Information sought: What is the basis of classifying durable and non-durable consumer goods in the industrial classification? What is the basis of data collection and the response percentage??Date on which response received: 2.2.2006Nature of response: Information not available with the Department, “as this does not fall under the purview of this Department”. (There seems to be a tendency to hide information or to give minimum information, which reflects that attitudinal change has not taken place. It may be mentioned here that, DIPP is the source agency for collection of data in respect of Index of Industrial Production with a weight of 51% and brings out an internal report on 209 items compiled by it with sub classifications, including that of consumer durable and non-durables).Case Study 2: Department of Revenue (CBDT)?Date of filing the application: 14.2.2006?Difficulty faced in filing the application: None?Information sought: Whether Income Tax benefits under Equity Linked Saving Schemes (ELSS) are still available under the new provisions of Income Tax Act??Date on which response received: 1.3.2006?Nature of response: The Department has informed that the “information asked for is not covered under the RTI Act”. However, copy of a Circular issued in regard of the tax benefit was enclosed.A Case StudiesAnnexure-I(4) Contd.Case Study 3: Ministry of Panchayati Raj?developPanchayati Raj institutions in the State of Jharkhand??Date on which response received: 22.2.2006?Nature of response: PRIs fall under the state subject and therefore the application forwarded to Jharkhand State for the desired information with a copy marked to the applicant. (Response from the state government was subsequently received and was satisfactory).Case Study 4: Central Statistical Organization?Date of filing the application: 1.2.2006?Difficulty faced in filing the application: None?Information sought: What is the sample size for collection of data on various sectors and the response rate? What is the basis of this sample size and is it as per international statistical standards??Date on which response received: Response awaited.?Nature of response: (Response has not been received till 15.05.2006).Date of filing the application: 1.2.2006Difficulty faced in filing the application: NoneInformationWhattakenandsought:measures are beingto strengthen9697Right to Information – Master Key to Good GovernanceA Comparative Analysis of the Right to Information Act of Different States98Annexure-I(4) Contd.Case Study 5: Ministry of Water Resources?Date of filing the application: 23.1.2006?Difficulty faced in filing the application: Pay & Accounts Office of the Ministry is located in a different building.?Information sought: Whether there are any ongoing projects to revive the Sone Canal System in Bihar, including its desiltation? Whether the Special River Commission for study of Sone River has been set up as envisaged while setting up the Bansagar Control Board, and whether its studies have been completed? What has been the discharge allowed to Bihar in the Sone River during May to October and December to March in F.Yrs.02-03/03-04??Date on which response received: On 31.1.06, it was informed that application has been forwarded to Water Resources Department, Govt. of Bihar and Central Water Commission. Reply received from Govt. of Bihar vide letter dated 27.2.06, and from CWC vide letter dated 16.3.06.?Nature of response: Appropriate details have been provided.RAJASTHAN- 2000Annexure-I(5)-To provide for Right to Information to the citizens about the affairs of the State and public bodies.“Subject to the provisions of this Act, every citizen shall have right to obtain information from the incharge of office and such incharge shall be liable to provide information under and in accordance with the provisions of this Act.” (Sec.3)GOA-1997Information not defined but “Right to Information” means the right to access to information relating to the affairs of the State or public bodies by means of-(a) obtaining certified copies of documents or records, or (b) inspection of accessible records and taking notes and extracts, or (c) inspection of public works, or (d) taking of samples of material from public works. [Sec.2(vi)]“Subject to the provisions of this Act, every citizen shall have right to obtain information from a Competent Authority.” (Sec3)Every Governmental action should be transparent to the public; and to achieve this object, every citizen should be able to get information from the rmation “ means any material or information relating to affairs of the State or any local or other authorities constituted under any enactment passed by the Legislative Assembly of Goa for the time being in force or a Statutory Authority or a Company, Corporation, Trust, Firm, Society or a Co-operative Society or any Organization funded or controlled by the Government or executing any public work or service on behalf of or as authorized by the Government” [Sec.2(c)]TAMIL NADU-1997In order to provide the public the right of access to information, about the administration and to enable them to get details about the schemes of the Government implemented by various departments, the works executed by various departments, the quantity of rice and other essential commodities supplied to each of the shops under public distribution system of their stocks and to pave the way for the people to question irregularities in the system, the Government have decided to bring a legislation.OBJECTIVEA COMPARATIVE ANALYSIS OF THE RIGHT TO INFORMATION ACT OF DIFFERENT STATES (Based on the enactments and information provided on the website of Commonwealth Human Rights Initiative)Information given an inclusive definition-Information “ includes copy of any document relating to the affairs of the State or any local or other authorities constituted under any act for the time being in force or a statutory authority or a company, corporation or a co-operative society or any organization owned or controlled by the Government.” [Sec.2(3)]SCOPE: DEFINITION OF INFORMATIONEvery person bonafide requiring information may have access to such information in accordance with the procedure specified under this Act.[Sec.3(1)]RIGHTS CREATED99Right to Information – Master Key to Good GovernanceContd..RAJASTHAN- 2000Theoretically yes. The exemptions are not blanket. As per Sec. 5, the Competent Authority may withhold information in the cases listed under that section.There are no blanket exemptions. As per Sec. 5, the Competent Authority may withhold information in the cases listed under that section. For this the reasons have to be recorded in writing.Exemptions have been listed. (Sec.5) These are blanket exemptions, except in the case of refusal on the ground that the request is too general, where the officer in charge is duty bound to render help to the person seeking information in referring his request to facilitate supplyof information. [Sec.5(x)(a)]Applicable to State Govt. and Public Bodies. Public Body includes:1. All local bodies and Statutory authorities.2. Government Company/corporation in which not less than fifty one percent of the paid up share capital is held by the State Government.3. A trust established by the State Government and controlled by it; or4. Society or a Co-operative Society or any other organisation established under any law for the time- being in force, by the State Government and directly controlled or funded by it.5. Any other body, which may be receiving substantial financial assistance from the State Government, as may be specified by notification in the Official Gazette for the purposes of this Act [Sec.2(v)]GOA-1997TAMIL NADU-1997Applicable to State, any Statutory Authority or a Company, Corporation, Trust, Firm, Society or a Co-operative Society, or any Organisation funded or controlled by the Government or executing any public work or service on behalf of or as authorised by the Government; (Partially applicable to some Pvt. Bodies) [Sec.2(c)]A number of exemptions have been listed. These are blanket exemptions.[Sec.3(2)]Exemtptions have been listed, but information which cannot be denied to the State Legislature shall not be denied to any person.(Sec.5)There are no blanket exemptions. As per Sec. 5, the Competent Authority may withhold information in the cases listed under that section. For this the reasons have to be recorded in writing.Theoretically yes. The exemptionsare not blanket. As per Sec. 5, theCompetent Authority may withholdNo.Yes. If in the opinion of the Competent Authority any information, if disclosed, is likely to cause breach of the peace or cause violence, or disharmony among the section of the people on the basis of religion, language, caste, creed, community or if it is prejudicial to public interest, the Competent Authority shall refuse to give information. shall refuse to give information.It applies to State and any statutory authority or a company, corporation or a co -operative society or any organization owned or controlled by the Government.(Not applicable to private bodies) [Sec.2(3)]EXEMPTIONSCAN INFORMATION BE OBTAINED IN EXEMPT CATEGORIESCAN INFORMATION BE DENIED IN NONEXEMPT CATEGORIESAPPLICABILITY TO NON GOVT./PVT. ORGANISATIONSA Comparative Analysis of the Right to Information Act of Different StatesContd..The request for seeking information under this Act shall be accompanied by a proof of payment of such fee as may be prescribed for furnishing of information.(Sec.8)Proper recordkeeping mandated. [Sec.9(1)&(2)]First appeal lies to the ‘Controlling Officer’. Second appeal lies to the District Vigilance Committee or the Rajasthan Civil Services Tribunal. (Sec.6 & 7) Legal proceeding can be initiated only after exhausting the remedies provided under the Act. (Sec.11)RAJASTHAN- 2000For this the reasons have to be recorded in writing.Person ‘Incharge of office’ to receive requests and give information. [Secs.2(iii) & 4]30 working days.NO PROVISIONNo mandate. But The State Government and public bodies may suo motu exhibit or expose such100information, from time to time, as it may consider appropriate in public interest, in the manner as may be prescribed. (Sec.12-A)NO PROVISIONNO PROVISIONGOA-1997information in the cases listed under that section. For this the reasons have to be recorded in writing.NO PROVISION.TAMIL NADU-1997Competent Authorities notified in the Act itself. Competent Authority to receive requests and give information. [Secs.2(a) & 4]No departmental appeal mechanism. Appeal can be made to the Administrative Tribunal. (Sec.6)30 working days.30 working days, Provided that where such information relates to the life or liberty of an individual, the Competent Authority shall either furnish information or pass order refusing the request within 48 hours on receipt of the application.No separate provision. But the Government has power to to make rules for carrying out the purposes of the Act. (Sec.7)No.The Competent Authority shall charge fees for supply of information which shall not exceed the cost of processing and making available of information. (Sec.14)NO PROVISIONCompetent Authorities to be notified by Government. Competent Authority to receive requests and give information. [Sec.2(1), 3(3) & 3(4)]Appeal against Competent Authority lies to Govt.or an Authority notified by Govt. (Sec.4)Proper recordkeeping mandated. (Sec.7)NO PROVISIONOne of the tasks of the State Council created under the Act is to advice the Govt. on HRD. [Sec.11(3)(d)]NO PROVISIONNO PROVISIONSTRUCTURESUO MOTUDISCLOSURESRECORDKEEPINGHUMAN RESOURCE DEVELOPMENTFEESTIME LIMITAWARENESS GENERATIONAPPEALS100101A Comparative Analysis of the Right to Information Act of Different StatesRight to Information – Master Key to Good GovernanceMAHARASHTRA 2002Annexure-I(5)-Subject to the provisions of this Act, every citizen shall have the right to get information. (Sec.3)Act applies to Public Authorities. “Public Authority” means any authority or body established or constituted by any Central or State law and includes any other body owned and controlled by the State or which receives any aid directly or indirectly by the Government and shall include the bodies whose composition and administration are predominantly controlled by the Government or the functions of such bodyare of public nature or interest or on which office bearers are appointed by the Government.[Sec.2(6)]“ Information “ means information relating to any matter in respect of the affairs of the Government and of any public authority and includes a copy of any record in the form of a document, diskettes, floppy or any other electronic mode.[Sec.2(5)]DELHI2001Right to information is the bed-rock of democracy and can pave the way for transparency, openness and accountability in governance of the affairs of the State and ensure effective participation of the people in a democratic society“Information” means any material or information relating to the affairs of the National Capital Territory of Delhi.[Sec.2(d)]Securing right to information in the National Capital Territory of DelhiKARNATAKA 2000Providing right of access to information to the citizens of the State promotes openness, transparency and accountability in administration and ensures effective participation of people in the administration and thus makes democracy meaningful.Subject to the provisions of this Act, every citizen shall have right to obtain information from a competent authority. (Sec.3)‘Right toinformation’ means the right of access to information and includes the inspection of works, documents, records, taking notes and extracts and obtaining certified copies of documents or records or taking samples of material.[Sec.2(i)]Act applies to Public Authorities. Public Authority means any authority or body established or constituted - (i) by or under the Constitution; (ii) by any law made by the Government and includes any other body owned, controlled or substantially financed by funds provided directly or indirectly by the Government. [Sec.2(g)]Act applies to Public Authorities. Public Authority means the State Govt, the KPSC and all local authorities, all authorities constituted by or under any Act of the State Legislature for the time being in force, a company, Corporation, trust, society, any statutory or other authority, Co-operative society or any organisation or body funded, owned or controlled by the State. [Sec.2(c)]OBJECTIVEA COMPARATIVE ANALYSIS OF THE RIGHT TO INFORMATION ACT OF DIFFERENT STATES (Based on the enactments and information provided on the website of Commonwealth Human Rights Initiative)“Information” means information relating to any matter in respect of the affairs of the administration or decisions of a public authority.[Sec.2(b)]RIGHTS CREATEDSCOPE: DEFINITION OF INFORMATIONSubject to the provisions of this Act every citizen shall have the right to information. (Sec.4). “Right to Information” means right of access to information from any public authority. [Sec.2(d)]APPLICABILITY TO NON GOVT./ANISATIONS103Penalties to be imposed as prescribed under the service rules.(Sec.10)NO PROVISIONNil.NO PROVISIONPenalties under Service Rules and in addition a Fine of Rs 100 per day of delay.(Sec.8)NO PROVISIONNil.GOA-1997NO PROVISIONNO PROVISIONNO PROVISIONNil.TAMIL NADU-1997NO PROVISIONPENALTIESFRIVILOUS/VEXATIOUS OR SUPERFLUOUS REQUESTSSPECIAL PROVISION FOR GOVERNMENT SERVANTSPROVISION OF FEE WAIVER102Contd..RAJASTHAN- 2000Right to Information – Master Key to Good GovernanceNo Sec. (7)First appeal to internal appellate authority and second appeal to Lokayukta/Upa-lokayukta whose decision is final. (Sec.11)There is a bar of jurisdiction of courts. (Sec.16)The Act mandates certain suo motu disclosures. (Sec. 4)PIO is designated by Competent Authorities to receive requests and give information. (Sec.6).Blanket exemptions have been provided (Sec.7)The Public Information Officer may also reject the request for supply of information, where (a ) The information is already published in the Official Gazette or otherwise, and is available to public or is of such a nature that the volume of information required to be retrieved or processed, would involve disproportionate diversion of the resources of a public Authority.(b) It relates to information that is required by law, rules, regulations or order to he published at a particular time. (Sec.8)A person desirous of obtaining information shall make an application to the Public Information Officer in the prescribed manner along with such fees, in such form and with such particulars, as may be prescribed. Where it is decided to provide the information on payment of any additional fees than the fees prescribed representing the cost of providing the necessary information, the Public Information Officer shall send an intimation to the applicant giving the details of the additional fees determined by him, requesting him to deposit the additional fees. [Sec.6(1) & (2)]15 working days. Within 24 hours where the request involves life and liberty of a person30 working daysThe Act mandates certain suo motu disclosures. (Sec.4)Yes, on the grounds mentioned in Section 6.No Sec. (6)The competent authority shall charge suc fees for supply of information as may be prescribed by rules, but which shall not exceed the cost of processing and making available of the information. (Sec.13)Competent Authority to receive request and give information.“Competent authority” means Authoritry notified by Govt.(Sec.5)Blanket exemptions have been provided. {Sec.6}Appeal lies to the Public Grievances Commission. (Sec.7)15 working daysContd..KARNATAKA-2000DELHI-2001MAHARASHTRA-2002Blanket exemptions have been provided. [Sec.4(2)]The Act mandates certain suo motu disclosures. (Sec.3)No these exemptions are blanket. Sec. 4(2)First appeal lies to the prescribed appellate authority. Second appeal lies to the Karnataka Appellate Tribunal. (Sec.7) There is a bar of jurisdiction of Courts. (Sec.10)Yes, if the request relates to personal information the disclosure of which has no relationship to any public activity or which would cause unwarranted invasion of the privacy of an individual except where larger public interest is served by relates to personal information the disclosure of which has no relationship to any public activity or which would cause unwarranted invasion of the privacy of an individual except where larger public interest is served by disclosure, or if it is too general in nature.(Sec.6)Competent authority to receive requests and give information.“Competent authority” means head of the office or any officer or person as may be notified by the State Government. Sec.5.A person desirous to obtain information shall make an application to the competent authority in the prescribed manner, along with such fee, in such form and with such particulars, as may be prescribed.[Sec.5(1)]TIME LIMITSUO MOTUDISCLOSURESSTRUCTUREFEESEXEMPTIONSAPPEALSCAN INFORMATION BE OBTAINED IN EXEMPT CATEGORIESCAN INFORMATION BEOBTAINED IN NONEXEMPT CATEGORIESA Comparative Analysis of the Right to Information Act of Different StatesContd..MAHARASHTRA-2002Proper record keeping mandated. {Sec. 4(a)}.Where any Public Information Officer has without any reasonable cause, failed to supply information within the specified period, the appellate authority may impose a penalty of Rs 250 for each day’s delay. Where it is found that the PIO has knowingly given incorrect/misleading or wrong/incomplete information, a penalty not excceding Rs 2000 may be imposed on such oficer. Apart from this, the PIO shall also be liable to appropriate disciplinary action under the service rules. (Sec.12)NoNo ProvisionNo ProvisionNilDELHI-2001Disciplinary action to be taken under relevant service rules. (Sec.9)NoNo ProvisionNo ProvisionProper record keeping mandated. {Sec. 4(a)}.The Public Information Officer may also reject therequest for supply of information, where (a )the information is already published in the Official Gazette or otherwise, and is available to public or is of such a nature that the volume of information required to be retrieved or processed, would involve disproportionate diversion of the resources of a public Authority:(b) it relates to information that is required by law, rules, regulations or order to he published at a particular time. (Sec.8)No ProvisionNilKARNATAKA-2000Where any competent authority, without any reasonable cause fails to supply information within the specified period or provides false information, the authority immediately superior to it may impose a penalty not exceeding Rs 2000, and he shall also be liable to disciplinary action under the Service Rules. (Sec.9)NoProperrecordkeeping mandated. {Sec. 3(a)}.RECORD KEEPINGNo ProvisionNo ProvisionPENALTIESHUMAN RESOURCE DEVELOPMENTAWARENESS GENERATIONPROVISION OF FEE WAIVERCompetent Authority may reject a request for supply of information where such request:(a) is too general in nature and the information sought is of such nature that, it is not required to be ordinarily collected by the public authority.(b) Relates to information that is required by law, rules, regulations or orders to be published at a particular time; or(c) Relates to information that is contained is published material available to public.(d) Relates to personal information the disclosure of which has no relationship to any public activity or which would cause unwarranted invasion of the privacy of an individual except where larger public interest is served by disclosure. (Sec.6)FRIVOLOUS/ VEXATIOUS/ SUPERFLUOUS REQUESTSInformation relating to returns of assets and liabilities filed by any Government servant shall be made available to the public.SPECIAL PROVISIONS FOR GOVT. SERVANTS104105Right to Information – Master Key to Good GovernanceA Comparative Analysis of the Right to Information Act of Different States106JAMMU & KASHMIR 2004Annexure-I(5)-To make provision for securing right to information and for matters connected therewith or incidental thereto.Subject to the provisions of this Act, every citizen shall have right to obtain information from the incharge of office and such incharge shall be liable to provide information under and in accordance with the provisions of this Act.(Sec.4)Act applies to Departments of the State Government and public bodies. “Public body” includes(i) offices of all local bodies and other authoritiesInformation means any document or information relating to the affairs of the State or a public body. [Sec.2(e)]MADHYA PRADESH 2003To provide for freedom to every citizen of the State to secure access to information under the control of public authorities consistent with public interest and as a right to promote openness and transparency in administrationThe word information not defined. Scope limited to obtaining copies of records. [Sec.4(1)]Act applicable to Public Bodies. ‘Public body’ means-(i) all offices of the State GovernmentSubject to the provisions of this Act every citizen shall have the freedom to inspect and obtain copies of any record created within three preceding calendar years which is in possession of a public body. [Sec.4(1)]ASSAM 2002To provide for right to information to the citizens so as to promote openness, transparency accountability in administration.OBJECTIVEA COMPARATIVE ANALYSIS OF THE RIGHT TO INFORMATION ACT OF DIFFERENT STATES (Based on the enactments and information provided on the website of Commonwealth Human Rights Initiative)Information. means and includes information relating to any matter in respect of the affairs of the administration or decisions of the State Government or a Public Authority but does not include any such information the publication of which has been prohibited by any law for the time being in force or by any notification issued by the State Government from time to time under this Act. [Sec.2(c)]Subject to the provisions of this Act, and the Official Secrets Act, 1923 every citizen shall have the right to obtain information from the Incharge of the Office and such Incharge shall be liable to provide the information in accordance with the provisions of this Act.[Sec.4(1)]‘Right to information’ means and includes the right of access to information relating to the affairs of the State Government or public authority. [Sec.2(f)]RIGHTS CREATEDPublic Authorities include Local Govts, Govt. companies, Govt. controlled cooperative societies, any other body, authority institution or organization receiving substantial financialAPPLICABILITY TO NON GOVT./PVT. ORGANISATIONSSCOPE:DEFINITION OF INFORMATION7 blanket exemptions.[Sec.6(1)]Yes, as provided in section 6(2) of the Act.constituted under any law for the time being in force; or(ii) any other statutory authority constituted by the Government under any law for the time being in force; or(iii) a Government Company/Corporation incorporated under the Companies Act, 1956 (Central Act No.1 of 1956) in which not less than fifty one per cent paid up share capital is held by the Government or a trust established by the Government under any law for the time being in force and controlled by it; or(iv) a Society or a Co-operative Society or any other organization established under any law for the time being in force, by the Government and directly controlled or funded by it; or(v) any other body, which may be receiving substantial financial assistance from the Government, as may be specified by notification, in the Government Gazette for the purposes of this Act [Sec.2(f)]Contd..JAMMU & KASHMIR 20049 Blanket exemptions.[Sec.4(2)]The designated officer may also reject a request for supply of information where such request-(a) is too general in nature and the information sought is of such nature that, it is not required to be ordinarily collected by the public body;(b) relates to information that is required by law, rules, regulations or orders to be published at a particular time;(c) relates to information that is contained in published material available to public;(d) relates to personal information the disclosure of which has no relationship to any public activity or which would cause unwarranted invasion of the privacy of an individual;(e) relates to matters classified as ‘Secret’ or ‘Confidential’.(f) is vague or meaningless; or too large in volume to prepare copies. (Sec.6)(ii) all local authorities and statutory authorities constituted under any Act of the State Legislature for the time being in force and all Companies. Corporations and Cooperative Societies in which not less than fifty one percent of the paid up share capital is held by the State Government. [Sec.2(b)]MADHYA PRADESH 2003Blanket exemptions are provided in Sec.4 (2) (a) to (k).Information may be refused on the following grounds also :(i) the request is too general or is of such a nature that having regard to the volume of the information required to be retrieved or processed for fulfilling it, it would involve disproportionate diversion of the resources of the State Government or the Public Authority, as the case may be or would adversely interfere with the functioning of such Authority;provided that where access is being refused on the ground that the request is too general it would be the duty of the Incharge of the office concerned to render help as far as possible to the person seeking information to reframe his request in such a manner as may facilitate supply of information,(ii) the request relates to information that is required by law or convention to be published at a particular time; or(iii) the request relates to information that is contained in published material for sale. [Sec.4(2)(l)]assistance from the State Government as may be notified by the State Government from to time the purposes of this Act. [Sec.2(e)]ASSAM 2002EXEMPTIONSCAN INFORMATION BE DENIED IN NONEXEMPT CATEGORIES107Right to Information – Master Key to Good GovernanceContd..JAMMU & KASHMIR 2004NOAny person aggrieved by the order of the incharge of the office or any person who has not received required information within the time stipulated under section 5, may appeal to the controlling officer, within thirty days of the decision rejecting his request for information or the expiry of period stipulated under section 5 for furnishing such information. (Sec.9)There is a bar of jurisdiction of Courts(Sec.14)Any person seeking information shall make an application to the incharge of the office regarding particulars of the matter relating to which information is sought.(Sec.5)Yes, under sub-sections (b), (c), (d) & (e) of section 3 of the Act.Proper recordkeeping mandated under the Act.[Sec.3(a), 11(1) & 11(2)]30 working daysNo provisionNo provisionDisciplinary action under relevant Rules.(Sec.12)The request for seeking information under this Act shall be accompanied by a proof of payment of such fee as may be prescribed for furnishing information.(Sec.10)NO30 working daysNo provisionAny person aggrieved by an order of the designated officer refusing to provide information may prefer an appeal within thirty days of the impugned order to the State Government or to such appellate authority as may be notified by the State Government subject to such rules as may be prescribed. (Sec.7)A person desiring to inspect or obtain a copy of record under this Act may make an application in writing to the designated officer.[Sec.5(1)]Where the head of a public body ordesignated officer fails to supply the desiredinformation within a period of thirty daysProper recordkeeping mandated under the Act.(Sec.3)Mandated to a limited extent. [Sec.3(c)]No provisionMADHYA PRADESH 2003ASSAM 2002Aggrieved persons can file first appeal to the Controlling Officer of the Incharge of Office. The Second Appeal lies to the Assam Administrative Tribunal.(Sec.6)There is a bar of jurisdiction of Courts(Sec.10)The Incharge of Office has to receive requests and give information.[Sec.5(1)]Every public body shall charge fees for the information supplied or inspection of document allowed at such rates as may be notified by the State Government.[Sec.5(4)]Proper recordkeeping mandated under the Act.(Sec.3)NO30 working daysNODisciplinary action under relevant Rules.(Sec.9)TIME LIMITCANINFORMATION BEOBTAINED IN EXEMPT CATEGORIESAPPEALSAny person desirous of obtaining information shall make an application to theIncharge of the Office in the prescribed manner, along with such fee, in such form and with such particulars, as may be prescribed. [Sec.5(1)]RECORDKEEPINGAWARENESS GENERATIONSTRUCTURENo provisionNo provisionPENALTIESFEESHUMAN RESOURCE DEVELOPMENTSUO MOTUDISCLOSURESA Comparative Analysis of the Right to Information Act of Different StatesContd..JAMMU & KASHMIR 2004NILThe Act stipulates certain grounds for refusal to furnish information. [Sec.6(2)]NilMADHYA PRADESH 2003from the date of receipt of the copy of the order of the appellate authority, the appellate authority may impose a penalty not exceeding two thousand rupees on the concerned head of the public body or designated officer. (Sec.8)NILNilThe Designated officer may also reject a request for supply of information where such request-(a) is too general in nature and the information sought is of such nature that, it is not required to be ordinarily collected by the public body;(b) relates to information that is required by law, rules, regulations or orders to be published at a particular time;(c) relates to information that is contained in published material available to public;(d) relates to personal information the disclosure of which has no relationship to any public activity or which would cause unwarranted invasion of the privacy of an individual;(e) relates to matters classified as ‘Secret’ or ‘Confidential’.(f) is vague or meaningless; or too large in volume to prepare copies. (Sec.6)ASSAM 2002NILNilThe Act stipulates certain grounds for refusal to furnish information. [Sec.4(l)]PROVISION OF FEE WAIVERFRIVOLOUS/ VEXATIOUS/ SUPERFLUOUS REQUESTSSPECIALPROVISIONS FOR GOVT. SERVANTS108109Right to Information – Master Key to Good GovernanceComparative Analysis of International Laws on Freedom of InformationINDIACANADASOUTH AFRICAUNITED KINGDOM‘Public Authority’ means any authority/body/institution of self government established or constituted:a) by or under the Constitutionb) by any other law made by Parliamentc) by any other law made by State Legislatured) by notification issued or order made by the appropriate Government and includes anyi) body owned,controlled or substantially financedii) non-Government organization substantially financeddirectly or indirectly by funds provided by the appropriate Government. [Sec.2(h)]All citizens shall have the right to information. (Sec.3)“Right to information” means access to information which is held by or under the control of any ‘public authority’. [Sec.2(j)]RIGHT TO INFORMATION ACT, 2005ACCESS TOINFORMATIONACT, 1985“governmentinstitution”means any department or ministry of state of the Government of Canada listed in Schedule I or any body or office listed in Schedule I. (Sec.3)Every person who is a Canadian citizen or a permanent resident (defined) has a right to and shall, on request, be given access to any record under the control of a government institution. [Sec.4(1)]PROMOTION OF ACCESS TOINFORMATION ACT, 2000This Act applies to(a) a record of a public body; and(b) a record of a private body, regardless of when the record came into existence. (Sec.3)“private body” means-(a) a natural person who carries or has carried on any trade, business or profession, but only in such capacity;(b) a partnership which carries or has carried on any trade, business or profession; or(c) any former or existing juristic person, but excludes a public body; (Sec.1)“public body” means(a) any department of state or administration in the national or provincial sphere of government or any municipality in the local sphere of government; or(b) any other functionary or institution when(i) exercising a power or performing a duty in terms of the Constitution or a provincial constitution; or(ii) exercising a public power or performing a public function in terms of any legislation; (Sec.1)A requester must be given access to a record of a public body [Sec.11(1)] A requester must be given access to any record of a private body [Sec.50(1)]FREEDOM OF INFORMATION ACT, 2000In this Act “public authority” means-(a) subject to section 4(4), any body which, any other person who, or theholder of any office which-(i)is listed in Schedule 1, or (ii)is designated by orderunder section 5, or(b) a publicly owned company as defined by section 6. [Sec.3(1)]Any person making a request for information to a public authority is entitled-(a) to be informed in writing by the public authority whether itholds information of the description specified in the request,and(b) if that is the case, to have that information communicated to him. [Sec.1(1)]PARAMETERCOVERAGERIGHTCREATEDNAME & YEAR OFENACTMENTS.No.32Annexure-I(6)-COMPARATIVE ANALYSIS OF INTERNATIONAL LAWS ON FREEDOM OF INFORMATION(Based on the enactments and information provided on the website of Commonwealth Human Rights Initiative)1110INDIAAnnexure-I(6)-YESTo some extent as :‘information’ has been defined to include information relating to any private body which can be accesed by a public authority under any other law for the time being in force. [Sec.2(f)]The term “public authority” has been defined to include any-i) body owned,controlled or substantially financed;ii) non- Government organization substantially financed,directly or indirectly by funds provided by the appropriate Government. [Sec.2(h)]Under Sec.4 (1) of the RTI Act, every public authority has toa) maintain all its records duly catalogued and indexed in a manner to facilitate right to information and ensure that appropriate records are computerized and have network accessibility as far as possibleb) publish particulars within 120 days of enactment of the RTI Act particulars as specified in Sec.4 (1) (b), sub-clauses i) to (xvii).CANADAThe designated Minister shall cause to be published, on a periodic basis not less frequently than once each year, a publication containing(a) a description of theorganizationandresponsibilities of each government institution, including details on the programs and functions of each division or branch of each government institution;(b) a description of all classes of records under the control of eachNONo.SOUTH AFRICAWithin six months after the commencement of this section or the coming into existence of a public body, the information officer of the public body concerned must compile in at least three official languages a manual containing information as prescribed in section 14(1), clauses (a) to (i). The manual must be updated at intervals of not more than one year [Sec.14(2)]Similarly, Private Bodies are also required to publish certain information suo motu. (Sec.52)NOUNITED KINGDOMAs per the provisions of Sec.50 (1), a requester must be given access to any record of a private body. As mentioned above, the term ‘private body’ has been defined in Sec.1 of the Act. The term “record” of, or in relation to, a public or private body, means any recorded information-(a) regardless of form or medium; (b) in the possession or under the control of that public or private body, respectively; and (c) whether or not it was created by that public or private body, respectively (Sec.1)To some extent.It shall be the duty of every public authority-(a) to adopt and maintain a scheme which relates to the publication of information by the authority and is approved by the Commissioner (in this Act referred to as a “publication scheme”),(b) to publish information in accordance with its publication scheme, and(c) from time to time to review itspublicationscheme.[Sec.19(1)]A publication scheme mustThe Secretary of State may by order designate as a public authority for the purposes of this Act any person who is neither listed in Schedule 1 nor capable of being added to that Schedule by an order under section 4(1), but who-(a) appears to the Secretary of State to exercise functions of a public nature, or(b) is providing under a contract made with a public authority any service whose provision is a function of that authority. [Sec.5(1)]Applicable to Legislature but not to JudiciaryPARAMETERAPPLICABIL ITYTO LEGISLATURE AND JUDICIARY4WHETHERPRIVATE BODIES COVEREDSUO-MOTUDISCLOSURE65S. No.111Right to Information – Master Key to Good GovernanceComparative Analysis of International Laws on Freedom of Information112INDIAAnnexure-I(6)-Yes. As per section 24, the Act does not apply to intelligence and security agencies mentioned in the Second Schedule (18 organisations as of now), except in case of information pertaining to corruption and violation of human rights.Although exemptions under ten categories are provided under the Act, [Sec.8(1)], they may be overridden in ‘public interest’ [Sec.8(2)]. Only in the case of infringement of copyright vesting in a person other than the State there exists an absolute exemption [Sec.9].CANADA(c) publish all relevant facts regarding policies or the time of their formulation or announcement.d) provide reasons for administrative or quasi judicial decisions to affected persons.Yes. There are absolute exemptions. In certain cases it has been prescribed that the head of a government institution shall refuse ernment institution in sufficient detail to facilitate the exercise of the right of access under this Act;(c) a description ofall manuals used by employees of each government institution in administering or carrying out any ofthe programs or activities of the government institution; and(d) the title and address of the appropriate officer for each government institution to whom requests for access to records under this Act should be sent. [Sec.5(1)]This Act does not apply to confidences of the Queen’s Privy Council for Canada, including, without restricting the generality of the foregoing,(a) memoranda the purpose of which is to present proposals or recommendations to Council;(b) discussion papers the purpose of which is to present background explanations, analyses ofSOUTH AFRICAUNITED KINGDOMYes, there are absolute exemptions. In these categories of cases it has been prescribed that the information officer must refuse information. [Sec.33(1)(a)]This Act does not apply to a record of(a) the Cabinet and its committees;(b) the judicial functions of(i) a court referred to in section 166 of the ConstitutionThe Act is applicable only to a list of agencies. It is not applicable to all governmental agencies, so question of exempting Govt. agencies does not arise.PARAMETER(a) specify classes of information which the public authority publishes or intends to publish,(b) specify the manner in which information of each class is, or is intended to be, published, and(c) specify whether the material is, or is intended to be, available to the public free of charge or on payment. [Sec.19(2)]The Commissioner may from time to time approve, in relation to public authorities falling within particular classes, model publication schemes prepared by him or by other persons. [Sec.20(1)]Yes. There are categories of absolute exemptions. [Sec.2(3)]In all these cases Right to Information does not exist.WHETHER ABSOLUTE EXEMPTIONS EXISTARE THEREGOVERNMENTORGANISATIONSWHICH HAVEBEEN EXEMPTED8S. No.7Annexure-I(6)-Yes, as mentioned in Sec.8(2).INDIACANADAproblems or policy options to Council for consideration by Council in making decisions;(c) agenda of Council or records recording deliberations or decisions of Council;(d) records used for or reflecting communications or discussions between ministers of the Crown on matters relating to the making of government decisions or the formulation of government policy;(e) records the purpose of which is to brief ministers of the Crown in relation to matters that are before, or are proposed to be brought before, Council or that are the subject of communications or discussions referred to in paragraph (d);(f) draft legislation; and(g) records that contain information about the contents of any record within a class of records referred to in paragraphs (a) to (f). [Sec. 69(1)]The head of a government institution may disclose information if certain conditions are fulfilled as mentioned in section 13(2).In matters relating to sections 14,15,16(1),16(2),17,18,21,22,23 and 26, the head of a governmentSOUTH AFRICA(ii) a Special Tribunal established in terms of section 2 of the Special Investigating Units and Special Tribunals Act, 1996 (Act No. 74 of 1996); or(iii) a judicial officer of such courtor Special Tribunal; or(c) an individual member of Parliamentor of a provinciallegislatureinthatcapacity.(Sec.12)Yes, there are various categories of cases wherein the Information Officer may refuse information. [Sec.33 (1) (b)]In these cases the Information Officer must grant access to information if:UNITED KINGDOMPart –II of the Act lists out several types of information which is exempt. Out of these there are 8 categories of absolute exemptions. In other cases of exemptions the information need not be given if the public interest in main taining thePARAMETERCONDITIONAL EXEMPTIONSS.No.9113Right to Information – Master Key to Good GovernanceComparative Analysis of International Laws on Freedom of Information114INDIAAnnexure-I(6)-CANADAApplication can be rejected only under exemption clauses i.e. Sections 8(1) and 9, and in case of organizations listed in the Second Schedule.Access may be refused either if the records do not exist, or if it is covered by exemption provi sions. (Sec.10)institution may refuse to dis close informationSOUTH AFRICA(a) the disclosure of the record would reveal evidence of(i) a substantial contravention of, or failure to comply with, the law; or(ii) animminentandserious public safety or environmental risk; and(b) the public interest in the disclosure of the record clearly outweighs the harm contemplated in the provision in question. (Sec. 46)The exemptions are worded as grounds for refusal.The information officer of a public body may refuse a request for access to a record of the body if(a) the request is manifestly frivolous or vexatious; or(b) the work involved in processing the request would substantially and unreasonably divert the resources of the public body. (Sec.45)UNITED KINGDOMPARAMETERexclusion of the duty to confirm or deny outweighs the public interest in disclosing whether the public authority holds the information.Disclosure of information may be refused on the following grounds:i. If the authority estimates that the cost of complying with the request would exceed the appropriate limit.(Sec.12)ii. If the request is vexatious.(Sec.14)iii. If the request has been complied with earlier.(Sec.14)GROUNDS FORREFUSAL10S. No.Annexure-I(6)-The application has to be accompanied by prescribed fee (Sec.6), which is currently Rs.10/-. For providing a copy of any document, additional fee of Rs.2/- per page is required to be deposited as per Rules issued by GOI. States have their own fee structure.First appeal lies with the officer who is senior in rank to the CPIO/SPIO in each public authority [Sec.19(1)]. A second appeal lies with the Central Information Commission or the State Information Commission. [Sec.19(3)]There is a bar on jurisdiction of Courts (Sec.23)INDIACANADASubject to this section, a person who makes a request for access to a record under this Act may be required to pay(a) at the time the request is made, such application fee, not exceeding twenty five dollars, as may be prescribed by regulation;(b) before any copies are made, such fee as may be prescribed by regulation reflecting the cost of reproduction calculated in the manner prescribed by regulation; [Sec.11(1)]The head of a government institution to which a request for access to a record is made under this Act may waive the requirement to pay a fee or other amount or a part thereof under this section or may refund a fee or other amount or a part thereof paid under this section. [Sec.11(6)]Subject to this Act, the Information Commissioner shall receive and investigate complaints regarding any request for access to a record. (Sec. 30)SOUTH AFRICAThe information officer of a public body to whom a request for access is made, must by notice require the requester, other than a personal requester, to pay the prescribed request fee (if any), before further processing the request. [Sec.22(1)]The head of a private body to whom a request for access is made must by notice require the requester, other than a personal requester, to pay the prescribed request fee (if any), before further processing the request. [Sec.54(1)]In case of Public Bodies there is a provision of an internal first appeal. The second appeal lies to the Court. In case of Private Bodies the first appeal lies directly to the Court. (Sections 74 & 78)UNITED KINGDOMPublic Authorities have to specify the fees structure. The fee structure is regulated by the Regulations issued by the Secretary of State. The Regulations may also provide for fees waiver.(Sec.9)Any person (in this section referred to as “the complainant”) may apply to the Commissioner for a decision whether, in any specified respect, a request for information made by the complainant to a public authority has been dealt with in accordance with the requirements of Part I. [Sec.50(1)]PARAMETERFEES STRUCTUREAPPEALSS.No.1112115116Right to Information – Master Key to Good GovernanceRight to Information – Master Key to Good GovernanceAnnexure-V(1)list of States which have constituted the Information Commissions(as on 12-4-06)S.NoStateName of State Chief Information CommissionerBackground1Andhra PradeshShri C.D. ArhaCivil Service2AssamShri R.S. MushaharyCivil Service3ChattisgarhShri A.K. VijayavargiyaCivil Service4GoaShri A. VenkatratnamCivil Service5GujaratShri P.K.DasCivil Service6HaryanaShri G.MadhavanCivil Service7Himachal PradeshShri P.S.RanaCivil Service8KarnatakaShri K.K.MishraCivil Service9KeralaShri Palat MohandasCivil Service10Madhya PradeshShri T.N.ShrivastavaCivil Service11MaharashtraShri Suresh V. JoshiCivil Service12MeghalayaShri G.P.WahlangCivil Service13NagalandShri P.TalitemjenCivil Service14OrissaShri D.N.PadhiCivil Service15PunjabShri Rajan KashyapCivil Service16RajasthanShri M.D. KauraniCivil Service17Tamil NaduShri S.RamakrishnanCivil Service18TripuraShri B.K.ChakrabortyCivil Service19UttaranchalShri R.S.ToliaCivil Service20Uttar PradeshJustice Shri Mohd. Asgar KhanJudiciary21West BengalShri Arun BhattacharyaCivil ServiceINDIAAnnexure-I(6)-Yes. [Sec.4(1)(a)]No provision.Sec.25 : The Central Information Commission or the State Information Commission shall after the end of each year prepare a report to the appropriate Government, which will in turn cause a copy of the report to be laid before each House of Parliament/each House of the State Legislature.30 days (Sec.7)40 days, where confidential third party information has been sought. [Sec.11(3)]Exists, in the form of Section 8(2), as mentioned above.CANADASec. 38: The Information Commissioner shall, within three months after the termination of each financial year, submit an annual report to Parliament on the activities of the office during that financial year.No30 days (Sec.7)No provisionSec.20(6) states : ‘The head of a gov ernment institution may disclose any record requested under this Act, or any part thereof, that contains information described in paragraph (1)(b), (c) or (d) if that disclosure would be in the pub lic interest as it relates to public health, public safety or protection of the envi ronment and, if the public interest in disclosure clearly outweighs in impor tance any financial loss or gain to, prejudice to the competitive position of or interference with contractual or other negotiations of a third party’.SOUTH AFRICANo30 days[Sec.25(1)]Sec.32. The information officer of each public body must submit a report to the Human Rights Commission every year.Sec. 84. The Human Rights Commission must include the prescribed information in its annual report to the National Assembly.S.46: Both public and private bodies must disclose information when it reveals evidence of substantial contravention of law or imminent and serious public safety or environment risk AND the public interest in disclosure outweighs the public interest in refusing.No specific provision(Covered in Protected Disclosures Act)UNITED KINGDOMAll exemptions (except absolute exemptions) are qualified by a public interest override whereby access will only be refused where the public interest in maintaining the exemption outweighs the public interest in disclosing the information.(Part II of the Act)20 working days(Sec.10)Sec.49 (1) The Commissioner shall lay annually before each House of Parliament a general report on the exercise of his functions under this Act.(2) The Commissioner may from time to time lay before each House of Parliament such other reports with respect to those functions as he thinks fit.PARAMETERNo provision. (Covered in Public Interest Dosclosure Act)The Secretary of State shall issue, and may from time to time revise, a code of practice providing guidance to public authorities as to the practice which it would, in his opinion, be desirable for them to follow in connection with the discharge of the authorities’ functions under Part I.REPORT TO PARLIAMENTPUBLICINTEREST CLAUSETIME FORCOMPLIANCE OF REQUESTS14S. No.13WHISTLEBLOWERS’ PROTECTION1615RECORDKEEPING MANDATE17117Right to Information – Master Key to Good GovernanceAnnexure-V (2)No. of CPIOs/PIOs in various Ministries/Departments(Based on information available on their web sites as on 11.05.2006)Sl NoMinistry/DepartmentNo. ofLevel ofWhetherCPIOsOfficersAppellateofficer appointed?1PMO1Dir.Yes2Department of Commerce41Dir./DS/USYes3Department of Industrial Policy & Promotion15Dir./DSYes4Ministry of Personnel, Public Grievances and Pensions42Dir./DSYes5Department of Revenue11Dir./DSNA6Department of Expenditure9Dir./DSYes7Ministry of Agro and Rural industries1Dir.Yes8Ministry of Civil Aviation1USYes9Ministry of Coal1DSYes10Ministry of Parliamentary Affairs3DSYes11Ministry of Environment and Forest22JS/Dir/DSYes12Ministry of External Affairs1JSYes13Ministry of Food Processing Industries15Dir./DSYes14Ministry of Labor and Employment1Dir.Yes15Ministry of Health and Family Welfare36Dir./DS/ACNA16Department of Legal Affairs6JS/Addl. Legal Adv.NA17Ministry of Mines1Dir.Yes18Department of Ocean Devlopment6Dir./DSYes19Department of Science & Technology1DSYes20Department of Tourism15Dir./DSYes21Ministry of Water Resources10Dir./DSNA22India Meteorological DepartmentNANANAJS=Joint Secratary; Dir.=Director; DS=Deputy Secretary; US=Under Secretary; AC=Assistant Commissioner; NA=Not AvailableRight to Information – Master Key to Good GovernanceAnnexure-V (3)Responses of some Ministries/Departments about status of record-keepingNo.AgencyResponse1Deptt. of Consumer AffairsRecord keeping would be developed with passage of time.2. Ministry of TourismSince the obligation under section 4(1)(a) must get discharged within a timeframe outsourcing of efforts to bring in place a system of e-managed records should be an option worth considering.3. Deptt. of PostThat retrieval and storage of information will become easier by use of systems based oninformation and computer technology. Detailed and standard procedures for this should be developed by the nodal Ministry4. Ministry of Petroleum & Natural GasThe present system of record management is appropriate for record keeping of the Ministry.5. Ministry of SteelRecord keeping at present is good enough6. Deptt. of ExpenditureRecord maintenance needs to be given constan attention for its own sake RTI or no RTI. There is need for consultation with Department of Personnel and Training on the advisability and extent to which the norms governing weeding out of records needs to be changed in the light of the RTI Act.7. Ministry of PowerThe State of record keeping is good enough8. Ministry of Overseas Indian AffairsComputerization of all the records and networking of all the offices is the only solution for providing all information stipulated under the RTI Act. They have also stated that they have started this process of computerization which would be completed within one year.9. Deptt. of TelecommunicationsIn few cases giving information may take more than the prescribed time. Hence efforts are needed to modernize the system of recordkeeping.10. Deptt. of ITThe status of recordkeeping is satisfactory at this stage.11. Ministry of Law and JusticeState of record-keeping is good12Ministry of Non Conventional Energy SourcesThe present of record-keeping may not be enough.It is necessary to develop appropriate information system through computers.13. Department of Agricultural Research and EducationThe Manual of Office Procedures is time tested and does not warrant changes.14. Ministry of Urban Development.There is a need to convert all records which are more than five years old into electronic form15. Deptt. of Health and Family WelfareThe state of record-keeping is satisfactory but it is being further improved.16. Deptt. of Agriculture and CooperationThe record-keeping has to be updated for easycomputerization, micro-filming, conversion into electronic form for web related application, to facilitate easy retrieval and access.118119Right to Information – Master Key to Good GovernanceAnnexure-VI(1)The Inverted Tree concept for maintaining inventory of the public authorities120SECOND REPORT: Unlocking Human Capital: Entitlements and Governance – a case study-SECOND REPORTSECOND ADMINISTRATIVE REFORMS COMMISSIONUNLOCKING HUMAN CAPITAL Entitlements and Governance – a case studySecond Administrative Reforms Commission Government of India2nd Floor, Vigyan Bhawan Annexe, Maulana Azad Road, New Delhi 110 011 e-mail : arcommission@nic.in website : 20062________________ -GOVERNMENT OF INDIASECOND ADMINISTRATIVE REFORMS COMMISSIONSECOND REPORTUNLOCKING HUMAN CAPITAL ENTITLEMENTS AND GOVERNANCE - A CASE STUDYJULY 2006________________ -PREFACEThe National Rural Employment Guarantee Act of 2005 is a path-breaking legislation. It signals a paradigm shift to legal entitlements, public accountability coupled with community rights, and responsive and participative management. In the past, wage employment programmes, though well stretched, suffered for a variety of reasons. Programme coverage was low. More than fifty per cent of beneficiaries were not from the most needy group. Labour employed was not always from the local population. Payment made was lower than the prescribed wage. There was disparity between wages paid to women and men. On an average, 16 to 29 days of employment were provided to a worker per annum. Quality of assets created was not always of the requisite standard. There were reports of forged muster roll. On the whole, wage employment programmes did not eventually achieve what they set out to do.The unhappy result was that even though a number of such schemes were taken up, the poor continued to remain poor, caught in social captivity and were not enabled to participate in the mainstream process. This was particularly true of areas plagued by extremism, and frontal and inaccessible areas where employment schemes were taken hostage by contractors and middlemen, locking people in a seemingly perpetual cycle of poverty. Empowering the poor is best done by breaking the barriers of unemployment, illiteracy, backwardness, ill- health and debilitating social inequality. It is sad but true that these barriers continue to restrain the participatory possibilities of the rural poor in the growth process. Inclusion and participation in the process of growth is extremely important for taking the poor out of the vicious cycle of poverty. We need to note that, while the nation is growing in a high-income trajectory, the bottom of the pyramid of the society is excluded from the benefits of growth. Unless we target the poor aggressively on the supply side and embark on initiatives which benefit them directly, growth and equality cannot be reinforced.The National Rural Employment Guarantee Act (NREGA) is one such revolutionary initiative targeted at the poor. In order to empower the poor, giving voice to them in the process of implementation of NREGA should be the main thrust of the Scheme. Community pressure on representatives of local authorities should demolish the traditional hierarchy of power that has disempowered the poor for so long. Such an accountability mechanism coupled with effective community participation should give democracy back to the people.We also need to note that the deterioration in the country’s administration and public delivery system has affected the poor the most. It is because they are critically dependent on the availability of public services and essential infrastructure. Corruption is one of the primary reasons why the public delivery system has not touched the lives of the poor. We have to fight corruption aggressively if the benefits of NREGA are to reach the poor.Extremism and Naxalism have spread to parts of more than 12 States and have taken a heavy toll. It is not a coincidence that most of these districts represent areas of high concentration of poverty, poor governance systems and practices, weak infrastructure and unequal power structure. These are also areas where Panchayats are simply non-existent and in many places, non-functional. The spread of democratic space through the effective implementation of NREGA is the only way to liberate these districts.The Commission has undertaken a study of institutional, administrative and financial management systems of NREGA. The study is greatly benefited by the deliberations at the National Workshops organized by the National Institute of Public Finance and Policy, and the eGovernments Foundation. It is also benefited by inputs from government functionaries, experts with domain knowledge, NGOs and other important stakeholders. Based on these inputs, the Commission has recommended comprehensive reforms so that the Act can be implemented seamlessly to benefit the poor. I am confident that, if successfully implemented, the Act will be the harbinger of transformative changes and participative democracy in rural India.(M Veerappa Moily)Chairman________________ -Government of India Ministry of Personnel, Public Grievances & Pensions Department of Administrative Reforms and Public GrievancesResolutionNew Delhi, the 31st August, 2005No. K-11022/9/2004-RC. — The President is pleased to set up a Commission of Inquiry to be called the second Administrative Reforms Commission (ARC) to prepare a detailed blueprint for revamping the public administration system.2. The Commission will consist of the following :(i) Shri Veerappa Moily - Chairperson (ii) Shri V. Ramachandran - Member (iii) Dr. A.P. Mukherjee - Member (iv) Dr. A.H. Kalro - Member (v) Dr. Jayaprakash Narayan - Member (vi) Smt. Vineeta Rai - Member-Secretary3. The Commission will suggest measures to achieve a proactive, responsive, accountable, sustainable and efficient administration for the country at all levels of the government. The Commission will, inter alia, consider the following :(i) Organisational structure of the Government of India (ii) Ethics in governance (iii) Refurbishing of Personnel Administration (iv) Strengthening of Financial Management Systems (v) Steps to ensure effective administration at the State level (vi) Steps to ensure effective District Administration (vii) Local Self-Government/Panchayati Raj Institutions (viii) Social Capital, Trust and Participative public service delivery (ix) Citizen-centric administration (x) Promoting e-governance (xi) Issues of Federal Polity (xii) Crisis Management (xiii) Public OrderSome of the issues to be examined under each head are given in the Terms of Reference attached as a Schedule to this Resolution4. The Commission may exclude from its purview the detailed examination of administration of Defence, Railways, External Affairs, Security and Intelligence, as also subjects such as Centre-State relations, judicial reforms etc. which are already being examined by other bodies. The Commission will, however, be free to take the problems of these sectors into account in recommending re-organisation of the machinery of the Government or of any of its service agenciesSome of the issues to be examined under each head are given in the Terms of Reference attached as a Schedule to this Resolution5. The Commission will give due consideration to the need for consultation with the State Governments.6. The Commission will devise its own procedures (including for consultations with the State Government as may be considered appropriate by the Commission), and may appoint committees, consultants/advisers to assist it. The Commission may take into account the existing material and reports available on the subject and consider building upon the same rather than attempting to address all the issues ab initio.7. The Ministries and Departments of the Government of India will furnish such information and documents and provide other assistance as may be required by the Commission. The Government of India trusts that the State Governments and all others concerned will extend their fullest cooperation and assistance to the Commission.8. The Commission will furnish its report(s) to the Ministry of Personnel, Public Grievances & Pensions, Government of India, within one year of its constitution.( P.I. Suvrathan ) Additional Secretary to Government of India________________ -CONTENTSChapter 1 Introduction 1Chapter 2 Review of Public Employment Programmes 5 2.1 Wage Employment Programmes in the Past 5 2.2 Employment Guarantee Scheme 8 2.3 Lessons 8Chapter 3 National Rural Employment Guarantee Act - Implementation 10Challenges 3.1 Salient Features of the Act 10 3.2 Shift towards Universalisation and Entitlements 10 3.3 Union Funding and Execution by State Governments 11 3.4 Centrality of Local Governments 12 3.5 Administrative and Institutional Arrangements 12 3.6 Special Challenges of Backward Areas 13Chapter 4 Special Problems of Backward Districts 14Chapter 5 Issues and Recommendations 20 5.1 Applicability to Other Programmes 20 5.2 Change towards Universalisation and Entitlements 20 5.2.1 Guaranteeing Reach 20 5.2.2 Guaranteeing Outcomes 23 5.2.3 Ensuring Convergence 25 5.2.4 Expanding the Scheme 27 5.3 Union Funding and State Execution 28 5.3.1 Accountability Mechanisms 28 5.3.2 Fixing Wage Rates 29 5.3.3 Financial Management System 33 5.3.4 Preparing Estimates for Works 51 5.3.5 Maintaining Labour Material Ratio 58 5.3.6 Mechanism for Procurement 58 5.4 Administrative and Institutional Arrangements 59 5.4.1 Strengthening Local Governments 59 5.4.2 Selection and Maintenance of Works 65 5.4.3 Block Resource Centre 66 5.4.4 Entrepreneurship Institutes for the Rural Poor Areas 67 5.4.5 Monitoring Systems 68 5.4.6 Curbing Corruption and Leakages 715.4.7 Transparency and Right to Information Act 73 5.4.8 Use of Information Technology 75 5.4.9 Implementation of NREGA in Fifth and Sixth 85Schedule Areas 5.4.10 Implementation of NREGA in Areas Affected by Natural 87Calamities 5.4.11 Relaxation of Certain Restrictive Provisions 88 5.4.12 Records 90 5.4.13 Coordination Mechanism 92 5.4.14 Building a National Identity 94Chapter 6 Conclusion 95Chapter 7 Summary of Recommendations 96 LIST OF ANNEXURES I(1) List of participants at the workshop organized jointly with NIPFP 112 I(2) Speech of Dr. C Rangarajan, Chairman, Economic Advisory Council to the Prime Minister 115 I(3) Speech of Chairman ARC 123 I(4) Recommendations of the workshop at NIPFP 129 I(5) List of participants at the workshop organized jointly with eGovernments Foundation 153in Bangalore I(6) Recommendations of the workshop organized jointly with eGovernments Foundation 155in Bangalore I(7) Questionnaire circulated to various stakeholders 160 IV(1) Statistical profile districts under NREGA 179 V(1) Questions on IT System and response of the Ministry of Rural Development 186 V(2) Summary of Recommendations made by the ‘Expert Group on Planning at the 189Grassroots Level’ on implementation of PESA LIST OF ABBREVIATIONS USED ARC Administrative Reforms Commission CEGC Central Employment Guarantee Council EAS Employment Assurance Scheme GOI Government of India IT Information Technology NFFWP National Food for Work Programme NGO Non Governmental Organisation NIPFP National Institute of Public Finance and Policy NREGA National Rural Employment Guarantee Act NREP National Rural Employment Programme PWD Public Works Department REGS Rural Employment Guarantee Schemes RLEGP Rural Landless Employment Guarantee Programme RTI Right to Information SEGC State Employment Guarantee Council SGRY Sampoorna Grameen Rojgar Yojana SHG Self Help Group________________ -11INTRODUCTION“The measure of a country’s greatness should be based on how well it cares for its most vulnerable populations”.Mahatma Gandhi1.1 There is a shift in Government’s approach towards development. Instead of relying only on increase in general affluence to enhance the living standards of citizens, the approach is to consider the acquisition of minimum levels of education, health, employment and nutrition as basic entitlements, and recognize the key role of the state in providing them to every needy citizen in the country. In essence, the shift is towards universalization and entitlements.1.2 There is also increased emphasis on promoting balanced development in which all regions in the country have the opportunity to develop evenly. This equity-promoting role demands that greater resources be allocated to the backward regions to remove gaps in the provision of basic services and human development. As a result, large investments will flow to those districts of the country which are classified as backward. Admittedly, these are the most difficult districts to implement development programmes because of poor governance structures, low organizational capacity, weak infrastructure and unequal power structures. If the programmes can be implemented with a modicum of success in these backward regions, it would have garnered mainstreaming of development in the poorest parts of the country.1.3 There is also a fundamental change in how government programmes are funded and executed. Increasingly key programmes are being funded by the Union Government and executed by State Governments. This ensures that on the one hand, no entititlement programme is made to suffer due to resource constraint and, on the other, funds are available with greater regularity to implementing districts, blocks and Panchayati Raj Institutions so that programme outcomes can be seamlessly achieved with local participation, ownership, initiative and supervision.1.4 In his budget speech for 2006-07, the Union Finance Minister stated that the bulk of resources of the Union Government would go to seven flagship programmes, namely, Sarva Shiksha Abhiyan, Mid-day Meal Scheme, Drinking Water Mission, Total Sanitation Campaign, National Rural Health Mission, Integrated Child Development Services, and National Rural Employment Guarantee Scheme. They have been allocated substantially higher funds during 2006-07.________________ -Introduction Unlocking Human Capital : Entitlements and Governance - a case studyTable 1.1- The Flagship Schemes (Rs Crores) (Source: Report of the Expert Group on Planning at the Grassroots Level)Sl. Scheme Ministry/ Allocation in Allocation in No. Department 2005 -06 2006-071 Sarva Shiksha Abhiyan Department of 7156 10041Elementary Education2 Mid-day Meal Scheme Department of 3010 4813Elementary Education3 Drinking Water Mission Department of 3645 4680 Drinking Water Supply4 Total Sanitation Department of 630 720Campaign Drinking WaterSupply5 National Rural Health Ministry of Health 6553 8207Mission and Family Welfare6 Integrated Child Ministry of HRD - 3315 4087Development Services Department ofWomen and Child Welfare7 National Rural Ministry of Rural 10000 14300Employment Guarantee Development Scheme (including SGRY)Total 34309 468481.5 All these flagship programmes signal a change in the development approach towards universalization and entitlements. To that extent a key consideration in the implementation of these programmes is to guarantee the reach and the outcomes of the programmes. Theseare part of the emerging paradigm of Union funding and execution by the State Governments. The challenge under the circumstances would be to maintain the ease and regularity of fund flow and ensure accountability in achieving the intended programme outcomes without incentives being distorted because of the duality in funding and execution.1.6 Since these flagship programmes are bound by the common objective of delivering entitlements on a universal scale, it is necessary that they converge at the grassroots and their individual planning systems are integrated harmoniously. Such integration would ensure common implementation framework for all the schemes.1.7 Above all, adequate and appropriate administrative and institutional arrangements are essential for the success of these programmes. In their design, these programmes provide for a multi-tier structure of administrative and institutional arrangements for implementation and monitoring with specified roles and responsibilities. The agencies involved are the respective ministries of the Union Government, departments of the State Governments and the local governments. The structure of implementation and monitoring, both elaborate and complex, underscores the criticality of various institutional structures working in tandem: at the minimum, what is required for the successful implementation of the programmes is both vertical coordination of different tiers of governments and horizontal coordination across departments for execution of the programmes through the local government.1.8 Of the seven flagship programmes, the Rural Employment Guarantee Scheme under the National Rural Employment Guarantee Act (hereinafter referred to as NREGA or simply ‘the Act’) is certainly the largest in terms of its outlay, coverage and expected outputs. In particular, suitable administrative and financial management systems need to be put in place in order to achieve the desired objectives of NREGA in terms of the benefits of the programme reaching the intended groups to build capacity to implement the Scheme at decentralized levels and create a proper information system not only to implement the Scheme effectively but also to ensure accountability and transparency.1.9 Evolving appropriate administrative and financial management systems is the key to the success of NREGA. The Administrative Reforms Commission (ARC) attaches the highest importance to these systems because once they are tried and tested in the implementation of NREGA, lessons can be drawn and used for other flagship programmes as well.1.10 It is in this context that ARC undertook a study of strengthening of administrative and financial management systems for effective implementation of NREGA. To initiate a process of wide consultations, the ARC and the National Institute of Public Finance and Policy (NIPFP) jointly organized a National Workshop which was inaugurated by23________________ -4Unlocking Human Capital : Entitlements and Governance - a case studyDr. C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister. The Workshop was attended by representatives from ministries/departments of the Union Government, Secretaries of the State Governments in charge of Rural Development, officers from the districts, academicians, economists, activists from NGOs and other stakeholders. The list of participants and recommendations of the Workshop are at Annexures I(1), and I(4) respectively. Another workshop was organized jointly with eGovernments Foundation with participation of government functionaries, international experts with domain knowledge and representatives of a number of NGOs. The list of participants and recommendations are at Annexures I(5), and I(6) respectively.2.1 Wage Employment Programmes in the Past1.11 The Commission formulated a comprehensive questionnaire reflecting several aspects concerning the implementation of the Act and circulated it to the State Governments seeking responses from Panchayats, Chief Executives of District Panchayats/Collectors and NGOs {Annexure I(7)}. The Commission visited some of the states and held discussions with government functionaries and other important stakeholders. In order to assess the situation at the ground level, the Commission conducted field visits in the states of Karnataka, Tamil2.1.1 Government of India has taken up a number of wage employment programmes starting with the Rural Manpower Programme in 1960. Productive absorption of underemployed and surplus labour in rural areas has, in fact, been a major focus of planning for rural development in order to provide direct supplementary wage employment to the rural poor through public works. The following table describes the programmes undertaken by Government of India over a period of time :Nadu, Jharkhand, Bihar and Rajasthan. Based on all these inputs, the Commission hasTable 2.1 : Wage Employment Programmes1 identified issues and constraints and has suggested solutions and made recommendations.Programmes Period ObjectivesRural Manpower 1960-1969 Provide employment to 2.5 million persons Programme (RMP) in areas exposed to pronounced seasonalemployment.Crash Scheme for Rural 1971-1974 Provide employment to 1000 persons in 350 Employment (CSRE) districts through labour intensive works andcreate durable assets.Drought Prone Areas 1971-1973 Mitigate the severity of scarcity conditions Programme (DPAP), Rural by organizing labour intensive and Works Programme (Later production oriented works so as to generate restructured as Area considerable employment. Development Programme)Food for Work 1977-1980 (i) Generate gainful employment to a Programme (FWP) large number of unemployed and under- employed persons, both men and women in the rural areas which will improve their incomes and consequently their nutritional levels. (ii) Create durable community assets REVIEW OF PUBLIC EMPLOYMENT PROGRAMMES251 Extracted from Drought 2002, Department of Agriculture and Cooperation, Ministry of Agriculture, GOI________________ -Review Unlocking Human Capital : Entitlements and Governance - a case studyof Public Employment ProgrammesProgrammes Period ObjectivesProgrammes Period Objectives and strengthen the rural infrastructure which will result in high production and better living standard in rural areas; and (iii) Utilise surplus foodgrains for development of human resources.National Rural Employment 1980-1989 Generate additional gainful employment; Programme (NREP) create durable community assets; and raisenutritional standards of the poor.Rural Landless Employment 1983-1989 Provide 100 days of employment to at Guarantee Programme least one member of a landless household. (RLEGP)Jawahar Rozgar 1989-1999 Primary objective: Generate additional Yojana (JRY) gainful employment for unemployed and under-employed persons, both men and women, in rural areas through creation of rural economic infrastructure, community and social assets, particularly, in favour of the poor and with an aim at improving quality of life in rural areas.Employment Assurance 1993-1999 Provide 100 days of assured employment Scheme (EAS) to a person in 1752 backward blocks during lean agricultural periods in the form of manual work.Food for Work 2000-2002 Augment food security through wage Programme II employment in drought affected ruralareas.Jawahar Gram Samridhi 1999-2001 Primary Objective: Creation of demand Yojana (JGSY) driven community village infrastructure, including (i) durable assets at the village level and (ii) assets to enable the rural poor to increase the opportunities for sustainedemployment. Secondary objective: Generation of supplementary employment for unemployed poor (Below Poverty Line) in the rural areas.Sampoorna Grameen 2001 Provide wage employment, food security, Rozgar Yojana (SGRY) and creation of durable assets (the schemewas formed by merging EAS and JGSY).2.1.2 There have been a number of evaluation studies of these wage employment programmes. They reveal? Funds were not utilized in full. Lack of planning; untimely release of funds, both from the Union Government to the District Rural Development Agencies (DRDAs) and from the DRDAs to blocks; and other factors such as inability of the states to generate matching resources were important factors that contributed to low utilization of funds.? Coverage of villages and the target group was extremely low.? A large part of the funds was used less in labour intensive activities and more in capital intensive activities. The normative capital labour ratio was not adhered to.? Majority of beneficiaries received less than 30 days of wage employment in a year. Non-poor households were also found to have been the beneficiaries of these programmes.? There was bogus reporting to achieve targets.? These programmes created income for the rural poor but left very few durableassets.? The programmes encouraged corruption, both at political and administrativelevels.? Fudging of muster rolls and measurement books was common and resulted in loss of funds that could have been otherwise invested in creation of rural infrastructure.? Participation of women was lower than the stipulated norm of 30 per cent.? In most cases, contractors were involved and the use of machinery was alsoreported, though the schemes expressly forbade it.7 6________________ -Review Unlocking Human Capital : Entitlements and Governance - a case studyof Public Employment Programmes2.2 Employment Guarantee Scheme2.2.1 The Employment Guarantee Scheme (EGS) started in Maharashtra in the early 1970s. EGS guarantees employment to persons above 18 years of age who are willing to do unskilled manual work on a piece rate basis. The scheme is self-targeting. The objectives are to improve welfare of the households through provision of employment and contribute to the development of the rural economy in the long run through strengthening of infrastructure. An urban employment tax is used to partially finance EGS.2.2.2 Evaluation studies of EGS show? The programme continues after 30 years without any decrease in demand forunskilled wage work? Modest impact on poverty reduction and on unemployment reduction? Distress migration of workers from backward region continues? Quality of the assets created and their maintenance is not satisfactory? Failure to adopt a local development policy to promote overall area development2.3 Lessons2.3.1 Inadequate Planning for Assets The most glaring weakness is the absence of careful planning for assets. Inadequate planning and serious flaws in project selection had adverse impact on the productivity and quality of the physical capital created. This underscores the importance of a holistic development plan fully integrated with the implementation of other development initiatives.2.3.2 Lack of People’s Participation The process of planning and implementation was flawed because of lack of people’s participation. An important input from the evaluation studies was that in the absence of people’s participation, the bureaucracy dominated the process of planning and implementation, with the result that the approach was technocratic and top-down.2.3.3 Limited Role of Panchayats Although Panchayats were associated with the implementation of some of the wage employment schemes, they played only a limited role. The involvement of Panchayats, however, did strengthen the planning and implementation of the employment schemes wherever they were associated. This highlights the need for giving a greater role to the Panchayats in the implementation of wage employment programmes.2.3.4 Lack of Capability Very few elected Panchayat chiefs and other functionaries were given training. This underscores the importance of building capability in the Panchayats through appropriate training and orientation programmes. Training of officials/representatives of the Panchayat bodies is the key to the effective planning and implementation of employment programmes.2.3.5 Focus on Physical Work The earlier employment generation programmes/schemes were inherited from the colonial relics of famine relief works introduced after the Deccan Riots in 1890, and these focused on physical work. In the process of exploiting this country as a dependent economy to accelerate the advent of the industrial revolution, our knowledge based rural economy was destoyed by the colonial power. There is therefore, a need to redefine employment programmes through an appropriate use of knowledge and skills in the works. This approach will herald a self-sufficient rural economy. It will also help in convergence of rural-urban divide.2.3.6 Leakages Leakages were a common feature in the implementation of employment programmes. Fudging of muster rolls and measurement books was very common. In most cases, contractors were involved.9 8THIRD REPORT: Crisis Management: From Despair to HopeSECOND ADMINISTRATIVE REFORMS COMMISSIONCRISIS MANAGEMENT From Despair to HopeCRISIS MANAGEMENTFrom Despair to HopeSecond Administrative Reforms Commission Government of IndiaSEPTEMBER 20062nd Floor, Vigyan Bhawan Annexe, Maulana Azad Road, New Delhi 110 011 e-mail : arcommission@nic.in website : OF INDIASECOND ADMINISTRATIVE REFORMS COMMISSIONTHIRD REPORTCRISIS MANAGEMENTFROM DESPAIR TO HOPESEPTEMBER 2006PREFACE“Crisis shouldn’t turn them beggars...”Mahatma Gandhi during the Bihar Earthquake in 1934The neglect of our natural assets and environment has always led to crisis. Whether it is the Mithi River of Mumbai or Tapi of Surat or the civilisational crises in the past in which the “cradle of civilisation” in the Middle East eventually became a desert, Greece and Turkey were deforested, and the destruction of the American prairie contributed to the Dust Bowl, these are eloquent testimony to such neglect. The once mighty Khmer Empire in Southeast Asia or the small tribes that lived on Easter Island in the Pacific Ocean were consigned to the throes of oblivion only because they so willfully decimated their natural assets and environment.India is endowed with extraordinary natural and civilisational resources. Around the time of our Independence, the American scholar Kingsley Davis gave a glowing account of the fabulous geography of India, especially the great Indo-Gangetic plain:“India is probably the third most gifted of the world’s regions with respect to industrial capacity, and the second or third with reference to agricultural resources. But in sheer area it is big enough. The geographical traits of the subcontinent are fabulous and their description requires unblushing superlatives...”The key to the region’s peculiar geography lies more outside than inside the boundaries, although it has its main effects inside. This is the Himalayan range, the loftiest mountain barrier in the world, which shuts off the subcontinent from the rest of Asia. From 150 to 250 miles, the Roof of the World stretches over 1,500 miles across the north of India. It boasts of the three highest points on the earth’s surface, fifty summits of 25,000 feet or more, and an average elevation of 19,000 feet. The Himalayas contribute greatly to the soil, climate and the isolation of India. They are eroding rapidly and sending out rich loam to the plains below. Because high plateau lands lie to the north, the drainage runs southwards towards India. The three main rivers of the subcontinent - Indus, Ganges and Brahmaputra - with most of their tributaries, have their sources in the Himalayas and bring down silt that has made the Indo-Gangetic plain, covering the whole of northern India, the most fertile areas of its size in the world.True, we cannot prevent natural hazards, which are endemic to our geology, geography, climate, social and cultural settings, but we can certainly strive to manage crisis more efficiently so that hazards do not degenerate into disasters. With a coherent and meaningful crisis management strategy in place, it is quite possible to visualize our country despite its manifold hazards as a place that will eventually be free of all disasters.In the realm of crisis management, announcing a policy or promulgating a law or creating an institution is a relatively easy task; the challenge lies in implementing policies to achieve the desired outcomes. Crisis management, a governance issue that is both vital and complex, is at the core of India’s administrative system. The system requires innovative thinking and fundamentalchanges in order to quicken the emergency responses of administration and increase the effectiveness of the machinery to meet the crisis situation and enhance crisis preparedness. To that end, it is necessary that the apparatus of crisis management should perform and deliver. The India Meteorological Department (IMD), in its 24 hours forecast and the National Centre for Medium Range Weather Forecast (NCMRWF) in its 46 hours forecast predicted only 8 cm to 16 cm of rainfall over Mumbai on 26th and 27th July 2005, while the actual rainfall recorded was 94.4 cm. Thus the margin of error was nearly 600%. There were significant intra-regional differences in rainfall due to cloudbursts in some areas. For example Colaba had a rainfall of 7.3 cm while Santacruz experienced a rainfall of 96 cm. Neither IMD nor NCMRWF could forecast these huge intra-city differences in rainfall.What is needed is ushering in a new paradigm in the quality and efficacy of our institutional capacity and delivery mechanisms while ensuring, at the same time, that they are embedded in both the structures of authority and the mechanisms of accountability.While dealing with disasters, we need to be particularly responsive to the emotional and social problems that people experience due to a disaster. Almost 10 per cent of the people affected by the tsunami – potentially half a million people – had mental health problems so severe that they required professional treatment. Psychosocial care deals with a broad range of emotional and social problems and helps in restoring social cohesion as well as the independence and dignity of individuals and groups. It prevents pathologic developments and further social dislocations. Normalisation of emotional reaction is an important task in psychosocial care for the survivors of the disaster. Emotional reactions such as guilt, fear, shock, grief, vigilance, numbness, intrusive memories, and despair are responses of people experiencing unforeseen disasters beyond their coping capacity. Emotional reactions are normal responses to an abnormal situation. Nearly 90% of survivors of disaster do undergo these emotional reactions immediately after the disaster. Psychosocial care is essential for all these people.The Commission has carefully studied the present structure of crisis management, systems and processes including the Disaster Management Act, 2005 and the perceived gaps. In order to arrive at its recommendations, it has critically examined aspects related to constitutional and legal framework, institutional mechanisms, funding and infrastructure support systems, preparedness measures, human resources development and knowledge management institutions. The Commission’s recommendations aim at not only having more efficient systems of governance but also at innovative ways of capacity building and empowerment of all stakeholders at all levels including panchayats and the community, strategic applications of science and technology, realisation of a sound emergencycommunication network, building safe homes and infrastructure, and learning from research and development and also from the experiences of handling crisis situations in the past. Each of these tasks is a challenge, and calls for a careful strategy of planning and implementation coupled with coordinated efforts of a variety of players both within and outside the governmental structure.The Commission thanks Dr. Manmohan Singh, Prime Minister of India for his valuable guidance and also for having given an opportunity to the Commission to critically examine this issue. The Commission is also grateful to Shri Shivraj V. Patil, Union Minister of Home Affairs for his cooperation and help.Let me quote Mahatma Gandhi once again to highlight the essence of our recommendations ...“A technological society has two choices. First, it can wait until catastrophic failures expose systemic deficiencies, distortion and self-deceptions.... Secondly, a culture can provide social checks and balances to correct for systemic distortions prior to catastrophic failures”.The recommendations aim at establishing the synergy and convergence of advances in the technological and knowledge era with our rich socio-cultural practices and indigenous coping mechanisms.New Delhi(M. VEERAPPA MOILY)September 19, 2006ChairmanGovernment of India(xi) Issues of Federal PolityMinistry of Personnel, Public Grievances & Pensions Department of Administrative Reforms and Public Grievances(xii) Crisis Management(xiii) Public OrderResolutionNew Delhi, the 31st August, 2005Some of the issues to be examined under each head are given in the Terms of Reference attached as a Schedule to this Resolution.No. K-11022/9/2004-RC. — The President is pleased to set up a Commission of Inquiry to be called the second Administrative Reforms Commission (ARC) to prepare a detailed blueprint for revamping the public administration system.2.The Commission will consist of the following :(i)Shri Veerappa Moily - Chairperson(ii)Shri V. Ramachandran - Member(iii)Dr. A.P. Mukherjee - Member(iv)Dr. A.H. Kalro - Member(v)Dr. Jayaprakash Narayan - Member(vi)Smt. Vineeta Rai - Member-Secretary3.The Commission will suggest measures to achieve a proactive, responsive, accountable,sustainable and efficient administration for the country at all levels of the government. The Commission will, inter alia, consider the following :(i)Organisational structure of the Government of India(ii) Ethics in governance(iii) Refurbishing of Personnel Administration(iv) Strengthening of Financial Management Systems(v)Steps to ensure effective administration at the State level(vi) Steps to ensure effective District Administration(vii) Local Self-Government/Panchayati Raj Institutions(viii) Social Capital, Trust and Participative public service delivery(ix) Citizen-centric administration(x) Promoting e-governance The Commission may exclude from its purview the detailed examination ofadministration of Defence, Railways, External Affairs, Security and Intelligence, as also subjects such as Centre-State relations, judicial reforms etc. which are already being examined by other bodies. The Commission will, however, be free to take the problems of these sectors into account in recommending re-organisation of the machinery of the Government or of any of its service agencies.11.The Commission will give due consideration to the need for consultation with theState Governments.12.The Commission will devise its own procedures (including for consultations with theState Government as may be considered appropriate by the Commission), and may appoint committees, consultants/advisers to assist it. The Commission may take into account the existing material and reports available on the subject and consider building upon the same rather than attempting to address all the issues ab initio.13.The Ministries and Departments of the Government of India will furnish suchinformation and documents and provide other assistance as may be required by the Commission. The Government of India trusts that the State Governments and all others concerned will extend their fullest cooperation and assistance to the Commission.14.The Commission will furnish its report(s) to the Ministry of Personnel, PublicGrievances & Pensions, Government of India, within one year of its constitution.Sd/(P.I. Suvrathan)Additional Secretary to Government of IndiaGovernment of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reformsand Public GrievancesRESOLUTIONNew Delhi, the 24th July, 2006No. K-11022/9/2004-RC (Vol.II) – The President is pleased to extend the term of the second Administrative Reforms Commission by one year upto 31.8.2007 for submission of its Reports to the Government.Sd/(Rahul Sarin)Additional Secretary to the Government of IndiaChapter 1 Chapter 2CONTENTS1Chapter 6Emergency Response System77Chapter 3Introduction46.1Emergency Plan77Chapter 4Crisis Management - An Overview46.2Coordinating Relief79Chapter 52.1History of Crisis Management46.3Role of Specialized Agencies812.2Types of Crises56.4Setting up Integrated Emergency Operations Centre (EOC)892.3Scale of Crises56.5Organising Emergency Medical Relief902.4Crisis Management7Chapter 7Recovery922.5Phases of Crisis/Disaster Management87.1Relief and Rehabilitation922.6Elements of Crisis Management97.2Revisiting the Financial Procedures962.7A Shift to Disaster Risk Reduction10Chapter 8Gender Issues and Vulnerability of Weaker Sections992.8Disaster Risk Reduction Framework12Chapter 9Drought Management101India’s Key Hazards, Vulnerabilities and the Crisis Response Mechanism129.1Risk Reduction1013.1The High Cost of Disaster149.2Revisiting Long Term Interventions1013.2Earthquakes159.3Livelihood Management in Extremely Drought Prone Areas1023.3Cyclones169.4Codifications of Management Methodologies1033.4Tsunamis179.5Rationalization of Drought Declarations1043.5Floods189.6Deployment of Remote Sensing for Diagnosis and Prognosis1053.6Landslides and Avalanches19of Drought Situations3.7Industrial Disasters209.7Making Rivers Perennial1063.8Epidemics219.8Rainfed Areas Authority1073.9Nuclear Hazards22Chapter 10Management of Specific Crisis Situations1083.10 Desert Locusts22(Epidemics and Disruption of Essential Services)3.11 Slow Onset Disasters2510.1 Epidemics1083.12 Crisis/Disaster Response Mechanism in India3410.2 Disruption of Essential Services111Legal and Institutional Framework34Chapter 11Conclusion1134.1Constitutional Provision - is their need for a separate entry?35Summary of Recommendations1144.2Legal Framework42LIST OF BOXES4.3Institutional Framework52Box No.TitleRisk Reduction522.1Disaster Management and Sustainable Development75.1Reducing Disaster Risk522.2Distinction between Hazard and Disaster85.2Enunciating a Policy Towards Crisis Management542.3World Conference on Natural Disaster, Reduction, Yokohama 199410Which Emphasizes Risk Reduction572.4Information - the Key to Risk Reduction115.3Assessment of Risk - Hazard and Vulnerability Analysis583.1Cyclone Shelters165.4Generating Awareness about Risk623.2Traditional Knowledge for Disaster Management165.5Preparation of Disaster Management Plans633.3Flood Control and Management175.6Making Crisis/Disaster Management Plans a Part of703.4Mitigation Measures for Avalanches18Development Plans723.5Global Warming235.7Instruments for Mitigation of Hazards733.6Land Erosion by Sea or River255.8Early Warning Systems753.7Laws Dealing with Disaster in USA265.9Building Community Resilience3.8Timely Action Saves Lives295.10 Financial Tools for Risk Reduction 5.11 Research and Use of Knowledge4.1The Role and Functions of a National Disaster Management Organisation 394.2Evolution of the Crisis/Disaster Management System in the United States 404.3Mayor of New York Gets Time Person of the Year Award455.1Management of Urban Floods: Case Study of Mumbai Floods 2005535.2Flood Risk Reduction in China575.3The Bhopal Gas Tragedy595.4BIS Codes for Earthquake Protection655.5Model Building Byelaws655.6Warning Systems - Key to Disaster Management705.7Public Address System Saves Lives in Pondicherry Villages715.8Some Capacity Building Initiatives Taken by Government of India725.9Insurance and Disaster Management745.10Constraints of Insurance in Developing Countries745.11Risk Reduction Through Catastrophic Insurance: Examples from Japan 755.12India Disaster Resource Network766.1Lessons Learnt from Tsunami776.2Discretion and Judgement are Important786.3Civil Defence837.1From Relief to Recovery: The Gujarat Experience: UNDP927.2Recovery an Opportunity937.3Community Participation937.4Guiding Principles for Post - Disaster Recovery947.5Inadequate Planning and Preparation in Rescue and Relief95may Lead to Further Disasters8.1Women in Disasters999.1Drought-prone Area Development101LIST OF TABLESTable No. Title2.1Crises Management Matrix63.1Region-wise Earthquakes143.2Frequency of Cyclones153.3Nodal Ministries for Managing Different Types of Disasters285.1Classification of States according to Seismic Zones54LIST OF FIGURESFigure No. Title2.1Elements of Crisis Management93.1Increasing Trends of Natural Disasters133.2Crisis Management Structure in the Country303.3Unification of Crisis Management32(as visualized in the Disaster Management Act, 2005)4.1Four Components of an Early Warning System70LIST OF ANNEXURESAnnexure ISpeech of Shri M. Veerappa Moily, Chairman, ARC,134at the Round-table held at NIDM, New DelhiAnnexure-IIComparison of State Disaster Management Laws144Annexure-IIISalient Features of the Disaster Management Act, 2005152Annexure-IVRecommendations of the Working Groups at the164Regional WorkshopsAnnexure-VEarly Warning Systems182Annexure-VIQuestionnaire for Disaster Management186LIST OF ABBREVIATIONSAbbreviationFull FormARCAdministrative Reforms CommissionBISBureau of Indian StandardsCAPECrop Acreage and Production EstimationCBSECentral Board of Secondary EducationCDCivil DefenceCMGCrisis Management GroupCREDCentre for Research on the Epidemiology of Disasters, BelgiumCRFCalamity Relief FundCWCCentral Water CommissionDDPDesert Development ProgrammeDPAPDrought Prone Areas ProgrammeEOCEmergency Operation CentreEMRIEmergency Management Research InstituteFASALForecasting Agricultural Output Using Space,Agrometerology and Land ObservationsGISGeographical Information SystemGSDMAGujarat State Disaster Management AuthorityGSIGeological Survey of IndiaHPAIHighly Pathogenic Avian InfluenzaHPCHigh Powered CommitteeIITIndian Institute of TechnologyIMDIndia Meteorological DepartmentIDRNIndia Disaster Resource NetworkIRSAIndian Remote Sensing AgencyISROIndian Space Research OrganisationNCMCNational Crisis Management CommitteeNCCFNational Calamity Contingency FundNCRCWNational Commission to Review the Working of the ConstitutionNDMANational Disaster Management AuthorityNECNational Executive CommitteeNGOsNon Governmental OrganisationsNICNational Informatics CentreNIDMNational Institute of Disaster ManagementNRSANational Remote Sensing AgencyOFDAOffice of US Foreign Disaster AssistanceUNDPUnited Nations Development ProgrammeUNHSPUnited Nations Human Settlements ProgrammeUSAUnited States of America1INTRODUCTION1.1 The dictionary meaning of the term ‘crisis’ is ‘an unstable or crucial time or state of affairs in which a decisive change is impending; especially, one with the distinct possibility of a highly undesirable outcome’1. In the context of public policy, an event or occurrence can be termed as a crisis situation if it poses a threat to human life and property or causes or threatens to cause large-scale disruption of normal life. Thus, ‘crisis’ may be defined as “an emergency situation arising out of natural or human activity which poses a threat to human life and property or leads to large scale disruption of normal life”. This emergency situation may arise suddenly or it may be an outcome of a simmering problem or issue, which was not ‘nipped in the bud.’ A crisis may degenerate into a disaster if it is not properly managed resulting in avoidable loss of human life and property on a large scale.1.2 Preparedness and quick response can save lives, protect property and lessen disruptions caused by crises.This calls for a total and effective response, which must subsume the coordinated response of the entire governmental system as also civil society. The response should not only incorporate traditional coping mechanisms, which have evolved over the centuries but also involve meticulous planning and coordination. Cumulative experience with crisis management over the years points to an urgent need for putting in place a holistic and effective response mechanism which is professional, result-oriented, innovative and people-centric.1.3 One of the terms of reference of the Second Administrative Reforms Commission pertains to crisis management and in particular, to the following aspects of this subject: -(i)To suggest ways to quicken the emergency responses of administration.(ii) To suggest ways to increase the effectiveness of the machinery to meet the crisis situation and enhance crisis preparedness.1.4 Crises include various events, which require immediate attention because of the threat they pose to human life and property. In this Report, the Commission has dealt primarily with natural and man-made disasters (for example earthquakes, industrial accidents, etc.) but has used the terms ‘crisis’ and ‘disaster’ interchangeably as relevant in the context. Crisis11Merriam Webster Online Dictionary - Management - From Despair to Hopesituations caused by hostile elements like terrorists and extremists involving taking of hostages, hijacking an aircraft or severely disrupting public order and administration are not included in this Report and will be dealt with in its Report on ‘Public Order’.1.5 While finalizing the present Report, the Commission has examined policies, operational issues and institutional contexts relevant to crisis management. In order to generate suitable discussions the Commission asked the National Institute of Disaster Management (NIDM) to prepare a concept paper on the subject, which was then circulated to all ministries and departments of Government of India for their comments/suggestions. Based on this paper and the suggestions received, a questionnaire was developed by the Commission for eliciting views and opinions from institutions, organizations and stakeholders in civil society. A consultation workshop was also held with various governmental agencies and based on all these inputs, a paper was prepared for discussion in the four regional workshops held at Chennai, Jammu, Mumbai and Jaipur. The participants at these workshops included officers from Union and State Governments, technical experts who spoke on specific disasters, District Collectors who presented case studies on management of recent disasters and a large number of stakeholders including NGOs and the media. The Commission also had discussions with the Vice Chairperson and Members of the National Disaster Management Authority, the Cabinet Secretary and the Union Home Secretary. The deliberations at the workshops, the feedback received from various organizations, the recommendations made in the past by different Committees and lessons from past crisis/disasters have all contributed to the formulation of our views in this Report.IntroductionExecutive Director, NIDM; Shri S K Das, Consultant ARC; Shri Sanjay Srivastava, ISRO; Shri Naved Masood, Joint Secretary, Ministry of Agriculture; representatives of citizens’ groups, officers of Government of India and State Governments and experts and academicians who participated in the workshops. The Commission also wishes to record its special thanks to Shri Ghulam Nabi Azad, Chief Minister of Jammu and Kashmir, who inaugurated the workshop in Jammu. The Commission also acknowledges the contributions made by the National Safety Council and the Department of Earthquake Engineering, Indian Institute of Technology, Roorkee.1.6 The Commission has also drawn upon international declarations and best practices. The ‘Yokahama Declaration’ of 1994, enunciated during the International Decade for Natural Disaster Reduction signaled a radical shift in disaster management: the earlier practice of disaster management being regarded as the most efficient manner of responding to acute emergencies was replaced by a ‘holistic’ approach embracing all aspects of crisis management that is response,prevention, mitigation and preparedness.The ‘Declaration’ elucidates how prevention and mitigation are the keys to minimize, if not prevent, distress caused by natural disasters and thus form the bedrock of integrated disaster management. The Commission has been influenced by the principles underlying the ‘Yokahama Declaration’ and the subsequent Hyogo Framework of Action, in recommending a comprehensive prevention and mitigation strategy, with the ultimate goals of protecting people and structures from disasters and increasing the effectiveness of response and recovery.1.7 The Commission wishes to record its gratitude to Gen. N C Vij, PVSM, UYSM, AVSM (Retd), Vice Chairperson, NDMA; Members of NDMA; Shri B K Chaturvedi, Cabinet Secretary; Shri V K Duggal, Union Home Secretary; Shri P G Dhar Chakrabarti,23Crisis Management - An Overview2CRISIS MANAGEMENT - AN OVERVIEW“In the old days, we had famine codes and drought codes but I think now there are many more sources of uncertainty, many more sources of disorder and turbulence and therefore I think one should pay adequate attention to understanding the processes of this turbulence and how our administrative system has the primary responsibility to come to the help of our people in these times of difficulties, stress and strain”.22.1 History of Crisis ManagementNatural disasters and crises have been an integral part of human history right from the dawn of civilization. The rise and fall of the Indus Valley and Babylonian civilizations are a testimony to this. In the early days, individuals and communities would lead the response to crisis. However, with the emergence of the modern welfare state and the 20th century trends of globalization, urbanization, large-scale migrations of human population and climate changes, the nature of crises facing nations has increased both in magnitude and complexity. For example, while the frequency of calamities may have remained unchanged, increasing population densities and urbanization have resulted in greater impact on human lives and property. In the field of public health, while science has secured a major victory over epidemics, new strains of viruses and drug resistant micro-organisms have emerged raising the sceptre of global pandemics of new and more deadly diseases. Similarly, while frequency of wars has declined, modern weapons and mass urbanization have increased manifold the human crisis caused by such conflicts. The scourge of terrorism has created new types of crises and increasing dependence on communications and computer networks have increased the threat of newer emergencies in case these are disabled by accident or design. Further, phenomena like modernization, information explosion, transnational migrations, and the economic interdependence among nations have all contributed to extending the impact of crisis situations over larger areas.a.Climatic events: cyclones and storms (associated sea erosion), floods and drought andb.Geological events: earthquakes, tsunamis, landslides and avalanches;(ii) Crises caused by environmental degradation and disturbance of the ecological balance;(iii) Crises caused by accidents. These, again, can be further classified into: industrial and nuclear mishaps and fire related accidents;(iv) Crises caused by biological activities: public health crises, epidemics etc;(v)Crises caused by hostile elements: war, terrorism, extremism, insurgency etc;(vi) Crises caused by disruption/failure of major infrastructure facilities including communication systems, large-scale strikes etc; and(vii) Crises caused by large crowds getting out of control.These crisis situations and their specific features are captured in a ‘crisis management matrix’ shown in Table-2.1.2.3 Scale of CrisesDepending on its intensity and area of impact, a crisis situation may be labeled as local, subdistrict, district, state or national level. State Governments and their agencies, district officials and local governments have important roles to play along with communities in crisis management. The scale of crisis determines the nature and level of response. The Union Government has to step in for major disasters by way of providing financial, material and human resources support. Also, in case of certain specific crisis situations, which affect the national interest, a national level response is necessary. Such contingent situations may be terrorist incidents like hijacking of an aircraft, suicidal attacks, sabotage, attacks on important installations/buildings or community symbols; hostage crisis; threat or actual use of nuclear/ chemical/biological weapons; war or war-like situations; mutiny; migration/infiltration/; breakdown of important services like Railways; chemical/biological disasters and those relating to major mines-mishaps; oil spills; cyber terrorism etc.2.2 Types of CrisesCrises can be classified into the following categories:(i)Crises caused by acts of nature. These can further be divided into the followingsub-categories:2.4 Crisis Management2.4.1 In the traditional disaster management approach, the focus was on emergency relief and immediate rehabilitation. Society deemed these measures sufficient as anything more was considered ‘unaffordable’. Besides, as stated in the Yokohama Declaration, the element of ‘drama’ and flurry of activities associated with these interventions tended to show to the452 Excerpts from Prime Minister’s remarks to IAS probationers; April 28, 2006, New Delhi.Crisis Management - An OverviewCrisis Management - From Despair to Hopegettingunrulyeringsgath-Largesociety at large that the State ‘cared’. A ‘Welfare State’ entails wider responsibilities meaning thereby that in addition to the traditional responsibilities of relief and immediate rehabilitation, governments in conjunction with the local bodies, the civil society, voluntary organizations and corporate bodies, address the factors leading to the crisis, in a manner that ideally prevents their occurrence, or at any rate,significantly reduces their ill effects.Box 2.1: Disaster Management andLimitedLimitedLimitedA FewHoursNilNoYesof essen-Disrup-servicesLimitedLimitedA FewLargeDaystionNoYesNotialInstantaneousTerrorismLimitedSustainable Development“While we cannot do way with natural hazards, we can eliminate those we cause, minimize those we exacerbate, and reduce our vulnerability to most. Doing this requires healthy and resilient communities and ecosystems. Viewed in this light, disaster mitigation is clearly part of a broader strategy of sustainable development – making communities and nations socially, economically and ecologically sustainable.”NilYesYesNoNoelementsHostile2.4.2 It is also necessary to recognize that often a crisis does not emerge suddenly; it has a life cycle, which may take days, months or even decades to develop depending on its causative factors. A crisis, therefore, needs to be examined in terms of its management cycle that would enable us to anticipate the crisis, prevent and mitigate it to the extent possible and deal with the crisis situation as it emerges. This ‘life cycle’ of crisis management may be divided broadly in three phases - pre-crisis, during crisis and post crisis.ExtremismDays ToLimitedMonthsLargeYesNilYesYesGenerally NoEpidemicsProlongedeventsBiolo-MediumgicalYesNilNoYesTable-2.1: Crises Management MatrixLimitedLimitedA FewHoursFireSource: J. Abramovitz, 2001.(Extracted from - Living with Risk, A global review of disaster reduction initiatives, ISDR 2004)NoYesYesYesAccidentsProlongedMediumNuclearNoNilNoYesYesIndustrialLimitedA FewDays2.5 Phases of Crisis/Disaster Management2.5.1 Pre-Crisis: Preparedness2.5.1.1 This is the period when the potential hazard risk and vulnerabilities can be assessed and steps taken for preventing and mitigating the crisis and preparing for actual occurrence. These include long-term prevention measures like construction of embankments to prevent flooding, creating or augmenting irrigation facilities and adopting water shed management as drought proofing measures, increasing plantations for reducing the occurrence of landslides, construction of earthquake resistant structures and sound environment management.NoNilYesNoYesLandslideMinutesLimitedLimitedA FewNoNilYesYesGeologicalEarthquakeLarge ScaleMinutesA FewLargeNoNilYesYesNatural eventsTo LargeMediumLimitedExtentA FewFloodSomeDaysYesYesYesTsunamiLimitedA FewHoursLargeVeryClimaticNilYesYesYes2.5.1.2 Crisis can also be mitigated through various short term measures, which either reduce or modify the scale and intensity of the threat or improve the durability and capacity of the elements at risk, for example, better enforcement of building codes and zoning regulations, proper maintenance of drainage systems, better awareness and public education to reduce the risks of hazards etc.LimitedCycloneExtentA FewLargeSomeDaysYesYesYesDroughtMonthsExtentA FewLargeSomeYesNoYesNoWhether Rescue Required?Structures ImportantLevel of CommunityWhether MitigationCrisis causedby ?Measures Possible?Whether BuildingSpecific Features2.5.1.3 For different types of disasters, mitigation measures may vary but what needs to be emphasized is the priority and importance to be attached to various measures. In order to do that, an appropriate legal and operational framework is essential.Early WarningArea AffectedPreparednessDuration ofPossible?Disaster67Crisis Management - From Despair to Hope2.5.2 During Crisis - Emergency Response 2.5.2.1 When a crisis actually occurs, those affected by it require a speedy response to alleviate and minimize suffering and losses. In this phase, certain ‘primary activities’ become indispensable. These are, evacuation, search and rescue, followed by provision of basic needs such as food, clothing, shelter, medicines and other necessities essential to bring the life of the affected community back to a degree of normalcy.2.5.3 Post-Crisis2.5.3.1 Recovery : This is the stage when efforts are made to achieve early recovery and reduce vulnerability and future risks. It comprises activities that encompass two overlapping phases of rehabilitation and reconstruction.2.5.3.2 Rehabilitation: Includes provision of temporary public utilities and housing as interim measures to assist long term recovery.2.5.3.3 Reconstruction: Includes construction of damaged infrastructure and habitats and enabling sustainable livelihoods.2.6 Elements of Crisis ManagementThese three stages - preparedness and risk management, emergency response and recovery and rehabilitation may be subdivided into various detailed activities as presented in Fig 2.1.Thus a crisis management strategy should aim at:i.Creating appropriate legal and organizational framework;ii.Making government organizations, local bodies, communities/groups and individuals at all levels aware of the risk of potential natural and man-made hazards as well as their vulnerabilities;iii. Meticulous long and short term planning for crisis management, and effective implementation of plans and enforcement measures;iv.Building resilience of the communities to face crises and ensuring their full participation;Crisis Management - An Overviewv.Building and maintaining capabilities (human and institutional), infrastructureand logistics; andvi. Developing and disseminating knowledge for effective crisis management. Integration of traditional knowledge in crisis management efforts.2.7 A Shift to Disaster Risk Reduction2.7.1 Little attention was paid in the past to disaster risk reduction strategies that have the potential to save thousands of lives by adoption of simple preventive measures. Reviews of the global scenario carried out in the 1990s in the wake of the “Yokohama Declaration” also brought home the fact that economic losses caused by natural disasters were increasing. Lack of coherent disaster reduction strategies and the absence of a ‘culture of prevention’ were identified as the major causes for this disturbing phenomenon'.2.7.2 Disaster risk reduction (disaster reduction) has been defined as the ‘systematic development and application of policies, strategies and practices to minimise vulnerabilities, hazards and the unfolding of disaster impacts throughout a society, in the broad context of sustainable development’.4 Disaster reduction strategies include appraisal of likelihood and intensity of hazards and analysis of vulnerabilities thereto of the community. Building of institutional capabilities and community preparedness is the next step. Crucial to all theseBox 2.2: Distinction between Hazard and Disaster“Strictly speaking, there is no such thing as a natural disaster, but there are natural hazards, such as cyclones and earthquakes. The difference between a hazard and a disaster is an important one. A disaster takes place when a community is affected by a hazard (usually defined as an event and even psychological factors that shape people’s that overwhelms that community’s capacity to cope). In other words, the impact of the disaster is determined by the extent of a community’s vulnerability to the hazard. This vulnerability is not natural. It is the human dimension of disasters, the result of the whole range of economic, social, cultural, institutional, political lives and create the environment that they live in.”Source: Twigg, J. 2001.(Extracted from Living with Risk, A global review of disaster reduction initiatives 2004 version)89'Living with Risk - a global review of disaster reduction initiatives (UN/ISDR)4Source: UNDP (extracted from )Crisis Management - From Despair to Hopeefforts, however, is the existence of a ‘safety culture’ in societies. Inputs like education, training and capacity building play a very significant role. It needs to be understood that such preparedness can not be a ‘one time’ effort, but is a continuous process.2.7.3 Knowledge plays an important role in disaster reduction. The traditional knowledge available with the communitity has to be used along with knowledge acquired through research and past experiences.2.7.4 Risk (in the context of disaster) is defined as the probability of harmful consequences or expected losses (deaths, injuries, property, livelihoods, economic activity disrupted or environment damaged) resulting from interactions between natural or human-induced hazards and vulnerable conditions.5 Thus ‘risk’ depends on the nature and intensity of the hazard on the one hand and thevulnerability of the communityBox 2.3: World Conference on Natural Disaster Reduction,on the other.Yokohama, 1994Yokohama Strategy and Plan of Action for a Safer World?Risk assessment is a required step for the adoption of adequate and successful disaster reduction policies and measures.?Disaster prevention and preparedness are of primary importance in reducing the need for disaster relief.?Disaster prevention and preparedness should be considered integral aspects of development policy and planning at national, regional, bilateral, multilateral and international levels.?The development and strengthening of capacities to prevent, reduce and mitigate disasters is a top priority area to be addressed so as to provide a strong basis for follow-up activities to IDNDR.?Early warnings of impending disasters and their effective dissemination are key factors to successful disaster prevention and preparedness.?Preventive measures are most effective when they involve participation at all levels from the local community through the national government to the regional and international level.?Vulnerability can be reduced by the application of proper design and patterns of development focused on target groups by appropriate education and training of the whole community.?The international community accepts the need to share the necessary technology to prevent, reduce and mitigate disaster.?Environmental protection as a component of sustainable development consistent with poverty alleviation is imperative in the prevention and mitigation of natural disasters.?Each country bears the primary responsibility for protecting its people, infrastructure, and other national assets from the impact of natural disasters. The international community should demonstrate strong political determination required to make efficient use of existing resources, including financial, scientific and technological means, in the field of natural disaster reduction, bearing in mind the needs of the developing countries, particularly the least developed countries.Crisis Management - An Overviewwould determine the magnitude and impact of a likely hazard. A social, cultural, political and economic and technological assessment of the community would indicate its vulnerability. The two combined together would give an indication of the risk.2.8.3 Risk Awareness and Preparation of Plans for Risk MitigationHaving assessed the risk the next step is to make the stakeholders and the decision makers aware of the risk. This enables government and civil society to take measures to mitigate the harmful effects of disasters. A plan of action, which should include both long term and short term components need to be prepared. The plan would be complete only if it also includes measures to improve community resilience.2.8.4 Implementation of the PlanThe disaster management plan need not be confined only to rescue and relief measures but should be all encompassing and include measures like environment management, urban planning, and enforcement of safety laws.2.8.5 Early Warning SystemsThe provision of timely and reliable information, through identified institutions, that allows the community and the government machinery to reduce their risk and be prepared to face the hazard is essential. Technological advances have helped in accurately forecasting some of the disasters. The challenge here is to use mechanisms to ensure that the warning reaches the vulnerable population with utmost urgency.2.8.6 Use of KnowledgeResearch in the field of disaster management has contributed substantially towards acquiring knowledge about disasters and their impacts. Most of the natural disasters can now be predicted with a fair degree of accuracy (earthquakes are an exception), and this has led to establishment of efficient Early Warning Systems. Similarly, a reservoir of knowledge and experience now exists about managing all aspects of disasters. The challenge is to ensure that the community at large and the decision makers are empowered with this knowledge. Moreover, information on the subject is growing at a rapid rate, which, again, calls for development of systems for processing and sharing of such information. While limitations of technology do exist, they are being addressed through research globally.2.8 Disaster Risk Reduction FrameworkThe disaster risk reduction framework is composed of the following fields of action:62.8.1 Policy towards Risk ManagementA policy framework has to be drawn up backed by the requisitelegalandinstitutionalmechanism that focuses on risk reduction as the major priority in disaster management.2.8.2 Assessment of Risk including Hazard Analysis and VulnerabilityRisk assessment is done based on the assessment of hazards and the resilience of the community. The likely intensity, location, frequency and past experienceBox 2.4: Information-the Key to Risk ReductionEffective disaster risk management depends on the informed participation of all stakeholders. The exchange of information and easily accessible communication practices play key roles. Data is crucial for ongoing research, national planning, monitoring hazards and assessing risks. The widespread and consistent availability of current and accurate data is fundamental to all aspects of disaster risk reduction.(Source: Living with Risk: A global review of disaster reduction initiatives; ISDR 2004)10115 Living with Risk - a global review of disaster reduction initiatives (UN/ISDR)6 These are based on the framework provided by Living with Risk - a global review of disaster reduction initiatives, with some modifications.India’s Key Hazards, Vulnerabilities and the Crisis Response Mechanism3earthquakes of similar measurements in USA or Japan have had relatively little impact. Tragedies like the Bhopal gas leakage (the gas was Methyl Iso-Cynate) and regular outbreaks of floods and droughts in different parts of the country every year indicate that much more needs to be done to achieve holistic disaster management in the country.INDIA’S KEY HAZARDS, VULNERABILITIES AND THE CRISIS RESPONSE MECHANISM3.1.4 In terms of erosion of resources, disasters have proved frightfully expensive. According to a recent study by the World Bank8, 2.25% of the GDP and 12.15% of the revenue of the country were lost due to natural disasters during 1996-2000, when the country was hard3.1 The High Cost of Disasters3.1.1 The Intergovernmental Panel on Climate Change (IPCC) came to the conclusion that, worldwide the frequency and magnitude of all types of natural disasters are on the rise (Fig 3.1). Discernible changes in weather with a general increase in temperature (or a decrease in the number of cold days) have been observed in nearly all the land masses. There is also an increase in the frequency of heavy precipitation events. In some regions of the country, the frequency and intensity of droughts have increased over the past few decades. Projections for this century show that the number of ‘hot’ and ‘very hot’ days will continue to rise. It is also likely that the intensity and frequency of extreme precipitation events will increase over many areas, resulting in greater number of floods and landslides. Mid-continental areas would generally become drier, thus increasing the risk of summer droughts and forest fires. Increase in tropical cyclone peak wind intensities and mean and peak precipitation intensities are expected to be on the rise. Such increasing trends in natural disasters will inevitably create crisis situations. Should these dire prognostications come to pass, crisis management will become a very critical issue in the coming years.3.1.2 India is very vulnerable to natural hazards because of its unique geo-climatic conditions. Disasters occur in India with grim regularity causing enormous loss of life and property. Almost 85% of the country is vulnerable to single or multiple disasters and about 57% of its area lies in high seismic zones. Approximately 40 million hectares of the country’s land area is prone to flood, about 8% of the total land mass is vulnerable to cyclone and 68% of the area is susceptible to drought (Source: Disaster Management in India — A status report, 2004, Ministry of Home Affairs, Government of India). Of the 35 states and union territories, 27 are prone to one or more of these ‘events’. To this, it must be added that some areas are also vulnerable to industrial, chemical and biological disasters.Fig 3.1. Increasing trends of natural disasters (Source: EM-DAT: The OFDA/CRED International Disaster Database. , UCL - Brussels, Belgium).3.1.3 The magnitude of loss of human lives and livelihood in our country due to such disasters is excessive by any modern standard. There is no reason why 13,805 deaths, 11,67,000 injuries, 2,22,035 houses destroyed, and 917,158 houses damaged7 should have been the result of an earthquake measuring 6.9 on the Richter scale in Gujarat whereasput to mobilize equivalent resources for health care. The Eleventh Finance Commission provided an amount of Rs. 11007.59 crores for the Calamity Relief Fund (CRF) for the period 2000-2005. Besides, a further amount of Rs. 8041 crores was spent under the National Calamity Contingency Fund (NCCF). The Twelfth Finance Commission has further enhanced the allocations of CRF to Rs. 21333.33 crores for the period 2005-2010. Apart from assistance from the CRF and the NCCF, additional resources had to be mobilized from multilateral financial institutions following severe disasters like the Gujarat earthquake (Rs. 7936 crores) and the Tsunami (Rs. 9870 crores) for long term rehabilitation and reconstruction9. This has serious implications for macro-economic management and development planning. Arguably,12137Presentation of GSDMA at Mumbai Workshop.8 Financing Rapid Onset Natural Disaster Losses in India: A Risk Management Approach, August 2003.9 DM Division, Ministry of Home Affairs, Government of India.Crisis Management - From Despair to HopeIndia’s Key Hazards, Vulnerabilities and the Crisis Response Mechanism14the bulk of such expenditure could have been avoided with better planning, and measures for prevention and mitigation. Several cross-country studies have shown that investment in disaster prevention and mitigation is highly cost effective: for example, every dollar spent on mitigation saves three to five dollars on relief and rehabilitation10. Unfortunately, longterm benefits of crisis prevention and mitigation have not been duly factored into our planning and administrative systems.3.1.5 Although the broad principles of crisis management are applicable to different types of disasters, each disaster category has its peculiar features, which need to be factored in crisis management efforts. A brief description of some major crises/disasters, which India faces is given in the following paragraphs:3.2 Earthquakes3.2.1 The Himalayas - the youngest among the mountain ranges - are still evolving and adjusting to tectonic movements; existence of two major fault lines located on its west and east, have resulted in very severe earthquakes in several parts of the Himalayan and surrounding regions. This makes the entire region covering fourteen states (located in western and central Himalayas, northeast, and parts of Indo-Gangetic basin) highly prone to earthquakes. The hilly regions are also prone to earthquake-induced landslides. The other seismically active regions of the country include the Gulf of Khambhat and Rann of Kutch in Western Gujarat, parts of peninsular India, the islands of Lakshadweep and Andaman and Nicobar Islands. Based on seismic data of the past 109 years the distribution of earthquakes of 5.0 or more on the Richter scale and their recurrence (return period) has been worked out in Table 3.111:Table 3.1 – Region-wise Earthquakes (M>5.012) 1897-2006SNoSeismic regionNo. of earthquakes of magnitudeReturn period5-5.96-6.97-7.98.0+1Kashmir &257212.5–3 yrsWestern Himalayas2Central Himalayas6828411 yr3North East India200130154<4 months4Indo-Gangetic Basin146--5 yrs5Cambay and Rann of Kutch65217 yrs6Peninsular India3210--2.5-3 yrs7Andaman & Nicobar Islands806811<8 months10 Source: The Federal Emergency Management Agency has estimated that every dollar spent on disaster mitigation saves between three and five dollars in future economic losses - Source: Compiled by Dr. A S Arya, Professor Emeritus, IIT Roorkee (Courtesy: NIDM)12 M>5: Magnitude greater than 5 on Richter scale.3.2.2 In our present state of knowledge, earthquakes can neither be prevented nor predicted in terms of their magnitude, or place and time of occurrence. Therefore, the most effective measures of risk reduction are pre-disaster mitigation, preparedness and preventive measures for reducing the vulnerability of the built environment combined with expeditious and effective rescue and relief actions immediately after the occurrence of the earthquake.3.3 Cyclones3.3.1 More than 8000 km of coastline in the east and the west face the hazards of tropical cyclones, and associated storm surges and heavy rainfall, before and after the monsoon. Post-monsoon cyclones are usually more intense both in numbers and intensity. It has been estimated that over 58 per cent of the cyclonic storms that develop in the Bay of Bengal approach or cross the east coast in October and November. Only 25 per cent of the storms that develop over the Arabian Sea hit the west coast. In the pre-monsoon season, corresponding figures are 25 per cent over the Arabian Sea and 30 per cent over the Bay of Bengal.Table 3.2: Frequencies of Cyclones crossing various districts during 1891-200513West CoastEast CoastStateCoastal districtNo. of stormsStateCoastal districtNo. of stormsKeralaThiruvananthapuram1West Bengal24 Parganas23(North & South)Ernakulam1Midnapore12Malappuram1OrissaBalasore19Kozhikode2Cuttack17Kannur1Puri10KarnatakaSouth Kannada2Ganjam7Andhra PradeshSrikakulam14Visakhapatnam8East Godavari8Krishna14Guntur3Nellore21GujaratBharuch1Tamil NaduChingleput15Bhavnagar2South Arcot5Junagadh10Thanjavur13Jamnagar3Ramanathapuram3Kutch3Tirunelveli213 Source: NIDM115Crisis Management - From Despair to HopeIndia’s Key Hazards, Vulnerabilities and the Crisis Response MechanismBox 3.1: Cyclone SheltersOne of the most successful ways of reducing loss of human lives during cyclones is the provision of cyclone shelters. In densely populated coastal areas, where large scale evacuations are not always feasible, public buildings can be used as cyclone shelters. These buildings can be so designed, so as to provide a blank fa?ade with a minimum number of apertures in the direction of the prevailing winds. The shorter side of the building should face the storm, so as to impart least wind resistance. Earth berms and green belts can be used in front of these buildings to reduce the impact of the storm.(Source: Website of IMD)3.3.2 The ‘super cyclone’ that hit the coastal areas of Orissa on October 29, 1999 had wind speeds of 270-300 km per hour accompanied by torrential rains for the next three days. Sea waves that hit the coast were 7 m high. The super cyclone caused extensive damage killing about 10,000 people and lakhs of livestock population. Over 2 million houses were damaged. The economy, infrastructure and environment were devastated.3.3.3 An effective cyclone disaster prevention and mitigation plan requires: (i) efficient cyclone forecast - and warning services; (ii) rapid dissemination of warnings to the government agencies, particularly marine interests like ports, fisheries and shipping and to the general public and (iii) construction of cyclone shelters in vulnerable areas, a ready machinery for evacuation of people to safer areas and community preparedness at all levels to meet the exigencies.3.4 Tsunamis3.4.1 Tsunamis are large waves generatedBox 3.2: Traditional Knowledge forDisaster Managementby sudden movements of the ocean floor Why should people be brought in for a community that displace a large volume of water. approach to disaster management? The answer should beeasy to appreciate. If tribals in the Andamans could surviveAlthough usually associated with the tsunami, it was because their existing warning systemsearthquakes, tsunamis can also be triggered worked well in comparison to our non-existent modern by other phenomena like submarine or systems. The fact that traditional houses of wood and stonesurvived the Uttarkashi earthquake not so long ago whileterrestrial landslides, volcanic eruptions, modern buildings collapsed offered a similar lesson. In theexplosions or even bolide (e.g, asteroid, flood-prone rural North-East, one can find houses on meteor, comet) impacts. Tsunamis have the bamboo stilts that allow flood waters to flow under themrather than through or over! One need not multiplypotential to strip beaches, uproot examples to just make a small point: Native intelligence isplantations, and inundate large inland tracts significant and technical expertise needs to treat this ascomplementary. This intelligence needs to be tapped forand extensively damage life and property devising approaches to management of disasters. Further,in coastal areas. The Indian coastal belt had policies and laws for disaster management need to provide not recorded many tsunamis in the past space for such intelligence to be counted.although the earthquakes of 1881 and 1941 (Source: , also reported in Economic andover the Bay of Bengal had caused some Political Weekly, September 2-8, 2006).damage in the Andamans region. Theearthquakes of 1819 and 1845 near the Rann of Kutch also created rapid movements ofwater in the Arabian Sea. The 1945 Makran earthquake (Magnitude 8.1) generated a tsunami of 12 to 15 meters height causing some damage in the Gulf of Cambay and Mumbai.3.4.2 The phenomenon of tsunami that usually occurs near seismically active spots in the Pacific Ocean was uncommon in India till it hit the east and west coast in December 2004. The waves that struck our mainland were 3-10 m high and penetrated 300 metres to 3000 metres inland causing severe damage to life and property in the coastal areas of Andhra Pradesh, Tamil Nadu, Pondicherry, Kerala and Andaman and Nicobar Islands, devastating and crippling the coastal economy as never before. The confirmed death toll in India was 12,405 while 5,640 people are still unaccounted for. Seventy five per cent of the fatalities were women and children; 787 women were widowed and 480 children were orphaned. As many as 1,089 villages were affected, 1,57,393 houses were destroyed and approximately 7,30,000 individuals had to be evacuated. The figures for other damages are: 83,788 boats damaged or destroyed; 31,755 livestock lost; and 39,035 hectares of ripe agricultural land damaged14. The total estimated value of damages is Rs.11,300 crores (Approx US $2.56 billion). The lessons learnt from the tsunami disaster are summarized in Box 6.1.3.5 Floods3.5.1 Floods occur regularly in India affecting about 10% of area. The term flood is generallyused when the water-flows in rivers, streamsBox 3.3: Flood Control and Managementand other water bodies cannot be contained ? There should be a master plan for flood control andwithin natural or artificial banks. Accordingmanagement for each flood prone basin.to the estimates of the National FloodCommission (1980), commonly known as ? Adequate flood-cushion should be provided in water flood management. In highly flood prone areas, flood storage projects, wherever feasible, to facilitate better control should be given overriding consideration inthe Rashtriya Barh Ayog, Assam and Biharreservoir regulation policy even at the cost of sacrificingare the States worst affected by floodssome irrigation or power benefits.followed by U.P. and West Bengal. However, ? While physical flood protection works likeembankments and dykes will continue to be necessary,during monsoon months, all states are proneincreased emphasis should be laid on non-structuralto floods, including even Rajasthan! Themeasures such as flood forecasting and warning, floodseverity of flooding at any location is aplain zoning and flood proofing for the minimisation oflosses and to reduce the recurring expenditure on floodfunction of factors such as intensity andrelief.extent of rainfall and antecedent conditions ? There should be strict regulation of settlements andeconomic activity in the flood plain zones along withof catchment area, physical characteristicsflood proofing, to minimise the loss of life and propertyof the river, topography etc. In many cases,on account of floods.the natural process of flooding is aggravated ? The flood forecasting activities should be modernised,value added and extended to other uncovered areas.by man-made hindrances to free out-flow/Inflow forecasting to reservoirs should be instituted forabsorption of floodwater both in agriculturaltheir effective regulation.areas and particularly in urban areas with (National Water Policy)1611714Source: Retrieved from on 10-9-06. These figures are based on Government of India, Ministry of Home Affairs Report, 25 May, 2005.Crisis Management - From Despair to HopeIndia’s Key Hazards, Vulnerabilities and the Crisis Response Mechanism18unplanned or unauthorized construction activities; sudden large releases from upstream reservoirs, which often is more than the carrying capacity of the basin results in massive destruction of river embankments and downstream flooding. Increasing pace of urbanization, population growth and development have all led to pressures on the flood plains magnifying the damage caused by floods. The incidence of floods in recent times in urban areas such as Mumbai, Surat, Vadodara and other places is symptomatic of this trend and is the direct result of unauthorized construction activities in flood plains and river beds, poor urban planning and implementation, lack of investment in storm water drainage and sewerage for several decades as well as inadequate planning and response mechanisms. Freak weather conditions, possibly the result of global warming, have been reflected recently in incessant rains in August 2006, resulting in floods in the deserts of Rajasthan, leading to loss of about 300 lives, immense damage to housing and infrastructure and widespread devastation in an area where people are not used to floods and have few mechanisms to cope with the crisis. The country has to shift towards efficient management of flood plains, disaster preparedness, response planning, flood forecasting and warning.3.6 Landslides and Avalanches3.6.1 Landslides are mass movements of rocks, debris or earth, down mountain slopes or riverbanks. Such movements may occur gradually, but sudden sliding can also occur without warning. They often take place in conjunction with earthquakes, floods and volcanic eruptions. At times, prolonged rainfall causing heavy landslides block the flow of rivers for quite some time, which on bursting can cause havoc to human settlements downstream.3.6.2 The hilly terrains of India, particularly in the Himalayas and the Western Ghats, are most vulnerable to landslides. The Himalayan mountain belt comprises of tectonically unstable younger geological formations and often the slides are huge, and in most cases, the overburden along with the underlying lithology is displaced during sliding, such as in theMalpa landslide of 1998 when an entire village was buried by a huge landslide. In contrast, the Western Ghats and Nilgiri Hills are geologically stable but have uplifted plateau margins influenced by neotectonic activity and the slides are usually confined to the over burden without affecting the bedrock beneath. The slides are generally in the nature of debris flows occurringBox 3.4: Mitigation Measures for AvalanchesThese can be classified into structural and non-structural measures:1. Structural measures:a) Planting (Avalanche Prevention Forest)b) Stepped Terracesc) Avalanche Control Pilesd) Avalanche Control Fencee) Suspended Fencesf) Snow Cornice Control Structuresg) Protection structures such as stopping, deflecting and retarding structures.2. Non-structural measures - removing snow deposits on slopes by blasting, predicting avalanches and evacuating people from vulnerable areas.mainly during monsoons, but the effects are felt more acutely due to higher density of population in the region. Measures to control landslides include micro zonation so as to regulate settlements in hazard prone areas, non interference with the natural water channels, construction of retaining walls against steep slopes and strengthening of weak areas with grouting. In India, landslide studies are conducted by a number of institutions, research and academic. However, there is a need for better coordination among these institutions and also the user agencies.3.6.3 The sliding down of snow cover on mountain slope causes avalanches. Avalanches may occur due to a combination of factors such as the slope of the mountain, depth of snow cover, wind velocity and atmospheric temperature, vibrations caused by gunfire and strength of resisting forces like vegetation cover of trees and shrubs. When the balance between the gravitational force of snow cover and the resisting force of the slope and the anchoring effect of shrubs are lost, avalanches are caused. Avalanches create various crisis situations for the local administration; road traffic may be blocked and communication links to vital areas may be disrupted and winter sports may be disturbed stranding tourists in places with scant facilities. Small rivers may be blocked creating danger of down stream flooding. Avalanches may sometimes hit or bury human settlements down the slopes, as in the Kashmir avalanche of 2005, which killed 278 persons, mostly living in temporary winter hutments.153.7 Industrial Disasters3.7.1 Among the man made disasters, probably the most devastating (after wars) are industrial disasters. These disasters may be caused by chemical, mechanical, civil, electrical or other process failures in an industrial plant due to accident or negligence, which may cause widespread damage within and/or outside the plant. The worst example globally was the Methyl Iso-cynate gas leak in 1984 from the Union Carbide Factory in Bhopal (hereinafter referred to as the Bhopal Gas Tragedy) which has so far claimed more than 20,000 lives and injured several lakh persons16 besides stunting the growth of a generation born from the affected population. This disaster triggered a completely new legal regime and practices for preventing such disasters.3.7.2 In the pre-Bhopal Gas Tragedy era, industrial safety was governed by legislations like the Factories Act, 1948 and the Explosives Act, 1884. These laws proved to be inadequate to provide safety to workers as well as to the people living in the surrounding areas. After the Bhopal Gas Tragedy, a new chapter was inserted in the Factories Act, 1948 dealing with hazardous processes. The Environment Protection Act, 1986 was enacted. More importantly, several Rules were promulgated under the Act. Important among them are:1.The Environment (Protection) Rules, 1986.15Source: SITREP; National Disaster Management Division, Ministry of Home Affairs; Dated 28-2-200516Number of claims filed in death cases - 22149, for personal injuries 10.01 lakhs; source-website of Bhopal Gas Tragedy Relief and Rehabilitation Department; Government of MP; Bhopal, website – mp.nic.in/bgtrrdmp2119Crisis Management - From Despair to HopeIndia’s Key Hazards, Vulnerabilities and the Crisis Response Mechanism2.Hazardous Waste (Management and Handling) Rules, 1989.3.The Manufacture, Storage and Import of Hazardous Substances Rules, 1989/ 2000 (MSIHS).4.The Public Liability Insurance Act and Rules and Amendment, 1992.5.The Chemical Accidents (Emergency Planning, Preparedness, and Response) Rules, 1996.6.The Environment (Siting for Industrial Projects) Rules, 1999.7.The Municipal Solid Wastes (Management and Handling) Rules, 2000.8.The Ozone Depleting Substances (Regulation and Control) Rules, 2000.3.7.3 About 1633 major industrial hazard units are located in 245 districts in 19 States/ UTs17. Stringent environmental protection laws have prevented major industrial disasters after Bhopal, but minor disasters do take place on and off site and also during transportation of hazardous materials, which claim a number of lives each year besides creating environmental problems. Industrial disasters are a major concern today because of increase in the pace of industrialization. It is reported that more than 1140 workers lost their lives and 48,000 workers suffered injuries in factories in 200518. The figure would be more if one includes the civilians who have lost their lives due to accidents in manufacturing processes, storage and transportation of hazardous material. With rapid industrialization, the threat of industrial disasters has increased. However, in spite of the existence of a large number of laws, their enforcement has left much to be desired.3.8 Epidemics3.8.1 In India, the major sources of epidemics can be broadly categorized as follows:(a) Water-borne diseases like cholera (and forms of gastroenteritis), typhoid, Hepatitis A, Hepatitis B etc - major epidemics of such diseases have been recorded in the past and continue to occur; (b) Vector-borne (often mosquito-borne) epidemics like dengue fever, chikungunya fever, Japanese encephalitis, malaria, kala-azar etc, which usually occur in certain regions of the country; (c) Person to person transmission of diseases e.g. AIDS and other venereal diseases; and (d) Air-borne diseases like influenza and measles that can also be transmitted through fomites (used clothes etc.).3.8.2 In addition to the above, there are certain types of emerging infectious diseases such as epidemic of Severe Acute Respiratory Syndrome (SARS), which had occurred in China or the recent outbreak of avian flu in poultry in certain parts of the country and which has the potential of being transmitted to human beings. Epidemics due to the Dengue virus haveoccurred in many metropolitan cities of India and outbreak of various other types of viral diseases is also a recurring phenomena.3.8.3 Epidemics often take place due to poor sanitary conditions leading to contamination of food and water or due to inadequate disposal of human or animal carcasses in post-disaster situations. They become real dangers during floods and earthquakes. Sometimes, poor solid waste management may create epidemics like plague. Incidence of plague is quite uncommon now but it can still occur claiming many human lives and disrupting normal life as it did in Surat in 1994.3.8.4 Avian Influenza: The continuing outbreaks of highly pathogenic avian influenza (HPAI) in some parts of the country have spelt disaster for the poultry industry and have raised serious public health concerns. Over a million domestic poultry have either died or been destroyed. Economic losses to the poultry sector are likely to have serious implications, but despite control measures the disease continues to recur, causing further economic losses and threatening the livelihood of millions of poor livestock farmers, jeopardizing small-holder entrepreneurship and commercial poultry production and seriously impeding regional and international trade and market opportunities.3.8.5 The HPAI virus has the potential of being transmissible among human beings, thereby causing threat to millions of lives. It has been estimated by the WHO that millions of people could die of HPAI, should a human pandemic occur. Considering the potential for this scenario, it is imperative to have a synergy between global and national strategy to help stem the broad negative impact of the disease. The long-term vision of the strategy is to minimize the global threat and risk of HPAI in domestic poultry and humans, through progressive control and eradication of HPAI, particularly that caused by H5N1 virus, from terrestrial domestic poultry in the country. Achieving this goal will diminish the global threat of a human pandemic, stabilize poultry production, enhance a robust regional and international trade in poultry and poultry products, increase human and food safety, and improve the livelihoods of the rural poor.3.9 Nuclear Hazards3.9.1 With increased emphasis on power generation through nuclear technology, the threat of nuclear hazards has also increased. The Department of Atomic Energy (DAE) has been identified as the nodal agency in the country in respect of man made radiological emergencies in the public domain. Nuclear facilities in India have adopted internationally accepted guidelines for ensuring safety to the public and environment. A crisis management system is also in place to take care of any nuclear hazard. In addition to the other types of emergency response plans in place within the facility to handle local emergencies, response plans have202117Annual Report, Ministry of Environment and Forests, 2005-0618Source: Website of Director General, Factory Advice Service & Labour Institutes; Management - From Despair to HopeIndia’s Key Hazards, Vulnerabilities and the Crisis Response Mechanismalso been drawn up for handling such emergencies in the public domain, which are called as “off site Emergencies”. These plans - drawn up separately in detail for each site - which are under the jurisdiction of the local district administration, cover an area of about 16 km radius around the plant or the off site Emergency Planning Zone.193.10 Desert Locusts3.10.1 Desert Locusts, Schistocerca gregaria, are undoubtedly the most dangerous of locust species. Under favourable environmental conditions, a few solitary individuals can dramatically multiply, form large swarms able to migrate great distances and threaten agriculture over a large part of Africa, the Middle East and Southwest Asia. In the last century, there have been six plagues of Desert Locusts, one of which lasted almost 13 years. Initial Desert Locust control efforts were largely curative but the trend in the twentieth century had been toward preventing such plagues from occurring. Affected countries have assumed ever more responsibility for monitoring locust breeding areas and treating infestations before they increase in size and number. In fact, our knowledge of the Desert Locust has evolved along with the ability to manage locust plagues.3.10.2 International cooperation lies at the core of an effective strategy for locust control. as a result, locust management decisions are based on information gathered by and exchanged with national agencies and international organizations that have developed programs to regularly monitor locusts and the weather in the desert before they reach agricultural areas. This strategy has proved to be quite effective because countries have come to accept that international cooperation is critical in the fight against the Desert Locust. Nevertheless, plagues are not always prevented and often substantial control operations are required to reduce locust numbers and try to bring a halt to an upsurge or plague. It has become apparent that such operations could be strategically applied at certain times or in specific areas. One example is the delaying of control operations until locusts become concentrated into a relatively small area, which would allow more locusts to be treated using a lower quantity of pesticides applied over a smaller area. The challenge in coming years will be to evolve Desert Locust management strategies in a manner that ensures food security while minimizing any detrimental effects on the environment.3.11 Slow Onset Disasters3.11.1 Disasters can also be classified as ‘slow onset’ disasters and ‘rapid onset’ disasters. Earthquakes, cyclones, floods, tsunamis would fall under the category of rapid onset disasters; climate change (global warming), desertification, soil degradation, and droughts, would fall under the category of slow onset disasters. Slow onset disasters are also termed as ‘Creeping Emergencies’. It may be added that with ‘prevention’ forming an integral part of the ‘management cycle’, slow onset disasters like global warming, and desertificationmust find adequate reflection in disaster preparedness - these phenomena gradually erode the ‘health’ of ecosystems and expose societies to the vagaries of nature. Unlike the rapid onset disasters, their impact is not felt immediately; however societies lose their ability to derive sustenance from their surroundings, over a period of time. Development policies and the manner in which they are implemented are some of the main reasons for the slow onset disasters.3.11.2 Climatic Change3.11.2.1 Climate change is defined as ‘a statistically significant variation in either the mean state of the climate or in its variability, persisting for an extended period (typically decades or even longer). Climate change may be due to natural internal processes or external forces, or to persistent anthropogenic changes in the composition of the atmosphere or in land use20.’ Global warming caused due to the “Greenhouse effect” is one of the major reasons for climate change. Global warming leads to melting of glaciers, rise in sea level and threatens low lying coastal areas (Like the Sunderbans and entire nations such as Bangladesh and Maldives). Recent unexpected and unseasonal rainfall and drought is attributed to global warning. Combating global warming requires urgent and concerted efforts by the international community.3.11.3 Droughts3.11.3.1 Droughts refer to a serious shortfall in availability of water, mainly, but not exclusively, due to deficiency of rains, affecting agriculture, drinking water supply and industry. Droughts occur in several parts of the world and can bring untold misery to populations particularly those depending on agriculture and living on generally degraded land. The causative factors are both natural and man made. The impact of droughts on societies varies depending on coping capabilities and the general health of the national economies concerned.3.11.3.2 Droughts in India have their own peculiarities requiring appreciation of some basic facts. These are:?India has an average annual rainfall of around 1150 mm; no other country has such a high annual average, however, there is considerable annual variation.?More than 80% of rainfall is received in less than 100 days during the South-west monsoon and the geographic spread is uneven.Box 3.5: Global WarmingThe World’s climate has barely changed since the industrial revolution. The temperature was stable in the 19th century, rose very slightly during the first half of the 20th century, fell back in the 1950s-70s, then started rising again. Over the last 100 years, it has gone up by about 0.6 Degrees Celsius. So what’s the fuss about? Not so much the rise in temperature as the reason for it. Previous changes in the world’s climate have been set off by variations either in the angle of Earth’s rotation or in its distance from the Sun. This time there is another factor involved: man-made “green house” gases.(Source: The Economist; September 9-15, 2006)2212319Source: Department of Atomic Energy Website. Retrieved on 10-9-0620, Climate change website of the Ministry of Environment and Forests, Governmentof India. Retrieved on 10-9-06.Crisis Management - From Despair to HopeIndia’s Key Hazards, Vulnerabilities and the Crisis Response Mechanism?21% area receives less than 700 mm rains annually making such areas the hot spots of drought.?Inadequacy of rains coupled with adverse land-man ratio compels the farmers to practice rain-fed agriculture in large parts of the country.?Irrigation, using groundwater aggravates the situation in the long run as ground-water withdrawal exceeds replenishment; in the peninsular region availability of surface water itself becomes scarce in years of rainfall insufficiency.?Per capita water availability in the country is steadily declining.?As against total annual availability 1953 km3, approximately 690 km3 of surface water and 396 km3 of from ground water resources can be put to use. So far, a quantum of about 600 km3 has been put to use21.?The traditional water harvesting systems have been largely abandoned.3.11.3.3 The above factors demonstrate the complexity of Indian droughts and the constraints which rule out ‘perfect solutions’. Further, the causes for droughts are increasingly attributable to the mismatch between supply and demand, particularly the demand for non-agricultural purposes. In other words, it is not as if a simple pre-existing problem is awaiting better remedies, the problem itself is becoming more complex.3.11.3.4 It also needs to be appreciated that, like anywhere else in the world, agriculture in India is affected by weather in all its phases - from tillage and sowing to post-harvest disposal. Thus, while adequate availability of water is crucial to agriculture, it continues to be affected by other variables such as temperature, humidity, solar radiation and wind patterns.3.11.4 Desertification and Soil Degradation3.11.4.1 Any kind of land degradation can be termed as desertification. This can take place due to soil erosion, increasing alkalinity in soil and water-logging. Land degradation is estimated to affect one third of the total area of the country. While desertification poses serious livelihood challenges for the affected populations, for areas under stress of soil erosion and land degradation the process of desertification is accelerated due to continuing cultivation. About 8.6 million hectares of India’s land area is afflicted with the twin problems of alkalinity and salinity coupled with water-logging, which seriously reduces agricultural productivity and has grave implications for our food security system.223.11.5 Sea Erosion3.11.5.1 The landward displacement of the shoreline caused by the forces of waves and currents is termed as erosion. Coastal erosion occurs when wind, waves and long shore currents move sand from the shore and deposit it somewhere else. The sand can be movedto another beach, to the deeper ocean bottom, into an ocean trench or onto the landside of a dune. The removal of sand from the sand-sharing system results in permanent changes in beach shape and structure. The impact of the event is not always seen immediately, but it is equally important when we consider loss of property that it causes. It takes months or years to note the impact. So, this is generally classified as a “long term coastal hazard”. While the effects of waves, currents, tides and wind are primary natural factors that influence the coast, other factors leading to coastline erosion are: the sand sources and sinks, changes in relative sea level and geomorphological characteristics of the shore and sand, etc. Other anthropological effects that trigger beach erosion are: construction of artificial structures, mining of beach sand, offshore dredging, or building of dams23.3.11.5.2 About 23 per cent of India’s mainland coastline of 5423 km is getting affected by erosion, according to a survey. As much as 1248 km of the shoreline was getting eroded all along the coast with 480 km of the 569 km shoreline of Kerala affected by the phenomenon24.3.11.5.3 Prevention measures against sea erosion include (i) sea walls, (ii) gabions, (iii) boulders, (iii) revetments, (iv) steel piles, (iv) rock groynes and (v) offshore rock bars. The Ministry of Ocean Development has undertaken several ‘Shoreline Management Plan Projects’. The State Governments have also taken up implementation of anti sea erosion works.3.12 Crisis/Disaster Response Mechanism in India3.12.1 Over the centuries, local communities have developed their own indigenous survival mechanisms. This rich storehouse of knowledge is a part of our country’s legacy. The Arthashastra, (a treatise on public administration by Chanakya in the 4th century B.C), devoted a section to mitigation measures to combat famines. Modern methods of crisis management began to be applied from the late 1870s when the first Famine Commission suggested formulation of Famine Codes and establishment of Agriculture Departments in the provinces to improve agricultural production as a safeguard against famines as well as preparatory measure to deal with acute scarcities occasioned by frequent failure of rains.Box 3.6: Land Erosion by Sea or RiverThe erosion of land, whether by the sea in coastal areas or by river waters inland, should be minimised by suitable cost-effective measures. The States and Union Territories should also undertake all requisite steps to ensure that indiscriminate occupation and exploitation of coastal strips of land are discouraged and that the location of economic activities in areas adjacent to the sea is regulated.Each coastal State should prepare a comprehensive coastal land management plan, keeping in view of the environmental and ecological impacts, and regulate the developmental activities accordingly.(National Water Policy)2412521Report of the National Commission for Integrated Water Resources Development, 199923 Taken from the website of the National Institute of Oceanography22 Website of the Central Soil Salinity Research Institute, study conducted by the Ocean Engineering Division of the National Institute of Oceanography, GoaCrisis Management - From Despair to HopeIndia’s Key Hazards, Vulnerabilities and the Crisis Response Mechanism3.12.2 Legal Framework3.12.2.1 Realizing the importance of crisis management, many countries have passed laws to deal with various aspects of crisis management. For example, in the United States various laws dealing with crisis management enacted between 1950 and 2000 are indicated in Box 3.7.3.12.2.2 In India, recurrent crises in the form of widespread famines and locust invasions were a common feature of the colonial period and to deal with these, various famine commissions were set up in the 19th century and Famine Codes were developed as mentioned earlier. The entire crisis management exercise was confined to fighting natural calamities, particularly severe droughts causing famines. After Independence, drought relief works were undertaken in areas affected by severe droughts. With the onset of the green revolution in the late 1960s the necessity for famine relief work declined and a holistic drought management programme was taken up in the form of the Drought Prone Areas Programme (DPAP).3.12.2.3 Legislation on disaster management at the national level was enacted in the year 2005 with the Disaster Management Act, 2005. Several states had also passed their own legislation on disaster management prior to the National Act. A comparison of these state legislations and the salient features of the Disaster Management Act, 2005 are placed at Annexures-II and III respectively.3.12.3 The Response Mechanism3.12.3.1 The community is usually the first responder in case of a disaster. Field level response on behalf of the government in rural areas is by the nearest police station and the revenue functionary (patwari/patel/talati/karnam etc); in urban areas the response is articulated by agencies like the civic authorities, the fire brigade and the local police station. At present, panchayats do not have the capacity to react institutionally in any effective manner to such situations and it is the district administration, which retains the basic responsibility of handling crises situations with the Collector playing a pivotal role.3.12.3.2 The Indian Constitution has delineated specific roles for the Union and State Governments. However, the subject of disaster management does not find mention in any of the three lists in the Seventh Schedule of the Indian Constitution.3.12.3.3 Role of State Government: In India the basic responsibility to undertake rescue, relief and rehabilitation measures in the event of natural disasters rests with the State Governments. The entire structure of crisis administration in the State Governments had been oriented from the very beginning towards post disaster relief and rehabilitation. Most of the states have Relief Commissioners who are in charge of the relief and rehabilitation measures. The Relief Commissionerate is usually an adjunct of the Revenue Department whose main job is to administer land ownership, land revenue and tenurial conditions in rural areas. Relief Commissioners work under the Secretary of the Revenue Department. In some states, the Revenue Secretary is also the ex-officio Relief Commissioner. This has the advantage of providing a direct chain of command to the district Collectors and the Tehsildars who are the main field functionaries in the districts and sub-districts, the basic units of administration, but the focus on crisis prevention and mitigation or even of preparedness is missing in such a supervisory framework. A few states have switched over to a Disaster Management Department with the required linkages with the various development and regulatory departments concerned with prevention, mitigation and preparedness.3.12.3.4 Every state has a Crisis Management Committee under the chairpersonship of the Chief Secretary, consisting of secretaries in charge of concerned departments, which reviews crisis situations on a day-to-day basis at the time of crisis, coordinates the activities of all departments and provides decision support system to the district administration. At the ministers’ level, a Cabinet Committee on Natural Calamities under the chairpersonship of the Chief Minister takes stock of situations and is responsible for all important policy decisions.3.12.3.5 The District Magistrate/Collector has the responsibility for the overall management of disasters in the district. He has the authority to mobilize the response machinery and has been given financial powers to draw money under the provisions of the General Financial Rules/Treasury Codes. All departments of the State Government including the police, fire services, public works, irrigation etc. work in a coordinated manner under the leadership of the Collector during a disaster, except in metropolitan areas where the municipal body plays a major role. The District Collector also enjoys the authority to request for assistance from the Armed Forces if circumstances so demand. NGOs have also been effective in providing relief, rescue and rehabilitation in recent times.3.12.3.6 Role of Union Government: Although the State Government concerned has the primary responsibility for crisis management, the Union Government plays a key supportive role in terms of physical and financial resources and providing complementary measures such as early warning and co-ordination of efforts of all Union ministries, departments and organizations. At the apex level, a Cabinet Committee on Natural Calamities reviews theBox 3.7: Laws dealing with disaster in USA1950 Federal Disaster Relief Act (PL 81-875)1966 Disaster Relief Act of 1966 (PL 89-769)1968 National Flood Insurance Act (PL 90-448)1969 Disaster Relief Act of 1969 (PL 91-79)1970 Disaster Assistance Act of 1970 (PL 91-606)1973 Flood Disaster Protection Act (PL 93-234)1974 Disaster Relief Act of 1974 (PL 93-288)1977 Earthquake Hazards Reduction Act (PL 95-124)1979 Creation of Federal Emergency Management Agency1988 Robert T. Stafford Relief and Emergency Assistance Act1994 National Flood Insurance Reform Act (PL 103-325)2000 Disaster Mitigation Act of 2000 (PL 106-390)26127Crisis Management - From Despair to HopeIndia’s Key Hazards, Vulnerabilities and the Crisis Response Mechanismcrisis situations. A High Level Committee of Ministers under the chairmanship of Minister of Agriculture deals with the issue of financial support to be provided to the State Governments from the National Calamity Contingency Fund, if the funds available with the State Governments under Central Relief Fund are not adequate. Matters relating to nuclear, biological and chemical emergencies are looked after by the Cabinet Committee on Security.3.12.3.7 The Cabinet Secretary, as the highest executive officer, heads the National Crisis Management Committee (NCMC). Secretaries of ministries and departments concerned and heads of other organizations are members of NCMC, which reviews and monitors crisis situations on a regular basis and gives directions to the Crisis Management Group as deemed necessary. The NCMC can give directions to any ministry, department or organization for specific action needed for meeting the crisis situation.3.12.3.8 Till recently, the Department of Agriculture and Cooperation had the nodal responsibility for managing disasters. After the Gujarat earthquake in 2001, this responsibility has been shifted to the Ministry of Home Affairs. However, in view of the highly technical and specific nature of certain disaster events such as aviation disasters, rail accidents, chemical disasters and biological disasters etc; the ministries dealing with that particular subject have the nodal responsibility for handling that particular type of disaster, as shown in Table 3.3 .Table3.3: Nodal Ministries for Managing Different Types of DisastersTypes of Disasters /CrisesNodal MinistryNatural and Man made DisastersMinistry of Home AffairsDroughtsMinistry of AgricultureAir AccidentsMinistry of Civil AviationRailway AccidentsMinistry of RailwaysChemical DisastersMinistry of EnvironmentBiological DisastersMinistry of HealthNuclear AccidentsDepartment of Atomic Energy3.12.3.9 The Central Relief Commissioner in the Ministry of Home Affairs is the Chairman of the Crisis Management Group (CMG) consisting of nodal officers from various concerned ministries. The CMG’s functions are to review annual contingency plans formulated by various ministries, departments and organizations in their respective sectors, measuresrequired for dealing with a natural disaster, coordinate the activities of the Union Ministries and State Governments in relation to disaster preparedness and relief, and to obtain information from the nodal officers on all these issues. In the event of a disaster, the CMG meets frequently to review relief operations and extends all possible assistance required by the affected states to overcome the situation. The Resident Commissioner of the affected state is also associated with such meetings. The existing structure of crisis management is shown in Fig 3.2.Box 3.8: Timely Action Saves LivesOn June 26, 2005, there was a sudden breach in the artificial lake on river Parechu, in Tibet (China) which led to an unprecedented rise in the water level of river Satluj and caused flash floods in five districts of Himachal Pradesh. Due to a timely alert sounded by the ITBP post at Lepcha and prompt action initiated by the State Government and Government of India for evacuation of people residing on the bank of rivers Spiti and Satluj, not a single human life was lost. The flash floods, however, caused extensive damage to roads, bridges, agricultural crops, government & private properties and other infrastructure.(Source: Annual Report, Ministry of Home Affairs, Government of India, 2005-06)Government. The size of the corpus is determined with reference to the expenditure normally incurred by the state on relief and rehabilitation over the past ten years. In case the funds under CRF are not sufficient to meet the specific requirements, State Governments can seek assistance from the National Calamity Contingency Fund (NCCF) – a fund created at national government level. Both these funds, as the names suggest, are meant for relief and rehabilitation and do not cover either mitigation or reconstruction works, which have to be funded separately by the State or Union Government.3.12.3.11 Armed Forces: The Armed Forces, in view of their ability to organize action in adverse ground circumstances, their speed of operational response and also the resources and capabilities at their disposal play a major role in assisting the civil administration particularly in emergency support functions such as communications, search and rescue operations, health and medical facilities, transportation, power, food and civil supplies, public works and engineering, in the immediate aftermath of major disasters.3.12.3.12 Apart from natural disasters, certain other types of crises are dealt with through separate legislations or rules framed thereunder. For example, the Chemical Accidents (Emergency Planning, Preparedness, and Response) Rules, 1996 have been framed under3.12.3.10 Schemes for financing expenditure on relief in the wake of natural calamities are governed by the recommendations of the Finance Commission appointed by the Government of India every five years. Under the existing scheme, each state has a corpus of funds called Calamity Relief Fund (CRF) administered by a State Level Committee headed by the Chief Secretary of the State28129Crisis Management - From Despair to HopeIndia’s Key Hazards, Vulnerabilities and the Crisis Response MechanismFig. 3.2: Crisis management structure in the country (prior to enactment of theDisaster Management Act, 2005)the Environment Protection Act. Similar Rules have been framed under Atomic Energy Act. Most States Governments have passed Essential Services Maintenance Acts (ESMA) to ensure provision of essential services during the time of crisis. The Code of Criminal Procedure (Cr.P.C) still remains the most important Act to tackle crisis situations due to public order problems.3.12.4 High Powered Committee [HPC]3.12.4.1 A paradigm shift in the approach to crisis management from relief and rehabilitation to prevention and mitigation and towards a holistic and comprehensive framework, took place with the United Nations deciding to observe the 1990s as the International Decade of Natural Disaster Reduction (IDNDR). National Governments were expected to pay special attention to measures to deal with natural disasters in a manner designed to minimizetheir occurrence and to mitigate hardships if they do occur. The efforts took concrete shape in India in 1999 with the constitution of a High Powered Committee (HPC) on Disaster Management. The mandate of the HPC was to suggest institutional measures for effective management of both natural and man made disasters, in the country. The HPC submitted its final report in October 2001 outlining a vision to create a disaster-free India through adherence to the culture of preparedness, quick response, strategic thinking and prevention. The HPC came out with a large number of recommendations, dealing with the constitutional and legal framework, organizational structures and institutional mechanism in the overall disaster management system of the country.3.12.5 New Institutional Arrangements3.12.5.1 Following the Gujarat earthquake, the Government of India took important policy decisions/measures for revamping the disaster management system in the country. These are:?Disaster management with reference to rapid onset disasters was moved from the purview of the Ministry of Agriculture to the Ministry of Home Affairs. The Ministry of Agriculture retains the responsibility for droughts, pest attacks and hailstorms;?State Governments were advised to reorganize their Relief & Rehabilitation Department into a separate Disaster Management Department;?State Governments were further advised to constitute State Disaster Management Authority under the Chairmanship of State Chief Ministers and the District Disaster Management Committee under the Chairmanship of District Collectors;?A specialized force comprising eight battalions to be named as National Disaster Response Force to be constituted with state-of-the-art equipment and training to respond to various natural and man made disasters;?An advanced fail-proof disaster communication network would be set up through Emergency Operation Centres (EOC) at national, state and district levels;?The National Institute of Disaster Management was set up at Delhi for training, capacity building, research and documentation on different aspects of disaster management in the country;?Basics of disaster management to be introduced in school education, disaster resistant technologies to be introduced in engineering and architecture courses and emergency health management to be introduced in medical and nursing education;30231Crisis Management - From Despair to HopeIndia’s Key Hazards, Vulnerabilities and the Crisis Response Mechanism32?A community based disaster risk management programme to be launched in multi-hazard districts throughout the country.3.12.6 Unification of Crisis Management: The Disaster Management Act, 20053.12.6.1 While the post-Gujarat earthquake reform initiatives were still in their initial phase of implementation, a devastating tsunami hit many countries on the rim of the Indian Ocean including several states of our country. This experience brought home the necessity of further reforms in the system. Taking the institutional reform process further, the Union Government decided to formulate a comprehensive disaster management legislation, providing for a legal and institutional framework of crisis management at all levels in the country. The Disaster Management Bill was introduced in Parliament in May 2005 and finally enacted in December 2005. Sections 2 to 8, 10, 75, 77 and 79 of theFig 3.3: Unification of crisis management (as visualized in the Disaster Management Act, 2005)Act have been notified on 28th July, 2006. However the National Disaster Management Authority was constituted by an Executive Order dated 28th September, 2005. The salient features of the Act are given in Annexure-III.2133Legal and Institutional Framework4LEGAL AND INSTITUTIONAL FRAMEWORKsuch as terrorists. There are already various entries in the three lists, which deal with some aspect or other of disaster management. ‘Public order’ finds a place in the State List, as does Public Health. Entries 14 and 17 in the State List deal with Agriculture and Water respectively. Environment and Social Security are included in the Concurrent List. Atomic energy and Railways are part of the Union List. In addition, after the 73rd and 74th amendments all civic powers have been delegated to local bodies.4.1 Constitutional Provision - is there need for a separate entry?4.1.1 Under the Seventh Schedule of the Constitution, subjects that come under the legislative competence of the Union and State Governments are enumerated in the Union and the State Lists respectively. Subjects have also been identified for which both the Union and the States have concurrent legislative jurisdiction and these are included in the Concurrent List. As already noted, ‘Disaster Management’ as a subject is not mentioned in any of the three lists. A subject not specifically mentioned in any of these lists comes under the Residuary Powers of the Union under entry 97 of the Union List. According to one view, Parliament therefore has the competence to legislate on this subject. However, by practice and convention the primary responsibility for managing disasters rests with the State Governments. The Ministry of Agriculture made a plea to the National Commission to Review the Working of the Constitution (NCRCW) to recommend insertion of an entry on the subject in the Concurrent List. The High Powered Committee (HPC) also recommended that a conscious view needs to be taken to make an appropriate mention of the subject of disaster management in one of the lists. The NCRCW ultimately made the following recommendation;4.1.4 Due to the cross cutting nature of activities that constitute disaster management and the vertical and horizontal linkages required which involve coordination between the Union, State and local governments on the one hand and a host of government departments and agencies on the other; setting up of a broadly uniform institutional framework at all levels is of paramount importance. The legislative underpinning for such a framework would need to ensure congruence and coherence with regard to the division of labour and responsibilities among the agencies at the Union, State and other levels. This could best be achieved if the subject of Disaster Management is placed in the Concurrent List of the Constitution. Unlike in other cases of proposals for inclusion in the Concurrent List, State Governments may also welcome this, as this will also enable them to have legislation without ambiguity regarding the entry.4.1.5 Recommendation :a. A new entry, “Management of Disasters and Emergencies, natural or manmade”, may be included in List III (Concurrent List) of the Seventh Schedule of the Constitution.“Management of Disasters and Emergencies, natural or man-made be included in list three i.e. the concurrent list of the Seventh Schedule of the Indian Constitution”.4.2 Legal Framework4.1.2 Parliament has enacted the Disaster Management Act, 2005 by invoking entry 23 namely ‘Social security and social insurance, employment and unemployment’ in the Concurrent List even though all aspects of crisis management cannot be said to be covered by this entry. Similarly, some States have also passed laws governing disaster management. Before one examines the issue of where the subject should appropriately be included, it is necessary to analyze the activities that constitute ‘disaster management’ so as to ensure that these do not come into conflict with other entries in the three lists.4.2.1 Evolution of the Legal Framework4.2.1.1 Traditionally the district administration, under the instructions of and with the Union and State Governments, has been the focal point of disaster management activities and powers (formal and informal) have been vested in the Collectors. While there was no comprehensive law on the subject, laws and regulations pertaining to certain specific types of disaster situations did exist. These include:4.1.3 Disaster management encompasses all activities including preparedness, early warning systems, rescue, relief and rehabilitation. The term disaster includes natural calamities, health related disasters (epidemics), industrial disasters and disasters caused by hostile elements?The Factories Act, 1948 amended after the Bhopal tragedy to include the right to information; along with the EPA ,1986 which lays down rules for the protection of land, water and air; and the Manufacture, Storage and Transport of Hazardous Chemicals Rules,1989 and the Chemical Accident (Prevention and Preparedneess) Rules, 1996;3435Crisis Management - From Despair to Hope?The Atomic Energy Act combined with Rules notified under the Environment Protection act, 1986 (EPA) which provide for emergency response plans both on and off site for atomic accidents / disasters;?State Essential Services Maintenance Acts (ESMA) which govern incidents involving disruption of essential public services;?Various Regulations/Codes/Rules relating to different aspects of disaster management e.g. Coastal Zone Regulations, Building Codes, Fire Safety Rules etc;?State Public Health Acts;?The Code of Criminal Procedure, which deals with public nuisance;?The Army Act, which empowers civil administration to seek help of army during crisis; and?State laws dealing with public order and local governments.4.2.1.2 A comprehensive legislation on the subject was envisaged in 2001 when the HPC drafted a “National Calamity Management Bill”. This draft Bill aimed at ensuring efficiency and effective management of natural and other calamities and achieving greater coordination and responsiveness with respect to prevention and mitigation of disasters so as to provide better relief and rehabilitation of victims of disasters. Besides, HPC also drafted a Model State Disaster Management Bill.4.2.1.3 While the Central law was under consideration, the following state laws were passed: (i) The Bihar Disaster Management Act, 2004, (ii) Uttaranchal Disaster Mitigation, Management and Prevention Act, 2005, (iii) The Gujarat State Disaster Management Act, 2003 and the Uttar Pradesh Disaster Management Act, 2005. An analysis of the provisions of the state laws is given in Annexure-II. The Bihar Disaster Management Act is based on the model recommended by the HPC. The Uttaranchal Disaster Mitigation, Management and Prevention Act, 2005 contemplates constitution of a Disaster Mitigation and Management Center. This center would focus on disaster management, creating awareness, networking and information exchange, establishing and operationalising an Advance Warning System in the region etc. The Gujarat State Disaster Management Act is quite different. The definition of ‘disaster’ is wider than in the model proposed by HPC. The Gujarat Act also constitutes a State Disaster Management Authority, headed by the Chief Minister with state ministers and officers as its members. This Authority acts as the central planning, coordinating and monitoring body for disaster management. The Act does not constitute any body at the district level but envisages that the Collector would head the disasterLegal and Institutional Frameworkmanagement efforts. As stated earlier, Parliament passed the Disaster Management Act in 2005 to deal with all aspects of disaster management throughout the country.4.2.2 What should a law on crisis management provide?4.2.2.1 The experience from past disasters and the prospect of more disasters/crisis, demand a holistic and an agile system for dealing with crisis/disasters. This would require strengthening of the existing legal framework, removal of loopholes, wherever they exist, ensuring an effective coordination mechanism and an administrative structure with unity of command and well defined responsibilities at all levels.4.2.2.2 The traditionally used definition of the word ‘disaster’ and its association with natural calamities is limited in scope. With rapid economic development, man-made disasters pose equally grave threats to all life, property and environment. Moreover, man-made disasters are preventable and therefore what needs to be tackled is ‘crisis’ and not disaster. Every disaster is a crisis, but every crisis may not lead to a disaster. Focus should be on management of crises so that their degeneration into a disaster is prevented.4.2.2.3 The multidisciplinary nature of crisis/disaster management, its large canvass spreading from preparedness to rehabilitation and evaluation, and its widespread impact, which require resources to be drawn from different levels of government, means that a totally centralized or totally decentralized mechanism would be ineffective. It is best if certain functions of disaster management are centralized while others are decentralized down to the lowest level.4.2.2.4 Immediate rescue and relief should be the responsibility of the level of government closest to the affected population. This logically has to be the district administration and the local self-governments. The same argument also holds good for the rehabilitation efforts. The district administration is part of the State Government and the primary responsibility for managing any disaster is with the State Governments. The resources of states being limited they seek and get assistance from the Union Government. This arrangement of ‘bottom-up’ responsibilities regarding implementation is appropriate and has worked well in the past and should not be disturbed.4.2.2.5 On the other hand, disaster management planning requires wider perspective and expertise. Developments in science and technology should be used for mitigating the adverse impacts of disasters and have to be studied, researched and updated. Specialized manpower and equipment for dealing with disasters also needs to be readily available. A repository of best practices needs to be created so that these could be replicated, adapted, if necessary and used on future occasions. National and regional early warning systems need to be developed and deployed. Moreover, there is the need for implementation of standard capacity building362137Crisis Management - From Despair to Hopeand awareness generation programmes. These types of activities call for an agency to coordinate efforts at the state and the national levels.4.2.2.6 Thus, the legislation for disaster/crisis management needs to create agencies/ authorities at local/district/state and national levels. The responsibility and the authority assigned to each one of these have to be distinct. National level planning, research, analysis and adoption of best practices, development of standard operating procedures (national level), development of training and capacity building programmes, administration of early warning systems and formulating policy on crisis/disaster management are best entrusted to a national body. Local planning and the actual work of implementation are better left with State Governments, local governments and the district administration with support from the Union Government’s implementing agencies.4.2.2.7 Disaster/crisis management may require mobilization of resources and services. Such resources and services may have to be requisitioned including from individuals and private organizations. The law needs to empower authorities handling disasters to requisition such resources for specified periods and the issue of compensation should not be a hindrance in crisis management efforts.4.2.2.8 A warning about a looming disaster, received well in time, can avert huge loss of human lives. To ensure this, state-of-the-art early warning systems have to be meticulously designed and installed. But even with a high degree of sophistication, the human element is involved in the transmission process and any slippage due to carelessness could prove disastrous. Prompt transmission of information, as prescribed under standard operating procedures and instructions for transmission, should be made a statutory duty of each concerned functionary. Responsibilities of citizens should also be appropriately provided for in the law.4.2.2.9 Another lesson learnt from past disasters is that funds meant for disaster relief often tend to get misused as normal procedures are not followed because of urgency. While enforcing stringent procurement procedures may become a hurdle in the disaster management effort, the penalty for misutilization of funds meant for disaster relief should be stringent and could form part of the law itself.4.2.3 Analysis of the Disaster Management Act, 20054.2.3.1 The Disaster Management Act, 2005 defines disaster as natural or man made event that cause substantial loss to life, property and environment. The scope of this definition does not cover a variety of other crisis situations that may or may not culminate in a disaster. The Act concentrates very comprehensive powers and functions at the national level for dealing with disasters. Thus, the National Disaster Management Authority (NDMA) hasLegal and Institutional Frameworkthe responsibility for not only laying down policies, plans and guidelines, but also has executive functions for ensuring timely and effective response to disasters {Sections 6, 10(2)(m), 36f}. The National Executive Committee (NEC) which is to be set up under the NDMA would be chaired by the Secretary to the Government of India in charge of the Ministry or Department of the Union Government having administrative control of disaster management {Section 8(2)(a)}. This body has extensive powers and functions including laying down guidelines and giving directions to the concerned ministries or departments of the Government of India, State Governments and State Disaster Management Authorities regarding measures to be taken by them in response to any threatening disaster and also powers to require any department or agency of the government to make available to the national authority or state authorities, such men or material resources as are available with it. In other words, the NDMA as well as the National Executive Committee (NEC) have been given the role not just of planning, coordinating, monitoring and providing assistance during a disaster but also executive functions related to implementation of the emergency relief and disaster response.4.2.3.2 The Disaster Management Act envisages a unified structure of disaster management in the country; the integration of this institutional structure with the existing constitutional, legal and administrative framework of the country may, however, pose several problems. Under the Act, the NDMA and the NEC will not only approve the national plans and the plans of the respective union ministries/departments; they will also lay down guidelines for the state authorities, coordinate the enforcement and implementation of these policies and plans for disaster management and ensure timely response. All these functions traditionally have been performed by State Governments. What, in fact, is however needed is further empowerment and delegation to the front-end functionaries when it comes to implementation of disaster management efforts. Moreover, in any crisis situation, expeditious and appropriate response is the essence, and the field functionaries, the State Governments and the line departments and ministries of the Union Government being aware of the field situationBox: 4.1: The Role and Functions of a National DisasterManagement OrganisationThe main scope of a disaster management law; or a National Disaster Counter Measure Act is to establish a national agency/ organization for coordination of disaster management.The role of such an organization is to:?Provide a coherent approach to disaster management across all phases from preparedness and mitigation to response and recovery.?Provide a common framework?Allocate responsibilities clearly.?Provide a framework for coordinated response.The National Disaster Management Organisation (NDMO) is not intended to:?Duplicate normal government.?Act independently of government.?Seek to control other agencies.(Source: Presentation by AJ Rego, Director PDIR, Asian Disaster Preparedness Centre to the GOI-CII-UNDP Disaster Preparedness and Mitigation Summit. New Delhi, November 2002)3839Crisis Management - From Despair to HopeLegal and Institutional Framework4.2.3.5 Recommendations :The Disaster Management Act, 2005 (Central Act) needs to be amended to bring in the following features:a.Disaster/Crisis Management should continue to be the primary responsibility of the State Governments and the Union Government should play a supportive role.b.The Act should provide categorization of disasters (say, local, district, state or national level). This categorization along with intensity of each type of disaster will help in determining the level of authority primarily responsible for dealing with the disaster as well as the scale of response and relief detailed guidelines may be stipulated by the NDMA on this subject.c.The functions of the National Disaster Management Authority should be: to recommend policies, to lay down guidelines for preparation of different disaster management plans and standard operating procedures; to promote and organize vulnerability studies, research and evaluation; to advise on parameters of categorization and on declaration of national and state level disasters; to develop expertise and knowledge in the field of crisis/disaster management and disseminate to the field, to develop and organize training and capacity building programmes, to coordinate the early warning systems; to deploy specialized manpower and machinery in support of local/State Governments, where required; to advise on constitution and use of the Disaster Management Funds and; to give recommendations on all matters relating to crisis/disaster management to the government.d. The task of implementation of mitigation/prevention and response measures may be left to the State Governments and the district and local authorities with the line ministries/departments of Government of India, playing a supportive role.e.The law should cast a duty on every public functionary, to promptly inform the concerned authority about any crisis, if he/she feels that such authority does not have such information.f.The law should create a uniform structure at the apex level to handle all crises. Such a structure may be headed by the Prime Minister at the national level and the Chief Minister at the state level. At the administrative level241would be in the best position to provide timely and effective response, if they are fully authorized to do so.4.2.3.3 International practices also do not normally involve setting up centralized authorities with command and control functions to deal with disasters. For example, in the US, the Federal Emergency Management Agency (FEMA) is an agency that operates under the control of the Department of Home Land Security for the purpose of overseeing federal government assistance in domestic disaster preparation, training of first responders and coordination of the government’s disaster response efforts. Similarly, in Japan, although legislation provides an overall structure for planning and response, local governments have the primary responsibility of disaster management. Bangladesh, on the other hand, with its history of recurrent floods and cyclones, has adopted a more unitary model, setting up a Ministry of Disaster Management and Relief (MDMR) at the national level under which a Directorate of Relief and Rehabilitation (DRR) operates relief activities for distribution to the remote field levels. (It may, however,Box 4.2: Evolution of the Crisis/Disaster Management System in the United StatesThe 1960s and early 1970s brought massive disasters requiring major federal response and recovery operations by the Federal Disaster Assistance Administration, established within the Department of Housing and Urban Development. Hurricane Carla struck in 1962, hurricane Betsy in 1965, hurricane Camille in 1969, and hurricane Agnes in 1972. The San Fernando earthquake rocked Southern California in 1971, and the Alaskan earthquake hit in 1964. To respond to national concern regarding these events, the Congress passed the 1974 Disaster Relief Act that established the process of Presidential disaster declarations.However, emergency and disaster activities were still fragmented. Many parallel programs and policies existed at the state and local level, compounding the complexity of federal disaster relief efforts. In 1979, President Carter issued an executive order that merged many of the separate disaster-related responsibilities into a new, independent Federal Emergency Management Agency (FEMA) Among other agencies, FEMA absorbed the Federal Insurance Administration, the National Fire Prevention and Control Administration, the National Weather Service Community Preparedness Program, the Federal Preparedness Agency of the General Services Administration, and the Federal Disaster Assistance Administration activities from HUD. Civil defense responsibilities were also transferred to the new agency from the Defense Department’s Defense Civil Preparedness Agency.FEMA led the federal response to hurricane Andrew, which slammed into and leveled much of South Florida in August 1992. Based on recommendations following the response to hurricane Andrew FEMA was elevated to a cabinet level agency whose director reported to the President. The Homeland Security Act of 2002,5 which established DHS, created new requirements for emergency preparedness and response and placed FEMA within DHS.(Extracted from; Statement of William O. Jenkins, Jr., Director Homeland Security and Justice Issues. Testimony before the Committee on Homeland Security, U.S. House of Representatives; May 9, 2006)be noted that Bangladesh has a unitary form of government).4.2.3.4 The Commission has considered the issues carefully from an administrative angle and is of the view that the Disaster Management Act, 2005 requires substantial amendments to ensure that it provides a coherent and practical framework for dealing with disasters at the Union, State, District and local levels.40Crisis Management - From Despair to HopeLegal and Institutional Frameworkthe structure is appropriately headed by the Cabinet Secretary and the Chief Secretary respectively.g. The law should make provisions for stringent punishment for misutilization of funds meant for crisis/disaster management.h. The role of the local governments should be brought to the forefront for crisis/disaster management.i.The NEC as stipulated under the Disaster Management Act need not beconstituted, and the NCMC should continue to be the apex coordination body. At the state level, the existing coordination mechanism under the Chief Secretary should continue (refer para 4.3.3).j.Since all sections of the Act have not been notified, it is suggested thatthe above amendments be carried out without further delay. Meanwhile, except for those sections for which amendments are suggested, the others can be notified straightway so that the law can be brought into effect.4.3 Institutional Framework4.3.1 Institutional Framework at Apex Level4.3.1.1 HPC had observed that disaster/crises management needs full political commitment at all levels of national, state and local government as cataclysmic events sometimes assume the nature of national crisis involving the mobilization of practically the entire government at the highest level25. The HPC had recommended that an institutional mechanism needs to be created at the highest level by setting a Cabinet Committee on Disaster Management that would ensure continued and sustained focus on this area at the highest level of the government. The HPC also recommended that the All Party National Committee under the Chairmanship of the Prime Minister and the Working Group set up under it, need to be institutionalized as permanent standing bodies as the former would help generate the necessary political will, consensus and support, while the latter, that is the Working Group, being a body of experts, will evolve appropriate strategies for implementation of broad policy guidelines.4.3.1.2 The Commission broadly agrees with the suggestions of the HPC that a Cabinet Committee on Crisis Management be set up and notes that such a Committee has already been set up. However, with the setting up of the National Disaster Management Authority, on the lines proposed, the Working Group as recommended by the HPC may not be required.4.3.2 Is There a Case for a Separate Ministry/Department of Disaster/Crisis Management?4.3.2.1 The HPC recommended the creation of a separate ministry of disaster management for sustained and focused efforts in the area of disaster preparedness, mitigation and management. It was envisaged that this ministry would deal with both man-made and natural disasters as a “nodal ministry’. The functions expected of the ministry were networking and coordination of national resources while the concerned ‘functional’ ministries would continue to discharge their responsibilities and functions in accordance with their respective disaster management plans and also work in close cooperation with the nodal ministry. A separate department of disaster management and mitigation was also mooted at the state level. Uttaranchal is the only state, which has a separate department of disaster management. Bangladesh is the only South Asian country to have set up a separate ministry for disaster management and relief26.4.3.2.2 The Commission feels that given the multi-disciplinary nature of activities in crisis management, creation of a separate ministry is likely to lead to conflict and delays rather than coordination. For planning, research, capacity building and coordination of national resources; such a coordination mechanism is now available with the formation of the NDMA. And for the purposes of implementation, a coordination mechanism headed by the Cabinet Secretary would be more effective. Therefore, the Commission is not in favour of creation of a separate ministry/department at the national or the state level.4.3.3 Coordination at the Apex Operational Level4.3.3.1 The National Crisis Management Committee (NCMC) headed by the Cabinet Secretary coordinates and guides the work of different departments of Government of India in times of crisis. The NEC envisaged under the Disaster Management Act, 2005 would be duplicating the role of NCMC to a great extent. The NCMC has inherent advantages of ensuring quick decisions and immediate implementation. If parallel bodies are created the possibility of the pre-existing and newly formed committees trespassing on each other and creating confusion and blurring of responsibilities during crisis situations cannot be ruled out. Moreover, there is need to shift the focus from managing disasters to managing crises and the NEC would not be in position to handle all types of crises. This problem would be further compounded in case of multiple crises or disasters. Unity of command and quick decision making are paramount in any crisis management situation. The Commission is therefore of the view that NEC, as envisaged under the Disaster Management Act need not be constituted and that the existing coordination mechanism under the Cabinet Secretary should continue. Similarly, at the state level the existing coordination mechanism under the Chief Secretary should be retained.4.3.3.2 The Act also envisages establishment of a National Disaster Response Force (NDRF), a uniformed and highly trained quick response agency to respond to the needs of search and42214325Report of the High Powered Committee on Disaster Management, 2001.26Duryog Nivaran. South Asian Network for Disaster Risk Reduction; Management - From Despair to HopeLegal and Institutional Frameworkbodies to provide for a well defined role to the municipal bodies and panchayat raj institutions.rescue and to provide, on the spot, life-saving assistance to the victims. To a large extent, this role has been admirably filled by our Armed Forces, in particular, the Army. The lessons learnt from the devastating hurricane Katrina in the US is that extraordinarily severe disasters could overwhelm specialized agencies and that in such situations the Armed Forces remain the ‘measure of last resort’. It is imperative that even after the NDRF becomes fully functional, the ‘enabling role’ of the Armed Forces in assisting the civil authorities be retained and the Armed Forces continue to maintain capabilities in specialized search and rescue operations.4.3.3.3 Recommendations :a.There is no need for a separate ministry/department of disastermanagement at the national or the state level.b. The NEC as stipulated under the Disaster Management Act, 2005 need not be constituted, and the NCMC can continue to be the apex coordination body. At the state level, the existing coordination mechanism under the Chief Secretary may continue.c. Notwithstanding the establishment of NDRF, the role of the Armed Forces, particularly the Army, in coming to the aid of victims of disasters should be retained and the special capabilities acquired by the Armed Forces in search and rescue and on-the spot medical attention need to be maintained.4.3.4 Role of Local Self-Governments4.3.4.1 Local self-governments, both rural and urban, have emerged as important tiers of governance, after the 73rd and 74th Amendments to the Constitution. For the people, they are also the nearest units of administration and are among the first responders to any crisis besides being closely knit with the communities. These units can thus play an important role in crisis management under the overall leadership of the District Administration. With the enactment of a central legislation on the subject and the possibility that more state level legislations will be forthcoming, State Governments would need to examine if enabling, provisions need to be introduced in disaster management legislations or even the municipal legislations to bring greater salience to the role of the municipal bodies in responding to disasters.4.3.5 Crisis Management Set Up for Metropolitan Cities4.3.5.1 In major cities (say, with population exceeding 2.5 million), Municipal Corporations have a large administrative system including departments like engineering, public health and revenue, and sometimes fire services. These should provide a good mechanism for coordinated response in case of any crisis/disaster. Moreover, in cities where there is a Police Commissioner system, the District Collector does not have as much a role as in other districts. In such situations, District DisasterManagement Authority prescribed by the Disaster Management Act, 2005 may not be very suitable. In metropolitan cities it is advisable to make the urban metropolitan government directly responsible for disaster management.4.3.5.2 Recommendation :a.In larger cities (say, with population exceeding 2.5 million) the Mayor,assisted by the Commissioner of the Municipal Corporation and the Police Commissioner should be directly responsible for Crisis Management.4.3.6 Bringing “Water” at the Centre Stage of Policy Domain4.3.6.1 Two of the major types of disasters i.e. floods and droughts are primarily water related. Adoption of both short and long term measures would remain sub-optimal unless larger issues like the National Water Budget and a policy regime that takes cognizance of the mismatch between supply and demand are properly addressed. A major impediment to making any progress in this direction is the ‘segmented policy attention’ from a number of ministries/ departments. Without being exhaustive, attention may be invited to the following different policy platforms:?Ministry of Water Resources; Irrigation and Flood Control, Inter-State Basin Issues etc.4.3.4.2 Recommendation :a.State Governments may examine the need to incorporate provisions inthe state disaster management law and also the state laws governing local44Box 4.3: Mayor of New York gets Time Personof the Year AwardSixteen hours had passed since the Twin Towers crumbled and fell, and people kept telling Rudy Giuliani to get some rest. The indomitable mayor of New York City had spent the day and night holding his town together. He arrived at the World Trade Center just after the second plane hit, watched human beings drop from the sky and - when the south tower imploded - nearly got trapped inside his makeshift command center near the site. Then he led a battered platoon of city officials, reporters and civilians north through the blizzard of ash and smoke, and a detective jimmied open the door to a firehouse so the mayor could revive his government there. Giuliani took to the airwaves to calm and reassure his people, made a few hundred rapid-fire decisions about the security and rescue operations, toured hospitals to comfort the families of the missing and made four more visits to the apocalyptic attack scene.(Source- )2145Crisis Management - From Despair to HopeLegal and Institutional Framework?Department of Drinking Water Supply; Rural Water Supply.?Ministry of Urban Development and Poverty Alleviation; Urban Water Supply.?Ministry of Environment and Forests; Lakes, control of desertification/aridity.?Ministry of Agriculture; Watershed Development/Droughts.?Ministry of Rural Development; Water conservation in rural areas.?Ministry of Science and Technology; Hydrology, Hydrogeology etc.4.3.6.2 The long term interests of the country, including drought related concerns, will be better addressed if all the policy aspects and schemes with water, water conservation and improving water availability as their primary focus are brought on a single policy platform. This aspect needs to be considered along with other issues concerning ‘machinery of the central government’. It may be added here that while a National Water Policy encompassing diverse policy concerns was framed in 2002 with the Ministry of Water Resources as the ‘nodal point’, recognition of ‘policy diversities’ has not resulted in the emergence of a road map for integration of responsibilities.4.3.6.3 The National Commission for Integrated Water Resources Development Plan-1999, examined the issue of institutional set up at the state and national levels. That Commission stated as follows about the structure at the state level.The dominant institutional structure of governments in India is departmental and that is true of the water sector also. In that structure, there is division of responsibilities among departments, both in the Ministry (secretariat) and at the implementing levels (Head of the Department and his vertical organization down to the field level) - No department is in charge of or can command services of all components of work that are essential for achieving results. Since the number of departments has increased, there is need for time-consuming consultations. While there are constant inter-departmental references and meetings, there is a weak coordination and lack of a holistic approach. The negative effects of departmental structure are aggravated by the lack of internal delegation of decision-making. The head of the department and organization for research, education, training and survey and data collection - which should have enough autonomy in their working, function as subordinate offices and have to seek the Ministry’s orders and approvals on most matters. Micro-management and not achievement of results is the main result. The basic constraints in a departmental structure are compounded in the case of ‘Water’, because many departments deal with different aspects of water.Since the raison de’etre of departmental officialdom is to serve farmers, the irrigation bureaucracymust understand and appreciate the socio-economic dynamics of human interaction. The pressingneeds of integrated decision-making require an organizational restructuring to a more holistic management orientation involving a multidisciplinary interaction of diverse expertise covering the full range of water management skills to achieve the goals. The irrigation departments may be restructured from a hierarchical to a functional orientation.4.3.6.4 Similarly, it emphasized the need for an integrated approach at the national level also. It stated:The Ministry of Water Resources was concerned, from its earlier days as Ministry of Irrigation and Power, mainly with ‘irrigation’ aspects of water resources. Its current mandate in the Allocation of Business includes the following general clause, namely:‘Development, conservation and management of water as a national resource; overall national perspective of water planning and coordination in relation to diverse use of water’.Water supply – urban and rural, soil conservation and watershed development, environment, water quality etc. are dealt with by other ministries/departments, The policies and programmes of the one impinge on the other. Since water has diverse uses, the entire subject cannot be brought under one ministry and as stated above, what is essential is to ensure coordination. For this purpose, the ministry (secretariat) and more so, its attached office (head of the department) should have multi-disciplinary capability.The challenges of integrated water development and management can be fixed only if the apex institution at the national level is suitably equipped for it and has the necessary multi-disciplinary capacity. The status of an attached office, which is in practice subordinate to the Ministry and has little autonomy in functioning, is inappropriate for achieving this. We recommend that the CWC should be restructured into a statutory high-powered inter-disciplinary Commission, with maximum autonomy, in order to deal with policy and reforms, centre-state and inter-state issues, planning and project finalization, international aspects other than those that have to be retained with the ministry; legal economic and financial issues, water productivity, conservation and management, environmental aspects and rehabilitation, people’s participation and communication, coordination and facilitation of inter-disciplinary research, HRD and training, and a National Information/Data System.4.3.7 Essential ‘Policy Integration’ between Long and Short Term Measures to Achieve Disaster Avoidance4.3.7.1 While a number of Centrally Sponsored Schemes have objectives connected directly or indirectly, with drought avoidance, the two major interventions in this sphere are the Drought Prone Areas Programme (DPAP) and the Desert Development Programme (DDP).462147Crisis Management - From Despair to HopeLegal and Institutional FrameworkThe thrust of these schemes is to ‘treat’ land and vegetation in selected areas in a manner that the ‘treated areas’ become less vulnerable to ill effects associated with high drought vulnerability and aridity. These schemes are handled by the Department of Land Resources (DoLR) in the Ministry of Rural Development. DoLR is also entrusted with another issue of crucial significance to agriculture, namely, Land Reforms. It is learnt that there is a proposal under active consideration for forming a National Rainfed Areas Authority. As already mentioned, for droughts, management of the chronic malady and the crisis are best dealt with in a holistic manner in the same Ministry.4.3.7.2 The Commission would like to only underscore these two major issues (4.3.6 and 4.3.7) in this Report. Formulation of suitable recommendations on the subject would be dealt with in the Report on the organizational structure of the Government of India.4.3.8 Creation of Legal and Institutional Framework for Managing Floods in Inter-State Rivers4.3.8.1 This year’s (2006) unprecedented floods in many states have highlighted the need for coordinated release of waters from reservoirs in the case of inter-state rivers. Timely information of storage levels and inflows is not published and there is also the tendency to retain water in the reservoirs until the levels reached are considered dangerous. Sudden release of water leads to large scale flooding of downstream regions. The National Commission for Integrated Development Plan for Water Resources (1999) had recommended the constitution of inter-state river basin authorities. A beginning should be made at least for the purpose collection of data, timely release of such data and working out of agreed releases from reservoirs on reaching certain levels of storage. Legislation needs to be enacted urgently by Parliament using the power under Entry 56 of the Union List dealing with inter-state rivers.4.3.8.2 Recommendation:a. Using powers under Entry 56 in the Union List, a Law may be enacted to set up mechanisms for collection of data, managing flow in rivers and release of water from reservoirs, so as to prevent disasters, with interstate ramifications.4.3.9 Empowering the Relief Commissioners/Disaster Management Departments to Effectively Discharge Disaster Related Responsibilities4.3.9.1 The state level nodal points, by whatever names known, have to discharge onerous responsibilities of coordination and supervision of disaster relief operations. Such duties are more demanding in case of droughts due to the much longer duration of the phenomenonand involvement of more governmental agencies. Keen observers of the scene have generally held the view that there needs to be a standing, though not necessarily permanent arrangement, to enable the nodal points to discharge the heavy responsibilities effectively during crisis. This responsibility encompasses many spheres - damage assessments, planning of relief operations, sectoral arrangements, inter-sectoral cooperation, distribution of relief and monitoring activities with communication of reports and returns. Added to this is the daunting task of rendering accounts. Clearly, therefore, a strengthening of the nodal point and establishment of an executing-coordinating agency is imperative. This could be achieved by secondment of officers from related departments to the State Disaster Management Authorities during a crisis. All these officers should work under the leadership of the Disaster Management Department/Authority. An added advantage of this arrangement will be that over a period of time departmental representatives will develop expertise in disaster management. This should help address the long term need for a dedicated cadre of disaster managers.4.3.9.2 Recommendation:a. The State Disaster Management organisations need to be strengthened for dealing with crises. This could be achieved in the following manner:(i) A framework should be in readiness to be put in place immediately during crisis or on fulfillment of some pre-defined scenarios – the ‘trigger mechanism’ needs to be well defined to ensure that the ‘framework’ is put in active operation instantaneously.(ii) The ‘framework’ may consist of officers (designated by name) drawn from Revenue, Police, Agriculture, Animal Husbandry, Public Health Engineering, Water Resources, Women & Child Development, Welfare, Public Works, Highways, Irrigation, Health, and Treasury & Accounts Departments. The designated officers must undergo a week’s orientation every year, though they may continue to discharge their normal departmental responsibilities except when seconded to the nodal point in the manner suggested above.(iii) The designated officers will work as a cohesive integrated team under one roof on whole-time basis during crisis situations, under the leadership of the nodal officer and be responsible entirely for the functioning of their department insofar as it relates to drought/ disaster management.482149Crisis Management - From Despair to HopeLegal and Institutional Framework(iv) The role and responsibility of each department needs to be specifically identified and defined on the lines the Ministry of Agriculture has specified the responsibilities of various Union Government agencies during severe droughts.(v) The designated departmental officer should be delegated powers and responsibilities defined in advance and will deal with other departmental functionaries directly.4.3.10 Institutional Support of Science and Technology Institutions for Disaster Management4.3.10.1 Disaster management depends heavily upon the inputs from various science and technology institutions. Indeed, major improvements in disaster management efforts may be attributed to developments in science and technology. As crisis management is multidisciplinary in nature, the relevant research is carried out in several sectoral Research and Development organizations.4.3.10.2 Towards strengthening the national response mechanisms, the Department of Space (DOS) in the 10th Five Year Plan launched a Disaster Management Support (DMS) programme. Using synergistically space and airborne systems in conjunction with the conventional technologies, the programme has been providing space enabled products and services on a reliable and timely basis for effective disaster management. The DMS is proposed to be considerably expanded during the Eleventh Plan. Other Science and Technology Departments have also drawn up similar major proposals. The organizations are working through mutual consultations, but it is advisable to provide a formal common platform to achieve synergy.4.3.10.3 Recommendation:a. The National Disaster Management Authority, assisted by NIDM, may facilitate a common platform between the Science and Technology organizations and the users of the relevant technologies. Such mechanisms may be operationalised both at the Union and State levels.4.3.11 Strengthening of National Institute of Disaster Management (NIDM))4.3.11.1 The National Institute of Disaster Management (NIDM) is a premier national organization working for human resource development at national level in the area of disaster mitigation and management. It is an autonomous body under the Ministry of Home Affairs and its objectives are: (i) to undertake quality research, (ii) to work as a national resource centre, (iii) to professionalise disaster management, (iv) to promote training, (v) to build partnerships withstakeholders and other institutions and (vi) to link learning and action. Certain steps are necessary to enable the institution to meet the expectations with which it was established.4.3.11.2 Recommendation:(a) NIDM may continue as an autonomous body and function as the apex professional institution in disaster management. In addition to research and studies, the institution needs to engage itself in documenting and disseminating global and national best practices and in developing planning, training and evaluation methodologies.4.3.12 Professionalization of Disaster Management4.3.12.1 Institutional development for disaster management in the country has clearly suffered on account of paucity of professionally qualified personnel. While civil servants and other senior personnel in organizations like the police, armed forces and municipal bodies have provided a leadership role and their leadership will continue to be required, it is time that special attention is paid to the long felt need to professionalize disaster management in the country.4.3.12.2 The ‘best practices’ in disaster management are the strategies and methods perfected by several developed countries and India can take advantage from exposure to these practices. It is, therefore, desirable that the possibility of bilateral agreements with foreign governments for exchange of experiences and learning from their documentation and research efforts be fully explored.4.3.12.3 Recommendations:(a) ‘Disaster Management’ as a body of knowledge should be introduced as a subject in Management and Public Administration. The University Grants Commission may initiate the process to see how best this can be implemented in selected universities.(b) The possibility of bilateral agreements with foreign governments and international institutions dealing with different aspects of disaster management, for exchange of experiences and learning from their documentation and research efforts may be explored.50251Risk Reductiona.Disaster management to be professionalized.5RISK REDUCTIONBox 5.1: Management of Urban Floods: Case Study of Mumbai Floods 2005b. Risk management to be brought to the centre stage in all disaster mitigation plans.Lessons:5.1 Reducing Disaster Risk5.1.1 As explained in the previous chapter, disaster risk is a consequence of hazard and vulnerability. Disaster risk can be reduced by forecasting occurrence of hazards as accurately as possible and well in time, and preparing in advance for their onset and even manipulating those natural hazards, which lend themselves to manipulation. It can also be brought down by taking measures to reduce vulnerability. In this chapter, the issues involved in risk reduction are analyzed and recommendations made. The underlying principles apply to all types of crises/disasters. However, some crises/disasters have very specific features which are also dealt with in this chapter. The chapter has been structured around the different components of risk reduction, described in the following paras.271. The limitations of the weather prediction and early warning system were exposed.2. Response of Government agencies was quick. Army was deployed within 12 hours of heavy rainfall on the first day i.e. 27th July, 2005.3. Declaration of holidays on 27th and 28th July, 2005 reduced distress.c.All efforts for disastermanagement to be based on hazard and vulnerability analysis.d. Communities and local governments to be made aware of the hazards and the vulnerabilities.5.2 Enunciating a Policy Towards Crisis Management Which Emphasizes Risk Reduction5.2.1. The enactment of laws and the setting up of national, state and district level authorities is an acknowledgement of the fact that disaster management is an integral part of administration. The preparation of well considered disaster management plans with preventive and risk management measures and their implementation will be an important component of the work of these bodies.e. Communities and local governments to be involved in formulating disaster management plans.4. Civil society responded in a big way.5. Massive immunization and effective mobilization of health services prevented major epidemic.6. While unprecedented rainfall was the main reason for the Mumbai flood in 2005, major contributing factors were unplanned urban development in complete disregard of the delicate environment and ecology of the area, such as:?900 green plots were de-reserved to make way for real estate developments.?730 acres of mangrove wetland filled in Mahim creek for the development of Bandra-Kurla complex.?Western Expressway was widened despite objections from BMC thereby seriously compromising the drainage system.?Course of Mithi river diverted for expansion of airport runway.?Transferable Development Right was allowed indiscriminately without consideration of carrying capacity of the area.7. The drainage system was clogged by solid wastes.5.2.2 The NDMA has been mandated to lay down policies, plans and guidelines for disaster management {Section 6(1) of the Disaster Management Act, 2005}. The Commission is of the view that a national policy should reflect the paradigm shift in disaster management from a short term to a long term perspective, from relief and rehabilitation to mitigation and risk reduction, and from a government led approach to innovative partnerships involving the community, civil society, corporate bodies and with a focus on women and children who often bear the brunt of most disasters.8. The Disaster Management Plan was not updated.9. Community was not involved in the planning process. (Source: National Institute of Disaster Management)f. The primary responsibility for disaster management to be that of the State Government, with the Union Government playing a supportive role.g.Effective implementation of land use laws, building byelaws, safety lawsand environmental laws.5.2.3 Recommendations: There is need to have a National Policy on Disaster Management. The policy must address all issues not included in legislations and may, in particular include the following:525327This is a modified version of the framework proposed in Living with Risk, A global review of disaster reduction initiatives, 2004 version. (Inter-Agency Secretariat of the International Strategy for Disaster Reduction)h. Setting up a framework to coordinate the responses from different sections like donors, voluntary organisations, corporate bodies etc.i.Special needs of women, children, elderly and physically challenged persons to be addressed.Crisis Management - From Despair to Hope5.3 Assessment of Risk - Hazard and Vulnerability Analysis5.3.1 The first step in planning for mitigation measures for any crisis in an area is an understanding of the potential hazards in that area. Closely linked with this is assessing the vulnerability of society to such hazards. The operational level at which disaster management plans are prepared, is the district level. But it has been noticed that these plans are usually not based on proper hazard and vulnerability analysis of the district. Hazard analysis is a multi-disciplinary task and requires inputs from different specialized organizations. Similarly, vulnerability analysis also requires study of social, cultural, economic and political aspects of the local communities.5.3.2 The entire landmass of India has been mapped for the three natural hazards, viz. earthquake, cyclone (windstorm) and flood in a scale of 1:2.5 million using the Survey of India maps of the same scale as the base map. This map was published as Vulnerability Atlas of India in 1998. This was followed up by preparing Vulnerability Atlases for each state in the same scale covering these hazards. The census data of existing housing types were used to assess the vulnerability of structures and to carry out district-wise risk analysis of housing units. This atlas, which offers a useful guide to development planners, decision makers, professionals and householders for assessing the risk to the shelters in a particular area, is currently under revision, similarly, the Building Materials and Technology Promotion Concil (BMPTC) has prepared the Landslide hazard zonation atlas of India.5.3.3 Based on the available data on epicentres and years of occurrence of earthquakes (>5.0 intensity) as per the IMD catalogue of earthquakes, and expected maximum intensity of earthquake related seismo-tectonic features in different parts of the country (on the basis of studies conducted by the Geological Survey of India and the Department of Earthquake Engineering of IIT Roorkee), a seismic zone map of India has been standardized. This map divides the entire country into four seismic zones, II to V, as shown in Table 5.1 :Table 5.1: Classification of States according to Seismic ZonesSeismic ZoneRisk ZoneIntensityStatesMSK28R. Scale29VVery High Damage Risk ZoneIX8+Entire North East and parts of Jammu & Kashmir, HP, Uttaranchal, Gujarat, Bihar and Andaman & Nicobar IslandsRisk ReductionSeismic ZoneRisk ZoneIntensityStatesMSKR. ScaleIVHigh Damage Risk ZoneVIII7 - 7.9Parts of Jammu & Kashmir, HP, Punjab, Haryana,Uttaranchal, UP, Bihar, Jharkhand, West Bengal, Gujarat and Maharashtra.IIIModerate Damage Risk ZoneVII5 - 6.9Parts of Punjab, Haryana, UP, Bihar, Jharkhand, West Bengal, Orissa, MP, Chhattisgarh, Rajasthan, Gujarat and Maharashtra, AP, TN, Karnataka, Kerala and Lakshadweep.IILow Damage Risk ZoneVI- 4.9Parts of Rajasthan, MP, Chhattisgarh, Jharkhand, Orissa, Maharashtra, AP, TN, Karnataka and Kerala.5.3.4 Thirty-five major towns with population of more than half a million each are located in seismic zones III, IV and V. The total population of these towns is 100 million. Each of these towns has the potential risk of seismic damages to life and property.5.3.5 The seismic zone based categorization of the entire country on 1:1.25 million scale is a good indication of the seismic hazards of the states and districts, but is inadequate for undertaking seismic mitigation activities at the sub-district or city level. This requires advanced micro-zonation maps in 1:1000 scale, based on local geological, soil and ground water surveys. The preparation of such maps was taken up on a pilot basis for the selected cities of Delhi, Guwahati and Jabalpur, but none of the studies has been completed with common standards and protocols that can be accepted as the scientific basis for seismic designing of new buildings and retrofitting of old buildings. In the absence of such maps, broad macro-level maps are being used for regulating building design, which may not always be ideal particularly for high-rise structures which have come up in metro cities. Priority needs to be given to seismic micro-zonation of vulnerable major cities and urban centres, with topmost priority being given to cities with population of more than one million, along with detailed assessment of buildings and infrastructure.5.3.6 It is also possible to use the Geographical Information System (GIS) tools to integrate various spatial data such as topography, hydrology, land use, land cover, settlement pattern, built up structures etc and non-spatial data such as demography, socio-economic conditions and infrastructure like road, rail network, communication system, hospital etc. on a common platform for developing a sound information base for crisis management. This can be further integrated with satellite and aerospace data and Geographical Positioning System (GPS) for real time monitoring of crisis situation and for scientific assessment of damages. This should be taken up as a Plan scheme during the Eleventh Five Year Plan bringing all the scientific, technological and research organizations such as NRSA, ISRO, NIC, GSI, NIDM and other institutions together on a common platform for this purpose. Care has to be taken to ensure545528MSK: Medvedev-Sponheuer-Karnik scale of seismic intensity {Degree I (Imperceptible) to Degree XII (Very catastrophic)} 29R scale: Richter scaleCrisis Management - From Despair to Hopethat these efforts are able to generate hazard maps, which can be used as a base for preparing operational plans.5.3.7 However, till such time that the GIS based hazard maps become operational, conventional maps will have to be used for hazard analysis. A proper vulnerability analysis would require in-depth knowledge about the conditions of people in the hazard prone zone which is only possible with full community participation. These principles would apply to all types of natural disasters, including industrial disasters.Risk Reduction5.4 Generating Awareness about Risk5.4.1 The basic purpose of carrying out risk analysis of an area is to use it as a tool to prepare for disaster mitigation. The goal is to bring about attitudinal and behavioral change in the communities by wide dissemination of the vulnerability of a particular area or community. Such an awareness campaign should be treated as a social marketing effort which should specifically target different sections of the community. The role of local self-governments would be particularly important in such efforts.5.3.8 Recommendations:a.Hazard and vulnerability analyses should be made an essential component of all crisis/disaster mitigation plans.b. Priority should be given to seismic micro-zonation of vulnerable major cities, hazard prone areas, and urban agglomerations in a scale of 1:1000 in Zones V and IV, with topmost priority being given to cities with population of more than one million.c.Geographical Information System tools should be used to integrate spatial data such as topography, hydrology, land use, land cover, settlement pattern and built structure as well as non-spatial data such as demography, socio-economic conditions and infrastructure on a common platform. This should be integrated with satellite and aerospace data as well as data from Geographical Positioning Systems for real time monitoring of crisis situations and for scientific assessment of damages.d.Scientific, technological and research organizations such as NRSA, ISRO, NIC, GSI and NIDM should be brought on a common platform by NDMA for developing a sound information base for crisis management. This exercise should generate base hazard maps for district and sub-district levels and should be completed by the end of Eleventh Plan. Till such time the GIS based hazard maps are prepared, the conventional maps have to be used. These maps should form the basis for hazard analysis.e.A detailed vulnerability analysis should be carried out in all hazard prone areas. Such an analysis would prioritize the areas in order of vulnerability; it should also highlight the vulnerability of different sections of society and infrastructure.565.4.2 The mass media plays a very important role in spreading awareness about disasters. Immediately after a major disaster in any part of the world, the curiosity and apprehension among the communities about their own risk is at its maximum. This is an opportune time to carry out public awareness campaigns and use media to focus on generating awareness about the risk the community is exposed to. This could best be achieved through a healthy partnership between the media and the disaster management machinery.5.4.3 An important input in such awareness generation programmes, could be the lessons that have been learnt from disasters in the past or from disasters in other areas. For this purpose, the details of all such disasters need to be properly documented and kept in the public domain. The District Disaster Management Authorities, the State Disaster Management Authorities and the NDMA should have these details along with the lessons learnt, on their respective web-sites.Box 5.2: Flood Risk Reduction in ChinaThe reclamation and use of lakes, flood plains and slope land in up-stream areas had reduced the storage/discharge capacity of floodwater in China. The flood control plans were difficult to put into practice and the conflicts between the local interest and overall river basin management led to inefficient flood operation during the flood periods.Appropriate policies including economic ones were not emphasized in flood management before the 1998 large flood event. Local governments and people were often reluctant to follow the planned activities in flood management. China has now put in place steps for integrated water resources management and flood management; the relevant terms include:?Water development plans should be formulated on the basis of integration of all the factors emphasizing on multipurpose use and the coordination of the water use in livelihood, development and environment;?Water resources development programs should be integrated into the national and social development plan;?The water management system is based on the integration of river basin management and that of the administrative regions (mainly provinces);5758Crisis Management - From Despair to HopeBox 5.2: Flood Risk Reduction in China (Contd.)?Construction of any building, infrastructure, etc. or any activity within river channel management areas affecting flood discharge capacity in flood passage is prohibited.?The central government has laid down specific policies for implementation of the above-mentioned laws, comprising:* Restoration of reclaimed slope area, lake area and the flood prone areas to natural forest and lakes with government subsidy;* Relocation of people of these reclaimed areas and economic compensation and tax exemption for the settlers; and* Restraining the economic development and control of the population growth in flood prone areas, especially in frequently flooded areas.* Specific policies to cope with soil and water loss in mountainous and hilly areas include:^ Integrated regulation and management of small catchments;^ Establishment of a contract system for regulation and management of small catchment in soil erodedareas;^ Reinforcement of prevention of soil erosion; and^ Establishment of a market oriented mechanism in soil and water conservation.(Source: China: Flood Management by Zhang Hai-lun, Institute of Hydrology and Water Resources, Nanjing Hydraulic Research Institute, Nanjing China)5.5 Preparation of Disaster Management Plans5.5.1 Disaster Risk Reduction Plans (or mitigation30/prevention plans) are important components of the plans to be prepared for disaster management at different levels. In this context for ease of analysis, the whole question of disaster management plans is being examined.5.5.2 The Disaster Management Act, 2005 mandates preparation of District, State and National level Plans. The Tenth Five Year Plan also accorded a high priority to such planning30Mitigation is defined as structural and non-structural measures undertaken to limit the adverse impact of natural and technological hazards (ISDR). The Disaster Management Act, 2005 defines mitigation as measures aimed at reducing the risk, impact or effects of a disaster or threatening disaster situation.Risk Reduction“... we now have to look ahead and plan for disaster preparedness and mitigation, in order that the periodic shocks to our development efforts are minimized.”.5.5.3 The Disaster Management Act, 2005 visualizes the district plan as the one that lists out the vulnerable areas in the district, the measures required for prevention and mitigation of disasters, the capacity building and preparedness measures involved, the allocations of responsibilities among the different district level departments, and the emergency response mechanisms including communication systems, procurement of essential resources, dissemination of information etc.5.5.4 While the concept of the district plan as mentioned in the Act is quite comprehensive, it should be understood that measures for prevention and mitigation of disasters are capital intensive and usually cut across district boundaries. Therefore, the mitigation plan may have a longer perspective ranging from 5-20 years depending upon the local situation. Normally, it is understood that plans incorporate only developmental measures such as construction ofshelters,constructionofembankments etc. But disaster mitigation plans should also incorporate a schedule of ‘enforcement measures’ and the functionaries who will be held responsible for these. Such enforcement measures being ‘unpleasant’ and unpopular are very often not contemplated leave aside acted upon. These measures could include enforcement of building regulations in urban areas, removal of encroachments from natural watercourses or environmentally fragile areas, and strict enforcement of environmental, safety and public health regulations.5.4.4 Recommendations:a. Awareness generation programmes should be undertaken using tools of social marketing.b. A responsible media, which is also well informed about all aspects of disaster, is a very powerful tool for sensitizing people. Proactive disclosures about all aspects of disaster management would build a healthy relationship between the media and disaster management agencies.c.Details of past accidents and disasters and the lessons learnt, should be documented and kept in the public domain. The Disaster Management Authorities have to take up this task.Box 5.3: The Bhopal Gas TragedyOn a cold wintry night of December, 2nd /3rd December, 1984, when the residents of Bhopal went to their beds, they had no inkling that many of them were doing so for the last time. Not far from them in the factory of Union Carbide (India) Limited, a chemical reaction had already started to that end. At around midnight, this chemical reaction culminated in the leakage of deadly Methyl Isocyanate (MIC) gas from one of the tanks of the factory. A cloud of gas gradually and surely started descending and enveloping the city in its lethal folds. On the morning of December, 3, the whole world learnt about the holocaust in shocked disbelief. The tragedy took an immediate toll of about 3000 lives and left thousands and thousands of citizens physically impaired or affected in various degrees. Livestock were killed, injured and infected. Businesses were interrupted. Environment was polluted and the ecology affected with flora and fauna disturbed. Such was the enormity of the tragedy that all available instruments in the field of health care, administration and law were found to be inadequate.(Source: ) Lessons:1. Due consideration to human safety was not given while locating the plant.2. The safety regulations were not followed at all.3. Total lack of awareness about the risk of a hazardous unit like the Union Carbide Plant.4. The emergency response system was woefully inadequate.5. The need for having a legislative framework for corporate responsibility in case of disasters was highlighted.6. The need for a pro-active disaster management policy was felt.7. The battle for compensation was very prolonged.59Risk ReductionCrisis Management - From Despair to Hope5.5.5 Therefore, the District Disaster Management Plan should have two components:a.Long Term Disaster Management Plan.b.Emergency Response Plan including a listing of ‘standard operating procedures’.The Long Term Disaster Management Plan, in turn, should have the following parts:a.Long Term Development Plan.b.Long Term Enforcement Plan.5.5.6 Annual plans should be culled out from the Long Term Development/Enforcement Plans. These principles should apply to the state and the national plans. It should also be borne in mind that there is a distinct possibility of duplication between plans of various districts, particularly those that are geographically contiguous, in the matter of long term plans. This calls for a mechanism at the state level to quickly scrutinize such plans and suggest improvements.5.5.7 The HPC has recommended an outline for the preparation of the District Disaster Management Plan. The outline provides framework for preparation of the plan, but it has to be ensured that all the components mentioned above should form an integral part of the plan.5.5.8 Apart from the district plan, on site and off site plans are to be prepared for nuclear installations and major hazardous industries. The plans prepared for nuclear emergencies are quite comprehensive as they are prepared under the supervision of experts. But the same cannot be said for the other off-site emergency plans {Preparation of such plans is stipulated under the Chemical Accidents (Emergency Planning, Preparedness and Response) Rules, 1996}. The quality of off-site emergency plans requires considerable improvement in terms of completeness and practicability of implementation considering the situation at the ground level. Lack of proper vulnerability analysis again constitutes a major weakness of these plans.5.5.9 Recommendations:a.Crisis/disaster management plans as stipulated under the DisasterManagement Act, 2005 should be prepared, based on hazard and vulnerability analysis. The off site emergency plans, in case of industrial hazards, should be integrated into the District Crisis/Disaster Management Plan. The State Disaster Management Authorities should set up a mechanism to evaluate these plans periodically, and ensure the effectiveness of the plans.b. The District Disaster Management Plan needs to have two components:i.Long Term Mitigation Plan.ii. Emergency Response Plan.The Long Term Mitigation Plan, in turn, should have the following components:i.Long Term Development Plan.ii. Long Term Enforcement Plan.Annual plans should be culled out of the Long Term Development/ Enforcement Plans. State Governments must evolve a mechanism for speedily scrutinizing district level long term plans to harmonize these with similar plans for other districts, particularly those located contiguously.c.The quality of on-site and off-site emergency plans in hazardous industrialunits need to be enhanced in terms of completeness and practicability of implementation considering the ground level situation. The State Disaster Management Authorities should set up a mechanism in place to evaluate these plans periodically.d. The plan should be prepared in consultation with all role players. Each role player should understand and accept his/her roles. This would require awareness campaigns, especially for the community.e.For ensuring quality of on-site and off-site emergency plans (for hazardousunits), the professional expertise available, both in industry, and in enforcement agencies such as the Factory Inspectorates should be improved.f.All crisis/disaster management plans should be tested periodically throughmock drills.g.It should be the responsibility of the state level ‘nodal department’ toensure that adequate assistance is available at the district level for drawing up and periodically updating the plans. The nodal department must engage agencies and experts on a continuing basis to examine the plans and bring methodological and substantive deficiencies to the notice of agencies formulating the plans.h. The same principles would apply mutatis mutandis to plans at other levels.6061Crisis Management - From Despair to Hope5.6 Making Crisis/Disaster Management Plans a Part of Development Plans5.6.1 The Yokohama message emanating from the International Decade for Natural Disaster Reduction in May 1994 underlined the need for an emphatic shift in the strategy for disaster mitigation. It was emphasized that disaster prevention, mitigation and preparedness are better than only disaster response in achieving the objectives of vulnerability reduction. It has been stated that mere disaster response is insufficient as it yields only temporary results at very high costs whereas prevention and mitigation contribute to lasting improvement in safety and are essential to integrated disaster management31. The Tenth Plan also emphasizes that development cannot be sustainable without mitigation being built into the development process.5.6.2 Long term disaster mitigation/prevention plans include major capital intensive activities such as training of water courses, construction of protective bunds, afforestation, plantation of drought resistant vegetation, construction of shelters, raising embankments, retrofitting of buildings, permanent relocation of vulnerable settlements etc, which can sometimes have inter-district or even inter-state ramifications. Therefore, the long term plans may have to encompass block, district, state and national levels and once the national and state level works have been detailed; the works, which would be taken up at the district, block and panchayat level can be planned. It has also been noted that since the benefits from such works are not experienced in the short term, local bodies tend to give low priority to such works and consequently not many are taken up. Therefore, the immediate supervisory level should ensure that while preparing their annual developmental plans, the long term works included in the disaster plan are given priority and they do not remain “paper plans”.5.6.3 Recommendations:a.The activities in the disaster management plans should be included inthe development plans of the line agencies and local bodies like panchayats and municipal bodies.b. The supervisory level of each agency should ensure that the annual plan of that agency incorporates the activities listed out in the disaster management plan on a priority basis.c.Incorporation of disaster mitigation plans into the development plansshould be specially monitored at the five year and annual plan discussions at State and Union (Planning Commission) levels. The Planning Commission, State Planning Boards and Planning Departments must revise on priority basis the proforma for formulating plan proposals to ensure that the process adequately takes into account the disaster prevention/mitigation concerns.Risk Reduction5.7 Instruments for Mitigation of HazardsThere are various instruments through which the adverse impact of a hazard can be reduced. Such instruments differ for different types of hazards but these could be categorized into the following:0Proper environmental management.0Hazard reduction measures.0Effective implementation of legal measures5.7.1. Proper Environment Management5.7.1.1 Over-exploitation of natural resources and unplanned growth in human settlements leads to environmental degradation. This, in turn, may lead to a disaster as the delicate ecological balance gets disturbed, and may also increase the vulnerability of certain sections of society which depend on these environmental resources. A disaster may further degrade the environment. Thus, environmental degradation and disasters constitute a vicious cycle. Development practices that enhance the quality of environment would not only help in mitigating disasters but could also build community resilience. Normally, environmental management is lost sight of in disaster management plans, as well as in the normal development plans. Environment management must be factored into all planning and development activities.5.7.1.2 Recommendation:a. Environment management should be made an integral part of all development and disaster management plans.5.7.2 Hazard Reduction Measures5.7.2.1 Different disasters require different mitigation measures. Flood mitigation requires measures like training the rivers, building embankments, raising level of habitations etc. Earthquake mitigation requires construction of disaster resistant structures, retrofitting of buildings and relocation of habitations. Cyclone mitigation requires construction of embankments, strengthening of buildings, construction of shelters etc. Mitigating industrial disasters requires proper enforcement of safety regulations, incorporation of safety devices etc. Adoption of soil conservation measures, water harvesting practices, optimum use of water resources, transfer of water from surplus to deficit areas, plantation of drought resistant vegetation are some measures to reduce the vulnerability of drought prone areas. Several technologies like sand dune stabilization, shelterbelt plantation, soil and water conservation, improved agro-forestry systems, management of cropland, pasture and range areas,626331Disaster Management in India- a status report; Ministry of Home Affairs 200464Crisis Management - From Despair to Hopemanagement of saline-sodic soils are available for arresting desertification. Measures to counter global warming would include putting industrial development on an environment-friendly path, switching over to cleaner fuels, taking measures to reduce air pollution and increasing forest cover. Soil and crop management, crop improvement, irrigation and drainage engineering are some measures to arrest soil salinity. Some measures like awareness generation, capability building of community are common for all types of disasters. Another cross cutting mitigating/preventive measure is effective implementation of laws governing planned development of habitations, building byelaws and environmental regulations. In order to have a comprehensive and integrated approach it would be better if all these measures are also made part of the long term mitigation plans. Long term prevention and mitigation measures can be broadly be divided under three heads - (i) construction of major civil engineering structures, (ii) construction of disaster resistant dwellings and public use buildings, and (iii) non-structural measures.5.7.2.2 Construction of Major Civil Engineering Structures5.7.2.2.1 Structural measures are mainly engineering solutions to prevent disasters such as construction of dams, diversion channels, flood protection walls, sea walls, cyclone shelters, shelterbelt plantations and regeneration of mangrove belts in coastal areas etc. Structural prevention measures, if properly planned, after taking into account environmental considerations are effective and lasting solutions to prevent disasters but these are usually highly capital intensive and cannot provide complete solution to prevent every crisis situation. Since these measures are in the nature of civil works, they should be included in all long term disaster management plans, and executed as explained in para 5.6.5.7.2.3 Construction of Disaster Resistant Dwellings and Public Use Buildings5.7.2.3.1 Unlike the major structures mentioned in the previous para, (which seek to divert the impact of the hazard itself), disaster resistant structures (dealt with here) seek to protect the people staying inside them by withstanding the onslaught of the disaster or at least by remaining intact. In this context it may truly be said that whereas ‘earthquake hazard is natural, earthquake-disaster is ‘man-made’, as the earthquake by itself may not kill but the damage caused by it to buildings results in large scale loss of life and property. Similarly, disaster resistant structures also minimize damages during floods and cyclones.5.7.2.3.2 Construction of houses and other buildings is regulated through the mechanism of building byelaws. These byelaws exist in major cities but are virtually non-existent in the smaller cities and rural areas. Even in areas where these byelaws exist, they generally regulate the total built up area in a housing or commercial unit and also specify the extent of land, which can be used for construction. But they do not stipulate the construction standards which have to be maintained. Thus safety of the constructed units is not sought to be enforced by these byelaws. As a result, unsafe buildings are added on day by day to theRisk Reductionalready large number of existing unsafe buildings. Most of these buildings are non-engineered constructions where engineers and architects are not consulted. Generally, the owner and the mason take important decisions including those affecting strength of the building. The collapse of such buildings have resulted in wide spread casualties and loss of property. About 10000 people lost their lives and 15000 houses were destroyed in the Killari earthquake; 13805 people lost their lives and 300000 houses were destroyed in the Bhuj earthquake, primarily due to collapse of non-engineered stone masonry houses.5.7.2.3.3 The technology for construction of disaster resistant units exists and has been codifiedBox 5.5: Model Building ByelawsThe Ministry of Home Affairs constituted a Committee to develop Model Building Bye-Laws and the Review of Town and Country Planning Act, develop the Zoning Regulations, vide Govt. Order No. 31/35/2003-NDM-II dated January 20, 2004, on the recommendation of the National Core Group on Earthquake Mitigation set up by the Ministry. The Core Group suggested that the Model Bye-Laws “should be a speaking and self-contained document” as far as possible by including the main features of the BIS Codes and the non-structural aspects, which have bearing on seismic safety. It was also of the view that the State Town & Country Planning Act as well as Zoning regulations be reviewed so as to ensure that these are in conformity with the mitigation requirement. The Committee studied the Model Town & Country Planning legislation framed during 1960, based on which most of the State Town & Country legislation are enacted. Also the Committee studied the revised Model Regional & Town Planning & Development Law 1985 framed by Town & Country Planning Organisation, Ministry of Urban Development & Poverty Alleviation. This combined planning and development law was formulated to provide for planning authorities and plan implementations were combined together so that single agency could undertake both these functions.these Standards, Codes and guidelines for earthquake resistant design and construction of buildings are seldom used. The main reason for unsatisfactory implementation of these codes is ignorance about them and even if there is awareness in some sections of society, the fear that adoption of these measures would increase the costs substantially discourages people from adopting them. A balance has to be struck between safety and cost.Box 5.4: BIS Codes for Earthquake Protection1. IS: 1893-2002 “Criteria for Earthquake Resistant Design of Structures (Fifth Revision)” .2. IS: 13920-1993 “Ductile Detailing of Reinforced Concrete Structures subjected to Seismic Forces - Code of Practice”.3. IS: 4326-1993 “Earthquake Resistant Design and Construction of Buildings - Code of Practice (Second Revision)”.4. IS: 13828-1993 “Improving Earthquake Resistance of Low Strength Masonry Buildings - Guidelines”.5. IS: 13827-1993 “Improving Earthquake Resistance of Earthen Buildings - Guidelines”.6. IS: 13935-1993 “Repair and Seismic Strengthening of Buildings - Guidelines”.7. IS: 1893 (Part 4): 2005 “Criteria for Earthquake Resistant Design of Structures”.by the Bureau of Indian Standards. The National Building Code of India (NBC) 2005, a comprehensive building Code, is a national instrument providing guidelines for regulating the building construction activities across the country. It serves as a Model Code for adoption by all agencies involved in building construction. The Code mainly contains administrative regulations, development control rules and general building requirements; fire safety requirements; stipulations regarding materials, structural design and construction (including safety); and building and plumbing services32.But6532 Source: ; retrieved on 10-9-06.Crisis Management - From Despair to Hope5.7.2.3.4 As a pre-requisite, the Codes, should be in public domain and freely available at the BIS33 website. Simplified booklets/ practical manuals/ guidelines explaining the various clauses of the codes with some practical examples need to be generated so that it is easily understood even by common people interested in building their own houses.5.7.2.3.5 A programme seeking adoption of disaster resistant technologies for construction of dwelling units by the people at large would not succeed without creating proper awareness regarding: (i) earthquakes/disasters, the phenomena including causes and their natural characteristics, (ii) how the natural occurrence of ground motion (or onslaught by floods or waves or storms) becomes disastrous and (iii) how the disastrous effects can be avoided. There is definite need to start broad based educational and training programs in seismic zones34 III, IV and V and intensive training programme in zone V areas. For awareness generation, apart from the normal means, setting up Building Technology Demonstration Centres and undertaking demonstrative constructions should be taken up.5.7.2.3.6 Awareness generation about disaster resistant construction may lead to voluntary acceptance of the technology to some extent, but recourse to legal measures would be necessary in the larger public interest. Incorporation of the safety codes in the building byelaws would provide the necessary legal framework.5.7.2.3.7 An approach of applying these safety norms to selected areas first would prove more successful, rather than an across-the-board application to all areas. The areas in zone V should be taken up on priority. Also for all public buildings, and buildings constructed under government schemes in hazard prone areas, adoption of such safety norms should be inbuilt in the model design. The Municipalities/Corporations/Development Authorities at present do not have the structure and the capability to implement the new building bye-laws incorporating the disaster resistant construction. Institutional changes are needed either to establish self-sustaining new Wings/Cells or to reorganize the set up so that it is able to meet the demand.5.7.2.3.8 There are large areas where town planning legislation and development control/ building byelaws are not applicable and the sanctioning authority is the panchayat. The safety norms stipulated by the BIS are complicated and can be understood only by qualified engineers and architects. It would be incorrect to presume that such complicated provisions (BIS codes) would be enforced by the panchayats. The BIS should convert these norms (at least for small dwelling units) into commonly understood principles, which could be followed and enforced even by village panchayats.Risk Reduction5.7.2.3.9 The approach of drafting model byelaws and circulating them to the states for incorporation by the local bodies has not produced the desired results. Adoption of these model regulations would require periodic monitoring. Targets should be fixed each year and even financial incentives need to be used to motivate the local bodies to adopt the safety features in their building byelaws.5.7.2.3.10 Owners of private buildings and the general public need to be made aware and advised to carry out upgrading of their residential buildings by providing incentives in terms of subsidies, reduced insurance premia and allowing increased Floor Area Ratio (FAR).5.7.2.3.11 The limitation of building byelaws, even if they are effectively enforced, is that their effect is only prospective. The huge stock of existing dwelling and other units would continue to be vulnerable. Technically, retrofitting of buildings provides a solution, but it is too expensive to be adopted by a common citizen. In the case of government buildings, the concerned departments could take it up, with the more commonly used public buildings being given priority. Private buildings like hospitals and schools in hazardous areas would also have to be given the same priority but the issue of financing the retrofitting effort would remain. A financial package to fund such an effort may be worked out by the state governments along with banks and insurance agencies. Even non-financial incentives like relaxation on extent of built up areas could act as an incentive to motivate private owners to take up retrofitting.5.7.2.3.12 Zoning regulations: Zoning regulations are normally issued under the Town and Country Planning Acts of the respective states. They stipulate the nature of construction and the density of construction permissible in a defined zone. Zoning regulations provide an important mechanism for planned development of any area. These could be used to prevent settlements in hazard prone areas like the riverbanks, which are flood prone, or areas near coasts, which are prone to cyclones, or areas of extremely high seismic activity, or ecologically sensitive areas. Apart from preventing human settlements in critical areas, these could also be used to spread out the population so that impact of any hazard is limited. However, at present zoning regulations exist only in big cities. In small towns and rural areas the concept of zoning regulations is almost non-existent. Even in bigger cities where they do exist, they are often not prepared with an intention to mitigate hazards or reduce vulnerabilities of populations. Another weakness of these zoning regulations is their poor enforcement. Therefore, there is an urgent need to update the zoning regulations in the cities from the point of view of disaster management. The town and country planning set up in the smaller cities and rural areas also need to be strengthened. It would be advisable if the hazard analysis as described in para 5.3 is used as one of the important tools in preparing zoning regulations for an area.666733Bureau of Indian Standards website : are five seismic zones in India, zone I being the secure place and zone V, most vulnerable to earthquakes.Risk ReductionCrisis Management - From Despair to Hope5.7.2.3.13 Recommendations:such buildings in hazard prone areas. Private buildings used by the public should also be tackled on priority. A mix of regulatory and financial incentives could be used for this purpose by the local bodies.a.Structural prevention measures should be a part of long term disaster management plans for an area.b. Appropriate zoning regulations need to be extended to all areas. Phasing of the areas to be covered should be done based on the intensity of the hazard anticipated. This would require strengthening of the Town and Country Planning Departments of State Governments. Local bodies can be given financial incentives for preparation of zoning regulations. The hazard zonation maps prepared should be one of the inputs for preparation of zoning regulations.h. All these measures should become an integral part of long term disaster/ crisis management plans.5.7.2.4 Non structural measures: These measures are in the form of capacity building and improved livelihood practices. These include afforestation, scientific watershed management, vegetative bunds, improved agricultural practices and relocation of habitations. All these measures should be included in the long term disaster management plans.c.Building byelaws should incorporate the disaster resistant features ofbuildings. Since safety codes are complex and technical, it is necessary to issue simplified guidelines which could be understood by citizens. Further, these codes should be implemented in the most hazard prone areas, on priority.d.The importance of disaster resistant constructions and simplified safetyguidelines should be widely disseminated so as to promote compliance. In so far as the rural areas are concerned, other methods of dissemination including setting up of Building Technology Demonstration Centres and undertaking demonstrative disaster constructions in severe hazard prone areas should be taken up. Demonstration camps should also be used to make the people aware of the concerns and the solutions.e.The existing system of enforcement of building regulations needs to berevised. It should be professionalised by licensing architects and structural engineers for assessment of structures and for certification of safe buildings. The units of local bodies dealing with enforcement of building byelaws and zoning regulations also need to be strengthened.5.7.3 Effective Implementation of Laws and Regulations5.7.3.1 Some of the major industrial disasters as well as seemingly natural disasters such as urban floods are due to ineffective planning, poor enforcement of laws and toleration of flagrant violations of laws over years. The Uphaar35 and Bhopal Gas tragedies as well as urban floods in Tamil Nadu and Mumbai are noteworthy examples. While there are a large number of laws regulating fire hazards, safety of buildings, public health, environmental concerns and industrial safety, unfortunately, as the cases mentioned above indicate, the requirements prescribed under these laws are not complied with and violators often get away with impunity. This is due to collusion or a lenient view taken by the authorities or sheer negligence. The Commission is of the view that special mechanisms have to be evolved to ensure proper compliance and implementation of such laws. One option may be to institute concurrent third party audit of all major alleged violations. Records relating to such permissions must be brought in the public domain suo-motu and could be posted on the websites of the respective organizations. Another option could be to have periodic inspections by a team of stakeholders assisted by experts. Education of the public on the consequences of violations is also important.5.7.3.2 Recommendations:f.The standards prescribed by BIS for disaster resistant buildings shouldbe available in the public domain, free of cost. This should be posted on websites of the concerned government agencies to promote compliance.a.Effective enforcement of laws on encroachments, public health and safety,industrial safety, fire hazards, safety at public places should be ensured. The same applies to zoning regulations and building byelaws.b. Third party audit of all major alleged violations needs to be introduced in the respective regulation governing the activity.g. Among the existing buildings, government buildings used by the public should be evaluated and retrofitted first, giving preference to buildings housing essential services. It would be advisable to fix a schedule for allc.All records pertaining to permissions/licenses should be brought in thepublic domain suo motu.686935On 13th June, 1997, a faulty transformer led to a devastating fire in Uphaar Cinema Hall in Delhi and more than 50 lives were lostCrisis Management - From Despair to HopeRisk ReductionBox 5.7: Public Address System Saves Lives inPondicherry VillagesIn the coastal villages of Nallavadu and Veerampattinam in the Union Territory of Pondicherry, a Public Address System (PAS) installed in their ‘Rural Knowledge Centres’ saved thousands of lives when the tsunami struck on 26th December, 2004.One of the residents of Nallavadu, who lived abroad, heard about the tsunami and informed his village on telephone. The villagers used the PAS to warn the residents who quickly vacated the village and were saved.In Veerampattinam, a fisherman was repairing his boat when he noticed a dramatic increase in the sea level. He raised an alarm which alerted the Panchayat leaders who used the PAS to make the villagers vacate the area.(Source: 20050128006701600.htm)5.8 Early Warning Systems5.8.1 The objective of an early warning system is to alert the community of any impending hazard so that they can take preventive measures. An early warning system basically hasfour components - capturing the precursor events, transmission of this data to a central processing facility, alert recognition of an impending crisis and warning dissemination. Capturing the precursor events is generally a technology driven process for most disasters. However for disasters like epidemics, strikes and terrorism, the human element plays a vital role in the data capture. Transmission of this data to the central processing facility is also totally technology based. Alerts are generated based on data analysis. Sometimes, alert generation may take some time, as a decision making process may be involved. The dissemination of warning to the vulnerable sections again has both technology and human elements.5.8.2 The last decade has seen major advances in technology relating to data capture, transmission, analysis and even dissemination. Thus, the early warning phase of disaster management is largelytechnology driven with satellite imagery, remote sensing, seismology, oceanography, climatology etc providing vital inputs. But like most technologies there are last mile problems which make human intervention essential. It is important that the warning reaches the most vulnerable sections in a manner that is understood by them. Therefore, in spite of far reaching technological advances, mechanisms still have to be put in place to suit the local conditions. And without the total involvement and awareness of the local community, the last mile issue cannot be addressed or resolved.d. There should be periodic inspections of all such places/facilities by a team of stakeholders assisted by experts.e. A scheme for enforcement of laws should be part of the long term mitigation plan.f.Public education on consequences of violations is important.Box 5.6: Early Warning Systems - Key to Disaster Management“Early warning systems are the key to effective risk reduction. They do save lives and livelihoods (and) in the world we live in, with so much division between rich and poor, they also save an enormous amount of investment for the donor countries who will be called upon to help when people die from such disasters. (...)We know that the most effective early warning takes more than scientifically advanced monitoring systems. All the sophisticated technology won’t matter if we don’t reach communities and people. Satellites, buoys, data networks will make us safer, but we must invest in the training, the institution building, the awareness raising on the ground. If we want effective global early warning systems, we must work together, government to government, federal and local officials, scientists with policy makers, legislators with teachers and community leaders.”10(Excerpt from the United Nations Special Envoy for Tsunami Recovery, President William J. Clinton’s statement at EWC III, on 27 March, 2006).5.8.3 Recommendations:a.Though it is the responsibility of the government machinery and the localbodies to disseminate the warning, peoples’ participation has to be enlisted. For this purpose, the role of community leaders, NGOs and others should be clearly defined in the emergency response plan and they should be fully trained and prepared for their respective roles.b. Communications networks, with sufficient redundancies should be established between the data collection point to the points where hazard is likely to occur. The communication channels from the point of alert generation to the point of disaster should have enough redundancies so as to maintain line of communication in the event of a disaster striking. Care has to be taken to put in place systems to disseminate warnings to all sections of the people.c.The early warning system should be evaluated after each disaster to carryout further improvements.As Early Warning Systems will be increasingly technology driven, the systems in use for different types of disasters and the improvements being undertaken are briefly described in Annexure-V.7170Crisis Management - From Despair to Hope5.9 Building Community Resilience5.9.1 Disaster risk reduction can be effective if the communities feel that their needs are being met and participate in it. The community is also a repository of knowledge and skills which have evolved traditionally and these need to be integrated in the risk reduction process. It is necessary to educate the community about the entire disaster risk reduction and even to impart skills and assign specific roles to the members of the community, so that the first response from the community is a well coordinated one. This could be achieved by:i.Undertaking location specific training programmes for the community: Such programmes should be a part of the disaster management plan. As the number of persons to be imparted knowledge and skills is very large, a cascading approach should befollowed.Villagepanchayats, should be entrusted this responsibility. These training programmes could be made more meaningful if roles are assigned to individual members and then they are given the necessary skills to dischargetheirrespectiveresponsibilities.ii.Mainstreaming crisismanagementineducation: Disaster management education needs to be integrated and institutionalized within the formal and informal systems of education (already, substantial progress has been achieved in this direction by CBSE inRisk Reductionincorporating disaster management in the school syllabi). An appropriate component of disaster awareness at the school/college/university level will help increase awareness among student and teacher community and their family members. All state governments may be persuaded to include disaster management education in junior, middle and high schools and in colleges and universities. Disaster management and disaster resistant development practices may be included as specific components in professional and technical education. Appropriate short duration courses could also be developed for various vocational courses.iii. Mainstreaming crisis management in training programmes: Priority should be given to training and capacity building of elected leaders and personnel in critical sectors like police, revenue, agriculture, irrigation, health, public works etc.5.10.1 As already stated, the two funding mechanisms are mainly for relief and rehabilitation efforts. While post disaster funding is an important element of crisis management, excessive dependence on it creates a regime where there are no incentives for adoption of risk reductionBox 5.8: Some Capacity Building Initiatives Taken byGovernment of India?Two National programmes for capacity building in earthquake risk management have been undertaken for training of 20,000 engineers and architects.?Disaster Management faculties are being financially supported by the Ministry of Home Affairs in 29 State level training institutes located in 28 States. The State Training Institutes take up focused training programme for different target groups within the State.?Training capsules have been drawn up and integrated in the syllabi of training programmes for All India Services. Disaster Management has been made an essential component for the initial training of Central Police Forces.?Disaster management, as a subject in social sciences, has been introduced in the school curricula for Classes VIII, IX & X through the Central Board of Secondary Education. Training of teachers for teaching the curricula has been undertaken by CBSE with financial assistance from the Ministry. The State Governments have also been advised to take similar steps through their respective School Boards of Education. Several State Governments have already introduced similar curricula in school education.?The Ministry of Home Affairs has also initiated programmes for training of volunteers under the Nehru Yuvak Kendra Sanghthan (NYKS) and National Service Scheme (NSS).?The Lal Bahadur Shastri National Academy of Administration (LBSNAA), Mussoorie has been designated as the Nodal Training Institute for the purpose of training of trainers in different modules of incident command system.(Source: Annual Report, Ministry of Home Affairs, Government of India, 2005-06)5.9.2 Recommendations:a.Location specific training programmes for the community should be executed through the panchayats.b. Crisis management awareness needs to be mainstreamed in education. For the purpose, an appropriate component of disaster awareness should be introduced in schools, colleges, universities and in professional and vocational education.c.Disaster awareness should be included in training programmes for elected leaders, civil servants, police personnel, and personnel in critical sectors such as revenue, agriculture, irrigation, health and public works.d. Orientation and sensitization programmes highlighting issues and concerns in disaster management should be taken up for legislators, policy makers, and elected leaders of urban local bodies and panchayati raj institutions.e. NIDM and NDMA would have to play a vital role in working out the details of these suggestions for implementation by different authorities.5.10 Financial Tools for Risk Reduction7273Crisis Management - From Despair to Hopemethods by individuals, agencies and governments, The HPC was of the opinion that insurance brings quality in infrastructure and a culture of safety. However, the large sections of low income populations coupled with low penetration by the insurance companies poses a major challenge to provide insurance cover to the vulnerable sections.5.10.2 Following the success of micro-credit for rural development, micro-insurance has started emerging as a tool for ex ante risk management. In fact, micro-credit and micro-insurance support each other. Several government agencies and NGOs have come forward in this field, but their efforts need to be scaled up.5.10.3 While the Commission would not go into the details ofworkingoutaninsurance framework for disaster management, it would strongly recommend that that the tool of insurance be made attractive through a set of policy measures and fiscal incentives.5.10.4 Recommendation:a. Government and the insurance companies should play a more pro-active role in motivating citizens in vulnerable areas to take insurance cover. This could be done through suitably designed insurance policies, if required, with part funding from government. NDMA could play a major facilitating role in this area.Risk ReductionBox 5.11: Risk Reduction through Catastrophic Insurance: Examples from JapanLying in one of the most seismically active zones on Earth, Japan is home to a dynamic catastrophe insurance market. Under the guidance of a governmental organization established after the 1995 Kobe Earthquake, the Earthquake Research Committee (ERC) has brought out the Japan National Seismic Hazard Maps based on extensive seismic sources and ground motion modeling which incorporate the latest understanding of subduction zones, active faults, crustal zones, and intraslab seismicity zones. Theses maps have been put to use and have been found appropriate for modeling financial risk, including time-dependent and time-independent rates of earthquake recurrence. In addition, a more robust set of cascade events was introduced in the model.The risk assessment provides the most advanced modeling of the vulnerability of individual risks in Japan. The methodology uses an objective measure of ground motion intensity called spectral acceleration to directly correlate ground motion to building performance based upon building height, construction material, and ground motion propagation. Vulnerability functions in the model are based on actual building behavior observed in the Kobe Earthquake and other recent events, including the 2004 Niigata-ken Chuetsu earthquake. These functions also reflect changes to the seismic design criteria in the Japanese building code by considering year of construction, building height, and construction type. At the heart of the vulnerability module is the regional inventory database, which uses detailed exposure information from housing surveys, the census report, and other sources to estimate the density of exposure values by city/ward for insured lines of business. Japan’s Earthquake Model meets the unique needs of insurance market by allowing insurers to assess the seismic vulnerability of individual locations and successfully manage their entire portfolio at risk using the latest scientific modeling techniques and market research on financial loss perspectives.(Source: Japan Earthquake, RMS Japan Earthquake Model)5.11 Research and Use of Knowledge5.11.1 Disaster management is an area which has attracted the attention of researchers for a long time, and as a result, a wide body of knowledge has developed. Most significant outcomes have been in the field of early warning systems. Besides, the past experiences have generated a huge amount of data and information. In spite of existence of a wealth of information, there is a problem of ‘accessing this information. With the spread of internet even this is being solved through formation of networks and data bases. But it should not be forgotten that access to internet is still limited. Therefore, conventional methods of knowledge dissemination and adaptation have to be taken up on an increased scale.5.11.2 The India Disaster Resource Network (IDRN) - a web enabled centralised data base has been operationalised. Such databases can be useful if they are updated with correct information periodically otherwise they may foster a false sense of security.5.11.3 It should however be borne in mind that the human aspects of disaster management should not be lost track of in our ‘enthusiasm’ for using science and technology. The same may be said for the use of traditional knowledge. Research has to give adequate attention to the social, economical and political aspects. It is also observed that the research carried out by researchers and disaster management functionaries in the field is often uncoordinated and, therefore, a national agenda to direct research in the desired field is required. NIDM is best suited to carry out this task under the guidance of NDMA.Box 5.9: Insurance and Disaster Management“Insurance is a potentially important mitigation measure in disaster-prone areas as it brings quality in the infrastructure & consciousness and a culture of safety by its insistence on following building codes, norms, guidelines, quality materials in construction etc. Disaster insurance mostly works under the premise of ‘higher the risk higher the premium, lesser the risk lesser the premium’, thus creating awareness towards vulnerable areas and motivating people to settle in relatively safer areas.”[Extract from a Chapter on ‘Disaster Management - The Development Perspective’ in the Tenth Five-year Plan Document by the Planning Commission of India (2002- 2007)]Box 5.10: Constraints of Insurance in Developing CountriesYet, despite their growing exposures and vulnerabilities to hazards, developing countries retain most of the attendant risk due to the undeveloped state of their domestic insurance markets and a resultant inability to transfer risk to international reinsurance markets. In these countries, less than 1% of total direct losses from natural disasters is insured, compared with 40-100% in industrial countries such as the United States or France. Even the small amount of insurance coverage that is available in practice tends to be limited to major commercial properties in urban areas. With the level of insurance negligible. Catastrophe protection for better off homeowners is sometimes present in middle-income emerging markets. The key constraint on insurance market development is low per capita income, since low-income consumers have less discretionary income and fewer assets to insure. The major determinant of insurance density (premium per capita) is per capita income, and there appear to be few means to circumvent this “iron law” through private markets alone.(Source: Rapid Onset Natural Disasters: The Role of Financing in Effective Risk Management, Eugene Gurenko & Rodney Lester, The World Bank Policy Research Paper).7475Crisis Management - From Despair to Hope5.11.4 Recommendations:a.NIDM should develop methodologies for effective dissemination ofknowledge on disaster management.6EMERGENCY RESPONSE SYSTEMb. Disaster management plans should attempt to integrate traditional knowledge available with the communities.6.1 Emergency Planc.NIDM should coordinate with research institutions and universities onthe one hand and field functionaries on the other and identify areas where research is required.d. It may be ensured that the IDRN network is updated regularly.6.1.1 During a major crisis, the normal emergency response system usually gets overwhelmed and mobilization of all resources of community, government, local bodies (municipalities and panchayats), NGOs and private sector becomes necessary. The problem gets further compounded because of the following:Box 5.12: India Disaster Resource NetworkoAt the onset of any crisis the picture is often unclear and the situation usually gets chaotic, making organized relief and rescue difficult. The situation is further complicated in caseBox 6.1: Lessons Learnt from Tsunamidisaster hits during night time.’s1. Although the State Governments response was quick, SOPA web-enabled centralized data base for the India Disaster Resource Network has been operationalized. The IDRN is a nation-wide electronic inventory of essential and specialist resources for disaster response with both specialist equipment and specialist manpower resources. The IDRN lists out the equipments and the resources by type and by the functions it performs and it gives the contact addresses and telephone numbers of the controlling officers in-charge of the said resources. The IDRN is a live system providing for updating of inventory once in every quarter. Entries into the inventory are made at district and State levels. The network ensures quick access to resources to minimize response time in emergencies. The list of resources to be updated in the system has been finalized. It has 226 items. About 69,329 records in 545 districts throughout the country have already been uploaded since September 1, 2003 when the India Disaster Resource Network was formally inaugurated. The system will give, at the touch of the button, location of specific equipments/ specialist resources as well as the controlling authority for that resource so that it can be mobilized for response in the shortest possible time. The data base will be available simultaneously at the district, state and national levels.(Source: Disaster Management in India - A status report; August 2004; Ministry of Home Affairs)oThe resources available are limited while the demand is very high. It becomes difficult to prioritise the allocation of the available resources, as there is pressing demand from all quarters for deployment of resources.need to be developed to minimize response time.2. The relief teams need to be equipped with proper equipments.3. Need for a stronger coordination mechanism for rescue and relief especially for NGOs.4. Mismatch between demand and supply of relief material has to be through effective communication.5. Post-disaster public health problems were avoided due to timely immunization, sanitation and disinfection.6. Coastal Zone Regulations should be strictly enforced.7. Urgent need for early warning system.(Source: NIDM)oThe first reaction is to act spontaneously without due planning and thinking.oCollapse of communication and transportation networks further worsens the situation.6.1.2 Thus providing initial response when the onset and impact are sudden, is extremely challenging and very vital.7677Crisis Management - From Despair to HopeEmergency Response System6.1.3 The district administration headed by the Collector provides government’s first organized response to any crisis. This is not to belittle the efforts of other first responders, the community, NGOs, and the nearest government functionaries like the policemen, firemen, the village officer and the local government functionaries. Standard operating procedures (SOPs) lay down the drill in case of crisis. At the first sign of any crisis the trigger mechanism should spontaneously set the emergency quick response mechanism into action, without formal orders from anywhere as per the standard operating procedures. In large cities, there is blurring of responsibilities between the agencies of the state government and those of local bodies.6.1.4 In crisis situations, the Emergency Response Plan should define the trigger point in unambiguous terms so that there is no delay on the part of the role players to initiate action as laid down in the plan. This would entail that the role players should have full knowledge about the tasks each has to perform. The Emergency Response Plan should also identify resources, including human resources, logistics, specialized equipments and the way to put them into action.6.1.5 It has been observed that the District Emergency Response Plans are not always up to the mark. This is because ‘crises’ are considered low probability events and advance planning does not receive the attention it deserves. The plans are more often than not, prepared on assumptions (and not ground realities) and without intensive consultations with the role players. They are also not updated from time to time. Such plans also remain on paper as they are not backed by mock drills and the required building of teams and their capacity.6.2 Coordinating Relief6.2.1 The emergency response phase can be divided into two distinct categories of activities. The first is rescue and the second is relief. The immediate response to any disaster should be launching of rescue operations which have the primary aim of saving human lives and thereafter animal lives and property. The rescue operations have to be carried over a short period of time as the window of opportunity is usually small ranging from a few hours to a few days. Mobilization of local efforts, use of volunteers, civil defence and other personnel, police and fire forces and armed forces, is important depending upon the intensity of the disaster. As the rescue operations are on, the phase for providing relief starts. Providing relief entailsb. The district emergency response plan should be prepared in consultation with all concerned. The plan should be known and accepted by all the role players. (This should be a part of the District Disaster Management Plan).c.Standard operating procedures should be developed for each disaster at the district and community level, keeping in mind the disaster vulnerability of the area. Disaster management plans at all levels should have handbooks, checklists, manuals with precise instructions for disaster management personnel, search and rescue teams, and Emergency Operations Centres.d. Unity of command should be the underlying principle for effective rescue operations. For example in a district all agencies of Union and State Government have to work under the leadership of the Collector. Such unity of command principle should pervade at all field levels.e.The plan should be validated annually through mock drills and it should be backed by capability building efforts.f.Any plan would have its limitations as each crisis situation would vary from another. Plans are therefore, no substitute for sound judgement at the time of crisis.g. Handling of crisis should be made a parameter for evaluating the performance of officers.h.These principles apply to plans at other levels and also in case of metropolitan cities.6.1.6 Recommendations:a.Since the initial response in any crisis/disaster should be timely and speedy,the Emergency Response Plans should be up-to-date and should lay down the ‘trigger points’ in unambiguous terms.78Box 6.2: Discretion and Judgement are ImportantIf one considers the observations of Albert Camus, the point that immediately emerges is that along with familiarity with governmental instructions and orders, codes and manuals on the subject, what is needed on the part of the administration is imagination, sympathy and initiative to cope with unprecedented situations. Discretion and judgement cannot be subordinated to the tyranny of the written word in the midst of crisis administration. Crisis administration is not a fossilized interpreter rules but a vibrant response to the dynamics of any unforeseen contingency. Consistency is not always a virtue in crisis administration. Moreover, these qualities are not values to be cherished in the abstract but they must inform the entire administrative machinery which should evolve in consonance with the dynamics of the situation.**T N Chaturvedi; Crisis Administration: Public Administration Vision and Reality: Indian Institute of Public Administration; New Delhi.2179Crisis Management - From Despair to HopeEmergency Response System6.2.6 Recommendations:a.Effective coordination is essential at the district and sub-district levels for rescue/relief operations and to ensure proper receipt and provision of relief. During rescue and relief operations, unity of command should be ensured with the Collector in total command.b. In order to avoid mismatch between demand and supply, the demand should be assessed immediately and communicated to all concerned80making immediate arrangements to ensure that the basic minimum necessities of life like food, clothing, shelter, security, and basic health and sanitation facilities are made available. The relief phase may last for a few weeks, till the affected families are properly rehabilitated. NGOs can play a particularly important role during the relief phase.6.2.2 The biggest task is to ensure that the resources are deployed in such a manner that they reach all affected sections in an equitable manner. This calls for an effective coordination mechanism at the district and sub-district levels. It needs to be ensured that the needs are properly assessed and communicated to all agencies so that unwanted relief material is not mobilized.6.2.3 It has been observed that the focus of relief effort is on food, clothing and shelter and aspects of public health and sanitation are often overlooked. Chances of spread of epidemics immediately following a disaster are very high. Therefore, ensuring supply of safe water and sanitized living conditions should receive as much priority as other items of relief.6.2.4 The distribution of relief material often raises issues about political discrimination, partisan attitude and certain vulnerable sections getting left out. Total transparency should be followed in distribution and procurement of relief materials. It is desirable to constitute vigilance committees of the community to keep a watch over these activities and act as grievance redressal fora.6.2.5 Each major disaster is followed by an ‘assessment exercise’. Teams from Government of India are deputed to validate the assessments reported by the State Governments. This ad-hoc procedure has several drawbacks. There is need to evolve objective methods of assessing the damage so that there are no allegations of bias, distortions, exaggeration or arbitrary scaling down. Satellite imagery could be used as a tool to validate the reported damages and NDMA could draw up the necessary guidelines for the assessment teams. However, after the recovery phase, a more comprehensive assessment of all aspects of disaster management is required, which is dealt with in the chapter on ‘Recovery’.including through the media, so that the relief provisions are provided as per requirements.c.Ensuring safe drinking water and sanitized living conditions should receive as much a priority as other basic means of livelihood.d. All procurement and distribution of relief materials should be done in a transparent manner.e.Monitoring and vigilance committees should be set up involving the stakeholders. These committees could also look into grievances.f.Trauma care and counseling should be made an integral part of the relief operations.g. There is urgent need to evolve objective methods of assessing the damage so that there are no allegations of bias, distortions, exaggeration or arbitrary scaling down. Satellite imagery could be used as a tool to validate the reported damages. NDMA should be requested to draw up the necessary detailed guidelines for assessment, to be followed by all authorities.6.3 Role of Specialized AgenciesThere are several agencies which have an important role in disaster management. Some of these are described in the following paras:6.3.1 Civil Defence6.3.1.1 The Civil Defence Policy of the Government of India till the declaration of emergency in 1962, was confined to making the States and Union Territories conscious of the need for civil protection measures and asking them to prepare civil protection plans for major cities and towns under the then Emergency Relief Organisation (ERO) scheme. The Chinese aggression in 1962 and the Indo-Pak conflict in 1965 led to considerable re-thinking about the policy and scope of Civil Defence. As a result, the Civil Defence Policy as it exists today was evolved and Civil Defence legislation was enacted in the Parliament in 1968. The country was subjected to further hostile attacks in December, 1971 when the Civil Defence Organisation acquitted itself commendably. (Extracted from the website of Civil Defence Organisation).6.3.1.2 Civil Defence in the country has been raised on the strength of the Civil Defence Act, 1968, C. D. Rules, 1968 and Civil Defence Regulations, 1968. Although the Civil281Crisis Management - From Despair to HopeEmergency Response SystemDefence Legislation is a Central Act, the C. D. Regulations, 1968 delegate all the powers to implement and execute the C. D. Scheme to the State Government. However, the Union Government makes the policies and plans and also finances the States for implementing of the C. D. Scheme on discrete financial terms36.6.3.1.3 Although the Civil Defence Act, 1968 is applicable throughout the country, the organization is only raised in such areas and zones, which are tactically and strategically considered vulnerable from the point of view of enemy aggression. At present, Civil Defence activities are restricted to 225 categorized towns spread over 35 States/Union Territories. Civil Defence is primarily organized on voluntary basis except for a small nucleus of paid staff and establishment, which is augmented during emergencies. The present target of C.D. volunteers is 12.98 lakh, out of which 6.6 lakh volunteers alone have been raised.37 Civil Defence Corps has the following 12 services in which volunteers are trained:?Headquarters Service?Warden Service?Communication Service?Casualty Service?Fire Fighting Service?Rescue Service?Welfare Service?Salvage Service?Corpse Disposal Service?Depot & Transport Service?Training Service?Supply Service6.3.1.4 The relevant provisions of the Civil Defence Act, 1968 are as follows:i.It extends to the whole of India {Section 1(2)}ii.‘civil defence’ has been defined to include “any measures, not amounting to actual combat, for affording protection to any person, property, place or thing in India or any part of the territory thereof against any hostile attack, whether from air, land sea or other places, or, for depriving any such attack of the whole or part of its effect, whether such measures are taken before, during at or after the time of such attack”.{Section 2(a)} (emphasis added).6.3.1.5 Thus, ‘civil defence’ concerns itself with measures for protection of human life and property. The catchword, however, is the term ‘hostile attack’ against which such protective measures are envisaged. But its envisaged coverage is wide: it not only includes concurrent, in situ measures for protection, but also measures for preparedness, mitigation and post-incident relief and recovery.6.3.1.8 As a result, the civil defence structure still exists with its old wartime mandate. An examination of the powers vested in the Union Government to make rules in matters described under section 3(1) of the Act reveals that with very few amendments, the mandate of this Act can be extended to also include crisis/disaster management. This could be achieved by inserting the term ‘disasters’ in section 2(a) of the Civil Defence Act to give a wider meaning to the definition of ‘civil defence’. Accordingly, a new sub-section 2(d) may be inserted in the Act to include the definition of ‘disaster’ which should be in congruence6.3.1.6 The term ‘hostile attack’ has been defined in the Act to mean “any attack by any person or body of persons, whether during any war, external aggression, internal disturbance or otherwise which endangers the security of any life, property, place or thing in India or any part of the territory there of”. {Section 2(c)} (emphasis added)}6.3.1.7 The inclusion of the phrase ‘internal disturbance or otherwise’ in the definition of ‘hostile attack’ gives it a wide import. It can be construed to include incidents of militancy, extremism, terrorism etc. as far as the application of the Act is concerned. The lacuna inherent in this definition, for the purposes of crisis management, is that it cannot be made applicable to natural disasters, thereby depriving it of a wider role in the administrative set-up for crisis management.Box 6.3: Civil DefenceThe term ‘civil defence’ has been defined in the Protocol, additional to the Geneva Convention of 12th August, 1949, and relating to the Protection of Victims of International Armed Conflicts (Protocol I) adopted at Geneva on 8th June, 1977. The text of this Protocol is set out in the Fifth Schedule {inserted by the Geneva Convention (Amendment) Act, 1998} to the Geneva Conventions Act, 1962. Chapter VI of this Protocol pertains to ‘Civil Defence’, wherein it has been defined in Article 61 in the following manner:“For the purposes of this Protocol:‘civil defence’ means the performance of some or all of the undermentioned humanitarian tasks intended to protect the civilian population against the dangers, and to help it to recover from the immediate effects, of hostilities or disasters and also to provide the conditions necessary for its survival. These tasks are:a. warning;b. evacuation;c. management of shelters;d. management of blackout measures;e. rescue;f. medical services, including first-aid, and religious assistance;g. fire-fighting;h. detection and marking of danger areas;i. decontamination and similar protective measures;j. provision of emergency accommodation and supplies;k. emergency assistance in the restoration and maintenance of order in distressed areas;l. emergency repair of indispensable public utilities;m. emergency disposal of the dead;n. assistance in the preservation of objects essential for survival;o. complementary activities necessary to carry out any of the tasks mentioned above, including, but not limited to, planning and organization.”82218336Extracted from Report, Ministry of Home Affairs 2005-06.Crisis Management - From Despair to HopeEmergency Response Systemwith the National Disaster Management Act, 2005. In the same vein, the provisions of section 3(1) of the Act may be streamlined to bring it in consonance with crisis management protocols as per international standards. Further, section 4(1) of the Act may be amended to insert the phrase ‘all the districts within the State’ in place of the existing phrase ‘any area within the State’.6.3.1.9 The whole structure of ‘civil defence’ may be left at the disposal of the State Governments (which is also provided in section 4 of the present Act). Further, section 17 of this Act provides that the State Government may, by notification, direct that all or any of the powers which may be exercised by it, shall be exercised by an officer not being inferior in rank to that of a District Magistrate (State Governments have notified the District Magistrate as this officer). As the District Magistrate is also the authority charged with the responsibility of looking after disaster management at the district level (both under the state and Union legislations on disaster management), specific provisions may be inserted in the civil defence legislation for making the powers of the District Magistrate co-terminous with those under the Disaster Management Act, 2005 and allowing induction of members of civil defence corps from the local community to make community participation an important ingredient of crisis management at the district level.6.3.1.10 The existing enrollment of about 6 lakh volunteers is grossly inadequate for a vast country like India. Some of the developed countries keep a target of about 1976 of the total population as civil defence volunteers. But with the high threat that India faces, this figure of 1976 may not be sufficient. However, as a first step, efforts should be made to reach this target within 5 years.6.3.1.11 The financial allocation for civil defence activities is very inadequate38. There is need to increase this substantially. For this to be done without delay, the increase should not be linked to any matching contribution from the states. The HPC had recommended that donations from corporate sector should be permitted for civil defence activities. The Commission agrees with this.6.3.1.12 Normally, the States have a common directorate for civil defence and home guards. With the expanded definition of ‘Civil Defence’, all activities of the Civil Defence Organization would be for crisis management. Therefore, the Directorate of Civil Defence should be brought under the control of the State Crisis Management set-up.6.3.2 Police, Home Guards and Fire Services6.3.2.1 The police are among the first responders in any crisis. This response normally comes from the nearest police station or police outpost. Their immediate responsibility is to communicate the information and mount rescue and relief efforts with whatever resources those are available with them. It is essential therefore, that policemen at field level who would be the first responders are sufficiently trained. The training need not be generic but specific to the types of crisis anticipated in an area. More importantly, they should be fully involved in the preparation of the local crisis/disaster plan and they should be fully conversant with the area.6.3.2.2 The role of Home Guards is to serve as an auxiliary to the police in the maintenance of internal security, help the community in any kind of emergency such as an air-raid, fire, cyclone, earthquake, epidemic, etc., help in maintenance of essential services, promote communal harmony and assist the administration in protecting weaker sections, participate in socio-economic and welfare activities and perform civil defence duties The total strength of Home Guards in the country is 5,73,793 against which the raised strength is 4,87,239. The organization is spread over in all States and Union Territories except Kerala. Home Guards are raised under the Home Guards Act and Rules of the States/Union Territories. They are recruited from cross-sections of the society who are willing to give their spare time to the organization for betterment of the community39.b.Civil Defence should be constituted in all districts which are vulnerable not only to hostile attacks but also to natural calamities. The goal of community participation should be pursued primarily through the instrumentality of Civil Defence especially in urban areas.c.The objective should be to include 1% of the population within the fold of Civil Defence within five years. Efforts should be made to enlist paramedics as Civil Defence volunteers.d.Budgetary allocations relating to Central Financial Assistance for Civil Defence should be increased substantially.e.Civil Defence set-ups at all levels should be permitted to accept donations.f.The Civil Defence set up at the state level may be brought under the control of the Crisis/Disaster Management set-up.6.3.1.13 Recommendations:a.The Civil Defence Act should be amended as proposed so as to cover alltypes of disasters.84218538As per the Annual Report of the Ministry of Home Affairs the allocated budgetary provision was only Rs. 10 crores in 2005-06.39Annual Report, Ministry of Home Affairs 2005-06.Crisis Management - From Despair to HopeEmergency Response System6.3.2.3 Although, both Civil Defence and Home Guards are voluntary corps, the essential difference between the two is that Home Guards on duty are like any public servants. This is because the primary task of Home Guards is enforcement of law. Section (5) of the Bombay Home Guards Act reads as follows:“5. Powers, protection and control (1) A member of the Home Guards when called out under section 4 shall have the same powers and protection as an officer of police appointed under any Act for the time being in force.(2) No prosecution shall be instituted against a member of the Home Guards in respect of any thing done or purporting to be done by him in the discharge of his functions or duties as such member except with the previous sanction of the District Magistrate”.6.3.2.4 Thus, a Home Guard could be very effective in any activity assigned to him during crisis management, provided he is properly trained in that activity. Therefore as has been suggested for policemen, each Home Guard should also be mandatorily trained in crisis management. The HPC recommended that the Home Guards should be placed under the operational and administrative control of the State Level Disaster Management Agency. The Commission is not in favour of this, as basically Home Guards perform policing functions and it is best that they are under the control of police. In case of crisis, they would, however, perform the tasks assigned to them by the concerned authority.6.3.2.5 Also in several state laws it is prescribed that the qualification of a person to be a Home Guard should be ‘Primary Pass’. This should be revised to at least a pass in the 10th class given the increasing responsibility and complexity of tasks to be entrusted to them.6.3.2.6 The fire services have been set up by the state governments with the Government of India providing technical and financial support. There is, however, no uniform structure of Fire Services in the country. In some states they are managed by the municipal authorities whereas in a few states, the police controls the fire services but in a large number of states it is organized as a department, with fire stations spread all over the state. In most of the states the Fire Services are not supported by legislation. Although Fire Services have been playing a crucial role in all types of disasters, the focus has been on fire related crises. There is an urgent need to train and equip the Fire Services to handle all types of crisis/disasters in line with international best practices where they have been modernized as multi-hazard forces. It would also be appropriate if they are renamed as Fire and Rescue Services.6.3.2.7 A Standing Fire Advisory Committee was constituted by the Ministry of Home Affairs on the recommendation of the Conference of Chiefs of Fire Services in India in 1955. The Standing Fire Advisory Committee was renamed Standing Fire Advisory Council in theyear 1980. This Council has been giving recommendations to the Government of India on various issues pertaining to Fire Services.6.3.2.8 An issue which arises while examining the structure of Fire Services is whether they should be handed over to the municipal authorities or they should continue as a department of the State Government. Bigger cities like Mumbai have their own Fire Services under the control of the Municipal Corporation. If Fire Services are kept with the local governments, this may ensure a well-coordinated response by all the concerned agencies in case of a crisis. However, small municipalities may not be able to support a separate Fire Service wing. An added problem would be of jurisdiction in case the crisis arises outside the limits of any such municipal body. Moreover, it is necessary to get the latest practices, equipment and technology in disaster and rescue management, and this would be possible only if there is a centrally located body which carries out research and keeps itself abreast with the latest developments and then disseminates these through appropriately designed training programmes and is able to procure expensive equipment that may be beyond the financial capacity of local bodies. The Commission, on balance, feels that for bigger cities (population exceeding 2.5 million), Fire Services should be totally under the control of the municipal authorities. In the remaining parts of the state, the Fire Services should be organized as a department. However, within a district, full operational control should be given to the District Crisis/Disaster Management Authority. However, in the long run, as the capabilities of municipal bodies are built up, Fire Services may be transferred to them in a phased manner. The state level set up should lay down policy guidelines, carry out capacity building programmes, carry out research and development etc. The department should also be professionalized by inducting persons with the required expertise at all levels.6.3.2.9 A model bill for the Fire Service was drawn up in October, 1956 in consultation with the Law Ministry and was examined and finalized by the Standing Fire Advisory Committee, after the State Governments had been consulted. The finalized draft model bill was circulated to all Central Ministries and State Governments (Ministry of Home Affairs letter No.28/3/56-ER-II, dated the 17th October, 1958). The Bill provides guidelines to formulate the State Fire Service Act and includes matters pertaining to the setting up and maintenance of the Fire Service, the appointments of various ranks, discipline, deployment, powers of the members of the Fire Service, levy and collection of fire tax etc. The Standing Fire Advisory Council in its various meetings has been recommending the adoption of this bill by the states.6.3.2.10 The model bill proposed in the 1950s is quite out of date. It would be desirable to have these provisions revised. It would be better if the Fire and Rescue Services are structured under the Crisis/Disaster Management Law. The law should inter-alia provide a mandate for862187Crisis Management - From Despair to HopeEmergency Response Systemdealing with all types of crisis/disasters. The mandate of the erstwhile Fire Services should be broadened and Fire and Rescue Services should become an integral part of the State Crisis/ Disaster Management set up. The role of the local governments and the District Crisis/ Disaster Management set up vis a vis the Fire and Rescue Services should be clearly laid down in the law. It should be ensured that the operational control of the Fire and Rescue Services is given to the local authorities/District Disaster Management Authorities.6.3.2.11 Recommendations:a. Policemen, Firemen and the Home Guards at the field level who are among the first responders should be adequately trained in handling crises/ disasters. Such training should be specific to the types of crises envisaged in an area. More importantly, they should be fully involved in the preparation of the local Crisis/Disaster Management Plan and also be fully conversant with them.6.3.3 Armed Forces/Territorial Army/Ex-Servicemen6.3.3.1 Armed forces have invariably played an important role in rescue and relief operations in all major disasters in the country. The constitution of specialized NDRF battalions would reduce the pressure on the armed forces, but with widespread presence, availability of highly trained, dedicated and well equipped human resources, and their capability to react within a short time-frame, the armed forces would continue to play a vital role in rescue and relief during all major crises. Territorial Army units should also be incorporated in crisis management planning and operations. The potential of ex-servicemen available throughout the country should also be tapped for disaster management. They should be mobilized for creating a voluntary disaster task force at the local level.b. The minimum qualification for entry to Home Guards may be revised to at least a pass in the 10th class, given the increased responsibility and complexity of tasks to be entrusted to them.c. A section of Home Guards should also be given para-medical training.d. Fire Services should more appropriately be renamed as Fire and Rescue Services with an enhanced role to respond to various types of crises.e.While in the long run, it would be desirable to place the Fire Servicesunder the control of all municipal bodies, as a first step, this may be done in bigger cities (population exceeding 2.5 million). In the remaining parts of the state, the Fire Services should be organized as a department but within a district, full operational control should be given to the District Crisis/Disaster Management Authority. Transfer of these services to municipal authorities should be accompanied by transfer of commensurate financial resources.f.Only persons with expertise in crisis/disaster management should beinducted into the top management of the Fire (and Rescue) Services.6.4 Setting up Integrated Emergency Operations Centre (EOC)6.4.1 As stated in para 3.12.3.8, the responsibility for disaster management at the national level has been shifted to the Ministry of Home Affairs (after the Gujarat earthquake) except drought (which continues to be with the Ministry of Agriculture) while specific types of disasters like rail accidents, atomic accidents, chemical disasters, biological disasters etc are dealt with by the subject ministries, some of which have round the clock EOCs. In all types of crises, getting early warning is critical to take precautionary measures or mount appropriate rescue and relief efforts without any delay. This would be possible if all the nodal ministries (for the designated type of crisis) have full time EOCs. It would be even better if there is only one unified EOC at the national level with personnel equipped and trained to handle information related to any type of crisis. If a ministry is already running a control room, the same could be housed in this integrated EOC. Such an integrated EOC could then be accessed by all agencies in the country or even by an international agency to pass on any information about an impending crisis. It would also be possible to have a robust communication link for this EOC with a large degree of redundancy built in so that the communication system becomes virtually fail proof. After getting the first information about any crisis, the concerned nodal ministry may immediately take steps to bolster the EOC by deputing more staff. Such an EOC should also have links to various electronic media channels and try to capture information about any crisis from these media channels, as many channels now have excellent reporting systems right down to the district/block levels. A similar arrangement should also be made at the state and district levels.6.4.2 Recommendation:g. Fire and Rescue Services should be brought under the control of the State Crisis/Disaster Management set up under the Disaster Management Law.h. The NDMA may be requested to suggest model provisions regarding these services for inclusion in the Disaster Management Act/s.a.While it is necessary that each nodal ministry handling crisis has an EOC,it is clearly desirable to have an integrated National Emergency Operation Centre for all types of crises. ‘Subject-matter specific’ Ministries/ Departments should deploy representatives in this Centre which must be networked with all other EOCs and control rooms.882189Crisis Management - From Despair to HopeEmergency Response System6.5 Organising Emergency Medical Relief6.5.1 One important facet of crisis management which is greatly neglected is the emergency relief for gravely ill patients, accident and fire victims, and others who need immediate attention. Most of these catastrophes / emergencies may be of individual and group nature, and may not affect large communities. Therefore, the administration in general is not involved. Nevertheless, a legal and institutional framework is necessary to provide emergency relief and immediate access to medical attention in order to save precious lives.6.5.2 In many developed countries, systems exist to handle such emergencies. For instance, in USA, the 911 telephone number is reserved for seeking emergency assistance of all kinds. The cost of relief is met through imposition of a small additional tariff on all telephone calls in the country. Similarly, in Europe, 128 is the number any person can dial in an emergency. In these advanced countries, the medical, fire, police and other emergency care services are well-prepared to meet all contingencies with reasonable effectiveness.6.5.3 In India, the police and fire services are legally entrusted with specific duties and are geared to respond to emergencies involving their intervention, subject to personnel and infrastructure limitations. Public health infrastructure is grossly inadequate and generally unsatisfactory whereas private health care is both costly and somewhat reluctant to deal with emergency management given the medico-legal complications and absence of health insurance coverage.6.5.4 In this backdrop, we need to create a legal and institutional framework throughout the country to deal with emergencies – medical or others. A non-profit initiative called EMRI40 has been established in Andhra Pradesh recently (in 2005), and is now providing services to callers in 32 towns and cities and neighbouring areas. A phone number 108 has been reserved for emergencies, and the state agencies like the police and fire services are increasingly collaborating with the private, non-profit initiative in receiving and sifting calls, and responding to emergencies.6.5.5 In effect, the call centre of EMRI with emergency number 108 has become the nodal centre for receiving all distress calls. Calls relating to police (burglary, murder, violence etc) and fire services are transferred instantly to state agencies, and calls for emergency medical assistance are handled by the EMRI. The EMRI provides transport immediately, and an emergency medical unit provides immediate rescue and emergency care. The patient is then sent to a hospital of her/his choice; or a public hospital. MOUs are entered into between EMRI and private hospitals.6.5.6 The experience of EMRI shows that there is great need for a nation-wide service of a similar kind, and thousands of lives can be saved annually through such a service. Also, in some parameters, we, in India, can improve upon the benchmarks set by the West, thanks to the rapid progress in information and communication technologies and innovations based on best practices. In order to institutionalize such an emergency response system, several legal and institutional arrangements need to be put in place all over the country for effective emergency response. We may need a law dealing with emergency medical services in the private sector and another law establishing an Indian Emergency Number Authority (IENA), dealing with protocols regarding a toll-free number for emergency dialing and coordination among various state and non-state agencies. A statutory authority may have to be created to monitor emergency medical management. A viable and sustainable funding mechanism may need to be evolved to make such a system work.6.5.7 Recommendations:a.An institutional arrangement to attend to medical emergencies is required to be put in place.b. Access to this system should be facilitated by having an identical telephone number throughout the country.b. This arrangement envisages involvement of the private hospitals. The enunciation of the role of various role players may be through legislation.9029140Emergency Management Research InstituteRecoveryavalanches is localized and is of a similar nature as in earthquakes but on a smaller scale. Finding safer sites near such locations often poses challenges and resistance.7RECOVERY7.1.4 The first step after stabilizing the situation by providing sufficient relief is to assess the damage. A meticulously executed assessment exercise would provide an ideal base for the rehabilitation efforts. This exercise is best carried out through multi-disciplinary teams which go into all aspects of damage (social, economical, psychological) in participation with the local community - based on guidelines already referred to (para 6.2.6).7.1 Relief and Rehabilitation7.1.1 The International Strategy for Disaster Reduction (ISDR) defines recovery as the “decisions and actions taken after a disaster with a view to restoring or improving the pre-disaster living conditions of the stricken community, while encouraging and facilitating necessary adjustments to reduce disaster risk”.Box 7.2: Recovery an OpportunityDisaster can become a development opportunity if relief efforts do not merely restore the poor status quo ante, but rather put people on a path to sustainable development. The goal in the transition phase must be to avoid a ‘circularity of risk’. This is what can happen when houses built with valuable international assistance get washed away during floods, dams left unrepaired after an earthquake aggravate drought conditions, and procedural delays in receiving rehabilitation packages from government and donor agencies leave the poor more vulnerable to the next disaster.7.1.5 Based on the assessment of the damage and the needs, a recovery strategy has to be formulated. The strategy should include all interventions - economic, social, political and psychological. The resources should be identified and the roles and responsibilities of all concerned should be defined.(Source: From Relief to Recovery: The Gujarat Experience:UNDP)7.1.2 While emergency response is vital as it is aimed at saving human lives and providing relief, the ultimate objective of any crisis management is restoration of devastated livelihoods. This restoration should not only encompass social, economic and psychological rehabilitation, but go beyond by addressing the underlying cause of disaster. Recovery efforts following rescue and relief in any disaster, can be classified into short term and long term. The short term activities for recovery are debris clearance, providing semi-permanent shelter and ensuring sanitation and restoringlifelines, while the long termactivities involve building a safer andBox 7.1: From Relief to Recovery: The Gujarat Experience: UNDP.....whatever the type and scale of disaster, the period of more sustainable livelihood.transition from relief to recovery is the most critical. During the relief phase, huge volumes of resources pour in from a range of entities such as government, the private sector, international aid agencies and civil society organizations (CSOs), each with diverse agendas and interests. As the relief phase draws to a close, public and donor interest wanes, and government and other agencies embark on a long process of recovery. In the period when relief is done but recovery is yet to begin, vulnerable groups are especially at risk.7.1.3 The damage caused by floods,earthquakes and cyclones is on amuch larger scale than otherdisasters and recovery after thesedisasters poses a challenge. Indisasters like drought, the reliefphase is prolonged and since thereis no damage to the infrastructure and property, the rehabilitation is confined to restoration of livelihoods which can get subsumed in normal development programmes. Recovery in case of epidemics is more in the form of sanitizing the locality against any future recurrence and may involve counselling of the victims. Industrial disasters being quite varied in nature, the rehabilitation in major ones like the ‘Bhopal Gas Tragedy’ could involve rehabilitation efforts spanning over a generation of victims apart from restoring livelihoods and providing social and psychological assistance. Rehabilitation following disasters such as landslides and7.1.6 Following any major disaster, a number of players arrive on the scene and as already stated, ensuring proper coordination amongst them becomes very important. Recovery activities are taken up by government agencies, local bodies, international agencies, Voluntary Organisations and others, through separate, overlapping and uncoordinated interventions. This leads to imbalances in the scale of operations, duplication of efforts in some areas, gaps in others and leakage and misuse of resources. Therefore establishing a framework for coordination is necessary for effective recovery. The role of Voluntary Organisations including international ones like the Red Cross is extremely useful for downscaling the impact of disaster. Voluntary Organisations are often better equipped to handle some aspects of accident relief and post-disaster rehabilitation. The district administration should set up a Voluntary Organisations’ coordination centreBox 7.3: Community Participationto coordinate the relief andrehabilitation activities of the In Latur, thousands of people waited five years for the Governmentto construct their houses. Contractor-built houses are not only Voluntary Organisations so that they disempowering, but can incrementally regress to non-seismicare not concentrated in a few structures. On the other hand, once people are given technical inputson seismic safety features, owner-built houses help to internalize thepockets.7.1.7 It is often observed that post- disaster recovery efforts tend to focus on rapid and visible solutions toknow-how and to foster experimentation through different approaches and mix of technology. Involving the community in design helps to cater to specific agricultural needs such as grain storage, cattle-rearing and milk-processing.(Source: From Relief to Recovery: The Gujarat Experience:UNDP)92193Crisis Management - From Despair to HopeRecovery94restore normalcy at the cost of sustainable development. The post-disaster recovery phase provides a ‘window of opportunity’ for disaster risk reduction and risk reduction aspects should therefore be built into the redevelopment process. This aspect in respect of shelter is highlighted by UNHSP.7.1.8 “Shelter is one of the most visible and immediate needs in post-crisis settings. Relief efforts are often focused on providing shelter quickly, without taking into account the impact of short-term shelter strategies. Long-term shelter strategies help not only to focus on determination and implementation of realistic and permanent reconstruction plans for the affected communities, but also to tie up with rebuilding community confidence and support structure for civic responsibility and urban governance, through participatory planning of reconstruction. Shelter issues are closely bound to mitigation aspects as well. The development of disaster resistant housing is a major factor reducing vulnerability to disasters. However, shelter issues in mitigation go beyond the structural. Rights to ownership and security of tenure make an enormous difference to the maintenance, management and development of shelter, particularly in urban areas. When people have security where they live, they are better able to manage space and engage in activities that will reduce, rather than increase their vulnerability41.”7.1.9 Normally, it is seen that the recovery efforts have a tendency of tapering off with the passage of time. The Bureau for Crisis Prevention and Recovery has also observed “the general experience that once the initial flurry of activities of providing rescue and relief is over, the attention received by the recovery efforts goes on declining steadily over a period of time and ‘business as usual’ sets in”42. This decline in recovery effort with the passage of time needs to be arrested. This could be achieved by setting up monitoring mechanisms in which the community is involved and periodically taking up impact evaluation studies through independent agencies. The recovery plan should incorporate measures to reduce vulnerability by building community resilience. This could be achieved by capability building of the community and awareness generation and preparing local crisis management plans.41Theme paper on sustainable relief and reconstruction in post-conflict, natural and human made disasters. Governing Council of United Nations Human Settlements Programme (www://).42United Nations Development Programme; Bureau for Crisis Prevention and Recovery - Disaster Reduction Unit7.1.10 A system of accountability needs to be evolved during the relief and rehabilitation phase. This system should ensure that the relief material reaches the target groups and that the funds are being utilized efficiently and optimally. A grievance redressal mechanism should also be put in place.7.1.11 After the recovery phase, it is necessary to conduct a detailed evaluation of all aspects of crisis management. This should bring out the strengths and weaknesses of the disaster management machinery and also provide the basis for future improvements. Such an evaluation should be carried out by an independent professional agency through the NIDM, in all major disasters. This evaluation should also include a quick audit of the expenditure incurred.Box 7.4: Guiding Principles for Post-Disaster Recovery1. Mainstreaming disaster risk reduction in the recovery/ development process2. Improving/maintaining coordination3. Promoting participatory approaches and decentralized planning and programming for recovery4. Enhancing safety standards and integrating risk reduction in reconstruction and development5. Improving the living conditions of the affected communities and sectors6. Building local and national capacities for increased resilience, risk management and sustainable development7. Taking advantage of ongoing initiatives8. Gender sensibility9. Demonstrative effects10. Monitoring, evaluating and learning(Source: United Nations Development Programme Bureau for Crisis Prevention and Recovery - Disaster Reduction Unit)7.1.12 Recommendations:a.Damage assessment should be carried out by multidisciplinary teams in a transparent and participatory manner in accordance with guidelines laid down by NDMA. (refer para 6.2.6 g).b. The efforts of NGOs and other groups have to be coordinated with government activities at the district and state levels.c.A recovery strategy should beevolved in consultation with the affected people and concerned agencies and organisations. The recovery strategy should include all aspects of rehabilitation - social, economic and psychological.d. Minimum standards of relief should be developed to address the requirements of food, health, water, sanitation and shelter. Focus should be placed on the special needs of the vulnerable population that is, children, women, the elderly and the physically challenged.Box 7.5: Inadequate Planning and Preparation in Rescue and Relief may Lead to Further Disasters42 die in stampede at Chennai flood relief camp.They came in droves seeking relief from their tragedy. But instead they fell victim to another tragedy as a stampede on Sunday (18-12-05) at a relief camp for flood victims in this Tamil Nadu capital left 42 people dead and 40 injured.Hundreds of people ran for cover following a sudden downpour and fell on each other, crushing women and children in their wake.The tragedy occurred at 4.30 a.m. as a crowd of around 4,500 - largely poor people - gathered in front of the locked gate of Arignar Anna Corporation Higher Secondary School at K.K. Nagar in west Chennai to receive food and other relief goods. The K.K. Nagar relief camp in the school was one of 141 such camps in and around Chennai distributing relief to victims of floods caused by unprecedented rains in different parts of the state since October.(Source: articleshow/1336840.cms)95Crisis Management - From Despair to HopeRecoverye.Implementation of the rehabilitation efforts should be carried out by the village panchayat/local bodies. The first priority should be to get the beneficiary oriented works executed through the beneficiaries themselves.f.Concurrent monitoring and a quick financial audit should be carried out to prevent misuse of funds.g.Risk reduction aspects should be incorporated into the recovery plans. Land use plans which ensure safety of the inhabitants should be brought into effect during reconstruction.h. All new civil constructions should mandatorily be made disaster resistant as per prescribed standards.i.A mechanism for redressal of grievances should be established at the local and district levels.j.For all major disasters, NIDM should conduct a detailed evaluation exercise through independent professional agencies.7.2 Revisiting the Financial Procedures7.2.1 In pursuance of their mandate to recommend measures for “financing relief expenditure on account of natural calamities”, successive Finance Commissions have included recommendations to enable states to respond to the immediate requirements of funds to deal with the emergencies caused by such calamities. At present, such arrangements are in the form of the Calamity Relief Fund (CRF), a readily available source of meeting immediate expenditure sharable between the Union and the states in the ratio of 3:1; and the National Calamity Contingency Fund (NCCF), a source of meeting additional fund requirements for particularly severe natural calamities financed solely by the Union Government from the surcharge on certain central taxes. These funds have generally enabled the states to respond to alleviate the immediate distress caused by natural calamities and give some compensation for loss. Long term rehabilitation and preparation could not receive the requisite attention due to paucity of resources.7.2.2 Section 46 of the Disaster Management Act, 2005 envisages establishment of two funds, namely, “National Disaster Response Fund” and “National Disaster Mitigation Fund”. Similar funds are also to be established at the State and District levels.7.2.3 Long term mitigation measures, being capital intensive, have to be carried out as part of the national plan or the state plan of the concerned Ministry/Department. Modalities of integrating projects taken up under the Mitigation Fund and other projects taken up under different schemes would have to be worked out. NDMA may be requested to finalise such modalities and also recommend guidelines for use of the Mitigation Funds at the National, State and District levels. Similar guidelines would also have to be worked out for the ‘Response Fund’.7.2.4 With the establishment of the National Disaster Response Fund, and the National Disaster Mitigation Fund, the CRF and NCCF may cease to exist at the end of the award period of the Twelfth Finance Commission (2005-06 to 2009-10). The quantum of assistance from these new funds for each state and its details and conditions of release may be suggested by NDMA - on the basis of a transparent criteria - rather than once in five years by the Finance Commission. It is desirable that both the funds are made operational from April 1, 2007, with an initial annual contribution of Rs 5000 crores each from the Government of India, in addition to the CRF and NCCF, which may cease to exist at the end of the award period of the Twelfth Finance Commission.7.2.5 Experience of the manner in which the existing funds have been administered has brought to light a number of anomalies. Some of these are:(i)Delay in initiation of relief expenditure, particularly from the CRF in case of droughts where states often wait for additional allocations from the NCCF before commencing distribution of relief on the ground.(ii) Absence of accounts for relief expenditure separately for a calamity under ‘each head of relief’; at present annual accounts are compiled on ‘over-all’ basis.(a) Lack of transparency about the basis on which assistance from the NCCF is sanctioned.(b) Absence of concurrent evaluation of relief efforts - this leads, among other things, to allegations of misuse and partisanship, with or without justification.7.2.6 Recommendations:a.Both the funds (National Disaster Mitigation Fund and the NationalDisaster Response Fund) may be operationalised from April 1, 2007 with an initial annual contribution of Rs. 5000 crores each from the Government9697Crisis Management - From Despair to Hopeof India. This would be in addition to CRF and NCCF for the present. The CRF and NCCF would cease to exist at the end of the award period of the Twelfth Finance Commission.8GENDER ISSUES AND VULNERABILITY OF WEAKER SECTIONSb. NDMA may recommend to Government of India the quantum and criteria of assistance and conditions of release from the two new funds as well as manner of replenishment of these funds from different sources.c.A system of compiling accounts for each calamity separately with referenceto each head of relief expenditure should be initiated. The Comptroller and Auditor General of India may consider laying down a standardized format in this regard.Box 8.1: Women in Disasterd. Accounts as above may be available on the website of the state level nodal agency at such intervals as may be laid down.e.The basis for calculation of assistance from the funds should be availableon appropriate websites.8.1 It has been noted that women and children are the most adversely affected in disasters, particularly natural disasters, and consequently suffer the most. This was evident during the recent Tsunami in India where in Nagapattinam district, 2406 women died as compared with 1883 men. The basic reason for this situation is the gender disparities which exist in our society because of which womenhave little say in decision making,particularly outside the household,they are comparatively less literate,dependant on men folk in most matters. Consequently, they are not adequately consulted in the decisionhave lesser mobility and areffIn Nagapattinam, the worst affected district of Tamil Nadu in South India, government statistics state that 2406 women died, compared with 1883 men. In Cuddalore, the second most aected district, almost three times as many women were killed than men, with 391 female casualties, compared with 146 men. In Devanampattinam village in Cuddalore, for example, 42 women died compared with 21 men. In Pachaankuppam village, the only people to die were women.Some of the causes of these patterns are similar across the region: many women died because they stayed behind to look for their children and other relatives; men more often than women can swim; men more often than women can climb trees. But differences too are important: women in Aceh, for example, traditionally have a high level of participation in the labour force, but the wave struck on a Sunday morning when they were at home and the men were out on errands away from the seafront. Women in India play a major role in fishing and were waiting on the shore for the fishermen to bring in the catch, which they would then process and sell in the local market. In Sri Lanka, in Batticoloa District, the tsunami hit at the hour women on the east coast usually took their baths in the sea.disaster preparedness plans or during relief and rescue operations, the special needs and concerns of women including their psychological and(Source: Oxfam’s report on Tsunami Impact on Women- health and well being are notw. nwmadequately addressed. It is, therefore, necessary that all disaster management policies/plans including disaster preparedness and mitigation relief and rescue operations specially address the vulnerability of both women and children during disasters. This would necessitate involving women in all disaster preparedness and mitigation plans. The same principles apply to other vulnerable sections like the children, the elderly and the physically challenged.News/Roundup/oxf am%20report.htm)98making process in the communityand have a lesser role in all activities.8.2 This disadvantaged situationobviously gets aggravated in crisissituation. As a result, whether it is in99Crisis Management - From Despair to Hope8.3 Recommendations:a.The vulnerability analysis should bring out the specific vulnerabilities ofwomen and these should be addressed in any mitigation effort. Disaster mitigation plans should be prepared, in consultation with womens’ groups. Similar steps should be taken for other vulnerable groups.9DROUGHT MANAGEMENTb. Rescue and relief operations should focus on the most vulnerable groups women, children, the elderly and the physically challenged.c.Relief measures should take into account the special requirements ofwomen and other vulnerable groups. Particular attention needs to be given to their physical and mental well being through health care and counselling.d. In the recovery phase, efforts should focus on making women economically independent by offering them opportunities of earning incomes, providing training in new skills, forming self-help groups, providing micro-finance, marketing facilities etc.e.The title of new assets created should be in the names of both husbandand wife.Box 9.1: Drought-prone Area DevelopmentDrought-prone areas should be made less vulnerable to drought-associated problems through soil - moisture conservation measures, water harvesting practices, minimisation of evaporation losses, development of the ground water potential including recharging and the transfer of surface water from surplus areas where feasible and appropriate. Pastures, forestry or other modes of development which are relatively less water demanding should be encouraged. In planning water resource development projects, the needs of drought-prone areas should be given priority.Relief works undertaken for providing employment to drought-stricken population should preferably be for drought proofing.f. Camp managing committees should have adequate number of women representatives.(National Water Policy)9.1 Risk Reduction9.1.1 The principles of disaster risk reduction outlined in the previous chapters are applicable to droughts as well, but unlike floods, earthquakes, and cyclones, droughts have certain distinct features - (i) the onset is slow giving adequate warning, (ii) it affects livelihoods of people over a large area, (iii) the duration of the disaster is much longer and so the relief efforts have to be sustained over this stretched time period, (iv) it remains basically a rural phenomenon except that very severe drought may also impact on urban water supply by drying up sources and drastically reducing water table in regions withg. Trauma counselling and psychological care should be provided to widows and women and other persons in distress. These activities should form part of the disaster management plan.aquifers, and (v) there is a possibility that drought management efforts could reduce vulnerability by improving moisture conservation and vegetal cover etc. This does not hold true of other natural disasters. In other words, droughts lend themselves to being managed in a manner not possible in most other disasters. All these factors necessitate ‘independent consideration’ drought management.h. Arrangements have to be made for orphaned children on a long term basis. NGOs should be encouraged to play a major role in their rehabilitation.9.2 Revisiting Long Term Interventions9.2.1 Unlike other disasters, risk reduction measures in drought in the form of DPAP, DDP and Watershed Development Programmes, have been undertaken for quite sometime. There is strong circumstantial evidence, however, that these schemes have not lived up to their full or promised potential.9.2.2 It is also noteworthy that while the net irrigated area which was 20.85 million hectares in 1950-51 rose to 53.07 million hectares in 2002-03 (representing an increase of more than 150%), the corresponding decline in areas vulnerable to repeated droughts has been no more than 20%. A major constraint in developing this theme further is absence of an over-100101Crisis Management - From Despair to Hopeall Impact Evaluation of DPAP and DDP. So far only specific projects viz. individual blocks or a cluster of blocks in geographically contiguous area have been assessed and positive ‘local’ findings (like improvement in vegetative cover, and water table and improved productivity etc) have been arrived at such local levels. There has been no assessment, for instance, of DPAP making any difference to frequency and intensity of droughts. Similarly, no study of “drought proofing” actually achieved, by extension of irrigation coverage in the peninsular region is as yet available. The point that emerges, therefore, is that much work remains to be done to ascertain the reasons why droughts continue to occur even in areas where irrigation is now available or other major ameliorative interventions have been made.9.2.3 Another aspect which needs to be seriously studied is the long term impact of water harvesting on the local ecosystems as such measures, though of great immediate utility, have the potential of altering, to some extent, the natural ‘pathways’ of water flow, changes in such pathways and their possible impact on acute droughts need to be studied in detail, unfettered by presumptions.9.2.4 A long term impediment in understanding the causes (and remedies) for occurrence of droughts is the absence of integrated expertise in water. There are institutions of excellence in hydrology, concerning scientific and engineering aspects of water and those concerned with ground-water and water requirements of crops etc. The diverse ‘water centered’ expertise scattered in such institutions is currently difficult to be integrated to generate the requisite multi-disciplinary approach for optimum results. The Commission therefore feels that a National Institute of Drought Management should be set up. Such an institution should take the lead in carrying out research on various aspects of drought as a multi-disciplinary problem. It should be a resource centre on droughts and also have the expertise to carry out impact evaluation studies of the drought management efforts, etc.9.2.5 Recommendation:a. A National Institute of Drought Management may be set up for networking on multi-disciplinary, cross-sectoral research on various aspects of drought, acting as a resource centre on droughts and carrying out impact evaluation studies of the drought management efforts. It needs to be ensured that the mandate and agenda of this proposed institute does not duplicate the efforts of the National Institute of Disaster Management.9.3 Livelihood Management in Extremely Drought Prone Areas9.3.1 Areas suffering repeated droughts over the millennia have highly degraded land resources. Such areas are found in pockets in many parts of the country and the subsistence/Drought Managementunsustainable agriculture practiced in such areas make them easy prey to even a modest drought. Human populations in many such degraded spots have adapted their life-styles to deal with the vagaries of nature through a predominantly pastoral mode of existence. There are a number of studies which show that such well-adapted populations have developed greater resilience and coping capabilities. There are, however, areas where deep attachment to agriculture tends to dissuade frequently drought affected communities from looking at ecologically more compatible livelihoods. Programmes like the DDP have contributed significantly to promoting alternative and more sustainable non agricultural livelihoods. The issue of concretizing a strategy of facilitating pursuing of livelihoods appropriate to an ecosystem is beyond the remit of the Commission; there are, however, some aspects which need to be addressed urgently to mitigate frequent crises which result from ‘unsustainable agriculture’. These measures could include identification of areas where conventional agriculture is not sustainable and devising methods to motivate people in such areas to switch over to appropriate livelihood regimen etc.9.3.2 Recommendation:a. A strategy for making people pursue livelihoods compatible with their ecosystems needs to be evolved. Some concrete steps in this direction could be:(i) A multi-disciplinary team needs to be immediately constituted by the Ministry of Environment and Forests to specifically identify villages where soil and climatic conditions make ‘conventional agriculture’ unsustainable.(ii) Alternate means of livelihood have to be evolved in consultation with the communities, in such areas.9.4 Codifications of Management Methodologies9.4.1 Following the famines in the 19th century, two Royal Famine Commissions were appointed. Their recommendations led to the Famine Codes which laid down a framework for keeping a watch on emerging situations detecting signs of distress, apportioning responsibilities and delegating powers for provision of relief and the system of monitoring and supervision etc. In the first half of the last century, the Codes were generally kept up-to-date; around that time floods were added to famines and subsequently a distinction – sign of the changing times - was drawn between “famines” and “scarcity” etc. It is noted that the Codes/Manuals were generally left untouched in the second half of the century - updating was either not carried out or was done very fitfully through “correction slips” endowing the102103Crisis Management - From Despair to Hopeonce comprehensive Codes with a degree of asymmetry. Out of date Codes and Manuals are not only counter productive but can also create serious confusion as the subordinate functionaries tend to place considerable reliance on these archaic vade mecums.9.4.2 Many developments in the last half a century or so have made considerable difference to the way droughts are diagnosed and handled. Chief among them are powerful tools like satellite imagery, long term forecast of Monsoons and discovery of sophisticated determinants of the movement of the Monsoon. Over-exploitation of ground-water and extension of surface irrigation from ‘non-snow melt sources’ (particularly in the peninsular region), crop diversification from coarse grains to cash crops and availability of a wide variety of alternate crops are important developments with a bearing on occurrence and management of droughts – these do not find place in the manuals. Added to this is the emergence of new Departments and agencies both in the Government of India and the State Governments. A related matter is the advances made in respect of other natural disasters, notably cyclones and floods – often the guiding document remains the same Relief Code. The Commission therefore feels that these Codes need to be re-written keeping in view the latest developments.9.4.3 Recommendations:(i) State Governments need to rewrite the Relief ‘Manuals’ in the light of recent developments including inputs from the NDMA and their own experience and update them once in a few years.(ii) Ministry of Science and Technology may compile from time to time a document incorporating details of available scientific and technical inputs/ facilities for detecting the onset and progress of drought; and inter-face between scientific and technical organizations with disaster management agencies of the Union and State Governments.9.5 Rationalization of Drought Declarations9.5.1 Requirements of revenue laws or executive instructions of Famine/Scarcity Codes entail a formal declaration of droughts. In many states, relief works can commence only after such a declaration. Such declaration has the effect of wholly or partly extinguishing the liability of the land-holder to pay land revenue. In the days when land revenue constituted a major resource for the state, issue of such declarations had major fiscal consequences unconnected with the management of disaster per se. Not surprisingly, therefore, issue of declarations has become a rather cumbersome process preceded by ‘crop cutting’ experiments variously called ‘Paisewari’, ‘Anawari’, ‘Relief Khatauni’ or ‘Kharaba’ etc. For ‘Kharif’ droughts the earliest declarations have not been possible before October i.e. at least three months into a severeDrought Managementdrought. Some states do have an enabling provision about ‘eye estimations’ in case of a very severe drought. This involves an assessment of area that is left unsown due to severe moisture distress or withering of plants soon after germination. The Commission is of the view that the drought declaration process needs to be rationalized and made uniform in all states. It would not be appropriate to base such declaration upon the crop yields as it delays the commencement of drought relief measures. Therefore, the declaration would have to be based upon an estimate of the cropped area. To begin with, these would have to be eye estimates. With advances in satellite imagery, these estimates could be corroborated and ultimately the entire exercise could be based on remote sensing. These could be finalized in consultation with the states and under the guidance of NDMA.9.5.2 Recommendations:The method and mechanism of declaration of droughts needs to be modified under the guidance of NDMA. While it is for the State Governments to work out the modalities keeping in view the peculiarities of their agro-climatic conditions, the Commission recommends that the modified mechanism may incorporate the following broad guiding principles:(a) Where a certain percentage (say twenty per cent) of area normally cultivated remains unsown till the end of July or December for Kharif and Rabi respectively, the affected Tehsil/Taluka/Mandal could be declared drought affected by the government.(b) To begin with, ‘eye estimates’ could be used. Such estimates may be verified with reference to remote sensing data as access to such facilities improves progressively. The ultimate objective should be to use remote sensing as the primary tool of early detection of droughts with ‘eye estimates’ remaining only as ‘secondary verifying methods’.9.6 Deployment of Remote Sensing for Diagnosis and Prognosis of Drought Situations9.6.1 Satellite imagery and similar techniques are powerful tools in anticipating the occurrence and assessment of the effect of ‘extreme weather events’. Crop Acreage and Production Estimation (CAPE) was initiated in 1995 with the sponsorship of the Department of Agriculture and Cooperation. Under this project, multi-date IRS satellite data are used for pre-harvest acreage and production estimation for major food crops as well as cotton. The estimates are provided for kharif rice in Bihar, rabi rice in Orissa, mustard in Assam, Gujarat, Haryana, Rajasthan and West Bengal, wheat in Bihar, Himachal Pradesh, Gujarat, Madhya Pradesh, Rajasthan and Uttar Pradesh and sorghum in Maharashtra. Based on the104105Crisis Management - From Despair to Hopeoutcomes of CAPE, an enlarged and comprehensive scheme known as Forecasting Agricultural output using Space, Agrometeorology and Land based observations (FASAL) has been taken up.9.6.2 Remote sensing has not yet been dovetailed in the routine institutional framework, as for instance, is the case of communication technologies. The process calls for innovative solutions which apart from being cost effective leave room for technological and professional innovation. A workable, indicative, model would involve positioning of technical personnel of the National Remote Sensing Agency (NRSA) at the District level on the analogy of similar arrangements by the National Informatics Centre. The NRSA personnel will function in close association with the Revenue functionaries of the District to generate information that is constantly buttressed by ‘ground truth verification’. A state level cell of the NRSA will have the responsibility of collating district-wise information on as near ‘real time’ basis as possible. Such arrangements lend themselves eminently to being codified in the form of a ‘doable’ manual to be drawn up nationally by the NRSA in conjunction with experts from the states with minor (though significant) state level variations being appended ‘locally’.9.6.3 Recommendation:a.Deployment of remote sensing as the primary tool for diagnosingdroughts, monitoring their course and forecasting prognosis is a goal that needs to be pursued speedily and systematically. This would require dovetailing remote sensing into the routine framework of drought management. This could be best achieved through establishment of an NRSA cell in identified drought prone districts. The activities of the NRSA cells in the districts must include monitoring of other disasters as well.9.7 Making Rivers Perennial9.7.1 The bane of frequent droughts in the peninsular region has been traced as much to many of the areas in the region falling in ‘rain-shadow’ zones as to the seasonal nature of the rivers in this region. This is also borne out by the fact that in the Northern region even major deficits in precipitation do not so adversely impact the ecosystems as most of the rivers in this area depend on the snowmelt and are thus perennial.Drought Managementexamined this issue. That Commission envisaged a system of regulated inflow of discharge in rivers from the catchment areas, mainly within the forests, though rigorous and accurate monitoring of inflows and outflows and engineering interventions through close collaboration between the Forest and Irrigation Departments.9.7.3 The Commission feels that this neglected aspect deserves much greater attention and approaches and methodologies for achieving it need to be standardized and evaluated. Technical agencies under the Ministries of Water Resources, Environment and Forests and Science and Technology should immediately carry out river specific feasibility studies to determine the ecological and hydrological implications of this approach in different habitats.9.7.4 Recommendation:a.Technical agencies under the Ministries of Water Resources, Environmentand Forests and Science and Technology must immediately carry out river specific feasibility studies to determine the ecological and hydrological implications of making seasonal rivers perennial.9.8 Rainfed Areas Authority9.8.1 The Commission understands that the constitution of a National Rainfed Areas Authority is under active consideration and the Authority can deal inter alia, with the above aspects and also the formation of National Institute of Drought Management referred to earlier.9.8.2 Recommendation:a. A National Rainfed Areas Authority may be constituted immediately. The Authority can deal, inter alia, with all the issues of drought management mentioned in this chapter.9.7.2 Irrigation systems based on perennial rivers retain their efficacy even during severe droughts while there is, at times, a total collapse of this system in areas served by seasonal streams. It is not surprising, therefore, that the issue of upgrading seasonal rivers to the ‘perennial status’ has engaged attention of scientists, engineers and policy makers from time to time. The Revenue Reforms Commission of Karnataka, 2003 for instance, has106107Management of Specific Crisis Situations (Epidemics and Disruption of Essential Services)10MANAGEMENT OF SPECIFIC CRISIS SITUATIONS (EPIDEMICS AND DISRUPTION OF ESSENTIAL SERVICES)10.1.4 This legislation is outdated and needs comprehensive modifications. This is evident from the fact that to deal with the situation arising out of the detection of Avian Influenza in certain parts of Maharashtra, this year, slaughter of poultry birds in the affected areas had to be ordered under the provisions of the Bombay Police Act! While such ad hoc measures display commendable innovation, it is clear that epidemics-related emergencies need to be dealt with more normatively.10.1 Epidemics10.1.1 That epidemics may assume crisis proportions when an outbreak is geographically widespread and the causative strain is of a particularly virulent variety is understood. It is, however, also clear that the entire system of public health is based on the validated premise that, given an adequate regimen of surveillance and safeguards, epidemics can be prevented from assuming crisis proportions. Figures of mortality relatable to causes of death provide ample testimony to the fact that in the last several decades the toll taken by epidemics has shown a significant declining trend. The decline is also the result of advances made in medical sciences and through improvement of more efficacious therapeutic agents. It is, therefore, encouraging to note that, over the years, fewer epidemics have assumed the nature of catastrophe.10.1.5 The Public Health Emergency Bill currently being considered by the Ministry of Health and Family Welfare in the light of responses of the State Governments and other agencies concerned seeks to achieve this end. There is a provision for the Union or State Governments to declare a particular area as ‘epidemic or bio-terrorism affected’. Upon such declaration, action can be initiated under the provisions which apart from measures like inspection and quarantine etc., also seeks to empower government to prohibit activities which lead to or are likely to lead to epidemics or bio-terrorism. The schedule annexed to the proposed legislation also lists out epidemics which fall within the purview of the Act.10.1.2 The complex nature of control of epidemics is evident from the fact that in the Constitution of India all the three legislative lists of the Seventh Schedule enumerate some aspects of the matter as follows:10.1.6 Many states also have laws on the public health system as a whole which has the responsibility of preventing, containing and managing epidemics. Mention may illustratively be made of the Madras Public Health Act, 1939 which deals with a whole range of issues with a bearing on all aspects of public health and sanitation relevant to prevention and management of epidemics. The legislation treats public health in its entirety and covers aspects like water supply, sanitation and drainage within the same framework. An innovative feature of this law is that it includes what can be referred to as quality of life within the domain of public health and introduces control of all activities or inactions that may cause ‘annoyance’ to the public thereby bringing in irritants like sound pollution within its purview.List-I; entry 28 “quarantine” and entry 81 “inter-State quarantine”; List-II; entry 6 “Public health and sanitation”;List-III; entry 29 “prevention of the extension from one State to another of infectious or contagious diseases”.Such legislations, it need hardly be emphasized, are more conducive to comprehensive management of epidemics.10.1.3 Pending the enactment of a new law which is under consideration of the Government, the Epidemic Diseases Act, 1897 continues to deal with management of epidemic related diseases. It is an omnibus legislation which essentially supercedes all laws in force in the event of outbreak or a threatened outbreak of a ‘dangerous epidemic disease’ and authorizes the Union and State Governments (when authorized by the Union), to resort to all necessary measures to deal with the emergency through temporary regulations. The Act also empowers search of vessels and other means of transport and detention and segregation of any persons suspected to be suffering from an epidemic disease. Power has also been given to the governments on how funds required to deal with operational requirements including payment of compensation, will be provided.10.1.7 The Commission’s terms of reference requires it to deal with crisis management aspect of epidemics in the context of administrative reforms. The Commission would, therefore, not like to address technical and general public health issues even though they are germane to an effective management of epidemics-related crises. The Commission would only like to note that a comprehensive, well planned public health system is the most dependable bulwark against epidemics-related crises and to deal with such crises, should they arise despite preventive measures. In this connection the Commission notes the efforts to develop a model indicative Public Health Bill and strongly recommends its early finalization with the hope that State Governments will move speedily for its enactment.1081109Crisis Management - From Despair to HopeManagement of Specific Crisis Situations (Epidemics and Disruption of Essential Services)10.1.12 Recommendations:(i) To more effectively prevent outbreak/spread of epidemics, it is imperative that a comprehensive revised ‘model’ legislation on public health is finalized at an early date and that the Ministry of Health and Family Welfare systematically pursues its enactment by the states with adaptations necessitated by local requirements.(ii) The Union legislation governing Public Health Emergencies be introduced for final consideration in the light of feedback received from the states at an early date.11010.1.8 The Commission also notes that the enactment of the Public Health Emergencies Bill is now proceeding satisfactorily in the light of the feedback received from the States. The emerging scourge of bio-terrorism also needs to be taken adequate note of and care has also to be taken to facilitate incurring of expenditure on emergent basis (for which enabling provision exists in the 1897 Act).10.1.9 The manner in which the Disaster Management Act, 2005 defines the term ‘disaster’ leaves no doubt that an epidemic of extraordinary severity spreading rapidly is covered by it. The Act also overrides the provision of any other law (Section 72). As such, it is clear that management of epidemics-related crisis would also fall within the jurisdiction of the National Disaster Management Authority and that apart from the legislation being contemplated by the Ministry of Health and Family Welfare, it will be imperative that the planning and preparatory exercises envisaged in the Disaster Management Act, 2005 are also undertaken. In any case, bio-terrorism is the cutting edge between the public health and general disaster management systems as the National Disaster Response Force will be a substantive ‘first responder’ in such contingencies under the technical supervision of public health professionals. The Public Health Emergencies Bill has to provide for this coordination.10.1.10 Further, while the public health infrastructure in the country is being upgraded and strengthened, it is quite possible that a severe, widely prevalent epidemic could overwhelm the coping capacity of the functionaries. It is, therefore, also imperative that the contingency plans dealing with such situations draw upon the general system of disaster management by developing formal and well defined linkages.10.1.11 Keeping in view the above considerations, the Commission would like to make the following recommendations:10.2 Disruption of Essential Services10.2.1 With rapid development, industrialization and urbanization, the life of citizens depends on a wide range of essential services like power, transport, telecommunications and drinking water supply. Any disruption in these services would lead to large scale hardship to people. Such disruptions may be caused by accidents, sabotage or strikes. It has been observed that often during natural disasters such essential services are severely hit. It is, therefore, necessary that the community and the administration should be prepared to meet such eventualities. Dealing with such situations would have specific technical aspects but there could be a host of administrative measures which would be required to mitigate hardships during such crisis. The Commission is not going into the details of each one of these situations but would like to emphasise that while drawing up disaster management plans these types of crises should not be lost sight of. It is essential to formulate ‘standard operating procedures’ and mitigation plans for these crises also.(iii) Ministry of Health and Family Welfare has to ensure that requisite plans envisaged under the Disaster Management Act, 2005, are drawn up in respect of epidemics also and that the role of the district administration finds explicit mention in the Public Health Emergency Bill. The structure created by the Disaster Management Act, 2005, should be utilized for managing epidemics also.(iv) While surveillance and management of epidemics are the responsibility of public health professionals, it is clear that a particularly severe outbreak could overwhelm the capacities of the ‘line organizations’. The Ministry of Health and Family Welfare and the State Governments must ensure that ‘standard operating procedures’ are devised to assign roles and responsibilities of agencies and personnel outside the line organisations wherever a situation so warrants.(v) State level handbooks and manuals concerning disaster management should have a chapter on “epidemics-related emergencies”. A model chapter may be circulated by the Ministry of Health and Family Welfare for guidance of states. It may be useful to document the past handling of epidemics like the Plague (Surat) and Japanese encephalitis (Eastern UP) to facilitate standardization of response mechanisms.21111Crisis Management - From Despair to Hope10.2.2 Recommendations:(i) All crisis/disaster management plans should include plans for handling possible disruptions in essential services.11CONCLUSION(ii) All agencies/organizations engaged in the supply of essential services should have their own internal crisis management plans to deal with emergencies.(iii) Regulatory authorities of the respective sectors may lay down the required framework for drawing up standard operating procedures and crisis management plans.11.1 In terms of the reference made to it, the Commission was asked to suggest ways to quicken the emergency responses of the administration and increase its effectiveness to meet crisis situations and enhance crisis preparedness. The Commission, however, has taken a holistic view of the entire gamut of crisis management, and in the process, has gone beyond its mandate of looking at response and preparedness. In doing so, the Commission has been influenced by the cumulative experience of crisis management over the years, which points to an urgent need to move from fatalism to prevention, from response to preparation, and from mobilizing resources after the fact to reducing risk before the fact.11.2 Systematic preparedness, early warning, quick response and sustainable recovery have been the cornerstones of the Commission’s approach to crisis management. The Commission is of the view that to reduce vulnerability, a strategy that emphasises all four is better than one of mere response. To that end, the Commission has recommended a comprehensive preparedness, early warning, quick response and recovery strategy, with two goals: to protect people and structures from disasters and to increase the effectiveness of crisis response and recovery.11.3 Managing a crisis is primarily the responsibility of the government. But the community, local bodies and voluntary organizations also play a vital role. It is for the administration to coordinate the efforts of all stakeholders such that the synergy generated reinforces and multiplies the resources available and results in a comprehensive and timely response.11.4 While making its recommendations, the Commission has taken due note of the mechanisms that synergize pre-disaster and post-disaster activities. The Commission is of the view that crisis management is not a separate discipline but an approach to solving problems involving all the sectors in a manner to ensure collective response. In that context, crisis reduction becomes the responsibility of all stakeholders who may be potentially affected by the crisis. Working in that perspective, the Commission has attempted to delineate a road map involving all stakeholders, agencies and organizations at all levels during all phases of a crisis.11221113Summary of RecommendationsSUMMARY OF RECOMMENDATIONSd. The task of implementation of mitigation/prevention and response measures may be left to the State Governments and the district and local authorities with the line ministries/departments of Government of India, playing a supportive role.e.The law should cast a duty on every public functionary, to promptly informthe concerned authority about any crisis, if he/she feels that such authority does not have such information.1. Constitutional provision - Is there need for a separate entry (Para 4.1.5)a. A new entry, “Management of Disasters and Emergencies, natural or manmade”, may be included in List III (Concurrent List) of the Seventh Schedule of the Constitution.f.The law should create a uniform structure at the apex level to handle allcrises. Such a structure may be headed by the Prime Minister at the national level and the Chief Minister at the state level. At the administrative level, the structure is appropriately headed by the Cabinet Secretary and the Chief Secretary respectively.2. Analysis of the Disaster Management Act, 2005: (Para 4.2.3.5)The Disaster Management Act, 2005 (Central Act) needs to be amended to bring in the following features:a.Disaster/Crisis Management should continue to be the primaryresponsibility of the State Governments and the Union Government should play a supportive role.b.The Act should provide categorization of disasters (say, local, district,state or national level). This categorization along with intensity of each type of disaster will help in determining the level of authority primarily responsible for dealing with the disaster as well as the scale of response detailed guidelines may be stipulated by the NDMA on this subject.c.The functions of the National Disaster Management Authority shouldbe: to recommend policies, to lay down guidelines for preparation of different disaster management plans and standard operating procedures; to promote and organize vulnerability studies, research and evaluation; to advise on parameters of categorization and on declaration of national and state disasters; to develop expertise and knowledge in the field of crisis/disaster management and disseminate to the field, to develop and organize training and capacity building programmes, to coordinate the early warning system and deploy specialized manpower and machinery in support of local/state governments, where required; to advise on the constitution and use of the Disaster Management Funds; and to give recommendations on all matters relating to crisis/disaster management to the government.g. The law should make provisions for stringent punishment for misutilization of funds meant for crisis/disaster management.h. The role of the local governments should be brought to the forefront for crisis/disaster management.i.The NEC as stipulated under the Disaster Management Act need not beconstituted, and the NCMC should continue to be the apex coordination body. At the state level, the existing coordination mechanism under the Chief Secretary should continue (refer para 4.3.3).j.Since all sections of the Act have not been notified, it is suggested that theabove amendments be carried out without further delay. Meanwhile, except for those sections for which amendments are suggested, the others can be notified straightway so that the law can be brought into effect.3. Coordination at the Apex Operational Level: (Para 4.3.3.3)a.There is no need for a separate ministry/department of disastermanagement at the national or the state level.b. The NEC as stipulated under the Disaster Management Act, 2005 need not be constituted, and the NCMC can continue to be the apex coordination body. At the state level, the existing coordination mechanism under the Chief Secretary may continue.c.Notwithstanding the establishment of NDRF, the role of the Armed Forces,particularly the Army, in coming to the aid of victims of disasters should114115Crisis Management - From Despair to HopeSummary of Recommendationsbe retained and the special capabilities acquired by the Armed Forces in search and rescue and on-the spot medical attention need to be maintained.4. Role of Local Self-Governments: (Para 4.3.4.2)a.State Governments may examine the need to incorporate provisions inthe state disaster management law and also the state laws governing local bodies to provide for a well defined role to the municipal bodies and panchayat raj institutions.5. Crisis Management Set Up for Metropolitan Cities: (Para 4.3.5.2)a.In larger cities (say, with population exceeding 2.5 million), the Mayor,assisted by the Commissioner of the Municipal Corporation and the Police Commissioner should be directly responsible for Crisis Management.6. Creation of Legal and Institutional Framework for Managing Floods in Inter-State Rivers: (Para 4.3.8.2)a. Using powers under Entry 56 in the Union List, a Law may be enacted to set up mechanisms for collection of data, managing flow in rivers and release of water from reservoirs, so as to prevent disasters, with interstate ramifications.7. Empowering the Relief Commissioners/Disaster Management Departments to Effectively Discharge Disaster Related Responsibilities: (Para 4.3.9.2)a.The State Disaster Management organisations need to be strengthenedfor dealing with crises. This could be achieved in the following manner:(i) A framework should be in readiness to be put in place immediately during crisis or on fulfillment of some pre-arranged scenarios – the ‘trigger mechanism’ needs to be well defined to ensure that the ‘framework’ is put in active operation instantaneously.(ii) The ‘framework’ may consist of officers (designated by name) drawn from Revenue, Police, Agriculture, Animal Husbandry, Public Health Engineering, Water Resources, Women & Child Development, Welfare, Public Works, Highways, Irrigation, Health, and Treasury & Accounts Departments. The designated officers must undergo a week’s orientation every year, though they may continue to dischargetheir normal departmental responsibilities except when secondedto the nodal point in the manner suggested above.(iii) The designated officers will work as a cohesive integrated team under one roof on whole-time basis during crisis situations, under the leadership of the nodal officer and be responsible entirely for the functioning of their department insofar as it relates to drought/ disaster management.(iv) The role and responsibility of each department needs to be specifically identified and defined on the lines the Ministry of Agriculture has specified the responsibilities of various Union Government agencies during severe droughts.(v) The designated departmental officer should be delegated powers and responsibilities defined in advance and will deal with other departmental functionaries directly.8. Institutional Support from Science and Technology Institutions to Disaster Management: (Para 4.3.10.3)a. The National Disaster Management Authority, assisted by NIDM, may facilitate a common platform between the Science and Technology organizations and the users of the technologies. Such a mechanism may be operationalised both at the Union and State levels.9. Strengthening of National Institute of Disaster Management (NIDM): (Para 4.3.11.2)a. NIDM may continue as an autonomous body and function as an apex professional institution in disaster management. In addition to research and studies, the institution needs to engage itself in documenting and disseminating global and national best practices and in developing planning, training and evaluation methodologies.10. Professionalization of Disaster Management: (Para 4.3.12.3)a.‘Disaster Management’ as a body of knowledge should be introduced as asubject in Management and Public Administration. The University Grants Commission may initiate the process to see how best this can be implemented in selected Universities.11621117Crisis Management - From Despair to HopeSummary of Recommendationsb. The possibility of bilateral agreements with foreign governments and international institutions dealing with different aspects of disaster management, for exchange of experiences and learning from their documentation and research efforts may be explored.11. Enunciating a Policy Towards Crisis Management Which Emphasizes Risk Reduction: (Para 5.2.3)There is need to have a National Policy on Disaster Management. The policy must address all issues not included in legislations and may, in particular include the following:a.Disaster Management to be professionalized.b. Risk management to be brought to the centre stage in all disaster mitigation plans.c.All efforts for disaster management to be based on hazard and vulnerability analysis.d. Communities and local governments to be made aware of the hazards and the vulnerabilities.munities and local governments to be involved in formulating disaster management plans.f.The primary responsibility for disaster management to be that of the State Government, with the Union Government playing a supportive role.g.Effective implementation of land use laws, building byelaws, safety laws and environmental laws.h. Setting up a framework to coordinate the responses from different sections like donors, voluntary organisations, corporate bodies etc.i.Special needs of women, children, elderly and physically challenged persons to be addressed.12. Assessment of Risk - Hazard and Vulnerability Analysis: (Para 5.3.8)a.Hazard and vulnerability analyses should be made an essential component of all crisis/disaster mitigation plans.b. Priority should be given to seismic micro-zonation of vulnerable major cities, hazard prone areas, and urban agglomerations in a scale of 1:1000in Zones V and IV, with topmost priority being given to cities with population of more than one million.c.Geographical Information System tools should be used to integrate spatialdata such as topography, hydrology, land use, land cover, settlement pattern and built structure as well as non-spatial data such as demography, socioeconomic conditions and infrastructure in a common platform. This should be integrated with satellite and aerospace data as well as data from Geographical Positioning Systems for real time monitoring of crisis situations and for scientific assessment of damages.d. Scientific, technological and research organizations such as NRSA, ISRO, NIC, GSI and NIDM should be brought on a common platform by NDMA for developing a sound information base for crisis management. This exercise should generate base hazard maps for district and sub-district levels and should be completed by the end of Eleventh Plan. Till such time the GIS based hazard maps are prepared, the conventional maps have to be used. These maps should form the basis for hazard analysis.e.A detailed vulnerability analysis should be carried out in all hazard proneareas. Such an analysis would prioritize the areas in order of vulnerability; it should also highlight the vulnerability of different sections of society and infrastructure.13. Generating Awareness about Risk: (Para 5.4.4)a. Awareness generation programmes should be undertaken using tools of social marketing.b. A responsible media, which is also well informed about all aspects of disaster, is a very powerful tool for sensitizing people. Proactive disclosures about all aspects of disaster management would build a healthy relationship between the media and disaster management agencies.c.Details of past accidents and disasters and the lessons learnt, should bedocumented and kept in the public domain. The Disaster Management Authorities have to take up this task.14. Preparation of Disaster Management Plans: (Para 5.5.9)a.Crisis/disaster management plans as stipulated under the DisasterManagement Act, 2005 should be prepared, based on hazard and11821119Crisis Management - From Despair to HopeSummary of Recommendationsvulnerability analysis. The off site emergency plans, in case of industrial hazards, should be integrated into the District Crisis/Disaster Management Plan. The State Disaster Management Authorities should set up a mechanism in place to evaluate these plans periodically, and ensure the effectiveness of the plans.b. The District Disaster Management Plan needs to have two components:i.Long Term Mitigation Plan.ii. Emergency Response Plan.The Long Term Mitigation Plan, in turn, should have the following components:i.Long Term Development Plan.ii. Long Term Enforcement Plan.Annual plans should be culled out of the Long Term Development/ Enforcement Plans. State Governments must evolve a mechanism for speedily scrutinizing district level long term plans to harmonize these with similar plans for other districts, particularly those located contiguously.c.The quality of on-site and off-site emergency plans in hazardous industrialunits need to be enhanced in terms of completeness and practicability of implementation considering the ground level situation. The State Disaster Management Authorities should set up a mechanism in place to evaluate these plans periodically.d. The plan should be prepared in consultation with all role players. Each role player should understand and accept his/her roles. This would require awareness campaigns, especially for the community.e.For ensuring quality of on-site and off-site emergency plans (for hazardousunits), the professional expertise available, both in industry, and in enforcement agencies such as the Factory Inspectorates should be improved.f.All crisis/disaster management plans should be tested periodically throughmock drills.g.It should be the responsibility of the state level ‘nodal department’ toensure that adequate assistance is available at the district level for drawing up and periodically updating the plans. The nodal department must engage agencies and experts on a continuing basis to examine the plans and bring methodological and substantive deficiencies to the notice of agencies formulating the plans.h. The same principles would apply to plan at other levels.15. Making Crisis/Disaster Management Plans a Part of Development Plans: (Para 5.6.3)a.The activities in the disaster management plans should be included inthe development plans of the line agencies and the authorities like panchayats and municipal bodies.b. The supervisory level of each agency should ensure that the annual plan of that agency incorporates the activities listed out in the disaster management plan on a priority basis.c.Incorporation of disaster mitigation plans into the development plansshould be specially monitored at the five-year and annual plan discussions at State and Union (Planning Commission) levels. The Planning Commission, State Planning Boards and Planning Departments must revise on priority basis the proforma for formulating plan proposals to ensure that the process adequately takes into account the disaster prevention concerns.16. Instruments for Mitigation of Hazards: (Para 5.7.1.2)a. Environment management should be made an integral part of all development and disaster management plans.17. Construction of Disaster Resistant Structures: (Para 5.7.2.3.13)a.Structural prevention measures should be a part of long term disastermanagement plan for an area.b. Appropriate Zoning Regulations need to be extended to all areas. Phasing of the areas to be covered should be done based on the intensity of the hazard anticipated. This would require strengthening of the Town and Country Planning Departments of State Governments. Local bodies can be given financial incentives for preparation of Zoning Regulations. The hazard zonation maps prepared should be one of the inputs for preparation of Zoning Regulations.12021121Crisis Management - From Despair to HopeSummary of Recommendationsc.Building byelaws should incorporate the disaster resistant features ofbuildings. Since safety codes are complex and technical, it is necessary to issue simplified guidelines which could be understood by the citizens. Further, these codes should be implemented in the most hazard prone areas, on priority.d.The importance of disaster resistant constructions and simplified safetyguidelines should be widely disseminated so as to promote compliance. In so far as the rural areas are concerned, other methods of dissemination including setting up of Building Technology Demonstration Centres and undertaking demonstrative disaster constructions in severe hazard prone areas should be taken up. Demonstration camps should also be used to make the people aware of the concerns and the solutions.e.The existing system of enforcement of building regulations needs to berevised. It should be professionalised by licensing architects and structural engineers for assessment of structures and certification of safe buildings. The units of local bodies dealing with enforcement of building byelaws and zoning regulations also need to be strengthened.f.The standards prescribed by BIS for disaster resistant buildings shouldbe available in the public domain, free of cost. This should be posted on websites of the concerned government agencies to promote compliance.g. Among the existing buildings, government buildings used by the public should be evaluated and retrofitted first, giving preference to buildings housing essential services. It would be advisable to fix a schedule for all such buildings in hazard prone areas. Private buildings used by the public should also be tackled on priority. A mix of regulatory and financial incentives could be used for this purpose by the local bodies.h. All these measures should become an integral part of long term disaster/ crisis management plans.18. Effective Implementation of Laws and Regulations: (Para 5.7.3.2)a.Effective enforcement of laws on encroachments, public health and safety,industrial safety, fire hazards, safety at public places should be ensured. The same applies to Zoning Regulations and Building Byelaws.b. Third party audit of all major alleged violations needs to be introduced in the respective regulation governing the activity.c.All records pertaining to permissions/licenses should be brought in the public domain suo motu.d.There should be periodic inspections of all such places/facilities by a team of stakeholders assisted by experts.e. A scheme for enforcement of laws should be part of the long term mitigation plan.f.Public education on consequences of violations is important.19. Early Warning Systems: (Para 5.8.3)a.Though it is the responsibility of the government machinery and the local bodies to disseminate the warning, peoples’ participation has to be enlisted. For this purpose, the role of community leaders, NGOs and others should be clearly defined in the emergency response plan and they should be fully trained and prepared for their respective roles.b. Communications networks, with sufficient redundancies should be established between the data collection point to the points where hazard is likely to occur. The communication channels from the point of alert generation to the point of disaster should have enough redundancies so as to maintain line of communication in the event of a disaster striking. Care has to be taken to put in place systems to disseminate warnings to all sections of the people.c.The early warning system should be evaluated after each disaster to carry out further improvements.20. Building Community Resilience: (Para 5.9.2)a. Location specific training programmes for the community should be executed through the panchayats.b. Crisis management awareness needs to be mainstreamed in education. For the purpose, an appropriate component of disaster awareness should be introduced in school, college, university, professional and vocational education.12221123Crisis Management - From Despair to HopeSummary of Recommendationsc.Disaster awareness should be included in training programmes for electedleaders, civil servants, police personnel, and personnel in critical sectors such as revenue, agriculture, irrigation, health and public works.d. Orientation and sensitization programmes highlighting issues and concerns in disaster management should be taken up for legislators, policy makers, and elected leaders of urban local bodies and panchayati raj institutions.e. NIDM and NDMA would have to play a vital role in working out the details of these suggestions for implementation by different authorities.21. Financial Tools for Risk-Reduction: (Para 5.10.4)a. Government and the insurance companies should play a more pro-active role in motivating citizens in vulnerable areas to take insurance cover. This could be done through suitably designed insurance policies, if required, with part funding from government. NDMA could play a major facilitating role in this area.22. Research and Use of Knowledge: (Para 5.11.4)a.NIDM should develop methodologies for effective dissemination ofknowledge on disaster management.b. Disaster management plans should attempt to integrate traditional knowledge available with the communities.c.NIDM should coordinate with research institutions and universities onthe one hand and field functionaries on the other and identify areas where research is required.d. It may be ensured that the IDRN network is updated regularly.23. Emergency Plan: (Para 6.1.6)a.Since the initial response in any crisis/disaster should be timely and speedy,the Emergency Response Plans should be up-to-date and should lay down the ‘trigger points’ in unambiguous terms.b. The district emergency response plan should be prepared in consultation with all concerned. The plan should be known and accepted by all the role players. (This should be apart of the District Disaster ManagementPlan).c.Standard operating procedures should be developed for each disaster atthe district and community level, keeping in mind the disaster vulnerability of the area. Disaster management plans at all levels should have handbooks, checklists, manuals with precise instructions for disaster management personnel, search and rescue teams, and Emergency Operations Centres.d. Unity of command should be the underlying principle for effective rescue operations. For example, in a district, all agencies of Union and State Government have to work under the leadership of the Collector. Such unity of command principle should pervade at all field levels.e.The plan should be validated annually through mock drills and shouldbe backed up by capability building efforts.f.Any plan would have its limitations as each crisis situation would varyfrom another. Plans are, therefore, no substitute for sound judgement at the time of crisis.g. Handling of crisis should be made a parameter for evaluating the performance of officers.h.These principles apply to plans at other levels and also in case ofmetropolitan cities.24. Coordinating Relief: (Para 6.2.6)a.Effective coordination is essential at the district and sub-district levels forrescue/relief operations and to ensure proper receipt and provision of relief. During rescue and relief operations, unity of command should be ensured with the Collector in total command.b. In order to avoid mismatch between demand and supply, the demand should be assessed immediately and communicated to all concerned including through the media, so that the relief provisions are provided as per requirements.c.Ensuring safe drinking water and sanitized living conditions should receiveas much a priority as other basic means of livelihood.d. All procurement and distribution of relief materials should be done in a transparent manner.12421125Crisis Management - From Despair to HopeSummary of Recommendationse.Monitoring and vigilance committees should be set up involving thestakeholders. These committees could also look into grievances.f.Trauma care and counselling should be made an integral part of the reliefoperations.g. There is urgent need to evolve objective methods of assessing the damage so that there are no allegations of bias, distortions, exaggeration or arbitrary scaling down. Satellite imagery could be used as a tool to validate the reported damages. NDMA should be requested to draw up the necessary detailed guidelines for assessment, to be followed by all authorities.25. Civil Defence: (Para 6.3.1.13)a.The Civil Defence Act should be amended as proposed so as to cover alltypes of disasters.b.Civil Defence should be constituted in all districts which are vulnerablenot only to hostile attacks but also to natural calamities. The goal of community participation should be pursued primarily through the instrumentality of Civil Defence especially in urban areas.c.The objective should be to include 1% of the population within the foldof Civil Defence within five years. Efforts should be made to enlist paramedics as Civil Defence volunteers.d.Budgetary allocations relating to Central Financial Assistance for CivilDefence should be increased substantially.e.Civil Defence set-ups at all levels should be permitted to accept donations.f.The Civil Defence set-up at the state level may be brought under thecontrol of the Crisis/Disaster Management set-up.26. Police, Home Guards and Fire Services: (Para 6.3.2.11)a. Policemen, Firemen and the Home Guards at the field level who are among the first responders should be adequately trained in handling crises/ disasters. Such training should be specific to the types of crises envisaged in an area. More importantly, they should be fully involved in the preparation of the local Crisis/Disaster Management Plan and also be fully conversant with them.b. The minimum qualification for entry to Home Guards may be revised to at least a pass in the 10th class, given the increased responsibility and complexity of tasks to be entrusted to them.c. A section of Home Guards should also be given para-medical training.d. Fire Services should more appropriately be renamed as Fire and Rescue Services with an enhanced role to respond to various types of crises.e.While in the long run, it would be desirable to place the Fire Servicesunder the control of all municipal bodies, as a first step, this may be done in bigger cities (population exceeding 2.5 million). In the remaining parts of the state, the Fire Services should be organized as a department but within a district, full operational control should be given to the District Crisis/Disaster Management Authority. Transfer of these services to municipal authorities should be accompanied by transfer of commensurate financial resources.f.Only persons with expertise in crisis/disaster management should beinducted into the top management of the Fire (and Rescue) Services.g. Fire and Rescue Services should be brought under the control of the State Crisis/Disaster Management set up under the Disaster Management Law.h. The NDMA may be requested to suggest model provisions regarding these services for inclusion in the Disaster Management Act/s.27. Setting-up Integrated Emergency Operations Centre (EOC): (Para 6.4.2)a.While it is necessary that each nodal ministry handling crisis has an EOC,it is clearly desirable to have an integrated National Emergency Operation Centre for all types of crises. ‘Subject-matter specific’ Ministries/ Departments should deploy representatives in this Centre which must be networked with all other EOCs and control rooms.28. Organising Emergency Medical Relief: (Para 6.5.7)a.An institutional arrangement to attend to medical emergencies is requiredto be put in place.b. Access to this system should be facilitated by having an identical telephone number throughout the country.12621127Crisis Management - From Despair to HopeSummary of Recommendationsc.This arrangement envisages involvement of the private hospitals. Theenunciation of the role of various role players may be through legislation.29. Relief and Rehabilitation: (Para 7.1.12)a.Damage assessment should be carried out by multi-disciplinary teams ina transparent and participatory manner in accordance with guidelines laid down by NDMA. (refer para 6.2.6 g).b. The efforts of NGOs and other groups have to be coordinated with government activities at the district and state levels.c.A recovery strategy should be evolved in consultation with the affectedpeople and concerned agencies and organisations. The recovery strategy should include all aspects of rehabilitation - social, economic and psychological.d. Minimum standards of relief should be developed to address the requirements of food, health, water and sanitation shelter requirements. Focus should be placed on the special needs of the vulnerable population that is, children, women, the elderly and the physically challenged.e.Implementation of the rehabilitation efforts should be carried out by thevillage panchayats/local bodies. The first priority should be to get the beneficiary oriented works executed through the beneficiaries themselves.f.Concurrent monitoring and a quick financial audit should be carried outto prevent misuse of funds.g.Risk reduction aspects should be incorporated into the recovery plans.Land use plans which ensure safety of the inhabitants should be brought into effect during reconstruction.h. All new civil constructions should mandatorily be made disaster resistant as per prescribed standards.i.A mechanism for redressal of grievances should be established at the localand district levels.j.For all major disasters, NIDM should conduct a detailed evaluation exercisethrough independent professional agencies.30. Revisiting the Financial Procedures: (Para 7.2.6)a.Both the funds (National Disaster Mitigation Fund and the NationalDisaster Response Fund) may be operationalised from April 1, 2007 with an initial annual contribution of Rs. 5000 crores each from the Government of India. This would be in addition to CRF and NCCF for the present. The CRF and NCCF would cease to exist at the end of the award period of the Twelfth Finance Commission.b. NDMA may recommend to Government of India the quantum and criteria of assistance and conditions of release from the two new funds as well as manner of replenishment of these funds from different sources.c. A system of compiling accounts for each calamity separately with reference to each head of relief expenditure should be initiated. The Comptroller and Auditor General of India may consider laying down a standardized format in this regard.d. Accounts as above may be available on the website of the state level nodal agency at such intervals as may be laid down.e.The basis for calculation of assistance from the funds should be availableon appropriate websites.31. Gender Issues and Vulnerability of Weaker Sections: (Para 8.3)a.The vulnerability analysis should bring out the specific vulnerabilities ofwomen and these should be addressed in any mitigation effort. Disaster mitigation plans should be prepared, in consultation with women’s groups. Similar steps should be taken for other vulnerable groups.b. Rescue and relief operations should focus on the most vulnerable groups-women, children, the elderly and the physically challenged.c.Relief measures should take into account the special requirements ofwomen and other vulnerable groups. Particular attention needs to be given to their physical and mental well being through health care and counselling.d. In the recovery phase, efforts should focus on making women economically independent by offering them opportunities of earning incomes; providing training in new skills, forming self-help groups and providing micro-finance, marketing facilities etc.e.The title of new assets created should be in the names of both husband12821129Crisis Management - From Despair to HopeSummary of Recommendationsand wife.f. Camp managing committees should have adequate number of women representatives.g. Trauma counselling and psychological care should be provided to widows and women and other persons in distress. These activities should form part of the disaster management plan.h. Arrangements have to be made for orphaned children on a long term basis. NGOs should be encouraged to play a major role in their rehabilitation.32. Revisiting Long Term Interventions (Droughts): (Para 9.2.5)a. A National Institute of Drought Management may be set up for networking on multi-disciplinary, cross-sectoral research on various aspects of drought, acting as a resource centre on droughts and carrying out impact evaluation studies of the drought management efforts. It needs to be ensured that the mandate and agenda of this proposed institute does not duplicate the efforts of the National Institute of Disaster Management.33. Livelihood Management in Extremely Drought Prone Areas: (Para 9.3.2)a. A strategy for making people pursue livelihoods compatible with their ecosystems needs to be evolved. Some concrete steps in this direction could be:(i) A multi-disciplinary team needs to be immediately constituted by the Ministry of Environment and Forests to specifically identify villages where soil and climatic conditions make ‘conventional agriculture’ unsustainable.(ii) Alternate means of livelihood have to be evolved in consultation with the communities, in such areas.34. Codifications of Management Methodologies: (Para 9.4.3)(i) State Governments need to rewrite the Relief ‘Manuals’ thoroughly in the light of recent developments including inputs from the NDMA and their own experience and update them once in a few years.(ii) Ministry of Science and Technology may compile from time to time a document incorporating details of available scientific and technical inputs/facilities for detecting the onset and progress of drought; and inter-face between scientific and technical organizations with disaster management agencies of the Union and State Governments.35. Rationalization of Drought Declarations: (Para 9.5.2)The method and mechanism of declaration of droughts needs to be modified under the guidance of NDMA. While it is for the State Governments to work out the modalities keeping in view the peculiarities of their agro-climatic conditions, the Commission recommends that the modified mechanism may incorporate the following broad guiding principles:(a) Where a certain percentage (say, twenty per cent) of area normally cultivated remains unsown till the end of July or December for Kharif and Rabi respectively, the affected Tehsil/Taluka/Mandal could be declared drought affected by the government.(b) To begin with, ‘eye estimates’ could be used. Such estimates may be verified with reference to remote sensing data as access to such facilities improves progressively. The ultimate objective should be to use remote sensing as the primary tool of early detection of droughts with ‘eye estimates’ remaining only as ‘secondary verifying methods’.36. Deployment of Remote Sensing for Diagnosis and Prognosis of Drought Situations: (Para 9.6.3)a.Deployment of remote sensing as the primary tool for diagnosing droughts,monitoring their course and forecasting prognosis is a goal that needs to be pursued speedily and systematically. This would require dovetailing remote sensing into the routine framework of drought management. This could be best achieved through establishment of an NRSA cell in identified drought prone districts. The activities of the NRSA cells in the districts must include monitoring of other disasters as well.37. Making Rivers Perennial: (Para 9.7.4)a.Technical agencies under the Ministries of Water Resources, Environmentand Forests and Science and Technology must immediately carry out river specific feasibility studies to determine the ecological and hydrological13021131Crisis Management - From Despair to HopeSummary of Recommendationsimplications of making seasonal rivers perennial.38. Rainfed Areas Authority: (Para 9.8.2)a. A National Rainfed Areas Authority may be constituted immediately. The Authority can deal inter alia, with all the issues of drought management mentioned in this chapter.39. Epidemics: (Para 10.1.12)(i) To more effectively prevent outbreak/spread of epidemics, it is imperative that a comprehensive revised ‘model’ legislation on public health is finalized at an early date and that the Ministry of Health and Family Welfare systematically pursues its enactment by the states with adaptations necessitated by local requirements.(ii) The Union legislation governing Public Health Emergencies be introduced for final consideration in the light of feedback received from the states at an early date.(iii) Ministry of Health and Family Welfare has to ensure that requisite plans envisaged under the Disaster Management Act, 2005, are drawn up in respect of epidemics also and that the role of the district administration finds explicit mention in the Public Health Emergency Bill. The structure created by the Disaster Management Act, 2005, should be utilized for managing epidemics also.(iv) While surveillance and management of epidemics are the responsibilities of public health professionals, it is clear that a particularly severe outbreak could overwhelm the capacities of the ‘line organisations’. The Ministry of Health and Family Welfare and the State Governments must ensure that ‘standard operating procedures’ are devised to assign roles and responsibilities of agencies and personnel outside the line organizations wherever a situation so warrants.(v) State level handbooks and manuals concerning disaster management should have a chapter on “epidemics-related emergencies”. A model chapter may be circulated by the Ministry of Health and Family Welfare for guidance of states. It may be useful to document the past handling of epidemics like the Plague (Surat) and Japanese encephalitis (Eastern UP)to facilitate standardization of response mechanisms.40. Disruption of Essential Services: (Para 10.2.2)(i) All crisis/disaster management plans should include plans for handling possible disruptions in essential services.(ii) All agencies/organizations engaged in the supply of essential services should have their own internal crisis management plans to deal with emergencies.(iii) The regulatory authorities of the respective sectors may lay down the required framework for drawing up standard operating procedures and crisis management plans.13221133Crisis Management - From Despair to HopeRound-table at NIDMAnnexure-ISpeech of the Chairman, Administrative Reforms Commission at the Round-table held at NIDM, New Delhi on 9th December, 2005Dear ParticipantsI have great pleasure in welcoming you to this brainstorming session on Crisis Management. The Second Administrative Reforms Commission, which was constituted recently, has been given the daunting task of recommending reforms in the governance system of the country. The Commission has decided that one of the subjects it should deliberate upon is Crisis Management and that a report should be submitted to the Government by the end of March, 2006. I am happy that those assembled here today represent the best and brightest in the area of Crisis Management. The Commission is looking forward to utilize. your domain knowledge and insight in the important area of Crisis Management.Disasters are major catastrophic events caused by vagaries of nature, often aggravated by human intervention, resulting in adverse conditions which affect both natural resources and human habitats and causing untold misery and havoc to life and property. They range from intense to the diffuse, from predictable to the unpredictable and from those that are preventable to those whose consequences can at least be mitigated. The severity of natural disasters is often measured in terms of number of deaths and injuries but the implications of such calamities are much more profound and extend well beyond what is implied by conventional indicators.Considering the large number of disasters that occur, a generic categorization of disasters could be made that would include:a)Water and Climate related, such as floods, droughts, cyclones, tsunamib)Geologically related, such as earthquakes, land slides, sea erosion, dam burstsc)Chemical, Industrial and Nuclear relatedd)Accident relatede)EpidemicsThe impact of natural disasters has been particularly severe on the population and economy of developing countries such as India. It is an irony of nature, that over 60% of all the reported major natural disasters have occurred in the developing countries, some of whichAnnexure-I Contd.have the least capacity to sustain heavy losses. Major disasters since 1900 have caused over 45 million deaths and affected over 3.7 billion people globally, resulting in massive damage and destruction of property and infrastructure. The highly populated and vulnerable Asian continent has been the largest victim of such disasters accounting for over 60% of deaths and 85% of affected people globally. Of all these disasters, drought (including famine) and flood head the list, responsible for the largest number of deaths (over 53%), causing irreparable damage and economic loss. In the last 20 years alone, extreme natural disasters have caused destruction to property estimated between 50 and 100 billion dollars, loss of nearly three million lives and have affected over 800 million people, nearly one-sixth of the global population. According to one recent estimate, roughly 44% of the damage due to natural disasters worldwide is attributable to floods alone. The impact of recurring disasters due to storm surges is even more devastating, as evidenced from the number of people killed in the Bay of Bengal. About 60% of all deaths due to storm surges, have occurred in the low-lying coastal areas of the countries bordering the Bay and the adjoining Andaman Sea. The above underscores the need to improve capabilities to deal with such calamities, strengthen organisational strctures and empower local bodies to undertake preventive, mitigative and timely ameliorative measures.Practically all the developing countries, being primarily agrarian, are very much dependent on the vagaries of seasonal rainfall and climatic conditions. The picture of erratic rainfall causing floods in certain areas and drought in other parts of the country resulting in widespread famine conditions is a common occurrence in the developing countries. These natural disasters result in increased soil erosion and degradation of catchments areas, which in turn cause frequent flash floods due to a reduction in the natural storage capacity. On an average, statistics indicate that severe drought occurs once every five years in most of the tropical countries, though often they occur during successive years, causing untold misery to human life and property.Extreme events in the form of natural hazards, will continue to occur, causing extensive damages to property and life, the economic impact of which is often beyond the survival capability of developing countries. Extensive deforestation, land degradation, no conservation of soil and water resources and destabilization of the greenhouse equilibrium have, in the recent times, resulted in the alarming increase in the frequency, intensity and the magnitude of the impact of extreme natural disaster events. Humanity, so far, has continued to coexist with natural disasters, implicitly accepting these extreme events as ‘acts of God’ and suffering silently. Today, however, scientific and technological advances have not only helped us to understand the mechanisms of many of these natural disasters but have also provided tools13421135Crisis Management - From Despair to HopeRound-table at NIDMAnnexure-I Contd.to predict and combat most of them. Although prevention of earthquakes, volcanic eruptions, cyclones and other violent natural events is beyond our capability, there is much that can and should be done to protect life and property against them by taking appropriate timely measures. This requires implementation of effective strategies and policies, use of the best available techniques and information and concerted national and international efforts to reduce the vulnerability of population to natural disasters. The designation of the 1990s as the International Decade for Natural Disaster Reduction (INDUR) by the United Nations is a testimony to the growing worldwide concern about natural disasters and the recognition that calamities, if not preventable, are at least mitigatable to a large extent.The recently concluded world Conference on Disaster Reduction at Kobe, Japan in January, 2005 also reflected the worldwide concern about disasters. The deliberations in Kobe set in motion a collective vision to mitigate the natural disasters by mainstreaming sustainable development, multi-hazard prevention strategies and well-knit institutional infrastructure for early warning systems. Visibly, there is a paradigm shift worldwide from a traditional relief approach to disaster preparedness, a more holistic and long-term strategy which incorporates vulnerability reduction as part of the development planning process. This comprehensive approach recognizes the fact that disaster reduction is most effective at the community level if the specific local needs are met. Crisis Management consists of an entire process that includes different phases from preparedness and mitigation before a disaster strikes; to emergency response, relief, and rehabilitation in the immediate aftermath; to reconstruction in the long-term. Since the tsunami in the Indian Ocean, we have become increasingly aware of disasters and the potential and likely devastation they can cause. I think preparedness for and mitigation of disasters is a positive result of this awareness. But a comprehensive crisis management plan is one that best uses available resources in all phases - preparedness, immediate response and long-term recovery. To make sure that a crises management plan is as effective as possible, the risks should be identified, vulnerabilities assessed and then preparation made on that basis.Crisis management and development are closely linked and mutually reinforcing. The best crisis management systems are ones that are most effective at limiting a disaster’s impact on people, property, economy and the environment. And of course, the poorest people usually suffer the most from disasters. Many of the steps that help protect people are also good for long term, sustainable development. For example, to move people and vulnerable communities out of a vulnerable area such as an earthquake zone or flood plain may have some upfront costs, but when disaster does strike, the payoff is great.Annexure-I Contd.India is susceptible to multiple natural hazards with some regions/states being prone to more than one natural hazard. A disaster management plan in the context of India must address. these multiple hazards and diverse vulnerabilities arising on account of peculiar socio-economic factors.The templates for preparing disaster management plans at the District, Block and Gram Panchayat levels should be developed and shared with the State Governments. The templates should serve as broad guidelines to be utilized for developing disaster management plans at various levels. The broad components addressed in these plans should consist of district profile, hazard-risk and vulnerability analysis, institutional mechanism, mitigation plan, response plan, recovery and reconstruction plan, standard operating procedures, linking with the developmental plan, budget and other financial allocations and monitoring and evaluation.I am happy to say that the Government of India has put in place a national disaster management framework laying down the gamut of activities proposed to be undertaken for building capacities at all levels for holistic disaster management. Post-tsunami, the primary emphasis has been on putting in place an appropriate institutional, policy and legislative framework at the national, state and district levels.The development of a national disaster management plan is a complex, intricate and long-drawn process in a country like India with diverse climatic zones, differential vulnerabilities with differential impacts and varying prevention, mitigation and preparedness measures necessitating a multi-dimensional and multi-sectoral approach. It should mandate incorporation of inputs from experts and related institutions of excellence. Moreover, a national disaster management plan has to take into account the disaster management plans developed by the State Governments.There are four pillars, viz., policy, institutional framework, technology matrix and financial regime, which should ideally work in synergy towards managing crises. For example, advances in technology matrix, unless appropriately supported by compatible institutional framework at various levels and also not in harmony with policies and financial regimes, will not get absorbed. It is therefore necessary to evolve a strategy, which should aim at establishing synergy among all the four.Although the institutional and policy mechanisms for carrying out response, relief and rehabilitation have been well-established since independence and have proved to be quite13621137Crisis Management - From Despair to HopeRound-table at NIDMAnnexure-I Contd.robust and effective, a need has been felt to reappraise and reorient the existing institutional, policy and legislative mechanisms required for the same in view of the increasing frequency and ferocity of natural disasters inflicting a mounting human and economic toll. The changed policy approach mandates adoption of a holistic and comprehensive strategy for disaster management addressing an entire gamut of issues relating to disaster prevention, mitigation, preparedness, response, relief, rehabilitation and reconstruction.Recognising that structural mitigation measures are the key to minimizing the impact of disasters, there is a need to review and, if necessary, amend the building byelaws to incorporate seismic codes for construction in the concerned zones. Similarly, appropriate amendments need to be made to the existing Town & Country Planning Acts, land use zoning regulations, development control regulations & building bye-laws to upgrade the existing legal instruments. It should also be ensured that the building bye-laws should provide for safety aspects to be taken care of in all new constructions and upgrading the strength of existing structurally vulnerable constructions.In India, the Finance Commission makes recommendations with regard to devolution of funds between the Union Government and the State Governments. The terms of reference of the Twelfth Finance Commission were enlarged to look at mitigation and prevention aspects too. It is necessary that where there is a shelf of projects, the projects addressing mitigation should be given priority. It should also be stipulated that each project in a hazard-prone area would have disaster prevention and mitigation as a term of reference and the project document has to reflect as to how the project addresses it. Apart from environmental impact assessment (EIA), studies to assess whether the project introduces a new risk or accentuates an existing one, should also be conducted. Feasibility analysis of a proposal to link grant of housing and infrastructure development loans by banks and financial institutions with incorporation of hazard-resistant construction features should also be undertaken.The potential for technology use in crisis management is huge. We need to take cognizance of technologies such as IT, space, early warming systems for extreme events such as tsunami, cyclone, floods etc and the knowledge products and services. There are very useful products from communications systems to internet-based software programmes that serve as virtual operations centre to keep responders connected, to early warning siren systems to alert people of an impending earthquake, hurricane or tsunami. GIS has been effectively used in many of these products. In general, GIS is relevant in all phases of crises management because geographical representation of reality allows people to analyse problems in a different way. Whether in earthquake-modeling, in organizing relief logistics or as a tool to identifyAnnexure-I Contd.and map out the locations of vulnerable populations, GIS has a lot to contribute to disaster management field. There are, however, gaps in the technological products and services vis-a-vis their absorption and effective utilizations down the line.The urgent task before us today is to evolve a response system that is quick, comprehensive and effective and this is where today’s deliberations by all of you will be of immense help to the Commission. Crises in the context of a disaster threaten the whole of society and, therefore, their management calls for a mechanism which will enable a TOTAL & EFFECTIVE RESPONSE. It is also necessary that such a response mechanism should encompass the coordinated response of the entire governmental system and the whole of civil society. This would call for meticulous planning and coordination between various role-players in order to prevent disasters and to mitigate their impact whenever they occur. Apart from incorporating the traditional coping mechanisms, it should also have a human rights’ perspective. A human rights’ perspective to crises management is particularly crucial because it is the poorest and weakest sections of society which suffer most in terms of loss of life and property, whenever a disaster strikes. If such human rights’ concerns can be taken care of effectively and at the earliest, then only can the impact of disasters be mitigated to the maximum.What are the concerns that need to be addressed while evolving such a response system? To my mind, the following are the barest minimum:a.The governmental system in India comprises of the Union Government in New Delhi& the State Governments in the state capitals. The district administration represents the governmental system closest to people and the community followed by the block development agencies. The first response in any disaster situation is from the community, which has traditionally risen invariably to provide succour to the needy at the earliest. How can the Panchayati Raj system be empowered to come to the aid of the community in a disaster situation? Is it possible to have a group of volunteers trained to provide hands-on relief at say, every district headquarters to enable quick response whenever needed? If so, what should be its size? Can home guards fulfill this role? Shouldn’t the civil police be trained for emergency relief work? Can this help in changing their public image?munity based disaster management, which seeks to empower community directlyto enhance their indigenous coping mechanisms is a must. But, then, the following questions arise: apart from empowering Panchayati Raj system, what could be the13821139Crisis Management - From Despair to HopeRound-table at NIDMAnnexure-I Contd.strategies to enhance the community resilience? What are the types of technological, financial and physical interventions to strengthen indigenous coping mechanisms, promote collective wisdom and social networking?c.Technology is a major advantage, which is available today to managers of disasters.There are, however, gaps in the technological products and services vis-a-vis their absorption and more effective utilization down the line. Early warning products, for example, need to be ‘actionable’ at the community level. What all technologies can you suggest to provide assistance in managing disasters? Whether there is access to, availability and usefulness of those technologies? What are the gaps? What could be the perspectives on closer integration of knowledge institutions, disaster management agencies and community-based organizations?d.Restorations and rehabilitation are an important part of crisis management. Everydisaster traumatizes the affected population specially the women & children. How can this phenomenon be addressed, considering that revival to normalcy is a slow process? First aid & medical attention itself is a delicate operation requiring a great deal of sensitivity in the doctors & paramedical staff. Can they attend to the task of assuaging the shock due to trauma in the first instance? What local arrangements can be made to carry on trauma counselling after the medicos have left, as they must leave at the earliest to attend to other victims of devastation? How can the local bodies & panchayats be geared to coordinate these activities? Can the beneficiaries themselves be organised for self-help to bolster their self-esteem & self-confidence and also to minimize complaints as well as to maximize the benefits?e.Major natural disasters like floods & drought are cyclic in their occurrence in the sameareas of the country year after year and advance action to prevent or mitigate their impact is possible. In addition, technology is now available which can give advance notice of a week in the case of cyclones and quite a few hours in the case of Tsunami. So the questions arise: What all can you suggest by way of preventive actions? What all warning devices are available to our experts in India for natural disasters of different types? What are the gaps in our existing warning systems? Whether these gaps have been due to technological constraints or our lack of preparedness down the line to act on warning products/services?f.The condition of public health in India forebodes a disaster in-waiting. The Suratplague about a decade ago is a grim reminder of what is likely to happen if theAnnexure-I Contd.existing state of public health is not addressed seriously. What remedy can you suggest to tide over this state of affairs?g.There is a need to inculcate elements of safety concerns in various walks of life as well as in the basic infrastructure of society. Anticipating problems and taking pro-active preventive measures has to be built into the cultural and administrative ethos of the country. How can safety concerns be built-into the extra-curricular activities of our students in schools, colleges, professional institutes & universities? Have you any ideas on this, which may be further developed and implemented?These are some of the specific questions I had in mind, which, I think, the august assemblage of experts here should address today. On the whole, however, there are certain broad themes that have to be dealt with, for evolving a total and effective response to crises situations. They are:3/4What do you need further to act quicker in times of crisis?3/4What are the present constraints?3/4Do you have real time access to information, warning and resources etc?3/4Whether the gaps lie in (i) access to knowledge inputs/technology, (ii) policy and (iii)institutional arrangements?3/4Are relief and rehabilitation connected with long-term development?3/4What could be the most appropriate technological tools in operational environment?3/4Whether the knowledge products are ‘actionable’ down the line?3/4What are the ‘gaps’ in product delivery vis-a-vis absorption towards twin track strategy?3/4Is there any specialized capacity building/training need?I am confident that with your domain knowledge and expertise, you will find answers and solutions to the questions I have posed and the concerns I have raised. I am sure, with the insights you provide and the valuable suggestions you make, the Commission would be in a position to evolve a total and effective crisis management system.14021141Crisis Management - From Despair to HopeRound-table at NIDMAnnexure-I Contd.List of Participants - Round-table held at NIDM, New Delhi on 9.12.2005Sl.No.NameDesignation1. Shri S.K. AggarwalMember (RM), Central Water Commission, New Delhi2. Shri Y. ChaudhuryExecutive Director, Nehru Yuva Kendra Sangathan, New Delhi3. Shri B.K. BandyopadhyayDirector (NHAC), India Meteorological Department, New Delhi4. Shri K.C. GuptaDG, National Safety Council, Navi Mumbai5. Shri R.P. BhanushaliAdvisor (Tech), NSC, Navi Mumbai6. Dr. Kishore KumarFaculty, CRRI, New Delhi7. Shri J.K. PrasadExecutive Director, BMPTC, New Delhi8. Dr. P. NagNATMO, Kolkata9. Dr. G.C. BhattacharyaNational Institute of Oceanography, Goa10. Prof. K. SekarNIMHANS, Bangalore11. Prof. D.K. PaulHead, Civil Engineering Department, IIT, Roorkee12. Dr. R. ViswanathanConsultant, ARC13. Shri P.G. Dhar ChakrabartiExecutive Director, NIDM14. Shri Anil SinhaConsultant, Gurgaon15. Ms. Srilekha MajumdarConsultant16. Ms. Shikha SrivastavaConsultant17. Shri B.K. MalhotraUnder Secretary (GS-I), Ministry of Defence, New Delhi18. Sq. Ldr. Amit KansalHQ IDS, Ministry of Defence, New Delhi19. Shri Sanjay SrivastavaISRO, Bangalore20. Shri KamlakarYouth Officer, NSS, New DelhiAnnexure-I Contd.ADMINISTRATIVE REFORMS COMMISSION (ARC) :Sl.No. NameDesignation1.Shri M. Veerappa MoilyChairman, Administrative ReformsCommission2.Dr. A.P. MukherjeeMember, Administrative ReformsCommission3.Ms. Vineeta RaiMember Secretary, AdministrativeReforms Commission14221143Crisis Management - From Despair to HopeComparison of State Disaster Management LawsAnnexure-IIComparison of State Disaster Management LawsUttaranchal DisasterUttaranchalMitigation, Management and Prevention Act, 2005Similar to Gujarat Act [Sec.2(e)]Disaster means a catastrophe, calamity or mishap, a grave occurrence being, natural or otherwise, which causes, human sufferings, destruction or annihilation of human/ animal and plant life, damage to and destruction of property, degradation of environment which overwhelms the prudent and protective measures and disrupts and paralyses the normal functioning of Government and society at large, and includes any one or more of the occurrences mentioned in Schedule. [Sec.2(a)]The Bihar DisasterBiharUttar Pradesh DisasterUttar PradeshManagement Act, 2004Disaster means a catastrophe, calamity or mishap, grave ocurrence, which causes loss of life, human suffering, damage to and destruction of property, and/or degradation of environment and/or which disrupts the normal affairs of societies, Government and/or communities and/or adversely affects indviduals and families and it includes any or more of the ocurrences mentioned in Schedule. [Sec.2(i)]Same as Gujarat ActManagement Act, 2005No specific definitionSame as Gujarat ActGujarat“an actual or imminent event, whether natural or otherwise ocurring in any part of the State which causes, or threatens to cause all or any of the following:(i) widespresd loss or damage to property, both immovable and movable; or(ii) widespread loss of human life or injury or illness to human beings; or(iii) damage or degradation of environment;and any of the effects specified in sub-clauses (i) to (iii) is such as to be beyond the capacity of the affected community to cope up with using its own resources and which disrupts the normal functioning of the community”. [Sec.2(h)] .“a continuous and integrated process of planning and implementation of measures with view to:(i) mitigating or reducing theThe Gujarat State DisasterManagement Act, 2003ParameterDefinition of ‘disastermanagement’Definition of ‘disaster’Name of the Act231Sl.No.14421145(a) The State Government(b) Uttaranchal State Disaster Management Autority(c) Heads of Government Departments(d) Divisional Commissioners(e) District Magistrates of districts(f) Local authorities(g) Disaster Mitigation and Management Center (DMMC) (Sec. 3)(a) The State Government(b) Standing Technical Committee (STC) (c ) State ReliefCommissioner (SRC)(d) District ReliefCommissioner (DRC) (Sec. 3)Same as Gujarat Act, except for substitution of Uttar PradeshDisasterManagementAuthority in place of GSDMA, District Magistrate for Collector and addition of “Any agency, organization or body authorized by the Authority” (Sec.3)(a) The State Government,(b) The Gujarat State Disaster Management Authority,(c) Heads of Government Departments,(d) Commissioner,(e) Collector of a district,(f) Local authorities. (Sec.3)Authorities for disastermanagement4UttaranchalAnnexure-II Contd.BiharUttar PradeshComparison of State Disaster Management LawsGujaratrisk of disasters;(ii) mitigating the severity or consequences of disasters;(iii) capacity-buildng;(iv) emergency preparedness;(v) assessing the effects of disasters;(vi) providing emergency relief and rescue; and(vii) post-disaster rehabilitationandreconstruction”[Sec.2(i)]ParameterSl.No.Crisis Management - From Despair to HopeComparison of State Disaster Management Laws146Annexure-II Contd.District Magistrate with the assistance of the local authorities shall prepare a disaster management plan for the district by anticipating the types of disaster that may occur and their possible effects and identifying the communities and properties at risk. He shall provide for appropriate prevention and mitigation strategies and promote capacity building. (Sec. 22).At the time of disaster, to conduct search and resque operations, provide alternate shelters, food and medicines etc. [Sec. 19(2)].To take action in accordance with prescribed guidelines. (Sec. 20).Disaster Mitigation and Management Center has been assigned the responsibility. [Sec. 17(4)].UttaranchalComparison of State Disaster Management LawsTo supervise, coordinate and discharge the responsibilities and perform functions as prescribed. To prepare disaster management plan in accordance with the Rules and notify it for information of the general public, and implement it during the time of disasters. (Sections 6&7)BiharNo specific provisionUttar PradeshSame as Gujarat Act (same sections also)Same as Gujarat Act (same sections also)GujaratCollector to issue directions to the officers of the departments of the State Government and the local authorities in the affected areas to provide emergency relief in accordance with the disaster management plans.[Sec.23(1) & (2)]GSDMA to promote general education and awareness ondisastermanagement,emergency planning andresponse[Sec.12(2)(d)]GDSMA to do so by publishing guidelines, facilitating access to its electronic database, coordinating the integration of methodologies for awareness and preparedness with development plans etc. [Sec.16(1)].Collector to facilitate community training, awareness programmes. [Sec.24(1)(f)].ParameterRole ofCollector /DistrictAdministrationResponsibility for awareness generationSl.No.9821147UttaranchalAnnexure-II Contd.Disaster Mitigation and Management Center has been assigned the responsibility. [Sec.17(4)].BiharNo specific provisionSection 16 of the Act envisages the creation of a Disaster Mitigation and Management Center. One of the core functions of this Center is ‘Data Collection and Research’. [Sec. 17(1)].No specific provisionNo. It provides for constitution of a Standing Technical Committee for the purpose of facilitatingprocurementsrelatedto disaster management. [Sec.4 (3)]No specific provisionUttar PradeshYes.[Sec.4(2)(b)]Comparison of State Disaster Management LawsSame as Gujarat Act (same sections also)Same as Gujarat Act (same sections also)Yes.[Sec.4(2)(b)]GujaratDepartments of the State Government to assist other authorities [Sec.5(1)(a)] GSDMA to advise and train the community, and stakehoders with a view to increasing their capacity to deal with potential disasters [Sec.16(1)]Departments of the State Government to assist other authorities [Sec.5(1)(a)] GSDMA to take steps to collect or cause to be collected data on all aspects of disasters and disaster management, to analyze such data and to cause and conduct research and study relating to effects of disasters (Sec.13) GSDMA to be repository of all information concerning disasters (Sec.14)ParameterResponsibility for capability building and trainingResponsibilityfordatacollectionWhether any provision for formationof‘CrisisManagement Group’ or such other entities?75Sl.No.6Crisis Management - From Despair to HopeComparison of State Disaster Management Laws148149Annexure-II Contd.Annexure-II Contd.UttaranchalNo specific provisionTo assist the disctrict magistrate in preparation of disaster management plan for the district [Sec. 22(1)].In disaster affected areas, local authorities to assist the USDMA, the State Commissioner for Disaster Management and the District Magistrate. Also to provide training to the staff and ensure that all building in their local area comply with laid down specifications. [Sec. 21 (1)].No specific provisionYes. [Sec. 4 (3)].Comparison of State Disaster Management LawsUttaranchalComparison of State Disaster Management LawsGujaratCitizens to assist the Commissioner and the Collector in prevention, response, warning, emergency operation, evacuation and recovery activities. (Sec.31).Yes.[Sec.4(3)]GujaratSubject to directions given by GSDMA and under the supervision of the Collector, local authorities shall: (a) carry out relief operations in the affected area subject to the directions of the Commissioner (b) carry out reconstruction and rehabilitation work in accordance with the guidelines framed by GSDMA (c) prepare a disaster management plan suitable for the local area, clearly defining the role and responsibilities of the local authority etc. [Sec.25(1)]Community groups, youth organizations to assist theAuthorities.(Sec.28)Similarly, each Factory as defined under the Factories Act, 1948 shall assist the Commissioner and the Collector and prepare a disaster management plan. Each private and public sector entity shall provide assistance to GSDMA, the Commissioner and the Collector. (Sec.29). All voluntary agencies, including non-governmental organizations, which desire toparticipateindisastermanagement activities may provide assistance to the Commissioner and the Collector. (Sec.30).To assist the State and/or District Relief Commissioner in prevention, mitigation, response, rescue etc. (Sec.11).Same as Gujarat Act (same section also)Yes, general powers. [Sec. 4(6)].Same as Gujarat Act (same section also)BiharUttar PradeshBiharUttar PradeshEach Municipal Local Body and panchayat to prepare a Disaster Management Plan to meet adequately the requirements of the locality concerned in their respective jurisdiction. They shall be responsible for effective implementation of the plan drawn up by them in this behalf. [Sec.8 (1) & (3)].Same as Gujarat Act (same section also)Each Factory as defined under the Factories Act, 1948, and each of the undertakings and enterprises, as may be prescribed shall have a disaster management plan in confirmity with the plan of local authorities/ district administration. They shall be responsible for its effective implementation. [Sec.8 (1) & (2)].Same as Gujarat Act (same sections also)ParameterSl.No.Duties of private bodies12Role of local bodies10Role of general public11Whether any provision for issuing direction to a person or authority forpurposeofavoidinganimminent damage or for mitigation of effects of a disaster?13ParameterSl.No.Crisis Management - From Despair to HopeComparison of State Disaster Management Laws150151Annexure-II Contd.USDMA to assist the State Government in formulation of policy relating to emergency relief. Revenue Department and other departments of the State Government to implement emergency relief. [Sec. 11(1)(b)].State Commissioner for Disaster Management to make arrangement for release and use of resources for providing relief [Sec. 14(2)] and to development and appropriate relief implementation strategy taking into account unique features of each district. [Sec. 15(1)(b)].District Magistrate is responsible for relief works in the district. [Sec. 19].Yes. [Sec. 4(4)].UttaranchalUSMDA to act as central planning body [Sec. 11(1)(a)]. State Commissioner for disaster management to prepare, review and update district or divisional level emergency plans. [Sec. 15(1)(c)].District Magistrate to prepare disaster management plan for the district [Sec. 22(1)].Yes. (Sec. 29 to 31).Comparison of State Disaster Management LawsUttaranchalAnnexure-II parison of State Disaster Management LawsGujaratYes. (Sec.38)Departments of the State Government to carry out relief operations under thesupervisionoftheCommissioner and the Collector[Sec.5 (1) (b)] GSDMA to assist the State Government in formulation of policy relating to emergency relief notwithstanding that the implementation of the same shall be the responsibility of the Revenue Department and other departments of the State Government. [Sec.12(2)(b)]. Where GSDMA is of the opinion that relief provided by the Commissioner or the Collector is not adequate, it shall recommend modifications in the prescribed norms [Sec.18(2)]GujaratGSDMA to develop or cause to be developed guidelines for the preparation of such plans and assist departments, local authorities and persons specified by it in preparation of such plans. [Sec.15(1)] Collector to ensure that district disaster management plans are prepared, revised and updated. [Sec.24(1)(d)]. Each department of the State Government in a district shall prepare a disaster management plan for the district and the Collector shall ensure that these are integrated into the plan for the whole district. (Sec.26).Yes.[Sec.4(4)]Responsibility of State Relief Commissioner and DistrictReliefCommissioner.(Sec.6&7)Same as Gujarat Act (same sections also)BiharUttar PradeshBiharUttar PradeshYes. (Sections 13 and 14).Yes. (Sec.38)No specific provisionSame as Gujarat Act (same section also)State Government may prepare a disaster management policy [Sec. 4 (2)(a)] .DRC may prepare a district management plan, and Local Bodies and other Agencies may prepare a Disaster Management Plan in accordance with the district plan (Sections 6 & 8).Same as Gujarat Act (same sections also)ParameterSl.No.ParameterSl.No.Relief works15Whether any provision for suspending operation of any executive order which prevents, hinders or delays necesaary action in coping with disaster?14Whether any provisions for offences and penalties?17DisasterManagement Plans16Crisis Management - From Despair to HopeSalient Features of The Disaster Management Act, 2005Annexure-IIISalient Features of The Disaster Management Act, 2005Preamble: An Act to provide for the effective management of disasters and for matters connected therewith or incidental thereto.1.The Act defines disaster as ‘a catastrophe, mishap, calamity or grave occurrence inany area, arising from natural or man made causes, or by accident or negligence which results in substancial loss of life or human suffering or damage to, and destruction of, property, or damage to, or degradation of, environment, and is of such a nature or magnitude as to be beyond the coping capacity of the community of the affected area’.432.The Act provides for establishment of a National Disaster Management Authority(NDMA) with Prime Minister as the ex-officio Chairperson and other Members, not exceeding nine in number, one of them being Vice Chairperson. The NDMA shall be responsible to44a)lay down policies on disaster management;b)approve the National Plan;c)approve plans prepared by the Ministries or Departments of the Government of India in accordance with the National Plan;d)lay down guidelines to be followed by the State Authorities in drawing up the State Plan;e)lay down guidelines to be followed by the different Ministries or Departments of the Government of India for the purpose of integrating the measures for prevention of disaster or the mitigation of its effects in their development plans and projects;f)coordinate the enforcement and implementation of the policy and plan for disaster management;g)recommend provision of funds for the purpose of mitigation;h)provide such support to other countries affected by major disasters as may be determined by the Central Government;i)take such other measures for the prevention of disaster, or the mitigation, or for preparedness and capacity building for dealing with threatening disaster situation or disaster as it may consider necessary;Annexure-III Contd.j.lay down broad policies and guidelines for the functioning of the NationalInstitute of Disaster Management.3.The Act further provides for the consititution of a National Executive Committee(NEC). The Secretary in charge of the Ministry or Department of the Central Government having administrative control of disaster management shall be ex officio Chairpseron of the NEC. Secretaries in the Ministries or Departments having administrative control of agriculture, atomic energy, defence, drinking water supply, environment and forests, finance (expenditure), health, power, rural development, science and technology, space, telecommunications, urban development, water resources and the Chief of the Integrated Defence Staff of the Chiefs of Staff Committee shall be ex officio members of NEC. NEC shall be responsible for the following45:a)act as the coordinating and monitoring body for disaster management;b)prepare the National Plan to be approved by the National Authority;c)coordinate and monitor the implementation of the National Policy;d)lay down guidelines for preparing disaster management plans by differentMinistries or Departments of the Government of India and the State Authorities;e)provide necessary technical assistance to the State Governments and the StateAuthorities for preparing their disaster management plans in accordance with the guidelines laid down by the National Authority;f)monitor the implementation of the National Plan and the plans prepared bythe Ministries or Departments of the Government of India;g)monitor the implementation of the guidelines laid down by the NationalAuthority for integrating of measures for prevention of disasters and mitigation by the Ministries or Departments in their development plans and projects;h)monitor, coordinate and give directions regarding the mitigation andpreparedness measures to be taken by different Ministries or Departments and agencies of the Government;i)evaluate the preparedness at all governmental levels for the purpose of respondingto any threatening disaster situation or disaster and give directions, where necessary, for enhancing such preparedness;j)plan and coordinate specialized training programme for disaster managementfor different levels of officers, employees and voluntary rescue workers;1522115343Section 2 (d)45Sections 10(1) and (2)44Sections 6(1) and (2)Crisis Management - From Despair to HopeSalient Features of The Disaster Management Act, 2005Annexure-III Contd.k)coordinate response in the event of any threatening disaster situation or disaster;l)lay down guidelines for, or give directions to, the concerned Ministries or Departments of the Government of India, the State Governments and the State Authorities regarding measures to be taken by them in response to any threatening disaster situation or disaster;m) require any department or agency of the Government to make available to the National Authority or State Authorities such men or material resources as are available with it for the purpose of emergency response, rescue and relief;n)advise, assist and coordinate the activities of the Ministries or Departments of the Government of India, State Authorities, statutory bodies, other governmental or non-governmental organizations and others engaged in disaster management;o)provide necessary technical assistance or give advice to the State Authorities and District Authorities for carrying out their functions under this Act;p)promote general education and awareness in relation to disaster management; andq)perform such other functions as the National Authority may require it to perform.4.At the State level a State Disaster Management Authority with the Chief Minister asex officio Chairperson and other Members (not exceeding nine and inclusive of Chairperson of the State Executive Committee as ex officio Member) shall be responsible for the following46:a)lay down the State disaster management policy;b)approve the State Plan in accordance with the guidelines laid down by the National Authority;c)approve the disaster management plans prepared by the departments of the Government of the State;d) lay down guidelines to be followed by the departments of the Government of the State for the purposes of integration of measures for prevention of disaster and mitigation in their development plans and projects and provide necessary technical assistance therefor;e)coordinate the implementation of the State Plan;f)recommend provision of funds for mitigation and preparedness measures;Annexure-III Contd.g)review the development plans of the different departments of the State andensure that prevention and mitigation measures are integrated therein;h)review the measures being taken for mitigation, capacity building andpreparedness by the departments of the Government of the State and issue such guidelines or directions as may be necessary.5.A State Executive Committee with Chief Secretary as the ex officio Chairperson andSecretaries of four other departments, as the State Government thinks fit, as ex officio members shall act as the coordinating and monitoring body for disaster management in the state. It shall perform the following functions47:a)coordinate and monitor the implementation of the National Policy, the NationalPlan and the State Plan;b)examine the vulnerability of different parts of the State to different forms ofdisasters and specify measures to be taken for their prevention or mitigation;c)lay down guidelines for preparation of disaster management plans by theDepartments of the Government of the State and the District Authorities;d)monitor the implementation of disaster management plans prepared by thedepartments of the Government of the State and District Authorities;e)monitor the implementation of the guidelines laid down by the State Authorityfor integrating of measure for prevention of disaster and mitigation by the departments in their development plans and projects;f)evaluate preparedness at all governmental or non-governmental levels to respondto any threatening disaster situation or disaster and give directions, where necessary, for enhancing such preparedness;g)coordinate response in the event of any threatening disaster situation or disaster;h)give directions to any Department of the Government of the State or any otherauthority or body in the State regarding actions to be taken in response to any threatening disaster situation or disaster;i)promote general education, awareness and community training in regard to theforms of disasters to which different parts of the State are vulnerable and the measures that may be taken by such community to prevent the disaster, mitigate and respond to such disaster;1542115546Sections 18(1) and (2)47Sections 22(1) and (2)Crisis Management - From Despair to HopeSalient Features of The Disaster Management Act, 2005Annexure-III Contd.Annexure-III Contd.ii.coordinate and monitor the implementation of the National Policy, StatePolicy, National Plan, State Plan and District Plan;iii.ensure that the areas in the district vulnerable to disasters are identified andmeasures for the prevention of disasters and the mitigation of its effects are undertaken by the departments of the Government at the district level as well as by the local authorities;iv.ensure that the guidelines for prevention of disasters, mitigation of its effects,preparedness and response measures as laid down by the National Authority and the State Authority are followed by all departments of the Government at the district level and the local authorities in the district;v.give directions to different authorities at the district level and local authoritiesto take such other measures for the prevention or mitigation of disasters as may be necessary;vi.lay down guidelines for prevention of disaster management plans by thedepartment of the Government at the districts level and local authorities in the district;156j)advise, assist and coordinate the activities of the Departments of the Governmentof the State, District Authorities, statutory bodies and other governmental and non-governmental organizations engaged in disaster management;k)provide necessary technical assistance or give advice to District Authorities andlocal authorities for carrying out their functions effectively;l)advise the State Government regarding all financial matters in relation to disastermanagement;m) examine the construction, in any local area in the State and, if it is of the opinion that the standards laid for such construction for the prevention of disaster is not being or has not been followed, may direct the District Authority or the local authority, as the case may be, to take such action as may be necessary to secure compliance of such standards;n)provide information to the National Authority relating to different aspects ofdisaster management;o)lay down, review and update State level response plans and guidelines andensure that the district level plans are prepared, reviewed and updated;p)ensure that communication systems are in order and the disaster managementdrills are carried out periodically; andq)perform such other functions as may be assigned to it by the State Authority oras it may consider necessary.6.At the district level a District Disaster Management Authority (DDMA), withCollector/District Magistrate/Deputy Commissioner, as the case may be, as ex officio Chairperson, elected representative of the local authority as the ex officio co-Chairperson, and Chief Executive Officer, the Superintendent of Police, Chief Medical Officer, all ex officio and maximum two other district level officers to be appointed by the State Government, as members shall act as the district planning, coordinating and implementing body for disaster management and take all measures for the purposes of disaster management in the district in accordance with the guidelines laid down by the National Authority and State Authority.7.The Act has defined as many as thirty-nine specific powers and functions of DistrictAuthority, as under48:i.prepare a disaster management plan for the district including a districtresponse plan;48Sections 30(1) and (2).vii.monitor the implementation of disaster management plans prepared by the Departments of the Governments at the district level;viii.lay down guidelines to be followed by the Departments of the Government at the district level for purposes of integration of measures for prevention of disasters and mitigation in their development plans and projects and provide necessary technical assistance therefor;ix.monitor the implementation of measures referred to in clause (viii);x.review the state of capabilities for responding to any disaster or threatening disaster situation in the district and give directions to the relevant departments or authorities at the district level for their upgradation as may be necessary;xi.review the preparedness measures and give directions to the concerned departments at the district level or other concerned authorities where necessary for bringing the preparedness measures to the levels required for responding effectively to any disaster or threatening disaster situation;anize and coordinate specialized training programmes for different levels of officers, employees and voluntary rescue workers in the district;21157Crisis Management - From Despair to HopeSalient Features of The Disaster Management Act, 2005Annexure-III Contd.Annexure-III Contd.xiii.facilitate community training and awareness programmes for prevention of disaster or mitigation with the support of local authorities, governmental and non-governmental organisations;xiv.set up, maintain, review and upgrade the mechanism for early warnings and dissemination of proper information to public;xv.prepare, review and update district level response plan and guidelines;xvi.coordinate response to any threatening disaster situation or disaster;xvii.ensure that the Departments of the Government at the district level and the local authorities prepare their response plans in accordance with the district response plan;xviii.lay down guidelines for, or give direction to, the concerned Department of the Government at the district level or any other authorities within the local limits of the district to take measures to respond effectively to any threatened disaster situation or disaster;xix.advise, assist and coordinate the activities of the Departments of the Government at the district level, statutory bodies and other governmental and non-governmental organisations in the district engaged in the disaster management;xx.coordinate with, and give guidelines to, local authorities in the district to ensure that measures for the prevention or mitigation of threatening disaster situation or disaster in the district are carried out promptly and effectively;xxi.provide necessary technical assistance or give advise to the local authorities in the district for carrying out their functions;xxii.review development plans prepared by the Departments of the Government at the district level, statutory authorities or local authorities with a view to make necessary provisions therein for prevention of disaster or mitigation;xxiii.examine the construction in any areas in the district and, if it is of the opinion that the standards for the prevention of disaster or mitigation laid down for such construction is not being or has not been followed, may direct the concerned authority to take such action as may be necessary to secure compliance of such standards;xxiv.identify buildings and places which could, in the event of any threateningdisaster situation or disaster, be used as relief centers or camps and make arrangements for water supply and sanitation in such buildings or places;xxv.establish stockpiles of relief and rescue materials or ensure preparedness tomake such materials available at a short notice;xxvi.provide information to the State Authority relating to different aspects ofdisaster management;xxvii.encourage the involvement of non-governmental organizations and voluntarysocial-welfare institutions working at the grassroots level in the district for disaster management;xxviii. ensure communication systems are in order, and disaster management drills are carried out periodically; andxxix.perform such other functions as the State Government or State Authority mayassign to it or as it deems necessary for disaster management in the District.8.The Act provides for the preparation of a hierarchy of Plans at National, State andDistrict levels. All these Plans shall be reviewed and updated annually. The National Disaster Plan shall be prepared by the NEC with regard to the national policy and in consultation with the State Governments and expert bodies and organizations and shall be approved by the NDMA. All Ministries and Departments of Government of India shall draw up their own disaster management plans in accordance with the National Plan. The National Plan shall include49:a)measures to be taken for the prevention of disasters, or the mitigation of theireffects;b)measures to be taken for integration of mitigation measures in the developmentplans;c)measures to be taken for preparedness and capacity building to effectively respondto any threatening disaster situation or disaster;d)roles and responsibilities of different Ministries or Department of the Governmentof India in respect of measures specified above.9.The State Disaster Management Plan shall be prepared by the SDMA in line with theNational Plan and after consultation with the local authorities, district authorities and people’s representatives as it may deem fit. The State Plan shall include50:49Section 11 (3) 50Section 23 (4)15821159Crisis Management - From Despair to HopeSalient Features of The Disaster Management Act, 2005Annexure-III Contd.a)the vulnerability of different parts of the State to different forms of disasters;b)the measures to be adopted for prevention and mitigation of disasters;c)the manner in which the mitigation measures shall be integrated with the development plans and projects;d)the capacity-building and preparedness measures to be taken;e)the roles and responsibilities of each Department of the Government of the State in relation to the measures specified in clauses (b), ( c) and (d) above; andf)the roles and responsibilities of different Departments of the Government of the State in responding to any threatening disaster situation or disaster.10. The District Disaster Plan shall be prepared by the District Authority in consultation with the local authorities and municipality and in line with the National and State Plan. Every office of the Government of India and the State Government having office at district level shall prepare a disaster management plan in accordance with the district plan and submit a copy of the plan to the District Authority. The District Plan shall include51:a)the areas in the district vulnerable to different forms of disasters;b)the measures to be taken, for prevention and mitigation of disaster, by theDepartments of the Government at the district level and local authorities in the district;c)the capacity-building and preparedness measures required to be taken by theDepartments of the Government at the district level and the local authorities in the district to respond to any threatening disaster situation or disaster;d)the response plans and procedures, in the event of a disaster, providing for-(i)allocation of responsibilities to the Departments of the Government atthe district level and the local authorities in the district;(ii) prompt response to disaster and relief thereof;(iii) procurement of essential resources;(iv) establishment of communication links; and(v) the dissemination of information to the public.e)such other matters as may be required by the State Authority.Annexure-III Contd.11. The Act further provides for the constitution of the National Institute of Disaster Management (NIDM). The Institute shall have a Governing Body which shall excercise such powers and discharge such functions as may be prescribed by regulations. Subject to the provisions of the Act, NIDM shall function within the broad policies and guidelines laid down by the National Authority and be responsible for planning and promoting training and research in the area of disaster management, documentation and development of a national level information base.12. The Act further provides for the setting up of National Disaster Response Force (NDRF) for the purpose of specialist response to disaster or threatening disaster. The general superintendence, direction and control of the Force shall vest in the NDMA.13. The Act has also provided for the constitution of National Disaster Response Fund which shall be made available to the NEC and National Disaster Mitigation Fund which shall be applied by the NDMA. Besides, every Ministry and Department of the Government of India shall make provisions in its annual budget, for funds for the purpose of carrying out the activities and programmes set out in its disaster management plans. The States shall constitute similar funds at the State and district levels.14. The Act provides for punishment where52:i.there is obstruction in the way of any officer in the discharge of functions under the Actii.there is refusal to comply with any direction given under the Actiii.a false claim for obtaining any relief, assistance etc. has been knowingly madeiv.there is misappropriation of funds or materials meant for providing reliefv.a false alarm or warning is made or circulated leading to panicvi. any officer who, having been imposed with a duty under the Act, ceases or refuses to perform or withdraws from his duties without express permissionvii. there is contravention of section 65 of the Act i.e. written order for requisition of resources or premises or vehicles, as the case may be53.In case of offence being committed by any Department of the Government, the head of the Department shall be deemed to be guilty, unless it is proved that it was committed without his knowledge or he has exercised all due diligence to prevent it. In case it it is proved that1602116151Section 31 (3)52Chapter X of the Act. 53Section 56Crisis Management - From Despair to HopeSalient Features of The Disaster Management Act, 2005Annexure-III Contd.Annexure-III Contd.The State Authority shall forward its annual report to the State Government which shall place it before the State Legislature.vii. A bar on jurisdiction of court (except the Supreme Court or a High Court).viii. No suit or prosecution shall in any court against the Central Government or the National Authority or the State Government/Authority etc. for work done in good faith. Officers and employees of these authorities will also be immune from legal processes in regard to any warning in respect of any disaster disseminated by them.ix. The Central Government may make rules for carrying out the purposes of the Act. NIDM, with the previous approval of the Central Government may make regulations for the same. These rules and regulations shall be laid before each House of Parliament while in session for thirty days.x.The State Government may also make rules in this regard and lay it before itsLegislature.x.The Central and State Governments may make orders for removal of difficultiesarising while giving effect to the provisions of the Act, which should be laid before the Parliament or the State Legislature. But no order shall be made after expiration of two years from the commencement of the Act.the offence has been committed by or attributable to any officer other than the Head of the Department, he shall be liable to be proceeded against and punished accordingly54. In case the offence has been committed by a company or body corporate, every person, who at the time of the offence was in charge of, and responsible to, the company for the conduct of its business, as well as the company itself, shall be deemed to be guilty. If it is proved that the offence was committed by or attributable to any director, manager etc. of the company proceedings will be initiated accordingly. However, in case of offences under sections 55 & 56, the previous sanction of the appropriate Government shall have to be taken before instituting prosecution. Further, no court can take cognizance of an offence under the Act unless a complaint is made by the authorities mentioned in section 60(a) of the Act, or by a person who has given notice of nor less than 30 days to the authorities mentioned in section 60(b) of the Act.15. The Act also provides for the following:i.The Central Government can issue direction in writing to Ministries orDepartments of the Government of India, NEC, State Government etc. to assist in disaster management55.ii.Any officer or authority of the Union or a State shall have to make availablesuch manpower as requested by NEC, SEC or District Authority in connection with rescue, relief or other disaster related works56.iii. If it appears to the NEC, SEC or District Authority that provisions of any rule regulation etc. need to be made or amended for purposes of prevention and mitigation of disasters, it may require to do so and the appropriate authority will take action accordingly57.iv.NEC, SEC or District Authority may requisition any resources, premises orvehicle from any authority or person for rescue operations etc58 and in case of requisition of premises, shall pay compensation to the interested party.v.The National Authority, the State Authority or a District Authority mayrecommend to the Government to give direction to any person in control of any media or means of communication to carry out any warnings or advisories regarding disasters.vi. The National Authority shall prepare an annual report to the Central Government which shall cause it to be laid before both Houses of Parliament.1622116354Section 5555Section 6256Section 6357Section 6458Section 65Crisis Management - From Despair to HopeRegional Workshops on Disaster ManagementAnnexure-IVRecommendations of the Working Groups at the Regional WorkshopsRegional Workshop on Disaster Management (Earthquakes, Landslides and Avalanches) January 30-31, 2006, JammuGroup I (Issues related to earthquakes) Recommendations:1.1 A realistic vulnerability map at the micro level with maximum information should be developed. Volunteers, ex-servicemen, community can be involved for the preparation of the vulnerability map. It was suggested that for this, NIDM may prepare a template of vulnerability maps at village level and sensitization of all concerned may be taken up.1.2 Administrative structures and processes required for dissemination of early warning must be enforced. This will enable better preparedness amongst the likely to be affected people.1.3 Building codes need to be followed strictly. Public and private buildings need to be made earthquake resistant and already existing government buildings should be retrofitted. It was also suggested that safety of critical buildings like schools, hospitals should be given top priority.1.4 Development plans should be integrated with disaster management plans so that development does not become a disaster in itself.1.5 Media plays an important role in dissemination of information therefore, disaster related information must be shared with media. It was also suggested that media needs to be sensitized and made partner in mitigation activities.1.6 Capacity building of community and vulnerable to enhance their capability to cope with the disaster, as they are the first responders.1.7 Simulation/mock exercises should be carried out with participation of all concerned. This enables a high level of preparedness amongst all the stakeholders.1.8 It was suggested that some amount (say, 10%) of MP’s or MLA’s constituency development fund may be reserved for retrofitting of existing buildings.Annexure-IV Contd.1.9 Inventory of resources and equipments is needed. This helps the administration in immediate response to disasters.1.10 Civil Defence and other volunteers like NCC, Red Cross, school teachers should be involved in disaster mitigation, preparedness, relief distribution and response activities.1.11 Disasters should be managed with least involvement of Army and it should be called when extremely necessary. An institutional mechanism should also be developed for dovetailing of district disaster management with Defence forces.1.12 Emergency Operations Centres at district levels should be made functional round the clock armed with all required expertise and equipments and with a command or duty officer.Group II (Issues related to avalanches) Recommendations:2.1 Identification of villages prone to avalanches should be done by district authorities and Snow & Avalanche Studies Establishment’s (SASE) manpower should be strengthened and they may do the vulnerability assessment and zoning of vulnerable districts. Community, which is repository of traditional wisdom, should be involved in vulnerability mapping.2.2 Awareness is another key for preparedness. Slant slope houses are one of the better construction practices. Community may be made aware of this.2.3 Plantation and afforestation are other methods of mitigation. This may be taken up by the district authorities and the community as a method of effective mitigation.2.4 Micro-credit and micro-insurance may be encouraged at village level.2.5 Regular press briefings should be held and a nodal officer should be appointed.2.6 Mock drills, simulation exercises, benchmarking, development of indicators and certification may be used as methods to assess and evaluate level of preparedness. NIDM may develop some such indicators.16421165Crisis Management - From Despair to HopeRegional Workshops on Disaster ManagementAnnexure-IV Contd.Annexure-IV Contd.2.7 Women panchayat members must also be involved in disaster meetings.2.8 Corporate houses may identify and adopt some villages for disaster preparedness and capacity building activities.2.9 Donations from corporate houses may also be utilized for premium payment of the insurance.2.10 There should be one contact point for corporate-government interface.2.11 Sub-divisional and block level disaster management committees may be constituted.2.12 Limited number of visits of VVIPs may be encouraged.2.13 Incident commander should be left free from the VVIP Protocol.2.14 Existing system of synergy between Army and civil administration is well established and needs to be followed in future also.2.15 Inventory of resources and equipments is absolutely necessary.2.16 Capacity building and community empowerment may be taken up to meet the L1 level disasters59.2.17 Emphasis may be laid on information dissemination and IEC activities.2.18 The entitlement of victims may be need based and their quality and quantity may be standardized.2.19 Selected members of community should be given training in ‘First Aid’. Provision of mobile medical unit will help in speedy and timely medical relief to victims.2.20 District Magistrates/ Collectors may be delegated powers for emergency procurement of materials in a transparent manner.2.21 Laid down procedures for requisition of Army may be followed.2.22 Civil Defence may be re-structured and its mandate may be expanded.2.23 Interagency meetings of DM and NGOs may help in coordination between them during emergency.2.24 Disaster managers may be connected to the disaster loop alert system.2.25 Local level committees may be strengthened to decide about evacuation, shelter and relief activities.Group III (Issues related to Landslides)Recommendations:3.1 Need for Hill Development Authority at national, state and other levels. 3.2 Debris disposal policy should be made.3.3 Researches being done in the field of landslides may be shared with implementing agencies.3.4 Geo-technical investigations and clearance may be made mandatory as a policy before construction of the roads and undertaking major developmental activities.3.5 Advice of technical organisations may be made mandatory for all stabilizations measures for active landslides.3.6 Controlled blasting and silent explosive options should be used in Himalayan region.3.7 Vulnerability mapping of all areas may be taken up with priority.3.8 Awareness and skill transfer to the grassroots level with incorporation of traditional skills and involvement of community is needed.3.9 Compulsory insurance may be provided to community in the vulnerable areas with premium paid from CRF.3.10 Training and sensitization of media and also proper liaison of media with district administration is necessary.3.11 Pre-disaster drills keeping in view the periodicity and severity of disaster may be carried out.3.12 NDMA may periodically assess level of preparedness at different levels. 3.13 Resource inventory and stocking of resources should be continuously done.1662116759L1 level disasters are district level disasters which are within the capacity of the district administration to deal with.Crisis Management - From Despair to HopeRegional Workshops on Disaster ManagementAnnexure-IV Contd.Annexure-IV Contd.3.14 Village Disaster Management Teams (VDMTs) may be trained and equipped. 3.15 Security should be tightened in affected areas.3.16 A protocol officer should be nominated for all VVIP visits.3.17 Civil Defence force should be reactivated and reoriented for disaster management.3.18 Essential search and rescue equipments like stretchers, ropes, first aid, etc. and emergency medical facilities should be made available with community3.19 Disaster mitigation fund may be utilized for capacity building of the community and the district.3.20 Liaison officer should be appointed for coordination with NGOs. 3.21 Documentation of the past experiences of disasters should be done.Regional Workshop on Disaster Management(Cyclones and Floods)February 15-16, 2006, ChennaiGroup I (Preparedness, Prevention and Early Warning) Recommendations:1.1 DMC (Disaster Management Committee) may be formed at the Block, Taluk and Village levels. All line departments, elected representatives, voluntary organisations and NGOs may be made members of DMC.1.2 There may be a single disaster management administrative set up and Disaster Management plan, to avoid confusion among different departments.1.3 A DMM (Disaster Management Manual may be formulated) by the GOI and circulated to the states. The states may prepare state specific DMM based on local needs and vulnerabilities. States may be given autonomy in decision making. Adequate financial powers may be given to Relief Commissioner / District Collector.1.4 Hazard-risk-vulnerability maps may be prepared at the taluk, panchayat and village level by using the available technology.i.e., ISRO, NRSA, satellite data over the year etc.1.5 States may be provided financial support for mapping high vulnerable areas (0 2 kms from sea, river banks, etc.).1.6 The group pointed out a few organizations, which have already such maps: GIS map for Tamil Nadu by The Tamil Nadu Water Supply and Drainage (TWAD) Board, vulnerability map of Hyderabad and Visakhapatnam by Satyam Computers, Hyderabad.1.7 A DEW (Disaster Early Warning) system involving BSNL and other communication media may be set up in each District. The alert may be disseminated through local TV, radio, cell phone, SMS etc.1.8 Development plans need to be incorporated with Disaster Mitigation plan such as “Marriage Hall-cum-Cyclone Shelter”, “Community Hall-cum-Cyclone Shelter” etc.16821169Crisis Management - From Despair to HopeRegional Workshops on Disaster ManagementAnnexure-IV Contd.Annexure-IV Contd.1.9 IEC (Information, Education and Communication) material on disaster management may be prepared and distributed for public preparedness.1.10 A special DMF (Disaster Management Fund) may be created in addition to the existing CRF. The fund should be over and above CRF and placed at the disposal of NDMA. The allocation of the funding mechanism may be 60% - NDMA, 30% - SDMA and 10% - DDMA with a strict code for its utilization, in the event of a disaster.Group II (Disaster Rescue, Relief and Rehabilitation)Recommendations:2.1 Each state should have its own Disaster Response Force.2.2 Staff and officers of all government departments must be trained on Disaster Management during induction into service.2.3 First Aid training should be given to all students, government employees and staff of every panchayat / urban local body.2.4 Police stations in vulnerable areas should be adequately equipped with vehicles and communication facilities including satellite phones and manpower.2.5 Availability of helicopters at short notice should be ensured. Preferably the state government should have its own choppers at its disposal.2.6 Modern equipment may be identified and procured for search and rescue operations in various calamity situations.2.7 Sniffer dogs may be trained at district level and utilized in earthquake disaster areas to identify the survivors.2.8 Multistoried disaster resistant shelters with all facilities and provision to accommodate men and women need to be constructed in all vulnerable coastal areas.2.9 Safety standards for responders and operations personnel must be laid down clearly and the same may be communicated.2.10 The ICS (Incident Command System) suggested by Ministry of Home Affairs, Government of India, must be introduced in all districts of the state.2.11 PRIs (Panchayati Raj Institutions) must be trained and strengthened as part of the Disaster Management policy.2.12 Emergency Operation Centre must be set up in all districts with adequate life saving drugs, including anti venom and anti rabies vaccines.2.13 A package of remuneration must be formalized and publicized for government personnel, private doctors, paramedics, volunteers etc., for disaster management activities.2.14 Financial delegation to district administration for procurement and undertaking relief operations must be clearly laid down as part of the DM policy.2.15 Blood group directory of all prospective donors in vulnerable areas should be put on the web and donors should be issued ID cards.2.16 Past history of calamities in specific areas may be developed by the district administration in consultation with the local people.2.17 A detailed evacuation plan shall be formalized and put in place in all districts.2.18 Relief camps should be identified in safe zones and safe buildings must be identified scientifically in advance with assistance from experts.2.19 Special toilets and wheel chairs are to be provided in relief camps for the physically challenged.2.20 Special nutrition needs to be provided in relief camps for children, lactating mothers etc.2.21 Psychiatric and trauma counseling should be part of relief camp services.2.22 Separate rooms for kitchen, storage of cooking provisions and other items should be provided in the relief camp. Similarly, garbage disposal system should be in place in each relief camp.2.23 District Authority shall prepare and forward the requirement of relief materials to government and donor agencies in writing and also through print and electronic media.2.24 A standard suggestive set of packages can be evolved by for each kind and level of disasters to enable district admin to quickly extend relief.17021171Crisis Management - From Despair to HopeRegional Workshops on Disaster ManagementAnnexure-IV Contd.2.25 The “Procurement Unit” as mentioned in the Incident Command System (ICS) should invite tenders every 6 -12 months and fix rate contracts and place orders with a clear direction to supply the materials in a given time frame.2.26 Quality check of the materials has to be done by the “Procurement Unit” itself.2.27 Reconstruction should be executed through Public-Private partnership.2.28 The designs of the houses should be finalized in consultation with the victims or their representatives as well as experts.2.29 Social audit framework and documentation of standards of rescue, relief and rehabilitation should be evolved and mandated.Group III (Role of Armed Forces/ NGOs/ Civil Defence/ NCC/ Home Guards and Territorial Army in Disaster Management)Recommendations:3.1 A comprehensive ex-servicemen database may be prepared based on their individual skill sets at the state and district levels.3.2 The services of defence forces may be utilized sparingly, only as an exception, when state administration feels the situation really warrants it.3.3 Use of civil defence setup is still relevant in disaster management. They may be provided with appropriate training before involving them in disaster management activities.3.4 Compulsory training in civil defence and disaster management may be given to ex-servicemen.3.5 Fire services should be modernized as multi-hazard response force.3.6 Database on corporate capabilities may be prepared at district Head Quarters/ state Head Quarters and specific requisition may be made from them at the time of disasters.3.7 NGO coordination cell may be established in districts and the areas of work be demarcated for each NGO.3.8 Panchayat president and Block Development Officer (BDO) may discuss with NGO’s and utilize them effectively.Annexure-IV Contd.Group IV (Capacity Building of Government and Local Bodies) Recommendations:4.1 Disaster management chapter may be included in the Panchayati Raj Acts, reflecting the role of local bodies.4.2 A Disaster Mitigation Fund may be established with specific procedures for utilization of funds. Separate allocation of funds for disaster management activities may be made to panchayats (10%).4.3 List of experts at the state /district level may be prepared.4.4 Training may be made mandatory for induction / promotion. Mock drills may be included in refresher courses.4.5 Sensitization of politicians on disaster management is important. 4.6 Database on local bodies may be prepared using GIS technology.4.7 Disaster management teams such as early warning, rescue, relief, and medical aid, damage assessment etc may be set up.4.8 Local community particularly SHGs may be involved in preparation of disaster management plans, identification of victims for compensation and documentation of episodes, preparing risk maps, vulnerability assessment, cost benefit analysis, preparing preparedness and rehabilitation plans and formation of Special Teams for identifying safe shelters, stock piling of relief materials etc.4.9 Training Need Assessment (TNA) and Training of Trainers (TOT) programmes may be conducted for local communities.4.10 Local community may be encouraged to establish their own Disaster Management Fund.4.11 Relief schemes, calendar of activities including training and mock drills, list of beneficiary etc. may be published for general information.4.12 Enforcement mechanism may be strengthened by conducting random checks and imposing punishments.4.13 Service of the EDUSAT (which is widely used for educational purposes in Kerala) may be utilized for disseminating information on Disaster Management.4.14 Disaster management curriculum may be included in school and college syllabi. 4.15 Insurance schemes may be introduced in disaster prone areas. 4.16 Self-employment schemes may be introduced for victims.17221173Crisis Management - From Despair to HopeRegional Workshops on Disaster ManagementAnnexure-IV Contd.Regional Workshop on Disaster Management (Floods and Industrial Accidents) February 22-23, 2006, MumbaiGroup I (Issues regarding Earthquakes) Recommendations:1.1 Seismic and vulnerability map at the micro-level must be prepared, which will help the state to be better prepared for all the disasters.1.2 Incident command system should become a standard procedure in search and rescue (SAR) and some incentive schemes may be considered for SAR teams.1.3 Identification and optimum utilization of locally available resources (human resources, equipments and machinery) would reduce demand for resources from the state level.1.4 Mock drills, strict implementation of building codes, inventory of resources and equipments, professional accountability for certification of building safety with the architect and safety of critical buildings like school, hospitals are needed at all levels to ensure preparedness and readiness.1.5 Administrative structures and processes required for dissemination of information and success stories and best practices from earlier disasters at field levels may be ensured.1.6 Integration of development plans with disaster management plans is must. Group II (Issues regarding Floods)Recommendations:2.1 There is a need for revamping of organisations like India Meteorological Department (IMD) and Central Water Commission (CWC), their communication network and density of early warning equipments, to ensure flow of clear warning up to the local level.2.2 It is necessary to identify flood shelters and flood prone areas at the micro-levels. Conduct of pre-monsoon meetings with the participation of all stakeholders, clearance of storm water and natural drainage, plantation and afforestation should be taken up.Annexure-IV Contd.2.3 Awareness, micro-credit and micro-insurance may be encouraged at village level. This will help strengthening of first responders.2.4 Regular press briefings and mechanism of a nodal officer, for media interaction may be used for media management.2.5 Mock drills and simulation exercises, may be used as methods to assess and evaluate level of preparedness.2.6 Development of an institutionalized interface of administration with Armed Forces will enable the emergency officers to use army and other central forces for effective disaster management.2.7 Mitigation measures like rainwater harvesting, solid waste management, flood plain mapping, water bodies management and study on climate change impact are necessary and may be used effectively.2.8 A national flood mitigation and insurance programme may be launched. Group III (Issues Regarding Industrial Disasters) Recommendations:3.1 Standard operating procedures for industrial disaster managers and all the stakeholders must be based on need analysis.3.2 Proper land use planning may be done to enable better management of an industrial disaster.3.3 Awareness for existing rules and also simple ways to avert a disaster may be widely disseminated. Departmental manuals should be developed and made available to all the stakeholders.3.4 A good system of medical assistance like training of paramedics, trauma counselling, decontamination may be developed.3.5 All octroi posts and fire departments may be networked and strengthened. This will enable proper management of any hazardous material transportation through the residential area.3.6 Coordination and sharing of knowledge and information amongst all stakeholders is necessary.3.7 Instant speed recorder on the tanker carrying hazardous material is necessary to avert a disaster.17421175Crisis Management - From Despair to HopeRegional Workshops on Disaster ManagementAnnexure-IV Contd.Annexure-IV Contd.Regional Workshop on Disaster Management(Drought)May 22-23, 2006, JaipurGroup I (Drought Preparedeness & Mitigation Issues) Recommendations :A.Existing Structural Arrangements1.Permanent wing of disaster management cell at district level, block level as well as village level.2.Need to provide technical support at state level.B. Water and Land Resource Management1.Regulate flow irrigation (‘Diggi’ with sprinkler in command areas).2.Increased use of sprinkler and drip irrigation in rainfed areas.3.Institutionalisation of alternate crop planning with minimum support price.4.Identify unexecuted, appropriate conservation activities such as catchment area treatment (plantation and forestry), ground water recharge and watershed development and undertake them on priority.5.Interphasing of R&D outputs for efficient management of resources.6.Urban planning - provision of water harvesting.7.Incorporate provisions for incurring exenditure on material component in CRF and NCCF.3.8 Documentation of the past experiences and best practices in handling an Industrial disaster may be done for better preparedness to manage future disasters.3.9 Higher priority must be given to the development and implementation of national guidelines on?Risk assessment?Development and review of on-site emergency plans?Development and review of off-site emergency plans?Testing of the plans covering different stages?Protocols for each stage of testing?Training of all stakeholders3.10 Regular or project based funding of the faculty, research and documentation activities with the centres for disaster management or organisations imparting such training is necessary.3.11 There is a need for development of a mechanism for speedy payment of compensation for accident victims.3.12 There is a need to harmonise existing rules for industrial safety with the Disaster Management Act, 2005.C.Food, Nutrition and Fodder Security1.Strengthening PDS system / millets-bajra etc.2.Support for low water consuming crops like millets and bajra and pulses, horticulture products.3.Implementation of National Rural Employment Guarantee Act.4.Expanding pension and food supply schemes for the physically challenged and elderly persons.5.Strengthen nutrition through expanding ICDS and Mid-day Meal Programme.17621177Crisis Management - From Despair to HopeRegional Workshops on Disaster ManagementAnnexure-IV Contd.Annexure-IV Contd.6.Fodder farm expansion with minimum support price mechanism in command2. Bio-dieselarea.3. anise livestock and feed support appropriately.4.Market linkages and infrastructure8.Establishment of fodder banks in command areas.5.Non-farming revenue earning options through skill development options and9.Cultivating degraded land for fodder.nurturing of local skills.D. Role of Science and Technology in Long Term Mitigation of Drought1.Vulnerability mapping and risk assessment at smallest possible administrative level.2.Early warning impact assessment at appropriate administrative scale.3.Climate change impact assessment in respect of drought mitigation, agriculture and planning.4.Establishing application and extension services through Krishi Vigyan Kendra.5.Knowledge integration of multi-sectoral Science and Technology inputs and integration of line departments in decision making process and development of action plans (crop monitoring, cropping pattern, alternate crop planning, low water conservation crops).6.Identify and organize appropriate mitigation (water and conservation works and farm level option like tanks) through rejuvenating traditional water storage options.7.Integrate activities of drought mitigation appropriately with the National Rainfed Area Development Authority of Ministry of Agriculture.E.Short Term Crop Diversification1. Knowledge empowerment2.Availability of seeds3Crop insurance4.Exposure visits5.Adoption of best practices – progressive farmers.F.Alternative Livelihoods1.Agro forestry Group II (Drought Relief & Rehabilitation)2.1 The state component of CRF should be a mandatory budgetary provision for all states.2.2 If more than 50% of CRF in a particular year is utilized, then the state should be eligible for further NCCF funding without any adjustments.2.3 CRF and NCCF should be kept in interest bearing public accounts. 2.4 Food grain assistance should become a dedicated component of CRF.2.5 A National Food Trust should be set up to cater to the special needs of food deficit areas.2.6 Financial contributions from the community should be encouraged through the establishment of a Community Drought Fund at each Gram Panchayat. Community contributions should be matched by government funds, and the fund should allow each Gram Panchayat to meet localized drought needs.2.7 In order to strengthen public-private partnership, a matching District Relief Fund should be set up. Area specific preferences of the donors should be accommodated.2.8 Land and off-land interventions that have drought-proofing capabilities should be recognized as long term loans by financial institutions.A. Long Term Measures for Rehabilitation/Linking Relief and Development1.National Rural Employment Guarantee Scheme (NREGS) combines objectivesof development with employment generation and is therefore an ideal drought management instrument. Eventually when all districts are covered under NREGS, then the objective of harmonizing development and mitigation would have been realized.17821179Crisis Management - From Despair to HopeRegional Workshops on Disaster ManagementAnnexure-IV Contd.2.Till such time, all-out efforts should be made to dovetail all line departments’programmes to ensure that relief works create long term assets.3.Taking up individual beneificiary works as part of relief operations should beallowed.4.NGO coordination committee should be activated and the involvement ofNGOs in drought management should be institutionalized.5.The institutionalization of CRF in state budgets should be reinforced by makingdrought an explicit mandate of all line departments to ensure that all development schemes make an integrated impact on drought.6.Gram Panchayat Drought Perspective Plans should be prepared as a long termdrought planning and response tool and as a platform for government-community interaction.7.Wireless telemetric rain gauges should be installed in each village to provideadditional scientific data to streamline crop insurance claims and settlements. This rainfall data should be subsumed with IMD data.8.All states should be encouraged to implement the scheme of CRF in letter andspirit.B. Manuals and Codes1.Every state should have area-specific drought manual. A provision for regularrevisions and updating should be made to allow area plans to be dynamic.2.Drought codes should be drawn up for specific areas for immediateimplementation as action plans.3.Village Drought Committees should be established, and representatives of theseVDCs should be apexed into a Gram Panchayat Sub-Committee for Drought. The Gram Panchayat Drought Perspective Plan and Action Plan as well as the Community Drought Fund should be brought under the purview of this sub-committee.munity institutions (SHGs, CBOs) and civil society should be recognizedas implementing agencies for drought management.5.Dovetailing of community and civil society schemes should be recognized forCRF supplementation to meet drought objectives.Annexure-IV Contd.Group III (Role in Management of NGOs, Community Groups, Local Bodies and Capacity Building for Drought Management)3.1 Community should be at the forefront for identifying the risk, need and prioritization initiatives.3.2 Government should facilitate by providing Knowledge Resource Centre (KRC) for a group of Panchayats as per the local need (risk areas). KRC will be comprised of a group of technical experts. Certain percentage of CRF should be allocated for running KRC. KRC will do the task of capacity building of the community, CBOs, NGOs, PRI and ground level government functionaries.3.3 Community should decide the need and the nature of work and the government guidelines should support that.3.4 Community, through Gram Sabha, will identify the gaps, list of livelihood seekers and help in ensuring entitlement.3.5 Community through local resources and government support would build sustainable system for cattle and water conservation.3.6 IEC campaigns for generating awareness must be undertaken.3.7 Government should provide support to proactive community risk reduction measures/projects by earmarking CRF.3.8 Panchayat should take help of community in the management of the infrastructure created for risk reduction.3.9 Panchayat / local bodies should be strengthened for risk reduction.3.10 NGOs/CBOs, private sectors may be supported to bring the community initiatives in the forefront.3.11 New financial concepts/tools for risk transfer, insurance and management be promoted with the help of NGOs, government, insurance companies and financial institutions.3.12 Local issues to be addressed by local government and the larger community issues to be addressed by the district and state government.3.13 Capacity development programme for the local, district and state level officials of the government should be undertaken.3.14 Transparency at all levels must be ensured.3.15 Social audit at local levels should be made mandatory.18021181Crisis Management - From Despair to HopeEarly Warning SystemsAnnexure-VEarly Warning Systems1. Early Warning of Cyclone1.1 The cyclone warning system comprises of 557 surface observatories, 38 Radiosonde stations and 65 Pilot Balloon stations. 10 cyclone detection S-band radars along the entire coastline of India including 3 Doppler S-Band radars in the east coast have also been installed. A satellite based Cyclone Warning Dissemination System (CWDS) has been operational since 1985. Under the system, 250 receiver antennas with audio warning receiver sets are placed in the coastal offices of the State Governments and other disaster management officials. The Area Cyclone Warning Centres of IMD have facility to uplink direct to the INSAT/ Satellites. Cyclone warnings and messages in the regional language and English are broadcast by selectively activating the receivers in the field without losing any time.1.2 After the Orissa Super Cyclone, advanced Doppler radars have been installed at three locations on the eastern coast which has made the tracking of cyclones more accurate, but such systems are not available in the west coast which makes weather prediction fairly primitive as was demonstrated during the unprecedented rainfall in Mumbai last year. There is need to improve the design of tide-gauge to capture storm surges and augmentation of their network along east and west coasts of India. Cyclone modeling should be done for all coastal areas prone to cyclone so that accurate and focused forecasts can be made about the level and extent of tide surge and inundation on the basis of which effective steps can be taken for evacuating people likely to be affected. Sometimes, generalized forecasts create unnecessary panic among the community and the administration ends up evacuating people from large tracts, which remain unaffected. Moreover, there is need to improve the system for rapid and prompt dissemination of early warning, to the community.2. Early Warning of Floods2.1 The Central Water Commission has established Flood Forecasting Centres (FFCs) in all major river catchments of India. A good network of stream flow measurement stations and rain gauges, supported by wireless network have been established. At present, the flood forecasting and warning network of CWC covers 62 major inter-state river basins with 132 water level forecasting stations and 25 inflow forecasting stations. Hydrological and hydro-meteorological data from nearly 700 stations in these river catchments are being collected and analyzed, and flood forecasting and warning messages are issued, generally 24 to 48 hours in advance. In case of large flood events, advisory forecasts are issued 72 hours in advance or more with details on extent and areas of impact. The FFCs are supported by theAnnexure-V Contd.Flood Meteorological Offices (FMOs) operated by India Meteorological Department. Quantitative precipitation forecasts based on the latest meteorological situation are provided by the FMOs to the FFCs. With the availability of satellite data, monitoring of major floods have been taken up by the National Remote Sensing Agency, Hyderabad. The flood inundation maps are provided to CWC and concerned Sstate Government agencies.2.2 The flood warning system in the country is reasonably accurate in normal times, but such warnings have been found to falter badly during times of heavy rainfall largely due to the absence of adequate number and proper maintenance of rain gauge stations and lack of timely transmission of data from the existing stations. Often, there is lack of coordination among departments in transmitting such information. For example, hydel power stations do not issue timely warnings to the irrigation and flood control departments regarding releases from dams and irrigation departments, which in turn, do not warn transport and railway authorities, as was demonstrated by the tragic submergence of a train in Andhra Pradesh, leading to a large number of casualties.3. Early Warning of Drought3.1 The prediction and early warning of drought is mainly based on three kinds of rainfall predictions.a)Long range rainfall prediction: Longs range forecasts for the country as a whole arebeing provided by India Meteorological Department since the year 1875. Use of parametric and power regression models and dynamic stochastic transfer models since 1989 has made these forecasts fairly accurate. The seasonal total rainfall for the entire country is predicted in the forecast.b) Medium range rainfall prediction: National Centre for Medium Range Weather Forecasting provides in advance weather forecast at every 1 deg. x 1 deg. grid. At present, the centre issues weekly forecast to 76 agro-meteorological advisory service units (AAS). Out of these, 42 units are given 3-day forecast.c)Short range rainfall predictions: India Meteorological Department, based on IndianNational Satellite (INSAT) data supported with weather and Agromet observations, issues Farmer’s Weather Bulletins twice a day. These forecasts are valid for 24 to 72 hours.18221183Crisis Management - From Despair to HopeEarly Warning SystemsAnnexure-V Contd.3.2 Forecasting of drought and its impact on agriculture needs to be further streamlined. Efforts being made in various institutions in the country should be integrated to devise models for drought prediction based on the experience of occurrence of drought conditions in the past few decades. Rigorous monitoring of drought conditions may be carried out at village level using a network of automatic weather stations and satellite data.4. Seismic Monitoring4.1 The India Meteorological Department (IMD) maintains round-the-clock watch of seismic activity in the country. The operational task of the department is to determine the earthquake parameters immediately after the occurrence of an earthquake anywhere in the country and disseminate the information to all concerned agencies. On the basis of trigger information received on line from the field observatories, the Central Receiving Station ascertains the occurrence of an earthquake in and around the country and collects the waveform and phase data from the field stations. After computer processing of the data received, a Preliminary Earthquake Report (PER) is generated giving details of the time of origin, location (latitude and longitude) and magnitude of the event. The PER is disseminated immediately, within 20-30 minutes depending upon the location and magnitude, to all the concerned state and central government agencies responsible for carrying out relief and rehabilitation measures. The information is also transmitted to other concerned agencies including public information channels, press, media etc.The existing regional seismological network is broadly capable of locating earthquakes of various magnitudes, as per details given below:i)M: 3.5 and above in Peninsular region.ii)M:4.0 and above in the extra-Peninsular region andiii) M:5.0 and above in the border regionsTo achieve the objective of locating earthquakes of magnitude 3.0 and above uniformly over the entire country, an optimum network design has been worked out, which consists of a total of 177 seismological observatories throughout the country. IMD is now believed to be in the process of upgrading its seismological network in a phased manner to meet these objectives. The ongoing upgradation plans include a 20-station telemetry system for Northeast India and a 40-station regional seismological network as part of an optimumAnnexure-V work plan for the country as a whole. The upgradation plan needs to be taken up and implemented on priority basis.5. Tsunami Early Warning5.1 In the aftermath of the Great Sumatra earthquake of 26th December, 2004, Government of India has initiated actions for setting up an Early Warning System for Tsunamis and, Storm Surges in the Indian Ocean. The system is expected to be functional by September, 2007 and will help in providing advance warnings of Tsunamis and Storm Surges in the region. The Department of Ocean Development (DOD), Department of Science & Technology (DST), India Meteorological Department (IMD), Department of Space (DOS), and CSIR laboratories are the major agencies involved in this endeavor. An operational centre has been established by the DOD at Indian National Centre for Ocean Information Services (INCOIS), at Hyderabad on a 24X7 basis.5.2 As part of the Tsunami Early Warning System, a 17 station Real Time Seismic Monitoring Network (RTSMN) is being set up by the Department of Science & Technology (DST). The seismological network is expected to be operational by July/August, 2006. Data from the Broadband seismic field stations will be transmitted in real time through V-SAT communication facilities to the Central Receiving Station (CRS) of IMD at New Delhi for processing and interpretation.6. Early Warning of Landslides6.1 At present, no early warning system for landslides is available in the country although landslides are monitored along important highways. There is need to step up R&D activities on prediction and forecasting of landslides, especially for early warning against reactivation of old landslides, repetitive landslides, those occurring in the areas known to be hazardous and areas close to dense human settlements.18421185Crisis Management - From Despair to HopeQuestionnaireAnnexure-VIQuestionnaire for Disaster Management(For State/UT Governments)1. PREPARATIONPreparation to face crises is the most important aspect. This preparation has to be by the Government agencies, the community and the civil society at large inclusive of volunteers, specialized functionaries like doctors etc.a.Does the existing set up for disaster management at the state and the district level require further strengthening? What are the suggestions?b.Is there a need to reorient the Civil Defence and the Home Guards set up towards disaster management also?c.What were the lessons learnt in respect of functioning of government machinery & structure during any recent disaster?d.How are the NGOs and the community made partners for disaster management in the formal set up?e.Has a vulnerability mapping of each district been done?f.Are disaster management plans prepared for districts and also sub-district levels like the municipalities and the blocks? How are all these plans integrated/ updated?g.Is the district management plan disseminated to the public? What is the mechanism?h.Should the police and some civilian officers be trained in disaster management? Similarly, should volunteers in disaster prone areas also be trained?i.How are the development plans and the long term disaster management plans being integrated?j.What steps have been taken for better enforcement of existing laws for prevention of disasters such as industrial accidents, epidemics etc.k.Have the building byelaws been modified in order to ensure that only disaster resistant building/structures come up in future?l.In case of earthquake-prone areas, is there a plan to retrofit the existing public buildings?Annexure-VI Contd.m. What is the funds flow mechanism at the time of disasters?n.What steps have been taken to streamline procurement of relief materials atthe time of crisis such that the process is transparent on the one hand and is quick on the other?o.Women, children, aged and the physically challenged are the most vulnerablegroups in case of disasters. How to empower them to face disasters?p.Any suggestions to improve civil military synergies.q.Is there a disaster management set-up at the sub-district level?r.How often are the disaster management plans updated? Is there any periodicalmock rehearsal, especially in the disaster prone areas?s.Is there a mechanism to assess the district’s preparedness for disaster management/any suggestions?2. EARLY WARNINGMajor natural disasters like floods & drought are cyclic in their re-occurrence in the same areas of the country year after year. Advance action to prevent or mitigate their impact is possible. To be forewarned is to be forearmed. Technology is now available which can give adequate advance notice in the case of cyclones and quite a few hours in case of Tsunami.a.What are the gaps in our existing warning systems?b.Are these gaps due to technological constraints? If no, what may be / are thereasons?c.How can the common citizen / the public be given the early warnings? Whatare the best practices, which can be followed / replicated?d.What, in your opinion, can be done to bring closer the knowledge institutions,disaster management agencies and community-based organizations?e.What technologies can you suggest to provide assistance in managing disasters?Kindly state whether there is access to the availability of those technologies. Kindly also state about the usefulness of these technologies.3. QUICK RESPONSEThe governmental system in India comprises the Union Government in New Delhi & the State Governments, in the state capitals. The district administration represents the18621187Crisis Management - From Despair to HopeQuestionnaireAnnexure-VI ernmental system closest to people and the community followed by the block development agencies. The first responder in any disaster situation is the community, which has traditionally risen invariably to provide relief and help to the needy at the earliest.a.What measures would you suggest to ensure that the response is timely andquick?b.How can the panchayati raj system and the local municipalities be empoweredto come to the aid of the community in a disaster situation?c.Is it possible to have a group of volunteers trained to provide hands-on-relief atsay, every district headquarters to enable quick response whenever needed? If so, what should be its size? Can home guards fulfil this role?d.Shouldn’t the civil police be trained for emergency relief work? Can this help inchanging their public image?e.What are the different types of interventions to strengthen indigeneous copingmechanisms, promote collective wisdom and social networking?f.How would you like the lessons learnt after each disaster to be kept alive /retained and institutionlised for suitable preventive action in future?g.What is the existing system of fund flow at the time of disasters? Is thereadequate delegation of financial powers to the districts? How to improve the fund flow mechanism at the time of disasters?4. MANAGING RELIEFThe electronic media has reduced the response time to a major disaster, of the whole world - in any place in the world, as also anywhere in the world. As a result, relief material & expertise begin to pour in at the nearest airports and railway stations for being taken/ carried to wherever it is required. Even the district headquarters of the affected districts get flooded with relief material and gets over-crowded with volunteers & experts of all types, who along with the district administration in the recipient district are sometimes unprepared in dealing with this inflow of men & materials. At times, some of these materials may not be of much use as they are not really necessary.a.After disaster, relief in various forms pours in. How should this be streamlinedand coordinated? What should be the mechanism of informing the requirements of aid to various agencies?Annexure-VI Contd.b.A large number of NGOs move in immediately after a disaster takes place. What should be the coordination mechanism for them?c.After the initial rush of aid and relief material, help generally reduces. How to ensure that the relief and rehabilitation measures are sustained during the time of need?5. RESTORATION & REHABILITATIONa.Should there be a policy defining the rehabilitation package?b.Interventions of different agencies in the restoration and rehabilitation effort may create disparities in the package. How to bring about uniformity in the rehabilitation efforts?c.Every disaster traumatizes the affected population, specially the women & children. How can this phenomenon be addressed, considering that revival to normalcy is a slow process?6. PROMOTING A CULTURE OF SAFETYa.How can safety concerns be built into the extra/co- curriculur activities of ourstudents in schools, colleges, professional institutes & universities and the community at large?18821189Crisis Management - From Despair to HopeQuestionnaireAnnexure-VI Contd.Questionnaire for Disaster Management(For NGOs)1. PREPARATIONPreparation to face crises is the most important aspect. This preparation has to be by the government agencies, the community and the civil society at large inclusive of volunteers, specialized functionaries like doctors etc.a.Is the present governmental set up set up adequate for handling disasters? Keeping in focus that different types of crises would demand different requirements, what, according to you/your organisation should be the organisational set up for disaster management at the state and the district levels?b. How should the community be prepared to face crisis? What should the community be taught to prepare it to face any crisis?c.In what way should the commmunity be involved in preparing the disaster management plan for a district/area?d. How should the disaster management plan be disseminated to the community?e.What roles could be played by the NGOs in the preparatory phase?f.What should be the role of the corporate sector? How can they be best utilised as they have financial resources, equipments and a trained workforce?g.There are disasters like industrial accidents, epidemics etc, which can be prevented by proper enforcement of existing regulations. What are the reason(s) for not enforcing these regulations? What measures would you suggest for proper enforcement of such regulations?h.How to integrate the development plans with long term disaster mitigation plans?i.How to address the public health issues such that disasters due to epidemics are prevented?j.Women, children, aged and the physically challenged are the most vulnerable groups in case of disasters. How to empower them to face disasters?Annexure-VI Contd.2. EARLY WARNINGMajor natural disasters like floods & drought are cyclic in their re-occurrence in the same areas of the country year after year. Advance action to prevent or mitigate their impact is possible. To be forewarned is to be forearmed. Technology is now available which can give adequate advance notice in the case of cyclones and quite a few hours in case of Tsunami.a.What are the gaps in our existing warning systems?b.Are these gaps due to technological constraints? If no,what may be / are the reasons?c.How can the common citizen / the public be given the early warnings? What are the best practices, which can be followed / replicated?d.What, in your opinion can be done to bring closer the knowledge institutions, disaster management agencies and community-based organizations?e.What technologies can you suggest to provide assistance in managing disasters? Kindly state whether there is access to the availability of those technologies. Kindly also state about the usefulness of these technologies.f.The heroic elements in society come forward in such tragic situations. How best can they be mobilized to provide relief?g.A disaster also provides opportunities to the basest elements in society. Kindly suggest ways to hold them in check?3. QUICK RESPONSEThe governmental system in India comprises the Union Government in New Delhi & the State Governments, in the state capitals. The district administration represents the governmental system closest to people and the community followed by the block development agencies. The first responder in any disaster situation is the community, which has traditionally risen invariably to provide relief and help to the needy at the earliest.a.What measures would you suggest to ensure that the response is timely andquick?b.How can the panchayati raj system and the local municipalities be empoweredto come to the aid of the community in a disaster situation?19021191Crisis Management - From Despair to HopeQuestionnaireAnnexure-VI Contd.Annexure-VI Contd.c.Is it possible to have a group of volunteers trained to provide hands-on-relief at say, every district headquarters to enable quick response whenever needed? If so, what should be its size? Can home guards fulfil this role?d.Shouldn’t the civil police be trained for emergency relief work? Can this help in changing their public image?e.What are the different types of interventions to strengthen indigeneous coping mechanisms, promote collective wisdom and social networking?f.How would you like the lessons learnt after each disaster, to be kept alive / retained and institutionlised for suitable preventive action in future?4. MANAGING RELIEFThe electronic media has reduced the response time to a major disaster, of the whole world - in any place in the world, as also anywhere in the world. As a result, relief material & expertise begin to pour in at the nearest airports and railway stations for being taken/ carried to wherever it is required. Even the district headquarters of the affected districts get flooded with relief material and gets over-crowded with volunteers & experts of all types, who along with the district administration in the recipient district are sometimes unprepared in dealing with this inflow of men & materials. At times, some of these materials may not be of much use as they are not really necessary.a.After disaster, relief in various forms pours in. How should this be streamlined and coordinated? What should be the mechanism of informing the requirements of aid to various agencies?b.A large number of NGOs move in immediately after a disaster takes place. what should be the coordination mechanism for them?c.After the initial rush of aid and relief material, help generally reduces. How to ensure that the relief and rehabilitation measures are sustained during the time of need?5. RESTORATION & REHABILITATIONa.Should there be a policy defining the rehabilitation package?b.Interventions of different agencies in the restoration and rehabilitation effort may create disparities in the package? How to bring about uniformity in the rehabilitation efforts?c.Every disaster traumatizes the affected population specially the women &children. How can this phenomenon be addressed, considering that revival to normalcy is a slow process?6. PROMOTING A CULTURE OF SAFETYa.How can safety concerns be built into the extra/co-curriculur activities of ourstudents in schools, colleges, professional institutes & universities and the community at large?19221193Crisis Management - From Despair to HopeQuestionnaireAnnexure-VI Contd.Questionnaire for Disaster Management(For Collectors of Districts)1. PREPARATIONPreparation to face crises is the most important aspect. This preparation has to be by the government agencies, the community and the civil society at large inclusive of volunteers, specialized functionaries like doctors etc.a.Does the existing set up for disaster management at the state and the district level require further strengthening? What are the suggestions?b.Is there a need to reorient the Civil Defence and the home guards set up towards disaster management also?c.What were the lessons learnt in respect of functioning of government machinery & structure in any recent disaster?d.How are the NGOs and the community made partners for disaster management in the formal set up?e.Has a vulnerability mapping of each district been done?f.Are disaster management plans prepared for districts and also sub-district levels like the municipalities and the blocks? How are all these plans integrated/ updated?g.Is the district management plan disseminated to the public? What is the mechanism?h.Should the police and some civilian officers be trained in disaster management? Similarly, should volunteers in disaster prone areas also be trained?i.How are the development plans and the long term disaster management plans being integrated?j.What steps have been taken for better enforcement of existing laws for prevention of disasters such as industrial accidents, epidemics etc.k.Have the building byelaws been modified in order to ensure that only disaster resistant building/structures come up in future?l.In case of earthquake-prone areas, is there a plan to retrofit the existing public buildings?Annexure-VI Contd.m. What is the funds flow mechanism at the time of disasters?n.What steps have been taken to streamline procurement of relief materials at the time of crisis such that the process is transparent on the one hand and is quick on the other?o.Women, children, aged and the physically challenged are the most vulnerable groups in case of disasters. How to empower them to face disasters?p.Any suggestions to improve civil military synergies?q.Is there a disaster management set up at the sub-district level?r.How often are the disaster management plans updated? Is there any periodical mock rehearsal, especially in the disaster prone areas?s.Is there a mechanism to assess the district’s preparedness for disaster management/ any suggestions?2. EARLY WARNINGMajor natural disasters like floods & drought are cyclic in their re-occurrence in the same areas of the country year after year. Advance action to prevent or mitigate their impact is possible. To be forewarned is to be forearmed. Technology is now available which can give adequate advance notice in the case of cyclones and quite a few hours in case of Tsunami.a.What are the gaps in our existing warning systems?b.Are these gaps due to technological constraints? If no, what may be / are the reasons?c.How can the common citizen / the public be given the early warnings? What are the best practices, which can be followed / replicated?d.What, in your opinion can be done to bring closer the knowledge institutions, disaster management agencies and community-based organizations?e.What technologies can you suggest to provide assistance in managing disasters? Kindly state whether there is access to the availability of those technologies. Kindly also state about the usefulness of these technologies.19421195Crisis Management - From Despair to HopeQuestionnaireAnnexure-VI Contd.3. QUICK RESPONSEThe governmental system in India comprises the Union Government in New Delhi & the State Governments, in the state capitals. The district administration represents the governmental system closest to people and the community followed by the block development agencies. The first responder in any disaster situation is the community, which has traditionally risen invariably to provide relief and help to the needy at the earliest.a.What measures would you suggest to ensure that the response is timely andquick?b.How can the panchayati raj system and the local municipalities be empoweredto come to the aid of the community in a disaster situation?c.Is it possible to have a group of volunteers trained to provide hands-on-relief atsay, every district headquarters to enable quick response whenever needed? If so, what should be its size? Can home guards fulfil this role?d.Shouldn’t the civil police be trained for emergency relief work? Can this helpin changing their public image?e.What are the different types of interventions to strengthen indigeneous copingmechanisms, promote collective wisdom and social networking?f.How would you like the lessons learnt after each disaster to be kept alive /retained and institutionlised for suitable preventive action in future?4. MANAGING RELIEFThe electronic media has reduced the response time to a major disaster, of the whole world - in any place in the world, as also anywhere in the world. As a result, relief material & expertise begin to pour in at the nearest airports and railway stations for being taken / carried to wherever it is required. Even the district headquarters of the affected districts get flooded with relief material and gets over-crowded with volunteers & experts of all types, who along with the district administration in the recipient district are sometimes unprepared in dealing with this inflow of men & materials. At times, some of these materials may not be of much use as they are not really necessary.a.After disaster, relief in various forms pours in. How should this be streamlinedand coordinated? What should be the mechanism of informing the requirements of aid to various agencies?Annexure-VI Contd.b.A large number of NGOs move in immediately after a disaster takes place. What should be the coordination mechanism for them?c.After the initial rush of aid and relief material, help generally reduces. How to ensure that the relief and rehabilitation measures are sustained during the time of need?d.What is the existing system of fund flow at the time of disasters? Is there adequate delegation of financial powers to the districts? How to improve the fund flow mechanism at the time of disasters?5. RESTORATION & REHABILITATIONa.Should there be a policy defining the rehabilitation package?b.Interventions of different agencies in the restoration and rehabilitation effort may create disparities in the package. How to bring about uniformity in the rehabilitation efforts?c.Every disaster traumatizes the affected population, specially the women & children. How can this phenomenon be addressed, considering that revival to normalcy is a slow process?6. PROMOTING A CULTURE OF SAFETYa.How can safety concerns be built into the extra/co- curriculur activities of ourstudents in schools, colleges, professional institutes & universities and the community at large?19621197Designed & produced by Ashok Creatives, India Tourism Development Corporation and printed at M/s. Shree Om Enterprises Pvt. Ltd., New Delhi - 110 020.FOURTH REPORT: Ethics in GovernanceSECOND ADMINISTRATIVE REFORMS COMMISSIONSecond Administrative Reforms Commission Government of India2nd Floor, Vgyan Bhawan Annexe, Maulana Azad Road, New Delhi 110 011 e-mail : arcommission@nic.in website : “You must be the changeyou wish to see in the world.”Mahatma GandhiJANUARY 2007GOVERNMENT OF INDIASECOND ADMINISTRATIVE REFORMS COMMISSIONFOURTH REPORTETHICS IN GOVERNANCEJANUARY 2007PREFACE“You must be the change you wish to see in the world.”Mahatma Gandhi“As human beings, our greatness lies not so much in being able to remake the world - that is the myth ofthe atomic age - as in being able to remake ourselves”Mahatma GandhiThe Mahatma’s vision of a strong and prosperous India - Purna Swaraj - can never become a reality if we do not address the issue of the stranglehold of corruption on our polity, economy and society in ernance is admittedly the weak link in our quest for prosperity and equity. Elimination of corruption is not only a moral imperative but an economic necessity for a nation aspiring to catch up with the rest of the world. Improved governance in the form of non-expropriation, contract enforcement, and decrease in bureaucratic delays and corruption can raise the GDP growth rate significantly. The six perceived governance quality measures, each an aggregate of a number of sub-measures, are: voice and accountability; absence of political instability and violence; government effectiveness; reasonableness of the regulatory burden; the rule of law; and the absence of graft. Of these, the last two are the most directly significant in the context of ethical governance. ‘Rule of law’ measures whether crime is properly punished or not; enforceability of contracts; extent of black market; enforceable rights of property; extent of tax evasion; judiciary’s independence; ability of business and people to challenge government action in courts etc. ‘Absence of graft’ measures relative absence of corruption among government, political and bureaucratic officials; of bribes related to securing of permits and licences; of corruption in the judiciary; of corruption that scares off foreign investors.There is a perception that the public services have remained largely exempt from the imposition of penalties due to the complicated procedures that have arisen out of the Constitutional guarantee against arbitrary and vindictive action. Those Constitutional safeguards have in practice shielded the guilty against the swift and certain punishment for abuse of public office for private gain. A major corollary has been the erosion of accountability. The huge body of jurisprudential precedents has crowded out the real intent of Article 311, and created a heap of roadblocks in reducing corruption. Such a provision is not available in any of the democratic countries including the UK. While the honest have to be protected, the dishonest seem to corner the full benefit of Article 311. Hence there is need for a comprehensive examination of the entire corpus of administrative jurisprudence to rationalise and simplify the procedures. One of the indicators of lax enforcement is delay in sanctioning prosecution of a delinquent by the competent authority. Reference may be made to the Annual Report of the Central Vigilance Commission for the year 2004. Out of 153 cases for sanction, 21 cases were pending for more than 3 years, 26 cases between 2-3 years, 25 between 1-2 years. The departmental enquiries are soft-pedalled either out of patronage or misplaced compassion.Integrity is much more than financial honesty. Public office should be treated as a trust. There are two facets to corruption: (1) the institution which is highly corrupt; (2) individuals who are highly corrupt. There is a need to work on public profiteering and also value to be attributed to the services rendered by officers. Interlocking accountability is a process by which evaluation could be done easily and accountability ensured.Building trust and confidence requires an environment where there is a premium on transparency, openness, boldness, fairness and justice. We should encourage this.Clearly, the absence of rules is not the problem. One cannot mandate honesty. The rule of law can only defeat the perverse mind. However, it cannot defeat the perversity of the heart. In to the words of Aleksandr Solzhenitsyn: “The line separating good and evil passes not between states nor between classes... but through the middle of every human heart”. We have no destinies other than those we forge ourselves. He who administers government by means of his virtues may be compared to the Pole star which keeps its place and all other stars turn towards it. When the ruler himself is right, the people naturally follow him in his right course. If governance is by men who are derelict, the governed will suffer. We have to keep in mind Plato’s injunction:“The punishment suffered by the wise who refuse to take part in government, is to suffer under the government of bad men”Good governance must be founded on moral virtues ensuring stability and harmony. Confucius described righteousness as the foundation of good governance and peace. The art of good governance simply lies in making things right and putting them in their right place. Confucius’s prescription for good governance is ideally suited for a country like India where many of our present day players in governance do not adhere to any principle and ensure only their own interests.Confucius emphasizes the righteousness for life and character building. This is in conformity with Dharma or righteousness as taught by all religions in the world and preached in Buddhism very predominantly in its fourth noble truth. He also emphasizes that man himself must become righteous and then only there shall be righteousness in the world. This is comparable with what Gandhiji said, “Be the change you wish to see in the world”.So, in the ultimate analysis, it is a question of ethics. Ethics is a set of standards that helps guide conduct. One of the problems is that the present codes of conduct are not direct and to the point. They are full of vague sermons that rarely indicate prohibitions directly. For formulating a code of ethics, it would be useful to keep in mind the advice ofNapoleon who said, ‘Law should be so succinct that it can be carried in the pocket of the coat and it should be so simple that it can be understood by a peasant’.While it may not always be possible to establish the criminal offence of misappropriation in a court of law, the Government servant can still be removed from service for causing serious monetary loss to the State. An engineer may have deliberately permitted the construction of a defective irrigation dam or building. It may not be possible to get him convicted in court on charges of corruption but he could be removed from service on grounds of incompetence. A tax official may have connived to allow the leakage of revenue for return favours in the future. Such conduct may not provide the ingredients of a criminal offence but can lead to his exit from service.The standard for probity in public life should be not only conviction in a criminal court but propriety as determined by suitable independent institutions specifically constituted for the purpose. We have broadly copied the British model of governance. Ministers in Tony Blair’s government have had to resign on such minor improprieties as a telephone call to the concerned person to fast track the issue of a visa for the ‘nanny’ of the Minister’s child or the grant of British citizenship to a generous contributor to a cause supported by the Government. Such principles were upheld and pronounced by Jawaharlal Nehru in the Mudgal case in which the said Lok Sabha Member was expelled by Parliament on 24" September, 1951 even when the Member volunteered to resign. The Mudgal case is often cited as the noblest example of the early leadership’s efforts at setting high standards of conduct in parliamentary life.We need to reverse the slide by prescribing stringent standards of probity in public life instead of providing shelter to public figures of suspect integrity behind the argument of their not having been convicted in a court. The standard should be one of not only the conduct of Caesar’s wife but of Caesar himself.The solution to the problem of corruption has to be more systemic than any other issue of governance. Merely shrinking the economic role of the state by resorting to deregulation, liberalization and privatization is not necessarily the solution to addressing the problem. Prevalent institutional arrangements have to be reviewed and changes made where those vested with power are made accountable, their functioning made more transparent and subjected to social audit with a view to minimize discretionary decisions. All procedures, laws and regulations that breed corruption and come in the way of efficient delivery system will have to be eliminated. The perverse system of incentives in public life, which makes corruption a high return low risk activity, need to be addressed. In this context, public example has to be made out of people convicted on corruption chargeand the legal process in such cases has to be expedited. This hopefully, will also address the growing permissiveness in the society, in the more recent times, to the phenomenon of corruption. In addition, with changes in economic policy regime, regulatory bodies that guide and monitor the functioning of the relevant economic agents, lay down the rules of conduct in the interest of consumers and devise such practices that help in efficient functioning of the system, will have to be established in many sectors of the economy that are now being opened up. At the same time, social monitoring through empowered autonomous and credible structures will have to be established even for the highest of the public offices. Right to information has to be the starting point for some of these changes.The focus should be on e-governance and systemic change. An honest system of governance will displace dishonest persons. As Gladstone so aptly said, “The purpose of a government is to make it easy for people to do good and difficult to do evil”.We always find alibi for our lapses by quoting trespass from other democratic institutions, by resorting to a blame game. The executive/civil services blame interference by the political executive or legislatures and vice versa; legislators blame the judiciary and vice versa – the main problem lies in each one leaving space for others to occupy. If any of the democratic institutions leaves space, the mafia or extra-constitutional authority occupies that space. Realization of its own authority and discharging its sphere of responsibility, developing accountability and responsiveness are the real solutions to the conflicting situations of eroding democratic polity. I conclude by quoting an ancient subhashit (good message) -“Rivers do not drink their waters themselves, nor do trees eat their fruit, nor do the clouds eat the grains raised by them. The wealth of the noble is used solely for the benefit of others.”New Delhi(M. Veerappa Moily)January 16, 2007Chairman Government of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reforms and Public GrievancesResolutionNew Delhi, the 31" August, 2005No. K-11022/9/2004-RC. — The President is pleased to set up a Commission of Inquiry to be called the second Administrative Reforms Commission (ARC) to prepare a detailed blueprint for revamping the public administration system.2.The Commission will consist of the following :(i)Shri Veerappa Moily - Chairperson(ii)Shri V. Ramachandran - Member(iii)Dr. A.P. Mukherjee - Member(iv)Dr. A.H. Kalro - Member(v)Dr. Jayaprakash Narayan - Member(vi)Smt. Vineeta Rai - Member-Secretary3.The Commission will suggest measures to achieve a proactive, responsive, accountable,sustainable and efficient administration for the country at all levels of the government. The Commission will, inter alia, consider the following :(i)Organisational structure of the Government of India(ii) Ethics in governance(iii) Refurbishing of Personnel Administration(iv) Strengthening of Financial Management Systems(v) Steps to ensure effective administration at the State level(vi) Steps to ensure effective District Administration(vii) Local Self-Government/Panchayati Raj Institutions(viii) Social Capital, Trust and Participative public service delivery(ix) Citizen-centric administration(x) Promoting e-governance(xi) Issues of Federal Polity(xii) Crisis Management(xiii) Public OrderSome of the issues to be examined under each head are given in the Terms of Reference attached as a Schedule to this Resolution.4.The Commission may exclude from its purview the detailed examination ofadministration of Defence, Railways, External Affairs, Security and Intelligence, as also subjects such as Centre-State relations, judicial reforms etc. which are already being examined by other bodies. The Commission will, however, be free to take the problems of these sectors into account in recommending re-organisation of the machinery of the Government or of any of its service agencies.5.The Commission will give due consideration to the need for consultation with theState Governments.6.The Commission will devise its own procedures (including for consultations with theState Government as may be considered appropriate by the Commission), and may appoint committees, consultants/advisers to assist it. The Commission may take into account the existing material and reports available on the subject and consider building upon the same rather than attempting to address all the issues ab initio.7.The Ministries and Departments of the Government of India will furnish suchinformation and documents and provide other assistance as may be required by the Commission. The Government of India trusts that the State Governments and all others concerned will extend their fullest cooperation and assistance to the Commission.8.The Commission will furnish its report(s) to the Ministry of Personnel, PublicGrievances & Pensions, Government of India, within one year of its constitution.Sd/(P.I. Suvrathan)Additional Secretary to Government of IndiaGovernment of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reformsand Public GrievancesRESOLUTIONNew Delhi, the 24' July, 2006No. K-11022/9/2004-RC (Vol.II) – The President is pleased to extend the term of the second Administrative Reforms Commission by one year upto 31.8.2007 for submission of its Reports to the Government.Sd/(Rahul Sarin)Additional Secretary to the Government of IndiaChapter 1 Chapter 2CONTENTS15.3Role of Media132Chapter 3Introduction85.4Social Audit133Chapter 4Ethical Framework85.5Building Societal Consensus134Chapter 52.1Ethics in Politics18Chapter 6Systemic Reforms1352.2Ethics in Public Life216.1Importance of Systemic Reforms1352.3International Approach22 28 37 41 45 476.2Promoting Competition1372.4Ethical Framework for Ministers58 58 60 71 74 77 77 796.3Simplifying Transactions1382.5Ethical Framework for Legislators866.4Using Information Technology1402.6Office of Profit876.5Promoting Transparency1422.7Code of Ethics for Civil Servants896.6Integrity Pacts1432.8Code of Ethics for Regulators986.7Reducing Discretion1442.9Ethical Framework for the Judiciary1056.8Supervision145Legal Framework for Fighting Corruption106 106 108 111 116 120 1226.9Ensuring Accessibility and Responsiveness1473.1Evolution of the Anti-Corruption Laws in India1256.10 Monitoring Complaints1493.2The Prevention of Corruption Act, 19881256.11 Reforming the Civil Services1493.3Corruption Involving the Private Sector1306.12 Risk Management for Preventive Vigilance1503.4Confiscation of Properties Illegally Acquired by Corrupt Means6.13 Audit1523.5Prohibition of ‘Benami’ Transactions6.14 Proactive Vigilance on Corruption1533.6Protection to Whistleblowers6.15 Intelligence Gathering1553.7Serious Economic Offences6.16 Vigilance Network1563.8Prior Concurrence for Registration of Case: Section 6A of6.17 Sector Specific Recommendations157the Delhi Special Police Establishment Act, 1946Chapter 7Protecting the Honest Civil Servant1583.9Immunity Enjoyed by LegislatorsChapter 8International Cooperation1633.10 Constitutional Protection to Civil Servants - Article 311Chapter 9Relationship between the Political Executive and1663.11 Disciplinary Proceedingsthe Permanent Civil Service1723.12 Statutory Reporting ObligationsConclusion173Institutional FrameworkSummary of Recommendations LIST OF BOXES94.1Existing Institutions/AgenciesBox No.Title174.2Evaluation of the Anti-Corruption Machinery in India2.1Ethics in the UK18 20 22 38 444.3The Lok Pal2.2Corruption and Hypocrisy4.4The Lokayukta2.3Need for Ethical Code4.5Ombudsman at the Local Level2.4An Extract from the Code of Good Governance of Spain4.6Strengthening Investigation and Prosecution2.5The Constitution of Belize and Code of ConductSocial Infrastructure2.6Edmund Burke on Parliament5.1Citizens’ Initiatives2.7Evolution of Morality5.2False Claims Act2.8 2.9 2.10 3.1 3.2 5.1 5.2 5.3The Seven Social Sins44LIST OF ABBREVIATIONS Abbreviation Full FormThe Credibility of a Profession Independence of Judiciary The Whistleblowers45ADBAsian Development BankThe Need for a Serious Frauds Office The ICAC of Hong Kong49AIRAll India ReporterRecoveries under the US False Claims Act Purpose of the False Claims Act78APSAustralian Public Service79 125 130 130CATCentral Administrative TribunalCBICentral Bureau of InvestigationCJIChief Justice of IndiaLIST OF TABLESCLBCompany Law BoardCrPCCode of Criminal ProcedureTable No.TitleCVCCentral Vigilance Commission2.1International Comparison of Appointments to the Supreme Court51CVOChief Vigilance Officer4.1International Comparison of Persons Convicted for Bribery110DDADelhi Development AuthorityLIST OF FIGURESDySPDeputy Superintendent of PoliceFigure No.TitleIPCIndian Penal Code3.1Stages in a Disciplinary Proceeding101MCOCAMaharashtra Control of Organised Crime Act4.1Analysis of Cases Prosecuted by CBI under the108MLAMember of Legislative AssemblyPrevention of Corruption ActMLALADSMember of Legislative Assembly Local Area Development Scheme4.2Analysis of Cases Investigated and Prosecuted by108State Anti Corruption WingsMPMember of Parliament4.3Comparison of Conviction Rates of CBI and State Anti Corruption109MPLADSMember of Parliament Local Area Development SchemeOrganisationsNCRWCNational Commission to Review the Working of the Constitution4.4Pendency of Cases in Courts109NGONon Governmental OrganisationLIST OF ANNEXURESNJCNational Judicial CouncilAnnexure I(1)Speech of Mr. Justice Y K Sabharwal, Chief Justice of India, at the National Colloquium195OECD PILOrganization for Economic Cooperation and Development Public Interest Litigation(2)Speech of Shri M Veerappa Moily, at the National Colloquium214PSUPublic Sector Undertaking(3)Speech of Minister of State for Personnel, Public Grievances & Pensions and Parliamentary Affairs, Shri Suresh Pachouri,227RBIReserve Bank of Indiaat the National ColloquiumSEBISecurities and Exchange Board of India(4)List of Participants at the National Colloquium231SFIOSerious Frauds Investigation Office(5)Recommendations of the National Colloquium233SFOSerious Frauds Office(6)Questionnaire240SPESpecial Police EstablishmentAnnexure VIISystemic Reforms in a Few Sectors244UKUnited KingdomAnnexure VIII Honesty in Finland261UNUnited NationsUPSCUnion Public Service CommissionUSUnited StatesINTRODUCTION11.1 Ethics is a set of standards that society places on itself and which helps guide behaviour, choices and actions. The Commission is painfully aware that standards do not, by themselves, ensure ethical behaviour; that requires a robust culture of integrity. The crux of ethical behaviour does not lie in bold words and expressions enshrined as standards, but in their adoption in action, in sanctions against their violations, in putting in place competent disciplinary bodies to investigate allegations of violations and impose sanctions quickly and in promoting a culture of integrity.1.2 Corruption is an important manifestation of the failure of ethics. The word ‘corrupt’ is derived from the Latin word ‘corruptus’, meaning ‘to break or destroy’. The word ‘ethics’ is from the original Greek term ethikos, meaning ‘arising from habit’. It is unfortunate that corruption has, for many, become a matter of habit, ranging from grand corruption involving persons in high places to retail corruption touching the everyday life of common people.1.3 Anti-corruption interventions so far made are seen to be ineffectual and there is widespread public cynicism about them. The interventions are seen as mere posturing without any real intention to bring the corrupt to book. They are also seen as handy weapons for partisan, political use to harass opponents. Corruption is so deeply entrenched in the system that most people regard corruption as inevitable and any effort to fight it as futile. This cynicism is spreading so fast that it bodes ill for our democratic system itself.1.4 There are two, somewhat contrary, approaches in dealing with corruption and abuse of office. The first is overemphasis on values and character. Many people lament the decline in values and the consequent rise in corruption. The implicit assumption is that until values are restored, nothing much can be done to improve the conduct of human beings. The second approach is based on the belief that most human beings are fundamentally decent and socially conscious, but there is always a small proportion of people, which cannot reconcile individual goals with the good of society. Such deviant people tend to pursue personal gain at the cost of public good and the purpose of organized government is to punish such deviant behaviour. If good behaviour is consistently rewarded and bad behaviour consistently punished, the bulk of the people follow the straight and narrow path. However, if good1Ethics in GovernanceIntroductionbehaviour is not only not rewarded, but is actually fraught with difficulties and bad behaviour is not only not punished, but is often extravagantly rewarded, then the bulk of the people tend to stray from the honourable path.1.5 In the real world, both values and institutions matter. Values are needed to serve as guiding stars, and they exist in abundance in our society. A sense of right and wrong is intrinsic to our culture and civilization. But values need to be sustained by institutions to be durable and to serve as an example to others. Values without institutional support will soon be weakened and dissipated. Institutions provide the container, which gives shape and content to values. This is the basis of all statecraft and laws and institutions. While incentives and institutions matter for all people, they are critical in dealing with the army of public servants – elected or appointed – endowed with authority to make decisions and impact on human lives and exercising the power to determine allocation of resources. Public office and control over public purse offer enormous temptation and opportunity to promote private gain at public cost. Therefore, creation of institutions and designing of incentives are of utmost importance in promoting ethical conduct of public servants.1.6 In our society, corruption and abuse of office has been aggravated by three factors. First, there is a colonial legacy of unchallenged authority and propensity to exercise power arbitrarily. In a society which worships power, it is easy for public officials to deviate from ethical conduct. Second, there is enormous asymmetry of power in our society. Nearly 90% of our people are in the unorganized sector. Quite a number of them lead a precarious existence, depending on subsistence wages with no job security. And nearly 70% of the organized workers with job security and regular monthly wage are employed by the state directly or through public sector undertakings. Almost all these employees are ‘educated’ in a largely illiterate and semiliterate society and economically even the lowliest of public servants are better off than most people in the country. What is more, their employment in government comes with all the trappings of power. Such asymmetry of power reduces societal pressure to conform to ethical behaviour and makes it easy to indulge in corruption.1.7 Third, as a conscious choice, the Indian state in the early decades after Independence chose a set of policies whose unintended consequence was to put the citizen at the mercy of the State. Over regulation, severe restrictions on economic activity, excessive state control, near-monopoly of the government in many sectors and an economy of scarcity all created conditions conducive to unbridled corruption. In addition, many state subsidies and beneficiary-oriented programmes in a situation of asymmetry of power converted the public servant into patron and master and reduced most citizens into mendicants. This at once enhanced opportunities to indulge in corruption and reduced the citizens’ capacity to resist extortionary demands.1.8 The experience of the past six decades in our country and elsewhere offers us valuable lessons in curbing corruption. It is generally recognized that monopoly and discretion increase the propensity to corruption while competition and transparency reduce corruption. This has been dramatically witnessed in India in the wake of economic liberalization. As competition came in and choice expanded, corruption plummeted. Telephones, steel, cement, sugar and even two-wheelers are among the many sectors, which have seen enhanced supply and choice, reducing or even eliminating corruption. Similarly, wherever technology and transparency have been introduced, corruption has been significantly contained. Computerization and access to information have made many services from railway reservation to issuing of driving licenses increasingly free from corruption.1.9 A factor which increases corruption is over-centralization. The more remotely power is exercised from the people, the greater is the distance between authority and accountability. The large number of functionaries between the citizen and final decision-makers makes accountability diffused and the temptation to abuse authority strong. For a large democracy, India probably has the smallest number of final decision makers. Local Government is not allowed to take root and power has been concentrated both horizontally and vertically in a few hands. The net results are weakened citizenry and mounting corruption.1.10 It is well recognized that every democracy requires the empowerment of citizens in order to hold those in authority to account. Right to Information, effective citizens’ charters, opportunity and incentives to promote proactive approach of citizens, stake-holders’ involvement in delivery of public services, public consultation in decision making and social auditing are some of the instruments of accountability that dramatically curbed corruption and promoted integrity and quality of decision making.1.11 In the ultimate analysis, the state and a system of laws exist in order to enforce compliance and promote desirable behaviour. Therefore, enforcement of rule of law and deterrent punishment against corruption are critical to build an ethically sound society. A detailed analysis of our anti-corruption mechanisms and the causes of their failure is necessary in order to strengthen the forces of law and deter the corrupt public servants.1.12 Perhaps the most important determinant of the integrity of a society or the prevalence of corruption is the quality of politics. If politics attracts and rewards men and women of integrity, competence and passion for public good, then the society is safe and integrity is maintained. But if honesty is incompatible with survival in politics, and if public life attracts undesirable and corrupt elements seeking private gain, then abuse of authority and corruption become the norm. In such a political culture and climate, desirable initiatives will not yield23Ethics in GovernanceIntroductionadequate dividends. Competition and decentralization certainly reduce corruption in certain sectors. But if the demand for corruption is fuelled by inexhaustible appetite for illegitimate funds in politics, then other avenues of corruption will be forcibly opened up. As a result, even as corruption declines in certain areas, it shifts to other, sometimes more dangerous, areas in which competition cannot be introduced and the state exercises a natural monopoly. What is needed with liberalisation is corresponding political and governance reform to alter the incentives in politics and public office and to promote integrity and ethical conduct.1.13 All forms of corruption are reprehensible and we need to promote a culture of zero-tolerance of corruption. But some forms of corruption are much more pernicious than others and deserve closer attention. In a vast majority of cases of bribery, the citizen is a victim of extortion and is compelled to pay a bribe in order to get a service to which he is entitled. Experience has taught most citizens that there is a vicious cycle of corruption operating and they often end up losing much more by resisting corruption. Delays, harassment, lost opportunity, loss of precious time and wages, uncertainty and, at times, potential danger of loss of life or limb could result from resistance to corruption and non-compliance with demands. In such cases, the citizen is an unwilling victim of coercive corruption. But there are several cases of collusion between the bribe giver and corrupt public servant. In such cases of collusive corruption, both parties benefit at immense cost to society. Awarding of contracts for public works and procurement of goods and services, recruitment of employees, evasion of taxes, substandard projects, collusive violation of regulations, adulteration of foods and drugs, obstruction of justice and concealing or doctoring evidence in investigation are all examples of such dangerous forms of corruption. As the economy is freed from state controls, extortionary corruption declines and collusive corruption tends to increase. We need to fashion strong and effective instruments to deal with this growing menace of collusive corruption, which is undermining the very foundations of our democracy and endangering society.1.14 Corruption is a global phenomenon and has also become a serious global concern. The United Nations Convention against Corruption was adopted by the UN General Assembly in October 2003, providing an international instrument against corruption. The ADBOECD Anti-Corruption Action Plan, which has been signed by the Government of India, is a broad understanding to further the cause of inter-regional cooperation in the matter of prevention of corruption. The World Bank has also declared war against corruption by refusing to fund projects whose implementation is tainted by corrupt practices. At the annual meeting of the International Monetary Fund and the World Bank Group in Singapore in 2006, a joint statement was issued with major multilateral financial institutions agreeing on a framework for preventing and combating fraud and corruption in the activities and operations of their institutions.1.15 In India, some recent anti-corruption initiatives are steps in the right direction. The Supreme Court has ruled that candidates contesting elections should file details regarding their wealth, educational qualifications and criminal antecedents along with their nomination papers. The Right to Information Act, which has recently been enacted, is a potent weapon to fight corruption. The introduction of information communication technologies, e-governance initiatives and automation of corruption prone processes in administration have succeeded in reducing corruption.1.16 Much more remains to be done however, and beyond the realm of existing regulation. The escalating levels of corruption in various segments of our economy resulting in large-scale generation of black money, serious economic offences and fraud, and money laundering leading even to the funding of terrorist activities against the State, have created a grave situation which needs to be dealt with severely. Benami properties of corrupt public servants need to be forfeited, as also the assets illegally acquired from corrupt practices. Whistleblower legislation has to be put in place to protect informants against retribution. Also, we have to suitably strengthen the institutional framework for investigating corrupt practices and awarding exemplary punishment to the corrupt thereby raising the risk associated with corrupt behaviour.1.17 Ethics in governance, however, has a much wider import than what happens in the different arms of the government. An across-the-board effort is needed to fight deviations from ethical norms. Such an effort needs to include corporate ethics and ethics in business; in fact, there should be a paradigm shift from the pejorative ‘business ethics’ to ‘ethics in business’. There is need for ethics in every profession, voluntary organization and civil society structure as these entities are now vitally involved in the process of governance. Finally, there should be ethics in citizen behaviour because such behaviour impinges directly on ethics in government and administration.1.18 One of the terms of reference of the Administrative Reforms Commission pertains to ethics in governance, specifically the following aspects:-A. Vigilance and Corruption:?Strengthening pro-active vigilance to eliminate corruption and harassment to honest civilservants including, wherever necessary, limiting executive discretion.?Addressing systemic deficiencies manifesting in reluctance to punish the corrupt.?(a) Identify procedures, rules and regulations and factors which lead to corruption (b) suggest measures to combat corruption and arbitrary decision making, and45Ethics in GovernanceIntroduction(c) suggest a framework for their periodical review in consultation with the stakeholders.B. Relationship between PoliticalExecutive and Permanent CivilService:?To suggest improvements in the institutionalarrangements for smooth, efficient and harmonious relationship between civilservice and the political executive.C. Code ofConduct fordifferentorgans ofGovernment:?PoliticalExecutive, CivilServices, etc.1.19 While the Commission has examined items A & C in considerable detail in this Report; item B will be dealt with comprehensively in the ARC’s report on Civil Services Reforms. The Commission has examined the relevant laws, codes and manuals, which deal with ethics and corruption. It has critically studied the institutional framework that investigates corruption and brings the corrupt to book. It has also looked at the corruption prone processes in government and examined the systems, rules and procedures, which govern these processes.1.20 In order to ascertain views from different stakeholders on ethics in governance, the Commission organized a National Colloquium at the National Judicial Academy, Bhopal in September 2006. The Commission expresses its deep gratitude to the then Chief Justice of India, Mr. Justice Shri Y K Sabharwal who delivered the valedictory address', the Minister of State for Personnel Public Grievances & Pensions and Parliamentary Affairs Shri Suresh Pachouri who presided over the inaugural function' and to Mr. Justice S.B.Sinha for his valuable suggestions. The Chairman ARC addressed the gathering'. The list of participants at the National Colloquium organized by the Commission on the subject is at Annexure I(4). The recommendations of the Colloquium are at Annexure I(5). The questionnaire circulated to various stakeholders is at Annexure I(6).1.21 The Commission would like to place on record its gratitude to the Lokayuktas, representatives of CVC and the state anti corruption wings, members of ‘citizens’ initiatives’, officers of Government of India and the State Governments for their active participation in the workshop. The Commission also expresses its deep gratitude to Mr Justice J S Verma, former CJI; Mr Justice M N Venkatachaliah, former CJI; Mr. Justice Santosh Hegde, former Judge, Supreme Court; Mr Justice N Venkatchala, former Lokayukta Karnataka; Shri Fali Nariman; Shri B V Acharya, former Advocate General, Karnataka; Shri K R Chamayya, former Law Secretary, Government of Karnataka; Shri K Eshwara Bhat, former Law Secretary, Government of Karnataka and Admiral R H Tahiliani (Retd), Chairman, Transparency International, India, whose views and suggestions have been ofimmense help to the Commission in articulating its recommendations. The Commission expresses its appreciation for the valuable contribution made by Shri S K Das, Consultant ARC in drafting this Report.1.22 As issues relating to ethics in governance cut across other terms of reference, an attempt has been made to deal with the major issues in this Report. The Report is organized in nine chapters dealing with different aspects of ethics in governance. The recommendations range from those seeking to change the legal framework to those which could be implemented through executive directions within a short time frame. Recommendations which could be implemented immediately through executive direction are identified by prefixing a symbol ‘*’, in the Summary of Recommendations.671 Speech at Annexure I(1) Z Speech at Annexure I(3) s Speech at Annexure I(2)Ethical Frameworkissues in detail in its ensuing Report on Public Order. It only needs to be stated here that, in this situation, the criminal who, paradoxically, is able to ensure speedy justice in some cases becomes almost a “welcome character”! On his part, the criminal builds on this “acceptance” and is emboldened to enter politics and elections. The opportunity to influence crime investigations and to convert the policemen from being potential adversaries to allies is the irresistible magnet drawing criminals to politics. The elected position and the substantial protection that it can give, helps him either to further and expand his activities or to evolve into an entity with higher political ambitions. As for political parties, such individuals bring into the electoral process, their ability to secure votes through use of money and muscle power.2.1.1.3 This is a short-term win-win situation for all, except for public good and good governance. All this has not taken place everywhere, but to the extent that it did, it led to a situation when the Election Commission formally stated that one in six legislators in India faced grave criminal charges. It was then time for urgent corrective steps.2.1.1.4 Large, illegal and illegitimate expenditure in elections is another root cause of corruption. While there are formal limits to expenditure and some steps have been put in place in an attempt to check them, in reality, actual expenditure is alleged to be far higher. Abnormal election expenditure has to be recouped in multiples to sustain the electoral cycle! This results in ‘unavoidable’ and ubiquitous corruption altering the nature of political and administrative power and undermining trust and democracy. Cleansing elections is the most important route to improve ethical standards in politics, to curb corruption and rectify maladministration.2.1.2 Recent ImprovementsDespite all the flaws in the functioning of a democracy, it has a measure of self correction. As stated earlier, significant efforts have been made over the last two decades to bring about meaningful electoral reforms. Some have observed that the past decade has seen more political reform in India than in any other large democracy after the Second World War. Briefly stated, the more important of the reforms relate to :2.1.2.1 Improvement in Accuracy ofElectoralRolls:?The Election Commission has made efforts to make voter registration more accessible to voters and involve, to some extent, post offices in revision of Electoral rolls.Box 2.1: Ethics in the UKOver 80 years ago, the first Labour Government led by Ramsey Mc Donald in the U.K, fell in the wake of the “Campbell Affair”, because the government decided to withdraw criminal charges in a case of sedition for purely political reasons. The resultant outcry led to the government being voted out of office and to fresh polls. Since then, British Ministers and high officials, it is said, have rarely dared to interfere in crime investigation or prosecution.2ETHICAL FRAMEWORK2.1 Ethics and Politics2.1.1 Introduction2.1.1.1 Any discussion on an ethical framework for governance in a democracy must necessarily begin with ethical values in politics. Politics and those engaged in it, play a vital role in the legislative and executive wings of the State whose acts of commission and omission in working the Constitution and the rule of law become the point of intervention for the judiciary. While it is unrealistic and simplistic to expect perfection in politics in an ethically imperfect environment, there is no denying the fact that the standards set in politics profoundly influence those in other aspects of governance. Those in politics have a clear and onerous responsibility. India was fortunate that high standards of ethical conduct were an integral part of the freedom struggle. Unfortunately, ethical capital started getting eroded after the transfer of power. Excesses in elections (in campaign-funding, use of illegitimate money, quantum of expenditure, imperfect electoral rolls, impersonation, booth-capturing, violence, inducements and intimidation), floor-crossing after elections to get into power and abuse of power in public office became major afflictions of the political process over the years. Political parties, governments and more importantly the Election Commission and the Supreme Court have taken several steps since the late 1980s in an attempt to eliminate the gross abuses that had virtually become the norm.Yet, there is a widespread view that much more needs to be done to cleanse our political system. Along with that of corruption, this issue was raised in every public hearing held by the Commission during its visits to the States.2.1.1.2 Criminalization of politics – ‘participation of criminals in the electoral process’ - is the soft underbelly of our political system. The growth of crime and violence in society (to the point of encouraging ‘mafia’ in many sectors) is due to a number of root causes. Flagrant violation of laws, poor quality of services and the corruption in them, protection for law-breakers on political, group, class, communal or caste grounds, partisan interference in investigation of crimes and poor prosecution of cases, inordinate delays lasting over years and high costs in the judicial process, mass withdrawal of cases, indiscriminate grant of parole, etc., are the more important of the causes. The Commission will deal with these89Ethics in GovernanceEthical Framework?Printed electoral rolls/CDs have been made available for sale.?Computerisation of entire electoral rolls of over 620 million voters has been initiated.?The provision of photo-identity cards for all voters has been started.Studies by civil society organizations like Loksatta have shown considerable improvement and reduction in errors in electoral rolls between 1999 and 2004.2.1.2.2 Disclosure ofAntecedents ofCandidates:?The Supreme Court has directed that a candidate should declare any conviction by a court or whether a criminal case is pending against him;?The direction to file a declaration of assets and liabilities of the candidate and family members would enable a check at the time of the next elections.2.1.2.3 Disqualification ofPersons Convicted ofCriminalOffence:?The Supreme Court ruled in 2005 that Section 8(4) of the Representation of the People Act was unconstitutional as it violated equality before law. Now all convicted candidates stand at an election on the same footing, whether at the time of conviction they were incumbent legislators or not. (However, during the term of a legislator, exemption from disqualification does apply if an appeal is pending and sentence is stayed).2.1.2.4 Enforcement ofthe Code ofConduct:?Using its over-all powers to “superintend, control and direct” elections under Article 324 of the Constitution, the Election Commission has made the Code of Conduct for elections binding in all respects, issuing directions regarding timings of campaigns, prohibition of festoons/cutouts, insistence on daily expenditure statements, appointment of a large number of observers, ordering of re-poll in specific polling booths and other such steps.2.1.2.5 Free and fearless polling:?Policing arrangements have been improved, including greater use of Central Forces and holding of elections for more than one day in a State, and measures like sealing of borders, etc.?Electronic voting machines have been introduced throughout the country (in the parliamentary elections of 2004).?It has been decided that the death of an independent candidate would not lead to the cancellation of an election.2.1.2.6 Reduction in size of Council of Ministers:A recommendation to restrict the size to 10% was made by the first Administrative Reforms Commission more than three decades ago. The Constitution (Ninety-first Amendment) Act, 2003 restricts the size of the Council of Ministers to 15% of the strength of the Lower House in Parliament/State legislature. The amendment is a step towards moderating the number of Ministers to some extent.2.1.3 Issues in Political ReformsDespite the measures taken, improvements are marginal in the case of important problems of criminalization, the use of money in elections, subtle forms of inducements and patronage in the form of chairmanships and memberships of public units and the anomaly of legislators functioning as disguised executives. More effective steps have, therefore, been suggested and the Commission would like to deal with the more important of them.2.1.3.1 Reform of Political Funding2.1.3.1.1 In India, one of the sources of funding of political parties has been through private donations. Internationally, there are three broad patterns of state funding for political parties and elections. One is the minimalist pattern, wherein elections alone are partially subsidized usually through specific grants or state rendered services. Candidates are accountable to the public authority for observance, reporting and disclosure of expenditure for the limited election period. The UK, Ireland, Australia, New Zealand and Canada are examples of this pattern, while the US is a variant of the same with election funding being largely private and subjected to strict reporting and disclosure requirements as well as limits on contributions.2.1.3.1.2 The second, maximalist pattern of state funding involves public funding not merely for elections but even for other party activities, as in Sweden and Germany. This pattern involves less detailed regulation of contributions and expenditure because parties are dependent largely on state support and local requirements enforce internal democracy as well as general transparency.In between, there are a variety of mixed patterns involving partial reimbursement for public funding of elections on a matching grant basis such as in France, Netherlands and South Korea.2.1.3.1.3 While the Representation of the People Act puts limits on election expenditure, company donations to political party were banned in 1969 but later allowed by an amendment of the Companies Act in 1985. The Dinesh Goswami Committee on Electoral Reforms set up in 1990 recommended limited support, in kind, for vehicle fuel, hire charges of1011Ethics in GovernanceEthical Frameworkmicrophones, copies of electoral rolls etc., while simultaneously recommending a ban on company donations. Subsequent developments include parties being forced to file returns under the Income Tax and Wealth Tax Acts after the Supreme Court issued notices and also passed an order on 4`' April, 1996 which effectively repealed Explanation-I of Section 77 of the Representation of People Act and clubbed expenditure by third party(s) as well as by the political party under the expenditure ceiling limits prescribed under the Representation of People Act. Another Committee, the Indrajit Gupta Committee on State Funding of Elections has recommended partial state-funding mainly in kind. However, the National Committee for Review of the Constitution has expressed the view that until better regulatory mechanism for political parties can be developed in India, state funding of elections should be deferred.2.1.3.1.4 Parliament in 2003 unanimously enacted the Election and Other Related Laws (Amendment) Act in a spirit of bipartisanship. It took into consideration the recommendations of the Committee on Electoral Reforms (Dinesh Goswami Committee, 1990) , the Committee on State Funding of Elections (Indrajit Gupta Committee, 1999) and the Law Commission of India (170th report on Reform of Electoral Laws, 1999). The Law Minister while introducing the Bill, acknowledged the recommendations of the Dr. Manmohan Singh Committee on Party Finances set up by the Indian National Congress in 2002. The Act contains the following key provisions:?Full tax exemption to individuals and corporates on all contributions to political parties.?Effective repeal of Explanation I under Section 77 of the Representation of the People Act. Expenditure by third parties and political parties now comes under ceiling limits, and only travel expenditure of leaders of parties is exempt.?Disclosure of party finances and contributions over Rs.20,000.?Indirect public funding to candidates of recognized parties – including free supply of electoral rolls (already in vogue), and such items as the Election Commission decides in consultation with the union government.?Equitable sharing of time by the recognized political parties on the cable television network and other electronic media (public and private).2.1.3.1.5 In order to eradicate the major source of political corruption, there is a compelling case for state funding of elections. As recommended by the Indrajit Gupta Committee on State Funding of Elections, the funding should be partial state funding mainly in kind for certain essential items.2.1.3.1.6 Recommendation:a.A system for partial state funding should be introduced in order to reducethe scope of illegitimate and unnecessary funding of expenditure for elections.2.1.3.2 Tightening ofanti-defection law:2.1.3.2.1 Defection has long been a malaise of Indian political life. It represents manipulation of the political system for furthering private interests, and has been a potent source of political corruption. The anti-defection legislation that was enacted to combat this malaise, fixed a certain number above which defection in a group was permitted. Legalising such selective defection however, provided opportunities for transgressing political ethics and opportunism. There is no doubt that permitting defection in any form or context is a travesty of ethics in politics.2.1.3.2.2 The 91' Amendment to the Constitution was enacted in 2003 to tighten the anti-defection provisions of the Tenth Schedule, enacted earlier in 1985. This Amendment makes it mandatory for all those switching political sides – whether singly or in groups – to resign their legislative membership. They now have to seek re-election if they defect and cannot continue in office by engineering a ‘split’ of one-third of members, or in the guise of a ‘continuing split of a party’. The Amendment also bars legislators from holding, post-defection, any office of profit. This Amendment has thus made defections virtually impossible and is an important step forward in cleansing politics. Besides, the Election Commission has also insisted on internal elections in political parties to elect their leaders.2.1.3.2.3 The Election Commission has recommended that the question of disqualification of members on the ground of defection should also be decided by the President/Governor on the advice of the Election Commission. Such an amendment to the law seems to be unfortunately necessary in the light of the long delays seen in some recent cases of obvious defection.2.1.3.3 Disqualification:2.1.3.3.1 It has been suggested that disclosure of past acquittals in respect of serious criminal charges will be of value. Given the delays in our criminal justice system, disqualification2.1.3.2.4 Recommendation:a.The issue of disqualification of members on grounds of defection shouldbe decided by the President/Governor on the advice of the Election Commission.1213Ethics in GovernanceEthical Frameworkafter conviction for crimes may be an insufficient safeguard. There are candidates who face grave criminal charges like murder, abduction, rape and dacoity, unrelated to political agitations. In such cases, there is need for a fair reconciliation between the candidate’s right to contest and the community’s right to good representation. As a rule, it would be rash and undemocratic to disqualify candidates on some pretext or other. An election outcome must be decided by the people who are the ultimate sovereigns through the ballot box. Election by indiscriminate disqualification is a stratagem sometimes resorted to by dictatorships to pervert the democratic process. However, in the present situation, on balance, in cases of persons facing grave criminal charges framed by a trial court after a preliminary enquiry, disallowing them to represent the people in legislatures until they are cleared of charges seems to be a fair and prudent course. But care must by exercised to ensure that no political vendetta is involved in such charges and people facing charges related to political agitations are not victimized. The draft Ordinance of July 2002 relating to disclosure of candidate details following a Supreme Court judgment provided for disqualification of candidates facing charges related to grave and heinous offences. The heinous offences listed were murder, abduction, rape, dacoity, waging war against India, organised crime and narcotics offences. It also seems reasonable to disqualify persons facing corruption charges, provided the charges have been framed by a judge/magistrate after prima facie evidence. The Election Commission4 has suggested that as a precaution against motivated cases, it may be provided that only cases filed six months before an election would lead to such disqualification.2.1.3.3.2 Recommendation:a.Section 8 of the Representation of the People Act, 1951 needs to beamended to disqualify all persons facing charges related to grave and heinous offences and corruption, with the modification suggested by the Election Commission.2.1.3.4 False Declarations:2.1.3.4.1 The Election Commission has recommended that all false declarations before the Returning Officer, Electoral Officer, Chief Electoral Officer or the Election Commission should be made an electoral offence under Section 31 of the Representation of the People Act (now restricted to statements relating to preparation/revision, inclusion/exclusion in electoral rolls). The proposed amendment will act as an effective deterrent against false statements.2.1.3.5 Publication ofAccounts by PoliticalParties:2.1.3.5.1 Political parties have a responsibility to maintain proper accounts of their income and expenditure and get them audited annually. The steps taken in the Election and OtherRelated Laws (Amendment) Act, 2003, following various reports mentioned in para 2.1.3.1.4 will be strengthened if this is made mandatory under law. The Election Commission has reiterated this proposal. This needs to be acted upon early. The audited accounts should be available for information of the public.2.1.4 Coalition and Ethics2.1.4.1 The phenomenon of coalition politics has emerged as a strong presence in the Indian polity in recent years. The very diversity and complexity of the Indian electorate and our vibrant democracy has made this a familiar aspect of our electoral process. Coalitions are often necessitated by the fact that, in a multiparty system such as ours, it is difficult today for a single party to obtain a clear majority in the Legislature. In order to make coalitions legitimate, it is necessary for the coalition partners to reach an understanding based on broad-based programmes to ensure that the goals of socio-economic development are met. Such an understanding needs to be translated into a common minimum programme and announced either prior to the election or before the formation of the coalition government.2.1.4.2 The ethics of coalition government is, however, seriously strained when the coalition partners change partnerships mid-stream and new coalitions are formed, primarily driven by opportunism and craving for power in utter disregard of the common minimum programme agreed to for the realization of the goal of socio-economic development. The common programme, which has been explicitly mandated by the electorate prior to the election, or implicitly after the election but before the formation of the government, becomes non-existent, and the power given by the people is abused. To maintain the will of the people, it is necessary to lay down an ethical framework to ensure that such exercises in opportunism, through redrawing of coalitions between elections, do not take place.2.1.4.3 Recommendation:a.The Constitution should be amended to ensure that if one or more partiesin a coalition with a common programme mandated by the electorate either explicitly before the elections or implicitly while forming the government, realign midstream with one or more parties outside the coalition, then Members of that party or parties shall have to seek a fresh mandate from the electorate.2.1.5 Appointment of the Chief Election Commissioner/Commissioners2.1.5.1 The present procedure of appointment of the Chief Election Commissioner and other Election Commissioners, is laid down in Article 324 of the Constitution and stipulates that they are to be appointed by the President on the advice of the Prime Minister.1415a Source: “Proposed Electoral Reforms”. Election Commission of India, 2004. .inEthics in GovernanceEthical Framework2.1.5.2 During debates in the Constituent Assembly on the procedure for appointment, there were suggestions that the person appointed as the Chief Election Commissioner should enjoy the confidence of all parties and therefore his appointment should be confirmed by a 2/3 majority of both the Houses. Thus even at that stage, there was a view that the procedure for appointment should be a broad based one, above all partisan considerations. In recent times, for statutory bodies such as the National Human Rights Commission (NHRC) and the Central Vigilance Commission (CVC), appointment of Chairperson and Members are made on the recommendations of a broad based Committee. Thus, for the appointment of the Chief Vigilance Commissioner, the Committee consists of the Prime Minister, the Home Minister and the Leader of the Opposition in the Lok Sabha, whereas for the NHRC, the Committee is chaired by the Prime Minister and has as its members, the Speaker of the Lok Sabha, the Home Minister, the Leader of the Opposition in the Lok Sabha, the Leader of the Opposition in the Rajya Sabha and the Deputy Chairman of the Rajya Sabha.2.1.5.3 Given the far reaching importance and critical role of the Election Commission in the working of our democracy, it would certainly be appropriate if a similar collegium is constituted for selection of the Chief Election Commissioner and the Election Commissioners.up Special Tribunals as provided for under Article 323B of the Constitution. While doing so, it would have to be specifically ensured that the decisions of such tribunals are final with appeal jurisdiction being restricted to the Supreme Court alone as already provided in the Constitution. Such Tribunals may have two members, one a Judge of the High Court, and the other, an administrative member. In case of difference of opinion between the two, the matter may be referred to the High Court.2.1.6.3 Recommendation:a.Special Election Tribunals should be constituted at the regional level underArticle 323B of the Constitution to ensure speedy disposal of election petitions and disputes within a stipulated period of six months. Each Tribunal should comprise a High Court Judge and a senior civil servant with at least 5 years of experience in the conduct of elections (not below the rank of an Additional Secretary to Government of India/Principal Secretary of a State Government). Its mandate should be to ensure that all election petitions are decided within a period of six months as provided by law. The Tribunals should normally be set up for a term of one year only, extendable for a period of 6 months in exceptional circumstances.2.1.5.4 Recommendation:16a. A collegium headed by the Prime Minister with the Speaker of the Lok Sabha, the Leader of Opposition in the Lok Sabha, the Law Minister and the Deputy Chairman of the Rajya Sabha as members should make recommendations for the consideration of the President for appointment of the Chief Election Commissioner and the Election Commissioners.2.1.6 Expediting Disposal of Election Petitions2.1.6.1 Election petitions in India are at present to be filed in the High Court. Under the Representation of the People Act, such petitions should be disposed of within a period of 6 months. In actual practice however, such petitions remain pending for years and in the meanwhile, even the full term of the House expires thus rendering the election petition infructuous. There have been suggestions from other high level committees and eminent persons that a separate judicial set-up may be required. The National Commission to Review the Working of the Constitution (NCRWC) recommended that special election benches should be constituted in the High Courts earmarked exclusively for the disposal of election petitions.2.1.6.2 The Commission is of the view that given the huge existing case load in the High Courts, it would be possible to ensure speedy disposal of election petitions only by setting2.1.7 Grounds of Disqualification for Membership2.1.7.1 Article 102 of the Constitution provides for disqualification for membership of either House of Parliament under certain specific circumstances, which are as follows:(1) A person shallbe disqualified for being chosen as, and forbeing, a memberofeitherHouse ofParliament -(a) ifhe holds any office ofprofitunderthe GovernmentofIndia orthe Governmentof any State, other than an office declared by Parliament by law not to disqualify its holder;(b) ifhe is ofunsound mind and stands so declared by a competent court;(c) ifhe is an undischarged insolvent;(d) if he is not a citizen of India, or has voluntarily acquired the citizenship of a foreign State, or is under any acknowledgement of allegiance or adherence to a foreign State;(e) if he is so disqualified by or under any law made by Parliament. Explanation - For the purpose ofthis clause a person shallnot be deemed to hold anBox 2.2: Corruption and HypocrisyCorruption and hypocrisy ought not to be inevitable products of democracy, as they undoubtedly are today.Mahatma Gandhi17Ethics in GovernanceEthical Frameworkoffice ofprofit under the Government ofIndia or the Government ofany State by reason only that he is a Minister either for the Union or for such State.(2) A person shallbe disqualified for being a memberofeither House ofParliament ifhe is so disqualified under the Tenth Schedule.2.1.7.2 It is evident from Article 102(e) that Parliament has also been authorized to pass a law to include any further conditions for such disqualification. So far, no such law has been enacted. In view of recent development leading to expulsions of some Members of Parliament, it may be desirable to comprehensively spell out other circumstances under which the Members of Parliament can be disqualified. This could be done by enacting such a law under Article 102 (e). This would remove any ambiguity in the matter and also re-affirm the supremacy of Parliament in all such matters.every holder of public office is accountable ultimately to the people. Such accountability is enforced through a system of laws and rules, which the elected representatives of the people enact in their legislatures. Ethics provides the basis for the creation of such laws and rules. It is the moral ideas of people that give rise to and shapes the character of laws and rules. Our legal system emanates from a shared vision of what is good and just.2.2.2 The fundamental principle in a democracy is that all persons holding authority derive it from the people; in other words, all public functionaries are trustees of the people. With the expansion of the role of government, public functionaries exercise considerable influence over the lives of people. The trusteeship relationship between the public and the officials requires that the authority entrusted to the officials be exercised in the best interest of the people or in ‘public interest’.182.1.8 The proposals highlighted in the preceding paragraphs require serious discussion amongst our political parties. Whether these are adopted sooner or later, will depend upon them. We are among a handful of democracies which sustained freedom and stability for six long decades among nations liberated after the Second World War. Democratic maturity needs time, patience, and genuine efforts to find rational answers to complex problems and willingness to reconcile conflicting views. All great democracies went through the tortuous process of democratic transformation. The power of ideas, high quality of leadership, inspiration and a spirit of idealism are the necessary conditions to build a great democracy free from major distortions. India has the strength and resilience to build such a democracy and our political parties should rise to the occasion.2.2 Ethics in Public Life2.2.1 Ethics is grounded in the notion of responsibility and accountability. In democracy,2.2.3 The role of ethics in public life has many dimensions. At one end is the expression of high moral values and at the other, the specifics of action for which a public functionary can be held legally accountable. Any framework of ethical behaviour must include the following elements:a.Codifying ethical norms and practices.b.Disclosing personal interest to avoid conflict between public interest and personalgain.c.Creating a mechanism for enforcing the relevant codes.d.Providing norms for qualifying and disqualifying a public functionary fromoffice.2.2.4 A system of laws and rules, however elaborate, cannot provide for all situations. It is no doubt desirable, and perhaps possible, to govern the conduct of those who occupy positions in the lower echelons and exercise limited or no discretion. But the higher the echelon in public service, the greater is the ambit of discretion. And it is difficult to provide for a system of laws and rules that can comprehensively cover and regulate the exercise of discretion in high places.2.2.5 One of the most comprehensive statements of what constitutes ethical standards for holders of public office came from the Committee on Standards in Public Life in the United Kingdom, popularly known as the Nolan Committee, which outlined the following seven principles of public life:1. Selflessness: Holders ofpublic office should take decisions solely in terms ofpublic interest.2.1.7.3 Recommendation:a.Appropriate legislation may be enacted under Article 102(e) of theConstitution spelling out the conditions for disqualification of membership of Parliament in an exhaustive manner. Similarly, the States may also legislate under Article 198 (e).Box 2.3: Need for Ethical CodeSenator Fulbright identified a problem of government employees who committed ethical lapses not amounting to criminal conduct. He asked-What should be done about men who do not directly and blatantly sell the favors of their offices for money and so place themselves within the penalties of the law? How do we deal with those who, under the guise of friendship, accept favors, which offend the spirit of the law but do not violate its letter?He further elaborated-One of the most disturbing aspects of this problem of moral conduct is the revelation that among so many influential people, morality has become identical with legality. We are certainly in a tragic plight if the accepted standard by which we measure the integrity of a man in public life is that he keep within the letter of the law.Source: Senate Ethics Manual 2003 Editions:page-6; retrieved from ethics.downloads/pdffiles/ manual.pdf19Ethics in GovernanceEthical FrameworkBox 2.4: An Extract from the Code ofGood Governance of SpainNonetheless, at the present juncture, it is necessary for public authorities to offer citizens an undertaking that all the senior offices must satisfy not only the obligations laid down by law, but, in addition, their conduct must be inspired and be guided by principles of ethics and good conduct which have not yet been expressly stated in the regulations – although they are no doubt implicit – and which offer a code of good governance....First. Basic principles — Members of the Government and the senior officers of the General State Administration shall carry out their activities in accordance with the Constitution and the rest of the legal system, following the following principles of ethics and good conduct developed in this Code: objectivity, integrity, neutrality, responsibility, credibility, impartiality, confidentiality, dedication to public service, transparency, exemplary conduct, austerity, accessibility, efficiency, honesty and promotion of the cultural and environmental environment and of equality between the sexes....Source: 35521364.pdf; retrieved on 7-12-0620They should not do so in order to gain financial or other material benefits for themselves, their family or their friends.2. Integrity:Holders ofpublic office should not place themselves underany financial orother obligation to outside individuals or organizations that mightinfluence them in the performance oftheir official duties.3.Objectivity: In carrying outpublic business, including making public appointments, awarding contracts or recommending individuals for rewards and benefits, holders ofpublic office should make choices on merit.4. Accountability: Holders ofpublic office are accountable fortheirdecisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.5. Openness:Holders ofpublic office should be as open as possible about all the decisions and actions they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.6. Honesty: Holders ofpublic office have a duty to declare any private interests relating to theirpublic duties and to take steps to resolve any conflicts arising in a way that protects the publicinterest.7. Zeadership:Holders ofpublicofficeshould promoteand supportthese principles by leadership and example.2.2.6 These principles of public life are of general applicability in every democracy. Arising out of such ethical principles a set of guidelines of public behaviour in the nature of a code of conduct becomes essential for public functionaries. Indeed any person who is privileged to guide the destiny of the people must not only be ethical but must be seen to practice these ethical values. Although all citizens are subject to the laws of the land, in the case of public servants there must be standards of behaviour more stringent than those for an ordinarycitizen. It is at the interface of public action and private interest that the need arises for establishing not just a code of ethics but a code of conduct. A code of ethics would cover broad guiding principles of good behaviour and governance while a more specific code of conduct should, in a precise and unambiguous manner, stipulate a list of acceptable and unacceptable behaviour and action.2.3 International Approach2.3.1 By its Resolution 58/4 of 31" October, 2003, the General Assembly adopted the United Nations Convention against Corruptions. Article 8 of the Resolution states:“Codes ofconductfor public officials1.In order to fight corruption, each State Party shallpromote, inter alia, integrity, honestyand responsibility among its public officials, in accordance with the fundamentalprinciples ofits legalsystem.2.In particular, each State Party shall endeavour to apply, within its own institutional andlegalsystems, codes orstandardsofconductfor the correct,honourableandproperperformance ofpublic functions.3. For the purposes of implementing the provisions of this article, each State Party shall, where appropriate and in accordance with the fundamentalprinciples ofits legalsystem, take note of the relevant initiatives of regional, interregional and multilateral organizations, such as the International Code ofConduct for Public Officials contained in the annex to GeneralAssembly resolution 51/59 of12 December 1996.4. Each State Party shall also consider, in accordance with the fundamentalprinciples ofits domestic law, establishing measures and systems to facilitate the reporting by public officials ofacts ofcorruption to appropriate authorities, when such acts come to theirnotice in the performance oftheirfunctions.5. Each State Party shall endeavour, where appropriate and in accordance with the fundamentalprinciples ofits domestic law, to establish measures and systems requiring public officials to make declarations to appropriate authorities regarding, inter alia, their outside activities, employment, investments, assets and substantialgifts or benefits from which a conflictofinterestmay result with respectto theirfunctions as publicofficials.6. Each State Party shall consider taking, in accordance with the fundamentalprinciples of its domestic law, disciplinary or other measures against public officials who violate the codes or standards established in accordance with this article.”2.3.2 Various countries have, from time to time, addressed the issue of prescribing a Code of5 India is a signatory to the Convention, but yet to rarify it.21Ethics in GovernanceEthical FrameworkConduct/Ethics for its Ministers, legislators and civil servants. There is a Ministerial Code in UK, in the US Senate a Code of Conduct and in Canada a ‘Guide for Ministers’. In Belize, the Code of Conduct for public functionaries is prescribed in the Constitution itself6.2.4 Ethical Framework for Ministers2.4.1 As stated in the foregoing paragraph, a number of countries have prescribed a Code of Conduct/Ethics for Ministers. In Canada, the ‘Guide for Ministers (2006)’ sets out core principles regarding the role and responsibilities of Ministers. This includes the central tenet of ministerial responsibility, both individual and collective, as well as Ministers’ relations with the Prime Minister and Cabinet, their portfolios, and Parliament. It outlines standards of conduct expected of Ministers as well as addressing a range of administrative, procedural and institutional matters7. In UK, the Ministerial Code provides guidance to Ministers on how they should act and arrange their affairs in order to uphold these standards. It lists the principles which may apply in particular situations drawing on past precedent. It also stipulates that:“Ministers are personally responsible fordeciding how to act and conduct themselves in the lightofthe Code and for justifying their actions and conduct in Parliament. The Code is not a rulebook, and it is not the role of the Secretary of the Cabinet or other officials to enforce it or to investigate Ministers although they may provide Ministers with private advice on matters which it covers.Ministers only remain in office for so long as they retain the confidence ofthe Prime Minister. He is the ultimate judge ofthe standards ofbehaviour expected ofa Minister and the appropriate consequences of a breach ofthose standards, although he willnot expect to comment on every allegation that is brought to his attention.”82.4.2 Government of India has prescribed a Code of Conduct which is applicable to Ministers of both the Union and State Governments. The Code of Conduct merits reproduction here.1.In addition to the observance ofthe provisions ofthe Constitution, the Representation of the People Act, 1951, and any otherlaw for the time being in force, a person before taking office as a Minister, shall:a.disclose to the Prime Minister, or the ChiefMinister, as the case may be, details ofthe assets and liabilities, and ofbusiness interests, ofhimselfand ofmembers ofhis family. The details to be disclosed shall consist of particulars of all immovable property and the total approximate value of (i) shares and debentures, (ii) cash holdings and (iii) jewellery;b.sever all connections, short ofdivesting himselfofthe ownership, with the conductand managementofany business in which he was interested before his appointment as Minister; andc.with regard to a business concern which supplies goods orservicesto the Governmentconcerned or to undertakings ofthat Government (excepting in the usual course of trade or business and at standard or market rates) or whose business primarily depends on licenses, permits, quotas, leases, etc., received orto be received from the Governmentconcerned, divesthimselfofallhis interests in the said business and also ofthe management thereof.Provided, however, that he may transfer in the case of (b) his interest in the management, and in the case of(c) both ownership and management, to any adult member ofhis family or adult relative, other than his wife (or husband, as the case may be), who was priorto his appointment as Minister associated with the conduct ormanagementorownership ofthe said business. The question ofdivesting himself ofhis interests would notarise in case ofholding ofshare in publiclimited companies except where the Prime Minister, or the ChiefMinister, as the case may be, considers that the nature orextent ofhis holding is such that it is likely to embarrass him in the discharge ofhis official duties.2. After taking office, and so long as he remains in office, the Minister shall:-(a) furnish annually by the 31st March to the Prime Minister, or the ChiefMinister, as the case may be, a declaration regarding his assets and liabilities;(b) refrain from buying from orselling to, the Governmentany immovable property except where such property is compulsorily acquired by the Governmentin usual course;(c) refrain from starting, or joining, any business;Box. 2.5: The Constitution of Belize and Code of ConductSection 121(1): The persons to whom this section applies shall conduct themselves in such a way as not-(a) to place themselves in positions in which they have or could have a conflict of interest;(b) to compromise the fair exercise of their public or official functions and duties;(c) to use their office for private gain;(d) to demean their office or position;(e) to allow their integrity to be called into question; or(f) to endanger or diminish respect for, or confidence in the integrity of the Government.This section applies to the Governor-General, members of the National Assembly, members of the Belize Advisory Council, members of the Public Services Commission, members of the Elections and Boundaries Commission, public officers, officers of statutory corporations and government agencies, and such other officers as may be prescribed by law enacted by the National Assembly.e Section 121(1), The Constitution of Belize, retrieved from , on 30-11-067 Source: Accountable Government, a Guide for Ministers-2006; retrieved from , on 24-11-06 e Source: in GovernanceEthical Framework24(d) ensure that the members of his family do not start, or participate in, business concerns, engaged in supplying goods orservices to that Government (excepting in the usual course oftrade or business and atstandard ormarketrates) or dependent primarily on grantoflicenses, permits, quotas, leases, etc., from thatGovernment; and(e) report the matter to the Prime Minister, or the ChiefMinister as the case may be, ifany memberofhis family sets up, orjoins in the conductand managementof, any otherbusiness.3.1 No Ministershould:-(a) personally, orthrough a memberofhis family, accept contribution forany purpose, whether political, charitable or otherwise. Ifany purse or cheque intended for a registered society, or a charitable body, or an institution recognized by a public authority, or a political party is presented to him, he should pass it on as soon as possible to the organisation for which it is intended; and(b) associate himselfwith the raising offunds except for the benefit of(i) a registered society, ora charitable body, oran institution recognised by a public authority and (ii) a politicalparty. He should, however, ensure that such contributions are sent to a specified office bearer, etc. ofthe society orbody orinstitution ofparty concerned and notto him. Nothing herein before shallpreventa Ministerfrom being associated with the operation for disbursementoffunds raised as above.3.2 A Minister, including the Union Ministers, the Chief Ministers and other Ministers of State Governments/Union Territories, should notpermit their spouse and dependents to accept employment under a Foreign Government, in India or abroad, or in a foreign organisation (including commercialconcerns) withoutpriorapprovalofthe Prime Minister. Where the wife or a dependent ofa Minister is already in such employment, the matter should be reported to the Prime Minister for decision whether the employment should or should not continue. As a generalrule, there should be totalprohibition on employment with a Foreign Mission.4.1 A Minister should-(a) notacceptvaluable gifts exceptfrom close relatives, and he ormembers ofhis family should not accept any gifts at allfrom any person with whom he may have official dealings; and(b) not permita member ofhis family, contractdebts ofa nature likely to embarrass or influence him in the discharge ofhis official duties.4.2 A Minister may receive gifts when he goes abroad or from foreign dignitaries in India. Such gifts fall into two categories. The first category will include gifts, which are of symbolic nature, like a sword ofhonour, ceremonialrobes etc. and which can be retained by the recipients. The second category ofgifts would be those which are not ofsymbolic nature. If its value is less than Rs. 5,000/- it can be retained by the Minister. If, however, there is any doubt about the estimated value ofthe gifts, the matter should be referred to the Toshakhana for valuation. Ifthe value ofthe gift, on assessmentis found to be within the prescribed limit of Rs.5,000/- the gift will be returned to the Minister. If it exceeds Rs.5,000/- the recipient will have the option to purchase it from the Toshakhana by paying the difference between the value as assessed by the Toshakhana and Rs.5,000/-. Only gifts of household goods which are retained by the Toshakhana, such as carpets, paintings, furniture etc. exceeding Rs.5,000/- in value, will be kept in Rashtrapati Bhavan, Prime Minister’s House or Raj Bhavan as State property. (Note: The value ofthe giftrefers to its approximate market value in the country oforigin).4.3 In case of grant of an award by any organisation to a Minister/a person holding the Minister’s status/rank, the following procedure may be followed:-(a) the credentials ofthe organisation giving award may be gone into;(b) ifthe credentials ofthe body giving the awards are unimpeachable, the award as such, may be accepted but the cash partshould notbe accepted;(c) if the awards relate to the work done by the individual prior to his holding the office ofMinister, such awards may be accepted butin allsuch cases, specificapproval ofthe Prime Minister or the ChiefMinisteras the case may be, should be obtained. The ChiefMinister and other Ministers shallhave to take permission ofthe Prime Minister and the Union Home Minister; and(d) those instances, where a Minister is to receive any award by any organisation which has connections with any Foreign Agencies/Organisations, such a Minister/ a person holding the Minister’s status/rank, willhave to seek priorapprovalofthe Prime Minister of India.4.4 A Minister should follow the instructions given from time to time by the Prime Minister in matters relating to attending functions arranged by foreign missions in India orabroad, and also for accepting the membership ofany foreign trust, institution or organisation other than UN Organisations ofwhich India is a Member.25Ethics in GovernanceEthical Framework5. A Minister should-(a) while on official tour, as far as practicable, stay in accommodation belonging to himselfor maintained by Government, Governmentundertakings, public bodies orinstitutions (such as circuit houses, dak bungalows etc) orin recognised hotels; and(b) avoid attending, as far as possible, ostentatious or lavish parties given in his honour.6.The authority for ensuring the observance of the Code of Conduct will be the PrimeMinister in the case of Union Ministers, the Prime Minister and the Union Home Minister in the case ofChiefMinisters, and the ChiefMinister concerned in the case of State Ministers except where it is otherwise specified. The said authority would follow such procedure as itmightdeem fit, according to the facts and circumstances ofeach case, for dealing with or determining any alleged or suspected breach ofthis Code.Explanation: In this code, a Minister’s family shallinclude his wife (or husband, as the case may be) not legally separated from him(or her), minor children, and any other persons related by blood or marriage to, and wholly dependent on the Minister.2.4.3 The Code of Conduct is a starting point for ensuring good conduct by Ministers. However, it is not comprehensive in its coverage and is more in the nature of a list of prohibitions; it does not amount to a Code of Ethics. It is therefore necessary that in addition to the Code of Conduct, there should be a Code of Ethics to provide guidance on how Ministers should uphold the highest standards of constitutional and ethical conduct in the performance of their duties. The Code should be based on the overarching duty of Ministers to comply with the law, to uphold the administration of justice and to protect the integrity of public life. It should also lay down the principles of minister-civil servant relationship. The Code of Ethics should also reflect the seven principles of public life as enumerated in para 2.2.5. The Commission has examined the code of conduct in other countries and is of the view that a Code of Ethics and a Code of Conduct for Ministers should include the following:a.Ministers must uphold the highest ethical standards;b.Ministers must uphold the principle of collective responsibility;c.Ministers have a duty to Parliament to account, and be held to account, for the policies, decisions and actions of their departments and agencies;d.Ministers must ensure that no conflict arises, or appears to arise, between theirpublic duties and their private interests;e.Ministers in the Lok Sabha must keep separate their roles as Minister andconstituency member;f.Ministers must not use government resources for party or political purposes;they must accept responsibility for decisions taken by them and not merely blame it on wrong advice.g.Ministers must uphold the political impartiality of the Civil Service and not askcivil servants to act in any way, which would conflict with the duties and responsibilities of civil servants;h.Ministers must comply with the requirements which the two Houses ofParliament lay down from time to time;i.Ministers must recognize that misuse of official position or information isviolation of the trust reposed in them as public functionaries;j.Ministers must ensure that public moneys are used with utmost economy andcare;k.Ministers must function in such a manner as to serve as instruments of goodgovernance and to provide services for the betterment of the public at large and foster socio-economic development; andl.Ministers must act objectively, impartially, honestly, equitably, diligently andin a fair and just manner.2.4.4 The authority for ensuring the observance of the present Code of Conduct is the Prime Minister in the case of Union Ministers, the Prime Minister and the Union Home Minister in the case of Chief Ministers, and the Chief Minister concerned in the case of Ministers of the State Government. The Commission is of the view that dedicated units should be set up in the offices of the Prime Minister and the Chief Ministers of the states to monitor the observance of the Code of Conduct. An annual report indicating violations should be submitted to the appropriate legislature for consideration. Besides, the present Code of Conduct is not in the public domain and, as a result, members of the public are perhaps not aware that such a code exists. The Commission would like to recommend that the Code of Conduct for Ministers, duly amplified, should be put in the public domain as some other2627Ethics in GovernanceEthical Framework28countries have done.9 As coalition politics has become the order of the day it is particularly appropriate to ensure that the ministers from the coalition partners both at the Centre and the State also adhere to the Code of Ethics/Conduct and the Prime Minister and the Chief Ministers are duty bound to put violation of these Codes in public domain.2.5 Ethical Framework for Legislators2.5.1 Ethical Framework for Legislators in Other Countries:2.5.1.1Among the four pillars of an ideal democratic structure, the legislature has the most important position. It is the expression of the will of the people and the executive is answerable to it. This demands that the requirement of ethical standards for the executive must be preceded by an equally emphatic requirement of ethical standards for legislators.9 The UK Ministerial Code is available at The US Constitution, in Article I, Section 5, grants broad authority to Congress to discipline its Members. However, the present Congressional Ethics Committees and formal rules governing the conduct of Members, officers, and employees did not exist until the 1960’s. Earlier disciplinary actions by Congress against Members took place on an ad hoc basis. In 1964, the Senate adopted S. Res. 338, 88th Congress, which created the Senate Select Committee on Standards and Conduct. This six-member Committee was bipartisan with advisory functions and investigative authority to “receive complaints and investigate allegations of improper conduct which may reflect upon the Senate, violations of law, and violations of rules and regulations of the Senate.” In 1968, the Senate adopted its first official code of conduct, with substantial revision and amendment of the Code occurring in 1977. The Committee’s name was changed to the Select Committee on Ethics10. The Senate Code of Conduct regulates financial disclosures, gifts, travel reimbursements, conflicting interests, post employment restrictions, employment practices etc.2.5.1.3 The UK House of Commons adopted the present Code of Conduct for its Members vide their Resolution dated 19th July, 1995. The purpose of this Code of Conduct is to assist Members in the discharge of their obligations to the House, their constituents and the public at large by providing guidance on the standards of conduct expected of Members in discharging their parliamentary and public duties. It is also stated that the obligations set out in this Code are complementary to those which apply to all Members by virtue of the procedural and other rules of the House and the rulings of the Chair.112.5.2 The Committee on Ethics of the Rajya Sabha:2.5.2.1 Chapter XXIV of the Rules of Procedure and Conduct of Business in the Council of States, provides for constitution of the Committee on Ethics to oversee the moral and ethical conduct of Members. The Committee on Ethics was first constituted by the Chairman of the House on 4th March 1997. In its First Report, the Committee had, inter-alia, dealt with matters such as values in public life, criminalisation of politics and electoral reforms. It suggested a framework for a Code of Conduct for Members of the Rajya Sabha12. In its Second Report, the Committee emphasized the procedural aspects of enforcing the Code of Conduct suggested in the First Report, including maintenance of ‘Register of Members’ Interests’, declaration of interests by Members, procedure for inquiry and penalties. In the Third Report, the Committee dealt with issues germane to the behaviour of Members in the House as well as outside of it. In the Fourth Report, the Committee dealt with discipline and decorum in the Council, declaration of assets and liabilities, registration of interests, Code of Conduct and the Committee’s power to recommend sanctions.132.5.2.2 The following is the existing framework of the Code of Conduct for Members of the Rajya Sabha14:10 Source: Source: ; retrieved on 30-11-0612 Both, First and Second Reports of the Committee were discussed and adopted together by Rajya Sabha on the 15th December, 199913 Extracted from the Sixth Report of the Committee on Ethics Source: ; retrieved on 8-12-062.4.5 Recommendations:a.In addition to the existing Code of Conduct for Ministers, there should be a Code of Ethics to provide guidance on how Ministers should uphold the highest standards of constitutional and ethical conduct in the performance of their duties.b. Dedicated units should be set up in the offices of the Prime Minister and the Chief Ministers to monitor the observance of the Code of Ethics and the Code of Conduct. The unit should also be empowered to receive public complaints regarding violation of the Code of Conduct.c.The Prime Minister or the Chief Minister should be duty bound to ensure the observance of the Code of Ethics and the Code of Conduct by Ministers. This would be applicable even in the case of coalition governments where the Ministers may belong to different parties.d. An annual report with regard to the observance of these Codes should be submitted to the appropriate legislature. This report should include specific cases of violations, if any, and the action taken thereon.e.The Code of Ethics should inter alia include broad principles of the Minister-civil servant relationship and the Code of Conduct should stipulate the details as illustrated in para 2.4.3.f.The Code of Ethics, the Code of Conduct and the annual report should be put in the public domain.29Ethics in GovernanceEthical FrameworkThe Members of Rajya Sabha should acknowledge their responsibility to maintain the public trust reposed in them and should work diligently to discharge theirmandate for the common good ofthe people. They must hold in high esteem the Constitution, the Law, Parliamentary Institutions and, above all, the generalpublic. They should constantly strive to translate the ideals laid down in the Preamble to the Constitution into a reality. The following are the principles which they should abide by in their dealings:(i) Members must not do anything that brings disrepute to the Parliament and affects their credibility.(ii) Members must utilize their position as Members ofParliament to advance general wellbeing ofthe people.(iii) In theirdealings ifMembers find that there is a conflict between their personalinterests and the public trust, which they hold, they should resolve such a conflictin a manner that their private interests are subordinated to the duty oftheir public office.(iv) Members should always see that their private financialinterests and those ofthe members oftheir immediate family do not come in conflict with the public interest and ifany such conflict ever arises, they should try to resolve such a conflict in a manner that the public interest is not jeopardized.(v) Members should never expectoracceptany fee, remuneration orbenefitfora vote given or notgiven by them on the floorofthe House, for introducing a Bill, formoving a resolution, putting a question orabstaining from asking a question orparticipating in the deliberations ofthe House or a Parliamentary Committee.(vi) Members should not take a gift, which may interfere with honestand impartialdischarge oftheirofficialduties. They may, however, acceptincidentalgifts or inexpensive mementoes and customary hospitality.(vii) Members holding public offices should use public resources in such a manneras may lead to publicgood.(viii) IfMembers are in possession ofconfidentialinformation owing to their being Members of Parliament or Members of Parliamentary Committees, they should not disclose such information for advancing their personalinterests.(ix) Members should desist from giving certificates to individuals and institutions ofwhich they have no personalknowledge and are notbased on facts.(x) Members should not lend ready support to any cause of which they have no or little knowledge.(xi) Members should not misuse the facilities and amenities made available to them.(xii) Members should notbe disrespectful to any religion and work for the promotion ofsecular values.(xiii) Members should keep uppermostin their mind the fundamentalduties listed in partIV A ofthe Constitution.(xiv) Members are expected to maintain high standards ofmorality, dignity, decency and values in public life.2.5.3 The Committee on Ethics of the Lok Sabha2.5.3.1 There is a Committee on Ethics of the Lok Sabha to oversee the moral and ethical conduct of Members of that House15. The Committee on Ethics (Thirteenth Lok Sabha) in its First Report16 observed that norms of ethical behaviour for members have been adequately provided for in the Rules of Procedure and Conduct of Business in the Lok Sabha, directions by the Speaker and in the conventions which have evolved over the years on the basis of recommendations made by various Parliamentary Committees. Apart from the existing norms, the Committee recommended that the members should abide by the following general ethical principles17:i.Members mustutilize their position to advance generalwellbeing ofthe people.ii. In case ofconflict between theirpersonalinterestand public interest, they mustresolve the conflictso that personalinterests are subordinate to the duty ofpublic office.iii. Conflictbetween private financial/family interestshould be resolved in a manner that the public interestis notjeopardized.iv. Members holding public offices should use public resources in such a manneras may lead to publicgood.v. Members mustkeep uppermostin theirmind the fundamentalduties listed in Part-IV of the Constitution.vi. Members should maintain high standards of morality, dignity, decency and values in public life.2.5.3.2 As per available information, only a few State Legislatures such as Andhra Pradesh, Orissa etc. have adopted Codes of Conduct for their Legislators. A Resolution was unanimously adopted at the ‘All India Conference of Presiding Officers, Chief Ministers, Ministers of Parliamentary Affairs, Leaders and Whips of Parties on Discipline and Decorum in Parliament15 The present Committee on Ethics was constituted by Speaker on 28th April, 2005.16 Presented to the Speaker on 31st August, 200117 Adopted by the House on 16th May, 20023031Ethics in GovernanceEthical Frameworkand Legislatures of States and Union Territories’ held at New Delhi on 25th November, 2001. The Resolution included adoption of a Code of Conduct for Legislators. It was also recommended that Ethics Committees be constituted in all Legislatures where these have not already been constituted for enforcing the Code of Conduct.2.5.4 Disclosure of Interest2.5.4.1 One way of avoiding conflict between public and private interest is through disclosure of one’s interest. This by itself cannot resolve the conflict of interest but is a good first step as it acknowledges the possibility of such a conflict. Legislatures in different countries have adopted different approaches to this issue. In some countries the automatic outcome of such a disclosure is abstention from participation in the decision making process, whereas in other countries, the decision is left to the Chair.2.5.4.2 The disclosure of one’s interest can be done in different ways and at different stages of a public service career. One system could be an ad-hoc disclosure of a private interest when such a clash is anticipated. The rules of the US Congress and the Australian and Canadian Parliaments do not allow a legislator to vote if they have a direct pecuniary interest. Another system is prior registration of interest. This again can cover a variety of personal and pecuniary interests including those of close family members.2.5.4.3 In India, disclosure of interest is provided in both Houses of Parliament, in different ways. It has been ruled by the Chairman of the Rajya Sabha that a Member having a personal pecuniary or direct interest on a matter before the House is required, while taking part in the proceedings in that matter, to declare the nature of interest.{Rulings and Observations from the Chair 1952-2000(469), p 338}18.2.5.4.4 The Rules of Procedure and Conduct of Business in the Lok Sabha prescribe that if the vote of a Member in a division in the House is challenged on grounds of personal, pecuniary or direct interest in the matter to be decided, the Speaker may examine the issue and decide whether the vote of the Member should be disallowed or not and his decision shall be final19. Furthermore, the Handbook for Members provides that a Member having personal, pecuniary or direct interest in a matter to be decided by the House is expected, while taking part in the proceedings on that matter, to declare his interest.2.5.5 Register of Interests2.5.5.1 A specific mechanism for disclosure of private interests is maintenance of a ‘Register of Interests’. Legislators are expected to record in the register all their interests periodically. In order to make the system practical, the types of interest, which require disclosure, areprescribed. A closely related mechanism is declaration of the assets and liabilities of the members at regular intervals.2.5.5.2 The Committee on Ethics (Thirteenth Lok Sabha), in its First Report (31-8-2001) recommended that it may be made mandatory for each Member of the Lok Sabha to disclose his/her income, assets and liabilities. It further recommended that a register of Members’ Interests may be maintained in the Lok Sabha Secretariat, which should be treated as confidential and the information contained therein should be made available to any person only with the permission of the Speaker.20 However in its Second Report (20-11-2002), the Committee observed that since the requirement of financial disclosures and declaration of interests by members, as recommended by them in their First Report, has been fully met with the promulgation of the Ordinance21, there was no need for further action at that stage by the Committee.2.5.5.3 Rule 293 (Rules of Procedure and Conduct of Business in the Council of States) stipulates that a ‘Register of Members’ Interests’ has to be maintained by the Committee on Ethics. The Committee on Ethics of the Rajya Sabha, in its Fourth Report, recommended that to start with the following interests of Members should be entered in the Register:22i) Remunerative Directorship;ii) Regular Remunerated Activity;iii) Shareholding of Controlling Nature;iv) Paid Consultancy; andv)Professional Engagement2.5.6 Filing Assets and Liabilities Statement2.5.6.1 The Representation of the People Act, 1951, has been amended by the Representation of the People (Third Amendment) Act, 2002. A new Section, 75A, has been inserted which stipulates that every elected candidate for a House of Parliament or the Legislature of the State, shall, within ninety days from the date on which he/she makes and subscribes an oath or affirmation, files the details of his/her assets/liabilities to the Chairman of the Council of State or the Legislative Council, or the Speaker of Lok Sabha or the Legislative Assemblies as the case may be. Accordingly, the Members of the Lok Sabha (Declaration of Assets and Liabilities) Rules, 2004, and the Members of the Rajya Sabha (Declaration of Assets and Liabilities) Rules have been formulated.323320 Adopted by the House on 16th May, 200221 The Representation of the People (Amendment) Ordinance, 2002. Section 75A was inserted in the Representation of the People Act, 1951, which required every Member to file a statement of his/her assets and liabilities.22 The Report was adopted unanimously by the Council on the 20th April, 200518 Source: Rule 371, Rules of Procedure and Conduct of Business in Lok SabhaEthics in GovernanceEthical Framework2.5.6.2 From the above it is evident that both Houses of Parliament have provided for Codes of Conduct and also norms for disclosure of interest and declaration of assets and liabilities of their Members. The Committees on Ethics of both the Lok Sabha and the Rajya Sabha have been mandated to oversee the moral and ethical conduct of members.2.5.7 Enforcement of Ethical Norms in Legislatures2.5.7.1 In India, both Houses of Parliament have on occasions acted firmly against violation of ethical principles. As early as in 1951, an ad hoc Committee of the House was appointed by the Provisional Parliament to investigate into the conduct of Shri H G Mudgal. The Committee came to the conclusion that Shri Mudgal’s conduct in accepting money and other benefits from the Bombay Bullion Association for extending certain favours to them in Parliament, was derogatory to the dignity of the House and inconsistent with the expected standards of behaviour. Prime Minister Nehru summarized the issue succinctly, as follows:-“The question arises whetherin the presentcase this should be done or something else. Ido submit that it is perfectly clear that this case is not even a case which might be called a marginal case, where people may have two opinions about it, where one may have doubts if a certain course suggested is much too severe. The case ifImay say so, is as bad as it could wellbe. Ifwe consider even such a case as a marginal case or as one where perhaps a certain amount oflaxity might be shown, I think it willbe unfortunate from a variety ofpoints ofview, more especially because, this being the first case ofits kind coming up before the House, ifthe House does notexpress its willin such matters in clear, unambiguous and forcefulterms, then doubts may very wellarise in the public mind as to whetherthe House is very definite aboutsuch matters ornot. Therefore Ido submit that ithas become a duty for us and an obligation to be clear, precise and definite. The facts are clear and precise and the decision should also be clear and precise and unambiguous. And Isubmit the decision ofthe House should be, after accepting the finding ofthis report, to resolve that the Member should be expelled from the House.”232.5.7.2 Similar issues came to the fore again half a century later. In December, 2005, allegations of improper conduct, made in news telecasts of the ‘Aaj Tak’ (12th Dec. 2005) television channel, regarding the acceptance of money by ten Members of the Lok Sabha for asking questions or raising other matters in the House, were enquired into by an Enquiry Committee of the House (Committee to inquire into allegations of improper conduct on the part of some members). The Committee came to the conclusion that the conduct of the said Members was unbecoming of a Member of Parliament and also unethical. The Committee recommended the expulsion of the Members from the House, a proposal that was accepted by the House.2.5.7.3 As already mentioned, the ‘Rules of Procedure and Conduct of Business in theCouncil of States’ stipulate that the Committee on Ethics would oversee the moral and ethical conduct of Members and examine cases concerning the alleged breach of the Code of Conduct by Members as also cases concerning allegations of any other ethical misconduct of members. The Committee may also take up matters suo motu. If, upon enquiry, it is found that a Member has indulged in unethical behaviour or that there is other misconduct or that the Member has contravened the Code/Rules, the Committee may recommend the imposition of an appropriate sanction. The Chairman of the Rajya Sabha referred the incident regarding the telecast by ‘Aaj Tak’ channel, involving one Member of the House, to the Ethics Committee. The Committee came to the conclusion that the Member had contravened para 5 of the Code of Conduct for Members of the Rajya Sabha and acted in a manner, which seriously impaired the dignity of the House and brought the whole institution of Parliamentary democracy into disrepute. The Committee recommended the expulsion of the Member from the House and the House accepted the recommendation.2.5.7.4 While the enunciation of ethical values and codes of conduct puts moral pressure on public functionaries, they need to be backed by an effective monitoring and enforcement regime. Legislatures the world over have adopted different models for this purpose. The Canadian Conflict of Interest and Post-Employment Code for public office holders (2006) relies on an Ethics Commissioner to oversee the Code and to provide advice. The Ethics Commissioner is an Officer of Parliament appointed under Section 72.01 of the Parliament of Canada Act. The Commissioner reports on the inquiries he conducts pursuant to the Members’ Code and makes annual reports to the House of Commons on his activities in relation to its Members. Based on the recommendations of the Nolan Committee, the House of Commons has established the office of Parliamentary Commissioner for Standards. The Commissioner’s main responsibilities are24:?Overseeing the maintenance and monitoring the operation ofthe Register ofMembers’ Interests.?Providing advice on a confidentialbasisto individualMembers and to the SelectCommittee on Standards and Privileges about the interpretation ofthe Code ofConduct and Guide to the Rules relating to the Conduct ofMembers.?Preparing guidance and providing training forMembers on matters ofconduct, propriety and ethics.?Monitoring the operation of the Code of Conduct and Guide to the Rules and, where appropriate, proposing possible modifications ofit to the Committee.3435zs Observations made by Pandit Jawahar Lal Nehru, India’s first Prime Minister while speaking on the motion for expulsion of" Source: , retrieved on 30-11-06Shri H D Mudgal on 24 September, 1951Ethics in GovernanceEthical Framework?Receiving and investigating complaints aboutMembers who are allegedly in breach ofthe Code ofConduct and Guide to the Rules, and reporting his findings to the Committee.?In addition, the Commissioner’s office is responsible for maintaining and monitoring the operation ofvarious registers and lists; providing advice about them; and receiving and investigating complaints about them.2.5.7.5 The constitution of the Office of Parliamentary Commissioner for Standards has helped the House by bringing greater transparency in matters relating to ethical standards. It has also helped the Members by providing them timely advice in matters relating to the Code of Conduct. The Commission is of the view that both Houses of Parliament may consider creation of a similar office. It is envisaged that this Office would function under the Speaker. It could also assist the Ethics Committee in the discharge of its functions, provide advice to the Members when required and maintain records.2.6 Office of Profit2.6.1 The Constitution of India lays down that legislators would be disqualified for being chosen as, and for being, a member of the legislature if they were to hold any office of profit under the government other than an office declared by the legislature by law not to disqualify its holder. The underlying idea was to obviate a conflict of interest between the duties of office and their legislative functions. The principle debarring holders of office of profit under the government from being a legislator is that such a person cannot exercise his functions independently of the executive of which he is a part. The principle can be traced to developments in British constitutional history, in the course of which it came to be established that the Crown and its officers shall have no say in Parliament. The Constitution makers quite rightly wanted the legislative office to be insulated from executive influence and manipulation.2.5.7.6 Recommendations:a. An Office of ‘Ethics Commissioner’ may be constituted by each House of Parliament. This Office, functioning under the Speaker/Chairman, would assist the Committee on Ethics in the discharge of its functions, and advise Members, when required, and maintain necessary records.b. In respect of States, the Commission recommends the following:i.All State legislatures may adopt a Code of Ethics and a Code of Conduct for their Members.ii. Ethics Committees may be constituted with well defined procedures for sanctions in case of transgressions, to ensure the ethical conduct of legislators.iii. ‘Registers of Members’ Interests’ may be maintained with the declaration of interests by Members of the State legislatures.iv. Annual Reports providing details including transgressions may be placed on the Table of the respective Houses.v.An Office of ‘Ethics Commissioner’ may be constituted by each House of the State legislatures. This Office would function under the Speaker/Chairman, on the same basis as suggested for Parliament.362.6.2 Constitutional theory envisages that the elected legislature exercises oversight functions over government. The making of laws, approval of the budget and monitoring of all government actions are within the purview of the legislature. The executive branch of government should implement the laws, utilize the public money for the approved purposes and be accountable to the legislature in its functioning. Therefore, if the legislators are beholden to the executive, the legislature can no longer retain its independence and loses the ability to control the Council of Ministers and the army of officials and public servants. From this perspective, the Constitutional embargo on office of profit for legislators is both necessary and welcome.2.6.3 We accepted the Westminster model because of familiarity and historical association. In this model, the executive (Council of Ministers) is drawn from the legislature. While in theory, the legislature holds the government to account, in reality it is often noticed that the government controls the legislature as long it has a majority in the House. The key issue for the government’s survival is sustaining its majority. Much of the struggle for power, compromise on cabinet composition, and patronage are linked to this need to satisfy the majority of legislators. This is the reason why the size of the Council of Ministers became unwieldy over the decades. Finally, the 91' Amendment to the Constitution enacted in 2003 limited the size of Council of Ministers to 15% of the Lower House. Chairmanships of Corporations, Parliamentary Secretaryships of various ministries, and other offices of profit are often sops to legislators to satisfy their aspirations for rank, status and privilege and a way of buying peace for the government. This is undoubtedly a perversion of the theory of separation of powers. But as long as such perversion is integral to our model of democracy, it would be very inadequate if we limited this discussion only to technical and legal issues relating to office of profit.37Ethics in GovernanceEthical FrameworkBox 2.6: Edmund Burke on ParliamentOver 230 years ago (in 1774!) Edmund Burke, while addressing his electors in Bristol, spoke as follows:Your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.Parliament is not a congress of ambassadors from different and hostile interests; which interests each must maintain, as an agent and advocate, against other agents and advocates; but parliament is a deliberative assembly of one nation, with one interest, that of the whole; where, not local purposes, not local prejudices ought to guide, but the general good, resulting from the general reason of the whole. You choose a member indeed; but when you have chosen him, he is not member of Bristol, but he is a member of parliament.2.6.4 Constitutionally, a person cannot be a Minister unless he is an MP/MLA/MLC. Even if a non-MP/ MLA/MLC is made a Minister, he must become an MP/MLA/MLC within six months. Given this context, the executive and legislature are fused in our system. But in countries like Britain and Germany, such fusion is not, by and large, leading to corruption or patronage. That is because a political culture has been evolved, in which public office is a means for promoting social good and not for private or family gain. In our case, at times public office is perceived to be an extension of one’s property. That is why, sometimes, public offices are a source of huge corruption and a means of extending patronage.2.6.5 Given this proclivity and the compulsions under which any government functions, there is need to re-examine the definition of office of profit. Articles 102 and 191 of the Constitution relating to office of profit have been violated in spirit over the years even when the letter is adhered to. As a result, the Legislatures kept on expanding the list of exemptions from disqualification under Articles 102 and 191. For instance, the Act 10 of 1959 listed scores of offices in the exemptions from disqualification under Article 102. There does not appear to be a clear rationale to such a list, except perhaps the expediency to protect holders of certain offices from time to time. Similar laws have been enacted by State Legislatures under Article 191, exempting hundreds of offices from disqualification for the State Legislature. Each time a legislator is appointed by the executive to an office which might be classified an office of profit, a law is enacted including that office in the list of exempted categories.2.6.6 Often, the crude criterion applied is whether or not the office carries a remuneration. In the process, the real distinction of whether executive authority is exercised in terms of decision making or direct involvement in deployment of public funds is often lost sight of. The Supreme Court’s clarification about the appointment and removal being in the hands of the executive branch of government does not help either, because many appointments made may be in advisory capacities.2.6.7 Nor do the existing norms apply to Local Area Development Schemes under which legislators are empowered to sanction public works and authorize expenditure of funds granted under MPLADs and MLALADs schemes. Several party leaders and legislators feel the need for discretionary public funds at their disposal in order to quickly execute publicworks to satisfy the needs of their constituencies. However, these schemes do seriously erode the notion of separation of powers, as the legislator directly becomes the executive. The argument advanced that legislators do not directly handle public funds under these schemes, as these are under the control of the District Magistrate is flawed. In fact, no Minister directly handles public money. Even the officials do not personally handle cash, except the treasury officials and disbursing officers. Making day-to-day decisions on expenditure after the legislature has approved the budget, is a key executive function.2.6.8 Several constitutional experts and legal luminaries have pointed out the unconstitutionality of the above schemes. A report, “MPLADS: Concept, Confusion and Contradictions”, written by former Public Accounts Committee Chairman Era Sezhiyan, states that the scheme (MPLADS) distorted the MPs’ role in the federal system and diverted funds which should have actually gone to agencies like the Panchayati Raj institutions. Apart from infringing on the rights of the local governments, the most serious objection to the scheme is the conflict of interest that arises when legislators take up executive roles. A similar issue was examined in 1959 by a committee of the Congress party in Parliament, chaired by V K Krishna Menon, which went into the question of parliamentary supervision for state undertakings. At that time the issue of nomination of Members of Parliament on governing bodies of Public Sector Undertakings came up. The V K Krishna Menon Committee held that “the overwhelming weight of considerations” must be against such appointments".2.6.9 Therefore it seems necessary to sharply define office of profit to ensure clearer separation of powers. Legislators who are not Ministers often do have significant expertise from their own personal or professional background. In addition, their experience in public service gives them unique insights and understanding of public policy. Such expertise and insights would be valuable inputs to the executive in policy making. Therefore, Committees and Commissions of a purely advisory nature can be constituted with legislators. The mere fact of such positions carrying certain remuneration and other perks does not make them executive offices. The Constitution recognized that holding of such offices in expert and advisory bodies does not violate separation of powers and left it to Parliament and State Legislatures to exempt such non-executive offices from disqualification. But appointment in statutory or non-statutory executive authorities with direct decision making powers and day-to-day control of field personnel, or positions on the governing boards of public sector undertakings or as government nominees in private enterprises clearly carry direct executive responsibilities and involve decision making powers. Such appointments would undoubtedly violate separation of powers. Giving discretionary powers to legislators to sanction or approve public works is clearly an exercise of executive function, whether or not the government appoints the legislators to a designated office. It is necessary to sharply distinguish executive functions and exercise of executive authority while defining office of profit, irrespective of whether such a role or office carries remuneration and perks.3839zs Extracted from: “A chronic aberration: a review of ‘Members of Parliament Local Area Development Scheme (MPLADS): Concept, Confusion, Contradictions’ by Era Sezhiyan”, by V Ramachandran, Economic and Political Weekly, June 2005.Ethics in GovernanceEthical Framework2.6.10 Given these circumstances, it would be appropriate to amend the law on the following lines:?All offices in purely advisory bodies where the experience and insights of a legislator would be inputs in governmental policy will not be treated as offices of profit, irrespective of the remuneration and perks associated with such an office.undertakings and statutory and non-statutory authorities directly deciding policy or managing institutions or authorizing or approving expenditure shall be treated as offices of profit, and no legislator shall hold such offices.iii. If a serving Minister, by virtue of office, is a member or head of certain organizations like the Planning Commission, where close coordination and integration between the Council of Ministers and the organization or authority or committee is vital for the day-to-day functioning of government, it shall not be treated as office of profit.(The use of discretionary funds at the disposal of legislators, the power to determine specific projects and schemes, or select the beneficiaries or authorize expenditure shall constitute discharge of executive functions and will invite disqualification under Articles 102 and 191, irrespective of whether or not a new office is notified and held.)b. Schemes such as MPLADS and MLALADS should be abolished.c. Members of Parliament and Members of State Legislatures should be declared as ‘Public Authorities’ under the Right to Information Act, except when they are discharging legislative functions.?All offices involving executive decision making and control of public funds, including positions on the governing boards of public undertakings and statutory and non-statutory authorities directly, deciding policy or managing institutions or authorizing or approving expenditure shall be treated as offices of profit, and no legislator shall hold such offices. (Discretionary funds at the disposal of legislators or the power to determine specific projects and schemes, or select the beneficiaries or authorize expenditure shall constitute discharge of executive functions and will invite disqualification under Articles 102 and 191, irrespective of whether or not a new office is notified and held).?If a serving Minister, by virtue of office, is a member or head of certain organizations like the Planning Commission, where close coordination and integration between the Council of Ministers and the organization or authority or committee is vital for the day-to-day functioning of government, it shall not be treated as office of profit.2.6.11 The Supreme Court has held that members of legislatures are public servants under the Prevention of Corruption Act26. The Commission feels that Members of Parliament and the Members of State Legislatures should be declared as ‘Public Authorities’ under the Right to Information Act except when they are discharging legislative functions.2.6.12 Recommendations:a. The Law should be amended to define office of profit based on the following principles:i.All offices in purely advisory bodies where the experience, insights and expertise of a legislator would be inputs in governmental policy, shall not be treated as offices of profit, irrespective of the remuneration and perks associated with such an office.ii. All offices involving executive decision making and control of public funds, including positions on the governing boards of public40" P V Narasimha Rao v State (CBI/SPE) AIR 1998 SC 21202.7 Code of Ethics for Civil Servants2.7.1 The Committee on Prevention of Corruption (‘Santhanam Committee’-1964) had remarked:“For a country like India, development ofhermaterialresources and raising the standards oflife of all classes are, indeed imperative. At the same time, the deterioration in the standards of public life has to be arrested. Ways and means have to be found to ensure that idealism and patriotism have the proper place in the ambition ofour youth. The lack ofmoralearnestness, which has been a conspicuous feature ofrecent years, is perhaps the greatest single factor which hampers the growth ofstrong traditions ofintegrity and efficiency.”2.7.2 The inculcation of values facilitating the subordination of the self to a larger, societal good, and engendering a spirit of empathy for those in need of ameliorative state interventions are not skills which could be easily imbibed after joining the civil services. Such attitudes need nurturing over not merely individual life-times, but through successive generations - the ‘right’41Ethics in GovernanceEthical Frameworkethos takes long to evolve. Nevertheless, it must be accepted that our civil service system has a tradition of attitudes and achievements which sets examples to be emulated by current and prospective civil servants. It must also be accepted that the existing framework for maintaining and promoting the norms of ‘right conduct’ cannot be enforced through a rigid mindless enforcement of laws and rules. It is all a question of striking the right balance. Within the civil services there are formal, enforceable codes setting out norms of expected behaviour with ‘sanctions’ prescribed for unacceptable departures from such norms. There are also inchoate conventions of propriety and acceptable behaviour without formal sanctions but with nonobservance of such practices and conventions attracting social disapproval and stigma.2.7.3 The current set of ‘enforceable norms’ are ‘Conduct Rules’, typified by the Central Civil Services (Conduct) Rules - 1964 and analogous rules applicable to members of the All India Services or employees of various State Governments. The norms prescribed in such rules are much older than the Rules themselves. Thus specific acts were proscribed from time to time through notifications under the Fundamental Rules and the Civil Service Regulations. Some examples are the disapproval of habitual lending and indiscriminate borrowing (1869), and the banning of various actions – accepting gifts (1876), buying and selling property (1881), making commercial investments (1885), promoting companies (1885) and accepting commercial employment after retirement (1920). The breach of such prohibitions entailed punitive actions like removal from service. There were, of course, provisions like ‘illegal gratification’ or bribery - Sections 161 to 165 of the IPC - or ‘criminal breach of trust by a public servant’ - Section 409 IPC - which provide for terms of imprisonment. In 1947, with the enactment of the Prevention of Corruption Act, a new set of offences was also created.2.7.4 In the 1930s, a compendium of instructions containing ‘do’s and don’ts’ was issued and collectively called ‘Conduct Rules’. The compendium was converted in the form of distinct rules in 1955. The Santhanam Committee recommended considerable enlargement of such rules resulting in the 1964 version. These rules have subsequently been updated to include additional norms of behaviour. Some of the additions are: the requirement of observing courtesy, prohibiting demanding and accepting dowry, prohibiting sexual harassment of women employees, and, recently, prohibition to employ children below 14 years of age as domestic help. This is understandably a continuing process, and reflects the changing, often increasing expectations of society, from the civil services.2.7.5 The code of behaviour as enunciated in the Conduct Rules, while containing some general norms like ‘maintaining integrity and absolute devotion to duty’ and not indulging in ‘conduct unbecoming of a government servant’, is generally directed towards cataloguing specific activities deemed undesirable for government servants. There is no Code of Ethicsprescribed for civil servants in India although such codes exist in other countries. What we have in India are several Conduct Rules, which prohibit a set of common activities. These Conduct Rules do serve a purpose, but they do not constitute a Code of Ethics. There is, of late, a concern that more ‘generic norms’ need to be added to the list of accepted conduct. In this context, conflict of interest is an important area which should be adequately addressed in these codes. It is necessary to build safeguards to prevent conflict of interest. A draft ‘Public Service Bill’ now under consideration of the Ministry of Personnel, Public Grievances and Pensions seeks to lay down a number of generic expectations from civil servants, which are referred to as “values”. The salient ‘values’ envisaged in the Bill are:?Allegiance to the various ideals enshrined in the preamble to the Constitution?Apoliticalfunctioning?Good governance for bettermentofthe people to be the primary goalofcivilservice?Duty to act objectively and impartially?Accountability and transparency in decision-making?Maintenance ofhighest ethical standards?Merit to be the criteria in selection ofcivilservants consistent, however, with the cultural, ethnic and other diversities ofthe nation?Ensuring economy and avoidance ofwastage in expenditure?Provision ofhealthy and congenial work environment?Communication, consultation and cooperation in performance offunctions i.e. participation ofalllevels ofpersonnelin management.2.7.6 The draft Bill also envisages a Public Service Code and a Public Service Management Code laying down more specific duties and responsibilities. Violation of the Code would invite punishments akin to the current major and minor penalties by the heads of institutions/ organizations. A ‘Public Service Authority’ is also envisaged to oversee implementation of the Code and values indicated above and to render advice in the matter of the values and the Code. The Commission has decided that a detailed examination of the proposed draft Bill will be appropriately made in its forthcoming report on Civil Services Reforms.2.7.7 The various issues discussed above are not significant only for the civil services. They are important for all segments of the bureaucracy and, equally so, for all local bodies and their employees. After the 73d and the 74t' Amendments of the Constitution, the local bodies now have an important role to play in the nation’s development and have major executive powers. It is essential that the need for relevant codes for these bodies and their employees, and for any public authority, is recognized.4243Ethics in GovernanceEthical FrameworkBox 2.7: Evolution of Morality“...we know that as knowledge comes, person grows, morality is evolved, and idea of non-separateness begins. Whether men understand it or not, they are impelled by that power behind to become unselfish. That is the foundation of morality. It is the quintessence of all ethics, preached in any language, or any religion, or by any prophet in the world...”-Swami Yivekananda2.7.8 In 1999, the Government of Australia enacted the Australian Public Service Act, which prescribes a set of Public Service Values. These are not merely aspirational statements of intent, but all employees are expected to uphold these values and comply with the Code, even as senior executives are expected to promote these values. Interestingly, the Public Service Commissioner is authorized to evaluate the extent to which agencies incorporate and uphold the values, and the adequacy of the systems and procedures required to ensure compliance with the Code. He has both statutory powers and policy responsibilities. These include an annual report to Parliament on the state of the service, including an evaluation of the extent to which various agencies of Government have incorporated the values.2.7.9 The Commission is of the view that there should be a set of Public Service Values which should be stipulated by law. As in the case of Australia, there should be a mechanism to ensure that civil servants constantly aspire towards these values. The values prescribed in the draft Public Services Bill, 2006 is a step in the right direction. The Commission will examine this Bill in detail in its report on Civil Services Reforms.2.7.10 It has been noticed that normally codes of conduct are prescribed for a ‘service’. Along with this, it would be desirable that organizations also prescribe codes of conduct. This is particularly true of organizations having public interface.2.7.11 The Commission feels that the prevailing practice of nominating serving officers on the boards of public sector bodies may compromise with the desired objectivity and independence necessary for decision making in these bodies. Also, the government is both the owner and the sovereign authority controlling the public undertaking. It would be unrealistic and imprudent for an official to sit in judgement of a decision taken by a Board of which he is a Member. There is a case for not nominating nor permitting serving officers to be nominated on boards of public sector bodies since there could be a conflict of interest.2.8 Code of Ethics for Regulators2.8.1 There are codes of conduct for professionals and other trades. In fact, such codes have existed in society since time immemorial. For example, Hammurabi’s code prescribed:27?Ifa builder builds a house, and constructs it well, the owner willpay two shekels for each surface ofthe house.?Ifa builder builds a house for someone, and does not construct it properly, and the house which he built, falls down and kill its owner, then that builder shall be put to death.2.8.2 The prescription and enforcement of Codes of Conduct for different sections of society is generally through internal regulatory mechanisms. Guilds are the oldest example of such a mechanism. A guild was an association of persons of the same trade or pursuits, formed to protect mutual interests and maintain standards28. With the emergence of competition and industrialization, guilds have, more or less, ceased to exist. However, the last century has seen the emergence of a large number of professions, especially in what is today termed as the services sector. These professions initially organized themselves into different types of associations in order to pursue common objectives and also to evolve acceptable norms of behaviour and mechanisms to enforce them. In some cases, such mechanisms have been provided statutory backing. The Indian Medical Council Act, 1956 (102 of 1956), prescribes that the Council may prescribe standards of professional conduct and etiquette and a Code of Ethics for medical practitioners. The Medical Council has accordingly made regulations relating to the Professional Conduct – ‘Etiquette and Ethics for Registered Medical Practitioners’.29 The Advocates Act, 1961 incorporates the functions of the Bar Council of India, which include laying down standards of professional conduct and etiquette for advocates. The Charteredparastatal organizations. Any transgression of these values should be treated as misconduct, inviting punishment.b) Conflict of interest should be comprehensively covered in the Code of Ethics and in the Code of Conduct for officers. Also, serving officials should not be nominated on the Boards of Public undertakings. This will, however, not apply to non-profit public institutions and advisory bodies.2.7.12 Recommendations?:a)‘Public Service Values’ towards which all public servants should aspire,should be defined and made applicable to all tiers of Government and44Box 2.8: The Seven Social SinsThe Seven Social Sins, as quoted by Mahatma Gandhi in “Young India,” 19251.Politics without principles2.Wealth without work3.Leisure without conscience.4.Knowledge without merce without morality6.Science without humanity7.Worship without sacrificeBox 2.9: The Credibility of a ProfessionThe credibility of a (professional) council including its ‘disciplinary body’ in respect of any profession - whether it is law, medicine, accountancy or any other vocation - depends upon how they deal with cases of delinquency involving serious misconduct which has a tendency to erode the credibility and reputation of the said profession” and “the punishment, of course, has to be commensurate with the gravity of the misconduct”,Supreme Court in : Shambhu Ram Yadav vs Hanum Das Khatry, dated 26.07.2001 (retrieved from )45? More detailed set of recommendations will be made in the Commission’s forthcoming Report on Civil Services Reforms27 Source: , retrieved on 15-12-0628 Source: ; retrieved on 10-12-0629 Issued on 11th March 2002.Ethics in GovernanceEthical FrameworkAccountants Act, 1949 stipulates the creation of the Institute of Chartered Accountants of India for regulation of the profession of chartered accountancy in India. The Chartered Accountants Act, 1949 and the Schedules to the Act also set out the acceptable forms of behaviour of members of the profession. The Press Council of India functions under the Press Council Act, 1978. It is a statutory, quasi-judicial body, which acts as a watchdog of the press. It adjudicates the complaints against and by the press for violation of ethics and for violation of the freedom of the press respectively. The objects and functions of the Council include laying down a code of conduct for newspapers, news agencies and journalists in accordance with high professional standards. The Press Council of India has issued the Norms of Journalistic Conduct, to which the media is supposed to adhere. The Institution of Engineers (Incorporated under the Royal Charter, 1935) has prescribed a ‘Code of Ethics for Corporate Members.’2.8.3 Apart from internal regulators, there is another category of regulators, which may be termed as ‘External Regulators’. An example of an external regulator is the All India Council of Technical Education (AICTE), which is a statutory body, established for proper planning & co-ordinated development of the technical education system throughout the country. The introduction of competition in erstwhile governmental functions has seen the emergence of a number of ‘External Regulators’. The Telecom Regulatory Authority of India and the State Power Regulatory Authorities are some other examples.2.8.4 In spite of the existence of a plethora of Codes of Conduct for almost all important professions, it is often pointed out that adherence to ethical norms has been generally unsatisfactory. Decline in ethical values in the professions has adversely impacted on the governance of the country and is an important reason for increasing corruption in public life. The role of external regulators would also increase as government’s functions are thrown open. In such cases, prescribing ethical norms for the regulators themselves as well as for the service providers would become essential. Even more important would be evolution of objective, transparent and fair decision making processes and enforcement mechanisms. The Commission would in a separate report, examine all issues related to professions, regulatory bodies and their ethics, However, the Commission feels that there should be a Code of Ethics and a comprehensive and enforceable Code of Conduct for all major professions.2.8.5 Recommendation:a. A comprehensive and enforceable Code of Conduct should be prescribed for all professions, with statutory backing.462.9 Ethical Framework for the Judiciary2.9.1 In the Terms of Reference of the Commission, it has been stated:“The Commission may exclude from its purview the detailed examination ofadministration of Defence, Railways, ExternalAffairs, Security and Intelligence, as also subjects such as Centre-State relations, judicial reforms etc, which are already being examined by other bodies. The Commission will, however, befree to take theproblems ofthese sectors into accountin recommending re-organisation ofthe machinery ofthe Government orofany ofits service agencies”.Thus even though detailed examination of judicial reforms is not strictly within the purview of the Administrative Reforms Commission, it is necessary to refer to a few important elements of reforms relating to the judiciary because of the critical role that the judiciary has in ensuring ethical governance.2.9.2 Independence of the judiciary is inextricably linked with judicial ethics. An independent judiciary enjoying public confidence is a basic necessity of the rule of law. Any conduct on the part of a judge, which demonstrates a lack of integrity and dignity, will undermine the trust reposed in the judiciary by the citizens. The conduct of a judge should, therefore, always be above reproach.2.9.3 In the United States, Federal Judges abide by the Code of Conduct for United States Judges, a set of ethical principles and guidelines adopted by the Judicial Conference of the United States. The Code of Conduct provides guidance for judges on issues of judicial integrity and independence, judicial diligence and impartiality, permissible extra-judicial activities, and the avoidance of impropriety or even its appearance.30 In Canada, there is no written Code of Conduct for federally appointed judges but, various documents published by the Canadian Judicial Council over the years describe the ethical standards to which judges aspire. The Canadian Judicial Council was created in 1971, with a broad legislative mandate in the area of judicial governance. The main objective of the Council is to promote efficiency and uniformity and to improve the quality of judicial service in all superior courts in Canada.2.9.4 The Supreme Court of India in its Full Court Meeting held on May 7, 1997 unanimously adopted a charter called the ‘Restatement of Values of Judicial Life’, generally known as the Code of Conduct for judges. It reads as under:31a. Justice mustnot merely be done but itmustalso be seen to be done. The behaviour and conduct ofmembers ofthe higherjudiciary mustreaffirm the people’sfaith in the impartiality ofthe judiciary. Accordingly, any act ofa Judge ofthe Supreme Court or a High Court, whetherin official or personal capacity, which erodes the credibility ofthis perception has to be avoided.soSource : , retrieved on 10-12-06si Source: Judicial Independence Fiscal Autonomy and Accountability; Justice S.B. Sinha; Judge, Supreme Court of India; in GovernanceEthical FrameworkBox 2.10: Independence of Judiciary“A judiciary independent of a king or executive alone is a good thing; but independence of the will of the nation is a solecism, at least in a republican government”.- Thomas Jeffersonb.A Judge should not contest the election to any office ofa club, society or otherassociation; furtherhe shallnothold such elective office exceptin a society orassociation connected with the law.c.Close association with individualmembers ofthe Bar, particularly those who practise in the same court, shallbe eschewed.d. A Judge should not permit any member ofhis immediate family, such as a spouse, son, daughter, son-in-law or daughter-in-law or any other close relative, ifa member ofthe Bar, to appear before him or even be associated in any manner with a cause to be dealt with by him.e.No member of his family, who is a member of the Bar, shall be permitted to use the residence in which the Judge actually resides orother facilities for professional work.f.A Judge should practise a degree ofaloofness consistent with the dignity ofhis office.g. A Judge shall not hear and decide a matter in which a member of his family, a close relation or a friend is concerned.h.A Judge shall not enter into public debate or express his views in public on political matters or on matters that are pending or are likely to arise for judicial determination.i.A Judge is expected to lethis judgments speak for themselves. He shallnotgive interviews to the media.j.A Judge shall not accept gifts or hospitality except from his family, close relations and friends.k. A Judge shallnot hear and decide a matterin which a company in which he holds shares is concerned unless he has disclosed his interestand no objection to his hearing and deciding the matter is raised.l.A Judge shallnot speculate in shares, stocks or the like.m. A Judge should not engage directly or indirectly in trade orbusiness, either by himselfor in association with any other person. (Publication ofa legal treatise orany activity in the nature ofa hobby shallnot be constructed as trade or business).n.A Judge should not ask for, accept contributions or otherwise actively associate himself with the raising ofany fund for any purpose.o.A Judge should not seek any financial benefit in the form of a perquisite or privilege attached to his office unless it is clearly available. Any doubt in this behalfmust be got resolved and clarified through the ChiefJustice.p.Every Judge must, at alltimes, be consciousthat he is under the public gaze and there should be no act oromission by him which is unbecoming ofthe high officehe occupies and the public esteem in which that office is held.These are only the “Restatement of the Values ofJudicialLife”and are not meant to be exhaustive but illustrative ofwhat is expected ofa Judge.2.9.5 The following two Resolutions were also adopted in the said Full Court Meeting of the Supreme Court of India:“RESOLVED that an in-house procedure should be devised by the Hon’ble ChiefJustice ofIndia to take suitable remedialaction againstJudges who by theiracts ofomission orcommission do not follow the universally accepted values ofjudiciallife including those indicated in the “Restatement of Values of Judicial Life”.RESOLVED FURTHER THATevery Judge should make a declaration ofallhis/her assets in the form ofrealestate or investments (held by him/her in his/her own name or in the name ofhis/ herspouse or any person dependent on him/her) within a reasonable time ofassuming office and in the case ofsitting Judges within a reasonable time ofadoption ofthis Resolution and thereafter wheneverany acquisition ofa substantialnature is made, it shallbe disclosed within a reasonable time. The declaration so made should be to the Chief Justice of the Court. The Chief Justice should make a similar declaration for the purpose ofthe record. The declaration made by the Judges or the ChiefJustice, as the case may be, shallbe confidential”.2.9.6 The Restatement of Values of Judicial Life is a comprehensive but not exhaustive code of ethics. As stated earlier, mere prescription of a Code of Conduct is not an end in itself. Along with the Code of Conduct, a mechanism for enforcing the code needs to be evolved. It would be desirable to designate a senior Judge of the Supreme Court as the ‘Judicial Values Commissioner’. The Judicial Values Commissioner should be empowered to enquire into cases of violation of the Code of Conduct and report the matter to the Chief Justice of India for taking action. The Judicial Values Commissioner should have jurisdiction over the judges of the Supreme Court, and members of other judicial and quasi-judicial bodies. A similar institution should also be constituted at the state level. Closely linked with this is the issue of judicial accountability. The need for an effective mechanism for the enforcement of judicial accountability cannot be overemphasized.4849Ethics in GovernanceEthical Framework2.9.7 Judicial independence and accountability should go together. Article 235 of the Constitution of India provides for the ‘control’ of the High Court over the subordinate judiciary, clearly indicating that the provision of an effective mechanism to enforce judicial accountability is a part of our constitutional philosophy. But this does not in any way compromise the independence of the judiciary at that level. In fact, it respects and strengthens the directive principle of separation of the judiciary from the executive as enshrined in Article 50 of the Constitution. It cannot be doubted that the independence of a subordinate judge is as important as that of a Judge in a High Court or in the Supreme Court. If this is accepted, then there should be no reason not to consider an accountability mechanism for the higher judiciary. What then should be that mechanism?2.9.8 Article 124 vests the power of appointment of the Chief Justice of India (CJI) and the Judges to the Supreme Court in the President. It is stipulated that the President shall appoint a Judge of the Supreme Court, after consultation with such of the Judges of the Supreme Court and of the High Courts as the President may deem necessary. The appointment of Judges of the High Courts is also made by the President of India. The President has to consult the CJI, the Governor of the State and the Chief Justice of the High Court. A Presidential reference was made on 23rd July, 1998 to the Supreme Court in which nine questions were referred for consideration by the Supreme Court. One of the principles laid down by the Supreme Court was that the Chief Justice of India has to form a collegium of four senior-most puisne Judges of the Supreme Court . This is necessary for appointments of judges to the Supreme Court or to transfer a High Court Chief Justice or a High Court judge, and the opinion of the collegium will have primacy in the matter of appointments. It further clarified that it is open to the executive to inform the collegium of its objections. However, if the Chief Justice and his companion judges are still of the view that there is no reason to withdraw their recommendation, then that appointment should be made as a matter of healthy convention. However, even if two judges have serious reservations about a particular appointment, then it should not be made.2.9.9 The system of appointments to the higher courts, as stipulated by the Constitution and as interpreted by the Supreme Court, has always placed the highest premium on judicial independence. In India, it is only a collegium of judges that recommends to the President names for elevation to the bench and there is no outside advice available for this purpose. Judicial pronouncements have made the recommendation binding. Perhaps in no other country in the world does the judiciary have a final say in its own appointments. In India, neither the executive nor the legislature has much say in who is appointed to the Supreme Court or the High Courts. The current system of appointments is not open to public scrutiny and thus lacks accountability and transparency. A comparative analysis of the appointment mechanism for judges in different countries is given in Table 2.1. A glance at the tablewould indicate that across these countries, there is a collegium to recommend persons to the higher judiciary and this collegium included persons, presumably of eminence, but not necessarily from the judiciary itself.Table 2.1: International Comparison of Appointments to the Supreme CourtCountry/ Name of the Apex CourtAppointingAppointment ProcessAuthorityUK/ Supreme Court of the United Kingdom32 {Section 23(1)}The Supreme Court consists of 12 judges appointed by Her Majesty by letters patent. {Section 23 (2)}.A recommendation in this regard is made by the Prime Minister. (Section 26).The Lord Chancellor is required to convene a selection commission for the selection of a person to be recommended. The selection commission consists of 5 members including the President and Deputy President of the Supreme Court and one member each of the following bodies: (i) the Judicial Appointments Commission (ii) the Judicial Appointments Board of Scotland (iii) the Northern Ireland Judicial Appointments Commission (Schedule 8). The selection commission must consult senior judges, the Lord Chancellor, the First Minister in Scotland, the Assembly First Secretary in Wales and the Secretary of State for Northern Ireland and make a report to the Lord Chancellor about the selection. (Section 27). On receipt of the report, the Lord Chancellor consults the same dignitaries as in the case of the selection commission. After consultation, he may either notify the selection to the Prime Minister, or reject it or require the commission to reconsider it. This process may involve three stages. Even then, the Lord Chancellor may notify a person who was not selected on basis of reasons recorded in writing. (Sections 28, 29 and 30).Notification by Lord Chancellor is binding on the Prime Minister.{Section 26(3)}.50Contd. on page 5251" Based on the Constitutional Reform Act 2005. References in parentheses are to this Act.Ethics in GovernanceEthical Framework52Contd. from page 51Table 2.1 Contd.Country/ Name of the Apex CourtAppointing AuthorityAppointment ProcessUSA/Supreme Court of the United States33President of the United States with the advice and consent of the Senate.President of the United States makes the nomination. The Senate Judiciary Committee conducts hearings and makes a report to the Senate. Simple majority vote of the Senate is required to confirm the nomination.France/Cour dePresidentofthePresident of the Republic presides overCassation34Republic on receiptCSM and the Minister of Justice is itsofproposalsforex officio Vice-President. In addition, there are 16 other members. Four ofappointments fromConseil Superieur de lathe members are not magistrates. TheyMagistrature (CSM).are prominent public figures. The(Article65of theremaining twelve members are split inConstitution).two formations: one dealing with sitting judges and one dealing with public prosecutors. The formation dealing with sitting judges is composed of five sitting judges and one public prosecutor. The four members who are not magistrates sit in both formations.Germany/FederalCourt consists of twoThe judges to be elected by theConstitutional Court35panels of 8 judges. HalfBundesrat are elected with two thirds(Bundesverfassungsgericht)of eachpanelareof the vote of the Bundesrat. In case ofelectedbythethe Bundestag, the judges are electedBundestag(Lowerindirectly.TheBundestag,byHouse of Parliament)proportional representation, elects aand the Bundesrattwelve-member electoral committee.(Federal Council).To be elected, a judge requires at least eight votes.33 Source: Source: Based on Federal Constitutional Court Act (Gesetz uber das Bundesverfassungsgericht), source: A closely related aspect of the accountability of judges is the mechanism for removal of judges for deviant behaviour. Other than impeachment under Articles 124(4) and 217(1), there is no mechanism to proceed against any inappropriate behaviour or misdemeanour of judges. At the time of framing the Constitution, it was felt that judicial conventions and norms would constitute strong checks. However, the impeachment provisions have turned out to be impracticable as it is virtually impossible to initiate any impeachment proceedings, let alone successfully conclude them. There are five stages, all of them difficult to accomplish. First is a mandatory presentation of not less than hundred Lok Sabha members or fifty Rajya Sabha members for giving notice. At the second stage, the Speaker or the Chairman has to admit the motion; if he does not admit it, the matter ends there. In the third stage, if there is one, a committee is appointed to conduct an enquiry. The fourth stage is that the committee makes a report and forwards it to the Speaker or the Chairman. The fifth and final stage is reached when the two Houses of Parliament proceed to act in the manner prescribed by Section 6(3) of the Judges (Inquiry) Act. Inadequacy of the existing mechanism was affirmed in the K Veeraswami case, 1991(3) SCC 65536 and the infructuous impeachment proceedings in the case of V Ramaswami37 even after adverse findings of the Judges’ Committee under the Judges Inquiry Act, 1968.2.9.11 The issue of appointment and removal of judges was examined by the National Commission to Review the Working of the Constitution. The Commission recommended the constitution of a National Judicial Commission which would have the effective participation of both the executive and the judicial wings of the State “as an integrated scheme for the machinery for appointment of judges”.2.9.12 The Government introduced the Constitution (Ninety-eighth Amendment) Bill in the Lok Sabha in 2003. This Bill sought to create a National Judicial Commission (NJC) headed by the Chief Justice of India with two Judges of the Supreme Court next to the CJI in seniority; the Union Minister for Law and Justice; and one eminent citizen to be nominated by the President in consultation with the Prime Minister, as members. The Bill also proposed to empower the National Judicial Commission to draw up a code of ethics for judges, and to inquire into cases of misconduct of a judge (other than those punishable with his/her removal). This Bill could not be passed.2.9.13 The Law Commission in its 195th Report, examined the draft Judges (Inquiry) Bill, 2005. It stated:Judicialindependence is not absolute. Judicialindependence and accountability are two sides of the same coin. The presentproposals in the Billof2005 together with our recommendations for36 In 1991, in a case arising from the discovery of large sums of money from the residence of Justice K Veeraswami, the then Chief Justice of Madras High Court; when the CBI initiated prosecution prioceedings, the Supreme Court ruled that no FIR can be registered against a judge nor a criminal investigation be initiated without prior consent of the Chief Justice of India.37 The charges against the judge dealt with irregularities in purchases. These purchases were audited by the CAG and it was in that process the evidence of wrong deals came to light. The three judge-statutory committee found Justice Ramaswamy guilty on charges of corruption. However, the impeachment motion failed on the floor of the house.53Ethics in GovernanceEthical Frameworkenabling the JudicialCouncilto impose ‘minor measures’including stoppage ofassignmentof judicial work are constitutional. They ought not to be viewed as an encroachment on Judicial Independence by the Executive orby the Legislature. (p.341)2.9.14 The Law Commission observed that the Bill of 2005, which provides for the establishment of a National Judicial Council consisting only of judges is constitutionally valid and is consistent with the concept of independence of the judiciary, judicial accountability and doctrine of separation of powers. (p.363)2.9.15 While supporting the idea of a Code of Conduct for the Judiciary, it recommended that the Code should be published in the Gazette of India, and till such time the Judicial Council publishes a Code of Conduct, the Bill must provide that the ‘Restatement of Values of Judicial Life’ adopted by the Supreme Court in its Resolution dated May 7th, 1997 shall be treated as the Code of Conduct for the purposes of the proposed law. It also favoured the suggestion that a breach of the Code of Conduct could be treated as misbehaviour.2.9.16 Government is contemplating introduction of The Judges’ (Inquiry) Bill, 2006. The Bill seeks to establish a National Judicial Council to undertake preliminary investigations and enquiring into allegations of misbehaviour and incapacity of a Judge of the Supreme Court or High Court and to regulate the procedure for such investigation, inquiry and proof, and for imposing minor measures. It further provides that the Council in the interest of administration of justice, issue a code of conduct containing guidelines for the conduct and behaviour for judges. The Bill also provides that every judge at the time of appointment and annually thereafter, shall give intimation of his assets and liabilities to the Chief Justice of India or the Chief Justice of the High Court as the case may be. It has been provided that any person may make a complaint in writing involving any allegation of misbehaviour or incapacity in respect of a judge to the Council. The Council thereafter may inquire into the case and if it is of the opinion that the charges proved do not warrant removal of the judge, it may impose the prescribed minor measures. In case the Council is satisfied that the charges which have been proved are of serious nature warranting the removal of the judge then it shall advise the President accordingly.2.9.17 While the constitution of the National Judicial Council is a positive development in the direction of ensuring greater judicial accountability, the composition of the Council needs to be broadbased, and its powers enhanced so that it can exercise the necessary oversight of the judiciary. It is necessary to ensure that only candidates of the highest integrity and ability are appointed to these courts and that, once appointed, they perform their duties with highest standards of integrity, honesty, dedication and competence. This requires most meticulous scrutiny at the time of appointment. Such scrutiny would be ensured if theNational Judicial Council has representation from the executive, the legislature and the judiciary.2.9.18 As pointed out in para 2.9.10, the impeachment process for removing errant judges has failed. Given the vital position of higher Courts in our constitutional scheme, and the critical role higher courts are playing to correct the distortions in the functioning of other institutions and organs of state, it is of paramount importance to ensure both competence and integrity in the higher judiciary. As Table 2.1 shows, in all major democracies, appointments are made by either the executive directly, or with the advice and consent of the legislature or through an elective process by the legislature.2.9.19 The Commission is of the considered view that appointment of judges in higher courts should be with the participation of the executive, legislature and the Chief Justice and it should be a bipartisan process above day-to-day politics. Therefore, the proposed National Judicial Council should comprise representatives of all three organs of State - the legislature, the judiciary and the executive. Such a body can devise its own procedures in identifying and screening the candidates for the higher judiciary.2.9.20 The Commission is also of the considered view that the NJC should be entrusted with the responsibility of recommending removal of judges of higher courts. Such recommendations should be binding on the President, and Articles 124 and 217 of the Constitution should be amended accordingly. This revised procedure for removal of judges is necessitated by the failure of the impeachment process in India. According to Article II, Section 4 of the US Constitution, the President, Vice President and all civil officers of the United States shall be removed from office or impeachment for, and conviction of treason, bribery or other high crimes and misdemeanors. So far, 17 federal officials including two Presidents, one Cabinet officer, one senator and 13 federal judges faced impeachment proceedings. While the two Presidents, Andrew Johnson and Bill Clinton were acquitted, one other President, Richard Nixon chose to resign in the face of certain impeachment and removal. The preponderance of judges among those who faced impeachment is evident in the US. Out of the 13 judges who were impeached, 9 were removed from office and 4 were acquitted. Thus, the impeachment process worked satisfactorily in the US. But the failure of the impeachment process in India, as well as the inability of the system to address serious questions of probity in the judiciary necessitate a revised, transparent, accountable and a bipartisan process for enquiry into judicial misconduct and removal of judges.2.9.21 A bipartisan body comprising high dignitaries of great standing would be the ideal institution which can be entrusted with the grave responsibility of enquiring into complaints5455Ethics in GovernanceEthical Framework5756and charges against judges and recommending removal. Accordingly, the Commission is of the view that the National Judicial Council, constituted as above, should have the power to enquire into judicial misconduct and recommend to the President, removal of judges. Such recommendations should be binding on the President. Articles 124 and 217 should be amended suitably. The NJC should have the power to devise its own procedures in discharge of its onerous functions.2.9.22 The Constitution of a NJC would have to be done by providing for it under Article 124 of the Constitution (and also Articles 217 and 218). Simultaneously, changes would also have to made in the Judges (Inquiry) Act, 1968. The creation of such a Council will require changes in three places in the existing laws. Any change in the process of appointment to the Supreme Court will require that Article 124 of the Constitution be amended to provide for a National Judicial Council. A similar amendment will have to be made to Article 217. Also, since the Council is to have the authority to oversee and discipline judges, further changes will need to be made to Article 217 (Clause 4).2.9.23 Recommendations:p. Based on the recommendations of the NJC, the President should have the powers to remove a Supreme Court or High Court Judge.q. Article 124 of the Constitution may be amended to provide for the National Judicial Council. A similar change will have to be made in Article 217. Also, since the Council is to have the authority to oversee and discipline judges, further changes will need to be made to Article 217(Clause 4).a.A National Judicial Council should be constituted, in line with universallyaccepted principles where the appointment of members of the judiciary should be by a collegium having representation of the executive, legislature and judiciary. The Council should have the following composition:r.A Judge of the Supreme Court should be designated as the Judicial ValuesCommissioner. He/she should be assigned the task of enforcing the code of conduct. Similar arrangement should also be made in the High Court.?The Vice-President as Chairperson of the Council?The Prime Minister ?The Speaker of the Lok Sabha?The Chief Justice of India?The Law Minister?The Leader of the Opposition in the Lok Sabha?The Leader of the Opposition in the Rajya SabhaIn matters relating to the appointment and oversight of High Court Judges, the Council will also include the following members:?The Chief Minister of the concerned State?The Chief Justice of the concerned High Courtb. The National Judicial Council should be authorized to lay down the Code of Conduct for judges, including the subordinate judiciary.c.The National Judicial Council should be entrusted with the task ofrecommending appointments of Supreme Court and High Court Judges. It should also be entrusted the task of oversight of the judges, and should be empowered to enquire into alleged misconduct and impose minor penalties. It can also recommend removal of a judge if so warranted.Legal Framework for Fighting Corruption583LEGAL FRAMEWORK FOR FIGHTING CORRUPTION3.1 Evolution of the Anti-Corruption Laws in India3.1.1 In the pre-independence period, the Indian Penal Code (IPC) was the main tool to combat corruption in public life. The Code had a chapter on ‘Offences by Public Servants’. Sections 161 to 165 provided the legal framework to prosecute corrupt public servants. At that time the need for a special law to deal with corruption was not felt.3.1.2 The Second World War created shortages which gave opportunity to unscrupulous elements to exploit the situation leading to large scale corruption in public life. This situation continued even after the war. The lawmakers concerned about this menace, felt that drastic legislative measures need to be taken. Hence the Prevention of Corruption Act, 1947 was enacted to fight the evils of bribery and corruption.3.1.3 The Prevention of Corruption Act 1947: This Act did not redefine nor expand the definition of offences related to corruption, already existing in the IPC. Similarly, it also adopted the same definition of ‘Public Servant’ as in the IPC38. However the law defined a new offence - ‘Criminal misconduct in discharge of official duty’ - for which enhanced punishment (minimum 1 year to maximum 7 years) was stipulated. In order to shift the burden of proof in certain cases to the accused, it was provided that whenever it was proved that a public servant had accepted any gratification, it shall be presumed that the public servant accepted such a gratification as a motive or reward under Section 161 of IPC. In order to prevent harassment to honest officers, it was mandated that no court shall take cognizance of offences punishable under Sections 161,164 and 165 without the permission of the authority competent to remove the charged public servant. The Act also provided that the statement by bribe-giver would not subject him to prosecution.39 It was considered necessary to grant such immunity to the bribe-giver, who might have been forced by circumstances into giving a bribe. If this immunity was not provided, all complainants would become liable for punishment, which would deter them from giving complaints against any public official who accepted a bribe.3.1.4 The Criminal Law (Amendment) Act, 1952 brought some changes in laws relating to corruption. The punishment specified under Section 165 of IPC was enhanced to three years38 Section 2; The Prevention of Corruption Act, 194739 Section 8; The Prevention of Corruption Act, 1947instead of the existing two years. Also a new Section 165A was inserted in the IPC, which made abetting of offences, defined in Sections 161 and 165 of IPC, an offence. It was also stipulated that all corruption related offences should be tried only by special judges.3.1.5 Amendments in 1964: The anti-corruption laws underwent comprehensive amendments in 1964. The definition of ‘Public Servant’ under the IPC was expanded (The Santhanam Committee had also recommended an expanded definition of the term ‘Public Servant’). The CrPC was amended to provide in camera trial if either party or the court so desires. The presumption which was available under Section 4 of The Prevention of Corruption Act, was extended to include offences defined under Sections 5(1) and 5(2). The definition of ‘criminal misconduct’ was expanded and possession of assets disproportionate to the known sources of income of a public servant, was made an offence. Section 5(A) was amended so as to empower the State Governments to authorize officers of the rank of Inspectors of Police to investigate cases under the Act (earlier, this could be done only with the approval of the Magistrate (The Santhanam Committee recommended this). Police officers, competent to investigate cases under the Act, were empowered to inspect bankers’ records, if they had reasons to suspect commission of an offence under the Act (This power is available under Section 94 CrPC, but only after a case has been registered. This was also one of the recommendations of the Santhanam Committee).3.1.6 The Prevention of Corruption Act, 1988: This Act received Presidential assent on 9th September, 1988. It consolidates the provisions of the Prevention of Corruption Act 1947, the Criminal Law Amendment Act, 1952 and some provisions of IPC. Besides, it has certain provisions intended to effectively combat corruption among public servants. The salient features of the Act are as follows:a.The term ‘ Public Servant’ is defined in the Act. The definition is broader than what existed in the IPC.b.A new concept – ‘Public Dduty’ is introduced in the Act.c.Offences relating to corruption in the IPC have been brought in Chapter 3 of the Act, and they have been deleted from the Indian Penal Code.d.All cases under the Act are to be tried only by Special Judges.e.Proceedings of the court have to be held on a day-to-day basis.f.Penalties prescribed for various offences are enhanced.59Ethics in GovernanceLegal Framework for Fighting Corruptiong.CrPC is amended (for the purposes of this Act only) to provide for expeditioustrial {Section 22 of the Act provides for amended Sections 243, 309, 317 and 397 of CrPC}.h.It has been stipulated that no court shall stay the proceedings under the Act onthe grounds of any error or irregularity in the sanction granted, unless in the opinion of the court it has led to failure of justice.40i.Other existing provisions regarding presumptions, immunity to bribe-giver,investigation by an officer of the rank of DySP, access to bank records etc have been retained.3.2The Prevention of Corruption Act, 19883.2.1 Defining Corruption3.2.1.1 The Prevention of Corruption Act does not provide a definition of ‘Corruption’. Interestingly, Finland, which is the least corrupt nation according to the Transparency International’s Corruption Perception Index also does not have any formal definition of corruption in its laws. Even the United Nations Convention against Corruption does not provide a definition of corruption. It lays down in Article 5, some preventive anti-corruption policies and practices. They are:1. Each State Party shall, in accordance with the fundamentalprinciples ofits legalsystem, develop and implement or maintain effective, coordinated anti-corruption policies that promote the participation ofsociety and reflect the principles ofthe rule oflaw, proper management of public affairs and public property, integrity, transparency and accountability.2. Each State Party shall endeavour to establish and promote effective practices aimed at the prevention ofcorruption.3. Each State Party shallendeavour to periodically evaluate relevant legalinstruments and administrative measures with a view to determining their adequacy to preventand fight corruption.States Parties shall, as appropriate and in accordance with the fundamentalprinciples of theirlegalsystem, collaborate with each other and with relevantinternationaland regional organizations in promoting and developing the measures referred to in this Article. That collaboration may include participation in internationalprogrammes and projects aimed atthe prevention ofcorruption.3.2.1.2 The Prevention of Corruption Act, 1988, lists offences of bribery and other related offences and the penalties from Sections 7 to 15. These offences broadly cover acceptance of illegal gratification as a motive or reward for doing or forbearing to do any official act, or favouring or disfavouring any person; obtaining a valuable thing without consideration or inadequate consideration; and criminal misconduct involving receiving gratification, misappropriation, obtaining any pecuniary advantage to any person without any public interest, or being in possession of pecuniary resources or property disproportionate to his known sources of income. Attempts to commit such offences and abetment are also listed as offences, in keeping with the principles usually applied in criminal law. The accent is thus on consideration, gratification of all kinds and pecuniary advantage.3.2.1.3 However, experience of the past decades shows that such an indirect definition of corrupt practices is paradoxically restrictive and a whole range of official conduct, detrimental to public interest, is not covered by strong penal provisions. In particular, there are four types of official conduct which cause immense damage to public interest, which do not explicitly constitute violation of criminal law.3.2.1.4 The first and possibly the most important of these is gross perversion of the Constitution and democratic institutions, including, wilful violation of the oath of office. Constitutional functionaries have sometimes been found to indulge in such constitutional perversion out of partisan considerations or personal pique. In most such cases, there may be neither illegal consideration nor pecuniary advantage, nor any form of gratification involved. In some of those cases, the Supreme Court held individuals holding high office guilty of gross misconduct amounting to perversion of the Constitution. In such cases, except public opinion, political pressure and dictates of the conscience of the individual, there are no legal provisions to punish the perpetrators.3.2.1.5 The second such class of offences is abuse of authority unduly favouring or harming someone, without any pecuniary consideration or gratification. In such cases, often partisan interests, nepotism and personal prejudices play a role, though no corruption is involved in the restrictive, ‘legal’ sense of the term. Nevertheless, the damage done by such wilful acts or denial of one’s due by criminal neglect have profound consequences to society and undermine the very framework of ethical governance and rule of law.3.2.1.6 Third, obstruction or perversion of justice by unduly influencing law enforcement agencies and prosecution is a common occurrence in our country. Again in most such cases, partisan considerations, nepotism and prejudice, and not pecuniary gain or gratification, may be the motive. The resultant failure of justice undermines public confidence in the system and breeds anarchy and violence.6016140 Section 19(3)(b); The Prevention of Corruption Act, 1947Ethics in GovernanceLegal Framework for Fighting Corruption3.2.1.7 Finally, squandering public money, including ostentatious official life-styles, has become more common. In all such cases, there is neither private pecuniary gain nor specific gain or loss to any citizen. There is also no misappropriation involved. The public exchequer at large suffers and both public interest and citizens’ trust in government are undermined.3.2.1.8 It is generally believed that all these four types of wilful abuse of office are on the increase in our country at all levels and need to be firmly curbed if we are to protect public interest and our democratic system. Otherwise, public servants – elected or appointed – will be seen not as custodians of public interest and sentinels of democracy but as opportunists working for personal aggrandizement and pursuing private agendas while occupying public office.3.2.1.9 There is therefore need for classifying the following as offences under the Prevention of Corruption Act:?Gross perversion of the Constitution and democratic institutions amounting to wilful violation of oath of office?Abuse of authority unduly favouring or harming someone?Obstruction of justice?Squandering public money3.2.2 Collusive Bribery3.2.2.1 In any corrupt transaction, there are two parties - the bribe-giver and the bribe-taker. The offence of bribery can be classified into two categories. In one category the bribe giver is a victim of extortion, he is compelled to pay for a simple service, because if he doesnot submit to the extortionary demands of the public servant, he ends up losing much more than the bribe. The delays, harassment, uncertainty, lost opportunity, loss of work and wages - all resulting from non-compliance with demands for a bribe - are so great that the citizen is sucked into a vicious cycle of corruption for day-to-day survival. Besides, there is another category of cases where the bribe-giver and bribe-taker together fleece society, and the bribe-giver is as guilty or even more guilty than the bribe-taker. These are cases of execution of substandard works, distortion of competition, robbing the public exchequer, commissions in public procurement, tax evasion by collusion, and causing direct harm to people by spurious drugs and violation of safety norms. These two categories of corruption are also termed as ‘coercive’ and ‘collusive’ corruption respectively. With the rapidly growing economy, cases of coercive corruption are on the increase, and, at times, these often assume the magnitude of ‘serious economic offences’.3.2.2.2 Chapter III of the Prevention of Corruption Act lays down various offences and penalties. Section 7 makes acceptance of illegal gratification by a public servant for doing any official act an offence. Though giving bribe is not separately defined as an offence, the bribe-giver is guilty of the offence of ‘abetment’ and is liable for the same punishment as the bribe-taker.41 Section 24 of the Act, however, provides immunity from prosecution to a bribe-giver if he/she gives a statement in a court of law that he/she offered bribe. However, the Prevention of Corruption Act does not differentiate between ‘corecive’ and ‘collusive’ corruption.3.2.2.3 Systemic reforms are very effective in combating coercive corruption. Besides, even though the general conviction rate in cases of corruption is low, it is observed that the rate of conviction in cases of coercive corruption is more than in collusive corruption. The reason for this is, the bribe-giver is also the victim and because of the immunity provided to him under Section 24 of the Prevention of Corruption Act, he often comes forward to depose against the bribe-taker. Besides, the ‘trap cases’ by the vigilance machinery are quite effective in such cases. The same is not true for ‘collusive’ corruption. Getting conviction in these cases is extremely difficult as both, the bribe-giver and the bribe-taker collude and are beneficiaries of the transaction. The negative impact of collusive corruption is much more adverse and the government and often the society, at large, are the sufferers.3.2.2.4 The Commission is of the view that ‘collusive’ corruption needs to be dealt with by effective legal measures so that both the bribe-giver and the bribe-taker do not escape punishment. Also, the punishment for collusive corruption should be made more stringent. In cases of collusive corruption, the ‘burden of proof’ should be shifted to the accused.3.2.1.10 Recommendation:a.The following should be classified as offences under the Prevention ofCorruption Act:?Gross perversion of the Constitution and democratic institutions amounting to wilful violation of oath of office.?Abuse of authority unduly favouring or harming someone.?Obstruction of justice.?Squandering public money.6216341 Section 12 of The Prevention of Corruption ActEthics in GovernanceLegal Framework for Fighting Corruptionc.The punishment for all such cases of collusive bribery should bedouble that of other cases of bribery. The law may be suitably amended in this regard.3.2.2.7 Recommendations:a.Section 7 of the Prevention of Corruption Act needs to be amended to provide for a special offence of ‘collusive bribery’. An offence could be classified as ‘collusive bribery’ if the outcome or intended outcome of the transaction leads to a loss to the state, public or public interest.b.In all such cases if it is established that the interest of the state or public has suffered because of an act of a public servant, then the court shall presume that the public servant and the beneficiary of the decision committed an offence of ‘collusive bribery’.643.2.2.5 The basic principle of our criminal justice system is that every person is presumed to be innocent till he/she is proved guilty. In other words, the burden of proving the charges lies totally on the prosecution. However, the Indian Evidence Act itself provides certain exceptions to this principle. For Example, Section 113A of the Indian Evidence Act provides that “When the question is whether the commission ofsuicide by a woman had been abetted by herhusband or any relative ofher husband and it is shown that she had committed suicide within a period ofseven years from the date ofher marriage and thather husband or such relative ofherhusband had subjected her to cruelty, the courtmay presume, having regard to all the other circumstances ofthe case, thatsuch suicide had been abetted by her husband or by such relative of her husband”. Similarly, Section 13(1)(e) of the Prevention of Corruption Act stipulates that a public servant is said to commit the offence of criminal misconduct if he/she cannot satisfactorily account for the property in his/her possession, which is disproportionate to his/her known sources of income. It is therefore implied that the burden is on the accused public servant to justify his possessions in relation to the sources of income. Also Section 20 of the Prevention of Corruption Act stipulates that if it is proved that the accused public servant has accepted any gratification, the court is under an obligation to presume that the gratification was for a reward as mentioned in Section 7 and the burden of proof shifts to the accused.3.2.2.6 Section 7 of the Prevention of Corruption Act, therefore, needs to be amended to provide for a special offence of ‘collusive bribery’. An offence could be classified as ‘collusive bribery’ if the outcome or intended outcome of the transaction leads to a loss to the state, public or public interest. In all such cases if it is established that the interest of the state or public has suffered because of an act of a public servant, then the court shall presume that the public servant and the beneficiary of the decision committed an offence of ‘collusive bribery’. The punishment for all such cases should be increased to 10 years.3.2.3 Sanction for Prosecution3.2.3.1 Section 19 of the Prevention of Corruption Act provides that previous sanction of the competent authority is necessary before a court takes cognizance of the offences defined under Sections 7, 10, 11, 13 and 15 of the Act. The objective of this provision is to prevent harassment to honest public servants through malicious or vexatious complaints. The sanctioning authority is expected to apply his/her mind to the evidence placed before him/ her and be satisfied that a prima facie case exists against the accused public servant. Although the intention of this provision is clear, it has been argued that this clause has sometimes been used by a sanctioning authority to shield dishonest officials. There have also been cases where there have been inordinate delays in grant of such sanction. There have also been instances where unintentional defects in the grant of sanction has been used by the accused to challenge the sanction and have it set aside, thus nullifying the entire proceedings. The Commission has examined various aspects related to sanctions and is of the view that there are some areas requiring improvements, and this would need some amendments to the Law. These are dealt with in the following paras:3.2.3.1.1 Dispensing with sanction in cases where public servants have been trapped red-handed or in cases of possessing assets disproportionate to their known sources of income: There are a number of cases of public servants being caught red handed while demanding/accepting bribes. The omnibus protection given under Section 19 of the Prevention of Corruption Act sometimes comes in the way of bringing corrupt public servants to justice as often the sanction is delayed or denied. The intention of the legislation appears to be to provide adequate protection to public servants in the discharge of their legitimate official duties. This objective can well be served if this provision is limited to such cases where the alleged misconduct is directly connected with the discharge of official duties. Such a protection is not required for offences which are basically based on the direct evidence of:i.Demand or/and acceptance of bribes,ii.Obtaining valuable things without or with inadequate consideration, andiii.Cases of possession of assets disproportionate to the known source of income.Therefore, there is a case for excluding the protection given in the above mentioned circumstances.2165Ethics in GovernanceLegal Framework for Fighting Corruption3.2.3.1.2 Validity of sanction for prosecution: It has been found that sanctioning authorities are often summoned to adduce evidence on the sanction they had given, and this takes place several years later. A number of cases are discharged/acquitted on the grounds that the sanctioning authority had not applied its mind while giving the sanction. Moreover, this often happens after all the other evidences have been adduced in the trial!The objective of Section 19 of the Prevention of Corruption Act was to prevent prosecution without sanction of the competent authority. In many such cases, the issue of the validity of sanctions gets raised after the prosecution has adduced all evidence. This is not fair to the sanctioning authority who may have given this sanction several years earlier. It is also not fair to the accused who has undergone a major part of the prosecution process, particularly if the sanction is found to be untenable. Moreover, it has also been noted that sanctioning authorities are often not able to attend the court because of other official preoccupation and this also contributes to delay in concluding trial.The Commission feels that there is need for amending the Prevention of Corruption Act to ensure that sanctioning authorities are not summoned as witnesses and if a trial court desires to summon the sanctioning authority, it should record the reasons for doing so. This should be at the first stage, even before framing of charges by the court.3.2.3.1.3 Sanctioning authority for MPs and MLAs: Section 2 (definition) of the Prevention of Corruption Act does not explicitly include MPs or MLAs. This issue, whether elected representatives are public servants or not, came up for determination before various courts. The Supreme Court in P.V. Narasimha Rao v .State (CBI/SPE) held as follows:“ We think that the view of the Orissa High Court that a member of a Legislative Assembly is a public servant is correct. Judged by the test enunciated by Lord Atkin in Mc. Millanv Gust and adopted by Sikri, J. in Kanta Khaturia case, the position of a Member of Parliament, or of Legislative Assembly, is subsisting, permanent and substantive; it has an existence independent of the person who fills it and it is filled in succession by successive holders. The seat of each constituency is permanent and substantive. It is filled, ordinarily for the duration of the legislative term, by the successful candidate in the election for the constituency. When the legislative term is over, the seat is filled by the successful candidate at the next election. There is, therefore, no doubt in our minds that a Member ofParliament, or of a Legislative Assembly, holds an office and he is required and authorized thereby to carry out a public duty. In a word, a Member of Parliament or of a Legislative Assembly is a public servant for the purposes of the said Act”.The National Commission for Review of the Constitution (NCRWC) recommended as follows:“A second issue that was raised in this case concerned the authority competent to sanction prosecution against a member in respect ofan offence involving acceptance ofa consideration for speaking or voting in a particular manner or for not voting in either House ofParliament. A Member of Parliament is not appointed by any authority. He is elected by his or her constituency or by the State Assembly and takes his or her seat on taking the oath prescribed by the Constitution. While functioning as a Member, he or she is subject to the disciplinary control of the presiding officer in respect of functions within the Parliament or in its Committees. It would, therefore, stand to reason that sanction for prosecution should be given by the Speaker or the Chairman, as the case may be.The Commission is of the view that the Authority for according sanction for prosecution under Section 19 of the Prevention of Corruption Act, should be stipulated in case of elected representatives. This Authority, in case of Members of Parliament should be the Speaker or Chairman, as the case may be. A similar procedure may be adopted by State Legislatures.3.2.3.1.4 Protection to those persons who have ceased to be public servants at the time of taking cognizance of the offence by the court: Section 19(1) of the Prevention of Corruption Act reads as follows:“No court shall take cognizance of an offence punishable under Sections 7,10,11,13 and 15 alleged to have been committed by a public servant, except with the previous sanction,(a) in the case ofa person who is employed in connection with the affairs ofthe Union and is not removable from his office save by or with the sanction of the Central Government, ofthatGovernment;(b) in the case ofa person who is employed in connection with the affairs ofa State and is notremovable from his office save by orwith the sanction ofthe State Government, ofthatGovernment;(c) in the case ofany otherperson, ofthe authority competentto remove him from his office.”An issue has arisen whether such sanction would be necessary in case the accused is no longer a public servant on the day of taking of cognizance by the court. The Supreme Court has held that where the accused had ceased to be a public servant on the day the court took cognizance of the offence, the provisions of Section 6 (Prevention of Corruption Act, 1947) would not apply and the prosecution against him will not be vitiated by the lack of a previous sanction by the competent authority.662167Ethics in GovernanceLegal Framework for Fighting Corruptione.In all cases where the Government of India is empowered to grant sanctionfor prosecution, this power should be delegated to an Empowered Committee comprising the Central Vigilance Commissioner and the Departmental Secretary to Government. In case of a difference of opinion between the two, the matter could be resolved by placing it before the full Central Vigilance Commission. In case, sanction is required against a Secretary to Government, then the Empowered Committee would comprise the Cabinet Secretary and the Central Vigilance Commissioner. Similar arrangements may also be made at the State level. In all cases the order granting sanction for prosecution or otherwise shall be issued within two months. In case of refusal, the reasons for refusal should be placed before the respective legislature annually.The objective of this provision was to provide protection to the public servant from malicious prosecution, and his/her status at the time of the commission of the alleged offence is relevant rather than his/her status at the time of taking cognizance of the offence by the court. The interpretation given by the courts may lead to a situation where a person who superannuates, or resigns from service would not get the protection of this provision, even if the alleged offence was committed while he/she was in service. Therefore, the law should be amended so that retired public servants can also get the same level of protection, as a serving public servant.3.2.3.1.5 Expediting sanctions: It has been represented to the Commission that many a time there is substantial delay in obtaining sanction for prosecution from government, with the result that corrupt officials are often not brought to book. The Commission is of the view that the procedure for granting sanction, where government is the competent authority, needs to be streamlined so that there is no delay in processing such cases. The Commission would like to recommend that at the level of the Union Government, the sanction for prosecution should be processed by an Empowered Committee consisting of the Central Vigilance Commissioner and the Departmental Secretary to Government42. In case of a difference of opinion between the two, it could be resolved by placing the subject before the full Central Vigilance Commission. In case, sanction is sought against a Secretary to Government, the Empowered Committee would comprise the Cabinet Secretary and the Central Vigilance Commissioner.3.2.3.2 Recommendations:a.Prior sanction should not be necessary for prosecuting a public servant who has been trapped red-handed or in cases of possessing assets disproportionate to the known sources of income.b. The Prevention of Corruption Act should be amended to ensure that sanctioning authorities are not summoned and instead the documents can be obtained and produced before the courts by the appropriate authority.c.The Presiding Officer of a House of Legislature should be designated as the sanctioning authority for MPs and MLAs respectively.d. The requirement of prior sanction for prosecution now applicable to serving public servants should also apply to retired public servants for acts performed while in service.6842 Section 19(1) stipulates that sanction should be provided by the authority competent to remove the accused public servant. This would necessitate an amendment to Section 19.3.2.4 Liability of Corrupt Public Servants to Pay Damages3.2.4.1 While corrupt acts of a public servant are liable for punishment under the Prevention of Corruption Act, there is no civil liability for the wrong doer nor is there a provision for compensation to the person/organization which has been wronged or has suffered damage because of the misconduct of the public servant. The Constitutional Review Committee had recommended the enactment of a comprehensive law to provide for the creation of liability in cases where public servants cause loss to the State by malafide actions or omissions (para 6.17).3.2.4.2 The Supreme Court did impose exemplary damages in cases of improper allotment of petrol pumps43. However, this order was later reversed in a Review Petition44 in which the Court held that though exemplary damages could be awarded against public servants it was not justified in these cases. The Commission is of the view that in cases where public servants cause loss to the State or citizens by their corrupt acts, they should be made liable to make good the loss so caused, and in addition, should be made liable for damages. This may be provided by insertion of a chapter in the Prevention of Corruption Act. The circumstances of cases where such damages would be payable, the principles of assessing the damages and the criteria for awarding the damages to the persons who have been wronged should be clearly spelt out. It should also be ensured that adequate safeguards are provided so that bona fide mistakes should not end in award of such damages, otherwise public servants would be discouraged from taking decisions in a fair and expeditious manner.43 (1996) 6 Supreme Court Cases 59344 (1999) 6 Supreme Court Cases 6672169Ethics in GovernanceLegal Framework for Fighting Corruption3.2.4.3 Recommendation:a.In addition to the penalty in criminal cases, the law should provide thatpublic servants who cause loss to the state or citizens by their corrupt acts should be made liable to make good the loss caused and, in addition, be liable for damages. This could be done by inserting a chapter in the Prevention of Corruption Act.3.2.5 Speeding up Trials under the Prevention of Corruption Act:3.2.5.1 The average time taken by trial courts in the disposal of cases has increased over the years. At the end of 1996, the number of cases pending trial were 8225 whereas at the end of the year, the number of cases pending trial rose to 12703. In the year 2005 the number of cases registered were 3008, 2162 cases were chargesheeted and in 2048 cases, trials were completed. (These figures pertain to cases taken up by the State Anti-Corruption Wings, extracted from ‘Crime in India’ published by the National Crime Records Bureau).3.2.5.2 A major cause of delay in the trial of cases is the tendency of the accused to obtain frequent adjournments on one plea or the other. There is also a tendency on the part of the accused to challenge almost every interim order passed even on miscellaneous applications by the trial court, in the High Court and later, in the Supreme Court and obtaining stay of the trial. Such types of opportunities to the accused need to be restricted by incorporating suitable provisions in the CrPC. It may also be made mandatory for the judges to examine all the witnesses summoned and present on a given date. Adjournments should be given only for compelling reasons.3.2.5.3 In order to ensure speedy trial of corruption cases, the Prevention of Corruption Act made the following provisions:a.All cases under the Act are to be tried only by a Special Judge.b.The proceedings of the court should be held on a day-to-day basis.c.No court shall stay the proceedings under the Act on the grounds of any error or irregularity in the sanction granted, unless in the opinion of the court it has led to failure of justice.3.2.5.4 The experience with the trial of cases under the Act, has been disappointing in spite of the provisions which were considered as path-breaking at the time. Although the judges trying corruption cases under the Prevention of Corruption Act have been declared as SpecialJudges, they have been saddled with numerous other non-corruption cases with the result that trials in corruption cases get delayed.3.2.5.5 The Commission feels that there is need to fix a time limit for various stages of trial in corruption cases. This could be done through an amendment to the CrPC. More importantly, the existing provisions for conducting trials on a day-to-day basis should be meticulously adhered to.3.2.5.6 Recommendations:a.A legal provision needs to be introduced fixing a time limit for variousstages of trial. This could be done by amendments to the CrPC.b. Steps have to be taken to ensure that judges declared as Special Judges under the provisions of the Prevention of Corruption Act give primary attention to disposal of cases under the Act. Only if there is inadequate work under the Act, should the Special Judges be entrusted with other responsibilities.c.It has to be ensured that the proceedings of courts trying cases under thePrevention of Corruption Act are held on a day-to-day basis, and no deviation is permitted.d. The Supreme Court and the High Courts may lay down guidelines to preclude unwarranted adjournments and avoidable delays.3.3 Corruption Involving the Private Sector3.3.1 According to the Bribe Payers Index 2006 of Transparency International, businesses from India, China and Russia, who are at the bottom of the index, had the greatest propensity to pay bribes. This raises the issue of how corruption in private bodies should be dealt with.3.3.2 Corruption in the private sector does not come under the purview of the Prevention of Corruption Act. However, if the private sector (or any person engaged by them) is involved in bribing any public authority then he/she is liable to be punished for the offence of abetment of bribery under the Prevention of Corruption Act. A large number of public services, which were traditionally done by government agencies, are being entrusted to non-government agencies. In such cases, persons engaged by the private agency replace the role of erstwhile public servants. It is therefore necessary to bring such agencies within the fold of the Prevention of Corruption Act. Also, a large number of Non-Governmental Organizations receive70271Ethics in GovernanceLegal Framework for Fighting Corruptionsubstantial aid from government. As these agencies spend public money it would be desirable that persons engaged by such organizations be deemed to be public servants for the purpose of the Prevention of Corruption Act.3.3.3 Article 12 of UN Convention against Corruption, to which India is a signatory, however, deals with corruption in the private sector:1. Each State Party shall take measures, in accordance with the fundamentalprinciples of its domestic law, to prevent corruption involving the private sector, enhance accounting and auditing standards in the private sector and, where appropriate, provide effective, proportionate and dissuasive civil, administrative or criminal penalties for failure to comply with such measures.2.Measures to achieve these ends may include, inter alia:(a) Promoting cooperation between law enforcementagencies and relevant private entities;(b) Promoting the development ofstandards and procedures designed to safeguard the integrity ofrelevant private entities, including codes ofconduct for the correct, honourable and proper performance ofthe activities ofbusiness and allrelevant professions and the prevention ofconflicts ofinterest, and forthe promotion ofthe use ofgood commercialpractices among businesses and in the contractualrelations ofbusinesses with the State;(c) Promoting transparency among private entities, including, where appropriate, measures regarding the identity of legal and natural persons involved in the establishment and management ofcorporate entities;(d) Preventing the misuse ofproceduresregulating private entities, including procedures regarding subsidies and licenses granted by public authorities for commercial activities;(e) Preventing conflicts ofinterest by imposing restrictions, as appropriate and for a reasonable period oftime, on the professional activities offormer public officials or on the employment ofpublic officials by the private sectoraftertheir resignation or retirement, where such activities or employment relate directly to the functions held or supervised by those public officials during their tenure; and(f) Ensuring that private enterprises, taking into account their structure and size, have sufficient internal auditing controls to assistin preventing and detecting acts of corruption and that the accounts and required financial statements of such private enterprises are subjectto appropriate auditing and certification procedures.3.In order to prevent corruption, each State Party shall take such measures as may benecessary, in accordance with its domesticlaws and regulations regarding the maintenance of books and records, financial statement disclosures and accounting and auditing standards, to prohibit the following acts carried out for the purpose ofcommitting any of the offences established in accordance with this Convention:(a) The establishmentofoff-the-books accounts;(b) The making ofoff-the-books or inadequately identified transactions;(c) The recording ofnon-existentexpenditure;(d) The entry ofliabilities with incorrect identification oftheir objects;(e) The use offalse documents; and(f) The intentionaldestruction ofbookkeeping documents earlier than foreseen by the law.4. Each State Party shall disallow the tax deductibility ofexpenses that constitute bribes, the latterbeing one ofthe constituent elements ofthe offences established in accordance with articles 15 and 16ofthis Convention and, where appropriate, otherexpenses incurred in furtherance ofcorrupt conduct.3.3.4 The Prevention of Bribery Ordinance (PBO) of Hong Kong deals specifically with corruption in the private sector. For example, Section 9 of PBO safeguards the interests of private companies by protecting employers from employees who are corrupt. Section 9 also prohibits an agent from soliciting or accepting an advantage without his principal’s permission when conducting his principal’s affairs or business.3.3.5 In India, the Companies Act, 1956 provides the statutory framework which governs the internal processes of a Company. The Company is a juridical person whose internal processes are determined by the Companies Act and its Articles of Association. In case of non-compliance, the penal provisions are invoked against the Company and its officers in default. The Companies Act, 1956 contains penal provisions against criminal offences by companies and their directors and officers. Though the offence of corruption or bribery is not specified under the Companies Act, 1956, instances of wrong doing by722173Ethics in GovernanceLegal Framework for Fighting CorruptionCompanies and their officers are addressed through the mechanisms of Accounts and Audit (Section 211), Inspection under Section 209A, Technical Scrutiny of Balance Sheet (Section 234), Investigation under Section 235/237 or Section 247, special audit under Section 233A, reference to Company Law Board (CLB) under Section 388B etc. Besides, Companies are required to have audit committees of the Board of Management to look into various aspects related to financial propriety. The Commission feels that corruption in the private sector should be addressed by effective enforcement of ‘Regulations on Corporate Governance’.3.3.6 The Commission is further of the view that corruption within the private sector should be tackled through the effective enforcement of existing laws and regulations. Bringing the activities of the entire private sector within the fold of the Prevention of Corruption Act is neither desirable nor practical. (‘Serious Economic Offences’ is dealt with later in this Chapter in para 3.7)At present, for attachment and forfeiture of illegally acquired property of public servants the provisions of the Criminal Law Amendment Ordinance, 1944 are invoked. Under this Ordinance, there is a provision for interim attachment of the property illegally acquired. The Special Judge is empowered to do so based on an application by an authorized person. Depending upon the outcome of the criminal case, the attached property is either forfeited or released.3.4.3 Another shortcoming in the existing provisions is that the procedure for attachment can start only after the court has taken cognizance of the offence. In actual situations, this may be too late as the accused may get enough time to hide or adjust his/her ill gotten wealth. Moreover, under the existing provisions, the State or the Union Government has to authorize the filing of a request seeking attachment. This could also be time consuming.3.4 Confiscation of Properties Illegally Acquired by Corrupt Means3.4.4 In the case of DDA v Skipper Construction Company (private limited), the Supreme Court observed:“A law providing for forfeiture ofproperties acquired by holders ofpublic offices by indulging incorrupt and illegal acts and deals is a crying necessity in the present state ofour society”.3.4.5 The Law Commission in its 166`1' Report (1999) observed as follows:“ The Prevention of Corruption Act has totally failed in checking corruption. In spite of the fact that India is rated as one of the most corrupt countries in the world, the number of prosecutions and more so the number of convictions are ridiculously low. A corrupt Minister or a corrupt top civil servant is hardly ever prosecuted under the Act, and in the rare event of his/her being prosecuted, the prosecution hardly reaches conclusion. At every stage there will be revisions and writs to stall the process.”3.3.7 Recommendations:a. The Prevention of Corruption Act should be suitably amended to include in its purview private sector providers of public utility services.b. Non-Governmental agencies, which receive substantial funding, should be covered under the Prevention of Corruption Act. Norms should be laid down that any institution or body that has received more than 50% of its annual operating costs, or a sum equal to or greater than Rs 1 crore during any of the preceding 3 years should be deemed to have obtained ‘substantial funding’ for that period and purpose of such funding.3.4.1 Prosecution and subsequent conviction of corrupt public servants has not been commensurate with the extent of corruption. As mentioned earlier, the level of proof required and the procedural hurdles have ensured that a large number of corrupt public servants are not convicted. Even worse, they often flaunt their ill-gotten wealth with impunity. It is necessary that apart from criminal prosecution, the corrupt public servant should also be denied the ownership of his/her ill gotten wealth.3.4.2 The Prevention of Corruption Act provides for confiscation of assets of public servants in excess of their known sources of income. However, the provision has proved inadequate because such forfeiture is possible only on conviction for the relevant offences.3.4.6 In the same Report, the Law Commission had suggested enactment of a law for forfeiture of property of corrupt public servants and a Bill titled ‘The Corrupt Public Servants (Forfeiture of Property)’ was annexed. The Report is pending consideration of the Government since February 1999. The relevant provision of the Bill reads as follows:“where any person holds any illegally acquired property in contravention of the provisions of sub-section (1), such property shallbe liable to be forfeited to the Central Governmentin accordance with provisions ofthe Act”.3.4.7 Under the draft Bill, a public servant is prohibited from holding any ‘illegally acquired property’, and it is provided that such property shall be liable to be forfeited to the742175Ethics in GovernanceLegal Framework for Fighting Corruptiongovernment. Powers of forfeiture are proposed to be given to the Competent Authority (CVC). The provisions of the proposed Bill regarding forfeiture are in addition to the provision relating to conviction for a minimum period of seven years, which may extend up to fourteen years. The provisions of the proposed Bill apply not only to the public servant but also to every person who is a “relative” of the public servant or an “associate” of such person or the holder of any property which was at any time previously held by the public servant, unless such holder proves that he was a transferee in good faith for adequate consideration. It is also stipulated in the draft Bill that the burden of proving that the property sought to be forfeited has not been acquired illegally, is on the accused public servant. As the proceedings would be of a civil nature, the level of proof would not be as stringent as in a criminal trial.3.4.8 The Commission notes that the Jammu and Kashmir Legislature has passed ‘The Prevention of Corruption (Amendment) Act, 2006’. This Act provides for seizure and forfeiture of properties of a public servant that have been acquired by acts of omission and commission which constitute an offence of criminal misconduct under Section 5 of the Prevention of Corruption Act. The initial powers of seizure have been given to the Investigating Officer. However, the seizure order made by the Investigating Officer has to be placed before a ‘Designated Authority’ within 48 hours for confirmation or otherwise. The Designated Authority is notified by the State Government and is an officer not below the rank of Secretary to Government. An appeal against the order of the Designated Authority lies with the Special Court. The Special Court if satisfied about such seizure, may order forfeiture of such property. Thus, the scope of the Jammu and Kashmir Prevention of Corruption (Amendment) Act 2006, is somewhat limited as compared to the draft Bill suggested by the Law Commission. Moreover, the Act of Jammu and Kashmir provides for confiscation only on conviction.3.4.9 The Commission is of the view that for confiscation of the property of a public servant convicted for possession of disproportionate assets, the law should shift the burden of proof to the public servant who is convicted. The presumption, in such cases, should be that the disproportionate assets found in the possession of the public servant were acquired by him though corrupt means and a proof of preponderance of probability should be sufficient for confiscation of property. These requirements are adequately met in the draft Bill proposed by the Law Commission.3.5 Prohibition of ‘Benami’45 Transactions3.5.1 The Law Commission, in its 57th and 130th Reports, had recommended enactment of a legislation prohibiting Benami transactions and acquiring properties held Benami. A law entitled The Benami Transactions (Prohibition) Act, 1988 was passed in 1988. The Act precludes the person who acquired the property in the name of another person from claiming it as his own. Section 3 of the Act prohibits Benami transactions while Section 4 prohibits the acquirer from recovering the property from the Benamidar.3.5.2 Section 5 of the Act permits acquisition of property held benami. It states“(1) Allproperties held benamishallbe subject to acquisition by such authority, in such manner and after following such procedure as may be prescribed.(2) For the removalofdoubts, it is hereby declared that no amount shallbe payable for the acquisition ofany property under sub-section (1)”.3.5.3 Unfortunately, in the last 18 years, Rules have not been prescribed by the government for the purposes of sub-section (1) of Section 5, with the result that the government is not in a position to confiscate properties acquired by the real owner in the name of his benamidars. The wealth amassed by corrupt public servants is often kept in ‘Benami’ accounts or invested in properties in others’ names. Strict enforcement of the the Benami Transactions (Prohibition) Act, 1988, could unearth such properties and make property accumulation difficult for corrupt officers and also work as a deterrent for others.3.6 Protection to Whistleblowers3.6.1 Whistleblowers play a crucial role in providing information about corruption. Public servants who work in a department/agency know the antecedents and activities of others in their organization. They are, however, often unwilling to share the information for fear of reprisal. There is a very close connection between the public servant’s willingness to disclose corruption in his organization and the protection given to him and his/her identity. If adequate statutory protection is granted, there is every likelihood that the government would be able to get substantial information about corruption.The term “whistleblowing” itself is a relatively recent addition to our lexicon. In the United States, in the post-Watergate era, after the trials and tribulations of Daniel Ellsberg, the man who “blew the whistle” on the so called3.5.4 Recommendation:a.Steps should be taken for immediate implementation of the BenamiTransactions (Prohibition) Act, 1988.3.4.10 Recommendation:a.The Corrupt Public Servants (Forfeiture of Property) Bill as suggestedby the Law Commission should be enacted without further delay.762177'S ‘Benami’ is a Hindi word meaning ‘without name’. It is commonly used to denote immoral transfers of property in names of others or even fictitious names, with an intention to escape from certain laws.Ethics in GovernanceLegal Framework for Fighting CorruptionBox 3.1: The WhistleblowersManjunath Shanmugam working with Indian Oil Corporation (IOC) was a graduate of the Indian Institute of Management, Lucknow. He refused bribes and ignored threats to his life in his fight against adulteration by the petrol pump owners. He paid the price. He was shot dead on 19" November, 2005 allegedly at the behest of corrupt petrol pump owners.Satyendra Dubey, working with the National Highways Authority of India (NHAI), exposed the rampant corruption in construction of roads. He was also found dead on 27r" November, 2003.?Acts of harassment or victimization of or retaliation against, a whistleblower should be criminal offences with substantial penalty and sentence.“Pentagon papers”, whistleblowing has not only been protected by statute but is also encouraged as an ethical duty on the part of the citizens. Furthermore, after the spectacular collapse of Enron and WorldCom, the US Congress passed the Sarbanes-Oxley Act of 2002, granting sweeping protection to whistleblowers in publicly traded companies. Anyone retaliating against a corporate whistleblower can now be imprisoned for up to 10 years46.3.6.2 Laws providing such protection exist in the UK, the USA, Australia and New Zealand. The UK Public Interest Disclosure Act, 1998, the Public Interest Disclosure Act, 1994 of Australia, the Protected Disclosure Act, 2000 of New Zealand, and the Whistle blowers Protection Act, 1984 of USA are legislations providing protection to whistleblowers. All these laws generally provide for preserving the anonymity of the whistleblower and safeguarding him/her against victimization within the organization.3.6.3 The Law Commission in its 179th Report has proposed a Public Interest Disclosure (Protection of Informers) Bill, which provides protection to whistleblowers. The Bill has provisions for providing safeguards to the whistleblowers against victimization in the organization. It also has a provision that the whistleblower may himself seek transfer in case he apprehends any victimization in the current position. In order to ensure protection to whistleblowers, it is necessary that immediate legislation may be brought on the lines proposed by the Law Commission.ac Source: Raghu Dayal-“Whistleblowers need to be protected”-ET: 26-12-063.7 Serious Economic Offences3.7.1 Economic Offences, called frauds in common parlance (the term itself has been defined in the Indian Contract Act47) have become a matter of concern because of an increasing trend both in terms of size and complexity. This worrying trend has its roots in the rapid pace at which the Indian economy is growing and the financial sector is diversifying. The impact of some of these crimes is widespread and can cause much damage to the economy seriously affecting the public at large and sometimes even becoming a threat to national security. These economic offences include tax evasion, counterfeiting, distorting share markets, falsification of accounts, frauds in the banking system, smuggling, money laundering, insider trading and even bribery. In a world of increasing financial activity, with new instruments for such activity and new technology to facilitate it, the present laws are not adequate to combat new economic crimes.3.7.2 There are a large number of laws governing economic offences. These include the Indian Penal Code (IPC); the Banking Regulation Act, 1949; the Companies Act, 1956; the Customs Act, 1962; the Income Tax Act, 1961; the Essential Commodities Act, the Conservation of Foreign Exchange and the Prevention of Smuggling Activities Act, the Foreign Exchange Management Act, the Prevention of Food Adulteration Act, the Indian Patents Act etc. In a large number of these Acts, investigations are carried out by the police. Some states have also established Economic Offences Wings to guide such investigations. In respect of some Central Laws, investigations are taken up by designated agencies under the law. The Central Bureau of Investigation also takes up cases by way of referral by other authorities or on directions by the government or the courts. It is generally felt that the punishment provided under the existing laws is not enough of a deterrent; as a result these offences have become a high gain low risk activity.47 Section 17 of the Contract Act defines fraud as follows: “Fraud means and includes any of the following acts committed by a party to a contract, with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract: (a) suggestion as a fact, of that which is not true, by one who does not believe it to be true; (b) active concealment of a fact by one having knowledge of belief of that fact; (c) a promise made without any intention of performing it; (d) any other fact fitted to deceive; (e) any such act or omission as the law specifically describes to be fraudulent”.3.6.4 Recommendation:a.Legislation should be enacted immediately to provide protection towhistleblowers on the following lines proposed by the Law Commission:?Whistleblowers exposing false claims, fraud or corruption should be protected by ensuring confidentiality and anonymity, protection from victimization in career, and other administrative measures to prevent bodily harm and harassment.?The legislation should cover corporate whistleblowers unearthing fraud or serious damage to public interest by willful acts of omission or commission.78Box 3.2: The Need for a Serious Frauds OfficeInvestigations into the recent stock market ‘scam’ have underscored the limitations of a fragmented approach in our enforcement machinery. Though a number of agencies investigated the highly publicised fraud, none really got the holistic picture of what really happened. The chances of effectively punishing the fraudsters, in such a situation, are very slim.Financial frauds in the corporate world are very complex in nature, and can be properly investigated only by a multidisciplinary team of experts; there are limits to what even gifted amateurs can achieve, especially when they do not have a common platform and different enforcement agencies concerned play a lone hand from their respective turfs. There is a need to provide for a more concerted approach, perhaps by creating an office along the lines of the Serious Fraud Office (SFO) in the United Kingdom.Source: Report of the Committee on Corporate Audit and Governance (Naresh Chandra Committee, 2002)2179Ethics in GovernanceLegal Framework for Fighting Corruption3.7.3 Of late, economic offences, have been drawing more attention because these are being used to fund criminal and even terrorist activities. In 1993, the N.N. Vohra Committee had revealed the powerful nexus between those who violated the economic laws, politicians and government functionaries, which resulted in protection of large-scale economic crimes. That Committee had also pointed out that in those cases, which became public, only nominal action was taken against the offenders.3.7.4 Developed countries have responded to the challenge of such offences by constituting a specialized machinery to deal with serious economic crimes. In England and Wales, the Serious Frauds Office (SFO) was formed in April 1988, in response to the need for a unified organisation for the investigation and prosecution of serious fraud cases. The Office is headed by the Director who is appointed by and accountable to the Attorney General. This office has multi-disciplinary teams with expertise in law, accountancy, investigation etc. Investigations are led by Case Controllers who are generally experienced lawyers. The SFO derives powers under the Criminal Justice Act, 1987, and also prosecutes its own cases, without having to refer to the Crown Prosecution Service (CPS). It needs to be mentioned that the Criminal Justice Act, 1987 does not define ‘serious fraud’. The Director of the SFO is empowered under Section 1(3) of the Act to “investigate any suspected offence which appears to him on reasonable grounds to involve serious or complex fraud”.3.7.5 In New Zealand, the Serious Fraud Office (SFO) constituted under the SFO Act, detects, investigates and prosecutes cases of serious fraud. The SFO Act, 1990 gives the SFO powers to obtain evidence during the course of its investigations. The SFO is headed by a Director who is empowered to investigate serious frauds. In determining what constitutes a serious fraud, the Director has to consider- (a) The suspected nature and consequences of the fraud; (b) The suspected scale of the fraud; (c) The legal, factual, and evidential complexity of the matter; (d)Any relevant public interest considerations.3.7.6 The Mitra Committee Report (The Report of the Expert Committee on Legal Aspects of Bank Frauds 2001) submitted to the Reserve Bank of India pointed out that criminal jurisprudence in India based on proof beyond doubt was too weak an instrument to control bank frauds. The Committee recommended a two-pronged strategy for systemic reforms through strict implementation of Regulator’s Guidelines and obtaining compliance certificates. Second, a punitive approach by defining scams as a serious offence with the burden of proof shifting to the accused and with a separate investigative authority for serious frauds, and special courts and prosecutors for trying such cases was recommended. The Committee suggested the creation of a Statutory Fraud Committee under the Reserve Bank of India. It also recommended a legislation called “The Financial Fraud (Investigation, Prosecution, Recovery and Restoration of Property) Bill, 2001.” In its proposed draft,provisions have been made for constitution of a Financial Fraud Enquiry Committee and a Bureau of Investigation of Financial Fraud. An amendment has been suggested in the I.P.C. by insertion of a new chapter XXIV containing Sec.512 and 513(a). The proposed Section 512 defines ‘Financial Fraud’ to mean and include “any of the following acts committed by a person or with his connivance, or by his agent, in his dealings with any bank or financial institution or any other entity holding public funds:?the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;?active concealment of a fact by one having knowledge or belief of the fact;?a promise made without any intention of performing it;?any other act fitted to deceive;?any such act or omission as the law specially declares to be fraudulent provided that whoever acquires, possesses or transfers any proceeds of financial fraud or enters into any transaction which is related to proceeds of fraud either directly or indirectly or conceals or aids in the concealment of the proceeds of financial fraud, commits financial fraud.”3.7.7 The proposed Section 513(a) provides for punishment for financial fraud. Following the Davie Committee Report of England, Explanation (2) to the proposed Section 513(a) provides guidelines for classifying serious financial frauds. Thus, “if and only if, the case:?involves a sum exceeding Rs. Ten crores; or?is likely to give rise to widespread public concern; or?its investigation and prosecution are likely to require high specialized knowledge of financial market or of the behaviour of banks or other financial institutions; or?involves significant international dimensions; or?in the investigation of which there is requirement of legal, financial, investment and investigative skills to be brought together; or?which appear to be complex to the regulators, banks, Union Government or any financial institution;8081Ethics in GovernanceLegal Framework for Fighting Corruptioncan it be classified as ‘financial fraud’ for the express purposes of the proposed Act. This draft Act also provides for establishment of special courts and amendment to the Indian Evidence Act, 1872 relating to trial of cases pertaining to financial frauds.3.7.8 The Committee also recommended the inquisitorial system of proof in the evidential process. For this, they have suggested amendment of the Indian Evidence Act so that mens rea could be presumed by the court.3.7.9 The Naresh Chandra Committee on Corporate Audit and Finance recommended in 2002:1. A Corporate Serious Fraud Office (CSFO) should be setup in the DepartmentofCompany Affairs with specialists inducted on the basis oftransfer/deputation and on special term contracts.2.This should be in the form ofa multi-disciplinary team that not only uncovers the fraud, butis able to directand supervise prosecutions under various economic legislations through appropriate agencies.3.There should be a Task Force constituted for each case undera designated team leader.4. In the interest ofadequate control and efficiency, a Committee headed by the Cabinet Secretary should directly oversee the appointments to, and functioning ofthis office, and coordinate the work ofconcerned departments and agencies.5. Later, a legislative framework, along the lines ofthe SFO in the UK, should be set up to enable the CSFO to investigate all aspects of the fraud, and direct the prosecution in appropriate cases.3.7.10 A Serious Frauds Investigation Office (SFIO) was set up in 2003 as a specialised multi-disciplinary organisation to deal with cases of serious corporate frauds. It has experts from the financial sector, capital market, banks, accountancy, forensic audit, taxation, law, information technology, company law, customs and investigation. SFIO presently carries out investigations under the provisions of Sections 235 to 247 of the Companies Act. Its Charter includes forwarding of its investigation reports on violations of the provisions of other Acts to the concerned agencies for prosecution/appropriate action.3.7.11 The Expert Committee on Company Law, headed by Dr. Jamshed J. Irani (2004) had observed:“In addition to investigation, there is also a need to take up prosecution ofthe concerned corporate and officers in default in the appropriate forum. For this purpose, procedures would need to be simplified to enable SFIO to move swiftly and purposefully forsuccessfulprosecution ofthe guilty. To enable this, there are certain ambiguities in the law which would have to be removed to enable SFIO to take up prosecution under the IPC in addition to violation ofthe Companies Act. The Committeerecommendsthata separate statute may beframedto regulate and guide the functioning ofthe (SFIO) and to address such issues to enable successfulinvestigation and prosecution ofcases ofcorporate fraud. Therefore, presence ofSFIO may be recognized in the Companies Act. Officers ofthe SFIO may also be authorised by Central Government to file complaints for offences under CriminalProcedure Code in addition to for offences under the Companies Act.The Committee took note of the fact that corporate frauds were generally the result of very complex and intricate series ofactions. It may not be easy for the law enforcementagencies atthe State Government level to respond effectively to such situations in the absence ofpropertraining and developmentofskills ofthe concerned law enforcing personnelfor such investigations. The Committee recommends that the SFIO, set up by the Central Government, should serve as a NodalAgency fordevelopmentofsuch expertise and its dissemination to the State Governments, who may also be encouraged to setup similar organisations and provide requisite specialization as a part oftheir action against economic offences. This would also enable better coordination in respect ofprosecution ofoffences underIPC”3.7.12 The West Bengal National University of Juridical Sciences, Kolkata had also undertaken a project on drafting of an Economic Offences Code for India. The draft code, entitled ‘Serious Economic Offences (Prevention, Control, Investigation and Trial) Act’ defines ‘Serious Economic Offence’ to mean “any dishonest, fraudulent or illegal transaction involving money or property of the value exceeding Rupees Five Crores or such other amount as may be prescribed, which –a)has serious impact on the national economy or the national security of India, orb)affects, or is likely to prejudicially affect, the social, economic or political relationof India with other nations, orc)has adversely affected large number of citizens of India as victims of the offence,ord)involves person holding high positions of public trust or public duty ingovernment, public or private undertakings, including banks and other financial institutions or other body corporates, and shall also include such offence committed by persons within India or in any place beyond India.”8283Ethics in GovernanceLegal Framework for Fighting Corruption84establishment of a new and adequately empowered Serious Frauds Office (SFO) which would, necessarily, subsume the existing SFIO. The Serious Frauds Office thus constituted should be under the control and supervision of a Serious Frauds Monitoring Committee chaired by the Cabinet Secretary with representatives from the financial sector, capital and futures markets, commodity markets, accountancy, direct and indirect taxation, forensic audit, criminal and company law, investigation and information technology. The SFO should be empowered to take up cases suo motu or upon reference by the Union or the State Governments.3.7.18 As getting conviction for economic offences under the existing laws is difficult and moreover, because these offences many times generate funds for other organized crimes and terrorist activities, the Commission agrees with the suggestion made by the Mitra Committee that for ‘Serious Frauds’ the Court may presume the existence of mens rea.3.7.19 Recommendations:a. A new law on ‘Serious Economic Offences’ should be enacted.b. A Serious Economic Offence may be defined as :i.One which involves a sum exceeding Rs 10 crores; orii.is likely to give rise to widespread public concern; oriii. its investigation and prosecution are likely to require highly specialized knowledge of the financial market or of the behaviour of banks or other financial institutions; oriv. involves significant international dimensions; orv.in the investigation of which there is requirement of legal, financial, investment and investigative skills to be brought together; orvi. which appear to be complex to the Union Government, regulators, banks, or any financial institution.c. A Serious Frauds Office (SFO) should be set up (under the new law), to investigate and prosecute such offences. It should be attached to the Cabinet Secretariat. This office shall have powers to investigate and prosecute all such cases in Special Courts constituted for this purpose. The SFO should be staffed by experts from diverse disciplines853.7.13 The draft Bill envisages the constitution of a high-powered and autonomous body called the ‘Commission for the Control of Serious Economic Offences’ to ensure effective implementation of this law. Establishment of special courts and special rules of procedure and evidence relating to investigation and trial of serious economic offence have also been provided.3.7.14 During the hearing of a PIL filed in the Supreme Court by an NGO, Common Cause, the Reserve Bank of India suggested the creation of an independent and insulated Serious Frauds Office. This PIL was in relation to the mammoth size of non-performing assets plaguing the banking sector and the frequency of economic offences. While appreciating the suggestion, the Hon’ble Supreme Court has asked the Union Government to respond to the idea on priority basis.483.7.15 The Commission had discussions on this issue with the Reserve Bank of India, the Security and Exchange Board of India and the ICICI Bank. SEBI is of the view that given the absence of an adequate number of persons of appropriate level with skill sets in the area of financial investigation, it might be worthwhile to strengthen existing institutions rather than create new institutions. ICICI Bank is of the view that strong investigation, law enforcement and judicial systems would go a long way in the development of a an effective fraud control mechanism in the financial system; and the Economic Offences Wing and the Cyber Crime wing in the bank are lending specialization and expertise in dealing with frauds/crimes related to Banking. They also stated that a similar specialization and dispensation in the Judiciary will be of immense help in trying cases of frauds in the financial system. RBI was of the view that the recommendations of the Mitra Committee should be implemented.3.7.16 The Commission is of the view that the current provisions in the Banking Regulation Act, 1949; SEBI Act, 1992 and the Companies Act, 1956 are not strong enough to prevent large scale fraudulent practices nor are they deterrent enough. The present regulatory bodies like RBI, SEBI and Department of Company Affairs are not adequately empowered to address criminality involved in such scams and frauds. There is, therefore, need for a separate institution for investigation and prosecution of serious financial fraud cases and recovery of assets involved therein.3.7.17 There is need to define ‘Serious Economic Offence’ under a statute and prescribe deterrent punishment for it. The existing SFIO, though a positive step, can investigate offences only under the Companies Act. The complex and multi-disciplinary nature of ‘Serious Economic Offences’ would require the constitution of an empowered body to investigate and prosecute the cases under all such offences. This would require the' Reported in The Times of India, New Delhi Edition on 11th November, 2006Ethics in GovernanceLegal Framework for Fighting Corruptionsuch as the financial sector, capital and futures market, commodity markets, accountancy, direct and indirect taxation, forensic audit, investigation, criminal and company law and information technology. The SFO should have all powers of investigation as stated in the recommendation of the Mitra Committee. The existing SFIO should be subsumed in this.d. A Serious Frauds Monitoring Committee should be constituted to oversee the investigation and prosecution of such offences. This Committee, to be headed by the Cabinet Secretary, should have the Chief Vigilance Commissioner, Home Secretary, Finance Secretary, Secretary Banking/ Financial Sector, a Deputy Governor RBI, Secretary, Department of Company Affairs, Law Secretary, Chairman SEBI etc as members.3.8.3 The counter argument is that officers at the level of Joint Secretaries and above have an important role in decision making in the government. Also while taking these decisions or rendering advice they should be able to do so without any fear or favour. Exposing these officers to frequent enquiries could have a demoralizing effect on them and encourage them most of the time to ‘save their skin’ and not act in a manner that would best serve the public interest.3.8.4 The Commission on balance is of the view that it would be necessary to protect honest civil servants from undue harassment, but at the same time in order to ensure that this protection is not used as a shield by the corrupt, it would be appropriate if this permission is given by the Central Vigilance Commissioner in consultation with the Secretary to Government concerned and if the Secretary is involved, a committee comprising the Central Vigilance Commissioner and the Cabinet Secretary may consider the case for granting of permission. In case of Cabinet Secretary such permission may be given by the Prime Minister.e.In case of involvement of any public functionary in a serious fraud, theSFO shall send a report to the Rashtriya Lokayukta and shall follow the directions given by the Rashtriya Lokayukta (see para 4.3.15).3.8.5 Recommendation:3.8. Prior Concurrence for Registration of Cases: Section 6A of the Delhi Special Police Establishment Act, 19463.8.1 As per Section 6-A of the Delhi Special Police Establishment Act, 1946“The DelhiSpecialPolice Establishment shallnotconduct any inquiry orinvestigation into any offence alleged to have been committed underthe Prevention ofCorruption Act, 1988 exceptwith the previous approval ofthe Central Government where such allegation relates to-b.the employees ofthe CentralGovernmentofthe levelofJointSecretary and above; andc.such officers as are appointed by the CentralGovernmentin corporations establishedby or underany CentralAct, Governmentcompanies, societies and localauthorities owned or controlled by that Government.3.8.2 It has been argued that given the prevailing corruption ridden environment, there is danger of such a provision being misused to protect corrupt senior public servants, and if at all such a protection is to be given, the power should vest with an independent body like the CVC, which can take an objective stand.f.In all cases of serious frauds the Court shall presume the existenceof mens rea of the accused, and the burden of proof regarding its non-existence, shall lie on the accused.3.9 Immunity Enjoyed by Legislators3.9.1 The National Commission to Review the Working of the Constitution recommended (Para 5.15.6) that Article 105(2) may be amended to clarify that the immunity enjoyed by Members of Parliament under parliamentary privileges should not cover corrupt acts committed by them in connection with their duties in the House or otherwise. Such a recommendation was made because corrupt acts include accepting money or other valuable considerations to speak and/or vote in a particular manner and, for such acts, they should be liable for action under the ordinary law of the land.a.Permission to take up investigations under the present statutoryarrangement should be given by the Central Vigilance Commissioner in consultation with the concerned Secretary. In case of investigation against a Secretary to Government, the permission should be given by a Committee comprising the Cabinet Secretary and the Central Vigilance Commissioner. This would require an amendment to the Delhi Special Police Establishment Act. In the interim the powers of the Union Government may be delegated to the Central Vigilance Commissioner, to be exercised in the manner stated above. A time limit of 30 days may be prescribed for processing this permission.8687Ethics in GovernanceLegal Framework for Fighting Corruption3.9.2 The NCRWC stated as follows“The law of immunity of members under the parliamentary privilege law was tested in PV Narsimha Rao Vs. State (CBI/SPE), (AIR 1998 SC 2120). The substance of the charge was that certain members of Parliament had conspired to bribe certain other members to vote against a no-confidence motion in Parliament. By a majority decision the Court arrived at the conclusion that while bribe-givers, who were Members of Parliament, could not claim immunity under Article 105, the bribe-takers, also Members of Parliament, could claim such immunity if they had actually spoken or voted in the House in the manner indicated by the bribe-givers. It is obvious that this interpretation of the immunity of Members of Parliament runs counter to all notions of justice, fair play and good conduct expected from Members of Parliament. Freedom of speech inside the House cannot be used by them to solicit or to accept bribes, which is an offence under the criminal law of the country. The decision of the court in the aforesaid case makes it necessary to clarify the true intent of the Constitution. To maintain the dignity, honour and respect of Parliament and its members, it is essential to put it beyond doubt that the protection against legal action under Article 105 does not extend to corrupt acts”.3.9.3 Right to equality and equal protection of law is a fundamental right and the Constitution enshrines this principle of equality. The Ruling in the above case creates an anomalous situation wherein the Members of Parliament are immune from prosecution for their corrupt acts if they are related to voting or speaking in the Parliament. This runs contrary to norms of justice and fair-play. Members of Parliament, being the lawmakers have to maintain the highest standards of integrity and probity. It is, therefore, necessary to amend the Constitution to remove this anamoly.3.10 Constitutional Protection to Civil Servants – Article 3113.10.1 Civil servants in India enjoy unique protection in terms of specific provisions in Part XIV of the Constitution, which authorize the regulation of their conditions of service. Article 309 stipulates that subject to the provisions of the Constitution, acts of appropriate legislature may regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or of a State. Under Article 310, persons serving the Union or a State hold office during the pleasure of the President or the Governor of the State as the case may be. The exercise of this pleasure is, however, circumscribed by the provisions of Article 311. The Article reads as follows :“Dismissal, removal orreduction in rank ofpersons employed in civil capacities under the Union or a State–(1) No person who is a member ofa civilservice ofthe Union or an all-India service or a civil service of a State or holds a civil post under the Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed.(2) No such person as aforesaid shallbe dismissed orremoved or reduced in rank exceptafter an inquiry in which he has been informed ofthe charges againsthim and given a reasonable opportunity ofbeing heard in respect ofthose charges:Provided that where, itis proposed aftersuch inquiry, to impose upon him any such penalty, such penalty may be imposed on the basis ofthe evidence adduced during such inquiry and it shallnot be necessary to give such person any opportunity ofmaking representation on the penalty proposed:Provided further that this clause shallnot apply —3.9.4 Recommendations:a.The Commission, while endorsing the suggestion of the National Commission to Review the Working of the Constitution, recommends that suitable amendments be effected to Article 105(2) of the Constitution to provide that the immunity enjoyed by Members of Parliament does not cover corrupt acts committed by them in connection with their duties in the House or otherwise.b. The Commission also recommends that similar amendments may be made in Article 194(2) of the Constitution in respect of members of the state legislatures.88(a) where a person is dismissed or removed orreduced in rank on the ground ofconductwhich has led to his conviction on a criminal charge; or(b) where the authority empowered to dismiss orremove a person or to reduce him in rank is satisfied thatforsome reason, to be recorded by thatauthority in writing, itis notreasonably practicable to hold such inquiry; or(c) where the Presidentorthe Governor, as the case may be, is satisfied that in the interest of the security ofthe State it is notexpedient to hold such inquiry.(3) If, in respect of any such person as aforesaid, a question arises whether it is reasonably practicable to hold such inquiry as is referred to in clause (2), the decision thereon ofthe89Ethics in GovernanceLegal Framework for Fighting Corruptionauthority empowered to dismiss or remove such person or to reduce him in rank shallbe final.”3.10.2 The procedure laid down in Article 311, subject to the provisos, or exceptions, therein, is intended to, first, assure a measure of security of tenure to government servants, who are covered by the Article and, second, provide certain safeguards against arbitrary dismissal or removal of a government servant or reduction to a lower rank. These provisions are enforceable in a court of law and where there is an infringement of Article 311 orders passed by the disciplinary authority are ab-initio void. The provisions of Articles 310 and 311, apply to all government servants.Arguments in favour of retaining Article 3113.10.3 Article 311 of the Constitution has been a matter of much debate over the past fifty years. Arguments range from its retention in its present form, or even strengthening it, to its total deletion. Those in favour of retaining Article 311 argue that the Article subjects the doctrine of pleasure contained in the preceding Article 310 to certain safeguards. Indeed, this Article earlier also envisaged giving an opportunity to the accused official to protest the quantum of punishment proposed if the charges were proved - this requirement was, however, dispensed with through the 42' amendment to the Constitution.3.10.4 It is further argued that the safeguards under Article 311 are focused and that the framers of the Constitution were mindful of the rare eventualities in which even such minimal safeguards would not be necessary. Indeed, the safeguard of an opportunity of being heard has been held to be a fundamental principle of natural justice. Even if Article 311 were to be repealed, it is argued, the need for giving an opportunity to be heard cannot be dispensed with. The requirement that only an authority which is the appointing authority or any other authority superior to it can impose a punishment of dismissal or removal also appears reasonable as the government follows a hierarchical structure where the appointing authority for different categories of employees are assigned to different levels- the obvious principle being that for positions having higher responsibility, the appointing authority is higher up in the hierarchy.3.10.5 Moreover, if Article 310 stands without the procedural safeguards of Article 311, it is highly unlikely that the rules governing disciplinary proceedings and departmental inquiries can be dispensed with on the ground that the President or the Governor have a right to dismiss an official from service without proving charges after due inquiry. In such a situation the only outcome would be an increase in litigation concerning service matters.3.10.6 Besides, judicial review is an integral part of our Constitution and a substantial portion of the appellate work of the Supreme Court concerns Article 311. A random check of the decided cases from the Index notes of the Supreme Court cases yields various rulings, which indicate that the Article is not an obstacle in dealing with delinquent public servants:(i)The disciplinary authority is free to take a view contrary to the finding of ‘notguilty’ by the inquiry officer. (High Court v Shrikant Patil 2000 1SCC 416).(ii) Where the charges are proved in a departmental inquiry while the person is acquitted of the same charges in criminal prosecution, acquittal will have no effect on disciplinary action as the degree of proof required in the two proceedings is quite different. (Senior Superintendent v A. Gopalan AIR 1999 SC 1514).(iii) Where the appointing authority is the President or the Governor, it is not necessary for these office-holders to be personally satisfied about the justification for disciplinary penalty. (Union v Sripati Ranjan 1975 4 SC 699).(iv) Where the three eventualities envisaged in second proviso to Article 311 (2) are attracted, recourse to Article 14 cannot be had to get an opportunity of being heard. (Union v Tulsiram Patel 1985 3 SCC 398).(v) Where witnesses are intimidated, it is open to the disciplinary authority to take a view that an inquiry is not “reasonably practicable” (Satyavir v Union 1985 4 SCC 252).(vi) Article- 311 is also not attracted if age of retirement is reduced. ( Andhra Pradesh v Moinuddin AIR 1994 SC 1474).(vii) Compulsory retirement also does not attract the aforesaid Article (Biswanath v Bihar 2001 SCC 2 305).(viii) Courts do not sit in appeal over findings of Departmental inquiries. The role of the higher courts is restricted to ascertain whether the inquiry was fairly or properly conducted; once that is proved, the court will not interfere with the ultimate finding. The court will interfere only in cases where there is no evidence whatsoever to support the finding of guilt. (Kuldeep v Commissioner of Police 1999 2 SCC 10).9091Ethics in GovernanceLegal Framework for Fighting Corruption3.10.7 It is argued that it is the rules governing disciplinary enquiries, and not Article 311 itself, that are responsible for the delays in enquiry and even in the removal of delinquent government servants. Most of the relevant procedures antedate the Constitution and little information exists about their origin, or, in some cases, even about their raison d’etre. It will be clear from the rulings cited above that the Supreme Court has adopted a judicious approach to Article 311 and it would be unreasonable to take the view that the said Article has proved a panacea for delinquent Government employees.Arguments in favour of repealing Article 3113.10.8 But the argument above is itself the starting point of the argument in favour of repealing Article 311. It can be argued that if the decisions of the judiciary did not obviate the need to act against delinquent officials, then why retain the Article with its potential to protect the corrupt through any unintended interpretation? Indeed, it is not as if in all cases involving Article 311 the Supreme Court has taken a ‘pro Government’ stance. There are cases where the apex court has struck down the actions of the disciplinary authority or the Government. Some instances can be cited illustratively;(i)Where a temporary servant was accused of accepting bribe, it was held that thematter should have been dealt with in accordance with Article 311 and if proved guilty the penalty of dismissal, instead of termination of service should have been imposed. (Madan Gopal v Punjab AIR 1963 SC 531).(ii)Where a temporary constable was discharged from service, it was held that“the order of discharge, though couched in innocuous terms and stated to be made in accordance with (the rules) was really a camouflage for an order of dismissal from service on the ground of misconduct as found on an enquiry into the allegations behind her back. It was penal in nature as it cast a stigma on the service career of the appellant. The order was made without serving the appellant any charge sheet, without asking for any explanation from her, without giving any opportunity to show cause against the purported order of dismissal from service and without giving any opportunity to cross-examine the witnessess. It, therefore, contravenes Article 311(2) of the Constitution and is liable to be quashed and set aside.” (Smt. Rajinder Kaur v State of Punjab and Another, AIR 1986 SC 1790).(iii) Where an inquiry was held at a place away from the place of posting and the accused employee could not attend the proceedings due to lack of funds as he was not paid any subsistence allowance (during the period of suspension), it was held that the inquiry was vitiated. (Fakirbhai v Presiding Officer 1986 3 SCC 111).(iv) It is necessary for the Disciplinary Authority to furnish copy of report of Inquiry Officer to Charged Officer and give him an opportunity to make a representationagainst it before taking a decision on the charges. (Union of India v. Mohd. Ramzan Khan, 1991 (1)SLR SC 159 : AIR 1991 SC 471)(v) (a) Adverse entries awarded to an employee lose their significance on his promotion to a higher post and cannot be taken into consideration for forming opinion for prematurely retiring him.(b) Uncommunicated remarks or remarks pending disposal of representation cannot be the basis for premature retirement. (Brij Mohan Singh Chopra v. State of Punjab, 1987 (2) SLR SC 54).(vi) It has been been observed, “But even if the Government has, by contract or under the rules, the right to terminate the employment without going through the procedure prescribed for inflicting the punishment of dismissal or removal or reduction in rank, the Govenment may, nevertheless, choose to punish the servant and if the termination of service is sought to be founded on misconduct, negligence, inefficiency or other disqualification, then it is a punishment and the requirements of Article 311 must be complied with.” (P.L. Dhingra v Union of India, 1958 SCR p.828 at 862).3.10.9 There are a number of decisions of the lower courts which have tied down the disciplinary authorities with technical detail where the procedure has become more important than the substance.3.10.10 In present times, the position prevailing in India has to be viewed against the practice followed in other countries, where such punitive action is possible with a hearing permitted at the discretion of the appropriate authority, not as a matter of right. Even in the UK, whose administrative systems were adopted in India, such freedom does not exist. India is perhaps one of very few countries where a public servant, who, though an agent of the government, has the power to invoke Constitutional rights against the government which is his/her employer.3.10.11 The Constitution has been amended to recognize the needs of governance as felt from time to time. The Indian Constitution, and Part XIV thereof, was drafted at a time when, in the aftermath of partition, and post-colonial administrative upheavals, it was felt necessary to prescribe certain guarantees to the bureaucracy. In the present scenario, that protection does not appear quite necessary. For one, the recent growth of the economy has ensured that Government is no longer the only significant source of employment. Indeed, in the present debate of even providing outcome oriented contractual appointments for senior positions, there is a new focus on the question of permanency in the civil services. Inflexibility and compartmentalization, created over decades within the bureaucratic structure, has been encouraged by the difficulty in even transferring staff who have rushed to courts against their transfer; this was presumably not the intention of the framers of the Constitution. The increase in corruption and inefficiency in Government has been9293Ethics in GovernanceLegal Framework for Fighting Corruptionacknowledged as requiring major “surgery”. The role of Government as a model employer cannot take away from the fact that public good must override individual right, certainly of the corrupt and inefficient public servant.3.10.12 It is no doubt essential that reasonable opportunity is provided to a government official against what might be arbitrary or vindictive action. But this should be only reasonable, not excessive, and that must be the criteria for assessing the nature of legal protection that the employee must receive. The protection required to be provided in terms of security of tenure or permanancy in the civil service must not lead to a situation where delayed action becomes common reason for emboldening errant officials into committing acts against public interest.3.10.13 It has been held that, for proper compliance with the requirement of ‘reasonable opportunity’ as envisaged in Article 311(2), a government servant against whom action is contemplated should, in the first instance, be given an opportunity to deny the charges. If, as a result of an inquiry, the charges are proved and it is proposed to impose any of the penalties of dismissal, removal, or reduction in rank, such penalty may be imposed on the basis of the findings of the inquiry. It is not necessary to give him any opportunity of making a representation on the penalty proposed after the amendment of clause (2) of Article 311 of the Constitution with effect from 3d January, 1977. The Santhanam Committee had listed as many as 15 criteria laid down by the Supreme Court and the High Courts in order to enable conduct of an inquiry in accordance with the spirit of the Constitution. The interpretations and requirements laid down by the highest courts have made disciplinary proceedings for major penalties very convoluted, tedious and time consuming involving a large number of sequential steps before a person can be found guilty of the charges and punished. The process unfortunately does not end there. Provisions exist for appeal, revision and review only after completion of which, the delinquent officer would begin to suffer the penalty. The accused officer also has the right to challenge the legality of the action of disciplinary authority before the Administrative Tribunal, get an interim stay of the proceedings and relief thereafter, and to substantively appeal against the decision of the disciplinary authority or the government as the case may be in the Tribunal. This apart, he reserves his fundamental right to invoke the writ jurisdiction of the High Court and the Supreme Court protesting the violation of such rights in the conduct of the inquiry.3.10.14 Understandably, this has given rise to the demand for curtailing rights of the public servant in relation to his employment. The only amendment of any substantial nature that has been affected is to dispense with the requirement of a second opportunity to show cause. The Santhanam committee had observed:“....In view ofthe constitutionalrequirements and the judicialpronouncements, we consider thatit would notbe possible to radically simplify the procedure unless the Constitution is suitably amended. However, we examined the possibility of simplifying the procedure in relation to disciplinary proceedings to the extent possible within the existing legalframework”.3.10.15 The Hota Committee, while recommending measures to make civil services responsive, citizen, friendly and ethical, has stated as follows:“We recommend that Article 311 ofthe Constitution be amended to provide that ifthere are allegations against a civilservant /person holding a civilpost ofaccepting illegalgratification or of having assets disproportionate to his known sources of income and the President or the Governor is satisfied that the civilservant /person holding a civilpost be removed from service forthwith in the public interest, the Presidentor the Governor may pass an order removing the civilservant /person holding the civilpostfrom service and give him an opportunity in a postdecisionalhearing to defend himself.Ifthe person removed from service is prosecuted in a court oflaw, the President or the Governor may also specify by orderthata post-decisionalhearing may be given to the person removed from service only after a judgement ofthe court oflaw acquitting him becomes final and conclusive. The person so removed shallbe given a post-decisionalhearing in a regular departmentalinquiry to defend himselfagainst the charge. Ifhe is exonerated ofthe charge, he shallbe reinstated in service with fullrestoration ofhis service conditions, including his seniority, and shallbe paid the arrears of pay and allowances due to him in full.In our view, such a Constitutional amendment would :?Facilitate summary removalfrom service ofa corrupt officer;?Inspire confidence in the minds ofthe common people that corruptpractice by members of the civilservice /persons holding civilposts willnot be tolerated;?Ensure justice to the officialso removed in a post-decisionalhearing.3.10.16 The National Commission to Review the Working of the Constitution had recommended :“Yetthe services have remained largely immune from imposition ofpenalties due to the complicated procedures thathave grown out ofthe constitutionalguarantee againstarbitrary and vindictive action (Article 311). The constitutional safeguards have in practice acted to shield the guilty against swift and certain punishment forabuse ofpublic office for private gain. A major corollary9495Ethics in GovernanceLegal Framework for Fighting Corruption96has been erosion ofaccountability. It has accordingly become necessary to revisit the issue of constitutionalsafeguards under Article 311 to ensure that the honest and efficient officials are given the requisite protection butthe dishonestare notallowed to prosperin office. A comprehensive examination of the entire corpus of jurisprudence has to be undertaken to rationalize and simplify the procedure ofadministrative and legal action and to bring the theory and practice ofsecurity and tenure in line with the experience ofthe last more than 50 years”.3.10.17 The view favouring the deletion of Article 311 argues ultimately that, over time, the provisions of Article 311 have given rise to a mass of judicial pronouncements which have led to much confusion and uncertainty in interpretation. These pronouncements should not continue to have significance and effect on the strength of the continued existence of Article 311. If this Article is deleted, judicial pronouncements based on the Article would no longer be in force and binding. This could be made clear in the statement of objects and reasons of any proposed amendment to the Constitution so that these rulings are not relied upon to claim a protection which was not intended.Summing up – Removing Article 3113.10.18 The Commission has given deep consideration to the case for and against Article 311 remaining in the Constitution of India. No other Constitution appears to contain the kind of guarantees that this Article does. The Government of India Act-1919 was the first enactment to apply the ‘doctrine of pleasure’ in India, through Section 96B thereof. Its application was “subject to rules”, and the courts while examining challenges to penalties under that Act applied the extant rules to determine whether these were rightly imposed. In other words, when this doctrine was first applied in India, it was deemed sufficient to provide protection against any unjust exercise of ‘pleasure’. With the provisions of Judicial review now available in our Constitution, the protection available to Government employees is indeed formidable even outside Article 311. This is borne out by the fact that ample relief is available to employees invoking judicial intervention in cases involving compulsory retirements even though Article 311 does not extend to such cases.3.10.19 When Sardar Patel argued for protection of civil servants, the intention was clearly to embolden senior civil servants to render impartial and frank advice to the political executive without fear of retribution. But the compulsions of equal treatment of all public servants and judicial pronouncements have made such a protection applicable to employees of PSUs, para-statal organizations and even body corporates like cooperatives and this has crated a climate of excessive security without fear of penalty for imcompetence or wrongdoing. The challenge before the nation now is to confront this exaggerated notion of lifetime security irrespective of performance and to create a climate conducive to effective delivery of services and accountability with reasonable security of tenure.3.10.20 The Commission believes that the rights of a civil servant under the Constitution should be subordinate to the overall reqirement of public interest and the contractual right of the State. It cannot be an argument that a corrupt civil servant’s rights are more important than the need to ensure an honest, efficient and corruption-free administration. Ultimately, the public servant, an agent of the State, cannot be superior to the State and it is his fundamental duty to serve the State with integrity, devotion, honesty, impartiality, objectivity, transparency and accountability.3.10.21 It is true that the government as an employer is expected to act in a fair manner and it has to be a model employer worthy of emulation by others. It has also to be ensured that honest and efficient public servants are not subjected to the whims and fancies of their superiors. No government can be expected to dispense with the services of a government servant in an arbitrary manner or without a proper enquiry. Such arbitrary removal is not possible even in the private sector. Strictly, there should be no need for retaining Article 310, and legal safeguards may be provided through legislation under Article 309.3.10.22 Articles 309, 310 and 311 form a continuum. If the whole gamut of “conditions of service” is codified as required by the substantive part of Article 309, this can include matters such as disciplinary proceedings and imposition of penalties. Moreover, as noted above, with rule of law accepted as an integral part of the basic structure of the constitution, reasonable protection now attributed to Article 311 will continue to be available to satisfy the requirements of ‘rule of law’.3.10.23 Taking into account these considerations and a fairly common perception that explicit articulation of “protection” in the Constitution itself gives an impression of inordinate ‘protection’, the Commission is of the view that on balance Article 311 need not continue to be a part of the Constitution. Instead appropriate and comprehensive legislation under Article 309 could be framed to cover all aspects of recruitment and service, even with regard to dismissal, removal or reduction in rank. Appropriate legislation by the respective legislatures may also be ensured through a revised Constitutional provision. The Commission will examine in detail issues related to such enactment in its Report on Civil Services Reforms.3.10.24 Recommendations:a.Article 311 of the Constitution should be repealed.b.Simultaneously, Article 310 of the Constitution should also be repealed.97Ethics in GovernanceLegal Framework for Fighting Corruption983.11 Disciplinary Proceedings3.11.1 The term, “Disciplinary Proceedings” has not been defined under any legislation or rules. A working definition would, however, run something like; Action initiated to find whether an employee has violated a prescribed or implicit code ofethical and professional conduct to enable the employer to impose penalties like forfeiture ofemployment or denialofemploymentrelated benefits on the guilty. In the entire repertoire of measures to deal with misconduct by civil servants, disciplinary proceedings occupy a special place as the entire process is carried out within the civil service system. It is axiomatic that an efficient disciplinary system promotes efficiency and professionalism and drastically inhibits recourse to external judicial processes.3.11.2 Prior to the enactment of the Government of India Act, 1919, there was no formal system of departmental inquiries as a prelude to disciplinary action. Police manuals and regulations governing Forest Departments provided penalties like dismissal, monetary fines and stoppage of increments etc. Such penalties were imposed after calling for, and considering explanations. A system of oral inquiry appears to have first started in the Railways in the early 1920s although at that time the Indian Railway system was an amalgam of private and public initiatives. Insofar as the system of disciplinary proceedings is concerned, enactment of the Government of India Act, 1919 is rightly regarded as a watershed. Section 96B of that Act, while prescribing that “every person in the civil service of the crown holds office during His majesty’s pleasure”, had made this “subject to provisions of this Act and Rules made thereunder”. The importance of this provisions was that specific rules were envisaged for the first time to regulate conditions of service, including imposition of penalties.3.11.3 Pursuant to the above provision, the Civil Services Classification Rules, 1920 were framed. Rule XIV of these Rules, for the first time, prescribed a procedure for conducting disciplinary proceedings. The provisions of these rules were amplified in the form of the amended Civil Services Regulations of 1930. The basic provisions currently in vogue essentially remain unchanged. [The early history of these measures can be gleaned from a number of judicial pronouncements such as; the judgement of the Privy Council in R. Venkata Rao v Secretary of State for India AIR (1937) PC 31, and of the Calcutta and Rangoon High Courts respectively in Satish Chandra Das v Secretary of State ILR (54) Cal 44 and J.R Baroni v Secretary of State AIR (1929) Rang 207].3.11.4 It is also pertinent to note that the provisions relating to “Services under the Union and the States” in Part XIV of the Constitution, and in particular Articles 309 to 313 thereof, reproduces verbatim, provisions of the Government of India Act, 1935. As such, the present framework for prescribing penalties, including the method of imposition thereof, contained in the Central Civil Services (Classification, Control and Appeal) Rules, 1965 essentially continues the pattern firmed up in pre independence days with certain modifications brought in pursuance of the recommendations of the Santhanam Committee. Rules on the subject framed by State Governments are also remarkably similar to the Central Rules (to be referred hereinafter as the ‘CCA Rules”) for the obvious reason that they share a ‘common lineage’ as the ‘parent rules’ of 1920 had all India application including to the local governments.3.11.5 A major change that has been brought about, post independence, is that the Code of Conduct has been separated from CCA and analogous Rules in the form of Central Civil Services (Conduct) Rules and the All India Services (Conduct) Rules etc on the lines suggested by the Santhanam Committee have been notified. That Committee, after examination of the separate rules then prevailing in regard to discipline and appeal for the All India Services, the Central Civil Services, the Railways and the civilians in Defence Services recommended unified set of rules. The Committee stated: “Our intention was that the conduct rules, particularly those relating to integrity should be uniform. If, for any reason, it is necessary to promulgate the rules separately for a service or a department there could be no objection to the rules being promulgated separately provided the rules, particularly those relating to integrity are uniform”. Accordingly, in the present pattern, the norms of professional and, to a limited extent personal behaviour, are laid down in the conduct rules while the consequences of violation of these norms are dealt with in the CCA and similar rules.3.11.6 CCA Rules envisage two kinds of penalties. Minor penalties consist of “Censure”, “Withholding of promotion for a specified period”, and “Withholding of increment and recovery from the salary of whole or part of pecuniary loss caused by the employee”. Minor penalty can be imposed after calling for and considering the explanation of the accused employee. Major Penalties comprise reduction in rank through reversion to a lower scale of pay or to the parent cadre etc, compulsory retirement, removal or dismissal from service. Such penalties can be imposed only after a detailed inquiry except in cases covered by the second proviso to Article 311 (2) i.e. in the eventuality of conviction for a criminal offence, on grounds related to security of the state and where an inquiry is considered not practicable.c.Suitable legislation to provide for all necessary terms and conditions of services should be provided under Article 309, to protect the bona fide actions of public servants taken in public interest; this should be made applicable to the States.d. Necessary protection to public servants against arbitrary action should be provided through such legislation under Article 309.99Ethics in GovernanceLegal Framework for Fighting Corruption3.11.7 Detailed procedures governing the initiation of disciplinary proceedings, and the progress and culmination, thereof, is diagrammatically depicted in Figure 3.1. While there are minor variations in this pattern in the states or even in the Union Government in respect of the non Gazetted establishment, broadly the ‘flows’ indicated therein embrace the entire community of central and state government employees including those of the public sector and nationalized banks. Without going into the details of such procedures, but to be able to appreciate the issues involved, it will be sufficient to note the following procedural outlines along with the time limit within which the Central Vigilance Commission (CVC) expects these to be attended to:?Complaints received or lapses noticed are examined to ascertain whether they involve a ‘vigilance angle’ (essentially violation of conduct rules) - 1 month .?Decision about whom to refer complaints to ascertain whether these have any substance to the CBI or departmental agencies-3 months.?Submission of findings of investigations- 3 months.?Department/CBI report to be sent for ‘First Stage Advice’ to the CVC- 1 month from the date of reference.?Formulation of CVC’s advice-1 month.?Issue of charge-sheet, statement of imputation of misconduct, and list of witnesses and documents etc, if it is decided to proceed in departmental inquiry - 1 month from the receipt of CVC advice.?Consideration of Defence Statement of the accused employee- 15 days.?Issue of final orders in minor penalty cases-2 months from receipt of Defence Statement.?Appointment of the Inquiry Authority (IA) and Presenting Officer (PO) where the ‘first stage advice’ recommends major penalty which requires detailed inquiry- Immediately after receipt of Statement of Defence.?Completion of inquiry- 6 months from the date of appointment of the Inquiry Officer and the Presenting Officer.?Sending a copy of the inquiry report, (where the accused is held guilty or the disciplinary authority records reasons for disagreement with an inquiry report holding that charges are not proved), to the charged officer for representation, if any- 15 days from the receipt of representation.100101Ethics in GovernanceLegal Framework for Fighting Corruption?Considering the representation of the accused employee and forwarding the inquiry report for Second Stage Advice to the CVC- 1 month from the date of receipt of the representation.?Issue of orders on the inquiry report- 1 month from the receipt of CVC’s ‘second stage advice ( or 2 months from the date of inquiry report where such advice is not required).(Itmay be noticed that the above schedule does notinclude the time taken between commission of a ‘wrong’and its detection or receiptofa complaintaboutit. A very rough calculation would also indicate that even ifthe above time schedule is adhered to, the estimated time taken in bringing to culmination cases involving minor and major penalties can be respectively estimated at 10 month 15 days and 16months. Itneeds to be added that this schedule excludes the time required for consultation with the UPSC wherever required)3.11.8 In order to appreciate the problems involved in the conduct of actual proceedings, it will be necessary to also invite attention to the following factors impinging on departmental inquiries particularly in the Union Government.?The CVC has emerged as the nodal, statutory authority to over-see vigilance administration and, also to a certain extent of the working of the Central Bureau of Investigation. Initiation and completion of inquiries require clearance of this authority.?Each Ministry/Department or other organization in the Union Government now has an internal vigilance set-up under a whole-time or part-time Chief Vigilance Officer (CVO) with the responsibility of conducting or supervising preliminary investigations in complaints, preparing the article of charge etc. keeping a watch on progress of proceedings and examining inquiry reports apart from undertaking preventive vigilance and surveillance etc.?The total civil establishment of the Government of India consists primarily of Groups “C” and “D” staff. The monitoring and supervisory role of the CVC is, however, confined to only Groups “A” and Gazetted “B”. In other words, the bulk of disciplinary cases do not benefit from the attention of the CVC.?Disciplinary proceedings are often resorted to in cases originally investigated by the CBI for criminal prosecution if warranted by the investigation, but where the investigating agency eventually reaches the conclusion that the incriminating evidence collected is not sufficient to secure conviction but is of a degree tosuffice for the finding of guilt in departmental proceedings. (The degree of proof required in a criminal case must prove guilt ‘beyond reasonable doubt; in departmental proceedings, as also in civil cases, ‘preponderance of probabilities is sufficient).?Historically, departmental proceedings were entrusted for inquiry to officials from within the organization, chosen at random subject only to the consideration that the inquiry officer be senior to the accused in rank. The present trend is to have full time inquiry officers working as Commissioner Departmental Inquiries in the CVC. This, however, only supplements the system of part-time inquiry officers as the number of departmental inquiries is significantly high.?The Department of Personnel and Training now has a very limited role in conduct of departmental inquiries except in case of members of All India services and, for the most part, the various Ministries/Departments exercise the functions of disciplinary authorities in respect of officials borne on their establishment.With the formation of Central Administrative Tribunals (CATs) in the 1980s most of the judicial proceedings arising out of departmental inquiries are handled in these fora which, not infrequently, entertain pleas to stay disciplinary proceedings on technical grounds and even entertain pleas against interlocutory orders. Public servants are able to challenge the orders of the tribunal in High Courts. There is, in addition, recourse to the Supreme Court under Article 136 of the Constitution of filing ‘appeal by special leave”.3.11.9 The Commission takes note of the fact that there is considerable dissatisfaction among all sections of stake-holders about the way the process of disciplinary proceedings is operating. The Hota Committee which had gone into some aspects of such proceedings had also drawn attention to the delays and procedural aspects therein which prevent disciplinary penalties from becoming a tool for ensuring efficiency and probity. That committee had also suggested measures like more frequent resort to proceedings for minor penalties, relieving the inquiry officer of all other duties while conducting the inquiry, and furnishing copies of the documents proposed to be utilized to prove the case against the accused employee along with the charge-sheet etc.3.11.10 A recent study" brings out some revealing information. Some of the salient findings (cases studied) are;?In 116 cases studied, the average time taken between reference to CVC for the ‘first stage advice’ and receipt of the advice in cases studied was 170 days (these cases apparently involved imposition of minor penalty).10210349 Source: “Disciplinary Proceedings as a Tool of Anti Corruption Strategy”, W R Reddy (IIPA New Delhi, 2005)Ethics in GovernanceLegal Framework for Fighting Corruption?In 234 cases involving proceedings for a major penalty the average time taken between appointment of the Inquiry Officer and completion of inquiry was 584 days.?In 56 cases the average time taken from receipt of the inquiry report to sending the case to the CVC for ‘second stage advice’ was 288 days.?In 33 cases the average time taken between the ‘date of occurrence of misconduct’* and sending the cases to the CVC for ‘first stage advice’ was 1284 days.?Analysis of certain completed cases revealed the following ‘break-up’ of time taken by various agencies;Administrative Department- 69%Inquiry Officer- 17%CVC- 9%UPSC- 5%?There was considerable variation in the time taken often in the same stages depending on the source relied upon viz. Disciplinary Cases Monitoring and Management Information System (DCMMIS) of the Administrative Vigilance Division of the Department of Personnel and Training, CVC data of ‘first stage advice’ i.e. cases resulting in closure or minor penalties and ‘second stage advice’ of the same organization i.e. cases referred again after departmental inquiry.(The concept of ‘date of occurrence of misconduct’, though an innovative bench-mark, needs to be used with caution in a situation where the ‘discovery’ of misconduct is necessarily possible only at some future date).3.11.11 From the above data two facts clearly emerge: first, there is no congruence between the time taken in completion of various stages and the schedule prescribed for their completion by the CVC; and second, while it would be unrealistic in such cases to expect ‘immediate report of the offence’, the discovery of the commission of a ‘misconduct’ is shockingly delayed. In fact, it is not very clear, on the whole, as to how such ‘misconducts’ come to light-whether a significant number of cases could be detected within the organization or whether most such cases were disclosed through complaints of ‘affected-outsiders’. These are aspects on which greater clarity and empirical evidence are clearly required.3.11.12 The Commission is of the view that the existing regulations governing disciplinary proceedings need to be recast and the following broad principles should be followed in laying down the new regulations.a.The procedure needs to be made simple so that the proceedings could be completed within a short time frame.b.Emphasis should be on documentary evidence, and only in case documentary evidence is not sufficient, recourse should be made to oral evidence.c.An appellate mechanism should be provided within the department itself.d.Imposition of major penalties should be recommended by a committee in order to ensure objectivity.The Commission would be elaborating these aspects in its Report on civil services reforms. 3.12 Statutory Reporting Obligations3.12.1 Statutory provisions have cast reporting obligations on the citizen. Such provisions apply to both citizens and public servants backed with penal provisions in the event of failure to comply with such obligations. Section 39 of the Code of Criminal Procedure, 1973 makes it mandatory for any person to report to a magistrate or officer of the law any alleged corrupt offence by a public servant failing which he shall be liable for prosecution. However, this provision has remained a dead letter because no mechanisms are available for protection of the informants. Obviously, fear of potential whistleblowers being subjected to reprisals by the perpetrators of corrupt acts, and the inability of the government to protect their person and property in the event of such threats are powerful deterrents which far outweigh the moral pressure of duty as a citizen. In the case of a civil servant, the threat is not only from the actual agents who perpetrate the crime reported, but also from the government apparatus where there is collusive corruption. Thus, he suffers both from external physical threat and internal official harassment.3.12.2 Failure to give information as required by law also constitutes an offence under Sections 176 or 202 of the Indian Penal Code which deal with omission to give notice to public servant by a person legally bound to give it and intentional omission to give information of offence by a person bound to inform. Section 125 of the Indian Evidence Act, 1872 also covers aspects of the interest and integrity of the information given in respect of offences. Official communication with regard to crime is privileged, and a police officer or a magistrate cannot be compelled to disclose the source of information received by him with regard to the commission of the offence. These provisions indicate how the law makers had, over a century ago, realized the importance of the need to encourage public and official reporting of crimes or of the intention to commit crimes of corruption. In this context, Malaysia has stipulated that a public official who is offered a bribe but fails to report it, may be convicted and imprisoned for up to ten years. The Commission feels that making a law on whistleblower’s protection would provide the necessary protection against departmental victimization (para 4.7.4) thus creating an environment where public servants would come forward and reveal details of corrupt practices within their organizations.104105Institutional Framework4INSTITUTIONAL FRAMEWORK4.1 Existing Institutions/AgenciesUnion Government4.1.1 The Administrative Vigilance Division of the Department of Personnel & Training is the nodal agency for dealing with Vigilance and Anti-corruption. Its tasks, inter alia, are to oversee and provide necessary directions to the Government’s programme of maintenance of discipline and eradication of corruption from the public services. The other institutions and agencies at the Union level are - (i) The Central Vigilance Commission (CVC); (ii) Vigilance units in the Ministries/Departments of Government of India, Central public enterprises and other autonomous organisations; and (iii) the Central Bureau of Investigation (CBI).Central Vigilance Commission4.1.2 In pursuance of the recommendations made by the Committee on Prevention of Corruption, popularly known as the Santhanam Committee, the Central Vigilance Commission was set up by the Government of India by a Resolution dated 11.2.1964. It was accorded statutory status, consequent upon the judgement of the Hon’ble Supreme Court in Vineet Narain v. Union of India, through the Central Vigilance Commission Act, 2003. The CVC advises the Union Government on all matters pertaining to the maintenance of integrity in administration. It exercises superintendence over the working of the Central Bureau of Investigation, and also over the vigilance administration of various Ministries and other organizations of the Union Government.Vigilance Units in the Government of India4.1.3 All Ministries/Departments in the Union Government have a Chief Vigilance Officer (CVO) who heads the Vigilance Division of the organization concerned, assisting and advising the Secretary or Head of Office in all matters pertaining to vigilance. He also provides a link between his organisation and the Central Vigilance Commission on the one hand and his organisation and the Central Bureau of Investigation on the other. Vigilance functions performed by the CVO include collecting intelligence about corrupt practices of the employees of his organisation; investigating verifiable allegations reported to him; processinginvestigation reports for further consideration of the disciplinary authority concerned; and referring matters to the Central Vigilance Commission for advice wherever necessary.The Central Bureau of Investigation4.1.4 The Central Bureau of Investigation (CBI) is the principal investigative agency of the Union Government in anti-corruption matters. It derives its powers from the Delhi Special Police Establishment Act, 1946 (DSPE Act) to investigate certain specified offences or classes of offences pertaining to corruption and other kinds of malpractices involving public servants. The Special Police Establishment, which forms a division of the Central Bureau of Investigation, has three units, viz. (i) Anti-corruption Division, (ii) Economic Offences Wing, and (iii) Special Crimes Division. The Anti-corruption Division investigates all cases registered under the Prevention of Corruption Act, 1988 as also cases of offences under any other sections of the IPC or other law if committed along with offences of bribery and corruption. The Anti-corruption Division investigates cases pertaining to serious irregularities allegedly committed by public servants. It also investigates cases against public servants of State Governments, if the case is entrusted to the CBI. The Special Crimes Division investigates all cases of economic offences and conventional crimes; such as offences relating to internal security, espionage, sabotage, narcotics and psychotropic substances, antiquities, murders, dacoities/robberies, cheating, criminal breach of trust, forgeries, dowry deaths, suspicious deaths and other offences under IPC and other laws notified under Section 3 of the DSPE Act.Vigilance Systems in State Governments4.1.5 At the level of state governments, similar vigilance and anti-corruption organisations exist, although the nature and staffing of these organisations vary between and across state governments. While some states have Vigilance Commissions and anti-corruption bureaus, others have Lokayuktas. Andhra Pradesh has an Anti Corruption Bureau, a Vigilance Commission and a Lokayukta. Tamil Nadu and West Bengal have State Vigilance Commissions to oversee the vigilance functions. The Vigilance Commissioner in Tamil Nadu is a serving Secretary to Government and functions as a Secretary though he brings out an Annual Report in his capacity as Vigilance Commissioner. Maharashtra has a combination of an Ombudsman and a Vigilance Commissioner, a multi-member body called the Lokayukta with a retired Judge of the higher judiciary as the Chairman and a retired civil servant as Vice Chairman. There are Vigilance Commissioners in the States of Assam, Bihar, Gujarat, Jammu & Kashmir, Meghalaya and Sikkim. In the Union Territories, the Chief Secretary himself acts as the Vigilance Commissioner. Some States have adopted the pattern of the Union Government and set up internal vigilance organizations with dual responsibility of reporting to the Vigilance Commissioner and the departmental head with subordinate units in offices of Heads of Departments and the districts reporting to the higher formations and the Vigilance Commissioner.106107Ethics in GovernanceInstitutional Framework4.2 Evaluation of the Anti-Corruption Machinery in India4.2.1 The working of many of these anti-corruption bodies leaves much to be desired. In order to analyse the functioning of the anti-corruption laws and the agencies involved in their enforcement, the Commission studied the details of cases investigated, tried and convicted in the past three decades, based on the annual statistics published by the National Crime Records Bureau. The analysis is summarized in Fig-4.1 to Fig-4.4.Fig. 4.1: Analysis of Cases Prosecuted by CBI under the Prevention of Corruption ActFig.4.2: Analysis of Cases Investigated and Prosecuted by State Anti Corruption WingsFig 4.3: Comparison of Conviction Rates of CBI and State Anti Corruption OrganisationsFig. 4.4: Pendency of Cases in Courts4.2.2 From an analysis of the available statistics, the following broad conclusions may be drawn:a.The conviction rate in cases by CBI is low compared to the cases registered,which nevertheless is double that of the State Anti Corruption organisations. The number of cases of the CBI pending for trial at the beginning of the year 2005 was 4130 and 471 more cases were added during the year. But only 265 cases could be disposed of during the year. Similarly, in the States there were 12285 cases pending at the beginning of 2005, and 2111 cases were added during the year. But only 2005 cases were disposed of during the year. If one were to assume that no cases are filed from now onwards, it would take about six years to clear the backlog in the states.10821109Ethics in GovernanceInstitutional Framework4.3 The Lok Palb.There has been rapid increase in the number of cases registered and investigatedby the State Anti-Corruption organisations after 1988.4.3.1 The first Administrative Reforms Commission had recommended the establishment of the institution of Lok Pal. The Lok Pal Bill has been introduced several times but due to various reasons it has not been enacted into law. The Lok Pal is supposed to be a watchdog over the integrity of Ministers and the Members of Parliament. The Indian Lok Pal was intended to be similar to the institution of Ombudsman existing in the Scandinavian countries. The institution of Ombudsman has emerged ‘as a bulwark of democratic government against the tyranny of officialdom’. The Lok Pal Bill provides for constitution of the Lok Pal as an independent body to enquire into cases of corruption against public functionaries, with a mechanism for filing complaints and conducting inquiries etc.c.The number of cases pending for investigation before the State Anti Corruptionorganisations has been increasing.d.The number of cases disposed of in trials each year is much less than the numberof cases filed, indicating that the backlog of cases in trial courts is increasing.4.2.3 An international comparison of the conviction rate for the offence of bribery, as indicated in Figure 4.5, reveals that most countries have a much higher rate of conviction than India."Table 4.1: International Comparison of Persons Convicted for Bribery4.3.2 The Commission is of the view that the Lok Pal Bill should become law with the least possible delay. As recommended in the Bill, the Lokpal should deal with allegations of corruption against Ministers and Members of Parliament.YearRate per 100,000 inhabitantsiCountry199819992000199819992000Albania 24 As and0.03k10.74 ibute0.34Armeniai4.3.3 Allegations of corruption against government officials are dealt with departmentally and also by the Central Bureau of Investigation under the Central Vigilance Commission. In some cases of corruption there may be collusion between the Ministers and the officers. Therefore there should be an organic link between the Lok Pal and the Central Vigilance Commissioner. The reason for this is that an overarching approach to fighting corruption in high places is necessary. Corruption at the political level is at times with the connivance of officials. Some cases of corruption involving officers may also point towards political patronage and involvement. Thus the linkage between the CVC and the Lok Pal would enable sharing of information and prompt action against all persons involved. It may also be provided that all cases of corruption involving Ministers or Members of Parliament which also have elements of connivance or collusion by officials, should be enquired into by the Lok Pal only. While the Central Vigilance Commission should enjoy full functional autonomy, it should nevertheless work under the overall guidance and superintendence of the Lok Pal.13120.3228q454545Azerbaijan0.560.560.572.20 ntiveon a246224 Ha2.24 of timp2.44o the f Belarus220 ar2005)0.47ole of Bulgariaed26s,320.32 orru0.39 n agCo38Chile and0.05 ies as0.05 bodh5y 8iste0.03r78,568 hdi0.69China9,7298,7700.770.7144pppCosta Rica100.100.110.27syst1.26nable1.00pri44ndepen Croatiawit31of it0.7155 dhe bo Cyprus0.13 froely a0.13t11rue--nfluenc. The Czech Republic1.07 the1.15 thatce a110fas 1.08ializ118eria111” I0.841.92 s he528 f1,225 huchs Egypt--3.141.4443y28p1.99Estonia200.06 n theonvent Finlandncu0.063st be0.103y5s tr3140.470.54ecis193outr France0.33.2790.360.04Georgia20.201811427 upent a0.48Germany 25 Unncie395n Go0.52e, --ity of5.26369600 l380 ti3.32 A3.52 i dGuatemaa h bblyHongKong, China (SAR)741.961301.101071.574.3.4 The Commission is of the view that the Lok Pal should be a three-member body. This would bring in the expertise and insight of more than one person which would be essential for transparency and objectivity. Moreover, the multi-member characteristic would render it more immune to any extraneous influence. The Commission is also of the view that of the three members, the Chairman should be from the judiciary (a serving or retired Supreme Court Judge), the second member should be an eminent jurist and the third should be the Central Vigilance Commissioner (ex-officio).2.94 enc2.94 thetion294ntcorr Hungarywit278ppi2972.75 nde684 ndThe C Indiaanc654Gov0.070.07 then --Indonesa combin136S0.11 reausilan391rrup0.19nd A0.07mis232Italy ith1.24 k of963h1.261.67723717Japan187p1190.091530.120.15803 ongmplementaton Korea, Republic of1,466 ategtive960unis2.03nto3.131.73 eve1.33 fres17saat the0.420.69 systen32orrup Latviaea1044 n43nsituto Lithuania1.161.381.1951110.941.14Macedonia, FYR19230.552303.436411.04Malaysia2.8280049247Mexico0.252390.250.05110111Population source: World Bankso Source: Eighth United Nations Survey of Crime Trends and Operations of Criminal Justice Systems, covering the period 2001 – 2002; in GovernanceInstitutional Framework4.3.5 One issue which has been debated for long is whether the office of Prime Minister should be brought under the jurisdiction of the Lok Pal. Those who believe that the Prime Minister’s conduct should be scrutinized by the Lok Pal rightly argue that all public servants should be accountable. In a democracy, the citizen is the sovereign, and every public servant holds office to serve the citizens, spending tax money and exercising authority under the laws made on citizens’ behalf or under the Constitution, which we, the people, gave unto ourselves. Therefore, no functionary, however high, should be exempt from scrutiny by the Lok Pal.4.3.6 In constitutional theory, according to the Westminster model, the Prime Minister is the first among equals in a Council of Ministers exercising collective responsibility. Therefore, whatever rules apply to other Ministers, should apply to the Prime Minister as well.4.3.7 However, there are deeper issues that need to be examined carefully. While the Prime Minister’s office was merely the first among equals in conception, over time the Prime Minister became the leader of the executive branch of government. The Cabinet accepts collective responsibility once decisions are made. That is why all policy debates are customarily within the Council of Ministers away from public gaze, and Ministers are not free to express their reservations or differences of opinion in public. It is the function of the Prime Minister to lead and to coordinate among the Ministers in framing of policies, decision making and execution of those policies and decisions. The Prime Minister’s unchallenged authority and leadership are critical to ensure cohesion and sense of purpose in government, and to make our Constitutional scheme function in letter and spirit. The Prime Minister is accountable to the Parliament, and on his survival, depends the survival of the government. If the Prime Minister’s conduct is open to formal scrutiny by extra-Parliamentary authorities, then the government’s viability is eroded and Parliament’s supremacy is in jeopardy.4.3.8 In our Constitutional scheme of things, the Prime Minister is appointed on the basis of the President’s judgment of his commanding majority support in Parliament. All Ministers are then appointed only on the advice of the Prime Minister. The President cannot ordinarily dismiss the Prime Minister as long as he enjoys the majority support in the House of the People. But other Ministers are removed by the President at any time on the advice of the Prime Minister. No reasons are required to be given by the Prime Minister for removal of such Ministers. Integrity and competence of the Ministers are not sufficient conditions to continue in office. They must enjoy the confidence of the Prime Minister in order to hold office as Ministers. This scheme has been deliberately introduced in our Constitution to preserve the authority of the Prime Minister, and to ensure cohesion and coordination in the functioning of government. Any enquiry into a Prime Minister’s official conduct by any authority other than the Parliament would severelyundermine the Prime Minister’s capacity to lead the government. Such weakening of Prime Minister’s authority would surely lead to serious failure of governance and lack of harmony and coordination, and would severely undermine public interest.4.3.9 Those who argue that the Prime Minister is like any other Member of Parliament or any other Minister are technically correct. In reality, in all countries following the Parliamentary executive model drawing the Cabinet from the legislature, the Prime Minister becomes the leader of the country and government. The authority of the Prime Minister, as long as he enjoys Parliamentary support, has become synonymous with the nation’s dignity and prestige. A Prime Minister facing formal enquiry by a Lok Pal would cripple the government. One can argue that such an enquiry gives the opportunity to the incumbent to defend himself against baseless charges and clear his name. But the fact is, once there is a formal enquiry by a Lok Pal on charges, however baseless they might be, the Prime Minister’s authority is severely eroded, and the government will be paralysed. Subsequent exoneration of the Prime Minister cannot undo the damage done to the country or to the office of the Prime Minister. If the Prime Minister is indeed guilty of serious indiscretions, Parliament should be the judge of the matter, and the Lok Sabha should remove the Prime Minister from office. No lengthy enquiry or impeachment is therefore contemplated in our scheme of things, and a mere passing of no-confidence motion without assigning reasons is sufficient to change government. In the directly elected executive model of government, the Parliament cannot remove the President who is the chief executive, and therefore a complex process of impeachment, and an enquiry by Special Prosecutors to precede such an impeachment have become necessary.4.3.10 It could be argued that since any Minister could be removed on Prime Minister’s advice, or Parliament as well, the Lok Pal need not have jurisdiction on a Minister’s conduct also. But Parliament does not really sit in judgment over a Minister’s conduct. It is the Prime Minister and the Council of Ministers as a whole whose fate is determined by Parliament’s will. And the Prime Minister does not have the time or energy to personally investigate the conduct of a Minister. The government’s investigative agencies are controlled or influenced by the Ministers, and therefore it is difficult for the Prime Minister to get objective assessment of the Ministers’ official conduct. Therefore, an independent, impartial body of high standing would be of great value in enforcing high standards of ethical conduct among Ministers. A similar reasoning applies to Members of Parliament, since Parliament’s time and energy cannot be consumed by detailed enquiry into the conduct of a Member. But, the final decision of removing the Member must vest in Parliament, and that of removal of a Minister must be on the advice of the Prime Minister. Parliament is responsible to the11221113Ethics in GovernanceInstitutional Framework114nation for its decisions, and the Prime Minister is responsible to the Parliament for his decisions. These responsibilities of Parliament and Prime Minister cannot be transferred to any unelected body.4.3.11 Finally, while the Prime Minister is yet another Member of Parliament in constitutional theory, political evolution transformed him into the leader of the nation. Theoretically, each member of the legislature is elected by his/her constituents in our model of government. But over the past century, elections even in parliamentary system have become plebiscitary in nature. Most often, the Prime Minister’s personality, vision, and leadership are the issues, which determine the electoral outcomes. Similarly, the opposition focuses its energies and hopes on its leader. The electoral contest is transformed into a test of acceptability of the leaders. The constituency contests have thus become increasingly dependent on the larger question of whose governmental leadership people trust or seek at that point of time. Given this overwhelming political reality, it would be unwise to subject the Prime Minister’s office to a prolonged public enquiry by any unelected functionary. Ultimately, the Parliament is the best forum we can trust to enforce integrity in the office of the Prime Minister.4.3.12 The same principles and arguments also hold good in respect of the Chief Minister of a state.Therefore, it would be unwise to include the Chief Minister in the Lokayukta’s jurisdiction. Several states have excluded the Chief Minister from the Lokayukta’s ambit though in a few states, the Chief Minister is included. But, if the Chief Minister is brought under the jurisdiction of a federal institution of high standing, then the risks are mitigated. The Commission is of the view that once the Lok Pal or equivalent institution is in place, all Chief Ministers should be brought under Lok Pal’s purview. Such a provision would necessitate making Lok Pal a Constitutional authority and defining his jurisdiction in the Constitution while leaving the details of appointment and composition to be fixed by parliament through legislation.4.3.13 In order to enable the Lok Pal to enhance its effectiveness and to increase the trust the public has in the institution, it is essential for the Lok Pal to establish mechanisms for effective interaction with the public in general and the private sector and the civil society in particular. Such association would also help better understanding of the environment, build checks and balances in its functioning, and prevent abuse of authority by investigating agencies by bringing them to the Lok Pal’s notice. The experience of ICAC in Hong Kong which has been elaborated upon in para 5.1.2 has shown that the education and awareness raising function is crucial to any anti-corruption strategy if it is to be effective. Botswana’s DCEC, Singapore’s CPIB and the ICAC of New South Wales, Australia, have similar mandates. In fact, the ICAC of New South Wales is noted for holding public hearings toexpose corruption. In the light of the successful experience of these countries with anticorruption efforts by associating the public in general and the private sector and the civil society in particular, the Commission would like to recommend that such activities should be taken up by the Lok Pal.4.3.14 The role of the Lok Pal in ethical conduct in high places cannot be over-emphasised. The Commission would like to recommend, that the Lok Pal be given a Constitutional status. This would provide the eminence and status and Constitutional safeguards appropriate for such an important institution, which is expected to be a watchdog against wrong doings by high public authorities.Another minor issue is the name itself. To provide an element of a continuum in the fight against corruption from the Union to the States, from the top to the grass roots, it may be useful to provide a connect with the State Lokayuktas and name the proposed Lok Pal as the ‘Rashtriya Lokayukta’. The Commission would, therefore, like to make the following recommendations to make changes in the Lok Pal Bill.4.3.15 Recommendations:a.The Constitution should be amended to provide for a nationalOmbudsman to be called the Rashtriya Lokayukta. The role and jurisdiction of the Rashtriya Lokayukta should be defined in the Constitution while the composition, mode of appointment and other details can be decided by Parliament through legislation.b. The jurisdiction of Rashtriya Lokayukta should extend to all Ministers of the Union (except the Prime Minister), all state Chief Ministers, all persons holding public office equivalent in rank to a Union Minister, and Members of Parliament. In case the enquiry against a public functionary establishes the involvement of any other public official along with the public functionary, the Rashtriya Lokayukta would have the power to enquire against such public servant(s) also.c.The Prime Minister should be kept out of the jurisdiction of the RashtriyaLokayukta for the reasons stated in paras 4.3.7 to 4.3.11.d. The Rashtriya Lokayukta should consist of a serving or retired Judge of the Supreme Court as the Chairperson, an eminent jurist as Member and the Central Vigilance Commissioner as the ex-officio Member.21115Ethics in GovernanceInstitutional Framework4.4 The Lokayukta4.4.1 In the wake of the recommendations of the first Administrative Reforms Commission, many State Governments enacted legislation to constitute the Lokayukta to investigate allegations or grievances arising out of the conduct of public servants including political executives, legislators, officers of the State Government, local bodies, public enterprises and other instrumentalities of Government including cooperative societies and universities. By virtue of such legislation, a member of the public can file specific allegations with the Lokayukta against any public servant for enquiry. It is also open to the Lokayukta to initiate suo-motu inquiry into the conduct of public servants. The Lokayukta is generally a retired Judge of the High Court or the Supreme Court and normally appointed for a five-year term on the basis of a joint decision involving the Chief Minister, the Chief Justice, the Speaker of the House and leader of the Opposition. However, in many states the Lokayukta does not have an independent investigating authority at its disposal and is therefore dependent on Government agencies to carry forward its investigations. The Maharashtra and Orissa Lokayuktas assume more the character of a grievance redressal organization rather than an Ombudsman for cases of corruption.4.4.2 Over seventeen states presently have Lokayuktas but there is no uniformity in the provisions of the enactments, with fundamental differences regarding their functions. While in all states the Lokayuktas deal with issues of corruption, in some, they also deal with other grievances. In a few states, a wide range of functionaries including Chief Ministers,Vice Chancellors and office bearers of cooperatives have been brought within the Lokayukta’s purview; in others, the coverage is quite restrictive. In some States, investigative powers are vested in them with an investigation machinery attached. Some also provide for powers of search and seizure in the course of investigation. The expenditure on the Lokayukta is, in some States, charged on the consolidated fund of the State providing requisite financial independence for the institution. Some Lokayuktas have powers to punish for contempt.4.4.3 Be that as it may, the experience in regard to the working of the Lokayuktas has been rather unfortunate as the following examples will show. Though Maharashtra was the first State to establish this institution as early as in 1972, its public credibility was lost when the incumbent continued to function for several months after he was asked to step down. Orissa instituted and then abolished the institution. In Haryana, the institution of Lok Pal was abolished overnight through an Ordinance as the serving High Court Judge functioning as the Lok Pal had protection against summary dismissal. The Punjab Government also repealed the Act through an Ordinance as a fallout of a matter in which the Lok Pal had received eight complaints against former Ministers in the previous ministry in the State. The Rajasthan Lokayukta was forthright in recommending to the Government in its annual report in 1996 that there was no use of continuing the institution as the institution had not proved to be effective. Even though the Madhya Pradesh Lokayukta had indicted two Ministers in a land deal and certain other Ministers were also held responsible for wrong doing, no action whatsoever was taken against any of them. Here too, in its annual report for 1997-98, the Lokayukta had advised the Government that unless adequate powers were given to it there was no need for continuance of the institution. In Andhra Pradesh and Bihar, the annual reports of the Vigilance Commission have not been laid on the table of the legislature as required by the order constituting the Commission.4.4.4 The Karnataka Lokayukta which has been a very active institution, is headed by a retired Judge of the Supreme Court and has jurisdiction over all public servants including the Chief Minister and Ministers. With the Anti Corruption Bureau of the State forming part of the institution, it has unfettered power to enquire or investigate into cases of misconduct and deals both with allegations and grievances. However, though the Karnataka Act provides for the submission of property returns to the Lokayukta by the Chief Minister, Ministers and all legislators, few have submitted these returns so far and no action has been taken against those who have not done so.4.4.5 In this context, the Lokayuktas’ Conferences) had proposed a comprehensive Bill for a uniform institution of Lokayukta in every state, based on a Central legislation with Constitutional back up. In the Draft Bill, maladministration has been defined to make it more broad based to facilitate investigation and the definition of public functionary coming(e) The Chairperson of the Rashtriya Lokayukta should be selected from a panel of sitting Judges of the Supreme Court who have more than three years of service, by a Committee consisting of the Vice President of India, the Prime Minister, the Leader of the Opposition, the Speaker of the Lok Sabha and the Chief Justice of India. In case it is not possible to appoint a sitting Judge, the Committee may appoint a retired Supreme Court Judge. The same Committee may select the Member (i.e. an eminent jurist) of the Rashtriya Lokayukta. The Chairperson and Member of the Rashtriya Lokayukta should be appointed for only one term of three years and they should not hold any public office under the government thereafter, the only exception being that they can become the Chief Justice of India, if their services are so required.(f) The Rashtriya Lokayukta should also be entrusted with the task of undertaking a national campaign for raising the standards of ethics in public life.11621117" Held on 17th and 18th January, 2003 in Bangalore.Ethics in GovernanceInstitutional Framework118within the ambit of the institution has been widened. Various powers have been proposed to strengthen the Lokayukta. Most importantly, it has been proposed that the proceedings before the Lokayukta should be treated as judicial proceedings investing it with jurisdiction, powers and authority to punish for contempt of itself as a High Court. The proposals include the conferment of constitutional status on par with High Court Judges.4.4.6 The entire structure of the anti-corruption machinery in the States needs reconsideration. An all-out effort to combat corruption would require that this problem be dealt with appropriately at all levels. On the one hand, curbing corruption at the cutting edge level would require a machinery having wide reach which could investigate a large number of cases of corruption effectively. On the other, curbing corruption at the highest level would require a mechanism with adequate powers, expertise and status which could investigate cases against high public functionaries like Ministers. If the Lokayukta is to be effective, it would neither be appropriate nor feasible to make this institution investigate petty cases against junior functionaries as its primary effort. Therefore, it is necessary to have the equivalent of the Central Vigilance Commission at the state level to deal with cases of corruption among public servants. The Lokayukta could then deal with corruption at the highest level covering senior-most public functionaries. However, often the thread of corruption runs through several levels, indicating connivance of Ministers and public officials. It is therefore necessary to have a link between the Lokayukta and the State Vigilance Commissioner. The Commission in para 4.3.15 has recommended that the Central Vigilance Commissioner be made a Member of the Lok Pal. The Commission has also recommended a multi-member Lok Pal, so that it is better insulated against outside influence and also because a decision of a multi-member Commission would be more objective as it would have inputs from the different members. A similar approach at the state level would be appropriate. The multi-member Lokayukta should have a retired Supreme Court Judge or a retired Chief Justice of the High Court in the Chair, the State Vigilance Commissioner as a member and an eminent jurist or an eminent administrator of impeccable credentials as a member. A collegium comprising the Chief Minister, the Leader of the Opposition and the Chief Justice of the High Court should appoint the Chairman and Members of the Lokayukta.4.4.7 The State Vigilance Commissions should exercise superintendence over the functioning of the Anti-Corruption Bureaus. It should tender independent and impartial advice to the disciplinary and other authorities in disciplinary cases, involving the vigilance angle at different stages i.e. investigation, inquiry, appeal, review etc; and exercise a general check and supervision over vigilance and anti-corruption work in Departments of the State Government and other organizations within the control of the State Government.4.4.8 The Commission is of the view that to insulate the institution of Lokayukta from the vagaries of political expediency, of the kind witnessed in the past, it would be necessary to give the Lokayukta, as in the case of the Lok Pal, a Constitutional status. It would be necessary to amend the Constitution to provide for the institution of Lokayukta in all states. This would also provide the opportunity to vest this authority with certain uniform powers, responsibilities and functions across all states. To this effect the Commission believes that the Lokayukta can be a state level equivalent of the Rashtriya Lokayukta with a similar constitution.4.4.9 Recommendations:a. The Constitution should be amended to incorporate a provision making it obligatory on the part of State Governments to establish the institution of Lokayukta and stipulate the general principles about its structure, power and functions.b. The Lokayukta should be a multi-member body consisting of a judicial Member in the Chair, an eminent jurist or eminent administrator with impeccable credentials as Member and the head of the State Vigilance Commission {as referred in para 4.4.9(e) below} as ex-officio Member. The Chairperson of the Lokayukta should be selected from a panel of retired Supreme Court Judges or retired Chief Justices of High Court, by a Committee consisting of the Chief Minister, Chief Justice of the High Court and the Leader of the Opposition in the Legislative Assembly. The same Committee should select the second Member from among eminent jurists/administrators. There is no need to have an Up-Lokayukta.c.The jurisdiction of the Lokayukta would extend to only cases involving corruption. They should not look into general public grievances.d. The Lokayukta should deal with cases of corruption against Ministers and MLAs.e.Each State should constitute a State Vigilance Commission to look into cases of corruption against State Government officials. The Commission should have three Members and have functions similar to that of the Central Vigilance Commission.21119Ethics in GovernanceInstitutional Frameworkf.The Anti Corruption Bureaus should be brought under the control of the State Vigilance Commission.g. The Chairperson and Members of the Lokayukta should be appointed strictly for one term only and they should not hold any public office under government thereafter.h. The Lokayukta should have its own machinery for investigation. Initially, it may take officers on deputation from the State Government, but over a period of five years, it should take steps to recruit its own cadre, and train them properly.i.All cases of corruption should be referred to Rashtriya Lokayukta or Lokayukta and these should not be referred to any Commission of Inquiry.4.5 Ombudsman at the Local Level1204.5.1 The 73rd and the 74th amendments to the Constitution have firmly established decentralization of powers and functions to the third tier of the government hierarchy on a statutory footing as a measure of democratisation calculated to bring government closer to the people and increase the accountability of the local administration. However, concern has been expressed that decentralisation without proper safeguards can increase corruption, if the process is not simultaneously accompanied by the creation of suitable accountability mechanisms otherwise available at the level of the Union Government and state governments. This gives greater scope for corruption. A disturbing trend visible is the growing corruption and capture of power by local political elites with questionable integrity.4.5.2 The Commission is of the view that a system of Local Bodies Ombudsman may be established to hear complaints of corruption against local bodies (elected members as well as officials). Such Ombudsman may be constituted for a group of districts. The Local Bodies Ombudsman should have powers to enquire into allegations of corruption against public functionaries in local bodies. They should be empowered to take action against the elected members if they are found guilty of misconduct. For this, the State Panchayat Raj Acts, and the Municipalities Acts would have to be amended to prescribe the details. The overall superintendence over the Local Bodies Ombudsman’s should vest in the Lokayukta of the state, who should be given revisionary powers over the Local Bodies Ombudsman.4.5.3 The Government of Kerala has appointed Ombudsman under the Kerala Panchayati Raj (Amendment) Act, 1999. It conducts investigations in respect of any action involvingcorruption, maladministration or irregularities in the discharge of administrative functions by local self government institutions, or by an elected representative, of or an official working in any local self government institution and for the disposal of any complaint relating to such action in accordance with the provisions of the Kerala Panchayat Raj Act, 1994 (Act No.13 of 1994).4.5.4 In the wake of the larger Constitutional role now envisaged for decentralised local governments, it would be a good initiative to have a separate vigilance oversight agency to investigate allegations of corruption and maladministration against elected executives and members of the three tiers of these local bodies and their paid personnel. The total number of such elected personnel is so large that it is virtually impossible for the state Lokayuktas to exercise effective vigilance over these bodies.4.5.5 The Commission is of the view that the Ombudsman should be appointed under the respective Panchayat Raj/Urban Local Bodies Acts in all States/UTs., for a group of connected districts. The Ombudsman should be empowered to investigate cases of corruption or maladministration by functionaries of local self government institutions. It is often argued that constitution of Local Ombudsman would lead to duplication of efforts since the Lokayukta is already there. The Commission has already recommended that the Lokayukta should investigate cases only against Ministers or equivalent rank public functionaries and legislators. Therefore, there would be no clash of jurisdiction between the Local Ombudsman and the Lokayukta. However, in order to provide proper guidance to the Local Ombudsman, they should be placed under the overall guidance and superintendence of the Lokayukta.4.5.6 Recommendations:a. A local bodies Ombudsman should be constituted for a group of districts to investigate cases against the functionaries of the local bodies. The State Panchayat Raj Acts and the Urban Local Bodies Act should be amended to include this provision.b. The local bodies Ombudsman should be empowered to investigate cases of corruption or maladministration by the functionaries of the local self governments, and submit reports to the competent authorities for taking action. The competent authorities should normally take action as recommended. In case they do not agree with the recommendations, they should give their reasons in writing and the reasons should be made public.21121Ethics in GovernanceInstitutional Framework1224.6 Strengthening Investigation and Prosecution4.6.1 Prosecution is often a weak link in the chain of anti-corruption law enforcement and there are instances where prosecutors have facilitated the discharge of a delinquent officer. It is, therefore, crucial that cases of corruption are handled by efficient prosecutors whose integrity and professional competence is above board. The Supreme Court did mandate a key safeguard in corruption cases, by decreeing that a panel of lawyers, answerable to a body similar to that of the Director of Prosecutions in the United Kingdom should be created to review the prosecution of corruption cases. As the Supreme Court observed, this panel of “competent lawyers of experience and impeccable reputation shall be prepared on the advice of the Attorney General.” According to the Supreme Court, each case of prosecution by the CBI will have to be reviewed by a lawyer from the panel, and responsibility for unsuccessful prosecution should be fixed. It would be desirable that the Lokayuktas/State Vigilance Commissions are empowered to supervise the prosecution of corruption related cases. This would provide the much needed oversight of the prosecutors on the one hand, and guidance to the prosecutors on the other.4.6.2 Corruption prevention and enforcement in an increasingly electronic environment both in government institutions and outside, requires specific measures to equip the investigating agencies with electronic investigating tools and capability to undertake such investigation. Systematic training of officers in this area more particularly at the state level is essential.4.6.3 In view of the complexities involved in investigating modern-day corruption, the investigating agencies should be equipped with economic, accounting and audit, legal, technical, and scientific knowledge, skills and tools of investigation. More specifically they require specialised knowledge of forensic accounting, audit in different fields like engineering depending on the nature of the case. It would be advisable to have officials in the investigative agencies drawn from different wings of government.4.6.4 Inter-agency information exchange and mutual assistance among various enforcement and investigative agencies such as the Directorate of Enforcement, Economic Intelligence Agencies including those relating to direct and indirect taxes as well as the State investigating agencies can play a key role in unearthing serious cases of frauds and economic offences. In recognition of this fact, Ministry of Finance has set up an elaborate nodal agency for this purpose. Under the present system, there is an Economic Intelligence Council chaired by the Union Finance Minister with representatives from key Ministries and investigative and intelligence agencies at the national level. Eighteen Regional Economic IntelligenceCommittees (REICs) were also set up in 1996 and reactivated in 2003 to, inter alia, ensure operational coordination between various enforcement and economic intelligence agencies as well as similar State level agencies. The REICs are required to meet on a monthly basis. There is perhaps need for the Ministry of Finance to monitor the work of the REICs so that they become more effective nodal agencies for checking fraud and corruption arising from economic and related offences.4.6.5 It has been also noticed that the cases filed relate mostly to those based on complaints or press reports, being reactive action on the part of the anti-corruption agencies. Few cases emanate out of the department’s own efforts. Streamlined vertical corruption runs through several levels of the official hierarchy in corruption prone departments, and does not receive the attention it deserves. This calls for strengthening sources of information to specifically target officers involved in the chain of hierarchical corruption. Anti-corruption agencies should conduct systematic surveys of departments with particular reference to highly corruption prone ones in order to gather intelligence and to observe officers at the higher levels with questionable reputations.4.6.6 Recommendations:a. The State Vigilance Commissions/Lokayuktas may be empowered to supervise the prosecution of corruption related cases.b.The investigative agencies should acquire multi-disciplinary skills and should be thoroughly conversant with the working of various offices/ departments. They should draw officials from different wings of government.c.Modern techniques of investigation should also be deployed like electronic surveilance, video and audio recording of surprise inspections, traps, searches and seizures.d. A reasonable time limit for investigation of different types of cases should be fixed for the investigative agencies.e.There should be sustained step-up in the number of cases detected and investigated. The priorities need to be reoriented by focussing on ‘big’ cases of corruption.21123Ethics in Governance5f.The prosecution of corruption cases should be conducted by a panel oflawyers prepared by the Attorney General or the Advocate General in consultation with Rashtriya Lokayukta or Lokayukta as the case may be.g.The anti-corruption agencies should conduct systematic surveys ofSOCIAL INFRASTRUCTUREdepartments with particular reference to highly corruption prone ones in order to gather intelligence and to target officers of questionable integrity.5.1 Citizens’ Initiativesh. The economic offences unit of states need to be strengthened to effectively investigate cases and there should be better coordination amongst existing agencies.5.1.1 The citizens’ voice can be effectively used to expose, denounce and restrain corruption. This calls for the engagement of civil society and the media in educating citizens about the evils of corruption, raising their awareness levels and securing their participation by giving them a ‘voice’. This introduces a new dimension to the concept of accountability of government to the people otherwise than through the traditional horizontal mechanisms of legislative and legal accountability of the executive and internal vertical accountability. Civil society here refers to formal as well as informal entities and includes the private sector, the media, NGOs, professional associations and informal groups of people from different walks of life.5.1.2 The Independent Commission Against Corruption (ICAC) of Hong Kong has produced exemplary results over the last quarter century by strengthening the ability of civil society to question corruption. The credit for raising the consciousness of the community in Hong Kong about fighting corruption, goes largely to the vigorous public education campaigns carried out by the ICAC. The ICAC has used innovative social strategies to combat corruption, but its main emphasis has been on bringing about changes in the public attitude to corruption. Corruption in Hong Kong was entrenched before the ICAC started functioning. At that time, people regarded corruption asBox 5.1: The ICAC of Hong KongThe ICAC has taken the anti-corruption message to every corner of the community in a complex operation which has called for the skilful use of every possible avenue open to it. Mass media has been the most effective channel of spreading the anti-corruption message. Every year, the ICAC produces a series of radio and television advertisements to keep the issue of corruption in the forefront of public consciousness. The ICAC also produces a television drama series called the ‘ICAC Investigators’, telecast on local television stations. Based on real cases, the series educates the community about corruption by depicting how investigators of the ICAC expose and punish corruption. Advertisements, feature articles, and reports in newspapers and magazines, tell people about corruption and the work done by the ICAC. The ICAC also uses face-to-face contact with the community to spread the anti-corruption message and educate members of the public from all walks of life. Every day, the staff of the ICAC take education services to the door steps of various levels of the community in order to spread the anti-corruption message and enlist public support. The ICAC produces specially designed education packages with video and games to appeal to the students in various age-groups. These packages inform students of anti-corruption work in Hong Kong. They also seek to promote positive values such as the correct attitude towards money and the importance of fair play. Corruption is portrayed, in such campaigns, concerts, sporting events and in material distributed to school children, as harmful to families, to the society and to the economy.124125Ethics in GovernanceSocial Infrastructureinevitable and any effort to fight it as futile. But the well-conducted public relation campaigns conducted by the ICAC shattered that conception. The ICAC has, in fact, transformed a passive social environment, which condoned corruption and helped sustain it in the process. It is noted for its unique outreach programme comprising press releases, public announcements, interviews, documentaries, posters, leaflets, meetings and work with schools and universities to convey anti-corruption message to the public. It also sponsors sporting, cultural and entertainment events that are aimed at youth which emphasize anti-corruption themes. A feature of its working includes collaborative efforts with major Chambers of Commerce to promote the Hong Kong Ethics Development Centre to further ethics in corporate governance. It also instructs, advises and assists any person, on request, on ways in which corrupt practices may be eliminated and advises heads of government departments or of public bodies of changes in practices or procedures compatible with the effective discharge of their duties.5.1.3 In India, there have been many outstanding cases of civil society engagement. In fact, civil society initiatives to improve governance in India has grown in scale and content from the early 1990s. There have been efforts in different parts of country to challenge current paradigms, test alternative approaches and share the learning from these experiences. Some successful civil society engagements are:1)Public Interest Litigation by Common Cause Delhi and Consumer Education and Research Centre, Ahemedabad, the Association for Democratic Reforms of Ahmedabad;2)Report Card Survey of Public Affairs Centre, Bangalore;3) Jan Sunwai by Mazdoor Kisan Shakti Sangathan, Rajasthan and Parivartan, Delhi;4)Campaign for Electoral Reforms and Citizens’ Charters by Lok Satta, Hyderabad;5)Capacity Building for Advocacy by National Centre for Advocacy Studies, Pune;6)Campaign for Effective Municipal Decentralization by CIVIC, Bangalore;7)Public discussion on municipal and State budgets by Disha and PROOF of Bangalore and participatory municipal budgeting by Janaagraha, Bangalore;8) Campaign for Citizen Charters by PRAJA of Mumbai; Voter Awareness Campaign by Catalyst Trust, Chennai, Public Affairs Centre, Bangalore and Lok Satta, Hyderabad; and9) National Campaign for People’s Right to Information/Parivartan, New Delhi on Right to Information.5.1.4 The example of just two of these organizations would indicate the excellent work being done by these and other civil society organisations. The Mazdoor Kisan Shakti Sangathan (MKSS) in Rajasthan, a well-known NGO, started uncovering corruption in local public works by gaining access to employment rolls, vouchers, beneficiary lists, and completion and utilisation certificates and then, handing them over to the concerned villagers for scrutiny in public hearings called Jan Sunwai. Instances of large-scale corruption were unearthed in these public hearings regarding false muster rolls, false bills and vouchers, and false completion and utilisation certificates. As a result of these public hearings facilitated by MKSS, the government in Rajasthan was finally persuaded to introduce serious reforms such as the creation of a ward sabha that was given the power to conduct social audit of government programmes, approve proposals for public works and certify proper execution of works. Parivartan, an NGO based in Delhi, used the Right to Information law to expose corruption in the Public Distribution System by insisting on access to stock registers maintained by fair price shops, and expose that large quantities of rice, wheat and oil intended for the public had been diverted to the open market.5.1.5 What do these initiatives signify? Civil society groups have put pressure on erring governments to reform corrupt practices. They have also provided monitoring mechanisms to track corruption by educating members of the public and associating them in anticorruption efforts. They have helped generate demand for reducing corruption and introducing systemic reforms. On the whole, these civil society engagements are path-breaking initiatives that have emerged out of an urge to serve the needs of the common man and have involved a great deal of educating people and mobilizing them.5.1.6 The successful initiatives of civil society groups underscore the criticality of educating people and raising their awareness in fighting corruption. Though such initiatives come from the society, the government can create an environment whereby the citizens’ groups can effectively participate in its efforts to root out corruption. Some measures to facilitate this could be:a.inviting civil societies to oversee government programmes;b.establishing and disseminating service standards;1265212753Ethics in GovernanceSocial Infrastructure128c.establishing credible complaints mechanisms;d.assessing public confidence in anti-corruption institutions, judiciary and law enforcement and in desigining programmes to improve trust levels;e.enforcing access to information;f.educating society on the events of corruption and to instil moral commitment to integrity;g.using public hearings to audit government activities where audiences gather to hear details of public work schemes and residents provide their own perception;h.initiating government or private sector sponsored public education and awareness campaigns through radio, newspapers and the television;i.holding integrity workshops and public hearings at the national and local levels at regular intervals to discuss problems and suggest changes involving all participants;j.surveying and assessing public service delivery periodically;k.surveying corruption perceptions in general or specific sectors of government functioning;l.incorporating corruption as a subject in the education curriculum; andm. setting up websites on corruption - containing information, facilitating dialogue and feedback from citizens, associating former public servants in lobbying against corruption.5.1.7 Citizens’ Charters make administration both accountable and citizen-friendly. A few years back, almost every government department and organisation launched its Citizens’ Charter. The Charter is an undertaking a public service organization gives to the citizens, to provide a high level of service while meeting the standards contained in the declaration. Over time in a large number of offices Citizens’ Charters have fallen into disuse. The promises made in the charters have become pious declarations with no mechanism to enforce them. The Citizens’ Charter should contain specific provisions and set out specific obligations for the public services, the time within which the department would be obliged to provide a service or to respond to a query or complaint. The Commission feels that in order to make these charters effective tools for holding public servants accountable, the charters shouldclearly spell out the remedy/penalty/compensation in case there is a default in meeting the standards spelt out in the charter. It would be better to have a few promises which can be kept rather than a long list of lofty declarations which are impractical.5.1.8 Citizens may be involved in the assessment and maintenance of ethics in major government offices and institutions with large public contacts. This assessment could be done at the state, district and sub-district levels. The assessment may be made from the perception of citizens who have been in touch with such offices, with the help of professional agencies. A mechanism needs to be put in place in government offices so that a data base of all visitors is maintained. The professional agency should contact these persons and get their feedback. Based on these feedbacks, the public office could be given a rating.5.1.9 A policy of incentivising citizens’ participation should be actively pursued. Enacting a False Claims Law (para 5.2) is one way of incentivising citizens’ participation. A reward system for reporting cases of corruption could also help in bringing to light cases of corruption. Prompt action on citizens’ complaints apart from redressing the grievance also motivates others to bring their grievances to the notice of authorities.5.1.10 School awareness programmes can be very effective in bringing about attitudinal changes in the society. Such programmes are ideally taken up in high schools and should educate students about the role of citizens in a democracy, the role of civil society, harmful effects of corruption, principles of collective assertion in fight against corruption, some exposure to functioning of public institutions etc.5.1.11 An allied aspect relates to the question of government using positive inducements or rewards to disclose information on corruption. There are reward schemes in taxation departments where complainants are rewarded a percentage of the income unearthed based on the information. Such cases of rewards should also be offered where information is furnished about corrupt practices. Innovative incentives need to be introduced so that people are motivated to expose the wrong doings of corrupt public officials. Change will come when the incentives to throw out a corrupt system become stronger than the incentives to retain such a system. The need of the hour is to have zero tolerance towards corruption.5.1.12 Recommendations:a.Citizens’ Charters should be made effective by stipulating the service levelsand also the remedy if these service levels are not met.b. Citizens may be involved in the assessment and maintenance of ethics in important government institutions and offices.129Ethics in GovernanceSocial Infrastructure1305.2 False Claims Act5.2.1 The existing provisions in the Indian Penal Code and other enactments are not adequate to enable interested citizens and civil society groups to approach courts for recovery of the proceeds of corruption and provide for a share in the proceeds. In the United States, the False Claims Act makes it possible for interested citizens to approach any court in any judicial district for recovery of the proceeds of corruption.5.2.2 Under the Federal False Claims, any person who has knowledge about a fraud committed by another person or entity, may file a law suit on behalf of the Federal Government. And if the fraud is established in a court of law, the person committing the fraud is penalized and the plaintiff is rewarded with a percentage of recovery. The Law was enacted during the Civil War52 to control fraud in Federal contracts. It was amended in 1986 and given more teeth. The amendments to the False Claims Act in US in 1986 were carried out as the Congress felt that government alone cannot win the war against frauds and sought to create incentives for private citizens to come forward and supplement government’s efforts. A significant feature of the law is the protection it offers to whistle blowers. The Commission has recommended the enactment of a law to provide protection to whistleblowers (para 3.6.4). It would be appropriate to emphasise the fact here that “insider information” regarding false claims made to a government office, in a case of collusion would be more forthcoming with the passing of that law.5.2.3 The central features of the US False Claims Law are as follows :?The provider of goods orservicesinpublic procurement should offer to Federal Government the best price. If any other customer is provided a more favourable price for the same quality, the contractor is liable to make good the difference in price.?The citizens are empowered to file a civil suit in the Federal Courts on behalf of the United States. The US Government is notified of such an event and the Government may implead itself as a litigant in such cases.?The Court will determine the loss sustained by the public. Such loss includes actual monetary loss and non-monetary loss to society in the form of poor quality of goods and services, pollution and other social costs. In respect of social cause, the court computes it in money terms. The court is empowered to impose a penalty of three times the loss sustained or computed.?The citizen filing the civil suit will get 15 to 35% of the penalty levied as the compensation for his efforts, depending upon his involvement in the case. This provides strong incentive to citizens and civil society organizations to unearth false claims and corruption and to file civil suits.?The whole procedure is governed by rules of civil litigation and the standard of proof needs to meet civil court norms, and does not require proof beyond reasonable doubt.5.2.4 There is need for legislation on the lines of the US False Claims Act, which will make it possible for interested citizens and civil society groups to seek legal relief for the recovery of the proceeds of corruption and claim a share. Such a law would help in curbing corruption where the fraud has been committed in collusion with a public servant. But more important, such a law would help in building a culture of fair play in private and public organizations.c.Reward schemes should be introduced to incentivise citizens’ initiatives.d. School awareness programmes should be introduced, highlighting the importance of ethics and how corruption can be combated.Box 5.2: Recoveries under theUS False Claims ActRecoveries in suits and investigations of fraud against the United States for the fiscal year ending September 30, 2003, tallied a record $2.1 billion. This is a 75 per cent increase over the prior year’s recoveries ($1.1 billion) and brings total recoveries to over $12 billion since Congress substantially strengthened the civil False Claims Act in 1986.Source: US Department of Justice: http:/ /opa/pr/2003/ November/03_civ_613.htm (dated:10- 11-2003)Box 5.3: Purpose of the False Claims ActThe government needs help - lots of help - to adequately protect the Treasury against growing and increasingly sophisticated fraud ... Part of the solution - something I consider essential to any meaningful improvements in cutting down fraud - is the establishment of a solid partnership between public law enforcers and public taxpayers. The Federal government has a big job on its hands as it attempts to ensure the integrity of the nearly $1 trillion we spend each year on various programs and procurement. That job is simply too big if government officials are working alone.Senator Charles Grassley explaining the purpose behind the Act while introducing amendments to the False Claims Act in 1985.5.2.5 Recommendations:a.Legislation on the lines of the US False Claims Act should be enacted,providing for citizens and civil society groups to seek legal relief against fraudulent claims against the government. This law should have the following elements:i.Any citizen should be able to bring a suit against any person or agency for a false claim against the government.ii.If the false claim is established in a court of law, then the person/131" This Law, originally enacted in 1863 is also called the Lincoln LawEthics in GovernanceSocial Infrastructure(BRAI) with both licensing and oversight functions covering the electronic media. The Bill also proposes to lay down norms and provide for a self-regulatory mechanism to ensure observance of a liberal Content Code. There has also been a proposal for the formation of a Media Commission. The Commission is not going into the details of these proposals. The Commission is of the view that since the electronic media plays a role as important as the one played by the print media, there is need to have a code for the electronic media covering different aspects of its functioning.agency responsible shall be liable for penalty equal to five times the loss sustained by the exchequer or society.iii. The loss sustained could be monetary or non-monetary as in the form of pollution or other social costs. In case of non-monetary loss, the court would have the authority to compute the loss in monetary terms.iv. The person who brought the suit shall be suitably compensated out of the damages recovered.5.3.5 Recommendations:a. It is necessary to evolve norms and practices requiring proper screening of all allegations/complaints by the media, and taking action to put them in the public domain.1325.3 Role of Media5.3.1 A free media has a crucial role in the prevention, monitoring and control of corruption. Such media can inform and educate the public on corruption, expose corruption in government, private sector and civil society organizations and help monitor codes of conduct while policing itself against corruption.5.3.2 Investigative reporting by media or reporting of instances of corruption as they occur can be a significant source of information on corruption. Daily reporting of instances of corruption as they occur is another type of contribution. Timely action should be taken by the authorities to immediately respond to such reports, to appraise the correct facts, to take steps to bring the culprits to book and to keep the press and the public informed from time to time of the progress of such action. It has been the common experience that very often there is no systematic arrangement to take note of these allegations and to follow them up. The collation of reports appearing in different sections of the media and their follow up should be an integral part of complaints monitoring mechanism in all public offices.5.3.3 It has been observed that sometimes under pressure of competition, the media does not verify allegations and information before putting them in the public domain. Occasionally, such allegations/complaints are motivated. It is necessary to evolve norms and practices that all allegations/complaints would be duly screened, and the person against whom such allegations are made is given a fair chance to put forth his version.5.3.4 The Press Council was reconstituted to maintain and improve the standards of newspapers and news agencies in India. The Press Council of India has prescribed a Code of Conduct for the print media. However, no such code exists for the electronic media. The Ministry of Information and Broadcasting has prepared a draft Broadcasting Services Regulation Bill which proposes to set up a Broadcasting Regulatory Authority of Indiab. The electronic media should evolve a Code of Conduct and a self regulating mechanism in order to adhere to a Code of Conduct as a safeguard against malafide action.c. Government agencies can help the media in the fight against corruption by disclosing details about corruption cases regularly.5.4 Social Audit5.4.1 Social audit through client or beneficiary groups or civil society groups is yet another way of eliciting information on and prevention of wrong doing in procurement of products and services for government, in the distribution of welfare payments, in the checking of attendance of teachers and students in schools and hostels, staff in the hospitals and a host of other similar citizen service-oriented activities of government. This will be a useful supplement to surprise inspections on the part of the departmental supervisors. The Commission, without entering into details of all these, would like to suggest that provisions for social audit should be made a part of the operational guidelines of all schemes.5.4.2 Recommendation:a.Operational guidelines of all developmental schemes and citizen centricprogrammes should provide for a social audit mechanism.1336Ethics in Governance5.5 Building Societal Consensus5.5.1 In fighting corruption, it is necessary to build a broad consensus on the importance of making society corruption-free. Towards that end, it is essential that the political parties which have crucial roles and responsibilities in governance, pursue anti-corruption agendas. It is heartening to know that for the Lok Sabha elections in 2004, most major political parties had included fight against corruption as a major theme in their election manifestos. For example, the election manifesto of the Indian National Congress stated:?The Congress will tackle the root causes ofcorruption and generation ofblack money. To a large extent, deregulation, removal of laws that have outlived their utility or have not fulfilled their socialpurpose, transparency in party financing and state funding ofelections willhelp. Even so, the Congress is conscious ofthe havoc that corruption at alllevels adds to the harassmentofthe common man and is determined to rid the country ofthis scourge.The manifesto of the National Democratic Alliance stated :?The NDA governmentis committed to giving corruption-free governance atalllevels.The above are only illustrations on the basis of materials available with the Administrative Reforms Commission. Such affirmations are in the right direction. The Commission would like to recommend that a more inclusive and broad-based societal consensus should emerge in the fight against corruption.SYSTEMIC REFORMS“A fallacy promoted by some in the field of anti-corruption and at times also by the international community is that one “fights corruption by fighting corruption”- through yetanother anti-corruption campaign, the creation ofmore “commissions”and ethics agencies, and the incessant drafting ofnew laws, decrees, and codes ofconduct. Overall, such initiatives appear to have little impact, and are often politically expedient ways ofreacting to pressures to do something aboutcorruption, substituting for the need forfundamental and systemic governance reforms”53.Monopoly + Discretion - Accountability = Corruption546.1 Importance of Systemic Reforms6.1.1 A holistic approach for combating corruption would require an optimum mix of punitive and preventive measures. Punitive measures act as a deterrent whereas preventive measures reduce opportunities for corruption by making systems transparent, increasing accountability, reducing discretion, rationalsing procedures etc. Better preventive measures act as ‘Systemic Reforms’ as they seek to improve systems and processes. Some of the initiatives taken in recent years in this direction are listed below:?Railway Passenger Bookings (Indian Railways): The computerization of railway passenger bookings, including ‘on-line’ booking and e-ticketing has eliminated the middlemen, decongested booking offices and brought considerable transparency to the Railway reservations process.?Common Entrance Test (Karnataka) : This seeks to ensure merit-based selection to professional colleges in a timely and transparent manner.?Teachers Appointment Scheme (Karnataka): This unique effort provided for a fool-proof, objective and a transparent system for appointing teachers.?Registration & Stamps (Maharashtra): The intention was devising more transparent property valuation tables, computerization of records, setting time limits for returning a registered document, use of digital cameras for photos13413553 Source: Finance and Development; IMF, September 2005, Volume 42, Number 3; basics.htm54 American economist Robert KlitgaardEthics in GovernanceSystemic Reformsand finger-printing, etc. The expedient of ‘valuation tables’ has virtually done away with arbitrary assessment of stamp duty and achieved the multiple objectives of minimizing corruption, ruling out harassment to purchasers of immoveable property and augmenting tax collection.?Unit Area Scheme (Delhi): This provided a system for the payment of property tax and registration of property involving self assessment and normative basis of calculation .?e-Cops (Punjab): This seeks to ensure on-line registration of complaints and their systematic follow-up enabling complainants to ascertain the outcome and the higher police echelons to keep ‘real time’ watch over the manner the ‘cutting edge’ level functionaries act on complaints.?e-Governance in Andhra Pradesh (E- Seva), and Kerala (FRIENDS standing for Fast, Reliable, Instant, Effective Network for Distribution of Services): These provide improved service delivery by simplifying transactions between government and citizens involving use of information technology for payment of utility bills or seeking different services on a single platform. Mention may also be made of the initiative ‘E-Choupals’ in Madhya Pradesh for the benefit of farmers selling their produce.?Rural Kiosks, known as RSDP (Rural Service Delivery Points) in Andhra Pradesh: This ensures the reach of E-Seva through internet to facilitate payment of bills, information, downloading of forms, etc reducing public inconvenience and releasing employees to more ‘substantive’ public duties.6.1.2 Such ‘best practices’ drive home the point that given a pragmatic approach to problem solving, proper leadership and planning; impressive results can be achieved in enhancing the quality of services and reducing corruption. But looking at the magnitude of existing corruption such initiatives are far too few. The lack of transparency that generally shrouds government operation and programmes is a fertile ground for corruption. The weakness of accountability mechanisms also provides opportunities for corruption. Bureaucratic complexity and procedures make it difficult for the ordinary citizen to navigate the system. What is required is large scale reform of both systems and procedures.6.1.3 The range of activities undertaken by government is so vast that any meaningful systemic reform would require an in-depth study of each of these functions. However, certain general principles would apply to all functions of government at all levels and these are dealt with in this chapter.6.2 Promoting Competition6.2.1 Most public services in India are provided by government in a monopolistic setting. Such a situation by its very nature is conducive to arbitrariness, and complacence with a high probability of a section of functionaries taking advantage of the ‘departmental hegemony’ for corruption. Introduction of an element of competition in the provision of public services is thus a very useful tool to curb corruption. Two successful initiatives can be cited in this connection; first, the gradual de-monopolisation of the telecom sector; second, the growing role of private players in providing direct marketing services to farmers outside the government-controlled mandis in Madhya Pradesh.6.2.2 The case of telecommunication is one of the most successful examples of curbing corruption through introduction of competition. Our telecommunication sector was, until recently, the exclusive preserve of government. Such monopolistic control lead to a high incidence of corruption. The Indian Telegraph Act, 1885, stipulated that it was only the Department of Telecommunication, which could operate as the policy maker, service provider and the licensor in the field of telecommunications. As a result of policy reforms, which introduced competition, private players have been allowed in the international and national long distance sectors as well as in the form of private cellular services. Policymaking has thus been separated from provision of services. The result has been a drastic lowering in the cost of services and the universal recognition of a major decline in corrupt practices.6.2.3 The Agricultural Produce Marketing Act, 1972, of Madhya Pradesh permitted only the traders in the officially designated mandis to buy the produce of the farmers. The officials of the Mandi Samitis and the traders formed a monopsonistic nexus to cheat the farmers by paying them less than the fair price of their produce. The Act was later amended and now farmers and traders are no longer obliged to transact business only in designated mandis. This reduced corruption in the regulated markets indulged in by traders and officials.6.2.4 Clearly, ending government’s monopoly in a large number of service sectors and allowing others to compete can play a major role in reducing corruption. To a large extent, therefore, dismantling monopolies and introducing competition go together. However, deregulating in one area may increase corruption elsewhere. The process can itself be subverted and sometimes private agencies, which replace the government agencies in service delivery could be even more corrupt. It is, therefore, necessary that such demonopolisation and competition is accompanied by a ‘regulation mechanism’ to ensure performance as per prescribed standards so that public interest is protected.136137Ethics in GovernanceSystemic Reforms1386.3 Simplifying Transactions6.3.1 The causal relationship between incidence and intensity of corruption and the complex nature of work methods needs no elaboration. An ordinary citizen who has just to pay a bill to the government could be condemned to making multiple visits to government offices. There is high probability of such a citizen ending up greasing the palms of officials to avoid harassment. Similarly, elaborate hierarchies not only breed complex work methods but also cause diffusion of responsibility. Time honoured practices like “territorial” distribution of work also, for instance, tend to cause overcrowding and consequent motivation to ‘jump queues’ by paying speed money or employing touts and middlemen. The practice of laying down methodologies through manuals has fallen in disuse. Properly deployed, and regularly upgraded, such documents can be a great source of demystifying administrative procedures and promoting accountability. In the era of Information Technology and Right to Information, such documents can be an excellent source for ‘simplifying transactions’ inasmuch as they would afford a degree of clarity to the literate service user.6.3.2 One of the maladies of administration in India is the multiplicity of layers in every decision making process. Apart from delays, this contributes to corruption. Whenever abuse of authority is noticed, another layer of administration is added in the hope that this would act as a check. More often than not, each additional layer further adds to delay and corruption without solving the original problem. A classic example of this is of when, confronted withthe presence of large-scale black money in real estate transactions, a ‘Competent Authority’ was constituted in the Income Tax department to clear all sale transactions above a certain value. This ‘Competent Authority’ had the power to acquire properties, which were found to be undervalued. Very few properties were acquired but the arrangement proved extremely counter productive as it created a further incentive for undervaluation to avoid the process of getting a clearance from the ‘Competent Authority’. After more than two decades of experimentation the provision has been deleted from the rulebook!6.3.3 A single window clearance of all requirements or one-stop service centres is a step which can cut down on corruption as it simplifies procedures and reduces layers. In Canada, for instance, the single window gives all approvals in just two days. This requires not merely a single window but also fully automated back up of all related offices. Yet another administrative method is what is called ‘positive silence’ sanctions, an example of which is deemed sanction of an application upon expiry of the stipulated period for such sanction as in the case of deemed sanction of building permits (one has to take care however to avoid subsequent harassment by the building inspector who is sure to find violation of bylaws for possible extraction of a bribe). One of the most successful examples of one-stop service centres is Andhra Pradesh’s E-Seva model. E-Seva offers the services of some 13 state and local government organisations, three central government organisations and nine private sector organisations under one roof. The services that E-Seva offers include the payment of public service bills, provision of birth and death certificates, payment of property tax, train and bus reservations, private mobile phone bill payments, receipt of passport applications and also, transfer of shares. A user survey conducted by the Administrative Staff College of India indicates that the expected benefits are being realized by E-Seva and that corruption has been reduced substantially.6.3.4 Most of the procedures dealing with permissions, licenses and registration were laid down years ago. These procedures are quite complex and require documentation, which a common citizen finds difficult to complete. It is, therefore, necessary to have a review of all such procedures so that unnecessary procedural requirements are eliminated.6.2.5 Recommendations:a. Each Ministry/Department may undertake an immediate exercise to identify areas where the existing ‘monopoly of functions’ can be tempered with competition. A similar exercise may be done at the level of State Governments and local bodies. This exercise may be carried out in a time bound manner, say in one year, and a road map laid down to reduce ‘monopoly’ of functions. The approach should be to introduce competition along with a mechanism for regulation to ensure performance as per prescribed standards so that public interest is not compromised.b. Some Centrally Sponsored schemes could be restructured so as to provide incentives to states that take steps to promote competition in service delivery.c.All new national policies on subjects having large public interface (and amendments to existing policies on such subjects) should invariably address the issue of engendering competition.6.3.5 Recommendations:a.There is need to bring simplification of methods to the center-stageof administrative reforms. Leaving aside specific sectoral requirements, the broad principles of such reforms must be: adoption of ‘single window’ approach, minimizing hierarchical tiers, stipulating time limits for disposal etc.139Ethics in GovernanceSystemic Reforms6.4 Using Information Technology6.4.1 The relationship of the government with its constituents, citizens and businesses, and also between its own organs can be transformed through the use of the tools of modern technology such as Information and Communication Technology (ICT). The digital revolution has the potential to transform and redefine processes and systems of governance. The most visible impact has been in access to information and data, in building management information systems and in the field of electronic service delivery. E-Governance is the logical next step in the use of ICT in systems of governance in order to ensure wider participation and deeper involvement of citizens, institutions, civil society groups and the private sector in the decision making process of governance. The Commission proposes to examine this promising area of reforms in a subsequent Report and will, therefore, confine itself only to some broad aspects here in the context of reducing corruption.6.4.2 Some of the recent initiatives clearly demonstrate what such applications may achieve. The Gyandoot project in Madhya Pradesh is one such example. It seeks to provide information about prevailing agricultural produce prices at auction centres and easier processes for obtaining copies of land records. It involves installation of a low cost intranet linking various market centres and villages. In the project, local youth act as entrepreneurs running the kiosks on commercial lines and charging a user fee. The services provided at the kiosks include agricultural produce auction centre rates; copies of land records; online registrationof applications; online public grievance redress; village auction site; and updated information regarding beneficiaries of social security pension, rural development schemes, government grants of various kinds, etc. This has had the effect of empowering local communities. Some kiosks have installed photocopy machines. An interesting aspect of Gyandoot is that the entire expenditure of the project was borne by the panchayats and the local community. The average cost incurred by each village community was Rs 75,000/-. Evaluation shows that agricultural produce rates, land records and grievance services were the most popular, accounting for 95 per cent of the usage and that opportunities for corruption have been greatly reduced.6.4.3 Another example is the Bhoomi Project in Karnataka, under which 20 million records of land ownership of 6.7 million farmers in the state were computerized. Previously, farmers had to seek out a village revenue official to get a copy of the record of rights, tenancy and crops (RTC), that is needed in many contexts, such as application for loans; and this often involved bribery. Today, for a fee of Rs15, a printed copy of the extract can be obtained online at computerized land record kiosks (Bhoomi Centres) in 177 offices. When a change of ownership takes place, the farmer files for a mutation of land record at the Bhoomi Centre. The computer automatically generates notices, and a revenue inspector stationed in the field approves the change after thirty days if no objection is received. There are plans to increase the number of kiosks through public-private partnerships. An independent evaluation conducted in 2002 showed significant impact on efficiency in delivery and reduction of corruption.6.4.4 However, it is not always true that the use of IT by itself helps in reducing corruption. For example, Andhra Pradesh’s scheme of the Computer-Aided Administration of Registration Department Programme (CARD), failed to arrest corruption in rural sub-Registrar Offices; there was no difference in corruption levels between computerized and non-computerized Sub Registrar Offices". If the pilots referred to above and similar initiatives are to be mainstreamed, much greater preparation in terms of adapting the existing administrative structures to ‘receive’ and ‘adapt’ technologies needs to be worked out. The provider of technological inputs and the manager of public services need to understand the applicability of such technologies, including their limitations for achieving the desired results. The development of internet has added another dimension of transfer of the data and information over long distances at virtually no cost. It is this storage, retrieval, processing and transmitting power of IT, if properly harnessed that can make governmental processes more transparent and objective and reduce the scope for corruption. But, before any introduction of IT is attempted, it is necessary that the existing procedures are properly re-engineered and made computer adaptable.b. The existing Departmental Manuals and Codes should be thoroughly reviewed and simplified with a responsibility on the Head of the Department to periodically update such documents and make available soft-copies on-line and hard copies for sale. These manuals must be written in very precise terms, and phrases like ‘left to the discretion of’, ‘as far as possible’, ‘suitable decision may be taken’ etc should be avoided. This should be followed for all rules and regulations governing issue of permissions, licenses etc.c.A system of rewards and incentives for simplification and streamlining of procedures may be introduced in each government organization.d.The principle of ‘positive silence’ should generally be used, though this principle cannot be used in all cases. Wherever permissions/licenses etc are to be issued, there should be a time limit for processing of the same after which permission, if not already given, should be deemed to have been granted. However, the rules should provide that for each such case the official responsible for the delay must be proceeded against.140141ss Source: Ramesh Ramanathan and Suresh Balakrishnan, “State of the Art as Art of the State, Evaluating e-governance Initiatives Through Citizen Feed Back,” Public Affairs Centre, June 2000, p.13Ethics in GovernanceSystemic Reforms6.4.5 There have been several successes in introduction of e-governance. But the greatest challenge has been their replicability and up-scaling. There are very few examples of e-governance examples with a nationwide impact (the railway reservation system is one of them). The lack of good infrastructure and the inadequate capability of the personnel have proved to be major bottlenecks in the spread of e-governance. Much greater attention needs to be paid to familiarize Departmental officials with the relevant processes and their capabilities. Apart from imparting on-the-job training, the Departmental officials involved with planning and implementations of such strategies may be sent to organizations, including some in the private sector, where these are already mainstreamed.6.4.6 The National Informatics Centre (NIC) has played a useful role in facilitating e-Governance. The Commission feels that NIC may take concrete steps to build up skills and domain expertise among its personnel so that specific organizational needs are more fully understood by technology providers. The Ministry of Information Technology itself must assess new areas for computerization across the country.6.4.7 Recommendations:a. Each Ministry/Department/Organisation of government should draw up a plan for use of IT to improve governance. In any government process, use of Information Technology should be made only after the existing procedures have been thoroughly re-engineered.6.5.2 India took a major step towards transparency in administration with the enactment of the Right to Information Act, 2005. The Commission has examined all aspects of ‘Freedom of Information’ in its First Report titled ‘Right to Information: Master Key to Good Governance’, and has made comprehensive recommendations.6.6 Integrity Pacts6.6.1 One mechanism that can help in promoting transparency and creating confidence in public contracting is the use of ‘integrity pacts’. The term refers to an agreement between the public agency involved in procuring goods and services and the bidder for a public contract to the effect that the bidders have not paid and shall not pay any illegal gratification to secure the contract in question. For its part, the public agency calling for bids commits to ensuring a level playing field and fair play in the procurement process. An important feature of such pacts is that they often involve oversight and scrutiny by independent, outside observers. Such pacts have contributed significantly to improved transparency and public confidence in the manner in which major deals in Government and public sector organizations are concluded. Many national legal systems now give considerable weightage to such pacts (Source: the website of Transparency International India).6.6.2 ONGC is the first PSU to have signed a MoU with Transparency International India and the CVC on April 17, 2006. A provision has been made in the revised Defence Procurement Procedure Manual, 2006 for adoption of an “Integrity Pact” in all defence contracts and procurements of more than Rs. 300 crores (Source: Defence Procurement Procedure Manual 2006 as posted on the website of Ministry of Defence, Government of India, ).b. The Ministry of Information and Technology needs to identify certain governmental processes and then take up a project of their computerization on a nationwide scale.c.For computerization to be successful, computer knowledge ofdepartmental officers needs to be upgraded. Similarly, the NIC needs to be trained in department specific activities, so that they could appreciate each other’s view point and also ensure that technology providers understand the anatomy of each department.6.5 Promoting Transparency6.5.1 In public administration the term transparency is used to imply openness and accountability. An organisation is said to be transparent when its decision making and manner of working is open to public and media scrutiny and public discussion. A transparent system of administration helps to engender participation by the public in the decision making processes of government thus contributing to a grass roots level and functioning democracy.1426.6.3 The Commission understands that Government organizations in the country have so far not shown much interest in adopting this healthy practice. The reluctance is said to be also on account of uncertainty about the place of such pacts in our legal framework. The Commission feels that this mechanism must be encouraged and integrated into government transactions in as many sectors as possible.6.6.4 Recommendation:a. The Commission recommends encouragement of the mechanism of ‘integrity pacts’. The Ministry of Finance may constitute a Task Force with representatives from Ministries of Law and Personnel to identify the type of transactions requiring such pacts and to provide for a protocol for entering into such a pact. The Task Force may, in particular, recommend whether any amendment in the existing legal framework like the Indian Contract Act, and the Prevention of Corruption Act is required to make such agreements enforceable.143Ethics in GovernanceSystemic Reforms6.7.3 Recommendations:a. All government offices having public interface should undertake a review of their activities and list out those which involve use of discretion. In all such activities, attempt should be made to eliminate discretion. Where it is not possible to do so, well-defined regulations should attempt to ‘bound’ the discretion. Ministries and Departments should be asked to coordinate this task in their organizations/offices and complete it within one year.b. Decision-making on important matters should be assigned to a committee rather than individuals. Care has to be exercised, however, that this practice is not resorted to when prompt decisions are required.c. State Governments should take steps on similar lines, especially in local bodies and authorities, which have maximum ‘public contact’.1446.7 Reducing Discretion6.7.1 Opportunities for corruption are greater in a system with excessive discretion in the hands of the official machinery particularly at lower levels. Such opportunities can be minimized by reducing discretion and maximizing transparency in the system and introducing strict accountability for actions. The most successful anti-corruption reforms are those that seek to reduce discretionary benefits, which are controlled by public officials. An interesting example of improved transparency is the system introduced for effecting transfers of teachers in Karnataka. Under the old system, the practice was that every year some 15000 school teachers used to request transfers to a place of their choice through written applications to several authorities, requiring initiation of action at different levels. Often, the process of decision-making was non-transparent and was riddled with corruption. Under the changed system, applicants are required to submit the reasons for the request for transfer and these are prioritized centrally. A computer-generated list containing the names of transfer seekers along with their ranking (based on the reasons for transfer) are published on the notice board of the department, and objections, if any, are invited. It is reported that this scheme contributed to considerably reducing corruption.6.7.2 There are a large number of governmental activities where discretion can be totally eliminated. All such activities could be automated and supported by IT. Registration of ‘Births and Deaths’ and recruitment of teachers based on marks secured in qualifying exams are examples of this. Where it is not possible to eliminate discretion, then the exercise of powers should be bound by well-defined guidelines to minimize discretion. Effective checks and balances should be built over exercise of discretion.6.8 Supervision6.8.1 Most governments and their agencies have a hierarchical structure. In such a structure, one of the important tasks of each functionary is to supervise the work of the official immediately next, reporting to him/her. As mentioned in earlier paras, there have to be effective checks and balances against the discretion vested in public functionaries. Supervision provides one such mechanism. The very fact that not many cases are initiated against corrupt officials by the department itself is an indicator that the supervision function is not being given the attention it deserves.6.8.2 Controlling corruption in an office or an organization should primarily be the responsibility of the head of the office. Moreover, as all government offices/agencies have a hierarchical structure, each level should be responsible for taking preventive steps to minimize the scope of corruption for the levels below it. It has generally been observed that with the constitution of independent agencies to combat corruption, departmental officers feel that it is not their responsibility to curb corruption in their offices/subordinates or turn a Nelson’s eye to the problem. It needs to be emphasized that the external anti-corruption machinery with their limited resources and reach can, in no way, be a substitute for anti-corruption measures taken by officers in leadership positions. These measures could be random inspections, surprise visits, confidential feedback from citizens/ clients, putting procedures in place which make it difficult to seek bribe, use of decoy clients etc. It is, therefore, suggested that reporting officers while evaluating the performance of their subordinates should clearly comment on the efforts made by the latter to check corruption. There should be a column in the self-assessment portion of the Annual Performance Report wherein each supervisory officer should indicate the measures he/she took to check corruption in his/her office and amongst his/her subordinates, and what were the outcomes of such measures. The Reporting officer should then give his/her comments on this self-evaluation.6.8.3 It has been observed that confidential reports of officials are not always recorded with due care and diligence by the reporting officers. Reporting officers tend to play ‘safe’ by not commenting objectively on the integrity of a public servant even when certain unethical practices have come to his/her notice. This is mainly because there is little accountability of reporting officers about the way they evaluate their subordinates. Colourless entries such as ‘nothing adverse has come to notice’ are quite common. There is, however, need to make supervision more proactive in rooting out corruption. In order to ensure that reporting officers evaluate and record accurately about the integrity of their subordinates, it should be mandated that in case a reporting officer has given a ‘clean chit’ in his assessment of any officer and such an officer is charged with any offence under the Prevention of Corruption Act and the corrupt act took place wholly or partly during the year under report, then the reporting officer should explain why that officer was given the ‘integrity certificate’.145Ethics in GovernanceSystemic Reforms6.8.4 Surprise inspections by supervisory officer are yet another useful tool to detect wrong doing in public offices. Such inspections should be more rigorous in offices having dealings with the public, check posts, toll tax collection points, parking lots, pollution check mobile vans, weights and measures and meter checking centres, quarries, mines, works in progress, pay and accounts offices, relief distribution centres during calamities, etc. On-site inspection of works executed and verification of genuineness of beneficiaries is another variant of such surprise inspection. Surprise checks could extend to establishment sections and cash branches more particularly of taxation departments to verify prompt accounting of cash received, depositing of cheques and drafts in government account, accuracy of preparation of pay bills, remittances of recoveries from salaries of government employees in government account, etc in order to detect misappropriation of funds. Surprise verification of cash in the possession of officers having public dealings has had a salutary effect in discouraging acceptance of bribes while in the office. This is a measure, which should be extended through all offices, making it mandatory for senior officers to periodically undertake this function.6.8.5 Reviews/checks could be conducted internally for information relating to price paid for a wide range of purchases made by different field departments, local bodies and parastatals for stationery, computer accessories and office equipment, consumables and department specific purchases like lighting and sanitation requirements, drugs and pharmaceuticals, hospital requirements; clothing requirements of hospitals, uniformed services, education institutions and hostels; books and other educational accessories and construction materials. These checks should not be limited to comparison of price of articles purchased in one office at a single point of time with market prices, but should extend to a period of say one or two years with the market price prevailing. Such comparison should extend to the price paid by different offices of the same department during the same period and also the prices paid by different departments for the same product. Similar comparative analysis could also be useful in departments which obtain periodical returns from citizens, such as various tax departments.6.8.7 Recommendations:a.The supervisory role of officers needs to be re-emphasised. It bears reiteration that supervisory officers are primarily responsible for curbing corruption among their subordinates, and they should take all preventive measures for this purpose.b.Each supervisory officer should carefully analyze the activities in his/her organization/office, identify the activities which are vulnerable to corruption and then build up suitable preventive and vigilance measures. All major instances of loss caused to the government or to the public, by officials by their acts of omission or commission should be enquired into and responsibility fixed on the erring officer within a time-frame.c.In the Annual Performance Report of each officer, there should be a column where the officer should indicate the measures he took to control corruption in his office and among subordinates. The reporting officer should then give his specific comments on this.d.Supervisory officers who give ‘clean certificates’ to subordinate corrupt officers in their Annual Performance Reports should be asked to explain their position in case the officer reported upon is charged with an offence under the Prevention of Corruption Act. In addition, the fact that they have not recorded adversely about the integrity of their subordinate corrupt officers should be recorded in their reports.e.Supervisory officers should ensure that all offices under them pursue a policy of suo motu disclosure of information within the ambit of the Right to Information Act.6.9 Ensuring Accessibility and Responsiveness6.8.6 Corruption can take place when a public servant does something illegal in order to benefit the citizen. Passing an illegal assessment order to favour a tax assessee is an example. Corruption, as in the case of “speed money”, can take place even while doing the right thing. Corruption may take place through deliberate negligence on the part of the public servant. Allowing an illegal consignment through a checkpost is an example of this. The creation of an institutionalized system to prevent corruption, after a careful analysis of instances of corruption, is an essential first step to effectively tackle corruption. This should be the primary responsibility of all supervisory officers.6.9.1 Departments of government have to be accessible to members of the public and responsive to their needs and aspirations and also responsible for prompt redressal of their grievances. To ensure this, it is necessary that the facilities, concessions and rights which are available to them in each department should be made public and the details about authorities who are competent to grant them together with the procedure for securing the same and getting their grievances redressed should be put in the public domain. There is need to define service standards. Every department should be required to take steps to understand146147Ethics in GovernanceSystemic Reformsc.Public interaction should be limited to designated officers. A ‘singlewindow front office’ for provision of information and services to the citizens with a file tracking system should be set up in all government departments.the problems of its customers, define the standards which the department would maintain in the provision of its services and specify the conditions which customers should fulfil to qualify for the same. Appeal procedures available in case the customers want further redressal should also be indicated. It is also essential to ensure timely disposal of applications. In order to do this, time limits need to be prescribed for disposal of different categories of applications. The Rustomjee Committee on Administrative Reforms had identified 187 services required by the citizens in different departments and had fixed time-limits for their disposal. A compilation of time-frames was made and the government released a booklet on ‘Time-Frames’ which was supplied to all government departments as well as representatives of the public. Such an attempt to codify the services provided in each Department, specify time-frames for provision of such services and make these details available in all offices and on the internet, needs to be re-emphasized and continued. The drive to have a citizens’ charter for different services will be a right step in this direction.6.9.2 Various small measures, too numerous to detail here, are possible to improve transparency in government offices. Help desks at the cutting edge level, prominent display of names of officials, automatic call centres and simplified computerized systems of service delivery are steps in the right direction. Concentration of tasks which are corruption prone in a few hands should be avoided. These tasks should be, as far as possible, broken up into activities which are handled by different people. Public interaction should be limited to the head of office and some designated officers. This can be supported by a ‘single window front office’ for providing information.6.10 Monitoring Complaints6.10.1 Recourse to complaints is an important tool in the hands of a citizen to get his/her grievance redressed. Very often these complaints are not handled with due care. Most public offices in India have a complaint monitoring system, but more often than not, the system does not work, as the complaint ends with the official against whom the charges are alleged. It usually takes several months for a complainant to get a response from the government (if at all there is a response). This contrasts adversely with the scenario in some countries. For instance, the ICAC in Hong Kong responds to a complaint within 48 hours. Similarly, in Singapore, a complainant to the office of the Commission is attended within five minutes, the complaint is looked into within 24 hours and an enquiry or investigation is completed within two months. While setting up such deadlines in a country of our size and complexity may be difficult, some attempts in the direction are necessary. Unless public bodies respond promptly, all efforts to give a voice to the citizen would be futile. Complaints must be monitored, followed up and an end result achieved within a specified period to be given in general or by the supervising officer for a particular case. The action taken must be regularly assessed.6.11 Reforming the Civil Services6.11.1 Civil Services reforms is the basic mandate of the Commission and any attempt to recommend systemic reforms on such a broad plane would not be be appropriate or practical1491486.9.3 Accessibility of government servants to the public should be so designed as to ensure regular, time bound and courteous interaction between the citizens and official functionaries. To this end, business process in government departments should be re-engineered so that back office functions are segregated and take place in a time bound manner based on the principle of ‘first in first out’, with the minimum scope for discretion while the front office should be a “single window” for provision of services to citizens in full public view.6.9.4 Recommendations:6.10.2 Recommendations:a.All offices having large public interface should have an online complaint tracking system. If possible, this task of complaint tracking should be outsourced.b. There should be an external, periodic mechanism of ‘audit’ of complaints in offices having large public interface.a.Service providers should converge their activities so that all services aredelivered at a common point. Such common service points could also be outsourced to an agency, which may then be given the task of pursuing citizens’ requests with concerned agencies.c.Apart from enquiring into each complaint and fixing responsibility forthe lapses, if any, the complaint should also be used to analyse the systemic deficiencies so that remedial measures are taken.b. Tasks, which are prone to corruption, should be split up into different activities that can be entrusted to different persons.Ethics in GovernanceSystemic Reformsin this Chapter. The issue of frequent and arbitrary transfers has been briefly dealt with in Chapter-9 of this Report and will be discussed in its entirety in a later Report. It is necessary, however, to briefly discuss here the present unsatisfactory state of accountability of civil servants as this is often cited as a major causative factor for corruption and misgovernance.6.11.2 The administrative system should be transformed so that at every level of the civil service, there is a clear assignment of duties and responsibilities with structured and interlocking accountability in which the government servant can be held accountable for the manner in which he/she performs his/her duty. Such assignment should be specific and categorical and include in concrete terms the supervisory and oversight responsibilities of the controlling officers. This should go all the way up the line so that the interlocking accountability forces every level of government servants to function efficiently. There also has to be an in-built system of rewards and punishments, with criteria being laid down which can eliminate arbitrariness and subjectivity in granting rewards or awarding punishments. At present, there is no incentive to work diligently and efficiently and no adverse consequences of shirking work, indulging in corruption or failing to achieve an acceptable level of efficiency. At present, not only is there no performance audit but even the old system of awareness of an officer’s strengths, weaknesses and reputation seems to have become a thing of the past. It is high time that a robust system of performance audit to periodically monitor and objectively evaluate the performance of officers is introduced for every level of the civil service. The Commission would be looking into all these aspects in greater detail in its Report on Civil Services Reforms.6.12 Risk Management for Preventive Vigilance6.12.1 The risk of corruption in government depends on the nature of the office and its activity and the character of the person holding that office. An office having more discretion and more public interface is more vulnerable to corruption than an office in which there are no discretionary powers. This implies that it may be possible to classify various positions in government as ‘high risk of corruption’, ‘medium risk of corruption’ and ‘ low risk of corruption’. To illustrate, the post of a tax assessing officer or an inspector at a border check-post could be classified as a ‘high risk position’, whereas the position of an official at an enquiry counter is a ‘low risk position’.6.12.2 Similarly, individual government servants vary in their level of integrity, ranging from those who indulge in outright extortion to those who are absolutely upright.A risk management system to prevent corruption should seek to minimize risk by ensuring that ‘low risk personnel’ should hold ‘high risk jobs’ and vice versa. This would work efficientlyonly if a risk profiling is done for different jobs and also of government servants. The placement policy should then ensure deployment of ‘low risk staff’ to ‘high risk jobs’.6.12.3 Risk profiling of government officials poses a challenge in the sense that the present system of performance evaluation discourages a reporting officer from giving anything ‘adverse’. Moreover, categorizing an official as ‘high’ risk based on an adverse rating by one reporting officer may not be fair (unless a glaring misconduct has come to notice). It would, therefore, be better if risk profiling of officers is done by a committee of ‘eminent persons’ after the officer has completed ten years of service, and then once in every five years. The committee should use the following inputs in coming to a conclusion:a.The performance evaluation of the reported officer.b.A self-assessment given by the reported officer focusing on the efforts he/she has made to prevent corruption in his/her career.c.Reports from the vigilance organization.d.A peer evaluation to be conducted confidentially by the committee through an evaluation form.6.12.4 One method to assess the integrity of a person is the integrity test. It is like an ordinary ‘paper-pencil’ test wherein the candidate has to answer various questions. It is also similar to a personality test. These tests are used in some developed countries to identify suspected corrupt persons. The following extract from “Best Practices in Combating Corruption” published by the Office of the Coordinator for Economic and Environmental Activities, Vienna, Austria succinctly describes the technique of integrity testing, and its legality and benefits. “Integrity testing has now emerged as a particularly useful toolfor cleaning up corruptpolice forces – and for keeping them clean. The object is to test the integrity ofan official, and not to renderan honestone corruptthrough a process ofentrapment. Mostcountries have agentprovocateur rules in their criminal codes, which act as a judicial check on what is permissible. These rules vary from jurisdiction to jurisdiction, but they obviously have to be borne in mind”.6.12.5 Since 1994, the New York City Police Department (NYPD) has conducted a very intensive programme of integrity testing. The department’s Internal Affairs Bureau creates fictitious scenarios based upon known acts of police corruption, such as the theft of drugs and/or cash from a street level drug dealer, to test the integrity of NYPD officers. The tests are carefully monitored and recorded using audio and video electronic surveillance as well as the placement of numerous “witnesses” at or near the scene. The NYPD strives to make the150151Ethics in GovernanceSystemic Reformsscenario as realistic as possible and they are developed, based upon extensive intelligence collection and analysis. All officers are aware that such a programme exists and that their own conduct may be subjected, from time to time, to such tests. They are not, however, told about the frequency of such tests. This produces a sense that they are far more frequent than they actually are. The London Metropolitan Police has also initiated a similar programme of integrity testing, administered by specialist internal anti-corruption units. Early reports indicate that the London Police are getting similar benefits as the NYPD did.6.12.6 Integrity tests, like all tests, are imperfect, and can lead to wrong conclusions and are thus not a foolproof method to evaluate integrity of a person. Therefore, taking displinary action based on such a test would not stand the scrutiny by a court, but these can be used as one of the inputs while risk profiling an officer.6.12.7 Recommendations:a.Risk profiling of jobs needs to be done in a more systematic andinstitutionlised manner in all government organizations.b. Risk profiling of officers should be done by a committee of ‘eminent persons’ after the officer has completed ten years of service, and then once in every five years. The committee should use the following inputs in coming to a conclusion:i.The performance evaluation of the reported officer.ii. A self-assessment given by the reported officer focusing on the efforts he/she has made to prevent corruption in his/her career.iii. Reports from the vigilance organization.iv. A peer evaluation to be conducted confidentially by the committee through an evaluation form.6.13 Audit6.13.1 The audit authorities often do not convey information which has come to their knowledge in respect of serious irregularities in which criminal misconduct is involved, to the anti-corruption bodies. The information becomes available to the anti-corruption bodies only when the audit report of the CAG is laid before the Parliament or the State Legislatureas the case may be. By the time a serious irregularity (which is detected in audit and reported to the department for response as an audit query and incorporated as a part of the annual audit report laid before the house), comes to the knowledge of the anti-corruption bodies, a lot of time is lost. Such delays not only alert the culprits in the organization but also give them enough time to cover their tracks and destroy the evidence and material records thus making it extremely difficult for the investigating agencies to successfully complete their investigations. In view of this, it would be desirable to make a standing arrangement with CAG and the AG to report such instances as soon as they are unearthed in audit. A second innovation in this regard would be to equip the agency concerned in the mechanics of forensic audit so that aspects crucial for criminal investigation could be taken due care of. It would be in the fitness of things if the anti-corruption bodies are equipped to undertake such forensic audit of government departments where major irregularities come to their notice. The idea is to have an in-house forensic team in these offices. Similar capability could be built in the local fund audit department. To start with, a forensic audit training course could be conducted to develop expertise in this regard. The Commission will examine the details of audit mechanisms in its report on ‘Financial Management’. The entire process of audit must come into public gaze through publication of pending audit observations annually.6.13.2 Recommendations:a.It should be prescribed that as soon as any major irregularity is detected or suspected by the audit team, it should be immediately taken note of by government. A suitable mechanism for this may be put in place. It shall be the responsibility of the head of the office to enquire into any such irregularity and initiate action.b. Audit teams should be imparted training in forensic audit.c. Each office should make an annual public statement regarding pending audit queries.6.14 Proactive Vigilance on Corruption6.14.1 Preventive vigilance attempts to eliminate or reduce the scope for corruption in the long run. The current approach to proactive vigilance is based on the recommendations of the Santhanam Committee in 1964. The main emphasis in proactive vigilance has been on identifying suspected corrupt elements and then devising mechanisms to weed them out or to ensure that they do not occupy sensitive positions. In this regard, the following main tools have been evolved:-152153Ethics in GovernanceSystemic Reforms154a.List of Officers of Doubtful Integrity: This is a list of Officers/Executives maintained in the organization/departments which contains the names of all officers against whom disciplinary action on some vigilance related issue is pending or who is undergoing punishment on a vigilance related matter.b.Agreed List of Suspect Officers: This is a list of Officers/Executives in PSUs/Banks on whom there is a strong suspicion of indulging in corruption. The list is prepared by the Chief Vigilance Officers of organizations and the Central Bureau of Investigation. These officers are kept under watch.c.List of Undesirable Contactmen: The Central Bureau of Investigation prepares a list of middlemen, touts etc. dealing with sensitive organizations and shares the information with senior officers in the concerned organizations on ‘need to know basis’.d.Annual Property Returns: This is another tool to identify suspected corrupt elements/practices.e.Vigilance Clearance: Vigilance clearance is obtained from the CVC for Board level appointments in PSUs and PSBs. Besides, the Government of India has established procedures for getting vigilance clearance before appointing an officer.6.14.2 The above listed measures are, by and large, at the initiative of the vigilance machinery. The Commission feels that such measures should also be initiated by the departments/ organizations themselves, as the inputs available with them about their officials and the tasks they perform are much more than with an external machinery. Following are some measures which can be taken by the departments/organization:a.Timely submission and scrutiny of assets and liabilities statements of public servants should be ensured.b.These should be put in the public domain.c.Annual lists of public servants of doubtful integrity should be prepared in all departments in consultation with the anti-corruption agencies. The list should contain names of those officers who have been found to be lacking in integrity in the course of an inquiry or after an inquiry. For example:i.those convicted in a Court of Law on a charge of lack of integrity or for anoffence involving moral turpitude but on whom penalty other than dismissal, removal or compulsory retirement is imposed;ii.those awarded a major penalty departmentally for lack of integrity or on charges of gross dereliction of duty in protecting the interest of Government;iii.those against whom major proceedings for a penalty, or trial involving lack of integrity or moral turpitude is in progress; andiv.those who were prosecuted but acquitted on technical grounds.d.There should be a mandatory annual review of officers who have attained the age of 50/55 years or completed 25 years of service, based on Annual Reports, other records, and general reputation in order to retire officers of doubtful integrity compulsorily. This would presuppose that making realistic entries relating to integrity in the annual performance reports should be made mandatory unlike the present practice of being vague and silent on this aspect. Officers should be required to be graded based on levels of integrity.ernment servants, who display exemplary capacity to identify major irregularities and scandals and bring corrupt elements to book and plug major loopholes which cause substantial loss to public exchequer, should be rewarded. Such officers should be protected from harassment.f.There should be public shaming of known corrupt officers.Some of these would be dealt with in detail in the Commission’s forthcoming Report on Civil Services Reforms.6.15 Intelligence Gathering6.15.1 Gathering intelligence about their own personnel is a practice followed by security and investigative agencies. There could be several ways of gathering intelligence about public servants. These include keeping surveillance over suspected public servants, studying their life-styles, studying the decisions the have made, analysis of complaints, feedback from citizens and peer group. Incentive money from secret funds are used at times to gather1556.14.3 Recommendation:a.Taking proactive vigilance measures should primarily be the responsibilityof the head of the office. Some possible measures are indicated in para 6.14.2.Ethics in GovernanceSystemic Reformssuch information. Although all such measures may not always be desirable or practical, a supervisory officer should assess the integrity of his/her subordinates based on his/her handling of cases, complaints and feedback from different sources. This could then become an important input for risk profiling of officers.6.15.2 Recommendation:a.Supervisory officers should assess the integrity of his/her subordinatesbased on his/her handling of cases, complaints and feedback from different sources. This could then become an important input for risk profiling of officers.6.16 Vigilance Network6.16.1 There are a large number of disciplinary cases and also criminal cases relating to corruption pending with various authorities. One reason for this large pendency is that these are rarely reviewed by supervisory officers. It would be desirable to create a national database of such cases unpdated regularly, which should be in the public domain. This, apart from providing a tool for monitoring of all such cases by authorities at different levels, would generate public opinion for quick action in such cases. This national database should have information on preliminary enquiries, regular inquiries with all enquiring agencies and all disciplinary authorities, investigation, prosecution trial, punishments and penalties, recovery of assets, and appeal, review and revision processes covering both disciplinary and criminal cases linking the entire government machinery and all departments and other organizations to which the executive power of the State extends. The network should cover cases of both elected and paid public servants, cases under the Prevention of Corruption Act, and other white collar economic offences by public servants involving public property or resources and public conduct under the Indian Penal Code. In addition, the internet should have information on all annual property statements and all other related information involving conflict of interest. It would be useful to incorporate in the network all information on officers of doubtful integrity, suspect officers, contractors, suppliers, etc blacklisted by government for corruption, information relating to touts, liaison men etc. Part of this information would be accessible to the general public, part to all the departments, and the entire information to anti-corruption bodies. The Central Vigilance Commission may take the lead in establishing such a networked database.6.16.2 Recommendation:a.A national database containing the details of all corruption cases at alllevels should be created. This database should be in the public domain. Identified authorities should be made responsible for updating the database regularly.6.17 Sector Specific RecommendationsSome of the cross-sectoral systemic issues have been discussed in this Chapter. The Commission has also examined some specific sectors which are prone to corruption and suggestions for some systemic reforms have been given in Annexures - VII(1) to VII(3).156157Protecting the Honest Civil Servantthe competent authority in the bank decides to close the case, if the officer involved is of the level for which the Vigilance Commission’s advice is required.1587PROTECTING THE HONEST CIVIL SERVANT7.1 The raison d’être of vigilance activity is not to reduce but to enhance the level of managerial efficiency and effectiveness in the organization. Risk-taking should form part of government functioning. Every loss caused to the organization, either in pecuniary or non-pecuniary terms, need not necessarily become the subject matter of a vigilance inquiry. One possible test for determining the bona-fides could be whether a person of common prudence working within the ambit of the prescribed rules, regulations and instructions, would have taken the decision in the prevailing circumstances in the commercial/operational interests of the organization.7.2 Even more than in government, managerial decision-making in public sector undertakings and day-to-day commercial decisions in public sector banks offers considerable scope for genuine mistakes being committed which could possibly raise questions about the bona-fides of the decision-maker. The Central Vigilance Commission has recognized this possibility of genuine commercial decisions going wrong without any motive whatsoever being attached to such decisions. In view of the commercial shift in the role and functions of commercial banks, appropriate attention is being paid to this aspect while deciding on the involvement of a vigilance angle in the complaints/disciplinary cases relating to the banking sector. For that purpose, each bank has set up an internal advisory committee of three senior officers, to scrutinize the complaints received in the bank and also the cases arising out of inspections and audit etc, to determine involvement of vigilance angle, or otherwise, in those transactions. The committee records reasons for arriving at such a conclusion and sends it to the CVO. The CVO, while taking a decision in each case, considers the advice of the committee. Such records are maintained by the CVO and made available to an officer, or a team of officers of the Central Vigilance Commission for scrutiny when it visits the bank for the purpose of vigilance audit. All decisions of the committee on the involvement of the vigilance angle, are expected to be taken unanimously. In case of difference of opinion among the members, the majority view may be stated. The CVO refers its recommendations to the disciplinary authority. In case of difference of opinion between the disciplinary authority and the CVO, the matter is referred to the Central Vigilance Commission for advice. The investigation/inquiry reports of audit and inspection, involving a vigilance angle are required to be referred to the Vigilance Commission for advice even if7.3 There are genuine apprehensions about the system’s ability to protect an honest public servant. Fortunately, there are sufficient safeguards in the law and procedure to ensure protection of an honest civil servant against baseless, mala-fide, malicious and motivated complaints. The ‘single point directive’ which is now a statutory provision as a result of amendments made to the Delhi Special Police Establishment Act, requires prior permission of the Union Government for initiating investigation against an officer of the rank of a Joint Secretary and above in the Government of India and its equivalent in the Central Public Undertakings. Sanction for prosecution of a public servant is required from the Government or the appropriate authority under Section 19 of the Prevention of Corruption Act, 1988 and Section 197 of the Indian Penal Code as applicable in so far as such offences relate to and form part of official conduct. Investigation within the organization itself is subject to prior approval of the Superintendent of Police concerned in the case of CBI. A case under the Prevention of Corruption Act can only be registered by the Special Police Establishment of the CBI or the anti-corruption agency of a state and not by the civil police. Only a special judge is competent to take cognizance of an offence of corruption. By virtue of the procedural instructions, CVC has to recommend sanction of prosecution to Government in respect of civil servants coming within its jurisdiction. In States, where Vigilance Commissions are in existence, it is the Vigilance Commission who examines and recommends sanction for prosecution.7.4 Both the ‘single point directive’ and the requirement of prior sanction for prosecution have been called to serious question as obstructive of the statutory right of the investigating agency and an unnecessary interference in the judicial process. The Supreme Court, in the Jain Hawala case, had annulled the then executive direction of the Union Government requiring its prior permission for commencing investigations in cases involving Joint Secretaries and above. It was to nullify this that the Union Government brought in a statutory requirement in the Delhi Special Police Establishment Act. The ground for this inclusion was to safeguard honest civil servants and senior public sector executives including from nationalized banks engaged in policy advice and commercial decisions respectively. While there is no doubt that honest public servants do require to be protected, it is equally essential to assure citizens that such provisions for prior permission for investigation and sanction for prosecution are not used as tools in the hands of Government to favour and protect corrupt public servants. The Central Vigilance Commission has instituted a mechanism for screening cases of public sector executives within its jurisdiction. The question is one of exercising due discrimination to protect an honest civil servant from being dragged through investigative processes involving harassment and loss of prestige and enormous anguish.159Ethics in GovernanceProtecting the Honest Civil Servant1611607.5 There is a general perception among officers and managers that anti-corruption agencies do not fully appreciate administrative and business risks and that they tend to misinterpret the motives where the decision has gone awry or where a loss is caused in a commercial transaction. Such a perception is not without foundation. It is essential therefore for the investigating agencies to establish that their actions are designed in such a way as to protect honest officers. This depends on the ethical standards and professional competence of the personnel manning anti-corruption agencies. Allegations can be made by dishonest subordinates against whom the officer has initiated disciplinary proceedings or he may have stood in the way of dishonest intentions of the corrupt subordinate. More sinister could be the role of “aggrieved” outsiders who failed to have their wrongful way.7.6 It is generally assumed by the investigating agencies that (1) a decision should be wrong for there to be corruption, and (2) it is easier to involve everyone in the chain of decision-making and allege ‘conspiracy’ than to take pains to find out the individuals who are actually involved. It is often overlooked that a corruption can take place even when the decisions are correct and that it also takes place at specific points inside and outside the system. This entrenched approach to investigation has led to conviction rates being dismally low, honest functionaries getting demoralized and dishonest ones often going scot free.7.7 The crucial question is one of ensuring a balance between equality before law and protection of an honest civil servant who has his reputation to safeguard, unlike a corrupt one. Such a balance could be achieved by an impartial agency which would screen cases of prior permission for investigation and sanction prosecution of public servants involved in corruption. The Commission has already recommended that the Central Vigilance Commission should be empowered to give such permission.7.8 There is need for a special investigation unit reporting to the proposed Lok Pal (Rashtriya Lokayukta) to investigate allegations of corruption against investigating agencies. This unit should be multi-disciplinary and should also investigate cases of allegations of harassment against the investigating agency. Similar units should also exist in States under the State Lokayuktas.7.9 Recommendations:a.Every allegation of corruption received through complaints or fromsources cultivated by the investigating agency against a public servant must be examined in depth at the initial stage itself before initiating any enquiry. Every such allegation must be analyzed to assess whether the allegation is specific, whether it is credible and whether it is verifiable.Only when an allegation meets the requirements of these criteria, should it be recommended for verification, and the verification must be taken up after obtaining approval of the competent authority. The levels of competent authorities for authorizing verifications/enquiries must be fixed in the anti- corruption agencies for different levels of suspect officers.g.Capacity building in the anti-corruption agencies should be assured through training and by associating the required experts during enquiries/ investigations. Capacity building among public servants who are expected to take commercial / financial decisions should be built through suitable training programmes.h.The supervisory officers in the investigating agencies should ensure that only those public servants are prosecuted against whom the evidence is strong.b.In matters relating to allegations of corruption, open enquiries shouldnot be taken up straightaway on the basis of complaints/source information. When verification/secret enquiries are approved, it should be ensured that secrecy of such verifications is maintained and the verifications are done in such a manner that neither the suspect officer nor anybody else comes to know about it. Such secrecy is essential not only to protect the reputation of innocent and honest officials but also to ensure the effectiveness of an open criminal investigation. Such secrecy of verification / enquiry will ensure that in case the allegations are found to be incorrect, the matter can be closed without anyone having come to know of it. The Inquiry / Verification Officers should be in a position to appreciate the sensitivities involved in handling allegations of corruption.c.The evaluation of the results of verification/enquiries should be done ina competent and just manner. Much injustice can occur due to faulty evaluation of the facts and the evidence collected in support of such facts. Personnel handling this task should not only be competent and honest but also impartial and imbued with a sense of justice.d. Whenever an Inquiry Officer requires to consult an expert to understand technical /complex issues, he can do so, but the essential requirement of proper application of mind has to take place at every stage to ensure that no injustice is caused to the honest and the innocent.Ethics in GovernanceINTERNATIONAL COOPERATION88.1 Corruption transcends national boundaries. Therefore, national anti-corruption measures need reinforcement at the international level with mutual assistance and cooperative law enforcement initiatives against corruption in areas such as bribing of and by foreign nationals, mutual legal assistance, gathering and transferring evidence, money laundering, technical assistance and information exchange, extradition, tracing, freezing, seizure and confiscation of illicit funds transferred abroad, asset recovery and repatriation, etc. In particular, strengthening of provisions relating to the prevention of laundering of the proceeds of corruption and safeguards to prevent offshore financial centres from harbouring the proceeds of grand corruption are essential steps to control corruption.8.2 The United Nations Declaration against corruption and bribery in international commercial transactions adopted by the General Assembly in December 1996 is an important milestone. It deals with both public and private sectors. The Declaration is in the nature of political commitment backed by actions to be taken through institutions at national, regional and international levels subject to each country’s Constitution, fundamental legal principles, laws and procedures. The Declaration calls for enactment and enforcement of laws prohibiting bribery in international transactions, laws criminalizing the bribery of foreign public officials and laws ensuring that bribes are not tax deductible. It also calls for international cooperation in punitive measures relating to investigation, prosecution and extradition. Another UN initiative is the international Code of Conduct for public officials adopted in December 1996 to guide the member-states in their efforts against corruption through a set of guiding principles that public servants should follow in the performance of their duties in relation to loyalty, integrity, efficiency, effectiveness, fairness, impartiality, prevention of conflict of interest, disclosure norms, acceptance of gifts and favours, maintenance of secrecy and regulation of political activity consistent with impartiality and inspiring public confidence. In addition, the UN has prepared a manual on anti-corruption policy and an anti-corruption tool kit as a policy guide and an operational tool. The United Nations has also prepared a model law on money laundering and proceeds of crime.8.3 The United Nations Convention against Corruption adopted by the UN General Assembly in October 2003 provides an effective international legal instrument against corruptiong.There should be profiling of officers. The capabilities, professional competence, integrity and reputation of every government servant must be charted out and brought on record. Before proceeding against any government servant, reference should be made to the profile of the government servant concerned.h. A special investigation unit should be attached to the proposed Lokpal (Rashtriya Lokayukta)/State Lokayuktas/Vigilance Commission, to investigate allegations of corruption against investigative agencies. This unit should be multi-disciplinary and should also investigate cases of allegations of harassment against the investigating agency. Similar units should also be set up in states.162163Ethics in GovernanceInternational Cooperationwhich has been signed by India but is yet to be ratified. The Convention binds the signatories to render specific forms of mutual legal assistance in gathering and transferring evidence for use in court to extradite offenders and to undertake measures to support tracing, freezing, seizure and confiscation of proceeds of corruption. Asset recovery is a fundamental principle of the Convention even though the needs of the countries seeking illicit assets have to be reconciled with the legal and procedural safeguards of the countries whose assistance is sought. The UN Office of Drugs and Crime (UNODC) has been coordinating meetings of experts to identify the main challenges in the area of repatriation of illegally transferred funds, the tracing and identification of such funds and the efforts and procedures required for the return of such funds to their countries of origin. Countries seeking the return of looted assets often face severe problems in recovery due to problems arising from diversity of legal systems, difficulties in meeting the evidentiary and procedural requirements of developed countries, intermingling of such proceeds with other assets etc. Developing countries are further constrained in these efforts due to the lack of finacial resources and expertise to successfully investigate and prosecute such cases to a logical conclusion. Capacity building domestically combined with effective coordination at the international level, especially in the area of technical assistance, coordination and communication will be crucial for making headway in this critical area.8.4 The ADB OECD Anti Corruption Action Plan for Asia Pacific which has been signed by the Government of India is not a binding agreement but a broad understanding to further the cause of inter-regional cooperation in the matter of prevention of corruption.8.5 A Joint Statement as agreed upon by a number of international regional agencies at Singapore has already been referred to in para 1.14. As a backgrounder to the agreement, the leaders had the Uniform Framework for Preventing and Combating Fraud and Corruption prepared by an Anti Corruption Task Force established by the constituent International Financial Institutions. As per the Joint Statement, the signatory institutions “recognize that corruption undermines sustainable economic growth and is a major obstacle to the reduction of poverty”. Corruption affects growth by raising costs at a given level of efficiency of operations, and/or by reduction in efficiency. As for poverty, the most direct adverse impact will be seen if funds meant to combat poverty are misused and misappropriated.8.6 The Uniform Framework has come up with the following definitions. A corrupt practice is “the offering, giving, receiving, or soliciting, directly or indirectly, of anything of value to influence improperly the actions of another party”. A fraudulent practice is “any act or omission, including a misrepresentation that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation”. A coercive practice is “impairing or harming, or threatening to impair or harm, directly or indirectly,any party or the property of the party to influence improperly the actions of a party”. A collusive practice is an “arrangement between two or more parties designed to achieve an improper purpose including influencing improperly the actions of another party”.8.7 The principle and guidelines for investigations form the bulk of the Uniform Framework document. The relatively more important principles and guidelines are noted below. Each organisation will have a Investigative Office responsible for conducting investigations. The purpose of an investigation by the Investigative Office is to examine and determine the veracity of allegations of corrupt or fraudulent practices with respect, but not limited, to projects financed by the organisation and allegations of misconduct on the part of the organisation’s staff members. The Investigative Office is to perform its duties independently from those responsible for or involved in operational activities and from staff members liable to be the subject of investigations and shall also be free from improper influence and fear of retaliation. The investigative findings are to be based on facts and analysis, which may include reasonable inferences. Recommendations shall be based on such findings.8.8 An important provision in the framework is about the source of complaints. The Investigative Office shall accept all complaints irrespective of their source, including complaints from anonymous or confidential sources. Since anonymous complaints too are accepted, a quantum jump in the number of complaints can be expected. The principles and guidelines are not limited to generalities only. There are instances of very specific and detailed ones as well. For instance, Paragraph 37 states that to the extent possible, interviews by the Investigative Office should be conducted by two persons, while Paragraph 38 provides for interviews to be conducted in the language of the person being interviewed.8.9 International cooperation is not merely between governments but also between international private sector business and professional bodies and the national chapters; and international networking and mutual assistance between civil societies in the task of prevention of corruption in the public and private sectors. Private and public sector can have mutually cleansing or corrupting relations. Initiatives on the part of Indian private sector, professional groups and civil societies are also areas to be pursued.1643165Relationship between the Political Executive and the Permanent Civil Service9 RELATIONSHIP BETWEEN THE POLITICAL EXECUTIVE AND THE PERMANENT CIVIL SERVICE9.1 The Indian Constitution provides for separation of powers between the legislature, executive and judiciary with well-defined roles and responsibilities for each one of them. Since India is a parliamentary democracy, there is an interface between the legislature and the executive at the level of the Council of Ministers, which is collectively responsible to the legislature. The Constitution separates the executive into two parts. In terms of Articles 53 and 154, the executive power of the Union and the States vests in the President or Governor directly or through officers subordinate to him. These officers constitute the permanent civil service and are governed by Part XIV of the Constitution.9.2 The other part of the executive is the ‘political’. The President or Governor is required to act according to the aid and advice of his Council of Ministers, appointed under Articles 73 and 163 of the Constitution. Because the advice is normally binding, such advice for the officers becomes an order which they must obey under Articles 77 and 166 respectively. The President and Governor frame rules for the conduct of business in the government. Work is allocated among Ministers as per the Government of India (Allocation of Business) Rules and the manner in which the officers are required to help the President or Governor to exercise his executive functions is governed by the Government of India (Transaction of Business) Rules. What this means is that though officers are subordinate to the President or Governor, they carry out the orders of the Council of Ministers in accordance with the rules framed in this behalf. The Rules of Business of Government do provide for the Secretary to the Government to advise his Minister about the course of action proposed in a particular matter and to submit to him a note which tells him about the propriety or legality of his orders and suggest that either such orders not be given or that they be suitably modified. The relationship between the Secretary and the Minister is organic. The Minister has the mandate of the people to govern, but the Secretary has an equivalent constitutional mandate to advise the Minister. Once his advice has been suitably considered, unless the Minister passes an illegal order, the Secretary is bound to implement it. The Minister, on his part, is required to support the Secretary who is implementing his order. Once a law is framed or rules and regulations are approved, they apply to everyone, whether a member of the politicalexecutive or of the permanent civil service. A civil servant is required to implement the orders of government without bias, with honesty and without fear or favour. It is precisely in this area that a degree of a difference of opinion begins to emerge between the political executive and the civil servants.9.3 This happens because there is no system of specifying of accountability, thus making the relationship between the political executive and the permanent civil servants only issue-sensitive. This underscores the criticality of defining the relationship between the Minister and the civil servant more objectively. This is possible only if we put the relationship in an output-outcome framework. Outputs or key results are specific services that the civil servants produce and deliver, and therefore, the civil servants should be held to account for the delivery of key results, which becomes the basis for evaluation of their performance. Outcome is the success in achieving social goals and the political executive decides what outputs should be included so that the desired outcomes or social goals can be achieved. In such a scheme, the political executive becomes accountable to the legislature and the electorate for the outcome. The political executive is judged on the basis of whether it has chosen the right outputs to achieve social goals. If this is done, the relationship between the political executive and permanent civil service would have been objectively defined.9.4 Another area which has tension in the relationship is the arbitrary transfer and posting of civil servants at the behest of Ministers and other political leaders particularly in the states. Robert Wade, in his study of Andhra Pradesh, has shown how the process works. As Wade says,“The transferis the politicians’basic weapon ofcontrol over the bureaucracy and thus the lever for surplus-extraction from the clients ofthe bureaucracy. With the transfer weapon not only can the politiciansraise money by directsale; they can also remove someone who is notbeing responsive enough to their monetary demands or to theirrequest for favours to those from whom they get money and electoralsupport- in particular, the contractors. One is thus led to visualise a special circuit oftransactions, in which the bureaucracy acquires the control offunds.... then passes a portion to MLAs and especially Ministers, who in turn use the funds for distributing short-term materialinducements in exchange forelectoralsupport. These funds, itshould be noticed, do flow through the public domain; but they are neither open to public scrutiny nor available for public expenditure programmes.”9.5 In fact, the process of transfers of civil servants is perceived to be so lucrative that it is popularly known as the transfer industry. N N Vohra, a retired civil servant, has commented that:166167Ethics in GovernanceRelationship between the Political Executive and the Permanent Civil Service“Transfers ofgovernment functionaries have in many States, virtually assumed the status ofan industry. Officials at alllevels are repeatedly shifted from station to station in utter disregard of the tenure policies or any concern about the disruption ofpublic services delivery and the adverse effecton the implementation ofdevelopmentprogrammes.”In Mohsina Begum’s case, the Allahabad High Court lamented that ‘whenever a new government is formed, there is a tidal wave oftransfers ofgovernment servants on the basis ofcaste or community or monetary considerations’leading to ‘totaldemoralisation ofthe bureaucracy and its division on caste and communalbasis, besides spread ofcorruption’and breakdown ofallnorms ofadministration’.9.6 H D Shourie of Common Cause had filed a Public Interest Litigation in the Supreme Court asking for a direction for framing of rules governing the process of transfer of civil servants. But the Supreme Court refused to do so on the ground that,We do not consider it necessary to entertain this writ petition...since the guidelines for taking such administrative decisions are well settled and it is obvious that all administrative decisions should satisfy the rule of non-arbitariness and be honest and fair. Individual cases in which the decision-making process is vitiated for any such reason can always be challenged in a suitable manner.9.7 The Fifth Pay Commission was driven to make some adverse observations about the ‘transfer industry’. The Commission declared:There is a definite feeling that the instrument of transfer is widely misused in this country, particularly by politicians in power, to subjugate the government employees. Transfer is also used as an instrument ofpunishment.... Demands have, therefore, been made that no transferbefore the expiry ofthree years in a post, should be made appealable, particularly ifithas been made at the behest ofpoliticians.9.8 The Fifth Pay Commission made several recommendations about evolving detailed, clear, and transparent transfer policies. First, the Commission recommended that detailed guidelines should be formulated and publicised by each department as part of a comprehensive transfer policy, so that arbitrariness in transfers is eliminated altogether, and transfers are effected in as transparent a manner as possible.9.9 Second, in order to ensure administrative continuity and stability to incumbents, frequent transfers should be discouraged, and a minimum tenure for each posting of officers should be predetermined, and it should normally be three to five years, except in cases where longer tenures are justified on functional grounds, like continued availability of certain specialized skills. In the case of sensitive posts, where opportunities exist for developing vested interests, the tenure should be defined for a shorter period, which may be two to three years.9.10 Third, any premature transfer before the completion of the prescribed tenure should be based on sound administrative grounds, which should be spelt out in the transfer order itself. The civil servant should be given the right to appeal against such an order if he feels aggrieved, and a provision for a summary procedure to deal with such a situation should be made within each department. In case of emergency, when such an order is made in the exigencies of public interest and has to be implemented at once, representation against the transfer order should be dealt with by an authority superior to the officer ordering the transfer after personal discussion, if possible, on the same day.9.11 Fourth, the instrument of transfer should not be allowed to be misused either by bureaucrats themselves or by politicians in power. It should not be used as a means of punishment by circumventing the procedure laid down for disciplinary proceedings.9.12 The issue was raised by many persons in every public hearing and press conference held by the Commission. Amongst the many letters/comments received by the Commission on this matter, is a detailed one written by Lokayukta of Karnataka. He says:Over the years, my experience as a Lawyer,judge and now as Lokayukta has made me feel that the policy ofthe Governmentin regard to transfer ofits officers requires serious re-consideration. Ihad several occasions to meet various officers both ofState and Central Government and in the course ofmy discussion with them, Ifound there is lotofdiscontentmentamongst them in regard to the transfer policies oftheirrespective Governments. The common complaintseems to be that there is no proper policy at all and transfers are effected at the whims and fancies ofthe decision making authority which is mostly influenced by the pressure from the politicians’various hues. Such transfers are likely to have serious adverse effect on the efficiency ofthe Government itself. Even otherwise, to have an independentattitude and peace ofmind, a Governmentservantmust have some assured tenure in any postto which he is posted before he is transferred. Transfers based on the recommendations ofpersons who are notconnected with the Governmentin any way, which includes elected representatives, would certainly lead to corruption and undue favours being shown in favourofsuch beneficiaries. Atthe same time, transfers though shown foradministrative reasons, quietoftenseem tobetheoutcomeofsomeone’spersonalgrievance, amountingtopunishment. Such occasions will certainly have adverse effect on the performance ofthe Government.There is a talk amongst the public that transfers to certain powerfulposts are being made for collateralconsiderations which involves corruption. It is in this background Ithink itappropriate to write to you, requesting the Administrative Reforms Commission, to make suitable recommendations in regard to the transferpolicies, both in the Centraland atthe State Government levels. One suggestion Icould make in this regard, which may at the outsetmay seem to be rather rigid, is to leave the transferto bureaucracy itselfwithoutthere being any interference whatsoever1683169Ethics in GovernanceRelationship between the Political Executive and the Permanent Civil Serviceby the Ministry. In my opinion, in so far as the statewide transfer is concerned, the same should be done on the recommendations ofa Committee consisting ofthe ChiefSecretary ofthe State, next senior-mostSecretary and the Secretary ofthe Department in which the transferis soughlt to be effected. Ifthis Committee is directed to perfom its funcitons transparently, it willbe open to the Ministry to oversee the complaints on the actions ofthe Committee and remedialactions could be taken. This would certainly take away the public perception that transfers are being done on political or collateral considerations. Similarly, in regard to transfer ofofficers at Divisional and Districtlevels, the same should be effected through a Committee headed by the seniormost officer ofthat Division or the District, and nextsenior officer ofthe departmentin which the transferis soughtto beeffected.Lastly and most importantly, there should be minimum of three years’fixed duration for the officers’stay in a particular post, which should not be normally reduced or enlarged except for good reasons to be recorded in writing.9.13 The National Commission to Review the Working of the Constitution has also commented on this. The Commission said:The questions of personnel policy including placements, promotions, transfers and fast-tract advancements on the basis offorward-looking careermanagementpolicies and techniques should be managed by autonomous PersonnelBoards for assisting the high levelpolitical authorities in making key decisions. Such CivilService Boards should be constituted understatutory provisions. They should be expected to function like the UPSC. The sanctity ofparliamentary legislation underarticle 309 is needed to counteract the publicly known trends ofthe play ofunhealthy and destabilizing influences in the managementofpublic services in generaland highercivilservices in particular.9.14 The Draft Public Services Bill, 2006 moots the idea of constituting a Central Public Services Authority for good governance. In terms of Article 19(e) of the Bill, the Authority has been charged with the responsibility of ensuring that: “the transfers and postings of public servants are undertaken in a fair and objective manner and the tenure ofthe public servant in a post is appropriately determined and is maintained consistent with the need to maintain continuity, and the requiremets ofgood governance”. However, the recommendations of the Authority in these matters cannot be mandatory, but only advisory.9.15 Another likely area of conflict between the Minister and the officers is the influence exercised by the Minister in the day-to-day functioning of subordinate officers. Efficient running of activities of a ministry or department requires delegation of powers and functions to the various levels of bureaucracy. Once this delegation has been done, the bureaucracy should be allowed to discharge its duties, of course as per the delegated authority. It hasoften been observed that Ministers issue instructions, formal or informal, to influence the decisions of the subordinate bureaucracy. It has also been observed that officers, instead of taking decisions on their own, look up to the Ministers for informal instructions. Several states have created an institution of ‘District Incharge Minister’ to review the development activities in the district. There have been instances when District Ministers have exceeded their brief and issued instructions on issues which come totally within the officer’s domain. These practices are unhealthy as they can have a propensity to check an officer’s initiative and impinge on the authority delegated to him. It could lead to decisions which are not in public interest and also demoralised a consencious civil servant.9.16 It is necessary to spell out the relationship between the politcal executive and the bureaucray in a comprehensive manner. The Commission would suggest the details of the the institutional and legal framework required to build a healthy relationship between the political executive and the bureaucracy in its forthcoming Report on Civil Services Reforms.170171CONCLUSIONSUMMARY OF RECOMMENDATIONSThis report must end on a note of optimism. Indians have always valued a world beyond the material and have embraced spiritualism as a way of life. Instances abound in our epics of good behaviour, of the triumph of good over evil, of the wisdom of sages. Stories of the honesty, generosity and piety of legendry kings such as Vikramaditya, are told to our children even today. There is no reason why Ram Rajya cannot be attempted.In modern India, poverty, insufficiency and class conflicts are slowly giving way to a confident, inclusive, empowered India. On the Transparency International’s Corruption Index, India’s position has improved significantly, and hopefully will continue to do so. The vigilance of our enlightened people will ensure this.The Commission believes that this Report on Ethics in Governance is among the most important that this Commission has been called upon to write, because increased honesty in governance would have a major impact on the everyday lives of the people of India. When the recommendations in this report are implemented, greater efficiency in government work and accountability would be achieved, because more public servants would work not with a private agenda but for the larger public good. Equally importantly, a more corruption free regime would lead to a much higher rate of growth of our GDP, bring an overall improvement in the economy and lead to greater transparency in government actions in serving its people. All this, in turn, will lead to greater empowerment of the people – the core need of a vibrant democracy.1. (2.1.3.1.6) Reform of Political Fundinga.A system for partial state funding should be introduced in order to reducethe scope of illegitimate and unnecessary funding of expenditure for elections.2. (2.1.3.2.4) Tightening of Anti-Defection Lawa.The issue of disqualification of members on grounds of defection shouldbe decided by the President/Governor on the advice of the Election Commission.3. (2.1.3.3.2) Disqualificationa.Section 8 of the Representation of the People Act, 1951 needs to beamended to disqualify all persons facing charges related to grave and heinous offences and corruption, with the modification suggested by the Election Commission.4. (2.1.4.3) Coalition and Ethicsa.The Constitution should be amended to ensure that if one or more partiesin a coalition with a common programme mandated by the electorate either explicitly before the elections or implicitly while forming the government, realign midstream with one or more parties outside the coalition, then Members of that party or parties shall have to seek a fresh mandate from the electorate.5. (2.1.5.4) Appointment of the Chief Election Commissioner/Commissionersa. A collegium headed by the Prime Minister with the Speaker of the Lok Sabha, the Leader of Opposition in the Lok Sabha, the Law Minister and the Deputy Chairman of the Rajya Sabha as members; should make172173Ethics in GovernanceSummary of Recommendationsrecommendations for the consideration of the President for appointment of the Chief Election Commissioner and the Election Commissioners.6. (2.1.6.3) Expediting Disposal of Election Petitionsa.Special Election Tribunals should be constituted at the regional level underArticle 323B of the Constitution to ensure speedy disposal of election petitions and disputes within a stipulated period of six months. Each Tribunal should comprise a High Court Judge and a senior civil servant with at least 5 years of experience in the conduct of elections (not below the rank of an Additional Secretary to Government of India/Principal secretary of a State Government). Its mandate should be to ensure that all election petitions are decided within a period of six months as provided by law. The Tribunals should normally be set up for a term of one year only, extendable for a period of 6 months in exceptional circumstances.7. (2.1.7.3) Grounds of Disqualification for Membershipa.Appropriate legislation may be enacted under Article 102(e) of theConstitution spelling out the conditions for disqualification of Membership of Parliament in an exhaustive manner. Similarly, the States may also legislate under Article 198(e).8. (2.4.5) Ethical Framework for Ministers*a. In addition to the existing Code of Conduct for Ministers, there should be a Code of Ethics to provide guidance on how Ministers should uphold the highest standards of constitutional and ethical conduct in the performance of their duties.*b. Dedicated units should be set up in the offices of the Prime Minister and the Chief Ministers to monitor the observance of the Code of Ethics and the Code of Conduct. The unit should also be empowered to receive public complaints regarding violation of the Code of Conduct.*c. The Prime Minister or the Chief Minister should be duty bound to ensure the observance of the Code of Ethics and the Code of Conduct by Ministers. This would be applicable even in the case of coalition governments where the Ministers may belong to different parties.*d. An annual report with regard to the observance of these Codes should be submitted to the appropriate legislature. This report should include specific cases of violations, if any, and the action taken thereon.*e. The Code of Ethics should inter alia include broad principles of the Minister-civil servant relationship and the Code of Conduct should stipulate the details as illustrated in para 2.4.3.*f. The Code of Ethics, the Code of Conduct and the annual report should be put in the public domain.9. (2.5.7.6) Enforcement of ethical norms in Legislatures*a. An Office of ‘Ethics Commissioner’ may be constituted by each House of Parliament. This Office, functioning under the Speaker/Chairman, would assist the Committee on Ethics in the discharge of its functions, and advise Members, when required, and maintain necessary records.*b. In respect of states, the Commission recommends the following:(i) All State legislatures may adopt a Code of Ethics and a Code of Conduct for their Members.(ii) Ethics Committees may be constituted with well defined procedures for sanctions in case of transgressions, to ensure the ethical conduct of legislators.(iii) ‘Registers of Members’ Interests’ may be maintained with the declaration of interests by Members of the State legislatures.(iv) Annual Reports providing details including transgressions may be placed on the Table of the respective Houses.(v) An Office of ‘Ethics Commissioner’ may be constituted by each House of the State legislatures. This Office would function under the Speaker/Chairman, on the same basis as suggested for Parliament.10. (2.6.12) Office of Profita. The Law should be amended to define office of profit based on the following principles:174175Ethics in GovernanceSummary of Recommendations(i) All offices in purely advisory bodies where the experience, insights and expertise of a legislator would be inputs in governmental policy, shall not be treated as offices of profit, irrespective of the remuneration and perks associated with such an office.(ii) All offices involving executive decision making and control of public funds, including positions on the governing boards of public undertakings and statutory and non-statutory authorities directly deciding policy or managing institutions or authorizing or approving expenditure shall be treated as offices of profit, and no legislator shall hold such offices.(iii) If a serving Minister, by virtue of office, is a member or head of certain organizations like the Planning Commission, where close coordination and integration between the Council of Ministers and the organization or authority or committee is vital for the day-to-day functioning of government, it shall not be treated as office of profit.(The use of discretionary funds at the disposal of legislators, the power to determine specific projects and schemes, or select the beneficiaries or authorize expenditure shall constitute discharge of executive functions and will invite disqualification under Articles 102 and 191, irrespective of whether or not a new office is notified and held.)b. Schemes such as MPLADS and MLALADS should be abolished.c. Members of Parliament and Members of State Legislatures should be declared as ‘Public Authorities’ under the Right to Information Act, except when they are discharging legislative functions.11. (2.7.12) Code of Ethics for Civil Servants*a. ‘Public Service Values’ towards which all public servants should aspire, should be defined and made applicable to all tiers of Government and parastatal organizations. Any transgression of these values should be treated as misconduct, inviting punishment.*b. Conflict of interests should be comprehensively covered in the code of ethics and in the code of conduct for officers. Also, serving officials shouldnot be nominated on the Boards of Public undertakings. This will, however, not apply to non-profit public institutions and advisory bodies.12. (2.8.5) Code of Ethics for Regulatorsa. A comprehensive and enforceable code of conduct should be prescribed for all professions with statutory backing.13. (2.9.23) Ethical Framework for the Judiciarya.A National Judicial Council should be constituted, in line with universallyaccepted principles where the appointment of members of the judiciary should be by a collegium having representation of the executive, legislature and judiciary. The Council should have the following composition:?The Vice-President as Chairperson of the Council?The Prime Minister?The Speaker of the Lok Sabha?The Chief Justice of India?The Law Minister?The Leader of the Opposition in the Lok Sabha?The Leader of the Opposition in the Rajya SabhaIn matters relating to the appointment and oversight of High Court Judges, the Council will also include the following members:?The Chief Minister of the concerned State?The Chief Justice of the concerned High Courtb. The National Judicial Council should be authorized to lay down the code of conduct for judges, including the subordinate judiciary.c.The National Judicial Council should be entrusted with the task ofrecommending appointments of Supreme Court and High Court Judges. It should also be entrusted the task of oversight of the judges, and should be empowered to enquire into alleged misconduct and impose minor penalties. It can also recommend removal of a judge if so warranted.176177Ethics in GovernanceSummary of Recommendationsd. Based on the recommendations of the NJC, the President should have the powers to remove a Supreme Court or High Court Judge.e. Article 124 of the Constitution may be amended to provide for the National Judicial Council. A similar change will have to be made to Article 217. Also, since the Council is to have the authority to oversee and discipline judges, further changes will need to be made to Article 217 (Clause 4).f.A Judge of the Supreme Court should be designated as the Judicial ValuesCommissioner. He/she should be assigned the task of enforcing the code of conduct. Similar arrangement should also be made in the High Court.14. (3.2.1.10) Defining Corruptiona.The following should be classified as offences under the Prevention ofCorruption Act:?Gross perversion of the Constitution and democratic institutions amounting to wilful violation of oath of office.?Abuse of authority unduly favouring or harming someone.?Obstruction of justice.?Squandering public money.15. (3.2.2.7) Collusive Briberya.Section 7 of the Prevention of Corruption Act needs to be amended toprovide for a special offence of ‘collusive bribery’. An Offence could be classified as ‘collusive bribery’ if the outcome or intended outcome of the transaction leads to a loss to the state, public or public interest;b.In all such cases if it is established that the interest of the state or publichas suffered because of an act of a public servant, then the court shall presume that the public servant and the beneficiary of the decision committed an offence of ‘collusive bribery’;c.The punishment for all such cases of collusive bribery should be doublethat of other cases of bribery. The law may be suitably amended in this regard.16. (3.2.3.2) Sanction for Prosecutiona.Prior sanction should not be necessary for prosecuting a public servant who has been trapped red-handed or in cases of possessing assets disproportionate to the known sources of income.b. The Prevention of Corruption Act should be amended to ensure that sanctioning authorities are not summoned and instead the documents can be obtained and produced before the courts by the appropriate authority.c.The Presiding Officer of a House of Legislature should be designated as the sanctioning authority for MPs and MLAs respectively.d. The requirement of prior sanction for prosecution now applicable to serving public servants should also apply to retired public servants for acts performed while in service.e.In all cases where the Government of India is empowered to grant sanction for prosecution, this power should be delegated to an Empowered Committee comprising the Central Vigilance Commissioner and the Departmental Secretary to Government. In case of a difference of opinion between the two, the matter could be resolved by placing it before the full Central Vigilance Commission. In case, sanction is required against a Secretary to Government, then the Empowered Committee would comprise of Cabinet Secretary and the Central Vigilance Commissioner. Similar arrangements may also be made at the State level. In all cases the order granting sanction for prosecution or otherwise shall be issued within two months. In case of refusal, the reasons for refusal should be placed before the respective legislature annually.17. (3.2.4.3) Liability of Corrupt Public Servants to Pay Damagesa.In addition to the penalty in criminal cases the law should provide thatpublic servants who cause loss to the state or citizens by their corrupt acts should be made liable to make good the loss caused and, in addition, be liable for damages. This could be done by inserting a chapter in the Prevention of Corruption Act.178179Ethics in GovernanceSummary of Recommendations18. (3.2.5.6) Speeding up Trials under the Prevention of Corruption Act:a.A legal provision needs to be introduced fixing a time limit for variousstages of trial. This could be done by amendments to the CrPC.b.Steps have to be taken to ensure that judges declared as Special Judgesunder the provisions of the Prevention of Corruption Act give primary attention to disposal of cases under the Act. Only if there is inadequate work under the Act, should the Special Judges be entrusted with other responsibilities.c.It has to be ensured that the proceedings of courts trying cases under thePrevention of Corruption Act are held on a day-to-day basis, and no deviation is permitted.d. The Supreme Court and the High Courts may lay down guidelines to preclude unwarranted adjournments and avoidable delays.19. (3.3.7) Corruption Involving the Private Sectora. The Prevention of Corruption Act should be suitably amended to include in its purview private sector providers of public utility services.b. Non-Governmental agencies, which receive substantial funding, should be covered under the Prevention of Corruption Act. Norms should be laid down that any institution or body that has received more than 50% of its annual operating costs, or a sum equal to or greater than Rs 1 crore during any of the preceding 3 years should be deemed to have obtained ‘substantial funding’ for that period and purpose of such funding.20. (3.4.10) Confiscation of Properties Illegally Acquired by Corrupt Means.a.The Corrupt Public Servants (Forfeiture of Property) Bill as suggested bythe Law Commission should be enacted without further delay.21. (3.5.4) Prohibition of ‘Benami’1 Transactionsa.Steps should be taken for immediate implementation of the BenamiTransactions (Prohibition) Act 1988. 22. (3.6.4) Protection to Whistleblowersa.Legislation should be enacted immediately to provide protection towhistleblowers on the following lines proposed by the Law Commission:?Whistleblowers exposing false claims, fraud or corruption should be protected by ensuring confidentiality and anonymity, protection from victimization in career, and other administrative measures to prevent bodily harm and harassment.?The legislation should cover corporate whistle-blowers unearthing fraud or serious damage to public interest by willful acts of omission or commission.?Acts of harassment or victimization of or retaliation against, a whistleblower should be criminal offences with substantial penalty and sentence.23. (3.7.19) Serious Economic Offences:a. A new law on ‘Serious Economic Offences’ should be enacted.b. A Serious Economic Offence may be defined as :(i) One which involves a sum exceeding Rs 10 crores; or(ii) is likely to give rise to widespread public concern; or(iii) its investigation and prosecution are likely to require highly specialized knowledge of the financial market or of the behaviour of banks or other financial institutions; or(iv) involves significant international dimensions; or(v) in the investigation of which there is requirement of legal, financial, investment and investigative skills to be brought together; or(vi) which appear to be complex to the Union Government, regulators, banks, or any financial institution.c. A Serious Frauds Office (SFO) should be set up (under the new law), to investigate and prosecute such offences. It should be attached to the Cabinet Secretariat. This office shall have powers to investigate and180181Ethics in GovernanceSummary of Recommendationsprosecute all such cases in Special Courts constituted for this purpose. The SFO should be staffed by experts from diverse disciplines such as the financial sector, capital and futures market, commodity markets, accountancy, direct and indirect taxation, forensic audit, investigation, criminal and company law and information technology. The SFO should have all powers of investigation as stated in the recommendation of the Mitra Committee. The existing SFIO should be subsumed in this.d. A Serious Frauds Monitoring Committee should be constituted to oversee the investigation and prosecution of such offences. This Committee, to be headed by the Cabinet Secretary, should have the Chief Vigilance Commissioner, Home Secretary, Finance Secretary, Secretary Banking/ Financial Sector, a Deputy Governor, RBI, Secretary, Department of Company Affairs, Law Secretary, Chairman SEBI etc as members.e.In case of involvement of any public functionary in a serious fraud, theSFO shall send a report to the Rashtriya Lokayukta and shall follow the directions given by the Rashtriya Lokayukta (see para 4.3.15).f.In all cases of serious frauds the Court shall presume the existenceof mens rea of the accused, and the burden of proof regarding its non-existence, shall lie on the accused.24. (3.8.5) Prior Concurrence for Registration of Cases: Section 6A of the Delhi Special Police Establishment Act, 1946a.Permission to take up investigations under the present statutoryarrangement should be given by the Central Vigilance Commissioner in consultation with the concerned Secretary. In case of investigation against a Secretary to Government, the permission should be given by a Committee comprising the Cabinet Secretary and the Central Vigilance Commissioner. This would require an amendment to the Delhi Special Police Establishment Act. In the interim the powers of the Union Government may be delegated to the Central Vigilance Commissioner, to be exercised in the manner stated above. A time limit of 30 days may be prescribed for processing this permission.25. (3.9.4) Immunity Enjoyed by Legislatorsa.The Commission, while endorsing the suggestion of the National Commission to Review the Working of the Constitution, recommends that suitable amendments be effected to Article 105(2) of the Constitution to provide that the immunity enjoyed by Members of Parliament does not cover corrupt acts committed by them in connection with their duties in the House or otherwise.b. The Commission also recommends that similar amendments may be made in Article 194(2) of the Constitution in respect of members of the state legislatures.26. (3.10.24) Constitutional Protection to Civil Servants – Article 311a.Article 311 of the Constitution should be repealed.b.Simultaneously Article 310 of the Constitution should also be repealed.c.Suitable legislation to provide for all necessary terms and conditions of services should be provided under Article 309, to protect the bona fide action of public servants taken in public interest; this should be made applicable to the States.d. Necessary protection to public servants against arbitrary action should be provided through such legislation under Article 309.27. (4.3.15) The Lok Pala. The Constitution should be amended to provide for a national ombudsman to be called the Rashtriya Lokayukta. The role and jurisdiction of the Rashtriya Lokayukta should be defined in the Constitution while the composition, mode of appointment and other details can be decided by Parliament through legislation.b. The jurisdiction of Rashtriya Lokayukta should extend to all Ministers of the Union (except the Prime Minister), all state Chief Ministers, all persons holding public office equivalent in rank to a Union Minister, and Members of Parliament. In case the enquiry against a public functionary establishes the involvement of any other public official along with the public182183Ethics in GovernanceSummary of Recommendationsfunctionary, the Rashtriya Lokayukta would have the power to enquire against such public servant(s) also.c.The Prime Minister should be kept out of the jurisdiction of the RashtriyaLokayukta for the reasons stated in paras 4.3.7 to 4.3.11.d. The Rashtriya Lokayukta should consist of a serving or retired Judge of the Supreme Court as the Chairperson, an eminent jurist as Member and the Central Vigilance Commissioner as the ex-officio Member.e.The Chairperson of the Rashtriya Lokayukta should be selected from apanel of sitting Judges of the Supreme Court who have more than three years of service, by a Committee consisting of the Vice President of India, the Prime Minister, the Leader of the Opposition, the Speaker of the Lok Sabha and the Chief Justice of India. In case it is not possible to appoint a sitting Judge, the Committee may appoint a retired Supreme Court Judge. The same Committee may select the Member (i.e. an eminent jurist) of the Rashtriya Lokayukta. The Chairperson and Member of the Rashtriya Lokayukta should be appointed for only one term of three years and they should not hold any public office under government thereafter, the only exception being that they can become the Chief Justice of India, if their services are so required.f.The Rashtriya Lokayukta should also be entrusted with the task ofundertaking a national campaign for raising the standards of ethics in public life.28. (4.4.9) The Lokayukta :a.The Constitution should be amended to incorporate a provision makingit obligatory on the part of State Governments to establish the institution of Lokayukta and stipulate the general principles about its structure, power and functions.b. The Lokayukta should be a multi-member body consisting of a judicial Member in the Chair, an eminent jurist or eminent administrator with impeccable credentials as Member and the head of the State Vigilance Commission {as referred in para 4.4.9(e) below} as ex-officio Member. The Chairperson of the Lokayukta should be selected from a panel ofretired Supreme Court Judges or retired Chief Justices of High Court, by a Committee consisting of the Chief Minister, Chief Justice of the High Court and the Leader of the Opposition in the Legislative Assembly. The same Committee should select the second member from among eminent jurists/administrators. There is no need to have an UpLokayukta.c.The jurisdiction of the Lokayukta would extend to only cases involvingcorruption. They should not look into general public grievances.d. The Lokayukta should deal with cases of corruption against Ministers and MLAs.e.Each State should constitute a State Vigilance Commission to look intocases of corruption against State Government officials. The Commission should have three Members and have functions similar to that of the Central Vigilance Commission.f.The Anti Corruption Bureaus should be brought under the control ofthe State Vigilance Commission.g. The Chairperson and Members of the Lokayukta should be appointed strictly for one term only and they should not hold any public office under government thereafter.h. The Lokayukta should have its own machinery for investigation. Initially, it may take officers on deputation from the State Government, but over a period of five years, it should take steps to recruit its own cadre, and train them properly.i.All cases of corruption should be referred to Rashtriya Lokayukta orLokayukta and these should not be referred to any Commission of Inquiry.29. (4.5.6) Ombudsman at the Local Levels*a. A local bodies Ombudsman should be constituted for a group of districts to investigate cases against the functionaries of the local bodies. The State Panchayat Raj Acts and the Urban Local Bodies Act should be amended to include this provision.184185Ethics in GovernanceSummary of Recommendations*b. The local bodies Ombudsman should be empowered to investigate cases of corruption or maladministration by the functionaries of the local self governments, and submit reports to the competent authorities for taking action. The competent authorities should normally take action as recommended. In case they do not agree with the recommendations, they should give their reasons in writing and the reasons should be made public.30. (4.6.6) Strengthening Investigation and Prosecution*a. The State Vigilance Commissions/Lokayuktas may be empowered to supervise the prosecution of corruption related cases.*b. The investigative agencies should acquire multi-disciplinary skills and should be thoroughly conversant with the working of various offices/ departments. They should draw officials from different wings of government.*c. Modern techniques of investigation should also be deployed like electronic surveilance, video and audio recording of surprise inspections, traps, searches and seizures.*d. A reasonable time limit for investigation of different types of cases should be fixed for the investigative agencies.*e. There should be sustained step-up in the number of cases detected and investigated. The priorities need to be reoriented by focussing on ‘big’ cases of corruption.*f. The prosecution of corruption cases should be conducted by a panel of lawyers prepared by the Attorney General or the Advocate General in consultation with Rashtriya Lokayukta or Lokayukta as the case may be.*g. The anti-corruption agencies should conduct systematic surveys of departments with particular reference to highly corruption prone ones in order to gather intelligence and to target officers of questionable integrity.*h. The economic offences unit of states need to be strengthened to effectively investigate cases and there should be better coordination amongst existing agencies.31. (5.1.12) Citizens’ Initiatives*a. Citizens’ Charters should be made effective by stipulating the service levels and also the remedy if these service levels are not met.*b. Citizens may be involved in the assessment and maintenance of ethics in important government institutions and offices.*c. Reward schemes should be introduced to incentivise citizen’s initiatives.*d. School awareness programmes should be introduced, highlighting the importance of ethics and how corruption can be combated.32. (5.2.5) False Claims Acta.Legislation on the lines of the US False Claims Act should be enacted,providing for citizens and civil society groups to seek legal relief against fraudulent claims against the government. This law should have the following elements:i.Any citizen should be able to bring a suit against any person oragency for a false claim against the government.ii.If the false claim is established in a court of law, then the person/agency responsible shall be liable for penalty equal to five times the loss sustained by the exchequer or society.iii. The loss sustained could be monetary or non-monetary as in the form of pollution or other social costs. In case of non-monetary loss, the court would have the authority to compute the loss in monetary terms.iv. The person who brought the suit shall be suitably compensated out of the damages recovered.186187Ethics in GovernanceSummary of Recommendations33. (5.3.5) Role of Media*a. It is necessary to evolve norms and practices requiring proper screening of all allegations/complaints by the media, and taking action to put them in the public domain.*b. The electronic media should evolve a Code of Conduct and a self regulating mechanism in order to adhere to a Code of Conduct as a safeguard against malafide action.*c. Government agencies can help the media in the fight against corruption by disclosing details about corruption cases regularly.34. (5.4.2) Social Audit*a. Operational guidelines of all developmental schemes and citizen centric programmes should provide for a social audit mechanism.35. (6.2.5) Promoting Competition*a. Every Ministry/Department may undertake an immediate exercise to identify areas where the existing ‘monopoly of functions’ can be tempered with competition. A similar exercise may be done at the level of State Governments and local bodies. This exercise may be carried out in a time bound manner, say in one year, and a road map laid down to reduce ‘monopoly’ of functions. The approach should be to introduce competition along with a mechanism for regulation to ensure performance as per prescribed standards so that public interest is not compromised.*b. Some Centrally Sponsored schemes could be restructured so as to provide incentives to States that take steps to promote competition in service delivery.*c. All new national policies on subjects having large public interface (and amendments to existing policies on such subjects) should invariably address the issue of engendering competition.36. (6.3.5) Simplifying Transactions*a. There is need to bring simplification of methods to the center-stage of administrative reforms. Leaving aside specific sectoral requirements, the broadprinciples of such reforms must be: adoption of ‘single window’ approach, minimizing hierarchical tiers, stipulating time limits for disposal etc.*b. The existing Departmental Manuals and Codes should be thoroughly reviewed and simplified with a responsibility on the Head of the Department to periodically update such documents and make available soft-copies on-line and hard copies for sale. These manuals must be written in very precise terms, and phrases like ‘left to the discretion of’, ‘as far as possible’, ‘suitable decision may be taken’ etc should be avoided. This should be followed for all rules and regulations governing issue of permissions, licenses etc.*c. A system of rewards and incentives for simplification and streamlining of procedures may be introduced in each government organization.*d. The principle of ‘positive silence’ should generally be used, though this principle cannot be used in all cases. Wherever permissions/licenses etc are to be issued, there should be a time limit for processing of the same after which permission, if not already given, should be deemed to have been granted. However, the rules should provide that for each such case the official responsible for the delay must be proceeded against.37. (6.4.7) Using Information Technology*a. Each Ministry/Department/Organization of Government should draw up a plan for use of IT to improve governance. In any government process, use of Information Technology should be made only after the existing procedures have been thoroughly re-engineered.*b. The Ministry of Information and Technology needs to identify certain governmental processes and then take up a project of their computerization on a nationwide scale.*c. For computerization to be successful, computer knowledge of departmental officers needs to be upgraded. Similarly, the NIC needs to be trained in department specific activities, so that they could appreciate each other’s view point and also ensure that technology providers understand the anatomy of each department.188189Ethics in GovernanceSummary of Recommendations38. (6.6.4) Integrity Pacts*a. The Commission recommends encouragement of the mechanism of ‘integrity pacts’. The Ministry of Finance may constitute a Task Force with representatives from Ministries of Law and Personnel to identify the type of transactions requiring such pacts and to provide for a protocol for entering into such a pact. The Task Force may, in particular, recommend whether any amendment in the existing legal framework like the Indian Contract Act, and the Prevention of Corruption Act is required to make such agreements enforceable.39. (6.7.3) Reducing discretion*a. All government offices having public interface should undertake a review of their activities and list out those which involve use of discretion. In all such activities, attempt should be made to eliminate discretion. Where it is not possible to do so, well-defined regulations should attempt to ‘bound’ the discretion. Ministries and Departments should be asked to coordinate this task in their organizations/offices and complete it within one year.*b. Decision-making on important matters should be assigned to a committee rather than individuals. Care has to be exercised, however, that this practice is not resorted to when prompt decisions are required.*c. State Governments should take steps on similar lines, especially in local bodies and authorities, which have maximum ‘public contact’.40. (6.8.7) Supervision*a. The supervisory role of officers needs to be re-emphasised. It bears reiteration that supervisory officers are primarily responsible for curbing corruption among their subordinates, and they should take all preventive measures for this purpose.*b. Each supervisory officer should carefully analyze the activities in his/her organization/office, identify the activities which are vulnerable to corruption and then build up suitable preventive and vigilance measures. All major instances of loss caused to the government or to the public, by officials by their acts of omission or commission should be enquired into and responsibility fixed on the erring officer within a time-frame.c.In the Annual Performance Report of each officer, there should be a column where the officer should indicate the measures he took to control corruption in his office and among subordinates. The reporting officer should then give his specific comments on this.d.Supervisory officers who give clean certificates to subordinate corrupt officers in their Annual Performance Reports should be asked to explain their position in case the officer reported upon is charged with an offence under the Prevention of Corruption Act. In addition, the fact that they have not recorded adversely about the integrity of their subordinate corrupt officers should be recorded in their reports.e.Supervisory officers should ensure that all offices under them pursue a policy of suo motu disclosure of information within the ambit of the Right to Information Act.41. (6.9.4) Ensuring Accessibility and Responsiveness*a. Service providers should converge their activities so that all services are delivered at a common point. Such common service points could also be outsourced to an agency, which may then be given the task of pursuing citizens, requests with concerned agencies.*b. Tasks, which are prone to corruption, should be split up into different activities that can be entrusted to different persons.*c. Public interaction should be limited to designated officers. A ‘single window front office’ for provision of information and services to the citizens with a file tracking system should be set up in all government departments.42. (6.10.2) Monitoring Complaintsa.All offices having large public interface should have an online complaint tracking system. If possible, this task of complaint tracking should be outsourced.b. There should be an external, periodic mechanism of ‘audit’ of complaints in offices having large public interface.190191Ethics in GovernanceSummary of Recommendationsc.Apart from enquiring into each complaint and fixing responsibilityfor the lapses, if any, the complaint should also be used to analyse the systemic deficiencies so that remedial measures are taken.43. (6.12.7) Risk Management for Preventive Vigilance*a. Risk profiling of jobs needs to be done in a more systematic and institutionlised manner in all government organizations.*b. Risk profiling of officers should be done by a committee of ‘eminent persons’ after the officer has completed ten years of service, and then once in every five years. The committee should use the following inputs in coming to a conclusion:(i) The performance evaluation of the reported officer.(ii) A self-assessment given by the reported officer focusing on the efforts he/she has made to prevent corruption in his/her career.(iii) Reports from the vigilance organization.(iv) A peer evaluation to be conducted confidentially by the committee through an evaluation form.44. (6.13.2) Audit*a. It should be prescribed that as soon as any major irregularity is detected or suspected by the audit team, it should be immediately taken note of by government. A suitable mechanism for this may be put in place. It shall be the responsibility of the head of the office to enquire into any such irregularity and initiate action.*b. Audit teams should be imparted training in forensic audit.*c. Each office should make an annual public statement regarding pending audit queries.45. (6.14.3) Proactive vigilance on corruption*a. Taking proactive vigilance measures should primarily be the responsibility of the head of the office. Some possible measures are indicated in para (6.14.2).46. (6.15.2) Intelligence Gathering*a. Supervisory officers should assess the integrity of his/her subordinates based on his/her handling of cases, complaints and feedback from different sources. This could then become an important input for risk profiling of officers.47. (6.16.2) Vigilance Network*a. A national database containing the details of all corruption cases at all levels should be created. This database should be in the public domain. Identified authorities should be made responsible for updating the database regularly.48. (7.9). Protecting the Honest Civil Servant*a. Every allegation of corruption received through complaints or from sources cultivated by the investigating agency against a public servant must be examined in depth at the initial stage itself before initiating any enquiry. Every such allegation must be analyzed to assess whether the allegation is specific, whether it is credible and whether it is verifiable. Only when an allegation meets the requirements of these criteria, should it be recommended for verification, and the verification must be taken up after obtaining approval of the competent authority. The levels of competent authorities for authorizing verifications/enquiries must be fixed in the anti-corruption agencies for different levels of suspect officers.*b. In matters relating to allegations of corruption, open enquiries should not be taken up straightaway on the basis of complaints/source information. When verification/secret enquiries are approved, it should be ensured that secrecy of such verifications is maintained and the verifications are done in such a manner that neither the suspect officer nor anybody else comes to know about it. Such secrecy is essential not only to protect the reputation of innocent and honest officials but also to ensure the effectiveness of an open criminal investigation. Such secrecy of verification/enquiry will ensure that in case the allegations are found to be incorrect, the matter can be closed without anyone having come to know of it. The Inquiry / Verification Officers should be in a position to appreciate the sensitivities involved in handling allegations of corruption.192193Ethics in Governance*c. The evaluation of the results of verification/enquiries should be done in a competent and just manner. Much injustice can occur due to faulty evaluation of the facts and the evidence collected in support of such facts. Personnel handling this task should not only be competent and honest but also impartial and imbued with a sense of justice.*d. Whenever an Inquiry Officer requires to consult an expert to understand technical / complex issues, he can do so, but the essential requirement of proper application of mind has to take place at every stage to ensure that no injustice is caused to the honest and the innocent.AnnexureI(1)National Colloquium on“Ethics in Governance – Moving from Rhetoric to Results”Organized byThe Administrative Reforms Commission and The National Judicial Academy*e. Capacity building in the anti-corruption agencies should be assured through training and by associating the required experts during enquiries/ investigations. Capacity building among public servants who are expected to take commercial / financial decisions should be built through suitable training programmes.Valedictory Address (02nd September, 2006)Justice Y. K. Sabharwal, Chief Justice of India*f. The supervisory officers in the investigating agencies should ensure that only those public servants are prosecuted against whom the evidence is strong.*g. There should be profiling of officers. The capabilities, professional competence, integrity and reputation of every government servant must be charted out and brought on record. Before proceeding against any government servant, reference should be made to the profile of the government servant concerned.*h. A special investigation unit should be attached to the proposed Lokpal (Rashtriya Lokayukta)/State Lokayuktas/Vigilance Commission, to investigate allegations of corruption against investigative agencies. This unit should be multi-disciplinary and should also investigate cases of allegations of harassment against the investigating agency. Similar units should also be set up in States.Ever since independence, India has been one of the front-runners in the comity of nations that cherish principles of civil society. India sought to redeem the pledge taken in this behalf by evolving a Constitution that dreamt of establishing an egalitarian society based on principles of equality, fairness and justice, one characterized by the belief that all people should have equal political, social and economic rights. Our system of governance is founded on the lofty principle of rule of law, wherein the State power is divided amongst three chief organs, each under a duty to conduct itself in a manner that subserves the common good of all and achieve the objectives of a welfare State. The checks and balances were put as inherent safeguards designed to ensure compliance with the maxim “Be you ever so high, the law is above you”. The dicta of the Constitution is crystal clear; namely, the goal of good governance.After having seen the way our polity works on the demands of the civil society, the Government of the day had set up, in 1966, a Commission of Inquiry that came to be known as the Administrative Reforms Commission. The recommendations of the said first Administrative Reforms Commission brought about qualitative changes in the system of governance in our country focusing, in the process, on issues as wide ranging as the structure of the administrative machinery, decentralization of powers & functions, revamp of financial management and, of course, the issue of dealing with corruption, a subject that has been the mother of all issues from times immemorial.Much water has flown down the Ganges ever since. India has come a long way in many ways. The population of the country has multiplied geometrically; the expectations of the194195Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexufe-I(1) Contd.Annexufe-I(1) Contd.people of India for social justice and guarantee of their fundamental rights today are far more acute and vociferous than ever before, in particular in matters concerning equality of status, equality before law, equality in the matter of opportunities for public employment, equitable distribution of resources and national income etc.India is no longer an impoverished State always looking for financial help even to feed millions of its population living in inhuman conditions below poverty line. We are today a modern State having taken giant strides in the spheres of development and economic progress. Ours is an economy that is perceived even by the developed nations of the west as one on the springboard for being catapulted into the position of a global power in near future. The changes in policies and planning over the last two decades or so have contributed, to a great degree, to the successes that we have witnessed in recent times, particularly in matters concerning development and economic activity. As a result of liberalization, the role of public functionaries has gradually been undergoing a change. Strict State controls are yielding place to regulatory mechanisms. Generally speaking, a sense of synergy pervading all stakeholders has been perceptible across the board.The flip side is that the massive economic progress notwithstanding, the fruits of development have not seen equitable distribution. In spite of Constitutional mandate through 73d and 74' Amendments for decentralization of State power by setting up Panchayati Raj institutions, regional imbalances arising out of extraneous & unhealthy considerations of caste or creed continue to dog us. The goal of total literacy remains a distant dream. Vast rural areas continue to be denied opportunities for gainful employment, public health services, or basic amenities like electricity, potable water, transportation etc. The holders of public offices still treat the authority in their hands as one bestowing, upon them, the status of a ruler rather than one in public service. Criminalization of politics and politicization of bureaucracy firmly block the passage for attitudinal change, resulting in nepotism, non-responsive conduct, apathy and degeneration at all levels. The hydra of corruption in public life remains our constant companion.After elapse of almost four decades since the first Administrative Reforms Commission concluded its task, it was in the fitness of things for the Government of India to constitute another Administrative Reforms Commission, particularly with the object of achieving “a pro-active, responsive, accountable, sustainable and efficient administration for the country at all levels of the Government”. The inclusion of this objective in the terms of reference only rekindles the hope that India is still alive to the goal of clean governance that we had set for ourselves through the Constitution adopted in 1950.The areas of study by the Administrative Reforms Commission include organizational structure of the Government, refurnishing of personnel administration, strengthening financial management systems, effective administration at state, district and panchayat level, Social Capital, Trust and participative public service delivery, public order etc. But, the subject of “ethics in governance”, to my mind, is of the paramount importance since it goes to the root of other issues on the agenda of the Commission. The theme of ethical governance is closely connected with the menace of corruption in public life. There cannot be corruption and also ethical governance at the same time. Both are incompatible. Hence the imperative need for debate about effectiveness of anti-corruption measures. It is an area which concerns all the three organs of the State. It is most appropriate that the Administrative Reforms Commission has organized this National Colloquium jointly with the National Judicial Academy so as to ascertain the views of various stake-holders including the judicial functionaries.Since we talk of ethics in governance, it is necessary to understand, may be once again, the concept of “governance” which is as old as human civilization. Ever since humanity decided to organize itself into political entities, the society comprised within each unit would evolve a system of governance through which its internal affairs and external relations could be regulated so as to afford to it the optimum benefit. In its most simplified form, the expression “Governance” simply means the process of decision-making and the process by which decisions are implemented. It entails, as described by the Human Development Report, “the exercise of power or authority – political, economic, administration or otherwise – to manage a country’s resources and affairs”.From this perspective, it encompasses “the mechanisms, processes and situations through which citizens and groups articulate their interests, exercise their legal rights, meeting their obligations and mediate their differences”. As a necessary corollary to the above, the act of governance involves “the interface through which citizens mediate and interact with the State”. This indicates that quality of governance depends largely upon the indulgence shown by the subjects. Speaking on basis of experiences of medieval period and the times of colonial rule, in particular in the continents of Africa and Asia, some political scientists would use sarcasm in describing the system of governance in the words that I quote:“the marvelofallhistory is the patiencewith which men and women submitto burdens unnecessarily laid upon them by their governments”.196197Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexufe-I(1) Contd.Annexufe-I(1) Contd.The world has come afar from the times of such skepticism. The majority of the member States of the free world today are founded on the principle of “Welfare State”, run with full participation of their respective inhabitants, striving to achieve the common good and in the process affording optimum opportunity and involvement for growth of the individual so as to attain societal interests. This has led to evolution of “Good Governance”, as opposed to mere governance, as the umbrella concept embracing within a system of governance that is able to unequivocally discover the basic values of the society where standards concern economic, political and socio-cultural issues including those involving human rights, and one that follows the same through an accountable and upright administration.Good governance is not a mirage or a utopian concept. It only signifies the way an administration ameliorates the standard of living of the members of its society by creating, and making available, the basic amenities of life; providing its people security and the opportunity to better their lot; instills hope in their hearts for a promising future; providing, on an equal & equitable basis, access to opportunities for personal growth; affording participation and capacity to influence, in the decision-making in public affairs; sustaining a responsive judicial system which dispenses justice on merits in a fair, unbiased and meaningful manner; and maintaining accountability and honesty in each wing or functionary of the Government.Baseness and depravity in governance and public life has been a cause of unease even in advanced societies at different times in their history. In a quote that has been attributed to Abraham Lincoln, it has been said: -“Isee in the nearfuture a crisis approaching that unnerves me and causes me to tremble for thesafety ofmy countryan era ofcorruption in high places willfollow, and the money-power ofthe country will endeavour to prolong its reign by working upon the prejudices ofthe people until the wealth is aggregated in a few hands and the Republic is destroyed.”As per the United Nation’s Commission on Human Rights, the key attributes of good governance include transparency, responsibility, accountability, participation and responsiveness to the needs of the people. Good governance is thus linked to an enabling environment conducive to the enjoyment of Human Rights and promoting growth and sustainable human development. The world community endorses ‘rights based approach’ to development and tests the track record of each member State on its anvil. The expectation of every civil society of its Government is that it would fulfill its commitments and providean equitable atmosphere conducive for individual’s growth. A Government is expected to be fully accountable to its people and transparent in the employ of public resources. It enforces the Human Rights including economic, social & cultural rights and has no place for corruption of any kind since dishonesty is anathema to economic well-being as it transmits public money allocated for development unjustly into private coffers depriving the citizenry of its use for their welfare. This is the prime reason why the World Bank views good governance and anti-corruption measures as central to its poverty alleviation mission.Mr. R. Venkataraman, former President of India said that a good Government is one that “is stable and truly representative of the majority of the people; maintains its territorial integrity and national sovereignty; accelerates economic growth and development; ensures the welfare of all sections of people; and renders justice without delay”.Since human rights are also designed to attain human development, good government has the protection of human rights as the top most priority on its agenda. Good Governance, in nutshell, entails effective participation in public policy-making, the prevalence of the rule of law and an independent judiciary, besides a system of institutional checks & balances through horizontal and vertical separation of powers, and effective oversight agencies. Researchers at the World Bank Institute have similarly distinguished amongst the main dimensions of good governance, key attributes including political stability; Government effectiveness, which includes the quality of policy making and public service delivery; accountability; civil liberties; rule of law, which includes protection of property rights; Independence of the judiciary; and control of corruption. The views evolved in UN Economic & Social Commission for Asia & the Pacific are almost identical. It holds that “Good Governance has 8 major characteristics. It is participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive and follows the rule of law. It assures that corruption is minimized, the view of minorities are taken into account and that the voices of the most vulnerable in society are heard in decision-making. It is also responsive to the present and future needs of society.”All these expressions convey theories pregnant with time-tested concepts. The “participation” in order to be effective, needs to be informed & organized and, therefore, depends upon the availability to the subjects “freedom of association & expression” on one hand and existence of “an organized civil society” on the other. This necessarily is a pointer to “representative democracy”. The attribute of “rule of law” inheres as prerequisites “fair legal frameworks” that are enforced impartially and particularly “full protection of human rights”, especially of19821199Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexufe-I(1) Contd.Annexufe-I(1) Contd.the vulnerable sections of the society. The factor of “transparency” requires that information is freely available and the decisions are taken or enforced in a manner that adheres to the rules and regulations. The attribute of “responsiveness” necessitates that all public institutions and their processes strive “to serve all stake holders within a reasonable time frame”.Good Governance depends upon endeavour to work out a broad consensus in the society so as to achieve sustainable human development. This factor again underscores the significance of representative democracy as the form of Government best suited to provide good governance. Such form of Government only can claim inclusiveness and assure an environment that offers equity and optimum opportunities for improvement and growth. Of course, the output would depend upon the efficiency in the sustainable use of resources that are available. The goal of good governance, however, would elude a society if its system of governance does not have in place the mechanism to hold the persons wielding State power accountable.Democracy, liberty and the rule of law together represent the troika that is universally accepted now as the index of a civil society. Democracy signifies a government of, by and for the people. The protection of individual liberties follows the notion of democracy as a natural corollary. This entails the espousal of a methodical configuration of laws by which society might be regulated and different conflicting interests can be harmonized to the fullest extent. This is why “the rule of law” is indispensable. It envisages the pre-eminence of law as opposed to anarchy or capricious dictates. In involves equal accountability of all before the law irrespective of high or low status.Democracy has been evolved through centuries of experience amongst the people, who care for human person, dignity & rights as the best and most acceptable form of good governance. It is a concept that occasions the idea that all citizens have a right to participate in the decision-making processes that lead to adoption of policies that are applicable to the societies. It also means that there are some limits on majority decision-making and, hence the inevitability of certain basic rights being protected. It rests on maintaining a necessary equilibrium between the numerous competing interests, demands, constrains and compulsions that exist in any civic society eager for development.Thus, the key principles that constitute the foundations of a modern democracy wedded to the concept of “welfare state” and that of the theory of “good governance” are common; namely full participation of all stake holders in the decision-making process ensured through free and fair elections; guarantee of basic rights conducive for growth of individual & societyincluding freedom of speech and press, equality before law and of opportunities; rule of law and independent & effective judiciary. From this perspective, “true democracy” is synonymous to “good governance”.The Constitution makers in India were wary of the caution in the words: “When the legislative and executive powers are united in the same person or body, there cannot be liberty... ...where the power of judging joined with the legislature, the life and liberty of the subject would be exposed to arbitrary control”, and further, “where the power of judging joined to the executive power, the judge might behave with all the violence of an oppressor”.Thus, in order to ensure that the basic structure of the Constitution is not eroded; that the Fundamental Rights are not abridged; that the rule of law always prevails; and that the Constitution remained “supreme lex”, the fundamental and paramount law of the land, the concept of judicial review has been planted as the instrumentality and the Constitution has been declared to be the touch stone of validity of all acts of each organ. Further, in order to guarantee that the rule of law would inure to, and for, everyone and the promises made by the Constitution would not remain mere paper promises, the Constitution makers made provisions for independence of the judiciary.One of the most important principles of just democratic governance is the presence of constitutional limits on the extent of government power. Such limits include periodic elections, guarantees of civil rights, and an independent judiciary, which allows citizens to seek protection of their rights, and redress against government actions. These limits help render branches of government accountable to each other and to the people. An independent judiciary is important for preserving the rule of law and is, therefore, most important facet of good governance.But then, it takes more than strong courts to ensure that a nation’s laws are enforced constantly and fairly. The law must willingly bind all branches of government. The rule of law also is the basis for business formation and the establishment of capital markets, which underpin economic development. Citizens, directly or through their elected representatives have to be involved in all levels of lawmaking. Participation in this process gives people a stake in the law and confidence that the law will preserve their personal and property rights.The judicial system has an important role to play ultimately in ensuring better public governance. There may be introduced a plethora of regulations, rules and procedures. But20021201Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexufe-I(1) Contd.Annexufe-I(1) Contd.when disputes arise, they have to be settled in a court of law. There could be, of course, alternative dispute resolution mechanism like arbitration. Ordinarily, however, it is the judiciary that must first step in and ensure that healthy practices prevail.Going by the agenda of this National Colloquium, I am confident that the scope for corruption and its overall impact on the governance in various aspects of the human activity have already been deliberated upon at length by the delegates over these two days. It is a matter of universal acknowledgement that corruption renders governance into a state of “non governance”. It would be fruitless to narrate, once again, the instances of corruption in different walks of public life in our country. The stories of defilement at all levels in our institutions, public or private, float around at regular intervals. Certain overzealous and highly charged sections of the media have made it a matter of routine for sting operations to lead to exposé of corrupt practices in almost each rung of the administrative hierarchy that governs us. I must hasten to add here that the methodology adopted in such sting operations at times is subject matter of ongoing debate. Be that as it may, this by itself can never condone the misdemeanor that has been bared to the public glare by such efforts adding to the disgust and revulsion felt by law-abiding citizenry. The cases of corruption by public figures are not limited to taking of paltry financial gains as illegal gratification for doing or abstaining from doing the official duties. They would extend to brazen abuse of office or authority for unjust enrichment of self or of the kith and kin, personal gain rather than financial rules dictating the award of public contracts or state patronage, favouritism on considerations of caste, creed etc., use of discretion for extraneous considerations, use of public sector enterprises as personal chattel, protection of the corrupt by their superiors thereby indicating, almost openly, community of design and so on and so forth.It is perhaps not possible to draw up a comprehensive list of areas of activity that give rise to scope for corruption. The discretionary powers with which public authorities are vested by the administrative rules are perhaps the biggest source of unethical practices. It is not that the entire work force in the civil services stands compromised or has sold its conscience on account of extraneous influences. The difficulty stems from the fact that those who refuse to bow down to the dictates of unscrupulous elements, out to abuse the authority of the public office to secure a favourable action, are easily marginalized while such public servants as treat the authority vested in them akin to a saleable commodity manipulate the process so that they are able to oblige and amuse the powers-that-be and, in the bargain, shift their career graph into fast track mode. No wonder, in this scenario, “transfer industry” mushrooms and functions as a highly productive unit in different Government departments. No wonder,an unholy politician-criminal-bureaucrat nexus evolves and thrives. No wonder, certain institutions in our polity are not stirred to function unless proper palms are greased.While we all know that cancer of corruption has seeped into the blood stream of our polity, the million dollar question that stares us in the face is what can be done other than what we have been doing in the name of combating this evil all along. If a part of human body suffers from gangrene, doctors might advise surgery. When gangrene spreads to all nooks and corners, probably surgical amputation cannot be the mode of management. The punitive methods in the form of criminal law on corruption and disciplinary action for breach of conduct rules of the public servants on one hand and preventive measures in the form of pro-active vigilance on the other may need to be strengthened and the loopholes plugged. But, to my mind, this may not suffice. As history shows, unscrupulous elements have always been one step ahead of the law. We need to do something over and above law enforcement.The predicament that we face today reminds me of a Chapter from Mahatma Gandhi’s autobiography “My Experiments with Truth”. Bapu had established, in 1911, an institution that became famous by the name of Tolstoy Farm in South Africa. Taking it to be his filial patrimonial duty to organize education for the children of the inhabitants at the farm, he made certain arrangements leading by example, as always, himself assuming the role of a schoolmaster. He was confronted with the issue as to what kind of education would be appropriate for the young children taken under his wings. Expressing his thought process on the subject, the foremost of which mandated that the instruction must lead to spiritual growth of the young minds, he conceived a teacher as a person who would represent an “eternal object lesson” for his pupils. He expounded on this further in the words that I quote: -“It would be idle for me, ifI were a liar, to teach boys to tell the truth. A coward teacher would never succeed in making his boys valiant, and a stranger to self-restraint could never teach his pupils the value ofself-restraint”.It has been said in Brihadaranyka Upnishad:-“You are what your deep, driving desire is.As your desire is, so is your will. As your will is, so is your deed.As your deed is, so is your destiny.”20221203Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexufe-I(1) Contd.Annexufe-I(1) Contd.In Ramayana, Maharshi Valmiki has underscored a very basic principle of governance in simple words “Yatha Raja Tatha Praja”. The message is loud and clear. The general erosion in values, ethics morality or integrity that is seen in a society only mirrors the character of those who run the affairs of that society.What I am trying to lay stress on is that if any paradigm change has to come in the matter of ethics in governance, it has to come from the top in every section of our society. Like charity, may be more than that, sense of morality also must begin from the door of the leader who preaches it. When those wielding power of governance, whichever wing of the State they may belong to, set about standardizing norms for conduct, they must first do so for ernment servants are controlled by Code of Conduct that is a part and parcel of their service rules, infraction of which is expected to result in disciplinary action. Almost every Government department has devised such a Code for its purposes, so much so that there seems a plethora of such Codes prevailing. On the other hand, the penal law called the Prevention of Corruption Act takes care of the role of criminal justice system in dealing with the hazard.The common features of the Code of Conduct for different categories of Government servants include expectation that he shall maintain absolute integrity; devotion to duty; do nothing which is unbecoming of a public office held by him; render his best judgment in the performance of his official duties; be prompt and courteous; not involve himself in acts of moral turpitude; not take part in party politics; not be associated with activities that are pre-judicial to the interests of the sovereignty and integrity of India or public order; not to engage himself in interviews with media, except with the lawful authority of his superiors; not divulge official information which has been entrusted to him in confidence; not accept pecuniary advantage, in particular, from those with whom he is involved in official duties; not to engage himself in private trade or business while holding public office; not to indulge in alcoholism or gambling; to manage his financial affairs in such a manner that he is always free from indebtedness and not to involve himself in transactions relating to property with persons having official dealings with him.The general impression that seems to prevail all over is that these disciplinary rules and the criminal law are meant to deal with misconduct in the nature of corruption by Government servants only. Every time a political leader is caught on the wrong foot, defences like “politically motivated” apart, a debate commences as to what is the import of the expression“public servant” for whose control these measures are designed. The jurisdiction to deal with corrupt elements under the conduct rules is generally seen to be invoked with great hesitation. A tendency seems to prevail to brush the scandals of corruption under the carpet, almost giving impression that the authorities are more interested in shielding the corrupt rather than cleansing the system. The statutory provisions of mandatory sanction meant to protect the honest public servants against malafide actions are used as an umbrella to save ex facie guilty public servants from criminal prosecution. The debate on the propriety and justification of “Single Directive” continues with the issue shuttling between different arms of the State. There is a school of thought that would also hold Article 311 responsible for lack of sufficient and timely action in this area. The political class has always laboured under the belief that no code of ethics binds them in their conduct vis-à-vis the people in whose service they claim to be active.In May 2000, the then Speaker of Lok Sabha had constituted a Parliamentary Committee on Ethics. The said Committee on Ethics had submitted its First Report on 3111 August 2001. The Report indicates that the Committee was of the view that norms of ethical behaviour for members of the legislature had been “adequately provided for” in the rules & procedure, directions by the Speaker and in the conventions which have evolved over the years on the basis of recommendations made by various Parliamentary Committees. The Committee was of the view that remedy with regard to unethical behaviour on the part of the legislators lay in the strict enforcement of the existing norms.Apart from this, the Committee recommended certain additional norms that it chose to call as “general ethical principles”. The thrust of these “general ethical principles” recommended by the Committee was that the legislators must utilize their position to advance general well-being of the people and in case of conflict between their personal interest and the public interest, they must resolve it so that personal interests are subordinate to the duty of their public office. It was recommended that conflict between private financial interests should not result in public interest being jeopardized and the legislators must maintain high standards of morality, dignity, decency and values in public life and keep uppermost in their minds, the fundamental duties listed in Part IV A of the Constitution.The Report itself indicated that the enforcement of the said general ethical principles is a slave of the discretion of the legislatures’ Committee of Privileges. It is common knowledge that the instances of such Committees actually finding legislators guilty of misdemeanor have been too scant to be of real deterrent value. We cannot feed on mere platitudes.20421205Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexufe-I(1) Contd.Annexufe-I(1) Contd.In the face of prevalent circumstances, some of which have been highlighted by me, our efforts at combating corruption suffer for three basic reasons: -(i)Absence of a basic or minimal code of conduct that applies uniformly to everyholder of public office or authority, irrespective of the wing of the State to which he belongs;(ii) A procedure that offers escape routes, at every step of the way, to the delinquent; and(iii) Lack of will or initiative on the part of authorities in catching the bull by the horns.India is not alone in the quest for clean governance. The then Prime Minister of United Kingdom had set up a Committee on Standards in Public Life in October 1994 which came to be known as the ‘Nolan Committee’. The Nolan Committee submitted its first report in May 1995 focusing its attention at that time on the code of conduct for members of Parliament, Ministers and Civil Servants etc. as this, in the views of the Committee, was a matter of “the greatest public concern”. The Committee examined the issues with a view to suggest adoption of measures to reinforce public confidence in the holders of public offices. It took note of cases of bribery, abuse of office, impropriety, rewards for past or future favours, states largesse etc. It observed that instances indicating slackness in observance and enforcement of high standards on the part of certain public figures, whose cases get publicized in the media, generate widespread suspicion that more misconduct occurs than comes to be revealed to the public gaze. The Committee was of the view that if corrective measures were not promptly taken, there was a danger that anxiety and suspicion would give way to disillusionment and cynicism. The Committee evolved seven general principles of conduct that underpin public life, the maintenance of which can restore the public confidence.To my mind, these seven general principles are of great merit and significance for our purposes. They include the following: -1. Selflessness:Simply put, this meansholdersofpublic offices are expected to conduct themselves such that they subserve public interest, as against interest ofthe self.2. Integrity:The conceptis wellknown. A public authority mustinsulate itselffrom extraneous influences in matters concerning officialduties.3. Objectivity:The duties ofpublic office vest, in the holder, authority to take decisions including making appointments, awarding contracts, recommending benefitsetc. The choicescannotbe allowed to be made on any criteria other than merit. The decisions must be based on reasons free from the vice ofcaprice. The executive can take a leafout ofthe book ofjudiciary by suo motu supply ofreasons forevery action. The requirementofrecording reasons is by itselfa greatsafeguard thatinhibits the decision maker from being subjective.4. Accountability:Any public office is an office oftrust. Therefore, public figure exercising any state function, and this includes members of the legislature, is accountable for all actions taken in performance ofthe functions ofthat office. Itnaturally flows from this that every act of commission or omission has to yield to scrutiny, whether by way ofinternal or external audit mechanism. Iam using the expression “audit”not in the narrow sense ofaudit of accounts but appraisal ofthe causes or consequences ofevery state action.5. Openness:There is no better disinfectant than sunlight. Transparency has to be the mantra of all officialacts. Judiciary follows this scrupulously by conducting its proceedings in the open. Transparency brings along inherentchecks. The introduction of“Right to Information” regime has indeed set the administrative setup in our country on the right course.6. Honesty:Injudiciary, we follow the rule that justice is not only to be done but mustbe seen to be done. The rules of natural justice that govern judicial ethics require essentially that a person cannotbe ajudge in his own cause. It is a travesty ofthe concept ofhonesty ifan administrative authority is taking decisions in matters which involve private interests of those closely connected with the authority. In this view, itis essential that holders ofpublic office must be obliged to declare their private interests so that they can always be held accountable in case there has been any conflict involving their public duties. This also means the assets and liabilities ofpublic functionaries mustbe a matter in public domain. The mandatory declaration atthe time ofentry in public office and periodically, thereafter, would only ensure the kind ofprobity we would like to be in place.20621207Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexufe-I(1) Contd.Annexufe-I(1) Contd.7. Leadership:This principle is articulation of the same idea as I referred in the context of Mahatma Gandhi’s Experiments with Truth. A true leader willalways lead by own example. Ifa leader is honest, sincere and committed to the task assigned to him, the vibes created percolate down the hierarchy cleansing the system thathe controls.I referred to politicization of bureaucracy and criminalization of politics. These two phenomenon together seem to constitute the major cause of all that ails in our polity today. Vested interests tend to control State actions by offering pelf or using arm-twisting tactics through the aegis of their henchmen in political executive, which acts through compromised sections of the bureaucracy. It is common knowledge that civil services consist of various lobby groups. Every time there is a change in the political climate of a State the group of bureaucrats loyal to the new political party in power takes over positions of authority at appropriate levels. The undue and unholy loyalty to political masters reflects in the decisions taken by such civil servants. It is commonplace to see senior bureaucrats vying with each other for political patronage, offices of profit, rewards, awards and post-retiral settlement, at times in constitutional authoritative positions. Take for example, the eminent office of Governor. It was conceived in the Constitution as one to be filled by a detached non-partisan person. Sarkaria Commission had, in fact, recommended that an aspirant for such a position should be a person who has not taken too great a part in politics generally and particularly in the recent past. In practice, however, the office of Governor is connected by a revolving door with two passages, one leading to civil services and other to active politics. No wonder, senior loyal bureaucrats assume responsibilities of governorship immediately after laying down the offices of civil servant or are ready to enter politics by way of nomination to the legislatures.Judiciary follows the norm of certain restrictions against active legal practice after one has demitted judicial office. This serves public interest in many ways including insulation of the judicial functionary from offers of future patronage. The principle needs to be extended and made part of a universal Code of Conduct prohibiting joining of active politics by civil servants and those holding constitutional positions after superannuating, for sufficiently long compulsory waiting period.Code of Conduct breach whereof entails disciplinary action on one hand and penal law governing corruption in public life, dealt with under the criminal justice administration, form two concentric circles. The authorities that deal with the two processes necessarily differ, the procedure applicable, the standard of proof and the consequences also being distinct. Yet, the common feature that runs through the rules or law governing both spheresarises out of a common legitimate expectation of corruption free governance. The demands of office connected with various services that are comprised in the State may be distinct. For example, the expectation from holders of judicial offices for fairness and non-partisan judgment are perhaps of the highest order. This is why, unlike in the case of civil services, members of the judiciary are generally expected to be asocial.But the fact remains that there are certain minimum standards of ethics and proper conduct in public life that can be applied to every person connected with governance or public duties, right from the inferior most up to the highest authority of the land. It has perhaps become necessary to evolve such a minimum Code of Conduct for universal application across the board for holder of every public office, breach whereof should be construed as indiscipline for purposes of control under the service jurisprudence on one hand and an offence for penal consequences to follow, through the mechanism of criminal justice apparatus on the other.The difficulty with our system is that we tend to engage ourselves more in debate than real action. One example that I can quote in this context is the subject of police reforms, in particular reforms concerning accountability of police forces to the public at large and to rule of law on one hand and insulation of investigative police agencies from political interference on the other. Reforms have been suggested on almost identical lines, over the last three decades, by various Commissions and Committees. Yet, we continue to be governed by Police Act that was given to us by the aliens in 1861, in the initial years of British Rule in India.In the same context, I would like to touch upon one of the several deficient provisions of the criminal law on corruption. The law provides for the assets acquired as a result of corruption to be attached, impounded or forfeited. Courtesy the Criminal Law Amendment Ordinance of 1944 vintage, this process is governed by civil procedure. The investigating or prosecuting agencies find the process of attachment of illicit assets of corrupt public servant too cumbersome. In cases where this process is initiated, it runs parallel to the criminal proceedings. This creates further difficulties for the criminal law apparatus. The public servant, as the defendant in each of these matters, derives undue advantage by taking resort to dilatory tactics. Should the concerned department also initiate disciplinary proceedings under the conduct rules, the public servant actually starts enjoying at the cost of the exchequer. He would delay each proceeding taking the excuse of pendency of the other. And when the proceedings reach the stage of recording of evidence, he would add to the confusion by referring to contradictions in the evidence of the common set of witnesses at different stages.20821209Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexuie-I(1) Contd.Annexuie-I(1) Contd.Under the existing rules of evidence, this pushes the prosecuting agency against the wall.In 1996, Supreme Court pointed out the inadequacy of the anti-corruption measures in the case of Delhi Development Authority v. Skipper Construction Co. (P) Ltd [(1996) 4 SCC 622]. The Court recommended enactment of a SAFEMA like law that “should place the burden of proving that the attached properties were not acquired with the aid of monies/ properties received in the course of corrupt deals upon the holder of that property”.The Law Commission of India took the above suggestion of the Supreme Court seriously and suggested in its 166`' report the enactment of a special law, also taking pains of drafting its Bill called the “Corrupt Public Servants (Forfeiture of Property) Bill” which was sent to the Government of India in February 1999. We still await the outcome of the said proposal.The right of silence on the part of an accused facing criminal charge needs reconsideration, in certain cases, balancing genuine & bonafide rights of accused on one hand and quest for truth on the other. While there is a good case for need to protect, and possibly reward, honest public servants, there is indeed a greater need to punish the black sheep since it is they who seem to be gradually taking on the mantle of role models. Deterrent punishment for the corrupt, through proceedings that are expeditious, is an object in which the judiciary and the executive will have to play a concerted role.No reforms in governance can ever be complete unless the measures also take into account the expectations of the people at large for judicial reforms. It is common knowledge that government is the major litigant in each rung of the judicial hierarchy. Therefore, if judicial reforms lead to expeditious disposal of cases, the Government would be the main beneficiary. Suggestions for appropriate mechanism to review the position taken by the Government in disputes coming before the courts of law have been made from time to time. The object of such a review mechanism is to curtail unnecessary and avoidable litigation. Unfortunately, these suggestions have always received half-hearted response. The State can ill-afford wastage of resources by engaging itself in legal disputes that are not going to serve public interest. A sense of accountability has to be brought about by sensitizing the officialdom at appropriate levels so that there is periodic appraisal of each ongoing litigation involving Government and irresponsible contest or prosecution of cases is not resorted to.Judicial reforms are part of the process of legal reforms. The legislature has introduced in recent times a number of amendments in procedural laws governing the courts of law. While dealing with issues concerning new measures in the Code of Civil Procedure, theSupreme Court in the case of Salem Advocate Bar Association (II) v. Union of India, (2005) 6 SCC 344, mooted certain further reforms to make the right to fair, speedy and inexpensive justice a real one.One of the areas on which the Court focused in the case of Salem Advocate Bar Association was the apathetic attitude of administrators facing the prospect of litigation. The court has pointed out that a more responsive and responsible action in the wake of notice u/s 80 CPC can save the exchequer from wastage of public money. The following observations of the Court need reiteration:-“38. ...Wherever the statutory provision requires service ofnotice as a condition precedent for filing of suit and prescribed period therefor, it is not only necessary for the Governments or departments or other statutory bodies to send a reply to such a notice but it is further necessary to properly dealwith allmaterialpointsand issuesraised in the notice. The Governments, government departments or statutory authorities are defendants in a large numberofsuits pending in various courts in the country. Judicialnotice can be taken ofthe fact thatin a large numberofcases either the notice is not replied to or in the few cases where a reply is sent, it is generally vague and evasive. The result is that the object underlying Section 80 ofthe Code and similar provisions gets defeated. It not only gives rise to avoidable litigation butalso results in heavy expenses and costs to the exchequer as well. A proper reply can result in reduction oflitigation between the State and the citizens. In case a properreply is senteitherthe claim in the notice may be admitted or the area ofcontroversy curtailed or the citizen may be satisfied on knowing the stand ofthe State. There is no accountability in the Government, Centralor State orthe statutory authorities in violating the spirit and object ofSection 80.39. These provisions castan implied duty on all Governments and States and statutory authorities concerned to send appropriate reply to such notices. Having regard to the existing state ofaffairs, we directallGovernments, Centralor State or otherauthorities concerned, wheneverany statute requires service ofnotice as a condition precedentfor filing ofsuitor other proceedings against it, to nominate, within a period ofthree months, an officer who shallbe made responsible to ensure that replies to notices underSection 80 or similar provisions are sent within the period stipulated in a particular legislation. The replies shallbe sent after due application ofmind. Despite such nomination, ifthe courtfinds that either the notice has not been replied to or the reply is evasive and vague and has been sent without proper application of mind, the court shall ordinarily award heavy costs against the Government and directit to take appropriate action against the officer concerned including recovery ofcosts from him”.21021211Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexufe-I(1) Contd.The Court has suggested, amongst others, examination by the Central Government of the issue of making adequate provision of subordinate courts commensurate with the needs of the times, and making it obligatory for “judicial impact assessment” to be made whenever any such legislation is introduced as has the possibility of generating new litigation and to make budgetary provision for providing judicial infrastructure to meet its challenge. Since the amended CPC lays stress on alternative dispute resolution methods, the Central Government has been called upon by the Court to examine the suggestion that the expenditure on compulsory reference of cases to mediation or conciliation ought to be borne by the State. A positive response from the Government would be in line with its constitutional obligation under Articles 14, 21, 37, 38, 39A and 247.I have already touched upon the abuse of the legal provisions regarding sanction for prosecution under Prevention of Corruption Act for purposes of shielding the corrupt. Pursuant to directions of the Supreme Court in the case of Vineet Narain [(1998) 1 SCC 226], the Central Vigilance Commission has been accorded statutory status. It is the apex authority on the subject of vigilance in the country. If we are serious on the question of administrative reforms leading to ethics in governance, it is high time CVC is vested with the authority to consider the question of sanction for prosecution in a manner that is final and binding on one and all. Keeping it as an authority whose recommendations can be flouted with immunity renders it to the position of a white elephant. Since it is a high powered body with special expertise in the subject of vigilance, its role rather needs to be expanded so as to arm it with the power to monitor the investigation and prosecution of cases of corruption involving the high functionaries, at least such cases as are investigated by CBI.Last but not the least, optimism being one of my weaknesses, I am still hopeful that we shall see, within our life time, the institution of Lok Pal being put in position as that would be the mother of all reforms for dealing with unscrupulous elements in the high echelons of our system of governance and without which the proper results can never be attained. Such Ombudsman, however, will have to be a truly independent, autonomous and self-sustaining authority which is equipped with powers of investigation, prosecution and necessary follow-up.Any machinery is as good as the man working it. The widespread corruption that we notice all around only mirrors the general erosion of morality and ethics in our society. H.M. Seervai, in his address as part of Sir Chimanlal Setalvad Lectures series in 1970, had observed: -Annexufe-I(1) Contd.“The ultimate guarantee against abuse ofpower, legislature, judicial and executive, lies in the politicaland legalsafeguards against such abuse, in a vigilant public opinion, and in the sense ofjustice in the people generally.”If we want to reform, attitudinal reforms will have to be first brought about even in our private lives. I would conclude by borrowing the words of Andre Beteille. He said: -“A Constitution may indicate the direction in which we are to move, but the socialstructure will decide how far we are able to move and at what pace”.21221213Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexure-I(2)Annexure-I(2) Contd.Speech of Shri M Veerappa Moily, Chairman,Second Administrative Reforms Commission on the occasion of theNational Colloquium onEthics and Governance – Moving from Rhetoric to Results.September 1, 2006Respected Justice J S Verma, Honourable Shri Suresh Pachouri, the Minister of State for Parliamentary Affairs and Personnel, Public Grievances & Pensions, Government of India, invited dignitaries, distinguished participants, the members of the Second Administrative Reforms Commission, ladies and gentlemen,I am happy to be here today, addressing this general session as a part of the National Colloquium on Ethics in Governance - Moving from Rhetoric to Results. To me, the title of the subject that the Colloquium addresses today and tomorrow is very apposite. We have talked ad nauseam about corruption: its causes and pervasiveness, its costs and consequences. Even at the risk of sounding self-deprecating, I should admit that our discourses on corruption, profound and moving as they are, have been long on precept and short on actionability. Time has come for us to make the necessary transition from rhetoric to results.But, let me point out one thing that the rhetoric on corruption did: it produced some useful metaphors. There is one that I particularly cherish. It is where corruption is portrayed using the symbolism of serious illness – as cancer. Something that spreads relentlessly from official to official, department to department, undermining institution after institution until the whole system perishes. These illness metaphors are stark and forbidding, but they do deliver an important message. Corruption can be a frightening problem in which governance and social conditions deteriorate irreversibly and venality takes the centre stage. The conclusion is inescapable: corruption must be eradicated so that the system can be nursed back to health, or, even better, it needs to be to stopped before the primary graduates to the secondary.Corruption is not a recent phenomenon. It has been with us through several centuries. Even at the time Kautilya wrote Arthasastra, commenting on the political economy of the Maurya era, he had said,?Just as it is not possible not to taste honey or poison placed on the surface of the tongue, even so it is not possible for one dealing with the money of the king not to taste the money in however small a quantity.?Just as fish moving inside water cannot be known when drinking water, even so officers appointed for carrying out works cannot be known when appropriating money.?It is possible to know even the path of birds flying in the sky, but not the ways of officers moving with their intentions concealed.?And he should make those who have amassed (money wrongfully) yield it up and should change them in (their) works, so that they do not consume (the king’s) property or disgorge what is consumed.?But those who do not consume (the king’s) goods and increase them in just ways, should be made permanent in their offices, being devoted to what is agreeable and permanent to the king.The fact remains that the costs and consequences of corruption have been debilitating. Information on the harm that corruption does to the country’s growth agenda, its economy, and the polity is not known because data on corruption is difficult to obtain. Luckily for us, research is now possible because of compilation of data in the form of multinational corruption index. This is to provide information to international companies trying to decide which countries to invest in. These data sets are based on the impressions of people knowledgeable about the countries concerned such as investors, bankers, and financial analysts.The most comprehensive multinational corruption index is prepared by the Transparency International. The Corruption Perception Index (CPI) prepared by the Transparency International, which ranks 85 countries, is a ‘poll of polls’, drawing upon numerous distinct surveys of expert and general public views of the extent of corruption, it reflects the perceptions of business people who participate in these surveys. Such data may not perhaps be as well-documented or replicable as social scientists would like them to be, but they are the best macrolevel data available in a difficult area such as corruption.Using data sets of such multinational corruption index, a number of recent cross-country studies are now in a position to establish the macroeconomic impact of corruption. For example, Paolo Mauro’s study indicates that high levels of corruption are associated with lower levels of investment as a share of the GDP in a cross-section of the countries studied. Mauro demonstrates that countries with high levels of corruption invest very little in human capital and in particular, investment in education is only minimal. This is because education21421215Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexure-I(2) Contd.Annexure-I(2) Contd.provides fewer opportunities for corruption when compared to other types of more capital-intensive public spending such as infrastructure and defence. Knack and Keefer’s study shows that high levels of corruption mean reduced investment, a lack of credible guarantees of property and contract rights, and poor institutionalization of the government. A study by Shang-Jin Wei linking corruption to international investment proves that corruption acts like a tax on foreign direct investment. While a one point increase in the tax rate reduces FDI by 5 per cent, an increase in the corruption level from that of Singapore to Mexico is the equivalent of 32 percentage point increase in the tax rate. In another study, a one standard deviation (2.4) improvement in the corruption index is associated with over a 4 percentage point increase in the investment rate and half a percentage increase in the annual growth rate of per capita GDP.There are also a number of studies, which tell us about the health of a society, which experiences high levels of corruption. Robert Cooter’s study shows that a society with high levels of corruption, has low levels of social interaction and weaknesses of the rule of law. Cooter, using game theory, shows that where people freely interact on a repeated basis, they are more likely to form strong and legitimate norms. According to Cooter, survey and interview research on popular conceptions of right and wrong suggests that most citizens judge civil servants by social norms learned in these everyday interactions. Cooter also points out that in countries which experience low corruption, a range of social groups – trade and professional associations, or community groups – have functioned as ‘law merchants’, and they have succeeded in promulgating codes of good practice and have been in a position to impose anti-corruption sanctions.Two studies by Isham, Kaufmann, and Pritchett demonstrate that societies with high levels of corruption have low levels of mass participation in politics and weak protection of civil liberties. The study by Easterly and Levine establishes that a society with large incidence of corruption is characterized by deep ethnic divisions and conflicts.In other words, these studies establish how corruption is closely correlated to reduced growth, reduced investment, and poor economic competitiveness. In essence, corruption hurts the economy. The studies also tell us how in the longer run, societies with high levels of corruption have low levels of social interaction and weaknesses of the rule of law, low educational attainment, low levels of participation in politics, weak protection of civil liberties, and deep ethnic divisions and conflicts.On the whole, corruption, apart from being worrisome for those who have to pay bribes, has more fundamental implications for the economy and the society. High levels of corruption hurt the economy and make the society very sick. These cross-country studies provide sickness metaphors, and they need to be taken seriously.What has been done to combat corruption? Traditionally, it has been done by using control systems.Control SystemControl systems are mechanisms designed to detect, punish and curtail corruption. Control systems can be of several types: the penalty rate, internal controls, external controls, and social control.PenaltyThe instrument most commonly used is penalty. Penalties - typically of a legal nature - can range from prison sentences to termination of employment to recovery of assets acquired illegitimately. For example, the Prevention of Corruption Act in Singapore stipulates penalty for corruption at imprisonment for five years and a fine of S$ 10,000. The Act further provides that a civil servant, against whom charge of corruption is proved, has to pay back the amount of bribe in addition to the judicial penalty. A separate legislation, the Corruption (Confiscation of Benefits) Act, 1989, empowers the Corrupt Practices Investigation Bureau to confiscate gains made by corruption.Most countries provide high penalties for corruption. Thailand is a case in point. The Thai Penal Code prescribes life imprisonment or death penalty for an offender convicted of corruption. In fact, punishment in the Thai penal system is significantly higher than the punishment provided for similar offences in other countries. Yet, Thailand figures among countries with the highest level of corruption.Stringency of penalty may not necessarily provide the needed deterrence. What is important is that penalties should be capable of being implemented. At a minimum, corruption, if proved, should be penalized with termination of government employment. Where employment in the civil service is highly regarded and brings prestige, dismissal means disgrace for the entire family, and therefore, members of the family have an incentive to discourage corruption. A stipulation prohibiting employment of such civil servants in the private sector makes the cost of indulging in corruption even higher.21621217Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexure-I(2) Contd.Annexure-I(2) Contd.Korea has made such stipulations. The General Administrative Reform Movement of 1975 prohibited the private sector from reemploying civil servants who had been dismissed on charges of corruption. The Movement even went a step further. A person who initially recommended the case of the official who was later found to be guilty of corruption, was also dismissed, and prohibition in respect of reemployment was extended to the sons and grandsons of a person found guilty of corruption.In fairness, penalties should be directed at not merely those who receive bribes but also those who pay them. This, unfortunately, is not a common practice, and most countries have been shy of punishing those who pay bribes. It is only in the United States that the Foreign Corrupt Practices Act imposes sanctions against multinational companies offering bribes.Internal Control SystemsAll departments have a Chief Vigilance Officer assisted by Vigilance Officers down the line to handle complaints of corruption and disciplinary proceedings. We have the Central Vigilance Commission to advise the Central Government in respect of all matters pertaining to maintenance of integrity in administration. The CBI collects information, conducts checks and searches, and takes necessary action to bring the corrupt to book. But the fact remains that the combined efforts of all these anti-corruption bodies have not been able to rise the stakes for corruption.At the level of the State Governments, similar vigilance and anti-corruption organizations exist, although the nature and staffing of these organizations vary between and across State Governments. While some states have vigilance commissions, others have anti-corruption bureaus as a part of the police department.The State Vigilance Commissions, wherever they exist, are patterned on the Central Vigilance Commission and headed by a person with the status of a Judge of the High Court. The State Vigilance Commissions are empowered to examine complaints against corrupt civil servants. In conducting investigations, State Vigilance Commissions are assisted by police officers on deputation from the State Governments.Some State Governments have set up the institution of Lokayukta, an anti-corruption institution which is legally independent of the executive. Although the institution of Lokayuka was set up following the recommendation of the First Administrative Reforms Commission, there is a great deal of variation in the structure of the institution across states.In general, there is an impression that the institution of the Lokayukta has not been given the degree of independence, which is necessary for it to function effectively as an autonomous anti-corruption body. The common refrain in the complaints of the Lokayuktas of various states is that they do not get sufficient information from the government departments which would enable them to function effectively.The internal control system has not worked in India. This is for several reasons. First, there is collusion at work at all levels of the government and a sharing of the gains from corruption. As a result, there have been very few cases in which corruption is reported, and even in those few cases, there are the usual delays and soft actions, which characterize the process of investigation in India.Second, investigating and prosecuting agencies are not independent of the executive government. In other words, the working of the investigative and prosecuting agencies has not been insulated from possible interference. A regular vehicle of interference has been power of the executive government to appoint and transfer key functionaries of the investigative agencies. The result, unenviably, has been lax investigation and prosecution.Third, even in the few cases which end up being investigated, there is wilful sabotage of the investigation process. There is no mechanism to monitor the investigation process by a nonpartisan, professional body like the Director of Prosecutions in the United Kingdom or the Special Independent Council in the United States.Fourth, the final decision to proceed against the corrupt civil servant criminally or punish him departmentally, rests with the executive government. Even the autonomous anticorruption bodies like the Lokayukta headed by individuals with judicial background, can only recommend prosecution or departmental action for the consideration of the executive government. And in such cases, the collusive network ensures that the decision goes in favour of the corrupt civil servant.Fifth, the procedural snarls involved in the proceedings are just too many. For example, there are twelve stages in a departmental action. These stages start with the preparation of a definite charge sheet and end with the imposition of a penalty. The numerous stages are procedurally necessary because of the constitutional safeguards guaranteed to a civil servant. In fact, the safeguards provided to a civil servant in India are more demanding than in most other countries. The constitutional safeguards have generally worked in favour of the corrupt.21821219Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexure-I(2) Contd.Annexure-I(2) Contd.On the whole, the internal control system in India, impressive as it is on paper, has not worked. There is a proverb in Bengali that neatly paraphrases the current health of the internal control system in India: ‘If there are ghosts in the mustard seeds, how will the same mustard seeds exorcise the ghosts?’External Control SystemThe external control system acts as a formal mechanism of restraint, and in an administration that provides for separation of powers, checks and balances are exercised by other branches of the government. In India, an external control system is fully in place – it consists of an external audit and an independent judiciary.AuditThere is a system of audit, represented by the Comptroller and Auditor General (CAG). The CAG is an independent authority created by the Constitution of India. The independence of audit is assured by providing it protection and privileges under the provisions of the Constitution. Its independence is further reinforced by enumerating the powers of the audit in a legislative enactment - the Comptroller and Auditor General of India (Duties, Powers and the Conditions of Service) Act, 1971.What are the conditions under which an audit can be effective in tackling corruption? First, audit should be independent of the executive and external to it. An independent and external audit assures expenditure control by exposures and sanctions against corruption. The CAG in India is independent of the executive and external to it. It has also been given the power, the means and the resources to scrutinize corrupt practices by civil servants and recommend action.Second, there should be mechanisms to act on the observations of the audit. In India, such mechanisms exist, but in practice, the executive in India has been reluctant to act on the observations of the audit.Third, no significant lag should be caused between acts of corruption and their exposure in the audit, that is, the audit and action on it should be quick so that corrupt civil servants are brought to book on the basis of the audit reports well in time. But because of delays in audit and the slow process involved in the consideration of the audit reports by public accounts committees, the impact of audit as an effective instrument of restraint has been only marginal. In fact, as is the common experience, audit reports relate to transactions which are several years old. During the intervening years, it is very likely that civil servants who were involvedin questionable practices might have been transferred to other departments, or even worse, might have retired from government service, or even died.In fairness, the audit does create an impact, but only marginally. The report of the CAG does a great deal of agenda-setting for national debates on corruption in high places. But in most cases, the time-lag between the actual act of corruption and reporting about it in audit is so big that corrupt practices are rarely exposed in time.The Fifth Pay Commission highlighted this aspect, and it recommended that in order to cut down on the time-lag, audit should be concurrent. In the words of the Commission,“Auditshould try to be as concurrentas possible. Scandals and scams are known even while they are being planned and executed. Ifauditdraws attention to them forthwith in a well-publicized manner, such scandals can be halted in mid-stride. Post-mortems are useful but can only be conducted while the patient is dead. It is better to cure the patient and try to keep him alive.”The JudiciaryThe other external control system, namely an independent judiciary, also exists in India. The judiciary in India is called upon to act as an important instrument of restraint, because both the Indian Penal Code and the Prevention of Corruption Act make corrupt practices punishable in a court of law. The judiciary in India is independent – it is independent of the executive.The judiciary, although independent, has not been able to act as an effective instrument of restraint. There are several reasons. First, not many corruption cases are brought before the courts for trial. This is because of the fact that the power of sanctioning prosecution in corruption cases rests with the executive, and as we have seen, the number of cases that have been sanctioned for prosecution, have been only few and far between.Second, the prosecutorial system as laid down in the Indian laws and followed in corruption cases, is weak and unprofessional. It has been difficult to obtain evidence, particularly of the kind required under the acts, to prove corruption and obtain conviction.Third, long delays in obtaining a decision from the courts in corruption cases have been a significant barrier. It is not uncommon to see a corrupt civil servant being convicted long after the crime, and in most cases, only after the civil servant has retired. In other words, there is no judicial effectiveness, and the judiciary in India seems to be incapable of expeditiously disposing off corruption cases.22021221Crisis Management - From Despair to HopeAnnexure-I(2) Contd.Ethics in Governance – Moving from Rhetoric to ResultsAnnexure-I(2) Contd.As if to compound matters, the safeguards and procedures prescribed under Article 311 have been so interpreted by the courts in India as if to ensure, unintentionally of course, that the cases go in favour of the corrupt on technical grounds. In fact, as the Santhanam Committee on Prevention of Corruption wryly remarked, ‘Article 311 of the Constitution as interpreted by our courts has made it very difficult to deal effectively with corrupt civil servants’. Even after Article 311 was amended, the panoply of safeguards and procedures still available is interpreted in such a manner as to make the proceedings protracted, and therefore, effete in the ultimate analysis. There is no gainsaying that the provisions of Article 311 have come in the way of bringing the corrupt civil servants to book. Article 311 would require a revisit.Of late, there has been a refreshing change. The interpretation of the law by the Supreme Court of India, and following this example, by a few high courts, particularly in corruption-related public interest litigation cases, has been extremely liberal. Public interest litigation petitions have been filed before these courts by concerned citizens, and the subject-matter of many of these petitions has been corruption.The Supreme Court, through a liberal interpreting of Article 142 of the Indian Constitution (which authorizes the Supreme Court to enforce decrees and orders that it considers necessary for doing ‘complete justice in any cause or matter pending before it’), has succeeded in giving a positive direction to corruption cases involving people in high places. Judges of the Supreme Court have gone to the extent of personally supervising the process of investigation if only to ensure that the investigation is not endlessly stonewalled by the investigating agencies at the behest of influential persons.The proactive stand of the Supreme Court of India has created the desired impact, but, this, even at its best, can only provide a lead. Most corruption cases, however, have to be brought before the ordinary courts as required under the provisions of the Prevention of Corruption Act. So, if the judiciary has to act as an effective instrument of restraint, the necessary burden has to be borne by the entire judicial system, and not merely by the Supreme Court of India.The point needs to be clarified in the context of the varieties of official corruption which exist in India. Official corruption can, very broadly, be divided into two general categories. One is the corruption of scams, as in the case of large contracts and big favours at the higher levels of the government. This normally involves politicians directly. It is in respect of scams that the Supreme Court of India has been successful in taking an activist stand.The other variety is the retail corruption. This is extortionary corruption which touches the lives of most citizens in the country. Retail corruption is more widespread - the Public Affairs Centre’s recent studies provide evidence on the extent of retail corruption in India. According to these studies, every fourth person in Chennai ends up paying a bribe in dealing with agencies such as the urban development authority, electricity board, municipal corporation and telephones, while in Bangalore, it is one in eight persons, and in Pune, one in seventeen persons. Clearly, retail corruption is widespread and deserves to be addressed with the same degree of seriousness as scams, if not more, because it touches the lives of citizens in myriad extortionary ways.For the judiciary to act as an effective instrument of restraint, four conditions should be met. The four conditions are judicial independence, judicial enforcement, free access to the judiciary and judicial effectiveness. The judiciary in India is independent. There is judicial enforcement - the judiciary in India is capable of enforcing its decisions. There is access to the judiciary. But in respect of the most important condition, there is no organizational efficiency in the judiciary in disposing off cases without long delays.Social ControlA strong and vigilant civil society can be a check on corruption and form the basis for countervailing action. Corrupt states abound in anti-corruption bodies and watchdog organizations which eventually end up concealing and protecting corruption instead of punishing it, because no one outside the state structure is in a position to demand accountability if the results are unsatisfactory. Even the most comprehensive set of formal democratic institutions may not be in a position to produce the needed accountability in the absence of a strong and vigilant civil society to energize them.As far as civil society in India is concerned, the hangover of old attitudes and inhibitions continues to persist. This has been in two ways. First, civil society in India is not too keen to look into the actual processes of the State, reinforcing in the process as it were, the view of state functionaries that the operations of the State are in the nature of a black box. Second, there is a shared belief - an inheritance from the past, once again - that it is perfectly alright for those occupying public offices to use the State, its structure and resources, in a manner that they choose i.e, in furtherance of their private interest.The main dimension, of course, is that the civil society in India does not share a common vision or values so far as corruption is concerned. It has not developed strong and legitimate norms about what is right and wrong, and as a result, it is not in a position to promulgate22221223Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexure-I(2) Contd.Annexure-I(2) Contd.codes of good practice. Since there is no widely-shared popular conception of right and wrong, which can be used as a benchmark to judge the behaviour of civil servants, there has been no judgement at all. This perhaps explains the fact that although quite a few groups are working in the area of civil liberties and human rights, there are not many groups working in the area of fighting corruption. H.D. Shourie of Common Cause had put up a brave but solitary fight, mainly through the courts, against corruption. The only other group - Samuel Paul’s Public Affairs Centre in Bangalore - is better known abroad than in rmationInformation about the government is a precondition for any meaningful anti-corruption effort by civil society. In India, a citizen was entitled to have access to government information only if he could satisfy the authorities that his life is affected by such information.The Official Secrets Act was a convenient smokescreen to deny members of the public access to government information. The bottom line is that knowledge is power, and therefore, the Official Secrets Act is a handy weapon in the hands of civil servants to hold on to as much of it close to their chest as possible. It has the blessings of ruling politicians who, in any case, would scarcely wish to account for their dubious decisions.The Right to Information Act, which has recently been enacted, is a path-breaking legislation, which signals the march from darkness of secrecy to the dawn of transparency. The Right to Information Act will be a powerful means for fighting corruption. It will increase the flow of official information to members of the public, and in that sense, supplement the process of effective overseeing of governmental processes by civil society. In addition, this Administrative Reforms Commission has already recommended to the Government that the Official Secrets Act, 1923 should be repealed.Citizens’ VoiceCitizens’ voice can be used to expose, denounce and restrain corrupt behaviour. In Japan, for example, social disapproval has been the principal means of regulating the behaviour of civil servants. Social disapproval in Japan is expressed in several ways. One is social shaming of civil servants of questionable integrity. The other is political embarrassment, and as Japanese civil servants admit, political embarrassment can be a very effective form of expressing social disapproval of official conduct.Social disapproval can be particularly effective as a mechanism of restraint in hierarchical bureaucratic structures in which the top civil servants are held responsible for the acts of their subordinates. In the Japanese system, social disapproval has played a key role in limiting corruption. Social disapproval in Japan is as much directed at the erring civil servant as at the senior civil servants supervising his work. Therefore, in cases where official misconduct is exposed in the courts, the media or the Diet, the impact is felt throughout the agency concerned as senior civil servants along with the Minister-in-charge, suffer the social consequences of the resulting public disapproval.Klitgaard has shown the effectiveness of shaming those guilty of corruption. But social disapproval can be effective only in those countries in which tradition has placed a high premium on the civil servants, and the civil servants, on their part, value the opinion of society.It is necessary, therefore, that civil society should come forward to denounce corruption and express its disapproval. Unfortunately, this is not the case in countries where there is a high societal acceptance of corruption. Such acceptance is essentially an expression of social capitulation, and it is detrimental to the detection and punishment of corruption, because citizens do not come forward to cooperate with the government in reporting corruption. In fact, such social capitulation is a familiar sight in most countries. In these countries economic development is slow, negative and uneven; there are institutional monopolies and a lack of economic and political alternatives; and people see corruption as inevitable and efforts to fight it as futile. In such a setting, there are few alternatives to dealing with corrupt civil servants except on their terms, and it is in the interest of corrupt civil servants to preserve the captive situation for as long as they can.I have always been impressed by how Hong Kong has reduced corruption in its government, and more importantly, has broken the mindset of the people about the inevitability of corruption.Hong Kong’s ICACHong Kong’s Independent Commission Against Corruption (ICAC) has used extensive legal and investigative powers and innovative social strategies to produce significant reductions in corruption and change public attitudes. Corruption in pre-ICAC Hong Kong was certainly entrenched. Worse, most citizens saw it as inevitable, and resistance as futile. Thus22421225Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexure-I(2) Contd.Annexure-I(3)226independence is essential: accountable only to top governmental leadership, and with its own officials forbidden to work in other public agencies for years after leaving, the ICAC is as free from networks of corruption as its architects could make it. Its powers are remarkable too: business as well as official corruption falls within its mandate. It can seize personal and business records with ease and can place the burden of proving innocence on the suspect.Many democracies would not confer such powers, but they can learn from the ICAC’s focus on civil society. Its massive, well-produced public relations campaigns have broken the belief that corruption is inevitable. Television advertisements publish a telephone number for complaints and promise protection. Corruption is portrayed, in such campaigns and in materials distributed to school children, as harmful to families, to the economy, and to traditional Chinese values. ICAC-funded concerts and sporting events foster social interaction with an anti-corruption theme.Many people in Hong Kong now report abuses to the ICAC, and watch as wrongdoers are publicly disgraced. By the 1980s, young people in Hong Kong took a stricter view of corruption than did their elders - one of the few societies where that was the case. The ICAC has changed a social environment that tolerated corruption and helped sustain it.The clearest lesson that Hong Kong’s experience has to offer is that the attitudes of people can be changed through focussed efforts. On the whole, people need to be exposed to information about incentives to have a corruption free government. Change will come when the incentives to throw out a corrupt system become stranger than the incentives to retain such a system.I am sure the distinguished gathering here will deliberate on the various issues concerned with ethics in governance. The issues proposed to be discussed are important and comprehensive: they range from policy and incentives to institutional framework. I am sure the colloquium will come up with findings that will help the Administrative Reforms Commission to make important recommendations to the Government. I wish the National Colloquium all success in its endeavours.Presidential Address by Shri Suresh Pachouri, Hon’ble Minister of State forPersonnel, Public Grievances & Pensions and Parliamentary Affairsat the Colloquium on“Ethics in Governance – Moving from Rhetoric to Results”held at the National Judicial Academy, Bhopalon 1" and 2' September, 2006Hon’ble Justice J.S. Vermaji, former Chief Justice of India, Esteemed Shri Veerappa Moilyji, Chairman, Administrative Reforms Commission, Prof. G. Mohan Gopal, Director, National Judicial Academy, Hon’ble Lokayuktas and Up-Lokayuktas, Hon’ble Justices and Judges, distinguished experts and officials, ladies and gentlemen,It gives me great pleasure to be here with you this morning at the National Colloquium on ‘Ethics in Governance’ organized by the Administrative Reforms Commission and the National Judicial Academy.At the outset, I compliment and congratulate the Organizers for organizing this National Colloquium on a subject of great contemporary importance and relevance.I also take this opportunity to express my deep appreciation for the work being done by the Administrative Reforms Commission under the able leadership of its Chairman Sri Veerappa Moilyji. The Commission has already submitted two reports focusing on effective implementation of two path-braking enactments made by the UPA Government, namely, the Right to Information Act and the National Rural Employment Guarantee Act. I am sure the recommendations of the Commission will pave the way for making our public administration more transparent, accountable, efficient and sensitive to the needs of the common man.It is a matter of great privilege and honour for us to have Justice J.S. Verma amongst us today. Justice Verma is celebrated, amongst other achievements, for strengthening the framework to combat corruption through his 1998 landmark judgment in the renowned Vineet Narain case. The enactment of Central Vigilance Commission Act, 2003 by the Parliament is the direct outcome of this judgment. This Act contains provisions to ensure independent functioning of CBI and it places CBI under the superintendence of a statutory Commission in relation to corruption cases. Credit for putting in place yet another important anti-corruption mechanism known as ‘Whistle Blower’s Resolution’ also largely goes to our judiciary. I feel greatly privileged in acknowledging the commendable contribution made by the judiciary in combating corruption in our country.21227Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexure-I(3) Contd.Annexure-I(3) Contd.228Before I come to the topic of the day, I would also like to thank Dr. G. Mohan Gopal, Director of this Academy for making such impressive arrangements for hosting this meet. I have known Dr. Gopal for several years now and I am sure under his able guidance this premier institution of judiciary shall achieve new heights of excellence.‘Ethics in Governance’ essentially refers to customary values and rules of conduct in public administration. Selflessness, integrity, objectivity, accountability, openness, honesty, leadership were the seven principles of public life identified by the Lord Nolan Committee in UK. Openness and accountability are essentially procedural in nature and procedures can be devised to ensure openness and accountability. Objectivity and leadership are performance related. The biggest challenge, however, is to make our public servants act with integrity, honesty and selflessness. These are the attributes solely ethical in nature and therefore pose difficulty in setting measurable standards for them.The Prime Minister, emphasizing the importance of ethics in governance, recently said and I quote “As a society, we must evolve to a level where probity becomes a way of life, where honesty is a routine expectation. If we have integrity, then nothing else matters, if we don’t have integrity then also nothing else matters. I firmly believe that we must set personal standards of integrity as public servants and the message should flow from the top downwards and not the other way round. The values of integrity, impartiality and merit remain the guiding principles of our civil services.” Unquote.Anticipating perhaps the crisis of ethics that lay in the future, Mahatma Gandhi, the father of the nation, warned us against “Seven Deadly Sins”: Wealth without work, pleasure without conscience, science without humanity, knowledge without character, politics without principle, commerce without morality, worship without sacrifice.The issue of ethics in public life, has also been discussed by Justice Verma in the Vineet Narain judgment wherein he very aptly observed and I quote – “holders of public office are entrusted with powers to be exercised in public interest alone, and therefore, the office is held by them in trust for the people. Any deviation from the path of rectitude by any of them amounts to a breach of trust and must be severely dealt with instead of being pushed under the carpet.” “Unquote.None can disagree that for our survival as an independent, democratic and prosperous society, it is essential that we as a people and all of us in government must maintain the highest ethical standards. The challenge, however, is ensuring that ethical values are followed andapplied in our daily lives, and in particular, in the matter of governance. This is a challenge faced today not only by India but by the whole world. While on one hand, the world is witnessing many positive developments of great promise, on the other, greed, selfishness, materialism and dishonesty are threatening our social fabric.What is needed is collective action from policy makers, law enforcement agencies and all right thinking people to stem the rot. All of us recognize that mounting political corruption is one of the most important areas of concern. There is need to evolve a political consensus on electoral and institutional reforms needed to check political corruption. All major political parties should place national interest above individual and party considerations and come together to evolve a consensus on the electoral and institutional reforms necessary to eliminate political corruption while ensuring that the independence, integrity, inclusiveness and openness of our democratic system and our electoral processes is not compromised.Prompt and effective investigation, prosecution and punishment of corruption cases is equally vital for strengthening enforcement of anti-corruption laws. In fact, in the Vineet Narain judgment, speaking for the Supreme Court of India, the then Chief Justice of India, Justice J.S. Verma said and I quote – “corruption must be prosecuted expeditiously so that the majesty of the law is upheld and the rule of law vindicated. It is the duty of the judiciary to enforce the rule of law and, therefore, to guard against erosion of the rule of law.” Unquote. Expeditious trial of corruption offences depends on the effectiveness of investigation and prosecution. These aspects need to be strengthened considerably to reduce incentive for corruption. I appreciate that the Supreme Court and High Courts are giving priority to the expeditious disposal of corruption cases. We need to work together to ensure that corruption cases are dealt with by courts speedily and that arrears in this regard are cleared as soon as possible. I have no doubt that we will get the full cooperation of the judiciary in this regard.UPA Government in its Common Minimum Programme has made a solemn pledge to the people of our country to provide a government that is corruption-free, transparent and accountable at all times, and to provide an administration that is responsible and responsive.In fulfillment of its pledge, UPA Government has taken several measures to provide a corruption-free, transparent and accountable administration to the people. Right to Information Act has been enacted to radically alter the administrative ethos and culture of secrecy and control and bring a new era of openness, transparency and accountability in governance. The impact of this historic legislation in achieving its objectives is already quite visible. An aware and participative public will in future take more and more recourse to this Act to get information which will perforce bring probity and transparency in public offices.21229Ethics in GovernanceEthics in Governance – Moving from Rhetoric to ResultsAnnexure-I(3) Contd.Citizens’ Charters have been formulated by various Government offices and efforts are being made to make available public services to citizens within the time-frame laid in these charters. Central Vigilance Commission has issued a number of instructions to bring in transparency in public procurement and tender processes. Vigilance Administration Machinery and public grievance redress mechanism has been greatly strengthened. A three-pronged strategy of preventive vigilance, surveillance and detection and deterrent punitive action has been devised to combat corruption.A number of reforms are also being introduced to improve the functioning of the civil services. A new system of mandatory mid-career training at various points in the career of a civil servants has been devised. Performance appraisal system for senior civil servants is being changed to provide for a more objective numerical grading based assessment of performance of the officer. Bench mark scores for promotion/empanelment are being prescribed and institutional means for ascertaining reputation of the officer are being established. Prime Minister’s awards have been instituted to reward excellence amongst civil servants. Steps are being taken to provide assured minimum tenure to civil servants.A very select group of Lokayuktas, senior officials responsible for anti-corruption wings of State and Central Governments, other government officials, academicians and civil society activities have assembled here today to discuss and develop specific recommendations and action points for strengthening the fight against corruption. I am especially happy that several High Court Judges are also amongst us today.I look forward to the deliberations and the recommendations that you will formulate and recommend. We need to redouble our efforts to fight corruption. We have had many occasions to debate and discuss the measures to reduce corruption. The time for action has now come and I am sure your efforts today will help the government in taking firm measures to combat corruption.I wish the National Colloquium all success. Thank you.Annexure-I(4)LIST OF PARTICIPANTSJUSTICES/LOKAYUKTAS/UP-LOKAYUKTAS:1.Hon’ble Mr. Justice J.S. Verma, Former CJI2.Hon’ble Mr. Justice Faizanuddin, Former Judge, Supreme Couret of India3.Hon’ble Mr. Justice Dr. M.K. Sharma, Chairman, Committee for Formulation of Training Programme, Delhi4.Hon’ble Mr. Justice A.S. Naidu, Judge, Orissa High Court, Cuttack5.Hon’ble Mr. Justice J. Chelameswar, Judge, Andhra Pradesh High Court6.Hon’ble Mr. Justice H.L. Dattu, High Court of Karnataka7.Hon’ble Mr. Justice J.S. Khehar, High Court of Punjab and Haryana8.Hon’ble Mr. Justice S.H.A. Raza, Lokayukta, Uttaranchal9.Hon’ble Mr. Justice Mohd. Shamim, Lokayukta, NCT, Delhi10. Hon’ble Mr. Justice N.K. Sud, Lokayukta, Haryana11. Hon’ble Mr. Justice Lakshman Uraon, Lokayukta, Jharkhand12. Hon’ble Mr. Justice Ripusudan Dayal, Lokayukta, Madhya Pradesh13. Hon’ble Mr. Justice Daljit Dhaliwal, Lokayukta, Punjab14. Hon’ble Mr. Justice Samaresh Banerjee, Lokayukta, West Bengal15. Hon’ble Mr. Justice N.K. Mehrotra, Lokayukta, Uttar Pradesh16. Hon’ble Mr. Justice R.N. Prasad, Lokayukta, Bihar17. Hon’ble Mr. Justice G. Patri Basavana Goud, Up-Lokayukta, Karnataka18. Hon’ble Mr. Justice Suresh Kumar, Up-Lokayukta, Maharashtra19. Hon’ble Mr. Justice M. Shivaratna, Up-Lokayukta, Andhra PradeshCHIEFS OF STATE JUDICIAL ACADEMIES, ETC20. Sh. Anant Vijay Singh, Director, Judicial Academy, Jharkhand, Ranchi21. Sh. Arali Nagaraj, Director, Karnataka Judicial Academy, Bangalore22. Sh. Bidhu Prasanna Parija, Director, Orissa Judicial Academy, Cuttack23. Sh. George, Director, H P State Judicial Academy, Shimla24. Sh. N. Ravi Shankar, Director, A P State Judicial Academy, Secundrabad25. Sh. M.K. Tiwari, Director, Chattisgarh State Judicial Academy, Bilaspur26. Sh. Kanchan Chakrabarty, Addl. Director, W B Judicial Academy, Kolkata27. Sh. K.B. Zinjarde, Jt. Director, Judicial Officers’ Training Institute, Nagpur28. Director, Bihar Judicial Officers’ Training Institute, PatnaCVC/VIGILANCE COMMISSIONERS/ANTI CORRUPTION BUREAU/CBI29. Sh. Balvinder Singh, Addl. Secretary, CVC, Delhi30. Sh. S.K. Upadhyaya, IPS, Director, Vigilance & Anti Corruption, Government of Tamil Nadu, Chennai31. Dr. Ashok Narain, Vigilance Commissioner, Government of Gujarat32. Sh. R.C. Samal, Vigilance Commissioner, Government of Andhra Pradesh, Hyderabad23021231Ethics in GovernanceAnnexure-I(4) Contd.Group RecommendationsAnnexure-I(5)33. Sh. J.D. Virkar, IPS, Director General, Anti Corruption Bureau, Government of Maharashtra, Mumbai34. Sh.B.K. Bhatt, Secretary, Gujarat Vigilance Commission, Gandhinagar35. Sh. R.R. Swain, DIG, SVO, Government of Jammu & Kashmir36. Sh. M.S. Ahlawat, IPS, DIG, State Vigilance Bureau, Government of Haryana, Panchkula37. Sh. Paramvir Singh, IPS, JD (AC/HQ), CBI, New Delhi38. Sh. C.S.R. Reddy, IGOP-cum-Director, Vigilance Bureau, Government of Punjab, Chandigarh39. Smt. Mamta Upadhyaya Lal, Director CVC, Delhi40. Sh. Ranvir Singh, Director, CVC, Delhi41. Sh. Vineet Mathur, DS, CVC, Delhi42. Sh. A.K. Pateria, DIG, CBI, ACR, Bhopal43. Sh. M.C. Sahni, SP, CBI, ACB, BhopalOTHERS44. Sh. M.N. Buch, IAS (Retd.)45. Sh. P.C. Parakh, IAS (Retd.)46. Sh. Ajai Singh, DGIT (Inv.), Patna47. Sh. A.K. Samant Ray, Additional Secretary, Law & Legislative Affairs Deptartment, Government of Chhattisgarh, Raipur48. Sh. S. Satyanarayana, CEO, NISG, Hyderabad49. Dr. G. Narendra Kumar, Secretary (Administrative Reforms), Government of NCT, Delhi50. Sh. Basant Singh, Resident Commissioner, Govt. of Manipur, New Delhi51. Sh. I.P. Singh, Former Deputy CAG, Delhi52. Sh. Padamvir Singh, Principal Secretary, PWD, Bhopal53. Sh. P.K. Tripathy, Director, DOPT, New Delhi54. Ms. Sangeeta Singh, Director, DOPT, New Delhi55. Dr. N. Bhaskara Rao, Chairman, CMS, New Delhi56. Ms. Madhu Bhaduri, Parivartan, Delhi57. Sh. P.S. Bawa, Transparency International India, Delhi58. Sh. S. Sen, Coordinator (Development Projects), CII, DelhiADMINISTRATIVE REFORMS COMMISSION59. Sh. M. Veerappa Moily, Chairman, ARC60. Sh. V. Ramachandran, Member, ARC61. Dr. A.P. Mukherjee, Member, ARC62. Dr. A.H. Kalro, Member, ARC63. Ms. Vineeta Rai, Member Secretary, ARC Group RecommendationsWorkshop 1Topic: What are the gaps in India’s anti-corruption policies and procedures when measured against international standards? What needs to be done to fill these gaps??Section 19 of the Prevention of Corruption Act, 1988 (PCA) should be suitably amended so that the requirement of sanction does not become a pre-requisite in case of disproportionate assets and trap cases.?Corruption should be defined in a comprehensive manner in the PCA.?Giving or attempt to give bribe should also be covered as a primary offence in the PCA.?Corruption by private sector which is related to public utility services should be included under the scope of corruption in the PCA.?A separate legislation may be enacted analogous to the US False Claims Act as suited to prevailing circumstances in India.Workshop 2Topic: Ethics Infrastructure?All Codes should incorporate the seven elements of ethics which are: Selflessness, Integrity, Objectivity, Accountability, Openness, Honesty and Leadership.?There should be separate Code of Conduct for Ministers, members of legislature and other elected representatives.?The Code of Conduct for civil servants should be amplified. It should prohibit them from associating with NGOs and hold elected office even in any club or social organization.?Lokpal/Lokayukta Bills should be passed. These institutions should be empowered to entertain complaints against Ministers, MPs and MLAs and even to permit their investigation and prosecution.?In respect of appointments, empanelment, promotions, transfers and disciplinary action in respect of civil servants of the rank of Joint Secretary and above, an independent Civil Service Commission should be created. This Commission23221233Ethics in GovernanceGroup RecommendationsAnnexure-I(5) Contd.should be appointed by a Committee consisting of Prime Minister/CM, Leader of Opposition, Chief Justice and should be headed by a judge of Supreme Court/ High Court.?In respect of professional bodies, even though Codes of Conduct exist, they are not implemented. This should change.Workshop 3Topic: Making Anti-corruption Institutions more effective?In DA cases and cases of direct demand/acceptance of bribe, there should be no need for prior concurrence for registration of criminal case. Even for preliminary enquiries, if required, concurrence should be given by CVC.?There is no need for sanctioning authority to appear as witness.?More effective use of F.R. 56J should be made to weed out incompetent persons of doubtful integrity. The rule also needs to be reviewed and strengthened in the context of judicial pronouncements which have reduced its effectiveness.?Internal vigilance systems and procedures should be made foolproof against rent opportunities.?There was a difference in opinion as to whether the PM should also be included within the jurisdiction of Lokpal.Workshop 4Topic: How can investigations be made more effective??The investigative agency should be brought under the superintendence of the Lokayukta.?Necessity of sanction should be dispensed with or the Lokayukta should be made the sanctioning authority for the purposes of Sec.19 of PCA and Sec.197 of Cr.PC.?Superintendence of prosecutions should also vest in the Lokayukta and public prosecutors should be specifically appointed for corruption cases.?The Lokayukta should also have jurisdiction over redressal of grievances arising from mal-administration.Annexure-I(5) Contd.?Constitution shall be amended and a Central Law enacted to ensure that the institution of Lokayukta exists in every state /UT, the selection process is robust and impartial, proper personnel are provided, victimization of deputed officers does not take place on repatriation and there is financial autonomy. The provisions of Karnataka Lokayukta Act should be incorporated.Workshop 5Topic: What specific steps can be taken to reduce the incentives for corruption??The manner in which the laws are implemented needs to be re-structured. Knowledge about the laws among citizens has to be dealt with to bring transparency.?Moral deprivation in the larger perspective and increased consumerism should also be addressed.?Market forces with regulatory mechanism should be brought to play wherever large public enterprises, large delivery systems, high technology and foreign investments are involved.?Monitoring and vigil in a decentralized fashion should be introduced.?Shortages should be eliminated.?Areas which affect vulnerable sections of the society should be targeted on priority. Citizen centric services should be introduced. Outsourcing should be promoted. Delivery systems in education, health etc should be re-engineered.?Ministries with high risk should have in-house arrangement to review procedures.?Village records should be accessible.?Internal supervision should be the primary responsibility of the Head of the Department.?There should be transaction and process audit rather than concentrating on financial audit.?There is no accountability on the part of the auditors. The whole functioning of the CAG would have to be revamped.23421235Ethics in GovernanceGroup RecommendationsAnnexure-I(5) Contd.Annexure-I(5) Contd.Workshop 6Topic: How can the accountability, integrity and transparency in the functioning of service regulatory agencies and professional regulatory agencies be ensured? Whether it should be systematically monitored and what should be the legal framework? What should be the legal institutional and procedural framework required to achieve accountability, integrity and transparency without affecting the operational autonomy for the effective functioning of these bodies?What steps should be taken to ensure accountability, transparency of non- governmental agencies whose projects are either funded or sponsored by the government or by funding agencies without compromising their autonomy and operational flexibility??Law should be enacted on the lines of Karnataka Transparency Act to ensure accountability and transparency.?The regulatory body should be an independent body and appointments should be made in consultation with the presiding officer of the legislature(s) and leader(s) of opposition. There should also be an adjudicatory body as an appellate and supervisory body for this regulatory body. The decisions of the appellate body should be made challengeable only in Supreme Court of India.?All members of statutory professional bodies should be brought under the definition of public servant for the purpose of PCA, IPC and Lokayukta Act. Similarly, all cooperative societies and societies under Societies Registration Act as notified by the government for this purpose should also be included.Workshop 7Topic: What should be the main elements of a practicable strategy to combat corruption? Should/can the fight against corruption be prioritized? Which are the areas on which to focus first? What should be the sequence? Are there “low hanging fruits” where reforms can produce quick wins with wide public benefits? (For Government of India and its agencies)?The sectors which could give fast results with substantial impact in this regard are: disaster management, public distribution system, rural employment, civil works, land information, taxation (direct & indirect), municipal services, licensing and police-public interface.?With regard to vicarious responsibility, there should be interlocking accountability and the supervising officer should be made answerable for his subordinates.?There should be a system of profiling of officers and postings should be based on such profiling.?Anonymous and pseudonymous complaints should be ignored. Workshop 8Topic: What should be the main elements of a practicable strategy to combat corruption? Should/can the fight against corruption be prioritized? Which are the areas on which to focus first? What should be the sequence? Are there “low hanging fruits” where reforms can produce quick wins with wide public benefits? (For State Government and their agencies)?IT tools should be introduced in a big way, as in the case of e-Sewa Kendra in Andhra Pradesh, e-Sampark Kendra in Chandigarh and e-Bhumi (computerization of all records).?Discretion should be minimized. Non-discretionary matters should be automated.?Priority areas for the fight against corruption should be: where public contact is maximum, large revenue areas and large public spending areas. Especially in areas of municipal property tax matters, e-sewa kendras and community policing resource centres (as in the case of Punjab), results could be achieved sooner.?Except in situations of mala fide, placing responsibility on superior officer may not be appropriate.?Sensitive posts should be identified and persons of doubtful integrity should not be posted there.?There should be stability of tenure in key posts and profiling of officers should be done so that long-term record can come to the rescue of honest officers.Workshop 9Topic: What are the weaknesses in existing system of investigation, prosecution and trial? How can these weaknesses be removed through legal/ procedural changes?23621237Ethics in GovernanceGroup RecommendationsAnnexure-I(5) Contd.Annexure-I(5) Contd.?E-governance should be used extensively.?Mobile courts may be useful in bringing justice to the local level. Court processes may be made transparent by use of video cameras.?Change of IO, IO burdened with cases, IO under political/bureaucratic influence, hostile witnesses, unavailability of adequate number of prosecutors, non-accountability of prosecutors, lapses in examination of witnesses in court, shortage of funds etc. are the weaknesses of the system.?By placing the superintendence and control of all aspects of anti-corruption establishment and investigation with the Lokayukta, adopting the mode of video recording of statements, providing security to witnesses, making prosecutors accountable, conducting trials on a day-to-day basis, placing anticorruption cases on higher priority by the courts etc are some ways to strengthen the system.?Disciplinary proceedings should be completed in a time bound manner.Workshop 10Topic: Procurement and Government Contracting?E-procurement process should be encouraged for greater transparency with suo motu disclosures at each step.?Rate contracts reduce corruption but do not eliminate it. Hence inspections at the manufacturers’ premises and at the receiving end should be done.?In case of highly specialized procurements, professional consultants should be appointed and supplies to other parties should be examined.?Pre-audit is desirable in case of major procurements but it can only be done by internal audit with the help of technical experts.Workshop 11Topic: How can civil society activities and public participation in governmental decision making (including at the panchayat level) reduce corruption? What measures should be taken to enhance transparency through greater transparency and use of IT and RTI.?RTI should be used to enhance transparency. Initially, State Governments should put information about processes and rationale for decision making in the public domain. PIOs should be educated.?Investigative journalism coupled with the use of RTI can enable citizens to becomemore aware.?Independent surveys and opinion polls should be used, albeit carefully, towards making it an instrument of transparency.23821239Ethics in GovernanceQuestionnaireAnnexure-I(6)Annexure-I(6) Contd.I - LEGAL FRAMEWORKQUESTIONNAIRE Ethics in Governance5.What should be the necessary ingredients of a Code of Conduct for civil servants?6.Should there be a Code of Conduct for professionals and professional bodies? III - INSTITUTIONAL MECHANISM AT THE GOVERNMENT OF INDIA1.Should there be a national policy for eradication of corruption? What should such a policy enunciate?2.Is the definition of corruption as per the Prevention of Corruption Act, adequate? Is there a need to expand the definition in view of the UN Convention to which India is a signatory? Should corruption in the private sector also get included in the definition?3.Should India have a law similar to the US False Claims Act?4.Is India over regulated? Are there laws/rules which create a climate for which facilitates corruption?5.Shortages of goods and services lead to creation. How can these shortages be eliminated?6.Does the Constitution and laws give undue protection to the civil servants? Is there a case to revisit Article 311?7.Should controlling officers be held answerable for misdemeanours of their subordinates for not exercising proper supervision?8.Are new laws required, such as dealing with the wealth acquired through illegitimate means?II - ETIHICS INFRASTRUCTURE1.What specific measures are required to strengthen the ethical foundations of the fight against corruption?2.What legal/institutional/administrative measures are required to effectively tame political corruption?3.Should we have a Code a Conduct for Ministers? What should it include?4.Should we have a Code of Conduct for elected members? What should it include? Is the existing institutional mechanism, comprising the CVC and the CBI adequate to combat corruption?5.Have controlling officers, over period of time been giving less attention to curb corruption among their subordinates? Would creation of institutions by itself eliminate corruption? Are external institutional mechanisms a substitute to internal vigilance? How to strengthen internal vigilance?6.Is the procedure for obtaining vigilance clearance for officers before posting them in Government of India, effective? If not what measures should be taken to improve it?7.What mechanism is required to ensure that only upright officers are posted to sensitive jobs?IV - INSTITUTIONAL MECHANISM AT THE STATE GOVERNMENTS1.What should be the relation between the Lokayukta, the State Vigilance Commission and the Anti Corruption Bureaus?2.The institution of Lokayukta differs from state to state. Can best features of each one of these be picked up to have a uniform framework in all states?3.How to ensure autonomy for these institutions and at the same time holding them accountable?4.Corruption at cutting edge levels hurts the common man. Are special measures required to combat this?5.What needs to be done to transfer power closer to people so that the decision making power point is near to the people? Would this increase accountability?V - PROCEDURAL ISSUES1.How to ensure that persons with integrity are posted in sensitive posts?24021241Ethics in GovernanceQuestionnaireAnnexure-I(6) Contd.Annexure-I(6) Contd.2.Should there be a mechanism for keeping a watch over the integrity of civil servants? Which agency should be entrusted this task?3.At present there is a system of getting vigilance clearance? How can this be improved?4.What safeguards are required to protect honest officials from harassment? Does the existing provision of taking prior sanction of Government before registration of cases, necessary? How to ensure that this does not become a shield for corrupt officers?5.Is the requirement of taking prior sanction of government before registering a case, a hindrance in fight against corruption? How does one safeguard honest official from harassment?6.Would outsourcing of some functions by regulatory agencies lead to reduction in corruption? What functions could be outsourced?VI - PREVENTIVE MEASURES1.Introducing competition gives choice to users/consumers. How can competition be introduced in service delivery by governmental agencies?2.Over-regulation increases scope for corruption. Which are the areas where regulation can be reduced?3.Should mandatory pre-audit of all major procurements/contracts be carried out?4.Systemic reforms can help in reducing scope for corruption. Which are the sectors which lend themselves for such systemic reforms? How can such systemic reforms be brought about?5.Use of technology can help in reducing discretion and thus bring in objectivity? What are the obstacles in use of modern technology in governance? How can these be overcome?6.Should there be a Whistleblowers Act?7.Is there a necessity to have ‘Civil Service Values’ spelt out in a separate Civil Services Law?VII - CITIZENS’ INITIATIVES1.What mechanism is required to actively involve citizens in fight against corruption?2.Could the ‘sting operations’ be given a legal backing?3.How can the stakeholders be involved in monitoring corruption in service delivery organizations?4.Should there be a system of evaluating and ranking offices based on corruption indices and then linking incentives to such evaluation?242243Ethics in GovernanceSystemic Reforms in a Few SectorsAnnexure-VII(1)Systemic Reforms in Government Procurements1. Growth in government procurement: The war effort during the Second World War called for massive mobilization and consequential procurement followed by the growth of the welfare state with state control of the commanding heights of the economy and planned economic development after Independence all of which led to manifold increase in government activity and resulted in exponential growth of public procurement by the Union and State Governments. Today, the world-over public procurement is big business. A World Bank estimate56, puts the total value of public procurement at all levels and by all agencies put together in the country at around $100 billion representing 13% of the total budget and over 20% of the Gross Domestic Product.2. Definition of procurement: Procurement may be defined “as the process which creates, manages and fulfills contracts relating to the provision of supplies, services or engineering and construction works, the hiring of anything, disposals and the acquisition or granting of any rights and concessions”. (Watermeyer).3. Emergence of large-scale corruption in procurements: The Santhanam Committee had as early as in the 1960s observed that “we were told by a large number of witnesses that in all contracts of construction, purchase, sales and other regular business on behalf of the government, a regular percentage is paid by the parties to the transaction, and this is shared in agreed proportions among the various officials concerned”.A Confederation of Indian Industry (CII) study of 1999 involving 210 private sector firms found 60% of the firms confirming 2-25% of the contract value to be the price payable to secure a government contract. The World Bank assessment of December 2003 referred to above also found that “both the officials and contractors, who were interviewed, confirm to its prevalence; but while the officials believe that it does not exceed 5% of the contract price, the contractors assert that the amount may be as much as 15% to cover all branches of government and is built into the price.”There are various reasons for corruption in procurement. The significant ones are:a.The Union and State Governments and their agencies allot large sums of moneyfor various development activities. Execution of these activities entails a substantial amount of purchase of goods and services. These purchases are carried out at all levels - the Government of India, State Governments, the district, the sub-district and panchayat levels. Indeed, procurement of goods and servicesAnnexure-VII(1) Contd.would perhaps be the single biggest item of expenditure in the government budget. Although the local bodies have been empowered to procure goods and services, a substantial share of such procurement has been centralized in order to obtain economy of scale and exercising better control over the purchase process. All procurement transactions involve payment of large sums to suppliers. This provides an opportunity to the corrupt officials to seek gratification even though the entire transaction might have been as per the prescribed rules and regulations. This practice is seen to prevail in many other situations where payment is involved.b.As procedures stipulated placing of orders on the party quoting the lowestrates (L1), a large number of prospective suppliers who are interested in obtaining the order as it represents a significant business opportunity for them, were willing to use illegitimate means of getting this business. Such corrupt practices multiplied when it was noticed by officials that this was indeed an easy avenue to becoming rich and that too at a seemingly low risk. Gradually this degenerated into a well-organized system of corruption.c.Sometimes the supplier, in order to sell goods, not meeting the quality standardsprescribed, was able to induce the officials to accept such goods.d.Despite an elaborate procedural framework, which among other objectives,seeks to minimize corruption, there are lacunae and loopholes, which are exploited, by both supplier and buyer to indulge in corrupt practices.Weaknesses in the Procurement Regimea. Absence of a dedicated policy making department/agency.b. Absence of a Central law.c. Absence of a credible complaint/challenge/ grievance procedure.d. Absence of standard tender documents.e. Preferential treatment in procurement.f. Negotiations.g. Delay in tender processing and award decision.h. Antiquated procedures for work contracts.i.Over-dependence on traditional recordkeeping.Source: India, Country Procurement Assessment Report, 2003; Documentofthe World Banke.Sometimes, in spite of the existing procedural framework there may beextraneous influences, which force the procurement agencies to indulge in wrong practices.f.Despite elaborate Rules, the procurementprocess is not really transparent.The risks of corruption substantially depend upon the value of the contract, the complexity of technology, the urgency of acquisition or immediacy of the project, the extent of discretion vesting in the officials, the opacity and complexity of the processes involved in24421245" India, Country Procurement Assessment Report, 2003; Document of the World BankEthics in GovernanceSystemic Reforms in a Few SectorsAnnexure-VII(1) Contd.Annexure-VII(1) Contd.procurement, the absence or inadequacy of the complaint redress mechanisms, the chances of detection of malpractice as reflected in the efficiency of pre, concurrent, post audit, and other accountability mechanisms, the certainty and speed of investigation and punitive action taken by the internal vigilance and external vigilance, investigation and oversight bodies and, above all, the prevailing politico-social climate.The situation in States is also similar. There is a decline in the capability of personnel handling procurement as one goes down from the state level to sub-district and panchayat/ local bodies levels. Cases of corruption are found at all levels. Negotiations with several bidders are held routinely and sometimes contracts are divided among many or all the bidders making a mockery of the tender process. In some States there is excessive use of annual ‘rate contracts’ which get extended year after year on some excuse or other, avoiding new tenders, thus favouring the current contract holders often for corrupt reasons.Contracts are sometimes manipulated by the procurement agency through tailor-made specifications intended to favour particular parties, selective information about contracting opportunities, invocation of urgency to avoid or limit competition, breaching the confidentiality of parties to favour somebody, unfair prequalification requirements giving inadequate response trust, recording false measurements, acceptance of bribes to manipulate decisions etc. On the supply side, the intending parties could collude to fix bid prices, take recourse to discriminatory technical standards, interfere in the evaluation of the tenders through political or other influence and directly offer bribes.5. Institutional and legal framework: The institutional and legal framework for procurement derives from the Constitution of India. Article 298 authorizes the Union and State Governments to contract for goods and services and requires the executive to protect the fundamental rights of all citizens to be treated equally. Article 299 of the Constitution deals with contracts on behalf of the Union and State Governments and Article 300 with suits and proceedings thereon.The broad framework for contracts is regulated by the Contract Act, the Sale of Goods Act, the Arbitration Act, the Limitation Acts and the recent Right to Information Act, 2005. There is no Union law governing procurement in India. The policies, procedures, guidelines and delegation of authority relating to procurement are issued by the Government of India primarily through the finance ministry, supplemented by orders of each Ministry/Department. The DGS&D in the Government of India and ‘Stores Purchase Departments’ at the State level, helped the governments in procuring goods a process of ‘rate contracts’ wherein ratesfor different items to be purchased as well as the suppliers are fixed periodically and then all government departments and agencies can place orders on such suppliers directly.The GFR provides procedure to be followed for purchase of goods and services by the government departments. The State governments/Central Public Sector Units (CPSU’s) have their own general financial rules based on the broad principles outlined in the GFR. The CAG and the Local Fund Audit Departments of State Governments are the primary oversight agencies to ensure accountability. The Central Public Accounts Committee and the State Public Accounts Committees examine the reports of the CAG. The Central Vigilance Commission, a statutory authority also issues guidelines in regard to procurement and has powers of oversight in the case of criminal misconduct and corruption on the part of public servants involved in public contracts. The Civil Courts and the High Courts and the Supreme Court provide judicial remedy in matters involving irregularities in procurement. The civil society organizations and the media also play a part in bringing corruption in public procurement to light.The World Bank while commenting on the procedures for procurement observed:“the basic proceduralframework being followed in this country is no different from the World Bank guidelines orthe UNCITRAL ModelLaw and the Government Procurement Agreement ofthe WTO and other good models ofpublic procurement. Thus there is a reasonably framework ofrules, procedures and documents and a few good practitioners as well.”The country procurement assessment made by the World Bank published in 2003 after a study of the Union, Central Public Sector and select State Government processes came to the conclusion that by and large, procurement by the Union Government ministries, departments and sub-agencies works satisfactorily when compared to public procurement in other developing countries and when compared to the performance in the States. However, this good performance is marred by cases of mal-practices, corruption and occasional scandals.Several measures have been taken by the Union and State Governments to reduce the scope of corruption in procurement. A beginning has been made by the Governments of Tamil Nadu and Karnataka to provide a formal legal framework to regulate public procurement for the first time in the country in the late 1990s, the pioneering effort in this context being by the Tamil Nadu Government when it enacted the Tamil Nadu Transparency in Tenders Act, 1998. This was followed by the Karnataka Transparency in Public Procurement Act,246247Ethics in GovernanceSystemic Reforms in a Few SectorsAnnexure-VII(1) Contd.Annexure-VII(1) Contd.1999. The Central Vigilance Commission has issued guidelines for procurement of goods and services.6. Prevention and Control-The Road Ahead: Anti-corruption measures that are needed to prevent and to control corruption in procurement can be broadly classified as generic measures applicable to the polity as a whole and specific sectoral measures relating to procurement processes. The generic measures or integrity pillars can be categorized as follows viz.,a.An effective criminal justice system which punishes the wrong doers.b.Effective administrative supervision and management control systems inherent in the system of governance;c.An efficient civil service system with well laid down code of integrity and conduct;d.Right of access to information;e.Effective audit to ensure value for money by an independent audit authorityf.Anti-corruption commission and investigative agencies to ensure effective enforcement;g.Independent ombudsman to investigate high level corruption; andh.Strong laws relating to corruption, whistleblower and witness protection and civil remedies to secure compensation for loss sustained.These generic measures need to be supplemented by specific remedial measures for misconduct in relation to procurement. Some of the specific measures are:a.All procurements should be after competition between suppliers. The specifications should be so designed that there are always a few suppliers who could meet the requirement.b.All States and the Union should have a ‘Transparency in Procurement Act’. This law should stipulate the methodology for procurement, lay down the authorities for procurement decisions, stipulate an appellate mechanism to look into irregularities etc.c.The terms and conditions governing the procurement process should be clearly spelt out without any ambiguity; It should be ensured that all bidders are informed about these terms and conditions, and their doubts if any should be clarified before the bidding begins.rmation about decisions made and the reasons thereof should be placed in the public domain.e.The criteria for evaluation of the bids should be laid down before the bidding begins and it should be made known to all bidders. Under no circumstances should the criteria be changed midway.f.Evaluation of bids involving large amounts should be carried out by committees.g.Procurement wings of departments should carry out market research to arrive at reasonableness or otherwise of the bids.h.Increasingly recourse should be made to Information Technology in order to make the procurement process transparent and efficient.i.Only officials with proven integrity should be involved in the procurement process.j.Payments to the suppliers should be settled promptly.k.Integrity pacts should be made use of in purchases of high value.l.The tender contracts should include a condition making it possible for the government to forfeit payments if bribery is detected.248249Ethics in GovernanceSystemic Reforms in a Few SectorsAnnexure-VII(2)Systemic Reforms in Corruption in Taxation Departments:(Case of Income Tax Department)1. Introduction: Opportunities for corrupt practices exist in all government departments. These opportunities basically arise due to constraints on the supply side, procedural bottlenecks and discretionary powers related to public service delivery on the one hand and collusion for private gain on the other. But in case of government departments responsible for tax collection and administration, opportunities also exist due to the perceived unwillingness on the part of the tax payer to pay taxes. This unwillingness gets more exacerbated in the case of direct taxes such as income tax for the simple reason that whereas the indirect taxes (excise, service tax etc.) either go unnoticed by the consumers or leave no choice with them or are seen as a part of business and considered as cost of doing business, income tax is construed as a tax on one’s hard earned income.2. Public Perception of Corruption: In a study taken up by Transparency International India in alliance with Centre for Media Studies (CMS) entitled ‘India Corruption Study 2005’ respondents were queried about the services provided by the Income Tax Department. For the purpose of the study, states were divided into three broad categories on the basis of Net State Domestic Product (NSDP): High, Medium and Low. The study leaves out of its purview corrupt practices undertaken by taxpayers themselves to minimize their tax liability in their interactions with the department. The following table presents the perception about the extent of corruption in the department as per this study:Perception of CorruptionState’s NSDPHighMediumLowTotalDisagree15221116Neither Agree nor Disagree20241820Agree61496760Can not say04050404This study indicated that the perception of corruption was relatively higher in the low income states. The study also focused on the purpose for paying bribes. The outcome is presented in the table below:Annexure-VII(2) Contd.(Figures in per cent)Purpose for paying bribeState’s NSDPHighMediumLowTotalFiling returns52264943Under-assessment09061913Issuing PAN Cards?09091512Ensuring Income-tax refunds17103021Ensuring case does not come under scrutiny05060807Ensuring closure of scrutiny06060807To reduce penalty05250310To get Income-tax exemptions03010503For getting back-dated collection of returns05081008The high percentage of corruption related to filing of returns indicates the following:?there is lack of knowledge about filing of returns, or?there is lack of knowledge about jurisdictional office, or?there is a tendency to file returns on the very last date, or?returns are being filed in jurisdictions where the chances of being picked up for scrutiny are less.3. Departmental Initiatives: The Income Tax Department has taken several initiatives to facilitate payment of tax by the assesses and also to reduce the scope for corrupt practices. Significant among these are:?Simplification of laws, procedures and various forms to be filled up by the assessee?Allotment of PAN and issuance of PAN Cards completely outsourced?Massive drive for computerization in full swing25025157 Now outsourcedEthics in GovernanceSystemic Reforms in a Few SectorsAnnexure-VII(2) Contd.Annexure-VII(2) Contd.xx.Issuance of intimation for demand and refunds should be separated functionally from both the jurisdictional offices and the processing centres. The net output should be uploaded daily at such specialized centres. Refunds should be paid electronically wherever the option is available.xxi.The integrity of the computerized processing of returns should be checked regularly and a list of common mistakes made by tax payers while filing the returns should be made and regularly updated. Based on this list, the department should periodically educate the public so that the mistakes do not recur and interface with the department is minimized. This could be done by publishing easy to understand and descriptive booklets and by placing it on the website. The information should be updated regularly. Similarly, common mistakes occurring while processing the return on the computer should also be tabulated. The staff doing the processing work should also be educated and trained accordingly.xxii. The procedure for rectification of mistakes apparent should be made simpler and effective (there disposal has already been made time-bound).xxiii. Computerisation should not lead to further increase in procedural levels and manual checks.C.As regards collusive corruption, the basic principle is simple enough: “paymentof bribe should not pay”. In other words, if the tax payer is made to realize that even by paying bribes, there is no certainty of his having escaped the long arm of the law, the incentive for collusive corruption will diminish drastically. This will require the following steps:i.The scheme of ‘revision of orders prejudicial to revenue’ should bestrengthened. This could be done , by way of illustration, by:?Extending its purview from orders passed within previous two financial years (the present scheme) to six financial years.?Defining what is ‘prejudicial to revenue’ in the Act itself. The definition should be simple enough so that appeals before Income Tax Appellate Tribunals get decided on merit and not on technical grounds.?Computerised processing of returns?Time bound disposal of rectification of mistakes apparent?Online payment of refunds also being tested out 4. The Road AheadA.Issues related to service delivery: A very significant number of taxpayers areeither salaried employees or have relatively small business/professional income. Corruption related to service delivery is concentrated to a large extent in the interface of the department with these taxpayers. The main reasons for their interface with the department arises due to :i.Filing of returns of incomeii.Processing of returnsiii.Claim of refund and issue of refundsiv.Inaccuracies/ mistakes apparent in the return resulting in issuance of notices of tax demand on processing of returns on the computerv.Procedural bottlenecks involved in rectification of mistakes apparent.B. Suggestions:rmation about jurisdictional offices should be made public every year well in advance through print media and on the webii.Clear instructions should be issued for first time filersiii.Returns should be acceptable at other public offices (as was done in 2006) at least one week before last date for filingiv.Processing of returns should be separated functionally from the jurisdictional offices and assigned to specialized computerized offices. Such centres should upload the information about the returns processed on a daily basis.252253Ethics in GovernanceSystemic Reforms in a Few SectorsAnnexure-VII(2) Contd.ii.The scheme of ‘reopening of assessment’ should be strengthened. Thiscould be done by:?Simplifying the provisions relating to reassessment (if need be, ‘income chargeable to tax escaping assessment’ may be defined in the Act in a simple way).?Uniform and unconditional application to six financial years (presently limited to four years generally and six years conditionally).iii. Building adequate safeguards and review mechanism regarding abuse of these provisions.iv.The organizational structure of the department’s ‘Central Information Bureau’ (CIB) should be strengthened and its role should be expanded and redefined (the CIB has the mandate for collection and dissemination of information). A surfeit of information from multiple sources, its utilization and a proper review of action taken on available information is the surest way of conveying the message that collusion will not pay. The steps needed would include:?Collection of information from various sources regarding cash transactions/financial transactions/property transactions etc.?Linking PAN to credit card usage and other financial transactions.?Reporting of cash transactions above a specified limit to CIB.?Analysis of data and identification of tax payers/ jurisdictional office.?Dissemination of information to jurisdictional offices and review of action taken by jurisdictional offices on the information provided. The information pertaining to identified tax payers should be tagged to the PAN database leading to automatic computerized selection of the cases for scrutiny. In case of non-identification of tax payers, information should be automatically disseminated to various regulatory bodies. Information which could not be analysed and taken to its logical conclusion is no information at all.Annexure-VII(2) Contd.?This would require adequate manpower and computerization of the CIB.v.Every new claim of exemption/deduction above a specified amount should be referred to the Directorate of Income Tax (Investigation) within three years for on the spot verification.vi.Scope of deducting taxes at source (‘withholding tax’) should be enlarged continuously.vii. Making penalty provisions simpler and effective to be of any use as deterrent to tax evasion.viii. Offences in cases where enough evidence is available of purposeful evasion of taxes should be made cognizable. Even minor punishments in such cases would act as a major deterrent.ix.The procedure for launching prosecution should be simplified.x.Felicitation of honest tax payers and immunity from scrutiny for three years.254255Ethics in GovernanceSystemic Reforms in a Few Sectors256Annexure-VII(3)Systemic Reforms in Land Administration1. Introduction: Land administration is perhaps one of the most important functions that the government performs. It basically deals with the maintenance of records about the ownership of land and immoveable properties of citizens. The land administration systems that exist in India were designed primarily in the pre Independence period. At that time the main objective of the land administration system was collection of ‘land revenue’. The system of land administration has been laid down in the Land Revenue Act, Code and the regulations made there under. The focus in the old system was on the rural lands. However, with increasing urbanization and spiraling land prices, land management systems in urban areas have assumed greater importance.The land revenue laws and regulations laid down elaborate procedures for maintenance of land records in the rural areas. In fact, one of the primary duties of the Collector, was land management which he/she carried out through the Tahsildars’, and ‘Patwaris’. But, similar procedures do not exist in the urban areas where such records are maintained by the municipal bodies or development authorities or at times by the ‘Tahsildars’.It is felt that the state of record keeping for land records leaves much to be desired. In rural areas the problems are further compounded by the relatively low levels of awareness among people. An extensive survey of lands has not been carried out for decades, and updating of records has been lagging behind considerably. In urban areas the high price of lands coupled with improper record management systems provides a fertile breeding ground for corruption.2. Public Perception: In a Transparency International – CMS Survey of Corruption in various Govt. Departments in 2005, nearly 4/5 of the respondents in the survey opined that the Land Administration Department was corrupt. There was no significant difference in perception among states with high level of or low level of computerization of land records.3. Statistics on Levels of Corruption:?According to the same survey, value of corruption in the Land Administration Department in the country is estimated at Rs.3126/- crores per annum.?14.4% of households in the country claimed to have interacted with the department in the last one-year.?7.6% of all households in the country who had interacted with the department during the year, claimed to have paid bribes to the department. This figure isAnnexure-VII(3) Contd.higher in East (10%) and South (9%) in comparison with West (3%) and North India (5%).?More than three-fourth (79%) of those interacting with the department had agreed that there is corruption in the department.?Nearly two-third (61%) of those interacting with the department had used alternate route like using influence than paying bribes for completion of their work.?Of those who paid bribes, more than one third (36%) had paid money to department officials, whereas 33% had paid money to middlemen like document writers, property dealers etc., to get their work done.Respondents who had claimed to pay bribe in the department were asked about the nature of work/service for which they had to pay bribes. 39% of the respondents claimed to have paid bribes for property registration. One fourth had paid bribes for mutation.Work for which bribes are paidMultiple responseFigures in per centWork/ServiceTotalProperty registration39Mutation25Clearing land tax dues12Undervaluing land/property12Land Survey12Purchasing stamp paper7Obtaining land/property documents43. Causes of corruption: In the Transparency International Survey, 2/5`' of the respondents who had interacted with the Land Administration Department, took recourse to alternative methods like exerting influence or bribery to get their work done. The reasons cited by the respondents for using alternative processes were as under:257Ethics in GovernanceSystemic Reforms in a Few SectorsAnnexure-VII(3) Contd.51% of the respondents said that it was to help save time, 46% said that they could not get the work done in the normal way and 3% attributed it to ignorance of rules and procedures of the transactions.The underlying reasons are of course that land has traditionally been a key symbol of prosperity, power and prestige in India and in a fast growing economy; it is now a vital economic resource. Control of land has thus become one of the main sources of corruption in India as shown by recent policy controversies on the Government’s SEZ policy and earlier controversies over allotments of public land at below market rates by government to private agencies, political parties, fraudulent charitable societies and the like.4. Reform measures needed and the road ahead: Urban Areas:a.Eliminating controls, opening up the supply of land particularly in urban areasby steps such as the repeal of the Land Ceiling Act and higher composition fees on vacant land, shifting public land allotment policies from discretionary allotments to competitive auctions through the market, and giving farmers who lose land to either the public or the private sectors a chance to share in the fruits of development by giving them a portion of the developed land are some measures that can reduce the scope for corruption and also lead to more broad based development.b.While most states have some form of land records for rural/agricultural land;for urban properties, registered documents, wills etc are the only property documents available and these inevitably become complex as well as inchoate over time leading to property disputes and fuelling massive litigation. Therefore, proper record keeping systems should be introduced. All urban lands should be surveyed periodically using modern techniques. Elaborate rules should be laid down to spell out the procedures for obtaining title deeds and affecting mutations in cases of acquisition of rights by individuals. The rules should also lay down the mechanism for resolution of disputes in cases of entries in the records, as in the rural areas where such dispute resolution mechanism has been provided under the land revenue laws.Annexure-VII(3) Contd.Rural Areas:a.A survey of all lands, which is long overdue, should be taken up immediately.b.There is a need to have an extensive capacity building programme for the fieldfunctionaries like the ‘patwaris’ to upgrade their knowledge about the various laws dealing with ‘acquisition of rights’.c.The supervisory officers should ensure that most mutations are done suo motu,without the need of the villagers running from pillar to post. The details ofComputerisation of Land RecordsIn Karnataka, 20 million land records of 6.7 million landowners in 176 Talukas have been computerized in an online system that uses finger print biometric authentication to rule out fraud, provides for ‘first in first out’ mutation processes and regular updation of land records online all contributing to total transparency in land records management combined with security and reliability. Thus, farmers now get land records in 2 minutes, records are authentic, mutations can also be done quickly and access to farm credit becomes easy. There are concomitant benefits for the judicial administration and financial institutions in terms of clear land titles and for the administrators in the form of an accurate, easy to maintain database that is useful for many other developmental and regulatory activities.revision of such records (including village survey maps) is a major source of harassment of the land-holder. Even in states where computerization of records has taken place, no significant improvement in the ‘satisfaction level’ of users is discernible. A time has perhaps come when the State legislation governing the matter should have penal stringent penal provisions for inaccurate updating and delay in supplying copies.f.A time has also come when village land management details encompassing allthe details of record of rights along with a cadastral survey map is published on the lines of ‘electoral rolls’. With computerization of land records, this has become quite practicable and will considerably dilute the mystique of land records (This should be followed in urban areas also).such mutations like sale deeds, inheritances etc are already available with the land revenue machinery.puterisation of landrecords should be taken up periodically. But it needs to be ensured that once these records are computerized they should be updated continuously.e.Absence of periodic updatingof land records and inaccurate258259Ethics in GovernanceHonesty in FinlandAnnexure-VII(3) Contd.g.The Collectors and his/her field staff have not been giving the attention requiredfor land management. It is necessary to provide adequate assistance to the Collector in the form of trained staff, in order to enable him/her to discharge this important function.5. Land Acquisition:Concerted efforts are needed to introduce country planning on firm basis. To begin with, the formal responsibility of laying down policies for this purpose may be vested in the state governments under the overall guidance of Ministry of Rural Development (Department of Land Resources).Inadequate land use statistics is also a major cause for irregularities in land acquisition. The Survey of India must be given the responsibility of compiling, maintaining and updating such data for every district. This should be done in conjunction with the land revenue departments of the states.6. Registration:a.There is need to rationalize high stamp duties that create an incentive for under-valuation and use of black money in property transactions combined with reforms and process improvements including the use of IT in the functioning of the Registration Departments in order to bring in automacity, reduce public-official interface, and eliminate corruption.b.As the stamp duties are based on the value of land, assessing the value of landevery time leaves a lot of discretion in the hands of registering authorities. It may be desirable to fix the land values well in advance for different localities and different types of lands.Annexure-VIIIReasons for Honesty Among Civil Servants in Central Government in Finland* There are some elements which explain why corruption so seldom occurs in Finland.1.Egalitarian society – no class distinction: In 1906, Finland became the firstcountry in the world to adopt universal suffrage that included the right of women not only to vote but to stand as candidates for election too. Public administration is open for everyone and a career as a civil servant has been open for everyone. The welfare services have expanded from the 1960s onward. The main elements of the welfare society are a basic old age pension for everyone over 65, free basic education, kindergarten places and higher education, and health care for everyone. The state takes care of the unemployed. All of the foregoing factors have reduced the urge to bribe civil servants and the temptation for civil servants to take bribes.2.Good status, adequate pay for civil servants: The career of civil servant hasalways been highly regarded. Salaries have not been particularly high, but good enough. The population and administration in Finland have been so small that if you lose your good name in society you lose a lot. Thus the risk of being accused of wrongdoing and being excluded from normal social circles has been a powerful deterrent. That is why individual cases of corruption have always been rare.3.Public financing of parties: All over the world, traditional ways of raisingfunds for political activities have included membership fees, canvassing, lotteries, donations, private support and small-scale commercial activities. Finland was one of the first countries to allocate state funds for political parties. The system has continued since 1967.4.The legal structure and culture of the administration: A decree in 1817reserved access to senior civil service posts in Finland for lawyers, or at least to university graduates with a degree in law. In spite of the modernization of the public sector, the core of governmental administration has maintained the legal tradition. An administration without clear political posts, with a low hierarchical structure, and, at the same time, with a high degree of individual and collective responsibility among civil servants at every level of administration, as well as exposure to public scrutiny, does not nurture corruption.260261*Extracted from: Good Governance and Corruption in Finland: experience from the least corrupt country in the world (written for Virtual Finland by Paula Tiihonen, Doctor of Administrative Sciences and Seppo Tiihonen, Doctor of Political Sciences).Ethics in GovernanceHonesty in FinlandAnnexure-VIIIContd.Annexure-VIIIContd.5.The referendary or rapporteur system: The referendary system is an oldpillar of legalism in the Finnish administration. A referendary is a civil servant who researches a matter under advisement, suggests options and offers a final proposal. In this system the referendary, who is of lower rank than the decision-making politician or civil servant, can adhere to his or her opinion against the superior party. A Minister can make a political decision that differs from the proposal of the referendary. If the referendary does not sign it, it nevertheless becomes legally binding. A referendary is legally responsible for the decisions he or she makes. If a Minister or the government makes a decision different from that which the civil servant involved proposed in the matter, the civil servant can obviate legal responsibility by writing a response, but that is quite unusual. From the point of view of corruption, the Finnish system demands from the potential corrupter double work. He or she has to convince both the decision maker and the referendary of his or her interests.6.Non-political civil servants as heads of ministries - until 2005: Finland hasnot had a system of political state secretaries. Non-political, professionally skilled, permanent civil servants have been regarded as the best types for promoting the interests of citizens. In 2005, the appointment of political state secretaries began in government ministries.7.Transparency and openness: The main principle in Finland has always beenthat everything in the public administration really is public, open for criticism by other civil servants, citizens and the media. All the diaries and records kept in the public administration are open to everybody.8.The duty to provide public explanation of the reasons behind decisionsand the duty to be proactive: According to the Constitution, among the most important guarantees of good governance are the right to be heard, the right to receive a reasoned decision and the right of appeal. Another important principle is that it is not enough for a civil servant not to make mistakes. A civil servant must be proactive in carrying out duties in the best interests of the citizens.9. The strong positions of the Chancellor of Justice and Ombudsman: The Chancellor of Justice works in the government - is a part of wider government-and the Ombudsman is part of parliament. The President nominates both, but they are wholly independent in their work. They have all the tools and rightsthey need to investigate and act. They are the highest and most highly regarded legal officers in Finland.10. Collective and collegiate decision structure: Corruption is facilitated if a decision-making unit consists of only one person. The corrupter can focus all tactics and resources on that individual. As both parties usually benefit, there is little reason for either one to reveal their dealings and thus make themselves liable for possible punitive measures. If, however, decisions are made by a collegiate body, corruption becomes much more difficult and unsafe, but not impossible. More people have to be convinced of the advisability of deciding in favour of an interest group and there is always the possibility of one would-be corruptee blowing the whistle on any shady transaction. Collegiate decision making has been a tradition in Finland since the seventeenth century.11. Low hierarchical structures plus personal independence and self-responsibility in administration: The administration has always been modest; the civil servants well educated, and a democratic mind-set has been dominant. For these reasons, most civil servants deal with their tasks personally from the beginning until their decision is reached without the intervention of superiors. Civil servants are responsible for their action in the vertical and horizontal directions. They are obliged to inform others about their tasks and their actions.12. Relatively closed civil service careers: In Finland, it is very rare for someone from outside the administration to be appointed to the higher posts within it, even though there is not a closed career system. Finland does not have any elite educational establishment for the production of future high ranking civil servants along the lines of France’s Ecole Nationale d’ Administration, the ENA. Nor does Finland have very hierarchical administrative structures as in some southern European countries.Checking the limits of corruption in practice: “What is a bribe?”: While the Finnish governmental tradition has been very legalistic, but at the same time, practical and flexible, it has been important that the Supreme Court, which is the highest instance for clarifying and examining values in legal and administrative affairs, from time to time clarifies what are intended to be the norms. This mechanism controls the behaviour of the political elite and the top-level civil servants and because this is reflected in the lower levels of administration, everyone is reminded of the limits and correct interpretation of the norms.262263FIFTH REPORT: Public Order – Justice for All . . . Peace for AllPUBLIC ORDERPUBLIC ORDERGOVERNMENT OF INDIASECOND ADMINISTRATIVE REFORMS COMMISSIONFIFTH REPORTPUBLIC ORDERJUNE 2007PREFACE“If real criminals in our society are left without punishment for years, because of delay in criminal justice for various reasons, it will indeed result in the multiplication of people taking to criminal acts.”Dr. A.P.J. Abdul KalamMaintenance of public order and the rule of law is a key sovereign function of the State, as important in its own way as defending the nation from external aggression or maintaining the unity and integrity of the nation State. “It is through the rule of law”, wrote Harold Laski, “that we have sought to avoid not merely the obvious dangers of unfettered executive discretion in administration, we have sought also to ensure that the citizen shall have his rights decided by a body of men whose security of tenure is safeguarded against the shifting currents of public opinion”. Rule of law has been defined by Dicey as “the absolute supremacy and predominance of regular law as opposed to the influence of arbitrary power, and excludes the existence of arbitrariness, of prerogative or even wide discretionary authority on the part of government”. The eminent jurist, Locke, put it succinctly, “wherever law ends, tyranny begins”. By putting the lives and liberty of common citizens at risk, the possible collapse of public order and of the rule of law has the potential to destroy the faith of citizens in its government and erode its legitimacy. Large scale violence and disruption can threaten a country’s social fabric, endanger national unity and destroy prospects for economic growth and development. If there is a failure of public order, it is because of the inadequacies of the legislature, the executive and the judiciary and we need to address them holistically in order to change things for the better.The police have always been recognised as a vital arm of the State, whether in the ancient kingdoms that ruled India or in the city states of Greece. Our colonial rulers recognised the importance of maintaining public tranquility through the use of an armed police force knowing that the tenuous grip of a few thousand British over India’s teeming millions would not survive any large scale public upsurge. They did so by establishing good communication links - the railways and the postal services - and by using the strong arm of the State to put down, with the use of force, any sign of challenge to the authority of the British Crown. They therefore developed the police in India as an armed force, as an organisation oriented not to the service of the people of India but principally to maintain the authority of the Crown. It was an agency of oppression, of subjugation, used for protecting British interests and to sustain their empire. The relationship between the police and the public was one of suspicion.At Independence, Sardar Patel, even though a witness throughout the freedom struggle to the indiscriminate use of the bullet and the lathi by the police, knew that the police and the civil services were but the instruments of the government of the day. He felt that if these services could serve a foreign power, efficiently and effectively, there was no reason why they could not be expected to serve much more efficiently and with a greater sense of dedication, their ownicountry when free. But, he envisaged quite a different role for the police in independent India. He observed, “You have served the previous regime under different conditions. The people then had a different attitude to you, but the reasons for that attitude have now vanished. Now the time has come when you can secure the affection and regard of the people.”However, the transformation that Sardar Patel envisaged is still to be fully achieved in post independence India even after the lapse of more than half a century. As noted by the National Police Commission, “ the present organisation of the police, based on the Police Act of 1861, is not suited for the current times because an authoritarian police of the imperial regime cannot function well in a democratic country.” The ugly fact is that no one appears to be sincerely interested in moulding the police into what Sardar Patel envisaged. This is particularly unfortunate because new threats to internal security in the form of terrorism and organised crime have emerged while the old problems of communalism, left-wing terrorism/naxalism, parochialism and social divisions and discrimination on the basis of caste, gender, language and ethnic identity still beset us. Religion, which should be a unifying force in society, has become in India, a force for discord and violence. It should be recognised however, that with all these problems, we have still come a long way in our growth and development as a nation. At the time of Independence, many observers wrote us off as a nation state destined to failure, teetering on the edge of anarchy and disintegration, unlikely to survive for long as a united entity. We continue to defy those prophets of doom to this day, maintaining our democratic status among a sea of failed States and repelling the recurrent threats to our unity and integrity by a combination of grit and determination, resilience and fortitude.Yet, there comes a time when a nation has to achieve and ensure long term stability in order to carry out substantial economic and social transformation. India is poised for an economic upsurge that can potentially change the lives of its people, as it gears up to tap the demographic dividend available from its youthful and talented population. For the economic boom to be sustained, the country has to move not only to a trajectory of high and sustained growth but also to high levels of social stability and public tranquility. For this to happen, governance has to go beyond the daily dose of crisis management and administration has to rise above merely a “holding of the fort”.At the same time, the incidence of prevalent social evils such as untouchability, dowry, child labour and physical and mental violence against women and children has continued unabated. These evils are both a cause and a consequence of deep rooted discriminatory practices against the vulnerable and deprived sections of our society. In particular, violence against women is complex and diverse in its manifestations. Its elimination requires a comprehensive and systematic response. Ending impunity and ensuring accountability for violence against women are crucial to prevent and reduce such violence. Often, the victims of such crimes that are rooted in the discriminatory practices of society suffer secondary victimisation at the hands of the police and it is critical therefore to sensitise police personnel to gender issues as well as other social disparities. This has to be backed by political commitment, systematic and sustained action and strong, dedicated and permanent institutional mechanisms to eliminate such offences that stem from social disparities.The incidence of crime and violence is a reasonably good index of the efficacy or otherwise of the rule of law. The conviction rate in IPC cases which was 64.8% in 1961, has dropped to 42.4% in 2005. Rampant crime accompanied by low conviction rates attest to our failure in enforcing the rule of law and as a result, we have the phenomenon of glorification of vigilantism in our popular culture as testified by the success of the film – Rang de Basanti.As has been stated by Dicey, “every office, from the Prime Minister to a constable is under the same responsibility for every act done without legal justifications as any other citizen”. Rule of law is a fundamental feature of our Constitution. No one, not even the Home Minister in charge of the police administration and answerable to Parliament in the matter, has the power to direct the police as to how it would exercise its statutory powers, duties and discretion. At the same time, as noted by the National Police Commission in its 1981 report, what is required is creation of the awareness of direct accountability to the people at the various levels in the police hierarchy. But this also requires an aware and vigilant citizenry, because, as pointed out by Montesquieu, “the tyranny of a prince in an oligarchy is not as dangerous to the public welfare as the apathy of a citizen in a democracy”. Hence the vision for the future has to focus on the citizen as depicted in the accompanying figure (Evolution of Police - Shifting Roles and Perspectives).In our report, we have tried to chalk out a reform agenda for the principal agencies responsible for enforcing the rule of law and maintaining public order, viz. the police and the criminal justice system. In respect of police reforms, we have tried to rise above the cacophony of the recent, rather sterile, debate on police reforms in the country in the context of the proposed amendments to the Police Act and have come out, instead, with a holistic and long term view of what needs to be done. Our focus is not on pitting one organ of the State against another but on creating new structures, based on the best international examples that would usher in an era of accountability, functional autonomy, transparency, responsiveness and professionalism in the Indian police. The emphasis is on changing the character of the police from a “force” meant to enforce the writ of the State to a “service” meant to secure the lives and liberty and constitutional freedoms of the citizens of a free and democratic country.While threats to national security from such problems as insurgent movements in the North East and the secessionist movement in Jammu and Kashmir have overarching political dimensions as well, which we propose to deal with separately in a report on Conflict Management, many other threats to internal security are exacerbated by our collective failure in providing good governance in vast swathes of the anised crime in particular has emerged as one of the most menacing challenges faced by this country. Those most successful in the commissioning of crimes are often the best organised and garner the most profit and cause the most harm. While the realm of organised crime is somewhat fluid, its reach runs deep to cover areas like money laundering, drug trafficking, illegal immigration, fraud, armed robbery etc. It is a big business and comes with huge cost.iiiiiThat is why, in the context of reforms to the police set-up in the country, we have focused on separation of and independence for, the crime investigation branch of the police from the general law and order branch under the supervision of an independent Board of Investigation. This would insulate crime investigation, which is a specialised function, both from political interference and from the day to day law and order functions that the police are saddled with. At the same time we have recommended an officer oriented civil police with initial recruitment at the level of the Assistant Sub Inspector (ASI). Autonomy for the law and order branch of the police is sought to be ensured by providing for a collegial system for appointments and transfers of police officers, a move that will also ensure security of tenure. Independent accountability mechanisms have been recommended at the state and district levels to look into complaints against the police. The traditional accountability structures such as the practice of the annual performance report of the SPs/Dy SPs being written by the Collectors and of the DGP/IGPs by the Chief Secretary should also be revived. While the ultimate accountability of the police to the elected government of the day cannot be diluted, its operational grip on day to day matters has to be relaxed in order to guarantee operational freedom and autonomy for the police to fulfill their statutory functions without fear or favour.Most of all, the mindset of negativism has to go. Police stations should become service centres rather than power centres. They have a role which is multi-dimensional, encompassing responsive policing, preventive policing, proactive policing and developmental policing. Police stations have to register complaints immediately even on email, and training of the personnel has to be reoriented to focus not only on structural skills but also the neglected soft skills such as communication, counselling, team building and leadership. The police service is the primary agent of the criminal justice system and its role has to be to protect human rights including the particular rights of the most vulnerable victims, such as women and children. The ethos of the police should reflect accommodation for all, prompt response to emergencies, professional problem solving, courteous behaviour, process based service dealing and public partnership in policing decisions.Aristotle had said, “It is in justice that the ordering of society is centered”. The criminal justice system is in many ways the bedrock of a democratic society since it upholds the rule of law which is a fundamental feature of a true democracy. Our criminal laws have to be sensitive to the changes in social structure and social philosophy, a reflection of contemporary social consciousness and a mirror of our values as a civilization. Delay in justice is justice denied, denial of justice is justice buried and non-accessibility of justice is justice aborted. A study undertaken by Dr. Wolfgang Kohling and the World Bank found a relationship between the quality of the judiciary and economic development based on data for Indian states. Quality was measured in terms of backlog of cases and frequency of appeals. It was found that a weak judiciary has a negative effect on social development, economic activity and on poverty and crime. Our criminal justice system, with a staggering 2.63 crore cases pending in the district and subordinate courts (though the number is less intimidating when we recognize that 29.49 lakh cases pertain to traffic challans and motor vehicle claims) is close to collapse with relatively unimportant cases clogging the judicial system.In these days when modern technology is available, delays in the courts are unpardonable. Use of e-governance tools to speed up the processing of criminal cases is imperative. The costs involved are quite insignificant when compared to the economic and social costs of the delay.In a court of law, legal technicalities must not override the basic requirement of providing justice. In this context, wide ranging recommendations have been made on issues such as the constitution of local courts, the right to silence of the accused, the admissibility of a statement made to a police officer, provisions for enhanced penalties for those guilty of instigating and fomenting mob violence, a functional linkage between crime investigation and prosecution to improve conviction rates and facilitating the police and courts to concentrate on their core function of handling serious crimes by outsourcing enforcement of social legislations and minor offences to the concerned departments. Other relevant issues such as guidelines for sentencing so that penalties are deterrent and not discretionary, how to tackle the problem of perjury that bedevils our courts, how to use the preventive provisions of our statutes to preempt mob violence etc. have also been covered in our Report.The criminal justice system needs to be rearranged to inspire public confidence by serving all communities fairly, to provide consistently high standards of service for the victims and the witnesses, and to bring more offences to justice through a modern and efficient justice system with rigorous enforcement so as to usher in compliance with the rule of law. The criminal justice system should be combined with modern and well run police and other services to render justice for all. It is by ensuring justice for each that we can assure peace for all.Public order and rule of law should be embedded in the minds of the people from childhood itself. The areas of vulnerabilities will have to be identified and dealt with at a young age by means of appropriate education and by removal of discrimination and fear. This applies to all communities, majority or minorities. The mind is the breeding ground for violation of rules which graduates to conflicts and terrorism.A new doctrine of policing and criminal justice embedded in an inclusive approach to governance, with zero tolerance towards those who violate the law is what has been propounded here. When we consider reforms in the criminal justice system or in police administration we should go for an integrated and holistic approach and mere tinkering or expediency will disrupt the reform process. The ‘justice gap’ between the number of crimes committed, recorded by police and the number where an offender is brought to justice in the court needs to be scrupulously bridged and the rule of law should reign in the realm. I may state, in conclusion, that the approach we have taken is to recommend “big bang” reforms that are structural, and not incremental in nature. This is not to state that their implementation cannot be incremental; it can, and probably has to be, on the basis of consensus building among our political parties and more importantly, in public opinion; but the implementation should be with a clear cut idea of what is the eventual outcome envisaged and what is the road map regarding how to get there. If this Report has sent a clear signal to those committing offences that the criminal justice system is united in ensuring their detection, correction and punishment we would have achieved our objective.ivvIn concluding, I would like to thank Justice M. N. Venkatachaliah, former Chief Justice of India, Justice R. C. Lahoti, former Chief Justice of India, Justice Y.K. Sabharwal, former Chief Justice of India, Justice N. Venkatchala, retired Judge of the Supreme Court, Justice B.N. Srikrishna, retired Judge of the Supreme Court and presently Chairman of the Sixth Pay Commission, Shri K. Padmanabhaiah, former Union Home Secretary, Shri Prakash Singh, former DG, BSF, Shri K.T.S. Tulsi, eminent lawyer and Shri Nikhil Kumar, M.P. for sharing valuable insights with us during our discussions. I may emphasise, however, that the views expressed in this Report are of the Commission’s alone.New Delhi(M. Veerappa Moily)June 1, 2007ChairmanGovernment of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reforms and Public GrievancesResolutionNew Delhi, the 31st August, 2005No. K-11022/9/2004-RC. — The President is pleased to set up a Commission of Inquiry to be called the second Administrative Reforms Commission (ARC) to prepare a detailed blueprint for revamping the public administration system.2.The Commission will consist of the following :(i)Shri Veerappa Moily - Chairperson(ii)Shri V. Ramachandran - Member(iii)Dr. A.P. Mukherjee - Member(iv)Dr. A.H. Kalro - Member(v)Dr. Jayaprakash Narayan - Member(vi)Smt. Vineeta Rai - Member-Secretary3.The Commission will suggest measures to achieve a proactive, responsive, accountable,sustainable and efficient administration for the country at all levels of the government. The Commission will, inter alia, consider the following :(i)Organisational structure of the Government of India(ii) Ethics in governance(iii) Refurbishing of Personnel Administration(iv) Strengthening of Financial Management Systems(v) Steps to ensure effective administration at the State level(vi) Steps to ensure effective District Administration(vii) Local Self-Government/Panchayati Raj Institutions(viii) Social Capital, Trust and Participative public service delivery(ix) Citizen-centric administration(x) Promoting e-governance(xi) Issues of Federal Polity(xii) Crisis Management(xiii) Public OrderviSome of the issues to be examined under each head are given in the Terms of Reference attached as a Schedule to this Resolution.4.The Commission may exclude from its purview the detailed examination ofadministration of Defence, Railways, External Affairs, Security and Intelligence, as also subjects such as Centre-State relations, judicial reforms etc. which are already being examined by other bodies. The Commission will, however, be free to take the problems of these sectors into account in recommending re-organisation of the machinery of the Government or of any of its service agencies.5.The Commission will give due consideration to the need for consultation with theState Governments.6.The Commission will devise its own procedures (including for consultations withthe State Government as may be considered appropriate by the Commission), and may appoint committees, consultants/advisers to assist it. The Commission may take into account the existing material and reports available on the subject and consider building upon the same rather than attempting to address all the issues ab initio.7.The Ministries and Departments of the Government of India will furnish suchinformation and documents and provide other assistance as may be required by the Commission. The Government of India trusts that the State Governments and all others concerned will extend their fullest cooperation and assistance to the Commission.8.The Commission will furnish its report(s) to the Ministry of Personnel, PublicGrievances & Pensions, Government of India, within one year of its constitution.Sd/-(P.I. Suvrathan)Additional Secretary to Government of IndiaGovernment of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reformsand Public Grievances......RESOLUTIONNew Delhi, the 24th July, 2006No. K-11022/9/2004-RC (Vol.II) – The President is pleased to extend the term of the second Administrative Reforms Commission by one year upto 31.8.2007 for submission of its Reports to the Government.Sd/-(Rahul Sarin)Additional Secretary to the Government of IndiaChapter 1 Chapter 2CONTENTSChapter 65.11Improvement of Forensic Science Infrastructure -115Chapter 3Introduction - Public Order, National Security,1Chapter 7Professionalisation of Investigation117Chapter 4Economic Development and Social HarmonyChapter 85.12 Strengthening Intelligence Gathering119Chapter 5Public Order: A General Perspective55.13 Training of the Police1202.1Public Order55.14 Police and Human Rights1222.2Some Grave Public Order Problems85.15 Community Policing123 125 129 1312.3Causative Factors of Major Public Order Problems185.16 Gender Issues in Policing1342.4Lessons from the Past205.17 Crime against Vulnerable Sections1342.5The Need for Comprehensive Reforms235.18 National Security Commission148The Existing Police System275.19 Union-State and Inter-State Cooperation and Coordination1493.1The Police Organisation27Maintaining Public Order1543.2People’s Perception of the Police316.1Public Order Management1553.3Declining Conviction Rate326.2Accountability of Public Servants Charged with1573.4Problems in the Existing Police Functioning32Maintaining Public Order159 159 161 1633.5Review of Recommendations for Police Reforms in the Past356.3The Executive Magistrates and the District Magistrate166 169 187 187 202 204 206 2103.6Reforms in Other Countries546.4Capability Building of Executive Magistrates212 212 215 223 228 235 242Core Principles of Police Reforms616.5Inter-Agency Coordination4.1Responsibility of the Elected Government616.6Adoption of Zero Tolerance Strategy4.2Authority, Autonomy and Accountability62Reforms in the Criminal Justice System4.3Disaggregation and Deconcentration647.1Role of the Criminal Justice System4.4Independence of Crime Investigation667.2Measures Taken in the Recent Past4.5Self-esteem of Policemen687.3Facilitating Access to Justice - Local Courts4.6Professionalisation, Expertise and Infrastructure687.4Using Information and Communication Technology (ICT)4.7Attendant Criminal Law Reform69to Modernise the Indian Courts4.8Police to be a Service707.5Reforms in InvestigationPolice Reforms727.6Prosecution5.1Organisational Structure of the Police of the Future727.7Trial5.2Police Accountability Mechanism - Balancing Autonomy and7.8Classification of OffencesControl767.9Sentencing Process5.3Competent Prosecution and Guidance to Investigation947.10 Prison Reforms5.4Local Police and Traffic Management987.11 Amendment to Criminal Laws5.5The Metropolitan Police Authorities101Constitutional Issues and Special Laws5.6Reducing Burden on Police - Outsourcing Non Core Functions 1038.1Should Public Order be Included in the Concurrent List?5.7Empowering the ‘Cutting Edge’ Functionaries1048.2Obligation of the Union and the States5.8Welfare Measures for the Police1078.3Federal Crimes5.9Independent Complaints Authorities1088.4Organised Crimes5.10 An Independent Inspectorate of Police1148.5Armed Forces (Special Powers) Act, 19588.6The Communal Violence (Prevention, Control andRehabilitation of Victims) Bill, 2005Chapter 9Role of Civil Society, Media and2458.6Definition of Organised Crime229Political Parties in Public Order2458.7Impact of Zero Tolerance Strategy2319.1Role of Civil Society2468.8Definition of ‘terrorist act’ under the Unlawful Activities2399.2Role of the Media in Public Order248(Prevention) Act.219.3Role of Political Parties250LIST OF TABLES22Conclusion253Table No.Title27Summary of Recommendations1 3 8 272.1Disposal of IPC Crime Cases by Police (Decadal Picture)28LIST OF BOXES34 36 102 104 1042.2Disposal of IPC Crime Cases by Courts (Decadal Picture)30Box No.Title1093.1Police-Population Ratio421.1Public Order1103.2Organisational Setup of State Police (2005)811.2Social Democracy1143.3Sanctioned and Actual Strength of Civil Police Including1032.1Communalism122District Armed Police as on 31.12.200563.1The Broken Window Syndrome1233.4A Comparative Analysis of Reforms Proposed113.2Difficulties Expressed by Police124 124 157 1595.1The Tripartite System under the Police and Magistrates’153.3Some Recommendations of the Indian Police Commission 1902161Courts Act, 1994 and the Police Reform Act, 2002165.1Metropolitan Police Authority, London162 173 192 1985.2Outsourcing Some Police Functions265.2The Constabulary216LIST OF FIGURES325.3Police Functions220Figure No.Title335.4Fake Encounters2212.1Public Order, Law and Order and Security of State755.5CCRB New York2272.2Trend of Terrorist Violence in Jammu and Kashmir1265.6HMIC (UK)2292.3Militancy in North East1265.7Citizen Focussed Policing in the United Kingdom2.4State-wise Extent of Naxal Violence1275.8Gender Violence throughout the Life Cycle2.5Instrumentalities of State to Maintain Public Order128 134 160 160 2065.9Crime Clock3.1Growth in Incidence of Crime (IPC)5.10Comparative Conviction Rates3.2Decline in Conviction Rates (IPC Cases)6.1Zero Tolerance in NYPD5.1Structure of Police in Future7.1Analysis of Crime Statistics5.2Offences under SC/ST (Prevention of Atrocities) Act7.2A Tale of Two Terror Trials5.3Disposal of Cases by Police {under the SC/ST7.3Delay in Completing Trial Proceedings(Prevention of Atrocities) Act}7.4Inquest Rules in Karnataka5.4Disposal of Cases by Courts {under the SC/ST7.5Right to Silence(Prevention of Atrocities) Act}, Year 20047.6Declaration of Basic Principles of Justice for Victims of Crime and5.5Types of Crimes against Children, 2005Abuse of Power6.1Number of Riots Per Annum8.1Article 3557.1Pendency of Criminal Cases in High Courts8.2The Mississippi Crisis7.2Pendency of Criminal Cases in Subordinate Courts8.3Provisions Similar to Article 355 Exist in Other Countries as well7.3Prison Inmates at the End of 20048.4Federal Crimes - a View Point8.5Magnitude of Organised Crime in the USLIST OF ANNEXURESIGPInspector General of PoliceIOInvestigating OfficerAnnexure IDetails of Consultations Carried out by the CommissionIPCIndian Penal CodeAnnexure-II (1)Questionnaire on Public OrderJUDISJudgement Information SystemAnnexure-II (2)Analysis of the Replies to the Questionnaire on Public OrderLANLocal Area NetworkMCOCAMaharashtra Control of Organised Crime ActLIST OF ABBREVIATIONSMPAMetropolitan Police AuthorityAbbreviationFull FormMPSMetropolitan Police ServiceACCCAustralian Competition and Consumer CommissionNCISNational Criminal Intelligence ServiceAFPAustralian Federal PoliceNCRBNational Crime Records BureauAFSPAArmed Forces (Special Powers) ActNCSNational Crime SquadASIAssistant Sub InspectorNECNorth Eastern CouncilASICAustralian Securities and Investments CommissionNGONon-Governmental OrganisationATOAustralian Taxation OfficeNHRCNational Human Rights CommissionCBICentral Bureau of InvestigationNICNational Informatics CentreCCRBCivilian Complaint Review BoardNPCNational Police CommissionCCTVClosed Circuit TelevisionPACEPolice and Criminal Evidence ActCHRICommonwealth Human Rights InitiativePADCPolice Act Drafting CommitteeCIDCrime Investigation DepartmentPCAPolice Complaints AuthorityCMSCase Management SystemPCBPolice Complaints BoardCPMFCentral Paramilitary ForcesPICPolice Integrity CommissionCPOCentral Police OrganisationsPOTAPrevention of Terrorism Act, 2002CPRCentre for Policy ResearchPPACPolice Performance and Accountability CommissionCrPCCriminal Procedure CodeRICORacketeer Influenced and Corrupt Organisations ActCSOCivil Society OrganisationSAPSouth African PoliceDGPDirector General of PoliceSHOStation House OfficerDMDistrict MagistrateSISub InspectorDy SPDeputy Superintendent of PoliceSLLSpecial and Local LawsECEuropean CommunitySOCASerious Organised Crime AgencyFBIFederal Bureau of InvestigationSPSuperintendent of PoliceFIRFirst Information ReportSPCAState Police Complaints AuthorityHMCICHer Majesty’s Chief Inspector of ConstabularySPOSpecial Police OfficerHMICHer Majesty’s Inspectors of ConstabularyTADATerrorist and Disruptive Activities (Prevention) Act, 1999ICACIndependent Commission against CorruptionTRACTransactional Access Clearing HouseICCPRInternational Convention on Civil and Political RightsUKISUnited Kingdom Immigration ServiceICESCERInternational Convention on Economic, Social and Cultural RightsULPAUnlawful Activities (Prevention) Act, 1967ICTInformation and Communication TechnologyUSAUnited States of AmericaIEAIndian Evidence ActUSSCUnited States Sentencing CommissionINTRODUCTION1Public Order, National Security, Economic Development and Social Harmony1.1 One of the terms of reference of the Second Administrative Reforms Commission pertains to Public Order. The Commission has been asked to specifically:(i) suggest a framework to strengthen the administrative machinery to maintain public order conducive to social harmony and economic development and(ii) capacity building measures for conflict resolution.1.2 The Commission recognizes that there is an inextricable link between the maintenance of public order and conflict resolution in view of the fact that the non-resolution of conflicts manifests itself in public disorder. Further, if conflicts are managed properly, the likelihood of breaches of public order is minimised. Public order is largely a product of efficient general administration, effective policing and a robust criminal justice system. Conflict management is a far more complex issue, involving a compact between the State and its citizens. It entails the effective and harmonious reconciliation of conflicting interests between various groups and also maintaining a delicate balance between various institutions of the State and among several tiers of government – national, state and local. The Commission has therefore decided to examine the two issues separately. This Report deals with public order, policing and attendant issues related to the criminal justice system. A separate Report will be presented on ‘Conflict Management’.1.3 Public order implies a harmonious state of society in which all events conform to the established law and is synonymous with peace, tranquility and the rule of law. ‘Public disorder’ has several connotations depending upon the nature of the State. In well developed societies, governed by the rule of law, even relatively minor infractions of law may be regarded as a public order problem. In most liberal democracies only serious disturbances which affect the even tenor of life would constitute a breakdown of public order. In autocraticsocieties, however, even orderly and peaceful protests and demonstrations against the Stateare often treated as breaches of public order.1Public OrderIntroduction1.4 There are many causes of public disorder. Widely prevalent crime is a cause as well as an effect of public disorder. In a pluralistic democracy like ours, political polarisation sometimes throws up issues leading to conflicts which escalate into public disorder. Even demonstrations held on legitimate grounds can sometimes degenerate into public disorder. Given our historical inequities on the basis of caste and other social factors, these can easily lead to conflicts that may degenerate into public disorder. Similarly, divisive impulses based on ethnicity, religion, region, language and the sharing of natural resources can exacerbate tensions. With enhanced citizen awareness and assertion, failure in the delivery of services by the State often leads to frustration manifesting itself in public disorder. This tendency is aggravated by increasing criminalisation of politics and persistent interference in the due process of law. With increasing globalisation and the communications revolution, indigenous and transnational criminal organisations have acquired enormous resources and power with the capacity to cause serious breakdown of public order and even undermine the security of India. As opposed to organised crime, which is motivated by the prospect of illegitimate economic gains, terrorist groups are activated by real or imagined ideological motives. They could be homegrown armed groups like Naxalites holding sway in some pockets, or foreign sponsored secessionist groups indulging in reckless violence and mayhem with the sole objective of spreading terror. The greatest danger to public order emanates from the conjunction of foreign sponsored secessionist terrorists with organised crime networks.1.5 Whatever be the cause of the breakdown of public order, it is imperative that peace and harmony be maintained. Public order along with the defence of the realm has always been the raison d’etre of the State throughout history. Emphasis on public order in monarchies and feudal oligarchies was often a result of the desire to perpetuate the domination of ruling elites. But in a modern, liberal, democratic, development oriented State, there are other compelling reasons to preserve public order. First, peace and order are necessary preconditions for freedom of expression of individuals and for the resolution of conflicting interests in a democratic society. Second, violence and disorder necessarily undermine economic growth and development, perpetuating a vicious cycle of poverty, frustration and violence. Third, rapid urbanization, which is a necessary concomitant of modernisation, tends to promote impersonal lives and create alienation, thus reducing peer pressure and social control. Fourth, the State’s constitutional commitment to equitable growth and justice itself may unleash social tensions, as powerful oligarchies attempt to perpetuate the status quo. Fifth, rapid economic growth may sometimes aggravate disparities between individuals, groups and regions leading to escalation of tension and breaches of peace. Sixth, weak enforcement and failure of the criminal justice system create a culture of lawlessness posing a major threat to public order. Finally, organised crime, militancy and terrorism have devastating consequences on the morale of the public; such a situation may even leadto the unnecessary loss of life as well as serious economic and political dislocation in an interdependent economy and polity.1.6 The action of non-State players – political parties, media and citizens’ groups - have a vital bearing on public order. However, it is well recognised that State agencies such as the administration, police and the criminal justice system have the direct responsibility and the commensurate authority to maintain public order. Among State agencies, police, by the very nature of their role, are the most visible arm of the government. The power of the State is expressed in its capacity to use force. As police are the agency to enforce the will of the State, the capacity of the police agencies to respond to a potential or real challenge to public order - rapidly, efficiently and justly - is of paramount importance. It is equally important to ensure that this power is exercised in a democratic society within the bounds of the Constitution and the law. Ultimately, the manner in which the police functions is an index of society’s respect for civil liberty and the rule of law.1.7 The National Police Commission (NPC, 1977-81), while dealing with public order issues and the police, observed:“Increasing violence is seen as the most disturbing feature of the contemporary law and order situation in the country. Newspapers frequently report details of violent incidents involving large groups of agitators who clash with the police while articulating some issue of discontent and frustration. Police action to restore order in such situations frequently involves the use of force, including firearms on some occasions, which in turn, draws adverse public reaction and escalates tension and hostility between the public and the law enforcement agency.”232Public Order1.8 More recently, commenting on the need for revamping the police system in the emerging internal security scenario, the Padmanabhaiah Committee (2000) observed:“ Internal security is an important element of national security. It would be prudent for the policy makers to realise that the present-day challenges to internal security, especially those posed by covert designs of the Pakistan ISI, or Maoist-Marxist extremist groups and of the religious fundamentalists are of such a nature that to meet them squarely, meaningfully and effectively, the society and the country need a highly motivated, professionally skilled, infrastructurally self sufficient and sophisticatedly trained police force.”1.9 However just and efficient policing may be, security agencies alone cannot enforce the rule of law and maintain public order. An effective and impartial criminal justice system is a necessary precondition for order and harmony in society. Therefore, the preventive provisions for maintaining peace and order and matters relating to crime investigation, prosecution and trial need to be examined in detail. It is for these reasons that in this Report the Commission has focused on police reforms and also the attendant reforms in the criminal justice system.1.10 The issues involved are contentious and complex, generating debate and arousing passions. Several expert Committees and Commissions have made important recommendations and Courts have made significant pronouncements. The Commission has felt it necessary to reconcile the divergent opinions of various stakeholders. The recommendations and pronouncements of expert bodies and Courts need to be harmonised and examined comprehensively to find a balance between the enforcement of law and order and the protection of constitutional liberties. Accordingly, the Commission held a series of workshops and interacted with experts (the details of workshops and interactions are at Annexure-I). The Commission has carefully studied the verdicts of Courts, reports of different Commissions and expert bodies and best international practices. On the basis of these, the Commission has identified the core principles of reforms and has made specific and far reaching recommendations. It is hoped that these would help the country meet the emerging challenges related to public order in the coming decades.PUBLIC ORDER – A GENERAL PERSPECTIVE“Internal security is the foundation for peace and development of the nation” 12.1 Public Order2.1.1 A democratic society is necessarily characterised by public expression of dissent. Such dissent arises from a variety of socio-economic, political and cultural factors. In India, the situation is further compounded by factors such as caste, religion, poverty, illiteracy, demographic pressures, ethnic and linguistic diversity. The country has witnessed many disturbances – agrarian unrest, labour and student agitations, communal riots and caste related violence – which sometimes escalate into major disorders, especially when partisan politics come into play and where the administration fails to act early in resolving conflicts. Indeed, lack of good governance and poor implementation of laws are the major factors for public disorder.2.1.2 Public order implies the absence of disturbance, riot, revolt, unruliness and lawlessness. Irrespective of the nature of a polity – democratic or autocratic, federal or unitary – maintenance of public order is universally recognised as the prime function of the State. Anarchy would result if the State failed to discharge this duty. Such persistent anarchy would lead to decay and destruction and the eventual disintegration of the State.2.1.3 As stated in the earlier chapter, different types of regimes have differing perspectives of public order. For an autocrat any dissent would mean a threat to his existence and he would look at it as public disorder. However, in a liberal democracy every citizen has a right to dissent and the expression of such dissent need not in itself breach public order. Even within a democratic society, a situation viewed as a public disorder by one stakeholder may not be disorder for another stakeholder. For example, if a dominant section of society indulges in degrading forms of exploitation of the underprivileged sections, the resultant protests by the latter are often perceived by law enforcement agencies as public disorder, but for the exploited sections, the injustice is a breach of their human rights against which they have vented their ire. This brings us to the distinction between ‘established order’ and ‘public order’. Established order may not always be as per the tenets of the rule of law. Perpetuating established order does not necessarily constitute public order in a society governed by democratic norms and the rule of law. The law enforcement machinery often451 The President of India, Dr. A.P.J. Abdul Kalam; Address at the 150th year of Chennai Metropolitan Police, Chennai (5-01-2007)Public OrderPublic Order – A General Perspectivetends to concentrate on maintaining status quo, since, for them, public order means ‘absence of any disturbance’. Laws and public policies aimed at desirable social change may sometimes lead to disturbance or even violence and yet such laws need to be enforced firmly if the core values of the Constitution and human rights are to be protected. In the ultimate analysis, public order is strengthened by protecting the liberty and dignity of citizens and bringing about social change.2.1.4 Clarifying the distinction between ‘law and order’, ‘public order’ and ‘public disorder affecting the security of the State’, Justice Hidayatullah observed:“Just as public order apprehends disorders of less gravity than those affecting the security of state, law and order also apprehends disorders of less gravity than those affecting public order. One has to imagine three concentric circles. Law and order represents the largest circle within which it is the next circle representing public order and the smallest circle represents the security of state. It is then easy to see that an act may affect law and order but not public order, just as an act may affect public order but not the security of state.” [Ram Manohar Lohia v. State of Bihar, 1 SCR 7009(746), 1966].2.1.5 Thus every situation in which the security of the State is threatened is a public order problem. Similarly, all situations which lead to public disorder, are necessarily law and order problems also. But all law and order problems are not public order problems. Thus, petty clashes between groups whose impact is limited to a small area are minor in nature with no impact on public order. But widespread violent clashes between two or more groups, such as communal riots, would pose grave threats to public order. A major terrorist activity could be classified as a public order problem impinging on the security of the State.2.1.6 While every violation of law should be seen as a challenge to public order, the State should not precipitate a crisis by treating every infraction as a public order crisis. Superstitions and cultural attitudes, for example, take time, patience and education to change. India is an over-legislated country. The temptation to short circuit the process of modernisation by law and use of force should be resisted except when local opinion andprevailing societal norms are grossly violative of the core principles of the Constitution and democratic governance. For instance, law must be applied with vigour in eliminating all forms of caste discrimination or protecting the vulnerable sections like women and children from exploitation. But when it comes to ending a practice such as, say, animal sacrifice, persuasion and education and not use of force against strong public sentiment, are called for. The problem in such cases is where to draw the line. If a law is violated with impunity, even if it is a minor law, should the State remain a mute spectator and condone violations promoting a culture of lawlessness? Or, should the State risk triggering a major public order crisis in its effort to enforce a law whose gains are minimal and risks are huge? The answer lies in two broad approaches. First, the State should resist the temptation to over-legislate except in crucial areas which constitute the essence of constitutional values or prevent significant public loss or promote vital public good. Persuasion, public education and social movements are the desirable routes to social change in such cases. Second, if such laws do exist, effective enforcement on case-to-case basis through prosecution of offenders is the better route and not the thoughtless precipitation of a public confrontation. If indeed a confrontation is called for, there must be adequate preparation, sufficient deployment of security forces, massive public campaign and preventive action in order to avert major rioting and loss of life.2.1.7 Although cases of violation of laws and isolated crimes may not, by themselves pose a threat to public order, their cumulative effect may create conditions for the breakdown of public order. Similarly, the generally prevailing feeling of Government being soft, condonation of low intensity crimes by society, weaknesses in the criminal justice system, complacency on the part of the administration and corruption eventually result in public disorders.2.1.8 In the post-Independence era, India has faced several instances of large scale public disorder, starting with the communal conflagration during Partition. Even now communal riots pose a grave threat to peace and order. The 1950s witnessed violent linguistic riots in some parts of the country. There have been violent secessionist movements in the North-East, Punjab and Jammu and Kashmir. There are numerous instances of agrarian, labour and student unrest. The last decade has seen an upsurge of violence by the left wing extremists, who have extended their influence over large tribal areas. Urbanisation has brought to the fore the shortcomings in the delivery of basic services, which at times, results in violent agitations. With improving awareness levels, conflicts over sharing of resources are increasing in rural and tribal areas. Organised groups, especially those concerned with the supply of essential services, have, on occasion, caused major public disorder by resorting to agitation, obstruction and violence.67Public OrderPublic Order – A General Perspective2.1.9 The post-independence Indian experience of public order management is marked by successes in controlling violence because of linguistic agitations, dealing with Naxalite violence in West Bengal and Kerala, tackling terrorist violence in Punjab, and, containing several militant movements. Many serious outbreaks of violence have been addressed with commendable efficiency. Notwithstanding these successes, there have also been failures on account of human rights violations and instances of police acting under extraneous influences. Several public order problems have become chronic in nature because the root causes of violence – persistent misgovernance and failure to ensure a fair deal – have not been addressed adequately. When ethnic identity, religious fundamentalism and extra-territorial sponsorship of violence and terror fuel violence and disorder, the challenge becomes particularly grave. Such threats to national security need to be addressed by concerted and consistent State action, backed by swift justice and indeed by competent governance and democratic legitimacy.2.2 Some Grave Public Order Problems2.2.1 Communal Riots2.2.1.1 Communalism in a broad sense implies blind allegiance to one’s own communal group – religious, linguistic or ethnic – rather than to the larger society or to the nation as a whole. In its extreme form, communalism manifests itself in hatred towards groups perceived as hostile, ultimately leading to violent attacks on other communities. General amity and the peaceful coexistence of various faiths in India have been the envy of the civilised world. Nonetheless given the diversity of our society and our complex historical baggage, we are often beset with communal tensions which occasionally erupt into violence. At times, either bigoted and fundamentalist leadership, or unscrupulous political operators with an eye on short term electoral advantage, have deliberately and maliciously engineered communal passions, hatred and even violence to achieve sectarian polarisation. Most of the communal flare-ups have been between Hindus and Muslims, though conflicts involving other communities have also occasionally occurred. Similarly, there have been other ethnic clashes from time to time.2.2.1.2 Though a number of communal riots have been dealt with effectively, there have also been many serious failures on the part of the administration in dealing with communal situations in a prompt and effective manner. A number of Commissions of Inquiry such as the Justice Raghubir Dayal Commission (Ranchi riots, 1967), Justice P Jaganmohan Reddy Commission (Ahmedabad riots, 1969), Justice D. P. Madon Commission (Bhiwandi riots, 1970), Justice Ranganath Misra Commission (Delhi riots, 1984), Justice B N Srikrishna Commission (Bombay riots 1992-93) and also the National Human Rights Commission have gone into the causes of these riots and analysed the causes and response of the administration and the police in handling them.2.2.1.3 At times, the law enforcement machinery has been accused of gross dereliction of duty. The Commission of Inquiry appointed to inquire into the anti-Sikh riots in Delhi 1984, observed:“The riots occurred broadly on account of the total passivity, callousness and indifference of the police in the matter of controlling the situation and protecting the people of the Sikh community...Several instances have come to be narrated where police personnel were found marching behind or mingled in the crowd. Since they did not make any attempt to stop the mob from indulging in criminal acts, an inference has been drawn that they were part of the mob and had the common intention and purpose... The Commission was shocked to find that there were incidents where the police wanted clear and definite allegations against the anti-social elements in different localities to be dropped out while recording FIRs.” 22.2.1.4 The following observations were made by the National Human Rights Commission on the Gujarat riots in 2002 :“The tragic events in Gujarat, starting with the Godhra incident and continuing with the violence that rocked the State for over two months, have greatly saddened the nation. There is no doubt, in the opinion of this Commission, that there was a comprehensive failure on the part of the State Government to control the persistent violation of the rights to life, liberty, equality and dignity of the people of the State. It is, of course, essential to heal the wounds and to look to a future of peace and harmony. But the pursuit of these high objectives must be based on justice and the upholding of the values of the Constitution of the Republic and the laws of the land. That is why it remains of fundamental importance that the measures that require to be taken to bring the violators of human rights to book are indeed taken”.3892 Extracted from the Report of the Justice Ranganath Misra Commission on the 1984 anti-Sikh riots in Delhi.3 Proceedings of the National Human Rights Commission, 31st May 2002; retrieved from on 5-4-07Public OrderPublic Order – A General Perspective2.2.1.5 The reports of various Commissions, which have inquired into different communal riots, have pointed to the following:Systemic Problems ?Conflict resolution mechanisms are ineffective;?Intelligence gathered is not accurate, timely and actionable and?Bad personnel policies - poor choice of officials and short tenures - lead to inadequate grasp of local conditions.Administrative Shortcomings ?The administration and the police fail to anticipate and read indicators which precipitated violence earlier;?Even after the appearance of first signals, the administration and police are slow to react;?Field functionaries tend to seek and wait for instructions from superiors and superiors tend to interfere in local matters undermining local initiative and authority;?The administration and police at times act in a partisan manner and?At times there is failure of leadership, even total abdication on the part of those entrusted with maintenance of public order.Post-riot Management Deficiencies ?Rehabilitation is often neglected, breeding resentment and residual anger and?Officials are not held to account for their failures, thus perpetuating slackness and incompetence.2.2.1.6 While some communal riots could be spontaneous, many are organised and pre-planned. Even in the case of spontaneous riots it is the underlying tensions between the communities, which flare up at the slightest provocation. The Union and State Governments have identified districts/cities/villages which are prone to communal violence because of their past history. Such areas obviously require special attention and preventive measures. It has been observed that while the administration swings into action to suppress riots, sufficient and timely attention is not paid to address the causes leading to such riots. Also, once the riots are controlled, cases against the guilty persons are not pursued with the required degree of urgency and tenacity. Even more reprehensibly, often as a ‘compromise’ following communal riots, serious cases against the accused are sought to be withdrawn from courts on extraneous considerations. There are also several instances of a new governmentresorting to en masse withdrawal of cases against those involved in earlier riots during the tenure of the previous government. Such political opportunism and short sightedness have seriously contributed to the erosion of public order.2.2.1.7 Most major communal riots are followed by Commissions of Inquiry. Sometimes, these Commissions of Inquiry take a long time to give their reports and very often the crucial recommendations made by them are not acted upon. All these have led to perpetuation of the causes of public disorder.2.2.2 Terrorism2.2.2.1 Terrorism has been defined as the illegal use of force or violence against people to create a wave of terror with the intention of achieving certain political or sectarian objectives. The border State of Jammu and Kashmir and some parts of the North East have witnessed prolonged terrorist activities. Several acts of terror in recent years – hijacking of an aircraft (1999), attacks on the Parliament in New Delhi (2001), on Akshardham Temple in Gujarat (2002), and at the Indian Institute of Science, Bangalore (2005), bomb blasts in market places in Delhi (2005) and in Varanasi (2006), serial bomb blasts in Mumbai (2006) and Malegaon (2006), massacre of labourers in Upper Assam (2007) etc. – all demonstrate that terrorism is not confined to a few pockets and that almost every part of the country is vulnerable. Even when the proximate cause of action or the political objective of the terror group is limited to a part of the country, the existence of sleeper cells, the spread of modern communications, an integrated economy and the increasing use of terror technology and tactics, have made it easy for the merchants of terror to spread their tentacles all over the country. As a result, terrorism is not merely a public order problem but has emerged as a grave threat to national security as well.1011Public OrderPublic Order – A General Perspective122.2.2.2 The country has suffered huge casualties amongst civilians as well as security forces, besides colossal damage to private and public property, due to terrorist incidents. Fig. 2.2 4 gives an idea about the impact of terrorism in the State of Jammu and Kashmir alone.2.2.2.3 An analysis of some of the recent terrorist attacks indicates that terrorist organisations have used the existing organised crime networks. Terrorist groups and these crime syndicates have international links with similar organisations and are supported by foreign agencies inimical to our interests. Their activities are being financed through international money laundering and drug trafficking thus creating an intricate web of crime, terror and trafficking in arms and drugs. Experience in some of the chronically insurgency affected states shows that terrorist outfits with initial political objectives sooner or later degenerate into mercenary groups.2.2.2.4 India is among the worst victims of terrorist violence in recent decades. In the face of this massive threat, despite severe limitations, the Indian State responded with a reasonable degree of success. Extra-territorial sponsorship of terrorism, porous borders, diplomatic complexities in dealing with safe havens across the border and the deficiencies in our own criminal justice system have made the task of countering terrorism extremely arduous and complex. And yet the valour and sacrifice of our security forces, the alertness and high degree of cohesion among various agencies, a broad political consensus backed by strong public opinion, democratic legitimacy of the State and the economic and social strengths that form the bedrock of our nation have greatly helped us withstand the onslaught of terror. The Indian response to terrorism has had significant success. Terrorism was totally eliminated from Punjab; Mizoram, which at one point of time was infested with insurgency, is now a peaceful state; there has been a decline in violence in Jammu and Kashmir, too. Several attempts of terrorists have been thwarted by timely action in many parts of the country.2.2.2.5 The success of counter-terrorism strategies in Punjab has also highlighted the importance of a well coordinated strategy. The security forces have to win the confidence and support of the local people. High handed action by security forces, especially violations of human rights tend to alienate the local people who may then fall prey to terrorist designs.2.2.2.6 To tackle the menace of terrorism, a multi-pronged approach is needed. Socioeconomic development needs to be taken up on a priority basis so that the local people do not fall into the trap of terrorists; the administration and the service delivery mechanisms4 Source: Annual Report, 2006-07; Ministry of Home Affairs, Government of India.need to be geared up so that the legitimate and long standing grievances of the people are redressed promptly and therefore cannot be exploited by terror groups. Strong measures are required to deal with criminal elements but with respect for human rights. To ensure this, the law enforcement agencies have to be supported with an appropriate legal framework, adequate training, infrastructure, equipments and intelligence. With the spurt in terrorism in recent years, many countries have enacted appropriate and stringent anti-terrorism laws. India too has had two enactments for dealing with terrorism in the past – (i) The Terrorist and Disruptive Activities (Prevention) Act, 1985 (allowed to lapse in 1995), and (ii) The Prevention of Terrorism Act, 2002 (repealed in 2004). However, both these legislations were allowed to lapse/repealed as it was contended that the powers conferred on the law enforcement agencies had the potential for misuse. The Law Commission in its 173rd Report (2000) examined this issue and highlighted the need for a law to deal firmly and effectively with terrorists. It also drafted “The Prevention of Terrorist Activities Bill”. The constitutional validity of anti-terrorism laws has also been upheld by the Supreme Court. Many have urged that a strong legal framework be created to deal with terrorism. Clearly there is a felt need to strengthen the hands of security forces in the fight against terror, even as human rights and constitutional values are protected. The Commission would be examining these and other issues related to terrorism in a separate Report.2.2.3 Militancy in the North East2.2.3.1 The North East region has more than 200 ethnically diverse groups with distinct languages, dialects and socio-cultural identities. Some parts of this region have been suffering from militancy for several decades. Militancy in the region started with the Naga movement way back in the early 1950s and rose to serious levels in Manipur in the 1960s. Large scale immigration into Tripura gave birth to militancy there in the 1960s. Militancy in Assam, on the ‘foreigners issue’, has multiplied and spread to many new areas.2.2.3.2 The numerous militant movements in the region have different objectives. A few movements seek outright secession from the Indian Union, some aspire for separate Statehood while others demand greater autonomy within the existing State. Extortion and abduction are frequently resorted to by some of the militant groups. Apart from causing huge loss of human lives, militancy has hampered economic development of the region. The situation is compounded by the involvement of some foreign intelligence agencies, which are providing material support to the insurgents. Besides, the long porous international borders have facilitated the movement of these groups and the smuggling of arms. Corruption, economic deprivation and unemployment are driving segments of youth into the fold of militant organisations. Ad hoc solutions resulting in widely varying degrees of ‘autonomy’ to different bodies – sometimes within a single state – have led to competitive demands and when they are not met, to alienation and violence.13Public OrderPublic Order – A General Perspective2.2.3.3 Another intractable problem has been created by migration from Bangladesh. Initially, this migration represented movement of peasants from the over populated eastern districts of Bengal to the sparsely populated and fertile and fallow Brahmaputra valley constituting Assam. The redrawing of national boundaries following Partition provided an impetus to migrants from East Pakistan for reasons of personal safety to settle in Assam, where their presence gave rise to ethnic and linguistic tensions. This was followed by fresh influx of all communities due to the agrarian crisis in East Pakistan. This migration has continued even after the emergence of Bangladesh. The fear among the local populace that this immigrant population would reduce them to a minority, as has in fact happened in some parts, has fueled militancy in the region.2.2.3.4 Currently, numerous militant groups are active in different North-Eastern states, particularly in Assam, Manipur, Meghalaya and Tripura. Some of these are: Assam - United Liberation Front of Assam (ULFA) and National Democratic Front of Bodoland (NDFB); Manipur - People’s Liberation Army (PLA), United Liberation Liberation Front (UNLF), People’s Revolutionary Party of Kangleipak (PREPAK), Kangleipak Communist Party, Kanglei Yaol Kanba Lup (KYKL), Manipur People’s Liberation Front (MPLF) and Revolutionary People’s Front (RPF); Meghalaya - Achik National Volunteer Council (ANVC) and Hynniewtrep National Liberation Council (HNLC); Tripura - All Tripura Tiger Force (ATTF) and National Liberation Front of Tripura (NLFT); Nagaland - Nationalist Socialist Council of Nagaland (Isak Muivah)-[NSCN(IM)] and Nationalist Socialist Council of Nagaland (Khaplang)-[NSCN(K)].52.2.3.5 The whole of Manipur (except the Imphal Municipal area), Nagaland and Assam, Tirap and Changlang districts of Arunachal Pradesh and a 20 km belt in the states having a common border with Assam and some parts of Tripura have been declared ‘Disturbed Areas’ under the Armed Forces (Special Powers) Act. There have also been demands for the repeal of this Act.62.2.3.6 The gravity of the problem of militancy in the North-East is indicated in Fig 2.37. The Government of India is engaging some of the militant groups in negotiations while providing financial assistance to the State Governments for upgrading their police for countering violence. It is also holding talks with neighbouring countries for effective border management.2.2.3.7 Several major initiatives for the development of the North East Region have been launched: (a) The North Eastern Council (NEC) was established in 1972 through an Act of Parliament, The North Eastern Council Act, 1971, for securing the balanced development of the North Eastern Region and for inter-state coordination; (b) The Department forDevelopment of North East Region was set up in September 2001 and became a full-fledged Ministry in 2004; this Ministry acts as the nodal Ministry of the Union Government to deal with matters pertaining to the socio-economic development of the eight states of the North East and (c) All Union Ministries/Departments earmark at least 10% of their budget for specific programme of development in the North Eastern Region; to the extentof shortfall in the utilisation of this provision by any Ministry/Department (except some exempted ones) according to this norm, the amount is transferred to a new Reserve Fund (Non-lapsable Central Pool of Resources).2.2.3.8 The problem of militancy in pockets of the North East is obviously very complex. The ethnicity, diversity, geography and history of the region demand a comprehensive nation building approach for resolving the complex issues. Fair reconciliation of conflicting interests in the region, adequate local empowerment with accountability, infrastructure development, economic growth, greater economic linkages with neighbouring regions and better governance and democratic legitimacy must together form the foundation of durable peace and prosperity in the region. However, in the short term, security agencies need to be strengthened, extortion and abductions must be stopped, militancy should be curbed and accountability should be institutionalised in order to protect human rights.2.2.4 Left-Wing Extremism2.2.4.1 Naxalism is the name given to radical, violent left wing extremism. This movement took birth in Naxalbari in West Bengal in the 1960s. Naxalites adopted a policy of annihilation of their ‘class enemies’. This localised movement was effectively dealt with by the Government. However, in recent years there has been a spread of the Naxalite influence in14155 Source: Annual Report, Ministry of Home Affairs, 2006-076 Source: ibid7 Source: ibidPublic OrderPublic Order – A General Perspectiveseveral states. The extent of Naxal violence has been tabulated in Fig 2.48. It has come down significantly in Andhra Pradesh in terms of both incidents and casualties but Chhattisgarh has seen higher levels of violence and casualties. It is also reported that Naxal groups have been trying to spread to Karnataka, Kerala, Tamil Nadu and Uttarakhand9. Apart from indulging in violence, Naxalites continue to hold Jan-Adalats, a mechanism to dispense crude and instant justice.2.2.4.2 Naxalism has become an issue of major concern. Naxalites operate in the vacuum created by the inadequacy and ineffectiveness of the administrative machinery. It is a fact that the tribal hinterland of the country has emerged as the bastion of the Naxalite movement. The problems of poverty and alienation, the demand of territorial rights and displacement from traditional forest habitats have aggravated the problem. Besides, unequal sharing of benefits of exploitation of resources has also helped create a fertile breeding ground for the growth of this menace. Naxalites exploit local grievances and take advantage of the sufferings of the deprived sections, gaining local support and recruiting cadres. They havealso successfully mobilised the support of some civil society groups to further their cause overtly. It is reported that they have been able to establish trans-border linkages with like-minded extremist groups for obtaining explosives and arms as also for organising training for their own cadres. These extremists often do not allow major development of the area including infrastructure development for fear of losing their hold over the people. They have also been making use of terror tactics to suppress any opposition and to demoralise the civil administration.2.2.4.3 Thus what started as an ideological movement with ‘romantic sacrificialism’ as the main ingredient, has now become increasingly militarised and criminalised. Use ofsophisticated weaponry, training in use of weapons and explosive devices, including for women and children, resort to abductions, mass killings, extortion rackets, links with secessionist and terrorist groups, assassination of public figures and arms trafficking are now the hallmark of Naxalite violence.2.2.4.4 Initially, several groups with ideological differences operated separately and at times were in confrontation with each other. In 2004, two of the main left wing extremist groups in the country came together under the single banner of the Communist Party of India (Maoist) (source: Ministry of Home Affairs, Annual Report, 2004-05). They have a command structure with provincial and regional committees and local platoons of weapon-wielding ‘soldiers’. They are backed by a chain of ‘couriers’ and sympathisers and some civil society organisations. The command and control structure, strategic planning and operational efficiency of the Naxalites are impressive. There also seems to be sufficient local delegation, which gives flexibility to the local formations operating mostly in remote and inaccessible areas. The knowledge of the terrain offers a great advantage to Naxalites, but they have also shown the capacity to target individuals in towns and cities. While armed cadres get depleted by liquidation or surrender, there is continuous fresh recruitment to replenish the losses.2.2.4.5 There is need to upgrade the existing state police forces quantitatively as well as qualitatively with adequate infrastructure, specialised training and sound intelligence support. Effective coordination among the affected states and an overarching national strategy are critical in combating left wing extremism. Care must, however, be taken to institutionalise mechanisms to prevent human rights violations.2.2.4.6 Government has adopted a multi-pronged strategy to contain this serious threat. Apart from countering violence, it is addressing the political issues involved, attending to the development needs of the affected areas and managing public perception. Strengthening of intelligence structures, financial assistance to the affected states, modernisation of the state police, long-term deployment of Central Police Forces, improved coordination mechanism, Backward District Initiatives and Backward Regions Grant Fund are some of the concrete measures taken by the Government of India. These initiatives need to be closely monitored to ensure that their impact is demonstrated on the ground and due accountability mechanisms for this have to be institutionalised. In dealing with the situation, a comprehensive political and administrative strategy is called for. While violence has to be dealt with by the security forces, other wings of civil administration have an important role to play in promoting development and equity and ensuring prompt action in tackling the problems confronting the people in the affected regions.16178 Source: Annual Report, Ministry of Home Affairs; 2006-079 Source: ibidPublic OrderPublic Order – A General Perspective182.2.4.7 Past experience of successfully dealing with Naxalite violence by states like Kerala, and West Bengal indicates that a two-pronged strategy of land reforms and socio-economic development coupled with firm police action and systematic investigation and prosecution of cases of violence, is effective in weaning away people from supporting the Naxalite creed of violence.2.3 Causative Factors of Major Public Order Problems2.3.1 The classical school in criminology propounded the theory that every human being acts on a rational basis and would try to maximise his gains or minimise his pains. This was the basis of the theory of deterrence. As per this theory the State tries to prevent crimes by institutionalising a system of law enforcement, which would give adequate punishment to the offender to act as a deterrent. The neo-classical school supports the classical viewpoint but places emphasis on reform and rehabilitation of the offender. There have been several other theories of criminology which have added social, psychological and economic dimensions to the causes of crime. As postulated by modern theorists, controlling crime requires a multi-pronged approach involving socio-economic and psychological measures; this does not, however, invalidate the theory of deterrence. Hence the importance of a comprehensive and efficient system of criminal justice administration.2.3.2 Any serious analysis of public order should recognise the inextricable link between crime control and public order. Deterioration in the ‘crime situation’ adversely affects public order and vice versa. Unchecked, widespread crime creates a culture of lawlessness. A society, which does not deal with crime swiftly and effectively, in effect rewards criminals and makes life insecure for innocent law abiding citizens. If such a climate persists, more and more people tend to perceive that crime pays, and that there is no penalty or risk attached to it. This can only lead to more crime. Such a climate is conducive to easy recourse to violence and results in the breakdown of public order. In addition, unpunished criminals become the agents of disorder in society. Local criminal gangs are almost always involved deeply in engineering or perpetuating violence in times of breakdown of public order. For instance, in almost all communal riots, the rowdy history sheeters and local criminals are involved in causing violence and mayhem. Any attempt to upgrade the existing arrangements to deal with public order aberrations will be unsuccessful unless accompanied by measures to generally bolster the system of administering criminal justice.2.3.3 According to David H. Bayley, a well-known authority on the Indian police, in the welter of disorder to which India was subjected, three broad categories of public violence can be discerned: violence of remonstrance, violence of confrontation, and violence of frustration. There are five broad causes of the types of violence mentioned above. These can be categorised as follows:i. Social: In India, the historical social structures and ‘hierarchy’ has been a root cause for social unrest. Caste has been a fundamental divisive factor in our society.ii. Communal: Religious orthodoxy and blind adherence to extreme view points is another fundamental cause for unrest. In India, the existence of every religion side by side has been the matter of strength in our multi-cultural system but fringe elements often create unrest.iii. Economic: Underdevelopment is arguably a cause of tension. The desire to improve one’s position in competition with others, itself creates stress and in India, with 250 million people below the poverty line, the strain is significant.iv. Administrative: The administrative machinery is not always perceived by people to be objective and fair. Slackness in delivery of services, lethargy in enforcement of laws is at times a major reason for frustration in citizens. Corrupt and self seeking behaviour of some officials compounds the problem further. One of the major causative factors for the eruption of public disorder is the inadequacy of the administration in enforcing the legitimate constitutional, statutory and traditional rights of citizens leading to serious discontentment among them.v. Political: In a vibrant democratic system, not a totalitarian regime, divergent political view points can lead to tension. More important, however, is the problem of political expediency where a section of the political leadership tries to use the administration for furthering its own political agenda. The increasing propensity to use public office for private gain, unwarranted interference in crime investigation and day to day functioning of police, short-term populism at the cost of durable solutions, complexities of a federal polity – all these make it difficult to address some of the growing threats to public order. Added to this is the relatively low importance attached to public order in our political discourse. All these contribute to breakdown of the public order fabric.2.3.4 Hostilities arising out of such tensions and conflicts provide opportunity for exploitation by external forces inimical to the country. The situation has also been exploited by radical political groups for furtherance of their own agenda and objectives. Attention has already been drawn to the instigation of militancy by agencies inimical to India. The bomb blasts in Mumbai in 1993 and again the recent bomb blasts in trains in Mumbai city and many other similar occurrences are manifestations of this. In the North-East also, cross-border support to various domestic movements has led to aggravation of anti-national activities. In order to prevent such exploitation of domestic conflicts by external forces, we must be able to manage such conflicts without allowing them to develop into prolonged and grave19Public OrderPublic Order – A General Perspective20disorder. Further, rapid spread of information, through technological developments, has the potential to accentuate the existing ones.2.4 Lessons from the Past2.4.1Sixty years have passed since we gained Independence. There is need to now identify the strengths and weaknesses of our institutions and systems based on past experience so as to draw useful lessons from them. Some of the major strengths of the existing legal framework are (a) a clearly laid down democratic, constitutional and legal framework, (b) an independent judiciary and an elaborate criminal justice system and judicial review of executive action, (c) representative institutions to debate issues of public importance,(d) a vigilant media and (e) emerging civil society responsiveness.2.4.2 The strong points of the administrative framework of the country have been (a) firmly established administrative traditions, (b) a well-organised police machinery, (c) systems of accountability, even if deficient and (d) the existence of a professional bureaucracy which brings about administrative cohesion and uniformity.2.4.3 We should however recognise that our legal and administrative framework has certain weaknesses:?delays in the criminal justice system;?unresponsiveness of the administration;?lack of functional autonomy for law enforcement and investigation agencies;?lack of adequate and effective accountability mechanisms;?outdated and unprofessional interrogation and investigation techniques;?tendency to use unwarranted disproportionate force and abdication of duties under partisan pressures;?inadequate training and infrastructure for police;?lack of coordination between prosecution and investigation;?insufficiency of laws dealing with terrorism and organised crime;?people’s propensity to perjury; and?neglect of victim’s rightsThese are some of the malaise which have to be addressed urgently, boldly and in an innovative manner.2.4.4 The declining efficacy of the existing systems of investigation and trial is clearly brought home in Tables 2.1 and 2.2. The number of crimes has increased over the years but what is more disturbing is the low rate of conviction. Table 2.2 shows that while the workload and pendency at investigation stage are increasing, a much higher percentage of cases are nowbeing chargesheeted. But the decline in conviction rates shows that investigation standards are falling, thus indicating that there may be an easy recourse to chargesheeting without adequate application of mind and gathering of evidence. This also reflects on the quality of public prosecution. If convictions resulting from confession of the accused are excluded, the rate of conviction would be even lower.2.4.5 The lack of accountability has been one of the main reasons for the tardy response of the government machinery. Rarely is an official held to account for his/her acts of omission or commission in dealing with a public order problem. The government machinery rarely attempts to address a brewing conflict. There have been cases, where adequate precautionary steps were not taken even when there was a high probability of outbreak of violence. In several instances, violence was not controlled with the degree of firmness required. One of the reasons for this is that incentives are often skewed in favour of not dealing with a situation firmly even when the situation so demands. Using force to restore order even whenTable 2.1: Disposal of IPC Crime Cases by Police (Decadal Picture)S.No.YearTotal No.Number of Cases InvestigatedPercentage of Casesof CasesforInvestigation(includingpendingcases)FoundCharge-Total TrueTotal *InvestigatedCharge-F/NC/MF#sheetedCases @(Col.(Col.7/sheeted4-6)Col.3x100)(Col.5x100/Col.6)(1)(2)(3)(4)(5)(6)(7)(8)(9)119616961555412828505953215158627984.253.62197111385888366342838281069189435478.552.83198116920601276557408811208339133599479.061.341991207571811862610915791530861164948779.571.352001223837910501913033971658258176327778.878.662002224684511691313357921670339178725279.580.072003216926810538312715041586562169194578.080.182004230335410324913176321651944175519376.279.892005236565810018313672681693652179383575.880.7# F/NC/MF- False/Non cognizable / Mistake of fact* Excluding cases where investigation was refused @ Cases charge-sheeted + Final report true submitted.Source: Crime in India, 2005; NCRB21Public OrderPublic Order – A General Perspective22Table 2.2: Disposal of IPC Crime Cases by Courts (Decadal Picture)Sl.YearTotal No. ofNo. of CasesPercentage ofNo.Cases for TrialCases(Including Pending Cases)Tried *ConvictedTrial CompletedConviction(Col.4/(Col.5 /Col.3)Col.4)(1)(2)(3)(4)(5)(6)(7)119618,00,7842,42,5921,57,31830.364.8219719,43,3943,01,8691,87,07232.062.03198121,11,7915,05,4122,65,53123.952.54199139,64,6106,67,3403,19,15716.847.85200162,21,0349,31,8923,80,50415.040.86200264,64,7489,81,3933,98,83015.240.67200365,77,7789,59,5673,84,88714.640.18200467,68,7139,57,3114,06,62114.142.59200569,91,50810,13,2404,30,09114.542.4* Excluding withdrawn/compounded cases.Source: Crime in India, 2005; NCRBjustified, runs the risk of future inquiries whereas soft pedaling may be a ‘safer’ option. There have, however, been cases where the security forces have over-reacted.2.4.6 An equally glaring problem is the propensity to use third degree methods and habitual violation of human rights by law enforcement agencies. Reconciliation of the imperatives of public order with a citizen’s liberty and dignity is a vital requirement in a liberal society. Training, equipments, procedures and attitudes need to be attuned to the citizens’ human rights.2.4.7 The civil administration including the police, today, have to perform their duties under a far more vigilant and demanding environment. Because of an increasing level of public awareness and expectations, there are greater demands on the administrative machinery, for delivery of better service. There is also greater public scrutiny of their actions because ofenhanced consciousness of the citizens about their rights and privileges and the emergence of a powerful media and citizens’ groups.2.5 The Need for Comprehensive Reforms2.5.1 The Commission circulated a questionnaire covering various aspects of public order {Annexures II (1) and II (2)}. Only 12% of the respondents stated that they were satisfied with the existing system of management of public order in the country. Another 5% were satisfied with it ‘only to some extent’; 79% were categorical in expressing their dissatisfaction. Prominent among the reasons for dissatisfaction mentioned were:?extraneous influence in public order management;?the root causes of problems not being addressed by the administrative agencies;?absence of attempts to find long term solutions to problems;?administrative decisions being guided by political expediency;?inadequate involvement of civil society, NGOs and social workers in public order management;?lack of an institutional mechanism defining the roles and responsibilities of the various stakeholders in conflict resolution;?lack of empowerment of junior ranks at the cutting edge levels of administration to effectively deal with problems at the nascent stage;?lack of appropriate training for functionaries of civil administration and the police on public order issues;?lack of modern technology and equipment with the police;?absence of computerised databases on criminal, anti-social and anti-national elements;?lack of specialised, well trained wings in the police organisations of many affected states to deal with problems like left wing extremism;?lack of a cohesive all India policy and legal framework to deal with problems of public order affecting security of state, such as terrorism and left wing extremism;?ineffective performance monitoring systems for public order management functionaries; and?lack of accountability of the police and administration to the public.2.5.2 Several Commissions of Inquiry have examined the causes and the handling of major instances of public disorder. Some of the important findings of the Commission of Inquiry for the riots in Mumbai in 1992 and the serial bomb blasts 1993, as one example, are as follows:23Public OrderPublic Order – A General Perspective“The canker of corruption has eaten into the entrails of Indian Society and police department is no exception.”“Frequent transfers of police personnel on grounds other than administrative convenience and nepotism and corruption in the matter of posting, allotment of quarters and even grant of leave, have haunted the police administration for long. Political interference at all levels, have haunted the police administration for long.”“Justice delayed is justice denied, more so, in case of a criminal trial. Very often the delay is on account of the unpreparedness of the investigating officer.”“There should be meticulous and effective consideration of intelligence collected for maintenance of law and order and prevention of crimes.”“Weapons available with the police in the police stations were inadequate in terms of quantity and quality.”“Manpower available with police is extremely inadequate and as a result an average policeman is required to work for at least 12 hours.”“Religious activities in congested areas led to flare up. Similarly, announcements on loudspeakers and religious observances in public places led to avoidable tension among different communities.”These extracts are only illustrative but they emphasise the need for a major overhaul of the public order management mechanism.2.5.3 The Committee on Reforms of Criminal Justice System has observed:“A former Chief Justice of India warned about a decade ago that the Criminal Justice System in India was about to collapse. It is common knowledge that the two majorproblems confronting the Criminal Justice System are huge pendency of criminal cases and the inordinate delay in disposal of criminal cases on the one hand and the very low rate of conviction in cases involving serious crimes on the other. This has encouraged crime. Violent and organised crimes have become the order of the day. As chances of convictions are remote, crime has become a profitable business. Life has become unsafe and people live in constant fear. Law and order situation has deteriorated and the citizens have lost confidence in the criminal justice system”.102.5.4 The Law Commission has given several reports on reforming the criminal justice system. The Committee on Reforms of Criminal Justice System, 2003 went into this issueat great length and made wide ranging recommendations. The National Police Commission, several State Police Commissions and State Administrative Reforms Commissions have gone into the issue of police reforms. The National Human Rights Commission has made recommendations for professionalising investigations by the police with a view to minimise human rights violations. Earlier, the All India Committee on Jail Reforms recommended wide ranging prison reforms (1980-83). More recently, the Police Act Drafting Committee, 2006 recommended a Model Police Act to be adopted by the states. The Supreme Court has also issued directions covering several aspects of police reforms11.2.5.5 All these reports and pronouncements emphasise the urgency for reforms in the police and the criminal justice system. Attaining a situation where there is perfect public order is no doubt utopian. Perhaps a more realistic target would be to establish the rule of law. It has been said that a State establishes rule of law by making it easier for people to do right and making it difficult for them to do wrong. This is achieved through a combination of preventive and deterrent measures. The State creates a congenial atmosphere by legislating and creating various institutions. Mere existence of good laws does not ensure rule of law. These laws have to be implemented in right earnest. The State has to provide fair, objective and transparent governance so that citizens have faith in it. The State can prevent public disorder by anticipating potential problems and attempting to resolve them. Visible policing is an extremely effective instrument to prevent crimes in society. In spite of all preventive measures, there are elements in society which will violate laws. Therefore in order to ensure justice to the persons wronged and to deter others, the criminal justice system seeks to punish the wrong doers. In order to ensure the rule of law, all the instrumentalities mentioned in the preceding paras have to function effectively and in harmony (Fig 2.5). Also any effort to move towards an ideal public order situation would require a comprehensive look at all the instrumentalities.2.5.6 Several stakeholders have to work in harmony to establish the rule of law. Essentially such a rule of law would entail:?a legal framework, which is fair and just and provides equal opportunities for all;?an effective, fair and just civil administration which infuses respect for law;?an effective, efficient, accountable and well equipped police system which prevents any threat to rule of law;?a strong, autonomous and effective crime investigation machinery backed by a professionally competent prosecution and a fair and swift criminal justice system;242510 Extracted from the Report of the Committee on Reforms of Criminal Justice System11 Writ Petition (Civil) No. 310 of 1996Public Order3?a civil society which is vigilant about its rights and duties; and?an alert and responsible media.2.5.7 The Commission, in this Report, has looked at all these aspects in a comprehensive and harmonious manner and also examined the linkages between different organisations involved in this process.THE EXISTING POLICE SYSTEM3.1 The Police Organisation3.1.1 ‘Public order’ and ‘Police’ figure as Entry 1 and 2 respectively, in List II (State List) in the Seventh Schedule of our Constitution, thereby making State Governments primarily responsible for maintaining public order. Invariably, police, which is a part of the civil administration, is at the forefront in maintaining law and order. In the field, the district administration (the District Magistrate and the Superintendent of Police) and in bigger cities in some states the Commissioner of Police assume the responsibility for public order. As explained earlier, the day-to-day policing and crime management also have a profound bearing on the rule of law and thereby public order (see Box 3.1 on The Broken Window Syndrome). This chapter therefore deals with the existing police system as well as public order management.3.1.2 Article 355 of the Constitution enjoins upon the Union to protect every state against external aggression and internal disturbance and thereby to ensure that the government of every state is carried on in accordance with the provisions of the Constitution. The Police Act, 1861 is still the basic instrument governing the functioning of the Indian police. Under this Act, the Inspector General2627Public OrderThe Existing Police Systemof Police (now designated as the Director General and Inspector General of Police) is the head of a state police. States are divided into districts and a Superintendent of Police heads the district police. A few states have also passed their own State Police Acts. Besides, other laws like the Indian Penal Code (IPC) of 1862, the Indian Evidence Act (IEA) of 1872 and the Code of Criminal Procedure (CrPC) of 1973 also govern the functioning of the police. An idea about the organisation of police in the states can be had from Table 3.212.Table 3.2 Organisational Setup of State Police (2005*)Sl.No.State/UTNo. of ZonesNo. of RangesNo. ofNo. ofNo. of CirclesNo. of Rural Police StationsNo. of Urban Police StationsNo. of Women Police StationsPopulationPoliceSubper PoliceDistrictsDivisionsStation1234567891011STATES1Andhra Pradesh141026153496115939723482652Arunachal Pradesh121551754150159133Assam0627274311611611144014Bihar5124611020264311401096415Chhattisgarh44214101941443610966Goa002709161518337Gujarat1273095863888041073548Haryana05214901585111006889Himachal Pradesh0312230582906986110Jammu & Kashmir26213801234925829711Jharkhand3624331122507908190212Karnataka101031119230447358106484713Kerala24175219231113337123314Madhya Pradesh01651145060033096426815Maharashtra327542630650292010284416Manipur249210451313672517Meghalaya02712161512085882Sl.No.State/UTNo. of ZonesNo. of RangesNo. ofNo. ofNo. of CirclesNo. of Rural Police StationsNo. of Urban Police StationsNo. of Women Police StationsPopulationPoliceSubper PoliceDistrictsDivisionsStation18Mizoram018150151902613419Nagaland27102417192414522820Orissa0934359129116867915021Punjab351596511669339297322Rajasthan08330172417294137804923Sikkim11411081902003224Tamil Nadu412372432875077151964401025Tripura1242029332205816726Uttar Pradesh7177030937611063401211399027Uttaranchal02137134664027860528West Bengal4827811062352280173167Total (States)1091766692098255780834190291Union Territories29A&N Islands0024418311618930Chandigarh0003001108187631D&N Haveli00113011011024532Daman&Diu002200207910233Delhi0394100129010736834Lakshadweep11111900673935Pondicherry0016151624322659Total (UTs)14167020441704Total (All-India)1101806852168257781274360295**Population figures are as per ‘Primary Census Abstract’, Census of India 2001 published by Office of the Registrar General, India.Source: National Crime Records Bureau (Crime in India, 2005)The strength of the Police Force in various states is given in Table 3.313282912 Source: National Crime Records Bureau (Crime in India, 2005)13 Source: National Crime Records Bureau (Crime in India 2005)Public OrderThe Existing Police System3.2 People’s Perception of the PoliceActual99471665564318942213134873002467523041980534655350634352161225364768563436165500264845214251880192270900120139914360972223236442232444372327315205185954125104657528341221519381(12)3.2.1 Max Weber defined ‘State’ as an organisation that has a “monopoly on the legitimate use of physical force”. Use of physical force becomes necessary when other peaceful mechanisms fail to produce results. The police are the instrument of physical force of the State. They have to bear the burden of failure of other instruments of governance as well. Thus the police always has to be at the forefront and face the wrath of the public even for the failure of other instruments of governance.Grand TotalSanctioned560165324736336136070572363033616565952142586642064971810930222842444596432353003318323390994181913809541252935510055133595379034916991148473312188215824184731690815457170901241(11)Table 3.3: Sanctioned and Actual Strength of Civil Police Including District Armed Police as on 31.12.2005 (Men + Women)(State & UT-wise)Actual1965237474947214634559844560626671062424334084417058303263223162337361184027283771226325673539699465731008354688251914457765835531822082163401822812794101288518245451314511881(10)Officers below ASI3.2.2 The police have faced and continue to face many difficult problems. In a country of India’s size and diversity, maintaining public order at all times is indeed a daunting task. It is to the credit of the police that despite many problems, they have by and large been successful in maintaining public order. Despite this, the police are generally perceived to be tardy, inefficient, high-handed and often unresponsive or insensitive.Sanctioned6296424696445404276733828363431164252204324104657311194044765259251950924559874052854811865989264945092484318742222162941392425209673632655157794855517352781741123441330135221(9)Actual4876139287471174242249303424674321046954887101346061276668390735212743171471413073349414104926783495245384562804451323432201517994721149172182313.2.3 The National Police Commission (NPC) observed:(8)Inspector,SI & ASI“...in the perception of the people, the egregious features of the police are politically oriented partisan performance of duties, partiality, corruption and inefficiency, degrees of which vary from place to place and person to person ... What the Police Commission said in 1903 appears more or less equally applicable to the conditions obtaining in the police today”.Sanctioned6127190661586667398512500811096219410146125750922113576935586743232501152976101347355769343242970913291347666639847317231042453284116721703383115071(7)Actual261945367724274958949783788041010548194164262285145926920022331555605395152193202411117127171111411(6)SSP/Addl.SP/ASP/Dy.SPThe NPC examined the issue of police-public relations in great detail. It came to the conclusion that police-public relations were in a very unsatisfactory state and police partiality, corruption, brutality and failure to register offences were the most important factors contributing to this situation. People also felt that police often harass even those who try to help them; and while by and large people did not think that police are inefficient, they want a change in the style of their functioning. Policemen, in general, did not believe that they are at fault and blamed the system for deficiencies and deviations.Sanctioned9286(5)467633303182711934954254338749810805078723043787068831591306116468102429223469632295152711717121Actual(4)47776733446323523338026606612106222939161414413901045202902108055351111DG/Addl DG/IG/DIG@ Previous year figures repeated in absence of current year data Source: National Crime Records Bureau (Crime in India, 2005)Sanctioned3.2.4 The NPC cited the reports of the Bihar Police Commission (1961), the Punjab Police Commission (1961-62) and the West Bengal Police Commission (1960-61), all of whom commented on the functioning of police and deterioration in the standards of investigations. The Punjab Police Commission observed that:(3)34322341430607018622343960168719154109711072727255063293501520033114011Dadar & Nagar HaveliUNION TERRITORIESJammu & KashmirArunachal PradeshHimachal PradeshMadhya PradeshTotal (All-India)Andhra PradeshMaharashtra @Daman & DiuUttar PradeshA&N IslandslakshadweepTotal (States)ChhattisgarhWest BengalPondicherryTamil NaduChandigarhUttaranchalTotal (UTs)MeghalayaJharkhandKarnataka“...public complained of rudeness, intimidation, suppression of evidence, concoction of evidence and malicious padding of cases.”STATES :RajasthanState/NagalandPunjab @MizoramManipurHaryanaGujaratTripuraSikkimUTKeralaOrissaAssam(2)DelhiBiharGoaNo.(1)Sl.27246789101213141617181920222324262832343515252930333511121313130Public OrderThe Existing Police System3.2.5 A study on petty corruption undertaken by Transparency International India and Centre for Media Studies which involved a sample of 14,405 respondents in 20 Indian states and covered 151 cities and 306 villages revealed that 80% of the respondents had paid a bribe to the police. The study also concluded after a survey of 11 public service agencies that police were regarded as the most corrupt agency and 74% of the respondents who interacted with the police were dissatisfied with the service.143.3 Declining Conviction Rate3.3.1 A study of the conviction rate for various types of crimes (Fig 3.2) shows that there has been a general decline in the conviction rate for all types of offences in the period between 1960 and 2005 whereas the number of cases charge-sheeted as a percentage of cases investigated has increased. Data also indicates that conviction rates for murder showed a general decline with a steeper decline noticed in the South Indian states. There is also a disturbing trend of increase in the number of custodial deaths which went up from 207 in 1995 to 88915 in 1997. This figure rose further in 2002-2003 to 1340. These statistics point to major structural problems which afflict the Indian Police and the criminal justice system. A deeper analysis of these problems would be of value in order to identify the reforms required to set things right.3.4 Problems in the Existing Police Functioning3.4.1 The major problems in the functioning of the Indian police have been brought to the fore recently through high profile cases such as the disappearance and killings of a large number of children in Nithari Village of U.P. and the Jessica Lal and Priyadarshani Mattoo murder cases, wherein callousness, collusion, shoddy investigation and ‘hostile witnesses’ made a mockery of the entire criminal justice system. A media-led outcry and interventions by the judiciary have ensured belated remedial action in a few cases. But the failure in countless other cases continues unaddressed.3.4.2 The instances mentioned above are symptomatic of the deeper malaise that afflicts Indian policing with its focus on maintaining law and order rather than trying to understand and resolve underlying problems. It is argued that the traditional snobbery and system of patronage has continued, corruption levels have gone up and so also the extent of political interference. There is a propensity to resort to physical violence and coercion3.4.4 It would not, however, be fair to place the entire blame on the police for the failure of the criminal justice system, because there are many factors responsible for the present situation. These could be broadly classified as follows:i. Problems related to general administration?Poor enforcement of laws and general failure of administration;?Large gap between aspirations of the people and opportunities with resultant deprivation and alienation; and?Lack of coordination between various government agencies.ii. Problems related to police ?Problems of organisation, infrastructure and environment;oUnwarranted political interference;oLack of empowerment of the cutting edge functionaries;oLack of motivation at the lower levels due to poor career prospects, and hierarchical shackles;oLack of modern technology/methods of investigation;oObsolete intelligence gathering techniques and infrastructures; andoDivorce of authority from accountability.even during investigations rather than taking recourse to scientific and sophisticated methods to gather evidence. The emphasis, therefore, is on oral evidence or confession, rather than on forensic evidence.3.4.3 It is therefore not surprising that the police are often perceived, not as citizen friendly guardians of public security and upholders of the rule of law, but as being biased against the oppressed and dishonest. Perhaps nowhere is the asymmetry of power in a society so evident as in the behaviour and attitude of the police particularly towards the disadvantaged sections of society.323314 India Corruption Study 2005 to improve governance. Retrieved from Source: Annual Reports, NHRCPublic OrderThe Existing Police Systemiii. Problems related to prosecution ?Best talent not attracted as public prosecutors;?Lack of coordination between the investigation and the prosecution agencies; and?Mistrust of police in admitting evidence.iv. Problems related to the judicial process/criminal justice administration?Large pendency of cases;?Low conviction rates; No emphasis on ascertaining truth; and?Absence of victims’ perspective and rights.3.5 Review of Recommendations for Police Reforms in the Past3.5.1 The indigenous system of policing in India was very similar to the Anglo Saxon system; both were organised on the basis of land tenure. As with the system in the medieval days of King Alfred, the zamindar16 was bound to apprehend all disturbers of public peace. The village responsibility was enforced through the headman. If a theft was committed within the village bounds, it was the headman’s business to trace the guilty. If he failed to recover the stolen property, he was obliged to make good the amount to the extent his means permitted. The Moghul system of policing followed closely on the lines of the indigenous system.17 Extortion and oppression flourished through all gradations of officials responsible for the maintenance of peace and order.3.5.2 To reform the then existing system, the first step taken by the British was to relieve the zamindars of their liability for police service and their place was taken over by the Magistrates in the district. Although several attempts were made to reform the police during the British Rule, the first major step was the constitution of the Police Commission of 1860. The Commission recommended the abolition of the military police as a separate organisation and the constitution of a single homogenous force of civil constabulary. The general management of the force in each province was to be entrusted to an Inspector General. The police in each district were to be under a District Superintendent. The supervision and the general management of the police by the District Magistrate was continued. The Commission submitted a Bill, based on the Madras Police Act, to give effect to these recommendations, and this became a law.3.5.3 The Indian Police Commission was constituted in 1902. It found concrete evidence of rampant corruption in the police department. The Commission observed of thanedars18 in particular: “This corruption has many forms, and is noticeable at all levels of work in a police station. A police officer accepts fee or gift for every work he does. Generally a plaintiff gives some fee to get his complaint registered. He bribes the investigation officer for an immediate action in his favour. As the investigation progresses, more money is given. When the investigation officer reaches the spot of incident, he becomes a burden not only to plaintiff and witness but to the entire village. People are harassed in such a way that they have to visit the police officer daily for days together. Sometimes he goes to their houses along with his colleagues. Their womenfolk are threatened with dire consequences in case men disagree with the official attitude about their cases. They are told that their houses would be attached and their wealth inquired into. They?Problems of organisational behaviour;oInadequate training; andoEntrenched attitudes of arrogance, insensitivity and patronage.?Problems of stress due to overburdening;oMultiplication of functions, with crime prevention and investigationtaking a back seat;oShortage of personnel and long working hours; andoToo large a population to handle.?Problems related to ethical functioning;oCorruption, collusion and extortion at different levels;oInsensitivity to human rights; andoAbsence of transparent recruitment and personnel policies.343516 Zamindar is a Hindi/Urdu word meaning a land owner who leased land to tenant farmers ‘landlord’17 Source: Compendium of the Recommendations of the Police Commissions of India; compiled by the National Crimes Records Bureau18 Thanedar means officer in charge of a Police StationPublic OrderThe Existing Police Systemare sometimes imprisoned and humiliated in a number of ways. People bribe policemen in order to get rid of such harassment.”193.5.4 In the post independence period, police reforms have been the subject of a number of Commissions and Committees, appointed by various State Governments as well as the Government of India.3.5.5 The UP Police Commission, headed by Shri Ajit Prasad Jain, M.P., was appointed in 1960. The Commission came to the conclusion that crimes were increasing but the official statistics for the period 1950 to 1959 showed a decline of 10% in the incidence of crime. It observed that concealment and minimisation of recorded crimes is a natural corollary of a system where the work of the Station House Officer is judged by the number of crimes committed in his jurisdiction. Some of the reasons identified by it for the increase in crime are decline in respect for law, breakdown of the old village police system, ineffectivenessof police, poor quality of investigation and prosecution, political interference, factionalism in the ruling party and association of criminals with political parties. The Commissionopposed the proposal to transfer some police functions to local bodies. It observed that – “There is little doubt that corruption is rampant in the non-gazetted ranks of the police force. Imputations of corruption against gazetted ranks are not wanting, but they are not so pervading in their character”.3.5.6 The West Bengal Police Commission constituted in 1960 recommended that the work of investigation should be separated from other work in the thanas20 at the district headquarters, in heavily industrialised urban areas and in other towns. It also recommended that the Calcutta Police and West Bengal Police should remain separate forces. It observed that the practice of not recording crimes or reducing their gravity arise from a belief among subordinate officers that credit could only be gained by maintaining a low return of crime. They suggested strengthening of the forensic science laboratory and made a number of concrete suggestions to reduce corruption.3.5.7 The Bihar Police Commission, 1961, made wide ranging recommendations ranging from registration of FIRs to the welfare of police personnel. It observed that the general impression seemed to be that the incidence of corruption was considerable in all ranks up to the Inspector of Police; it was rare in the rank of Deputy Superintendent of Police and insignificant in the rank of Superintendent of Police and the administrative ranks of the police force were free from blemish. It emphasised the importance of public cooperation and concluded that principal support to the police should come from the society itself.3.5.8 The Tamil Nadu Police Commission was appointed in 1969 to go into the conditions of service, duties and responsibilities, modernisation etc. of the police force. It made recommendations for reconstitution of the Service Cadres, improvement of service conditions, reorganisation of police establishments, modernisation and improvement of operational efficiency and the relationship between police, public and politics. It came to the conclusion that the constables were heavily overworked (some of them had to work for over 14 hours a day on an average). The Report concluded by stating – “... the strains and stresses in the functioning of the Police Force, which have arisen almost entirely as a result of politics are indeed cause for serious concern; but not yet for alarm”.3.5.9 At the national level, the Gore Committee on Police Training (1971-73) was set up to review the training of the police from the constabulary level to IPS officers. Government of India appointed the National Police Commission in 1977. The Commission submitted eight Reports covering different aspects of police administration in the country.In the First Report issues relating to the constabulary and internal administration such as pay-structure, housing, orderly system, redressal of grievances, career planning for constabulary, complaints against police etc. were analysed.The Second Report dealt with welfare measures for police families, police roles, duties, powers and responsibilities; interference in the working of police; Gram Nyayalayas; maintenance of crime records and statistics and how to avoid political and executive pressure on the police force. The recommendations included the constitution of state security commissions and security of tenure for officials.The Third Report focused on the police force and the weaker sections of society, village police, special law for dealing with serious and widespread breaches of public order, corruption in the police, economic offences and modernisation.The Fourth Report addressed the issues of investigation, court trials, prosecution, industrial disputes, agrarian problems, social legislation and prohibition.363719 ; retrieved on 10-4-0720 Thana means a police stationPublic OrderThe Existing Police SystemThe Fifth Report analysed and made recommendations on issues pertaining to recruitment of constables and sub-inspectors, training of police personnel, district police and the executive magistracy, women police and police public relations.The Sixth Report dealt with police leadership – the Indian Police Service, police and students, communal riots and urban policing.The Seventh Report discussed the organisation and structure of the police, state and district armed police, delegation of financial powers to police officers, traffic regulation, ministerial staff, performance appraisal of police personnel, disciplinary control and role of the Union Government in planning, evaluation and coordination.The Eighth Report covered the subject of accountability of police performance. It also recommended a draft Police Bill which incorporated several recommendations of the Commission.3.5.10 The Ribeiro Committee was set up in 1998 on the orders of the Supreme Court following a Public Interest Litigation (PIL) on police reforms. It recommended the setting up of Police Performance and Accountability Commissions at the State level, constitution of a District Complaints Authority, replacement of the Police Act, 1861 with a new Act etc. In 2000, the Padmanabhaiah Committee on Police Reforms was constituted to study, inter alia, recruitment procedures for the police force, training, duties and responsibilities, police officers’ behaviour, police investigations and prosecution.3.5.11 The Government of India constituted in September 2005 a Police Act Drafting Committee (PADC) with Shri Soli Sorabjee as Chairman, to draft a new Police Act to replace the Police Act of 1861. The Committee has drafted a model Police Bill keeping in view the changing role/responsibility of police and the challenges before it, especially on account of the growth and spread of insurgency/militancy/Naxalism etc. The new Bill also has measures for attitudinal changes of police including working methodology to elicit cooperation and assistance of the community. Some of the major features of the draft Bill are:?Superintendence of State police to vest in the State Government; State Government to exercise superintendence over police through laying down policies and guidelines, facilitating their implementation and ensuring that the police performs its task in a professional manner with functional autonomy.?Appointment of the Director General of Police by the State Government from amongst three senior most officers, empanelled for the rank. Empanelment to be done by the State Police Board.?Tenure of minimum of two years for the Director General of Police irrespective of his date of retirement.?Security of tenure for key police functionaries.?District Magistrate to have a coordinating role.?Initial appointment at Civil Police Officer Grade-II and Sub-Inspector levels.?Constitution of a State Police Board, headed by the Home Minister. The State Police Board to frame broad policy guidelines for promoting efficient, effective, responsive and accountable policing, in accordance with law; prepare panels for appointment of the Director General of Police; identify performance parameters to evaluate the functioning of the police services and review and evaluate organisational performance of the police service in the state.?Constitution of Police Establishment Committee.?Definition of the role, functions, duties and social responsibilities of the police.?Constitution of a village police system.?Creation of Special Security Zones.?Constitution of a State Police Accountability Commission to inquire into public complaints against police.?Constitution of a District Accountability Authority.3.5.12 The Commission has examined the important recommendations of the Soli Sorabjee Committee. The Commission appreciates the comprehensive exercise undertaken by the Committee, which has been of considerable value to the Commission in formulating its views. The broad framework proposed by PADC is very relevant to making police a useful instrument of public service in the 21st century. The draft Bill prepared by the Committee encompasses virtually all areas of police functioning. The Commission agrees with the formulations in the proposed legislation on grant of functional autonomy, treating police as a ‘service’, underscoring the functional insulation of the service, security of tenure, insistence on minimum level of infrastructural facilities and the attempt to lay down a broad charter of duties for the police personnel etc. While endorsing the broad direction indicated by PADC, the Commission is of the view that a holistic examination of the functioning of the police and criminal justice system is needed for comprehensive reforms.3.5.13 The PADC Draft Bill advocates ‘One Police Service’ for each state. The Commission is of the view that ‘police functions’ are not performed only by the police. Certain government3839Public OrderThe Existing Police Systemdepartments/agencies have already been given police powers. Currently, the state police have been entrusted with the enforcement of so many laws that they are overburdened and are unable to devote adequate time to their core functions. Thus, there is need to reduce this burden by empowering the departmental agencies to enforce their regulations. Similarly, local governments established pursuant to the Seventy Third and Seventy Fourth Amendments, would gradually require their own enforcement wings. No doubt the state police would continue to play the central role, but the need for other police services should be recognised, and creation of new services needs to be facilitated to meet future requirements.3.5.14 The two most important functions of the police in addition to crime prevention are investigation of crime and maintenance of law and order. These two functions are quite distinct requiring different capabilities, training and skills. More importantly they require different types of accountability mechanisms and different degree of supervision from the government. The constitution of the State Police Board as recommended by the PADC would give police the required degree of autonomy. But a separate mechanism should be put in place to insulate crime investigation, evidence gathering and prosecution from the vagaries of partisan politics. For this purpose, there will have to be a separate police service to deal with investigation of crimes exclusively with a mechanism to insulate the process from unwarranted interference.3.5.15 Some other recommendations included in the Draft Bill proposed by PADC may also need modification and these have been dealt with in the succeeding chapters.3.5.16 The Supreme Court, in Writ Petition (Civil) NO. 310 of 1996, (22-9-2006), observed:“ It is not possible or proper to leave this matter only with an expression of this hope and to await developments further. It is essential to lay down guidelines to be operative till the new legislation is enacted by the State Governments.Article 32 read with Article 142 of the Constitution empowers this Court to issue such directions, as may be necessary for doing complete justice in any cause or matter. All authorities are mandated by Article 144 to act in aid of the orders passed by this Court. The decision in Vineet Narain’s case ... notes various decisions of this Court where guidelines and directions to be observed were issued in absence of legislation and implemented till legislatures pass appropriate legislations.”3.5.17 The Supreme Court has directed the Union and the State Governments to take immediate steps for the following:i. Constitution of the State Security Commissions;ii. Notifying the procedure for selection and minimum tenure of DGP;iii. Security of tenure for other Police officers;iv. Separation of investigation function from law and order;v. Constitution of a Police Establishment Board in each state;vi. Establishment of State and District Complaints Authorities;vii. Constitution of a National Security Commission;3.5.18 State Governments have started taking action as per the directions of the Supreme Court. A comparative analysis of the Supreme Court’s directions, the PADC formulations and the provisions of the Kerala Police Ordinance21 and the Bihar Police Act, 2007 (as examples of emerging state laws) are summarised in Table 3.4.404121 The Kerala Police Ordinance was promulgated on 12th February, 2007Public OrderThe Existing Police SystemTable 3.4 : A Comparative Analysis of Reforms ProposedS.NoSupreme Court DirectionsPADC FormulationKerala Police OrdinanceBihar Police Act, 20071The State Governments are directed to constitute a State Security Commission in every State to ensure that the State Government does not exercise unwarranted influence or pressure on the State police and for laying down the broad policy guidelines so that the State police always acts according to the laws of the land and the Constitution of the country. This watchdog body shall be headed by the Chief Minister or Home Minister as Chairman and have the DGP of the State as its ex-officio Secretary. The other members of the Commission shall be chosen in such a manner that it is able to function independent of Government control. For this purpose, the State may choose any of the models recommended by the National Human Rights Commission, the Ribeiro Committee or the Sorabjee Committee.State Police BoardThe Government may, by notification in the Official Gazette, constitute a State Security Commission.State Police BoardThe recommendations of this Commission shall be binding on the State Government. The functions of the State Security Commission would include laying down the broad policies and giving directions for the performance of the preventive tasks and service oriented functions of the police, evaluation of the performance of the State police and preparingThe Commission shall have the following functions, namely: —(a) to frame the broad policy guidelines for the functioning of the police force in the State;(b) to issue directions for the performance of the preventive tasks and service, oriented functions of the police;(e) to evaluate, from time to time, the performance of the police in the State in general;(d) to prepare and submit an yearly report of its functions to the Government; and(e) to discharge such other functions as may be assigned to it by the Government.Notwithstanding any guidelines or directions issued by the Commission, the Government may issue such directions as it deems necessary on the matter, if the situation so warrants, to meet any emergency.The State Government shall, within six months of the coming into force of this Act, establish a State Police Board to exercise the functions assigned to it under the provisions of this Chapter. (S.41)The Government shall, within six months of the coming into force of this Act, establish a State Police Board to exercise the functions assigned to it under the provisions of this Chapter. (S.23)Functions of the StateThe State Police Board shall consist of:(a) Chief Secretary - Chairperson(b) Director General of Police - member and(c) Secretary in charge of the Home Department member-secretary. (S.24)The State Police Board shall perform the following functions:(a) frame broad policy guidelines for promoting efficient,effective, responsive and accountable policing, in accordance with the law;(b) identify performance indicators to evaluate the functioning of the Police Service. These indicators shall, inter alia, include: operational efficiency, public satisfaction, victim satisfaction vis-à-vis police investigation and response, accountability, optimum utilisation of resources, andPolice BoardThe State Police Board shall perform the following functions:(a) frame broad policy guidelines for promoting efficient, effective, responsive and accountable policing, in accordance with the law;(b) prepare panels of police for the rank of Director General of Police against prescribed criteria with the provisions of Section 6 of Chapter II;(c) identify performance indicators to evaluate the functioning of the Police Service. These indicators shall, inter alia, include: operational efficiency, public satisfaction, victim satisfaction vis-à-vis police investigation and response, accountability, optimum utilisation of resources, and observance of human rights standards; andS.NoSupreme Court DirectionsPADC FormulationKerala Police OrdinanceBihar Police Act, 2007a report thereon for being placed before the State legislature.(d) in accordance with the provisions of Chapter XIII, review and evaluate organisational performance of the Police Service in the state as a whole as well as district-wise against (i) the Annual Plan, (ii) performance indicators as identified and laid down, and (iii) resources available with and constraints of the police. (S.48)observance of humanrights standards; and(c) review and evaluate organisational performance of the Police Service in the state as a whole as well as district-wise against performance indicators as identifiedand laid down andresources availablewith and constraintsof the police. (S.25)2The Director General of Police of the State shall be selected by the State Government from amongst the three senior-most officers of the Department who have been empanelled for promotion to that rank by the Union Public Service Commission on the basis of their length of service, very good record and range of experience for heading the police force. And, once he has been selected for the job, he should have a minimum tenure of two years irrespective of his date of superannuation. The DGP may, however, be relieved of his responsibilities by the State GovernmentSelection and term ofThe Director General of Police shall be appointed by the Government from amongst those officers of the state cadre of the Indian Police Service who have either already been promoted to such rank or are eligible to be promoted to such rank, considering his overall record of service and experience for leading the police force of the state.Selection and term ofacting in consultation with the State Security Commission consequent upon any action taken against him under the All India Services (Discipline and Appeal) Rules or following his conviction in a court of law in aoffice of the Directoroffice of the DirectorGeneral of PoliceGeneral of Police(1) The State Government shall appoint the Director General of Police from amongst three senior-most officers of the state Police Service, empanelled for the rank.(1) The Director General of Police shall be appointed from a panel of officers consisting of the officers already working in the rank of the Director General of Police, or the officers who have been found suitable for promotion in the rank of Director General of Police after screening by a Committee under the rules made under the All-India Services Act, 1951 (Central Act 61 of 1951).(2) The empanelment for the rank of Director General of Police shall be done by the State Police Board created under section 41 of Chapter V of this Act, considering, inter alia, the following criteria:(2) The Director General of Police so appointed shall normally have a tenure of two years:(a) Length of service and fitness ofProvided that thehealth, standards as prescribed by the State Government;Director General of Police may be transferred from the post before the expiry of his tenure by the Government consequent upon:(b) assessment of the performance appraisal reports of the previous 15 years of service by assigning weightages to different grading, namely, ‘Outstanding’, ‘Very Good’, ‘Good’, &‘Satisfactory’ ;(c) range of relevant4243Public OrderThe Existing Police SystemS.NoSupreme Court DirectionsPADC FormulationKerala Police OrdinanceBihar Police Act, 2007criminal offence or inexperience, including(a) conviction by a courta case of corruption,experience of workof law in a criminalor if he is otherwisein Central Policeoffence or whereincapacitated fromOrganisations, andcharges have beendischarging his duties.training coursesframed by a courtundergone;in a case involving(d) indictment in anycorruption or moralcriminal or disciplinary proceedings or on theturpitude; orcounts of corruption(b) incapacitation byor moral turpitude; orphysical or mentalcharges having beenillness or otherwiseframed by a court ofbecoming unable tolaw in such cases.discharge his functions(e) due weightage toas the Directoraward of medals forGeneral of Police; orgallantry, distinguished(c) promotion to a higherand meritoriouspost under either theservice:State or the Central(3) The Director GeneralGovernment, subjectof Police so appointedto the officer’s consentshall have a minimum tenure of two yearsto such a posting.irrespective of his normal(d) any otherdate of superannuation : Provided that the Directoradministrative reasonswhich may be in theGeneral of Police mayinterest of efficientbe removed from thedischarge of duties.post before the expiry of his tenure by the State(S.6)Government through a written order specifying reasons, consequent upon:(a) conviction by a court of law in a criminal offence or where charges have been framed by a court in a case involving corruption or moral turpitude; or(b) punishment of dismissal, removal, or compulsory retirement from service or of reduction to a lower post, awarded under the provisions of theAll India Services(Discipline andAppeal) Rules 19- or any other relevantS.NoSupreme Court DirectionsPADC FormulationKerala Police OrdinanceBihar Police Act, 2007rule; or(c) suspension from service in accordance with the provisions of the said rules; or(d) incapacitation by physical or mental illness or otherwise becoming unable to discharge his functions as the Director General of Police; or(e) promotion to a higher post under either the State or the Central Government, subject to the officer’s consent to such a posting. (S.6)3Police Officers on operational duties in the field like the Inspector General of Police in- charge Zone, Deputy Inspector General of Police in-charge Range, Superintendent of Police in-charge district and Station House Officer incharge of a Police Station shall also have a prescribed minimum tenure of two years unless it is found necessary to remove them prematurely following disciplinary proceedings against them or their conviction in a criminal offence or in a case of corruption or if the incumbent is otherwise incapacitated from discharging his responsibilities. This would be subject to promotion and retirement of the officer.Term of office of keyThe Government may ensure a normal tenure of two years from the date of assuming charge of the post to the Director General of Police; and to all officers holding charge of Police Stations, Police Circles. Police Sub-divisions, Police Districts, Police Ranges and Police Zones.Transfers & PostingsThe Governmentthetappointing authority may, without prejudice to any other legal or departmental action, transfer any police officer before completing the normal tenure of two years, on being satisfied prima facie that it is necessary to do so on any of the following grounds, namely:—(a) if he is found incompetent and inefficient in the discharge of dutiespolice functionaries(i) The transfers and postings of the Police officers and personnel of Supervisory ranks shall be governed by the rules of Executive Business and such other rules framed by the Government from time to time.(ii) The officers shall ordinarily have a tenure of two years.Provided that any such officer may be transferred from his post before the expiry of the tenure of two years consequent upon:(a) promotion to a higher post; or(b) conviction, or charges having been framed, by a court of law or a criminal offence; or(c) incapacitation by(1) An officer posted as a Station House Officer in a Police Station or as an officer in-charge of a Police Circle or Sub-Division or as a Superintendent of Police of a District shall have a term of a minimum of two years and a maximum of three years:Provided that any such officer may be removed from his post before the expiry of the minimum tenure of two years consequent upon:(a) promotion to a higher post; or(b) conviction, or charges having been framed, by a court of law in a criminal offence; or(c) punishment of dismissal, removal,4445Public OrderThe Existing Police SystemS.NoSupreme Court DirectionsPADC FormulationKerala Police OrdinanceBihar Police Act, 2007discharge or compulsory retirement from service or of reduction to a lower rank awarded under the relevant Discipline & Appeal Rules; orso as to affect the functioning of the police force;physical or mental illness or otherwise becoming unable to discharge his functions and duties; or(d) suspension from service in accordance with the provisions of the said Rules; or(b) if he is accused in a criminal case involving moral turpitude;(d) the need to fill up a vacancy caused by promotion, transfer, or retirement; or(e) incapacitation by physical or mental illness or otherwise becoming unable to discharge his functions and duties; or(c) initiation of departmental proceedings against him;(e) any other administrative reasons, which may be in the interest of efficient discharge of duties. (S.30)(f) the need to fill up a vacancy caused by promotion, transfer, or retirement.(d) if he exhibits a palpable bias in the discharge of duties;(2) In exceptional cases, an officer may be removed from his post by the competent authority before the expiry of his tenure for gross inefficiency and negligence or where a prima facie case of a serious nature is established after a preliminary enquiry:(e) misuse or abuse of powers vested in him;Provided that in all such cases, the competent authority shall report in writing the matter with all details to the next higher authority as well as to the Director General of Police. It shall be open to the aggrieved officer, after complying with the order, to submit a representation against his premature removal to the Police Establishment Committee, which shall consider the same on(f) incapacity in the discharge of official duties.”S.NoSupreme Court DirectionsPADC FormulationKerala Police OrdinanceBihar Police Act, 2007merit and recommend due course of action to the competent authority.Explanation: Competent authority means an officer authorised to order transfers and postings for the rank concerned. (S.13)4The investigating police shall be separated from the law and order police to ensure speedier investigation, better expertise and improved rapport with the people. It must, however, be ensured that there is full coordination between the two wings. The separation, to start with, may be effected in towns/ urban areas which have a population of ten lakhs or more, and gradually extended to smaller towns/urban areas also.State Intelligence andThe Government may, having regard to the population in an area or the circumstances prevailing in such area, by order, separate the investigating police from the law and order police in such area as may be specified in the order to ensure speedier investigation, better expertise and improved rapport with people.State Intelligence andCriminal InvestigationCrime InvestigationDepartmentsDepartments(1) Every state police organisation shall have a State Intelligence Department for collection, collation, analysis and dissemination of intelligence, and a Criminal Investigation Department for investigating inter- state, inter-district crimes and other specified offences, in accordance with the provisions of Chapter(1) There shall be a State Intelligence Department for collection, collation, analysis and dissemination of intelligence, and a Crime Investigation Department for investigating inter- state, inter-district crimes and other specified offences, in accordance with the provisions of this Act.X of this Act.(2) The Government shall appoint a police officer of or above the rank of Inspector General of Police to head each of the aforesaid departments.(2) The State Government shall appoint a police officer of or above the rank of Deputy Inspector General of Police to head each of the aforesaid departments.(3) The Crime Investigation Department shall have specialised(3) The Criminal Investigation Department shall have specialised wings to deal with different types of crime requiring focused attention or special expertise for investigation. Each ofwings to deal with different types of crime requiring focused attention or special expertise for investigation. Each of these wings shall be headed by an officer not below the rank of a Superintendent of4647Public OrderThe Existing Police SystemS.NoSupreme Court DirectionsPADC FormulationKerala Police OrdinanceBihar Police Act, 2007these wings shall be headed by an officer not below the rank ofPolice.(4) The Governmenta Superintendent ofshall appoint an appropriate number ofPolice.officers from different(4) The State Intelligenceranks to serve in theDepartment shall haveCrime Investigationspecialised wings,Department, and the State Intelligenceto deal with andcoordinate specialisedDepartment, astasks such as measuresdeemed appropriatefor counter terrorism,with due regard to thecounter militancy andvolume and variety ofVIP Security.tasks to be handled.(S.14)(5) The State Government shallCreation of Special CrimeInvestigation Unitsappoint by rules prescribed under thisThe Government mayAct, an appropriatecreate, in crime pronenumber of officersareas, Special Crimefrom different ranksInvestigation Units, eachto serve in theheaded by an officer notCriminal Investigationbelow the state cadre rankDepartment, and the State Intelligenceof Sub-Inspector of Police, with such strength ofDepartment, asofficers and staff as maydeemed appropriatebe deemed necessary forwith due regard to theinvestigating economicvolume and variety ofand heinous crimes.tasks to be handled.The personnel posted(S.16)to this unit shall not be diverted to any other duty, except under very special circumstances with the written permission of theDirector General of Police.(S.36)Creation of SpecialInvestigation CellsAt the headquarters of each Police District, one or more SpecialInvestigation Cells will be created, with such strength of officers and staff, as the State Government may deem fit to take up investigation of offences of a more serious nature and other complex crimes,S.NoSupreme Court DirectionsPADC FormulationKerala Police OrdinanceBihar Police Act, 2007including economic crimes. These Cells will function under the direct control and supervision of the Additional Superintendent of Police/ Deputy Superintendent of Police. (S.41)Crime InvestigationDepartmentThe Crime Investigation Department of the state shall take up investigation of such crimes of interstate, inter-district or of otherwise serious nature, as notified by the Government from time to time, and as may be specifically entrusted to it by the Director General of Police in accordance with the prescribed procedures and norms. (S.43)Specialised Units forInvestigationThe Crime Investigation Department will have specialised units for investigation of cyber crime, organisedcrime, homicide cases, economic offences, and any other category of offences, as notified by the Government and which require specialised investigative skills. (S.44)5There shall be a Police Establishment Board in each State which shall decide all transfers, postings, promotions and other service related matters of officers of and below the rank of Deputy Superintendent of Police. The Establishment BoardPolice EstablishmentThe State Government may constitute aTransfer & Posting ofPolice Establishment Board which shall be a departmental body consisting of the Director General of Police as Chairman and four other senior Police Officers of the Department ofCommitteesSubordinate ranks(1) The State Government shall constitute a Police Establishment Committee (hereinafter referred to as the ‘Establishment(1) The Police Officers ranging from the rank of Inspector to Constable will be posted to a particular post within the jurisdiction of the District Superintendent4849Public OrderThe Existing Police SystemS.NoSupreme Court DirectionsPADC FormulationKerala Police OrdinanceBihar Police Act, 2007shall be a departmental body comprising the Director General of Police and four other senior officers of the Department. TheCommittee’) with the Director General of Police as its Chairperson and four other senior-most officers within the police organisation of the state as members.the rank of Additional Director General of Police as members.of Police by the District Superintendent of Police. They will have a tenure of six years in a District, eight years in a Range and ten years in a Zone. Transfers from one district to another within the Range will be done by a committee consisting of the Range DIG and the District Superintendents of Police of the Range. Transfers from one Range to anotherState Government may interfere with(2) Accept and examine complaints from police officersThe functions of the Board shall beRange will be made by a committee consisting of the Zonal IG and all the Range DIGs of the Zone. Transfers from one Zone to another Zone will be made by a committee consisting of the Additional Director General of Police and all the Zonal IGs.decision of the Board in exceptional cases only after recording its reasons for doing so. The Board shall also be authorized to make appropriate recommendations tocers about being subjected to illegal orders.(a) to decide on all transfers, postings, promotions and(2) An officer posted as a Station House Officer in a Police Station or as an officer in-charge of a Police Circle or Sub-Division or as a Superintendent of Police of a District shall have a term of minimum two years:State Government regarding the posting and transfers of officers of and above the rank of Superintendent of Police, and the Government is expected to give due weight to these recommendations and shall normally accept it. It shall also function as a forum of appeal for disposing of representations from officers of the rank of Superintendent of Police and above regarding their promotion/transfer/ disciplinary proceedings or their being subjected to illegal or irregular orders and generally reviewing the functioning of the police in the State.The Establishment Committee shall make appropriatether service related matters of police officers of and below the rank of Inspector of Police, subject to the provisions of the relevant service laws as may be applicable to each category of police officers;Provided that any such officer may be transferred from his post before the expiry of the tenure of two years or more consequent upon:recommendation tothethe Director General of Police for necessary action:(b) to make appropriate recommendations to the State Government regarding the postings and transfers of officers of and above the rank of Deputy Superintendent of Police;(a) promotion to a higher post; orProvided that if the matter under report involves any authority of or above the ranks of the members of the Establishment Committee, it shall forward such report to the State Police Committee for further action.(b) conviction, or charges having been framed, by a court of law in a criminal offence; or(3) The Establishment Committee shall recommend names of suitable officers to the State Government for posting to all the positions in the ranks of Assistant/Deputy Superintendents and above in the police organisation of the state, excluding the Director General of Police. The State Government shall ordinarily accept these recommendations, and if it disagrees with any such recommendation, it shall record reasons for disagreement.S.NoSupreme Court DirectionsPADC FormulationKerala Police OrdinanceBihar Police Act, 2007(4) The Establishment(c) incapacitation byCommittee shall alsophysical or mentalconsider and recommendillness or otherwiseto the Director Generalbecoming unable toof Police the names ofdischarge his functionsofficers of the ranksand duties; orof Sub-Inspector and Inspector for posting(d) the need to fill up bya vacancy causedto a Police Range onpromotion, transfer, orinitial appointment, or for transfer from oneretirement; orPolice Range to another, where such transfer is(e) any otheradministrative reasonsconsidered expedient forwhich may be in thethe Police Service.interest of efficient(5) Inter-district transfersdischarge of duties.and postings of non- gazetted ranks, within a Police Range, shall be decided by the Range(S.10)Deputy InspectorGeneral, as competent authority, on the recommendation of aCommittee comprising all the DistrictSuperintendents of Police of the Range.(6) Postings and transfers of non-gazetted police officers within aPolice District shall be decided by the DistrictSuperintendent of Police, as competent authority, on the recommendation of a District-levelCommittee in which all Additional/Deputy/Assistant Superintendents of Police posted in theDistrict shall be members.(7) While effecting transfers and postings of police officers of all ranks, the concerned competent authority shall ensure that every officer is ordinarily allowed a minimum5051Public OrderThe Existing Police SystemS.NoSupreme Court DirectionsPADC FormulationKerala Police OrdinanceBihar Police Act, 2007tenure of two years in a posting. If any officer is to be transferred before the expiry of this minimum term, the competent authority must record detailed reasons for the transfer.(8) No authority other than the authority having power under this Act to order transfer shall issue any transfer order. (S.57)6There shall be a Police complaints Authority at the district level to look into complaints against police officers of and up to the rank of Deputy Superintendent of Police. Similarly, there should be another Police complaints Authority at the State level to look into complaints against officers of the rank of uperintendent of Police and above. The district level Authority may be headed by a retired District Judge while the State level Authority may be headed by a retired Judge of the High court/Supreme court. The head of the State level complaints Authority shall be chosen by the State Government out of a panel of names proposed by the chief Justice; the head of the district level complaints Authority may also be chosen out of a panel of names proposed by the chief Justice or a Judge of the High court nominated by him.Police AccountabilityThe GovernmentDistrict Accountabilityshall establish a Police complaints Authority at the State level to look into complaints of grave misconduct against police officers of and above the rank of Superintendent of Police as well as serious complaints including death, grievous hurt or rape or molestation of women in police custody against officers of all ranks.(2) The State Authority shall consist of the following members, namely:—(i) a retired judge of a High court who shall be the chairman of the Authority;(ii) a serving officer of the rank of Principal Secretary to Government; and(iii) a serving officer of Police.The Government shall establish PolicecommissionAuthorityThe State Government shall, within three months of the coming into effect of this Act, establish a State-level Police Accountability commission (“the commission”), consisting of a chairperson, Members and such other staff as may be necessary, to inquire into public complaints supported by sworn statement against the police personnel for serious misconduct and perform such other functions as stipulated in this chapter. (S.159)(1) The Government shall establish in each district “District Accountability Authority” for such functions as mentioned in Section 61.District Accountability(2) The District Accountability Authority shall be presided over by the District Magistrate and shall have Superintendent of Police as a member and senior- most Additional District Magistrate/ Additional collector as Member- Secretary. (S.59)Functions of DistrictAccountability Authority(1) The District Accountability Authority shall:(a) monitor the status of departmental inquiries oraction on the complaints of “misconduct” against officers below the rank of Assistant/ Deputy Superintendent of Police, through a quarterly report obtained periodicallyAuthoritythe rank of Additionalto Director General ofinquiries(1) The State Government shall establish in each police district or agroup of districts in a police range, a District Accountability Authoritymonitor departmentalinto cases of complaints of misconduct against police personnel, as defined in Section 167(3). (S. 173)S.NoSupreme CourtPADC FormulationKerala PoliceBihar Police Act, 2007DirectionsOrdinancefrom the District Superintendent of Police;(b) issue appropriate advice to the District Superintendent of Police for expeditious completion of inquiry, if, in the Authority’s opinion, the inquiry is getting unduly delayed in any such case;(2) The Authority may also, in respect of a complaint of “misconduct” against an officer below the rank of Assistant/ Deputy Superintendent Police, call for a report from, and issue appropriate advice for further action or, if necessary, a direction for fresh inquiry by another officer, to the District Superintendent of Police when a complainant, being dissatisfied by an inordinate delay in the process of departmental inquiry into his complaint of “misconduct” or outcome of the inquiry if the principles of natural justice have been violated in the conduct of the disciplinary inquiry, brings such matter to its notice;Provided that the provisions contained in sub-sections (1) and (2) above shall not be construed to, in any manner, dilute the disciplinary, supervisory and administrative control of District Superintendent of Police. (S.60)complaints Authority at the district level to look into complaints against police officers of and up to the rank of Deputy Superintendent of Police.The District Authority shall consist of the following members, namely:—(i) a retired District Judge, who shall be the chairman;(ii) the District collector; and(iii) the District Superintendent of Police:The recommendations of the Authority or Authorities, for any action, departmental or criminal, against a delinquent police officer shall be binding in so far as initiation of departmental proceedings or registration of a criminal case is concerned. Such recommendation shall, however, not prejudice the application of mind by the enquiry officer or the investigating officer when he is conducting the departmental enquiry or criminal investigation, as the case may be.5253Public OrderThe Existing Police SystemS.NoSupreme Court DirectionsPADC FormulationKerala Police OrdinanceBihar Police Act, 20077The Central Government shall also set up a National Security Commission at the Union level to prepare a panel for being placed before the appropriate Appointing Authority, for selection and placement of Chiefs of the Central Police Organisations (CPOs), who should also be given a minimum tenure of two years. The Commission would also review from time to time measures to upgrade the effectiveness of these forces, improve the service conditions of its personnel, ensure that there is proper coordination between them and that the forces are generally utilized for the purposes they were raised and make recommendations in that behalf. The National Security Commission could be headed by the Union Home Minister and comprise heads of the CPOs and a couple of security experts as members with the Union Home Secretary as its Secretary.3.6 Reforms in Other CountriesThe Commission has specifically studied the police systems as well as police reforms undertaken in three countries viz. South Africa, United Kingdom and Australia (with particular reference to New South Wales). These countries were selected because they have many commonalities with not only our police system but also with our polity and governance structures. South Africa, for example, restructured their entire governance system, including the police, after the end of apartheid and has thus transformed a repressive colonial force intoa police service accountable to the people. Our present police system has many similarities in its organisation and duties with the police in the UK. That government carried out major reforms in their governance and police structures in the last two decades and today the police in the UK is universally acknowledged for its high standards of professionalism and citizen friendliness. Australia is a federal country with the police being a subject of the provincial government as in our country. They have introduced new mechanisms of police accountability which have been widely acclaimed. Some useful lessons, relevant to our country, have been drawn from all these reforms.3.6.1 South Africa3.6.1.1 In the early nineties, South Africa embarked upon an ambitious programme of police reform based on democratic principles. Ever since its establishment, the South African Police (SAP) had performed the colonial role of subjugating the local population. Earlier, the police forces in South Africa were known for their brutality, corruption and ineptitude. The police was structured on military lines. Control of crime was not through investigation and recourse to courts but through heavy handed action of the police. Investigations meant extracting confessions and custodial torture was the norm. However, with the end of apartheid, the South African Police embarked on an internal reform initiative - a response both to the changing political environment signalled by the release of Dr. Mandela, the lifting of the ban on the liberation movements in 1990 and to the pressure of changing crime trends and international scrutiny. The SAP’s 1991 Strategic Plan highlighted six areas of change22 :?Depoliticisation of the police force;?increased community accountability;?more visible policing;?establishment of improved and effective management practices;?reform of the police training system (including some racial integration); and?restructuring of the police force.3.6.1.2 In 1991, an Ombudsman was appointed to investigate allegations of police misconduct. Besides, the recruitment of black police personnel was increased, a civilian riot-control unit that was separate from the SAP was formed, a code of police conduct was evolved and training facilities were enhanced. In 1992, the restructuring of SAP into a three-tiered force started - a national police, primarily responsible for internal security and for serious crime; autonomous regional forces, responsible for crime prevention and for matters of general law and order; and municipal police, responsible for local law enforcement and for minor criminal matters. Police/community forums were formed in almost every police station.545522 Police Reform and South Africa’s Transition by Janine Rauch Paper presented at the South African Institute for International Affairs conference, 2000; retrieved from OrderThe Existing Police System3.6.1.3 The Interim Constitution, 1993 laid the foundation of a democratically controlled police system in South Africa. The principles of structuring the police were stipulated by the Constitution of the Republic of South Africa, 1996, which mandates that the national police service must be structured to function in the national, provincial and, where appropriate, local spheres of government. It also provides that a national legislation must establish the powers and functions of the police service and must enable the police service to discharge its responsibilities effectively, taking into account the requirements of the provinces. The process of transforming a repressive police force into a democratically controlled police service formally started with the enactment of the South Africa Police Services Act, 1995. The salient features of this Act are:?The South African Police Service shall be structured at both National and Provincial levels and shall function under the direction of the National as well as Provincial Governments.?National and Provincial “Secretariats for Safety and Security”, which would advise the political executives in the provinces on police policy matters, would monitor the adherence of the police to new policy, promote democratic accountability and transparency, evaluate the functioning of police etc.?The Police Service shall liaise with the community through community forums and area and provincial Community Police Boards. (Sections 18-23).?“Independent Complaints Directorate” to be established, which would receive and investigate public complaints of police misconduct. The Directorate would be independent of the police and would report directly to the Minister of Safety and Security (Sections 50-54).?Local governments were empowered to establish municipal or metropolitan police service.233.6.2 United Kingdom3.6.2.1 A structured police force was first established by the Metropolitan Police Act, 1829. The Police Act, 1919 brought in some reforms including a guaranteed pension for the police and prohibition of trade unions among the police (however a Police Federation was set up). The Police Act, 1946 provided for the amalgamation of smaller borough police forces with county constabularies in England and Wales. Following this merger, there were 133 police forces in the UK.3.6.2.2 As a sequel to a couple of high profile scandals involving borough police forces, the Royal Commission on the Police was appointed in 1960 under the chairmanship of Henry Willink to “to review the constitutional position of the police throughout Great Britain,the arrangements for their control and administration and, in particular, to consider:- (1) the constitution and functions of local police authorities; (2) the status and accountability of members of police forces, including chief officers of police; (3) the relationship of the police with the public and the means of ensuring that complaints by the public against the police are effectively dealt with; and (4) the broad principles which should govern the remuneration of the constable, having regard to the nature and extent of police duties and responsibilities and the need to attract and retain an adequate number of recruits with the proper qualifications”.24 Some of its recommendations were25:?No single national force was to be formed, but central government should exercise more powers over local forces?Retention of small police forces of between 200 and 350 officers “justifiable only by special circumstances such as the distribution of the population and the geography of the area”?The optimum size for a police force was more than 500 members, with the police area having a population of at least 250,000?There was “a case” for single police forces for major conurbations3.6.2.3 Following the recommendations of the Royal Commission, the Police Act received Royal assent in 1964. The old county and borough police authorities were replaced with ‘police authorities’ composed of two-thirds elected representatives and one-third magistrates. These new police authorities had far less powers than the earlier county and borough authorities. The powers of the Home Secretary over the police were increased. One of the effects of this Act was the reduction in the number of police forces.3.6.2.4 The Police and Criminal Evidence Act, 1984 (PACE) instituted a legislative framework for the powers of police officers in England and Wales to combat crime, as well as provide codes of practice for the exercise of those powers. The aim of the PACE Act was to establish a balance between the powers of the British police and the rights of members of the public. In 1996, an Act to consolidate the Police Act, 1964, Part IX of the Police and Criminal Evidence Act, 1984, Chapter I of Part I of the Police and Magistrates’ Courts Act, 1994 and certain other enactments relating to the police, was enacted as the Police Act, 1996. Under this Act, Police Authorities were established for each police force. Every police authority had the responsibility of securing the maintenance of an efficient and effective police force for its area (No Police Authority was constituted for the London Metropolitan City under this Act). Under the Act, the Secretary of State was given the overall powers of superintendence and control of all police forces. It was also stipulated that the chief constable of a police force shall be appointed by the police authority responsible for maintaining the Force, but subject to the approval of the Secretary of State. The Act565723 South Africa’s metropolitan municipalities of Ethekwini (Durban), Cape Town, Johannesburg, Ekurhuleni (Greater East Rand) and Tshwane (Pretoria)24 Source: ; retrieved on 5-4-07have established Metropolitan Police Departments. The functions of municipal police include traffic policing, crime prevention and municipal by-law25 Source-WikipediaenforcementPublic OrderThe Existing Police Systemalso established the Police Complaints Authority. The Police Act, 1997 constituted the National Crime Intelligence Service Authority. The Police Reform Act, 2002 established the Independent Police Complaints Commission.3.6.2.5 The Greater London Metropolitan Authority Act amended the Police Act, 1996 and established the Metropolitan Police Authority (MPA). The Metropolitan Police Authority has twenty-three members – twelve from the London Assembly appointed by the Mayor, four magistrates appointed by the Greater London Magistrates Courts Association and seven independent members, one appointed directly by the Home Secretary, with other members appointed on the basis of open advertisements. Members are appointed for a period of four years. The Chairperson of the MPA is chosen by the members among themselves.3.6.2.6 One of the key strategies identified by the Metropolitan Police Service (MPS) is promoting community cohesion and integration. The MPS has constituted a Diversity and Citizen Focus Directorate to consult communities so as to understand and get a feed back from them. Besides, the MPS has also introduced Safer Neighbourhood Teams in all localities.263.6.2.7 The Serious Organised Crimes and Police Act, 2006 established the Serious Organised Crime Agency (SOCA). The Agency has been formed by the amalgamation of the National Crime Squad (NCS), National Criminal Intelligence Service (NCIS), that part of HM Revenue and Customs (HMRC) which deals with drug trafficking and associated criminal finance and a part of UK Immigration dealing with organised immigration crime(UKIS). This Act seeks to enable SOCA staff and police to compel people to cooperate with investigations; streamline police powers of arrest and search in the Police and Criminal Evidence Act and extend the powers of Community Support Officers and other police support staff.3.6.3 Australia3.6.3.1 Organised policing started in New South Wales (NSW) in the early nineteenth century. In 1862, the Police Regulation Act amalgamated several independent police units in one police force. The Police Regulation Act, 1899 replaced the earlier Act and regulated the police force until 1990 when the Police Act, 1990 came into force. As per the provisions of this Act, the Commissioner is the head of the police force and is appointed by the Governor on the advice of the concerned Minister. The Act stipulates that the Minister shall consult the Police Integrity Commission as to the integrity of the person being recommended. The Commissioner holds office for a period specified in the the instrument of appointment. Appointments to executive positions are made by the Governor on the recommendationof the Commissioner, while appointments to non executive positions are made by the Commissioner by way of transfer or promotion or otherwise. The Act also authorises the Commissoner to conduct ‘integrity testing programmes’ to test the integrity of any police officer.3.6.3.2 Following a debate in the Legislative Assembly in 1994 on police performance, a Royal Commission to look into the New South Wales Police Service was constituted. Among other issues, the Commission was required to investigate the existence or otherwise of systemic or entrenched corruption in the police. At that time the anti-corruption mechanism was a mix of internal and external oversight. The Commission concluded that a state of systemic or entrenched corruption existed and the investigative framework to deal with cases of corruption was seriously inadequate. The Commission recommended the setting up of a permanent Police Integrity Commission. This led to the passage of the Police Integrity Commission Act, 1996. The principal objectives of the Act were:27?to establish an independent, accountable body whose principal function is to detect, investigate and prevent police corruption and other serious police misconduct,?to provide special mechanisms for the detection, investigation and prevention of serious police misconduct and other police misconduct,?to protect the public interest by preventing and dealing with police misconduct, and?to provide for the auditing and monitoring of particular aspects of the operations and procedures of the NSW Police Force.3.6.3.3 The Police Integrity Commission (PIC) is a one Member Commission appointed by the Governor. Its primary function is to prevent police misconduct. It has been authorised to investigate or oversee other agencies to investigate police misconduct. It has wide ranging powers that include enforcing attendance of witnesses, issuing search warrants, seizure of documents, use of listening devices (such as for tapping phones), and can even recommend punishment for contempt. The right to silence which is generally available to the accused is not available in the proceedings under the Police Integrity Commission Act. It has also been stipulated that the Commission may complete its investigation despite any proceedings that may be before any court. Furthermore, an Inspector (a State Supreme Court Judge) is appointed by the Governor to audit the operations of the Police Integrity Commission for the purpose of monitoring compliance with the law of the State. Both the Police Integrity Commission and the Inspector report directly to the Legislature and have all the powers of investigation and summoning witnesses. Besides, the system fixes responsibility at each level and simultaneously vests them with corresponding authority.585926 Source: Website of the Metropolitan Police Service, London; Section 3, Police Integrity Commission Act. 19964Public Order3.6.3.4 The Police Integrity Commission is in addition to the Independent Commission against Corruption (ICAC) and an Ombudsman. However, in order to prevent overlap of jurisdiction it has been provided that any complaint made to ICAC or the Ombudsman should be referred by them to the PIC, if it is connected to police misconduct. The Australian model is a good example of the intricate web of accountability and checks and balances required in dealing with police agencies in a democratic society seeking to harmonize imperatives of public order and effective crime investigation with human rights and integrity.3.7 In India, recommendations pertaining to police reforms, as mentioned earlier, have been made by a number of Commissions/Committees. However, the follow-up on these recommendations has been somewhat ad hoc and mostly minimal. Therefore, in the absence of a comprehensive approach to police reforms, the police system in most of the states continues to be beset with many shortcomings and the transformation of the Force as envisaged by various Commissions into an effective instrument of public service governed by the rule of law and safeguarding peace and order has not really taken place. The Commission in this Report has tried to redress this situation by taking a comprehensive view of the reports of earlier Commissions, as well as the formulations proposed by PADC, the directions of the Supreme Court and the best practices in various countries.CORE PRINCIPLES OF POLICE REFORMSThat there is need for police reforms in keeping with the requirements of a modern, democratic State is self-evident. A careful examination of the literature on the subject and the suggestions of various expert bodies show, however, that there is significant divergence of opinion on several issues of reform. Also, several recommendations have been made in the past in isolation, without regard to the linkages with other facets of police administration and the judiciary. The Commission therefore feels that it would be useful to outline the overarching principles of reform in the police and criminal justice system. Once such principles find acceptance, a reform package can be evolved in an integrated manner. Police constitute the key element of the power of the State to enforce compliance with the laws of the land and a vital continuing institution to safeguard citizens and public property. Therefore, police reforms must ensure minimal dislocation. Reform must meet the growing challenges of urbanization and emerging threats to constitutional order, even as a humane, effective, citizen-friendly police is institutionalised. On the basis of the analysis and recommendations of various expert bodies and inputs from citizens, civil society groups and professionals, the Commission is of the view that the following eight core principles should form the bedrock of police and criminal justice reforms:4.1 Responsibility of the Elected Government4.1.1 In a democracy, the government is elected to serve the people. People transfer a part of the right over their lives to government in order to serve the common goal of ensuring public order and protecting the liberties of all citizens. It is but natural that such an elected government must have authority. In our system, government is accountable to the legislature and to the people. Government must exercise real authority once elected to office. The imperatives of impartial investigation and fair trial demand autonomous functioning of the investigative and prosecution wings. But the overall accountability to the elected legislature and broad direction and supervision of the duly constituted government cannot be diluted. Also, several other functions of police including protection of public property, fight against terrorism, riot control and maintenance of law and order and intelligence gathering to anticipate threats need to be monitored and supervised by the political executive. Any6061Public OrderCore Principles of Police Reformsreform proposal must recognise this requirement of democratic accountability and the responsibility of the political executive and elected legislatures. A police free from political direction can easily degenerate into an unaccountable force with the potential to undermine the foundations of democracy. The coercive power of the police can easily extinguish liberty unless it is tempered by responsible political direction. A corollary or welcome consequence of responsible political direction will be the much needed depoliticisation of the police.4.2 Authority, Autonomy and Accountability4.2.1 At the same time, the various wings of police should have the authority and resources to fulfill their responsibilities. Each such wing should have functional and professional autonomy commensurate with its requirements. For instance, intelligence wings need to have the flexibility to recruit personnel at short notice through summary procedures and the authority to procure sensitive intelligence-gathering technology without having to go through normal procurement processes. Traffic police need the resources to deal with the increasingly complex urban transport challenges, the quasi-judicial authority to impose fines on offenders when facts are incontrovertible or uncontested and flexible funding mechanisms without tortuous financial clearances. Police for riot control need a clear and unambiguous framework in which to operate, ready reinforcements when necessary and the confidence that bonafide use of force will not lead to victimisation. For each arm of the police, these requirements of authority and autonomy need to be spelt out clearly and codified. However, such autonomy and authority should be accompanied by clearly defined formal systems of accountability. Ours is an evolving democracy and our institutions need to be constantly refashioned to suit changing needs. In our system of compensatory errors, often the failings and distortions of one institution are compensated by the distortions of another institution. If policemen resort to third degree methods, political oversight of police functioning can unearth such torture and protect the citizen. Therefore any autonomy must be accompanied by strong and verifiable systems of accountability so that the citizen is protected from abuse of authority. In a democracy struggling to reform its colonial institutions, there is nothing more frightening and enfeebling to a citizen than to be at the receiving end of police excesses. Any reform will yield dividends only when the efficacy of the system is enhanced while ensuring that the propensity for abuse of authority is curbed. As Paster Niemoller said “Man’s capacity for justice makes democracy possible; man’s inclination to injustice makes democracy necessary!”4.2.2 Although no one disputes that the police has to be accountable, there are differing views as to whom the police should be accountable to. It has often been argued that the police are answerable and accountable to too many authorities and institutions. They areanswerable to their higher-ups in the organisation, they are answerable to the judiciary and the executive magistracy, to the political executive and to the public. There is another view that the existing accountability mechanisms especially outside the police hierarchy are in fact too weak to extract any kind of accountability.4.2.3 There is a school of thought that the police should be accountable to the law and law alone. This, it is argued, would give the police the required autonomy to function in a fair and impartial manner and would totally insulate them from political and bureaucratic interference. This argument is based on Lord Denning’s historical judgement28 (1968):“I have no hesitation in holding that, like every constable in the land, he [the Police Commissioner] should be, and is, independent of the executive. He is not subject to the orders of the Secretary of State, save that under the Police Act, 1964, the Secretary of State can call upon him to give a report, or to retire in the interests of efficiency.I hold it to be the duty of the Commissioner of Police of the Metropolis, as it is of every chief constable, to enforce the law of the land. He must take steps so to post his men that crimes may be detected; and that honest citizens may go about their affairs in peace. He must decide whether or not suspected persons are to be prosecuted; and, if need be, bring the prosecution or see that it is brought.But in all these things he is not the servant of anyone, save the law itself. No Minister of the Crown can tell him that he must, or must not, keep observation on this place or that; or that he must, or must not, prosecute this man or that one. Nor can any police authority tell him so. The responsibility for law enforcement lies on him. He is answerable to the law and the law alone.”4.2.4 The Patten Commission,29 however, had just the opposite view:“Lord Scarman noted that the constitutional control of accountability meant that, while the police should exercise independent judgment, they were also the servants of the community and could not effectively enforce their judgment without the support of that community. We strongly agree with this, and we disagree with Lord Denning’s view that the police officer “is not a servant of anyone, save of the law itself ”; accountability to the law is vital but accountability is a much wider concept than that. It raises questions both of structure – the institutional relationship between the police and government both at central and local levels – and the style and purpose of policing. It involves partnerships – “constructive and inclusive partnerships with the community at all levels”, in the words of the Agreement. And it involves transparency – the police being open and informative about their work and amenable to scrutiny”626328 Extracts from Lord Denning’s judgement in R V Metropolitan Police Commissioner; ex parte Blackburn [1968] 2 QB 118;Annual Report of CBI, 2004; retrieved from ; retrieved on 26-3-07.29 The Independent Commission for Policing in Northern Ireland, 1998-99.Public OrderCore Principles of Police Reforms4.2.5 This Commission is of the considered view that accountability to law means allegiance to the law of the land and this is unexceptionable. The mode and manner of accountability of public servants, including police personnel has, however, to be laid down by law itself for the obvious reason that without the enabling framework, accountability would be rendered meaningless. In our sovereign democratic republic the citizen is the focus of all public service and it is therefore imperative that all government functionaries have citizen centered accountability laid down in sufficient detail in the laws of the land. This is all the more necessary in a scenario where all public services are best executed in a participative mode. The Commission, therefore, feels that apart from being accountable to law, public servants are also accountable to the public and public institutions established by law.4.3 Disaggregation and Deconcentration4.3.1 One of the major problems impeding police reforms stems from the traditional approach of clubbing a variety of disparate functions in a single police force and concentrating all authority at one level. A single, monolithic force now discharges several functions: maintaining law and order, riot control, crime investigation, protection of State assets, VIP protection, traffic control, ceremonial and guard duties, service of summons and production of witnesses in courts, anti-terrorist and anti-extremist operations, intelligence gathering, bandobast30 during elections, crowd control and several other miscellaneous duties. Often, even fire protection and rescue and relief are treated as police functions. In addition, giving support to state functionaries in removal of encroachments, demolition of unauthorised structures and such other regulatory activities are also treated as police responsibilities. Aggregation of all these functions in a single police force is clearly dysfunctional for four reasons: First, the core functions are often neglected when the same agency is entrusted with several functions. Second, accountability is greatly diluted when duties cannot be clearly and unambiguously stated and performance cannot be measured and monitored. Third, the skills and resources required for each function are unique and a combination of often unrelated functions undermines both morale and professional competence. Fourth, each function requires a different system of control and level of accountability. When a single agency is entrusted with all functions, the natural propensity is to control all functions by virtue of the need to control one function.4.3.2 As already stated, mere mechanical and uniform application of law in all situations will do irreparable damage to public interest. Therefore, the elected government and executive magistracy should broadly guide the use of force in riot situations. Crime investigation is a quasi-judicial function of the police, and painstaking professional methods are involvedin interrogation, gathering of evidence and forensic examination. There is no case here for supervision by the political executive or executive magistracy. However, as civilian supervision of police is inevitable in order to guide riot control and deployment of forces, such supervision will inevitably transgress into crime investigation when the same police force discharges both functions. By horizontal fusion of disparate functions, the executive control necessary for law and order and other service functions also spills over to the domain of crime investigation.4.3.3 Traditionally the police forces have been structured on the pattern of the armed forces. Insignia similar to those of the armed forces, hierarchical control extending from the SHO to DGP, a culture of demanded obedience, and a structure of units and formations have made police a highly centralised force. Inevitably, the Inspector General of Police in the earlier decades and now the chief of police designated as the Director General and Inspector General (DG & IGP) has become the focus of authority of a vast police force discharging diverse functions. Much therefore hinges on the personality of the DG & IGP, the method of appointment, tenure, competence, integrity and ability to command loyalty of the force. While such a focus of authority has certain advantages like potential for coordination, it is arguably dysfunctional because of over-centralisation.4.3.4 At the same time, disaggregation and deconcentration cannot be pushed to the extreme. There is need to strike a balance between authority and accountability, and between autonomy and coordination. Excessive fragmentation of the police force is as detrimental to public good as over-concentration. The Commission is of the view that three broad categories of functions can be clearly identified and the police force can be structured on those lines, while setting up mechanisms for effective coordination to prevent water-tight compartmentalisation; no agency of state can be an island, and each must support and draw strength from others. The three categories are:Crime investigation – this function would, in particular deal with serious offences. Crime investigation can be treated as a quasi-judicial function and an elite agency can be created to discharge this crucial function.Law and order – maintenance of law and order is another important function of police. This function includes intelligence gathering, preventive measures and riot control. Performance of this function requires close interaction with other government agencies, especially the Executive Magistrates. This function should be with the ‘law and order’ police. Besides, all crimes not investigated by the Crime Investigation Agency could also be handled by this police Agency. These functions and other service functions can be combined under the control ofthe chief of law and Order police in the state. Other646530 bandobast is a Hindi/Urdu word, meaning arrangementsPublic OrderCore Principles of Police Reformsperipheral services like protection of State assets, ceremonial duties, service of summons etc. can be progressively outsourced.Local policing - Many functions like enforcement of civic laws, traffic control, investigation of petty crime, patrolling and management of minor law and order problems can be effectively supervised by local governments. Apart from these local functions, other functions performed by law and order police can be progressively transferred to elected local governments over a definite period of time, but with adequate institutional checks and safeguards to prevent abuse of office.4.4 Independence of Crime Investigation4.4.1 The perception of an average citizen is that the police is essentially a crime prevention and investigation agency. Unearthing evidence in a crime, identifying the culprit, establishing the means, motive and opportunity, presenting evidence in a court of law through the prosecution, and securing a conviction are all critical functions of the police. Many citizens, fed on a staple of detective fiction, crime thrillers and television serials portraying police functioning, regard painstaking crime investigation and police assistance in prosecution as the key functions of the police. However, in real life this core function, often, is relegated to the background. Excessive reliance on ‘brawn’ in other areas has blunted the professional skills required for effective investigation. The use of third degree methods to extract a confession from an accused or obtain cooperation of the culprit to recover stolen goods or unearth other evidence sometimes replace analytical investigation. Failure to link all the threads in a criminal case and produce clinching evidence often leads to over-reliance on oral testimony in court. In our country, where perjury does not have serious legal or social consequences, witnesses often turn hostile because of inducement or fear. This again leads to lower conviction rates. The net result of deficiencies in crime investigation is the widespread belief that crime pays and the perpetrator can escape the clutches of law. It is usually the poor and illiterate who are victims of third degree methods and are convicted on the basis of oral evidence. The well-connected and better-off sections of society often find it easy to escape the consequences of their crimes as they are able to subvert crime investigation and the due process of law.4.4.2 Over the years, the failure of the criminal justice system has led to a pervasive atmosphere of lawlessness. There has been a proliferation of criminal groups providing rough and ready justice through brutal means. There is a growing ‘market demand’ for such gangs to ‘settle’ land disputes, ‘enforce’ contracts, or collect ‘dues’. There are instances of financial institutions hiring musclemen to recover dues from borrowers. Over time, these‘crime lords’ who make a profitable career out of dispensing rough and ready ‘justice’ have found politics attractive as a second career. This is because experience has taught them that once a person dons political robes, he can ‘control’ the police and influence crime investigation to his advantage. What is worse, police can at times even be protectors and allies of crime syndicates. This process has led to the criminalisation of politics. It is in this background that many expert bodies and jurists have been urging that crime investigation should be separated from other police functions and needed autonomy, professional skills and improved infrastructure provided to deal with the challenges of rising crime.4.4.3 When a police force is believed to be unresponsive to common citizens and pliant to politicians, the innocent victims of crime are forced to seek the help of politicians and middlemen even for the registration of an FIR, or pursuing an investigation. The lack of professionalism in an overburdened, under-funded and poorly-skilled police force, coupled with undue interference has led to lower level of trust in law enforcement. Many honest and hard-working policemen and officers do their best to serve society, but they are powerless to reverse the decline in standards of crime investigation. As a result, enforcement of rule of law and prosecuting and punishing the guilty have become major challenges in our governance.4.4.4 Given these circumstances, the Commission is of the view that a separate, elite crime investigation agency of police should be created in each state and it must be completely insulated from undue political and partisan influences. While separating crime investigation from other functions, care must be taken to ensure that the crime investigation agency is not overburdened with petty offences, unable to apportion sufficient time for the investigation of serious crimes. It is therefore advisable to entrust only specified cases to the separately created elite crime investigation agency. Such an investigative agency must be well-trained and supported by adequate infrastructure including a network of forensic laboratories. This would in effect mean that the existing set-up for special investigation of crimes (crime branch/CID/COD etc) would be replaced by an autonomous crime investigation agency with statutory jurisdiction.4.4.5 The crime investigation agency will be impervious to political and partisan influences only when the recruitment, placements and supervision are professionally managed in a transparent and efficient manner. Yet, the political executive must have the opportunity to give broad guidelines.6667Public OrderCore Principles of Police Reforms4.5 Self-esteem of Policemen4.5.1 Nearly 87% of all police personnel are constables31. The constable is the lowest level at which recruitment takes place. The educational requirement for selection of a constable is a school leaving certificate. A constable can generally expect only one promotion in a life time and normally retires as a head constable. An average constable has little hope of becoming a Station House Officer (SHO). The statutory powers of investigation are with the Station House Officer who is usually a sub-inspector in rural police stations, and an inspector in urban police stations. As a result, constables have become ‘machines’ carrying out the directions of their superiors with little application of mind or initiative. Constant political interference in transfers, placements and crime investigation, long and difficult working hours, the menial duties they are often forced to perform as orderlies to senior officers, and the emphasis on brawn rather than brain in most situations tend to brutalise and dehumanise policemen. A constable devoid of dignity, lacking opportunities for vertical mobility, constantly pilloried by superiors and politicians, often derided by the public and habituated to easy recourse to violence and force cannot generally be expected to sustain his/her self-esteem or acquire the professional skills to serve the citizens.4.5.2 Apart from the constabulary, the police force is top heavy. There is over-crowding at the top with no real strength at middle-management levels. Recruitment in most states is at several levels – constabulary, sub-inspector, deputy superintendent of police, and the Indian Police Service. Several tiers of recruitment have diminished opportunities for promotion and the level of recruitment by the accident of an examination often determines career progression, not competence, professionalism, integrity and commitment. Lateral entry to the police is not feasible, as rigorous training, experience, expertise and knowledge of peers and colleagues are vital to the police service. Since this is a sovereign function, no agency or experience outside government prepares outsiders for police work. At the same time, incentives for performance within the police agencies are feeble.4.5.3 The Commission is of the view that police recruitment needs to be restructured significantly in order to enhance motivation and morale, professionalism and competence of the personnel. This would require empowerment of the cutting edge functionaries and commensurate upgradation of their calibre and skills.4.6 Professionalisation, Expertise and Infrastructure4.6.1 Effective crime investigation, competent law and order management and useful intelligence gathering demand high standards of professionalism and adequate infrastructural and training support. Specialised training facilities are vital to hone skills and constantlyupgrade them. Forensic laboratories need to be established for every district or a group of districts – at least one per 3 to 4 million population. Only such well-endowed forensic facilities will help police agencies to meet the growing challenge of combating crime in a rapidly urbanising society. Strong communications support, state-of-the-art weapons, non-lethal, modern tools for riot control and a high degree of mobility are prerequisites for modern policing. Adequate resources, technology and manpower need to be deployed on a continuing basis to meet these requirements. Like national defence, internal security and public order cannot be compromised under any circumstances, if the integrity of the State and constitutional values are to be protected.4.7 Attendant Criminal Law Reform4.7.1 Police reforms by themselves, though necessary, are not sufficient. There is a growing perception in the minds of people that getting a criminal punished is a difficult proposition. The low conviction rates and the delays in disposal of cases reaffirm this belief. It is therefore necessary that other parts of the criminal justice system are also made effective and efficient.4.7.2 The number of courts is India is inadequate to meet the requirement of justice. It is well-known that our judge-population ratio is of the order of 11 to 1 million32, whereas in many developed democracies it is of the order of 100 to 1 million, or nearly ten times that of the strength of the Indian judiciary. The resultant inaccessibility, coupled with archaic and complex procedures has made our justice system slow, inaccessible and in reality unaffordable. The pendency of over 25 million cases is a testimony to this. It is therefore not surprising that people, particularly the poor and vulnerable, have little faith in the system’s capacity to deliver justice or enforce their rights. Consequently, they hesitate to approach courts and are often forced to accept injustice and suffer silently. Some even resort to extra-legal methods to obtain rough and ready justice through musclemen and organised gangs. This is leading to a culture of lawlessness in society and is a serious threat to public order in the broader sense of the term. Therefore, enhancing the strength of judges and creation of local courts to settle disputes and punish crimes swiftly are vital.4.7.3 In addition, there is need to amend procedural aspects of law in keeping with the times. Once the police act independently but with accountability, there would be need to trust them and amend the provisions of law to restore this trust, such as by making statements recorded by the police, admissible. Given the propensity of witnesses to perjure themselves in our courts, we need to strengthen the law against perjury, and make truthful evidence the norm in courts. The challenge posed by terrorists and armed groups to national unity and integrity must be countered by appropriate legal provisions. The role of the Union686931 Source: The Padmanabhaiah Committee Report, 2000.32 The sanctioned strength of subordinate judges was 14582 and the working strength was 11723 on 30th April, 2006. Extracted from the speech ofHon’ble Justice Y K Sabharwal, Chief Justice of India, 25th July 2006.Public OrderCore Principles of Police Reformsgovernment in respect of inter-state crimes, organised crime, terrorism etc also needs to be redefined to be able to protect national interests.4.8 Police to be a Service4.8.1 The preamble of the United Nations Basic Principles on the use of Force and Firearms recognises that “the work of law enforcement officials is a social service”. The European code of Police Ethics states that the police shall be organised with a view to earning public respect. During the colonial era the police was primarily used as a ‘force’ in the hands of the government of the day to suppress any uprisings by the locals. Even today the police is not totally free from this stigma. In a democracy, the police has to function as any other public service, which renders services to the community and not as ‘force’. In this connection it has been stated:“Every member of the force must remember his (sic) duty is to protect and help members of the public, no less than to apprehend the guilty persons. Consequently, whilst prompt to prevent crime and arrest criminals, he must look upon himself as the servant and guardian of the general public and treat all law abiding citizens, irrespective of their position, with unfailing patience, courtesy and good humour”.334.8.2 Prime Minister Dr. Manmohan Singh has observed:“Today, police forces have to serve the interests of the people, not rulers. In a democratic framework as we are in today, there is a need to have in the police forces a managerial philosophy, a value system and an ethos in tune with the times. I had emphasized the need to ensure that police forces at all levels change from a feudal force to a democratic service. The spirit of public service, of respect for the rights of individuals, of being just and humane in one’s actions must permeate the entire police force”.344.8.3 The Police Act Drafting Committee has also suggested that “There shall be a Police Service for each State”. The Commission is also of the view that this transformation is an urgent necessity. But this would require both legal and structural changes that would bring people closer to the police, involve citizens in policing and give citizens some say in policing. Besides, a total change in the mindset of the police as well as the citizenry would be required. The reorientation of all police would be essential.4.8.4 The concept of police as a ‘Service’ instead of a ‘Force’ encompasses the ideas of effective accountability, citizen centricity and respect for human rights and the dignity of the individual, These values should permeate all aspects of policing. Arguably the inordinate emphasis on police as the coercive apparatus of the State and its undeniable role in crimeinvestigation contributes to an impression that the cherished rights of individuals are somehow subsidiary to the classical concept of police duties. It must be recognised that the power of the State to use force is not an absolute power. It is tempered with the Fundamental Rights incorporated in Part III of the Constitution. A balance needs to be struck between the imperative to use force, to uphold the law and respect the human rights of all concerned – the victim, the accused and the society at large. This is the essence of the rule of law. The recommendations of the Commission have been formed by this perspective of police as a service and the inviolability of human rights in a civilised, modern democracy.707133 Patten Commission Report, quoting the very first Metropolitan Commissioners, Charles Rowan and Richard Mayne.34 Prime Minister’s address to the Annual Conference of DGPs / IGPs of States and UTs; October 6, 2005; New Delhi; retrieved from ReformsPOLICE REFORMS5.1.4 An independent prosecution wing, staffed by serving trial judges on deputation, special prosecutors appointed from time to time, and public prosecutors appointed for a renewable five year term would function under the supervision of the same Board, and work in close coordination with the crime investigation agency.5.1 Organisational Structure of the Police of the Future5.1.1 Based on the core principles outlined in the preceding chapter, the Commission, after exhaustive consultations and discussions has evolved a conceptual framework for the police of the future. The future police organisation and functioning should address the emerging challenges in a competent, honest, humane and fair manner. Piece-meal attempts must give way to a comprehensive and holistic approach. Interest of the State must be balanced by protection and promotion of constitutional values, respect for human rights, and recognition of victim’s rights. The police of the future should focus much more on crime investigation and prosecution. Centralised, hierarchical control should yield place to functional specialisation, local accountability and a citizen-centric approach. Hierarchical relationships and a culture of unquestioned obedience should be balanced by horizontal linkages and focus on tasks and teams. Given the awesome power of the police and its authority to use force when needed, an intricate web of institutions needs to be created to enforce accountability and prevent abuse of authority or obstruction of justice.5.1.2 The reforms envisaged and the rationale for the changes proposed are discussed in detail in the following pages. However, a bird’s eye view of the holistic restructuring of the police as envisioned by the Commission will bring clarity and facilitate better understanding. Accordingly, the key features of police reform envisaged are outlined here, and Fig 5.1 illustrates the reforms, linkages and relationships proposed by the Commission.5.1.3 Investigation of crimes (except offences entailing a prescribed punishment of, say, three years prison term or less) would be entrusted to a separate, fully autonomous, elite, professional, investigation agency in each state. This agency and the prosecution wing, would be managed by an independent Board headed by a retired High Court Judge, and appointed by a high-powered collegium. Crime investigation will be completely insulated from partisan influences and political control. It will be a highly professional, well-equipped, adequately staffed corps of officers, with its units at the district and sub-district levels. Officers of this agency cannot be transferred to other police agencies.5.1.5 The police station (a part of the law and order police), would be the first point of contact for citizens. All crimes (entailing prescribed punishment of less than three years imprisonment) would be investigated by the law and order police, and more serious offences will be transferred to the independent Crime Investigation Agency. There would be effective mechanisms for coordination between local police, crime investigation agency, and riot control (law and order) police. A system of local courts would ensure speedy justice through fair, but summary procedures (covering cases entailing prescribed punishment of up to one year). These local courts would be an integral part of the independent judiciary and would function under the full control of the High Court and Subordinate Courts. Many functions which need not be discharged by the police directly – service of summons, escort and general duties, etc. – would be outsourced or transferred to appropriate agencies. Duties under special laws would be transferred progressively to the concerned departments.5.1.6 Local police (under local authorities), in addition to investigation of petty crimes, would attend to other local police functions including traffic management and minor local law and order maintenance. More police functions would be progressively brought under the supervision of local governments.5.1.7 There would be a strong forensic division, with well-equipped laboratories in each district, to support the Crime Investigation Agency (and other police agencies). The Forensic division would be under the control of a Board of Investigation which is discussed later in this Report.5.1.8 The rest of the police (excluding crime investigation and local police) would constitute the law and order agency. The Commission envisages ultimate transfer of most police functions along with the personnel to the local governments over a period of time. Metropolitan cities with over one million population can be entrusted with some of these duties immediately. Until the local police are transferred to local governments, the law and order agency would continue to supervise all local police stations. This agency would be headed by a police officer and supervised by an autonomous State Police Performance and Accountability Commission. As law and order cannot be fully insulated from the political executive, this Commission would have both official representatives and independent members and the elected government would have a legitimate say in decisions to the extent required for effective maintenance of law and order, and democratic accountability.7273Police Reforms75Public OrderPolice Reforms5.2 Police Accountability Mechanism - Balancing Autonomy and Control 5.2.1 State Government and the Police5.2.1.1 The first and foremost issue required to be addressed in police reforms is the relation between the State Government and the Police. Public Order and Police are state subjects. The main instrument which lays down the framework of the police system in India is the Police Act, 1861 (a few states have enacted their own Police Acts, but the underlying principles are similar). The Act gives the power of control and superintendence of the police to the State Government.5.2.1.2 The National Police Commission (NPC) examined the issue of control of government over the police in great detail in its Second Report and stated that the arrangement that existed between the police and the foreign power before Independence was allowed to continue with the only change that the foreign power was substituted by the political party in power. The NPC also studied issues of structure of the Police Department and its interface with the State Government and other civil authorities. It stated as follows:“After long years of tradition of law enforcement subject to executive will under the British rule the police entered their new rule in Independent India in 1947. The foreign power was replaced by a political party that came up to the democratic process laid down in our constitution. For a time things went well without any notice of any change, because of the corrective influences that were brought to bear upon the administrative structure by the enlightened political leadership. However, as years passed by there was a qualitative change in the style of politics as the fervour of the freedom struggle and the concept of sacrifice that it implied faded out quickly yielding place to new styles and norms of behaviour by politician to whom politics became a career by itself. Prolonged one party rule at the centre and in the states for over 30 years coupled with the natural outcome of ruling party men to remain in positions of power resulted in the development of a symbiotic relationship between politicians on the one hand the civil services on the other. What started as a normal interaction between politicians and the services for the avowed objective of better administration with better awareness of public expectations, soon de-generated into different forms of intercession, intervention and interference with malafide objectives unconnected with public interest.”5.2.1.3 The NPC was therefore not in favour of section 3 of the Police Act of 1861, which reads as follows:“Section 3. Superintendence in the State Government:- The superintendence of the police throughout a general police-district shall vest in and shall be exercised by the StateGovernment to which such district is subordinate, and except as authorized under the provisions of this Act, no person, officer of Court shall be empowered by the State Government to supersede or control any police functionary.”5.2.1.4 The NPC stated that the powers of the superintendence of the State Government over the police should be limited for the purpose of ensuring that police performance is in strict accordance with law. The NPC also suggested the constitution of a statutory Commission in each state to be called the State Security Commission. This Commission was to lay down broad policy guidelines, evaluate performance of state police and function as a forum for appeal from police officers and also review the functioning of the police in the state.5.2.1.5 This issue has also been examined by the Police Act Drafting Committee (PADC), 2005. The PADC has given a formulation to define the relationship between the State Government and the police by suggesting Section 39 of the draft Bill which reads as follows:“Superintendence of police to vest in the State Government:(1) It shall be the responsibility of the State Government to ensure an efficient, effective, responsive and accountable Police Service for the entire state. For this purpose, the power of superintendence of the Police Service shall vest in and be exercised by the State Government in accordance with the provisions of this Act.The State Government shall exercise its superintendence over the police in such manner and to such an extent as to promote the professional efficiency of the police and ensure that its performance is at all times in accordance with the law. This shall be achieved through laying down policies and guidelines, setting standards for quality policing, facilitating their implementation and ensuring that the police performs its task in a professional manner with functional autonomy.”The formulation has achieved a salutary balance between the government’s power of superintendence and the autonomy required by the police. The Commission broadly agrees with the above formulation suggested by the PADC with the caveat that there should be several police agencies – law and order, crime investigation, local police, special laws enforcement agency etc. to deal with different functions – as explained earlier.5.2.1.6 However, considering the fact that formal and informal instructions (sometimes blatantly illegal) on every detail are issued, it has been urged that mere incorporation of a provision, “The State Government shall exercise its superintendence over the police in such7677Public OrderPolice Reformsmanner and to such an extent as to promote the professional efficiency of the police and ensure that its performance is at all times in accordance with the law...” would not suffice. The Commission has considered this and is of the view that a provision in the law should be made that issuing illegal or malafide instructions/directions by any government functionary to any police functionary and obstruction of justice would be an offence. This has been dealt with in the Commission’s Fourth Report on ‘Ethics in Governance’.5.2.1.7 The Commission in its Report on Ethics in Governance has observed that obstruction of or perversion of justice by unduly influencing law enforcement agencies and prosecution is a common occurrence in our country. Again in most such cases, partisan considerations, nepotism and prejudice, and not pecuniary gain or gratification may be the only motive. The resultant failure of justice undermines public confidence in the system and breeds anarchy and violence. The Commission is of the view that the issue of illegal or malafide instructions by any government functionary to any police functionary should be made an offence.5.2.2 Separation of Investigation from other Functions5.2.2.1 Accountability means an obligation or willingness to accept responsibility or to account for one’s actions.36 It is also defined as the principle that individuals, organisations and community are responsible for their actions and may be required to explain them to others.37 Accountability in the context of governance means that public officials have an obligation to explain their decisions and actions to the citizens. This accountability is achieved through various mechanisms - political, legal, and administrative.5.2.2.2 A police functionary is accountable to his/her internal departmental hierarchy and thus to the elected government. He/she is also accountable to the courts for any wrongful act and with the setting up of various Statutory Commissions like the Human Rights Commissions, he/she is also accountable to them. With this multiple system of accountability the issue which arises is whether the accountability mechanism existing today is effective and sufficient or excessive.5.2.2.3 Excessive accountability has got several negative fallouts. It may curb initiative and in a uniformed service like the police it may also demoralise the force. Therefore, setting up effective accountability mechanisms requires a delicate balance between control and initiative.5.2.2.4 Several State Police Commissions have reiterated the problems caused by undue political interference in police functioning.5.2.2.5 The Kerala Police Reorganisation Committee (1959) said:“The greatest obstacle to efficient police administration flows from the domination of party politics under the State administration. Pressure is applied in varying degrees and so often affects different branches of administration. The result of partisan interference is often reflected in lawless enforcement of laws, inferior service and in general decline of police prestige followed by irresponsible criticism and consequent widening of the cleavage between the police and the public affecting the confidence of the public in the integrity and objectives of the police force.”5.2.2.6 The National Police Commission also stated:“In the process, individual crimes affecting the interest of individual citizens by way of loss of their property or threat to their physical security got progressively neglected. Police got progressively nearer to the political party in power and correspondingly farther from the uncommitted general public of the country. Since most of the law and order5.2.1.8 Recommendations :a. The following provision should be incorporated in the respective Police Acts :It shall be the responsibility of the State Government to ensure efficient, effective, responsive and accountable functioning ofpolice for the entire state. For thispurpose, the power ofsuperintendence ofthepolice service shall vest in and be exercised by the State Government in accordance with the provisions oflaw.The State Government shall exercise its superintendence over the police in such manner and to such an extent as to promote the professional efficiency of the police and ensure that its performance is at all times in accordance with the law. This shall be achieved through laying down policies and guidelines, setting standards for quality policing, facilitating their implementation and ensuring that thepoliceperforms its task in a professional manner with functional autonomy.No government functionary shall issue any instructions to any police functionary which are illegal or malafide.b. ‘Obstruction of justice’ should also be defined as an offence35 under the law.787935 Refer the Recommendation made by the Commission in para 3.2.1.10 in its Report on Ethics in Governance.36 Meriam-Webster’s Online Dictionary,37 www2.warwick.ac.uk/services/archive/rm/policies/rmpolicy/glossary/Public OrderPolice Reformssituations tended to have political overtones, the political party in power got habituated to taking a direct hand in directing and influencing police action in such situations. This has led to considerable misuse of police machinery at the behest of individuals and groups in political circles. Police performance under the compulsions of such an environment has consequently fallen far short of the requirements of law and impartial performance of duties on several occasions”.5.2.2.7 The National Police Commission came to the conclusion that:i. political interference is seen by the public as a major factor contributing to the poor image of the police and manifests itself in the misuse and abuse of police powers and disregard of the law by police;ii. people consider political interference with police as a greater evil than even corruption; andiii. political interference appears more pronounced in rural than in urban areas.5.2.2.8 The Commission has examined the system of police accountability in some other countries. In the UK, the police are not a unitary body. In England and Wales, 43 forces undertake territorial policing on a geographical basis. In Scotland, there are eight regional police forces. In Northern Ireland, the Police Service of Northern Ireland (PSNI) was constituted in 2001 following the recommendations of the Patten Commission.5.2.2.9 The UK has a tripartite system of police accountability. This system was established under the Police Act, 1964 and reaffirmed by the Police Act 1996 and the Police Reform Act, 2002. In this tripartite system, accountability to Parliament is through the Home Secretary (who has responsibility for policing policy formalised through a National Policing Plan). The police is accountable to the local citizens through the local police authorities, which comprise elected local councillors, magistrates and eminent persons. The third arm of this tripartite arrangement is the Chief Constable, to whom his entire police force is accountable for their performance. This arrangement is summarised in Table.5.138Table 5.1: The Tripartite System under the Police and Magistrates’ Courts Act 1994 and the Police Reform Act, 2002Home Secretary / Home OfficeLocal Police AuthorityChief ConstableDetermines key National Policing objectives. Produces Annual National Policing Plan and presents it to the ParliamentResponsible for maintaining an effective and effecient forceResponsible for direction control of the forceDirects Police authorities to establish performance targets. Can require a Police Force to take remedial action if HMIC judges them ineffecient or ineffectiveDetermines local policing priorities. Produces a 3 year strategy consistent with National Policing PlanResponsible for Operaional ControlDetermines Cash grant for police authoritiesDetermines arrangements for public consultationDrafts local policing plan in conjunction with local police authorityApproves appointment of chief constablesEstablished as percepting body responsible for budgeting and resource allocationResponsible for achieving local and natinoal policing objectivesIssues statutory codes of practice and directions to police authoritiesResponsible for appointment and dismissal of the chief constable (subject to ratification by the Secretary of State). Can require suspension of early dismissal on public interests groundsResponsible for resource allocationIssues statutory codes of practice to Chief OfficersMembership of 17 (usually) : 9 from local governmentChief constables and deputy/ assistant chief constables on fixed term contracts5 local independents3 magistratesHas authority to order amalgamationsSource : Mawby and Wright 20035.2.2.10 In the US, there are 17,000 police forces and each is under the control of their respective local governments. The Federal Government and the States also have certain specialised forces. However, local police forces are totally accountable to the elected local governments.5.2.2.11 Thus there is a complex task of balancing controls over the use of police powers to hold them accountable and the need for operational autonomy. In order to appreciate this problem in its totality, it is necessary to examine the functions performed by the police. For the ease of analysis, police tasks can be categorised as follows:39(a) Prevention;(b) Investigation; and(c) Service provision.5.2.2.12 Preventive tasks cover actions such as preventive arrests under Section 151 of CrPC, initiation of security proceedings, arrangement of beats and patrols, collection of intelligence and maintenance of crime records to plan and execute appropriate preventive808138 Source: This categorisation is based on the Report of the National Police CommissionPublic OrderPolice Reformsaction, deployment of police force as a preventive measure when breach of peace is threatened, handling of unlawful assemblies and their dispersal, etc. Investigative tasks include all actions taken by the police in the course of investigating a case under Chapter XII of the Code of Criminal Procedure. The National Police Commission was of the view that the investigative tasks require complete professional independence and to that extent the investigative tasks of the police cannot be brought under any executive control or direction. Service-oriented functions will include rendering service of a general nature during fairs and festivals, rescuing children lost in crowds, providing relief in distress situations arising from natural calamities, etc. The National Police Commission observed that in the performance of preventive tasks and service oriented functions, the police will need to interact with other governmental agencies and service organizations; here the police should be subject to the overall guidance from the Government, which should lay down broad policies for adoption under different situations from time to time but there should be no instructions in regard to actual operations in the field.5.2.2.13 The Commission is of the view that the issue of accountability of the police is very sensitive. There is no doubt that the police have to be accountable, but to whom should the police be accountable and to what extent? The police perform different functions and the accountability required for each one of these is quite different. For example, for crime investigation, the police should not be subjected to executive control, whereas the preventive and service functions require civilian oversight.5.2.2.14 The National Police Commission recommended as follows:“The deployment of police personnel in law and order at the expense of investigational work in police stations arises primarily from inadequacies of manpower resources at the police station. There is not always a separate allocation of staff on law and order duties and these make heavy demand on police manpower resources. Once adequate manpower resources are available at the police station, the need for utilization of investigation staff or law and order duties may not arise so frequently as is presently taking place. [Para 50.21]”5.2.2.15 The Committee on Reforms of Criminal Justice System (2003) recommended:“The staff in all stations in urban areas should be divided as Crime Police and Law and Order Police. The strength will depend upon the crime & other problems in the PS area.a. In addition to the officer in-charge of the police station, the officer in charge of the Crime Police should also have the powers of the officer in charge of the police station.b. The investigating officers in the Crime Police should be at the least of the rank of ASI and must be graduates, preferably with a law degree, with 5 years experience of police work.c. The category of cases to be investigated by each of the two wings shall be notified by the State DGP.d. The Law & Order police will report to the Circle officers/SDPO. Detective constables should be selected, trained and authorised to investigate minor offences. This will be a good training ground for them when they ultimately move to the crime police.e. A post of additional SP (Crimes) shall be created in each district. He shall have crime teams functioning directly under him. He will carry out investigations into grave crimes and those having inter-district or inter-state ramifications. He shall also supervise the functioning of the Crime Police in the district.f. There shall be another Additional SP (Crime) in the district who will be responsible for (a) collection and dissemination of criminal intelligence; (b) maintenance and analysis of crime data: (c) investigation of important cases; (d) help the Crime Police by providing logistic support in the form of Forensic and other specialists and equipment. Investigations could also be entrusted to him by the District SP.g. Each state shall have an IG in the State Crime Branch exclusively to supervise the functioning of the Crime Police. He should have specialised squads working under his command to take up cases having inter district. & and inter-state ramifications. These could be (a) cyber crime squad; (b) anti -terrorist squad; (c) organised crime squad; (d) homicide squad; (e) economic offences squad; (f) kidnapping squad (g) automobile theft squad; (h) burglary squad etc. He will also be responsible for (a) collection and dissemination of criminal intelligence (b) maintenance and analysis of crime data (c) co- ordination with other agencies concerned with investigation of cases”.5.2.2.16 The Padmanabhaiah Committee (2000) also recommended separation of the investigation work from law and order and other duties. Each district SP should be given an additional SP exclusively to supervise the work relating to investigation [Para 103]. This recommendation has also been made by the Committee on Reforms of Criminal Justice System and earlier by the Gore Committee on Police Training.8283Public OrderPolice Reforms5.2.2.17 The Law Commission in its 154th Report (1996) also recommended separation of investigation from maintenance of law and order for the following reasons:“Firstly, it will bring the investigating police under the protection of judiciary and greatly reduce the possibility of political or other types of interference. The Punjab Police Commission (1961-62), the Delhi Police Commission (1968), the Gore Committee on Police Training (1972), the National Police Commission (1977-80), the MP Public Police Relations Committee (1983) have unanimously criticised political interference in the work of the police.Secondly, with the possibility of greater scrutiny and supervision by the magistracy and the public prosecutor, as in France, the investigation of police cases are likely to be more in conformity with the law than at present which is often the reason for failure of prosecution in courts.Thirdly, efficient investigation of cases will reduce the possibility of unjustified and unwarranted prosecutions and consequently of a large number of acquittals.Fourthly, it will result in speedier investigation which would entail speedier disposal of cases as the investigating police would be completely relieved from performing law and order duties, VIP duties and other miscellaneous duties, which not only cause unnecessary delay in the investigation of cases but also detract from their efficiency.Fifthly, separation will increase the expertise of investigating police.Sixthly, since the investigating police would be plain clothes men even when attached to police station will be in a position to have good rapport with the people and thus will bring their co-operation and support in the investigation of cases.Seventhly, not having been involved in law and order duties entailing the use of force like tear gas, lathi charge and firing, they would not provoke public anger and hatred which stand in the way of police-public co-operation in tracking down crimes and criminals and getting information, assistance and intelligence which the police have a right to get under the provisions of Sections 37 to 44 of the Code of Criminal Procedure.There should be a separate cadre of investigating agency in every district, subject to supervision by the higher authorities. When a case is taken up for investigation by an officer of such agency, he should be in charge of the case throughout till the conclusionof the trial. He should take the responsibility for production of witnesses, production of accused and for assisting the prosecuting agency. As observed in the Fourteenth Report of the Law Commission, there need not be absolute separation between the two branches.We recommend that the police officials entrusted with the investigation of grave offences should be separate and distinct from those entrusted with the enforcement of law and order and other miscellaneous duties. Separate investigating agency directly under the supervision of a designated Superintendent of Police be constituted. The hierarchy of the officers in the investigating police force should have adequate training and incentives for furthering effective investigations. We suggest that the respective Law and Home Departments of various State Governments may work out details for betterment of their conditions of service”.5.2.2.18 The Supreme Court in Writ Petition (Civil) No.310 of 1996 in Prakash Singh and others vs. Union of India and others has issued the following directions:“The investigating police should be separated from the law and order police to ensure speedier investigation, better expertise and improved rapport with the people. It must however be ensured that there is full coordination between the two wings. The separation, to start with, may be effected in towns/urban areas which have a population of ten lakhs40 or more, and gradually extended to small towns/urban areas also.”5.2.2.19 Separation of ‘crime investigation’ from other duties already exists to some extent in those police stations where there are separate ‘crime’ and ‘law and order’ wings. But this separation does not preclude personnel from one wing performing duties in the other wing, which in fact they do. Existence of the Criminal Investigation Department in states is also a type of separation. But here also there is frequent inward and outward movement of officers, which does not help in development of the required degree of specialisation in and total commitment to crime investigation. In any case, the professional requirements of an investigation agency are quite different from that of a ‘law and order’ maintenance machinery.5.2.2.20 The Commission has carefully examined this issue and feels that a clear separation of investigation from law and order duties is required. The entire police would have to be restructured so as to have two separate agencies - one dealing with ‘Investigations’ and the other dealing with ‘Law and Order’. The Commission is aware of the close linkages required between crime investigation and maintenance of law and order. This could be achieved through appropriate coordination mechanisms/linkages at various levels. But the agencies848540 1 million is equal to 10 lakhsPublic OrderPolice Reformshave to be separate and personnel should be non-transferable for the reasons explained earlier.5.2.2.21 Once the investigation function is separated from ‘law and order’, creating separate accountability mechanisms for the two functions and providing each the required degree of autonomy, becomes possible. The investigation police should be placed under an independent Police Chief who would in turn be supervised by a Board of Investigation. This Board of Investigation should oversee the investigation and hold the investigation police accountable. This arrangement would completely insulate the investigation police from unwarranted political and administrative interference as the Board of Investigation would have full administrative control over the Investigation Police. The role of the State Government vis-a-vis the Board would be to lay down broad policy framework and guidelines within which the Board should function. The Board of Investigation should also supervise the Forensic Department and the Prosecution Department.5.2.2.22 The Board of Investigation should have a retired High Court Judge as its head, and an eminent lawyer, an eminent citizen, a retired police officer, a retired civil servant, the Home Secretary (ex-officio), the Director General of Police (ex-officio), the Chief of Investigation (ex-officio) and the Chief of Prosecution (ex-officio) as Members. The Chairman and non official Members of the Board should be appointed by a high powered collegium, headed by the Chief Minister and comprising the Speaker of the Assembly, Chief Justice of the High Court, Home Minister and Leader of the Opposition in the Legislative Assembly. The Board of Investigation should furnish annual reports on its functioning to the State Legislature. Such a mechanism will institutionalise autonomy, impartial investigation and professional competence while ensuring effective accountability.5.2.2.23 The Chief of Investigation should be appointed by the State Government from a panel of officers recommended by the Board of Investigation. The Chief of Investigation should be appointed for a minimum tenure of three years, and he shall not be removed before the expiry of this tenure except with the approval of the Board of Investigation.5.2.2.24 The investigation agency should be staffed with persons with adequate qualification and knowledge in investigation, good analytical ability and sound training. The Crime Investigation Agency will be an officer corps, and the officers will be drawn from the existing police agencies on a one-time selection basis. Subsequently, the agency will have its own recruitment processes to appoint investigators. Serving policemen in other wings can join by selection but once they join the Crime Investigation Agency, they would be not transferable to other police wings. Gradually, the Board can start appointing and training its own cadre of officers.5.2.2.25 It is not necessary to entrust all crimes to this specialised agency. A large majority of crimes are minor offences which could be easily handled by the ‘law and order’ police at the police station level (and the local police) with its established supervisory hierarchy (The Commission in a subsequent paragraph has examined the possibility of entrusting the investigation of crimes under certain special State Laws to the department administering the law). The Crime Investigation Agency should be entrusted with investigation of only such crimes for which the prescribed punishment is above a certain limit (say equal to or more than three years of imprisonment) and this should be stipulated under law. However, because of the existing spread of police stations, registration of crimes should continue to be with the regular police station. On receipt of any information the initial work of investigation could be commenced by the law and order police till the matter is taken over by the Crime Investigation Agency, so that valuable time and evidence is not lost.5.2.2.26 The Commission envisages that the law and order police will investigate all offences entailing a prescribed punishment of less than three years imprisonment. Such a division of jurisdiction will ensure that the bulk of the criminal cases will be handled by the law and order police. Only the remaining cases, which constitute a small fraction of the total criminal cases registered, will fall under the jurisdiction of the Crime Investigation Agency. But these cases demand high professional competence and significant deployment of resources. Therefore, the Crime Investigation Agency may have about 5000-10000 trained officers in the larger states of the country, and will have to be backed by strong forensic and other infrastructure. This would also help curb the tendency to have increasing number of cases from all over the country, transferred to an over-burdened Central Bureau of Investigation.5.2.2.27 Currently, most major states have the CID wings with a staff of a few hundred including constables, and with minimal forensic support. The Commission’s proposal would mean a substantial enhancement of strength along with specialised training infrastructure and full autonomy and accountability in functioning.5.2.2.28 This arrangement can be institutionalised in cities with a population of more than one million immediately and within a period of three years all urban areas could be covered. Within five years, all rural and urban areas could be covered under this new arrangement, ensuring complete separation and autonomy of crime investigation.5.2.2.29 To ensure that the various agencies – crime investigation, law and order and local police function in close coordination, mechanisms would need to be devised at the State and the District levels.8687Public OrderPolice Reforms5.2.3 Accountability of Law and Order Machinery5.2.3.1 It is necessary now to turn to the functioning of the law and order machinery. As described earlier, the maintenance of law and order (and other preventive and service functions) requires close civilian oversight and coordination, but this civilian control should not extend to the operational control of the police.5.2.3.2 The Directions of the Supreme Court and the proposals of the Police Act Drafting Committee, provisions of the Ordinance promulgated by the Government of Kerala and provisions of the Bihar Police Act pursuant to the Supreme Court Directions have been summarised in Table 3.4.5.2.3.3 The Commission is of the view that a mechanism similar to the State Board of Investigation is required for providing supervision and guidance to the other wings of police. The National Police Commission had also recommended the constitution of a similar Authority - the State Security Commission. ‘Security’ is a wide term, and with the type of functions that are sought to be assigned to ‘this supervisory body’, it would be more appropriate to name the body as “Police Performance and Accountability Commission” (PPAC).5.2.3.4 The Commission agrees with the composition and the manner of appointment of the Chairman and Members suggested by the PADC (with a minor change as given in the recommendation in paragraph 5.2.3.7) It may however be noted that the powers and functions of this Commission should be different from those of the Board of Investigation. As recommended by PADC, it should perform the following functions:?frame broad policy guidelines for promoting efficient, effective, responsive and accountable policing, in accordance with law;?prepare panel for the post of Director General of Police against prescribed criteria;?identify performance indicators to evaluate the functioning of the police service; and?review and evaluate organisational performance of the police service.5.2.3.5 The Commission feels that the State Police Performance and Accountability Commission should prepare a panel only for the ‘office’ of Director General of Police and not for the ‘rank’ of Director General of Police. The Commission agrees with the procedure recommended by the PADC for appointment of the Director General of Police. The Commission feels that the Director General of Police should have a minimum tenure of three years.5.2.2.30 Recommendations:a. Crime Investigation should be separated from other policing functions. A Crime Investigation Agency should be constituted in each state.b. This agency should be headed by a Chief of Investigation under the administrative control of a Board of Investigation, to be headed by a retired/sitting judge of the High Court. The Board should have an eminent lawyer, an eminent citizen, a retired police officer, a retired civil servant, the Home Secretary (ex-officio), the Director General of Police (ex-Officio), Chief of the Crime Investigation Agency (ex-officio) and the Chief of Prosecution (ex-officio) as Members.c. The Chairman and Members of the Board of Investigation should be appointed by a high-powered collegium, headed by the Chief Minister and comprising the Speaker of the Assembly, Chief Justice of the High Court, the Home Minister and the Leader of Opposition in the Legislative Assembly. The Chief of Investigation should be appointed by the State Government on the recommendation of the Board of Investigation.d. The Chief of the Crime Investigation Agency should have full autonomy in matters of investigation. He shall have a minimum tenure of three years. He can be removed within his tenure for reasons of incompetence or misconduct, but only after the approval of the Board of Investigation. The State Government should have power to issue policy directions and guidelines to the Board of Investigation.e. All crimes having a prescribed punishment of more than a defined limit (say three or more years of imprisonment) shall be entrusted to the Crime Investigation Agency. Registration of FIRs and first response should be with the ‘Law and Order’ Police at the police station level.f. The existing staff could be given an option of absorption in any of the Agencies – Crime Investigation, Law and Order and local police. But once absorbed, they should continue with the same Agency and develop expertise accordingly. This would also apply to senior officers.g. Once the Crime Investigation Agency is staffed, all ranks should develop expertise in that field and there should be no transfer to other Agencies.h. Appropriate mechanisms should be developed to ensure coordination between the Investigation, Forensic and the Law and Order Agencies, at the Local, District and the State levels.8889Public OrderPolice Reforms5.2.3.6 In order to ensure further stability for the office of the Director General of Police, the PADC has stipulated that the Director General of Police may be removed by the State Government consequent to a conviction; or on imposition of a penalty of dismissal, removal or compulsory retirement; or on suspension; or on incapacitation; or on promotion. The Commission feels that while it is necessary to ensure a stable tenure to the Director General of Police, if the incumbent is found to be not competent, acts illegally or commits misconduct, the State Government should be able to remove him/her without any difficulty. The procedure suggested in the PADC formulation is complicated and time consuming. Therefore, it is necessary to achieve a balance between the State’s power to remove an incompetent or a delinquent officer and ensuring a stable tenure for the Director General of Police. This could be achieved by prescribing that the State Government shall have the powers to remove the Director General of Police but shall not do so unless the State Police Performance and Accountability Commission agrees to it.5.2.3.7 Recommendationsa. A State Police Performance and Accountability Commission should be constituted, with the following as Members:?Home Minister (Chairman)?Leader of Opposition in the State Assembly?Chief Secretary?Secretary in charge of the Home Department;?Director General of Police as its Member Secretary?(For matters pertaining to Director General of Police, including his appointment, the Home Secretary shall be the Member Secretary)?Five non-partisan eminent citizensb. The State Police Performance and Accountability Commission should perform the following functions:?frame broad policy guidelines for promoting efficient, effective, responsive and accountable policing, in accordance with law;?prepare panels for the office of Director General of Police against prescribed criteria;?identify performance indicators to evaluate the functioning of the police service; and?review and evaluate organizational performance of the police service.c. The method of appointment of the Chairman and Members of the State Police Performance and Accountability Commission should be as stipulated in the Draft Model Police Act.d. The State Government should appoint the Chief of Law and Order Police from the panel recommended by the State Police Performance and Accountability Commission. The panel will be for the ‘office’ of Director General of Police and not to other posts of the ‘rank’ of DGP.e. The tenure of the Chief of the Law and Order Police as well as the Chief of the Crime Investigation Agency should be at least three years. But this tenure should not become a hindrance for removal in case the Chief is found to be incompetent or corrupt or indulges in obstruction of justice or is guilty of a criminal offence. The State Government should have powers to remove the Police Chief but such order of removal should be passed only after it has been cleared by the State Police Performance and Accountability Commission (or the State Investigation Board, in the case of Chief of Investigation).5.2.4 Police Establishment Committees5.2.4.1 A closely related aspect of efficient functioning and autonomy of the police is the posting of officers based on merit and professional experience. Posting of police officers on considerations other than merit is a major reason which hampers efficient functioning of the police. Linked to this is the short tenure of police officers. The Commission has already given its recommendation for the appointment of the Chief of Police (Law and Order Agency) in paragraph 5.2.3. In order to bring objectivity in matters of posting of other police officers, the draft Bill recommended by PADC has stipulated the setting up of a Police Establishment Committee. According to the PADC, the Establishment Committee shall recommend names of suitable officers to the State Government for posting to all the positions in the ranks of Assistant/Deputy Superintendents and above in the police organization of the state, excluding the Director General of Police. The State Government shall ordinarily accept these recommendations, and if it disagrees with any recommendation, it shall record reasons for disagreement. In the formulation given by PADC it is also stipulated that postings and transfers of non-gazetted police officers within a Police District shall be decided by the District Superintendent of Police, as competent authority, on the recommendation of a District-level Committee in which all Additional/Deputy/Assistant Superintendents of Police posted in the District shall be members.5.2.4.2 The Group of Ministers on National Security (2000-2001) recommended that a state level Police Establishment Board, headed by the State Chief Secretary/Home Secretary should be set up in each State to decide transfers, postings, rewards, promotions, suspension, etc. of gazetted police officers. Another Board, under the State DGP, should decide these matters in respect of non-gazetted police officers.9091Public OrderPolice Reforms5.2.4.3 The Supreme Court has directed that there shall be a Police Establishment Board in each state which shall decide all transfers, postings, promotions and other service related matters of officers of and below the rank of Deputy Superintendent of Police. The Board shall also be authorised to make appropriate recommendations to the State Government regarding the postings and transfers of officers of and above the rank of Superintendent of Police, and the Government is expected to give due weightage to these recommendations and shall normally accept them. The Supreme Court has further directed that the State Government may disagree with the decision of the Board in exceptional cases only after recording its reasons for doing so.5.2.4.4 The Commission has carefully examined the matter and is in broad agreement with the approach adopted therein viz. to decide posting of officers and other personnel through collegial processes which rule out the possibility of unwarranted extraneous interference. Before making specific recommendations, the Commission would like to spell out certain relevant factors to formalise the structure at various levels:(a) The police organization does not exist in isolation. The top management of the organization, in particular has as much responsibility in dealing with the rest of the government and the general public, as within their organisation.(b) In a multi-member establishment committee, it is quite possible that some of the members would be of the same seniority as the candidates being considered for appointments. This may lead to avoidable heart-burning besides the apprehension of bringing in personal biases and prejudices. Moreover, it is also possible that the members of the establishment committee are themselves in the zone of consideration for similar senior posts.5.2.4.5 Keeping in view the above relevant factors, the Commission would recommend that the composition of the Police Establishment Committee should be more broad based in respect of appointments to the top management. Therefore, the Police Establishment Committee in matters relating to officers of the rank of Inspector General of Police and above should have the Chief Secretary as Chairperson, the Chief of Law and Order Police as Member Secretary and the Home Secretary and a nominee of the State Police Performance and Accountability Commission as Members.5.2.4.6 Similarly, the Police Establishment Committee for matters dealing with officers of the ranks of DySP/ASP (or gazetted officers) and above, up to the rank of Deputy Inspector General of Police, should have the Director General of Police as its Chairman and two other police officers to be nominated by the State Police Performance and Accountability Commission as members. Besides, the State Police Performance and AccountabilityCommission should also nominate one of its members on this Committee. Similarly there should be a District Police Committee headed by the Superintendent of Police and have the Additional Superintendent(s) of Police, and an Assistant Superintendent/Deputy Superintendent of Police as members to deal with matters related to non-gazetted officers and all staff.5.2.4.7 The Police Establishment Committees should deal with all matters relating to postings and transfers, promotions and grievances on establishment matters. For matters of postings and transfers, the State Police Establishment Committees should make recommendations to the State Government and the State Government should normally accept such recommendations. The State Government may, however, return the recommendations for reconsideration after recording its reasons. However in case of District Establishment Committees, their decision shall be final. In matters of promotion and grievances, the role of the Establishment Committees should be to give its recommendations to the Competent Authority. In case the Competent Authority is a part of the Establishment Committee, then such recommendation should be binding. For inter-district transfers of non-gazetted officers, the State level Establishment Committee may deal with it or delegate it to a Zonal or a Range level Committee. Similar Committees should also be constituted on the Investigation side.5.2.4.8 In respect of the Crime Investigation Agency, the Commission envisages that the Board of Investigation should have full and final control on all personnel matters. Therefore, the Board should act as the establishment committee for all senior functionaries in investigation and prosecution. Appropriate committee may be constituted at the district level, by the Board for dealing with non-gazetted officials.5.2.4.9 Recommendations:a. A State Police Establishment Committee should be constituted. It should be headed by the Chief Secretary . The Director General of Police should be the Member Secretary and the State Home Secretary and a nominee of the State Police and Accountability Commission should be the Members. This Committee should deal with cases relating to officers of the rank of Inspector General of Police and above.b. A separate State Police Establishment Committee should be set up with the Chief of Law and Order Police as its Chairperson and two senior police officers and a member of the State Police Performance and Accountability9293Public OrderPolice ReformsCommission as Members (All Members of this Committee should be nominated by the State Police Performance and Accountability Commission) to deal with cases relating to all gazetted officers up to the rank of Deputy Inspector General of Police.c. These Committees should deal with all matters of postings and transfers, promotions and also grievances relating to establishment matters. The recommendations of these Committees shall normally be binding on the Competent Authority. However, the Competent Authority may return the recommendations for reconsideration after recording the reasons.d. Similarly, a District Police Establishment Committee (City Police Committee) should be constituted under the Superintendent/Commissioner of Police. This Committee should have full powers in all establishment matters of non-gazetted police officers.e. For inter-district transfers of non-gazetted officers, the State level Establishment Committee may deal with it or delegate it to a Zonal or a Range level Committee.f. All officers and staff should have a minimum tenure of three years. Should the Competent Authority wish to make pre-mature transfer, it should consult the concerned establishment committee for their views. If the views of the establishment are not acceptable to the Competent Authority, the reasons should be recorded before the transfer is affected, and put in the public domain.g. The Board of Investigation should have full and final control on all personnel matters of Crime Investigation Agency. Therefore, the Board should act as the establishment committee for all senior functionaries in investigation and prosecution. An appropriate committee may be constituted at the district level by the Board, for dealing with non-gazetted officials.5.3 Competent Prosecution and Guidance to Investigation5.3.1 Investigation and prosecution of serious offences involve several key elements – complete fairness and objectivity, skills and training of the investigating team, adequate forensic capabilities and infrastructure, expert legal counsel regarding acceptable methods of investigation and admissibility of evidence, and fair and diligent documentation of the investigative process. Fairness and objectivity can be guaranteed only when the investigating team is completely free and unhampered by political or hierarchical considerations. Skills and professionalisation can only be assured when a lot of time, resources, and training are invested in an investigator, and there is constant updating and regular application of thoseskills. Judged against these criteria, there are many shortcomings and deficiencies in our system, which explain the failure of prosecution in many cases. For example, our present forensic infrastructure is both inadequate and outdated. The investigator’s training and professional skills are poor; as a result he is often unaware or unmindful of the due processes of law. Even the elementary principles of admissibility of evidence are often ignored. The documentation is usually of poor quality, and there are glaring inconsistencies on account of shoddy work. In the current system, the police investigate the case on their own, and their role largely ends with the filing of a charge sheet before the court. The prosecution then takes over. Because of lack of coordination between the police and the prosecution, each blames the other when the prosecution fails. The net result is that justice suffers and public faith in the criminal justice system gets severely eroded.5.3.2 Under the Constitution, Criminal law and Criminal procedure are Entries 1 and 2 respectively in List III of the Seventh Schedule to the Constitution, under which both the Parliament and the State Legislatures can legislate. In our criminal justice system, the duty of investigation and prosecution for any crime is that of the State. The State discharges this responsibility through the police and the public prosecutor respectively. The public prosecutor thus plays a very important role in the dispensation of criminal justice. About the role of the Public Prosecutor, the Supreme Court has observed:“A public prosecutor is an important officer of the state government and is appointed by the state under the CrPC. He is not a part of the investigating agency. He is an independent statutory authority. The public prosecutor is expected to independently apply his mind to the request of the invstigating agency before submitting a report to the court for extension of time...” 415.3.3 In the pre-independence period, even police officers officiated as public prosecutors. This situation continued till 1973 when the CrPC was amended and it was made mandatory that a public prosecutor should be a lawyer (Section 24 of Cr PC). A landmark judgement was delivered by the Allahabad High Court in Jai Pal Singh Naresh vs State of Uttar Pradesh (1976 CrLJ 32). In this case, the Court quashed a UP government order placing the Assistant PPs under the administrative and disciplinary control of the Superintendent of Police and the Inspector General of Police. The High Court held:“Applying the principles laid down by the Supreme Court and having regard to legislative history and the object and purpose which was sought to be achieved by the enactment of Section 22, there can be no manner of doubt that if administrative and disciplinary control over the public prosecutors was entrusted to the officers of the police department, the very purpose for which Section 25 was enacted would be frustrated”.949541 Supreme Court, Hitendra Vishnu Thakur v. State of Maharashtra (1994) 4 SCC 602Public OrderPolice Reforms5.3.4 This was subsequently upheld by the Supreme Court in S B Shahane v. State of Maharashtra (AIR 1995 SC 1628). In this case, the Supreme Court directed the Government of Maharashtra:“to constitute a separate cadre of Assistant Public Prosecutors either on district-wise basis or on state-wise basis, by creating a separate Prosecution Department for them and making the head to be appointed for such Department directly responsible to the State Government for their discipline and the conduct of all prosecutions by them before the Magistrates’ courts and further free such Prosecutors fully from the administrative and disciplinary control of the Police Department or its officers, if they still continue to be under such control”.5.3.5 The Code of Criminal Procedure (Amendment) Act, 2005 provides for the establishment of a Directorate of Prosecution to be headed by a Director. The Director has to be an advocate with a minimum of ten years experience. Thus, over the years there has been a total change in the institution of the public prosecutor from being a part of the police to a totally independent Directorate.5.3.6 The National Police Commission argued that making the prosecution totally independent has adversely affected conviction rates. To improve coordination between the investigation and the prosecution it recommended that a supervisory structure over the district prosecuting staff be developed with Deputy Directors of Prosecution at the regional level under the administrative purview of the Range DIGs and a Director of Prosecution at the State level under the administrative control of the IG of the police. The Padmanabhaiah Committee recommended that each State may create a Directorate of Prosecution under the Home Department.5.3.7 This issue was also examined by the Law Commission in its 154th Report (1996). The Law Commission relied on a Supreme Court ruling in S B Shahane vs State of Maharashtra which held that the prosecution agency should be autonomous having a regular cadre of prosecuting officers. The Law Commission observed as follows:“ It is a matter of common knowledge, that a public prosecutor has a dual role to play, namely, as a prosecutor to conduct the trial and as a legal adviser to the police department in charge of investigation. For some reason or the other, in the recent administration, the latter part is not given due weight and a virtual communication gap exists. The police officers also strongly feel that the concept of autonomy has done considerable harm, not from the point of objectivity but in reducing the scope for securing appropriate legal advice at the investigation stage. While nobody doubts the need for objectivity, it is felt that they should provide legal guidance at the stage of investigation. It is also noticed that some of the mistakes committed by investigating officers could have been avoided, if there had been some mechanism to provide legal guidance and assistance during the course of investigation”.5.3.8 Earlier, the Law Commission in its 14th Report had considered this issue, and it suggested that the prosecuting agency should be completely separated from the Police Department. The Law Commission (164th Report) examined the recommendations of the National Police Commission and accordingly recommended the insertion of a new Section 25A of CrPC which stipulates that the State Government may establish a Directorate of Prosecution under the administrative control of the Home Department in the state.5.3.9 The Committee on Reforms of Criminal Justice System in its report (March 2003) identified, inter alia, some weaknesses in the prosecution machinery and its functioning. It pointed out that there is inadequate coordination between the prosecution and investigation; the professional competence and commitment of prosecutor is also not up to the mark. In order to achieve coordination, the Committee recommended that a senior police officer with the requisite qualification of the rank of Director General may be appointed as the Director of Prosecution in the State in consultation with the Advocate General. The Committee also recommended that the Director of Prosecution function under the guidance of the Advocate General of the State. The duties of the Director of Prosecution, inter alia, would be to facilitate effective coordination among the investigating and prosecuting officers, and review the working of the prosecutors.5.3.10 In most developed countries after completion of investigation, the case is transferred to the office of the Attorney or the Prosecutor. The District Attorney in the USA is elected for a term of four years. In some States, the District Attorney can also conduct further investigations if he/she feels that some more evidence is required.5.3.11 The Commission is of the considered view that a system should be evolved at the district level which ensures professional competence, fair trial and close coordination between investigation and prosecution. A system similar to the District Attorney must be evolved in the country. The Commission feels that given our conditions, elected District Attorneys are neither desirable nor acceptable to society and the judiciary. We need highly competent, credible, impartial prosecutors who carry conviction with the public, can effectively guide investigation and control prosecution. Therefore, the Commission recommends that judicial officers of the rank of District Judge may be appointed as District Attorneys who in turn would guide investigation and control prosecution and also ensure proper coordination and understanding between the two. All the prosecutors in the district would work under the9697Public OrderPolice Reformsadministrative and technical control of the District Attorney who would function under the overall guidance of the Chief Prosecutor of the State.5.3.12 There should be a Chief Prosecutor for each state to be appointed by the Board of Investigation. The Chief Prosecutor should be a senior eminent criminal lawyer and should be appointed for a period of three years. The Chief Prosecutor should guide and supervise the District Attorneys.was recommended that investigation of offences under the Motor Vehicles Act, Forest Conservation Act, Essential Commodities Act etc could be undertaken by senior officers of the concerned departments. The Committee further suggested that the powers of investigation can be given to Executive Magistrates under Section 202 of CrPC, who in turn may even authorize some reputed NGOs to carry out investigations in respect of offences under social legislations.5.3.13 Recommendations:a. A system of District Attorney should be instituted. An officer of the rank of District Judge should be appointed as the District Attorney. The District Attorney shall be the head of Prosecution in a District (or group of Districts). The District Attorney shall function under the Chief Prosecutor of the State. The District Attorney should also guide investigation of crimes in the district.b. The Chief Prosecutor for the State shall be appointed by the Board of Investigation for a period of three years. The Chief Prosecutor shall be an eminent criminal lawyer. The Chief Prosecutor would supervise and guide the District Attorneys.5.4 Local Police and Traffic Management5.4.1 Crime investigation and bringing criminals to book is as important a function of the police as crime prevention. In India, however, maintenance of law and order because of its emergent nature invariably takes precedence over other police functions. As a result, investigations are given lower priority. With the separation of Investigation from Law and Order, this problem would be obviated to some extent. But as mentioned earlier, the Investigation Agency would be dealing with only specified cases. A large number of cases under the IPC as well as State and Special Laws would still come under the domain of the Law and Order police. Between 1999-2001, on an average, about 50 lakh crimes were registered in each year in the States and Union Territories. One-third of these were IPC crimes, and the rest were offences under various Special and Local Laws (SLL). Another reason for crime investigation of IPC related offences getting a low priority is the large number of special laws which the police have to handle. It is estimated that more than 70% of the total cases registered are under special laws. Moreover the conviction rate under the special laws is 86% whereas under the IPC it is only 37%.425.4.2 The Padmanabhaiah Committee recommended that investigation of offences under certain penal statutes should be entrusted to agencies other than the police. It5.4.3 As a large number of special laws are legislated by the states, it is suggested that an inter-disciplinary group may be constituted by the Home Department of each state to study all laws and thereafter suggest transfer of investigation powers to the concerned departments. Similarly, a group may also be set up at the Union level to examine this issue in respect of Union Laws.5.4.4 Local governments also enforce a large number of Rules and Regulations. These extend to maintaining sanitation and hygiene, controlling public nuisance, removing encroachments etc. The power to investigate such minor offences should be given to the local bodies. This would reduce the burden on the local police and at the same time make local governments more effective. In South Africa, which has a National Police, the law has provided for the establishment of Municipal Police Forces. The relevant provision in the South Africa Police Services Act 1996 is as follows:“64. (1) Any local government may, subject to the Constitution and this Act, establish-(a) a municipal police service; or(b) a metropolitan police service.(2)(a) The Minister shall prescribe which provisions of this Act shall apply mutatis mutandis to any municipal or metropolitan police service.(b) The Minister may make regulations regarding the establishment of municipal and metropolitan police services, including which categories of local governments may establish municipal police services and which categories of local governments may establish metropolitan police services.(3) The National Commissioner shall determine the minimum standards of training that members of municipal and metropolitan police services shall undergo.(4) Legal proceedings in respect of any alleged act performed under or in terms of this989942 Padmanabhaiah Committee Report 2000Public OrderPolice ReformsAct or any other law, or an alleged failure to do anything which should have been done in terms of this Act or any other law, by any member of a municipal or metropolitan police service, shall be instituted against the local government concerned and Section 57 shall not be applicable to such legal proceedings.(5) The establishment of a municipal or metropolitan police service shall not derogate from the functions of the service or the powers, duties or functions of a member in terms of any law.(6) Where a municipal or metropolitan police service has been established, such service shall be represented by at least one of its members designated by such service for that purpose on every community police forum or sub-forum established in terms of section 19 in its area of jurisdiction.”5.4.5 The Commission is of the view that there is need to constitute a similar local police service in bigger cities with populations more than one million and this should be extended to other cities and rural areas in a phased manner. The local police should be empowered to deal with offences prescribed under municipal and local Laws.5.4.6 Traffic management is a rapidly evolving function especially in the light of rapid urbanisation. With the increasing number of vehicles leading to both congestion and environmental pollution, traffic management in cities is a major task. In almost all major cities there is a wing of the city police dealing with traffic control. Although regulation of flow of traffic is done by the traffic police, there is a multiplicity of agencies dealing with the broader issue of urban traffic management. Providing engineering solutions, management of parking, providing pedestrian facilities etc comes within the purview of urban local bodies. Town planning, which impacts traffic density, is done by the Development Authorities, licensing of drivers and registration of motor vehicles is done by the Motor Vehicles Department and traffic violations are handled by the traffic police. In the fragmented structure that exists at present an integrated approach to traffic management is not possible. Therefore, it is recommended that all aspects of traffic management should be entrusted to the urban local bodies. To begin with this could be done in metropolitan cities with population exceeding one million and gradually extended to other urban and rural areas. This move would also require the provision of the much needed enforcement wing to the city governments. This is also in line with democratic decentralisation and strengthening of local bodies. However as patrolling and traffic management on the National Highways is becoming increasingly important, that should be entrusted to the Law and Order police. Within the city limits, this function may be discharged by the urban local body.5.5 The Metropolitan Police Authorities5.5.1 With rapid urbanisation and with some cities having population of more than that of a small state, it is unfortunate that there is no mechanism of accountability of the police to the people of the city. The absence of such a mechanism alienates the people from the police on the one hand and makes police less responsive to citizens’ needs on the other. There have been efforts to have Mohalla Committees but these are not an adequate substitute for proper accountability mechanisms where citizens have a voice in policing. In the USA the local governments have total control over the police. There are Police Authorities to supervise all polices in the UK; even the London Metropolitan Area whose Police Chief directly reports to the Home Secretary, now has a Metropolitan Police Authority. The Metropolitan Police Authorities in UK have wide ranging powers including powers to recommend appointment of the Police Chief.5.5.2 The Commission therefore feels that if our police has to become ‘community-centric’, a beginning must be made by giving a voice to its citizens in matters of policing. This5.4.7 Recommendations:a. A task force may be constituted in the Ministry of Home Affairs to identify those laws whose implementation, including investigation of violations could be transferred to the implementing departments. A similar task force should look into the state laws in each state.b. To start with, departments like the State Excise, Forest, Transport and Food with enforcement divisions may take some officers from the police department of appropriate seniority on deputation and form small investigation outfits by drawing departmental officers from corresponding ranks for the purpose of investigating cases of violations of appropriate laws; after a transition period, the concerned department should endeavour to acquire expertise and build capacity to cope with the investigation work with its own departmental officials.c. A Municipal Police Service should be constituted in Metropolitan cities having population of more than one million. The Municipal Police should be empowered to deal with the offences prescribed under the municipal laws.d. The function of Traffic control (along with traffic police) may be transferred to the local governments in all cities having a population of more than one million.100101Public OrderPolice Reforms43 Source: Privatisation and demilitarization in policing; S N Pradhan; Journal of SVP National Police Academy; January-June 2002.102103could be done by having Metropolitan Police Authorities in all cities with population over one million. This Authority should have nominees of the State Government, elected municipal councilors, and eminent non-partisan persons to be appointed by the government. Although, giving sweeping powers to such Authority as in some countries like the UK, immediately, may not be desirable, it could be given some powers initially and gradually its role and powers could be expanded.5.5.3 This Authority should have powers to plan and oversee community policing, improving police-citizen interface, suggesting ways to improve quality of policing, approve annual police plans and to review the working of such plans. The Authority should not, however, interfere in the ‘operational functioning’ of police. In order to safeguard this, it should be stipulated that individual members will have no executive functions nor can they inspect or call for records or interfere in matters of transfers or postings.5.5.4 Recommendations:a. All cities with population above one million should have Metropolitan Police Authorities. This Authority should have powers to plan and oversee community policing, improving police-citizen interface, suggesting ways to improve quality of policing, approve annual police plans and review the working of such plans.b. The Authorities should have nominees of the State Government, elected municipal councilors, and non partisan eminent persons to be appointed by the government as Members. An elected Member should be the Chairperson. This Authority should not interfere in the ‘operational functioning’ of the police or in matters of transfers and postings. In order to ensure this, it should be stipulated that individual5.6.1 As mentioned earlier, the police perform a number of functions, which do not require the special capability and knowledge of police functions. It has been suggested that these functions can therefore be outsourced either to government departments or to private agencies so that the police can concentrate on its core functions. Some of the functions that can be outsourced are the delivery of court summons, verification of antecedents and addresses, which are required in the context of passport applications, job verifications etc. In the latter case, such verifications can also be done by the revenue or other local authorities with inputs from the police station regarding a criminal record if any. The Commission is of the view that some of these non core functions of the police should be outsourced or redistributed to other government departments or private agencies. A suggested list of such functions is given in Table 5.2.435.6 Reducing Burden on Police - Outsourcing Non Core Functions:5.6.2 Recommendations:a. Each State Government should immediately set up a multi-disciplinary task force to draw up a list of non-core police functions that could be outsourcedmembers will have no executive functions nor can they inspect or call for records. Once the system stabilizes, this Authority could be vested with more powers in a phased manner.Public OrderPolice Reformsto other agencies. Such functions should be outsourced in a phased manner.b. Necessary capacity building exercise would have to be carried out for such agencies and functionaries in order to develop their skills in these areas.1045.7 Empowering the ‘Cutting Edge’ Functionaries “Rank structure at the primary levels of Civil Police(1)The rank structure of Group ‘C’ posts in the Civil Police, in the ascendingorder, shall consist of Civil Police Officer grade II, Civil Police Officer Grade I, Sub-Inspector and Inspector.(2)The direct recruitment to group ‘C’ posts in the Civil Police, other than inthe ministerial and technical cadres, after the coming into force of this Act, shall be made only to the ranks of Civil Police Officer Grade II and Sub-Inspector: Provided that the quota for direct recruitment to these two ranks shall be so fixed as to provide a fair balance between different ranks and prospects for promotion to eligible and meritorious officers at each level within a period of 8 to 10 years.(3)Every Civil Police Officers Grade II will undergo three years intensivetraining before being posted to the Service as a stipendiary cadet, and will, upon successful competition of training, have a graduation degree in police studies. Their scales of pay and conditions of service shall therefore be commensurate with ranks in other services under the state, which require similar levels of educational qualifications and training.”5.7.4 A serious and persisting malady in the civil police structure is the undue reliance on numbers - quantity, rather than the quality, of the personnel. The growing emphasis on the armed wing of the police as distinct from reliance on the civil police is an indicator of this. This distortion needs to be rectified. The allied aspect is the unthinking adherence to the lopsided police strength – majority of the total police strength in most states is composed of the armed wing and nearly 80-83% of the civil police is composed of personnel belonging to the ranks of constables and head constables. In other words, field level policing, whether urban or rural, is expected to be done through this lowest level of police.5.7.5 The situation is further aggravated by the unsatisfactory living and working conditions and the demeaning manner in which constables are often treated by their superiors as well as politicians and the public. It is, therefore, not surprising that the self respect, morale and confidence with which they start their career, gets eroded in a very short time. Added to this is the continuation of the orderly system which reduces constables to the status of domestic servants. It would obviously be unrealistic to expect such a Force to be healthy, motivated, sensitive or citizen centric. As stated at the start of this chapter, reforms in the organisation of the police have to be the critical first step in bringing about a lasting and substantive change in police practices and behaviour, especially at lower levels. The first step would be to upgrade the skills and training to the cutting edge level of the police service so that they are appropriately engaged to handle the challenges of present day policing. Further, the removal of the orderly system would also help the constabulary focus on their prime duty, policing. The orderly system should also be immediately abolished.5.7.1 As per the Indian Police Commission of 1902, the duties prescribed for the cutting edge functionary of police, i.e. the constable, were of a mechanical type, bereft of any discretion or application of mind. Today, the constable has to interact with people, and citizens expect to be treated with respect and sensitivity to their problems. There may be occasions when a constable has to take decisions without waiting for instructions from his superiors. As the constabulary is usually the first interface of the police with the public, any reform to be meaningful has to begin at this level.5.7.2 The National Police Commission (1977) recommended major improvements in the service conditions of constables and suggested equating a constable to a skilled worker for determining his/her pay structure. The Padmanabhaiah Committee (2000) recommended that a candidate should have passed the 10th standard for being eligible to be appointed as a constable. It also suggested two years of rigorous induction training.5.7.3 The PADC in the draft legislative formulation has recommended:105Public OrderPolice Reformsnumber of ASIs.c. Recruitment of constables would, however, continue in the Armed Police.d. The orderly system should be abolished with immediate effect.e. The procedure for recruitment of police functionaries should be totally transparent and objective.f. Affirmative action should be taken to motivate persons from different sections of society to join the police service. Recruitment campaigns should be organised to facilitate this process.5.8 Welfare Measures for the Police5.7.6 Presently, the constables are generally matriculates. A policeman today requires higher analytical skills, more initiative, broader thinking and better decision making capabilities. With increasing awareness among the citizens the emphasis in police is shifting from ‘brawn to brain’. As a part of the reforms process, an immediate and important first step would be to restructure the present levels of recruitment to the police service on the civil police side. Instead of recruiting constables who are generally matriculates it would be better to recruit graduates at the starting point in the Civil Police and give them the nomenclature of Assistant Sub-Inspectors (ASI).5.7.7 It is estimated that nearly 700 graduate Assistant Sub-Inspectors could be recruited annually against a vacancy of about 1000 constables, and that too without any financial burden. These officers upon completion of rigorous induction training could be assigned to various branches. These ASIs could then expect to be promoted up to the level of DySPs over a period of time. This by itself would serve as an effective motivating factor for such personnel to maintain high levels of integrity, professionalism and personal behaviour.5.7.8 The recruitment to the Armed Police units/Battalions may continue as at present but the procedure for recruitment should be so designed as to ensure that it is totally transparent and free from any stigma of corruption, casteism, gender, communalism and similar other biases. Their training will have to be drastically refashioned and imparted on a continuing basis.5.7.9 An important aspect in the recruitment procedure of policemen and police officers is that it should be totally objective and transparent. To inspire confidence in all sections of society it is equally important that the composition of the police force should reflect the composition of the society they are required to serve. To achieve this, police service should have fair representation from all sections of society including women. It has been observed that unless recruitment camps are organised in a widely dispersed manner, certain sections of society may hesitate to come to the traditional recruitment centres. A more proactive approach is therefore required to attract persons from all sections of the society to join the police force.5.8.1 Improvements in police performance are closely linked to the morale of policemen, particularly of cutting edge functionaries, which in turn depends on their working environment and service conditions. Long working hours, tough working conditions, mechanical nature of job, inadequate welfare measures and insufficient housing means that the police officials are constantly under pressure, sapping their morale and motivation. Radical improvements in the recruitment, training, emoluments, working and living conditions are essential to improve their morale, reduce their frustration and increase their professionalism. Earlier in the Report, recommendations have been made for raising the qualifications for the entry level posts in police and undertaking recruitment at a higher level than at present and for abolition of the degrading orderly system. These combined with better working conditions, improved promotion prospects and job enrichment can go a long way towards improving morale and performance. In addition, priority has to be given to welfare measures such as better education for children, medical care, housing etc. so that the there is an overall improvement in their working and living conditions.5.8.2 The National Police Commission had divided welfare measures for the police into two broad categories, the first covering items such as pension/gratuity, medical facilities, housing etc. which are to be funded entirely by the government and the second comprising miscellaneous welfare measures such as recreational and entertainment facilities, welfare centres to provide work for members of the families, financial aid for their children etc. for which it suggested the institution of a welfare fund to be partly funded by the government and partly by the police personnel themselves.5.8.3 Time bound measures for improving satisfaction levels among police personnel by provision of adequate housing and other welfare measures are required to be taken up on an urgent basis. Provision of adequate leave, at least for one month each year, on the pattern of the armed forces would also help provide a safety valve for police personnel suffering from physical and psychological exhaustion due to trying working conditions.5.7.10 Recommendations:a. The existing system of the constabulary should be substituted with recruitment of graduates at the level of Assistant Sub-Inspector of Police (ASI).b. This changeover could be achieved over a period of time by stopping recruitment of constables and instead inducting an appropriate106107Police Reformsto the District Magistrate and the State Government. However, accountability to the District Magistrate has eroded with the passage of time. The setting up of the National Human Rights Commission and the States Human Rights Commissions has brought in some element of accountability for human rights violations.5.9.4 The National Police Commission went into the issue of departmental accountability at great length. They concluded that effectiveness of internal accountability systems is totally dependant on the determinants used for evaluating police performance. They suggested that a comprehensive set of determinants be used for evaluating police performance at various levels. As regards complaints against the police, the National Police Commission recommended that all complaints should be dealt with by the police department. The Padmanabhaiah Committee also endorsed the view of the National Police Commission but made a distinction that where a complainant is not satisfied with the action taken by the police, he should have access to an independent Complaints Authority. The Committee recommended the Constitution of a non-statutory authority to be headed by the District Magistrate with an Additional Sessions Judge, the Superintendent of Police and an eminent citizen as members.5.9.5 The Padmanabhaiah Committee also suggested the constitution of an independent Inspectorate of Police. Attention was drawn to Her Majesty’s Inspectorate of Constabulary which has been functioning very effectively in the United Kingdom and advises the Minister on the efficiency of the police force.5.9.6 The Supreme Court in Writ Petition (Civil) No.310 of 1996, Prakash Singh and others vs Union of India has directed the constitution of State and District Complaints Authorities.5.9.7 The PADC has suggested that in addition to the already existing mechanisms, accountability of the police should be further ensured through the Police Performance and Accountability Commission and the District Accountability Authority. The PADC109Public OrderPolice Reformshas recommended the setting up of a State Police Accountability Commission headed by a retired High Court Judge. This Commission would enquire into allegations of serious misconduct against police personnel. It has also been suggested that there should be a District Accountability Authority to monitor departmental enquiries into cases of complaints of misconduct against police personnel.5.9.8 The Commission has analysed the systems prevailing in other countries. In the UK, the first statutory complaints system was introduced in England and Wales when the Police Act, 1964 granted Chief Officers sole responsibility for taking action on complaints against the police. The Police Act, 1976 created the Police Complaints Board (PCB), an independent body based in London with responsibility for reviewing completed investigations of complaints. The PCB did not have any investigative powers, but it could review an investigation and ask a Chief Officer to commence disciplinary proceedings, which would be heard by a disciplinary tribunal consisting of two PCB members. As the PCB was not found to be effective enough, the Police and Criminal Evidence Act,198444 constituted the Police Complaints Authority (PCA). The PCA’s structure and responsibilities were essentially the same as the PCB but the principal change was that its members could supervise police investigations into complaints. A mechanism for local resolution of less serious complaints was also provided. In May 2000, the government started consultation on a new complaints system for complaints against the police and a consultation document setting out the emerging framework – ‘Complaints against the Police - Framework for a New System’ – was published. This culminated in the Police Reform Act, 200245. Section 9 of the Police Reform Act, 2002 established the Independent Police Complaints Commission. Its functions include:?“(a) the handling of complaints made about the conduct of persons serving with the police;?(b) the recording of matters from which it appears that there may have been conduct by such persons which constitutes or involves the commission of a criminal offence or behaviour justifying disciplinary proceedings;?(c) the manner in which any such complaints or any such matters as are mentioned in paragraph (b) are investigated or otherwise handled and dealt with.”5.9.9 The South African Police Act also established an Independent Complaints Directorate.46 The New York City Police has an independent Civilian Complaints Review Board. New South Wales in Australia passed the Police Integrity Commission Act in 1996. The principal objective of the Act was “to establish an independent, accountable body whose principal function is to detect, investigate and prevent police corruption and other serious police misconduct”.5.9.10 The Prime Minister Dr. Manmohan Singh, while addressing Superintendents of Police on 1st September, 2005, stated that:“The Home Minister may also consider setting up an independent oversight mechanism to handle complaints against police misconduct.”5.9.11 In the model Act suggested by PADC, the District Accountability Authority has to be constituted to monitor departmental enquiries into cases of complaints of misconduct against police personnel. This is not quite in line with what has been directed by the Supreme Court. The Supreme Court has directed that the recommendations of the Complaint Authorities at the District and the State levels shall be binding. In its Report on Ethics in Governance, the Commission has recommended the constitution of a Local Bodies Ombudsman to look into complaints against officials of local bodies. Since the Local Bodies Ombudsman would have to investigate complaints against all the urban and rural local bodies and their officials, it may not be desirable to burden it any further. A separate District Police Complaints Authority should therefore be constituted for allegations against the police. This may be constituted for a district or a group of districts. The District Police Complaints Authority should not inquire into complaints relating to corruption which come under the purview of Lok Ayukta but should focus on other types of public grievances against the police such as non registering of complaints, general highhandedness, etc. The District Police Complaints Authority should have an eminent citizen as its Chairperson, with an eminent lawyer and a retired government servant as its members. The Chairperson and Members of the District Police Complaints Authority should be appointed by the State Government in consultation with the Chairperson, State Human Rights Commission or with the State Lok Ayukta. A government officer should be appointed as Secretary of the District Police11011144 Source: Chapter 10, South African Police Act, 1995.45 Extracted from the website of IPCC: OrderPolice ReformsComplaints Authority. This Authority should have powers to enquire against misconduct or abuse of power against the police officers up to the rank of Deputy Superintendent of Police. It should exercise all the powers of a civil court. The Authority should be empowered to investigate any case itself or ask any other agency to investigate and submit a report. The Disciplinary Authorities should by and large accept the recommendations of the District Polic Complaints Authority.5.9.12 A State Police Complaints Authority (SPCA) should be constituted to look into cases of serious misconduct by the police. It should also look into complaints against officers of the rank of Superintendent of Police and above. The State Police Complaints Authority should have a retired High Court Judge as Chairman. Nominees of the State Government, the State Human Rights Commission, State Lok Ayukta, the State Womens’ Commission, and an eminent human rights activist should be the members of the Complaints Authority. The Chairperson and the eminent human rights activist should be appointed by the State Government based on the recommendations of the State Human Rights Commission. In case the State Human Rights Commission has not been constituted, then the State Lok Ayukta may be consulted. A government officer should officiate as Secretary of the Authority. It should have the authority to ask any agency to conduct an enquiry or do the inquiry itself. It should also be empowered to enquire into or review a case which is before any District Police Complaints Authority if it feels that it is necessary to do so in public interest. The State Authority should also monitor the functioning of the District Police Complaints Authorities.5.9.13 In order to prevent frivolous and vexatious complaints, it may be provided that if upon an enquiry it is found that the complaint was frivolous or vexatious, then the Complaints Authority should have the power to impose a reasonable fine on the complainant.5.9.14 The Complaints Authority proposed above would be effective only if they are easily accessible to the aggrieved person. The procedure for lodging a complaint should be made very simple. Technology provides various solutions for this. The filing of complaints could be ‘web-enabled’. As telephone connectivity is more widely available than internet, the Complaints Authority should have facilities for recording complaints over telephone also. This could even be automated through the use of Interactive Voice Recorder (IVR) systems.5.9.15 Recommendations:a. A District Police Complaints Authority should be constituted to enquire into allegations against the police within the district. The District PoliceComplaints Authority should have an eminent citizen as its Chairperson, with an eminent lawyer and a retired government servant as its Members. The Chairperson and Members of the District Police Complaints Authority should be appointed by the State Government in consultation with the Chairperson of the State Human Rights Commission. A government officer should be appointed as Secretary of the District Police Complaints Authority.b. The District Police Complaints Authority should have the powers to enquire into misconduct or abuse of power against police officers up to the rank of Deputy Superintendent of Police. It should exercise all the powers of a civil court. The Authority should be empowered to investigate any case itself or ask any other agency to investigate and submit a report. The Disciplinary Authorities should normally accept the recommendations of the District Authorities.c. A State Police Complaints Authority should be constituted to look into cases of serious misconduct by the police. The State level Authority should also look into complaints against officers of the rank of Superintendent of Police and above. The State Police Complaints Authority should have a retired High Court Judge as Chairperson and nominees of the State Government, the State Human Rights Commission, the State Lok Ayukta, and the State Women Commission. An eminent human rights activist should be also be the member of the Complaints Authority. The Chairperson and the Member of the Authority (eminent human rights activist) should be appointed by the State Government based on the recommendations of the State Human Rights Commission. (In case the State Human Rights Commission has not been constituted, then the State Lok Ayukta may be consulted). A government officer should officiate as the secretary of the Authority. The Authority should have the power to ask any agency to conduct an enquiry or enquire itself. The Authority should also be empowered to enquire into or review any case of police misconduct, which is before any District Police Complaints Authority, if it finds it necessary in public interest to do so.d. It should be provided that if upon enquiry it is found that the complaint was frivolous or vexatious, then the Authority should have the power to impose a reasonable fine on the complainant.e. The State Police Complaints Authority should also monitor the functioning of the District Police Complaints Authority.f. The Complaint Authorities should be given the powers of a civil court. It should be mandated that all complaints should be disposed of within a month.112113Public OrderPolice Reforms5.10 An Independent Inspectorate of Police5.10.1 At present, the departmental hierarchy is responsible for ensuring that the police functions efficiently. However, the system of rigorous inspection of police stations and the functioning of police officers by higher departmental officers, has, over the years, become a routine ineffective exercise. Cases like ‘Nithari’47 bring to the fore the weaknesses of departmental inspection mechanisms. The Commission would reiterate the need for effective internal inspections. It is however recognised that routine inspections would not lead to substantial systemic changes as needed from time to time. In some countries like the UK an independent Inspectorate of Police has been constituted to promote efficiency and effectiveness of policing and also to ensure that agreed standards are achieved and maintained. The Padmanabhaiah Committee recommended the setting up of an independent Inspectorate of Police. The Commission feels that there are advantages in setting up of an independent Inspectorate of Police in each state under the supervision of the State Police Performance and Accountability Commission.5.10.2 At present, though the criminal laws are uniform throughout the country, there are variations in police functioning from state to state. Though some variations are necessary considering the local conditions, there should also be some common standards for functions of police, especially the quality of services provided by them. The task of identifying these common standards could be entrusted to the Bureau of Police Research and Development. These standards could then be updated regularly in the light of experience gained and adopted as the benchmark for inspections.5.10.3 The recent incidents of death in stage-managed police encounters have once again underscored the need for a strong accountability mechanism. The proposed Complaints Authority, no doubt, would investigate any compaints in this regard, however, in order to totally eliminate this unacceptable practice, a professional accountability mechanism should also be institutionalised. Therefore all cases of deaths in encounters, irrespective of whethera complaint has been made or not, should be inquired into by the proposed Inspectorate as an ongoing exercise to ensure police accountability. The Inspectorate of Police would submit its inquiry report to the PPAC and also to the SPCA. The SPCA should use the report as an input, in case it is conducting an inquiry in to any such incident.5.11 Improvement of Forensic Science Infrastructure - Professionalisation of Investigation5.11.1 As pointed out earlier, India, which had the first fingerprinting laboratory in the world in 1897, has proportionately fewer forensic laboratories than other developed countries. Inadequate infrastructure leads to transporting of case material to distant places, resulting in delays and giving scope for tampering, corruption, and incompetence. As a result, there is over-dependence on either oral evidence which can be unreliable (witnesses are often bought or coerced) or recourse to brutal third degree methods to extract confessions. Finally, the absence of legal counsel at the stage of crime investigation is leading to appallingly low rates of convictions.5.11.2 Forensic science which is highly advanced in developed countries is not adequately used by our police in investigation of crime. A large number of cases are investigated based on admissions and confessions by the accused often extracted under duress. In the long run,5.10.4 Recommendations:a. In addition to ensuring effective departmental inspections, an Independent Inspectorate of Police may be established under the supervision of the Police Performance and Accountability Commission to carry out performance audit of police stations and other police offices through inspections and review of departmental inspections. It should render professional advice for improvement of standards in policing and also present an annual report to the Police Performance and Accountability Commission.b. For all cases of deaths during ‘encounters’ the Independent Inspectorate of Police should commence an enquiry within 24 hours of the incident. The Inspectorate should submit its report to the PPAC and the SPACc. The working of the Bureau of Police Research and Development needs to be strengthened by adequate financial and professional support, so that it could function effectively as an organization for inter alia analysis of data from all parts of the country and establish standards regarding different aspects of the quality of police service.11411547 In Nithari village in Uttar Pradesh, about 20 children disappeared over a period, and subsequently, several bodies were recovered from a drain. The police was accused of apathy and indifference.Public OrderPolice Reformsmost such cases result in acquittal besides causing violation of human rights and brutalising the police on the one hand and letting go of the criminals on the other. Optimum utilisation of the tools of forensic sciences can lead to better investigation of crimes on the one hand and minimisation of abuse of human rights on the other.5.11.3 The Padmanabhaiah Committee went into this aspect at great length. It observed: “There are four issues relating to forensic science, which needs to be examined. The first one is how to build world class forensic science facilities. The second is how to ensure that the police use the forensic science facilities in criminal investigation. The third one is to ensure that the forensic reports achieve a reputation for integrity, impartiality and accuracy of their findings. The fourth one is to see that the forensic science reports are available very quickly”.5.11.4 A Core Group was constituted by the National Human Rights Commission to make a comprehensive examination of all aspects of forensic science services in India and to make appropriate recommendations. The Core Group, which submitted its Report48 in 1999, has also made several recommendations on effective use of forensic science in the criminal justice delivery system. The Core Group examined institutional, legal, personnel, financial and technical issues and made comprehensive recommendations on each one of these.5.11.5 With regard to the organisation of the forensic science institutions, the Core Group stated that the structure within these organisations is very hierarchical, compartmentalised, insensitive, bureaucratic and rigid and that the internal culture is influenced by the police environment. The Core Group observed that in most states, the forensic organisations are a part of the police set up and this affects their scientific work. They are also woefully short of funds and qualified staff. All this coupled with indiscriminate references made by investigating officers has led to a large pendency at the forensic laboratories.5.11.6 The Core Group also noted the legal lacunae in the use of forensic science services in investigation and trial. It pointed out that the CrPC and the Indian Evidence Act do not provide for mandatory collection, preservation, examination of forensic material, and for its appropriate legal status in the criminal justice process.5.11.7 The Commission has examined the report of the Core Group and agrees with it. Based on the recommendations made by the Core Group, the Commission makes the following recommendations:5.12 Strengthening Intelligence Gathering5.12.1 Intelligence is clearly one of the most important inputs for maintaining public order. In the states, intelligence gathering is done by the Special Branch (Intelligence Wing) of the police and the regular police stations. It is generally observed that the intelligence gathering efforts are devoted mainly to gathering information about major law and order problems, namely, likely agitations from students, labour unions, social and communal groups etc. Experience indicates that adequate attention is not paid to collection of intelligence relating to commission of crimes. It is imperative that the intelligence gathering machinery should give adequate attention to prevention of crimes also.5.12.2 Even today, the basic source for all conceivable information remains the police station, although there are Special Branchs in all the states for gathering intelligence. Indeed, collection of intelligence is the responsibility of all policemen. Information is collected through various sources - the beat constable, the traffic policemen, field visits, interaction with officials of other departments, study of FIRs, use of informants etc. Nevertheless, due to pressure of law and order duties, such efforts remain inadequate. Pressure of work - law and order duties - has considerably slackened such efforts in intelligence gathering.5.12.3 The system of the beat police which worked well in the past has fallen into disuse and in big cities patrolling is done mainly in vehicles. The beat police apart from giving a sense5.11.8 Recommendations:a. There is need to set up separate National and State Forensic Science Organisations as state-of-the-art scientific organizations. At the state level these organisations should function under the supervision of the Board of Investigation.b. There is need to expand the forensic facilities and upgrade them technologically. Every district or a group of districts having 30 to 40 lakhs population should have a forensic laboratory. This should be achieved over a period of five years. Government of India should earmark funds for this purpose for assisting the states under the police modernisation scheme. All the testing laboratories should be accredited to a National Accreditation Body for maintaining quality standards.c. The syllabus of MSc Forensic Science should be continuously upgraded in line with international trends.d. Necessary amendments should be effected in the CrPC and other laws to raise the level and scope of forensic science evidence and recognize its strength for criminal justice delivery.11611748 State of the Art Forensic Sciences: For Better Criminal JusticePublic OrderPolice Reforms5.12.5 In recent years, substantial measures have been taken to strengthen intelligence gathering and coordination mechanisms have been set up at various levels. The Commission would however like to emphasise that the police station and its functionaries should be the prime source for gathering intelligence. Rapid advancements in technology should be fully exploited for intelligence gathering. Also a mechanism for fixing accountability of intelligence officials and other executive officials who utilise such intelligence, needs to be evolved.5.12.6 Recommendations:a. The intelligence gathering machinery in the field needs to be strengthened and at the same time, made more accountable. Human intelligence should be combined with information derived from diverse sources with the focus on increased use of technology. Adequate powers should be delegated to intelligence agencies to procure/use latest technology.b. Intelligence agencies should develop multi-disciplinary capability by utilising services of experts in various disciplines for intelligence gathering and processing. Sufficient powers should be delegated to them to obtain such expertise.c. Intelligence should be such that the administration is able to use it to act in time by resorting to conflict management or by taking preventive measures.d. Instead of monitoring public places by posting a large number of policemen it would be economical as well more effective if devices like video cameras/CCTVs are installed in such places.e. The beat police system should be revived and strengthened.f. Informants giving information should be protected to keep their identity secret so that they do not fear any threat to life or revenge. However, they could be given a masked identity by which they could claim their reward at an appropriate time and also continue to act as informants as the situation develops.g. In case of major breakdown of public order, the State Police Complaints Authority should take appropriate action to fix responsibility on the police officers for lapses in acting upon intelligence or on the intelligence officers in case there has been a failure on their part.5.13 Training of the Police5.13.1 Recruitment to the Police is done at four levels - viz., the constables, Sub Inspectors (SI), Deputy Superintendent of Police (DySP) and Assistant Superintendent of Police (ASP). Recruitment to the ranks of Constable, SI, DySP are done by the states concerned. Normally the constables and SIs are recruited by the Department, DySPs are recruited by the State Public Service Commission {ASPs (IPS) are recruited by the UPSC}.5.13.2 Training has by and large been a neglected area so far as the large number of subordinate functionaries are concerned. In 1971, a Committee on Police Training49 was constituted. This Committee came to the conclusion that police training had been badly neglected over the years and training arrangements left much to be desired.5.13.3 Often the State Police Training Schools where a large majority of policemen undergo training are ill equipped, starved of funds and staffed by unwilling instructors. Furthermore, training methodologies are often outdated and focus is more on discipline and regimentation while attitudinal and behavioural improvements are relegated to the background.5.13.4 Training is important not only for building capacity but also for bringing attitudinal change. The capacity of the police to go beyond their individual economic and social background, to become aware, thinking, humanitarian and sensitive to weaker sections, can be inculcated by continuing capacity building measures. While the Commission does not wish to go into the technical details of training, it would like to emphasise its importance in police functioning.of security to the citizens, was also an important source of information. The Commission feels that this system needs to be restored and strengthened.5.12.4 Moreover, with the constitution of specialised wings in each state, the police stations sometimes feel that collection of intelligence is no longer their responsibility. It has also been observed that often the information collected as ‘intelligence’ is about an event which has already taken place. The Padmanabhaiah Committee summarised its observation about intelligence as follows:“ Presently, the intelligence apparatus is not integrated with well defined hierarchical or collateral linkages. It is neither obligatory on the part of the state police to share intelligence with other intelligence gathering agencies or vice-versa, nor mandatory to act upon it with seriousness that it deserves. The existing amorphous arrangements which heavily rely on personal equations and subjective appreciation needs to be replaced by professionally worked out institutional arrangements.”11811949 This Committee was headed by Shri M S Gore.Public OrderPolice Reforms5.14 Police and Human Rights5.14.1 Human rights issues have been placed centre stage in the last decade or so in discussions on police reforms. The General Assembly of the United Nations Organisation adopted the Universal Declaration of Human Rights on 10th December, 1948. India became a signatory to the International Convention on Economic, Social and Cultural Rights (ICESCR) and the International Convention on Civil and Political Rights (ICCPR) in 1966. The National Human Rights Commission (NHRC) was established on 12th October, 1993 as mandated by the Protection of Human Rights Act, 1993.5.14.2 In recent years, reports of occurrence of human rights violations have become increasingly related to counter-insurgency and counter-terrorism activities of the lawenforcement authorities. That terrorism has become a serious threat to national integrity, national security, rights of the citizens and social harmony cannot be over-emphasised. The National Human Rights Commission has laid stress on both aspects. It accepts that “A man in “khaki”50 does not shed off his basic human right to life on wearing “khaki” – violation of his human rights at the hands of terrorists is as much condemnable as the assault on human rights of other citizens” (Para 3.13, Annual Report, 2004-2005, NHRC). But it also reiterates the view of the Supreme Court of India in D.K. Basu vs the State of West Bengal [1997(1) SCC 416]: “ Challenge of terrorism must be met with innovative ideas and approach. State terrorism is no answer to combat terrorism. State terrorism would provide legitimacy to ‘terrorism’. That would be bad for the State, the community and above all for the Rule of Law. The State, therefore, must ensure that various agencies deployed by it for combating terrorism act within the bounds of law and not become law unto themselves. That the terrorist has violated the human rights of innocent citizens may render him liable for punishment but it cannot justify the violation of his human rights except in the manner permitted by law”.5.14.3 Other matters related to policing and human rights are concerned with custodial deaths, encounter deaths and torture. The NHRC has stated in its Annual Report for 2004 2005 that 74,401 cases were registered in the Commission during that year of which 1500 cases related to intimations of custodial deaths, 4 cases of custodial rapes and 122 related to police encounters (para 4.3).5.14.4 The NHRC has made it very clear that “with every passing year, the evidence before the Commission mounts that there must be major police reforms in the country if the human rights situation is to be improved...”51 It has stressed that modernisation per se would not lead to redressal of the situation. The most important element, in its view, is insulating the investigation work of the police from ‘extraneous influences’ and putting a stop to arbitrary transfers of police officials which is used to weaken the capacity of the police to function without fear or favour52. In fact, in the light of complaints received about police wrong doings and their complicity in the violation of human rights, it has urged the Union and State Governments to act with determination and implement the reforms recommended by it.535.14.5 The Commission agrees with the views of the NHRC. The Commission has already examined the issues identified by the NHRC in the foregoing paragraphs. The Commission has recommended a structure so as to insulate police from unwarranted interference; the emphasis on professional investigation and use of forensic science would dissuade investigating officers from taking recourse to coercive methods; the emphasis on training is likely to bring about an attitudinal change in police; the complaints authorities would provide an effective grievance redressal mechanism against police high handedness. All5.13.5 Recommendations:a. Deputation to training institutions must be made more attractive in terms of facilities and allowances so that the best talent is drawn as instructors. The Chief of Training in the state should be appointed on the recommendation of the Police Performance and Accountability Commission.b. The instructors should be professional trainers and a balanced mix of policemen and persons from other walks of life should be adopted.c. Each state should earmark a fixed percentage of the police budget for training purposes.d. For each level of functionary, a calendar of training for the entire career should be laid down.e. There should be common training programmes for police, public prosecutors and magistrates. There should also be common training programmes for police and executive magistrates.f. Training should focus on bringing in attitudinal change in police so that they become more responsive and sensitive to citizens’ needs.g. All training programmes must conclude with an assessment of the trainees, preferably by an independent agency.h. Modern methods of training such as case study method should be used.i. Impact of training on the trainees should be evaluated by independent field studies and based on the findings the training should be redesigned.j. All training programmes should include a module on gender and human rights. Training programmes should sensitise the police towards the weaker sections.12012150 ‘Khaki’ is generally the colour of police uniforms in India.51 Para 4.50, Annual Report of NHRC, 2002-2003.52 Ibid, Para 4.5353 Para 4.39, Annual Report of NHRC, 2003-2004.Public OrderPolice Reformsthese measures would go a long way in ushering a culture of upholding human rights by all enforcement agencies. The Commission would also emphasise that the human rights of the victims and the security agencies should be given equal importance.5.15 Community Policing5.15.1 Community Policing has been defined as:“Community Policing is an area specific proactive process of working with the community for prevention and detection of crime, maintenance of public order and resolving local conflicts and with the objective of providing a better quality of life and sense of security”.545.15.2 According to David H Bayley55, community policing has four elements:(1) Community-based crime prevention;(2) Patrol deployment for non- emergency interaction with the public;(3) Active solicitation of requests for service not involving criminal matters; and(4) Creation of mechanisms for grassroots feedback from the community.5.15.3 The basic principle underlying community policing is that ‘a policeman is a citizen with uniform and a citizen is a policeman without uniform’. The term ‘Community Policing’ has become a buzzword, but it is nothing new. It is basically getting citizens involved in creating an environment which enhances community safety and security.5.15.4 Community policing is a philosophy in which the police and the citizens act as partners in providing security to the community and controlling crime. It involves close working between the two with police taking suggestions from people on the one hand and using the citizens as a first line of defence on the other.5.15.5 Many states in India have taken up community policing in some form or the other. Be it ‘Maithri’ in Andhra Pradesh, ‘Friends of Police’ in Tamil Nadu, Mohalla Committees in Bhiwandi (Maharashtra), there have been several success stories from all over the country. Without going into details of each one of these, the Commission would like to lay down a few principles which should be followed in community policing:?It should be clearly understood that community policing is a philosophy and not just a set of a few initiatives.?The success of community policing lies in citizens developing a feeling that they have a say in the policing of their locality and also making the community the first line of defence. Community policing should not become a mere ‘public relations’ exercise but should provide an effective forum for police-citizen interaction.?Interaction with people should be organised through ‘community liaison groups’ or citizen’s committees at different levels.. It should be ensured that these groups are truly representative. The idea ofcommunity policing would be a success if it is people driven rather than police driven.?Convergence with activities of other government departments and organisations should be attempted.5.16 Gender Issues in Policing5.16.1 In spite of the constitutional, legal and institutional provisions, women continue to be victims of crime and oppressive practices throughout their life. The National Policy on Empowerment of Women acknowledges that there still exists a wide gap between the goals enunciated in the Constitution, in legislation, policies, plans and programmes, on the one hand and the situational reality of the status of women in India on the other. It notes that major gender gaps exist in key areas affecting women empowerment and well-being, e.g. mortality rates, sex ratio and literacy. It also states that a major manifestation of gender12212354 Source: Community Policing; Ashish Gupta & PM Mohan; Journal of National Police Academy; Jan-June 200455 Source: Community policing in Australia -An appraisal: Working paper: .auPublic OrderPolice Reformsdisparity is domestic and societal violence against women. The high rate of incidence of crimes is evident from the statistics published by the National Crime Records Bureau. Even more alarming are the lower rates ofconviction in cases of offences against women than in case of other offences.5.16.2 The Centre for Social Research undertook a study to assess how effectively police training academies in four states have incorporated gender sensitisation into the training programmes and have made a number of excellent recommendations. Briefly, the main recommendations are that gender training should be given as much time as other training and all training should have a gender component. They should also be specific to the special gender requirements of the States/regions (for example, trafficking of women in Andhra Pradesh, female foeticide and dowry deaths in large parts of North and West India, etc). It further recommended that the National Police Academy should formulate a gender policy for police training. It was highlighted that there are five essentials for a successful gender strategy for the police: education, training, awareness campaigns, research analysis and annual audits. These need to be properly evaluated and enforced.5.16.3 Various surveys and research studies have revealed that women are often reluctant to approach the police in matters relating to violence/cruelty against them. Even when a case has been registered, low conviction rates point to deficiencies in the investigation and the prosecution. The Tenth Plan sought to address this problem in a number of ways:i) strict enforcement of all relevant legal provisions and speedy redressal of grievances with a special focus on violence and gender-related atrocities;ii) measures to prevent and punish sexual harassment at the work place, protection for women workers in the organised/un-organised sectors and strict enforcement of relevant laws such as Equal Remuneration Act, 1976 and Minimum Wages Act, 1948;iii) regular review of crimes against women, their incidence, prevention, investigation, detection and prosecution etc. by the Centre and States at district level;iv) strengthening of Women’s cells in Police Stations, Women Police Stations, Family Courts, Mahila Courts, Counselling Centres, Legal Aid Centres; andv) Widespread dissemination of information on all aspects of legal rights, human rights and other entitlements of women.5.16.4 Since the police is the primary agency of the criminal justice system which protects human rights, it is essential to sensitise police personnel to gender issues. A well designed gender training, which internalises responses, can play a major role in changing mindsets, biases and entrenched attitudes.5.16.5 Another aspect of gender disparity of the criminal justice system is the low representation of women in all wings and especially the police. It is estimated that women constitute only about 2% of the civil police.56 This situation needs to be redressed through affirmative actions. The National Commission on Women has made various recommendations regarding the changes to be made in different laws. They have also made suggestions about sensitizing the entire criminal justice system. While the reform of the criminal justice system as suggested in this Report would help in making investigation more professional and help the victims including women to get justice, the Commission feels that police at all levels needs to be sensitized on gender issues.5.17 Crimes against Vulnerable SectionsCrimes against Scheduled Castes and Scheduled Tribes5.17.1 Certain sections of society like the Scheduled Castes, Scheduled Tribes and children are more vulnerable to exploitation and are often easy victims of crime. In these cases, maintenance of the established order or the status quo which may be exploitative does not5.16.6 Recommendations:a. The representation of women in police at all levels should be increased through affirmative action so that they constitute about 33% of the police.b. Police at all levels as well as other functionaries of the criminal justice system need to be sensitised on gender issues through well structured training programmes.c. Citizens groups and NGOs should be encouraged to increase awareness about gender issues in society and help bring to light violence against women and also assist the police in the investigation of crimes against women.12412556 Source: The Padmanabhaiah Committee on Police Reforms.Public OrderPolice Reformsensure justice and therefore is not a guarantee of permanent peace and public tranquility. Protection and enforcement of the rights of these sections would amount to a rule of law and justice in the real sense of the term. In their case, therefore, the role of the administration and police becomes all the more important. These sections, particularly the Scheduled Castes and Scheduled Tribes, in addition to being victims of other crimes, are also victims of atrocities, discrimination and prejudices perpetrated by other sections of society. Article 17 of the Constitution of India abolished untouchability and in furtherance of the Constitutional provision, the Protection of Civil Rights Act was enacted in the year 1955 providing for punishment for untouchability offences. The Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act was enacted in 1989 to curb atrocities on these sections.5.17.2 The Government of India and the State Governments have taken several measures to prevent exploitation of the Scheduled Castes and Scheduled Tribes. The Commission for Scheduled Castes and Scheduled Tribes was established in 1978 through an administrative order and was given Constitutional status in 1992, vide the Sixty Fifth Amendment of the Constitution. The Eighty Ninth Amendment of the Constitution brought in to existence a separate Commission for the Scheduled Tribes in 2004. To assist the State Governments in implementation of the provisions of the two Acts mentioned above, the Union Government provides financial assistance for strengthening of the administrative, enforcement and judicial machinery, awareness generation and relief and rehabilitation measures. The State Governments on their part have constituted ‘Civil Rights Enforcement Cells’ for enforcement of these Acts. State and District level Committees periodically review the implementation of these Acts.5.17.3 However, the implementation of these provisions as measured by the pace of disposal of cases under these Acts leaves much to be desired. Under the SC/ST (Preventionof Atrocities) Act, 32324 cases were under investigation (including those brought forward) in all States in 2004; of which 48.4% were chargesheeted in courts, 21.38% closed after investigation and 30.22% were pending with the police at the end of 200457. Moreover, the conviction rate under The SC/ ST (Prevention of Atrocities) Act (30.5%) and Protection of Civil Rights Act (19.7%) is significantly lower than the same under special and local laws (86%) as well as IPC crimes (40.6%). This trend, coupled with the high pendency ratio, needs to be addressed. These figures moreover do not capture a substantial number of offences which are not reported or registered.5.17.4 At times, the assertion of civil rights by the Scheduled Castes and Scheduled Tribes is met with hostile reprisal against them by other sections of society. Sometimes even enforcement agencies are reluctant to enforce the civil rights of the weaker sections for fear of further trouble. This tendency in the administration and the enforcement agencies needs to be strictly curbed. The administration should understand that civil rights of all, more so of the weaker sections need to be respected and enforced. The administration and the police have to play a more proactive role in detection and investigation of these crimes, particularly in remote rural areas where the awareness levels are low and victims often do not come forward to lodge complaints. The recommendations on police reforms in this report are geared towards making the police service in India more professional, responsive and citizen-friendly. However, the police will have to be specially sensitised to the problems of the Scheduled Castes and Scheduled Tribes. This could be achieved through appropriate training programmes.5.17.5 In areas with a history of communal and linguistic violence, as well as violence against Scheduled Castes and Scheduled Tribes, these vulnerable groups often harbour a sense of insecurity. Such apprehensions can be allayed to a large extent if the local police have adequate representation from these communities.Crimes against Children5.17.6 A recent study commissioned by the Ministry of Women and Child Welfare, Government of India, based on a survey of 13 States and 12,447 children, has come out12612757 Source: Annual Report on The Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) ActPublic OrderPolice Reformswith startling data on oppression and cruelty towards its most vulnerable segment i.e. children. The survey reveals that over half the children interviewed (53%) have been sexually abused with 23% being severely abused. Children who are working as well as street children are seen to be particularly vulnerable. While the findings from the study need to be moderated since they focused on the most vulnerable groups of children and not on a representative sample of the Indian child population, nonetheless it does point to a serious problem that has remained in the closet. Fig. 5.5 gives figures (for the year 2005) regarding incidence of various types of crimes against children. Time series data on these figures also show a general increase in all categories of crimes particularly those relating to trafficking of girls for prostitution as well as cases of child marriage and rape.5.17.7 The Government has taken some important steps recently for improving the condition of children including the passing of comprehensive amendments to the Juvenile Justice (Care and Protection of Children) Act, 2000 and setting up of National and State Commissions for the protection of child rights as well as Children’s Courts for providing speedy trials of offences or violation of children’s rights. However, as the survey referred to earlier indicates, much remains to be done.5.17.8 Tackling crimes directed at the most vulnerable sections of our society requires a combination of professionalism and sensitivity to ensure that the victims are not subjected to secondary victimisation even as they suffer from post traumatic stress. Unlike other victims, children often do not even realise that they are being wronged, and even if they do realize this, very few would complain about it to the authorities. Therefore, the enforcement agencies should themselves detect such violations and book the guilty. The normal approach of beginning an investigation only on receipt of an FIR would not suffice for dealing with crimes against children.5.18 National Security Commission5.18.1 The Supreme Court has directed that the Union Government should set up a National Security Commission:“The Central Government shall also set up a National Security Commission at the Union level to prepare a panel for being placed before the appropriate Appointing Authority, for selection and placement of Chiefs of the Central Police Organisations (CPOs), who should also be given a minimum tenure of two years. The Commission would also review from time to time measures to upgrade the effectiveness of these forces, improve the service conditions of its personnel, ensure that there is proper coordination between them and that the forces are generally utilized for the purposes they were raised and make recommendations in that behalf. The National Security Commission could be headed by the Union Home Minister and comprise heads of the CPOs and a couple of security experts as members with the Union Home Secretary as its Secretary”.5.17.9 Recommendations:a. The administration and police should be sensitised towards the special problems of the Scheduled Castes and Scheduled Tribes. Appropriate training programmes could help in the sensitising process.b. The administration and police should play a more pro-active role in detection and investigation of crimes against the weaker sections.c. Enforcement agencies should be instructed in unambiguous terms that enforcement of the rights of the weaker sections should not be downplayed for fear of further disturbances or retribution and adequate preparation should be made to face any such eventuality.d. The administration should also focus on rehabilitation of the victims and provide all required support including counselling by experts.e. As far as possible the deployment of police personnel in police stations with significant proportion of religious and linguistic minorities should be in proportion to the population of such communities within the local jurisdiction of such police station. The same principle should be followed in cases of localities having substantial proportion of Scheduled Castes and Scheduled Tribes population.f. Government must take concrete steps to increase awareness in the administration and among the police in particular, regarding crimes against children and take steps not only to tackle such crimes, but also to deal with the ensuing trauma.128129Public OrderPolice Reforms5.18.2 The tasks assigned to the said Commission are to recommend a panel of names for appointment of the Chiefs of the Central Police Organisations and to ensure coordination between these forces and also to review measure to upgrade the effectiveness of these forces.5.18.3 The Central Police Organisations include several armed forces of the Union, each constituted under a separate statute as indicated below:Border Security Force:Constitution of the Force: There shall be an armed force of the Union called the Border Security Force for ensuring the security of the Borders of India.58Indo-Tibetan Border Police:There shall be an armed force of the Union called the Indo-Tibetan Border Police Force for ensuring the security of the borders of India and performing such other duties as may be entrusted to it by the Central Government.59Central Industrial Security Force:Constitution of the Force : There shall be constituted and maintained by the Central Government an Armed Force of the Union to be called Central Industrial Security Force for the better protection and security of Industrial undertakings owned by that Government and to perform such other duties entrusted to it by the Central Government.60Central Reserve Police Force:There shall continue to be an armed force maintained by the Central Government and called the Central Reserve Police Force.615.18.4 From the above it is evident that all these ‘Forces’ are in effect armed forces of the Union though they are bracketed together as Central Police Organisations. Having the Chief of one of these Forces to recommend a panel of names for selection of the Chief of another Force may not be appropriate. For one, he/she will not be familiar with the working of other Forces. More over, a Chief of one of these Forces may also be in the zone of consideration for being appointed as Chief of another Force.5.18.5 These Forces work in close coordination with the Army in the border areas and in areas affected by insurgency. Therefore, coordination mechanisms are required at theoperational level. Furthermore, when they are deployed to assist the civil administration, coordination is required with the state authorities and the State Police. It is thus necessary to have operational coordination mechanisms rather than a coordination mechanism at the national level in which neither the Army nor the State Governments are represented. Similarly, measures for upgrading the effectiveness of each of these Forces should be reviewed for each force separately.5.18.6 Another aspect which needs to be emphasised is that the ‘set up’ recommended for the State Police cannot be replicated for the Central Police Forces as the Armed Forces of the Union cannot be compared with the State Police. The State Police enforce laws and investigate crime. The Armed Forces of the Union do not investigate crime.5.18.7 In the light of the facts mentioned above, it is clear that the answer to the question of appointment of the Chief of these Armed Forces of the Union does not lie in the creation of a National Security Commission. More so because, for dealing with all aspects of national security, there already exists the high powered National Security Council, headed by the Prime Minister. The Commission is of the view that the existing institutional mechanism of the oversight of the central police forces may continue to be discharged by the Ministry of Home Affairs of the Government of India. The selection of the Chiefs of these Central Polices Forces is done finally at the highest level of the Governmernt of India through the established procedure of the Cabinet Committee on Appointments.5.18.8 The Commission also notes that the Union Government is placing the relevant facts before the Supreme Court.5.19 Union-State and Inter-State Cooperation and Coordination5.19.1 Crime has no respect for state boundaries or even international borders. With rapid expansion of transport and communication facilities, several major crimes like organised crimes, terrorism, acts threatening national security, trafficking in arms and human beings and serious economic frauds are posing a serious threat to the society. In the past also, there was movement of criminals across the state borders posing jurisdictional and operational5.18.9 Recommendation:a. There is no need for a National Security Commission with a limited function of recommending panels for appointment to Chiefs of the Armed Forces of the Union. There should be a separate mechanism for recommending the names for appointment as Chief of each one of these forces, with the final authority vesting in the Union Government.13013158 The Border Security Force Act; Section 4.59 The Indo-Tibetan Border Police Act, 1992; Section 460 Central Industrial Security Force Act, 1968; Section 361 Central Reserve Police Force Act, 1949; Section 3Public OrderPolice Reformschallenges to the state police, but these were mostly confined to the inter-state border areas. Mechanisms have been evolved between the states for proper coordination in dealing with inter-state crimes and these have been in the form of coordination committees between states as well as at operational levels. There are also arrangements between the states which facilitate certain operations within a state by the police of another state. However, despite these arrangements, at times, issues come up which have to be resolved by higher levels of police or even by the State Government. This leads to delay which may hamper police operations. Apart from delay, there may be issues over which there are disagreements between the police of two or more states and this situation is liable to be exploited by criminals who are today far better organised and have a wide network.5.19.2 Dealing with crimes, which have inter-state as well as national dimensions, calls for effective coordination at the national level in addition to cooperation between the states. This is also necessary because the resources (technical, professional and financial) of the states are not adequate to meet the challenging requirements of these crimes. In certain cases like in dealing with Naxalism, there are national level coordination mechanisms including a few Union–State and Inter-State protocols for coordinated functioning. In most cases, however, there are hardly any institutional arrangements apart from periodic conferences and meetings which are obviously inadequate.5.19.3 Useful lessons can be drawn from the European example, where the countries are comparable in size to the Indian states. These countries have different criminal justice systems, different structures of police and still they have been able to evolve mechanisms to deal with crimes which have international ramifications. When the EC (European Communities) was constituted it focused on economic integration. This brought in free movement of persons, goods and services. Though this move benefited the member countries, it also eased movement of criminals and development of international criminal networks. The first step to curb this menace was the 1992 Maastricht Treaty which extended the mandate of the European Communities to include cooperation in justice and home affairs. Cooperation in criminal matters is termed as the ‘third pillar’ of the European Union. An international body, Europol (similar to Interpol) coordinates cross-border investigations, and seeks to provide support to domestic law. The Schengen agreement is much more effective and it includes sharing of information, cross-border supervision, “hot pursuit” across borders into the territory of another Member State etc. Though these arrangements have certain limitations, they have worked satisfactorily.5.19.4 In the United States, there are a large number of local and State police forces. Cooperation between the various police systems is achieved through inter-state compacts. The Federal Bureau of Investigation looks into several crimes which have inter-stateramifications. It investigates into various Federal Crimes such as organised crime, drug trafficking, espionage, terrorism, bank robbery, extortion, racketeering, kidnapping, money laundering, bank fraud and embezzlement. It investigates inter-state criminal activity and can arrest fugitives who cross state lines to avoid prosecution.5.19.5 The Commission is of the view that though each state may have its own structure of police, quite understandable in a country of sub-continental dimensions, with the basic criminal laws being the same nationaly, it is possible and highly necessary to have national level coordination institutions for various types of major crimes. It is also necessary to draw standard protocols for cooperation and coordinated functioning between the Union and the states. These protocols should cover issues like information sharing, joint investigation, joint operations, inter-state operations by a state police in another state, regional cooperation mechanisms and the safeguards required.5.19.6 Recommendation:a. The Ministry of Home Affairs should proactively and in consultation with the states, evolve formal institutions and protocols for effective coordination between the Union and the states and among the states. These protocols should cover issues like information/intelligence sharing, joint investigation, joint operations, inter-state operations by a state police in another state, regional cooperation mechanisms and the safeguards required.1321336Maintaining Public OrderMAINTAINING PUBLIC ORDER6.1.1.3 It may appear that riots, especially communal riots, break out spontaneously, but a deeper analysis would reveal that generally there is an incubation period during which the underlying cause develops and the discontent/distrust keeps on simmering. The spark is provided by an incident, which may even be accidental, causing the situation to flare up. The administration and police have to take measures as appropriate during different stages.1346.1 Public Order ManagementWith wide-ranging reforms in the police and the criminal justice system, the magnitude and frequency of major public disorders such as riots should reduce, but expecting that they would not occur would be obviously unrealistic. Therefore, the proper management of riots would continue to be an important function of the police as well as the administration. The measures required to deal effectively with riots or riot-like situations are examined in this chapter.6.1.1 Dealing with Mob Violence6.1.1.1 The number of cases of riots reported since Independence has shown an increase up to the 1990s and then a gradual decline (Fig 6.1). A riot or mob violence is an extreme manifestation of public disorder. It may be due to a clash between two or more sections of society, or demonstration of anger against the established authority. Although every effort has to be made to avoid mob violence, often despite best intentions mob violence does take place. The administrative machinery, particularly the law enforcement machinery must be geared to face any such eventuality.6.1.1.2 Government of India as well as State Governments have issued instructions from time to time outlining the steps to be taken for dealing with mob violence62. Several Commissions of Inquiry, which enquired into incidents of mob violence, particularly communal riots, have also made a large number of recommendations to prevent the recurrence of such incidents and also for effectively dealing with such outbreaks of violence.62 The Ministry of Home Affairs issued detailed guidelines in 1997 to promote communal harmony.Broadly, these measures could be classified as follows:a. Measures to be taken during normal times to address any situation so that it does not develop as a cause for rioting.b. Measures to be taken when an outbreak of riot is apprehended.c. Measures to be taken once a riot has started.d. Measures to be taken once the riot has been controlled.6.1.2 Measures to be Taken during Peace Time6.1.2.1 Preventing a riot is very important, since once it starts, it can cause irreparable damage to life, property and harmonious social relations. Therefore every effort must be made to address all events/issues which may lead to outbreak of riots and violence. For this, the first and foremost requirement is that the administration must win the trust of all sections of society by being responsive, transparent, vigilant and fair in their dealing with all sections of society. The grievances of individuals as well as groups should be promptly attended to. The police should act in a firm and fair manner against all law breakers without coming under the influence of any person or authority. The District Officer can play an important role here by providing leadership as well as coordinating and monitoring the activities of various departments/agencies. There are several examples wherein the administration and police have effectively used the mechanism of peace committees to reduce and even eliminate violence. Such fora improve mutual understanding among members of different communities and also between them and the administration.6.1.2.2 While the governance measures detailed above would go a long way in preventing breakdown of law and order, it is equally necessary to ensure that specific riot control plans based on ground realities are in place to meet any eventuality. In this connection it is necessary to ensure that each state and district has prepared riot control/internal security plans which are duly updated and are based on consultations with all stakeholders in the light of previous episodes. Further, it is important that these plans are explained to all functionaries including the police, the executive magistracy and community leaders so that they are fully aware of the roles required of them and their response is both quick and judicious in times of crisis. The Justice B N Srikrishna Commission had observed:135Public OrderMaintaining Public Order“ Though in the Communal Riot Scheme of 1986, and the ‘Guidelines’ there has been identification of the communal organisations in Maharashtra, and it is required that the police stations maintain an accurate and updated list of communal goondas, there has been scant attention paid to these. That is one of the weaknesses in the present Riot Control Scheme, which, though envisioned as efficacious, failed in practice”.6.1.2.3 Intelligence gathering should not slacken during this phase. As per the guidelines issued by the Ministry of Home Affairs, apart from the regular intelligence agencies, the District Magistrate and the police should also develop independent sources of information. This exercise should be carried out at micro level in the district. The Government of India and the State Governments have identified sensitive district/cities which should be given special attention. Justice B N Srikrishna Commission has recommended:“The officers at all levels must realise that the best way of feeling the pulse of the people is by moving with them and not travelling in vehicles with excessive security. Officers must continuously get an input of the judgement of the public of their role and keep correcting themselves and their subordinates to ensure that there is no deviation from acceptable standards”.It is the vigil and alertness maintained during normal peace times by having contacts with different sections of society, gathering, checking and counter-checking intelligence, and enhancing the level of preparedness, which can ultimately prevent the breakdown of public order. Effective implementation of regulatory laws by all public agencies will increase their compliance and thereby also assist in mitigating the factors leading to disorder.Municipal Laws related to construction of structures should be enforced rigorously.f. Public agencies should follow a zero tolerance strategy in dealing with violations of laws.6.1.3 Measures to be Taken When an Outbreak of Riot is ApprehendedThe administration, especially the police, is put to real test in this phase. Anticipating a riot requires vital inputs of intelligence as well as alertness and sound judgement particularly on the part of the police and the Executive Magistrates. Such an apprehension may be on the basis of past occurrences, some crucial intelligence input, religious festivals especially including processions, etc. Once it appears that an outbreak of riot is likely, the police has got powers which can be used to prevent the outbreak. These include:?Launching security proceedings against the suspects; preventive arrests (Sec 151 CrPC) and preventive detention; depositing firearms;?Resolving disputes relating to possession of land by using Section 145 CrPC;?Regulating processions and gatherings;?Imposing prohibitory orders (Section 144 CrPC); and?Deploying police in sensitive areas/increased patrolling and searching of suspected places.6.1.3.1 Security Proceedings6.1.2.4 Recommendations:6.1.3.1.1 Chapter VIII of The Indian Penal Code lists out (in Sections 141-158) various types of offences against public order and prescribes penalties against the same. The importance of bringing the offenders to book lies in creating a salutary and deterrent effect against those prone to committing such offences. Besides, the law also provides for a string of preventive measures in the statute books which, if used judiciously, can greatly help the administration in maintaining public order. Such preventive measures are outlined in Chapter VIII of the Criminal Procedure Code, 1973 (CrPC). For prevention of future commission of offences against public order, the provisions of this chapter authorize the Judicial/Executive Magistrates to obtain bonds from suspected trouble makers. Under Section 106, the Judicial Magistrate may order a previously convicted person to execute a bond for good behaviour. Section 107 authorises an Executive Magistrate to require a person/persons to execute a bond with or without sureties for keeping peace (Section 107). The Executive Magistrate can obtain similar bonds from persons disseminating seditious matter (Section108), suspected persons (Section109) as well as habitual offenders (Section110). In urgent cases of nuisancea. The administration should be responsive, transparent, vigilant and fair in dealing with all sections of society. Initiatives such as peace committees should be utilised effectively to ease tensions and promote harmony.b. The internal security plan/riot control scheme should be updated periodically in consultation with all stakeholders and in the light of previous episodes. The role of all major functionaries should be clearly explained to them.c. A micro analysis should be carried out in each district to identify sensitive spots and this should be regularly reviewed and updated.d. The intelligence machinery should not slacken during normal times and credible intelligence should be gathered from multiple sources.e. Regulatory laws such as the Arms Act, 1959, Explosives Act, 1884 and136137Public OrderMaintaining Public Orderor apprehended danger to public tranquility, the Magistrate is empowered under Section 144 CrPC to bar public assemblies and direct person/s to abstain from specified acts that may cause a breach of public peace. Finally, Section 151 CrPC empowers a police officer to arrest without a warrant any person suspected to commit an offense including any offence against public order.6.1.3.1.2 Despite the availability of such wide powers to the authorities to take preventive measures against those trying to breach public tranquility, the timely, well planned and judicious use of these provisions by the local police and magistracy is often lacking. The field functionaries, both in the executive magistracy and police, are often not fully aware of the manner in which these provisions should be used. In many states, no detailed guidelines for their use have been prescribed for the Police and the Executive Magistrates and the two often work at cross purposes when it comes to taking preventive measures. There are instances where the Executive Magistrate rejects the information report submitted by the police without proper appreciation of the facts. There are also instances of the police resorting to preventive measures more for rounding up vagrants and boosting their case statistics than initiating such measures against real trouble makers. Most often these proceedings once initiated are not taken to their logical conclusion and are allowed to lapse after the prescribed period of six months. It is therefore necessary that the police and especially the Executive Magistrates understand the importance of these provisions in the maintenance of public order.6.1.3.2 Addressing Property Disputes to Prevent Disruption of Public Order6.1.3.2.1 A variety of factors including fragmentation and more frequent transfer of land, unsatisfactory status of land records and above all, exceedingly long drawn out civil proceedings concerning property disputes in the civil courts, account for the steadily increasing instances of breach of public order and tranquility due to disputes over properties. While property disputes always prominently figured as motives for crime, the tendency,of late, is for such disputes to provoke group violence as with increasing pressure on land, property disputes gain prominence and involve more people. There are also indications that increasing tendencies of faction formation in villages is also responsible for property disputes leading to group clashes. Lastly, in isolated pockets where waste land or unsettled land is still available, delays in removing or regularising encroachments, too, have led to serious breaches of peace.6.1.3.2.2 Disputes over title or ownership are normally to be adjudicated in accordance with the provisions of the Civil Procedure Code read with applicable laws like the Indian Evidence Act, the succession laws, the personal laws governing the subject and other relevant provisions. However, there are two broad exceptions to these provisions. First is the powers of the Revenue Courts to carry out mutations and land records based on prima facie evidence (Revenue Courts in the eastern parts of the country are however generally, discouraged from granting mutations once acquisition of interest is disputed). The other exception is the power of Executive Magistrates to take immediate preventive action when a person in possession of a immovable property apprehends forcible dispossession or is dispossessed within a period of two months preceding the date of filing a complaint with the concerned Executive Magistrate. The relevant provisions for dealing with such complaint are found in Sections 145, 146 and 147 of the Code of Criminal Procedure. Section 145 is invoked when there is apprehension of breach of peace on account of property dispute and the Executive Magistrate, on being satisfied about the veracity of such information, is required to call upon the disputing parties to submit their claim in the form of written statements. Without going into the merits of the rival claims to title, the Magistrate is to determine who was in actual physical possession from the date of complaint or whether the complainant was forcibly evicted in the preceding two months from the date of complaint. Based on his/her objective determination, the Magistrate can then issue an order directing that the party in possession shall not be disturbed (except by the due process of law) or the party wrongfully dispossessed shall be restored possession. If the Magistrate is unable to satisfy himself as to who was in possession, the property is attached and a receiver is appointed till the rights are decided by the Civil Court.6.1.3.2.3 While these provisions have often proved effective in preventing property disputes from causing breach of public tranquility, recent pronouncements of courts have diluted their utility. Thus, although the provisions of the CrPC nowhere suggest that the Executive Magistrate should refrain from using these provisions solely on the ground of subsistence of a civil suit in respect of the property in question, certain pronouncements of the Supreme Court and High Courts {Mahant Ram Sumer Puri vs State of UP AIR 1985 SC472, and Shanti Prasad vs Shakuntala Devi 2004 (1)SCC 438} have led to the view that in case of pending litigation in Civil Courts, proceedings under Section 145 would not lie and the6.1.3.1.3 Recommendations:a. The use of preventive measures in a planned and effective manner needs to be emphasized. Training and operational manuals for both Executive Magistrates and police need to be revised on these lines.b. Regular supervision and review of these functionaries by the DM and the SP respectively should be done to focus attention on effective use of these provisions. For this purpose, a joint review on a periodic basis by the DM and SP should be done.138139Public OrderMaintaining Public OrderCivil Court itself must be approached for appropriate interim relief. It has further been propounded that in case of apprehension of breach of peace, the provision under Section 107 CrPC should be used in place of Section 145 CrPC. These recent orders of the Supreme Court are at variance with earlier pronouncements in Deo Kuer vs. Sheoprasad 1965(3) SCR 655 and Bhinka vs Charan Singh 1959 SCR (Supp) 798 which took the classical view that proceedings under Section 145 CrPC before the Executive Magistrate are maintainable even if the substantive matter is pending before the Civil Court.6.1.3.2.4 The Commission has carefully considered the matter. Considering the time taken in disposal of civil suits, the preventive and interim nature of proceedings under the CrPC and the fact that proceedings under this section entail only a temporary remedy, there does not appear to be any justification to deny the opportunity of quick redressal to the wronged party on the ground that a civil court is looking at the long term solution of the dispute. Given the time taken by the average civil suit, there is always a possibility that one of the parties may take the law into its own hands and cause a breach of peace by attempting to dislodge the other party of possession. The court of the Executive Magistrate has a very limited role in cases which does not abrogate from the undoubted powers of the civil court to adjudicate on questions of title or even issue declarations on possession, based on detailed examination of evidence. The wholesome provision of Section 145 CrPC must be permitted to operate in the limited sphere laid down therein and not further restricted.6.1.3.2.5 Proceedings under Section 107 CrPC are no substitute to those under Section 145 where the cause of an apprehended breach of peace is a dispute over possession of immoveable property or boundaries thereof. It is clear that the scope of inquiry available under the former Section is not suitable for determination of questions of physical occupation or forcible ouster of possession within sixty days. It is also clear to the Commission that if, in cases already under litigation in the civil courts, the Executive Magistrates were to proceed under Section 107 CrPC the nature of their inquiries will be practically the same as is laid down under Section 145 CrPC.6.1.3.2.6 There is little doubt that disputes relating to possession, particularly with regard to boundaries of land and water, arise more frequently where land records, including maps, are not periodically updated. As far as urban areas are concerned, in a large number of states there is no provision for maintenance of land records properly and property records for the purpose of municipal taxation reflect the ground position poorly, contributing to disputes about boundaries and demarcation of properties. The Commission proposes to consider this aspect in its report on urban governance.6.1.4 Regulating Processions, Demonstrations and Gatherings:6.1.4.1 A large number of communal riots have their origin in religious processions. Sometimes, religious processions become a show of strength for a community and the organisers of such processions deliberately wish to take the processions through communally sensitive areas. It has been observed that when such processions pass through sensitive areas, even small incidents, accidents, or rumours result in outbreak of major communal violence. It is, therefore, necessary that such processions are properly regulated and all precautions are taken so that the scope for any communal flare up is minimised. Other processions and demonstrations also, if not regulated properly, have the potential of precipitating violence.6.1.4.2 Justice D P Madon Commission on the Bhiwandi, Jalgaon and Mahad Riots in May 1970, observed:“Processions in one form or another, particularly by way of demonstration or a protest march or morchas, have become the regular feature of ones daily life, dislocating traffic,6.1.3.2.7 Recommendations:a. An Explanation may be inserted below Section 145 of the Code of Criminal Procedure clarifying that when from the evidence available with the Executive Magistrate it is clear that there is an attempt to dispossess a person or where a person has been illegally dispossessed of his property within sixty days of filing the complaint and that such acts cause a reasonable apprehension of a breach of the peace, such magistrate can pass an order contemplated in sub- section (6) of the aforesaid Section notwithstanding pendency of a civil case between the parties involving the same property.b. A time frame of six months may be stipulated for concluding the proceedings.c. Specific but indicative guidelines may be issued by the Ministry of Urban Development to the State Governments to lay down the minimum standards for maintenance of land records in urban areas including municipal ward maps so as to minimize possibility of disputes about possession and boundary of immoveable property.d. Detailed guidelines already exist in almost all states to periodically update land records in rural areas. Strict compliance of such guidelines needs to be ensured as out of date land records contribute to disputes and resultant breaches of peace.140141Public OrderMaintaining Public Orderpreventing other citizens, tired after a day’s hard and honest work, from going home at reasonable hour, and causing anxiety to police and the law and order agencies. What was once the the King’s highway for his subjects to pass and repass has today become the venue for demonstrations and morchas and a battleground for political and communal forces. Even processions taken out on religious and festive occasions today stand on no different footing, but pose an equal law and order problem. The spirit of festivity has long gone out of them and what was once a season of festivals has now become a season of tension and disorder”.6.1.4.3 Processions can be regulated under the Indian Police Act, the State Police Acts or even under CrPC. Processions, especially religious ones, should be regulated and properly escorted. Commissions of Inquiry, in the past have made several recommendations to regulate processions.6.1.4.4 Guidelines need to be framed in advance to lay down the norms of conduct for organizers and participants of processions and demonstrations. Recourse may be taken to existing provisions of law to enforce the guidelines, if required. Violation of such guidelines/orders should entail action under Section 188 IPC. There is a strong case for levying exemplary ‘damages’ on organizations or individuals found to have instigated rioting and group violence. The punitive fines may be in proportion to the damage caused and its proceeds disbursed among the victims.6.1.5 Imposition of Prohibitory Orders:6.1.5.1 Section 144 CrPC empowers the Executive Magistrates to impose several kinds of prohibitory orders. This is a very effective tool in the hands of the administration to prevent outbreak of violence. However, it is found that often such orders are promulgated only after outbreak of violence. Although, the imposition of prohibitory orders, even after the outbreak of violence helps in containing violence, such orders can be very successful if they are promulgated and enforced effectively before the outbreak of violence. As prohibitory orders have far reaching consequences, they are sometimes challenged in courts of law. It is therefore necessary that the orders are correctly drafted. Executive Magistrates should be properly trained to pass orders which can withstand judicial scrutiny. It would be desirable if a manual for Executive Magistrates is issued by the State Governments for the guidance of the Executive Magistrates. Such manuals should also contain various case laws on the subject.6.1.5.2 It has been brought to the notice of the Commission that at times prohibitory orders are not strictly enforced. Such a practice may become counter productive. All violators of prohibitory orders should be prosecuted under Section 188 IPC. Once prohibitory orders are imposed, all subsequent events should be video-graphed in sensitive areas. This would act as a deterrent as well as be available as evidence in prosecuting the offenders.6.1.5.3 Recommendation:6.1.4.5 Recommendations:a. Prohibitory orders once imposed, should be enforced effectively. Videography should be used in sensitive areas.142a. Based on the experience with major riots and the recommendations of various Commissions of Inquiry and pronouncements of the Supreme Court and the High Courts, fresh and comprehensive guidelines may be drawn up for regulation of processions, protest marches and morchas63.b. The guidelines should include preparatory steps (through intelligence sources), serious consultation and attempts to arrive at agreement with the groups/ communities involved, regarding route, timing and other aspects of procession. They should also cover prohibition of provocative slogans or acts as well as carrying of lethal weapons. It should be specifically stated in the guidelines that all processions or demonstrations should be dealt with the same degree of fairness and firmness.c. Organisations and persons found guilty of instigating violence should be liable to pay exemplary damages. The damages should be commensurate with the loss caused by such violence. The law should provide for distribution of the proceeds of damages to the victims of such violence.6.1.6 Measures to be Taken Once a Riot has Started6.1.6.1 Though there is a laid down drill for the management of law and order problems, certain measures need to be re-emphasised here. As soon as breach of peace is apprehended, the police force available in the district/city should be properly mobilised. If considered necessary, additional force may be requisitioned and if the situation so warrants there should be no hesitation or delay in alerting, requisitioning and deployment of central forces. It should be ensured that police officers with knowledge of local areas are deployed in sensitive spots. Despite preventive measures, if violence erupts, the first priority would obviously be to suppress this violence. In case of communal violence the situation should be brought under control by effective use of force. Prohibitory orders, if not already imposed, should be promulgated forthwith and enforced firmly. There would be need for vigilance even if there is a lull because it has been noted that this period of temporary respite is often used by the trouble makers and rioters to re-organise themselves and carry out subsequent attacks. Vulnerable areas need to be patrolled and protected even after peace has been restored.14363 Morcha: It is a Hindi word which connotes an organised demonstrationPublic OrderMaintaining Public Order6.1.6.2 The police often resort to rounding up rowdy and mischievous elements to bring the situation under control. While this is necessary, it is equally important to ensure that the instigators are also arrested.6.1.6.3 It appears that there is a tendency to delay the deployment of armed forces even if the situation so warrants. Justice B N Srikrishna Commission has observed:“The top officers and the State Administration should not treat the calling out of the army or any other force as infra dig or as a blow to their pride. In a contingency where it is required, after honest and self searching appraisement, the army authorities should at once be moved for operational duties for dispersal of unlawful assemblies”.6.1.6.4 The Commissioner of Police or the District Magistrate and the Superintendent of Police should be given a free hand in dealing with the situation. Unwarranted political interference should not be allowed at any cost while dealing with mob violence or, later, while investigating cases. During riots, visits by political leaders should be need based. Even well intended visits require VIP bandobast efforts which take away essential police staff from the much needed deployment for maintenance of law and order. Also, any provocative acts like public display of the dead or wounded should be totally banned. The media should be briefed with correct facts and figures so that there is no scope for rumour mongering.6.1.6.5 Once peace has been restored, relief measures should be taken up immediately. Any delay in doing so (even on grounds of sheer fatigue) can result in prolonged suffering of the victims which may further aggravate tensions. During extended periods of prohibitory orders, the District Magistrate should ensure that essential supplies are maintained, especially in the vulnerable areas.e. The media should be briefed with correct facts and figures so that there is no scope for rumour mongering.f. The police needs to be equipped with state-of-the-art crowd dispersal equipments.g. The District Magistrate should ensure that essential supplies are maintained and relief is provided, especially in vulnerable areas and particularly during prolonged spells of ‘curfew’.6.1.7 Measures to be Taken Once Normalcy has been Restored6.1.7.1 This is an important phase in dealing with mob violence, as positive steps taken during this phase could reduce the possibility of future riots. Investigation and prosecution of offences is an important part of this phase. Public memory being short, this phase is often not taken seriously and as a result the real culprits escape punishment. Sometimes, political and other extraneous influence is brought on the police so that cases against the culprits are not registered, or if such cases have already been registered, not properly investigated. The Commission has already recommended separation of investigation from other functions of police and the grant of substantial autonomy to the investigation agency. It is hoped that this would insulate the investigation from any unwarranted influence.6.1.7.2 A large number of riots including communal riots are often incited by vested interests who attempt to promote enmity between different religious or social groups. All such acts constitute an offence under Section 153A of IPC:“153A. Promoting enmity between different groups on grounds of religion, race, place of birth, residence, language, etc., and doing acts prejudicial to maintenance of harmony.6.1.6.6 Recommendations:(1) Whoevera. If violence erupts, then the first priority should be to quickly suppress the violence. In cases of communal violence, the situation should be brought under control by effective use of force.(a) By words, either spoken or written, or by signs or by visible representations or otherwise, promotes or attempts to promote, on grounds of religion, race, place or birth, residence, language, caste or community or any other ground whatsoever, disharmony or feelings of enmity, hatred or ill-will between different religious, racial, language or regional groups or castes or communities, orb. Prohibitory orders must be enforced rigorously.(b) Commits any act which is prejudicial to the maintenance of harmony between different religious, racial, language or regional groups or castes or communities, and which disturbs or is likely to disturb the public tranquility, 2[or]c. If the situation so warrants, the forces of the Union and the Army should be requisitioned and used without any reluctance or delay.d. The Commissioner of Police or the District Magistrate and the Superintendent of Police should be given a free hand to deal with the situation in accordance with law.144145Public OrderMaintaining Public Order146Shall be punished with imprisonment which may extend to three years, or with fine, or with both.”An obstacle in the speedy investigation of cases related to public order, especially against the instigators is because of the need to obtain sanction for prosecution under Section 196 CrPC.“196. Prosecution for offences against the State and for criminal conspiracy to commit such offence.(1) No Court shall take cognizance of-(a) any offence punishable under Chapter VI or under section 153A, of Indian Penal Code, or 2*[Section 295 A or sub section (1) of section 505] of the Indian Penal Code (45 of 1860) or(b) a criminal conspiracy to commit such offence, or(c) any such abetment, as is described in section 108A of the Indian Penal Code (45 of 1860), except with the previous sanction of the Central Government or of the State Government.”6.1.7.3 A suggestion was made before the Madon Commission that no sanction should be necessary for a prosecution under Section 153A of the Indian Penal Code. The Madon Commission, however did not agree with this suggestion and stated that the power to grant sanction to prosecute should rest only with the Union Government or the State Government as now provided by Section 196(i) of the CrPC.6.1.7.4 This issue has been examined by the Commission. It is felt that the sanction prescribed under Section 196 CrPC does not serve any useful purpose. Moreover, once a case is chargesheeted by the police, the magistrate would frame charges only if there is a prima facie case, and this is adequate and reasonable protection against any malicious prosecution. Moreover, with the checks and balances suggested in this Report with regard to police functioning, such a provision becomes even more unnecessary. Therefore, such sanction should not be necessary for prosecution.6.1.7.5 It has been brought to the notice of the Commission that, not infrequently, cases launched against persons for rioting have been sought to be withdrawn on grounds of ‘public interest’. Justice B N Srikrishna Commission recommended that once a prosecution has been launched against a person for rioting or other communal offence, it should under no circumstances be withdrawn. The Commission fully agrees with this view.6.1.7.6 Commissions of Inquiry are usually instituted following large scale riots. Often these Commissions take unduly long to submit their reports. Such delays are not in public interest since this could lead to delay in follow up action by the authorities against those who were responsible for the riots. It should therefore be mandated that such Commissions of Inquiry submit their reports within six months and in no case later than one year. The government should act upon the recommendations immediately. If for some reason, government does not agree with the recommendations/observations in the report, it should record its reasons and make them public.6.1.7.7 All riots should be documented properly and analysed so that lessons could be drawn from such experiences. The manual for instructions for police and executive magistrates for dealing with law and order problems should be periodically revised in the light of experience gained.6.1.7.8 Last but not the least, the existing arrangements for long term relief and rehabilitation of victims of riots leave much room for improvement. Sanction of ex-gratia payments for loss of life and property, apart from being inadequate are often alleged to be arbitrarily distributed. The insurance system is so far not geared to recompense loss of property. Concrete steps need to be taken to formulate rehabilitation packages in vulnerable areas.1476.1.7.9 Recommendations:a. No sanction of the Union Government or the State Government should be necessary for prosecution under Section 153(A). Section 196 Cr PC should be amended accordingly.b. Prosecution in cases related to rioting or communal offences should be not sought to be withdrawn.c. Commissions of Inquiry into any major riots/violence should give their report within one year.d. The recommendations made by a Commission of Inquiry should normally be accepted by the Government and if the Government does not agree with any observation or recommendation contained in the report of the Commission, it should record its reasons and make them public.e. All riots should be documented properly and analysed so that lessons could be drawn from such experiences.f. There is need for adequate follow up to ensure proper rehabilitation of victims.Public OrderMaintaining Public Order6.2 Accountability of Public Servants Charged with Maintaining Public Order6.2.1 The Gujarat riots of 2002 have rekindled the debate about the role of public servants who have a constitutional duty to maintain public order but who, by their inaction, allegedly due to political interference, allowed large scale breach of public tranquility to go virtually unchecked. At the other extreme, bona fide actions of public servants who order the use of force to quell rioting may lead to setting up of a Commission of Inquiry to go into their conduct. The net result is a skewed incentive that seems to penalise action and reward inaction. As a result, many key field functionaries hesitate to take decisions on the spot, even though they are empowered to do so and prefer to wait for instructions ‘from the top’.6.2.2 Despite the setting up of a large number of Commissions of Inquiry, including the two historical ones following the anti-Sikh riots in Delhi in 1984 and the post-Godhra riots in Gujarat in 2002, there have hardly been any instances of quick and sure justice being meted out to the rioters as well as their instigators. Similarly, rarely is a senior police or administrative officer punished for inaction. This situation underscores the need for a system that ensures penalty for inaction and at least protection, if not reward, for those who take decisive action in good faith.6.2.3 In general, most states fix the responsibility on the DM and the SP for major breakdowns in law and order. Usually, this takes the form of summary transfers or suspensions, neither of which can be considered a penalty given that such suspensions are only temporary. Inquiry Commissions that are often set up in the aftermath of major public disorder are a useful tool for the state to deflect public anger but often their proceedings are too long drawn and their findings too delayed for them to serve any useful purpose. Therefore, a permanent and independent accountability body as proposed by the Commission would have the twin benefit of affording protection to public servants who act in good faith in trying to maintain public order and fixing responsibility on those who shirk even their lawful duties.6.3 The Executive Magistrates and the District Magistrate6.3.1 An Executive Magistrate is an officer of the District administration who has been assigned certain responsibilities under the CrPC, the State Police Acts and also under certain special laws. Executive Magistrates are authorized to use force against people. They can also take the assistance of the Armed Forces to quell a riot. The executive magistracy has a hierarchy – Executive Magistrate (Taluka/Tehsil/Special), Sub-Divisional Magistrate, Additional District Magistrate and District Magistrate.6.3.2 The Police Act, 1861 states:The administration of the police throughout the local jurisdiction of the Magistrate of the district shall, under the general control and direction of such Magistrate, be vested in a District Superintendent and such Assistant District Superintendents as the State Government shall consider necessary.646.3.3 The State Police Acts (wherever they exist) also provide a similar structure and control mechanism.The Superintendent of Police shall be the head of the Police in the district or part of the district for which he is appointed as Superintendent. (2) The administration of the Police in a district or part of a district by the Superintendent of Police shall be subject to the general control of the District Magistrate of the District. (3) In exercising such control, the District Magistrate shall be governed by such rules and orders as the Government may make in this behalf .656.3.4 The District Magistrate (DM) is the head of district administration and is also responsible for the maintenance of law and order in the district. The Police Act/State Police Acts give the DM power of superintendence, direction and control over the district police. An issue which has been raised often is to what extent, if at all the District Magistrate should control the District Police. This issue has engaged the attention of almost every Police Commission and they have given different views.6.3.5 The West Bengal Police Commission (1961) observed:“We think it important that the District Magistrate’s position, as the officer ultimately responsible for police administration in the district, should not be whittled away or allowed, to be whittled away in any manner although he may have other duties to attend to. Law and order and prevention and detection of crime are no less important6.2.4 Recommendation:a. The State Police Complaints Authority should be empowered to identify and fix responsibility in cases of glaring errors of omission and commission by police and executive magistrates in the discharge of their duties relating to the maintenance of public order.14814964 Section 4, Police Act, 186165 Section 16, The Karnataka Police Act, 1964Public OrderMaintaining Public Order150than any development activities with which he may be concerned, and it seems to us wholly undesirable that police officers should come to regard him as interloper or intermeddler in a field which they should have all to themselves.”6.3.6 The Tamil Nadu Police Commission examined this issue and stated:“We believe that existing arrangements are working well in practice. There is, however a feeling among the higher police officers to which expression has been given in the memorandum furnished to us by the Madras branch of the Indian Police Service Association, that the role assigned to the District Collector, in relation to the working of the Police Department in the districts is anamolous; that it constitutes, somehow a reflection on the competence of the police department to perform the functions assigned to it; and that the District Collector should be divested of powers of “direction and control” relating to the field of responsibility assigned to the Superintendent of Police.The functions vested in the District Collector under existing rules and standing orders quite clearly are not intended in order to enable the former to interfere with the internal administrative independence of the Superintendent of Police or with the functioning of the chain of authority from top to bottom of the police department. It is intended to fulfil overall policy requirements of the government at the district level through a single authority. The simplest way in which the relationship between the District Collector and the Superintendent of Police may be described is that it is intended to reproduce at the district level the relationship between the Chief Minister and the Home Minister at the State political level”.6.3.7 The Bihar Police Commission (1961) observed:“The Commission feels that the relationship between the District Magistrate and the Superintendent of Police should be that of two colleagues working to a common end but they are of the view that time is not ripe for recommending that the general control of the District Magistrate as contemplated in Section 4 of the Police Act, 1861 should be modified. They however, express the hope that if all the improvements that have been suggested in this Report for a better police administration are given effect to, the police force should come up to the required standard and a time may come when their officers may be in a position to exercise greater and greater executive power.”6.3.8 The Uttar Pradesh Police Commission recommended:“In principle we do not agree that there is anything basically wrong with controls exercised by the District Magistrate over the Police..... We fully endorse the following observations made by the Indian Police Commission, 1902.“It is true that the absolute necessity of maintaining the responsibility of District Magistrate demands that he should receive the fullest assistance from the Superintendent of Police, and the latter should promptly carry out his orders. But the administration of the police is vested in the Superintendent of Police. He is the Head of Police in the District. Though he must carry out all lawful orders of the District Magistrate, he is not his assistant in the sense his Assistant Collector is; and it destroys police work to put him in that position. No unnecessary interference with the Superintendent of Police should be allowed. The Police Force, though bound to obey the Magistrates orders in regard to criminal administration, should be kept as far as possible departmentally distinct and subordinate to its own officers. And the District Magistrate should avoid so as to weaken the influence and authority of the Superintendent of Police; for discipline is one of the most important features of police work.”6.3.9 The National Police Commission (1977) stated:“The new police which we hope to create should have a self-contained organizational structure where there is no distortion of command and no dilution of accountability. We have also noted that police functions both in the investigative and preventive areas fall under the law and are subject to judicial scrutiny. Therefore, the police should perform with full accountability to the law of the land. The activities of the police organization require a high degree of interactive and multi-directional communicative skills with the community. Hence the police should have direct contact with the people whom they profess to serve. We are, therefore, of the view that the new police organization should function with a high degree of operational independence subject only to the control and direction of its own departmental hierarchial levels.We recommend that the role of the District Officer as the Chief Coordinating Authority in the district be recognised and respected by the police. The District Officer should have the capability to generally advise the police regarding the extent and quantum of performance required from them for the purpose of achieving developmental targets and also to maintain administrative standards. The District Officer is in a unique position of being responsible for the overall welfare of the people of the district and the overall effectiveness of administration in the district. In discharging his responsibility he has a large measure of public contact and as such is likely to have substantial information regarding the mood and temper of the population and its various other requirements. We are of the view that the District Collector should not only share his information with the police in the district but should also be in a position to ascertain the steps taken by the police to ensure that quick solutions to problems are found to public satisfaction and the level of administration is maintained at a high pitch of efficiency.151Public OrderMaintaining Public OrderWe do not think that subordination of any agency to another is essential or inescapable to bring about healthy cooperation between the two agencies. On the contrary we feel that subordination is extremely unsuitable factor to generate satisfactory coordination. Subordination pre-supposes the carrying out of orders and hence instead of there being any dialogue, discussion and thereafter a decision, the only implicit compliance where one party performs under resentment and the other under apprehension. Therefore, if, as we have recommended subordination of the police to the District Officer is removed, would bring about better coordination in a cordial and congenial atmosphere where identification of a common interest and orientation of action towards that interest would become automatic”.6.3.10 The First Administrative Reforms Commission (1967) also went into this issue and recommended that the Collector and the District Magistrate as the head of the regulatory administration in the district should exercise general supervisory control over the police organization in the district. Except in an emergency, he should not interfere with the internal working of the police administration.6.3.11 The Rajasthan Administrative Commission also examined this issue and was of the view:“Lastly, rightly or wrongly, Collector has since the beginning come to be regarded as the key coordinator and representative of the Government at the district level. Both these capacities as coordinator and representative of Government postulate certain overriding powers that can help in satisfactory redressal of people’s grievances and generate faith in their minds that on behalf of Government the Collector will look after their general welfare. Erosion of this feeling will directly affect his responsibility as the coordinator on behalf of Government and to that extent give a cruel blow to the entire administrative set-up in the society. With the trend now irrevocably in the direction of democratic decentralisation, Collector’s role and powers in the sphere of general developmental activities are in any case on the wane. In other words, the authority and power of patronage that he derived from his role in welfare activities will no longer be available to him. This situation makes it all the more desirable that his say and influence in other spheres of general administration is retained so as to enable him to discharge his role as the coordinator and representative of Government. Therefore, looking to the above it appears that on the balance, non-integration of magisterial powers with police is more convenient as well as in keeping with democratic values of our society.”6.3.12 The Police Act Drafting Committee, while drafting the model police Act, defined the relationship between the DM and SP as follows:“Coordination within the District Administration(1) For the purpose of efficiency in the general administration of the district, it shall be lawful for the District Magistrate, in addition to the provisions of the Code of Criminal Procedure, 1973 and other relevant Acts, to coordinate the functioning of the police with other agencies of district administration in respect of matters relating to the following:(a) the promotion of land reforms and the settlement of land disputes;(b) extensive disturbance of the public peace and tranquility in the district;(c) the conduct of elections to any public body;(a) the handling of natural calamities and rehabilitation of the persons affected thereby;(b) situations arising out of any external aggression or internal disturbances;(c) any similar matter, not within the purview of any one department and affecting the general welfare of the public of the district; and(d) removal of any persistent public grievance.(2) For the purpose of such coordination, the District Magistrate may call for information of a general or special nature, as and when required, from the Superintendent of Police and heads of other departments of the district. Where the situation so demands, the District Magistrate shall pass appropriate orders and issue directions in writing, to achieve the objective of coordination.(3) For the purpose of coordination, the District Magistrate shall ensure that all departments of the district, whose assistance are required for the efficient functioning of the police, will render full assistance to the Superintendent of Police.”6.3.13 The Commission is of the view that police administration is very much a part of civil administration. Diluting the role of the district magistrate is neither desirable nor practical. Governance requires coordinated efforts of various wings of government and this necessitates the existence of a coordinating agency. Coordination becomes ineffective if the coordinating agency has no authority over the departments involved. Moreover, as police represents the coercive power of the State, there is need to temper this power by a government functionary who can take a holistic view of the situation. There is need to achieve a balance between the imperative to use police force and the rights of citizens. This could be best achieved when such a balancing is done by an independent functionary. The Commission is however of the view that this control should not spill over to operational matters for which the District Police Chief should have full authority and responsibility.152153Public OrderMaintaining Public Order6.3.14 The Commission is of the view that the formulation proposed by the PADC needs to be changed so that there is no ambiguity in the role of police and the District Magistrate. Although the circumstances under which the District Magistrate can issue directions to the police have been listed in the Model Bill, there is need to widen this List. It needs to be provided that the District Magistrate should be able to issue directions for implementation/ enforcement of laws and government policies and programmes. It should also be stipulated that such directions shall be binding on the police.sensitive to the concerns of the citizens and the police and have a thorough knowledge of laws and rules. As they have to conduct legal proceedings and pass quasi-judicial orders, it is very necessary that they have the capability to pass speaking orders, which can withstand judicial scrutiny. This could be achieved by properly designed training programmes. Besides, having a Manual for Executive Magistrates, periodically updated, on the lines of the police manual would go a long way in guiding them in their tasks.6.4.2 Recommendations:6.3.15 Recommendation:a. All officers likely to be posted as Executive Magistrates should be specially trained in the relevant laws and procedures and should be eligible for posting only after qualifying in an examination.b. On the lines of a police manual, each state should also evolve a Manual for Executive Magistrates.a. The position of the District Magistrate vis-à-vis the police, and as a coordinatorand facilitator in the district needs to be strengthened. The District Magistrate should be empowered to issue directions under the following circumstances:i. promotion of land reforms and settlement of land disputes;ii. extensive disturbance of public peace and tranquility in the district (The decision of the DM as to what constitutes extensive disturbance of public peace should be final);iii. conduct of elections to any public body;iv. handling of natural calamities and rehabilitation of the persons affected thereby;v. situations arising out of any external aggression or internal disturbances;vi. any similar matter, not within the purview of any one department and affecting the general welfare of the public of the district;vii. removal of any persistent public grievance (as to what constitutes persistent public grievance, the decision of the DM shall be final); andviii. whenever police assistance is required to enforce/implement any law or programme of the government.b. These directions shall be binding on all concerned. Directions in respect of item No. ii should normally be issued in consultation with the Superintendent of Police.6.4 Capability Building of Executive Magistrates6.4.1 It has been observed that Executive Magistrates are often inadequately trained to discharge their legal responsibilities which require them to work closely with the police, be6.5.2 In parts of the country which are facing problems of militancy, extremism and terrorism, apart from the agencies of civil administration, Central Police Forces and even the Army have remained deployed for long periods. Needless to say, effective institutional mechanisms for coordination between all agencies operating in a common area, covering central and state agencies, would have to be put in place, at different levels. Further, the role and responsibilities of each agency, as far as possible, should be clearly spelt out keeping in mind the overall objective of maintaining public order.6.5.3 The need for coordination is even more necessary for sharing of intelligence. This needs special attention in ‘sensitive’ areas where there is a multiplicity of intelligence agencies, each required to communicate inputs vertically within their own hierarchies. This often reduces6.5 Inter-Agency Coordination6.5.1 As stated earlier, maintenance of peace and order is the cornerstone of good governance and has several stakeholders. It follows therefore that even in ‘peace time’ various governmental agencies need to be involved to rule out any threat to public order. It has been the experience that where the police and magistracy do not enlist the support of other agencies, full anticipation and forestalling of untoward incidents is often not achieved. Agencies involved with the normal tenor of social and economic activities also have an equally important role. Where there is breach of peace, the role of all such agencies assumes even greater significance, in restoring normalcy. Institutional mechanisms need to be evolved at all levels to ensure such coordination.154155Public OrderMaintaining Public Orderthe efficacy of the local administration to respond to any emerging crisis. There should be a mechanism providing for intelligence inputs of an operational nature which are also concurrently shared with the local administration. Both formal and informal mechanisms could be used for this purpose.6.5.4 In the districts, the institution of the District Magistrate provides a forum for effective coordination, though over the years, its efficacy has been eroded. In bigger cities there is no formal coordination mechanism. The Police Act Drafting Committee has in their Model Bill recommended the inclusion of the following section:“In order to ensure proper liaison, consultation and coordination between the police, the municipal authorities, the district administration and such other departments of the government, whose functioning impacts the working of the police, the State Government by notification, will constitute appropriate coordination machinery and lay down procedures. The structure of the machinery will be as notified.”6.5.5 Some states have notified Ministers to be in charge of districts. This has been done to review specific developmental programmes and also to achieve coordination. At times, such authorities transgress their powers and issue operational directions to the law enforcement machinery. This practice needs to be discouraged. The statutory authorities entrusted with the responsibility for maintenance of law and order should be given freedom to act in accordance with law.6.5.6 However, in bigger cities, which have the Police Commissioner System, there is no effective coordination mechanism. In urban areas there are a large number of service providers and proper coordination becomes very important in situations of crisis or a major law and order situation. In such cases, the State Government normally coordinates the efforts of all agencies. It would be desirable to create a permanent structure to ensure such coordination. This Commission in its Report on Crisis Management has recommended that the Mayor assisted by the Municipal Commissioner and the Police Commissioner should be directly responsible for any crisis management. The same structure should be used for coordination during law and order problems also, with all the service providers being represented on the Coordination Committee, to be headed by the Mayor. A similar structure should be evolved at sub-district/town levels.6.6 Adoption of Zero Tolerance Strategy6.6.1 As mentioned in para 3.1.1 while citing the so called “Broken Window Syndrome” and as highlighted in Box 6.1, fighting crime and upholding the rule of law requires a multi-dimensional approach in order to instill in the citizens of any local community a healthy respect for law. Thus, in New York, the successful crime fighting strategy tried to address the issues of urban decay and alienation in the inner cities by trying to place a policing strategy within a broader framework of urban regeneration. This was ensured by action directed not just against serious crimes but at all types of offences including petty “quality of life” offences like graffiti, vagrancy, littering etc. A similar zero tolerance strategy has been followed over a much longer period by Singapore and in both cities, substantial reduction in the rates of crime could be achieved.6.6.2 In our country there is a tendency for some enforcement agencies not to rigourously enforce the provisions of law. This is quite evident in case of traffic related violations, civic offences, infringement of pollution control laws etc. For their part, sometimes, the6.5.7 Recommendations:a. In a District, the District Magistrate should coordinate the role of all agencies at the time of crisis.b. In major cities, with the Police Commissioner System, a coordination committee should be set up under the Mayor, assisted by the Commissioner of Police and the Municipal Commissioner. All major service providers should be represented on this Coordination Committee.Box 6.1: Zero Tolerance PolicingThe “zero tolerance” policing involved a robust and proactive approach by the police towards petty criminals and those guilty of degrading the urban environment.This more aggressive style of policing was combined with making local commanders directly accountable for their performance. Twice weekly “Compstat” meetings had local precinct commanders gathered in the NYPD war room to review crime statistics and be cross-examined on their performance. Some officers performed well. Some did not, and were told to return with proof that the problem had been tackled effectively. Some were demoted or resigned. The sole objective of the exercise at every stage was clear: the reduction of crime. The crime figures responded extremely well to this zero-tolerance approach.?Overall crime fell by 54 per cent between 1992 and 2000 (Source: Civitas)?Between 1993 and 2000, New York underwent a 67 per cent decrease in the total amount of robberies.?The manslaughter and murder rate also decreased by 72 per cent in the same period.Zero tolerance policing is not enough in itself. Political leaders need to give the police unswerving political support as they take determined action to reduce crime. This was the case in New York, where Mayor Guiliani gave his full backing to the police in their fight against crime.Source: reformaroundtheworld/newyork.aspx156157Public Ordercommon citizen is equally to blame for flouting rules with impunity and without regard to public health, safety and consideration for others. A crackdown on these types of offences in some cities like Delhi, whether enforced by Courts or otherwise, have tended to operate as campaigns and may therefore be unable to create and sustain a long term impact because they are driven by personalities or by court verdicts rather than by the institutions themselves.6.6.3 Institutionalising a zero tolerance strategy toward offences in the cities requires a combination of proactive leadership and organisational reforms fused with incentives and penalties for the field level functionaries of the various agencies involved (including the police). Independent monitoring mechanisms would have to be evolved which would hold public functionaries answerable for non-enforcement of laws/rules. Modern technology including the use of IT, GIS mapping, satellite imagery and electronic surveillance can facilitate this exercise. Despite the fact that many enforcement agencies pay lip service to the type of accountability mechanisms as mentioned above, there is reluctance to confront the status quo by going beyond the generalities to formulate and apply simple parameters designed to evaluate the performance of the enforcement officials and then create appropriate incentives and penalties for them. The COMPSTAT66 strategy used by the New York Police provides one such model which could be suitably adapted not just by the police but also by other agencies in order to implement a broad based zero tolerance strategy to reduce all types of offences including serious crimes and create conditions in which public tranquility can be preserved on a long term basis. At the same time, a zero tolerance policing strategy should be combined with initiatives to involve the community in policing and crime prevention functions so that abuse of civil rights and liberties are avoided.REFORMS IN THE CRIMINAL JUSTICE SYSTEM77.1 Role of the Criminal Justice System7.1.1 A strong and effective criminal justice system is a fundamental requirement of the Rule of Law. The criminal justice system comprises the police (investigation), the prosecutor (prosecution), the courts (trial) and the prison (punishment and reforms). The role of the police is, no doubt, important in dealing with imminent threats to peace and order as well as in tackling violence when it erupts. However, for sustaining peace and order in society on a long term basis, the role of other wings of the criminal justice system is even more important. It is the criminal justice system which protects a law abiding citizen and deters a potential law breaker. The essence of an efficient criminal justice system is that the trial of an accused should be swift and punishment for a criminal should be certain and deterrent. In this regard, our track record has been rather dismal, with delays, mounting pendency and falling conviction rates being major shortcomings. There are innumerable examples of culprits, including those committing heinous offences, going scot-free. A former Chief Justice of India observed:“The criminal justice delivery system appears to be on the verge of collapse due to diverse reasons. Some of the responsibility will have to be shared by the Executive branch of the State. Not much has been done for improvement of the investigative & prosecution machinery. Significant suggestions for separation of Investigative wing from Law & Order duties and changes in rules of evidence still lie unattended. The public outrage over the failure of the criminal justice system in some recent high profile cases must shake us all up into the realisation that something needs to be urgently done to revamp the whole process, though steering clear of knee jerk reactions, remembering that law is a serious business.”676.6.4 Recommendations:a. All public agencies should adopt a zero tolerance strategy towards crime, in order to create a climate of compliance with laws leading to maintenance of public order.b. This strategy should be institutionalised in the various public agencies by creating appropriate statistical databases, backed up by modern technology, to monitor the level and trends of various types of offences and link these to a system of incentives and penalties for the officials working in these agencies. It should be combined with initiatives to involve the community in crime prevention measures.15815966 COMPSTAT is the name given to the internal accountability mechanism to monitor crimes in New York Police Department. It makes extensive use of67 Speech at the inauguration of the Joint Conference of Chief Justices and Chief Ministers held on 11th March 2006 byInformation Technology tools.Hon’ble Mr. Justice Y.K. Sabharwal; Chief Justice of IndiaPublic OrderReforms in the Criminal Justice System1607.1.2 To quote from India’s Legal System: Can it be Saved? (2006), authored by the veteran legal expert, Fali S. Nariman, “The pendency of criminal cases in the subordinate courts is in the region of 1,32,00,000 cases and the effective strength of judges in subordinate courts is only 12,205. Courts are able to dispose of, on an average, only 19 per cent of the pending criminal cases each year.”7.1.3 There is a general perception that one can commit an offence with impunity. The proliferation of crime has generated a feeling that criminal activity has become a high return and low risk activity and thus a profitable venture. Enforcement of even simple civic laws is so poor that it gives rise to the ‘Broken Window Syndrome’. For a victim, it is an uphill task to get justice. In the first instance, it is difficult to get an FIR registered. Even after the FIR is registered, investigation proceeds in a casual and an unprofessional manner. Once the case is charge-sheeted it may take several years for the conclusion of the trial. Making repeated visits to the court is usually an unpleasant experience for the victim and the witnesses. During trial, witnesses often resile from their original statements. Prosecution is often ineffective because of lack of coordination with investigation. The net result in many cases is the acquittal of the culprit who had actually committed the crime. This, apart from emboldening the accused, also leads to cynicism in the minds of law abiding citizens. The recent public outcry against the acquittal of the accused in some high profile cases is a pointer to this deeper malaise. Immediate restoration of the people’s faith in the criminal justice system is therefore vital in the interests of public order and a just society.7.1.4 The reforms required in the criminal justice system would include the following:?facilitating access to justice;?proper investigation;?effective prosecution;?better and swift trial; and?improving the prison system. 7.2 Measures Taken in the Recent Past7.2.1 Some measures have already been taken in recent years to expedite disposal of both civil and criminal cases. Plea bargaining has now been recognised by the Criminal Law Amendment Act, 2005. This measure would help in dealing with the large pendency of criminal cases and would also provide relief to undertrial prisoners. The ‘shift system’ has been mooted for the functioning of courts. On July 25, 2006, the Chief Justice of India proposed that courts work in two shifts. The basic idea of the shift system is that the infrastructure available can be put to use during the ‘idle’ time of the day. Gujarat has started the system of evening courts in which petty cases are being heard and decided. The Law Commission in its 125th Report (1988) had observed:“The buildings available to courts are hardly fully utilised, especially the building of the Supreme Court. Courts assemble at 10:30 am and leave at 4 O’ clock. Therefore, if some Courts start functioning at 8:30 am, then without spending a farthing on building, additional courts can effectively operate in the same building....There will be slight rise in the expenditure for providing some additional staff to the additional courts” .7.2.2 On the recommendations of the 11th Finance Commission, 1734 Fast Track Courts were sanctioned for disposal of long pending Sessions and other cases and a grant of Rs 502 crore was also provided for disposing these cases. The scheme envisages the appointment of ad hoc judges from among retired sessions/additional sessions judges, as well as judges promoted on ad hoc basis and posted in these courts from among members of the Bar. Selection of judges would be done by the High Courts. State Governments would have to fill the consequential vacancies resulting from ad hoc promotion of judges through a special drive. The Fast Track Courts of Sessions Judge disposed of 133475, 168861 and 171626 cases in 2003, 2004 and 2005 respectively. The Lok Adalats, constituted under the Legal161Public OrderReforms in the Criminal Justice SystemServices Authority Act, 1987, have been successful in settling a large number of cases, particularly the claims under the Motor Vehicles Act. Fast Track Courts have also proved to be successful.7.2.3 Apart from strengthening the infrastructure and increasing the number of courts, a large number of suggestions have been made to expedite disposal of cases in courts of law. Former Chief Justice of India, Justice Y K Sabharwal has made several suggestions68. Notable among these are:?Carrying out a Judicial Impact Assessment of each new legislation and making appropriate provisions for resources for augmentation of the judiciary;?Adopting case management techniques which include69:oIdentifying key issues in a case;oEncouraging parties to settle cases or agree on issues;oSummary disposal of weak cases and trivial issues;oDeciding the order in which the issues are to be resolved;oFixing a time table for parties to take specific steps;oAllocating each case to specific track (Fast Track/Multi Track) courts;?Adopting Court Management Techniques;?Classification and assignment of cases;?Managing cause lists in a rational manner so that unnecessary cases are not posted merely for the sake of being called out;?Making use of Alternate Dispute Resolution methods;?Modernisation and computerisation of courts;?Video conferencing;?Setting up Fast Track subordinate courts;?Transfer of petty cases from regular courts to special courts;?Adopting discretionary prosecution;?Using modern means of communication for service of summons;?Conducting pre-trial hearings;?Enlarging the list of compoundable offences; and?Submission of ‘Statement of Prosecution’ followed by a ‘Statement of Defence’.7.2.4 The former Chief Justice has also stated that a large number of cases involving petty offences (41,34,024) were pending before magisterial courts. He has suggested that since the pendency before Magisterial Courts is very high, there is need to transfer such cases to Courts of Special Magistrates, to be staffed by retired Judicial Officers/retired senior Government servants.7.2.5 The Commission without going into the details of each of these measures, would reiterate that the suggestions should be given urgent attention and implemented on a priority basis.7.2.6 Although the substantive, legal and procedural issues pertaining to the reforms in the criminal justice system are very complex, the Commission has examined some key elements which have a direct bearing on the maintenance of public order.7.3 Facilitating Access to Justice - Local Courts7.3.1 The measures enumerated above are essential but not sufficient in themselves to improve access to justice for a common citizen. Providing citizens with improved access to justice also requires a major thrust on increasing the number of courts; equipping the courts with required human, material and technological resources; simplifying their cumbersome procedures and placing an increased emphasis on use of the local language to deliver swift justice at lower costs.7.3.2 The Law Commission in its 120th Report (1987) had recommended that the number of judges should be increased so that there are 107 judges per million population by the end of year 2000. This ratio was achieved by USA in 1981.The Supreme Court, in the All India Judges Association case (March 2003; citation:2002 SOL Case No.204), held as follows:“Under the circumstances, we feel it is our constitutional obligation to ensure that the backlog of the cases is decreased and efforts are made to increase the disposal of cases. Apart from the steps which may be necessary for increasing the efficiency of the judicial officers, we are of the opinion that time has now come for protecting one of the pillars of the Constitution, namely, the judicial system, by directing increase, in the first instance, in the judge strength from the existing ratio of 10.5 or 13 per 10 lakh people to 50 judges for 10 lakh people. We are conscious of the fact that overnight these vacancies cannot be filled. In order to have additional judges, not only the posts will have to be16216368 Justice Sobhag Mal Jain Memorial Lecture on delayed Justice Delivered by Hon’ble Shri Y.K. Sabharwal, Chief Justice of India on Tuesday, the 25th July, 200669 Case Management as stated by Lord Woolf in his report “Access to Justice”Public Ordercreated but infrastructure required in the form of additional court rooms, buildings, staff, etc., would also have to be made available. We are also aware of the fact that a large number of vacancies as of today from amongst the sanctioned strength remain to be filled. We, therefore, first direct that the existing vacancies in the subordinate courts at all levels should be filled, if possible, latest by 31st March, 2003, in all the states. The increase in the judge strength to 50 judges per 10 lakh people should be effected and implemented with the filling up of the posts in a phased manner to be determined and directed by the Union Ministry of Law, but this process should be completed within a period of five years from today. Perhaps increasing the judge strength by 10 per 10 lakh people every year could be one of the methods which may be adopted thereby completing the first stage within five years before embarking on further increase if necessary”.7.3.3 The issue of the large pendency of criminal cases with subordinate courts was discussed in the Chief Justices’ Conference held on 9th &10th March 2006 and it was suggested that petty offences including traffic and municipal challans be transferred to the Courts of Special Metropolitan Magistrates/Special Judicial Magistrates to be staffed by retired Judicial Officers and retired senior government officers.7.3.4 While serious offences require highly skilled and thorough investigation, such high level of expertise and diligence are not required in most petty offences or offences under local laws. Efforts are also underway to create a system of local courts with summary procedures and adequate safeguards of appeal and inspections, to deal with the large number of minor cases at the local level. The Commission understands that the Union Government is contemplating the introduction of a Bill creating such local courts with the following features:?One court (honorary magistrate) for every 50000 population;?Summary procedures and trial at the scene of offence where possible;?Exclusive jurisdiction of cases of up to one year’s imprisonment and all other cases specified by law;?Integral part of independent justice system;?Provision for appeal; and?Verdict within 90 days.7.3.5 Earlier, there was a system of second class magistrates which worked fairly well. There were also honorary magistrates and mobile courts. Panchayats and Village Courts were also empowered to dispense justice in petty cases in some parts of the country. All these no longer exist except that in some backward areas, Panchayats (mostly caste-dominated) still164Public OrderReforms in the Criminal Justice SystemRetired judges or retired government officers (with appropriate experience) could be appointed.d. These courts may function from government premises and could also be in the form of mobile courts.e. These local courts may be constituted by a law passed by the Parliament to ensure uniformity.7.4 Using Information and Communication Technology (ICT) to Modernize the Indian Courts7.4.1 The National Informatics Centre (NIC) has been supporting the computerisation programme of the Supreme Court, High Courts and the subordinate courts for over a decade now. It has set up COURTNIC which provides information through NIC’s network, on pending cases including case lists, status reports, daily cause list etc as well as JUDIS (Judgement Information system) which is an online case law library containing all reportable judgements of the Supreme Court from 1950 onwards.7.4.2 An e-Committee was constituted by Government in 2004 under Dr. Justice G.C. Bharuka to assist the Chief Justice of the Supreme Court in formulating a national plan on the Computerisation of the Indian Judiciary and to advise on the attendant technological, communication and management reforms required. It made the following observation in its report:“With the enormous case load and workload, increase of courts, piling of arrears and erosion of values and work culture, the governance and administrative control over the judicial institutions through manual process has become extremely difficult resulting in systematic failure. This has directly impeded judicial productivity leading to disappointment and dissatisfaction among the justice seekers. The systematic failure has occasioned many vices and ill practices bringing disrepute to this constitutional organ.”- Report on Strategic Plan for implementation of ICT in Indian Judiciary prepared by the E-Committee constituted by the Government.”7.4.3 The status and extent of implementation of ICT in the Indian judiciary was recently assessed70 as follows:“The Indian judiciary comprises of nearly 15,000 courts situated in approximately 2,500 court complexes throughout the country. Of these, it was found that the Supreme Courtalready had an extensive ICT infrastructure which is in the process of further innovation and expansion. Similarly, most of the High Courts are using information technology since 1990 and onwards although the extent of usage varies. There is a demand for upgradation of the ICT tools and to make it uniform across the country. Some of the district courts are also using computers but it is essentially for digital transcriptions of court orders and judgments. In states like Karnataka, Delhi and Maharashtra, the ICT environment was better at all levels of state judiciary.The Supreme Court and all High Courts at their principal seat and benches have internet connectivity, computer rooms equipped with machines and related peripherals. All the Judges of these courts have even been provided with laptops. Desktops/PCs are available with Judges as also the court officials in some of the States for judicial and administrative work. The judgements and orders of the Supreme Court and some of the High Courts are available on the internet. The cause lists of Supreme Court and High Courts are being hosted on their websites.”7.4.4 In accordance with the National Policy and Action Plan prepared by the e-Committee, a five-year National Programme for Computerisation of the Indian judiciary was launched in 2005 to be carried out in three phases.7.4.5 In the first phase, the Action Plan envisages the following : provision of laptops to all judges; awareness and introduction of ICT and computer-based environment in the judicial system; video-conferencing between court and prisons at 100 locations; a fully developed and informative website – indianjudiciary.in; creation of a National Judicial Data Grid; creation of Committees and High Court Level Committees to monitor and guide the ICT implementation in the Court complexes; implementation of Wi-Fi at the Supreme Court and High Court premises and creation of Computer Rooms at Court complexes.7.4.6 Phase II of the Action Plan includes: coordination of ICT infrastructure for the judicial system; implementation of Software for Judicial Processes at all levels; creation of reliable critical infrastructure and continuation of IT training activities and extension of training programmes.7.4.7 Phase III includes: use of advanced ICT tools, intensive training, warehousing and mining tool customization to crystallize change management, Biometric facilities, Gateway interface with other agencies; upgradation of centralized facility and Digital Archive of the record room and a Digital Library Management System.16616770 Dr. Justice G. C. Bharuka - Modernising Indian Courts - Concepts and ChallengesPublic OrderReforms in the Criminal Justice System7.4.8 The Commission is of the view that modernisation of the Indian judiciary through use of information technology needs to be given much greater impetus, particularly focusing on the lower courts where the impact of ICT at present is limited and where much of the delay occurs. Increasing the efficiency of the trial courts will have a major impact on disposal of cases and will have a multiplier effect in terms of improving public order and instilling respect for the rule of law.7.4.9 In particular, there is an urgent need to focus on the critical procedures that need to be modernised such as the outmoded methods of recording oral evidence which should be replaced by digital sound and video-recording combined with text transcription by transcribers working outside the court rooms. A fully developed IT-enabled case management system, including on-line payment gateways for payment of fees and issue of authenticated copies of court records, and a full-fledged reengineering of judicial processes to be combined with use of modern technology tools would improve performance of the justice delivery system. Virtual courts or e-Courts without the physical presence of all the key participants viz. lawyers, accused, witnesses, judges etc in the same place and real time multi-media transcripts to replace paper should be the ultimate goal. Prioritization and selection of courts for the programme of computerisation based on levels of pendency and use of a clustering approach to provide common physical infrastructure to proximate subordinate courts through the use of local area networks(LANs)would be an appropriate implementation strategy. This has to be carried out in conjunction with large-scale expansion and upgradation of physical infrastructure, phasing out the old and outdated court buildings and replacing them with modern, state-of-the art buildings with the latest facilities and fixtures. A National Judicial Infrastructure Plan has reportedly been drawn up by the National Judicial Academy and has been endorsed by the Annual Conference of Chief Justices in April, 2007. Implementing such an infrastructure upgradation plan for our courts in synergy with the already approved National Plan for Computerisation of the Judiciary would have a significant and positive impact on judicial efficiency and productivity. And by providing modern databases and technology tools to assess the performance of Judges, such modernization will help to enhance judicial accountability as well.7.4.10 The Commission without going into further details of each of these initiatives and suggested measures would reiterate that these need to be implemented in a phased manner early.7.5 Reforms in InvestigationOnce a crime is registered, investigation by the police begins, which prepares the ground for prosecution and trial. As mentioned earlier, it has been observed that very often investigations are done in a superficial manner with little reliance on modern forensic science. State Governments have prescribed detailed police manuals which contain elaborate provisions regarding investigation procedures. These manuals are often not followed and supervision and monitoring of criminal investigations has also become ineffective. The Nithari killings confirm that there is large scale non-registration of FIRs due to both rampant corruption as well as deficiencies in the current departmental methods of monitoring and review of crimes. The Commission has made wide-ranging recommendations regarding grant of autonomy to police, emphasis on professional investigation, focus on ‘brain’ rather than ‘brawn’, improving training of the police, taking steps to improve the morale of the cutting edge functionaries etc. It is expected that with these changes, the quality of investigations would improve vastly. The Commission has examined in detail two important aspects of investigations – registration of FIRs and conduct of inquests – in the following paragraphs.7.5.1 Citizen Friendly Registration of Crimes7.5.1.1 Section 154 of the Code of Criminal Procedure, 1973 deals with the formalities pertaining to the recording of the First Information Report, more popularly known as the FIR. When information relating to the commission of a cognizable offence is given orally to an officer in charge of a police station, that officer is required to reduce it in writing. The FIR so written shall be read over to the informant. Such information whether given in writing or reduced to writing, shall be signed by the person giving the said information and a copy of the FIR should be given to the complainant. After registering the FIR, the officer in charge of the police station shall immediately send a copy of the FIR to the jurisdictional court. The police officer is bound to register the FIR and if he/she refuses to do so, then the aggrieved person can approach the superior police officers. Registration of an FIR sets the criminal justice system in motion.7.5.1.2 The National Police Commission in its Fourth Report (1980) observed:“A complaint often heard against the police is that they evade registering cases for taking up investigation when specific complaints are lodged at the police station. In the study conducted by the Indian Institute of Public Opinion, New Delhi, regarding “Image of the Police in India”, over 50% of the respondents have mentioned “non-registration of complaints”, as a common malpractice in police stations. Among the several malpractices,168169Public OrderReforms in the Criminal Justice Systemit is ranked third, the first two being (i) showing particular bias towards rich or influential people in cases involving them or reported by them, and (ii) shielding ‘goondas’ and other criminal elements involved in gambling dens, illicit distillation, etc. This malpractice stems from several factors, including the extraneous influences and corruption that operates in the system, as well as the disinclination of the staff to take on the additional burden of investigative work in the midst of heavy pressure of several other duties. Among all such factors, the most important one which, in our view, accounts for a substantial volume of crime going unregistered is the anxiety of the political executive in the State Government to keep the recorded crime figures low so as to claim before the State Legislature, the public and the press that crime is under control and is even going down as a result of ‘efficient’ police administration under their charge. The Chiefs of Police and other senior police officers also find it easy and convenient to toe the line of the Government in developing such a biased and distorted statistical approach for assessing the crime situation and evaluating police performance. As a consequence, this attitude of ‘burking’ permeates the entire hierarchy down the line and is reflected at the police stations in their reluctance and refusal to register cases when crimes are brought to their notice.” 717.5.1.3 The NPC suggested the setting up of reporting centres, especially in urban areas where specified citizens may be authorized to register FIRs and then pass these on to the concerned police station.7.5.1.4 The Commission is of the view that since registering the FIR is the first step in the criminal justice system and unless shortcomings in the registration procedure are set right, other reforms particularly in the subsequent stages would have limited impact. Therefore, a system has to be evolved in which registration of FIRs is totally transparent and instances of refusal to register FIRs are eliminated.7.5.1.5 With the rapid spread of communication facilities, several states have tried the use of technology to make the process of registration transparent. Rajasthan has introduced an innovative project called ‘Aarakshi’ that aims to improve the efficiency of police procedures. Each complainant is given a token number at the time of registration of his/her complaint which can be used for future referencing. Citizens can then access the police stations through the internet and ascertain the status of the complaint. The supervising officers can also monitor the progress in investigation. This brings a greater degree of accountability in the investigation. Andhra Pradesh has launched a state-wide computerized network of police stations – ‘e-cops’ (e-Computerised Operations for Police Services). Thus, after a case is registered in the computer of the nearest Police Station, a printout of the FIR is given to the complainant. Once registered, the status of the FIR could be viewed by thecomplainant from anywhere by accessing e-cops. The Thiruvananthapuram City Police has developed a system to receive certain types of complaints electronically through its website. Citizens can register any type of complaint such as traffic problems, petty thefts, communal disturbances, eve-teasing, pick- pocketing, illicit distillation of liquor.7.5.1.6 The Commission feels that with the rapid expansion of communication facilities, especially the internet, all types of communications to a police station should be taken cognisance of. At the same time, a complainant should have the option of registering complaints through various modes. As mentioned, several methods have been tried to ensure smooth registration of FIRs. In order to ensure that the registration of crime becomes totally hassle-free, a ‘call centre’ approach is one option. This call centre should receive complaints from citizens by means of voice recordings or faxes. All such information would get registered. These complaints could then be scrutinised by an authorized police officer and redirected to the concerned police station for registration. Such a system would have the added advantage of preventing ‘burking’ (i.e. not registering cases). Another option could be to set up suitable outposts, kiosks or ‘Kobans’ (as in Japan) to facilitate lodging of complaints. Such kiosks could also be given other tasks.7.5.1.7 Even after such technological interventions, a large number of people would still go to police stations for registering their complaints. It would, therefore, be desirable to have a continuous video-recording of the citizen-police interaction in a police station and such videos should be monitored randomly by the supervising officers.7.5.1.8 Apart from the issue of registration of FIR, another major issue is the contents of the FIR. It is said that “A good FIR must address the six issues of what is the nature of the incident, where and when did it happen, who is reporting and against whom and why did the incident happen. These six W’s begin the process of data collection, collation and analysis that hopefully results in the arrest and prosecution of the involved person or persons. In this investigation, additional information gathered from the witnesses, common citizens, informers and even other police officers is an important step for solving the case.”727.5.1.9 As noted by the National Police Commission (NPC) (1980), FIRs have drawn a number of court rulings that have tended to give undue importance to the omission of any salient fact in the FIR even if such omission was due to the disturbed or confused state of mind of the complainant. As a result, according to the NPC, police officers resort to the malpractice of delaying the FIR in order to obtain additional details because of the inordinate evidentiary value placed by the courts on the FIR. The NPC therefore recommended the following amendments in Section 154 CrPC to remedy the situation:17017171 National Police Commission Report.72 The Indian Police, Arvind Verma, 2005Public OrderReforms in the Criminal Justice System?Police should be allowed to query the informant to obtain additional details and clarifications;?Make it clear that registration of FIR is mandatory, whether or not the alleged offence has taken place within the jurisdiction of the police station; and?Allow constituent units of the police station such as police outposts etc to also record FIRs.7.5.1.10 Government and senior police officers quite rightly lay emphasis on keeping the crime situation under control. Unfortunately, this message has often been misinterpreted down the line and results in burking to keep the number of cases low. This undue emphasis on crime statistics to assess performance of a police station thus needs to be discouraged. The Commission is of the view that a more objective criteria should be evolved for evaluating the performance of the police station. Emphasis should be on the number of cases successfully detected and prosecuted and not necessarily on the number of crimes registered.The Commission is of the view that the above mentioned steps and use of technology would go a long way in making the registration of FIRs hassle-free.7.5.1.11 Recommendations:a. Registration of FIRs should be made totally citizen friendly. Technology should be used to improve the accessibility of police stations to the public. Establishing call centers and public kiosks are possible options in this regard.b. Police stations should be equipped with CCTV cameras in order to prevent malpractice, ensure transparency and make the police more citizen-friendly. This could be implemented in all police stations within a time frame of five years.c. Amendments to the CrPC should be made as suggested by the National Police Commission.d. The performance of police stations should be assessed on the basis of the cases successfully detected and prosecuted and not on the number of cases registered. This is necessary to eliminate the widely prevalent malpractice of ‘burking’ of cases.7.5.2 Inquests7.5.2.1 Section 174 of the Code of Criminal Procedure prescribes what should be done when an unnatural death is discovered or reported.7.5.2.2 Section 176 CrPC provides for mandatory magisterial enquiries in specific cases. Executive Magistrates (who often are not thorough with law, untrained and lack investigative skills) generally have not been conducting these inquests in a professional manner and routinely fill up the prescribed forms. Thus the basic purpose of inquest – finding the cause of death – is defeated by such perfunctory enquiry.7.5.2.3 The State Government of Karnataka has issued Rules73 under Section 174 CrPC which prescribe the manner in which investigations into all unnatural deaths have to be conducted. The highlight of the Rules is that the inquest has to be done in an open and accountable manner assisted by a professionally qualified group. The Executive Magistrate has to record a finding based on appreciation of evidence collected as to whether the unnatural death is to be considered an accident, suicide or homicide. The Commission is of the view that the conduct of inquests should be open and transparent and involve citizens’ groups and professionals, so that proper enquiry is conducted in all cases of unnatural deaths.7.5.2.4 Recommendation:a. All State Governments should issue Rules prescribing in detail the procedure for inquests under Section 174 CrPC.7.5.3 Statements Made before a Police Officer7.5.3.1 One issue which was brought before the Commission particularly by police officers, was the distrust of the police built into the criminal justice system. A manifestation of17217373 The Rules have been issued vide Notification No. HD 95 COD 99(Part-I), dated 24th January, 2004Public OrderReforms in the Criminal Justice Systemthis is the provision in the Code of Criminal Procedure that a statement made before the police shall not be signed by the person making the statement and that it could be used in the Court only to contradict the witness and not to corroborate. The prime reasons for including this provision in the CrPC was to ensure that police does not obtain statements through coercion.7.5.3.2 The Code of Criminal Procedure (chapter XIV) along with the Indian Evidence Act deals with all aspects of investigation:161. Examination of witnesses by police.-(1) Any police officer making an investigation under this Chapter, or any police officer not below such rank as the State Government may, by general or special order, prescribe in this behalf, acting on the requisition of such officer, may examine orally any person supposed to be acquainted with the facts and circumstances of the case.(2) Such person shall be bound to answer truly all questions relating to such case put to him by such officer, other than questions the answers to which would have a tendency to expose him to a criminal charge or to a penalty or forfeiture.(3) The police officer may reduce into writing any statement made to him in the course of an examination under this section; and if he does so, he shall make a separate and true record of the statement of each such person whose statement he records.162. Statements to police not to be signed: use of statements in evidence.-(1) No statement made by any person to a police officer in the course of an investigation under this Chapter, shall, if reduced to writing, be signed by the person making it; nor shall any such statement or any record thereof, whether in a police diary or otherwise, or any part of such statement or record, be used for any purpose, save as hereinafter provided, at any inquiry or trial in respect of any offence under investigation at the time when such statement was made. Provided that when any witness is called for the prosecution in such inquiry or trial whose statement has been reduced into writing as aforesaid, any part of his statement, if duly proved, may be used by the accused, and with the permission of the Court, by the prosecution, to contradict such witness in the manner provided by section 145 of the Indian Evidence Act, 1872; (1 of 1872) and when any part of such statement is so used, any part thereof may also be used in there- examination of such witness, but for the purpose only of explaining any matter referred to in his cross-examination.7.5.3.3 Regarding this matter, three major issues have drawn the attention of successive Law Commissions. These are:1. Whether witnesses should be made to sign their statements,2. whether the Investigating Officer should record everything that each witness states or he/she should record the statement of only those witnesses whose statement are relevant and to the extent the statement is relevant, and3. could the statement by the witness be used to corroborate any other evidence?7.5.3.4. It has been argued that this distrust towards the police implicit in Sections 161 and 162 CrPC quoted above, unnecessarily favours the accused as the witnesses conveniently make use of this to turn hostile at the trial stage. Such distrust towards the police also lowers their self-respect and leads to unethical practices and consequent damage to the criminal justice delivery. This has been vividly brought out in a number of sensational murder cases during the past decade or so. The Committee on Reforms in the Criminal Justice System recommended as follows on this issue :“In the circumstances, the Committee is of the opinion that:a. Section 161 CrPC should be amended to make it obligatory to record statements made by the witnesses during investigation in the narrative or in the question and answer form. The statement should be read over if admitted correct should be got signed by the witness;b. a copy of the statement should be immediately given to the witness.c. Section 162 of the Code should be amended so that the statement can be used both for corroboration and contradiction.”7.5.3.5 The Law Commission in its 14th Report (1958) recommended:“When a police officer records a statement under Section 161 of CrPC, the person making the statement, if he is able to read it for himself, should be required to read what has been written and sign and date it and certify that it is correct record of his statement.174175Public OrderReforms in the Criminal Justice SystemThe law should be amended so as to provide that the investigating officer should record the statement of every person that the prosecution proposes to examine as a witness, and the statement should as far as possible be in the witness’s own words”.7.5.3.6 The Law Commission in its 37th Report (1967) stated:“the signature of the witness in these circumstances, add very little to the strength of the statement recorded by the police officer. It is true that the statement could be used to contradict the evidence of the witness in court, to the extent permitted by Section 162. But, then, it can reasonably be envisaged that in every case where a witness is confronted with the statement before the police officer by showing him the signature to it he would invariably take the plea that his signature was given under duress or without reading what was recorded. It is not a statement made on oath. The strength given by the signature of the witness below such a statement would be very little.It has been said, that a literate person can read the signed statement himself, and see whether it is correct, whereas an illiterate person cannot read his statement and could be duped by the police officer. But there is no assurance that the literate persons will not be threatened by him. If a witness challenges a police officer that the statement which has been recorded is not correct according to his version, he cannot urge that an amendment should be made, by filing an affidavit.Upon a reconsideration of the question, thus, we are unable to accept this recommendation of the 14th Report. Our reasons in this respect may be briefly re-stated-a. the calibre of persons who are in the Police has not improved, and mal-practices in police investigation still continue to exist;b. the requirement that witnesses making statements before the police should sign the statements, will not serve any useful purpose;c. such requirement may even deter the witnesses from making such statement.”7.5.3.7 The Law Commission in the 41st Report (1969), however, expressed different views. They observed:“The permissive and discretionary provisions now contained in Section 161 {“may examine orally” in Section 161(1) and “may reduce in writing” in Section 161(2)} should not be fettered down in any way.The word truly should be inserted after the words ’bound to answer’. That a witness who can read his statement should be required to sign it.Police statements are, at present, available for contradicting a witness, and to make them available for corroborating the same witness seems merely to complete the picture. Actually, however, there is a material difference between contradiction and corroboration; and what is good enough for contradicting a witness is not always good enough for corroborating him. It is obvious that if a witness says one thing at one time and another at another time, it is a prima facie good ground for distrusting him; but if a witness says the same thing every time he is questioned, the reason for trusting him is not so obvious: many liars are consistent. The policy of law in permitting a witness to be contradicted by a police statement and not permitting him to be corroborated by the same statement is basically sound and sensible. On the other hand, there seems to be considerable risk (in the existing circumstances) in extending the scope of the proviso along the suggested lines.We are, therefore, not attracted by either proposal; and, apart from the change we have suggested above in regard to the first part of section 162(1), we are content, like the previous Law Commission to leave the substance of the second part and proviso unchanged.”7.5.3.8 The National Police Commission also examined this issue and was of the view that instead of recording the statement of witnesses, the investigating officer should make a statement of facts. It was also suggested that a great measure of credibility could be imparted to the statement of facts if it is provided that a copy of the statement, if desired by the witness, should be handed over to him/her under acknowledgement.7.5.3.9 The Law Commission in its 154th Report (1996), revisited this issue once again:“After giving our earnest consideration and in view of the fact that there is unanimity in respect of the need for making substantial changes in the law, we proposed that there should be changes on the following lines:“As recommended by the National Police Commission in its 4th Report, the Investigating Officer can make a record of the facts as ascertained by him on examination of witnesses which statements could be in the third person in the language of the Investigating Officer himself. This ensures that the material witnesses have been examined at the earliest moment. Such a statement recorded in third person cannot be treated as a previous statement and consequently cannot be used for contradiction or corroboration. To that extent, a change in section 162 CrPC is necessary. The signature of the witness on the statement thus recorded need not be obtained. But, if the witness so examined desires a176177Public OrderReforms in the Criminal Justice Systemcopy of such statement so recorded shall be handed over to him under acknowledgement. To reflect the shift in emphasis, a corresponding amendment to Section 172 should also be made to the effect that the Investigating Officer maintaining the case diary should mention about the statement of the circumstance thus ascertained, and also attach to the diary for each day, copies of the statement of facts thus recorded under Section 161 CrPC Neither the accused nor his agent shall be entitled to call for such diaries which can be put to a limited use as provided under Section 172 CrPC Under the existing provisions of the Code, the preparation of the earliest recorded of the statement of witness is left in the hands of Investigating Officer and as the mode of recording as provided in Section 162 does not ensure the accuracy of the record (It is well known that many good cases are spoiled by insidious incorrect entries at the instance of the accused and it is also well known that many innocent persons are sent up along with the guilty at the instance of the informant’s party) it is necessary amend Section 164 CrPC so as to make it mandatory for the Investigating Officer to get statements of all material witnesses questioned by him during the course of investigation recorded on oath by the Magistrate. The statements thus recorded will be of much evidentiary value and can be used as previous statements. Such recording will prevent the witnesses turning hostile at their free will. Such a change will also help the police to complete the investigation and submit a final report on the basis of such statements made on oath and on other facts and circumstances, such as recovery, etc.). On the above mentioned lines, the relevant Sections can be amended as follows:7.5.3.10 The Law Commission concluded by stating:“As recommended, if a separate investigating agency manned by officers of high caliber and integrity is established, the statements of facts by them will be more authentic. Keeping in view that the witness may prevaricate and the handicaps the defence may face, it is desirable that the statements should be recorded under Section 164 of the Code”.7.5.3.11 The Commission discussed this issue with a group of human rights activists in a workshop co-organised with the Commonwealth Human Rights Initiative (CHRI). The human rights activists were against the grant of any more powers to the police and were not in favour of the recommendations made in the Report of the Committee on Reforms of Criminal Justice System.7.5.3.12 The Commission has examined this issue in detail. With the implementation of large scale reforms proposed in this Report, it is expected that police investigation would become much more professional and unbiased and will be supervised by a body of legal and other experts. The literacy levels in India have improved tremendously and will improvefurther. There should therefore be no difficulty in making witnesses sign their statements. This would bring more seriousness in the witnesses, while deposing before the police and would reduce the possibility of witnesses turning hostile at a later stage. The Commission is of the considered view that as a part of the reforms regarding investigation, Sections 161 and 162 of CrPC should be amended to provide for signing of the statement given by witnesses, which would be used for both corroboration and contradiction. In the case of important witnesses, in addition, there should be audio or video recording of their statements.7.5.4.1 Another provision of law which distrusts the police is Section 25 of the Indian Evidence Act. This provides that no confession made to a police officer shall be used against a person accused of any offence except that portion of confession which leads to discovery of material evidence. This bar applies to recording of confession by a police officer irrespective of his rank. It has been argued by police officers that in certain heinous crimes and organised crimes, getting independent eye witnesses is extremely difficult and that this embargo has led to many unethical practices.7.5.4.2 The Law Commission in its 48th Report (1972) stated as follows:“(1) In the case of a confession recoded by a Superintendent of Police or higher officer, the confession should be admissible in the sense that the bar under sections 25 -26, Evidence Act, should not apply if the following conditions are satisfied:-(a) the said police officer must be concerned in investigation of the offence;(b) he must inform the accused of his right to consult a legal practitioner of his7.5.3.13 Recommendations:a. Sections 161 and 162 of CrPC should be amended to include the following:i. The statement of witnesses should be either in narrative or in question and answer form and should be signed by the witness.ii. A copy of the statement should be handed over to the witness immediately under acknowledgement.iii. The statement could be used for both corroboration and contradiction in a Court of Law.b. The statements of all important witnesses should be either audio or video recorded.7.5.4 Confessions before Police178179Public OrderReforms in the Criminal Justice Systemchoice, and he must further give the accused an opportunity to consult such legal practitioner before the confession is recorded;(c) at the time of the making and recording of the confession, the counsel for the accused, if he has a counsel must be allowed to remain present. If the accused has no counsel or if his counsel does not wish to remain present, this requirement will not apply;(d) the police officer must follow all the safeguards as are now provided for by section 164, CrPC in relation to confessions recorded by Magistrates. These must be followed whether or not a counsel is present;(e) the police officer must record that he has followed the safeguards at (b), (c) and (d) above.(2) In the case of a confession recorded by an officer lower than a Superintendent of Police, the confession should be admissible in the above sense if the following conditions are satisfied:-(a) the police officer must be concerned in investigation of the offence;(b) he must inform the accused of his right to consult a legal practitioner of his choice, and he must further give the accused an opportunity to consult such legal practitioner before the confession is recorded;(c) at the time of the making and recording of the confession, the counsel for the accused must be present. If the accused has no counsel or if his counsel does not wish to remain present, the confession should not recorded;(d) the police officer must follow all the safeguards as are now provided for by section 164, CrPC in relation to confessions recorded by Magistrates.(e) the police officer must record that he has followed the safeguards at (b), (c) and (d) above.”7.5.4.3 The Law Commission in its 69th Report (1977) revisited this issue and re-affirmed the suggestion made in the 48th Report.7.5.4.4 Once again the Law Commission examined this subject in great detail in its 185th Report (2003).“The Court quoted an article saying that “the technology of torture all over the world is growing ever more sophisticated – new devices can destroy prisoner’s will in a matter of hours – but leave no visible marks or signs of brutality.” The Court observed, “Many police officers, Indian and foreign, may be perfect gentlemen, many police stations, here and elsewhere, may be wholesome. Even so, the law is made for the generality andGresham’s law does not spare the police force.” The Court quoted from Miranda vs. Arizona 384 US 436 and form the Wickersham Commission Report and cases of interrogation by police to extract confessions. The police, the Court said must give rest to its fists and restlessness to its wits. The Court referred to Art.20(3) and to the right against ‘self incrimination’ and the right to silence. The Court referred to Art.22(1) and the right to consult a lawyer which is available even if a person is not under arrest. The Court finally emphasized (see para 68 of SCC):“Special training, special legal courses, technological and other detective updating, are important. An aware policeman is the best social asset towards crimelessness... More importantly, the policeman must be released from addiction to coercion and be sensitized to constitutional values.”The experience of the Law Commission in seminars held in relation to the ‘Law of Arrest’ during the year 2000 showed that several senior police officers suggested that the suspicion and stigma against arrest by police or in regard to police investigation while in custody is no longer warranted. The plea was that arrest should be allowed to be made on mere suspicion and that confessions to police must be made admissible. These suggestions, in our view, do not take into consideration the ground realities today as disclosed by the press and Court judgments as to what is happening inside a police station and these suggestions overlook the importance of clause (3) of Art.20 and Art.21. Further, the annual reports of the National Human Rights Commission are abundant evidence of the violence police are inflicting on prisoners and the said Commission has recommended to government in several cases to pay compensation to the victims of police violence. These are also widely reported in the press.Therefore, we are compelled to say that confessions made easy, cannot replace the need for scientific and professional investigation. In fact, the day all confessions to police, in all types of offences (other than those relating to a few specified categories like confessions by terrorists to senior police officers) is permitted and becomes the law, that will be the day of the demise liberty. The police will no longer depend on scientific techniques of investigation.It is true, the provisions of certain special Acts dealing with terrorists or organised crime (such as the TADA or the POTA or the Maharashtra Organised Crime Act and other similar State Acts) contain provisions for recording confessions by and before senior officers of the level of Superintendents of Police and for treating them as admissible, subject to certain conditions. There is good reason for doing so. In the case of such grave offences, like terrorism, it is normal experience that no witness will be forthcoming to give evidence180181Public OrderReforms in the Criminal Justice Systemthe prosecution proves to the court beyond reasonable doubt that the confession (notwithstanding that it may be true) was not obtained as aforesaid”.?Germany: Police interrogations of a suspect are governed by procedural law (StPO s 136, 136a). At the initial interrogation, the accused must be told of the charges against him and of his right to consult with an attorney. Statements made during the interrogation will be admitted in court provided they have been obtained without the following disqualifiers: the use of force, trickery or deceit, threats, drugs, hypnosis or exhaustion.75?South Korea: For confessions made before the police to be used as evidence of guilt, there must be a showing of (1) the voluntary nature of the confession, (2) due process being followed in obtaining the confession, (3) the establishment of the truth of the documents, (4) the reliability of the confession, and (5) existence of supporting evidence.76?USA: The landmark judgement Miranda v. Arizona {384 U.S. 436 (1966)}, clarified the position:“To summarize, we hold that when an individual is taken into custody or otherwise deprived of his freedom by the authorities in any significant way and is subjected to questioning, the privilege against self-incrimination is jeopardised. Procedural safeguards must be employed to protect the privilege, and unless other fully effective means are adopted to notify the person of his right of silence and to assure that the exercise ofthe right will be scrupulously honored, the following measures are required. He must be warned prior to any questioning that he has the right to remain silent, that anything he says can be used against him in a court of law, that he has the right to the presence of an attorney, and that if he cannot afford an attorney one will be appointed for him prior to any questioning ifhe so desires. Opportunity to exercise these rights must be afforded to him throughout the interrogation. After such warnings have been given, and such opportunity afforded him, the individualmay knowingly and intelligently waive these rights and agree to answer questions or make a statement. But unless and until such warnings and waiver are demonstrated by the prosecution at trial, no evidence obtained as a result of interrogation can be used against him” .77?South Africa: Section 217 of the Criminal Procedure Act stipulates:“(1) Evidence ofany confession made by any person in relation to the commission ofany offence shall, if such confession is proved to have been freely and voluntarily made by such person in his sound and sober senses and without having been unduly influenced thereto, be admissible in evidence against such person at criminal proceedings relating to such offence: Provided –against hard-core criminals. Further, these offender belong to a class by themselves requiring special treatment and are different from the usual type of accused.The exception made in cases of ‘terrorists’ should not, in our view, be made applicable to all accused or all types of offences. That would erode seriously into Article 21 and sections 24 and 25 of the Evidence Act and violate Art.14. Exception cannot become the rule.”7.5.4.5 The Committee on Reforms of Criminal Justice System, 2003 also went into this issue and recommended:“Hence, we recommend that section 25 of the Evidence Act may be suitably substituted by a provision rendering admissible, the confessions made before a Police Officer of the rank of Superintendent of Police and above. Provision should also be made to enable audio/video recording.”7.5.4.6 The Commission discussed this issue with some human rights activists. They were opposed to any such power being given to the police and were of the view that the existing provision of taking an accused before a magistrate for recording confessional statements should continue.7.5.4.7 The Commission studied the position in different countries and its findings are summarized as follows:?China (Hong Kong, SAR): Confessions and statements are not admissible where it is shown that they were not voluntarily given. However, they can be admissible in circumstances where there is only a procedural irregularity in their taking down.74?United Kingdom: Police and Criminal Evidence Act 1984, Section 76(2) provides:“If, in any proceedings where the prosecution proposes to give in evidence a confession made by an accused person, it is represented to the court that the confession was or may have been obtained—(a) by oppression of the person who made it; or(b) in consequence of anything said or done which was likely, in the circumstances existing at the time, to render unreliable any confession which might be made by him in consequence thereof,the court shall not allow the confession to be given in evidence against him except in so far as18218374 World Factbook of Criminal Justice Systems; World Factbook of Criminal Justice System; World Factbook of Criminal Justice System; ; retrieved on 5-4-07Public OrderReforms in the Criminal Justice System(a) that a confession made to a peace officer, other than a magistrate or justice, or, in the case ofa peace officer referred to in section 334, a confession made to such peace officer which relates to an offence with reference to which such peace officer is authorized to exercise any power conferred upon him under that section, shall not be admissible in evidence unless confirmed and reduced to writing in the presence ofa magistrate or justice; and ...”7.5.4.8 There are several laws in India where the investigating officer has been given the power to record confessions of the accused:1. Sections 8 and 9 of the Railway Property Unlawful Possession Act, 1996; {Every such inquiry as aforesaid, shall be deemed to be a “judicial proceeding” within the meaning of Sections 193 and 228 of the Indian Penal Code (45 of 1860)}.2. Section 108 of Customs Act, 1962; “Apex Court has held that:- A Custom Officer is under the Act of 1962 not a Police Officer within meaning of Section25 of the Evidence Act and statements made before him by a person who is arrested or against whom an inquiry is made are not covered by Section 25 of the Indian Evidence Act”783. Section 18 of TADA of 1987 (the Constitutionality of the same was upheld by the Supreme Court in Kartar Singh v State of Punjab: (1994) 3 SCC. 569. The Act has since lapsed.)4. Section 18 of the Maharashtra Control of Organised Crime Act, 1999:“18. Certain confessions made to police officer to be taken into consideration. --(1) Notwithstanding anything in the Code or in the Indian Evidence Act, 1872 (1 of 1872), but subject to the provisions of this section, a confession made by a person before a police officer not below the rank of the Superintendent of Police and recorded by such police officer either in writing or on any mechanical devices like cassettes, tapes or sound tracks from which sounds or images can be reproduced, shall be admissible in the trial of such person or co-accused, abettor or conspirator:Provided that, the co-accused, abettor or conspirator is charged and tried in the same case together with the accused.(2) The confession shall be recorded in a free atmosphere in the same language in which the person is examined and as narrated by him.(3) The police officer shall, before recording any confession under sub-section (1), explain to the person making it that he is not bound to make a confession and that, if he does so, it may be used as evidence against him and such police officer shall not record any such confession unless upon questioning the person making it, he is satisfied that it is being made voluntarily. The concerned police officer shall, after recording such voluntary confession, certify in writing below the confession about his personal satisfaction of the voluntary character of such confession, putting the date and time of the same.(4) Every confession recorded under sub-section (1) shall be sent forthwith to the Chief Metropolitan Magistrate or the Chief Judicial Magistrate having jurisdiction over the area in which such confession has been recorded and such Magistrate shall forward the recorded confession so received to the Special Court which may take cognizance of the offence.(5) The person from whom a confession has been recorded under sub-section (1) shall also be produced before the Chief Metropolitan Magistrate or the Chief Judicial Magistrate to whom the confession is required to be sent under sub-section (4) along with the original statement of confession, written or recorded on mechanical device without unreasonable delay.(6) The Chief Metropolitan Magistrate or the Chief Judicial Magistrate shall scrupulously record the statement, if any, made by the accused so produced and get his signature and in case of any complaint of torture, the person shall be directed to be produced for medical examination before a Medical Officer not lower in rank than of an Assistant Civil Surgeon.5. Section 32 of Prevention of Terrorism Act, 200279“Certain confessions made to police officers to be taken into consideration.-(1) Notwithstanding anything in the Code or in the Indian Evidence Act, 1872 (1 of 1872), but subject to the provisions of this section, a confession made by a person before police officer not lower in rank than a Superintendent ofPolice and recorded by such police officer either in writing or on any mechanical or electronic device like cassettes, tapes or sound tracks from out ofwhich sound or images can be reproduced, shall be admissible in the trial of such person for an offence under this Act or the rules made thereunder.”18418578 Romesh Chanra Mehta vs State of West Bengal, AIR 1970 SC 94079 This has been repealed by the Prevention of Terrorism (Repeal) Act, 2004.Public OrderReforms in the Criminal Justice System7.5.4.9 The Commission has suggested wide-ranging reforms in the structure of the police. It has been proposed that the investigation agency should be separated from the State law and order agency. It has also been recommended that the investigation agency should be supervised by an autonomous Board of Investigation. This would ensure that the Investigation Agency is insulated against any extraneous influences and it would function in a professional manner. It has also been recommended that the staff of the investigation agency should be specially trained for their job with emphasis on collecting evidence through use of forensic tools and eschewing coercive methods. Moreover the Commission has recommended the setting up of a District Complaints Authority and also a State Police Complaints Authority which would effectively deal with cases of any misconduct by police. With these elaborate safeguards there should be no reason to continue to distrust the police with regard to admissibility of statements made before them. The Commission is of the view that confessions before the police should be made admissible. The Commission would however recommend certain additional safeguards similar to those provided under the POTA.7.6 Prosecution7.6.1 The Commission has already recommended the introduction of a system of District Attorneys. It is expected that this would improve coordination between the investigation and prosecution, enhance the quality of prosecutors and increase accountability in the prosecution machinery.7.7 Trial7.7.1 The Judge’s Obligation to Ascertain the Truth7.7.1.1 We have continued with the adversarial criminal justice system inherited from the British as opposed to the inquisitorial system prevalent in countries such as France. In the adversarial system the judge allows the prosecution and the defence to present the rival evidences and contentions and truth is arrived at by the weight of such presentations, whereas in the inquisitorial system the judge participates in ascertaining the truth. In the adversarial system, the balance is tilted against the prosecution and the victim. It follows that the chances of a criminal getting acquitted under the adversarial system are higher than in an inquisitorial system. However, strictly speaking, in the adversarial system the judge may still play a more active role. In the case of Mohanlal vs Union of India the Supreme Court observed as follows: for consideration is whether the presiding officer of a Court should simply sit as a mere umpire at a contest between two parties and declare at the end of the combat who has won and who has lost or is there not any legal duty of his own, independent of the parties to take an active role in the proceedings in finding the truth and administering justice? It is a well accepted and settled principle that a Court must discharge its statutory functions- whether discretionary or obligatory – according to law in dispensing justice because it is the duty of a Court not only to do justice but also to ensure that justice is being done.7.7.1.2 The Supreme Court, in Smt. Shakila Abdul Gafar Khan vs. Vasant Ragunath Dhoble and Another80, observed:“As pithily stated in Jennison v. Backer (1972 (1) All E.R. 1006), “ The law should not be seen to sit limbly, while those who defy it go free and, those who seek its protection lose hope”. Courts have to ensure that accused persons are punished and if deficiency in investigation or prosecution is visible or can be perceived by lifting the veil trying to hide the realities or covering the deficiencies, deal with the same appropriately within the framework of law. Justice has no favourite, except truth. It is as much the duty of the prosecutor as of the Court to ensure that full and material facts are brought on record so that there might not be miscarriage of justice”.7.5.4.10 Recommendations:a. Confessions made before the police should be admissible. All such statements should be video-recorded and the tapes produced before the court. Necessary amendments should be made in the Indian Evidence Act.b. The witness/accused should be warned on video tape that any statement he makes is liable to be used against him in a court of law, and he is entitled to the presence of his lawyer or a family member while making such a statement. If the person opts for this, the presence of the lawyer/family member should be secured before proceeding with recording the statement.c. The accused should be produced before a magistrate immediately thereafter, who shall confirm by examining the accused whether the confession was obtained voluntarily or under duress.d. The above-mentioned recommendations should be implemented only if the reforms mentioned in Chapter 5 are accepted.18618780 Criminal Appeal No. 857 of 1996; (2003)7SCC749Reforms in the Criminal Justice System7.7.1.5 Eminent jurist Fali Nariman has observed:“The main problem in our criminal justice system is that there is little room for proactive trial judge to make all manner of procedural orders for ascertaining the truth. The tools are there, but they are seldom used. Section 311 of the Code of Criminal Procedure of 1973 provides that any court may, at any stage of inquiry, trial or other proceedings, summon any person as a witness, examine any person present though not summoned as witness, recall and re-examine any person already examined, and goes on also to provide that the Court shall summon and examine, or recall or re-examine any such person ‘if his evidence appears to be essential for a just decision of the case’. And the Supreme Court had observed that the requirement of ‘a just decision of the case’ did not limit the action of the Court to something in the interest of the accused only – ‘the action may equally benefit the prosecution’. But despite this decision, this provision remains a dead letter. In practice, rarely does the trial magistrate or the sessions judge ever summon on his own a material witness in a criminal case. He or she leaves it to the prosecution, and if the prosecution fails to call essential witnesses, the accused is acquitted.” 817.7.1.6 Section 311 of the Code of Criminal Procedure empowers the courts to get additional evidence. It reads as follows:“Any court may, at any stage of any inquiry, trial or other proceeding under this Code, summon any person as a witness, or examine any person in attendance, though not summoned as a witness, or recall and re-examine any person already examined; and the court shall summon and examine or recall and re-examine any such person if his evidence appears to it to be essential to the just decision of the case.”7.7.1.7 The Supreme Court in Kulwant Rai Sharma v Union of India (1995 Supp(4) SCC 451), sought a report from a District Judge on the mysterious death of a person in the custody of the Directorate of Enforcement. The Kerala High Court also took a similar stand in the case of the custodial death of one Varghese and that of Rajan.7.7.1.8 The Committee on Reforms of Criminal Justice System recommended that it is necessary to amend Section 311 CrPC imposing a duty on every court to suo motu cause production of evidence for the purpose of discovering the truth and requiring every court to take into account the evidence so collected, in addition to the evidence produced by the prosecution.18981 Jurist Fali Nariman in his book ‘India’s Legal System : Can it be Saved?’, 2006.Public OrderReforms in the Criminal Justice System7.7.1.9 After considering all these factors, the Commission is of the view that there is a strong and compelling case for the judge to question the accused and the witnesses to ascertain the truth and arrive at a just conclusion based on such questioning along with the other evidence before him. Such a provision is particularly critical in the trial of terrorism cases and organised crimes which affect society at large. Amendments to the CrPC, as suggested by the Committee on Reforms of Criminal Justice System, would go a long way to improve the quality of evidence and therefore of decisions.e. A specific immunity, possessed by persons who have been charged with a criminal offence, from having questions material to the offence addressed to them by police officers or persons in a similar position of authority.f. A specific immunity (at least in certain circumstances, which it is unnecessary to explore), possessed by accused persons undergoing trial, from having adverse comment made on any failure (a) to answer questions before the trial, or (b) to give evidence at the trial.827.7.2 Right to Silence7.7.2.1 A central issue facing all criminal justice systems is to strike a balance between the extent to which an accused could be used as a source of information and his/her right against self incrimination. Right to silence is a natural corollary of the maxim that no person can be forced to give evidence against one’s own self. The right to silence is a legal protection enjoyed by an accused person during investigation or trial. This right mandates that adverse inferences cannot be drawn by the judge from a refusal to answer questions before or during a trial or hearing. The right generally includes the following:a. A general immunity, possessed by all persons and bodies, from being compelled on pain of punishment to answer questions posed by other persons or bodies.b. A general immunity, possessed by all persons and bodies, from being compelled on pain of punishment to answer questions the answers to which may incriminate them.c. A specific immunity, possessed by all persons under suspicion of criminal responsibility whilst being interviewed by police officers or others in similar positions of authority, from being compelled on pain of punishment to answer questions of any kind.d. A specific immunity, possessed by accused persons undergoing trial, from being compelled to give evidence, and from being compelled to answer questions put to them in the dock.7.7.2.2 The Law Commission of India in its 180th Report, 2002 has elaborated about the Right to Silence:The right to silence has various facets. One is that the burden is on the State or rather the prosecution to prove that the accused is guilty. Another is that an accused is presumed to be innocent till he is proved to be guilty. A third is the right of the accused against self incrimination, namely, the right to be silent and that he cannot be compelled to incriminate himself. There are also exceptions to the rule. An accused can be compelled to submit to investigation by allowing his photographs taken, voice recorded, his blood sample tested, his hair or other bodily material used for DNA testing etc.837.7.2.3 Articles 20 and 21 of the Constitution provide the basis of the right to silence in India:“ 20 (1) No person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law or in force at the time of the commission of the offence.20 (2) No person shall be prosecuted and punished for the same offence more than once.20 (3) No person accused of any offence shall be compelled to be a witness against himself.21 No person shall be deprived of his life or personal liberty except according to procedure established by law”.7.7.2.4 The Law Commission has also pointed out that the earlier history of these provisions under the Code of Criminal Procedure, 1898, is quite revealing. Section 342(2) of the said Code contained a provision which reads as follows:7.7.1.10 Recommendation:a. It is necessary to amend Section 311 CrPC and impose a duty on every court to suo motu cause production of evidence for the purpose of discovering the truth, which should be the ultimate test of the criminal justice system. Suitable amendments to the Indian Evidence Act, 1872 may also be made to facilitate this.19019182 R v Director of Serious Fraud Office, Ex Parte Smith [1993] AC 1, [1992] 3 All ER 456, [1992] 3 WLR 66, [1992] BCLC 879, 95 Cr App Rep 19183 Law Commission of India, 180th Report, 2002Public OrderReforms in the Criminal Justice System“Sec. 342(2): The accused shall not render himself liable to punishment by refusing to answer questions or by giving false answers to them; but the court and the jury (if any) may draw such inference from such refusal or answers as it thinks fit.”7.7.2.5 This provision was not, however, repeated in the Code of Criminal Procedure of 1973 and was dropped obviously because of the guarantee under clause (3) of Article 20 of the Constitution of India which came in to force in 1950.7.7.2.6 The legal position regarding the right to silence varies in different countries. The American and Canadian Courts have not permitted any inroads into the right to silence while British, European and Australian Courts permit the jury and the Courts to take the silence of the accused into consideration before arriving at a finding of guilt beyond reasonable doubt, of course where a prima facie case is made out and the accused is informed of his right to an attorney.847.7.2.7 The Law Commission concluded as follows:7.7.2.8 The Committee on Reforms of Criminal Justice System has argued against the right to silence:-“Right granted by Article 20(3) is in reality an immunity to the accused from compulsion to speak against himself. Even when the accused is not compelled to speak, he has the discretion to speak or not to speak. If he chooses to speak, the court can draw appropriate inferences from his statement. Article 20(3) does not in terms speak of any immunity from drawal of appropriate inference when the accused refuses to answer. It is difficult to infer how immunity from drawal of appropriate inference including adverse inference flows from or is a part of the immunity against testimonial compulsions. If the court can draw an adverse inference against the accused from his silence there would be less incentive for the police to resort to compulsion or trickery to obtain a confession. If drawing of such adverse inference is not permissible it would tend to encourage such behaviour. Immunity from compulsion to be a witness against himself is a concept of ancient origin long before the time of the Star Chamber. The concept of immunity from adverse inference however is of the 20th century. This would suggest that immunity from adverse inference on silence of the accused would not flow from immunity against compulsion. It may not be right to say that adverse inference should always be drawn from the silence of the accused. Adverse inference should be drawn only where an answer is reasonably expected from the accused and not mechanically in every case. That adverse inference would be drawn by a trained judicial mind is sufficient to guarantee that it would be exercised reasonably and on irrelevant considerations.In the considered view of the Committee, drawing of adverse inference against the accused on his silence or refusing to answer will not offend the fundamental right granted by Article 20(3) of the Constitution as it does not involve any testimonial compulsion. Therefore the Committee is in favour of amending the Code to provide for drawing appropriate inferences from the silence of the accused.”7.7.2.9 The Committee, therefore, recommended:“Section 313 of the Code may be substituted by Section 313-A, 313-B and 313-C on the following lines :-i) 313-A In every trial, the Court shall, immediately after the witnesses for the prosecution have been examined, question the accused generally, to explain personally any circumstances appearing in the evidence against him.ii)313-B(1): Without previously warning the accused, the Court may at any stage of trial and shall, after the examination under Section 313-A and before he is called on his“The law in India appears to be same as in USA and Canada. In view of the provisions of clause (3) of Art. 20 and the requirement of a fair procedure under Art. 21, and the provisions of ICCPR to which India is a party and taking into account the problems faced by the Courts in UK, we are firmly of the view that it will not only be impractical to introduce the changes which have been made in UK but any such changes will be contrary to the constitutional protections referred to above. In fact, the changes brought about in the Criminal Procedure Code, 1973 leaving out the certain provisions which were there in 1898 Code, appear to have been the result of the provisions of clause (3) of Art. 20 and Art. 21 of our Constitution. We have reviewed the law in other countries as well as in India for the purpose of examining whether any amendments are necessary in the Code of Criminal Procedure, 1973. On a review, we find that no changes in the law relating to silence of the accused are necessary and if made, they will be ultra vires of Art. 20(3) and Art. 21 of the Constitution of India. We recommend accordingly.”19219384 ibidPublic OrderReforms in the Criminal Justice System194defence put such questions to him as the court considers necessary with the object ofdiscovering the truth in the case. If the accused remains silent or refuses to answer any question put to him by the court which he is not compelled by law to answer, the court may draw such appropriate inference including adverse inference as it considers proper in the circumstances.313-C(1): No oath shall be administered when the accused is examined under Section 313-A or Section 313-B and the accused shall not be liable to punishment for refusing to answer any question or by giving false answer to them. The answers given by the accused may be taken into consideration in such inquiry or trial, and put in evidence for or against him in any other inquiry into, or trial for, or any other offence which such answers may tend to show he has committed.”7.7.2.10 The British jurist, Jeremy Bentham, almost 170 years ago said :“If all criminals of every class had assembled, and framed a system after their own wishes, is not this rule the very first which they would have established for their security? Innocence never takes advantage of it. Innocence claims the right of speaking, as guilt invokes the privilege of silence.” 857.7.2.11 It has been argued that the accused is an important source of information and there are many facts which are solely within the knowledge of the accused. Under such circumstances, the right to silence comes in the way of getting these vital information. It is also urged that ‘professional’ criminals seek shelter under this right and are exploiting this weakness in the judicial system.7.7.2.12 Singapore curtailed the right to silence by amending its Criminal Procedure Code in the mid seventies. In the UK, the right to silence was curtailed by the Criminal Justice and Public Order Act 1994. The Act permits the court hearing the charge against the accused to draw such inferences as may appear proper from the fact of silence of the accused under certain circumstances:7.7.2.13 The Commission on examining all these views and on balance is of the view that though there should be a right to silence in all cases but in cases related to organised crimes and terrorism there is need to empower courts to draw inference from the silence of the accused. The Commission therefore recommends that Courts should have power to draw inference from the silence of the accused during trial in case of specified offences like terrorism and organised crime.85 Treatise on Evidence at 24; extracted from Balance in the Criminal Law; Review Group on the Right to Silence; Interim Report; January 31st, 2007;7.7.3 Perjury7.7.3.1 In the aftermath of the Zahira Sheikh and Jessica Lall cases, the critical need to tackle perjury as a crime which can subvert justice, has come to the forefront. Perjury is generally considered a major factor in bringing down conviction rates (for all IPC crimes) in India from 64.8% in 1961 to 42.4 % in 2005. During the same period, for murder cases the comparable rates were 49% and 34%.7.7.3.2 Contrary to popular belief, presumably arising from the infrequent application of these laws, perjury in India is a crime and its definition is laid down under Section 191 of the Indian Penal Code. The definition states that “whoever being legally bound by the oath or by any express provision of law to state the truth or being bound by law to make a declaration on any subject makes any statements which is false and which he either knows or believes to be false or does not believe to be true, is said to give a false evidence”. The punishment for giving such false evidence in judicial proceedings has been laid down under Section 193 of the IPC which states that such an offence should be punishable with imprisonment for a term which may extend up to seven years.7.7.3.3 Keeping the growing instances of perjury in mind, Section 195A was inserted in Chapter XI of the Indian Penal Code by Act 2 of 2006, thereby providing for a punishment of imprisonment for a term up to seven years, or with fine, or with both to a person who threatens any person to give false evidence. It also provides that if an innocent person is convicted and sentenced in consequence of such false evidence with death or imprisonment for more than seven years, the person who threatens shall be punished with the same punishment and to the same extent.7.7.3.4 Chapter XXVI of CrPC deals with provisions pertaining to offences affecting the administration of justice. Section 344 therein provides for summary procedure for trial for giving false evidence. The punishment to a person giving false evidence under this Section, is imprisonment up to three months or fine extending to five hundred rupees, or with both. Evidently, these provisions are inadequate in checking witnesses turning hostile on their own volition or through inducement or threat. To act as a deterrent, the punishment under Section 344 CrPC should be enhanced to a minimum of one year imprisonment. Further,7.7.2.14 Recommendation:a. Regarding grave offences like terrorism and organised crimes, in the case of refusal by the accused to answer any question put to him, the court may draw an inference from such behaviour. This may be specifically provided in the law.195Public OrderReforms in the Criminal Justice System196it should be ensured that the existing perjury laws are effectively applied by the trial courts without waiting for the main trial to come to a conclusion.7.7.3.5 Proving that a hostile witness has given false evidence is a time consuming and cumbersome task and there are broader issues such as the need to protect the anonymity of witnesses and to give physical protection to them, so that the phenomenon of witnesses turning hostile is controlled. These broader issues, including that of signing of statements by witnesses and the evidentiary value of their statements before the police have already been dealt with separately in Chapter 6.7.7.4 Witness Protection7.7.4.1 Witness protection and ensuring the anonymity of witnesses is necessitated by two sets of factors, one due to cases of intimidation and threats to the personal safety of the witness and, second, due to the particular vulnerability of the witness on account of age, sex or due to the trauma that he or she may have suffered.7.7.4.2 In India, courts have recognised the need for and granted witnesses anonymity on a case by-case basis, to a limited extent. They have also at various times reiterated the need for a comprehensive legislation and an institutionalized witness protection program in the country.7.7.4.3 Many countries, notably the United States, Australia and South Africa have comprehensive witness protection programs. The US witness protection program was established by the Organised Crime Control Act,1970 and outlines the modalities by which the US Attorney General may provide for relocation and protection of a witness in an official proceeding related to organised crime or other serious offences. The program offers witnesses a new name and location as well as physical protection by the US Marshals’ service or the FBI.7.7.4.4 The Supreme Court of India in its observations in the case of NHRC vs The State of Gujarat (2003) regretted that “no law has yet been enacted for giving protection to witnesses”. Later, the Court while transferring the Best Bakery case (2004) from the Gujarat High Court to Mumbai also ordered protection to the witnesses in the matter. The Apex Court again observed in Zahira Habibullah Sheikh and another vs State of Gujarat and Ors. (2006) 3 SCC 374 that:“Time has come when serious and undiluted thoughts are to be bestowed for protecting witnesses so that ultimate truth is presented before the Court and justice triumphs and that the trial is not reduced to a mockery.”The need for legislation on the matter was again felt by the Court which stated:“Legislative measures to emphasise prohibition against tampering with witness, victim or informant have become the imminent and inevitable need of the day. Conducts which illegitimately affect the presentation of evidence in proceedings before the Courts have to be seriously and sternly dealt with. There should not be any undue anxiety to only protect the interest of the accused. That would be unfair, as noted above, to the needs of the society.”The Seventeenth Law Commission took up the two issues of witness anonymity and witness protection and released a detailed Consultation paper on this issue in 2004 which emphasized the need to “balance the right of an accused to an open and fair trial with the need for fair administration of justice in which the victims and witnesses can depose without fear or danger of their lives or property or those of their close relatives”.7.7.4.5 The problem with implementing an American style witness protection program in India is that an individual Indian’s identity is so inextricably linked with his social group, joint family and place of origin that it may be practically impossible to extricate him from the same and relocate him with a fresh identity somewhere else in the country. It is also extremely costly. Consequently, witness protection programs of that type and scale may not be feasible except in a small number of very rare cases. Nevertheless, there is need for a statutorily backed witness protection programme.7.7.3.6 Recommendations:a. The penalties provided under Section 344 CrPC for those found guilty of perjury after a summary trial should be enhanced to a minimum of one year of imprisonment.b. It should be made incumbent upon the Courts to ensure that existing perjury laws providing for summary trial procedure are unfailingly and effectively applied by the trial courts, without awaiting the end of the main trial.7.7.4.6 Recommendation:a. A statutory programmme for guaranteeing anonymity of witnesses and for witness protection in specified types of cases, based on the best international models should be adopted early.197Public OrderReforms in the Criminal Justice System7.7.5 Victim Protection7.7.5.1 There is a general impression that the criminal justice system favours the accused and the interests of victims are not protected at all. The victim of a crime is merely a witness in the entire proceedings since prosecution is a State monopoly with the victim having little say in the matter. While there are a large number of safeguards for the accused, there is virtually no special dispensation for victims. A victim who has been wronged, apart from the mental and physical agony because of the crime, has to undergo hostile questioning by defence lawyers, intimidation by the accused and is also treated just like any other witness by the courts. With the low rate of conviction in criminal cases, the victim is often disillusioned as he/she often finds the criminals being let off without punishment. This also demoralizes the victim and erodes his/her confidence in the criminal justice system. The Supreme Court has also expressed concern over the plight of victims.“There has been lately, lot of criticism of the treatment of the victims of sexual assault in the court during their cross-examination.The provisions of Evidence Act regarding relevancy of facts notwithstanding, some defence counsel adopt the strategy of continual questioning of the prosecutrix as to the details of the rape. The victim is required to repeat again and again the details of the rape incident not so much as to bring out the facts on record or to test her credibility but to test her story for inconsistencies with a view to twist the interpretation of events given by her so as to make them appear inconsistent with her allegations. The court, therefore, should not sit as a silent spectator while the victim of crime is being cross-examined by the defence. It must effectively control the recording of evidence in the court. While every latitude should be given to the accused to test the veracity of the prosecutrix and the creditability of her version through cross-examination, the court must alsoensure that cross-examination is notmade a means of harassment or causing humiliation to the victim of crime. A victim of rape, it must be remembered, has already undergone a traumatic experience and if she is made to repeat again and again, in unfamiliar surroundings what she had been subjected to, she may be too ashamed and even nervous or confused to speak and her silence or a confused stray sentence may be wrongly interpreted as discrepancies and contradictions’ in her evidence.” 867.7.5.2 Section 357 of the Code of Criminal Procedure, 1973 empowers the court to order the accused to pay compensation to any person for any loss or injury caused by the offence. However, this provision has been used sparingly and only in a nominal sense.7.7.5.3 Several countries have passed victim’s rights protection laws. For example, the Victims Rights Act 2002, in New Zealand has given several rights to the victims of crime. These include: treating victims with courtesy and compassion, respecting their dignity and privacy, keeping them informed about the proceedings, taking the victim’s views on grant of bail to the accused, victim’s participation for grant of parole etc.7.7.5.4 The Law Commission in its 144th Report examined this issue and recommended that a new section, 357A may be inserted in the Code of Criminal Procedure. Under this proposed section it is provided that every state government would prepare a scheme for providing funds for the purpose of compensating the victim or his/her dependents who have suffered loss or injury as a result of the crime.7.7.5.5 The Commission is of the view that there is need for a law for the protection of victims’ rights. Such a law should recognize the vulnerable position of the victim, respect the sensitivities of the victim and treat him/her with dignity. The law should also provide that the prosecution shall consult the victim in case of grant of bail to the accused in heinous offences. Similarly, even for the release of prisoners on parole the views of the victim must be taken into account. The law should also explicitly provide for payment of compensation to the victims and for this purpose a special fund may be created.19819986 Source: State of Punjab vs Gurmit Singh and Others (1996) 2 SCC 384.Public OrderReforms in the Criminal Justice System2007.7.6 Committal Proceedings:7.7.6.1 The law governing committal proceedings has undergone major changes after Independence. Until 1955, the magistrate was required to take all the evidence – oral and documentary – that was produced in support of the prosecution, or on behalf of the accused, satisfy himself that there were sufficient grounds for committing the case to the Sessions Court, frame charge(s) against the accused, and thereafter commit the case to the Court of Session. If he was not so satisfied, he would discharge the accused. The main purpose of the committal proceedings was to ensure that an innocent person was not harassed by being made to face a sessions trial.877.7.6.2 There was a proposal to abolish committal proceedings in police cases in 1954. However, this was not accepted by Parliament and a modified form of committal proceedings was introduced (Section 207 A, CrPC). The Law Commission in its 14th Report (1958) examined the issue of committal proceedings. It did not favour abolition of committal proceedings for the following reasons: (i) there are bound to be some cases in which the magistrate could discharge the accused thereby saving the precious time of the sessions court. (ii) committal proceedings offer a chance to the accused person to satisfy the magistrate that there is no case against him/her. (iii) the evidence recorded in the committal proceedings is of great value as the earliest record on oath of their statements and delays in recording the evidence will encourage the tendency which already exists in witnesses to swerve from the truth.7.7.6.3 This issue was once again examined by the Law Commission in its Forty-first Report, 1969. The Commission was of the unanimous opinion that committal proceedingsare largely a waste of time and effort and do not contribute appreciably to the efficiency of the trial before the Court of Session. It further observed that the primary object of protecting the innocent accused from the ordeal of a sessions trial has not been achieved in practice. The Law Commission also recommended that the prosecuting agency should be separated from and made independent of its administrative counterpart, that is the police department, and that it should not only be responsible for the conduct of prosecution in the court but it should also have the liberty of scrutinizing the evidence particularly in serious and important cases before the case is actually filed in court. The Law Commission recommended the abolition of committal proceedings. The law was again amended in 1978. Section 209 of the Code of Criminal Procedure, 1973 provides for committal proceedings. It reads as follows:“209 Commitment of case to Court of Session when offence is triable exclusively by it – when in a case instituted on a police report or otherwise, the accused appears or is brought before the Magistrate and it appears to the Magistrate that the offence is triable exclusively by the Court of Session, he shalla. commit, after complying with the provisions of Section 207 or Section 208, as the case may be, the case to the Court of Session, and subject to the provisions of this Code relating to bail, remand the accused to custody until such commitment has been made;b. subject to the provisions of this Code relating to bail, remand the accused to custody during, and until the conclusion of the trial;c. send to that Court the record to the case and the documents and articles, if any, which are to be produced in evidence;d. notify the Public Prosecutor of the commitment of the case to the Court of Session”.7.7.6.4 It may be noted that though the law formally provides for commitment of a case by a Magistrate, the Magistrate has to only comply with the provisions of Sections 207 and 208 of the CrPC and commit the case to the Court of Session. Under Section 207 and 208 it has been stipulated that the Magistrate should supply copies of certain documents to the accused. Thus, under the present dispensation the Magistrate is not supposed to record the evidence of the witnesses. It has been urged before the Commission that abolition of detailed committal proceedings (in which the evidence of the witnesses of the prosecution could be recorded) has increased the time lag between the commitment of an offence and the recording of evidence on oath by the court. It has been argued that when the system of detailed committal proceedings was in vogue the evidence of crucial witnesses were recorded by the Magistrate and then the case was forwarded to the Court of Session. Thus,7.7.5.6 Recommendations:a. A new law for protecting the rights of the victims of the crimes may be enacted. The law should include the following salient features:i. Victims should be treated with dignity by all concerned in the criminal justice system.ii. It shall be the duty of the police and the prosecution to keep the victim updated about the progress of the case.iii. If the victim wants to oppose the bail application of an accused he/she shall be given an opportunity to be heard. Similarly, for release of prisoners on parole, a mechanism should be developed to consider the views of the victims.iv. A victim compensation fund should be created by State Governments for providing compensation to the victims of crime.20187 Law Commission of India; Forty-First Report 1969Public OrderReforms in the Criminal Justice Systemthe recording of evidence took place at an early date; this bound the witnesses down and they were less vulnerable to extraneous influences and coercion to change their statements later.7.7.6.5 The Commission has examined this issue. It has also studied the system prevailing in other countries. In most countries, the system of committal proceedings has been abolished. The Commission feels that one of the major reasons for declining conviction rates is because prosecution witnesses turn hostile. In such cases, the witnesses are either won over or coerced to resile from their earlier statements made before the police. However, if these statements are recorded on oath before a Magistrate the chances of witnesses resiling from these statements would be much less. Moreover, if the witness gives contradictory evidence later, he would also be liable for perjury. Therefore, the Commission is of the view that committal proceedings wherein the statements of the witnesses for the prosecution are promptly recorded should be reintroduced. The Commission is aware that this may lead to some delay but the advantages of such proceedings outweigh the disadvantages. This is particularly because the deposition of witnesses is vital in criminal proceedings.7.8 Classification of Offences7.8.1 A cognizable offence is one in which the police can arrest a person without a warrant. They are also authorised to start investigations into a cognizable offence on their own and do not need any orders from a Magistrate to do so. A non-cognizable offence is one where a police officer does not have the authority to arrest without a warrant and cannot investigate such an offence without the order of a Magistrate having the power to try such cases or commit the same for trial. Compoundable offences are those that can be compounded with or without the permission of the court while non-compoundable offences cannot be compounded. Offences are also classified as bailable and non-bailable depending on whether bail is to be granted automatically or is a matter of discretion for the Courts.7.8.2 Whether the classification of offences into the above categories mentioned above is useful or not has been a point of considerable debate. The Committee on Reforms of Criminal Justice System has made the following observation on this issue:“It is necessary to reclassify crimes in such a way that many of the crimes – which today take up enormous time and expense – are dealt with speedily at different levels by providingviable and easily carried out alternatives to the present procedures and systems.”7.8.3 It therefore recommended as under:“It is recommended that non-cognizable offences should be registered and investigated and as arrestability shall not depend on cognizability, the present classification has further lost its relevance.However the Committee feels that when reviewing the Indian Penal Code it may be examined whether it would be helpful to make a new classification into i) The Social Welfare Code, ii) The Correctional Code, iii) The Criminal Code and iv) Economic and other Offences Code. Hence the following recommendations:-?To remove the distinction between cognizable and non-cognizable offences and making it obligatory on the Police Officer to investigate all offences in respect of which a complaint is made.?Increasing the number of cases falling within the category of cases triable by following the summary procedure prescribed by Sections 262 to 264 of the code.?Increasing the number of offences falling in the category of ‘Petty Offences’ which can be dealt with by following the procedure prescribed by Section 206 of the Code .?Increasing the number of offences for which no arrest shall be made.?Increasing the number of offences where arrest can be made only with the order of the court and reducing the number of cases where arrest can be made without an order or warrant from the Magistrate.?Increasing the number of offences which are bailable and reducing the number of offences which are not bailable.?Increasing the number of offences that can be brought within the category of compoundable / settlement category.?The Committee recommends a comprehensive review of the Indian Penal Code, the Evidence Act and the Criminal Procedure Code by a broad based7.7.6.6 Recommendation:a. Committal proceedings should be reintroduced where the magistrate should have powers to record the evidence of prosecution witnesses. Suitable amendments may be carried out in Chapter XVI of the Code of Criminal Procedure.202203Public OrderReforms in the Criminal Justice System7.8.5 Recommendations:a. A comprehensive reclassification of offences may be done urgently to reduce the burden of work for both the Courts and the Police. A mechanism for ensuring regular and periodic review of offences should also be put in place to make such reclassification an ongoing and continuing exercise.b. The objective of this exercise should be to ensure that crimes of a petty nature including those which require correctional rather than penal action should be taken out of the jurisdiction of the police and criminal courts so that they are able to attend to more serious crimes. Such offencesshould, in future be handled by the local courts.7.9 Sentencing ProcessCommittee representing the functionaries of the Criminal Justice System, eminent men and women representing different schools of thoughts, social scientists and vulnerable sections of the society and to make recommendations to the Parliament”.7.8.4 The Commission is in broad agreement with the views of the Committee on Reforms of Criminal Justice System.7.9.1 Sentencing of guilty persons is an important and ultimate phase of the criminal justice system. Criminal laws normally provide for a maximum sentence that may be imposed if an offence is proved. There is a certain category of offences where a minimum punishment is prescribed. The courts have a wide discretion in deciding the quantum of punishment. It is contended that such discretion is necessary in order to enable the judge to impose a punishment depending upon the circumstances of each case. It has been argued however, that there are instances when such wide discretion has resulted in varying punishments for similar crimes in similar circumstances. It has been urged that there should be suitable guidelines to help judges in arriving at the quantum of punishment in each case.7.9.2 There is a view that in India there is a real problem arising from a lack of consistency in sentencing practices across the country. This is also compounded by broad executive discretion in commuting sentences and granting pardon. It is not as if the criminal courts have total discretion in deciding the amount of sentence. Apart from the law, the rulings of the High Courts and the Supreme Court also act as guidelines for the subordinate courts. But still the issue remains whether the existing ‘guidelines’ are sufficient or is there need tohave more elaborate guidelines with statutory backing. There is another school of thought which argues that in a big and diverse country like India it may not be possible to codify each and every situation, and it would be best to leave it to the judgement of the Court.7.9.3 This issue has emerged in other countries also. The sentencing frameworks prevailing in other countries vary from highly prescriptive ones where detailed guidelines have been laid down to systems where total discretion has been given to the courts. In the US, the United States Sentencing Commission (USSC), an independent agency in the Judicial Branch of the federal government, was created through the Sentencing Reform Act 1985. The objective of the Act is:“To provide certainty and fairness in meeting the purposes of sentencing, avoiding unwarranted sentencing disparities among defendants with similar records who have been found guilty of similar criminal conduct while maintaining sufficient flexibility to permit individualised sentences when warranted by mitigating or aggravating factors not taken into account in the establishment of general sentencing practices; 28 U.S.C. § 991(b)(1)(B)”.7.9.4 In the US, the Sentencing Commission lays down broad guidelines to help and guide the courts in fixing the punishment in conviction cases. A Sentencing Manual and Table lay down a sentencing range in months, within which the Court may sentence a defendant based on the relationship between two primary factors viz., nature of the offence and the defendants’ criminal history. While Federal Sentencing Guidelines in the United States were originally stated to be mandatory, a subsequent decision of the United States Supreme Court in 2005 found that the guidelines violate the constitutional right to trial by jury and therefore the guidelines cannot be mandatory and should be considered as discretionary, which means judges may consider them but are not required to necessarily adhere to them.7.9.5 In the UK, a Sentencing Advisory Panel and a Sentencing Guidelines Council was constituted by the Criminal Justice Act, 2003. The Secretary of State may at any time propose to the Council- that sentencing guidelines be framed or revised by the Council (i) in respect of offences or offenders of a particular category, or (ii) in respect of a particular matter affecting sentencing88. The Act also stipulates that every court must (a) in sentencing an offender, have regard to any guidelines which are relevant to the offender’s case, and (b) in exercising any other function relating to the sentencing of offenders, have regard to any guidelines which are relevant to the exercise of the function.20420588 Section 170 (2); Criminal Justice Act 2003, UK; retrieved from- OrderReforms in the Criminal Justice System7.9.7 Recommendations:a. The Law Commission may lay down ‘Guidelines’ on sentencing for the Trial Courts in India so that sentencing across the country for similar offences becomes broadly uniform.b. Simultaneously, the training for trial court judges should be strengthened to bring about greater uniformity in sentencing.7.10 Prison Reforms7.9.6 The Commission is of the view that it is necessary to have a framework of sentencing guidelines, to ensure similar treatment in similarly placed cases. This would also help in increasing people’s confidence in the criminal justice system, as when people hear of wide variations in the amount of sentence for similarly placed cases, their confidence in the system gets eroded. The Commission also feels that instead of bringing in such guidelines through a statutory mechanism it would be better to have them within the judicial framework, specially since some sort of guidelines have already evolved through judicial decisions.7.10.1. India’s prison population stood at 331,391 as on 31.12.2004 reflecting a jail population of 30 per hundred thousand Indians and jail occupancy levels which stood at 139% of capacity with the proportion of undertrial prisoners standing at 65.5%. Jharkhand had the highest overcrowding in its prisons (300.9%) followed by Delhi with 249.7%. The number of jail establishments in India stood at 1147 which were categorised as Central Jails, District Jails, Sub-Jails, Juvenile and Women Jails as well as open Jails/Camps. In comparison to the United States, which had a prison population of 2,193,798 (and a prison rate of 724 per 100,000 population) or China, which had a prison population of 1,548,498 in the same period, India’s jail population is quite low, both as a proportion of the population and in absolute terms. Despite this, our jails suffer from serious overcrowding with the bulk of the inmates comprising undertrial prisoners as shown in Fig. 7.3. These are often people from disadvantaged backgrounds involved in minor and technical violations of the law who are incarcerated due to theirinability to pay for bail and/or for good legal representation. Thus, hardened convicts as well as petty offenders like ticketless travellers could end up being imprisoned together for long periods in crumbling buildings with inadequate accommodation and sanitary facilities. The situation in many prisons is appalling enough to be considered a violation of human dignity as well as the basic human rights of the inmates. Paradoxically, a few individuals, who are powerful are allowed to enjoy extraordinary facilities not permitted under the rules.7.10.2 The case of Machan Lalung who was released in 2005 at the age of 77 from a jail in Assam after 54 years in prison for an IPC offence, for which the maximum sentence is not more than 10 years, puts a human face to the statistics mentioned above. The fact that over 65% of our prison population comprises undertrial prisoners (with the undertrial population reaching 90% in the states of UP, Manipur and Meghalaya) means that there could be a large number of comparable cases where similar injustice is being meted out to individuals by an impersonal and sometimes cruel criminal justice system.7.10.3 The report of the All India Committee on Jail Reforms (1980-83) chaired by Justice A.N. Mulla, had observed that “Over-crowded prisons, prolonged detention of under trial prisoners, unsatisfactory living conditions, lack of treatment programs and allegations of an indifferent and even inhuman approach of prison staff have repeatedly attracted the attention of critics over the years”.7.10.4 Modern prison reforms in the country is normally considered to have begun from the Indian Jails Committee of 1919-20. For the first time, its report identified reformation and rehabilitation as the true objective of prison administration. The Committee made the important recommendation that separate jails should be earmarked for various categories of prisoners, prescribing a minimum area of 75 square yards per inmate within the jail walls. It took strong objection to the presence of children in jails meant for adults. It recommended the creation of special courts for hearing of cases of juvenile delinquents and their housing in remand homes. It urged the holding of a conference of Inspectors General of Prison every alternate year. But many of its recommendations were not implemented as the subject of prisons was within the purview of the provincial governments. In a sense, the situation today remains almost unchanged.7.10.5 While prison reforms has been a neglected area for administration in India, Courts have intervened to lay down specific rules and guidelines in regard to matters like the right to physical protection, protection against physical assault, restrictions on handcuffing and fetters, solitary confinement, the right to speedy trial, freedom of expression etc. The Supreme Court has also issued directions regarding the procedure to be followed when a206207Public OrderReforms in the Criminal Justice Systemperson is arrested. In Joginder Kumar vs State of UP and others (1994), the Court referred to the National Police Commission’s finding that 60% of all arrests were either unnecessary or unjustified and laid down four requirements to be strictly followed:i. The right of the arrested person to request that a friend, relative or other persons be informed of his arrest and the place where he is detained;ii. The duty of the police officer to inform the arrested person of this right;iii. The need for an entry to be made in the police station diary as to who was informed of the arrest;iv. The duty of the Magistrate before whom the arrested person is produced, to satisfy himself that these requirements have been complied with.7.10.6 Besides, a police officer making an arrest should record in the case diary the reasons for making the arrest, implying thereby that every arrest by the police has to be justified in law.7.10.7 Despite such judicial interventions and the efforts made in some jails like Delhi’s Tihar Jail, to make the conditions for the prisoners more humane, in respect of most jails in the country the description of the prison system as being antiquated and overstretched remains valid. As mentioned earlier, India’s prison population (both in absolute terms and as a proportion of its population) may be low by international standards, but this may, regrettably, be a function of our declining conviction ratios. Nonetheless, this means that giving better facilities to inmates and promoting a professional and reformative approach in our prison administration should be possible and now certainly within our resources. Such change requires a concerted attempt to put prison reform on top of the agenda for the Union and State Governments. Reforms in prison administration requires provision of adequate resources for modernization of jail infrastructure as well as procedural reforms (through changes in the relevant statutes and rules) in the entire criminal justice system to reduce the number of arrests for petty offences and increase the availability of bail, speeding up of trials, providing alternatives to incarceration (such as community service) for less heinous offences, creation of an impartial and professional system to consider remission of sentences and parole etc.7.10.8 The Mulla Committee had examined all aspects of prison administration and made wide-ranging recommendations on issues such as the organisational structure of the prison services, the need for a common Jail Manual, the need to involve experts and NGOs in the field of treatment, care and rehabilitation of offenders, the need for more open prisons etc, which, if implemented, would go a long way to make prison administration more efficient, humane and professional. Subsequently, the NHRC has also prepared a model Prison Bill.The Ministry of Home Affairs had circulated a model Bill to the States in 1998 and some States have adopted new legislation for prisons such as the Rajasthan Prisons Act, 2001. A new model Jail Manual has also been circulated to all States by the Union Government in 2003.7.10.9 Without going into the finer details of these individual reforms proposals, the Commission is of the firm view that prison reforms is an integral part of any attempt to reform our criminal justice system in order to make it more humane and reformative. For this purpose, the Union and State Governments should be asked to fast-track modernisation, upgradation and reforms of our prison systems based on the report of the Mulla Committee and the various legislative proposals mentioned in the preceding paragraphs.7.10.10 In addition, the issue of misuse of the provisions for parole and for remission of sentences has significant implications for public order because indiscriminate and reckless grant of parole or remission of sentences can impact public order adversely. There is an urgent need to put in place a non-partisan and professional mechanism for taking decisions on these issues rather than leaving it to the discretion of individual functionaries.7.10.11 This is of particular relevance given the recent allegations of abuse of these powers on partisan and political lines in states like Kerala, Andhra Pradesh and Haryana and also the recent case of an Orissa police officer, whose son, a convicted rapist, jumped parole in Rajasthan and has been untraced for over several months now. In Kerala state, a Division Bench of the High Court is currently examining the power of the Home Minister and the Cabinet to grant parole to life-term convicts and has reportedly observed that the relevant provisions in the Kerala Prison Rules to grant parole to convicts is beyond the legislative competence of the State Governments on the ground that there is no such provision in the parent Prison Act. The case itself centres on certain cases of murder convicts who happened to be workers of particular political party and who were allegedly granted parole without justification on partisan considerations.7.10.12 Such cases have adverse ramifications for public order as well as the citizens’ respect for the rule of law because they create an impression that influential segments of society can obtain preferential treatment before the law.7.10.13 In order to ensure impartiality and uniformity in decision-making, it is felt that an Advisory Board to be chaired by a retired Judge of the High Court with the State DGP208209Public OrderReforms in the Criminal Justice Systemand the IG (Prisons) as members should be set up to make recommendations to the State Government on grant of parole to convicts. The recommendations of the Board should normally be accepted by the State Government. If the State Government differs with the Board, it should express its difference of opinion in writing and obtain fresh advice of the Board before taking a final decision in the matter. Similarly, for grant of remission of sentences, states should constitute Sentence Remission Boards as advisory bodies so that the decisions on this issue can be taken in an impartial and judicious manner.against Public Justice needs a fresh look. Offences relating to Coin and Government Stamps (Chapter XII) – have become obsolete in the background of the ‘Telgi Scam’ and would have to be recast. Offences relating to Religion (Chapter XV) have to be so modified to make a distinction between crimes committed with communal motives and normal crimes. Similarly, the Indian Evidence Act would also have to be revisited to reflect 21st century social values.7.10.14 Recommendations:a. The Union and State Governments should work out, fund and implement at the earliest, modernisation and reforms of the Prison System as recommended by the All India Committee on Jail Reforms (1980-83).b. The attendant legislative measures should also be expedited.c. Rules regarding Parole and Remission need to be reviewed. An Advisory Board with a retired judge of the High Court, the DGP and the Inspector General of Prisons should be set up to make recommendations on parole. The recommendation made by the Board should normally be accepted. In case of difference, State Government should obtain the advice of the Board again, stating its own views in writing. A similar or the same Board may deal with cases of remissions.7.11 Amendment to Criminal Laws7.11.1 Laws dealing with the criminal justice system, especially the Indian Penal Code and the Indian Evidence Act were enacted in the 19th century. The very fact that these laws are still working establishes that these have stood the test of time. However, rapid developments have taken place in the country after Independence. It is therefore necessary to have a comprehensive re-look at these laws, particularly the Indian Penal Code, in the context of the current socio, economic and political situation. The ‘definitions’ have to be revisited and the entire Act has to be made more gender-friendly. Offences against the State (Chapter IV) – the definitions and the punishments – have to be modified keeping in mind terrorist, insurgency, organised crimes, Naxalism and other disrupting activities affecting the security and integrity of the country. Offences against the Public Tranquility have to be revisited so as to make section such as 153 (A) of IPC more effective and stringent. Offences relating to Elections (Chapter IX A) require major changes keeping in mind the current political developments in the country. Chapter XI on False Evidence and Offences2102118Constitutional Issues and Special Lawsof the State in which such area is situated; extension of the powers and jurisdiction of members of a police force belonging to any State to railway areas outside that State.CONSTITUTIONAL ISSUES AND SPECIAL LAWSList II212Under our Constitution the responsibility for maintaining public order rests mainly with the State Governments. This does not dilute the overall constitutional obligation of the Union Government to preserve order throughout the country. Major public order crises can threaten our social fabric and endanger national security. The proliferation of organised crimes and terrorism, the rise of insurgent movements in certain parts of the country and the nexus among these, throw up challenges that require a coherent national response in the form of new laws and administrative structures. The Union Government is seized of these matters and has initiated several steps. These have often raised contentious jurisdictional issues. Some of these issues are dealt with in this chapter.8.1 Should Public Order be Included in the Concurrent List?8.1.1 Under the Constitution, ‘Public Order’ and ‘Police’ are in the State List (List II) of the Seventh Schedule. One issue that is often raised is whether public order should continue to be in List II or whether it should be brought in List III (Concurrent List). At present various subjects listed in the Seventh Schedule related to ‘Public Order’ are as follows:List-IEntry 2A: Deployment of any armed force of the Union or any other force subject to the control of the Union or any contingent or unit thereof in any State in aid of the civil powers; powers, jurisdiction, privileges and liabilities of the members of such forces while on such deployment.Entry 5: Arms, firearms, ammunition and explosives. Entry 8: Central Bureau of Intelligence and Investigation.Entry 9: Preventive detention for reasons connected with Defence, Foreign Affairs, or the security of India; persons subjected to such detention.Entry 80: Extension of the powers and jurisdiction of members of a police force belonging to any State to any area outside that State, but not so as to enable the police of one State to exercise powers and jurisdiction in any area outside that State without the consent of the GovernmentEntry 1: Public order (but not including the use of any naval, military or Air force or any other armed force of the Union or of any other force subject to the control of the Union or of any contingent or unit thereof in aid of the civil power.Entry 2: Police including railway and village police subject to the provisions of entry 2A of List I.List-IIIEntry I: Criminal law, including all matters included in the Indian Penal Code at the commencement of this Constitution but excluding offences against laws with respect of any of the matters specified in List I or List II and excluding the use of naval, military or air forces or any other armed forces of the Union in aid of the civil power.Entry 2: Criminal procedure, including all matters included in the Code of Criminal Procedure at the commencement of this Constitution.Entry 3: Preventive detention for reasons connected with the security of a State, the maintenance of public order, or the maintenance of supplies and services essential to the community; persons subjected to such detention.Entry 4: Removal from one State to another State of prisoners, accused persons and persons subjected to preventive detention for reasons specified in entry 3 of this List.8.1.2 Thus, in our constitutional scheme, police as well as public order comes within the exclusive jurisdiction of State Governments. The Union Government helps by providing the necessary legal framework and also by providing armed and para-military forces of the Union whenever required. It is also the responsibility of the Union to ensure that the executive power of every state be so exercised as to ensure compliance with the laws made by Parliament and any existing laws which apply in that state. Article 256 empowers the Union to issue directions to a state to ensure such compliance. Under Article 355, a duty is cast on the Union ‘to protect every state against external aggression and internal disturbance and to ensure that the Government of every state is carried on in accordance with the provisions of this Constitution’. In addition to these powers, Article 356 confers extraordinary powers on the Union to deal with a constitutional breakdown in a state whereupon all functions of the State Government may be assumed by the Union Government.213Public OrderConstitutional Issues and Special Laws2148.1.3 Arguments for inclusion of ‘Public Order’ in the Concurrent List8.1.3.1 A collapse of ‘public order’ has wide ramifications for national security, economic development and even on the legitimacy of the State. The absence of a clear-cut role of the Union Government in such situations means that it is often powerless to intervene in major crisis situations even when they threaten the social fabric and national security. As a result, the Union Government can either use the extreme provision of Article 356 of the Constitution or merely be a passive spectator till such time that the State Government seeks its assistance. A statutory mechanism that provides for a more proactive role for the Union Government, short of imposition of President’s rule, therefore appears necessary. It is argued that this can be provided by including ‘Public Order’ in the Concurrent List.8.1.3.2 Another reason often cited for bringing public order in the Concurrent List is that inter-state crime is on the increase. Differences in the legal and the administrative framework among the States can be easily exploited by organised criminal gangs. Due to the rapid growth in communication facilities and the use of modern technologies, organised crime and terrorism often operate on a national or even international scale and can best be tackled by providing for a unified legal, administrative and operational framework for police forces across the country. This would require certain uniform and effective legislations to deal with both organised crime and terrorism which can be best undertaken if ‘Public Order’ is in the Concurrent List.8.1.4 Arguments against bringing ‘Public Order’ in the Concurrent List8.1.4.1 As stated earlier, ‘Public Order’ and ‘Police’ are the first two entries in the State List of the Seventh Schedule. This makes maintenance of public order the prime responsibility of the State Government. The principle of subsidiarity demands that these functions be exercised by State Governments. In most of the large developed countries, the national government does not handle law and order which is left to the provincial and even local governments. States in India are administered by responsible, elected governments whose willingness to uphold public order and the rule of law should not be doubted. Any move to bring public order into the Concurrent List would also amount to duality of responsibility which may be detrimental to the efficient handling of serious public order situations.8.1.4.2 In an era of democratic decentralisation a move to bring public order into the Concurrent List would be a retrograde step and is likely to be resisted by State Governments as they would view this as an encroachment on their legitimate jurisdiction. The size and diversity of our country is another reason why ‘Public Order’ and ‘Police’ have been kept in the State List so that State Governments are in a position to enforce rule of law as per local requirements.8.1.5 The Commission has examined the arguments in favour and against the proposal of bringing ‘Public Order’ into the Concurrent List. On balance, the Commission is of the view that the existing constitutional responsibilities between the states and the Union which have stood the test of time should not be disturbed. Given the size and diversity of India, public order should continue to be the responsibility of State Governments. Moreover, with democratic decentralisation, there is need to entrust the responsibility to deal with minor public order issues to local governments. A move to place ‘Public Order’ in the Concurrent List may also bring in duality of responsibility. This would heighten and not lessen any confusion that may exist today in the role of the two levels of government. The existing provisions of the Constitution maintain a very fine balance between the responsibility of the State Government to maintain public order and the overall responsibility of the Union to ensure constitutional governance in each state. Therefore public order should continue to be in the State List. The Union Government should continue to assist the State Governments in maintaining public order.8.2 Obligations of the Union and States8.2.1 The Constitution contains specific provisions to deal with situations where the State Governments fail to fulfill their Constitutional obligations. The relevant Articles are 256, 352, 355, 356 and 365 and read as follows:256.Obligation ofStates and the Union. – The executive power of every State shall be so exercised as to ensure compliance with the laws made by Parliament and any existing laws which apply in that State, and the executive power of the Union shall extend to the giving of such directions to a State as may appear to the Government of India to be necessary for that purpose.352. Proclamation of Emergency. – (1) If the President is satisfied that a grave emergency exists whereby the security of India or of any part of the territory thereof is threatened, whether by war or external aggression or armed rebellion, he may, by Proclamation, make a declaration to that effect in respect of the whole of India or of such part of the territory thereof as may be specified in the Proclamation....355. Duty ofthe Union to protect States against external aggression and internal disturbance. – It shall be the duty of the Union to protect every State against external aggression and internal disturbance and to ensure that the government of every State is carried on in accordance with the provisions of this Constitution.215Public OrderConstitutional Issues and Special Laws356. Provisions in case offailure of constitutional machinery in States. – (1) If the President, on receipt of a report from the Governor of a State or otherwise, is satisfied that a situation has arisen in which the Government of the State cannot be carried on in accordance with the provisions of this Constitution, the President may by Proclamation –(a) assume to himself all or any of the functions of the Government of the State and all or any of the powers vested in or exercisable by the Governor or any body or authority in the State other than the Legislature of the State;(b) declare that the powers of the Legislature of the State shall be exercisable by or under the authority of Parliament;(c) make such incidental and consequential provisions as appear to the President to be necessary or desirable for giving effect to the objects of the Proclamation, including provisions for suspending in whole or in part the operation of any provisions of this Constitution relating to any body or authority in the State: Provided that nothing in this clause shall authorise the President to assume to himself any of the powers vested in or exercisable by a High Court, or to suspend in whole or in part the operation of any provision of this Constitution relating to High Courts.365. Effect of failure to comply with, or to give effect to, directions given by the Union. – Where any State has failed to comply with, or to give effect to, any directions given in the exercise of the executive power of the Union under any of the provisions of this Constitution, it shall be lawful for the President to hold that a situation has arisen in which the Government of the State cannot be carried on in accordance with the provisions of this Constitution.8.2.2 While prescribing the obligations of the Union and the States, Article 256 casts a responsibility on the Union touphold the rule of law. Article 256 has hardly been used. It has often been argued that during the Ayodhya crisis (1992) the Union Government could have invoked this Article.8.2.3 Deployment of Forces of the Union including Armed Forces is made on the request of or with the concurrence of the concerned State Government. In such circumstances the Armed Forces assist the civil administration in restoring order. The issue, which arises, is whether the Union can deploy its Forces and/or order that the these Forces act on their own without depending on the State Government machinery.8.2.4 On the question of the use of Article 356, the Sarkaria Commission proposed:“6.8.01 Article 356 should be used very sparingly, in extreme cases, as a measure of last resort, when all available alternatives fail to prevent or rectify a breakdown of constitutional machinery in the State. All attempts should be made to resolve the crisis at the State level before taking recourse to the provisions of Article 356. The availability and choice of these alternatives will depend on the nature of the constitutional crisis, its causes and exigencies of the situation. These alternatives may be dispensed with only in cases of extreme urgency where failure on the part of the Union to take immediate action under Article 356 will lead to disastrous consequences.(paragraph 6.7.04)6.8.02 A warning should be issued to the errant State, in specific terms, that it is not carrying on the government of the State in accordance with the Constitution. Before taking action under Article 356, any explanation received from the State should be taken into account. However, this may not be possible in a situation when not taking immediate action would lead to disastrous consequences.(paragraph 6.7.08)When an ‘external aggression’ or ‘internal disturbance’ paralyses the State administration creating a situation drifting towards a potential breakdown of the constitutional machinery of the State, all alternative courses available to the Union for discharging its paramount responsibility under Article 355 should be exhausted to contain the situation.”8.2.5 On the issue of deployment of the Armed Forces of the Union, the Sarkaria Commission observed and recommended:“ 7.5.01 Clearly, the purpose of deployment which is to restore public order and ensure that effective follow-up action is taken in order to prevent recurrence ofdisturbances, cannot be achieved without the active assistance and cooperation of the entire law-enforcing216217Public OrderConstitutional Issues and Special Lawsmachinery of the State Government. If the Union Government chooses to take unilateral steps to quell an internal disturbance without the assistance of the State Government, these can at best provide temporary relief to the affected area and none at all where such disturbances are chronic.7.5.02 Thus, practical considerations, as indicated above, make it imperative that the Union Government should invariably consult and seek the cooperation of the State Government, if it proposes either to deploy suo motu its armed forces in that State or to declare an area as ‘disturbed’, the constitutional position notwithstanding. It need hardly be emphasized that without the State Government’s cooperation, the mere assertion of the Union Government’s right to deploy its armed forces cannot solve public order problems.7.5.03 We recommend that, before deploying Union armed and other forces in a State in aid of the civil power otherwise than on a request from the State Government, or before declaring an area within a State as a ‘disturbed area’, it is desirable that the State Government should be consulted, wherever feasible, and its cooperation sought by the Union Government. However, prior consultation with the State Government is not obligatory”.7.5.03 “The existing relationship between the Union armed forces and the State civil authorities and the manner of their functioning as prescribed in the relevant Union laws and procedures do not need any change. However, before the Union Government deploys its armed and other forces in a State in aid of the civil power otherwise than on a request from the State Government or declares an area within a State as “disturbed”, it is desirable that the State Government should be consulted, wherever feasible, and its cooperation sought, even though prior consultation with the State Government is not obligatory. (paras 7.5.03 and 7.7.22).”8.2.6 The National Commission to Review the Working of the Constitution recommended:“8.19.4 The Commission feels that in a large number of cases where Article 356 has been used, the situation could be handled under Article 355 i.e. without imposing President’s rule under Article 356. It is most unfortunate that Article 355 has hardly been used.”8.2.7 The Supreme Court in Naga People’s Movement of Human Rights vs Union of India ruled that:“... After the Forty-second Amendment the legislative power of Parliament in respect of deployment of armed forces of the Union or any other force subject to the control of the Union or any contingent or unit thereof in any State in aid of the civil power flows from Entry 2-A of the Union List. The expression “in aid of the civil power” in Entry 1 of the State List and in Entry 2-A of the Union List implies that deployment of the armed forces of the Union shall be for the purpose of enabling the civil power in the State to deal with the situation affecting maintenance of public order which has necessitated the deployment of the armed forces in the State. The word “aid” postulates the continued existence of the authority to be aided. This would mean that even after deployment of the armed forces the civil power will continue to function. The power to make a law providing for deployment of the armed forces of the Union in aid of the civil power in the State does not comprehend the power to enact a law which would enable the armed forces of the Union to supplant or act as a substitute for the civil power in the State. We are, however, unable to agree with the submission of the learned counsel for the petitioners that during the course of such deployment the supervision and control over the use of armed forces has to be with the civil authorities of the State concerned or that the State concerned will have the exclusive power to determine the purpose, the time period and the areas within which the armed forces should be requested to act in aid of civil power. In our opinion, what is contemplated by Entry 2-A of the Union List and Entry 1 of the State List is that in the event of deployment of the armed forces of the Union in aid of the civil power in a State, the said forces shall operate in the State concerned in cooperation with the civil administration so that the situation which has necessitated the deployment of the armed forces is effectively dealt with and normalcy is restored......This would show that the powers that have been conferred under Section 4 of the Central Act do not enable the armed forces of the Union to supplant or act as substitute for the civil power of the State and the Central Act only enables the armed forces to assist the civil power of the State in dealing with the disturbed conditions affecting the maintenance of public order in the disturbed area.The expression ‘in aid of the civil power’ in Entry 2-A of List I and in Entry 1 of List II implies that deployment of the armed forces of the Union shall be for the purpose of enabling the civil power in the State to deal with the situation affecting maintenance of public order which has necessitated the deployment of the armed forces in the State.The word ‘aid’ postulates the continued existence of the authority to be aided. This would mean that even after deployment of the armed forces the civil power will continue to function.218219Public OrderConstitutional Issues and Special LawsThe power to make a law providing for deployment of the armed forces of the Union in aid of the civil power of a State does not include within its ambit the power to enact a law which would enable the armed forces of the Union to supplant or act as a subordinate for the civil power in the State. The armed forces of the Union would operate in the State concerned in cooperation with the civil administration so that the situation which has necessitated the deployment of armed forces is effectively dealt with and normalcy is restored.”8.2.8 A Committee89 was constituted to review the Armed Forces (Special Powers) Act, 1958. While giving its recommendations on this Act the Committee suggested that a new chapter may be inserted in the Unlawful Activities (Prevention) Act, 1967. One of the Sections of the proposed chapter is as follows:“ If the Central Government is of the opinion that on account of terrorist acts or otherwise a situation has arisen in a State or a Union Territory or in a part of a State, as the case may be, where deployment of a force under its control or any other armed forces of the Union, including army, navy or air-force have become necessary to quell internal disturbance, it may do so notwithstanding that no request for such force is received from the State Government concerned. While deploying the forces under sub-sections (2) or (3), the Central Government shall by a notification published in the Gazette, specify the State or the part of the State in which the forces are to operate and the period of deployment (not exceeding six months). At the end of the period so specified, the Central Government shall review the situation in consultation with the State Government and may extend the period of deployment, if found necessary, provided however, that such extension shall not be for more than six months at a time. It shall also be competent for the Central Government to vary the area of deployment where the earlier notification is for a part of the State. Every notification extending the period of deployment or the area of deployment, shall be laid on the table of both Houses of Parliament, within one month of publication of such notification.The force deployed under sub-section (2) or sub-section (3), shall act in aid of civil power and shall, to the extent feasible and practicable, coordinate their operations with the operations of the Security Forces of the State Government. However, the manner in whichsuch forces shall conduct their operations shall be within the discretion and judgement of such forces.”8.2.9 There are two main issues in the deployment of the Forces of the Union. First, whether these Forces can be deployed without the consent of the State Government and second whether the Forces, upon such deployment, can act on their own or need to receive instructions from the State Government or other authorities of the State Government. According to one view, Article 355 empowers the Union to unilaterally deploy its forces. They argue that as per the said Article, the Union is bound to protect a state from internal disturbance to ensure that the government of every state is carried out in accordance with the Constitution. A natural corollary of this is that the Union has the authority to use the Forces at its command to ensure this. Therefore the Union can deploy as well as command the Forces, if the situation so demands. Similar provisions exist in the US Constitution, and the US President has used Federal Troops, even against the wishes of the State.8.2.10 The other view is that Article 355 does not empower the Union to deploy its Forces against the wishes of the State Government. The contention is that since the Constitutional framework lays down the principle of civilian control over use of forces, this control has to be provided by the State Government. This is all the more necessary as investigation and prosecution has to be done by agencies which are in the purview of State Governments. Thus the Forces of the Union, when deployed cannot supplant the State Government.8.2.11 The Commission has examined this issue seriously. While there is no doubt that maintenance of public order comes within the domain of State Governments, at the same time, the Union also has a constitutional responsibility i.e. to ensure that the government of every state is carried on in accordance with the provisions of the Constitution. Indeed, if the Union is of the considered view that the government of a state cannot be carried on in accordance with the provisions of the Constitution, it may impose ‘President’s Rule’ in the state. A major breakdown of public order would definitely signal a constitutional breakdown in the state, and the Union would be well within its rights to invoke its powers under Article 356 and go to the extent of dismissing an elected State Government. Once22022189 The Committee was headed by Justice B.P. Jeevan Reddy.Public OrderConstitutional Issues and Special LawsPresident’s Rule is imposed, the Union can deploy and direct the police and the Union Forces. Thus, the founding fathers of the Constitution have ensured that the Union is sufficiently empowered to protect the Constitution. Extending the same logic, the Union cannot be a silent spectator to a major public order crisis. Under such circumstances it has to assist the State Government by providing all necessary support. If, however, it finds that the State Government is not willing to accept any such assistance, or is failing in its duty to maintain public order and the rule of law, then it has no option but to take charge of the situation and deploy and direct its Forces to bring the situation under control and prevent a constitutional breakdown in the state.8.2.12 The Union in the performance of its duty to protect the state from external aggression and internal disturbances, can invoke - after passing through various steps - Article 356. However, this would be an extreme step. Not acting in pursuance of the duty on grounds of ‘constitutional helplessness’ would be the other extreme. Therefore the Commission is of the view that the Union should have unambiguous powers to deploy and direct its Forces in case of a major public order crisis in a state if the State Government is clearly failing to meet its constitutional obligation to maintain public order and the rule of law. This is the underlying principle behind the constitutional provisions and it would be desirable if the ambiguity relating to this issue is removed.8.2.13 The Commission has carefully considered this issue and is of the view that a law could be enacted to empower the Union Government to deploy its forces and to direct such forces in case of major public order problems, regarding which steps under Article 256 read with Article 355 have been taken.8.2.14 At the same time sufficient safeguards need to be provided to prevent partisan misuse of this provision. The safeguards would also include a step-by-step approach under Articles 256 and 355, explaining the facts and giving directions and requiring the state to adopt certain measures. Any such deployment of Union Forces should be on a temporary basis not exceeding three months which could be extended by another three months after authorisation by Parliament. The law should also lay down the civilian hierarchy which would control the use of the Forces in such an event. If such a law does not withstand judicial scrutiny, it is necessary that Entry 2-A of List I is amended to make the position clear. A similar arrangement exists during the time of elections, when the Election Commission superintends and controls the state election machinery, for proper conduct of elections.8.3 Federal Crimes8.3.1. As mentioned earlier, rapid economic development and improvement of transport and communication infrastructure has added another dimension to crimes. Increasingly, major crimes like organised crimes, terrorism, trafficking in arms and serious economic offences have inter-state and even international ramifications and they often threaten national security. Though ‘Criminal law’ is in the Concurrent List, ‘Police’ is in the State List. As a result the state police investigates all major crimes in the country. Though the Central Bureau of Investigation has been constituted, it can investigate criminal cases only with the consent of the respective State Governments. It has been argued that the state police, with its jurisdiction confined to the respective state finds it difficult to carry out investigations across state borders. This is not to belittle the fact in some cases the state police have successfully carried out investigations with the help of the other state police(s). It is also argued that with an overburdened state police, there is need to entrust such major crimes to a specialised federal agency. Another reason cited is that at times crimes have international ramifications, and gathering information and investigation would require the expertise and resources which ordinarily are not available with the state police.8.3.2 The term ‘Federal Offence’ immediately draws attention to the US Criminal Justice System where a federal crime or federal offence is a crime that is either made illegal by US federal legislation or a crime that occurs on US federal property. The US Constitution is based on principles of federalism with the Federal Government having jurisdiction over national defence, foreign affairs and currency. All other powers are vested with the State Governments. At the beginning of the twentieth century, with the spread of transportation and communication networks, the Federal Government started assuming investigative8.2.15 Recommendations:a. A law should be enacted to empower the Union Government to deploy its Forces and to even direct such Forces in case of major public order problems which may lead to the breakdown of the constitutional machinery in a state. However, such deployment should take place only after the state concerned fails to act on a ‘direction’ issued by the Union under Article 256 of the Constitution. All such deployments should be only for a temporary period not exceeding three months, which could be extended by another three months after authorisation by Parliament.b. The law should spell out the hierarchy of the civil administration which would supervise the Forces under such circumstances.222223Public OrderConstitutional Issues and Special Lawspowers in certain inter-state crimes. Today the Federal Bureau of Investigation (FBI) is the investigative arm of the US Department of Justice and an important agency for fighting major crimes. The FBI’s investigative authority can be found in Title 28, Section 533 of the US Code. Additionally, there are other statutes, such as the Congressional Assassination, Kidnapping, and Assault Act (Title 18, US Code, Section 351), which give the FBI responsibility to investigate specific crimes.908.3.3 The Federal Bureau of Investigation has the following priorities:911. Protect the United States from terrorist attack;2. Protect the United States against foreign intelligence operations and espionage;3. Protect the United States against cyber-based attacks and high-technology crimes;4. Combat public corruption at all levels;5. Protect civil rights;6. Combat transnational and national criminal organizations and enterprises;7. Combat major white-collar crime;8. Combat significant violent crime;9. Support federal, state, county, municipal, and international partners;10. Upgrade technology to successfully perform the FBI’s mission.8.3.4 The Australian Constitution does not give the Australian Parliament a general power to make criminal laws. However, the Australian Parliament may make criminal laws in relation to the subject matter of other powers granted to it by the Constitution.92 In Australia, the states have jurisdiction over criminal laws. These laws are generally concerned with offences against persons or property, public order offences and social offences. Federal offences correspond with the Commonwealth’s areas of legislative responsibility, and have a national or international focus. Although the Australian Federal Police (AFP) is the principal law enforcement arm of the Australian Government, other federal agencies also exercise investigatory powers in regard to particular areas of federal responsibility. These are the Australian Taxation Office (ATO), the Australian Customs Service, the Department of Immigration and Multicultural Affairs, the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC). Similarly, several other countries have also put into place appropriate legal and institutional framework for dealing with national and international crimes.8.3.5 In the context of ‘federal crimes’, the Padmanabhaiah Committee, inter alia, examined the following issues:?Whether there is a need to declare certain offences as Federal Offences??Should a Federal Investigative Agency have exclusive jurisdiction over such cases??What type of Federal Agency (CBI or independent) should investigate such cases?8.3.6 As regards the first point, the Committee observed that there is a case for declaring a few selected categories of cases as federal offences and recommended the following criteria for categorising such offences:?“They have international implications.?They relate to security of nation.?They relate to the activities of the Union Government.?They relate to corruption in All India Services.?Protecting Government currency.?Controlling National borders.”8.3.7 As regards the agency to investigate such cases, the Committee observed:“ We have mentioned above that a central investigating agency as big as the CBI can only investigate about 600 cases (these are under the PC Act and related Sections of IPC) in a year. In addition, CBI investigated 918 cases under PC and related provisions of IPC. There are 1335 IPC cases and 1295 PC Act cases pending investigation in CBI at the end of 1999. If any central agency is to take up investigation of cases under more heads than the ones listed above, or take up cases under the above heads without proper justification, we need to have a huge set-up with staff spread throughout the country. Such an organization would compete with State police forces for scarce financial and human resources. If important cases are, as a matter of routine, to be taken up by the federal agency, the state police would be relegated with investigation of only less important cases, which, in course of time, can create a question of credibility of state police forces in public perception. Researchers at Syracuse University’s Transactional Access Clearing House (TRAC) in one of their studies of FBI from 1993 to 1997 have found that FBIs conviction rate is the worst among major federal law agencies.”8.3.8 The Committee cited the Report of the Task Force of the American Bar Association on Federalisation of Criminal Laws (1997), which identified many adverse effects of inappropriate federalisation as follows:?It generally undermines the state-federal fabric and disrupts the important constitutional balance of federal and state systems.22422590 Source: website of FBI.92 ALRC; OrderConstitutional Issues and Special Laws?It has the potential to relegate the less glamorous prosecutions to the state system, undermine citizen perception, and diminish citizen’s confidence in state law enforcement mechanisms.?It creates an unhealthy concentration of policing power at federal level.?It gives discretion to the federal agency, to pick and chose, in choosing what crimes and which people to prosecute.8.3.9 The Padmanabhaiah Committee recommended that there is no need to create a separate organisation at the national level for the time being, and investigation of federal crimes should be handed over to the special crimes/economic offences division of CBI.8.3.10 The Committee on Reforms of Criminal Justice System however recommended:“Time has come when the country has to give deep thought for a system of Federal Law and Federal Investigating Agency with an all-India Charter. It would have within its ambit crimes that affect national security and activities aimed at destabilising the country politically and economically. The creation of the Federal Agency would not preclude the State Enforcement Agencies from taking cognizance of such crimes. The State Enforcement Agencies and the Federal Agency can have concurrent jurisdiction. However, if the Federal Agency takes up the case for investigation, the State agencies’ role in the investigation would automatically abate. The State agencies may also refer complicated cases to the proposed Federal Agency.”?That in view of legal complexity of such cases, underworld criminals/crimes should be tried by federal courts (to be established), as distinguished from the courts set up by the State Governments.?That Government must ensure that End User Certificate for international sales of arms is not misused (as happened in the Purulia Arms Drop).?The banking laws should be so liberalized as to make transparency the corner- stone of transactions which would help in preventing money laundering since India has become a signatory to the U.N. Convention against Transnational Organised Crime.?That a Federal Law to deal with crimes of inter-state and / or international / trans-national ramification be included in List I (Union List) of the Seventh Schedule to the Constitution of India.8.3.11 The Commission notes that all the offences proposed to be included in the category of so called ‘Federal Crimes’ are already included as offences under the Indian penal laws.However, as the gravity and complexity of such offences have increased, it would be necessary to put in place appropriate procedures for dealing with such offences. This would necessitate the enactment of a new law to deal with a category of offences which have inter-state and national ramifications. This would also facilitate their investigation by a specialised State or Central agency. The following offences may be included in the proposed new law:?Organised Crime?Terrorism?Acts threatening national security?Trafficking in arms and human beings?Sedition?Major crimes with inter-state ramifications?Assassination (including attempts) of major public figures?Serious economic offences.8.3.12 The Commission agrees with the approach suggested by the Padmanabhaiah Committee that such crimes should be investigated by a specialised wing in the Central Bureau of Investigation. Entry 8 of List I deals with ‘Central Bureau of Intelligence and Investigation’. The Central Bureau of Investigation presently functions as a Special Police Establishment under the Delhi Special Police Establishment Act, 1946 as amended from time to time.8.3.13 Most of the offences mentioned in para 8.3.11 are of a relatively recent origin and the state police with its restricted territorial jurisdiction and limited resources is likely to find it difficult to investigate such crimes effectively. Even though “Police’ and ‘Public Order’ figure in the State List in the Constitution, it is felt that this category of crimes with inter-state and national ramifications would fall under the ‘residuary’ powers of the Union. The Commission226227Constitutional Issues and Special Lawskidnappings for ransom, gun running, illicit trafficking in women and children, narcotics trade, money laundering using the hawala network etc. Organised crime includes both violations of personal life and liberty and economic offences. There are no exact estimates available about the amount of money involved but evidently the figures are mind-boggling. What gets reported and investigated by the law enforcement agencies is only a minuscule percentage of the overall quantum of organised criminal activity. If not checked, these crimes have the potential of threatening national peace and security.8.4.2 Interpol has defined organised crime as “Any group having a corporate structure whose primary objective is to obtain money through illegal activities, often surviving on fear and corruption”. (Paul Nesbitt, Head of Organised Crime Group, Bresler 1993, 319).8.4.3 The United Nations views organised crime to be a large-scale and complex criminal activity carried on by groups of persons, however loosely or tightly organised, for the enrichment of those participating and at the expense of the community and its members. Such crime is frequently accomplished through ruthless disregard of any law, including offences against the person, and frequently in connection with political corruption.8.4.4 In essence, organised crime can be regarded the unlawful activities indulged in by a group of individuals with a degree of planning and resources not fount in case of ordinary gangs of criminals. Unlike groups of terrorists, the objective of such groups is pecuniary gain rather than subversion of established order.8.4.5 In India, organised crime in its current form had its genesis in Mumbai. After the introduction of prohibition, bootleggers started organizing themselves into groups and forming syndicates. The situation got aggravated following the introduction of the Gold Control Order a few years later. The229Public OrderConstitutional Issues and Special Lawsquick money these criminals earned attracted more people and these loosely organised groups started taking the shape of gangs with strong leadership and well organised structure. With increasing money and muscle power they diversified their activities into extortions, drug trafficking, providing ‘protection’, flesh trade etc. The last decade has seen a major transformation in the operation of these organised gangs into more dangerous outfits often with transnational terrorist links.8.4.6 The globalisation of the economy has definitely helped the crime syndicates carry out their illegal activities across the borders with great ease. This has been further facilitated by the phenomenon of ‘digital money’. Such organisations, very conveniently find safe havens outside the country.8.4.7 In the US also, organised crime started with bootlegging. The Twenty-first Amendment to the US Constitution repealed the Eighteenth Amendment, which had mandated Prohibition in the country. Thereafter crime groups and families that had been bootlegging moved on to other moneymaking crimes by controlling legitimate businesses and using some of them as fronts for criminal activity. Organised crime reached its peak in the 1960s.8.4.8 Over the years, the US Congress had enacted several statutes authorising increased punishment for typical organised crimes such as gambling, loan sharking, transportation of stolen goods, and extortion. Organised Crime Control Act was enacted in 1970. Title IX of the Act is the Racketeer Influenced and Corrupt Organisations Statute (18 U.S.C. § § 1961-1968), commonly referred to as the “RICO” statute.8.4.9 Section 1961 (RICO) defines “racketeering activity” as any act or threat involving murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in a controlled substance or listed chemical (as defined in section 102 of the Controlled Substances Act), which is chargeable under state law and punishable by imprisonment for more than one year. It also includes several other offences under the federal and state laws. Section 1962 prohibits a list of activities like receiving any income directly or indirectly, from a pattern of racketeering activity. It also prescribes that it shall be unlawful for any person employed by or associated with any enterprise to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.8.4.10 Section 1963 stipulates that whoever violates any provision of section 1962 shall be fined or imprisoned for not more than 20 years (or for life if the violation is based ona racketeering activity for which the maximum penalty includes life imprisonment), or both, and shall forfeit to the United States all benefits the person has derived by violation of Section 1962. In addition to these criminal law provisions, RICO also authorises civil suits, both by the government and by private individuals who are economically injured by a RICO violation. Section 1964 provides “ Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee...” .8.4.11 In the early nineties, the Government of India constituted the Vohra Committee “to take stock of all available information about the activities of crime syndicates/ Mafia organisations which had developed links with and were being protected by Government functionaries and political parties.” The Vohra Committee submitted its report in 1993. It observed:“An organised crime Syndicate/Mafia generally commences its activities by indulging in petty crime at the local level, mostly relating to illicit distillation/ gambling/organised satta prostitution in the larger towns. In port towns, their activities involve smuggling and sale of imported goods and progressivelygraduate to narcotics and drug trafficking. In the bigger cities, the main source of income relates to real estate – forcibly occupying lands/buildings, procuring such properties at cheaprates by forcing out the existing occupants/tenants etc. Over time, the money power thus acquired is used for building up contacts with bureaucrats and politicians and expansion of activities with impunity. The money power is used to develop a network of muscle-power which is also used by the politicians during elections.”8.4.12 The Committee on Reforms of Criminal Justice System had also examined issues related to ‘organised crime’ and recommended that:230231Public OrderConstitutional Issues and Special Lawsi. Government release a paper delineating the genesis of organised crime in India, its international ramifications and its hold over society, politics and the economy of the country.ii. Enabling legislative proposals be undertaken speedily to amend domestic laws to conform to the provisions of the UN Convention on Transnational Organised Crime.iii. An inter-Ministerial Standing Committee be constituted to oversee the implementation of the Convention.iv. The Nodal Group recommended by the Vohra Committee may be given the status of a National Authority with a legal frame-work with appropriate composition.a. This Authority may be mandated to change the orientation and perception of law enforcement agencies, sensitise the country to the dimensions of the problem and ensure that investigations of cases falling within the ambit of the Authority are completed within a specified time-frame;b. The Authority should be empowered to obtain full information on any case from any agency of the Central or the State Governments;c. It should also have the power to freeze bank accounts and any other financial accounts of suspects/accused involved in cases under its scrutiny.d. The power to attach the property of any accused.v. Suitable amendments to provisions of the Code of Criminal Procedure, the Indian Penal Code, the Indian Evidence Act and such other relevant laws as required be made to deal with the dangerous nexus between politicians, bureaucrats and criminals.vi. A special mechanism be put in place to deal with cases involving a Central Minister or a State Minister, Members of Parliament and State Assemblies to proceed against them for their involvement.vii. That the Code of Criminal Procedure provide for attachment, seizure and confiscation of immovable properties on the same lines as available in special laws.viii. A Central, special legislation be enacted to fight Organised Crime with a uniform and unified legal statute for the entire country.8.4.13 The State of Maharashtra, which for long has borne the brunt of organisd crime enacted a special law called the Maharashtra Control of Organised Crime Act, 1999 (MCOCA). The statement of objects and reasons of MCOCA mentions the following:“Organised crime has been for quite some years now come up as a very serious threat to our society. It knows no national boundaries and is fuelled by illegal wealth generated by contract, killing, extortion, smuggling in contrabands, illegal trade in narcotics, kidnappings for ransom, collection of protection money and money laundering, etc. The illegal wealth and black money generated by the organised crime being very huge, it has had serious adverse effect on our economy. It was seen that the organised criminal syndicates made a common cause with terrorist gangs and foster narco terrorism which extend beyond the national boundaries. There was reason to believe that organised criminal gangs have been operating in the State and thus, there was immediate need to curb their activities.It was also noticed that the organised criminals have been making extensive use of wire and oral communications in their criminal activities. The interception of such communications to obtain evidence of the commission of crimes or to prevent their commission would be an indispensable aid to law enforcement and the administration of justice.2. The existing legal framework i.e. the penal and procedural laws and the adjudicatory system were found to be rather inadequate to curb or control the menace of organised crime. Government, therefore, decided to enact a special law with stringent and deterrent provisions including in certain circumstances power to intercept wire, electronic or oral communication to control the menace of the organised crime.It is the purpose of this Act to achieve these objects.”8.4.14 MCOCA defines ‘organised crime’ in Section 2(e) (Box: 8.6 ) and provides for :a) Enhanced punishment for organised crime and for possessing unaccountable wealth on behalf of a member of organised crime syndicate (Sections 3 & 4).b) Constitution of Special Courts for trial of offences punishable under MCOCA (Section 5).c) Authorisation of interception of wire, electronic or oral communication, appointment of a Competent Authority for it and constitution of a Review Committee for review of authorisation orders (Sections 13,14 & 15).d) Special rules of evidence for the purpose of trial and punishment of offences under the Act (Section 17).e) Certain confessions made to police officer not below the rank of the Superintendent of Police to be taken into consideration (Section 18).f) Protection of witness (Section 19).232233Public OrderConstitutional Issues and Special Lawsg) Forfeiture and attachment of property (Section 20).h) Presumption by the Special Court that any accused has committed offence under the Act in certain cases (Section 22).i) Information about commission of an offence under the Act to be recorded with the prior approval of police officer not below the rank of Deputy Inspector General of Police; investigation to be carried out by an officer not below the rank of a Deputy Superintendent of Police and Special Court to take cognizance of any offence only when there is a previous sanction of an officer not below the rank of Additional Director General of Police (Section 23).8.4.15 Thus, it is evident that MCOCA has provided for a very elaborate mechanism to tackle organised crime. It is also seen that adequate safeguards are provided in this Act against misuse. For example, orders for authorising interception of communication have been put under the purview of a Review Committee; for confessions to be considered during trials, they have to be made before an officer not below the rank of a Superintendent of Police etc. This law however has enough teeth in the form of special rules of evidence, protection of witnesses, forfeiture of property, presumption against the accused in some cases, enhanced punishments etc.8.4.16 Recently, Karnataka, Andhra Pradesh and Delhi have enacted similar laws. Gujarat had also passed a similar law which is awaiting the assent of the President. The Commission has examined this issue and is of the view that such provisions as contained in MCOCA can be a major tool in the fight against organised crime. Further, as organised crime is increasingly having inter-state ramifications as well as links with transnational terrorist groups, the Commission feels that it is now essential to have a Central law. Such legislation should basically follow the pattern of MCOCA by providing for enhanced punishment, special courts, public prosecutors, authorisation for interception of communication, regulation and review of such authorisations, special rules of evidence, circumstances under which confessions to police officers can be admissible in trials, protection of witnesses, forfeiture and attachment of property, presumption of offence, cognizance of and investigation into an offence, etc. The Commission has already recommended major safeguards in its recommendations on police reforms in earlier paragraphs. With the reformed organisational structure of the police as prescribed in this Report and the additional safeguards which would be built in the Union law dealing with organised crime, potential for misuse of its provisions would be minimal.8.5 Armed Forces (Special Powers) Act, 19588.5.1 In the wake of serious disturbances following Partition, deployment of the Armed Forces in large areas and over long periods became inevitable. It was also realised that the normal provisions of CrPC (Section 130 and 131), which envisaged that the officer in-charge of the detachment of the Armed Forces present on the spot would use force and arrest members of an unlawful assembly, were not sufficient to control the situation. It was under these circumstances that the Armed Forces were given special powers with enactment of laws like the Bengal Disturbed Areas (Special Powers of the Armed Forces) Ordinance, 1947 and East Punjab Disturbed Areas (Special Powers of the Armed Forces) Ordinance, 1947. Essentially these laws empowered even non-commissioned officers to use force which could extend to causing death, searching premises without a warrant or rescuing persons wrongfully restrained and to provide immunity from prosecutions in respect of such acts.8.5.2 Though these enactments ceased to operate a few years after the situation in the affected states stabilized, the arrangements made therein were deemed very useful for situations requiring deployment of the armed forces etc for ‘internal security duties’ for prolonged periods. When deployment of the Army and the para-military forces in large numbers and for an indeterminate period to deal with the situation arising because of insurgency by the ‘Nagaland National Council’ became necessary, a law on the lines of the 1947 enactments was also considered to be indispensably required. The result was the Armed Forces (Assam and Manipur) Special Powers Act, 1958. The Naga inhabited areas affected by insurgency fell in the then Naga Hills District in Assam and three sub-divisions (Ukhrul, Tamenglong and Mao) in the then Union Territory of Manipur. The law was subsequently used to deal with insurgency in the then Mizo Hill District, and also in Assam and Tripura. Following the reorganization of the North-Eastern region in 1972 entailing, inter alia, a constriction of the territory of the State of Assam, the Act was amended and renamed the Armed Forces (Special Powers) Act (AFSPA).8.4.17 Recommendation:a. Specific provisions to define organised crimes should be included in the new law governing ‘Federal Crimes’. The definition of organised crime in this law should be on the lines of the Maharashtra Control of Organised Crime Act, 1999.234235Public OrderConstitutional Issues and Special Laws8.5.3 AFSPA now extends to all the states of the North East except Sikkim. It comes into operation after a declaration is made under Section 2 that a particular area is “disturbed”. Earlier, only the Governor/Administrator was competent to issue such declaration (in reality, the State or the Union Territory concerned); the 1972 amendment now vests a similar power with the Union Government. The Act applies to the Army, the Air Force and Central paramilitary forces etc. Once the declaration is issued, ‘special powers’, become available to commissioned or non-commissioned officers of the Armed Forces. The ‘special ’ under Section 4 are:(a) Power to use force, including opening fire, even to the extent of causing death if prohibitory orders banning assembly of five or more persons or carrying arms and weapons etc are in force in the disturbed area;(b) Power to destroy structures used as hide-outs, training camps or as a place from which attacks are or likely to be launched etc;(c) Power to arrest without warrant and to use force for the purpose;(d) Power to enter and search premises without warrant to make arrest or recovery of hostages, arms and ammunition and stolen property etc.8.5.4 Section 5 of AFSPA requires that persons arrested by the Armed Forces be handed over to the nearest Police Station “with the least possible delay” along with a report of “circumstances occasioning the arrest”. Section 6 gives members of the Armed Forces discharging duties under the Act immunity from prosecution and other legal proceedings except with the previous sanction of the Union Government.8.5.5 The Act has been used in Manipur and Nagaland since 1958 and in Mizoram, Assam and Tripura from later dates. Attempts have been made to seek judicial review of this law with a view to seek its annulment on grounds that it is repugnant to the right to equality and the federal structure of the Constitution etc. The matter has received a quietus following a unanimous pronouncement by a five Judge Constitution Bench of the Supreme Court in Naga Peoples’ Movement of Human Rights vs Union of India (1998) 2 SCC 109 holding the enactment to be Constitutionally valid. As regards powers vested in the Union Government, the Supreme Court noted that Section 3 was amended by Act 7 of 1972 by virtue of which the power to declare an area to be a ‘disturbed area’ has also been conferred on the Central Government.8.5.6 The five-judge bench of the Apex Court arrived at, inter alia, the following conclusions after taking into consideration various arguments:i. Parliament was competent to enact AFSPA in exercise of the legislative power conferred on it under Entry 2 of List I (pertaining to naval, military and air forces and also any other armed forces of the Union) and Article 248 of the Constitution read with Entry 97 of List I (pertaining to residuary powers of legislation). After the insertion of Entry 2A in List I by the Forty-Second Amendment to the Constitution, the legislative power flows from Entry 2A of List I (pertaining to deployment of any armed force of the Union or any other force subject to the control of the Union in any state in aid of the civil power etc).ii. It is not a law in respect of maintenance of public order falling under Entry 1 of List II.iii. While AFSPA is not a law under Entry 1 of List II, the expression “in aid of the civil power” in Entry 2 A of List I and Entry 1 of List II, implies that deployment of the armed forces of the Union shall be for the purpose of enabling the civil power in the State to deal with the situation affecting maintenance of public order which has necessitated the deployment of the armed forces in the State. It does not displace the civil power of the state by the armed forces of the Union.iv. AFSPA is not a colourable legislation or a fraud on the Constitution. It is not a measure intended to achieve the same result as contemplated by a Proclamation of Emergency under Article 352 or a proclamation under Article 356 of the Constitution.v. A declaration under Section 3 has to be for a limited duration subject to periodic review before the expiry of six months.vi. The conferment of power to make a declaration under Section 3 of AFSPA on the Central Government is not violative of the federal scheme as envisaged by the Constitution. Further, a similar conferment on the Governor of the State cannot be regarded as delegation of the power of the Central Government.vii. Although a declaration under Section 3 can be made by the Central Government suo motu without consulting the concerned State Government, it is desirable that the State Government should be consulted by the Central Government while making the declaration.viii. The powers conferred under Clauses (a) to (d) of Sections 4 and 5 of AFSPA on the officers of the armed forces, including a Non-Commissioned Officer are not arbitrary and unreasonable and are not violative of the provisions of Articles 14, 19 or 21 of the Constitution.ix. A person arrested and taken into custody in exercise of the powers under Sectionpowers236237Public OrderConstitutional Issues and Special Laws4(c) of AFSPA should be handed over to the officer-in-charge of the nearest police station with least possible delay so that he can be produced before the nearest magistrate within 24 hours of such arrest excluding the time taken for journey from the place of arrest to the Court of Magistrate.8.5.7 There was a serious outcry against the Act in Manipur in July 2004 following the alleged custodial death of a woman arrested by the Armed Forces. The agitation virtually paralyzed the Manipur valley and the Union Government appointed the Committee to Review the Armed Forces (Special Powers) Act, 1958 with Justice B.P Jeevan Reddy, a retired Judge of the Supreme Court, as its Chairman. The terms of reference of the Committee were to recommend amendments in the Act to “bring it in consonance with the obligations of the Government towards human rights or to replace the Act by a “more humane Act”. In other words, implicit behind the setting up of the Committee was the recognition that the provisions of the Act needed a fresh look.8.5.8 The above Committee examined the provisions of Section 4(a) of AFSPA and found that the powers conferred therein are not absolute and could only be invoked in the disturbed area if there was already a prohibitory order in force. Furthermore, the opinion formed by the officer concerned must be honest and fair. It also examined the provisions of Section 4(c) and found that the power conferred therein is circumscribed by Section 5. The Committee was of the view that the phrase ‘with the least possible delay’ as used in Section 5 has to be construed in the light of Article 22(2) of the Constitution which confers a right upon the person arrested and detained in custody to be produced before the nearest Magistrate within a period of 24 hours of such arrest (excluding journey time). The Committee took note of clauses (a) and (b) of Article 33 of the Constitution which empowers the Parliament to make a law determining to what extent any of the Rights conferred by Part 3 of the Constitution shall in their application to the members of the Armed Forces or the members of the Forces charged with the maintenance of public order be restricted or abrogated to ensure proper discharge of their duties. It felt that as Parliament had not chosen to make any such laws, the right conferred by Article 22(2) remains untrammelled.8.5.9 The Committee also noted that Article 355 of the Constitution places an obligation on the Union of India to protect every state against ‘external aggression and internal disturbance’. It also noted that prior to the Constitution (44th Amendment) Act the expressions ‘external aggression’ and ‘internal disturbance’ were common to both Articles 352 and 355. With the substitution of ‘internal disturbance’ by the expression ‘armed rebellion’ by the said Amendment, the power under Article 352 may not be available with the Union in case of an ‘internal disturbance’.8.5.11 Apart from the above, the Committee also examined the provisions of the Unlawful Activities (Prevention) Act, 1967 (ULPA) as amended by the Unlawful Activities (Prevention) Amendment Act, 2004. It took note of the definition of a ‘terrorist act’ as provided in Section 15 and the terrorist organizations listed out in the Schedule to this Act, which includes various organizations from the North-Eastern States. The Committee observed that Section 49(b) of this Act gives protection to any serving or any retired member of the armed forces or the para military forces in respect of action taken in good faith in the course of any operation directed towards combating terrorism. The Committee was of the view that Section 49(b) indicates that Parliament did take note of the fact that in many cases it may be necessary to deploy the armed forces or para military forces to combat terrorism and terrorist activities.8.5.12 The Committee after considering the views of various stakeholders came to the conclusion that AFSPA should be repealed. It was also of the view that it would be more appropriate to recommend insertion of appropriate provisions in the Unlawful Activities (Prevention) Act, 1967 (ULPA) instead of suggesting a new legislation. The reasons for this recommendation are summarised as under:8.5.10 The Committee felt that every ‘public order’ problem does not necessarily amount to ‘internal disturbance’ while the converse would be true. The Committee was of the view that this distinction should be kept in mind while interpreting the expression ‘Public Order’ as found in Entry 1 of List II of the Seventh Schedule to the Constitution. It also pointed out that Entry 2 A in the Union List speaks of deployment of the Armed Forces of the Union in any State in aid of civil power but it does not speak of or refer to ‘Public Order’.238239Public OrderConstitutional Issues and Special Lawsa. The ULPA defines terrorism in terms which cover the activities carried out by several insurgent groups in the North Eastern states.b. The ULPA not only defines ‘terrorism’ in expansive terms but also lists some of the organisations engaged in insurgent activities in the North East as is apparent from the Schedule appended to the Act.c. On the basis of the provisions of Section 49(b) of the ULPA it can be said that this Act envisages the deployment of the armed forces or para military forces in control of the Union for fighting insurgent activity carried on in some or all North Eastern states.d. Repeal of AFPSA would remove the feeling of discrimination and alienation among the people of the North Eastern states.e. The ULPA is a comprehensive law unlike the AFPSA which deals only with the operations of the armed forces of the Union in a disturbed area.8.5.13 The Committee, therefore proposed the insertion of Chapter VI A in the ULPA. A brief summary of the proposed insertion is reproduced below:a. If the State Government is of the opinion that on account of terrorist acts or otherwise, a situation has arisen where public order cannot be maintained in the state or in any part of the state except with the aid of armed forces in control of the Union, it may request the Union Government to deploy them for a period (not exceeding six months) as it may specify.b. It shall be open to the State Government to review the situation at the end of the period as specified and request the Union Government to extend the period of deployment for such period (not exceeding three months) as it may deem necessary. Such review can take place from time to time but each request shall be placed on the table of the Legislative Assembly (if there are two Houses, then on the table of both Houses) of the state.c. On receipt of such request from the State Government, the Union Government may deploy such forces under its control which are necessary for restoration of public order. This may be done by way of a notification published in the Gazette. On the basis of the request of the State Government the period of deployment and area of deployment can be extended or varied.d. If the Union Government is of the opinion that on account of terrorist acts or otherwise a situation has arisen in a state (or a part of the state)/UT, where deployment of forces under its control is required to quell internal disturbance, it may do so notwithstanding that no request for the sameis received from the State Government concerned. The Union Government shall do so by way of a notification published in the Gazette specifying the state or part of the state and the period of deployment (not exceeding six months). At the end of the specified period, it shall review the situation in consultation with the State Government and may extend the period of deployment. Such extension shall not be for more than six months at a time. Every notification extending the period of deployment or the area of deployment shall be laid on the table of both Houses of Parliament within one month of publication of the notification.e. The forces so deployed shall act in aid of civil power. In the course of undertaking operations, as are deemed necessary for the purpose of restoring public order or to quell internal disturbance, any officer not below the rank of non-commissioned officer may use force or fire upon person(s); enter and search without warrant any premises to arrest any person; enter, search and seize without warrant any premises and destroy firearms etc. (except where such premises happens to be in an uninhabitated area, the entry and search seizure operations shall be effected in the presence ofthe elders ofthe locality or the head ofthe household, and in case ofhis/her absence, any two independent witnesses) within the context of activities mentioned in Section 15 of the ULPA.f. The person arrested as mentioned above shall be handed over to the officer in charge of the nearest police station.g. The Union Government shall constitute a Grievances Cell in each district of a state where such forces are deployed. This shall be an independent body and shall be competent to enquire into complaints of violations of rights of citizens.8.5.14 The proposed Chapter VI A also includes an Appendix which incorporates the ‘Do’s and Don’ts’ issued by the Army and mentioned in paras 58 and 59 of the referred judgment of the Supreme Court and also the conclusions mentioned in paras 79(17) and 79(21) of that Judgment.8.5.15 There is no doubt that the definition of a ‘terrorist act’ as provided in the ULPA is quite exhaustive as it also takes it into its purview, inter alia, acts committed with intent to ‘threaten the unity, integrity, security or sovereignty of India’. In fact, the instances under which any area can be declared a ‘disturbed area’ under the AFSPA necessitating the deployment of the armed forces of the Union therein would necessarily be the outcome of activities which are covered under the definition of a ‘terrorist act’ under the ULPA. Thus there is little need for a separate Act. The proposed insertion of Chapter VI A in the ULPA240241Public OrderConstitutional Issues and Special Lawsbasically provides a mechanism through which the Armed Forces of the Union could be deployed in situations and areas where its need is felt. As indicated above, the proposed amendment incorporates the directions of the Supreme Court of India on the matter with regard to deployment of armed forces of the Union and the conduct of such armed forces during such deployment. It also provides for a grievance redressal mechanism. Most importantly it does not in any way dilute or compromise the paramount importance of ensuring national security in these disturbed insurgency affected areas.8.5.16 The Commission agrees that for reasons indicated in the foregoing paras, the AFSPA should be repealed. As recommended by the Committee to Review the Armed Forces (Special Powers) Act, 1958, a new chapter VI A could be inserted in the ULPA incorporating the provisions governing the deployment of armed forces of the Union in aid of civil power. However, the proposed insertion of Chapter VI A should apply only to the North-East.8.6 The Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 20058.6.1 The proposed Bill is intended to tackle the problem of communal disturbances and violence. Clause 3 of this Bill confers the power on the State Government to declare an area to be a communally disturbed area whenever one or more scheduled offences are being committed in that area in such a manner and on such a scale which involves the use of criminal force of violence against any group, caste and community, resulting in death and destruction of property. The State Government is required to take all possible measures to control communal violence. In order to enforce the provisions of this Bill the State Government shall appoint Competent Authorities who would be entrusted with various powers like power to take preventive measures, power to order deposit of arms, ammunition etc., power to search, detain and seize arms etc. in disturbed areas, power to prohibit certain acts and the power to make orders regarding conduct of persons in communally disturbed areas. Strict punishments for violating these orders have also been provided.8.6.2 The Bill provides for enhanced punishment for communal violence. In terms of Clause 19 of the Bill, whoever commits any act of omission or commission which constitutes a scheduled offence on such scale or in such manner which tends to create internal disturbance within any part of the state and threaten the secular fabric, unity, integrity or internal security of the nation is said to commit communal violence. Punishment for such offences other than in the case of an offence punishable with death or imprisonment for life is twice the longest term of imprisonment and twice the highest fine provided for that offence in the IPC or in any other Act specified in the Schedule to the Bill. In case of a public servant the punishment will not be less than five years and whosoever is found guilty shall be disqualified from holding any post or office under the government for a period of six years from the date of conviction.8.6.3 Chapters V and VI of the Bill deal with Investigation and Special Courts respectively. The notable feature is that there are provisions for constitution of a review committee, and special investigation teams. In terms of Clause 22, if a charge sheet is not filed within 3 months from the date of the registration of FIR, the case shall be reviewed by a committee headed by an officer of the level of an Inspector General of Police. This Committee has the authority to order a fresh investigation by another officer not below the rank of Dy. Superintendent of Police. The State Government can also constitute one or more Special Investigation Teams, if it comes to the conclusion that the investigation of offences committed in any communally disturbed area was not carried out properly.8.6.4 The Bill provides for institutional arrangements for relief and rehabilitation in the form of State Communal Disturbance Relief and Rehabilitation Council to be constituted by every State Government. In addition to the relief and rehabilitation work the Council shall also prepare a plan for every state to be called the state communal harmony plan for promotion of communal harmony and prevention of communal violence. There is also a provision for constitution of a District Communal Disturbance Relief and Rehabilitation Council. In terms of Clause 45, there will be a National Communal Disturbance Relief and Rehabilitation Council to be constituted by the Central Government. The National Council shall give its recommendations to the Government regarding relief and rehabilitation of the victims of the communal violence. The Council shall also submit reports to the Union Government recommending the steps required to be taken to deal with the situation giving rise to communal violence.8.6.5 The Bill also has provisions for setting up of a fund by every State Government to be called the State Communal Disturbance Relief and Rehabilitation Fund and there shall be credited thereto – (a) all moneys received from the Central Government, (b) all moneys received from the State Government and any other amount received as gifts or donations8.5.17 Recommendation:a. The Armed Forces (Special Powers) Act, 1958 should be repealed. To provide for an enabling legislation for deployment of Armed Forces of the Union in the North-Eastern states of the country, the Unlawful Activities (Prevention) Act, 1967 should be amended by inserting a new Chapter VI A as recommended by the Committee to Review the Armed Forces (Special Powers) Act,1958. The new Chapter VI A would apply only to the North-Eastern states.242243Public Orderor financial aid etc. In addition to that every State Government shall establish a fund to be called the Victims Assistance Fund in each district and place the same at the disposal of the District Council. The Councils at the District and the State levels are empowered to utilize these funds for relief and rehabilitation.8.6.6 One of the important provisions of the proposed Bill is the special powers of the Union Government to deal with communal violence in certain cases. In terms of Clause 55, the Central Government has been given power to give directions to the State Government in case of communal disturbances and to issue notifications declaring any area within a state as a communally disturbed area and to deploy armed forces wherever necessary. Where it is decided to deploy armed forces, an authority known as Unified Command may be constituted by the Central Government or the State Government for the purpose of coordinating and monitoring such deployment. Every notification declaring any area within a state as a communally disturbed area by the Union Government has to be laid before each House of Parliament. Clause 56 of the Bill provides that such notification shall also specify the period for which the area will remain so notified which shall not exceed in the first instance, 30 days. The Central Government may extend this period by notification but the total period during which an area may be notified as a communally disturbed area shall not exceed a total continuous period of 60 days.8.6.7 The Bill deals with all aspects of tackling communal violence ranging from preventive measures to rehabilitation measures. The Commission would be examining these measures along with the Bill in its Report on Conflict Management.244Public OrderRole of Civil Society, Media and Political Parties in Public Order9.1.5 Recommendations:a. Citizens should be involved in evaluating the quality of service at police stations and other police offices.b. Government should incentivise citizens’ initiatives.c. Formal mechanisms should be set up at the cutting edge level to involve citizens/ citizen’s groups in various aspects of public order management.9.2 The Role of the Media in Public Orderpublic grievances. These groups can also play a role in resolving conflicts between different sections of society. They also play an important role in relief and rehabilitation measures after the major crises. Last but not the least, community policing has emerged as a major civil society response to increased crimes.9.1.3 In its Report on Ethics in Governance, the Commission has recommended that citizens be involved in the assessment and maintenance of ethics in important government institutions and offices. This would very much apply to police stations and other police offices. Based on the perception of citizens who have approached the police station for any service, a periodic rating of all police stations should be done.9.1.4 The efforts of civil society need to be supported and acknowledged by the administration. To facilitate their contribution, institutional mechanisms may have to be created. Sometimes they may require statutory backing.9.2.1 The Fourth Estate has always played an influential role in the public sphere. Historically, the press has been a formulator of public opinion, been instrumental in bringing about change and has also provided a powerful platform for addressing national and public sentiments.9.2.2 While maintaining public order is an important aspect of the State’s effort to earn the approval of its people, equally important, for the purpose of legitimacy, is the people’s perception regarding its ability to do so. This perception cements the people’s faith in the State – a necessary input in legitimising the existence of the State. It is here that the positive role of the media emerges quite significantly. The increasing exposure of the general public to audio-visual and print media influences people’s perception towards the capabilities of the State.9.2.3 Technology has endowed the electronic media with three major attributes – instantaneity, spontaneity and locality. Instantaneity has provided it with a ringside view in real time, spontaneity has allowed it cover events as they unfold and locality has provided it with the power to bring the farthest corner of the globe into a household. This has also enhanced the reach and, therefore, the hold of the electronic media over the viewers’ minds. It has, however, also given rise to a multiplicity of players in this field, with consequential concerns of accountability, responsibility and public good. It is, therefore necessary to ensure that the media is prompt, responsible, sensitive, accurate and objective in its presentation of news. In the context of maintenance of public order, the role of the media could go a long way in preventing rumour mongering and incorrect or mischievous coverage by a small section of the media which could be supportive of partisan elements.9.2.4 The central issue, thus, is how to have an effective interface with the media. Given the technological environment in which the media functions today, the fact that there is no monopoly over sources of information and the need to have an informed public, control measures are neither feasible nor desirable. Thus, it is incumbent on the administration to continuously provide the media with immediate, accurate and reliable information so that the public is not left with gaps in their information which might be filled by sensational and biased news reporting. This requires capability building at various levels of the administrative machinery so as to provide a transparent and responsive administration.9.2.5 To ensure that government officials interact with the media in a professional manner, media management modules should be integrated in various training programmes. Media persons may also be associated with such training modules. Emphasis on local language media would obviously be useful.9.2.6 In hierarchical structures within the government, interaction with the media is generally regulated to avoid confusion and contradictions. To overcome such hindrances, officials should be designated at appropriate levels to interact with the media and their accessibility should be ensured.9.2.7 Recommendations:a. The Administration must make facts available to the media at the earliest about any major development, particularly activities affecting public order.b. In order to have better appreciation of each other’s view points there should be increased interaction between the Administration and the media. This could246247Public OrderRole of Civil Society, Media and Political Parties in Public Orderbe inter alia in the form of joint workshops and trainings.c. The Administration should designate points of contact at appropriate levels (a spokesperson) for the media which could be accessed during whenever required.d. Officers should be imparted training for interaction with the media.e. A cell may be constituted at the district level which may analyse media reports about matters of public importance.9.3 Role of Political Parties9.3.1 Our democratic polity encourages the resolution of conflicts and disputes through discussion, debate and consensus. This is ensured by participation in the political process institutionalised by the Constitution. There have been many instances where political outfits which once promoted the attainment of political and social objectives through violent means have accepted the democratic set-up of the country and have participated in the electoral process, thereby reducing conflicts.9.3.2 The most effective method of expressing collective concern is through organisation of peaceful assemblies and rallies. We have the good fortune of being heir to Mahatma Gandhi’s doctrine of non-violence. And yet, the number of instances where the exercise of the fundamental right of peaceful assembly has led to a break down of public order has been increasing over the years. Hooliganism and anti-social behaviour sometimes becomes a necessary accompaniment of many political rallies or demonstrations. The responsibility of political parties in such situations and their attitude towards the police involved in maintaining law and order needs to be redefined. This necessarily brings to centre-stage the relationship between politicians and the police. While the police have to be responsible and accountable to the people at large in a democratic set up, their efficiency and impartiality cannot be allowed to be impinged upon by extraneous political interventions.9.3.3 After more than five decades of Independence, a plethora of social, economic and political issues still exist and many grievances of the people remain unresolved. Political parties should act as a vehicle for mainstreaming such grievances through participation in the democratic process so that they could be resolved through discussion and debate. However, when political parties fail to act as the medium of expression of such concerns, a political vacuum is created which encourages the resolution of issues through conflict and leads to the breakdown of public order. The rise and growth of Naxalism in various parts of the country is a classic example of this.9.3.4 As the Commission has stated in its Report on ‘Ethics in Governance’, “Democratic maturity needs time, patience, and genuine efforts to find rationale answers to complex problems and willingness to reconcile conflicting views”.The Commission hopes that the political leadership of the country would come together to evolve a consensus on political conduct which would enable peaceful resolution of of conclicts for overall maintenance of public order.248249CONCLUSIONPublic order goes beyond being just another issue in the realm of good governance. It is indeed at the core of it, the most vital aspect of our democracy, of our very existence as a nation. The rule of law, in its widest sense, creates, and is also the effect of, an orderly, cultured, wise and equitable society.The importance of this Report lies in the attempt of the Commission to find new ways by which the rule of law would be upheld and our democracy strengthened. The Commission has tried to move beyond the straitjacket of the existing structures and systems of those wings of government which are directly involved in the maintenance of public order. Our recommendations, in their implementation, would require restructuring of the police in India and the involvement of not merely the Union and the States, but also of the third tier of governance, the local bodies. At the center of our proposals is the citizen, especially the vulnerable sections of our society.In our task, we have had the benefit of the thinking and the advice offered by previous Commissions and Committees. The pronouncements of the Supreme Court and the various High Courts have been before us and have guided the Commission in its deliberations. The issues that have been considered by such eminent bodies have greatly facilitated the Commission in arriving at its recommendations for holistic and overarching reform.Public order is a critical necessity for progress. An unruly society would be a recipe for economic disaster. Ultimately the quality of life of our citizens is in great measure dependent upon the maintenance of public order. There is a gowing concern that in the eyes of the law enforcing agencies some are more equal than others. It has been the endeavour of this Commission to propose changes which would substantially remove such a perception, reduce the scope for extraneous influences to bear upon the functioning of the police and make them professional, fair and citizen-friendly.The Commission notes that some of the changes proposed may take time to implement. But every long journey begins with a small step. There is need for an enlightened political will to accept and bring about these changes, which we believe are fundamental and essential for the maintenance of public order and a harmonious society.250251253252SUMMARY OF RECOMMENDATIONS1. (Para 5.2.1.8) State Government and the Policea.The following provision should be incorporated in the respective PoliceActs:It shall be the responsibility of the State Government to ensure efficient, effective, responsive and accountable functioning ofpolice for the entire state. For this purpose, the power ofsuperintendence of the police service shall vest in and be exercised by the State Government in accordance with the provisions oflaw.The State Government shall exercise its superintendence over the police in such manner and to such an extent as to promote theprofessional efficiency of the police and ensure that its performance is at all times in accordance with the law. This shall be achieved through laying down policies andguidelines, setting standardsfor quality policing, facilitating their implementation and ensuring that the police performs its task in a professional manner with functional autonomy.No government functionary shall issue any instructions to any police functionary which are illegal or malafide.b.‘Obstruction of justice’ should also be defined as an offence underthe law.2. (Para 5.2.2.30) Separation of Investigation from other Functionsa.Crime Investigation should be separated from other policing functions.A Crime Investigation Agency should be constituted in each state.b. This agency should be headed by a Chief of Investigation under the administrative control of a Board of Investigation, to be headed by a retired/ sitting judge of the High Court. The Board should have an eminent lawyer,Public OrderSummary of Recommendationsan eminent citizen, a retired police officer, a retired civil servant, the Home Secretary (ex-officio), the Director General of Police (ex-Officio), Chief of the Crime Investigation Agency (ex-officio) and the Chief of Prosecution (ex-officio) as Members.c. The Chairman and Members of the Board of Investigation should be appointed by a high-powered collegium, headed by the Chief Minister and comprising the Speaker of the Assembly, Chief Justice of the High Court, the Home Minister and the Leader of Opposition in the Legislative Assembly. The Chief of Investigation should be appointed by the State Government on the recommendation of the Board of Investigation.d. The Chief of the Crime Investigation Agency should have full autonomy in matters of investigation. He shall have a minimum tenure of three years. He can be removed within his tenure for reasons of incompetence or misconduct, but only after the approval of the Board of Investigation. The State Government should have power to issue policy directions and guidelines to the Board of Investigation.e. All crimes having a prescribed punishment of more than a defined limit (say three or more years of imprisonment) shall be entrusted to the Crime Investigation Agency. Registration of FIRs and first response should be with the ‘Law and Order’ Police at the police station level.f.The existing staff could be given an option of absorption in any of theAgencies – Crime Investigation, Law and Order and local police. But once absorbed, they should continue with the same Agency and develop expertise accordingly. This would also apply to senior officers.g.Once the Crime Investigation Agency is staffed, all ranks should developexpertise in that field and there should be no transfer to other Agencies.h. Appropriate mechanisms should be developed to ensure coordination between the Investigation, Forensic and the Law and Order Agencies, at the Local, District and the State levels.3. (Para 5.2.3.7) Accountability of Law and Order Machinerya. A State Police Performance and Accountability Commission should be constituted, with the following as Members:?Home Minister (Chairman)?Leader of Opposition in the State Assembly?Chief Secretary?Secretary in charge of the Home Department;?Director General of Police as its Member Secretary?(For matters pertaining to Director General of Police, including his appointment, the Home Secretary shall be the Member Secretary)?Five non-partisan eminent citizensb. The State Police Performance and Accountability Commission should perform the following functions:?frame broad policy guidelines for promoting efficient, effective, responsive and accountable policing, in accordance with law;?prepare panels for the office of Director General of Police against prescribed criteria;?identify performance indicators to evaluate the functioning of the police service; and?review and evaluate organizational performance of the police service.c. The method of appointment of the Chairman and Members of the State Police Performance and Accountability Commission should be as stipulated in the Draft Model Police Act.d. The State Government should appoint the Chief of Law and Order Police from the panel recommended by the State Police Performance and Accountability Commission. The panel will be for the ‘office’ of Director General of Police and not to other posts of the ‘rank’ of DGP.e. The tenure of the Chief of the Law and Order Police as well as the Chief of the Crime Investigation Agency should be at least three years. But this tenure should not become a hindrance for removal in case the Chief is found to be incompetent or corrupt or indulges in obstruction of justice or is guilty of a criminal offence. The State Government should have powers to remove the Police Chief but such order of removal should be passed only after it has been cleared by the State Police Performance and Accountability Commission (or the State Investigation Board, in the case of Chief of Investigation).254255Public OrderSummary of Recommendations4. (Para 5.2.4.9) Police Establishment Committeesa. A State Police Establishment Committee should be constituted. It should be headed by the Chief Secretary . The Director General of Police should be the Member Secretary and the State Home Secretary and a nominee of the State Police and Accountability Commission should be the Members. This Committee should deal with cases relating to officers of the rank of Inspector General of Police and above.b. A separate State Police Establishment Committee should be set up with the Chief of Law and Order Police as its Chairperson and two senior police officers and a member of the State Police Performance and Accountability Commission as Members (All Members of this Committee should be nominated by the State Police Performance and Accountability Commission) to deal with cases relating to all gazetted officers up to the rank of Deputy Inspector General of Police.c.These Committees should deal with all matters of postings and transfers,promotions and also grievances relating to establishment matters. The recommendations of these Committees shall normally be binding on the Competent Authority. However, the Competent Authority may return the recommendations for reconsideration after recording the reasons.d. Similarly, a District Police Establishment Committee (City Police Committee) should be constituted under the Superintendent/Commissioner of Police. This Committee should have full powers in all establishment matters of non-gazetted police officers.e.For inter-district transfers of non-gazetted officers, the State levelEstablishment Committee may deal with it or delegate it to a Zonal or a Range level Committee.f.All officers and staff should have a minimum tenure of three years. Shouldthe Competent Authority wish to make pre-mature transfer, it should consult the concerned establishment committee for their views. If the views of the establishment are not acceptable to the Competent Authority, the reasons should be recorded before the transfer is affected, and put in the public domain.g. The Board of Investigation should have full and final control on all personnel matters of Crime Investigation Agency. Therefore, the Board should act as the establishment committee for all senior functionaries in investigation and prosecution. An appropriate committee may be constituted at the district level by the Board, for dealing with non-gazetted officials.5. (Para 5.3.13) Competent Prosecution and Guidance to Investigationa. A system of District Attorney should be instituted. An officer of the rank of District Judge should be appointed as the District Attorney. The District Attorney shall be the head of Prosecution in a District (or group of Districts). The District Attorney shall function under the Chief Prosecutor of the State. The District Attorney should also guide investigation of crimes in the district.b. The Chief Prosecutor for the State shall be appointed by the Board of Investigation for a period of three years. The Chief Prosecutor shall be an eminent criminal lawyer. The Chief Prosecutor would supervise and guide the District Attorneys.6. (Para 5.4.7) Local Police and Traffic Managementa. A task force may be constituted in the Ministry of Home Affairs to identify those laws whose implementation, including investigation of violations could be transferred to the implementing departments. A similar task force should look into the state laws in each state.b. To start with, departments like the State Excise, Forest, Transport and Food with enforcement divisions may take some officers from the police department of appropriate seniority on deputation and form small investigation outfits by drawing departmental officers from corresponding ranks for the purpose of investigating cases of violations of appropriate laws; after a transition period, the concerned department should endeavour to acquire expertise and build capacity to cope with the investigation work with its own departmental officials.c. A Municipal Police Service should be constituted in Metropolitan cities having population of more than one million. The Municipal Police should be empowered to deal with the offences prescribed under the municipal laws.256257Public OrderSummary of Recommendationsd. The function of Traffic control (along with traffic police) may be transferred to the local governments in all cities having a population of more than one million.7. (Para 5.5.4) The Metropolitan Police Authoritiesa. All cities with population above one million should have Metropolitan Police Authorities. This Authority should have powers to plan and oversee community policing, improving police-citizen interface, suggesting ways to improve quality of policing, approve annual police plans and review the working of such plans.b. The Authorities should have nominees of the State Government, elected municipal councilors, and non partisan eminent persons to be appointed by the government as Members. An elected Member should be the Chairperson. This Authority should not interfere in the ‘operational functioning’ of the police or in matters of transfers and postings. In order to ensure this, it should be stipulated that individual members will have no executive functions nor can they inspect or call for records. Once the system stabilizes, this Authority could be vested with more powers in a phased manner.8. (Para 5.6.2) Reducing Burden of Police - Outsourcing Non Core Functionsa. Each State Government should immediately set up a multi-disciplinary task force to draw up a list of non-core police functions that could be outsourced to other agencies. Such functions should be outsourced in a phased manner.b. Necessary capacity building exercise would have to be carried out for such agencies and functionaries in order to develop their skills in these areas.9. (Para 5.7.10) Empowering the ‘Cutting Edge’ Functionariesa. The existing system of the constabulary should be substituted with recruitment of graduates at the level of Assistant Sub- Inspector of Police (ASI).b. This changeover could be achieved over a period of time by stopping recruitment of constables and instead inducting an appropriate number of ASIs.c. Recruitment of constables would, however, continue in the Armed Police.d. The orderly system should be abolished with immediate effect.e.The procedure for recruitment of police functionaries should be totallytransparent and objective.f.Affirmative action should be taken to motivate persons from differentsections of society to join the police service. Recruitment campaigns should be organised to facilitate this process.10. (Para 5.8.4) Welfare Measures for the Policea.Rational working hours should be strictly followed for all policepersonnel.b. Welfare measures for police personnel in the form of improved working conditions, better education facilities for their children, social security measures during service, as well as post retirement should be taken up on priority.c. Major housing construction programmes for police personnel should be taken up in a time bound manner in all states.11. (Para 5.9.15) Independent Complaints Authoritiesa. A District Police Complaints Authority should be constituted to enquire into allegations against the police within the district. The District Police Complaints Authority should have an eminent citizen as its Chairperson, with an eminent lawyer and a retired government servant as its Members. The Chairperson and Members of the District Police Complaints Authority should be appointed by the State Government in consultation with the Chairperson of the State Human Rights Commission. A government officer should be appointed as Secretary of the District Police Complaints Authority.b. The District Police Complaints Authority should have the powers to enquire into misconduct or abuse of power against police officers up to the rank of Deputy Superintendent of Police. It should exercise all the powers of a civil258259Public OrderSummary of Recommendations260court. The Authority should be empowered to investigate any case itself or ask any other agency to investigate and submit a report. The Disciplinary Authorities should normally accept the recommendations of the District Authorities.c. A State Police Complaints Authority should be constituted to look into cases of serious misconduct by the police. The State level Authority should also look into complaints against officers of the rank of Superintendent of Police and above. The State Police Complaints Authority should have a retired High Court Judge as Chairperson and nominees of the State Government, the State Human Rights Commission, the State Lok Ayukta, and the State Women Commission. An eminent human rights activist should be also be the member of the Complaints Authority. The Chairperson and the Member of the Authority (eminent human rights activist) should be appointed by the State Government based on the recommendations of the State Human Rights Commission. (In case the State Human Rights Commission has not been constituted, then the State Lok Ayukta may be consulted). A government officer should officiate as the secretary of the Authority. The Authority should have the power to ask any agency to conduct an enquiry or enquire itself. The Authority should also be empowered to enquire into or review any case of police misconduct, which is before any District Police Complaints Authority, if it finds it necessary in public interest to do so.d. It should be provided that if upon enquiry it is found that the complaint was frivolous or vexatious, then the Authority should have the power to impose a reasonable fine on the complainant.e. The State Police Complaints Authority should also monitor the functioning of the District Police Complaints Authority.f.The Complaint Authorities should be given the powers of a civil court. Itshould be mandated that all complaints should be disposed of within a month.12. (Para 5.10.4) An Independent Inspectorate of Policea.In addition to ensuring effective departmental inspections, an IndependentInspectorate of Police may be established under the supervision of the Police Performance and Accountability Commission to carry out performanceaudit of police stations and other police offices through inspections and review of departmental inspections. It should render professional advice for improvement of standards in policing and also present an annual report to the Police Performance and Accountability Commission.b. For all cases of deaths during ‘encounters’ the Independent Inspectorate of Police should commence an enquiry within 24 hours of the incident. The Inspectorate should submit its report to the PPAC and the SPACc. The working of the Bureau of Police Research and Development needs to be strengthened by adequate financial and professional support, so that it could function effectively as an organization for inter alia analysis of data from all parts of the country and establish standards regarding different aspects of the quality of police service.13. (Para 5.11.8) Improvement of Forensic Science Infrastructure - Professionalisation of Investigationa.There is need to set up separate National and State Forensic Science Organisations as state-of-the-art scientific organizations. At the state level these organisations should function under the supervision of the Board of Investigation.b. There is need to expand the forensic facilities and upgrade them technologically. Every district or a group of districts having 30 to 40 lakhs population should have a forensic laboratory. This should be achieved over a period of five years. Government of India should earmark funds for this purpose for assisting the states under the police modernisation scheme. All the testing laboratories should be accredited to a National Accreditation Body for maintaining quality standards.c. The syllabus of MSc Forensic Science should be continuously upgraded in line with international trends.d. Necessary amendments should be effected in the CrPC and other laws to raise the level and scope of forensic science evidence and recognize its strength for criminal justice delivery.14. (Para 5.12.6) Strengthening Intelligence Gatheringa.The intelligence gathering machinery in the field needs to bestrengthened and at the same time, made more accountable. Human261Public OrderSummary of Recommendationsintelligence should be combined with information derived from diverse sources with the focus on increased use of technology. Adequate powers should be delegated to intelligence agencies to procure/use latest technology.b.Intelligence agencies should develop multi-disciplinary capability by utilising services of experts in various disciplines for intelligence gathering and processing. Sufficient powers should be delegated to them to obtain such expertise.c.Intelligence should be such that the administration is able to use it to act in time by resorting to conflict management or by taking preventive measures.d. Instead of monitoring public places by posting a large number of policemen it would be economical as well more effective if devices like video cameras/ CCTVs are installed in such places.e.The beat police system should be revived and strengthened.rmants giving information should be protected to keep their identity secret so that they do not fear any threat to life or revenge. However, they could be given a masked identity by which they could claim their reward at an appropriate time and also continue to act as informants as the situation develops.g. In case of major breakdown of public order, the State Police Complaints Authority should take appropriate action to fix responsibility on the police officers for lapses in acting upon intelligence or on the intelligence officers in case there has been a failure on their part.15. (Para 5.13.5) Training of the Policea.Deputation to training institutions must be made more attractive in termsof facilities and allowances so that the best talent is drawn as instructors. The Chief of Training in the state should be appointed on the recommendation of the Police Performance and Accountability Commission.b. The instructors should be professional trainers and a balanced mix of policemen and persons from other walks of life should be adopted.c. Each state should earmark a fixed percentage of the police budget for training purposes.d. For each level of functionary, a calendar of training for the entire career should be laid down.e. There should be common training programmes for police, public prosecutors and magistrates. There should also be common training programmes for police and executive magistrates.f. Training should focus on bringing in attitudinal change in police so that they become more responsive and sensitive to citizens’ needs.g. All training programmes must conclude with an assessment of the trainees, preferably by an independent agency.h. Modern methods of training such as case study method should be used.i. Impact of training on the trainees should be evaluated by independent field studies and based on the findings the training should be redesigned.j. All training programmes should include a module on gender and human rights. Training programmes should sensitise the police towards the weaker sections.16. (Para 5.16.6) Gender Issues in Policinga.The representation of women in police at all levels should be increased through affirmative action so that they constitute about 33% of the police.b.Police at all levels as well as other functionaries of the criminal justice system need to be sensitised on gender issues through well structured training programmes.c.Citizens groups and NGOs should be encouraged to increase awareness about gender issues in society and help bring to light violence against women and also assist the police in the investigation of crimes against women.262263Public OrderSummary of Recommendations17. (Para 5.17.9) Crimes against Vulnerable Sectionsa.The administration and police should be sensitised towards the specialproblems of the Scheduled Castes and Scheduled Tribes. Appropriate training programmes could help in the sensitising process.b. The administration and police should play a more pro-active role in detection and investigation of crimes against the weaker sections.c. Enforcement agencies should be instructed in unambiguous terms that enforcement of the rights of the weaker sections should not be downplayed for fear of further disturbances or retribution and adequate preparation should be made to face any such eventuality.d. The administration should also focus on rehabilitation of the victims and provide all required support including counselling by experts.e.As far as possible the deployment of police personnel in police stationswith significant proportion of religious and linguistic minorities should be in proportion to the population of such communities within the local jurisdiction of such police station. The same principle should be followed in cases of localities having substantial proportion of Scheduled Castes and Scheduled Tribes population.ernment must take concrete steps to increase awareness in theadministration and among the police in particular, regarding crimes against children and take steps not only to tackle such crimes, but also to deal with the ensuing trauma.18. (Para 5.18.9) National Security Commissiona. There is no need for a National Security Commission with a limited function of recommending panels for appointment to Chiefs of the Armed Forces of the Union. There should be a separate mechanism for recommending the names for appointment as Chief of each one of these forces, with the final authority vesting in the Union Government.19. (Para 5.19.6) Union-State and Inter-State Cooperation and Coordinationa. The Ministry of Home Affairs should proactively and in consultation with the states, evolve formal institutions and protocols for effectivecoordination between the Union and the states and among the states. These protocols should cover issues like information/intelligence sharing, joint investigation, joint operations, inter-state operations by a state police in another state, regional cooperation mechanisms and the safeguards required.20. (Para 6.1.2.4) Measures to be Taken during Peace Timea.The administration should be responsive, transparent, vigilant and fair indealing with all sections of society. Initiatives such as peace committees should be utilised effectively to ease tensions and promote harmony.b. The internal security plan/riot control scheme should be updated periodically in consultation with all stakeholders and in the light of previous episodes. The role of all major functionaries should be clearly explained to them.c.A micro analysis should be carried out in each district to identify sensitivespots and this should be regularly reviewed and updated.d. The intelligence machinery should not slacken during normal times and credible intelligence should be gathered from multiple sources.e.Regulatory laws such as the Arms Act, 1959, Explosives Act, 1884 andMunicipal Laws related to construction of structures should be enforced rigorously.f.Public agencies should follow a zero tolerance strategy in dealing withviolations of laws.21. (Para 6.1.3.1.3) Security Proceedingsa. The use of preventive measures in a planned and effective manner needs to be emphasized. Training and operational manuals for both Executive Magistrates and police need to be revised on these lines.b. Regular supervision and review of these functionaries by the DM and the SP respectively should be done to focus attention on effective use of these provisions. For this purpose, a joint review on a periodic basis by the DM and SP should be done.264265Public OrderSummary of Recommendations26622. (Para 6.1.3.2.7) Addressing Property Disputes to Prevent Disruption of Public Ordera. An Explanation may be inserted below Section 145 of the Code of Criminal Procedure clarifying that when from the evidence available with the Executive Magistrate it is clear that there is an attempt to dispossess a person or where a person has been illegally dispossessed of his property within sixty days of filing the complaint and that such acts cause a reasonable apprehension of a breach of the peace, such magistrate can pass an order contemplated in sub- section (6) of the aforesaid Section notwithstanding pendency of a civil case between the parties involving the same property.b. A time frame of six months may be stipulated for concluding the proceedings.c.Specific but indicative guidelines may be issued by the Ministry of UrbanDevelopment to the State Governments to lay down the minimum standards for maintenance of land records in urban areas including municipal ward maps so as to minimize possibility of disputes about possession and boundary of immoveable property.d.Detailed guidelines already exist in almost all states to periodically updateland records in rural areas. Strict compliance of such guidelines needs to be ensured as out of date land records contribute to disputes and resultant breaches of peace.23. (Para 6.1.4.5) Regulating Processions, Demonstrations and Gatheringsa. Based on the experience with major riots and the recommendations of various Commissions of Inquiry and pronouncements of the Supreme Court and the High Courts, fresh and comprehensive guidelines may be drawn up for regulation of processions, protest marches and morchas.b. The guidelines should include preparatory steps (through intelligence sources), serious consultation and attempts to arrive at agreement with the groups/ communities involved, regarding route, timing and other aspects of procession. They should also cover prohibition of provocative slogans or acts as well as carrying of lethal weapons. It should be specifically stated in the guidelines that all processions or demonstrations should be dealt with the same degree of fairness and firmness.anisations and persons found guilty of instigating violence should beliable to pay exemplary damages. The damages should be commensurate with the loss caused by such violence. The law should provide for distribution of the proceeds of damages to the victims of such violence.24. (Para 6.1.5.3) Imposition of Prohibitory Ordersa.Prohibitory orders once imposed, should be enforced effectively.Videography should be used in sensitive areas.25. (Para 6.1.6.6) Measures to be Taken Once a Riot has Starteda.If violence erupts, then the first priority should be to quickly suppress theviolence. In cases of communal violence, the situation should be brought under control by effective use of force.b. Prohibitory orders must be enforced rigorously.c.If the situation so warrants, the forces of the Union and the Armyshould be requisitioned and used without any reluctance or delay.d. The Commissioner of Police or the District Magistrate and the Superintendent of Police should be given a free hand to deal with the situation in accordance with law.e.The media should be briefed with correct facts and figures so that there is noscope for rumour mongering.f.The police needs to be equipped with state-of-the-art crowd dispersalequipments.g.The District Magistrate should ensure that essential supplies are maintainedand relief is provided, especially in vulnerable areas and particularly during prolonged spells of ‘curfew’.26. (Para 6.1.7.9) Measures to be Taken Once Normalcy has been Restoreda. No sanction of the Union Government or the State Government should be necessary for prosecution under Section 153(A). Section 196 Cr PC should be amended accordingly.b. Prosecution in cases related to rioting or communal offences should be not sought to be withdrawn.267Public OrderSummary of missions of Inquiry into any major riots/violence should give their report within one year.d. The recommendations made by a Commission of Inquiry should normally be accepted by the Government and if the Government does not agree with any observation or recommendation contained in the report of the Commission, it should record its reasons and make them public.e. All riots should be documented properly and analysed so that lessons could be drawn from such experiences.f.There is need for adequate follow up to ensure proper rehabilitation of victims.27. (Para 6.2.4) Accountability of Public Servants Charged with Maintaining Public Ordera. The State Police Complaints Authority should be empowered to identify and fix responsibility in cases of glaring errors of omission and commission by police and executive magistrates in the discharge of their duties relating to the maintenance of public order.28. (Para 6.3.15) The Executive Magistrates and the District Magistratea.The position of the District Magistrate vis-à-vis the police, and as acoordinator and facilitator in the district needs to be strengthened. The District Magistrate should be empowered to issue directions under the following circumstances:i.promotion of land reforms and settlement of land disputes;ii. extensive disturbance of public peace and tranquility in the district (The decision of the DM as to what constitutes extensive disturbance of public peace should be final);iii. conduct of elections to any public body;iv. handling of natural calamities and rehabilitation of the persons affected thereby;v.situations arising out of any external aggression or internaldisturbances;vi. any similar matter, not within the purview of any one department and affecting the general welfare of the public of the district;vii. removal of any persistent public grievance (as to what constitutes persistent public grievance, the decision of the DM shall be final); andviii. whenever police assistance is required to enforce/implement any law or programme of the government.b. These directions shall be binding on all concerned. Directions in respect of item No. ii should normally be issued in consultation with the Superintendent of Police.29. (Para 6.4.2) Capability Building of Executive Magistratesa.All officers likely to be posted as Executive Magistrates should be speciallytrained in the relevant laws and procedures and should be eligible for posting only after qualifying in an examination.b. On the lines of a police manual, each state should also evolve a Manual for Executive Magistrates.30. (Para 6.5.7) Inter-Agency Coordinationa.In a District, the District Magistrate should coordinate the role of allagencies at the time of crisis.b. In major cities, with the Police Commissioner System, a coordination committee should be set up under the Mayor, assisted by the Commissioner of Police and the Municipal Commissioner. All major service providers should be represented on this Coordination Committee.31. (Para 6.6.4) Adoption of Zero Tolerance Strategya.All public agencies should adopt a zero tolerance strategy towards crime, inorder to create a climate of compliance with laws leading to maintenance of public order.268269Public OrderSummary of Recommendationsb. This strategy should be institutionalised in the various public agencies by creating appropriate statistical databases, backed up by modern technology, to monitor the level and trends of various types of offences and link these to a system of incentives and penalties for the officials working in these agencies. It should be combined with initiatives to involve the community in crime prevention measures.32. (Para 7.3.7) Facilitating Access to Justice - Local Courtsa. A system of local courts should be introduced as an integral part of the judiciary. There should be one such court for a population of 25,000 in rural areas (this norm could be modified for urban areas).b. The local courts should have powers to try all criminal cases where the prescribed punishment is less than one year. All such trials should be through summary proceedings.c. The judge of the local court should be appointed by the District and Sessions Judge in consultation with his/her two senior-most colleagues. Retired judges or retired government officers (with appropriate experience) could be appointed.d. These courts may function from government premises and could also be in the form of mobile courts.e. These local courts may be constituted by a law passed by the Parliament to ensure uniformity.33. (Para 7.5.1.11) Citizen Friendly Registration of Crimesa.Registration of FIRs should be made totally citizen friendly. Technologyshould be used to improve the accessibility of police stations to the public. Establishing call centers and public kiosks are possible options in this regard.b. Police stations should be equipped with CCTV cameras in order to prevent malpractice, ensure transparency and make the police more citizen-friendly. This could be implemented in all police stations within a time frame of five years.c. Amendments to the CrPC should be made as suggested by the National Police Commission.d. The performance of police stations should be assessed on the basis of the cases successfully detected and prosecuted and not on the number of cases registered. This is necessary to eliminate the widely prevalent malpractice of ‘burking’ of cases.34. (Para 7.5.2.4) Inquestsa. All State Governments should issue Rules prescribing in detail the procedure for inquests under Section 174 CrPC.35. (Para 7.5.3.13) Statements Made before a Police Officera. Sections 161 and 162 of CrPC should be amended to include the following:i.The statement of witnesses should be either in narrative or in questionand answer form and should be signed by the witness.ii. A copy of the statement should be handed over to the witness immediately under acknowledgement.iii. The statement could be used for both corroboration and contradiction in a Court of Law.b. The statements of all important witnesses should be either audio or video recorded.36. (Para 7.5.4.10) Confessions before Policea.Confessions made before the police should be admissible. All suchstatements should be video-recorded and the tapes produced before the court. Necessary amendments should be made in the Indian Evidence Act.b. The witness/accused should be warned on video tape that any statement he makes is liable to be used against him in a court of law, and he is entitled to the presence of his lawyer or a family member while making270271Public OrderSummary of Recommendations272such a statement. If the person opts for this, the presence of the lawyer/ family member should be secured before proceeding with recording the statement.c.The accused should be produced before a magistrate immediately thereafter,who shall confirm by examining the accused whether the confession was obtained voluntarily or under duress.d. The above-mentioned recommendations should be implemented only if the reforms mentioned in Chapter 5 are accepted.37. (Para 7.7.1.10) The Judge’s Obligation to Ascertain the Trutha. It is necessary to amend Section 311 CrPC and impose a duty on every court to suo motu cause production of evidence for the purpose of discovering the truth, which should be the ultimate test of the criminal justice system. Suitable amendments to the Indian Evidence Act, 1872 may also be made to facilitate this.38. (Para 7.7.2.14) Right to Silencea.Regarding grave offences like terrorism and organised crimes, in the caseof refusal by the accused to answer any question put to him, the court may draw an inference from such behaviour. This may be specifically provided in the law.39. (Para 7.7.3.6) Perjurya. The penalties provided under Section 344 CrPC for those found guilty of perjury after a summary trial should be enhanced to a minimum of one year of imprisonment.b. It should be made incumbent upon the Courts to ensure that existing perjury laws providing for summary trial procedure are unfailingly and effectively applied by the trial courts, without awaiting the end of the main trial.40. (Para 7.7.4.6) Witness Protectiona. A statutory programmme for guaranteeing anonymity of witnesses and for witness protection in specified types of cases, based on the best international models should be adopted early.41. (Para 7.7.5.6) Victim Protectiona. A new law for protecting the rights of the victims of the crimes may beenacted. The law should include the following salient features:i.Victims should be treated with dignity by all concerned in the criminaljustice system.ii. It shall be the duty of the police and the prosecution to keep the victim updated about the progress of the case.iii. If the victim wants to oppose the bail application of an accused he/she shall be given an opportunity to be heard. Similarly, for release of prisoners on parole, a mechanism should be developed to consider the views of the victims.iv. A victim compensation fund should be created by State Governments for providing compensation to the victims of crime.42. (Para 7.7.6.6) Committal mittal proceedings should be reintroduced where the magistrate shouldhave powers to record the evidence of prosecution witnesses. Suitable amendments may be carried out in Chapter XVI of the Code of Criminal Procedure.43. (Para 7.8.5) Classification of Offencesa. A comprehensive reclassification of offences may be done urgently to reduce the burden of work for both the Courts and the Police. A mechanism for ensuring regular and periodic review of offences should also be put in place to make such reclassification an ongoing and continuing exercise.b. The objective of this exercise should be to ensure that crimes of a petty nature including those which require correctional rather than penal action should be taken out of the jurisdiction of the police and criminal courts so that they are able to attend to more serious crimes. Such offences should, in future be handled by the local courts.273Summary of Recommendations47. (Para 8.3.14) Federal Crimesa.There is need to re-examine certain offences which have inter-state ornational ramification and include them in a new law. The law should also prescribe the procedure for investigation and trials of such offences. The following offences may be included in this category:anised Crime (examined in paragraph 8.4)ii. Terrorismiii. Acts threatening National securityiv. Trafficking in arms and human beingsv. Seditionvi. Major crimes with inter-state ramificationsvii. Assassination of (including attempts on) major public figuresviii. Serious economic offences.b. A new law should be enacted to govern the working of the CBI. This law should also stipulate its jurisdiction including the power to investigate the new category of crimes.c. The empowered committee recommended in the Commission’s Report on ‘Ethics in Governance’ (para 3.7.19) would decide on cases to be taken over by the CBI.48. (Para 8.4.17 ) Organised Crimea.Specific provisions to define organised crimes should be included in thenew law governing ‘Federal Crimes’. The definition of organised crime in this law should be on the lines of the Maharashtra Control of Organised Crime Act, 1999.49. (Para 8.5.17) Armed Forces (Special Powers) Act, 1958a. The Armed Forces (Special Powers) Act, 1958 should be repealed. To provide for an enabling legislation for deployment of Armed Forces of the Union in the North-Eastern states of the country, the Unlawful Activities (Prevention) Act, 1967 should be amended by inserting a new Chapter VI A as recommended by the Committee to Review the Armed Forces (Special Powers) Act, 1958. The new Chapter VI A would apply only to the North-Eastern states.275Public Order50. (Para 9.1.5) The Role of Civil Societya.Citizens should be involved in evaluating the quality of service at police stations and other police offices.ernment should incentivise citizens’ initiatives.c.Formal mechanisms should be set up at the cutting edge level to involve citizens/ citizen’s groups in various aspects of public order management.51. (Para 9.2.7) The Role of the Media in Public Ordera. The Administration must make facts available to the media at the earliest about any major development, particularly activities affecting public order.b. In order to have better appreciation of each other’s view points there should be increased interaction between the Administration and the media. This could be inter alia in the form of joint workshops and trainings.c.The Administration should designate points of contact at appropriate levels (a spokesperson) for the media which could be accessed during whenever required.d. Officers should be imparted training for interaction with the media.e. A cell may be constituted at the district level which may analyse media reports about matters of public importance.276Public OrderAnnexure-I Contd.The Commission would also like to express its gratitude to a number of eminent persons who generously spared time to discuss matters related to Public Order with the Commission. These include Shri Madhukar Gupta, Union Home Secretary, Shri P.K.H. Tharakan, Secreatary (R), Shri E.S.L. Narsiman, Director, Intelligence Bureau, Shri Vijay Shankar, Director, CBI, Shri P.C. Haldhar, Director Intelligence Bureau, Dr. N. Seshagiri, former Director General, NIC; Shri R.B. Sreekumar, former Director General of Police, Gujarat; Shri M.A. Basith, DG & IGP, Andhra Pradesh; Shri R. Srikumar, DGP and CMD Karnataka State Police Housing Corpotation; Shri K.K. Paul, Commissioner of Police, Delhi; Shri A.N. Roy, Commissioner of Police, Mumbai; Shri S.T. Ramesh, ADGP, Karnataka; Shri Sanjoy Hazarika, eminent journalist and Ms. Teesta Setalvad, eminent lawyer and activist. The Commission would also like to place on record its gratitude to Shri K. Asungba Sangtam, former Member of Parliament for preparing a report on the problems associated with law and order in North East India and Shri Shastri Ramachandaran, eminent journalist for preparing a Report on role of media in terrorism. These discussions and reports have been utilized by the Commission in this Report. The Commission also visited several States and had useful discussions. The Commission has benefited immensely from these discussions.Annexure-I(1)Workshop on Public Order2-3 February, 2006Centre for Policy Research, New DelhiList of Panelists/ParticipantsPanelists1. Mr. B.G. Verghese, Honorary Visiting Professor, CPR2. Mr. Ved Pratap Vaidik, Journalist3. Mr. Uday Sahai, IPS4. Mr. N.N. Vohra, Representative of Govt.of India for J&K5. Mr. T.V. Somanathan, IAS, Chennai6. Mr. Afzal Amanullah, Joint Secretary (Films), Ministry of Information & Broadcasting, GOI7. Mr. Suresh Khopade, Commissioner of Police, Railways, Mumbai8. Dr. Arnab Kumar Hazra, Consultant, Asian Development Bank9. Dr. Usha Ramanathan, AdvocateParticipants1. Mr. K.C. Sivaramakrishnan, Chairman, Executive Committee, CPR2. Dr. Pratap Bhanu Mehta, President & Chief Executive, CPR3. Dr. Ajit Mozoomdar, Honorary Research Professor, CPR4. Mr. Ramaswamy R. Iyer, Honorary Research Professor, CPR5. Prof. Partha Mukhopadhyay, Senior Research Fellow, CPR6. Dr. Shylashri Shankar, Honorary Research Professor, CPR7. Dr. B.N. Saxena, Honorary Research Professor, CPR8. Mr. T. Ananthachari, Former Director General, BSF9. Mr. G.P. Joshi, Senior Programme Coordinator, Commonwealth Human Rights Initiative10. Mr. K.S. Dhillon, IPS (Retd.), Bhopal11. Mr. R.C. Arora, Director (R&D), Bureau of Police Research & Development12. Mr. Vivek Kumar Tiwary13. Mr. Arbind Prasad14. Mr. Satish Sahney, IPS (Retd.), Chief Executive, Nehru Centre, Mumbai15. Mr. Ajay S. Mehta, Director, National Foundation for India278279Public OrderAnnexure-I(1) Contd.16. Mr. Rakesh Jaruhar, Director (Training), Bureau of Police Research & Development17. Mr. Amiya K. Samanta, IPS (Retd.), Kolkata18. Mr. Anjaneya Reddy, IPS (Retd.), Hyderabad19. Mr. Nasir Kamal, Deputy Director (Training), Bureau of Police Research & Development20. Mr. R.K. Raghavan, Former Director, CBI21. Mr. Ved Marwah, Former Commissioner of Police, Delhi22. Mr. Kamal Kumar, Director, Sardar Vallabhai Patel National Police Academy, Hyderabad23. Shri Sankar Sen, IPS (Retd.)24. Mr. Y.S. Rao, Consultant, ARC25. Mr. R. Viswanathan, Consultant, ARCAdministrative Reforms Commission1. Mr. M. Veerappa Moily, Chairman2. Mr. V. Ramachandran, Member3. Dr. A.P. Mukherjee, Member4. Dr. A.H. Kalro, Member5. Dr. Jayaprakash Narayan, Member6. Ms. Vineeta Rai, Member Secretary Annexure-I(2)Recommendations Made at the Workshop on Public OrderFebruary 2nd-3rd, 2006Centre for Policy Research, New DelhiA common theme was that “public order” had to be understood in a certain perspective. An appreciation of the difference between “order” and “established order” was required. The enforcement mechanisms and also public institutions seem more interested in perpetuating the established order of things, as it were and concentrate their activities in maintaining this status quo. It is important to recognize that in many instances a situation which is classified as a public order problem, is in actuality, an expression of popular discontent or a means of drawing attention to particular grievances and are, perhaps, extra-constitutional processes of social emancipation and change. In a democratic civil society, there must therefore be space for various forms of participation and dissent, which should be non-violent and preferably non-obstructive. The following suggestions were made during the workshop:I. Role of Media?The administration must make as much verified information available as soon as possible to ensure that accurate information reaches the people as soon and as effectively as possible. In light of this, the administration must develop a degree of competence to deal with issues brought to fore by media attention.?It has become imperative to have public officials who are able to professionally interact with the media. This could be incorporated in various training processes that various officials undergo. Furthermore, it could be beneficial to insource media professionals to assist the administration.?There needs to be sufficient delegated authority to local officials to interact with the media. In addition, there needs to be secure and quick flow of information that allows senior officials, who not at the site, to interact with the media with real-time information.?Communication with the vernacular media is a very important part of administrative interaction with the media and the administration needs to build up the capability to do this is a proactive and regular manner.280281Public OrderAnnexure-I(2) Contd.Annexure-I(2)?In a situation of competitive media, there is a vital need for a vibrant and non-partisan Public Broadcasting System (PBS). The PBS should function autonomously, for which independence to generate revenue is essential, yet revenue generation should not be its raison d’etre.?Government cannot play a major regulatory role in the media and it is fundamentally undesirable for it to extend its jurisdiction in this regard. The media should have its own mechanisms of self-regulation. The Press Council does need to be more pro-active in regulating infractions of its code. In addition, the Press Council has no jurisdiction over electronic media and a suitable mechanism needs to be devised.II. Role of the Civil Administration?Measures such as requiring bonds and sureties are currently under-utilised, though they are low-key, effective, and time-tested. Used intelligently, such measures can impose personal financial costs on troublemakers and ringleaders and discourage them from disrupting public order. Criminal Procedure Code Section 107 could perhaps be amended to allow the obtaining of bonds from organisers of processions.?The executive magistracy’s knowledge of laws relating to public order and its ability to write enforceable legal orders can be improved, since many orders are set aside on judicial review. An Executive Magistrate’s Manual containing model orders for various situations that cover judicial requirements, explain procedural steps, etc. could be developed and translated into Hindi and other state languages.?It is necessary to ensure adequate quantities of non-lethal technologies nonlethal crowd-dispersal technologies, such as water cannons and rubber bullets are available or able to be made available, preferably requiring not more than one hour’s notice, in all sensitive areas. Central funding for such measures can be considered, as well the possibility of outsourcing the maintenance and upkeep of equipment to private contractors, in order to ensure the equipment’s effectiveness if and when needed.?In gathering evidence, video technology ought to be utilised in potential trouble spots. Granting each station their own video equipment, however, might not be the best solution because of maintenance problems, instead, outsourcing, with adequate delegation of financial powers, ought to be considered.?The Centre using extant powers under the All India Services Act and Rules could declare that officers who receive strictures from the National Human Rights Commission or Commissions of Inquiry for failure to maintain public order will not be empanelled for Central posts. The Centre could (after consultation with the states) amend Rule 7 of the All India Services (Discipline & Appeal) Rules in order to empower itself to level charges against officers serving under the states in specified breaches of public order.III. Role of NGOs and Civil Society?It was suggested that the new Police Act incorporate a mandate to seek the “willing civic cooperation of the people” in situations of public disorder. The Mohalla Committee model of Bhiwandi could be explored a possible institutional model for people’s participation with appropriate refinements for other parts of the country.IV. Role of Judiciary?To increase the strength of the courts and reduce the administrative burden of judges, the initiation of the recruitment process could be separated from the selection process, which would remain within the judiciary as now. A mechanism for judge rostering and workforce planning would make knowledge about future vacancies available in advance and can enable the process of recruitment to begin automatically.?Basic infrastructure support needs to be provided for court support services and courts need to be assisted to develop separate well-equipped and trained staff for human resource, accounts, information technology systems and infrastructure management.?Backlogged cases should be targeted specifically through case management techniques like the removal of inactive cases by summary administrative means such as dismissal rules. Case flow management measures such as use of282283Public OrderAnnexure-I(2) Contd.specialised tracks with time standards appropriate for those cases and automatic monitoring and generation of appropriate notices to ensure that cases that are outside time standards are identified and acted upon is also an important tool for reducing case backlogs.?A fully developed IT enabled Case Management System (CMS) will be able to reduce case delays through more accurate and timely reporting on case status. An automated CMS can improve upon system of manual files by way of offering real-time update into the status of cases.?New processes can be introduced to perform key tasks in a more cost-effective manner, like early case conferences in complex cases.?Use of strict adjournment policy that encourages litigants and counsel to be prepared on the date set for them to appear.?Improving the efficiency with which specific processes are peformed, like use of video remand instead of transportation to court for hearing bail applications.Annexure-I(3)National Workshop on Public Order11th-12th March, 2006S.V.P. National Police Academy, HyderabadSpeech on Public Order by the Chairman, ARCIndia is a country whose democratic polity is founded on the bedrock of rule of law. The basic ingredient of rule of law is maintenance of peace and order. This was well recognised by the founding Fathers of our Constitution. The Indian Constitution, while according a pre-eminent position for the fundamental rights of citizens, recognizes the importance of public order, by providing for legislation imposing reasonable restrictions in the interest of public order. Under the Constitution of India, the Union and the federating units, that is, the States have well-defined areas of responsibility. ‘Public Order’ and ‘Police’ are essentially the responsibilities of State Governments. However, the Central Government assists them by providing Central Paramilitary Forces (CPMFs) as and when required.The Administrative Reforms Commission is looking at ‘Public Order’ with a view to suggest a framework to strengthen administrative machinery to maintain public order conducive to social harmony and economic development. ARC is looking into all aspects of the subject therefore the focus is on studying the causes of public disorder, how early symptoms of disorder should be detected and addressed well in time, what should be the role of various stakeholders in maintenance of public order, how the enforcement machinery should be made more effective to deal with public disorder. The Commission is examining the subject by focusing on its components namely causes of conflicts and their resolution, secondly the role of civil administration, media, society, Judiciary and NGOs in maintaining public order, and thirdly the role of police and the need for reforms. Accordingly, each one of these is being discussed in great length in three separate workshops. In the first workshop which was organised jointly with the Centre for Policy Research (CPR), the role of civil administration and other stakeholders was discussed; in the second workshop, which was organised jointly with CPR and the Kannada University, Hampi, the different types of conflicts in the Indian Society were discussed; and in this third workshop, which is being organised jointly with the National Police Academy the Role of Police would be discussed.284The first two workshops have already identified various issues for the consideration of the Commission. The groups formed at these workshops have crystallised a number of suggestions on these. The ARC will deliberate on them before finalising its recommendations.285Public OrderAnnexure-I(3) Contd.Annexure-I(3) Contd.In this third workshop, which is being organised jointly with the National Police Academy, the focus will be on examining the role of the State and organised violence, terrorism and extremism; role of the Government, Executive Magistracy and Judiciary in Public Order management; role of the Police in Public Order management, and finally, the Criminal Justice System including the legal framework, and the need for reforms in all these areas will be explored and measures will be identified.At this juncture, I would like to clarify the meaning of the word public order. Any violation of Law is a problem of Law and Order, but every such violation is not a case of disturbance of public order. The dividing line between ‘Public Order’ and ‘Law and Order’ is very thin. The Apex Court has explained the concept of public order. It is the potentiality of an act to disturb the even tempo of the life of the community which makes it “prejudicial to the maintenance of public order”. If the contravention in its effect is confined only to a few individuals directly involved, as distinct from a wide spectrum of public, it would raise the problem of “law and order” only. It is the potentiality of the act to disturb the even tempo of the life of the community which makes it “prejudicial to the maintenance of public order”.Importance of Maintaining Public OrderIndia today is poised to emerge as a global economic power with all its high growth rate of economy and all-round economic development. For realising our legitimate aspirations of economic development, it is essential that the problems of peace and order are managed efficiently in the country. No developmental activity is possible in an environment of insecurity and disorder. Failure to manage the multifarious problems arising out of violent conflicts based on religious, caste, ethnic, regional or any other disputes, can lead to unstable and chaotic conditions. Such conditions not only militate against realisation of our economic dream, but also would jeopardise our survival as a vibrant democracy. We have to look at the problem of public order management and the role of law enforcement in that regard, in this perspective. We should not forget that it is the weaker sections which suffer the most in any public disorder. There is also a need for greater transparency in the law enforcement agencies.Demands on the StateThe birth of the nation itself was marred by large-scale violence and one of the most traumatic instances of mass migration of population in modern history. Since independence, recourse to violent methods of agitation by groups and communities have incessantly put pressure on the State machinery in management of public order. Substantial parts of the country continue to suffer from attempts by various groups to tinker with public order in one way or another. Some public order issues also get aggravated due to exploitation by hostile external elements with a design to disintegrate the nation. The police in India have, time and again, come under severe strain and have had to really stretch themselves in safeguarding the unity and integrity of the country and by restoring peace and order whenever it was disrupted. In the process, they have also suffered considerable loss of life and limb of their personnel. In addition to the state police forces, the central police forces have also had to be deployed extensively from time to time. The demands and pressures of public order management have, thus, contributed to large-scale expansion of state and central police forces. The Indian experience of public order management, since Independence, is marked by some outstanding successes like tackling the terrorist violence in Punjab, Naxalite violence in West Bengal and Kerala, large-scale communal violence in different parts of the country, militant movements of a wide variety, etc. However, the police also have come under severe criticism, often not unjustifiably, for a series of omissions and commissions. Allegations of excessive use of force, violation of human rights etc. have been quite frequent. Probably, what has marred the police image most is allegations of partisan attitude and collusion with political parties in power while dealing with many public order situations.The country has had to tackle the problems of public order management during the last six decades under a legal and administrative framework which, it is vastly felt, is archaic and not suited to the emerging socio-political and economic environment. Many of the allegations against our administrative and law enforcement agencies emanate from their failure to achieve a delicate balance between the requirements of public order and the imperative need for respecting the citizens’ fundamental rights and their susceptibilities, in a democratic polity. Undoubtedly, the task of public order maintenance is also rendered more difficult by the general lack of recognition that some restrictions on the rights of individuals and some inconvenience to them are the price to be paid for the overall good of society.Further, the civil administration, today, has to perform its duties under a far more restraining environment. On the one hand, because of an increasing level of public awareness, there are greater demands of delivery of service with efficiency as well as speed on our administrative286287Public OrderAnnexure-I(3) Contd.Annexure-I(3) Contd.machinery, including the law enforcement agencies. On the other hand, as a result of the processes of democracy, there is far greater scrutiny of their actions or inactions, on account of greater consciousness of the citizens’ rights and human rights among the people, besides judicial activism, emergence of a powerful media, role of NGOs, international pressures etc.Terrorism and ExtremismTerrorism – both of domestic and international hues - has emerged as a major threat to not only public order but even to national security. The use of terror as a tool to furthering separatist interests has been the scourge of the country for the past quarter century. The marriage of religious and ethnic ideologies with separatist movements has complicated the issues involved in countering terrorism and the fightback itself has become a public order issue in some instances. Further, nexus of terrorism with organised crime as evidenced in the infamous Mumbai serial blast cases and riots of 1992-93, and the phenomenon described as narco-terrorism, only aggravates its threat potential. The problem of terrorism is no longer confined to some border states but even our political institutions, economic assets and scientific establishments in the hinterland have become vulnerable terrorist targets.Many states in the country - from UP to Tamilnadu and Maharashtra to West Bengal - are today affected by left wing extremism in varying degrees. The creation of Naxalite groups and a steady expansion of their base across the country in a systematic and coordinated manner, are matters of serious implications for public order as well as national security. By exploiting administrative inadequacies and socio-economic issues domestically while engaging into strategic linkages with other militant and criminal groups across the border, these groups are able to spread the reign of terror and lawlessness, in pursuit of their so-called ideological objectives. In such cases, matters have gone beyond the general issues involved in maintenance of public order and our ability to address various complex issues relating to socio-economic development of the people of the affected areas itself is being tested. As a large part of the affected area is tribal, their rights and sensitivities have also got to be addressed.A Holistic Approach: the Need of the HourDespite our efforts and more than five decades of planning, regional imbalances and economic disparities between rural and urban regions have grown, leading to disaffection and dislocation. The expectations and aspirations of the people have also risen with globalisationand liberalisation. While the new economic policies have contributed to growth on the whole, conflicts stem from disparity in patterns of development, giving rise to perpetual tensions. Many sections of the society, such as the labourers and the poorer sections, living in villages and largely dependent on agriculture, have felt neglected. Politically motivated groups often exploit their sense of grievance – real or perceived. This is already leading to major conflicts and often confrontations in different parts of the country, adversely affecting public order.While violent manifestations of all such problems will have to be inevitably tackled by the law enforcement agencies, given their socio-economic and political roots, these problems, most of the times demand a concerted response from different wings of the civil administration – both regulatory & developmental - for resolution in the long run. Indeed, the response of the police as the main law enforcement agency, is of crucial importance not only as a bulwark against eruption or escalation of violence but also in resolution of conflicts at the nascent stage itself, to prevent minor discords from turning into public order situations. All the other concerned wings of the civil administration too must be enabled and empowered to play their role in consonance with an efficient police response. Lack of a coordinated approach among different agencies, for instance, often proves to be a bane and this calls for institutionalized mechanisms of formal and informal coordination between all concerned agencies.There is need for national consensus among all the agencies apart from the political parties. Unless there is clarity and commitment on these issues, there would not be a convergence of national purpose. What is also required is a holistic approach towards managing such issues. For example, communal riots must be accepted as a failure of governance. We have to uncover the chemistry of these riots and suggest long-term measures.Reforms in the Criminal Justice SystemIn recent times, there has been a serious erosion of the people’s faith in the Criminal Justice System. One of the essential requirements for preservation of peace and order in a sustained manner is deterrence emanating from certainty and speed of punishment for those who indulge in crimes against society. Our Criminal Justice System is crippled currently with so many shortcomings that anti-social and anti-national elements are able to commit their nefarious criminal activity almost with a sense of impunity. An illustrative example is the snail’s pace of judicial process in the infamous Mumbai riot cases of 1992-93. The inadequacies of our Criminal Justice System, therefore, need to be comprehensively examined.288289Public OrderAnnexure-I(3) Contd.Annexure-I(3) Contd.In this regard, the recommendations made repeatedly by various Committees/Commissions, such as the National Police Commission, the Malimath Committee, the Padmanabhaiah Committee etc. have to be urgently considered. More specifically, the recommendations regarding amendments in the CrPC in respect of recording of the statement of witnesses, and in the Evidence Act in respect of recording confessional statements, need to be speedily acted upon.The ineffectiveness of our Criminal Justice System in dealing with criminal elements, also contributes to alienation of the public from the law enforcement agencies, making their task of public order management even more difficult. In such a scenario, it is imperative to search for the various legislative and administrative measures needed for better management of public order.The Committee on Reforms of Criminal Justice System (the Malimath Committee) has given an in-depth consideration to the phenomenon of growth of organised crime, terrorism etc. and their invisible co-relationship with the avowed objective of the latter to destroy the secular and democratic fabric of the country, and has specifically recommended enactment of a federal law to deal with certain categories of serious offences with inter-state and transnational ramifications. This needs immediate attention and proper appreciation.Public Order and Reforms in the PoliceLegally, the police are required to take cognizance of a public order issue only at a stage where a cognizable offence has taken place or where there is imminent threat to peace and order. There is no obligation placed on the police to explore possibilities of peaceful resolution of problems in the incipient stage itself, with or without involvement, as the case may be, of other stakeholders in the society. A time has perhaps come when, through appropriate provisions of law, it needs to be made obligatory on the police to adopt a more proactive approach, involving also other stakeholders, where necessary and feasible. But all this will have to be preceded by a change in public perception of the police.Building of a people-friendly police force will require changes in the recruitment process, training programmes and service conditions.The need for improving investigation skills, specialisation and improving the morale of the force is also constantly being voiced in various quarters.It is the role of the police, as the principal law enforcement agency, to preserve public order. Although the magistracy and the judiciary too have a vital role in preserving public order, it is the police, which have to bear the brunt of violations of the laws and also the ensuing violence. But in a large number of situations, addressing the root cause is much beyond their purview. The case of recent demolitions in Delhi is an example. The main cause there has been the non-enforcement of the building regulations by the officials who were entrusted this task. Another example is the ‘Ulhasnagar demolitions’. A large number of public disorders have administrative reasons as their root cause. Our response to public disorder should commence at the very initial stage, and it is here that the role of entire civil administration, including both regulatory and developmental agencies, becomes important. The challenge here is what institutional mechanisms are required to ensure that all wings of the Government realise their responsibility in maintaining public order.Need for Greater CoordinationFor efficient and effective tackling of the public order issues, the importance of cooperation and coordination among various agencies cannot be overemphasised. The capabilities of different intelligence agencies, state police and their specialised wings, other enforcement agencies as well as other wings of civil administration, have to be harmoniously integrated for achieving the larger objective of peace and order and security. Similarly, inter-state cooperation and centre-state cooperation also have to be promoted in an institutionalised manner.ConclusionDevelopment and security are truly mutually inter-related. We need therefore, to evolve a combined strategy to deal simultaneously with the twin challenges of development and security within the framework of a democratic polity committed to respect for all fundamental human freedoms and also committed to upholding the rule of law. Internal conflict management is the key to the success of participative democracy, strengthening national solidarity and cohesion and firming up the nation’s resolve and capability to meet any external threats to its security and territorial integrity. The deficiencies in this vital area need to be plugged through judicial and police reforms, better citizen participation in governance, transparency and more effective and integrated approach to public order maintenance.290291Public OrderAnnexure-I(3) Contd.Annexure-I(4)Violations of public order, given their socio-economic, political and administrative causes demand a concerted response from different wings of the civil administration. When this is done at the nascent stage itself, minor discords can be prevented from turning into major public disorders. The challenge lies in institutionalising a mechanism so that all wings of the civil administration as well as other stakeholders work in a coordinated fashion. I hope that this workshop would be able to come up with substantial recommendations for a framework and a roadmap for maintaining public order.National Workshop on Public Order11th-12th March, 2006S.V.P. National Police Academy, HyderabadList of ParticipantsMember of Parliament1.Shri Chandan Mitra, Editor, The Pioneer Judiciary/Advocates2.Dr. Justice V.S. Malimath, Former Chief Justice of Karnataka & Kerala High Courts3.Shri D.V. Subba Rao, Former Chairman, Bar Council of India4.Shri K.T.S. Tulsi, Senior Advocate, Supreme Court of India5. Dr A. Lakshminath, Dean & Registrar, NALSAR University of LawJournalists6.Shri Manoj Mitta, Senior Editor, The Times of India7.Shri K. Srinivas Reddy, City Editor, The HinduIAS Officers (Retd)8.Shri K. Padmanabhaiah, Representative of Government of India for Naga Peace Talks9.Shri K.R. Venugopal, IAS (Retd)292293Public OrderAnnexure-I(4) Contd.Annexure-I(4) Contd.10. Shri C.R. Kamalanathan, IAS (Retd)11. Shri K. Madhava Rao, Former Chief Secretary, Government of M P,IAS Officers (serving)12. Shri A.K. Srivastava, Joint Secretary (CS), Ministry of Home Affairs13. Shri R.H. Khwaja, Chairman & Managing Director, Singarenni Collieries Co. Ltd14. Shri L.V. Subrahmanyam, V C & M D, INCAPIPS Officers (Retired)15. Dr A.K. Samanta, IPS (Retd)16. Shri Satish Sahney, Chief Executive, Nehru Centre17. Shri S.V.M. Tripathi, Member, U P Human Rights Commission18. Shri R. Prabhakar Rao, Former DGP, Andhra Pradesh19. Shri P.S. Rama Mohana Rao, IPS (Retd)20. Shri C. Anjaneya Reddy, IPS (Retd)21. Dr. S. Subramanian, IPS (Retd)22. Shri Prakash Singh, Former Director General, BSF23. Shri Mahmood bin Muhammed, Former Ambassador to Saudi Arabia24. Shri M.M. Khajooria, Former DG of Police, J&K25. Shri V.N. Singh, IPS (Retd)26. Dr. D.R. Karthikeyan, Former Director, CBI & DG, NHRC27. Dr. P.S.V. Prasad, IPS (Retd)28. Dr. U.N.B. Rao, Secretary, Police Act Drafting Committee IPS Officers (serving)29. Smt Kanchan Choudhry, Director General of Police, Bhattacharya, Uttaranchal30. Shri Rakesh Jaruhar, Director (Training), BPR&D31. Shri K. Koshy, Director General of Police, Haryana32. Smt Manjari Jaruhar, Inspector General (HQ), CISF33. Shri S.T. Ramesh, Addl. DGP (Rectt & Trg), Government of Karnataka34. Shri Suresh Abaji Khopade, Commissioner of Police (Railways), Mumbai35. Shri M. Mahender Reddy, Commissioner of Police, Hyderabad36. Shri C. Balasubramanian, IGP, CRPF Southern Sector, HyderabadDefence37. Lt. Gen. M.A. Zaki, PVSM, AVSM, VrC (Retd) Academics38. Dr. Asha Bajpai, Associate Professor, Tata Institute of Social Sciences39. Prof. Aswini K. Ray, Professor (Retd)40. Prof. F.D. Vakil, Professor of Political Science41. Prof. G.R.S. Rao, Chairman, Centre for Public Policy and Social Development42. Prof. Gautam Pingle, Dean of Research & Consultancy, Administrative Staff College of India43. Prof. G. Hargopal, Professor294295Public OrderAnnexure-I(4) Contd.Annexure-I(4) Contd.Representatives of NGOs44. Ms. Maja Daruwala, Chairperson, CHRI45. Shri G.P. Joshi, Senior Programme Coordinator, CHRI Nominations from State Governments IAS Officers1.Shri Vivek Kumar Singh, Secretary, Information & Public Relations, Government of Bihar2.Dr. Amar Jit Singh, Commissioner of Health and Secretary, Family Welfare, Government of Gujarat3.Shri S.M. Vijayanand, Principal Secretary, CLSG& AR, Government of Kerala4.Shri Neeraj Mandloi, Collector & District Magistrate, Ujjain5.Shri Pankaj Jain, Commissioner & Secretary, IT Department, Government of Meghalaya6.Dr. Ashok Dalwai, Revenue Divisional Commissioner, Sambalpur7.Shri R. Venkat Ratnam, Special Secretary, School Education, Government of Punjab8.Shri R.M. Srivastava, Secretary, Home Department, Government of Uttar Pradesh9.Shri Trilochan Singh, Secretary, Personnel & Administrative Reforms, Government of West BengalIPS Officers10. Shri M. Bhaskar, Additional Director General of Police, Government of Andhra Pradesh11. Shri Manoj Kumar Lall, DIG / West Range, Government of Arunachal Pradesh12. Shri D.N. Gautam, Addl. DGP, Government of Bihar13. Shri Amrik Singh Nimbran, Inspector General of Police (Railways), Bihar14. Shri Kuldip Sharma, Additional Director General of Police (Training), Government of Gujarat.15. Shri Rakesh Malik, Additional Director General of Police (Reforms), Government of Haryana16. Shri Ashkoor Ahmed Wani, SSP, Baramulla, Jammu & Kashmir17. Shri Syed Ashaq Hussain, SSP, Anantnag, Jammu & Kashmir Bukhari18. Shri Jacob Punnoose, Additional Director General of Police, Government of Kerala19. Shri P.L. Pandey, Additional Director General of Police, Government of Madhya Pradesh20. Shri K.L. Prasad, Joint Commissioner of Police (SID), Government of Maharashtra21. Shri Sanjeev Kalra, DIG of Police (Admn), Punjab Police Headquarters22. Shri Kanhaiya Lal, Addl. Director General of Police, (Admn, Law & Order), Government of Rajasthan23. Shri S.D. Negi, IG of Police, Law & Order, Government of Sikkim296297Public OrderAnnexure-I(4) Contd.Annexure-I(4) Contd.24. Shri K.V.S. Murthy, Addl. Director General of Police (Law & Order), Government of Tamil Nadu25. Shri A. Ch. Rama Rao, Addl. Director General of Police (Law & Order), Government of Tripura26. Shri Shailja Kant Misra, Inspector General of Police, Lucknow27. Shri Bhupinder Singh, Addl. Director General of Police, Government of West Bengal28. Shri Ramnivas Meena, Addl. Superintendent of Police, Daman & Diu and Dadra & Nagar Haveli29. Shri S.K. Jain, Joint Commissioner of Police, Delhi30. Shri Bipin Gopalakrishna Secretary, PCAS, Home, Government of KarnatakaSVP National Police Academy1.Shri Kamal Kumar, Director2.Shri Santosh Macherla, Joint Director3.Shri A. Hemachandran, Deputy Director4.Shri Ashish Gupta, Deputy Director5.Dr S. Darvesh Saheb, Deputy Director6. Ms Tilotama Varma, Deputy Director7.Dr A.K. Saxena, Professor (T.M.)8.Shri G.H.P. Raju, Assistant Director9.Shri Rakesh Aggarwal, Assistant Director10. Shri N. Venugopal Assistant Director11. Shri B. Bala Naga Devi, Assistant Director12. Shri Abhishek Trivedi, Assistant Director13. Smt Satwant Atwal, Assistant Director14. Shri G.A. Kaleem, Assistant Director15. Dr A.K. Bapuly, Assistant DirectorOthers1.Shri R. Viswanathan, Consultant, ARC2.Shri Y.S. Rao, Consultant, ARC3.Shri Ashwin Mahesh, Consultant, ARCAdministrative Reforms Commission1.Shri M. Veerappa Moily, Chairman2. Shri V. Ramachandran, Member3. Dr A.P. Mukherjee Member4. Dr A.H. Kalro, Member5. Dr Jayaprakash Narayan, Member6.Ms Vineeta Rai, Member Secretary298299Public OrderAnnexure-I(5) Contd.Recommendations Made at ‘National Workshop on Public Order’March 11th-12th 2006SVP National Police Academy, anised Violence, Terrorism & Extremism: Role of the State and Reforms?A national forum should be set up for formulation of policy and strategy for dealing with terrorism.?A stable, comprehensive, all India anti-terrorist legislation, having adequate safeguards against abuse, must be put in place.?While terrorist violence has to be effectively dealt with by the security forces, people’s grievances – genuine and perceived – which get exploited, have to be redressed by concerned agencies with a sense of urgency.?A stable, effective and responsive administration is an antidote to terrorism.?For effectively dealing with violence, outdated laws (eg., The Explosive Act), containing irrelevant provisions resulting in delay in investigation and prosecution of offenders, must be amended.?Developmental activities should be planned and executed with due regard to problems of displacement of people, resettlement etc., so that violent eruption of conflicts on such issues can be avoided.?For tackling the root causes of Left Wing Extremism, relevant socio-economic issues such as land reforms, alienation of tribals from forest land etc. should be addressed and relevant laws must be strictly enforced.?An all-India legislation should be enacted for tackling the growing menace of organised crime.?Terrorism has to be fought by the security forces with the cooperation of the people. Appropriate sensitisation training should be given to security forces for avoiding alienation of the people and for enlisting their cooperation.?The administrative response to the problem of the North-East needs a thorough re-examination. The All India Service Cadre of North East has to be streamlined to make it effective and responsive to the problems of the people. A common cadre for the entire North-East would be desirable.Annexure-I(5) Contd.?Administration should be sensitised to problems and denial of the existence of problems should not be the approach.?Administrative reforms should aim at achieving zero tolerance of corruption. Increasing manifestation of frauds/scams involving the highest levels of the government has assumed the character of organised crime. Administrative reforms should address this issue.?Administrative reforms should adequately focus on improving the conditions of the poor and the deprived, in tune with our constitutional values. The civil administration should be sensitized on this through proper training, and the tendency of denial of grave issues/problems should be checked.II. Role of Government, Executive Magistracy & Judiciary in Public Order Management: Need for Reforms?Regular meetings should be held between the DM and the SP which can help anticipate and prevent public disorder situations.?There should be proper training for Executive Magistrates at the State level for effective discharge of their functions.?The police must proactively invoke participatory engagement of the communities they serve, and rebuild public confidence in the institution.?Modern methods of riot response need to be studied and adopted. While use of force may become unavoidable in some situations, the endeavour should be to avoid loss of lives in dealing with Public Order situations.?Public Order should be included in the Concurrent List under the Seventh Schedule of the Constitution.?The possibility of land-related conflicts becoming acute with potential for public disorder should be taken note of the initial stages itself, and measures should be taken for resolving the same through policy measures and other means.?Commissionerate of Police system which allows greater functional autonomy for the police is needed in urban areas. However, restructuring the police along these lines need not be linked to the municipal status itself.?The impact of judicial decisions on Public Order need to be recognised. The judiciary has to be sensitised to the same.300301Public OrderAnnexure-I(5) Contd.?Under the police-magistracy relationship, the following divergent viewpoints emerged:?SDPOs should be empowered under the CrPC. to exercise the authority of an Executive Magistrate.?Police being a coercive agency, civilian control is necessary and unavoidable and the same should be with Executive Magistrates.?Civilian control should be exercised through independent enquiry commissions like in the UK.?Emphasis should be on professional supervision of police work through a police hierarchy which should be made accountable.?The National Police Commission recommendations regarding coordination at the district level between SP and Collector need to be implemented.?When major decisions likely to have an impact on Public Order are taken by the government, there must be prior consultation with law enforcement agencies.?Before the police is given authority under new legislations, the capability and wherewithal of police for enforcing the same should be taken into account.?There should be codification of functions and responsibilities of different agencies involved in the Criminal Justice System, as envisaged in the Crime and Disorder Act, 1998 of UK.III. Role of the Police in Public Order Management: Need for Reforms?The recommendations made by the various Committees / Commissions, such as the National Police Commission, Rebeiro Committee, Padmanabhaiah Committee, Justice V.S. Malimath Committee etc. and the observations of NHRC with regard to the role of police in Public Order management, must be taken into account.?The core duties of police should be specified within a new legal framework (Police Act).?Basic facilities for strengthening police stations – infrastructure, forensic science field units, non-lethal weaponry, adequate staffing etc. – must be provided.?Separation of investigation from law and order at police station levels should be done This may begin with urban police stations.Annexure-I(5) Contd.?Provisions for sanction for prosecution envisaged in Section153(A) IPC and power to withdraw prosecution u/s 321 CrPC must be revisited and revised.?Greater avenues are needed for empowerment and career progression of constables. Direct recruitment at Dy SP level to be stopped to enable this. However, this suggestion on direct recruitment of Dy SPs was not unanimous.?There should be a thorough screening for career progression at all levels in the police (from constable to IPS).?The Police Act of 1861 should be replaced with another law for making police accountable to law and community.?State Security Commissions, as recommended by NPC, should be established.?There should be security of tenure for police officers from the level of Station House Officer to DGP.?Local community should be involved in Public Order management.?Police should be made a plan subject and brought under the Concurrent List of the Constitution.?Certain crimes with inter-state ramifications and national security implications should be categorized as ‘Federal Crimes’ and a dedicated agency for its investigation should be established. This could be achieved through the enlargement of the role and infrastructure of the present CBI.?Police performance indicators should be standardised. Surveys on public safety, fear of crime etc. should be included as parameters for this purpose.?Recruitment process in the police should emphasise on testing of aptitude, psychological screening including IQ/EQ.?More and more scientific and technological aids and e-governance measures should be adopted in policing.?There is greater need for civil police than militarising it. Training should aim at preparing the police for adopting humane approach in their work.?The teeth-to-tail (officer:constabulary) ratio in the police should be suitably altered to avoid disconnect between officers and constabulary.?Peripheral police duties should be outsourced.?Induction of more women should be effected in the police.302303Public OrderAnnexure-I(5) Contd.?There is an urgent need to address the issue of low self-esteem of the constabulary. This requires a series of organisational/governmental measures such as better status and salary, improved working conditions, other measures of empowerment like entrusting the constables with more professional work than only mechanical chores.?A holistic culture of law enforcement should be created across different organisations.?Standard guidelines for exercise of power must be evolved based on best practices.The same should be inculcated through appropriate training.?Good initiatives promoting community participation in policing should be sustained through legal and institutional framework.?Benchmarks for police performance should be evolved and utilized for proper assessment.?Credibility of the police as a professional, functionally-autonomous agency should be established by insulating them from extraneous interferences.?Arbitrary exercise of authority by police should be curbed through strict disciplinary control.?Over-burdening the police with powers under numerous special and local laws needs a review and wherever feasible other appropriate agencies can discharge the function.?Any violation of the law by the police themselves needs to be seriously dealt with.?The police should be given greater service orientation.?The Right to Information Act should be fully implemented effectively in the police organisation.Annexure-I(5) Contd.IV. Public Order: Need for Reforms in the Criminal Justice System?Prosecution wing to be headed by an officer of rank of DGP under the overall administrative control of the Advocate General of the State. There was also a view that this measure in itself may not lead to strengthening the prosecution.?The judges should try to find out the truth instead of acting merely as an umpire.?Witness should be treated with dignity. This should include providing a seat for the witness, while giving evidence.?Witness should be compensated for the loss due to attendance in court.?Effective programmes of witness protection including that of their families should be introduced.?Situations in which witnesses are unnecessarily called again and again in the courts must be avoided.?Expert evidence should be taken on affidavit.?The law of perjury should be made more stringent and effective.?All the amendments in criminal laws, as suggested by the Malimath Committee, should be implemented.?Every police station should have a proper interrogation room with audio-video facilities.?Mobile forensic units should be deployed adequately in police set-ups.?An Integrated Court Complex at every police station similar to the pattern in UK, should be adopted.?All the regulatory authority under the law should be vested with the police; quasi-judicial authority and functions should be left to the Magistrates.?Legal aid system should be strengthened.?For reducing the huge pendency in the courts, a pragmatic approach is needed. A system of discarding further action in respect of cases of a minor nature after careful scrutiny by a duly constituted independent committee was recommended.?The system of plea bargaining should be introduced for speedy disposal of criminal cases.304305Public OrderAnnexure-I(5) Contd.Annexure-I(6)?A National Arbitration Commission may be constituted for resolving contentious issues with potential for serious public order problems.?The number of days on which the courts are closed are far too many due to large number of holidays for the judiciary. Further, after the hearing is completed, sometimes there is inordinate delay for pronouncing the judgements. These issues need to be gone into objectively and remedial measures introduced.?A tendency on the part of judiciary to micromanage executive functions leading to practical problems, needs appropriate moderation.Roundtable on Policing and Public Order10th June, 2006Commonwealth Human Rights Initiative (CHRI), New DelhiList of ParticipantsSl. No.NameDesignation1. Mr. Justice Rajinder SacharFormer Chief Justice, Delhi High Court2. Ms Teesta SeetalvadAdvocate, Mumbai3. Mr Imtiyaz AhmedSocial Activist, Delhi4. Mr Ram Narayan KumarSocial Activist, Delhi5. Mr Suhel TirmiziAdvocate, Ahmedabad6. Mr Suhas ChakmaSocial Activist, Delhi7. Mr Vineet NarainJournalist, Delhi8. Mr Sanjoy HazarikaSocial Activist, Delhi9. Dr V. SureshAdvocate, Chennai10. Mr Justice H. SureshFormer Judge, Bombay High Court11. Mr Pradip PrabhuSocial Activist12. Mr Asghar AliSocial Activist, Mumbai13. Ms Usha RamanathanAdvocate, Delhi14. Mr K.S. DhillonFormer Director General of Police15. Mr Mihir DesaiAdvocate, Mumbai16. Mr S.R. SankaranFormer Secretary to the Government of India17. Mr UmakantSocial Activist, Delhi18. Mr B.N. JagdishAdvocate, Bangalore19. Mr Bikramjeet BatraAdvocate, Delhi20. Mr K.G. KannabiranAdvocate, Hyderabad306307Public OrderAnnexure-I(6) Contd.Annexure-I(7)Administrative Reforms CommissionSl. No.NameDesignation1. Shri M. Veerappa MoilyChairman2. Shri V. RamachandranMember3. Dr A.P. MukherjeeMember4. Dr A.H. KalroMember5. Ms Vineeta RaiMember SecretaryRecommendations made at the Roundtable on Policing and Public Order10th June, 2006Commonwealth Human Rights Initiative (CHRI), New DelhiI.Minimising the Possibility of Disorder?Good and equitable governance is required to sustain public order. Laws that empower people rather than the government should be enacted. Emphasis should be placed on creating “consensual equilibrium rather than cohesive equilibrium”.?The reasons behind occurrences of large-scale disorder should be clearly analysed and publicly debated to prevent recurrence. The focus should be on managing state power and not on managing people.?Instead of giving more powers to law enforcement agencies, focus should be placed on conditioning the exercise of existing powers. The police will have to be made more accountable, and stricter punishment has to be imposed. Laws that provide impunity for law enforcement agencies should be repealed.?Administrative Reforms efforts must help marginalised sections of society – the poor, Dalits, Adivasis, and minorities – realise their rights. Existing provisions to safeguard the rights of vulnerable groups should be properly enforced.?Every aspect of police functioning, administrative functioning and judicial functioning should be made public and transparent immediately, and on a regular basis. The institutional culture has to be changed.II. Democratise Governance?The whole culture, legal system and the manner in which government has been carried out needs to be understood, revamped, and brought in tune with modern times.?Policing should be fashioned towards addressing the growing needs and changing face of society.?The police should be trained on secular values.?Instead of looking towards the recommendations of the Malimath Committee308309Public OrderAnnexure-I(7) Contd.that seek to weaken fair trial guarantees, emphasis should be placed on making the state machinery more accountable.?Space for public protest, legitimate dissent has to be zealously protected by the government.?Constitutional discipline needs to be reinforced in the police, bureaucracy and the judiciary.?When crimes are established by the process of law, whether by courts or commissions, then irrespective of culpability, reparation principles must be guided by rationality, justice and completeness. Reparation to victims to torture should be built into the law through the enactment of a special Act on compensation.?A caste study should be conducted to see which castes are dominating and who are exploiting to formulate a policy on representation in the police, judiciary, medical and educational fields.?If reform exercises are to be made meaningful, each proceeding should be widely publicized in regional language newspapers and suggestions invited from ordinary people.III. Enhance Responsiveness of the Police Administration?Landmark rights, affirming court directives, should be incorporated into the Code of Criminal Procedure, police manuals, and rules.?The government must exercise its control over the police strictly in accordance with the law. Day-to-day interference in police work – particularly in transfers, postings and criminal investigations – needs to be done away with.?The role and responsibility of the political executive and the head of the police should be clearly delineated and prescribed in law, to minimise the possibility of external influence in policing.?There should be proper procedures to ensure merit based appointments and transfers in the police. Transfers of senior officers should not be done by the Chief Minister or Home Minister, but by a committee consisting of the Chief Minister, the Leader of the Opposition, a High Court Judge and prominent citizens.?The role of the police, in terms of public order maintenance, must be clearly defined. Things like preventing gambling should be taken out of the ambit of police duties.Annexure-I(7)?The police must reflect the composite mix of society. Efforts should be made to ensure that women, minorities and Dalits are represented in the police.?More women should be included in the police and given key posts to bring improvements in attitude and approach towards gender issues.?The police should be made accountable under the Right to Information Act, 2005. Everyone registering an FIR should have the right to know what action has been taken on their FIR, and what is the current stage in investigations.?There should be annual evaluation of police performance by an independent board. Parameters should include police response to crime, particularly public satisfaction, victim satisfaction and operational efficiency. A social audit of the police should be undertaken at the state, district, city, and mohalla levels.IV. Make the Police Accountable for Wrongdoing?The requirement of having to obtain prior sanction before prosecuting police officers for wrongdoing should be done away with.?Disciplinary proceedings should be completed expeditiously and swift action should be taken against errant officers.?A District Complaints Authority to inquire into important cases, referred by the National Human Rights Commission and State Human Rights Commissions, should be considered.?There should be an independent human rights complaints monitoring mechanism at the police station level that is accountable to the human rights commissions, but in their rejuvenated form.?A credible external mechanism to address complaints against the police should be put in place. Either the existing human rights commissions should be adequately strengthened, or an exclusive body to deal with police related complaints should be established as in other jurisdictions.?Human Rights Courts as mandated by the Protection of Human Rights Act, 1993 should be properly constituted and operationalised through the enactment of rules.?The police should be rigorously made to obey Supreme Court guidelines laid down in the D.K. Basu case.310311Public OrderAnnexure-I(7) Contd.Annexure-II (1)?Anomalies in the Indian Evidence Act, 1872 that reject the admissibility of confessions made to police officers [Section 25], but make admissible, recoveries made by the police through the very same confessions [Section 27], should be removed by repealing Section 27.V. Apart from the above, there was strong opposition to the recommendations suggested in the Report of the Committee on Reform of the Criminal Justice System (Malimath Committee Report).Questionnaire for Gathering Views & Opinionson ‘PUBLIC ORDER’BackgroundPublic order is synonymous with peace, safety and tranquility of the community. Maintenance of public order is a core function of governance. Any contravention of law affects peaceful order to varying degrees and can be referred to as a problem of law and order. It becomes a public order issue, when it affects the even tempo of life of the community. Public order is also linked with the security of the State. When a public order problem is not promptly and effectively resolved, it can assume grave proportions, threatening even the unity and integrity of the country and security of the State. A plethora of issues ranging from agitation by students to terrorism and insurgency come under the scope of public order issues.2.India today is poised to emerge as a global economic power with all its high growth rateof economy and all-round economic development. For realising our legitimate aspirations of economic development, it is essential that the problems of peace and order be managed efficiently in the country. No developmental activity is possible in an environment of insecurity and disorder. Failure to manage the multifarious problems arising out of violent conflicts based on religious, caste, ethnic, regional or any other disputes, can lead to unstable and chaotic conditions. Such conditions not only militate against realisation of our economic dream, but also would jeopardise our survival as a vibrant democracy. We have to look at the problem of public order management and the role of law enforcement in that regard, in this perspective.QUESTIONNAIRE1.Which are the problems and issues in our country that can be termed as ‘Public OrderIssues’, in your opinion? Please name them in descending order of their importance.2.Are you satisfied with the system and the manner in which Public Order issues /situations are being managed in the country? If not, please specify reasons.3. Are you aware of the broad legal framework and administrative arrangements for Public Order Management in the country?312313Public OrderAnnexure-II(1) Contd.4.If so, what do you think are the strengths of our legal framework and administrativearrangements in this regard?5.What, in your opinion, are the weaknesses or inadequacies of the legal frameworkand administrative arrangements for managing Public Order issues/situations?6.Do you think any changes are necessary in our laws (substantive, procedural laws orthe law of evidence) dealing with Public Order management? If so, please specify.7.Further, do you think our administrative arrangements/rules to deal with Public Ordermanagement are adequate and efficacious? If not, what are the inadequacies in your view and what should be done to rectify the same?8.There is a perception that in dealing with many public order situations, the rootcause of the problem is not adequately addressed. In this regard, the role of the entire civil administration – both regulatory and developmental agencies – assumes importance. What institutional mechanisms, in your view, are required to ensure that all wings of the Government effectively discharge their responsibility in the management of public order?9.What should be the role of Executive Magistracy in the management of public ordersituations? Would you like to suggest any improvements in this regard?10. In a democratic system of governance, local authorities, such as Panchayats, have an important role. Could the local authorities be legally entrusted with responsibilities relating to conflict resolution?11. Do you think Non-Governmental Organisations (NGOs), social organisations/ groups, social workers, etc., if structurally involved, can play a meaningful role in Public Order Management, including resolution of conflicts in incipient stages, mitigating surcharged atmospheres and/or healing the wounds for long-term peace? If so, what are those Public Order issues/situations in which their help should be enlisted by the concerned agencies?12. What in your opinion, should be the structured mechanism (also duly suggesting their role as well as accountability) to involve the above-mentioned organisations/groups/ individuals in the periods preceding, during and following a Public Order situation?13. The media – print as well as visual – have an important role in Public Order situations. Responsible actions by media can substantially contribute to resolution of conflicts and alleviating tensions. Unmindful reporting can lead to undesirable consequences. What are your views and suggestions in this regard?Annexure-II(1) Contd.14. Similarly, what are your views and suggestions with regard to the role of political parties – be it the ruling party or those in opposition – in Public Order management? What measures are needed to strengthen that role?15. Many of the challenges to Public Order today have their manifestation in phenomena like Terrorism, Organised Crime and other serious crimes of inter-state dimensions. There is a view that to ensure uniformity of response to such crimes, across-the-States, we need to adopt the concept of categorising such crimes as ‘Federal Crimes’ and have a federal law to deal with them. What is your view in this regard?16. In our constitutional scheme, Public Order Management is primarily the responsibility of the States. Do you feel satisfied with this arrangement or would you think that in view of the emerging scenario of many public order issues having serious implications for national security and economic development, the Union Government should play a more visible role in the handling of such issues/situations?17. ‘Public Order’ is a subject included in List II (State List) under the Seventh Schedule of the Constitution. This denies to the Parliament and the Central Government even a legislative/policy-making role in matters relating to Public Order. There is a view that since now many public order situations having ramifications on national security and other national interests, ‘Public Order’ and ‘Police’ (being the main instrument of maintenance of Public Order) should be brought under List III (Concurrent List), without diluting, in any manner, the federal nature of our polity. Do you concur with this view or not? Please specify reasons also.18. What other measures, if any, need to be taken, in your view, to ensure that the Central Government is able to fulfill its due role in management of Public Order issues/situations having dimensions of national interest?19. The police being the principal law enforcement agency of the country, are in the forefront of management of Public Order situations. The functioning of the police is primarily governed by the Police Act of 1861, which is now being perceived as archaic and not reflective of our constitutional/democratic aspirations. Would you think that this law needs to be replaced?20. If so, what new provisions, if any, would you like incorporated in a new Police Act?21. The role of police in Public Order Management, at present, is on a reactive mode, as per the statutory provisions under the current laws. There is no obligation on the police to explore possibilities of peaceful resolution in the early stages, with or without the314315Public OrderAnnexure-II(1) Contd.Annexure-II(2)involvement of other stakeholders in the society. Also could the police be given a facilitator’s role in such cases? Do you think it is necessary to change the laws in this regard?22. How to gear up the civil administration and the police to enable them to take effective preventive action to avail major public disorder situations?23. There is a view that the functional capabilities of the police and other concerned agencies need to be augmented to enable them to deal with growing dimensions of public order problems efficiently and effectively. What would you think are such capacity building measures, needed to be put in place?24. It is widely felt that the police machinery in the country, to day, is over-burdened with rising magnitude and complexities of their duties. Do you think some of the duties and functions currently performed by the police can be outsourced, to enable the police to concentrate on their core functions? If so, please specify functions that can be outsourced.25. What, in your view, are the other measures needed to improve the working and living conditions, as well as morale and motivation of policemen at the cutting edge levels of constabulary and other field police officers, to enable them to tackle complex Public Order Issues with professional efficiency but with a human face?26. In a democratic set up, the police are accountable to the public and the law, for efficient performance of their duties. What do you think should be the measures and mechanism for ensuring the accountability of the police to the people and the law?27. Efficient management of Public Order situations/issues requires involvement of several other agencies besides the police. In this context, the importance of inter-agency cooperation and coordination cannot be over-emphasized. What measures, in your opinion, are needed to promote inter-agency, inter-State and Centre-State cooperation in an institutionalised measure, to ensure synergy in the management of public order issues/situations?Analysis of the Replies to the Questionnaire on Public Order1. Which are the problems and issues in our country that can be termed as ‘Public Order Issues’, in your opinion? Please name them in descending order oftheir importance.Following are the public order issues in our country, in descending order of importance:a)Religious fundamentalism and communal strifeb)Caste and regional conflictsc) Terrorismd) Left Wing extremisme)Organised crimef)Armed insurgencies in the North Eastg)Labour/agrarian/student/political agitationsh)Violent demonstrations against government policiesi)Conflicts over sharing of resourcesj)Disasters – natural and man-madek)Strikes in essential service sectorl)Factionalismm) Kidnappingn)Political murders316317Public OrderAnnexure-II(2) Contd.2. Are you satisfied with the system and the manner in which Public Order issues / situations are being managed in the country? If not, specify reasons.Table 1 : Satisfied with the management of public order issuesAnnexure-II(2) Contd.3. Are you aware of the broad legal framework and administrative arrangements for Public Order Management in the Country?Table 2Yes84%No13%To a great extent2%To Some Extent1%Yes11%No79%To a great extent1%To Some Extent5%Can’t Say4%Reasons for dissatisfaction:(a) Administration is not proactive(b) Administration does not address the root causes of the problems. There is no attempt to find long term solutions(c) Everyone’s opinions and viewpoints are not considered while resolving issues – NGOs, media and social workers are hardly ever involved(d) Lack of accountability to public(e) Obsolescence of the system wherein the district magistrate is at the helm of the law and order machinery(f) Inadequate and ineffective laws to handle public order issues(g) Lack of equipment, inadequate training and legal knowledge of law enforcement agencies affects the manner in which public order issues are handled(h) Multifarious controls and interference of extraneous powers(i)No enforceable guidelines for media leads to their spreading misinformation andover sensationalisation of issues4. If so, what are the strengths of our legal framework and administrative arrangements in this regard?Strengths in legal framework:1. Clearly laid down legal frameworka. Constitution of Indiab. Civil and Criminal Procedure Code2. Criminal Justice System working under a functional democracy and a well-documented Constitutiona. Several layers of judiciaryb. Proactive judiciaryc. Separation of judiciary from executive3. Multifarious democratic and legislative fora are available to discuss issues of public importance4. Legal strength with the police and executivea. Power with the SHO and his subordinate staff to initiate preventive actions to combat public order problemsb. Discretion to decide quantum of force while handling public order issues318319Public OrderAnnexure-II(2) Contd.Annexure-II(2) Contd.c. Promulgation of prohibitory ordersd. Preventive detentionse. Power to regulate processionsf. Provisions of immunity to the police officer while discharging legitimate functions in dealing with public order issues5. Judicial / administrative review of police action Strengths in administrative framework:1. Firmly established traditions2. Well spread intelligence network3. Trained police machinery4. Political accountability of the police5. All India Services bring uniformity to dealing of public order issues6. A strong administrative system is able to handle public order issues against heavy odds5. What, in your opinion, are the weaknesses or inadequacies of the legal framework and administrative arrangements for managing Public Order Issues/situations?Weakness in legal framework(a) Delays in delivery of justice by the criminal justice system(b) The Criminal justice system favours the accused; the rich and powerful are able to manipulate it to their benefit(c) Evidence Act need to be re-examined in the context of public order issuesi.Provision of onus of proof on prosecutionii.Guilt to be proved beyond all reasonable doubt(d) Inadequate and ineffective preventive laws.(e) Inadequate and ineffective laws to deal with difficult problems like terrorism and organised crime(f) Inadequate protection to victims and witnesses Withdrawal of cases for reasons of expediency(c) No penal provision, other than departmental action, exists for dereliction of duty to maintain public orderWeaknesses in administrative frameworka) Administrative decisions are based on political expediencyb) Lack of autonomy and freedom from interferencec) Overlapping jurisdiction of police and magistracy leads to inordinate delays, confusion and duality of controld) Police have the responsibility of tackling public order problems but not given adequate role in conflict resolution and negotiation processe) Lack of an institutional mechanism defining the roles and responsibilities of the various stakeholders in conflict resolutionf) No system of identification of citizens like unique identity cards, etcg) No central computerised database on criminals, especially anti-nationalsh) Not many States have specialised wings to handle public order problems like left-wing extremismi)Lack of cohesive policy between the Centre and the States and between the States – ambiguity in federal system in dealing with public order issuesj)Lack of use of technology and trained manpower320321Public OrderAnnexure-II(2) Contd.Annexure-II(2) Contd.6. Do you think any changes are necessary in our laws (substantive, procedural laws or the law of evidence) dealing with Public Order management? If so, please specify.Table 3 : Is there a need to make changes in law?Yes79%No10%Did Not Respond11%Specific changes recommendedMost of the respondents felt that recommendations of the Malimath Committee in this regard needs to be implemented.Changes in substantive laws(a) Remove distinction between cognizable and non-cognizable offences(b) Strengthen preventive detention law and other specific acts dealing with public order issues(c) Enhance punishment for offences related to public order(d) Stringent punishment needed for willful dereliction of duty by public servants Changes in procedural laws(a) Getting 161 CrPC statements signed by witnesses(b) Adjournments during trials be made more stringent and specific reasons be cited for the same(c) A definite time frame should be fixed for completion of trials in cases relating to public order issues(d) Police officers be given powers for binding down persons u/s 106-110 CrPC(e) Provision of witness protection Provision of withdrawal of cases (Section 321 CrPC) should be removed(f) Provision of anticipatory bail be made more stringent(g) Sections 147, 148, 149, 152, 188 (for violation of prohibitory orders under Section 144 CrPC) IPC should be made non-bailable(h) Enhance time to keep a person in custody under Section151 CrPC to 15 days(i) Power of award of compensation to the victims of riots out of the confiscation of property of the convicts in riot cases or fine on conviction(j) Increase time of producing the arrested person before a Magistrate from 24 hours to at least 48 hours.Changes in law of evidence(a) Proactive role of the judges in “finding the truth” rather than merely shifting evidence(b) Convictions should be based on preponderance of possibilities rather than beyond all reasonable doubts(c) Confessions before senior police officers be made admissible(d) Suitable amendments be brought about to avoid acquittal on grounds of lapses in investigation – judiciary should become more proactive to order further investigation(e) Adverse inference should be drawn if certain information/document/object which is in the sole custody of the accused is not produced(f) Subsequent change in statement by a witness, once it has been recorded before a judicial magistrate, should be treated as perjury. Procedure to deal with perjury be simplified and punishment therefore be made more stringent.(g) Circumstantial evidence and motive behind the crime should be given equal weightage as direct evidence322323Public OrderAnnexure-II(2) Contd.Annexure-II(2) Contd.7. What are the inadequacies in our administrative arrangements/rules to deal with Public Order management and what should be done to rectify the same?Table 4 : Are existing administrative arrangements/rules adequate and effective?Yes20%No74%Did Not Respond5%Partially1%Inadequacies(a) Functional control of the police by the executive(b) Police has no functional autonomy(c) Extraneous interference in public order management(d) Lack of training(e) Lack of modern equipments(f) Lack of empowerment of lower ranks(g) Improper performance monitoring systems and lack of guidelines for fixing accountability(h) Thrust of rules/administrative arrangements for public order management should change from ‘law-centric’ to ‘people-centric’(i) Inadequate participation of civil society in public order management(j) No provision for rehabilitation of victims of public disorder SolutionsApart from measures to remove the above inadequacies, other solutions suggested are as follows:(a) Constitute a State Security Commission(b) Make police a plan subject for budgetary allocation(c) Provide for adequate manpower in police stations(d) Changes required in police recruitment, promotion and transfer(e) Reservation for women in police(f) The Superintendent of Police should be made the head of the law and order and the District Magistrate should be given a coordinating role8. What institutional mechanisms, in your view, are required to ensure that all wings of the Government effectively discharge their responsibility in the management of public order?Constitutional mechanisms to ensure that all wings of the government effectively discharge their duties:a) Conflict resolution should be clearly specified in the charter of duties of various wings of the governmentb) Broad guidelines to handle public order problems, once framed by a think tank of eminent people, should remain the same irrespective of the party in powerc) Establishment of National and State Arbitration Councils, comprising retired judges with a senior administrator, police officer and some distinguished citizens as advisors, to propose policy and strategies to handle serious law and order issues so that there is a continuity of approach despite change of governmentsd) A mechanism should be devised to make bureaucrats accountable for law and order problems that emanate from lack of implementation of developmental policies and programmese) Village panchayats should be made responsible for law and orderf) Police should be made party to planning and implementation of developmental work in left wing extremist affected areasg) Public scrutiny of the performance by the citizens should be introducedh) NGOs should be encouraged; civil society should assist and guide the police in dealing with sensitive issues324325Public OrderAnnexure-II(2) Contd.Annexure-II(2) Contd.i) Better coordination between all wings of the governmentj) Devise better and empathetic ways to deal with public grievancesk) An independent ‘Ombudsman’ will inspire public confidencel) Transparency in administration should be ensured9. What should be the role of Executive Magistracy in the management of public order situations?Table 5 : Is there a role of Executive Magistracy in public order management?Role of executive magistrates is appropriate(i) Proactive role of magistrates is desirable(j) Magistrates have a restraining influence on the police(k) Magistrates have a major role in relief work during disasters10. Could the local authorities be legally entrusted with responsibilities relating to conflict resolution?Table 6 : Can Local Bodies be entrusted with such responsibilities?Yes7%Yes, with provision40%No37%Did Not Respond16%Yes64%No34%Didn’t Respond2%326There are two view points with respect to the role of the Executive magistracy. Role of executive magistrates should be reduced(a) Powers be vested with police officers under Sections 106-110, 129, 133, 144 CrPC preventive detention(b) Decision making in public order issues should be vested with the police(c) Their role should be limited to mitigating the causes of public disorder(d) Duality of command creates confusion(e) Magistrate’s decision while externing criminals, allowing processions, etc may be at variance with police recommendations, leading to law and order problems(f) Police are specially trained for law and order; administrators should concentrate on developmental issues(g) Their role should be limited to conflict resolution and negotiations(h) Regulatory powers under the Cr.PC should be vested in police officers while judicial or quasi judicial powers and functions should remain with Executive Magistrates.Viewpoints in favour of empowering panchayats(a) According to Article 243(A) of the Constitution, the Gram Sabha exercise such powers and functions at the village level which may be entrusted by the State Legislature by law – hence a provision already exists to empower them(b) Formalisation of the system is required(c) Minor disputes could be referred to the panchayats, with the power to impose fine only(d) The men in the panchayat need to be trained(e) However, nyaya panchayats should be constituted separately from the gram panchayat to keep the executive separate from the judiciary(f) Panchayats should have some control over the police(g) Panchayats should be placed under the supervision of a regulatory body.327Public OrderAnnexure-II(2) Contd.Annexure-II(2) Contd.11. What are the Public Order issues / situations in which the help of NGOs social organisations/groups and social workers should be enlisted by the concerned agencies?Table 7 : Should NGOs, Social Organisations and Workers be involved?Yes79%No20%Didn’t Respond1%Issues and areas where they can be involved:a) Crime against weaker sections especially women, child abuse, rehabilitation ofjuvenile delinquents and street beggarsb) Addictions like alcoholismc) Family – marital and property disputesd) Inter/intra village disputese) Mitigating communal tensionsf) Opinion and awareness buildingg) Identifying issues before they snowball into major conflictsh) Grievance Redressali) Interface between administration and publicj) Role in left wing extremism, insurgency and caste conflictsk) Enforcement of social legislationsHowever, other view point advised caution in over use of these agencies for some of themmay have their own hidden agendas also.12. What should be the structured mechanism to involve the above-mentioned organisations/groups/individuals in the periods preceding, during and following a Public Order situation?Structured mechanism to involve NGOs, social workers, etc:a) Make the SDM, SDPO and member of an NGO collectively responsibleb) Regular coordination meetings both at the sub division and district levelsc) Create a legal frameworkd) Training of these organisations, wherever requirede) Black list of NGOs, if found to indulge in damaging actsf) Tribunal can oversee their performanceg) One suggestion was to limit their role in advisory capacity with proper scrutiny of membership of this advisory board13. What are your views and suggestions with regard to the role of print and visual media in conflict resolution and alleviating tensions?Role of the mediaa) Freedom of expression and Free Press are cardinal principles of a democracyb) Media plays a positive role in creating awareness in the public and being a watch dog of the governmentCautiona) However, a code of conduct needs to be evolved in order to avoid over- sensationalisation and misreportingb) Media should be trained and sensitized, wherever requiredc) Media should also educate the public about their duties and responsibilities and highlight the disastrous consequences of indifference of the enlightened citizens.328329Public OrderAnnexure-II(2) Contd.Annexure-II(2) Contd.14. What are your views and suggestions with regard to the role of political parties (ruling party or opposition party) in Public Order Management?Measures to strengthen role of political parties in public order management:a) Evolve a national consensus and code of conduct by the National Integration Councilb) Recommendations of the NPC in this regard and the guidelines issued by the MHA in 1997 are pertinentc) Elected representatives, irrespective of party affiliations, may be co-opted into district level committees to monitor public order issuesd) Use the mass base of the political parties to generate opinion and arrive at consensuse) Political parties should keep themselves away from the executive function of the police i.e. give police the functional autonomyf) Take measures to ensure that criminals don’t enter political stream15. We need to adopt the concept of categorising crimes like Terrorism, Organised Crime and other serious crimes as ‘Federal Crimes’ and have a Federal Law to deal with them. What is your view in this regard?Table 8 : Should there be federal crimes and federal law?Yes74%No21%Did not Respond5%a) In case of Inter-State issues like left wing extremism, terrorism, fake currency, conspiracy against the government, etc, Central legislations are required, however without disturbing the federal polityb) A Federal agency should be created to deal with federal crimes, which can operate across State boundariesc) Exact mechanism, however, needs to be worked out. One such mechanism could be enacting a Public Order Act. Wherever a public order situation occurs, the handling of the crisis could still be dealt by the State concerned where the incident happens, but if the tentacles spread to other States also, some provisions should be made in this Act allowing for Central intervention – however, the full consent and cooperation of the State Government should be obtained16. Should the Union Government play a more visible role in the handling of public order issues / situations having serious implications for national security and economic development?a) The existing arrangements are sufficient. Public Order Management cannot be centralized due to the vastness of the countryb) The authority and responsibility of the State should not be dilutedc) However, when problems transcends State boundaries, Central Government, without political considerations, should act as a facilitator and extend full support to the States concernedd) An institutionalized system should be in place for better coordination, exchange of information, resources and better monitoring17. Should the ‘Public Order’ and the ‘Police’ (being the main instrument of maintenance of Public Order) be brought under Concurrent List, without diluting the federal nature of our polity?Table 9 : Should Public Order and Police to be brought under Concurrent List?Agree58%Disagree36%Didn’t Respond6%330331Public OrderAnnexure-II(2) Contd.Annexure-II(2) Contd.Reasons in favoura) There is a need for uniformity of response and therefore uniformity of legal and policy frameworkb) Serious communal, naxal and terrorist problems should be tackled keeping a long term perspective in viewc) Neglect of law and order and related issues of governance leads to grave internal security situationsd) In matters affecting public order, interests of State and Centre should be in congruencee) This arrangement will go a long way in protecting the rights of the citizens and curbing the parochial and fissiparous tendencies at the lower levelReasons againsta) Police have a specific role within a State and each State has its own problemsb) It is difficult, if not impossible, to have remote management of public order in such a vast country as oursc) It is better to specify certain areas in internal security to be put in the Concurrent List rather than the whole subject as such18. What other measures need to be taken, to ensure that the Central Government is able to fulfill its due role in management of Public Order issues/situations having dimensions of national interest?(b) Central Government should take the role of a coordinatorvi.Better coordination between Central and State agenciesvii. Sharing of knowledge, skills and intelligence (c ) Criminal Justice System viii. Central Government should devise a new criminal justice system to provide speedy justiceix.Creation of National Judicial Service(d) Creation of a Federal Organisation for dealing with law and order situations(e) Make police a plan subject(f) States be made answerable to the Centre for maintenance of law and order by denial or cut in Central assistance for poor performance(g) Central Government to enact stringent laws to deal with public order problems19. The police being the principal law enforcement agency of the country, are in the forefront of management of Public Order situations. The functioning of the police is primarily governed by the Police Act of 1861, which is now being perceived as archaic and not reflective of our constitutional/democratic aspirations. Would you think that this law needs to be replaced?Table 10 : Should the Police Act of 1861 be replaced? Reasons for replacementYes87%No5%Can’t Say4%No response4%Measures to ensure that Central Government is able to fulfill its role in management of public order:(a) Central Government should take the role of a facilitatori.Provide logistical support in the form of manpower, equipment, training,budget for modernization of police force and development activitiesii.Welfare measures and more financial assistance to North Eastern Statesiii.Declare areas as ‘distributed’ and provide additional Para-military forcesiv. Education awareness programmesv.Ensure better implementation of poverty alleviation programmes332333Public OrderAnnexure-II(2) Contd.Annexure-II(2) Contd.a) Old and archaicb) Does not reflect the democratic aspirations of the peoplec) Word ‘public service’ does not figure in the Police Act20. If so, what new provisions, if any, would you like incorporated in a new Police Act?Provisions suggested to be included in the proposed new Police Acta) Change in the focus of police from being the coercive arm of the government to a service organisation catering to the aspirations of the peopleb) The new Police Act should be pro-people and pro-common manc) Role of police in internal and external security of the country needs to be reflectedd) Enhance powers of the police with reference to the maintenance of public peace and ordere) System of control of the police by executive magistracy should be done away withf) Role of Centre in federal crimes should be clearly delineatedg) Formulation of State Security Commission to ensure autonomy for the policeh) Make police more accountable, accessible and transparenti) Clarity of police role in conflict resolutionj) Use of IT should get reflected in the Police Actk) Cyber crime, terrorism and organised crime should be includedl) The relevant recommendations of the National Police Commission should be referred to21. Could the police be given a facilitator’s role in such cases? Do you think it is necessary to change the laws in this regard?Table 11 : Should police be given a facilitators’ role?Yes83%No11%Didn’t respond6%Table 12 : Is there a need to change law for providing a facilitator’s role to Police?Yes59%No31%Didn’t respond10%(a) Laws should enable the police to play a proactive role in preventing public order problems rather than having a reactive role(b) Police should also have a developmental role(c) Community policing has proved to be an effective tool for police to act as a facilitator – law should provide for institutionalisation of this.22. How to gear up the civil administration and the police to enable them to take effective preventive action to avail major public disorder situations?Measures to gear up administration to take effective preventive measures in public disorder issues:a) Enact a Public Order Maintenance Act which apart from incorporating preventive provisions of the CrPC should also have provisions including suspension of rights, etcb) Make administration functionally independent of political control334335Public OrderAnalysis of the replies to the questionnaire on Public OrderAnnexure-II(2) Contd.Annexure-II(2) Contd.c) Stop overburdening police with bandobust dutiesd) Better coordination between DM and SPe) Remove unnecessary legal impediments like stay orders, in dealing with law and order situations, through appropriate legal amendments.f) Use technical expertise of eminent persons in public order management by organizing seminars and workshopsg) Reviving age old village police systemh) Campaign for building awareness amongst people of legal rightsi) Legalising conflict resolution committees like peace committees etcj) Update security schemes of the district, periodically and regularlyk) Better intelligence networkl) Periodic review meetings with all departmentsm) Strategic trainingn) Strengthen panchayats by providing explicit provisions for maintenance of law and ordero) Police Commissionerate systems to be in place as they have proved more effective in preventive actionsp) Holistic approach of involving the police in development work23. To deal with growing dimensions of public order problems efficiently and effectively, what are such capacity building measures that need to be put in place in order to enhance the functional capabilities of the police and other concerned agencies?Capacity building measures: (a) Trained manpoweri.Regular in-service training for upgrading skillsii.Training in use of technologyiii.Leadership trainingiv.Physical fitnessv.Gender sensitisationvi. Reorientation programmes in police to handle mob fury are very essentialvii. Build capacity to adopt more democratic methods to handle law and orderviii. Sensitisation of the police to the socio-economic cultureix.Training that use of force should be the last resortx.Training of senior officers in problem solving and knowledgemanagement(b) Separate wing to handle white collar crimes(c) Specialisation in police force and separation of law and order and investigation wings(d) Massive computerisation(e) Sharing of intelligence and information by centralized data sharing(f) Introduction of technology in police work(g) Better communication infrastructure(h) Better mobility(i) Better equipment like weapons, protective gear, water canon, etc(j) Better welfare of police personnel(k) Introduction of tailor made community policing schemes(l) Enhanced participation of public and social organisations336337Public OrderAnalysis of the replies to the questionnaire on Public OrderAnnexure-II(2) Contd.Annexure-II(2) Contd.24. Do you think some of the duties and functions currently performed by the police can be outsourced, to enable the police to concentrate on their core functions? If so, please specify functions that can be outsourced.Table 13 : Is there a need to outsource police functions?Yes85%No14%Didn’t respond1%Areas which can be outsourced?Serving of summons, bailable warrants and traffic challans?Reception Counters?Maintenance of premises of police stations and offices?Security guard duties?Escort duties (VIPs)?Driving of Vehicles?Watch and ward duties?Security guards to persons other than Ministers and categorised protectees can be outsourced to private agencies on payment by the protectee?Traffic regulations at less important places?Escort of under-trial prisoners can be transferred to Jail Department, if necessary, along with sanctioned manpower.?Static guard duties of Government installations, of regular nature, can be entrusted to a “State Security Force” created for the purpose (it could be Home Guards)?Escort of cash of banks can be entrusted to Home Guards on payment basis?Procurement and handling of stores?Data feeding in computers?Legal training, computer training and latest training including using of fire arms, detection and controlling of mob during riots?Pay and accounts work?Catering?Disaster Management volunteers?CCTV monitoring and analysis of crime data?Prohibition Enforcement Views against outsourcinga) Instead of outsourcing, increase manpower in the policeb) Use community policing initiatives to involve public in policing functions; outsourcing is not the solution25. What, in your view, are the other measures needed to improve the working and living conditions, as well as morale and motivation of policemen at the cutting edge levels of constabulary and other field police officers, to enable them to tackle complex Public Order Issues with professional efficiency but with a human face?Measures to increase morale and motivation of cutting edge level: (a) Hygiene factorsi.Fixed hours of dutyii.Better equippediii.Better living and working conditionsiv.Better compensation package and social securityv.Post retirement settlement possibilitiesvi.Police welfarevii. Better manpower management systems to avoid ill treatment and harassment of men338339Public OrderAnalysis of the replies to the questionnaire on Public OrderAnnexure-II(2) Contd.Annexure-II(2) Contd.viii. Dry canteen facilities like armyix.Liberal sanction of leavex.Better emoluments(b) Treat subordinate officer with respect and courtesy(c) Trust the subordinates(d) Legal empowerment of constabulary(e) Providing promotional prospects(f) Better recognition of police work(g) Stop victimisation of policeman(h) Training(i) Image make over, modernisation, updating technology will instill confidence and pride in men26. What do you think should be the measures and mechanism for ensuring the accountability of the police to the people and the law?Measures to make police accountable to lawa) General Diary in police stations to be computerisedb) Recording of case diaries on computers so that they can also not be changedc) Registration of FIR on a computer with no possibility of changes ; web cam to record the process of registrationd) Recording locations of police vehicles by GPS and logging systemse) Strengthening Human Rights Organisationsf) Judicial and media activism are good means to ensure accountability Measures to make police accountable to peoplea) Right to Information Act and Citizen Charter should be widely publicizedb) Transparency in administration c) Place in civil police under local self government units to enhance public accountability, as is done in advanced countriesd) District Complaint Boards to be constituted to enquire into complaints against police officers; recommendations made but not accepted by the SP should be referred to the State Police Headquarters and then to the State Security Commissione) Police-public bipartite committees should review the situations periodicallyf) Monitoring systemi.Independent Constitutional body at the Centre and State levels to review performance of police officersii.Devise public feedback mechanismsiii. Public satisfaction to be made the index of monitoring, not crime statisticsg) Community policing initiativesh) Duty and accountability of each and every personnel in the police station should be clearly defined.i) Time bound redressal systemsj) Ombudsmank) Punishing deviant policemen27. What measures, in your opinion, are needed to promote inter-agency, inter-State and Centre-State cooperation in an institutionalized measure, to ensure synergy in the management of public order issues / situations?Measures to promote inter-agency, inter-state and Centre-State cooperation in public order management:a) Inter-State and Inter-Organisation exchange of men at supervisory levelsb) Joint training programmesc) System analysis is to be done to achieve better coordination340341Public OrderAnnexure-II(2) Contd.d) Achieve better coordination and cooperation between political parties in public order issuese) Frequent coordination meetings for sharing of information, ideas and strategiesf) Creation of Think Tank of police officers, citizens and other governmental agenciesg) Planning for development should include police also in areas affected by left wing extremismh) Better communication systems342SIXTH REPORT: Local Governance – An inspiring journey into the futureLOCAL GOVERNANCEAn inspiring journey into the futureOCTOBER 2007PREFACE“In this structure composed of innumerable villages, there will be ever widening, never ascending, circles. Life will not be a pyramid with the apex sustained by the bottom. But, it will be an oceanic circle, whose centre will be the individual, always ready to perish for the village, the latter ready to perish for the circle of the villages, till at last the whole becomes one life composed of individuals, never aggressive in their arrogance, but ever humble, sharing the majesty of the oceanic circle of which they are integrated units. Therefore, the outermost circumference will not wield power to crush the inner circle, but will give strength to all within and will derive its own strength from it.”Mahatma GandhiIn this report on Local Governance, the Administrative Reforms Commission has examined in detail the issues relating to rural and urban local governance in India with a special focus on the need for real democratic decentralisation in the country in order to usher in genuine grass roots democracy as envisaged by the founding fathers of our republic and as now specifically mandated by our Constitution. The Report examines these issues in three parts - the first part deals with common issues of local governance that are relevant for both rural and urban areas as well as the rural-urban continuum; the second deals with rural governance issues; and the third with urban governance.What are the characteristics of good governance? An institutional set-up that ensures good governance usually has the following features:1. ParticipationAll men and women should have a voice in decision-making, either directly or through legitimate intermediate institutions that represent their interests. Such broad participation is built on freedom of association and speech, as well as capacities to participate constructively.2. Rule of LawLegal frameworks should be fair and enforced impartially, particularly laws on human rights.iransparency 3.inf rmationra spare cy is uilt on he free flow of nformation Processes, nst tutions and re directl a cessi le to tho e co cerne wi h them and enough in ormation isprovided t un erstand and m on tor them.4. Reponsiveness nst tutions a d p oc sses ry o serve all s ta eholders. Orie tation . Consensust is in theGoogoverna ce media es differi g ntere t to r ach a bro d onse su o whbe t nte ests f t e gro p and whe e ossible, on olicies andp ocedurs.6 Eq ity All m n an women have o po tunitie t improve or ma ntain theirw ll-being.nd Efficien y 7. ffec ivenessP ocesses and nstitut ons pro uce esul s t at m ke he best use of esources.ountability Ac 8.sations are Decsi n-makers in gov rnment, the pr vat sect r and c vil society o gan ountab lity ac oun able to th pub ic a we l as to the i stitutional s ake olders. This acernal to an diffe s epe ding on the gan sation and whether he decision is internal or exorg nisation. . Straegic Vi ion ernan e and Lea ers an the p blic ave a broad a d long-term pe spec ive on goo go er is also human evelo ment long it a s ns of wh t i nee ed for such h evel pm nt. pe spective an u de sta ding of the historic l, ultura and social om lexit es i which thats g ounded. Our onstitut o prov des a c ear mandate fo democratic dece tra isat on not nly through t e Directiv P incip es of tate olicy w ich exhor s he Stat to promot Pa chayati Raj onsti utio nst tuti ns but more spe ifically now thro gh he 7 rd and 74t A end ents of the acy throug w ich se k o create an i stitution l f amework or usher ng in grass roo s democ he count y. t e medium f genuinely se f-gov rning oc l bo ies i bo h urb n and ru al reas ofdies s thHowe er, despite the co stitutio al andate t e growth of se f-gov rning oc l bt ird tier o g ver ance in the coun ry has een ueng aden, slow.haltiI was recently told about the observation of a visiting European who wondered how India is able to function without any local government worthy of the name. His bafflement is understandable. We have allowed local bodies to atrophy and starved them of funds to such an extent that while local government revenues accounted for 15% of the total government revenues in the USA in the year 2001, the corresponding figure in India was just 3%. Even after the passing of the 73rd and 74th Constitutional Amendments, the transfer of funds, functions and functionaries has been nominal in most States with notable exceptions such as Kerala. Throughout the seventies and eighties, a process of centralisation of even basic municipal functions such as water supply and sanitation into the hands of parastatals such as water boards and authorities has led to a massive decline in the role and status of local bodies which is only now sought to be reversed. Such reversal faces inevitable hurdles from the established institutional structures at the State Government and district levels.Local democracy is sometimes treated as synonymous with ‘decentralisation’, but the two are in fact quite distinct. In particular, decentralisation is not necessarily conducive to local democracy. In fact, in situations of sharp local inequalities, decentralisation sometimes heightens the concentration of power, and discourages rather than fosters participation among the underprivileged. To illustrate, in some tribal areas where upper caste landlords and traders dominate village affairs, the devolution of power associated with the Panchayati Raj amendments has consolidated their hold and reinforced existing biases in the local power structure.It is now well established that the constitutional division of subjects between the Union and the States has been overdrawn and that what matters is not the subjects but the functions under each subject. These should ideally be performed according to the principle that the central authority should have a subsidiary function performing only those tasks which cannot be performed effectively at the more immediate or local level. That is the decentralisation envisaged in the 73rd and 74th Constitutional Amendments which now needs to be implemented in full.The world today is poised to leave its rural past behind. With cities being the main beneficiaries of globalisation, millions of people chasing jobs are migrating to cities, both large and small. For the first time in history, more than half the world’s population of 3.3 billion is living in these urban complexes. Within the next two decades, five billion people, i.e. 80 per cent of the world’s population will be living in cities. By contrast, the world’s rural population is expected to decrease by 28 million during this same period.Since most of this demographic growth will be in Asia and Africa, the crucial question is how Nation States will cope with this demographic transition, especially since most of this urban growthiiiis going to be propelled by the poor. Are our policymakers and civil society with their ill-equipped managerial capacities equipped to deal with this mounting population growth? Satellite pictures show that together the urban sites now cover more than 2.8 per cent of the earth’s landmass, an area slightly smaller than Japan. But because our cities are pulsating with a concentrated mass of people, we tend to see them as being larger than what they actually are. A recent UNFPA report on the status of world population has said that India does not even recognise peri-urban areas within its urban population and so understates the percentage of people who need to be funded in plans for urban areas. Peri-urbanisation refers to rapid unplanned settlement over large tracts of land in the precincts of manufacturing facilities on a city’s periphery. Such areas lack clear administration, suffer from sanitation and water problems and are transitional zones between towns and the countryside.The key question of course is just how sustainable our urban conglomerates are. The answer to this complex question lies in the kind of consumption patterns our city dwellers are going to adopt. If we continue to foolishly dip into our natural resources — to give a few glaring examples, Brazilian Amazon forests are being torn down to export wood to the United States and Europe, or closer home, lakhs of farmers and villagers are being displaced to build dams in order to provide electricity and water to our metropolis — we will have to pay a heavy price.The interaction between urban and rural growth and sustainability is particularly critical for our future. Preventing environmental degradation and reducing vulnerability of the poor are key interventions that will determine the quality of life in our cities. In India, we are having the worst of urban development in the form of unsustainable slum improvement. We are also having the worst of rural development in the form of ill-designed SEZs. We have made a mess in both because we have not asked what the people want; only what we want for ourselves.To treat “rural” and “urban” poverty as somehow separate is to adopt a rather short-sighted view of the problem. Rural development supports urban development and vice versa. Another blinkered approach is to regard the urban poor as being a drain on the urban economy. Experts insist that the urban poor are essential to the economy and well-being of our cities. The majority may be working in the informal sector, but this sector is not a messy mix of marginalised activities as it tends to be viewed. Rather, it is a competitive and highly dynamic sector, which is well integrated into the urban and even the global economy.Over half the urban population in most developing nations is being forced to live in slums, with China and India together having 37 per cent of the world’s slums. The 2001 census estimated the number of slum dwellers in India at 40.3 million that is about 14.2 per cent of the population.ivYet, IYet, Indi Ane d Ano Ahave A lu s. It Ai Aless Ad nsely Apop late AthanAEn land, A apan,AH lla dAandAs veral otherAcoun ri s. AIf those An tion AhaveAa oided A lu s, AweA ho ld Ab Aa le to A o Athesa e.Inter-ATheAma or ty Aof thoseA iv ng Ain these slu sAare youngA eople bel wAt e A ge A f A18.Ato A eA pe sonal Ar val y AandAinse uri yAare A isingAa ongst these youngA eop e Awh Ahav Abeen fo ndurba A the Al rgest Aperpet at rsAof Avio ence A(ThyAar Aal o AitsApri cipal Avic im ). 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A ina ly, A he need to A iveA eAtime,A the cent al rol Ain Athe Aimplem nt tionAof Ac ntrallyAs onsored scheme Aw ile Aat A heAsa atutoryA in rea ing AtheApr po tion Ao Aunti d Afu dsAmade Aa ai able to A hemAforA arr ing Ao t AtheirAs f nct ons A re AalsoAhighli hte .earAcutA In A he areaA fAurbanAgov rna ce, Ath At endsAin Aurba is tion Ai AIn ia, A he A eed Af rAc toA akeA dem rc tio AofAthe Afu ctiona Ad mainA fAUrb nALocalAGov rnment A(U Bs) and A he need atio alA t e MayorAaA irectly ele te ACE Aof A heA LBsAare A xamin dAal ngAwithA xa ples AofAinter ec ion A bestApr cti es.AHow Am nicipal fina ce AcanAbeArev ta ised isAalso co eredAi Ad tail in AthisAructure In A he areaAofAinfras ruc ureAand service Apr vis on, A he needAto clea lyA akeAallAinfras AofAtheA service Ap ovidersAacc un abl AtoAtheAc ncer ed ULBsAis clearly Apre cr bed. ATheAim or anceAtheir merg ng Ameg Ac tie AinAthe cou try A nd A eedAfor specialAinsti utional Ame ha ismsAt Atack ssAmeg A specificA rob ems A re Aalso Aemp as sed. ATheAopp rt nityAofA re ti g A 5AtoA 0Awor dAcl atingAaA c tiesA nA ndiaA yAu ing Ath AJNNUR AS heme is AalsoAhigh ighted. A ina ly, A he A eedAforA r ch evedA s mbiotic Arela ionship bet een A heA LBsAa d AState AGov rnm nts and A owA hi Acan AbeAis A xam nedAandArecomme datiosA ade.AIn Acon l sion, IAwo ld like At Aex endAourAg at tud AtoA ri AMani Shanka AAiyar,A ini terAforAPa chay tiARaj, AGo er ment Ao AInd a; AS riAV. . AKaul, ACom tro lerAand Auditor Ge eralA fAI diaA utsAandA nd ShriAN.AGopa aswam ,AChief A lection AComm ss oner A fAI diaAf rAtheir A aluabl AinionsAon sug estio sAwh ch were Aof imme se hel Ato th AARCAinAfor ula ingAitsArecomme da variou AissuesA el tingA o ALocalAGo er ance AiAIn ia.ANwAD lhi A(M.A eerappaAMoily Oct ber A2, A2007 AanhaviGovernment of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reforms and Public GrievancesResolutionNew Delhi, the 31st August, 2005No. K-11022/9/2004-RC. — The President is pleased to set up a Commission of Inquiry to be called the second Administrative Reforms Commission (ARC) to prepare a detailed blueprint for revamping the public administration system.2.The Commission will consist of the following :(i)Shri Veerappa Moily - Chairperson(ii)Shri V. Ramachandran - Member(iii)Dr. A.P. Mukherjee - Member(iv)Dr. A.H. Kalro - Member(v)Dr. Jayaprakash Narayan - Member(vi)Smt. Vineeta Rai - Member-Secretary3.The Commission will suggest measures to achieve a proactive, responsive, accountable,sustainable and efficient administration for the country at all levels of the government. The Commission will, inter alia, consider the following :(i)Organisational structure of the Government of India(ii) Ethics in governance(iii) Refurbishing of Personnel Administration(iv) Strengthening of Financial Management Systems(v)Steps to ensure effective administration at the State level(vi) Steps to ensure effective District Administration(vii) Local Self-Government/Panchayati Raj Institutions(viii) Social Capital, Trust and Participative public service delivery(ix) Citizen-centric administration(x) Promoting e-governance(xi) Issues of Federal Polity(xii) Crisis Management(xiii) Public OrderviiSome of the issues to be examined under each head are given in the Terms of Reference attached as a Schedule to this Resolution.4.The Commission may exclude from its purview the detailed examination ofadministration of Defence, Railways, External Affairs, Security and Intelligence, as also subjects such as Centre-State relations, judicial reforms etc. which are already being examined by other bodies. The Commission will, however, be free to take the problems of these sectors into account in recommending re-organisation of the machinery of the Government or of any of its service agencies.5.The Commission will give due consideration to the need for consultation with theState Governments.6.The Commission will devise its own procedures (including for consultations withthe State Government as may be considered appropriate by the Commission), and may appoint committees, consultants/advisers to assist it. The Commission may take into account the existing material and reports available on the subject and consider building upon the same rather than attempting to address all the issues ab initio.7.The Ministries and Departments of the Government of India will furnish suchinformation and documents and provide other assistance as may be required by the Commission. The Government of India trusts that the State Governments and all others concerned will extend their fullest cooperation and assistance to the Commission.8.The Commission will furnish its report(s) to the Ministry of Personnel, PublicGrievances & Pensions, Government of India, within one year of its constitution.Shc-(P.I. Suvrathan)Additional Secretary to Government of IndiaviGovernmeGo er mentAofAIndia in stry Aof APe sonnel APublic AGr e ancesA&PensionsDe ar mentAofAAdmini trativeRef rmsAan APublicAGri evanc es......RESOL TIONNe ADe hi,A heA24 hAJuly, 2006AofAth A No. AK-11022/9 2004-RC A V l. I)A– AThe AP es dentAis pl ased At Aex endA he ter mi sio A second AAdmini trative Reforms ACo mi sio AbyA ne Ay ar Aupto A3 .8. 007 AforAsu of Aits Re ort AtoAtheAGovernmt.Sd/- A(Rahurin)AAAAAd itionalAS cr tar AtoAthe AGo er mentAofAIndiaGo er mentAofAIndia in stry AofAPe sonnel APublicAGr eva ces AandAPensionsDe ar ment AofAAdmini trative R forms A APublicAGrievancesRESOL TIONNe ADe hi AtheA 7AJuly,A2007AsecondA No.K-11022/26 2 07 ARA– AThe AP es dentAis pl ased At Aex endA he ter AofAth008AforA Admini trative Reforms ACo missi nA ARC) A yAseve Amon hs AuptoA3 .3.su mi sio Aof Aits Re ort AtoAthe AGovernmt.Sd/-A(Sha hiAKantrma)AAAAAd itionalAS cr tar AtoAthe AGo er mentiaAndixCONTENTSChapter 1 Introduction: Local Self Government – Evolution and Growth1Chapter 2 The Core Principles132.1 Introduction132.2 Subsidarity142.3 Democractic Decentralisation152.4 Delineation of Functions162.5 Devolution in Real Terms172.6 Convergence182.7 Citizen Centricity20Chapter 3 Common Issues213.1 The Constitutional Scheme213.2 Elections333.3 Functions of Local Governments443.4 Framework Law for Local Bodies483.5 Devolution of Funds593.6 Capacity Building for Self Governance683.7 Decentralised Planning743.8 Accountability and Transparency963.9 Accounting and Audit1083.10 Technology and Local Governance119Chapter 4 Rural Governance1244.1. Institutional Reforms1244.2. Functional Devolution1374.3. Panchayat Finance1514.4. Rural Development1654.5. Role of Panchayats in Delivery of Services1824.6. Local Government in the Fifth and Sixth Schedule Areas191Chapter 5. Urban Governance1985.1 Urbanisation and Growth1985.2 Structure of Urban Governance2045.3 Urban Finances2215.4 Infrastructure and Service Provision2405.5 Mega Cities – Metropolitan Corporations2765.6 Urban Poverty2845.7 Urban Planning2965.8 Urban Local Bodies and the State Government308Conclusion310xSummary of Recommendations312LILI T A FAANNExURESAnnexure -I(AASpee h A f AChairma ,AA CA tAt eANation l AColloqui m AAA39ADecentralisati n A nARur l AGovernan eAhe dA t AIS ,AN wADeliAAnnexure-I()ALi t A fAParticipan sA tAt eANation l AColloqui m AAA38ADecentralisati n A nARur lAGovernaneAAnnexure-I()ARecommendatio sA tAt eANation l AColloqui m AAA30ADecentralisati n A nARur lAGovernaneAAnnexure-I()AQuestionnai e A n ADecentralisati n A nARur l AGovernanAA367Annexure-I()ASpee hA fAChairma ,AA CA tAt eANation lAColloqui mAAA30AUrb n AGovernan e Ahe dA t AII ,ABangaloreAnnexure-I()ALi t A fAParticipan sA tAt eANation l AColloqui m AAA38AUrb nAGovernanceAnnexure-I()ARecommendatio sA tAt eANation l AColloqui m AAA30AUrb nAGovernanceAnnexure-I()AQuestionnai e A nAUrb n AGovernane A399Annexure-IV( )APowe s A f ASta e AGovernme tAund r ASo eAPanchaya iAR jAAcsA409Annexure-IV( )ARecommendatio s A fAt eAExpe tAGro p A n APlanni gA tAtAA44AGra sARoo sALev l A n ACentral y ASponsor dASchemesAnnexure-V( )AAppointme t A fAExecuti e AHea s A f ACi y AGovernmentAA46AInternation lAPracticeAnnexure-V( )APowe s A fAt e ASta e AGovernme tAund r ASo eAMunicip lAAcsA417E S LI T A FABOx11 11 AServi e ADecli eAund r AStat sAQo A42 3he ADelimitati1 AnAAc , A202 A46 32AEleven h ASchedu eA(Artic e A2 3 A) A47 33ATwelf h ASchedu eA(Artic e A2 3A) A6 3 34AExperien e A fAt e ASta eAFinan eACommissio sA n AIndaA8 2 35 AGuidelin s AIssu dA yAt e APlanni gACommissinA8 3 36 ADP s ASuppo tAFramewo k -ARecommendatio s A fAExpe tAGropA37 2 ACitizen-centr cAAccountabilit :ACa eA fAHubli-DharwAA1o nAMunicip lACorporati1 0 38AOvervi w A fAAud t A f APR sA y AC& GA n AMaharasht aA(2004-0)A11 1 39 ACa eAf rAPrude tAAccounti gAa dAReporti gANorsA121 3.0 AANationwi e AG SA o AImpro e APlannig A154 41 AIncome-wi e AClassificati n A fAVilla eAPanchaya s A nATam lANauA146 2ARoyal yAAccrua sA nAMinera sA nAStat sAwi hASignifica tAMinigA1esAActiviti43ATaxati nAPowe s A fAZi aAParisha s A n AMaharashta A18xi4.4Bharat Nirman : Tasks1674.5National Rural Health Mission (NRHM) – The Vision1724.6Role of Panchayati Raj Insititutions in NRHM1734.7Rural Radio Broadcasts by Ministry of Rural Development1794.8Community Radio in Jharkhand1814.9Approach of the Planning Commission in Promoting Access to183Health and Education in the Eleventh Five Year Plan4.10Drinking Water Coverage Norms1844.11Emphasis on Water Supply in Rural Areas in the Tenth Plan1855.1Urban Growth Trajectories2015.2Urban Agglomeration2035.3Netaji as Chief Executive Officer2165.4International Comparison of Fiscal Role of ULBs2225.5Financial Position of Urban Local Bodies2235.6Expenditure on Establishment2235.7Tax Domain for Municipalities2265.8Tax Collection Efficiency (1999-2000)2295.9Impact Fees2345.10A Regulatory Framework for Borrowing2355.11New Fiscal Tools Innovated in Haryana2385.12FSI as a Resource2395.13Pollution in Yamuna River2485.14Benefits of Delhi Metro2635.15Bus Based Public Transport System2645.16Mass Transit Options2665.17The Planned Development of a Mega City2785.18Rural Development and Self Employment Training Institute2865.19Health and Sanitation2905.20In-situ Rehabilitation of Slum Dwellers – The Tehkhand Project2915.21The Mumbai Floods – Reasons3005.22Land Encroachment in Bengaluru3005.23Inclusive Growth in a Small Corner302LIST OF TABLES3.1Comparison of Powers of State Election Commissions343.2Composition of State Election Commissions383.3Revenue and Expenditure of Local Bodies (Rural and Urban)603.4Constitution of DPCs – Variations Across some States793.5Status of Constitution of District Planning Committee in States (2006) 843.6Status of MPC Constitution923.7Allocation of Funds to Flagship Schemes1084.1Demographic Details of the Panchayats in States125and Union Territoriesx4.2Size 4. ASi eAof theAGramAa nchaytA12 4. ASi e AofAtheAInt rmediateAa nchaytA1264 4 A tatus AofAD vo utionAofA un ti nsAas Aof NoveberA206 A1384 5ABudgetA st matesA f AAn ual APla A20 6-07Afo ACentr , Sta esA&AUsA1664.6 Progres Aag instA eyAInpu AT rgesAofASA A1875.1ADis ri uti nAofAt eATot l,A rbanA ndARuralAPo ul tioAoftheAA 99 1 95-2030WorldAbyADe elopme t AGroup:AbanAA200 5 2AIndi :AN mberAand AP pul tionA(in Mi lion)fAU9 0120 1) AggloAerati nsA UAs)A nd ATownsA( 1lissA201 ATh 5.3 ALargestAMetopoies/A202 5 4 A rowth of AUrbanAP pu ationAin AMil ion-pluACi1 9 0-2001AggloAer tions in AIndiaA .5AUrbanAAgglomerati ns Towns AbyAClass/te gry:AA2 5A ensus ofAIn diA20015.6ARe ommendedACateg ri ation of AUr anALocalAGoerne ntA206A5.7A oliticalARepre entatio ARatos,A200A20 5. AModeAof El ctionAofA unicipalACh irp rson A nd AthirAT ersA214 .9 TrendAinA unicipalAesou r c eA22 5.10A llAIndi ARe enueAandAEx en iture ofAUr anALocABoiesA 225A(AllALeels)5. 1A ccess toA aterAandAS nitationAF cil tiesAorAbanA250AAH usehol s A iving in AS umsA( erAcent )A(002)5. 2 AHealt ASect r: IndiaAin AC mpar son Aw th AOtherAou nt r i eA2585. 3 A umber of AUrbanAH spit ls, Beds AandADis ensri eAper A25 A100,000APp u l aionA5.14A echnical Fea uresAand Ca acity ofAUrbanA ransptAMo d e sA2675.1 AFundin AP tternAnAJN N U RA2715. 6ASe tor AWi e A emandAnAJN N U RA27 5.17AP r ACapita AI vestme t A emandAnAJNNUR A2 3IGaRES1E1Avera1. AAver geADa lyAWater AAva labilityA(hur s/ay)A91.2 AM llennium ADe elopmntAGols A114.1ACo parative Po itionAof AD vo ution AnAStatsA1 64.2 A llAIndi AR venue AofAP nch yatiARajAIns i utions AA1998-9A1 24.3 A llAIndi AR venue AofAP nch yatiARajAIns i utions AA2 002-3A153 t a tsA180 .4ARur lAFemale Lite ac ARateA n ASeletASy stmA211 5.1A ictorialARepre en ati nAof Athe ProposdAS7 -0)A 5.224 AS urcesAo ARe enueAforA engaluruA200City 5.3 A224 AClas ifiationA fAAnnualAEx en i ureAof AaA unicpalA207-08) CoA porationA( e galuru A–Aby 5.AA256 APr mary AandASeconda y/SeniorA econdar ASoo lAM nageme t0 5Adurin004-xiiiLIST OF ABBREVIATIONSAbbreviationFull FormACAAdditional Central AssistanceARAccommodation ReservationARCAdministrative Reforms CommissionARVAnnual Rental ValueARWSPAccelerated Rural Water Supply ProgrammeASHAAccredited Social Health ActivistAUWSPAccelerated Urban Water Supply ProgrammeAYUSHAyurveda, Yoga and Naturopathy, Unani, Siddha andHomoeopathyBDOBlock Development OfficerBEOBlock Education OfficerBESTBrihanmumbai Electric Supply & TransportBRGFBackward Regions Grant FundBISBureau of Indian StandardsBSUPBasic Services to Urban PoorBWHBore Wells with Hand PumpsCAAConstitutional Amendment ActCAGComptroller & Auditor GeneralCBOCommunity Based OrganisationCD/NESCommunity Development/National Extension ServiceCDPComprehensive Development PlanCHCCommunity Health CentreCPHEEOCentral Public Health & Environmental EngineeringOrganisationCSSCentrally Sponsored SchemeDAsDevelopment AuthoritiesDDADelhi Development AuthorityDHMDistrict Health MissionDHSDistrict Health SocietyDLFADirector of Local Fund AuditDMDistrict MagistrateDMSDisaster Management SupportDPAPDrought Prone Areas ProgrammeDPCsDistrict Planning CommitteesDPEPDistrict Primary Education ProgrammeDPRsDetailed Project ReportsDRDADistrict Rural Development AgencyDWCUADevelopment of Women and Children in Urban AreasDWSCDistrict Water and Sanitation CommitteeEFCEleventh Finance CommissionxivEOEEOAE rthAObservatioEWS AEconomic llyAWe kerASectionsFDA A ishAFar ersADevelop entAAgencFSI AF oorAS aceAIndeGIS AGeograph calAInforma ionASysteGPsA ramAPanchayatsCBSAHou ing ACoopera ive ABuil ingASocietiesHDCOAHou ing and AU banADevelop entACorporatioIAYAIn iraA wasAYojnaCAI AInsti ut AofAChart redAAccount nt AofAIndiaCDSAIntegr ted AC ildADevelop entAScemeAISMTAIntegr tedADevelop en AofAS all andAMe iumATownIECAInforma ionAEduca ion andACommunicationISDPAIntegr tedAHou ing andA lumADevelop entAProgrammeICSSAIntegr ted Low A ost ASanita ionASchemeIMRMMRAIn antAMorta ityARate/Mate nalAMorta ityARateIMRBIndo-U AIDAFI E-DAIndo-U AIDAFinan ial AInstitut onsARef rms andAExpanson-ADebtPHSAIn ian APu licAHe lthAStandardsSROAIn ianAS ace ARese rchAOrganisationDCPAJh buaADevelop entACommunicat onsAProjectJNURMAJawaha lal AN hruANati nal AU banARen walAMissionJSCO AJamshe pur AUtili ies andAServ cesACompanyMDAAKol ataAMetropol tanADevelop entAAuthorityVICAK a iA&AVil ageAIndust iesACommissioLRTAL ght A ailATransiMLAAMe be AofALegisla iveAAssembl MLA AADS MLAAL cal A reaADevelop entASchemMMLAM delAMunic palALawMRDAAMu baiAMetropol tanARe ionADevelop entAAuthoriyMPAMe be AofAParliame tMP AAD AMPAL cal A reaADevelop entASchemePCsAMetropol tanAPlan ingACommitteeMWSA iniAW ter ASu plyASchemNBCANati nal ABuil ingACodeNAERANati nalACou ci Aof AApp ied AEcon micAResearchNERTANati nalACou ci AofAEducati nal ARese rch andATrainingNRWCANati nalACommis io AtoARe iew theAWor in AoftheAConstitutioNCUANati nalACommis io AonAUrbanisationDWMANati nal ADrin ingAW ter AMisnxvNGONon Governmental OrganisationNIPFPNational Institute of Public Finance and PolicyNIUANational Institute of Urban AffairsNLCPRNon Lapsable Central Pool of ResourcesNMAMNational Municipal Accounts ManualNMMPNational Mission Mode ProjectNNRMSNational Natural Resources Management SystemNREGANational Rural Employment Guarantee ActNRHMNational Rural Health MissionNSDPNational Slum Development ProgrammeNSLRSNational Scheme of Liberation and RehabilitationNSSONational Sample Survey OrganisationO&MOperation and MaintenanceOBCsOther Backward ClassesPACPublic Accounts CommitteePDSPublic Distribution SystemPEAFPanchayats Empowerment and Accountability FundPESAPanchayati Raj (Extension to Scheduled Areas) ActPHCPrimary Health CentrePHEDPublic Health and Engineering DepartmentPPPPublic Private PartnershipPRIsPanchayati Raj InstitutionsPSsPanchayat SamitisPURAProvision of Urban Amenities in Rural AreasREGSRural Employment Guarantee SchemeRGNDWMRajiv Gandhi National Drinking Water MissionROWRight of WayRTI ActRight to Information Act, 2005RUDSETIsRural Development and Self Employment Training InstitutesSCScheduled CasteSDMCsSchool Development and Management CommitteesSEBISecurities & Exchange Board of IndiaSECState Election CommissionSEZsSpecial Economic ZonesSFCState Finance CommissionSFDASmall Farmers Development AgencySGRYSampoorna Grameen Rozgar YojanaSHASUScheme of Housing and Shelter UpgradationSHGSelf Help GroupSJSRYSwarna Jayanti Shahari Rozgar YojanaSJSYSwaran Jayanti Swarojgar YojnaSPVSpecial Purpose VehiclexSSSASarv ASiksh AAbhiyanSASchedule ATribeSUMASchem Ao AUrba AMicr AEnterprisesSUWASchem Ao AUrba AWag AEmploymentSWSAStat AWate Aan ASanitatio AMissionTCPATow Aan ACountr APlannin AOrganisationTDCATrainin Aan ADevelopmen ACommunicatio AChannelTDATransfe Ao ADevelopmen ARightsTFATwelft AFinanc ACommissionTGATechnica AGuidanc Aan ASupervisionTISCATat AIro Aan AStee ACo.TSATota ASanitatio ACampaignTSATriba ASu APlanUIDSSMA AUrba AInfrastructur ADevelopmen ASchem Afo ASmal AansMediu ATowne UIAUrba AInfrastructur Aan AGovernancs ULBAUrba ALoca ABodies ULGAUrba ALoca AGovernments UMTAAUnifie AMetropolita ATranspor AAuthoritiee UNEAUnite ANation AEnvironmen AProgramms UNFPAUnite ANation AFun Afo APopulatio AActivitied URIAUrba AReform AInitiativ AFund URAUnifor ARecal APerios UTAAUnifie ATranspor AAuthorities UTAUnio ATerritoriea VAMBAAValmik AAmbedka AAwa AYojanx VAAValu AAdde ATae VEAVidyalay AEducatio ACommittek VPAVirtua APrivat ANetwors VRCAVillag AResourc ACentree VWSAVillag AWate Aan ASanitatio ACommitteZPAZil AParishadxviINTRODUCTION1Local Self Government - Evolution and Growth1.1. Integrating institutional reforms in local governance with economic reforms was Gandhiji’s far-sighted vision of ‘Poorna Swaraj’. Economic reforms and local government empowerment are the two great initiatives launched in the 1990’s. Economic reforms have taken roots over the years and have yielded significant dividends in the form of enhanced growth rate, bulging foreign exchange reserves and availability of a variety of goods and services. The freedom and choice resulting from the reforms have built a broad national consensus across the political spectrum ensuring their continuity. Local government empowerment too is broadly accepted as a vital principle and all parties are committed to it. But, in practice, real empowernment as envisaged has not taken place.1.2. Viewed in this context, the Terms of Reference of the Second Administrative Reforms Commission (ARC) pertaining to Local Self Government assume special significance since they cover key areas of reforms in Local Governance. These Terms of Reference are:(i)Improving delivery mechanism of public utilities and civic services with greatercitizens’ and stakeholders’ involvement in such processes.?Utilities like water, power, health and sanitation, education, etc.(ii) Empowerment of local self government institutions for encouraging participative governance and networking.(iii) To encourage capacity building and training interventions for better performance of local bodies.1.3. The Commission has examined the issues of Rural and Urban Local Governance in three parts which are as follows:(A) Common Issues: This part deals with issues which are common to both rural and urban governance.(B) Rural Governance: This part deals with issues related to rural governance.(C) Urban Governance: This part deals with issues concerned with urban governance.1Loca1.4. The concept of local self government is not new to our country and there is mention of community assemblies in the Vedic texts. Around 600 B.C., the territory north of the river Ganga comprising modern day north Bihar and eastern U.P. was under the suzerainty of small republics called Janapadas among which Lichhavis were the most powerful. In these Janapadas, the affairs of the State were conducted by an assembly consisting of local chieftains. In the post Mauryan times as well, there existed republics of Malavas and the Kshudrakas where decisions were taken by “sabhas”. The Greek Ambassador, Megasthenes, who visited the court of Chandragupta Maurya in 303 B.C. described the City Council which governed Pataliputra – comprising six committees with 30 members. Similar participatory structures also existed in South India. In the Chola Kingdoms, the village council, together with its sub-committees and wards, played an important part in administration, arbitrated disputes and managed social affairs. They were also responsible for revenue collection, assessing individual contribution and negotiating the collective assessment with the King’s representative. They had virtual ownership of village waste land, with right of sale, and they were active in irrigation, road building and related work. Their transactions, recorded on the walls of village temples, show a vigorous community life and are a permanent memorial to the best practices in early Indian polity. The present structure of Local Self Government institutions took shape in 1688 when the British established a Municipal Corporation at Madras which was followed by creation of similar bodies at Bombay and Calcutta (1726). Comprising a Mayor and a majority of British-born Councillors, these Corporations were basically units of administration enjoying considerable judicial powers. During the next 150 years, municipal bodies were created in several mufasil1 towns although their functions remained confined to conservancy, road repairs, lighting and a few other sundry items.1.5. In 1872, Lord Mayo introduced elected representatives for these municipalities and this was further developed by his successor, Lord Ripon, in 1882. By the 1880s, these urban municipal bodies had a pre-dominance of elected representatives in a number of cities and towns, including Calcutta and Bombay. A corresponding effective structure for rural areas came up with the enactment of the Bengal Local Self Government Act, 1885 which led to the establishment of district local boards across the entire territory of the then Bengal province. These boards comprised nominated as well as elected members with the District Magistrate as Chairman who was responsible for maintenance of rural roads, rest houses, roadside lands and properties, maintenance and superintendence of public schools, charitable dispensaries and veterinary hospitals. Within a span of five years, a large number of district boards came into existence in other parts of the country, notably Bihar, Orissa, Assam and North West Province. The Minto-Morley Reforms, 1909 and the Montague Chelmsford Reforms, 1919, when Local Self Government became a transferred subject, widened the participation of people in the governing process and, by 1924-25, district boards had a1 AM fasismall meatowns2ireponderance arrangem ntA re onderan eAofAelectedAre res n atives Aand a Anon-offic al A hairman.AThi c nti uedAtillA heAcountry’s In epen enc Ain A1947Aa dAth rea terA ill AthAlat A1 50s.AatAtimeAheAder A 1. . AbatesAinAth AConstit entAAsse blyA ndi ateAtha At eAle ders atAttemAandAasA A hesitant t Aintroduc AaAwho es leA hang AinAtheAth nAprevailingAa minist ati eA y heADirecti eA c mpr mise, A tAwa AagreedAth tAP nchayatiARaj Insti uti nsAwo ld find placeAinA ASta e Asha lA rinci lesAof State Pol cyA(Par AIV AArtic e A40) which AinterAa ia,A rov desAt at Ath nd aut or tyA akeAstep Ato Aorg niseAvilla eAp nchay tsAa dAen owAt emAwit Asu hApowersA u AthereA asA as Amay be necess ry At Ae ableAthe At Afunc io Aas Aunits AofAsel -go ernme t.A ALe islat reA a gene al Avi wAthatAloc l Agovernment insti ut onsAwould be cre tures of Athe AStatan Ahe ce thereAwas noAw it lin AdownA f A he A owers ofAtheAStateAGo er ment.yA ertainingA 1.7.A nAco pli nceAwith At e A rov sionsAofA heADirecti e A rinci lesAof StateAPoli itious ruralA to A st blishme t AofAvilla eA ancha at AasA nits Aof Asel Ag vernment, anAam inA1 52.AIt A secto Ain tiative,A heACommunit ADevelopme tAP ogramme, wa Alaun hed ugh people’sA ma n A hrustAwa AonAsecuring As cio-economic At an formati nAof village lifeAthr ngAtechni alA o nAd mocraticAan AcooperativeA rgan sat onsAwith At e Agovernm ntAprovid AaACommunit ser A ice ,Asuppl AandA redi .AUnderAt isA ro ram eA100Ato 150Avi l gesAforme yAel ment AofA Deve opm ntABlock Aand A ar ici ation of AtheAwh leA omm nit AwasAth Akcy. InA1953, th sAexp rimentAwhich str ngthened At e A oundationA fAgrassroo sA e m o cr rsionAofA heA theANatio alAExte sio AServiceAw sAint odu ed which Awa AanAamp ifidAvndAtechni alCommunit ADevelopm ntA rogra me andAaimedAat transferr ngA cientificA rly ngAthemeA knowledgeAto A gricul ural,Aani al A usban ryAan AruralAc afheAund Asectors.A as extensionA f Ainn vativeAp lot proje ts A ndAwhileA heA rog amme did notAhav Aa y Aconte tAof Aelect d Ademocratic insti utio sAsi ceA he AwereArunA yAgovernmentA unct ona iesA it At eAh lp Aof Aad Ahoc semi-p pula Abodi s Alike Vik sAMandal and APra han AS mit ,Ayet in the midst Aof theAeuphor a Aprevailin Aimme iately Aafter In epe denceAin theAc un r ,Athe ,AtoAaA reatAe ten ,Acaught A he att ntion ofAtheAu ra l ma ses.A .8. A nA1 56,Awh nAth ASec ndAF veA earAPlan A as launched,Ai Arec mme dedAtha AtheAVilla e APanc ay tsAshouldAb Aorgan call Alinked withApopularA rg nisati nsAatA igh rA evelsA strationAan nd AA nAstagesAt e Ade ocrati Abod Asho ld A akeAov rAtheAe tire AgeneralAa min wAandAorder,A d vel pmentAof th Adi tri tAor Athe subAdivis onAexclud ngAf nc ion Asu h AasAl stration.AToA a mi istrati nAo Ajustice and Aselec edAfunctio sA ertaini gAto ArevenueAad in ch irma shipA o erat onaliseAthi Ainitiativ ,AGovernm n Aappointe AaAco mit ee AunderAthe edAtwoAbroa A ofASh i ABal an rai AM hthe ABalAinA1957.AantraiAMe ta f ACom itt eAofefor AeffectiveA directi nal A hrus s; Afir t Athat th reAshouldAbeAa ministrativeAdec ntr lisation minist ativeA i pl men ation AofAth Adevelopme tAp ogr mmes AandAthe A ecentralisedAa ys emAsho ld Abe pla ed Aunde At eAcon rolAof A ocal Abo ie .ASecond,Ai Arec mme3GovernaneLocaCD/NES blocks throughout the country should be designed as administrative democratic units with an elected Panchayat Samiti at this level to operate as a fulcrum of developmental activity in the area. This Samiti would need guidance of technical personnel in many matters; hence it should have line department officers of suitable competence under its control. The Panchayat Samiti was also to be equipped with sources of income. Certain powers of control were retained by the government; like supersession of Panachayat Samiti in public interest, suspension of a resolution of a Panchayat Samiti by the Collector on grounds of breach of peace, being contrary to the law of the land or being ultra vires the Constitution. The recommendations also suggested reservation for SC/ST and women through co-option. In order to ensure coordination, the Committee recommended formation of a Zila Parishad at the district level consisting of all the Presidents of the Panchayat Samitis, Members of Legislative Assemblies and Members of Parliament with district level officers of the public health, agriculture, veterinary and education departments as members and the Collector as the chairman. But the Committee made it clear that the district tier was being conceived just as an advisory body; a support structure for Panchayat Samitis.1.9. The recommendations of the Committee were generally welcomed and Panchayati Raj legislations were enacted in a number of States to give effect to these recommendations. By the 1960s, Gram Panchayats covered 90% of the rural population in the country. Out of 4974 Blocks, Prakhand2 Samities were formed in 4033 blocks. Out of 399 districts in existence, 262 Zila Parishads were also constituted with varying degrees of actual power. Although a number of Panchayat structures were set up in different States at all the three tiers, they had limited powers and resources and the essential idea that all developmental activity should flow only through the Block Panchayat Samitis lost ground. Moreover, important schemes like the SFDA, DPAP and ITDP were not brought within the purview of the elected Zila Parishad even in States like Maharashtra and Gujarat where effective financial decentralisation had taken place. Unfortunately, after the intensive stage of the Community Development programme, there was a visible trend towards centralisation. Panchayati Raj elections were postponed indefinitely and flow of funds for Block Development were reduced to a trickle. The net result was that, by the 1970s, these bodies remained in existence without adequate functions and authority. The position of these institutions was further weakened due to the creation of a large number of parastatals, which were assigned many of the functions legitimately envisaged in the domain of PRIs, for example water supply, slum improvement boards, etc. on the perception that these functions were too complex and resource dependent to be handled by local governments.1.10. Beginning with Rajasthan and Andhra Pradesh in 1959, the Panchayati Raj system was at work in some form in all the States of the Indian Union, although the higher tier had not been set up in Kerala and Jammu & Kashmir. By end 1980s, except Meghalaya,2 ‘Prakhand’ means a development ‘Block’.4nmarginalAfarNagaland, Mizoram aga and AMizo am AandAth AU ionATerritor Aof Laksh dweep, all oth rAS atesAan AUTs AhadAen cte Ale islation fo AtheA re ti nAofAPR s.AI A14AS ate / UTs,Athere wasAaAt re - ierAsystem Ai A4A t tes/UTs A t AwasAaAt o-t er s ructure and in A9 Sta es/ A TsAonly Aone Atier fu ction d.Areport AonASta eA 1 11. A nA1969, AtheAfir tAAdmin strative AR fo msA ommiss on inAit ayatiA aj systemA Administr tion rec mmen edAthatAt e Amai Ae ecu ive AorganA fAt eAPanc At eABlockAl velA ho ldA eAlocate AatAt e A ist ictA ev l AinA heAformAo A“Z la A ar sha ” Aand notAa Ab tter p sitionA as A an hay t A ami i. AI Awas of A he Av ewAthatA he AZi a A ar s ad Awou d Abe Ain A andA hu AwillAbeA to take a A omp site Aview ofA heAre ou ces andAne ds AofAth Aen ireA istr cttA ue AtoApauc ty b e Ato for ula eAa Ap an for Athe Aar a. AThACommiss on Aa soA el evedAth AandAdeve op ent ofA esource ,AffitAwasAd ultA oAsustai AaAwellAequipp dAa ministrativ machi er A t AtheAl e v el of a ABlo k.ipAof Sh iA soka 1.12. AIn 1977,A o ernmentAf rmedA Aco mitteeAunder th Acha rmans gestAmeasu es At A Meh aAtoAgo in oAthe Awork ngA f APanchayati Raj In titutio sAandAto su Aa dAd velop entA str ngthenAt em Ain oAeffectiv Alo alAapparatus A orAdecen ral sedAplannin’s highA riorityA of the rur lAareas.AThsAwas Acon id redA ec ssa y Ain AviewAof theA overnmenoduction,A rea eA toA uralA evelopme tAw ichA nc udedAthe needAtoAincr aseAagricul uralAp of A he AviewAth tA employm ntAandAe ad cateA overt . ATheAAsok AMe ta Com itte Awas ectionsAhe dAf rA the Ad mocra ic A roce sA oul AnotA topAat th Astate le el. AThe Ase iesA fAe iti alAp oces esA Par iamentAandA tat ALegisl tur Ahad Aa tu ed A he ApeopleA o AtheAdem craticApo Ai AtheAco nt y.A and Ama e A hem Ac nscio sAo Atheir po er Aand Ari htsAas Apol ti al A overeign ,A sAbo hA n endA The Aconc ptAo APan hayatiARa ,A ikeAdemo rac AatAn tional A nd stat Al vel sAro tsAwh ch inA as we lAa Aa means.AItA asAanAine it bleAexten io Aof democ acy At AtheA ra urn A ak sAi Athe Abase A fAtheAd mo rat cApyrami Ao Ath Acou try.AInAth Aen , APanc ayatiA gAdevelop ent l,A aj s ouldAe er eAas AaAsys em Aof democratic local Agover mentAdischargi ra-Gu ara AmodelA municip lAandAulti atelyAregu atory fu cti ns.ABasedAon AtheAMa arash Aand A AnumberAofA wh ch was comm nded Aby AtheAfir tAAdmin strative AR for s Commis io decen ral satio A the Acommitte s, Ath ACo mittee Ac os Ath Adis rictA s A he AfirstApointAofbelowAthe A ta eAle el.isA ommitt eAwasA 1. 3. The AnextAlevel A f Aself-gover ingAinstitu io sAre ommendedA yAt 00A oA15,00 .AIt the Manda APa ch yatAw i h AwasAto Ac ve AaApop lation of aroundA 0, was thought th tAtheAcl sterAof vi lag s AfallingAin th Aju isdict onAof Athe Manda Apan haya A ouldAt rn Ainto aA ro th cen re.AAsAanAad hoc arrangeme t,AtheAComm tteeArecomme de Aco tinuation ofAthe Pa cha atASa itiAat the Bl c Alev l, not A sAaAunit Ao Ase fA o ernmentAb tAasAa nomin ted Amid le Al velAsup or Ab dyAworkin Aas an exe utin Aarm AofAt e AZilaAPar sh d. A imilarl ,Aat A he village le e AitAthoug tAofAaA omina ed Avillag Alevel Acom it eeA onsis ingAof (a) Aloc lA emberA lectedAtoA and l APan hayat, (b) Aloc lA emb rAel cted AtoAt eAZ laA a ishad, AandA(c) aA epres nta iveAof As allAandALocal Governance1.14. In the total view of the set-up, the Zila Parishad was recommended to take up planning for the district as a whole, to coordinate the programmes and to guide the lower PRI tiers. The recommendations also called for creation of a machinery for taking up the district level planning exercise and for this it recommended stationing professionally qualified teams of experts at the district headquarters. The annual plan thus prepared had to be placed before the Zila Parishad for their comments/views. The Committee’s other recommendation was on transfer of all development functions and related government staff to the control of the Zila Parishad. To assist the Zila Parishad, it recommended creating a senior post known as the Chief Executive Officer who could provide support to the body in formulation and implementation of policies. In order to ensure effective coordination among officers posted at the district, this officer could be senior in rank to the District Collector.1.15. With minor variations introduced by subsequent committees in the 1980s, the recommendations of the Asoka Mehta Committee were generally well received and led many of the States to introduce appropriate amendments in their Panchayati Raj Acts. Karnataka, Maharashtra, Andhra Pradesh, West Bengal and Gujarat adopted the new arrangement, but U.P., Bihar, Orissa, Punjab and Haryana held back. Some of them did not hold elections even to the existing bodies.1.16. The Committee which submitted its report in 1978 was also of the view that despite the rhetoric, Panchayat empowerment was not of much use unless it received Constitutional standing. Hence, there was need for introducing a Constitutional amendment on this subject. With some variations, these recommendations form the basis of the PRI format in existence in the country today.1.17. Although a number of committees were formed between 1978 and 1986 to look into various aspects of strengthening the local self government institutions such as the committees under Shri C.H. Hanumantha Rao, Shri G.V.K. Rao and Shri L.M. Singhvi, only minor suggestions were made for any change in the ideas/structures proposed by the Asoka Mehta Committee. The next landmark in decentralised governance occurred with the 64th and 65th Constitutional Amendment Bills introduced in July 1989 by the Government of Shri Rajiv Gandhi. The basic provisions of the Bills were: (a) it should be mandatory for all States to set up PRIs/ULBs, (b) the elections to be conducted by the Election Commission, (c) tenure of Panchayats/ULBs to be five years and, if dissolved before time, fresh elections should be held within six months, (d) all seats (except those meant for the representatives of other institutions) to be filled through direct elections, (e) reservation of seats to be made for SC/ST/Women, (f) Local Bodies to be entrusted with more functions e.g. minor irrigation, soil conservation, bio-gas, health, benefits to6IntroductionSC/ST etc. (g) pan hay t Alev l,AA SC/ST etc A(g)Aplan ing Aand bu getingAsys em Abe introduce AatAth sAandAfe s, A(i) AaA (h)Athe St teALegisl tureAtoAauthori eA anch yats/ULBs At Ale yAtax s/t l LBAacco nt Ato beA s pa ateAco mis ionAt Arev ew Athe AL cal Bod Afinance ,AandA(j AP I/ nAthe Ra ya ASa h . a di ed Ab Athe A AG.AThe A ill co ldAhow ve Ano Abe Ap ssedAiAbo hAPRIs & A LBsA 1.18.AI A1990, AaAcom ined ACons ituti nAAmendm nt AB ll, A o erin il Ato beAcr ftedA wasAtab ed inA a liament. It AwasAaAsk leton legi lat on Awhic Al ft theAdet cern ngAe ectionsA byAthe St teAGo ernme tsAinAtheir Stat Aenactm nts;AevenA attersAco heA issolutionA fA we eA eft completely to the discr tion AofAthe Stat AGo ernment.AWi hAth AGov rnm nt,AthisABil AtooAla se .lier exercise AonA 1.19 AFina lyAin A1992,A fter Asynt esising A mp rta t Afeatu esAofAthe ea mendmentsA illAi A thisAs bject,A ove nmentAdraf edA ndAi tro uced theA73rdAa dA74 hAIXAand IXAAin AtheA Par iament wh ch Awe e Apa sedAinA199 .AThseAin ro uce Ane AP rtsc lesA 43 to A2 3ZG I dianAConst tutionAc nta ni gAArtiewAchap er inAtheA 1.20 ATheA73rdAa dA 4th Amendments At Athe AConst t tio Aconsti ut AaA eAAmendments,A heA pro essAofAdemocrati Ad cen ralisati n A nAthe co ntry. In Aterms Aof the levelAwh chAaffctA espons bility Afo Ataking Ad cisionsAre ar ing activ tiesA t Athe grass roots leAthe selves. ByA peopl ’s Ali es Ad rect yAw uld Ares Aupon At e A lec ed Amem ers Aof AtheA eo hese inst tutio sA making re ularAelect ons AtoAPancha atiARa /Municipal bodie Amandatory,A Aro e AinApla ningA haveAbee Ag venAperm ne cy Aa AentitiesA fAse f governm nt Aw th a Aspecifi ty Athe A ntentionA forAec nom c Adeve opmentA nd A oci lAjus ice Af r A he Alocal A rea AInAtotal inAtheAde oc ati A o At es AAmend e ts AisAto as ign AaAp si ion A f A omm nd AtoAthem heAcons ituti nalA framewo k Ao AtheA ountr .A ut th reAs em AtoAbeAa Aa ea A fAweaknessAinA Ai pleme tabilityA scheme ALoca A overn entAbei gAaAS ate Asubj ct Au der ScheduleAVII,Ath dAstr ngthAofAth A o Ath se p ovisi nsAis,A oAa Alarge ex ent Adependen Aon theAinte ti nAa forAt eA ta eAlaw St teAPanchay ti RajAenactheAchalen .Aen eAis Ato Aensu eAa Aar hitec urewhich Ai AinA ota Aharmo y A ith theA pir t Aof the A73rdAan dA74 hAAmend ent exceptAthos Awi hA 1 21 AAr icle A243AB Ao Athe ACons itut onA nvi agesAthatAa lAthe A tates UTs, temA fA anc ayatsA populat on AnotAe ceed ngA2 Al khs, AwillA a eAtoAconst tuteAa th ee-tierAsy AbeenA efinedAas i. aA .AatAtheAvil age Ainterme iateAan Adist ict levels.A hil Athe distri tA a elsAhaveAno AbeenA o malAdi tri t Ain AaAState At eAjuris ict on AofAvillag Aand Ai term dia eAletitution is toAinedAinAeA pe ific lly A ehe Act AA A illage AasA er the provisions Ao At eA onp rtAan Ai cludesA specifidA y the AGo ernor AbyAa A ubl cAn tificati n A or At e Apu pos AofAthisag APanchay tA a A a gr up Aof Avilied.AThat Ameaage AsoAs ecisAth At r itorial areaAofAa VilyAco sis AofAmore be Asp cified AbyAa A ub icA otificati n A yAt e AGove nor ofA he AStat , A ndAm thanAoneAv lla e.ASimilarly AtheA nterm dia eA e elAwhi hAcan be a Taluk,,A7LocalAGovernanceis also to be specified by the Governor through a public notification in this regard. This provides a certain amount of flexibility to the States in constituting Panchayats at the lower and middle levels.1.22. Panchayati Raj Institutions (PRIs) in India have, over the years, developed certain critical strengths, although they are characterised by several systemic weaknesses and constraints as well. Post the 73rd Constitutional Amendment, Panchayats have been established at three levels, the district, block and cluster of villages (Village Panchayat). The number of Village Panchayats in the country as on 1st December, 2006 was 2,32,913; of the Intermediate Panchayats 6,094 and of the District Panchayats 537. The total number of representatives elected to these bodies is 28,28,779 – out of which 10,38,989 (36.7%) are women.1.23. Consequent to the 73rd Constitutional Amendment as well as the Supreme Court’s rulings which effectively mandate that local authorities are also to be treated as ‘Government or State;’ the PRIs have acquired substantial legitimacy, are recognised as an instrument of the Government, and have created participatory structures of grass roots democracy for the rural people. Creation of Constitutional bodies like the State Election Commissions and the State Finance Commissions have also given permanency and stability to these institutions. However, most Panchayats continue to be treated as agencies of the State for implementation of prescribed schemes, even though essential services such as provision of drinking water, rural sanitation, preventive health and primary education are accepted as their legitimate core functions. Moreover, the PRIs have a varied menu of potential taxes such as on professions, entertainment, tolls, users charges etc., but remain crippled by lack of elastic revenue sources. Internal Revenue mobilisation remained at only 4.17% of the total revenue of panchayats at all levels in 23 States during 1990-91 to 1997-98. In a few States like Bihar, Rajasthan, Manipur and Sikkim, it was ‘nil’ during this period. Although the 11th and 12th Finance Commissions have provided untied grants to these institutions, their financial capacity remains suspect. As a result, PRIs exist as over-structured but under-empowered organisations, boasting of Constitutional status but suffering from lack of effective devolution of powers and functions from the State Governments.1.24. At the same time, the structure of district administration under the control of the Collector/District Magistrate, characterised by a command structure and lack of horizontal coordination at the grass roots level, has become somewhat anachronistic in the modern democratic framework of our polity. In order to make local administration more responsive, transparent and accountable to citizens, there is need to have a representative government not only in the Union and States but also at the district and village levels with an equitable division of functions among them. However, any such reform agenda is constrained by the8Introductionlack of sAw llAa A lackAof Ac operati nAb tween AtheAl gis atu eAandAtheArepre en ative AofAlo al bodi sA ibiliti sA t eAlack Ao Ac pac tyAofAtheA anc ayati ARaj AIn ti utio s A o AtakeAo AenhancedArespon fact thatA ecauseA f A bsence A f Atrained pe sonn lA sAwel AasAthei AfinancialAi ca acit .AThe nis tionsA m stASt tesAha e,A uring the 1970 AandA80 , AcreatedA tate-wideA utonomousAorgean Athat andAp ra tatal Ato carr AoutA venAl cal Alevel func io sAsuc Aas Awa er As pplyA lsoA th Aissue Ao Ad visionAof functio s Abe weenAsuchAorg nis tio sAand theAlocalAa thoriie Aco esA n A heAway A fAgreaterAdecentr a lis a io .yArol AinA 1.25.A sAreg rdsAu banAlocal Aself-g vernment AalthoughAmuni ipalit e Apl yed A Ak nsAb AtheA localAself- overnm ntAduri gABri ish Rule,A heAa tu lAtaskAo Amana ingAcivic fu ctipen ence, ULBs A hemsel es tended to AremainAc ns raine Aby A heirApoo Afinan es.AAfterAInd banAlo alA the Afo us te de AtoAb AonAr ral Ind aAand At e A once tAofAG amA waraj andAustitu io A b die Awere notA iven Amuch A tten ion AThus,Athe Directive A ri cip es AofAtheACo at ALi t’A referA oAVillage Pan hay t Aan AtheAonly re erenc AtoAu banAlo al bo ies is AinA heA‘S ofAtheACons titu ion.Atil AtheA .26. The eAwer AnoAmaj r A han esAinAthe str ctureAand Af nc ion ng Ao Athe ULB cre seAinA 74thACons itutional Amendme tAdes ite ArapidAur ani ation Aand Acon equentia Ai AStat At A theAco pl xities Aof pr blems. TheA owersAand fu ction AofAth seAbod esAv riedA ro municipalA St teAas At e Asubj ct A‘Local Ag vern en ,A hat A sAt Asay,AtheAco sti utionA nd powersAof AtheAUL sA cor ora ions’Awa Ai clu edAin theAS ateAList,A mpo eringA he i State Ato defn At eAr leAo Aau onom A through statutes.A nfrequent A lecti ns,ArigidAgo ernmenta Acontrol,A nadequat itutional a d AlackAo Acap city have be nAs meAofAth Aprob em Aface Ab AULB . AThe A74thACons A me ndm etA roug tAin A omeAbas cA hange Ain AULBs. Mandato yA olding AoAperiodicA ro uct onA lections, AinSchedule,A of At e ATwelfth seats forr se vatio Aof tr cti nsA womenAandAre AofAStateA onA he power in erf reA G ve nmentsAto ioni gAo A in AtheAf ncmeAof Athe ULB Aa eAs atu esAo A importan Afi t u t i o n the a l A74thACons Amen mentAAct AAl hough A heAS9Lo al Governad.en amen ed th ir l ws relat ng to he UL s, he devolut on of functi ns nd finan es as b s ow nd hesitan t.rm 1 27 The St te Governme ts h ve crea e a la ge num er of functio al bod es in he f nd of developm nt authoriti s, hous ng boar s, s um developm nt agenc es nd wa er ty sanitat on boar s. The gro th of th se speciali ed agenc es as weake ed he author ed of munici al bod es nd contribu ed to th ir atrop y.his as a so ed t a fragmen in approa h, w t a la ge num er of bod es work ng in isolati n. Consequent y, U Bs rem to ill-equip ed in te ms of techni al manpo er nd organisatio al abil ty nd re una le re d al w th he spr ad of urbanisat on to he ru al are s. In additi n, ur m ga cit es in- characteri ed by spec fic probl ms of mount ng infrastructu al constrain s, la ge sc le ng migrat on nd governa ce structu es t at rem in unprofession l, unrespons ve nd lack in transparen c y.1 28 Improv ng he qual ty of l fe of citiz ns by provid ng t em ci ic amenit es as b en so he ba ic funct on of lo al governme ts e er si ce th ir incept on nd it contin es to be id e en tod y. Lo al governme ts re idea ly sui ed to prov de servi es l ke wa er supp y, so on wa te manageme t, sanitat on e c, as t ey re clo er to he peo le nd i a bet er posit to appreci te th ir conce ns nd e en econo ic princip es st te t at s ch servi es re b st provi ed at he le el of governm nt clos st to he peop e. Howev r, he performa ce o a la ge num er of lo al bod es on t is fr nt as genera ly b en unsatisfacto y . 1 29 Provid ng s fe drink ng wa er nd sanitat on h ve b en import nt eleme ts inen ur developm nt effor s, e er si ce he Fi st F ve Y ar Pl n. Tho gh th re h ve b ed improveme ts on t is fro t, b th in ur an nd ru al are s, he situat on can ot be ter es satisfacto y. As er he Cen us (200 ), o ly 3 .4 er c nt of to al populat on as latri on within/attac ed to th ir hous s. Wher as in ru al are s, o ly 2 .9 er c nt of populat as latri es within/attac ed to th ir hous s. ut of th s, o ly .1 er c nt househo ds h ve latri es w th wa er close s. In ur an are s, tho gh wa er availabili y, measu ed as lit es er cap ta er ay is qu te h gh or alm st ll Ind an cit es ut delive y, compu ed as wa er sup ly in ho rs er ay in he cit es is rat er p or (F g. 1.13 .er 1 30 The Millenn um Developm nt Go ls highli ht he importa ce of s fe drink ng wa ne sup ly nd sanitati n. The ‘Bha at Nir an Program e’ inclu es drink ng wa er as l’ of ts ix thr st are s. The ‘To al Sanitat on Campai n’ se ks to prov de ‘Sanitat on or a l. by 20 2. Howev r, in ll th se initiati es he r le of he lo al bod es is go ng to be cruci Th re re financi l, technologi al nd institutio al iss es wh ch n ed to be addressnce3Sour e: ‘Ur an Wa er Sec or in So th As a: Benchmark ng Performanc ’, Wa er nd Sanitat on Progr m, M y, 20 6; h ttp://w sp.oirg/flez/pu bs/urbanwater.IntroductionI therefore request State Governments to consider empowering district level institutional structures to handle the issue of water supply. This is also a constitutional obligation as water supply is one of the basic functions to be carried out by rural and urban local bodies as per the 11th Schedule of our Constitution.”1.31 The Commission feels that substantive reform of local self-government institutions is not possible without creating an autonomous space for them, built upon the premise that the local government institutions, being governments at their own level, are an integral part of the country’s governance system and therefore, must replace the existing administrative structure in respect of the functions or activities devolved to them. While there may be rationale for retention of some establishments of the State Government including that of the district administration at the local level, their functions and responsibilities should be confined to areas which are outside the jurisdiction of the local bodies. In respect of4 PM s a dress t the Annu l onference of Minist rs in charg of D ink ng Water a d Sa it tion07, Newuly 4,Delhi 20On institutional issues,Prime Minister Dr.Manmohan Singh stated4:“One problem we have with the management of the Drinking Water Sector is that this is one activity within the portfolio of rural development programmes which is still handled at the State level, at the level of State capital and not at the district level. Other programmes with which it seeks integration have moved to being managed at the district level. I sincerely believe the time has come to do the same thing with regard to other supply schemes as well.11LocalGoverna cedevolved funct ons, local government i stitut ons hould ha e a tono y nd m st be ree o the State G vernments’ b reaucrati c c nt ol.or anised 1. 2 n order t asce tain views f om various st keh lders, the Commissio e National t o National olloquiums sep ratel fo Rura and Urban h ov rnance. ies (ISS) Co loqui m on Rural Gov rnance wa o gan sed at th I stitut of Soc al St u ssoc ation Ne De hi and t e Nation l orksh p on Urban Gov rnance wa o ganised in s in urban with a aagr ha, a wel k own NGO in Bengaluru, asso iated w th refor Thv rnance. Te detai s o these tw wo ks ops are at The CoreiI. Te Com ission as gfieat y ene ted by the inpu s rov ded by t e inistry of Panc aya i Raj, t e inist y of Urban eve opm nt and t e inistry of ousin and Ur an Poverty ll viati n in their fiespec ive fe ds. During he process of con ult tions, the Comm ssio also held or Genera iscu sio s with t e Election Co missio of India, the o ptrolle & Audi ons, hos of ndia, some Sta e Election Co mis ioner and St te Finance C mmiss lating its views and ugge tion h ve been of i me se elp to the Co mission in orm Secretar , recom en ations. The Co mission s rate ul to Smt Meen kshi D tta Ghosh,inistry of Panc ayati Raj, Go ernmen of n ia; Shri M Ra achandran, Secretar , inist y of Urban D velopment, Go ernmen of ndia; Shr Bhurel l, Me ber, U ion Pub ic Service ommi sion Shri .P. Si gh, former Secretary, Go ernmen of I dia;ayat R j; Shri Na ed M sood Shri T.R. R ghuna dan, Joint Secretar , inistry of Pancof Indi ; Shri M Raja ani, Joint Secretar , inist y of Urban De eloplment, Go ernmen llevation, Dr. P. . Moh nty, Joint Secretar , inistry of ousin and Ur an Poverty Manageme t Go ernmen of ndia; Shri Vivek Kulkar i,Visiting Professor, De artment of & Managin Stud es, India I stitute f Science, Beng l ru; Shri Sundara , Chairman tea , ISR Directo , Sundaram Archite ts Priva e L mit d; a d Dr. V.S He ge an his ati ude to for the r valua le inputs. The Commi sion wo ld li e o plac on record it g Go ernme t he eminen scholars, activists, repr se tatives o citize s’ gro ps officers of wor sh ps, o In ia an the State ove nment for t eir active pa ti ipa ion in the so visite and n meet ngs during the C mmissi n’ visits to States. The Comm ssion a ce issues. Si gaporehailandd and held iscu sions with ut oriti s on urban governagaluru anThe Commis ion highly ppr ciates he report f rnished by anaagraha Besed in the In titute for Socia Sc ences New elhi wh ch con ain i put which a e til re arat on of t is Repo t. In this con ection the Commi sion wo ld like to ckn wledge the co tr buti ns of hri Ramesh amanathan, Jan agra a and hri Geo ge Mathew I stitut of Socia New Sc Delhi.ences,12THE CORE PRINCIPLES22.1 Introduction2.1.1 India is a Union of States. States can be created or amalgamated by a law of Parliament; residuary powers are vested in the Union (Entry 97 of List I); local governments were creatures entirely of State laws until the 73rd and 74th Constitutional Amendments and presently Constitutional devolution is the norm, not upward or outward delegation.2.1.2 The evolution of the Constitution, over the years, has tended to favour greater empowerment of States. The rise of regional parties and coalition governments at the State and Union levels, greater economic liberalisation reducing State control and diminishing the importance of State investment in commercial undertakings, a very healthy tradition of fair non-discriminatory fiscal devolution through various mechanisms and compulsions of economic growth engendering a healthy competition for investment – all these factors are responsible for a more harmonious balance in Union-State relations. The empowerment of States has not weakened the Union; in fact the Union’s role is better defined and more respected in recent decades as authority is tempered by leadership, cooperation and coordination. This rediscovery of the legitimate and effective role of the Union even as more powers are devolved on States is one of the happy features of our Constitutional evolution. Though the situation varies from State to State, overall, such a development is still in its infancy in the relationship between States and local governments. It has to be strengthened in the coming years by empowering local governments, while the State Government continues to have an important and significant role, appropriate to that level. In order to achieve this, the Commission has carefully considered the principles to be applied in the reform of local governance. It considers the core principles to be: application of the principle of subsidiarity in the context of decentralisation; clear delineation of functions of local governments vis-à-vis State Governments and among different tiers of local governments; effective devolution of these functions and resources accompanied by capacity-building and accountability; integrated view of local services and development through convergence of programmes and agencies and above all, ‘citizen-centricity’.13cal GovernanceLo2.2 Subsidiarity2.2.1 The central idea of subsidiarity is that citizens as sovereigns and stake-holders in a democracy are the final decision-makers. Citizens are also the consumers of all services provided by the State. The citizen-sovereign-consumer must exercise as much authority as practicable, and delegate upward the rest of the functions which require economies of scale, technological and managerial capacity or collective amenities.2.2.2 The Oxford dictionary defines subsidiarity as, “a principle that a central authority should have a subsidiary function, performing only those tasks which cannot be performed at a more local level.”2.2.3 The principle of subsidiarity stipulates: functions shall be carried out closest to citizens at the smallest unit of governance possible and delegated upwards only when the local unit cannot perform the task. The citizen delegates those functions he cannot perform, to the community, functions that the community cannot discharge are passed on to local governments in the smallest tiers, and so on, from smaller tiers to larger tiers, from local government to the State Governments, and from the States to the Union. In this scheme, the citizen and the community are the centre of governance. In place of traditional hierarchies, there will be ever-enlarging concentric circles of government and delegation is outward depending on necessity.2.2.4 Application of the subsidiarity principle has three great advantages in practical terms. First, local decision-making improves efficiency, promotes self reliance at the local level, encourages competition and nurtures innovation. The demonstration effects of successful best practices will ensure rapid spread of good innovations and there will also be greater ownership of programmes and practices by the local communities. Second, democracy is based on three fundamental assumptions: all citizens are equal irrespective of station and birth; the citizen is the ultimate sovereign; and the citizen has the capacity to decide what is in his best interest. Only when these principles are put in practice can a democratic system derive its full legitimacy. Subsidiarity is the concrete expression of these foundations of a democratic society. Third, once decision-making and its consequences are integrally linked at the local level, people can better appreciate that hard choices need to be made. Such awareness promotes greater responsibility, enlightened citizenship and maturing of democracy.2.2.5 The Commission is of the considered view that a local government reform package must be informed by the principle of subsidiarity. Only then can citizen-sovereignty be real and meaningful and democracy will acquire content beyond structures and institutions.14The Co2 3 Democratic Decent r a isati ng vernance, 2.3.1 While subsid ar ty hould be th overarch ng principle in estructurin tr li at on. in practical c nstit ti nal te ms it c n be applied only thr ugh effective dece we e ena ted It is i r cogni ion f t is, hat the 3rd and 74th C nstitution l Am ndmentsnts are ve yn 992 Most of the c nstitution l provis on rela ing to loca go ernmcep ion tha sim lar to tho e ert ining o the Stat s (S C, EC) with t e signific nt e le the loc l the Sev nt Sc edule of the Constit tion remai s n ltered. As a esu t, wh nal mandat , governm nt tructure nd attendant ins itution a e created by a c nstituti ility o the the act al fu ctions t b devo ved on loca go ern ents are the r sp nsi Gover me ts Stat s. Theref re, effecti e democratic dec ntra isatio f om St tes to Loca at on should hould be the cardi al principle of a ministra ive e orms. Such a dec ntralibe influ nced by four gidi ng norms.ci izen theotes and the 2.3.2 First, th r shou d be a lear link in ci izens’ inds etwee th ir mocracy with co seque ce in terms f th p blic good it prom t s. We ave a rob st d er of power. regul r elections, c nstituti nal freedoms and peac fu trans d the e is a .3.3 Second, dec ntral sa ion ten s to romote fiscal re ponsibil ty, p ov d ices P ople clear link bet een resour e g neration an ou come i the f rm of bet er ser betw en he will e ncour ged o raise m re r sour es on y h n there is a greater lin le only when t xes nd use fe s l vied and the erv ces that a e d li ered. Thi is ossi sta eholders ser ic delive y is lo al y m naged o the ex ent fea ible and th citizens as er, or th s are direc ly empow red to ra se esourc s a d manage t e functi ns. Howe l go er ment link to b establish d effect vely betw en eso rces and he ou comes, loc o alibis for must be pe ceive to be full re pon ible for th ser ices so t at they h ve re ter value non perf rman e. nly t en can fis al prude ce, resource mob lisatio and c gov rnanc . f the publi m ney spen b integral o democratiabo t pe 2.3. Thrd, there is considera le asymm tr of power in our ociet . Onlhly wage nd cen of o r ork forc i em loyed in he org nise ector ith a s cure mon n overnme t attenda t p ivil ge an ove 7 per ent of hes workers ar employed r is furthe at v rio s evels nd in ublic sector ndehis asymmtakings.tr of powAny er ous a cen uated by our hierarchic l tradit ons omb ned with our col nia legacy people a d a ffor to make o r governa ce apparatus n nstrume t f s rvice o t e ow rful to l to ach eve nation l obj ct ves eeds to take into cco nt these two car inal fac ors plagui g our system – he asymm try in ower and he imb lance in ts ex rcise. .3 5 Fourth, i centralise struct res, citizen art cipation nd wnership are ill sory des ite nat onal citizen sohe closer tereign y.e gover me t roc ss is to the15cal GovernanceLgreater the participation, stakes and understanding of the issues. Therefore, if democracy is to be real and meaningful, the locus of power should shift as close to the citizen as possible in order to facilitate direct participation, constant vigil and timely intervention.2.3.6 In the ultimate analysis, all governance processes are about fulfilling the citizens’ aspirations and needs. Whatever be the structure of governance, we have to face two great challenges in the coming decades. The first is the fulfillment of human potential, prevention of avoidable suffering and ensuring human dignity, access to speedy justice and opportunity to all Indians so that every citizen is a fulfilled and productive human being. The second is the rapid economic growth realising the nation’s potential and allowing India to play her rightful role in the global arena in order to protect the vital interests of present and future generations and become an important actor in promoting global peace, stability and prosperity. We need to sharply focus the State’s role and fashion instruments of governance as effective tools in our quest for these national goals. Decentralisation is a potent tool to counter the phenomenal asymmetry in the locus of power and the imbalance in the exercise of power.2.3.7 Only in an effective and empowered local government can the positive power to promote public good be reinforced and the negative impulses to abuse authority curbed. Equally, ordinary citizens can hold public servants accountable in the face of the asymmetry of power exercised by the bureaucracy, only when such citizens who are directly affected by their actions are empowered to exercise oversight functions.2.4 Delineation of Functions2.4.1 In a federal democracy, the roles and responsibilities of various tiers of government have to be clearly defined. In all federations, this is usually done through a constitutionally mandated scheme. It is no accident that every federal democracy has a written Constitution, clearly listing the subjects under the jurisdiction of each tier of government and the specific role assigned to it. India’s Constitution too enumerates the subjects under State control under List II of the Seventh Schedule. Where a subject requires a federal and State jurisdiction it is included in List III and clear principles are enunciated defining the extent of authority of the Union and the States. However, in respect of local governments there are two complications.2.4.2 First, since all local government subjects by definition are also State subjects, there should be clear delineation of roles of the State and the local government, in respect of each of the subjects/functions, otherwise needless confusion and undue interference by the State will be the inevitable consequences. It must be recognised that in several of these functions, States have a vital and legitimate role to play. For instance, while ‘school education’ should be a subject of devolution, the framing of the curriculum, setting of standards and conduct16Thens itut on andof common in healthca e, of comm n exam nati ns sho ld all wit in the S ate’s purv ew Similarly, onal s andards developme t of protocol a creditati n o hospital and enforci g profess e of the loc l sho ld n cessar ly all wit in the tat ’s purv ew nd outside th co petenal overnm ntsgo er men s. Much o the onfusion a ou devoluti n f fun tions to loloca bodies has ri en f r want of th s role- lar ty be wee th Stat and thal deli eat on 2.4.3 Secon , within lo al go er m nts her is a need for c ear functio entrust d to a amon st the var ous tier . For exampl , while sc ool ma agement c n eld all wit in Village Pa chayat/par nts ommitt e, ost staffig and a ademi mat ers wo the purvie of t e igher tiers of lo al governm nt. S m larly, while a helth su -centr may e ook d after by the Vil age Panchay t, the Primar Heal h Cent e PHC) sh ul be managed by t e Intermed ate Pan hayat, an the C mmunity Hea th Centre a d h spitals the fu c ions y the Dist ic Pa chay t. By he sa e oken t ere is ne d t delineat ittee. The War betwe n a city/u ban gov rnment nd t e m ller tier of a ar Com al sanitat on C mmittee c n be entrusted with sub- ocal functi ns like s reet ighting, loe Commis io ’s mana ement of local scho ls mana ement f local heal h h entres etc. t devol ti n appro ch is i formed by t is r cogni io t at ther is no o ni us approac ng in view the of owers to lo al over men s and t at t e et ils nee to be vo ved eep c principle o loca ci cumstance a d balan in of details of d cent ali ation with the asfs bsidiarity 2. Dev lution in ea Termspe atio alised 2.5. Thprinciples f s bsidiarity and democratic d centra is tion cannot beto be real nd b m re creati n of elabo ate structur s and peri dic electio s. De olut on, wered to fra e mean ngfu , dem nds that lo al gov rn ents shoul be effect ve y emp ere f action. re ulations, tak decisi ns an enf rce th ir wi l within t eir le it mate spe C nstit tionS ch emp we ment sh uld be clearly an unamb gu usl defined by tublic ser ants and Stat leg slatures. ven legisla ed empo erment r mains llusor unless ent usted wit t e discharge of r spons bil ties nder the lo al gov rnm nts s her are fully their serv ce nd pe manen ly under l cal gove nment c nt ol, subjec t prot ction o urate with the c ndit on . O ly then is the re pon ibili y of the l cal governme t co menstand rds: the auth rity. Finally, fica de oluti n to the lo al g vern ent must meet twost b sucal ov rnme t ust be abl to effcti ely fulfill ts ob igat on there mficient l ew schem s and room for flex bility through un ie resource , to establ sh pri rit es, dev se llocate funds. Equ lly i port nt the e must be b th pportunit a d incent ve to mobilise cia proprietyocal re ource throu h lo al axes cess and use f es, s bj ct i to no ms of fna to e ensu ed and ccoun ability. hile ev lving funds to loc l overn en s, it need um entitlem nt that iss es of e ional equit – inte -state as w l in ra-stat – and mini of iti ens acro s t e coun ry, the ri ht guarant ed to cit zens under t e C17Local Governancethe legitimate expectations of a better life and reasonable opportunity for vertical mobility to all children are similar across the country. Therefore, the devolution package to local governments must go beyond the per capita norms and should take into account certain benchmarks regarding quality of life and services.2.5.2 However, real empowerment should go well beyond what the State gives in terms of power and resources. Giving effective voice to local governments to enable them to negotiate with the State on a continuing basis is equally important. For instance, the Upper House in many federal countries is created as the voice of constituent States and gives them negotiating power. Corresponding provisions relating to legislative councils in the State needs to be strengthened suitably to give a voice to local bodies.2.5.3 Equally important is the building of capacity of local governments to discharge their functions effectively. Strengthening organisational and management capacity, constant training and human resource development activities, conversion of state agencies into expert manpower pools providing guidance and support on demand, strong federations, pooling of resources, talent and management practices, ability to attract expertise available outside government to meet the growing need for high quality human resources in public management are some of the crucial challenges in enhancing the capabilities of local governments.2.5.4 Finally, real empowerment not only demands devolution and capacity building but strategies also need to be evolved to overcome the resistance of the state executives and governments as the compulsions of real politics often preclude the possibility of any serious measures to enable local governments to function as institutions of self governance.2.5.5 In its Report on “Ethics in Governance”, the Commission had observed “If the legislators are beholden to the executive, the legislature can no longer retain its independence and loses the ability to control the Council of Ministers and the army of officials and public servants”. An effective mechanism like empowered legislative committees is therefore needed to enhance the legislators’ role to give them an opportunity of exercising positive power for public good. Appropriate mechanisms will also need to be devised to enhance the role of a legislator in keeping with democratic values and promotion of public good.2.6 Convergence2.6.1 In large, complex governance structures compartmentalisation is inevitable. But as governance is brought closer to the citizens, this fragmentation should yield place to convergence based on the recognition that the citizens’ needs and concerns are indivisible. Even in an otherwise efficient and honest administration, isolated functioning of disparate government agencies and departments complicates the citizen’s life immeasurably. Therefore,18The Core P’ roupThere are co verg nc ust be a key ri cip e in the org ni ation of local gov rnme ts. ollo ing f ur br ad areas of co verge ce w ic n ed to be a ddres ed.2.6 2 F rst, he ru al urb n ivi e in the int rme iate and distr ct tiers of local go er m nts is a colonia l gac . At th prim ry evel he nee s of he rural p pul tio and the a proaches Also the re uired t add ess them are somewhat diffe ent f om those of urba peo le.eve , in occ pation l rofie of the p pulat on len s tself to ru al-urban catego isation. Hongr ity, t e larger eder te tier of ex lusiv ly ru al local gov rn e ts, as a esul of this inc ey n ver new m chan sms like the District Planning omm tt e ad to be cre ted, and t ken int to k ro ts. W th rapid urb nis tion and i crea ing need for p ri-ur an ar as to be t vergenc a coun in city pla ning and dev lopme t, t er must b greater inst tutional cobetw en ural nd ur an local govrn me n s.epen ent 2.6. S cond, a earli r sta ed (pa a 1 27), the p rastat l bodies functio totally in nt. Thus, from he local go ern ent and are directly ac ou tab e to he State Go ernm fe ation he local go ern ents re often di ested of their mportant f ncti ns. Such prol itizens’ of pa asta als run c unt r to the ri ciple of sub idi rity and recludes effectivel with a part ci ati n in the m na ement of these er ices. Thc tizen is om elle to eun tio s mul ip icity of au ho ities o ac ess even he basic men ties and er ices. The local tutional of ll these au horities here or need t d volve on local gov rnme ts even as inst uidan e. m chan sm n ed to b d vised o be efit fr m experthrough a 2.hird, th.4cit ze must b e abled to inte act with al service roviderservices sing e ind w s far as pra ticable. Incr asi gly, all over t e world several isparate oof. For pr vided by different ag ncies of go ern ent, are va lable to citiz ns nder ne vice in nst nce, the os ffice i a nod l a ency or voter reg str tion and m ny other seb aining some c un ries. In G rmany a local g vern en offie is he point o c ntact inmilarly, a asspor , t ough t e actua s rvice is pr vid d by th federal go ernment. S on ios c ll ction o tar ffs, fees nd taxes b variou service rov de s a be at a comcent e. and all c mpl ints and su ges io s can be re e ved at a co mon calders nd 2.6.5 Fi ally, a po nt d ou in para 2.2 (subsi iarity), em ow rment of sta eho de s can local go ernmen s houl b een as a c ntinuum. W ereve a group of stak -ho directly b clearly i ent fied, for nst nce, th p rents of ch l ren of sch ol, th y hould betegrallmp wer d to t e extent os ible so that stak -ho ding and power wie ding are ito local linked. However, sta e-holder em owerme t s ou d no b seen as ant th tical based on g vernment emp werm nt. Both ar pa t of the s me uest or local g verna ce ed group sub id rit . At the s me ime, the repre entat ve local g ver men and the mpowe have to of stak -holde s cannot fu ction in i olat on Ju t as he tiers of local g vern en fu ction in close coor inati n, local g ver ment and mpowered stake holder19al GovernanceLocshould work in concert. The larger functions of support, coordination and policy will be with the local governments, and the actual day-to-day management and service delivery will be the responsibility of stake-holders. This convergence between the empowered stakeholders’ groups and local governments should be a key feature of decentralisation.2.7 Citizen Centricity2.7.1 The citizen is the heart of a democratic system. Therefore all governance institutions, particularly local governments should be judged by the satisfaction of citizens and the direct empowerment of people.2.7.2 Since propensity to abuse authority is intrinsic to all authorities; and local governments are no exceptions, for local governments to be effective in fulfilling their desired objectives, a series of mechanisms need to be constituted giving voice to the citizens. Measurement of citizens’ satisfaction as the consumer of public services is an important mechanism. Report cards, citizens’ feedback at delivery and service counters, call centres and such fora for the citizens’ voice to be heard and feedback to be counted, needs to be institutionalised in decentralised governance. In addition, social audit through credible community based organisations, civil society groups and prominent citizens would ensure citizen centricity.2.7.3 Representative democracy is a necessary mode of organisation in government. While citizen sovereignty is acknowledged, it is impractical for citizens to participate in decision making in large structures. However, at the local community level, the citizen as stakeholder can directly participate in decision making, relatively easily. A Gram Sabha comprising all the adult residents of a village is a far more legitimate guardian of public interest. Similarly, in urban governance too, we need to create smaller structures for decentralised decision making with people’s participation.2.7.4 The most important form of citizens’ participation is a community of clearly identifiable stakeholders in the delivery of a specific public service. For instance, parents sending their children to a public school, farmers receiving irrigation from a common source, producers selling their produce in a market and members of a cooperative are groups of clearly identifiable stakeholders who also need empowerment in consonance with the principle of subsidiarity.2.7.5 The Commission has taken note of the debate on local governments versus citizens’ groups. The Commission is of the considered view that empowerment of stakeholders and local governments must be seen as a continuum and that there should be no cause for conflict between stakeholders’ groups and representative local governments. Effective empowerment of stakeholders accompanied by mechanisms for coordination with local governments is, therefore, a key principle to be followed.203 C MMON ISSUEth ru al and The princi les govern ng democratic de ent ali atio ar the same or reas a d su h rban reas. l rge nu ber of iss es are ommon to oth u ban a d r rale i sues th t is ues have been c mprehens ve y ex mined in th s Chapter In additi n, t pters – Ruic toal re sp ciural or ur an overnanc a e d tailed i two sep r te ch overn nce and Urban ov rnance.3.1 The onstitu t i o n l cheme3.1. ThPrinciple of Subsi ar tya fun am nta 3. .1. The 73rd and 7 th Ame dments of the Const tutio , h ch aimed at in 1 93 w th shift in the nature f go ernanc , ere ass d in 1992 and c me into effec de shows that reat hope and anticipa ion How ver, the p st expe i nce of over dec ctions do n t creat ng structu es of elected loc l g vernment and en uring reg la el arpalikas and necessa ily guar ntee ffective loca empo erment. Whi e Panchayats Na as not alw ys unic pali ies ave come nto existence and elect ons a e be ng eld thisof degree t f ansl ted into real de en ralisa io ofThpower. Con tit tion ef the i sut guarantoe powerment nd dev lutio to the Stat Legislature. en ral s tion is nalienate the of citi en ’ ‘l berty or goo g ve nanc ’, it in fact delegitimi es democr cy, A large- iz d citize , perpetuate hi rarch es, an often bre ds orruption a d inefficiency. f po ul tio . dis ri t in I dia s lar er than a out 80 Na ion State i the or d in terms ttar Pradesh Most of our large S ates oul be a ong the l rg co ntries of th world. Europe. Uttar Mah rashtr , W st Be g l an Biha – eac would e the ar est nat on in n n th fac Pr desh w uld e l rger th n the world’s sixth la gest country. en ral sati lead to po r of such vas n mbers n t t speak o the enorm us ivers ty, an ofte the 73rd and unctio ing of p bli services and m rg nalisatio o cit zens. In his back rop mpowerin the 74th onstitutio al A endments we e n ended o e a b eath of fresh a r, emocracy, and ci izens through loca governme ts, redefin ng the State in igorating ur r, democrati inje tin efficiency and cc unt bility in our pu li servi es. As s ated earli cted to yield ins itutions eed patie ce, nurt ring and l ng voluti n, and cann t e expin tant res lts However, fo demo racy o work t ere should b consistency, p21cal GovernanceLoand effective empowerment of institutions combined with accountability. An analysis of the empowerment and functioning of local governments in various States leads to the following broad conclusions:?Despite the mandatory constitutional injunctions, it took years, and in some cases a decade, to even constitute local governments and hold elections.?Even when local governments are constituted and elections are held, States often postponed the subsequent elections on some pretext or other. Each time it is an uphill task to ensure compliance in some States, even with the mandatory provisions of the Constitution.?There has been no linear development or evolution in respect of democratic decentralisation.?State Governments, legislators and civil servants are in general reluctant to effectively empower local governments. Only the bare minimum required to implement the strict letter of the Constitution prevails in many States. What is implied by the spirit of the Constitution and principles of democracy is often ignored.?Even mandatory provisions like the constitution of District Planning Committees and Metropolitan Planning Committees have been ignored in many States.?Where the Panchayats have been constituted and elections held regularly, they are still left at the mercy of State Legislatures and State Executive. Although local governments have a long tradition of autonomy, the fact that Union and State Governments have an established tradition of centralisation for nearly four decades, means that strong vested interests have developed over time disallowing devolution of power.?Some legislators at times tend to act as ‘executives’, intervening in transfers and postings, sanctioning of local bodies’ contracts and tenders, crime investigation and prosecution – all of which are therefore often at the mercy of the local legislator. Given the compulsions of survival, the State Government which depends on the goodwill and support of legislators, does not usually intervene except where the Constitution specifically and unambiguously directs it.3.1.1.2 There is a strong case to revisit the basic constitutional scheme relating to local government.These are being outlined in the paras that follow.3.1.1.3 The provisions of Articles 243 G and 243 W of the Constitution relating to the powers, authority and responsibilities of local governments have been interpreted by most States as being merely advisory in nature. The Statement of Objects and Reasons of the Constitution (Seventy-third Amendment) Act, 1992 points out:22Commopectruit as “Thugh the Pa cha ati Raj Inst tuti ns h ve been in e ist n e fo a lo g imedi nity been bser ed th t these inst tuti ns ave ot b en able to acq ire th st tus and ence of o vi ble and re ponsive eople’ bo ie ue to n mber of reasons i cluding ab ecti ns regular el ctions, p olonged supers ssions, in ufficient repres nt tion o weaker po ers like S heduled Castes, S hedule Tr bes an women, in dequate de ol tion o so rces. nd lack ofinancial ref Stat 2. Ar ic e 4 of the Cons ituti n which e shr ne on of the D rective Pr nc ples d en ow Pol cy l ys d wn hat t e Sta e sh ll ta e teps to rganise village pa cha ats a tion s t em w th suc po ers and a th rit a may be n ce sary t ena le them to un in vie nits of self-gov rn ent In t e igh of the ex er enc in he la t for y y ar and erat ve of the short comin s wh ch h ve been o se ve , it is co side ed th t he e is an im ati Raj need to ns rin in the Cons itution certa n b sic and e sential eaures of Pa cha Inst tu ions t impart ce tainty, co tin ity and st engt he n them” -fourth 3. .1.4 The S at ment of Obj cts and Re son of the Cons itution (Sevent Am ndm nt) Act ad thisto say: va iety In many State , loca bod es hav bec me eak and in ffe tive on ac o nt of a ons and of easons, i clu ing the fa lure to hold regular el ctions, p olonged super ess are ot in dequate de ol tion o po ers and fu ct o s. As a resul , urb n loca bo iesable to perform effct vely as vibrant de ocrat c nits of self-govern ent”.e thiThcommo de ir was t ens re self go er men by t e local bodi s, hat is, trdtier f local 3.1.1.5 oweve , w ile the consti utional pr visions el tin to the s ru ture re less gov rnm nts re ver st ong and m nd tory in nature, rti l s 2 3 G a d 2 3 Wwel as cate or cal. Thi ten of the Cons it tion s cl ar rom the Obj cts and Re sons asrnment, the d fin tion f local gov rnme ts vide rti l s 2 3 D a d 243 P whe e local gov rnment. whether Pa ch yats or Municip lit es, ar d fined as inst tu ions of self gov s “w th Si ilarly, rti l s 2 3 G a d 2 3 W a e cle r about ndowi g local gov rnmen of Self su h p wer and a th rit a may be n ce sary t ena le them to un tion as inst tu ionsGover n m e n t” la ures 3.he.1.6ssue of w eth r a firm consti utional d rective co pelli g State Legipubli to empow r local gov rnments effct vely is d sir ble a been m tter of mucap ily, deb te ver he last decade. learl , here is need to empow r local gove nments. an im ressive p litical c ns nsus on th s iss e among p litical partie ac oss the23ocal Governanceexists. However, when it comes to action, many States seem to feel that the balance of convenience lies in favour of minimum local empowerment. Given this backdrop a strong constitutional provision mandating effective empowerment of local governments seems both desirable and necessary. However, there are difficulties in such an approach. First, the autonomy of States must be respected in bringing about major constitutional amendments. Second, the situation varies from State to State and the uniform approach [one shoe fits all] could be detrimental to the objective of local government. Third, the matters listed in the Eleventh and Twelfth Schedules could not be fully handled by the local governments even in the best of circumstances. As pointed out in para 2.4, there are several functions which can be identified under each matter/subject and they in turn should vest in the appropriate level of local government or State Government based broadly on the principle of subsidarity. Such detailed prescription is not possible in the Constitution and the States must have the operational freedom in devolving specific functions to local governments.3.1.1.7 A close examination of the Eleventh and Twelfth Schedules of the Constitution shows that they are only illustrative and not exhaustive. Also, there appear to be certain incongruities in the Twelfth Schedule and several matters listed in the Eleventh Schedule that ought to have been included, have been omitted inadvertently.3.1.1.8 Agriculture, rural housing, watershed development, farm forestry, minor forest produce, rural electrification – all are functions which by their very nature “belong” to rural local bodies. But non-conventional energy (sources), poverty alleviation programmes, education including primary and secondary education, adult education, technical training and vocational education, women and child welfare, family welfare, the public distribution system, even animal management and welfare (slightly different from husbandary in the traditional sense), libraries, cultural activities (which figure in the Eleventh Schedule but not in the Twelfth) – can surely be functions for municipalities too. The Twelfth Schedule does cover a vast range of subjects – urban planning, land and building regulation, fire services, roads and bridges, urban poverty alleviation, slum improvement and upgradation, provision of amenities, water supply, sanitation, public health, environment and so on. However, somewhat unexpectedly, “economic and social development” of urban citizens is restricted to only planning for them, and education covered only as “promotion of ....educational....aspects (sic).” On the other hand, as mentioned above, various aspects of education figure prominently in three functions listed in the Eleventh Schedule and are intended to be devolved on rural local bodies.3.1.1.9 The Commission examined the desirability of reviewing the two Schedules. However, these lists are merely illustrative and in any case, there is need for further functional24Common Issuesdelin ation bedelin ati n Abet eenAtheASt te A overn entAandAlo al governm nt inAr sp ctAof mostAofA two A che ul sA hese Amatt rs. Therefore, A he Co mis ionAisAof A he Ac nsid red vie AthatAthe Aillus ra iveA needAn t Ab Arev sed Abut that theA act tha AtheyAareA ot A xha stiv AandAareAonl beArecog is d. shouldAtionA NCRW ),A 3.1.1. 0 ATheANatio al Commis ion to ARevi w A heA orkingAofAth AConsti t Ao Afunc ionsA w ichA lso A ent Ainto A his question, was Ac nce ned A bout Athe Ap or devolutio t Alo alAb die AandAmade theAfollowingArecommen ati o :nctionsAto be Arti leA2 3G A longAwit AtheAEle enthASche ule indi at s AtheAkin Ao Af Aof Aexclu iv A dis hargedAbyAt eA anch yat .AItAdoes notAguarant eA s ign en sAofAaAse edAtoAplay inA fu ctionsAtoAt eAPan hay ts.A en eAth Akin Aof Ar le theyAwou dA eAex ec nt of Aa AState. gove na ceA epends onAt eAregime tha Acontrols A he g vernmealheACommissiyA eclaredAn,Atherefo e,Ar commendsAt at APan ha atsAshouldAbe categorigne AtoA hem.A toAbe “istitutionsAofAse f-g vernment” and Aexclu ive Afu ct onsAshou dA eAassFor thisApu pose AArtic eA 43GAsho ld beAa en ed AtoAreadAasAfollow : Sbstitut onAof A rti leA243G -AF rA rti le A243AG, theAfol owing Ar icleAshallAb Asubstituted,A amely:Pow rs, authorityAandA esonsibilityAofAPanc ay ts. AS ateA hall A ubjectAtoA he prov sionsAofAthis Con titution,At eA e islat reAofA ar Aneces aryA by law,AvestA heAP ncha atsAwi hAs ch Apowers an Aau horityAasAandA uch Alaw oA nableAth mA oAfunction Aa Ai stitutionsAofAs lf- over men pons bilitiesA shallAcont in A rov sionsAfor A he devolu ion ofApowers AandAre io s AasAsha lA u on Pan hayats Aat At eAappr priateA ev l, As bjectAto As ch condi beAspe ified therein AwiAre pectAto-AA( )Arepar tio Aof Aplan AforAeconom cAd velopmntAandAs cia Aju tice;A(b)Athe A mpementat on A fAscheme AforAeconom cAd velopm ntAandA oc alAju ti eAasAshal Ab Aent ustedAtoA hemAi cl dingAtho eA nArlationA oAtheA at ers listed Ai AtheAElev enthASch dule.”oAthe Apow rs, Simi ar Aame dm ntsA ho ldAbeAm deAi AArticle 24 WAr lating A authorityAandAre posibilitiesAofAM nici pal ties, etc.”Athe ex sti gATheANCR CAr com en ed A he Ause of Athe ph ase “shal Ab Alaw Ave t”A sAagains“may by lawAendo ” Ai A rti les 24 AG Aand A 43AW. A erha sASta es Aha e A ake25LocalAGovrnancepresent provisions as discretionary and not mandatory. The expectation is that, with an express mandatory provision the process of devolution would take centre-stage.3.1.1.11 The Commission has examined these reports, arguments and presentations with great care. It is of the considered view that while Articles 243 G and 243 W need to be strengthened, it is desirable to lay down general principles of empowerment without unduly restricting the States’ freedom of action. In particular, two principles need to be stated in the Constitution so that the State Legislatures can make laws based on these governing principles. First, devolution should be based on the broad principle of subsidiarity, and local governments at the appropriate level should be vested with adequate powers and authority to enable them to function as institutions of self government in respect of functions that can be performed by the local level. Second, as matters listed in Eleventh Schedule are not intended to be wholly transferred to local governments, the empowerment of local governments should be limited to specific functions, which can be performed at the local level. The Commission therefore recommends amendment to Article 243 G (and 243 W) on the following lines:3.1.1.12 Recommendations:a. Article 243 G should be amended as follows:“Subject to the provisions of this Constitution, the Legislature of a State shall, by law, vest a Panchayat at the appropriate level with such powers and authority as are necessary to enable them to function as institutions of self government in respect of all functions which can be performed at the local level including the functions in respect of the matters listed in the Eleventh Schedule”.b. Article 243 W should be similarly amended to empower urban local bodies.3.1.2 Strengthening the Voice of Local Bodies 3.1.2.1 Article 171(2) stipulatesUntil Parliament by law otherwise provides, the composition of the Legislative Council shall be as provided in clause (3).“(3) Of the total number of members of the Legislative Council of a State –26Common Issues(a Aas Ane rl Aas may be,Aone-t irdAs al AbeAele te AbyAelector tesAconsis in AofAmem er Aof Amunicipalit es,Adist ict Abo rds andA uchAo herAl calAauthori ie Ain theAS at AasAParlia ent ma Aby lawAspecfy;AofA Aas Ane(brl Aas may be,Aone-twe fthAs al AbeAele te AbyAelector tesAconsis inte A per onsAresi in Ain theAS ate whoA aveA een fo AatAl astAt ree Ay arsAgradu reeA of anyAuniver it Ain theAterri or AofAI di AorA aveA een fo AatAl astAt AbyA y ar AinAposses io AofAqualificat onsAprescr be Ab AorAu der any lawA ady;AParlia en Aas Aequiva en AtoA ha A fAaAgrad at Aof anyA uchAunivers (c Aas Ane rl Aas may be,Aone-twe fthAs al AbeAele te AbyAelector tesAconsis inAofAper ons whoA aveA een fo AatAl astAt ree Ay arsAeng ge AinAteac in AinA uchAeducati nalAinstitut onsAwi hin the ASt te, notAl we Ain Astan ard A hanA ha A fAaAsecon ary Asch ol Aas ma AbeAprescr be Ab AorAu der any lawA ad AbyAParliamnt; (d Aas Ane rl Aas may be,Aone-t irdAs al AbeAele te Aby the Amem erAof theALegisla iveAAsse bl Aof the AS ate A rom Aamo gstAper ons who are not Amem er Aof theAAssem ly;and (e) theA theAremai derAs al AbeAnomin te Aby theAGove no AinAaccord nceA ith5) ” .provis on AofAcl useA(Aof 3.1 2.2 APresen ly, A os Aof theASt te Ado notA aveALegisla iveACounc ls.AA ter theAenact en te A theA 3rd and A 4thAConstituti nal AAmendme t ,Aa At ird A ie AofAGovern ent has A eenAcre entA in theA or Aof theAl calAbod es AThe ACommis ion Af elsA hat A hisAt ird A ie AofAGovern ingA sh uld A lsoA a e AaAs ak AinAma ingA aw Ain theAS ateALegislatu es.AA art A romAconstitu AbeA Legisla iveACoun ils A(w ereA he Ado not Aexi t), the Aexis ingALegisla iveACoun ils mare as A sAaAcou cil forAl calAgovernm en t s .iveA 3.1 2.3 AArt cle 171 Aprov des for Aelec io Aof Aone-t ir Aof the AMem er Aof the ALegisla ticA Coun il At Abe Aele te Aby Al cal Abod es. AHowe er, Ag ven the Aimport nc Aof Ademocr nalA decentralisat on, A his Apropor io Aof Arepresenta ion for A he Ais not Aeno gh AThe Aconstituti ll A provis ons A a e Aa Ahistor cal Abackgr und Abec use the Anu be Aof Aeduc ted Apeop es, Aespeci hasA in Ar ral Aar as, was not Al rg Aat the A im Aof Afra in Aof the AConstitut on AThe Asitua ion hasA cha ged A ver the Aye rs. A ith Astr de Ain Aeducat on, the Anu be Aof Aeduc ted Aelecto ate er A incre sed Amani old a d Aa Agradua ion Ade re Ais Anot ing Aexcepti nal Ato ay. ATheref re, At io A i Ano Ara son Ad’ tre now for Aha i g Aa Agrad ate Aconstitue cy. AMoreo er, A ith Amodernisa may of the Aecon m , Aa Al rge Anu be Aof Aprofess ons A ave Aeme ged an Ain A u h Aa Ascen ri Ait no Abe Apr pe AtoA ive Arepresenta io AtoA nly one Aprofes ionA hat is, A‘teachi g’.AArt cle 171Aprov de Aan Aopportu ity for Arestructu ing theALegisla iveACoun il A s AaACou ci AofAl calAgovernme ts. Ahus, theALegisla iveACou cil Ash uldA ave Amem ers Aele tedAso ely A rom27LocalAGovernanceelected representatives of the local bodies. This would not require any amendment of the Constitution – a law of Parliament would suffice.3.1.2.4 Recommendation:a.Parliament may by law provide for constitution of a Legislative Councilin each State, consisting of members elected by the local governments.3.1.3 Structure3.1.3.1 In the current constitutional scheme, detailed and inflexible mandatory provisions exist in respect of the constitution and composition of local governments including the manner of election. There have been strong voices across the country seeking a more flexible scheme, granting greater freedoms to States to design the Panchayat structure, suitable to their requirements. In particular, there are three issues to be examined carefully:1.Number of position of local bodies and mode of elections3.Urban rural divide at the district level.Number of Tiers3.1.3.2 Article 243 B makes it mandatory for every State with a population exceeding 20 lakhs to have three tiers of Panchayats at the Village, Intermediate and District levels. In a vast and complex country with traditional diversity, it is not feasible to prescribe nationally any specific pattern of local governments. Also, the States should have freedom to experiment and improve the design from time to time. In Kerala, there are only about 999 Village Panchayats in 14 districts. Clearly a mandatory intermediate tier Panchayat would be redundant in Kerala. Even larger States, with generally smaller habitats mostly want to treat a group of villages as the polling unit of local government on the pattern of the countries in the West. In such a case again, Intermediate Panchayats may be redundant. At the same time, if the States wish to have three tiers, they should be free to adopt them. The Commission is of the considered view that while the States should constitute the Panchayats, the tiers of local government should be left for the State Legislature to decide. Article 243 B should be correspondingly amended to constitute in every State, Panchayats at the appropriate levels instead of specifying mandatory creation of Village, Intermediary and District position of Local Bodies and Mode of Elections3.1.3.3 Until 1993, States had their own models of Panchayats. Typically in most States, the Village Panchayat head was the ex-officio head of the Intermediate Panchayat (IP),28Common Issuesand the .ASeve alA an At e Ahead Aof AIn ermediate Pan hay tAwas A he member Ao ADistrictA anchaya ree tiersA State Abel eved th tAsuchAanAa rangeme tA nsured A n Aor anicAli kAb tween theAt AmakesAitandAf cilit tedAtheirA armonious Afu ctionin . AA t cl A24 AC AofAtheACo stitu io chosen byA man ato yAf r Aall th A eatsAinAa Pan hayat (atAev ry le el) Ato be ‘filledA yApers ns ords,A he direc Aele tionAfromAt rritorialAcons it enc esAinAthe Pancha at area’ AInAot erA eAelecte A membe Aof A ve yAtierAof P nchayat A AVillage, AIn e mediateA A istric A- shouldA anicAli kA d rec ly Aby A heA eop e Aand A heAS at s Ahave AnoAlex bilityAof Aes abl shing Aa yAor Panch yatA b tween the Ath eeAtiers AHowe er A here Ai AaAstron Aa gument in favo rAofAeach Aonce At eA bein Adirect yA lec ed AbyAt e Apeopl , A n tead Ao Aa series Ao Aindirect A lect ons nAwillAbeA embersA fAVillageA anc ayatsAar Aele t d.ASuc Aa system Ao AindirectArepr sent ti ve nmen .A in reasin lyAr mot AfromA heA eople andAmi ht A efea Athe Ave y A urpos AofAlocalAg Ae ect onA InAso eASt tes, Ath sAp oblem A as eva edAin Ath Apr -1 9 Aera Ab Aa Adire t Apopula Athe 198 A ofAthe AC ai per onAof Athe A anc ayat.AFor in tance, inAAndhr APrad sh, unde chosen byA law,Athe AC ai per onAofAth AVillage,AIn erm diateAan ADistrictA anch yats Aw re itutional dire tApopular A lection ,Athrough unive salAadult A ranch se. UnderAt eAcurrentAcons provisio A{A t cle A2 3AC (5)}, theAState AL gis at on Ahas no choice Ai Aal ering A he manner Ao Ae ect on AofAthe AC ai per on AofAthe AIn ermediate Pan hayatAan ADistrictA anch yat.AS meA tates A ay Apre er Adirec Ae e tion Aof Aa AC ai perso Ai Aorder toAensu e Agreater st bilit AofAlocalAg ver ments A ndAhigher Aacco nta ilityAandA egit macy A hat A o es Afro AaAdire tApopula Amandate AIndirec Ae ect onAofAthe AC air ers nA as Aled A oAcertainAcom li ations Aon oc asionsAhAaA artyA n A c ount Aof aAcomp ex systemAof Ares rvat ons AThereAa e Aseveral in tance A nAwhi whic At eA wit Amajori yAs ppo t Adi Ano AhaveAany electo al mem erAinAth Aca egory for office Aof AC air ersonAwasAreserv d.wAp ovi eA 3.1.3 4 AA t cle A24 AC A 3)( ) AandA(d) A tipu ate Athat theAStateAL gis at reA ayAbyAl AState atA for AtheArepr se tat onAof At e A embersAofA arl ament andAStateAL gi lat reAof th Ap esenceA le elsA the AthanAt eAvill ge level. AThe A om is ion is Ao Athe vie Athat Ath Aimposin ubdueAthe f A embersAofA arl ame t Aand theAStateAL gi lat reAin AtheA ancha ats Awo ldA antAlocalA em rgenc AofAlocal A eader hi A hich isA Asi eAq aAnonAfor Ad ve opmentA fAvib ament andA go ernments. Ther fore, Athe A om is ion is Ao Athe view Ath t A embersAofA arl theAlo alA StateALe islatu es A houldA ot Abeco e A ember AofAloc l Ab dies. ThisAw uld endowb diesAwith Adecis on-makingAcapa b i l i t i s. ecideAtheA .1.3.5 AO Aba ance, Athe A ommis ionA eels At at ASta es shou dA e Afree toA ondit onsA c mp sitionAofA anc aya s Aand A he manner Ao Ae ecti nAto A uitAt eir AlocalA AindirectA best AHo ever, Athe A om is ion is Ao Athe vi wAt atAin A he ASt tes whi hAoptAfo ers nsAof em ershipAof AIn ermediate P nchayatA ADistrictA anchaya ,Aw erebyAtheACh ir the Al werAti rs Abeca e A embers of Ahig erA iers, and th re AareAn Adirect yAelecte Am mb rs,AitAis de irab eAt AhaveAthe AC airperso Adirectl Ae ected AInAot er word ,AinA achAti29Local Governancethe members or the Chairperson should be directly elected so that the population will get proper representation.3.1.3.6 One important feature of the constitutional scheme of local government is the empowerment of the SC, ST, women and where the States choose so, OBCs through a system of reservations. Already evidence shows that women and weaker sections elected to Panchayats and Municipalities have performed very creditably. The resultant empowerment of these sections has been one of the most noteworthy features of local government.District Council3.1.3.7 The sheer accident of elected urban local governments coming into being first during the colonial era led to parallel and disjointed development of panchayats and municipalities. Consequently, the statutory framework has also been separate and no efforts were made to ensure their convergence. The isolation of rural local governments from urban local governments has resulted in several unhappy consequences. First, there is an artificial divide between the rural and urban populations even in matters relating to common needs and aspirations. For instance, health care and education are the basic public services that should be available to all categories everywhere. Segmentation of these services is neither desirable nor feasible because there is a hierarchy of institutions, each feeding into the other and the geographical location of an institution, say district hospital, does not mean it caters to only the urban population in the district town.3.1.3.8 Second, in a rapidly urbanising society, the boundaries between rural and urban territories keep shifting. In time, the population served by rural local governments will shrink quite significantly. In fact, the peri-urban areas around fast growing cities have hybrid characteristics of both village and town, and their special needs must to be addressed in an integrated manner. Further, the obvious need for coordination between rural and urban local governments at the district level gave rise to artificial institutions like District Planning Boards and District Development Review Committees in the pre-1993 era. This is now sanctified in the Constitution by the creation of DPCs under Article 243 Z D. Finally, in the public eye there is no single, undivided local government, representing all sections at the district level. The districts are over two centuries old and have come into their own as vibrant political, cultural, economic and administrative entities, with each having its own distinctive characteristics. Despite this, the artificial rural and urban separation meant that the people continue to view the Zila Parishad or the municipality as just another body and not the embodiment of the district in political terms. Not surprisingly, in most States, the District Collector continues to remain the real symbol of authority in the district.3.1.3.9 The 73rd Amendment of the Constitution built upon the Balwantrai Mehta model30Common Issuesand the Asoka Ai tegratio A ndAth AAsokaAMe taACommitteeArec mm n ations AasAa re ul AthereAi AnoAeffectiv dAin A tic at eA Ad st ict level ofAallAloca A overn en sA–Aur an orAr ral.ATheADP sA rescrib onAis AofAt eA 2 3Z AD are too AweakAand no -sta tersAin many AStatherefore, Ats. AeA om issrese tat vesA con ider dAvie ,Ath t A h re Amus Abe AaAs ngleAele tedADis rict CouncilAwithAre rAtheAent re f omA llAru alAand urba Aare s,Athat A il A unct on Aas aAtrueAloc lAg ver mentAf lAfunctio s,A dist i t.AInAs ch A Ascheme, theADis rict Co ncil AwillAb Are pon ibl AforA llAtheAloc eADPCAi Aits in luding tho eAli te Afo AthemAin the Elevent AandATwelf h h A che ul s.A pres nt formAwillA e Are u dant,Aon e AaADis rict A ounc lAcomes Ai to existence as env sagedAby Ath ACommiss on. Pla ning A orAthe Aw o eAdis ric A–Aur a Aand rural A AwllAbecom AanA Coll ctor/ MA nt gra Apart Aof the ADistr ct ACouncil’s Are po sibi it . AThArole Aof the ADistrictAGov rnm nt. ls AneedsAt Ab Are iewedAi At eAc ntextAof theADis ric ACo ncilAand theADistric ng advoc tesA ThereA re Atw Abro dAvi wsAthat have eme gedAo er theA earsAo AthisA ssue.AStr stitution is of Aloca Agovernment Aempo erme tAa gue Athat the ADistric ACollector’ Ai ernment AandA r dundantAin aAdemo rati AmilieuAw thA mpowered andAefectiveAloca Ago uti nAserve A shoul , A herefore, beAdi pensedAwith APrag atis sAa gueAthat Ath ACollector’ Ainsti dAorder inA A the cou tryA ell for Asome A woA ent ries and hasAbe n A heApillar ofA tabil ty a Am st A emainA diverse A nd Aturbu entAsocieherefore,Athy. AAi stitutio AofADistr ctAC llectould have A tsA i Athe cur ent A ormA or Aso eAmoreAtime AEv ntually, theADis rictAC unci Ashtilising th Aown ChiefAOffice .A ea while, A sAan Ainter mAmec an sm,At er AisAmerit inAom iss on AisA st engthAof Ath ACollector’ Ai stituti nAtoA mpowerAlocal goheA ernments. AableAand theA ofAt eAco side e Aview A hatA Agolden mean A etw en Athese A wo positions isA esi Ast engthAof Distri tAgo er mentAmust be Aem owere Awhile Afu ly A tilisingAtheA nstituti na theADistri c tAColle to .d,A y Amaking3.1.3.10 Ahe ACommis ionA eliev sAt atAtheseAt oAo je tives Acan be realis suc Aa Acase,A the ADistr ct AColle to Afu ction as Ath AC ief Officer Aof the ADist ic ACou c l. AIn ACouncil ATheA th ACollector’ Aappoi tm nt should Abe Ain cons lta ion Awith the ADist ic and Aw uld AbeA District AColl ctor- um-th AChie AOffic r Awo ld Ahave Adual Ar spo sibil ty to Athe ASta eA full Aa cou table At Athe Aele ted ADistri t A ove nment on Aall Al cal ma ter , Aand t.AThs A ssueAove nment Aon Aa l Aregul tor Amatters A ot del gatedAto theADistric AGo ernmewi lAbeA urth r A ealtAw th in A etailA n A he ARepor Aon ADistrictAA minis ra tio nA(TOR A6).3.1.3.11ARecmmndation :dAasA ollowAa. : AAr icleA2 3B 1)Ashou dA eAam nd dAtoAreaishereAshallAbatu eAmayA “Ac nstit tedAin ev ry A tate, asAtheAStat ALenceAwithAt eA by law Aprovid ,A anchayatsAa Aappro ri teAlevelsA nAac ord rovi ionsAo31LocalAGovernanceb. The Constitutional provisions relating to reservation of seats (Article 243 D) must be retained in the current form to ensure adequate representation to the under-privileged sections and women.c. Members of Parliament and State Legislatures should not become members of local bodies.d. Article 243 C(1) should be retained.e.Article 243 C (2 & 3) should be repealed and supplanted by Article 243C(2) as follows:243 C(2) Subject to the provisions of this part, the Legislature of a State may, by law, make provisions with respect to composition of Panchayats and the manner of elections provided that in any tier there shall be direct election of at least one of the two offices of Chairperson or members.Provided that in case of direct elections of members in any tier, the ratio between the population of the territorial area of a Panchayat at any level and the number of seats in such Panchayat to be filled by election shall, so far as practicable, be the same throughout the State. Also, each Panchayat area shall be divided into territorial constituencies in such manner that the ratio between the population of each constituency and the number of seats allotted to it shall, so far as practicable, be the same throughout the Panchayat area.f.There shall be a District Council in every district with representation fromboth urban and rural areas.g.243 B (2) should be substituted by:“There shall be constituted in every District, a District Council representing all rural and urban areas in the District and exercising powers and functions in accordance with the provisions of Articles 243 G and 243 W of the Constitution.”32Common Issues3.2ionsc tio n 3. .1 ATheAEle toralAPr oce s s3 2.1.1 Aft r Athe Ai itialAhi cups,Aele ti ns Ato local A odi sAa e Anow beingAcon uctedA airlyAreg la lyAin A lmo t Aall A tat s Aand Aindep ndentAEl ction ACommi sion Ahav AbeenAconst tutedAever wh re AasAconstitu ional Aauthor ti s.AAtApr sent,AJha kh nd A s Ath Aonly Sta eA otAt Ahav AheldAPan hayatAelec io s. AIn Ar sp ctAofAmunicipal tie ,AtheAc nd ct AofAele tio s Aha A eenAaA ment ittlAAmoreAirre ular,A artlyAb ca se Aof Ape iodicA ha ge AofAboun ar es Aof localAgovernAtheA withAurbanis tion.AHo ever, the e AareAs veral A ssues whic An ed toAbe Aadd es edA m ent s . c nd ct AofAele ti ns Ato localAgovernStateA 3 2.1.2 AAl hou h AtheAConsti utionAen rus sAtheAc nd ctAofAele ti ns A o Ath ASECsA ationA El ction ACommiss ons , Athe AComm ssion (S C) Ais oftenAhe ples Awh nAtheAdelimi A“the ex rc se A sAnotAcom le edAin time.AA tic e 24 ACA f AtheAConsti ution Apr vide Atha ratio Ab twe n AtheApopu at on A fAthe Aterri oria Aa e Aof Aa APan ha atA tAany lev lAa dAtheA umerAof se ts Ai Asuch APan ha at to AbeA il edAbyAel ctionA ha l, A sA arAasApracti ab e,A eAth AsameAthro gho tAthe AS ate”. Whil As chAan Aex licit Apro isi nAh s Ano Abee Am de AinAr sp ctAofAmunicipal ties, basicAprin ip esAofA qui yAandAdemo ratic Apartici ationA eman A hatAaAs milarApr cticeA ho ld AbeAfo lo edAin urban localAgovern ents. A lau e A 4)AofAA tic e 243AK A ta es AasAfo lows A“theALegis at reAof Stat Am y, Ab Alaw AmakeAprov sion AwithAr sp ctA oAall Am ttersAre ati g A o, or AinAconn ction with,Aele ti ns A oAtheAPanch ay ats . ”3 2. .3A s A anAb Asee Afr mAthe Tabl A3 1,Ai Amany AS ate , AtheA ow rs AofAdelimi at onAof t,Ai A localAgove nmentAconstitu ncie Ahav AbeenAre ai edA yAtheAGovern en s AAsAaAr su rc seA many A ases, Apartic la lyAin urban A rea , Ath ASEC Ah veAt Await u til AaAdelimi ationAex at ngA isAcom le edA y Athe StateAGovern ents. Thou hAtheAconstitu ional Aprov sionsAre righ A toAele ti nsA oALokASabha StateAAsse bli sAareAiden ical,AParl ame tAha Amad Alaws sion A fr m Athe Ainc pt on A fAthe ARe ublicAcr ating Aindep ndentADelimi ationACommi ctionA wi hAtheApartici at onA fAtheAEl ctionAComm ss onAofA nd ATh a. ficeAAofAtheAElutaryA Commis io erAi Afac Aa tsA s Athe ASecre ari tAf rAtheAdelimi ationAexe cis . AThisAsa la edA institu ionalAmec ani mAhasAe sure AthatAele ti nsAin Aindep ndent Indi Awere neverAd arateA onAg ou dsAofAinco pleteAdelimit ti n. AThe AComm ss on is A fAth Avie A hat AaAse SECs,A Delimi ation AComm ssi n Afor localAgover me ts Ais Aunnece sary. AIndep ndent rci eA espe iall Awhen Aapp in ed AasAConstitu ional Aauthor tie , AcanA asilyAund rtak AthisAex aw orA a dAtheAgove nme t Acan Ap ovi e Athe broad Aguid lin sAforAdelimi ation A it erA yA yAtheA by A ules AOnceAdelimi at onAis Ac rri dA ut Aby SECs, StateAGover ments A annot delc nd ct AofAele ti ns A n Ath Ap eaAof Ainco plete Adelimi ationAexe33Loca AGo ernanceTab eA .1ACom ar sonAo APowersA fAStateAEleponsibil tyAlies Ac ivityAreleAGovernmen ASE AReserva io deshAMah rashtra AReservnatakaA(for A Ps) Delimitatio AadeshAWest BengationA omm ssionsAWhereAt eArejastha AGujaraAndhr APradesPrad shAKlaAATamnaAAWeAAP njabBengalAAK r atakdAPrep rationtedAt AelectionsAandAR tation dAConstitelectorollsAH ryanamachalAPrshAAAKjabAMahartraAA ajasnAAAT milANadStaf AMadhyaAPr enciesAUttNad AAAHarA(forADPs &AIP )AKafAAn hraAPrrnatakaAAAPuAAAUtt rAPrad sh our e: ARepo tAofA he WorkingAGr upAon ADemocratic Dec ntral sationAa dAPRIs, APlanningAComi sion/Minis ryAo APanchaya i ARajANovemb r, 2006.Aant gedAsecti nsA 3.2.1. ATheACons itu ionAprovi esAfor Apoli ic lAempowerment ofAdisad ve , Aon e Aagain A nd Atherefor At e Areserv tion A f A lecti e Aoffices Ain Al cal Agove nmen s. AHowments. AGiv n A heA in most A ta es, Athe Apowe Ao Areserva io s Ais A etained Aby AS ate AG ver f Ase ts A eser ed complexit Ao Arese vations Ain loc l Ag vern ent Aand Ath Ah gh Apr portion A ary. AMany Sta esA (70% Aan Amore Ain certain A tates), A er odic A otation of Aseats Ab come Anecesom A ens sAfiguresA under ak Athe Aexerci e A f Aenu eration A f AOther Back ard A lasses (for Awe Athe Acond ct a ofA e A ot A vailable Ain At e Aeleven h Ahour, Adel yin Areservat on A nd Ather fo ci s Ashould A ls A electio s. The Com issi n Ais of Athe Aview th t Areservation A f Acons itue Assemblies, A oth be Ae tr sted Ato SE s. A n Ar spect of A he A ok ASabha Aan Athe ALegisl tivedelimitation and reserva ionsAareAdecid dA imu taneousl Aby AtheAElec tio nAC mmissio .ionsAin ASEC .ATheA 3. . .5AAr icle A243AK A es s Aprepara ionAo Ael ctora ArollsAfo Al calAe ec eAAss mbliesAandA eli ibi ityAcr teriaA orA otingArig ts A re A den icalAf r Athe Lok ASabha, Sta l calAgovern ents,Ather for ,Acon titu eA heAthirdAt erndA ftheAg vernacenational,A34Common Issuesstate and local governments should be seen as a seamless continuum. In such a situation preparation of separate electoral rolls for local governments is redundant and can only lead to confusion. Many States recognise this problem and some of the State laws have adopted the Assembly Electoral rolls prepared by the Election Commission of India for elections to local governments also. However, the laws vary from State to State and often the Assembly rolls are taken as the starting point and fresh registration is taken up by the SEC for local elections. In cases where fresh rolls are prepared, the two rolls (one for the local bodies and another for the Legislative Assembly) may differ. This is likely to lead to confusion among voters and could also pose legal complications. In order to obviate any such difficulty it would be better if the rolls for the Legislative Assembly are used as the basis for local bodies elections also. It however needs to be emphasised that the electoral rolls for the Legislative Assembly cannot be used straightaway for local bodies elections because of two reasons: (i) a local body area may not be exactly the same as the area covered by the electoral roll of a Legislative Assembly; (ii) the voters’ list in case of local bodies elections have to be prepared ward-wise whereas the voters’ list of the Legislative Assembly is part-wise and as a unit a ‘ward’ is completely different from a ‘Part’.3.2.1.6 At present, a ‘Part’ in an electoral roll for the Legislative Assembly is defined as follows5:“5. Preparation of roll in parts.—(1) The roll shall be divided into convenient parts which shall be numbered consecutively. . . .(4) The number of names included in any part of the roll shall not ordinarily exceed two thousand.”3.2.1.7 It has been experienced that such ‘Parts’ are not always compact geographical units because of which it becomes difficult to use them as the basic unit for the purposes of delimitation of municipal and village wards (constituencies). The Commission is, therefore, of the view that a ‘Part’ should be defined to be a compact geographical unit. Then a “Building Blocks” approach can be used so that a ward comprises one or more integral Parts (In smaller towns and villages, a ward may be smaller than a ‘Part’ and in such cases the ward should be so constituted such that one or more wards constitute a ‘Part’). A further step towards convergence would be to define ‘Enumeration Blocks’ during a census as co-terminus with ‘Parts’ of electoral rolls of the Legislative Assembly.3.2.1.8 The Commission is of the view that local government laws in all States should provide for adoption of the Assembly electoral rolls for local governments without any revision of names by SECs. For such a process to be effective, it is also necessary to ensure355The Registration of Electors Rules, 1960; the voter registration and preparation of electoral rolls by the Election Commission of India is based on geographic contiguity. Similarly, the electoral divisions for elections to local bodies should follow the Building Blocks approach.3.2.1.9 As stated earlier, rotation of reservations becomes necessary given the complexity and high percentage of reservation of seats. However, frequent rotation denies to the elected representatives, an opportunity to gain experience and grow in stature. This is particularly damaging for disadvantaged sections of voters who have hitherto been denied leadership opportunities. As a result, while reservations lead to numerical representation, empowerment is sometimes illusory because very often, entrenched local elites tend to nominate proxy candidates in reserved seats in anticipation of its rotation after a term. Considering these facts, the Commission is of the view that reservation of seats should be in a manner that leads to effective empowerment and not numerical and notional representation. This can be accomplished through the following three broad approaches:First, the rotation can be after at least two terms of five years so that there is possibility of longevity of leadership and nurturing of constituencies. In Tamil Nadu, this approach has been adopted. However, with multiple reservations this may lead to large sections being denied the opportunity of reservation for a generation or more.Second, instead of single-member constituencies, elections can be held to multi-member constituencies. Several seats can be combined in a territorial constituency in a manner that the number of seats allocation for each disadvantaged section remains the same in each election in that constituency. Elections can then be held by the List System so that parties get representation in proportion to votes obtained. Alternatively, members may be elected on the basis of votes obtained individually. In either case, the law should clearly specify the required number of members to be elected from each reserved category. The 1952-57 Lok Sabha/State Assembly elections were conducted in 2 or 3-member constituencies. Maharashtra has adopted multi-member constituencies for elections in Panchayats.Third, if the office of the Chairperson/Chief Executive is elected directly by popular vote there is greater pool of talent available from the disadvantaged sections and leadership can be nurtured and developed. The Commission’s recommendations vide para 3.1.3.11 to give the States the flexibility in the composition of Panchayats and the manner of elections would address this problem.3.2.1.10 In most States, DPCs/MPCs have not been constituted. As per Article 243 ZD, at least 80% of members of DPC shall be elected by and from amongst the elected members of the Panchayat at the district level and of the Municipalities in the district in proportion to36Common Issuesthe ratio tric .A nA theArat oAb tween Athe A op lat onAof theAr ral ar as A ndAof the Au ba Aar as AinAthe di ongstAt eA cas Ao AMPCs Aat Aleast tw -th rdAof At e Amem er Ashall A eA lec edAb AandAfr mAa ropo it nA elect d A emb rsAofAthe AMuni ipa itiesAand ACh ir ersonsAofA an hay tsAin AtheAMe ndAof AtheA areaAin A ro ort onAto theArat oAb tweenAthe A op lat onAofAtheAmuni ipa it esAgeAto theA an haya sAin thatAare A(Artic e A2 3ZE). AThs Aproces Ainvol es Agiving we ghtmmission,A votes Apr po tio al AtoAthe A opu ationA nd Atime y A onductAof A le tions. ATheAC heref re,A eel AthatAt e A onduct Aof ele tio s AforAt eAelect d A ember AofAth seAbod esAs ou dAalso Abe en rus ed AtoAthe ASEC .onsAB ll A 3 2.1.11ATheA ov rnmen Aof Indi AhasAalso A i culat dAaAModel Panchayat Elect ionAof Aan 20 7. A s Aper AtheA ro isio s Aof A his Bill,A he powers AofAdel mitation, i An ti ca haveAbee A election,Ar se vatio Ao Asea sA sAwellAasAr se vat on Ain th AofficesAofACh irpe sons p op sedAt Ab Agi enAto theAStat AElectionACommi s s io .3.2.1.12ARecommnd ti ns:he Atask Aof Adeshould AbeA . Aimi ation Aand Ar se vation Aof Acons ituenc esen rus edAto theAStat AElectionAC mmissi osA SECs) onAof b. AthA A ALocalA over me tAl wsAinA llASta esAshou dAp ovideAfo Aa opt visio Ao A Assembly elect ral rolls forAlocalAg vernmen sAw thout Aan Ar toAe sur A name Aby SECs A orAsuch aA ro essAtoAbfecAe iveAitAis ne essaryAElectionA that theAvoterAre ist ationAand Ap ep ration Aof elect ra ArollsAb arly,Atheom issio Ao AIndi Ai AbasedAonA eographicAc ntiguity. A imiABuild ngA electoral div sionsAfor el ction AtoAlo alAbod esAsho ldA ollowAth Blocksap ro ch.oAdefin Aa c.ATheAReAis rationAo AElect rs ARu es, A19 0, shouldA eA mende ‘ art’ Aas aAcompactAge graphca Au it.Ad AI AorderA oAachieve Ac nvergen eAbetw enAc nsu AdataAand electo alA olls,AtheA ou d riesAo Aa A Pa t’AandAanA‘E umerat onABlo k’ Ashouldconcide.Ae.AR se vatio Aof Ase tsAsho ldA oll wA nyA neA f AtheAtwoA rinciplesmentioedbe ow: Aafte A A tA .A n AcaseAofAsin le-memberAconst tue cies,Ath Aro at on Aca Ab lo gevityA lea tA A ermsA fA5A ea sAea hAsoA ha AthereAisAp ss bilityAofofA ead rshipAand nu turingAofAconst37Loc l AGovernani.AInst ad of Asingle-mem er Aconstituenci s, Aelecti nsA an beAh ld heA toAmulti-mem er Aconstituenc es byA he AL stASyst m,Aensur ngA usA reservat on ofAsea s. AhisAw llAobvi te A he An ed A orArotat onAtguarantee ngAallocat on ofAse ts A orA heAreser edAcategoris.f.A he Acond ct of Aelecti ns A or A he Aelec ed Amemb rs of ADistr ctAndAMetropoli anAPlann ng ACommitt es Asho ld beAentrus ed to A heASt teAElect onACommissio n.3. .2 AConstitut on of A heASt te AElect onACommissi ontoA 3.2. .1AGi en A he Acom onAfuncti ns of A heASt teAElect on ACommissi ns Aw thAreg rd atA lo al Abodi s’ Aelectio s, it is Anecess ry toAexam neA ow A heAsys emA asAfunctio edA ndAw msA improveme ts toAt atAsyst m, ifAa y,A reArequir d. TheASt teAElect on ACommiss onAperfo edA functi ns Asimi ar to At at ofA he AElect on ACommiss on ofAInd a. TheAnum er ofAelec ct representati es of A he Apeo leA as Aenormou lyAincrea edAo er A he Aye rsA ndA heAcond woA of Aelecti ns to A he Alo al Abod es isAind e Aa Agigan icAta k.AhisAinstitut on is A ot A etA ce deca esAo d,A ut Aho dsA heA ey t Aa Ahig ly Arepresentat veAsys em ofAdemocra icAgoverna inA he Acount y. It A s, Atherefo e, Aessent al At atA heAmachin ry A orAorganis ng Alo alAelecti ns isAadequat lyAsupporte d.onA 3.2. .2 The Aten reA nd Aconditio s,Aqualificati nsA nd Aconditi ns of Aserv ce ofASt teAElect Commissi nsAv ryAgrea lyAacr ssASta es asAindica ed in A heATa leA3.2.Ta le A3 2: AComposit on ofASt teAElect onACommissius AAsteATenreA geAliitAQualificatinsAStaa A4 Ayers 62 Ayer AA Amini um 25Aye rs AAAserv ce in Aadministrati AAAjudic al or Ale alAserv ce AAASt te orAUn AAAGovernmeofAStat s:AEq al to At at ofA e, AChairm n,APub icAServ fAACommissionA ayASca e:AL stA ayAdr t. inA heAgovernm ntAmi AAApensonABia A3 Ayers 62 Ayers A otAbe ow A heAr nk of A AAAAdditio alASecret ry AAAequival nt ApOIASala y:AS me as inA orAgovernm ntAserv ceAmi stApensin.AHaryn A5 AyersABetw AA 5 A& AAAyee AAAJu ge of AH gh ACo rt o 65Aper on A hoA as Aser rsAgovernm nt in A heAr nk o AAACommissio er A o A5 Ayears.AaASala y:AS me as inA edAgovernm ntAserv ceAmi AaApensCommon IssuesTable 3.2 Contd.StateTenureAge limitQualificationsStatusHimachal Pradesh5 years65 yearsNot below the rankSalary: Equal to that of a Judge of a High Court minus pension.of Additional Chief Secretary or equivalent position.Karnataka5 years62 yearsNo qualifications prescribed.Salary: Same as in the Government at time of appointment asSEC or Rs.6500/- per month whichever is higher minus pension.Kerala4 years62 yearsNo qualifications prescribed.Status: Equal to that of the State Chief Secretary. Salary: Rs. 8000/- per month (old scale) minus pension.Madhya Pradesh6 years62 yearsNot below the rank of GOI Additional Secretary or equivalent post in the State Government.Salary: Rs. 8000/- per month (old scale) minus pension.Maharashtra5 yearsNot below rank of Principal Secretary to the State Government.Salary: Rs. 7600/- per month (old scale)(also a provision of pay protection)Orissa5 years62 yearsRetired High Court Judge, or retired District Judge or a serving civil servant.Salary: Rs, 20,450/- per month minus pension or last salary drawn, which ever is higher. Facilities as available to Chairman, State PSC.Punjab5 years64yearsServing or a retired High Court judge, or service of at least 2 years as Financial Commissioner or Principal Secretary to State Government.Salary: equal to that of a High Court Judge.Tamil Nadu2 years62 yearsNot below the rank of Secretary to Government.Salary: As admissible to a Serving Judge of a High Court.(may bereappo-3940Lod.rnati eAw uldAStTteTenureASt teATeureAAficationsStatuslAGovanc AAidAAAfor AtwAsucce siveAAt rms).Ut ar A5 Aear A65 Ay ars A otbelow Ar nk of ASalary:s AadmisleAar Ain GO Aor to AhimAparA P adesh AAAheldAtheApont AAJ in ASe reAAAA ust have pa tment.AA AAof ADistr ct strateAorA AAADivisiona mis i nerAAA AandAaAseni cretariatAAAAA dminitratv ApostAW st A5 Aears AA65AsAofA nion orAmon h A(olA8000/erearsASuffici ntGovernmeBenga AAfai)Am A nusAAthe AaAAAAany ASt te Ap nsion.AAAAAanA dminiexperie ceA nASala y:Astrativ Apost. si n/Ministry ou ce: Report A fAthe Wo king AGroup onADemocraticADe ent alisa ionAand A RIs, APlanningACommi ofAP nchayatiA aj,ANv e m be r , 20 6.Auti nA(NCRWC)A 3.2.2 3 ATheANatio al Commis ion to ARevi w A he A orking AofAth AConstied t eAsta ush d A ecom ende AinA2 02Athat A tateAElection Commis io ersAshou dAb AaccorAtheAElect ono Aa AJ dgeAo Aa Hig ACou tAin At eA ameAmann r Aas AElection Co mis ionersAi Commi sio AofAIndi Aar Aaccor ed theAs at sAo AJudgeA fAtheA S upreme Cour .A unction AinA 3 2. .4 AThe eAis noAdo btAthatA tateAElecti nACo missionsA ustAd scharge At ei thAimpeccabl a A Atot llyA‘ne tral’Aman er. Moreover,Ath ACommi si n rAshou dAbe aApersonAw and Apo ers toA c edential . AThe AElect on ACom issi n Ashou dAhave Ae oug Aauton my isACommissi resist nA A llAextraneou A‘ res ures’. InAitsARe or Aon“EthicsAi AGov rnance”,Ate tedAthrou hAre omm nde Ath t Athe CECAand A therAElection Commis io ersAshou dAbeAseheAS C A houldA a Acoll gi lAp oces .AOnAthe sam Aanalogy, A he Co mis ionA sAof the vie AthatA ief Ministe ,A als Ab Aap ointedAonAthe Ar co m ndationsA fAa Acolleg um A ompri ingAtheAC t eAS eaker A nd the ALeader of Opp sitionAinAt eALegislat iveAAs em ly. .2.2 5AItA asAbee Aur ed Abefore A he AC mmi sionA hatAtheA tateAElect onAComis ionAsho ldAbe bro ghtAund r A heA ontrolAo AtheAElect on Commis ionA f India.A uchAameas re A ouldAvern entsA nd iveAtheA tateAElect onA ommissio AtheArequire Aind pende ceAfromASta eAG also Aensure aA they wo ld Abe Aabl Ato Ad scharg At ei Aduties Ai Aan Aobj ctihis Awoue Aman er. Ad ommonali y A fAa proachAin theAelec oralApro ess AHowever, Ao eAindependentAonstituti nalAau horityAc nnotA unction underAanotherA onstitutio al auth rity.ATheAon yAaltCommon Issuesbe to repeal Article 243K and amend Article 324 entrusting local elections to the Election Commission of India. Article 324 provides for appointment of Regional Commissioners. A Regional Commissioner could then be appointed for each State under this provision and it could function as the State Election Commission for local elections. Against this it has also been argued that, as the number of local bodies is so large, the Election Commission of India would hardly have the time to attend to election related matters in respect of local governments and therefore it is better to have a decentralised mechanism with each State having its own State Election Commission. Now that every State has constituted its SEC, repealing Article 243K and abolishing these offices would be impractical. The Commission feels that the balance of convenience lies in strengthening the independence of the State Election Commission. This can be accomplished by the State legislation providing (as suggested above) for appointment of the SEC by a collegium comprising the Chief Minister, the Chief Justice of the High Court and the Leader of Opposition in the Legislative Assembly. Certain aberrations like appointment of serving officers with lien on service should be eschewed. Uniform criteria need to be evolved and institutionalised regarding the qualifications of appointment, tenure of office and age of retirement. The Commission is of the view that a uniform tenure of 5 years subject to a age limit of 62 years as is applicable to the judges of High Courts would be appropriate. However, the Commission strongly believes that an effective institutional mechanism should be evolved and strengthened to bring the Election Commission of India and the SECs on one platform. This will facilitate regular interaction, logistical coordination, infrastructure sharing and technical support to the SECs. It will also help SECs draw upon the institutional strength and credibility the Election Commission of India has established over the decades. In addition, the Commission is of the view that the impressive infrastructure of Electronics Voting Machines (EVMs) available with Election Commission of India should be deployed for local elections, given their success in the Parliament and Legislative Assembly elections. For this, the State law should specifically provide for use of EVMs.3.2.2.6 Recommendations:a. The State Election Commissioner should be appointed by the Governor on the recommendation of a collegium, comprising the Chief Minister, the Speaker of the State Legislative Assembly and the Leader of Opposition in the Legislative Assembly.b. An institutional mechanism should be created to bring the Election Commission of India and the SECs on a common platform for coordination, learning from each other’s experiences and sharing of resources.41GovernaneLoca3.2.3 Correcting the Urban Rural Imbalance in Representation in Legislative Bodies3.2.3.1 Article 82 of the Constitution provides that the allocation of seats in the House of the People and the division of States into territorial constituencies shall be readjusted after each census. Similar provisions exist under Article 170 for State Legislative Assemblies. However, the Forty-second Amendment froze any such reallocation of seats till 2001. This freeze was further extended by the Eighty-fourth Amendment. The Statement of Objects and Reasons of the Eighty-fourth Amendment Act are as follows:“Provisos to Articles 82 and 170 (3) of the Constitution provide that no fresh readjustment of constituencies can be undertaken until the figures of the first census taken after the year 2000 are published. These provisos were inserted by the Constitution (Forty-second Amendment) Act, 1976 as a measure to boost family planning norms. Since the first census to be taken after the year 2000 has already begun, the constitutional embargo on undertaking fresh delimitation will lapse as soon as the figures of this census are published.There have been consistent demands, both for and against undertaking the exercise of fresh delimitation. Keeping in view the progress of family planning programmes in different parts of the country, the Government, as part of the National Population Policy strategy, recently decided to extend the current freeze on undertaking fresh delimitation up to the year 2026 as a motivational measure to enable the State Government to pursue the agenda for population ernment has also decided to undertake readjustment and rationalisation of territorial constituencies in the States, without altering the number of seats allotted to each State in42Common Issuesthe hedul dA t eA ous AofAth APe pleAandALeg slativeAAs em lie AofAthe States,Ai clu ing AtheAS ine AatA C ste and AtheAS hedul dATribeAconstit en ies AonAt eA asi Aof AtheApo ulationAasc rt Ag owthA th Ace sus for A heAye rA 99 ,A oAas At Are oveAthe Ai balanc Aca se AdueAt Auneve en ie . ofApopulation/el ct rate Ain A ifferentAconstitand AtheA It isAalsoAAro osed to A efix Ath An mberA fAseatsA ese ved for AtheAS hedule ACa tesAS ate A S hedule AT ibe AinAt eA ous AofAth APe ple andAtheALeg slativeAAs em lie AofAthonAt eA asi Aof AtheApo ulationAasc rt ine AatAth Ace sus for A heAye arA1991. sAaft rA 3. .3.2 ATheACons itu ion A adAl idAdown Apr vis ons AforAdeli it tion AofAconsti uenci ula ion ever Ac nsus so A hat AtheApopulat on-se t A atioAis Amai ta ned.AThe A nc easeAinApo has A otAbeen uniform Ath oug outAtheA ountry. A ore verA heAh gh rateA fA uralA oAurbanAm gra ionAhas Ai cre sed AtheApo ul tionA fAurbanAconsti uenc esAmuc Afas er Ath nAthe rAruralAcount rp r s. AAs Aa re ul ,AonAan ave age Ath An mberAofAele to at sAinA nAurbanAconsit ency -secondA is Amuc Ahig er thanA nAruralAconstit en ies. AThAfreeze im ose AbyAtheAFortAn mberAA end entAand further A xt nde AbyAthe AEight -fourth AAm nd ent AonAt eAtota nd bl ,A f A eat AinAt e A ous Aof Ath APe ple andAtheALeg slativeAAs em liesA sAquiteAunderstll t edA asA tA eeks to A elp AtheAob ec ives Ao AfamilyAp ann ng.ABu Awi hin Ath An mberA fAseatsA itat onA to A AS ate, A t A ould Abe Ad si ableA o Ac rry out AtheAad us ment of Asuc As ats. ATheADeli asAbe nA Ac , A2002, Ap imari yA eeksAto achi veAthisAob ec ive. ATheADeli itation ACo mis ionA skedA o Ac rry out AtheAdelim ta ion AasAper S ct on A AofA he AAc ,AwhihAs ys:Ato AtheA “8.AReadAus mentAo An mberAof As ats.—TheACo missio Ashall Ahavin Ar gartories A pr viionsAofA rti lesA 1, A 70, 330A ndA 32,Aa dA lso,Ain A el tio AtoAt e AUnionATerr f AUnionA exceptA ational Capital AT rr tory Ao ADelhi,Ae tio sA AadA3 AofAthe AGo er mentA toryA fA Ter itor esAA t,A 96 A(20A fA1 63 AandAin A el tio AtoAthe A ational CapitalAT rrDelhiAsu -cl us A(b)Ao Acl us A(2)Aof articl A2 9AA,Ab Aorder,Adet rmi e, arA 971A (aA AonAt eA asi AofAth Acensu Afiures Aas Aasc rt ine AatAth Acen us hel Ain A heAyAP op eA and su jec Ato AtheApr vi ionsAof se tio A4, Ath An mberA fA eat AinAt eA ous AofAthrt ine A to AbeAa lo ated toAea hAS ateAandAd te min AonAt eA asi AofAth Acensu AfiuresAasAascfor AtheA atAth Acen us hel Ain A heAyea A[2 01] Ath An mberAo As ats, if an ,AtoAbeA ese ved S hedule ACates and forAtheAS hedule AT ibe AofAth AStte; an arA 971A (bA AonAt eA asi AofAth Acensu AfiuresAasAasc rt ine AatAth Acen us hel Ain A heAyAtoAtheA and su jec Ato AtheApr vi ionsAof se tio A4,At e Atota An mberA fA ea sAtoAbeA ss gne uresAasA Leg slativeA ss mbly ofAea h AS ateAandAd te min AonAt eA asi AofAth i Acensu Af ese ved asc rt ine AatAth Acen us hel Ain A heAyea A[2 01] Ath AnmberAo As ats, if an ,AtoAbeA for AtheAS hedule ACates and for AtheAS hedule AT ibe AofAthe43al Governance Loc3.2.3.3 Such l lecto at 3. .3.3 Suc an e erc se wo ld et right he imba anc betw en he ur an and rur e opula ion in terms f he num er f vo ers pe se t with n the St te Ho ever, as t it would be o urba areas ould fur her inc ea e rapidl a comp red to ru al ar as env saged in desi ab e if suc a exerci e i carr ed o t afte e ch ensus as w s origina lyssemb y in the on tituti n. The nu be of sea s in he ok abha and th Legisla iv chan e. Th s St te wou d n t c ange but t e lloca ion of sea s wit in th State oul ould he p i gett ng the focus o l gisla ors on urban issu s a ong w th therural i sues.3.2.3.4 Reomen ation a In order to et right he electo al imba anc betw en he uran and rur l territorial opul ti n in iew of rapid rb nisation, n dju tment of th i e Asse b y c n titu nci s – bot for he ok abha and th Legislacles 81, 82, – w thin a St te shou d b carr ed o t after each cen us. Art 170 3 0 a d 332 of the Const tuti n ou d need to bamended. .3 Funct ons of Locant Sc edules.l Gov rnments3.3 1 evolut on f Powers and Resp o n s i b i ities .3.1.1 nderti le 243 (as regard Pa chayats anrti le 243(as regards Mun cip liti s), the 3rd and 74th C nstitution l Amendme ts em owered State Le islat re toe dow y law: aSu hupowersy nd aut or tycassmay be necess ryet te abletthe at ifunctionoas f gove nme t; in titu ions of selnsibili ie , ? Suchla ~mayconta np ovisionsf r evolut on fpowersandrespre pec to – subject o condit ons spec fied herein, wi h ju tice; and (a) th p epara ion of plans for economi de elopme t and so ialci l j st ce (b) i pl mentati n o schemes for economi de elopme t and s unctions and as may be entr sted to hem (Article 243 G /p rformance of ticle 243 W) i pl mentati n f s he es as may be entr sted to hem (Anth Schedule in lu ing thos i re ation t the m tt rs isted in the Elev (Pa cha ats) an the Twe fth Schedule (Mu icipalities)r e s p e ct ve y.or ty may bhe overrid3.3.1.2ng inten ion of these tw Art cles i th t powers nd utions of sel s d volved as to enab e P nchayats and M ni ipalitie t function as in titu for economi go ernme t. F r t is, he may also be empower d to repar lo al plans ns in luding de elopme t and s cia j stice and to implement sc emes/perf rm functith se isted in the relevaCommon Issues3.3.1.3 Though 15 years have gone by, the progress of devolution of powers and responsibilities to local governments at various levels is poor and uneven. A survey of the present status of devolution reveals the following position:a.Devolution has been sought to be done in most of the States by omnibuslegislations regarding Panchayats/Municipalities and Municipal Corporations, in which the ‘matters’ listed in the Eleventh and Twelfth Schedules are just repeated.b.The number of “subjects” said to have been transferred varies from a few innumber in some States to the entire list as given in the Schedules in some others. However, in all cases the progress in delineation of functions of the different tiers of local governments in a given subject matter has been very slow.c.Due to the persistent efforts of the Ministry of Panchayati Raj in the last threeyears, detailed “activity mapping” of different tiers of local governments have been undertaken in all the States.d.However, the exercise continues to be partial and prolonged. The draft activitymapping lists have not been approved by the State Governments in some cases.e.Even where activity mapping has been approved, parallel action to enablelocal governments to exercise the functions has not been taken. The existing Government Departments with their executive orders and instructions, parallel government bodies like DRDAs and the continuance of statutory bodies (as regards water, electricity, etc.) without any change, prevent the local governments from exercising the so called transferred functions.f.In some cases even those activities that can be undertaken by local governmentswithin the existing arrangements are got done by encouraging and financing the formation of a number of parallel community organisations of stakeholders and entrusting the activities exclusively to them, instead of working out a synergic relationship between them and the local governments.3.3.1.4 “The implementation space” at local levels is thus occupied by a multiplicity of governmental agencies – Union, State and local – even in the case of a single sector. Confusion, unnecessary duplication, inefficiency, wastage of funds, poor outputs and outcomes are the result of this organisational jungle. The local organisations which should be the most directly and fully concerned are at best treated as a small part of the implementation, occasionally consulted but, in most cases, bye-passed and ignored.3.3.1.5 The Standing Committee on Urban and Rural Development, 2004 (Thirteenth Lok Sabha) had noted the failure of the Union and State Governments in implementing the provisions of the Constitution.45ance“The overall aim of Part IX is to endow the Panchayats with such powers and responsibilities as may be necessary to enable them to function successfully as institutions of self-government, as per Article 243G of the Constitution. State Legislatures have been empowered to endow Panchayats by law with such powers and authority as may be necessary to enable them to prepare plans for economic development and social justice and implement schemes for economic development and social justice, including those in relation to the matters contained in the Eleventh Schedule. The Committee are, however, constrained to note that although more than nine years have passed since the Constitution (Seventy-third Amendment) Act was enacted, very few States seem to be serious about the implementation of said provision of Part IX. They further find that endowing Panchayats with certain functions is fruitful only if the Panchayats are equipped with the trained functionaries and adequate finances are also made available to them. Thus they note that Panchayats can fulfill their responsibility as institutions of self-government only if devolution is patterned on a nexus between the three Fs, i.e. functions, functionaries and finances. The Committee are unhappy to note that very few States have linked the very important devolution of functions to the means of actualising such devolution46Common Issuesthrough tth ough the d voution of func ionries nd und fo a l the 29 subjects en ist d in the Eleventh S che ule” 6rment of In this respe t, ther i need to identify racti al teps for effective em ow Art cle local gov rn ents, in ad ition to stre gth ning the const tutional p ov sions o243 Z 43. Ther are wo ar as wich nee special a tentio . First, Art c es 43nX of the man ate that all l ws hich are “inco sist nt” with the p ov sions of Par s IX and to b in Con titut on shall co ti ue to be in fo ce u til uch laws are suitabl a ended one ear them in c nfor ity with the Cons it tions or ep aled, or ntil the e pi ati n of fect The from he dat s of the 73rd and 74th Const tutional A endmen s co ing f in o and st 73rd and 74th Const tutional A endm nts ame i to effec on 24 h Ap il, 199 ce t en, J ne, 1993 resp cti el , and as entioned earlier de pite th p ss ge of 15 ye rs si den ife mo t St tes have not even i nsis en all t the statu es hich are inc X of the with he Par s IX and gnifcant Cons itutio . era a is i one s of aws xcept on whe e ozen amended. ave been den ified and Clea ly, when the arc it cture of g ve nance is fund mentally altered several exis ing aw n ed to be ernativ e suitabl am nded and al made to tatutory arr ngem nt by State transf r p wers now xe cised he local G ver ment an ficiaos toution of gov rnme ts. Mere con ti ot erve local go ernme ts ould det iled th purpos wit o t such aand thoroughe xe r c is.in Para 3. .1. For th reaso s tate the i w 3.1 1.8, the C mm ss on s of iv , set that a fr sh, more compr hen aid down of unctio s houl be all theor urba b dies, t in ludalrea y a tivi ies ha n ed to be er orm d at he loc l evel. In ad iti n to the unction ist d in th Twelfth chedule, unct ons li e school e ucatio ; publ c health ncluding ivit es; ommuni y health cen res/Area h spita s; traffic m nag ment nd civic policing acland ma agement, ncluding reg stra ion etc. ma also beStanding om ittee on rban nd Rural De elopme t (2004) ( okhirt entSabha) L47GovernaneLoca3.3.1.7 Recommendations:a.There should be clear delineation of functions for each level of local government in the case of each subject matter law. This is not a one-time exercise and has to be done continuously while working out locally relevant socio-economic programmes, restructuring organisations and framing subject-matter laws.b. Each subject-matter law, which has functional elements that are best attended to at local levels, should have provision for appropriate devolution to such levels – either in the law or in subordinate legislation. All the relevant Union and State laws have to be reviewed urgently and suitably amended.c.In the case of new laws, it will be advisable to add a ‘local government memorandum’ (on the analogy of financial memorandum and memorandum of subordinate legislation) indicating whether any functions to be attended to by local governments are involved and if so, whether this has been provided for in the law.d.In case of urban local bodies, in addition to the functions listed in the Twelfth Schedule, the following should be devolved to urban local bodies:-School education;-Public health, including community health centres/area hospitals;-Traffic management and civic policing activities;-Urban environment management and heritage; and-Land management, including registration.These, however, are only illustrative additional functions and more such functions could be devolved to urban local bodies by the respective States.3.4 Framework Law for Local Bodies3.4.1 The Statement of Objects and Reasons of the Constitution (Seventy-fourth Amendment) Act referred to in paragraph 3.1.1.4 had highlighed the weaknesses of the local bodies in many States.48Common Issues3.4.2 self- 3.4.2 A ticle 43 d) f the Consti utionines a Paneha at as an ‘insti ut on ofamin gover men ’ f r the rural reas. A ticl 243G exp ess s the int ntio that while f r and l ws on Panch yats, State Legisl tures hould endow these instit tions ‘wit such pow ent’ aut or ty s ay be nec ss ry to nabl t em to fu ct on as instit ti ns of self-gover n ct on Thus, Panc aya s are ‘gover me ts at the r own eve ’ an the m st be a lo ed to fu own. as govern ent . This mean tha they houl h ve an auto omous jurisd ct on of thei will Ho ev r, if the e are ‘govern en s’ at mu tiple l vels then gove nm nt a each leve t for enjo only p rtial aut nom . Ho much auto omous jurisd cti n an be arv d o self- Panc ay t is a at er of jud men . ut it an ot e too sm ll t ma e the c nc pt of cti n gov rning instit ti ns t the local level meanin less. Cr at ng an auto omous jurisdat on f r the Panc ay ts is ba ed n the constitu ional m nda e for effctive decentraliwould of govern ental po er as o po ed t mere administ ative deconcentr tio . This t and neces itate with ra al of c rtain acti it es or fun tion fr m the State Gove nme fr m transf rrin t em to local b dies Such conceptuali at on of Panc ayats m rks a brea vi nt t e way local gove nment instit tion were t ea ed n th p st as odies holly subseto State Governm ent s s, or 3. .3 The El venth Sc ed le f the Constit tion, which g ves l st of 29 activ ti um of func ions, in en ed to be trans er ed o the local b dies, o ers a broad sp ct tion, devel pment acti ities r ngin from acti it es n the oci l and ec nomic s ctors (educ nomic h alth, wom n and child develo ment, ocial sec rity fa m and no -farm ec l and acti itie e c) o the devel pm nt of infrastr ctu e and instit tions nec ssa y for oci rence ec nomic develo me t. The hru t is, obvi us y, on develo ment. Ho eve , f the dif y and b t een a s bje t and a fu ction r ma n as a major iatus b tween local level ac ivilocal govera nce.al ty 3. .4 n the urban s c or, a s milar sit ation pre ails. A ticl 24 P (e)ines a Munici e 243G as an insti ut on o self gover ment. A ticle 243W, which corre po ds to A ticl “the reg rding Panch yats, pr pose th t the Legis at r of a Stat m y, b law, endo ct on Municipa itie wit such owe s and aut or ty s ay be nec ss ry to nabl t em to fu on of as instit ti ns of self-gove nme t an su h l w may c ntain prov sio s f r the devo ut owe s and responsibi itie upon Municipal i i es. ”2004, 3. .5 Thfirst roun ta le of Panc aya i Raj Mini ters h ld in K lk ta o July 4-25, gr ed t m ke to their resp ctive Govern ents, inter ali , the fol owing recommendtion “for joint acce ta ce y the Uni n a d the S tat s”rm nt I) The Consti ution (A ticle 243G) pr vid s for “devolu ion” th t i , the empow of Panc aya i Raj Instit tions PR s) to fu ct on as instit ti ns of self-gove49Locl Governancefor the twin purposes of i) making plans for economic development and social justice for their respective areas, and ii) implementing programmes of economic development and social justice in their respective areas, for subjects devolved to the PRIs, including those listed in the Eleventh Schedule, and subject to such conditions as the State may, by law, specify. Therefore, the key objective is to ensure that Panchayati Raj Institutions function as institutions of self-government rather than as mere implementing agencies for other authorities in respect of such functions as may be devolved on them;II) While devolution must eventually comprise the entire range of subjects provided for the State legislation in a time-bound manner, States/UTs may prioritise their devolution programme to ensure that for such functions as are prioritised, there is full and effective devolution in empowering PRIs as institutions of self-government in respect of these functions;III) To this end, the essential step is the identification of activities related to the devolved functions with a view to attributing each of these activities to the appropriate tier of the 3-tier system. To the extent possible, there should be no overlapping between tiers in respect of any given activity;IV) In determining the tier of the Panchayati Raj System, to which any given activity is to be attributed, the principle of subsidiarity must, to the extent possible, be followed. The principle of subsidiarity states that any activity which can be undertaken at a lower level must be undertaken at that level in preference to being undertaken at any higher level; .............VIII) With a view to promoting a measure of irrevocability of devolved functions, devolution may be routed through legislative measures or, alternatively, by providing a strong legislative framework for devolution through executive orders.3.4.6 The National Commission to Review the Working of the Constitution (NCRWC) has, in its Report, recommended certain changes in the Constitution, especially with regard to the powers of the local bodies, both urban and rural. It has observed:“The Commission, therefore, recommends that the Eleventh and the Twelfth Schedules should be restructured in a manner that creates a separate fiscal domain for Panchayats and Municipalities. Accordingly, Articles 243H and 243X should be amended making it mandatory for the Legislature of the States to make laws devolving powers to the Panchayats and Municipalities.”50Common Issues3.4.7 I3 4.7 I s ite of the Constit tional prov sio s, and obser atio s ade by everalexpertin t e gro ps a d ven by Parlia entary Comm ttees, empo er ent o local gove nm nts ity of rea se se as no taken place Und r such circums an es, it eco es the respons bi ment d th U ion to ensu e t at t e 7 rd nd t e 74th Constit tional Ame dme ts are impl hemes, oth in let er and pir t. This eco es ll t e more ne es ary a major deve opment s funded ar ely by th Union Gove nme t, ar being impl me ted by th local gover ments. H wev r, th iss e that ar ses is the ma ner i wh ch th Union int rv nes to ensu e t at th local gove nme ts a e duly em ow red by thetate sof the 3. .8 Our Const tut on was fr m d at a ti e w en t e fist and f remost requ re entd by a oun ry was to cons lidate it e f as a atio . O er 400 p incely sta es h d been r pl c nis ng more homo eneous fed ra ion of larger tahe nes.xt fe yea s wer s ent in reorgbo ies and streng hen ng the ta es. The Const tut on id n t give pro in nce to th local t, and t tha p int f t me and legi lative powers r mained wit in tw t ers of Gove nme le and as s parate “sub ec s”. In the inte vening ecade th re w s also debat ab ut t e r a) th suit bi ity o local bo ies as insti ut ons of gov rna ce and it was rec gnis d t at y eed thi d ier of gov rnm nt may equi e some legi lative owe s, b) al three lev ls mto le is ate in t e same phe e, nd c) ne a eas of gov rnan e have e m erg e .he ule 3 4.9 The Com issio not s t at the p si ion f It m 5 n is II of the eventh S of the Const tut on has pla ed all respons bil ty fo local bodi s w th the ta es. I r ads as followstio ns, “Local gove nmen , ha is o s y, the const tut on and po ers of mu icipal corporlocal impr vement rusts, d strict oards, mining set lement auth rit es an otheauth rit es or the ur ose o local self-gov rn ent or illage administr a tio n . 3. .10 I 195 , w en the Const tut on was a opte , this all cat on was appro ria e, and ca not indeed con in es, by and la ge t be o even to ay. The gov rn nce o local bodies vi i s be con ro led by th Union over ook ng the tates. Nevert ele s, the multi arious act uch as of large mu icip l bod to ay a e su h th t they imp ct the na i n as a whol , s with com ercial devel pme t, nd m y ev n have intern tional ramific tion , uch opmen intern tional a rp rts n some it es. In the dis ric s, the und ng for d strict deve uat ly com s very arge y f om the entre, eca se the tate ’ ack of re ou ces to rovide ade direc fo local gove nment mak s them a pro ch the Gov rn ent o In ia for fu ds. The iNehru s amp of the Ce tre i urban affairs hrough pro ramm s uch as the Jaw harla re are N tiona Urban enewal iss on has become nec ss ry. I rural devel pment thcondition lit es set by the Ce tre in its pro ram es fo rural51Local Governance3.4.11 To make the flow of local level activity smooth through the various levels of government, one approach could be that Item 5 of List II (Local governments), or certain functions which are only with the Union, or only with the States, but which are directly relevant to all three tiers of government be placed in the Concurrent List to enable appropriate, hierarchical and framework legislation by the Union or the State. This would shift ‘functions’ to ‘subjects’ with regard to local bodies. This would enable Parliament to legislate on the subject ‘local governments’ and thus the Union could mandate the devolution of powers, functions and responsibilities to the local governments.3.4.12 Another approach to activate the changes that were intended to be made in our economic and political system through the 74th Amendment, would be that, along with the devolution of functions, certain legislative powers could also be devolved on the third tier of governance; there could be a List IV to the Seventh Schedule which would give limited legislative powers to the local bodies. If there are to be two sets of functions, one for rural and another for urban areas, then such a list can have two parts.3.4.13 A third approach may be a more integrated one, introducing a single, legally binding legislative framework under which the States and the local bodies would function, somewhat on the lines of the South African model for municipal systems. Framework laws exist in some other countries; the EU Directives are in the nature of framework legislation. But it is the South African model that may bear emphasis here.3.4.14 The South African Model: The South African Constitution lays down a cooperative model of Government under a hierarchical framework. Articles 40 and 41 of that Constitution read as follows:40. Government of the Republic1.In the Republic, government is constituted as national, provincial andlocal spheres of government which are distinctive, interdependent and interrelated.2.All spheres of government must observe and adhere to the principles in thisChapter and must conduct their activities within the parameters that the Chapter provides.41. Principles of co-operative government and inter-governmental relations1.All spheres of government and all organs of state within each sphere must -...52Common Issuese.s e. AofA Are pec AtheAconstitut onalAst tus,Ainstitut ons,Ap wer AandAfunc iore;A gover me tAi Athe A therAspher f sA Anot Aa sum Aany A ow r AorAfun tionAe ceptA hose Aconf rr dAon th mAinAio;A o AtheAConstitudoe g. A Aexe ciseA heirAp wer Aand Ape formA heirAfunc io s inAaAm nner that yAofA notAenc oa hAo AtheAgeograph cal,Afunct on l AorAinstitut onalAinte riAadA gover me t AinAan ther Asp ereby h. -A Aco-op rate wit AoneAan th rAinAm tualA rus Aand goodA ai honsA i.Afost ringAfri ndlyArelather;ii.Aassi tin Aand Asuppo tin AoneAano iii.Ainfo min AoneAan the Aof Aand Aconsu tin AoneAan the Aon,Amate sAof Ac mmonAinteestAiv. Aco-ordin ting A heir Aac ion AandAlegisl tion wit AoneAanohe;Av. Aadh ri gAtoAa reedAproced resAan Avi.Aavo ding A egalAprocee ings Aag ins AoneAanohe .Ast . AA -A AA tAofAParli ment mtateA a. 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A1TheAprovi 4: cialAlegisla ure AcanAlegi la eAinA hei AownAs hereA nderAAr icleAandA.ATheAlegisl tive Aauth ri y ofAaApro in eAisAv st d Ai AitsAprovi cialAlegisla ureer co -A fe sAo AtheAprovi cialAlegisl tur AtheA o .Ato p ss AaAconstit tio Afo AitsApro in eA r Ato A men AanyAconstit tionAp ss dA y A tAinA er sAofAsec ion A14 Aand14;o .Ato passAlegisl tio Afo AitsApro ince withAr ga dto-Ai AanyAm tter Aw t in AaAfunct onal areaAl st dAinASch dueA4aii AanyAm tter Aw t in AaAfunct onal areaAl st dAinASch dueA5; iii AanyAm tterAou sideA hoseAfunct onalAa eas Aand th tAisAexpr sslyAass gn dAt AtheApro in e Aby Anat onalAlegisla ionAan Aiv AanyAm tte AforA h chAaAprov si nAo AtheAConstit tionAenvi age AtheAenac met AofAprovi cialAlegisla andion53Lo alAGovernac.to assign any of its legislative powers to a Municipal Council in that province.3.4.15 There is also a part on local government, the equivalent of which are Parts IX and IXA of the Indian Constitution.7 And there are Schedules - Schedule 4 to provide for functional areas for concurrent national and provincial legislative competence and another, Schedule 5, for exclusive provincial jurisdiction.3.4.16 The major difference between the two Constitutions (Indian and South African), in regard to the present issue, appear to be that:i.In South Africa, functions listed for concurrent legislation, in Schedule 4 of that Constitution, include a vast part of municipal governance matters, whereas in the Indian Constitution, this is specifically a State “subject”.ii.The South African Parliament can pass a framework law in any matter to provide “for structures and institutions to promote and facilitate inter-governmental relations.”3.4.17 The Municipal Systems Act of South Africa, 2000, was enacted as a framework for urban governance in the country. The objective of the Act is detailed below:“To provide for the core principles, mechanisms and processes that are necessary to enable municipalities to move progressively towards the social and economic upliftment of local communities, and ensure universal access to essential services that are affordable to all; to define the legal nature of a municipality as including the local community within the municipal area, working in partnership with the municipality’s political and administrative structures; to provide for the manner in which municipal powers and functions are exercised and performed; to provide for community participation; to establish a simple and enabling framework for the core processes of planning, performance management, resource mobilisation and organisational change which underpin the notion of developmental local government; to provide a framework for local public administration and human resource development; to empower the poor and ensure that municipalities put in place service tariffs and credit control policies that take their needs into account by providing a framework for the provision of services, service delivery agreements and municipal service districts; to provide for credit control and debt collection; to establish a framework for support,, monitoring and standard setting by other spheres of government in order to progressively build local government into an efficient, frontline development agency capable of integrating the activities of all spheres of government for the overall social and economic upliftment of communities in harmony with their local natural environment; to provide for54nce7“Lo alAGovernme t” inA heASo thAAfri anAConstitut onAd esA otAsegreg te A ndAdifferenti teAru alA ndAur anAgovernme ts as in AIndiaCommon Issuesl galAmatter Ap rtain ng AtoAlocal gov rn ent; Aan Ato provide forAmatterinciden ta lAthe et .”3.4 18AA Ai sueAthatA sA eginni g A oAe ergeAi At e Amat er Ao Alocal Asel Ag veranceAi At eAdeg ee A oAwhic Ath Aright Aa dAd ties Aof the ci izenAcanAbe en nci ted.A nAtheASuthA fri anAAct Ath Aright Aa dAdutie Ao Ame bersA fAtheAloc lAc mmunity areAclearly en ncated.A tA sAuse ulA o Aquo e Athe Aea ly sec ion Ao AtheAActAin toto:“ ega ANatur Aan ARight AadADutiesAofAMunicip litiesLe a Anatureuni pa it — 2.AAAmleg slativeA (a) A is anAor an Aof A tat Awith nAtheA oclAsphere Ao Agovernmen AexercisingfAtheAlocal a d Aexecuti e Aauth ri y Awi hinAan Aare Ad termi ed in A ermsA governmen :AMunicipal Dema cationAAt, A1998; b)con ist Aof—(i)At eApolitica Ast ucturesAandAad in str tion Aof AtheAm nicipal ty; anduni ipality;(ii) At eA omm nityAof AtheAmyAandAotherA ( ) A unc ions in its Aarea Ai Aacc rda ce AwithAth Apolitica ,As atuto bearersAandA r lations ips betweenAi s Apolitical structure ,Apo iticalA ffice mmu ity A nd ad ini tra ion Aand Ait Acopart Aof (d) Ai sA Aha AaAse arate Alegal perso ality Awh chAexclud s A iab lity on the c mmu ityAfor th Aac ionsAof AtheAmunicipality. o-operativAg ove nmentA3.(1)AMu icip litiesAm st Aex rcise Athe r Ae ecutive Aand legislati eAauth rit AwithinAthe Aco stitut on lAsystem AofA o-operativ Agovernme t A nvisage Ai As cti nA41AofAtheACons it u ion.(2) A he A ational Aan Aprovin ia Aspheres Ao Agove nment A ust AwithinAtheAco stitut on lAsystem AofA o-operativ Agovernme t A nvisage Ai Ascti nA41AofAtheAC nstituti n, Aex rcise Athe r Ae ecutive Aand legislati e A u hority in Aa mann r At atAdoes Ano Ac mpromi e or AimpedeAaAmu icipali y’ Aabil ty orAright toA xerciseAi sAe ecutive Aand legis lativeAa tho ity (3)AFor thApurpose of AeffectiveA o-operative governmen ,Aorg nisedAloca gov rnme tAm55LocalAGove nance(a Adevel pAcommon Aa pro ches A or AlocalAg ve n entAas Aa distin tphereAofAgover ent;(b) Aenhance Aco-o eratio ,Amutual Aa sis anceAan As aring AofA esouresAamongApal ies municilly andA (c)AAfindA olu ions Afor problems re ating to AlocalAg vernmentAg ner ment (d) AandA AAf cilitate Ac mpli nce with AtheAp in iples Aof Aco- perativeAg ver elatio s.inter-gov rnmentalArAcounil R ghtsAa dA utiesAof A unicipal rig 4.(1)AThAc u cil AofAa Amun cip lit Ahas A heAomm ity;cnd to (b)AAdoA exe ciseAtheAmunic pality’sA xec tiveAandAle islativeAa tho it ,Aenc Aands Awithout improperAinte ferlitAAfi (c Aby— anceAt eA ffai sAofAtheAmun cipces; and (i) charAing feesAforA ervextentAA (ii) imposingAsArc arges on Afe s, rates Aon prop rt Aan ,AtoAtAa th rised Aby nationalAleg slati n.Aoth rAtaxe , Al viesAan Adu ies A(2) ATh Ac u cil AofAa Amuni ipalit ,Aw thin Athe Amunic pality’sA inacialAandAadmin strative cap city Aa dAhavi gA egardAto A racticalAconsid rat onsAhas theAdu Ato—(a)A exe ciseAtheAmunic pality’sA xec tiveAandAle islativeA uth rit Aan Ause AtheA es urc s Aof Athe Amun ci ali y Ain theAbestA nt res sAofAheAlocalAcomm i ty ;(b)A provide Awitho t A avour Aor Ap ejudice,Ad moc atic AandAacountableAver ment; goommnity; (c)A nco rage Athe Ain ol eme tAof A he AlocalAc om u ( )A ityA triveA oAen ureAthatA unicipal ser icesAare pr vid dAtoA heAlocalA eAm nner;inAaAfianc ally Aand Aenviro mentallyAsu tainabl(e Aco sult A he AlocalA ommunityA bou —(i)At eAlevel, quali y,A angeAa dA mpactAofA unicipal services pr vid dAby AtheAmunicipa ity del very(ii) AtheA vailab e Ao tion Afo AserviceA (f)Agiv Am mbe sAof A he AlocalA ommunityA quitab eA cce s Ato AtheAunicipal se vices to Aw ich they AareAent t led;(g Apr mote AandA ndertake Ade el pme t Ain AtheAmuni cip l ity;(h Apromo eAgend r A qui yAinAthe exrci e Aof Athe Amunic pality’sA xec tiveAandAle islativeAauthority;tAto—( ) A ove n Ao AitsAown Ai iti tive A he AlocalAg vernme tA ffai sAofheAlocalA56Common Issues(i) promote a safe and healthy environment in the municipality; and(j) contribute, together with other organs of state, to the progressive realisation of the fundamental rights contained in sections 24, 25, 26, 27 and 29 of’ the Constitution.(3) A municipality must in the exercise of its executive and legislative authority respect the rights of citizens and those of other persons protected by the Bill of Rights.Rights and duties of members of local community 5.(1) Members of the local community have the right(a) through mechanisms and in accordance with processes and procedures provided for in terms of this Act or other applicable legislation to(i) contribute to the decision-making processes of the municipality; and(ii) submit written or oral recommendations, representations and complaints to the municipal council or to another political structure or a political office bearer or the administration of the municipality;(b) to prompt responses to their written or oral communications, including complaints, to the municipal council or to another political structure or a political office bearer or the administration of the municipality;(c) to be informed of decisions of the municipal council, or another political structure or any political office bearer of the municipality, affecting their rights, property and reasonable expectations;(d) to regular disclosure of the state of affairs of the municipality, including its finances;(e) to demand that the proceedings of the municipal council and those of its committees must be(i) open to the public, subject to section 20;(ii) conducted impartially and without prejudice; and iii) untainted by personal self-interest;(f) to the use and enjoyment of public facilities; and(g) to have access to municipal services which the municipality provides, provided the duties set out in subsection (2)(b) are complied with.(2) Members of the local community have the duty(a) when exercising their rights, to observe the mechanisms, processes and procedures of the municipality;57Local Governance(b) where applicable, and subject to section 97(1)(c), to pay promptly service fees, surcharges on fees, rates on property and other taxes, levies and duties imposed by the municipality;(c) to respect the municipal rights of other members of the local community;(d) to allow municipal officials reasonable access to their property for the performance of municipal functions; and(e) to comply with by-laws of the municipality applicable to them.Duties of municipal administrations6.(1) A municipality’s administration is governed by the democratic values and principles embodied in section 195(1) of the Constitution.(2) The administration of a municipality must(a) be responsive to the needs of the local community;(b) facilitate a culture of public service and accountability amongst staff;(c) take measures to prevent corruption;(d) establish clear relationships, and facilitate co-operation and communication between it and the local community;(e) give members of the local community full and accurate information about the level and standard of municipal services they are entitled to receive; and(f) inform the local community how the municipality is managed, of the costs involved and the persons in charge.Exercise of rights and performance of duties7.The rights and duties of municipal councils and of the members of the localcommunity, and the duties of the administrations of municipalities, as set out in sections 4, 5 and 6, are subject to the Constitution, the other provisions of this Act and other applicable legislation.”3.4.19 The Commission is of the considered view that local governments fall under the rightful domain of the States. It would not be desirable to bring this subject in the Concurrent List in order to empower the Union to enact a ‘framework law’ for the local governments. The Commission is, therefore, of the view that a ‘Framework Law’ may be passed by Parliament under Article 252 (power of Parliament to legislate for two or more States by consent and adoption of such legislation by other States). The remaining States may then be persuaded to adopt this law. This law should spell out the rights and duties of the58Common Issuescitizen ic tizenAin re ati nAtoA heAlocalA uth rity andAa so tho eAofA heAl calAbodyA is- -visAthe ci izen. ItAw uldAals Aprov deAbroadAp inc plesAfor A et ilingAof Aa ti iti sAatA he Ath rdAtier AEquallyAimp rta tly, A heA odel law must lay AdownAg ide ines Afor Ad vo ution AofAresponsi ilitie ,Ap wersAandAf nc ion , AbyAthState .A3.4.20ARecommen ation:a.AG ve nment of AInd aAsho ld A raftA nd Apla e AbeforeAPa l ament,AaA couldAb A ram wor ALawA orAlocalAgov rn ents.ATheA ram workA awheASout A enac edAunde AAr ic eA2 2 AofAtheACon ti uti nAonA he lin s AofA heAbroadA Afr can Act AforAt eA tatesA o Aa opt AThisAL wAs ould lay downA sAtoA heA p in iplesAofAd vo utionAo Apowers,Arespons bil tiesAandA un tio o lowing: localAgo ern ents AandAcom uniti s, bas dAonAtheAfs diarity ? ri cipleAofASuba isation ?D mocraticADecentrF nctions ? De in ationAofAe lATerms ? D vo utio AinARn ergence ?Co CCitizenACent icity3.5 AD vo utionof AF nds3.5.1 Fi ances ofALocalAGov e r n m e n ssAand Ai A 3.5.1. ADe pite Athe A mpor antA oleAt at Aloc l Abo ie Apl yAin AtheAd mocrati Apr ceby Athe eA me ting A he Abasic Areq ir men s Aof Ath Ape ple, Athe financial A esources A en ratedAof A“ownA bo ies fallA ar short of Atheir Arequ remen s. A ableA .3 A hows AtheAp rcent ge sharAth nA93 r so rces” inAtotal re enu s AofA he Aloca he Afigures indiAb dies. AateA hatA or pe Ace tAofA heAtotal re enues of Arur lAbo iesAwer Ader vedAfrom external so rce.AOn A heAot erAha d, Aur an Aloc lAbodi s Arai ed A 9.69 pe Acent ofAtotal reve ues Af omA heirAownA es urces Ai A19 8-99 butAthisAp rcentage de lined to 58.44 Ain 2002 03. Als AtheApe Ac ntageAo ArevenueAex enditur Ac vered byA heir Aown A eso rcesA orA uralA ndAur anAloc lA ntage Ao A odie Ais 9.26 per cent A nd A68.97 percent, Aresp ct vely, Ain 20 2-03. AThe Ap rc cent A ndA revenu Ader ved from A wn A axes A or A ural A nd Aur an Aloc l Ab dies are 3.87 per9.23 per AcentAres ec ively Ain A2002-2003.59GovernaneLocaTable 3.3: Revenue and Expenditure of Local Bodies (Rural and Urban)(Rs. in Crores)1998-991999-002000-012001-022002-03RevenueOwn Tax5385.415828.56371.276696.625869.89Own Non-Tax2648.982885.863307.493496.33133.91Own Revenue8034.398714.379678.7610192.939003.79Assignment + Devolution7431.039155.139513.018914.068877.13Grants-in-Aid11552.0515369.8515665.4415895.7216230.45Others1792.842197.752968.22616.572495.64Total Revenue20775.9326722.7228146.6427426.3527603.23Total Revenue Expenditure28810.3235437.0937825.437619.2736607.02Revenue Expenditure22090.9426579.4529797.4930381.9528411.6Capital Expenditure8250.889565.3310005.79473.539871.72Total Expenditure30341.8436144.7939803.1939855.4838283.31Source: Data provided by State Governments to the Twelfth Finance Commission3.5.1.2 The local bodies are heavily dependant on State Governments for financial inflows, even for routine functions because the proceeds of various buoyant taxes like State Excise, VAT and Motor Vehicles Tax are not available to them as they form part of the Consolidated Fund of the State. The major sources of income for local governments like property tax etc. are woefully inadequate to meet their obligations both due to their inherent nature and inefficiency in collecting them. This asymmetry between the taxation power and the responsibility to provide civic amenities necessitates transfer of funds from the State to the local governments either through untied grants or through a share in other State Taxes or as part of various development schemes.3.5.1.3 The overall finances of the local bodies such as resource generation, efficiency of collection, investment, taxation etc. will be dealt in the respective chapters pertaining to Urban and Panchayat Finances. However, it is appropriate to deal with the issue of devolution of funds and functioning of the State Finance Commissions as a common issue between the State Government and urban and rural local governments.60Co61m m o nA ss es 3.5 2ATheASt te AFinance Commis i o nA(S C)AAau horis A 3.5.2 1 AAr icl s A24 HAan A2 3X AmakeAit obl gat ryAfo AtheAState Go ernment At odiesAsuchA the Alo al bodi s, byAlaw AtoAim oseAta es, A uti sAetc. an Aas ignAt Athe Al calA AalsoAmak A t xes/du ies leviedAan Ac lle tedAb Athe AState A over ment.AThe eAAr icle th AState.A pr vision Afor Agr nt -in aidAt Athe Al cal A odi s Afrom AtheAC nsol da ed A undAof ns itu ionA The de olutionA fAfinancia Ar sourc s Ato At ese bodi s AhasAb en Aensu ed AthroughAc onsAon A heA o AtheASt te AFinance A ommi sio sAthatAa eA equi ed AtoAmakeAreco me dat eA o ernor haringAand as ignment ofAvar ousAta es, A uties etc. A nderAthese A rov sions,At Aye rAfromA of aAStateA sA equiredAto con titut AtheASt te AFinance Commis ion with nAon he eaf er,A the Ac mm nce ent A fAtheA73r AAmendmen A(A t cle A24 AI A ndA 43 AY),AandA Pan hayatsA atAthe ex irati n Aof every fif hAyear Ato review At e Afinanci l A osi ion AofAthe quiredAforA and AMuni ip lities. AThe A om osi ionAof Athe A omm ssion, Athe Aqu lificatio sAr dedAb AtheA pp int entAasA tsA emb rsAand th Amann rAin whi h AtheyAa e A elected is dec eA o ernor StateA eg sla ur A yAwa Ao Aa Law. ItAisAalso st pul tedAin Athe AC nsti uti n AthatAt eAArticlesA of Aa A tate A hallA ause AeveryArec mmen at onA ade Aby Athe Commi sion A nderAthe aid beforeA to et er-withAanA xplanatory me or ndu AasAto theAa tionAta en th reon to AbeAtheA eg sla ureAofAthe ASt teme dat onsA 3.5. .2 The ASFCsAso A onstitute A(A t cle A24 AI andA 42 Y)Ah ve Ato AmakeAreco orA s to At At A–A eA ov rldA ove (a) n Athe A– princ plesAw ichAsh utA roc (i) edsA AtheAd stribut onA etwee Ath ASt teAan AtheAl ca Abo ies ofAtheAn ichAmay beA of theAtax s, Adu ies Atol sAand Afe sA evi ble Aby the AS ate Aw weenAt ese divi ed Ab tween them unde Ath sAP rtAand Athe allocat onAbehApr cee s;bodies al Aleve sAof Atheir respec iv Asha esAofAsuceAa si (ii) nedA AtheAde er ina ionAof theAtax s,Adu ies Atol sAand fee Aw ichAmayAcalAb die ;to,AorAa pro ria ed Aby AtheAloAth AundAof (iii)Athe Agr nt -in aidAt Athe Al cal A odi sAfromAtheAC nsol da edASt te;bod es; and (b)At e Ameas re Aneeded to A mproveAt e Afinanci lA osi ionAo Athe Alo alA norAinAt (c eA AanyAo her Amatt rA efe redAtoA heAFinance Co mis ionAbyAt eA ove nteret Aof As un Afin nceAo Athe A heseAloc a lAbod esticle 280AA 3.5.2.3 AThe pr visions A f AA t cle A24 A Aan A243 AYAareA ssentia ly modeled onA hich dealsAwith Ac ns i ution Ao Aa AFinance Co mis ion Aa Athe A ni nAle elAtoAmakeAreco mendat ons on–(a)AtheAd stribut onA etwee Ath AUn onAan At eAS ate ofAtheAn tA rocee sAofA axe Aw ich ar Ato be, or AmayA e,Adivi ed Ab tween them underAt is A hapLoclAGovernanceallocation between the States of the respective shares of such proceeds;(b) the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India;(bb) the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats in the State on the basis of the recommendations made by the Finance Commission of the State8;(c) the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State;9(d) any other matter referred to the Commission by the President in the interest of sound finance.3.5.2.4 The Tenth Finance Commission, for the first time, made a separate provision of Rs.1,000 crores for urban local bodies in the country (for a five-year period). They also madea provision of Rs.100 per capita for the Panchayats. The Eleventh Finance Commissionmade a detailed study of the local finances and also the recommendations made by various State Commissions. They recommended several measures to augment the ConsolidatedFund of the States including a total grant of Rs. 1,600 crores and Rs. 400 crores for the Municipalities for each of the five years starting from the Financial Year 2000-01. Besides, the Eleventh Finance Commission analysed the process of implementation of the 73rd and 74th Amendments and suggested certain changes as follows:a)Transfer of functions and schemes to the local bodies should be specificallyprovided by legislation.b)There is need for making legislative arrangements to clearly indicate the rolethat the different levels of Panchayat Bodies have to play in the system of governance.c)Special agencies like the District Rural Development Agency and the DistrictUrban Development Agency should be integrated with the local government set-up.d) For extending the provisions of the 74th Amendment to the Fifth Schedule Areas, an enabling legislation has to be enacted.e) DPCs and MPCs should be constituted in all States.3.5.2.5 Similar to the role of the Finance Commission in recommending devolution of funds from the Union to the States, the State Finance Commissions also make recommendations regarding the principles that should govern the distribution of taxes between the State on the one hand and the local bodies on the other. Thus, the SFC arbitrates the claims to resources of a State by the State Government and the local bodies. The terms of reference of the constitution of the State Finance Commissions generally include the provision that8 Inserted by 73rd Amendment.9 Inserted by 74th Amendment.62Comm n Issusons deration wh le making its re omm ndations, he Com issi n sh uld take into al bodi s for th re ource of the Sta e G ver ment, and th r qui ement of th lo all followe m eting revenu e pendi ure. The State Finan e Co missions ave gene as the local t e approach of stimatiinanceg heof the Sta e over me ts s wel e. Apart rom bo ies. ase on this, the FC ecommends he devol tion ackace C mmission d vo vin fund to the u ban an l c l bodi s a a wh le, the State Fina e urba lo al a so recomme ds rinciple for inter-s d strib tion of fun s bet een t various State bodie and differen P ncahayat . n a alysis of the r co mendati ns ofapproach anFinan e Commiss ons ndica es t at t ere is a id va iation i the so e States c ntents f he eports o the ifferent State Financ Comm ssio s. Whi others f llow hav follow d he conc pt of ooling o al rev nues and then s aring, of evolutio differe t ercentages ch iffere ces for d ffere t taxes. S dabl , as the are quite u de sta loc l odies aws g verni g thes tes as do the va y in d ffe en St functi ns and d ti s assigned tth m.venth Fina ce 3.5.2. The Elioned certa nCommis ion menwhich it was const ai ts be au e o FC eport as u abl to adopt t e omme dat on . the basis for its re re as These follows: anc ro n s a ti o n a) n on - s of the period of the r co men atio s o th SFCs a d the C ntral FinanceComm ss on;b) l ck of clarty in espect of he assignm nt of pow rs, authority and re po sib litie of thelcal bod es c abs nce oa timfram wihin w ich the sta e g63Local Governancerequired to take action on the recommendations of the SFCs; and d) non-availability of the reports of the SFCs.3.5.2.7 The Twelfth Finance Commission examined the functioning of the State Finance Commissions in great detail and made some very important recommendations which, if implemented, would go a long way in streamlining the scheme of fiscal decentralisation and achieving the ultimate goal of developing the local bodies as institutions of self-government. One of the important recommendations of the Twelfth Finance Commission (TFC) pertains to the time span for setting up of the SFCs, the time allowed for submission of its report, time limits for action taken report and synchronisation of its award period with that of the Central Finance Commission. The TFC recommended that:“It is desirable that SFCs are constituted at least two years before the required date of submission of their recommendations, and the deadline should be so decided as to allow the State Government at least three months’ time for tabling the ATR, preferably along with the budget for the ensuing financial year. Synchronisation of the award periods of the SFC with the central finance commission does not mean that they should be coterminus. What is necessary is that the SFC reports should be readily available to the central finance commission, when the latter is constituted so that an assessment of the State’s need could be made by the Central Finance Commission on the basis of uniform principles. This requires that these reports should not be too dated. As the periodicity of constitution of the Central Finance Commission is predictable, the States should time the constitution of their SFCs suitably. In order to fulfill the overall objective, the procedure and the time limits would need to be built into the relevant legislation.”3.5.2.8 The Twelfth Finance Commission made several recommendations regarding the working of the SFCs. These are summarised as follows:a.The principal recommendations made by the SFCs should be accepted by theGovernment as is the case with the recommendations made by the Central Finance Commission.b.The SFCs follow the procedure adopted by the Central Finance Commissionfor transfer of resources from the Centre to the States.c.While estimating the resource gap, the SFCs should follow a normative approachin the assessment of revenues and expenditure rather than make forecasts based on historical trends.d.It is necessary that the States constitute SFCs with people of eminence andcompetence, instead of viewing the formation of SFCs as a mere constitutional formality.64Common IssuesIn the d t followe. I t e matter of co pos tion f the FCs S ates may be el advis ons for the the Central leg slati n and rules whi h p escribe i the q ali cat hat exper s cha rperson and membe s and f ame si il r ules. It s im ortantnce, public ar drawn rom specific disc pl nes such a econo ics, ipu lic fnad ini tratonand aw.eac Sta e. f. The e should be a p rman nt SFC cell i the financ d part ent offunctionhis cell msy e headed by a sec etary eve offic r, w o will a soecr taryof the SF .ndat ry ut 3.5.2.9 The rec mm nda ions of the Cen ral Finance Com iss ons are n t m y radition from th beginning succ ssive Union Gove nments have e tablish d a healt without an f a cepting th devolu ion packa e ugg sted by the Financ Commis ion y. H wever, d viatio . In effect ther fore, these rec mmen ations have becom mandato re omm nded th s t adi ion as not been es abl shed in th tates, as a re ult even if y the SFCs, State Gover me ts ften d not com it adequa e r sou ces f r the local n general y ov rnments The healt y precedent es abl shed y the Unio G vernment sh uld also a cepting th devoluti n pr po als made y the U ion Financ Commi sion f the S ate be fol owed y the Stat Gov rnment wi h r gard to the rec mm nda ionsf f nctionFinance omm ssio s. This will ens re ffective and progressiv d volutiona d p wers o the oca bod es and l ad to theire m p owe r m nt.2 07/20 8, 3 5.2 10 With t e Thirte nth Financ Commi si n ikely to be co stituted i Co mission it would be ap ropria e to adv se tha all St tes a point their S ate Finance ble for the i adv nce so that th re orts f the S ate Finance Com issions a e a ail , is of t e c ns der tion of the Cen ral Finance Com ission. This Commission t er for ve years as vie that S ate Finance Commis io s s ou d be set up with the pe i iod city f up in tim req ired by the C nst tution, but equally mpor antl , that th y s ou d e se sion, their across he count y, so that, as re omm nded by the Twe fth Finance Commi rec mme da ions an b taken into c ns der tion by the Cen ral Finance Commiss on.3.5.2.11 I cid ntally, the onstitut on rov des for th s tti g up of the Cen ral Financ Comm ssiive years or earln eve yer. Article28 states:itution anhe Pres“dent s all with n tw ye rs from the om ence ent of this onse Preside t t ere fter at th e pirat on oifteve yyea or at uch ar ier time as tonsist o consider n cessa y, by orde onstitu e a Financ Comm ssion which s al a hair an an four o he m mbers to e ppo nted by the65al GovernanceLoc3.5.2.12 However, Article 243 I, which relates to the setting up of SFCs, does not provide for such a course to the States. Perhaps this is to prevent arbitrariness and adhocism in the setting up of SFCs. But since the need for the Central Finance Commission to take into account the recommendations of the SFCs arises out of Article 280 (3) (bb) and (c), Government may examine the need to modify Article 243 I suitably.3.5.2.13 The Commission also agrees with the recommendations of the Twelfth Finance Commission that each State should prescribe through an Act the qualifications of persons eligible to be appointed as Members of the State Finance Commission, on the lines of the Central Act. This would ensure that persons with requisite qualifications, experience and public standing are appointed.3.5.2.14 The task of the State Finance Commissions is undoubtedly complex. They have to assess the resource gap in case of all the urban and rural local bodies. Even within a State, there are wide variations in the financial position of these local bodies and also in the level of services provided by them. Lack of data on various aspects of local governance makes the task of the SFCs even more difficult. Generally, the SFCs have attempted to estimate the resource gap and recommended devolution of funds accordingly. The resource gap for any local body can never be measured in absolute terms as the resource gap is a function of variety of factors such as the level and quality of civic amenities provided, the efficiency of the local body in raising resources, the quantum of service charges levied by the local body etc. The Commission is of the view that the State Finance Commissions should link the devolution of funds to the level/quality of civic amenities that the citizens could expect. This approach would also help to bring about some uniformity in the quality of services provided by different local bodies. Basically, this would shift the focus from outputs to outcomes.3.5.2.15 Although SFCs, while making their recommendations about devolution of funds also give their recommendations on other matters affecting the resources of the local bodies, there has not been adequate emphasis on the outcomes of such devolutions. Local bodies focus their attention on getting the maximum possible funds from the State, and in the process, other recommendations which seek to enhance the resources of the local bodies such as improvement in their own tax base, higher efficiency in tax collection, economy in expenditures, reduction of surplus staff etc do not get due attention. In short, the local bodies implement only the ‘soft portions’ of the recommendations and the ‘hard’ recommendations are often not acted upon. As a result, the recommendations of the SFCs do not get implemented in totality and the outcomes are therefore sub-optimal. The Commission is of the view that the SFCs should carry out a more thorough analysis of the finances of local bodies and make concrete recommendations for improvements in their66Common Issuesworking. In case of b bro d ased, ut workin . In ase of mall r local bodies, such ec mmend tions oul to e more spe ific.in case of lar er l cal governments such ecom en at ons ould nee ro emen in efficienc With istorical data bei g av ila le w th he SFC, and wi h the imof dat coll ct on he SFC w ul be i a osition o carry ou t detai e analysis.goe towards meet ng 3 5.2.16 s bst ntial po ti n o the evenue of he loca bodiesfed in ome respects the estab ishment ex end ture. Genera ly, the local f od es a e overst tion.SFC sh uld nd yet the re uis tehecapabi ity is not available wit in the rganisevolve or s for expendi ure onf estab ishme t for d ife ren t ocal bodie .e SF s has gen ral y 3. .2.17 Monitori g he mplementation o t e r comm nda ions of t I is neces ar th t be n we k. This h s lso bee observ d by various Fi an e Commiss ons.t e r comme da ions mech nism s put i pl ce which revie s he mpl mentation of al gislatu e w thin six o the FCs. A Act on Taken ep rt ust b tabled in he Sta e Lth devol tion ad mo th , and th s houl b follo ed up wit a an ual statem nt oto the St te budget and grant give to ind vidual rb n bodies t rou h an ppendimade condit onal to doc ments. If ons dered nece sa y, th devo ut on o funds coul b oc l bodies gre ing to implemen t e r comme ndatio n s of the SFCs.3.5.2. 8 R commendati ns:the Twelf h Financea. Thi Co mission en ors s and re ter tes the views o Com ission eg rdi g th w rking f he SFCs alistedinparagra h3 5 2.8.b Ar icle 243 I ( )of th C nstitut on should e a ended o i clud the ph ase “ t suc ea lier ime” a teri he words“eve y fft year” ifcation o p rsons c. Each S ate sho ld pres rib through i an A t, the quaeli ib e to be ap oin ed as Members of the Stateinan e Comm ssion. s for devolu io and . SFCs sh uld evolve obje tive nd ransparent norrea-wise indi es fo d st ibuti n of f nds. The norms sho ld incl de nk th d vol tion of backwa dness. Stat Finan e Co mis ions shoul l tiz ns co ld e pect funds to the l vel/quali y of civ c amenit es th t the c Thi coul t en form t e basis ofan im act ev luati n.ions of the FC must e. ThA tio Taken Report o t e r com endac mp lso ily be pl ced i the concer ed Sta e L gislatnths67Local Governanceof submission and followed with an annual statement on the devolution made and grants given to individual local bodies and the implementation of other recommendations through an appendix to the State budget documents.f.Incentives can be built into devolution from the Union to the States to take care of the need to improve devolution from the States to the third tier of governments.g. Common formats, as recommended by the Twelfth Finance Commission (TFC) must be adopted, and annual accounts and other data must be compiled and updated for use by the SFCs.h. SFCs should carry out a more thorough analysis of the finances of local bodies and make concrete recommendations for improvements in their working. In case of smaller local bodies such recommendations could be broad in nature, but in case of larger local bodies, recommendations should be more specific. With historical data being available with the SFC, and with the improvement in efficiency of data collection, the SFC would be in a position to carry out the required detailed analysis. The special needs of large urban agglomerations particularly the Metropolitan cities should be specially addressed by the SFC.i.SFCs should evolve norms for staffing of local bodies.j.It is necessary that a mechanism be put in place which reviews the implementation of all the recommendations of the SFCs. If considered necessary, devolution of funds could be made conditional to local bodies agreeing to implement the recommendations of the SFCs.3.6 Capacity Building for Self Governance3.6.1 The crucial issue of capacity building in urban and rural local bodies remains a largely neglected area in decentralised self governance. Beyond short term ‘training’ of personnel and elected elements of these bodies, little has so far been contemplated, and even in this sphere there has been limited initiative and fitful progress. As a result, there is capacity deficit within the Panchayat and Municipal Institutions. With the enactment of the National Rural Employment Guarantee Act (with an annual outlay of Rs 60000 crores when ‘universalised’) and other ‘flagship’ schemes like the Jawaharlal National Urban68Common IssuesRenewal primarily Renewal Miss on- NNURM- (Rs 50 000 cro es fo fiv y ars for 63 ci ies) bein‘enablingmplemen ed t rough such in ti ut ons, t is clear that sust ined, w ll planne exer is s’ need to be un ertake to nsu e that the i plementi g ag nci s have te c pac ty and the ca abil ty t de l with the ch llenges in nde taking and i pleme ting hese maj r national progr mmes apart from be ng ab e to ulfil thei statutoryfunct on .im arting 3.6.2 A erron ous otion th t capaci y build ng r la es only o t aining an . Capaci y ne skills t em loyees an impr ving the r exis ing s il s eeds i to b clarife uild ng i muc more tha tr ini g, nd ha two major omponent , namely:? Individualte elopmentt?oOrg nisationaltde vel o ment.3.6.3 Individual evelopme t i volves the ev lopme t of huma resourceincluding tion wh chnh nc ment of an i dividual’s knowle ge, skills an access to nformnisational e ab es them to im rove their erf rman e nd th t of their or anisation. Org two major ev lop ent o the ot er ha d is abo t nabling an o ga isation to res ond t chal en es ha it has tonfront: ?dExternal ada tationaad survival n tegr tion.?Internalis with its 3.6 4 External ada tation a d s rv va has to o w th how the o ganis tion cope issues constant o y changi g external e virTh nment. s involves add essing th ?tmission, str tegies andng al ?cmeans toe chiev wtheh oalsuwhi heinclude os lectioniofe ppropriate management, tructures, processes, rocedures, inc ntives nd rewar s system.?t easur mentlwhi hsinvolvesne tablishinge ppr priate keyar su trareasa ro riteriant de ermi e how well ndi idual an teams are ac ompli hing their oals.at ons ips 3.6 5 Internal nt grati n is about e tablishing har onious a d effect ve working re lop sha ed in the or anisa ion, whi h involves denti yi g means of co mu ication to devshment for va ues power an statu of groups and i div duals, nd ewards and pun beha iour ncouragin desirabl be aviour and d scouraging ndesirables with the 3. .6 Thre is a so anot er rel te aspect f capacit buil ing, hich dea ev lopment of in tit tiona and lega f amewor to enable or an sations to enance the r regulato y apacit to p rsue thei ob ectiv a d goal by making th nece sar legal andercises to ch nges. Thse guiding prin ip es need to be k pt in view while ndertakin eenhance apacities, ind vidual and orga is tiona , in lo69Lo al Gove na ceand demanding the task of builan 3.6.7ing organi at onal capacit es s more co plexnt of th hither o the re uirement of sk ll upgradatio of an in ividual p rtl on acco equi ed to achieve ompl te neg ect of thi as ec and partly ue to more omplex i it atives on formulation of this g al. Orga isationa ca ac t buil ing is, to a larg e tent, depen enmix of ‘ n- ouse’ the appr pri te recrui ment and per onnel oli ies a d fidi g the righity bui ding woul pr vis on of servic s nd out-sou cing of functi ns. Orga isationa capa gineering nternal include de igning app opriat st uctures withi the organisat on, re-e g legal fr mework, pr ce ses, dele ati n of authority nd respo si il ty, crea ion o an enabli ard and pun shment de eloping man gement i formation systems, instit tio alising re a g eme t practices. s stems and a opting s und human esource m at the or ani ati n 3 6.8 Orga isationa capac ty ui ding ho ld n t be tak n to mean th ent ye rs a largeacqu res all the s ills and kn wledge equ red to pe form i s task . In re numb r of agen ies hav developed ertain pecialis d skill . Pr den e demands th t any rgan sat on should av the ca abil ty of apping such skills r t er thn spen in a large mo nt of res urce in ac uiring such skills t emselves. Evo ving partn rships, eve oping netwo ks and ou sou cin functi ns are all m tho s of enhan in te capabilityo f anor anisation.s is a m tter that.6.9 The Commi sion also bel eves tfing oat adequ te stalocal bodiacti e a socia ion re uires con id rab e att ntion o the State in nce Co missions in ter capaci ies. Thwith th S ate G ve nment in o der to endo these odies with re on Urban an R ral Comm ssi n agrees wit , he bservati ns of the St nding Com itteeher it um ariseDevelopmehirt o theeen h Lok Sabha in its Fifty si th Reportrie and fina ces’. the cr x of l ca bodies’ gro th as ‘develo ment of funct ons functio nsomew at neglectedThis a pro ch encom asses the mut all complem ntary butt a so underscores goal of organisati nal an in ividual grow h nd d velopment. tanda disation an th resp nsibility o S ate ove nments to ake the initiative or ring of out ourced ‘nor fixa ion in area l ke he strength of the establ sh ent, monit ctivitie , optimu internal re ource mob lis tion poten ia and unit costs of provd i ngs rv ces e c.th responsib lity 3.6. 0 The State F nance Comm ssio s, th refore nee to be vested with odi s to de er ine of sugges ing ‘staffing norms’ for various le el and ategor es of local ut ourcing r su ts the o timum r esirable de re of outsou cing f functions While ad n ted, depend in reduct on of ‘oper tio al personn l’, its uc essful utcome as alr ke a ho istic vi w on an app op iate compl ment of mo itoring me hani m Failure to t f thi approach i of en respons ble for o tsourced func io s ( articu ar y in t e sphe e o public hea th and s n tation b coming a source oftion. publ c Simlarly,dissatis aCommon Issuesnumber of ‘flagship’ schemes e.g. NREGS, JNNURM, cast implementing responsibilities on the various tiers of panchayati institutions and the municipal bodies. Besides, there are a number of other schemes particularly in the rural sector with considerable involvement of PRIs. Some such schemes do carry a ‘staffing component’ mainly for supervision. The state of preparedness of the local bodies in such cases is, however, not uniform and is often not properly assessed. This observation is primarily in the context of Centrally Sponsored Schemes. There is also a trend in certain States to involve such institutions in executing some of the State sector programmes; observations in the context of Centrally Sponsored Schemes also apply to such cases. There are clear indications that failure to upgrade organisational capacity to meet rising demands is a badly neglected aspect of local self-governance.3.6.11 This brings us to the conventional facet of capacity building through ‘Training’. While State Institutes of Rural Development and other institutions involved in training Panchayat functionaries have been imparting training to the ‘target beneficiaries’, these are generally limited to areas like Panchayat and Municipal laws, rudiments of book keeping, account codes and office procedures. Clearly, much more is required for capacity building and skills-inculcation beyond such routine measures. For example, issues like principles of good local governance, gender concerns and sensitivity, disaster management and Right to Information are aspects needing much more salience in training and individual capacity building initiatives. Training initiatives for elected local government representatives have been even more sporadic and inadequate. Apart from certain initiatives of ‘distance training’ of Gram Panchayat chiefs by the Indira Gandhi National Open University, some programmes financed by All India Council of Mayors and the occasional trainings in the State Administrative Training Institutes, there are hardly any other initiatives for meaningful capacity enhancement of the elected representatives. The tendency to respond to filling up training gaps by establishing more institutions is obviously not the answer.3.6.12 The 73rd Constitutional Amendment provides for minimum of 33% reservation of women in elective posts, thus putting over one million women in positions of leadership and mainstreaming them in the process of development. In fact, women in Panchayat seats today have enlarged their representation beyond the minimum 33% prescribed by the Constitution. They have also brought to their office, enthusiasm and courage and their contribution has enriched the quality of life in their communities. However, because of entrenched gender bias, there are still many instances of women Panchayat members encountering obstruction and exclusion and lacking self-confidence as also adequate knowledge of their duties and responsibilities. While the situation has improved due to special training and capacity building programmes, there is still need to give special attention to capacity building of women panchayat leaders and members so that they are truly equipped to carry out their envisaged role in the third tier of government.71Locl Governance3.6.13 With the responsibilities of rural and urban local government institutions expanding and with their role and reach poised for further enlargement in the foreseeable future, there is a clear need to bring about a ‘networking’ of the existing training institutions in various subjects like financial management, rural development, disaster management and general management to formulate compendia of training methodology and training modules to build institutional and individual capacities. There is a strong case for the Union Ministries of Panchayati Raj and Urban Development to initiate funding of specific ‘key’ training programmes. The training needs, assessment and content details of the training programmes should be best left to the local training institutions so that they are relevant to the local needs. It is equally important that training should be mainstreamed in the activity mapping of organisations so as to be a continuing activity.3.6.14 While it may be argued that there is no need for ‘standalone’ training institutions for Panchayat and Municipal institutions, there is little doubt that activities like applied and action research, case studies, documentation of major initiatives and evaluation of important interventions need special focus. Further, some of the larger, better endowed local bodies may be in a position to commission and finance academic initiatives and they should be encouraged to take action in this field. The primary responsibility in this behalf must rest with the State and Union Governments through funding under suitable state/ national schemes. The research and higher education funding establishment must also play a role to provide encouragement to ‘purely academic’ research on topics with implications for the functions performed by local bodies and those providing theoretical underpinnings and analytical framework for matters connected with decentralised governance, subsidiarity and allied issues.3.6.15 As a result of decentralisation, local bodies have become responsible for a number of services. One of the difficulties they face is the lack of specialised and technical skills required for these services pertaining to engineering design, project management, maintenance of high-tech equipment, accounting etc. In the ‘pre-decentralised’ period, such services were made available by the State Governments, at least to some extent. It would, therefore, be appropriate if a common pool of such expertise is maintained either by a federation of local bodies or by professional agencies which can be accessed by local bodies on demand and payment.3.6.16 Recommendations:a.Capacity building efforts in rural and urban local self governing institutionsmust attend to both the organisation building requirements as also the professional and skills upgradation of individuals associated with these72Common Issuesbodies, Municipal bodi s, whet er elected or appointe . Relevan Pa chayat an r enabling l gis ations nd man als framed ther under m st co tain cle y building pr visi ns in th s re herpect.should be speci l capaci pro ramme for women membe s.ce specifi b. State overnm nts shoul enco rage l ca bodies t outsou e, throu h f nction t public or privat a enc es as may be a propria shoul b enabling gui elines a d support. ut ourcing of activi ie o ersight backed by ev lopment f in-hou e c pacity for mon toring an rocurement of outsourced ctivities Likewise, ran pare t and fair to im rove proc du es nee t be p t n p ace b the State Go ernment fiscal dis ipline nd pro ity i the locabodies.res urces c. Co pre ensive a d holist c traini g require ex ertise an an be be t f om vari us sub ect matic traininger specinst tut s. This s su je ts chieved by ‘ et orking’ of i stitution con erned w th varioman gement such s financial anage ent, rural d velopmen , disaster l genci s nd general ana ement. Thi should be ens red b the nod in State Govnm nt .d. A an aid o capacit buildin , suita le s he es need o e dran up nder tat Plan fo Rura and Urban eve opment for doc me tati ns of ca e st dies, bes pr ctices and eval ation wit r fer nce to the er orm nce of the prescr bed duties and respo si ilit es of sucbodies. e e arded . raining of elected repr sen atives an perso ne shoulding m y be as a continuin activity. xpenditure eq irement n t ai taken i to acc unt b the St te Finance ommis ions w ile making recommedations. strategic . Academ c r s arch ha a d fin te r le to play n buildin long-terthe Ind an in titution l c pacity or gre ter p blic good. Or anis tio s like Counci of Soc al Scien e Re ea ch must be en oura ed to fund t eoretic l, pplied and acti n esearch on vari us asp cts of the un tioni g of loalb dies g A pool of xperts and pecia ists (e.g. engineer , pla ners tc ) could be ma n ained by a federation co sorti m of lo al odies. This73ocal Governancecould be then accessed by the local bodies whenever required for specific tasks.3.7 Decentralised Planning 3.7.1 Constitutional Provisions3.7.1.1 The concept of planning at the local level has been given an institutional framework under Articles 243 G, 243 W, 243 ZD and 243 ZE of the Constitution.243 G. Powers, authority and responsibilities of Panchayat: Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Panchayats, at the appropriate level, subject to such conditions as may be specified therein, with respect to-(a) the preparation of plans for economic development and social justice;(b) the implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule.243 W. Powers, authority and responsibilities of Municipalities, etc.: Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow-(a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to-(i) the preparation of plans for economic development and social justice;(ii) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule;(b) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule.243 ZD. Committee for district planning : (l) There shall be constituted in every State at the district level a District Planning Committee to consolidate the74Common Issuesplans lans pre ar d b the Panch yat an the Municipal ti s i the dis ric a d to pr p re a raft develo ment pla fo the dis ri t as a wolee c ( ) The Legisl tu e of a tate ma , by law, make prov sion with re to –(a the compos ti n o the Dis rict Pla ning Commit tee ;(b the lled: m nn r in hic the ea s in such Commi tees ha l i be fmb r Pro ided tha not less than four-ift s o the otal n from of me be s of such Comm ttee ha l be el cte by and rict amo gst the el cted me be s o the Panc ay t a the dis eve a d o the Municipal ti s i the dis ri t in propo ti n t the atio be wee the popul ti n o the ural rea a d o the rban re s i the distict gn (c) d the func ions rel ti g to dis rict pla ning hic m y be ass to such Committee ;(d the m nn r in hic the Chairpe so s of such Commi tes bechsen(3) very Dis rict Pla ning Comm ttee s al , in prep rin the raft develo ment pan,(a) - have r garan (i) ma te s of c mmon int rest be wee the Panch yat ri g the Municipal ties incl ding sp tial plan ing, sh the of ate and ther phy ica and na ural resou ces ntal integ ated develo me t of infrastru tur and environmion;conservac (iii l the e ten and ty e of avai able reso rces wh i ther fnaiseor otherma (b) , co sult such institu ion and organisa io s a the Gov rnorifyby o der, spewar ( ) The Chairp rs n of very Dis rict Pla ning Comm ttee hall fo the the develo ment la , as recomm nd d by such Commi te , tateGover me t o the S 24 ZE. Comm tte for Metropo itan plannin -(l) here ha l be constiut d in very Metropo itan r a, a Metropo itan Pla ning Comm tt e to pr p re ft raft develo ment pla fo the Metropo itan ar a as a wole(2 The Legisl tu e of a tate ma , by law, make prov sion with repec75Locl Governance(a) the composition of the Metropolitan Planning Committees;(b) the manner in which the seats in such Committees shall be filled:Provided that not less than two-thirds of the members of such Committee shall be elected by, and from amongst, the elected members of the Municipalities and Chairpersons of the Panchayats in the Metropolitan area in proportion to the ratio between the population of the Municipalities and of the Panchayats in that area;(c) the representations, in such Committees of the Government of India and the Government of the State and of such organisations and institutions as may be deemed necessary for carrying out the functions assigned to such Committees;(d) the functions relating to planning and co-ordination for the Metropolitan area which may be assigned to such Committees;(e) the manner in which the Chairpersons of such Committees shall be chosen.(3) Every Metropolitan Planning Committee shall, in preparing the draft development plan,-(a) have regard to-(i) the plans prepared by the Municipalities and the Panchayats in the Metropolitan area;(ii) matters of common interest between the Municipalities and the Panchayats, including co-ordinated spatial planning of the area, sharing of water and other physical and natural resources, the integrated development of infrastructure and environmental conservation;(iii) the overall objectives and priorities set by the Government of India and the Government of the State;(iv) the extent and nature of investments likely to be made in the Metropolitan area by agencies of the Government of India and of the Government of the State and other available resources whether financial or otherwise;(b) consult such institutions and organisations as the Governor may, by order, specify.76Common Issues(4) The Chairperson of every Metropolitan Planning Committee shall forward the development plan, as recommended by such Committee, to the Government of the State.3.7.1.2 In addition, the Twelfth Schedule, which lays down the functions of urban local bodies, lists urban planning including town planning, regulation of land use and planning for economic and social development as key functions of the ULBs.3.7.2 Planning Roles of the Panchayats, ULBs, DPCs and MPCs3.7.2.1 There is need to draw a distinction between the planning role of the largely rural Panchayats, which is focused on plans for economic development and social justice, which may be described as development planning; as compared to the planning functions of the urban local bodies (or rural areas in transition) which includes town planning, regulation of land use as well as planning for economic and social development. It is also essential to clarify the wider role of the DPCs and the MPCs which emphasises coordinated spatial planning of a much larger area, sharing of water and other physical and natural resources and the integrated development of infrastructure and environmental conservation as well as integration of the development plans of the various local bodies that fall in their jurisdictions.3.7.3 Legal Provisions in the States3.7.3.1 In the light of the Constitutional provisions, various States have passed new legislations or amendments to existing Panchayat and Municipal Acts to outline the structure and functions of the planning bodies at different levels.3.7.3.2 In Kerala, for example, the role of the Panchayat in planning has been defined in the Kerala Panchayat Act,1994 as under:“The Panchayat at every level shall prepare every year a development plan for the next year in respect of the functions vested in it, for the respective Panchayat area in the form and manner prescribed and it shall be submitted to the District Planning Committee before the date prescribed.(2) The Village Panchayat shall prepare the development plan having regard to the plan proposals submitted to it by the Gram Sabhas.(3) Where the District Planning Committee directs to make changes in the draft development plan on the ground that sector-wise priority and criteria for subsidy specified by the Government had not been followed or sufficient funds77Local Governancefor Scheduled Castes and Scheduled Tribes development schemes have not been provided in the draft development plan or that the scheme was prepared not in accordance with the provisions of the Act or rules; the Panchayat shall be bound to make such changes.(4) The Panchayat shall in addition to the annual and five year plans, prepare a perspective plan foreseeing a period of fifteen years, with special focus on spatial planning for infrastructure development and considering the resources and the need for further development and such plan shall be sent to the concerned District Planning Committee”3.7.3.3 In Tamil Nadu, the constitution of the DPCs has been defined in the Tamil Nadu Panchayat Act,1994 as under:“The Government shall constitute in every district a District Planning Committee (hereinafter in this section referred to as the Committee) to consolidate the plans prepared by the district panchayats, panchayats union councils, village panchayats, [town panchayats]10, municipal councils and municipal corporations in the district and to prepare a draft development plan for the district as a whole”..Its composition has been outlined as follows:(i) the chairman of the district panchayat;(ii) the Mayor of the City Municipal Corporation in the district;(iii) the collector of the district;(iv) such number of persons, not less than four-fifth of the total number of members of the committee as may be specified by the Government, elected in the prescribed manner from amongst the members of the district panchayat, town panchayats and councillors of the municipal corporations and the municipal councils in the district in proportion to the ratio between the population of the rural areas and of the urban areas in the district.In addition, the MPs and MLAs are to be permanent special invitees to the DPC along with MLCs registered as electors in the district and Municipal chairpersons. It is also stipulated that the Chairman, District Panchayat will be the Chairman and the Collector, the Vice-Chairman of the DPC.The role of the DPC in planning has been defined in accordance with the provisions of Article 243 ZD of the Constitution and is common across States.3.7.3.4 However, there are variations across States in the constitution of the DPCs and regarding the Chairperson which is shown in Table 3.4 below:10Inserted by Tamil Nadu Act 55 of 1997.78Common IssuesT bleA3.4:ACo po itio AfADPCsA–AV riatio s AAc ossAsomeAStesStateAElectedA AMemberominatedAChirpersonA tAo At eACEsAMem erscretaryOAof Zila Ass mA(AssamA AanchayatAParishad our-fifthOne-fifth A re ideAParishad1994 AAAAZilaOAof AZila arnataka (Se tinA301 AofA ) Kour-fifthOne-fifth A re ideParishadarnatakaA anctAo At eACEatAR jAAAZilaAParishadArlaAA12A3 A re identAof ectorAAAADistrict DistrictAPancha atMadhyPradeshAAour-fifthec or One-fifth MinisterAominated DistrictAovernmentAAA byAStateAGCollectoMa arashtraA{MaarashtraAour-fifthOne-fifth MinisterA mi teeAA byAStateAGDistric APlaningA overnment(Con tit tionAand A unctiominated DistrictAAct)} AAAAjatfficer 20A5 A re ide anAAtAofA heAChief PlanniAPari hadAAAAZilaPari hadAZilaADistrict T milANa uA(TmilANaduAour-fifthOne-fifth A re identAof AAct)AAAAanchayatAanchDis ri t ACEOAofancha atAUttaPradesh AAour-fifthme tA One-fifth MinisterAomina edAChiefADe vernmAAA byAStateAGWeentA fficer Bengal AAAour-fifthOne-fifth A re ideecto AAAAZilatAofAthe DistrictAos tion.A 3.7.3.5AS mil rly, for AM CsA hereAare Av riatio s Aacro s AStatesA ri arily in AtheirAcom ,A 994,AA I AKe ala,A he AMPC’sAco pos tion has Abe n A efin dAinAt eAKeralaA anch yatAAas A nder:of “The who AMet A— opolitan Planning A ommit ee Ashal Ac nsist A f Afiftee Am mber A and Afroma. A en shall Abe el cted Ain Asu h A ann r A s Amay Abe Apr sc ibe , Aby den sAofA amo gst,Ath Aelecte Am mbe sAof Athe AMunic pal tie AandAtheAP es heArati th A AVillageAP nc aya sAinAtheAmet opol ta AareaAinAp op rti nAtoA nc ayat A be ween Athe Ap pu ati nAof Athe AMunic pal tiesAan AVillageAPhaAare ;inAtAof b. who ve shall AbeAAf —om nat dAbyAtheAG ve nmentv e nm (i) ntA A ne sh ll AbeAa Ao fic rAof th A ank AofAaA ec etaryAtoAGs t at ionA orAa Aemine t Apers nAhaving Ae pe ience inAlocalAadmin strarApublicAadminiion AP ann (ii) rA A ne sh ll AbeAa Aof icerA otA elow th ArankA f ASe iorATow of the ATown Planning ADepartment;Parisha ASource:A olle tedAfrom different Asource .79LoclAGovernance(iii) one shall be an officer not below the rank of Superintending Engineer of the Public Works Department;(iv) one shall be an officer of any Government Department not below the rank of a Deputy Secretary to Government; and(v) one shall be the Collector of the district in which the metropolitan area is comprised or where more than one district is comprised in the metropolitan area one of the Collectors of such districts, as the Government may determine.(3) The members mentioned under clause (a) to sub-section (2) shall be elected under the guidelines, supervision and control of the State Election Commission and one among them shall be elected as the Chairman.”The nature of the plans to be prepared by the MPCs as defined in the Kerala Act broadly follows the provisions laid down in the Constitution i.e.“The Metropolitan Planning Committee shall, in preparing the draft development plan(a) have regard to(i) the plans prepared by the Municipalities and the Panchayats in the metropolitan area;(ii) matters of common interest between the Municipalities and Panchayats including the co-ordinated spatial planning of the area, sharing of water and other physical and natural resources, the integrated development of infrastructure and environmental conservation;(iii) the overall objectives and priorities set out by the Central or the State Government;”3.7.3.6 In West Bengal, the Metropolitan Planning Committee Act was enacted in 1994 and the Metropolitan Planning Committee was constituted in 2001 with the Chief Minister as its Chairperson. The Kolkata Metropolitan Development Authority (KMDA) is the technical secretariat of the MPC and the Secretary KMDA is the Secretary of the MPC. West Bengal is the only State which has actually constituted the MPC so far.3.7.3.7 In Maharashtra, the MPC Act was passed in 1999. It envisages a nominee of the State Government as the Chairperson, the MMRDA as the technical arm of the MPC and a mix of officials, MLAs/MPs and experts as nominated members. However, the MPCs are still to be constituted there.80Common Issues3.7.4APl nn ng A tAthe APan hayatALevelle elA 3 7. .1 AThe AConstitu ional A ch me Aof Ainstitutiona ising Adecentr lised Apl nn ng A t Athe fAthe APanc aya s Ah s Ano Abeen Area ise . A ne A fAthe Ar aso sAfo At is Ai Atha Amany Stat AA tsA oAnotAc ntain Aprov sionsAre at ng A oAtheA ctua At skAofApre aringAdevel pment pl nsA tAa lAthe A ev lsAofAPanch ya s,Aas Aenv sa edAinAA tic e 24 AG A f AtheAConstit u tion.skA sA 3 7.4. AE enAin A tates whe eAtheAresp ctive APan haya AAct Ahav Asuch Aprov sio ,Ath At tions/ not taken Aseri usly AThe eAare Av rious Ar aso sAfor this.A irst ArealAdevo ut onAofAfunc onAofA acti iti sAh sAnot taken pl ce Ai Amost AS at s.A nAtheAa se ceAof Amean ngfulAdevo ut otAbeA owe sAand Aresponsibi it es Ain Ar sp ct Aof local levelAactiv tie ,Athe local A odiesA an Athey ex ec ed to AbeAmot va edAt At ke Au AthisAfu ction Aser ous yAf r AtheA imple A easo Atha ntied wou d Ano Aha eAthe Aaut or ty Ato Aimp emen Awha Athey plan.ASec ndl ,Ath Al ckAofA levelA fu ds AisAa otherAcons rai tAf rAthe local A od esAt At ke Aup localApla ning. LocalfAtheA pl nningAreflcting Aco cer sAforAaddr ssi gAtheA rgent local needs A an o AbeAaAr al tyAdsAtoA Panc ayat Ah ve Aat their Adi posa AonlyAsch matic fu ds At Aus .AThey Ar quire A ntied fu inance Apr ject Athat A an otAbeAc ve ed A yAth Atied A unds.AL stly AtillAre ent yAtheANa ionalAPl nningAComm ssi n Ah dAnot take AmuchAin er st Ain localAgove nment levelApl nni gA o,A yA ndAinAinteg ati g Athe local plan Awi h Athe State A la s.AThe StateAPl nningA oards aland A arge, A ai edAtoAp epareA iableAfram wor s AforApre aring localAp lans.sAandA 3 7. .3A nAthe aboveAco text, Ac rvi gA utAanAauto omous Ajurisd cti n Afor localA odi onAof en urilowAof Ag Antied fu ds Ato these A odi s Aare Aprecond tio s AforAinstitutionali atwh reA local level Apla ning. AS ecificArecommend ti ns Aon these A ssue Ahav Abee AmadeAels i AthisARe port.3 .4.4AAPan haya A l n A–AaAho isticAco The t:ATeAPan haya AplanA ho ld be A nAtheA at r Aof Aa Aho isti AplanAco eri g AandAinteg ating A it inAit Amu tiple Ase to s, As At atA tAcanAa hie eAtheAobje ti es AofA“ec nomic Adevel pme t AandA ocial Aju tice” Aenv sa ed A n AtheAConstit tion ASomeAcen rally Aspo soredAprogr mm s, A n Athe other hand,Am ndateAprepa at onAofA stand alone Ase toral A lans As chAasA ea thAorAedu ation A la s. It Ais Anec ss ryAtoAdo etailAse toral plan AintoAo erallAdevel pmentApl nn ngA tAthe localAl eve l 3.7.5APl nn ng A t AtheADi trictLevel3 7.5. AR leA fAtheADi trict APl nningAComm itt e e3.7 5.1.1 UnderAA tic e A 43 ZD A f AtheAConstit tio ,Ath Ar le A f AtheADi trictAPl nningAComm tt es to A eA et upAin every St teA tAtheAdi trict level A xc ptAinAMegh laya,AMi oram,ANag land, J mmu A&AK shm r Aa d A CT Aof A el i, is Ato Aconso ida e Athe plansApr81Lo al Governanceby Panchayats and Municipalities in the district and to prepare a draft development plan for the district. It is for the State Legislatures to frame laws regarding the composition of District Planning Committees provided that not less than four-fifths of the total number of members of such Committee shall be elected by, and from amongst the elected members of the Panchayat at the district level and of the Municipalities in the district in proportion to the ratio between the population of the rural areas and urban areas in the district. For ensuring effective bottom up participative planning, there is a need to re-orient the district planning mechanism with a view to ensuring centrality of Panchayats in participative planning from the village level upwards. In order to ensure that the Eleventh Plan begins with and is founded on District Plans prepared in accordance with Part IX and IX-A of the Constitution, the Planning Commission has also requested all States in September and October 2005 to establish DPCs in accordance with Article 243 ZD of the Constitution.3.7.5.2 Nature of the District Plan3.7.5.2.1 There is also considerable confusion about the district plans. One type of confusion relates to its nature: is it a collection of the Panchayat and Municipal plans? What are the things that cannot be addressed at the micro-levels of Gram Panchayats, Intermediate Panchayats and the Municipalities, but require a macro-view for proper appreciation of the problems and issues? Settled answers to these questions are not yet available. The other type of confusion relates to the domain of planning. Will the district plans consist of only those functions which have been devolved to the local bodies? Should such plans also accommodate the82Common Issuesey activit es of he St te Governm nt t at re ot devol ed to he lo al bodi s, beca se t t? ay h ve an imp ct on he econo y, soci ty or he physi al environm nt of he distri el In ot er wor s, is th r a n ed or congrue ce betw en he percept on of he hig er lea governm nt nd t at of he lo al governme ts in prepar n a developm nt p an o an distri t? In c se of confli t, ow sho ld t is be resolv d? or distri ts w th substant al ure, are s, wh re Developm nt Authorit es ow ca ry ut t wn plann ng functi ns by statu ed he is ue of paral el plann ng bod es work ng in isolat on a so aris s. It ay be argut t at satisfact ry answ rs to th se questi ns w ll eme ge o er t me thro gh practi e. it t at ay ot be an al bi or ot recognis ng t em or address ng th m. In t is conte t, ce is necess ry to introd ce m re clar ty in he conc pt of he distr ct pl n. The r al esseas of he distr ct p an as to be in ensur ng integra ed plann ng or he ru al nd ur an ar in he distric t.nt 3.7.5. .2 I a reg me of multi-le el planni g, provid ng knowle ge nd ski ls tof difer lev ls i a prob em t at ne ds to be address d. In t is connecti n, he i ea of establish n83Local Governancededicated centre in each district for providing such inputs to the local bodies may be considered. Closely associated to this, is the need to ensure a two-way process of flow of information from the higher levels of government to the local governments and vice versa. In an era of advanced information technology, this should not be difficult.3.7.5.2.3 The National Planning Commission has recently issued guidelines (see Box: 3.5) to ensure that the concept of planning from below, as envisaged in the Constitution, is realised in practice. The guidelines envisage preparation of a vision document for the district by the District Planning Committee in consultation with the local government institutions. Among other things, this document will analyse the progress of the district in different sectors, identify the reasons for backwardness and indicate interventions for addressing the problems. The document will thus provide a framework for preparation of plans by the local government institutions.3.7.5.2.4 Decentralised planning should involve a process of decentralised consultations and stock taking exercise followed by a planning exercise at each local body level and then the consolidation and integration exercise. The vision should be articulated at every level of local governance. The Expert Group on Planning at Grassroots level headed by Shri V. Ramachandran has gone into great detail regarding the planning process at all levels viz. Gram Panchayat level, Intermediate level and the District level. Their recommendations have been accepted by the Ministry of Panchayati Raj and the Ministry is strictly monitoring its implementation. Specifically, with regard to the measures needed to strengthen the capacity of the DPCs, the Expert Group has made detailed recommendations. (See Box 3.6).3.7.5.2.5 Constitution of District Planning Committee – The current status across the States is given in Table 3.5.Table 3.5: Status of District Planning Committees (Article 243-ZD)S. No.State/UTsState of Constitution of DPCs1.Andhra PradeshNot yet Constituted. However, an ordinance hasbeen issued by the Govt. of AP in December, 2003 for constitution of DPCs.2.Arunachal PradeshNot Constituted3.AssamNot mon IssuesTable 3.5 Contd.S. No.State/UTsState of Constitution Of DPCsBihar37 districts out of 38 Districts constituted on adhoc basis. Chairman ZP in the Chairperson of DPCs.5. ChattisgarhConstituted. Minister is the Chairperson of DPC.6. GoaConstituted. President of ZP Chairperson of DPC.7. Gujrat NotConstituted8. HaryanaOnly in 16 Districts out of 19 Districts.9. Himachal PradeshConstituted only in 6 Districts out of 12 Districts. Minister is the Chairperson of DPC.10. KarnatakaConstituted. President of ZP Chairperson of DPC.11. JharkhandPanchayat Elections yet to be held.12. KeralaYes, Chairman of District Panchayat(DP) is Chairman of DPC.13. Madhya PradeshYes, District incharge Ministers are Chairperson.14. MaharashtraNot Constituted15. ManipurYes, in 2 Districts out of 4 Districts. Adhyaksha, DP is the Chairperson.16. OrissaOnly in 26 Districts. Minister is the Chairperson of DPC.85Local GovernanceTable 3.5 Contd.S. No.State/UTsState of Constitution Of DPCs17. PunjabNot Constituted18. RajasthanConstituted. Chairperson of DP is Chairman of DPC.19. SikkimYes20Tamil NaduYes, Chairperson, DP is Chairperson.21. TripuraNot Constituted22. Uttar PradeshNot Constituted23. UttarakhandConstituted. Minister is Chairperson of DPC.24. West BengalConstituted. Chairperson ,DP is Chairperson.25. A & N IslandsConstituted. Chairman of DP is Chairman of DPC.26. ChandigarhNot Constituted27. D& N HaveliConstituted. Chairman , DP is Chairman of DPC.28. Daman & DiuConstituted. Chairman, DP is Chairman of DPC.29. LakshwadeepConstituted. Collector-cum-Development Commissioner is Chairperson of DPC.30. PondicherryNot Constituted. Panchayat Elections not held.Source: Website of Ministry of Panchayati Raj86Common Issues3.7.5.3 Structure of the DPCs in the States3.7.5.3.1 Regarding the constitution of the DPCs, the National Institute of Urban Affairs, has observed as follows :“These include Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Haryana, Karnataka, Kerala, Madhya Pradesh, Orissa, Rajasthan, Tamil Nadu and West Bengal. The members of DPCs vary among the states. They generally comprise the Minister-incharge of the district, the Mayor of the Corporation, Chairperson of the Council, Chairperson of the Zila Parishad/Panchayat, elected members of local bodies (both rural and urban), special invitee members (i.e., MPs, MLAs, MLCs), nominated members, the Divisional Commissioner, Deputy Commissioner, Additional Deputy Commissioner, District Collector, District Planning Officer, District Statistical Officer, etc. Insofar as the functioning of DPCs is concerned, it is understood that in Karnataka, Kerala and Tamil Nadu, DPCs have been constituted and technically they are functioning. However, it is learnt that in Karnataka they have not been functioning as expected. In fact, Kerala is the only State in South India where DPCs are active and functional. In the case of Madhya Pradesh, it is learnt that the DPC has no executive powers. In Chhattisgarh, the DPCs are not functioning at all and no meetings of DPCs are being held11 ”.3.7.5.3.2 As regards who chairs the DPCs, two broad patterns are visible; one of having a State minister as the Chairperson (e.g. in Maharashtra, Madhya Pradesh, Uttar Pradesh) and the other of the Zila Parishad Chairman/District Panchayat President as the Chairperson of the DPC (e.g. in Kerala, West Bengal, Karnataka etc). This issue in turn is also closely linked to the broader issue of decentralisation from the State to the district and local levels and whether the District Panchayat or Zila Parishad should take on the broader role of a district government at some future date; an issue which is dealt with in the following paragraph.3.7.5.4 Rural-Urban Divide and Long-Term Role of DPC vis-a-vis District Council3.7.5.4.1 The Commission is of the view that of all the institutions created by the 73rd/74th Constitutional Amendments, the District Planning Committee (DPC) is one, which in most States, has so far failed to emerge as an effective institution. Some States have not formed the DPC. Besides, there are some inherent problems with this institution. In a developmental State, planning is an essential function of government at any level. Creating a separate authority independent of the structures of governance for undertaking the exercise of development planning has no logic. The DPC is the only body in the decentralisation scheme of the Constitution where up to one-fifth of the total members can be nominated.8711 NIUA: Impact of the 74th CAAocal GovernanceA nominated member can also be the Chairperson of the DPC. Nomination could be used as a convenient tool available to the ruling party of a State to induct members on narrow political considerations. Some States have the system of nominating a minister as head of the Committee, thus converting the DPC into a power centre that is stronger than the elected local bodies. Also, the DPC is a stand-alone committee within the Panchayat-Municipal system and there is no organic linkage between the two. Being constituted partly through indirect election and partly by nomination, it is neither accountable to the people directly, nor to the PRI-Municipal system. With all these weaknesses, the DPC in its present form is hardly able to make any contribution to the process of democratic decentralisation. The situation is compounded by the fact that separate ‘district plans’ are required to be prepared for each of the major Centrally Sponsored Schemes.3.7.5.4.2 It may be pointed out, however, that under the guidelines in Kerala, the DPC plays an important role in coordinating the planning exercises at the levels of various local governments, providing technical guidelines to the local bodies, examining the local plans for, among other technical things, prevention of overlapping and duplication of schemes and for preparation of the district plan. When all the local bodies are required to prepare plans for their respective areas, it is necessary that the above activities are performed at the district level.3.7.5.5 District Council – Relevance vis a vis DPCs3.7.5.5.1 It is urged in some quarters that in the strict sense of the term, only the Gram Panchayat and the Municipality qualify for being regarded as local governments. It is also significant that powers of taxation, which is an indicator of governmental authority, is enjoyed by these two bodies among all the local bodies. On the other hand, traditionally, the district has been an indispensable unit of our country’s administration. Hence, if democratisation of local administration is the goal, then there has to be a representative body at the district level. Therein lies the justification for having a District Panchayat or Zila Parishad, as it is called in most States. Even when the British introduced local self government in the country, District Boards had been set up. Thus the District Panchayat has a long tradition. Compared to this, the idea of Intermediate Panchayat is a new one – the product of the Balwantrai Mehta Committee report. The Asoka Mehta Committee had recommended a two-tier structure.3.7.5.5.2 The urban areas on the other hand have a separate local government system in the form of municipalities or corporations. There are institutional linkages between different tiers of Panchayats, the chairpersons of the lower tiers being members of the higher tiers. There is operational linkage also between them, since it becomes difficult for the higher88Common Issuestier to fun tier to function y remainin complet ly d tac ed fr m the low r tiers a d smilar y the lower tiers quit of en need th as istance an su port o the ig er tiers in disch rgi g their ow func ions. Urban l ca bo ies, n the other ha d, function i depndentl and rem in etac ed n t on y fro ea h ot er b t a so from t e Pancha yat syst m.rur l a eas .7.5.5.3 The i stitutional arran ement under whic Panc ay ts ater o theillage and and the Mu ic pal ties o the urban are s on y, may work at the mi ro-level of to ns. W en it omes o he evel of t e d strict, the distinction d sappears. Adeve opm ntl and r an lan f r the who e d strict, or xa ple, has o take into c nsid ratio bo h rurc nsisting areas A d st ict plan s so ethi g m re han he two sets of se a ate plans - on wns. s on of mic o-pla s for rur l a eas a d the othe comp isi g plans fo indiv du l t es of p an mo es from the ic o-l vels to he meso-and m cro-levels, ers ectives an p iorittr ct plan,change. The onstitutio rec gni es this and accordingl pre cri es that he die regard to as d stin uis ed from th individu l P nchayat a d Muni ipal p ans, should ha s, in ther ‘matte s of com on inte est between th Pa cha ats and the Muni h ipal ti s’. T ords me ns that the devel pm nt eeds f t e rur l and urban re s sho ld bd al with in a integ ated manner and th refore, he di trict pl n whi h i plan for large are c nsisting of illage and t wns, shou d take nto ccount uc factors as ‘spatia planni g’ sharing f ‘ hysical and natural resources’ integrated de elopment of inf astucture’ and ‘e vironmental c nservati n’ [Articl 24 ZD(3) . A l these ar import nt,because theother. Ma y elation hip betw en illag s nd towns is co ple entar . O e need the rovider of fu cti ns th t the t wn perf rm as seats f ind str , trade nd us ness and smun cati ns vario s service , incl ding highe education, specia ised health ca e services, co etc ha e n i pact on the dev lopment an welf re of r ral people Si ilarly,the or er y g owth f the rb n centre s epe dent on the kin of org ni linkage it esta lis es wi h its ruralhinterlan . .7. .5.4 In the d central sed r gi e, t ere s t u nee for bo y which cacoordi ate between th indi idu l rur l and urban oca b die and at t e sa e t me take the re po sibi ity o s ch ta ks of local ad in strati n s cannot b d sch rged by thindi idual l ca bodies. s explai ed arl er t e DPC is an i appropriate ins ituti n or t is. In his context th concept of distric govern ent becom s el vant It s f lt that he Distri t vernment y anch yat or Z la ar shad can e per ectl fit ed i to the role of distric gt e pe ple e panding its ur sdi tion o the who e d strict. Its me bers ma b el cted b ction among o bo h rur l and rban reas nder su h a scheme, the rural-urban distiP nc aya s loca government nsti utions wil remain fo individual mu ici ali ies and th ear a d the up to the nterme ia e l vel. At he dis ric level, the dist nction wi l d sap ba people. loca government in titu ion a tha level wi l rep es nt r ra as well s the u The Distri t anch yat n th t ca e will have a much mor mea in ful ole89Local Governanceit is playing now. In fact, as the Gram Panchayats and the Intermediate Panchayats start functioning as self-governing institutions, the necessity of the District Panchayat as a representative body of the rural areas only gets reduced. But with its expanded role as the government of the whole district, it can give a new dimension to the project of democratic decentralisation. As already recommended earlier, the present office of the District Collector may be converted into the Chief Officer of such a District Government fully accountable to the elected District Government in all local matters. This idea is not new. In the 1980s, the state of Karnataka made an experiment with the concept of district government. In 1991, District Councils were formed in Kerala based on a 1988 Report on Decentralisation and continued for about a year. The suggestion to expand the jurisdiction of the Zila Parishad to cover the entire district and the abolition of the DPC in its present form was also made by the Institute of Social Sciences in its consultation paper submitted to the National Commission to Review the Working of the Constitution (2001). Recently, the National Advisory Council has given similar suggestions which are as follows:?The district tier of local government may represent both rural and urban population.?Article 243(d) needs to be amended facilitating election of a single representative body at the district level for both rural and urban population.?Article 243 ZD may be repealed, since with the district tier representing both rural and urban areas, the DPC in its present form will be redundant.3.7.5.5.5 A committee dedicated to the task of planning will, however, be necessary for coordination of the planning exercises of various local bodies, providing technical guidelines to them, examining the local plans for ensuring technical and financial viability and for preventing overlapping and duplication of schemes and for preparation of the district plan. Such a committee may function under the district council.3.7.5.5.6 For the metropolitan areas, which often encompass more than one district, an alternative institutional structure in the form of a Metropolitan Planning Committee has been mandated by the Constitution and its planning functions will have to be harmoniously dovetailed with the DPC/District council framework as discussed later in this chapter.3.7.5.6 Recommendations:a.A District Council should be constituted in all districts with representationfrom rural and urban areas. It should be empowered to exercise the powers and functions in accordance with Articles 243 G and 243 W of the Constitution. In that event, the DPCs will either not exist or become,90Commonocess.at besta b st, an a vis ry arm of the D strict C uncil. rti le 43 (d) of the Const tution sh uld be me ded to fac litatehi .chemb. , In the nte im and in acc rdan e w th the resent constit tional le ion DPCs sh uld be cons it ted in all States withi three mo ths of com dy or of el ct ons t local bod es and should bec me t e sole p anni g ba fu l the di tr ct. The DPC sh uld be a si t d by a p anni g offie withtime D strict P anningfiO cer c. Fo urban di trict whe e town p anning fu cti ns ar bei g one by Deve opment Autho ities these auth rities should bec me the tec hnical/p anni g rms of t e D Cs and ult ma ely of the D strict Cou c l.uts to d. A de icated ce tre i every d strict sh uld be se up to rovide in mation th local bod es for prepa at ons of p ans. A wo- ay flow of info etween d fferent le els of gov rnm nt m y lso be e ns re .to the e. The gui elines is ued by the P anning Com ission per ai ing of the prep ra ion of t e p an or the d str ct nd the recommen at ons Exper Group re ard ng the p anning ro ess at the d stric level sh uld be s rictly implemeted. . Eac State Gov rnment should eve op the meth do ogy of particpator loca level p ann ng and rovi e such up or as is ne es ary to instituti n lise a re ime of decent alised plan ing.withi g. Sta es may d sign a p anning c lendar pres rib ng t e time limits e next whi h eac loc l b dy has toinal se i s p an a d en it to t higher le el, to fac lit te the prep ra i n of a compre ensi e p an or the ditr ct. h State P anning Boards should ensu e t at the d stric pl ns are int grat d w th th Stat pla s t at are p ep red b t em. It sh uld e made ma dat ry dat ng or the St tes to repar their deve opmen pla s onl after consol has o th p ans of th local od es. The N tional P anning Com iss ont ke the ini ia ive in institution lisi g this p91Loc3.7.6 rAUrban Areas 3 7.6 Plann ngAfoAprovisio s: 3. .6.1AC rr nt AStatusAofAi pl mentationAofAc nstitutiona 3.7.6. .1 The in A ATa ta le us A3 Aof 6. AM CAinAv ri usASt te AisAg venATabl A3 6: A tatus Aof AMPCACostit ti nSl.Aame of StateANo.Aof Compo i- o.AAAr asAinAStMetrop li anA tatusAof tesA Ci ies Ati nA tAthAMPA1Amil ion) 1 AAendAo A2006AAUrbanAa lomeratio s Aexceedinconstdra A rad sh A3 ANotAyettted AAs am A- ANotAyetconsttted ABi ar A1 ANotAyetconstittd4 A uja at A4 ANotAyetconstittd5 A ary na A1 ANotAyetconstitutdAJh rkh nd A2 ANotAyetconstitutdAKa nat ka A1 ANotAyetconstiued8 Ker la A1 ANotAyetconsti uted9 AMdya A rad sh A3 ANotAyetAonstituted1Aaha ashtraA4 AA tAp ss d-Ayet AtoAbeAAAonstittd11 Pun ab A2 ANotAyetAonstitute1ARa ast an A1 ANotAyetAonsti uted3Tam lAN du A3 ANotAyetAonsti uted14 Atar A rad sh A6 ANotAyetAonst tuted1Aest Beng lA2 AYesA( frAKo ka a)16 ANTAo ADe hi A1 ANotAyetAon ti uted17AUTAfCha dig rhA1ANotAyeAconsittedATotal 36A3. .6. .2 AW ileA he AD Cs A av Ab e Aset Au Ai AaAnumb rA f AS ate , Aan MPCAhasAbee Ac nsti utedAi AWestA en alAalon .ATheAKolkata Metropol tanAPlannittee ng(KMPC)ACom92Common Issuescomprises 60 members, including the Chief Minister, Minister-in-charge of Municipal Affairs and Urban Development, elected members of local bodies and nominated members. Of the 60 members, two-third members are elected and one-third are nominated. The Chief Minister of the State is the Chairman of the KMPC and the Minister-in-charge of Municipal Affairs and Urban Development Department of the State is the Vice-Chairman. Kolkata Metropolitan Development Authority (KMDA) is the technical secretariat of the KMPC and Secretary, KMDA is the Secretary of the KPMC.3.7.6.1.3 A proposal for constituting MPCs is also in an advanced stage in Maharashtra. The Maharashtra MPC Act specifies that the State Government shall nominate the chairperson of the MPC and it also envisages the MMRDA as its planning or technical arm to assist the MPC in preparing the development plan for the Mumbai metropolitan area. The Kerala Municipalities Act makes provision for election of a chairperson of the MPC from among the elected members.3.7.6.2 Multiplicity of Planning Authorities3.7.6.2.1 At present there is a multiplicity of planning agencies in cities. It has been observed: “These two constitutionally authorised planning mechanisms, viz. DPCs and MPCs, as and when they are set up in all States, will have to contend with the existing multiple planning structures for major cities which are in the form of Development Authorities, Town and Country Planning Departments and Housing Boards and/or the Municipal Corporations. It has been pointed out that in many Indian cities, Development Authorities wear the hat of planner and developer simultaneously as a result of which physical development supersedes planning concerns”12. At present, we are in a transitional phase where urban spatial planning in most cities involves a multiplicity of agencies whereas the constitutional provisions appear to broadly envisage local level planning by local bodies and regional planning by the DPCs and MPCs. Government of India’s conditionalities under the JNNURM scheme are, however, helping States to accelerate the transition to a regime where ULBs gain full jurisdiction over town planning functions.3.7.6.2.2 For the metropolitan areas in particular, there is an additional issue of how the two committees i.e. the District Planning Committee and the Metropolitan Planning Committee (DPC and MPC) would interface with each other in different scenarios. For example, in Delhi the Metropolitan area comprises 7 revenue districts some of which still have rural areas but all of which are likely to be urbanised in the next decade or so. There can be other cases where the urbanisable area for particular metropolitan cities could extend to more than one district and the setting up of DPCs and MPCs without delineating their jurisdictions, may only lead to confusion. The difficulty with MPCs is also that they have a peripheral outreach that extends into rural areas. There are also issues of externalities. Some9312Planning for urban infrastructure-Olivier Toutain and S Gopiprasad in India Infratsructure Report,2006LocalAGov rna ceside AitsA of A he Aurban Af cili i s Ahave a Alarger A lientel Aou side it A rea Aor a Asou ce which Ai Aou bringingA juri di tio . AThe Abu Aserv ce A ften Ah s Arou es whic Ago Ainto A on-urban Al cations, AhundredA om uters orAother At avel ers intoA he A ity;At e A ource ofAwat r As pp y mayAbe A AMany ofA k lome res awa AandAthe lan fillsA orAso idA asteAareA er ain yAin Athe Acou trys de ctricityA these ser ice Amay Ac t AacrossAjur sd ctionAo Aseve al Aloca Abod es Asuc Aas AwithAel t, whi hA tran mi sion. It wouldA eA sefulAto dov tailA heA iews AandA nt res sAofA heAruralA istri spe tAisA is AitsA mmediateAhi terl nd, intoAtheAMet opolitan Planning AC mmittee AAnoth rA heseAtwoA t eAfuture Arel tionshi Abe ween the two Aand Athe A“o ne ship”Ain AG ve nment ofA el pmentA inst tu ion . AIn Athe AG ve nmentA fAI dia,Afor exa ple, Athe Mi istry ofAUrbanADe ARaj AInA is Are pon ible for AM CsAwhileA districtA la ning Ais with Athe Mi istry AofAP ncha atvenAmor A mos AStat s, t ereAisA Asimila Ap oblemAofAcoor ination ACle rlyAt is woul AbeA Amat ersA cutelyAa dificul y Ain A heAfield.AP e entl ,AaAZila Par shadAhasAjur sd ctionAi AcertaiA PC AandA th t Aex end into Ath Acitie .ASho ld t ere Abe AaA iffrence Ao Aopinio Ab twe nAao n-maker? aAnei hbou ing DPC,A ho wou dAbe AtheAdecisi .7. .2.3 AOne possib eAopt on wou dAb AforA heAState AG ve nmentA oAn tify AtheAjursd cti nAof th AMPC A nAsuch aAma ner thatAallA istrict Afalli gAw thinA tsAfully A rb nisedAorAu banisingA(pe i-urban) Ab undar es Aw uldAc meA nde Aon AM C Aa dAn ADPC for AsuchAd istricts edAt Ad A po tionsAofA istr ct AneedAbeAcon ti uted. TheAT milANadu AG ver ment AhasA tt mp Ato beA A thisAbyA rovi ing tha Ath AMP AforAth AChennaiAmet opol tanA re AwillA eA ee e anA rea.A DPC A or Athose po tio sAofAth ArevenueA istr cts that Aare in lud dAinAtheAmet opolihis Awou opol ta AdAen ure At atAt er A illAbe a Asingle planningA uth rit Afor At eAentireAmetAfurth rA a eaAt AbeAdul An tifid AbyA heAStateAGo ernm nt AwithAnoA ompe ing DP .AAnd AticalA ndA ensureAin eg ati n AofAthe planning A unc ion,Athe planning A es urces in termsAofA ech re sAmayA human A es urc sAof Athe existingADe elopmentAAu hor ties A or AtheseAmet opoli anAder tion beAi tegr ted withAtheAsec et ria sAofAtheA oncerned DPC/MP . ATa ingAintoAcons ya sAa dA the needAforAcoor in tio ,Ait ma Aalso AbeA ec ssar AtoAhaveACha rp rsons AofAP nch ingAZilaA ofA he Aloc l A odi s Ain A he A PCs. ForAthis pur ose, AtheAP es den sAofAtheAnei hbou teesA(or P nchayats A onc rne Aand Athe Ch irm nAofAthe adjacent District PlanningAC mmi mmi tee.A District A ouncil ) A hould Abe ex-offici Am mbe sAofAtheAMet opolitan PlanningACiv dA otA This Ap in i le,Aof a Asingle planningAa thor ty, Aw llAa pl Aev n Ai At eADPC AisA onc utAasAa A as AanAin ependent plann ng bo y,Aas AisA urre tlyA ai Ado nAin AtheACons itu io ;AherAsuch adjunct plan ing AofficeA ep r ing Ato AaArepre entative District Ag vernment (whe district Ag ve nment A sAc lledAthe Distric AC uncilAor DistrictA an haya AorAZilaAar shad)AasAre om ende AbyAthis AC mmissionA ls wher Ain Athi AR port AIn Athat scena ioA lso AforAtheAMet opoli an Aar asAwh se Aurban A ootprint Aen ompasse AseveralAd st ict ,AanA PCA lo eAmayAbeAco stit ted AwithArepre enta ion fromAthe District ACoun ils/Zila AParishadsDistrict94Common IssuesPanchayats that fall within its urban-peri-urban boundaries. In any case, there would be no need for a DPC for these areas.3.7.6.2.4 Recommendations:a. The function of planning for urban areas has to be clearly demarcated among the local bodies and planning committees. The local bodies should be responsible for plans at the layout level. The DPCs/District Councils – when constituted – and MPCs should be responsible for preparation of regional and zonal plans. The level of public consultation should be enhanced at each level.b. For metropolitan areas, the total area likely to be urbanised (the extended metropolitan region) should be assessed by the State Government and an MPC constituted for the same which may be deemed to be a DPC for such areas. As such an area will usually cover more than one district, DPCs for those districts should not be constituted (or their jurisdictions may be limited to the rural portion of the revenue district concerned).The MPCs should be asked to draw up a Master Plan/CDP for the entire metropolitan area including the peri-urban areas.c. The planning departments of the Development Authorities (DAs) should be merged with the DPCs and MPCs who will prepare the master plans and zonal plans.d. The task of enforcement and regulation of the master plans/CDPs drawn up by the MPCs should be the specific statutory responsibility of all the local bodies falling within the extended metropolitan region concerned.e. The monopoly role of Development Authorities (DAs) in development of land for urban uses, wherever it exists, should be done way with. However, public agencies should continue to play a major role in development of critical city level infrastructure as well as low cost housing for the poor. For this purpose, the engineering and land management departments of the DAs should be merged with the concerned Municipality/Corporation.95Local Governance3.8 Accountability and Transparency 3.8.1 Need for Effective Accountability3.8.1.1 While democracy, including local democracy, is by no means a perfect tool to improve governance, the only antidote to imperfections in democracy is more and better democracy. The improvement of conditions through local empowerment is necessarily an evolutionary process. Experience over the last decade shows that, in many cases, local governments are beset by the same problems of corruption, patronage, arbitrary exercise of power and inefficiency which have bedevilled governance.3.8.1.2 This failure is part of a larger process of democratic evolution and needs to be addressed with patience, perseverance and innovation. In an environment where corruption is still a major problem, local governments cannot be expected to be islands of probity and competence, overnight. The exercise of power often becomes distorted, sometimes leading to a patronage-based, unaccountable governance structure. Not surprisingly, power at the local level is also, at times, sought to be exercised in a similar manner. The difference is that local corruption and arbitrariness are far more glaring and visible and touch people’s lives more directly as they affect basic amenities and services. In time, as people understand the link between their vote and quality of public goods and services better, things will no doubt improve. That is the logic of democracy and universal franchise.3.8.1.3 However, since power is prone to corruption and abuse, there is need for effective instruments of accountability to be able to check abuse of power and give citizens a voice in improving the quality of services.3.8.2 Elements of Accountability3.8.2.1 Generally speaking, accountability of public institutions has focused almost wholly on two issues namely, (a) prevention of activities not specifically authorised by law or any subordinate legislation and (b) integrity of the public system or maintenance of financial propriety, which is often equated with adherence to financial rules. While these are important, there are other components also for which the local bodies are expected to be accountable. One of them is responsiveness. The activities of the local bodies must meet the felt needs of the people. At no level of government are the expectations about the congruence of government activities and the felt needs of the community more than at the level of the local government, as it is nearest to the people. The other component is96Common Issuesmeasurement of ubli Ares urcesA measuremen AofAper orman e At rou hAwhichAo eAcan Aa certai AwhetherAAmeasuremen Aof ha eA eenAut lisedAt Aderive ma imum A enefit. ATheA as c Aparameter Ao ut utA(inAt rmsA performa ceA re AefficiencyAa dAeffecti eness. Effiien yAref rs toAthe rat oAofAioAwithAc rtainA ofAs rv cesApr vided orApublic go ds Apr du ed)AtoAco t.AB Acomp ring thisAra li Ainstitut onA tec ni al As andar sAorAwithA the Aya dsticksAo e Am yAde e mineAh wAwellAaApu ti ene sArefe sA isAuti is ng Areso rc s A rAwhe her Ait is Ad ing A‘m re’ Awith A‘ ess’ f Aresourc s.AEfe a Apublic Aag nc A o Athe deg ee Ato Aw ich Athe A er ice provid d Aor the Apubl c A o d Aprod ced Aby e Abe ng A eriv dA co responds to Athe A xp c ed Aoutcome of A Aprogram e, Athe A xpect d Aoutco government in AaA fro At e Afelt A eeds Aof peop e. AL st y, fair Aplay is Aan Aess nt al Aattribu e A f hei AregulatoryA d mocra y. AHen e, Aloc l A odie Ashould Abe A eld accountable for Ad scharging Ardance wi h Ath Aa d Adevelopmental A es o sibi ities A n Aa fair Aman er and Astrict y Ain acclo al Abodies it s irit of Ar le of Alaw. AThs, A n Adesignin At e Acomponents Ao Aa count bility ofisAne es ary to AfocusAonAheAfollowing: ) AInstitut on lAmech nismsAtoAe sure Aprop iety Aproprie y AthatAinlu esA nte ri yAin Athe Au e Aof Areso rce , Aobjecti e Aand Aeffectiv Ai plem nta ionAofAlawsA Apublic Aofficials ndAregulati ns Aelimination of Arent-se ki g Atend nciesAof rep esen ativ s A ndAfair Apl yAinAexercisin AadministativeApo er .b) AMea ures AtoAimprov Ar spo siven ssAofA he loc lAbodiesAoAtheApeop e. nceAin Ate ms AofA )AEva uation of localAb di s AbyAresu ts Aor measuring At ei Aperf rmefficien y,A ffecti enessAandAot he rA ndicators.E ns u r eA ropriety 3.8 3AInstitut on lAMech nismsAtoAateAG ve nment,A 3.8.3. ATrad tional y,Al cal A odies Ah ve beenAsu je tAt Acont olAbyAtheAS nd legislation A wh ch AitAe ercisesA hroughAfinanc alAregulations Aadmini tra iveApurviewA ly annual Aa dit The Atr dit onalAsys em Afor Ae suring Afin ncialApro rie yAcomp isesA( )Atim ol ow-up actionA ofAac ountsAan Aother Afina cia Adocume ts,A(b)A egular int rnal Aaudi ,A(c)A ponsib lit Afo A nAa ditAreport Afor Acor ectingAfinancia Air egu ariti sAand A(d) Afixin Are es.ATheA ea uresA l psesAandA seAofAs nctio sAa ain tAthose Awho are resp nsible A or suchAlap Report.ATheA A relate Ato ‘account ngAand fina cialAaudi ’AareAdisc ss dAse arately in thisirs tAinstituti nalA require entAof Aensurin Aa count bility in lo alAbodi sAi Ato Apr videAforArobu echanisms. Such A echanisms wouldA as callyA elate toAaudit,A tateAGo ern en AcontrolAan Aan Aindep ndent Agri vanceAredres alAbod .onAofAa Aperso ,A 3. .3.2 Audit:A The Amost Ag ne al defini io Ao AanAaudit A s A n evaluat oAascert inA heA organ sation, A ystem,A ro ess,Apro ectAor pro uct.AAudi sA re Aperfor edA ystemsAint rnalA validity an Areliabilit Aof info mationA nd also Aprovi e A n assessm ntAofAaA control.” ATradi iona ly, Aau itsAwere mainly AinancialAau its, associate97ithAobtai ingA*AWikipLocal Governanceinformation about a company’s financial accounts and reporting systems. Indeed, the dictionary defines the term audit as “an official examination of accounts.” Audits today are diverse in scope, and are ultimately directed at improving governance. The three broad categories of audits, in this context, are Compliance Audits, Financial Audits and Performance Audits.3.8.3.2.1 A large number of scandals in recent years have invited attention to strengthening audits and the role of audit committees in corporate governance in the corporate sector, in order to improve governance. The role of audit committees has been the subject matter of continuing debate in India and several committees were set up by Government as well as by SEBI, to examine the issues and make suitable recommendations, in order to improve transparency, accountability and ethical behaviour.3.8.3.2.2 There is an elaborate audit mechanism in Government with the report of the Comptroller and Auditor General being scrutinised by the Public Accounts Committees. This mechanism has proved to be effective to a certain extent. However, holding public agencies accountable, based on the existing audit mechanism sometimes becomes difficult because of the large time lag between the decision making and its scrutiny by audit. Also a large number of audit objections/observations remain unattended due to lack of proper monitoring and follow up.3.8.3.2.3 It may therefore be desirable to consider introducing some of the best practices of good governance prescribed for the corporate sector into the public sector. One such practice is the appointment of an audit committee by the State Government with independent members of proven integrity and professional competence and with appropriate oversight powers. It was certain events in the public sector and failures in the quality of government audits that prompted the U.S. Government Accountability Office (GAO) to recommend that public sector entities consider the benefit of using audit committees. In 2003, the GAO revised Government Auditing Standards to require that auditors communicate certain information to the audit committee or to individuals with whom they have contracted for the audit. Accordingly, each government entity is required to designate an audit committee or an equivalent body to fulfill the role.3.8.3.2.4 Audit committees are expected to play a significant role in improving all aspects of governance, including transparency, accountability and ethical behaviour. In the case of local bodies, such audit committees may be constituted at the district level. For metropolitan bodies, separate audit committees may be constituted. Essentially, the audit committee must exercise oversight regarding the integrity of financial information, adequacy of internal controls, compliance with the applicable laws and ethical conduct of all persons98Common Issuesinvolved in the tie Adiligentl ,A involv dA nAthe entit .AToA ulfilAthese rol sA ffective yAa dAtoAp rformAitsAd pe den e,AaccessA he Com issi nAis of A heAvi wAthatAth Aaud t Aco mittee AmustAh veAind cco ntabili yAto to allAinf rm tion,Aabili yAto communica eAwithA ech icalAexpertsAa dA the public.A nceAtheA ist ictACo nci sAareAfor edA(as A is usse Aearlier i Athis AR port),AaA dAother Afin nc alA pe ial committe AofAthe Dis rictACo nci Amay A xamineA heA udit A eportsAa be authorised AtoA tatem nts Aof the Alo al A odies Awit in A his Ache Adistri t. Amm ttee Amay Aa soDistricix ArA ouncilAsponsibi ity Afor fin ncial Al ps s. A n Ares ect Aof A he aud t Areport Aof AthelarAf nction.ATh tself,Aa AApe ial committeeAo AtheALe isl tiveACoun i Amay Adi chargeAaA imc ti v eAl calAbody. audit commit ee sho ldAreportA o Athe respefAgover an e AmayA 3. .3.3ALegis ative AOve sight:AHows eve Ainde ende t A heAthirdAt erA issionAisA fAth A ecome Ai Ashould Asti lA eAr spons bleAtoAtheAS at ALegislatu e. The Com isingAaAs pa ateA con ideredAview thatAlegisl tiv As pervisi nA anAbe Aensured AbyAi s itutiona ay als Afunct on C mmitte Ao ALo alABo iesAinAtheAS ate Legislatuhis ACe.A mmitteeAommend dAin A hisA in A heAmannerAofA heAPar iamentar APublicAA co ntsACommitt e A sAre o un t sAa dAAudit’. Rep rt Aw ileAdeali gAw thA‘Ac clABody AOm udsma ) 3. .3.4 AInde endentAGr evance ARe ressal Mech nismA(LocaevanceAre ressa A 3.8 3.4 1AApar Afrom th Aabo e,A hereAisAneedAforAi s itutional singAaAgrsAa d Aoffic alsAofAmech nismAwh ch AwouldAa dressAcom laints A egarding Aelec edA unction ri the rAco plain sA he AhiocalA odies.A Awould Ap ov deA Aplatfor Ato the Acit zens A or Avoicing .AWithAinc ea edA a dAa so AbringAou At eAd ficienc es A n AtheAsy temAforA uitable reme ialAactio ta Aschemes Awi lA evolu ion Ato Athe local Agovernm n Ainstitu io s, Aa Aplethora of Adeve opme ld Abe handl ng aA e Ai pleme ted Aa Athe Ag as Ar ots Aleve . On Aan Aave age, A AP nchayat A o increases Apub ic crore Awo th Aof progr mmes e ery Ay ar. A uc Aa Alar e Asiz Aof Apubli Afunds rop rAsafegu rdsA expe tatio s. AI Aa so Agives rise to Aconcerns Athat decentr lisati n AwithoutA us yAa companie A mayAinc easeAcorrupt on Apa ticular y A fAt e Aprocess Ais An tAsimultane avail ble atAth b A AtheAcre tionAofAsuitab eAaccounta ilityAm ch nisms similarAt At ose ep rtAonA“Ethi sA UnionAand StateAG ve nment Aleve s. TheA ommiss on AinA ts FourthA lAbody Om udsmanA in AGover ance Aconsi er dAt is iss e. AI Awas o AtheA iewA hat AaAlocfAcorruptionAandA shou dAb A onsti ut dAforAaAg ou Aof A istr cts AtoAloo Ai to Acomplai tsA ers and Aos.A aladmin strationAagai st funct onaries of Al cal Abod es,Abot Ael ctedAmemficiarespectiveASt te F rAthis, theAterm ‘Publi AS rvant’AdefishouldAbeed app opriatelyA nAthecasesA nd submitA legislati ns. AThe Ombu sma Ashould Ah ve theAauthori yAto A nve tigate thoritie Asho ldA re ortAtoAcomp ten Aautho ities Af r Ata ingAactio .ASuchAcomp tentAa mu tAbeAre ord dA nor al yAtakeAactio Aa Arec mm nded.AInAcase of Adisa reem nt AreasonsmendmentsA n Athe n Awrit ng and beApla ed Ain At e Apu licAd main. AThseAwouldAr qu reA respectiv ASta eAP nch yat AA ts Aan AtheAU banA oc l ABodie AActs AtoAicludeAprov si nsA ertai ingA oAtheAloca.99al GovernanceLoc3.8.3.4.2 The Commission has further deliberated on the matter and is of the considered view that the local body Ombudsman should be a single-member body. The Ombudsman may be appointed by a Committee consisting of the Chief Minister of the State, the Speaker of the State Legislative Assembly and the Leader of the Opposition in the Legislative Assembly. The Ombudsman should be selected from a panel of eminent persons of impeccable integrity who should not be serving government officials. The Commission is also of the view that in case a group of districts has a metropolitan city in its fold, then a separate Ombudsman may be constituted for the metropolitan local body, that is, in addition to the Ombudsman for that group of districts.3.8.3.4.3 The Commission in its Report on ‘Ethics in Governance’ had recommended that the local body Ombudsman should function under the overall guidance and superintendence of the Lokayukta. The Lokayukta should also have revisionary powers over the local body Ombudsman. The Commission is of the view that in case of complaints and grievances against a local body in general or its elected members with regard to corruption and maladministration, the local body Ombudsman should have powers to investigate into the matter and forward its report to the Lokayukta who shall further recommend it to the Governor of the State. In case of non–acceptance of the recommendations made by the Ombudsman, the reasons for doing so should be placed in the public domain by the State Government. Time limits may be described for the Ombudsman to complete its investigations into complaints.3.8.3.4.4 The Commission is also of the view that as far as complaints related to infringements of law governing elections to these local bodies are concerned, the State Election Commissioner (SEC) would be the appropriate authority to investigate in the matter. The SEC should submit its report on such matters to the Governor of the State who shall act on his/her advice.3.8.4 Measures to Improve Responsiveness of the Local Bodies to the People3.8.4.1 In order to ensure efficient service delivery, accessibility and reach, there is need for improving the responsiveness of the local bodies to the citizens. Such responsiveness could be enhanced through:?Delegation of functions?In-house mechanism for redressal of grievances?Social audit?Transparency100Common Issues3.8.4.2 oAinculcateA 3.8.4. ADlegationAo AF ncti ns: ToAmak AtheAlowest functionary acc un ableAandA Athe Alow stA re po sib lityAat theA utting edgeA eve ,A he eAhasAto Ab Ad legationA fA unc ions At spons veAinA possible fu cti naryA n Athe Al cal bodie .AThi Awo ld Ama e AtheA ocal Abodie Ar the rAin erf ce Awit AtheAcommon man.overnme tal 3.8. .3AIn-hou e AM chanismAf rA edressalAof Griev nces: Whi eAauditAandA tAgrievan eA controlAa eAn cessar Afo Amaki g Athe A ocal Abodies acc un ableAandAan independe rAenforcingA re ressa AbodyAw uld provideA he Ac tiz nsAw thAthe muchAneede Ain trumentAf omA istak sA acc unt bilit , Athe A ocalAbodie Athems lv s A h uld Abe Ai Aa posit onAt AlearnAf reAa Arob stA and Amoul Athemselv sA cco dingA o A he A eeds Aof the peopl .AThis Aw u dArequin-hou eAm chanism Af r A edressalAofgrievan es.A3. .4.4S oc ialAAu it3.8.4.4.1AInstit t onalis ng a Asyst mAof A oc al AauditA sAe sential Af r Aimp ovingAlcalAserv ceA eAsyst m AofA eli ery AandA or Aensurin Acom lian eAw th AlawsAand A eg lations. fAnAefe tidsAare madeA ocia Aaud tA il Ahave to beA asedAonAt o Apre epts Afirst,A hatAservi eAs anda AisAmade Ao A pu licAthrou hAcitize s’A harters andA econd,At atA erio ic Asuo Amot Ad sclo ur esAareAal oA a tainmen AofAserv ceAdelive yA tan ardsA y Athe Al calAbo ies. A ocial Aaud tAp oces kAof A ocialA mporta t AtoAensure Ae fect veness AThey should a soAevolv AaAsuitab eA ramewo vedAi AeachA audi Acl rifyingAits objec ive ,Ascope A ndAm thods.ASu h Af am workAma Ab Aevo Aoth rs. TheA S ateAthrou hAextensive Ac nsul ati nsAwi h Athe Ac vilAsociety Ao gan sations an GOs A nd Athe CB sAsho ldAbe Ag ven supportAand Ae co ragement toA obili eAtheAloc lA ns der tionA ommunityAin undert king As ci lAaudi .ATheA ormalA udit sho ld Agive AdueAc to th Afindin sAof A oci lAau it Aandvice Avers .AAre ognisedA .8.4.4.2 AThAC mmi sionAi Aits AF ur h ARepor Ao A“EthicsAin GovernancelityAandA nA th Ai porta ce Aof Aciv lAs cietie Aand A oc al Aaudit A nAenforcingAac oun ab AtoA‘SocialA providing transparentAadm ni tration A n A ha terA Aon Aof thatARepor Ap rtainin par Infr5.1.12:str cture’, At eAfollowingArec mmen atio sA ereA ade AatA lsA nd “aAals A AACitize s’ACha te sAsh uld AbeAm de effectiveAby sti ulating theAse vic AlevarnotAmet. t eArem dyAifAt eseAse vic Ale elsA . AA it zens Amay be inv lvedAin Ath Aas essmentAand mantenan eA f AethicsAnAimportan AgovernmentA nst tutionfisA dAofce .c.AARe ard Asc em sAshouldAb Ai troducedAto incentivi eAcitizens’iniative .d.AAScho lAawarenes Aprogr mm sAshouldAbe introduced,A igh ightingAthAi portan eAo Aet icsAandAho Aco ru tionAcanAb101Loc l AGovernance3.8.4.4.3 As regards social audit, the Commission in the said Report observed that: “5.4 Social Audit5.4.1 Social audit through client or beneficiary groups or civil society groups is yet another way of eliciting information on and prevention of wrong doing in procurement of products and services for government, in the distribution of welfare payments, in the checking of attendance of teachers and students in schools and hostels, staff in the hospitals and a host of other similar citizen service-oriented activities of government. This will be a useful supplement to surprise inspections on the part of the departmental supervisors. The Commission, without entering into details of all these, would like to suggest that provisions for social audit should be made a part of the operational guidelines of all schemes.5.4.2 Recommendation:a.Operational guidelines of alldevelopmental schemes and citizen centric programmes should provide for a social audit mechanism.”3.8.4.4.4 The need for social audit was also emphasised by the Commission in its second Report on implementation of the National Rural Employment Guarantee Act entitled “Unlocking Human Capital, Entitlement and Governance- a case study”. The Commission observed that,“5.4.6.4 Community Control and Social Audit of All Works5.4.6.4.1 The operational guidelines stipulate that there should be a local vigilance and monitoring committee composed of members of the locality or village where the work is undertaken, to monitor the progress and quality of work. The Gram Sabha has to elect the members of this committee and ensure adequate representation of SC/ST and women on the committee.102Common Issues5.4.6.5.4 6.4.2 AS ct on 17Aof NREGA Astip late Atha AGramA abhas shall Ac nductAr gularA ocialA ud tsA f AallApr jects under REGS. A ocial au i Ais AaAp oc ss AinA hich,Ad ta lsA sAforA fAthe Ares urce Aboth Afin nci l Aand Anon-fina cial Au ed Aby A ublicAag nc iublicA devel pment Ainiti tiv sAareA hare Awi hAthe Acomm nity, oftenAt r ugh AaA e ncy,A pla form. A ocialA udits allowA eo leAtoAe force Aaccounta ili yAandAtranspa ives.A pro idi g Athe Aul imate us rsAanAoppor un ty AtoAscru iniseAdevel pmentAinitia ocial C ap er 11 A fAthe AOpera ionalAGuid lin s AhasAemph sis d AtheAimpo ta ce AofAnuous aud tAf r Athe A roper Aimplemen at onAof A RE A.A t Ahas Apres r bed AaAcont aud t and Aa Aman atory A ocial audit foru Ao ceA n Asix Am nth .ATheAguidline Aalso Apre cri e Athe Ametho olo y Afor Apubl cit ,Athe Adocumen ation Are uir dAa dAtheAman atoryAa enda. AFol owing theseAguide in s,Ain A ett rAand As irit, wo l AgoA Alo gA il it y. ayAinAenf rcing A ocialAaccountabroperA 5.4 6.4 3 A or Aan Aeff ctive A ocialA udi ,Athe Aess ntial Arequir ments wo l AbeAaA tAandA infor ationArec rdi gAand Adissemi ation As stem,Aexp rt se Ato Ac nduct aud ecordA awa eness amo gAth AGram Sabha Am mbers about theirAr ghts AThus A roperA theseA ke ping, Acapa ilityAbu ldi g Aand Aawa enessAgene ation wo ldAbe Areq ire .AAlla pect Ahav Abeen deal Awith under Aresp ctiveA pa ra s.”nm ntA 3.8 4.4.5ATher fo e, AanAeffctive A ys em AofA ocial au it A tAall A ev ls Aof loca AselfAgovectionA is Acr ti alAtoA nsureAaccounta ili yAand Atransp re cy Ain theseAinstitu ions AS me A fAtheA oints Asug es edA nAtheA ep rt A fAtheA xpert Gr up Aon A‘Pl nn ng A tAthe Grass rootsAL vel’,A arch A2006 (para A .9 5) Ai AthisA ega dAare Amen ionedAbel w:(a)A ocial auditA hou dA otAbeAindivi uallyApresrib dAfo AeachA chemeAimple en edA yAthe localAb d es.AAAmultip icty AofA ocialA uditsAsepa atelyApresrib dAfo AeachA chemeAunde min s AtheAimpo ta ce A f AtheAproce s.(b)AAd quateApub icity ne ds to Abe giv nAforA ocialAaud t.(c)A ocial auditA“ ction takenAre orts Ah ve toAb Atime boud AandA la ed A n AtheA ublicAd ma n. ItAisAadv sa leAtoAp e edeAaA ocial audi Awi hAthe A ction ta enA n AtheAprviousA ocialAaud t.(d)AOppor uni yA as to Abe gi enAtoA eo leAtoAi spe tAtheAr co dsA fAthe localA odiesApartic larly their Adocumen at onAonApr pertyA ist ,AtaxAasses men sAa dAtaxAcoll cted,Ameasu ement boo s AandA usterArol s. e)AI AcseAo AP IsA tAma Aa soAbeAadv sa leAto a optAaA ystem w ereAaA igher le elAofAPanc ayat As ch A sAtheAInterm diateAPanc ayat,Ap ovideAd tals A fAtheAcompa ativeAperfo maceA fAallAPancayatsAf llingA ith nAitsAjurisdi ti n,As AthatA eop eAc nA etAa Ai ea Aof where theirAPan hayatA ta dsAinAr sp ctAo AeachAs rviceAdeli103(f) State Governments should encourage conduct of social audit of Gram Panchayats by the committees of Gram Sabha.(g) Space has to be provided to Community Based Organisations to be involved in the social audit.The Commission endorses these action points and recommends them for adoption by the State Governments.3.8.4.5. Transparency3.8.4.5.1 Suo motu disclosure of information, especially with regard to duties, functions, financial transactions and resolutions should become the norm for all the local bodies as provided under the RTI Act, 2005. Several local bodies have developed there own transparency mechanisms (see Box 3.7). Such practices may also be adopted by other local bodies.3.8.5 Evaluation of Performance of Local Bodies3.8.5.1 Local bodies have to be evaluated in terms of efficiency, effectiveness and resource mobilisation, apart from the efforts to promote participation and transparency as indicated above. One way of achieving this would be to benchmark the performance of local bodies. To ensure effective service delivery, the performance of local bodies has to be closely monitored. The best way of doing this is to fully involve these institutions at all levels in the monitoring process. This can be done by development of yardsticks for monitoring through discussions at the local level. The development of indicators can itself become a very good capacity building exercise. Another way of encouraging such self-assessment of performance is to consolidate data relevant to a particular indicator and compare it with the best possible status, as well as the minimum actual level of achievement within a particular area, say, within the district in the case of PRIs and within the State for ULBs. It may also be worthwhile for these bodies to lay down certain accepted quality standards concerning service delivery and give wide publicity to them by way of citizens’ charters, followed by periodic checks to ensure conformity.3.8.5.2 In Tamil Nadu, a study to develop an approach towards comparative assessment of municipalities was carried out under the Indo-USAID FIRE-D (Financial Institutional Reforms and Expansion) project. The study adopted a total of forty one (41) indicators in assessing performance levels of municipalities, which included financial (15), service level and coverage (17) and service efficiency (9) indicators13. The financial indicators for debt management included ‘outstanding loan per capita and overdue’, service coverage indicators for sewerage and sanitation level included ‘persons per unit of public conveniences’ and the104ocalAGovernance13ti.re.in/eriin/users/case3.htmlCommon Issuesservice 00 Apo ulati n. erviceAeffic enc Aindicat rsA orAsewerag AandAsan tati f nAi cluded stafAperA10 r ki n gAw s A one.A On A he AbasisAof th Aperf rmance A f AlocalAbodi s,A enchmASchemeAfo Ath A .8.5.3AThAU ionAMinist yAo APa chay tiARajAhas al oAinst tutedA nAA ardAGram Panc ayatA Panch yat A(in A2005 .AOne Aimp rta tAcriterion for dete mini gAthe Abes ife Abenchmar sA u de Athis ASc emeAisA efficientA ervice deliver Atested against i As ecificAiden and id ntifiedArange AoAactivi ie ’14.AldAconduche AAsu hA3.8.5 4 A omm ssio AisA f Athe view AthatAS ate AGo ernment Ashonts mayAutil se exercise AforAdevelo ing benc marks. AF rAt isApu pose,Athe AS ate Governm theAservice Aof Aindepend ntAprofessi nalA valuators. AS ch Abe chmar in Awo ldAbrin AinAtheAdesire Aa countab li yfiAin Ares ect ofAefcienyAand Ao tcome .AiesAmayAa soAb A 3. .5. AApart from Athe Aa ov ,Ae aluationAof th Aperf rmance ofA ocal bo ptAofA‘fee ba kA at empted Afr m A he A iewpoint A f At eAcitizens. ThisAes ent allyAbr ng AtheAconcrmi y,Aservice A m chani m’ toAtheAf re.AThAf ed ackAc uld beAonAlega AandAproced ralAconfldAbeA rganise A and Aa eniti s,A ublic Awo ksA nd Aproje tsA nd Aplan in Aand A is on.AItAco AwardsAandAe en around pollingA oot s,Av lla esA( fA h yAareA artAofAaAla gerAP nch yat)AtheAcate oriesA communit es.AThAfeedba k A ould Aconsi t ofAindicatin AaAsa is act onAscoreAo s’ Rep rt ACard’A en ionedAabo e. The Aco lationAof these feedbac s would Aprov deAaA‘ itizeforApe forma ce on th Ape forma ce Aof At e A ocalAbodies. A n Chhat isgarh, aAp lotAproject A30 Asample GramA ratingAbas d AonA Commu ity Scor ACard Aha AbeenA ri d A ndAtes edAi Awer Aass s ed.A P ncha atsAs readAover se en Adi t ictsA n A hichAa tota AofAtwel eA(1 )AserviceSAdis ribution AThese Aw reA– organis ng AGram Sabhas, Ahe lth,Aedu ation, dri kingAwater,APture,AhandAp mpA otherA chem s,AMid- ayAMealASch me,Asani ation, Aphysical infr stru an Ataxation1 .A m inten nce,ANawa AAnj r A(Chhat isgarhA istrict AP vertyARe uct onAProject) Ano Areco nise A TheA ommi sion feels At at s chAmethodsAof aApart cipat ryA atu eAwhichAar and Aem ow rmentA t e world ov r AasAaAme nsAofAimpro ingAgov rnance,A erv ceAdeliveryshould beAincr as ngly Aadopted Aa Aaccoutabil tyAtools.Aommen ations:3.8.6 AReernments atAth A a.A udi Ac mmitteesAma Ab Aco stitu edAbyAtheAS at AGo ityAofAfinanc alA d strict Al vel AtoAex rciseAove sig t Aregardi gA heAinteg Athe app icableA infor at on,Aadeq acyAofAin ernalAcont ols, com lianceAwit alAbodies. These awsAand et ica Aconduc AofAallA er onsAi volvedA n Alo ma ion,Aabilit A comm ttees Amust Aha eAinde en enc ,AaccessAtoA llAinfo Ato theApublic.A toA ommunicat AwithAte hni alAexperts,Aan Aa cou tabilit or AMetropolit n ACorpor tions Aseparate A uditAc mmtteesAshould AbeA14 _bes105_p ncha yats.htmA15A Governanceconstituted. Once the District Councils come into existence, a special committee of the District Council may examine the audit reports and other financial statements of the local bodies within the district. Such committee may also be authorised to fix responsibility for financial lapses. In respect of the audit reports of the District Council itself, a special committee of the Legislative Council may discharge a similar function.b. There should be a separate Standing Committee of the State Legislature for the local Bodies. This Committee may function in the manner of a Public Accounts Committee.c. A local body Ombudsman should be constituted on the lines suggested below. The respective State Panchayat Acts and the Urban local Bodies Acts should be amended to include provisions pertaining to the local body Ombudsman.i.Local body Ombudsman should be constituted for a group of districts to look into complaints of corruption and maladministration against functionaries of local bodies, both elected members and officials. For this, the term ‘Public Servant’ should be defined appropriately in the respective State legislations.ii. Local body Ombudsman should be a single member body appointed by a Committee consisting of the Chief Minister of the State, the Speaker of the State Legislative Assembly and the Leader of the Opposition in the Legislative Assembly. The Ombudsman should be selected from a panel of eminent persons of impeccable integrity and should not be a serving government official.iii. The Ombudsman should have the authority to investigate cases and submit reports to competent authorities for taking action. In case of complaints and grievances regarding corruption and maladministration against local bodies in general and its elected functionaries, the local body Ombudsman should send its report to the Lokayukta who shall forward it to the Governor of the State with its recommendations. In case of disagreement with the recommendations of the Ombudsman, the reasons must be placed in the public domain.106Common IssuesIn case oi . InAcaseAofAa MetropolitanA o poration ,AaAsepar teAOmb ds anAshouldAbec nsti uted.v ATi e A imitsAmayA eAp esc ibedAforA he Ombudsma Ato completeAitsAi vest gationsAintoA om lain s. .AInAcaseA fAc mplaintsAa dAgriev nc sArelatedAto in rin eme tAofAtheA oAsuspension/ aw Agovern ng elect onsAt Athese A ocalAbo ie , AleadingAteAsh uld lieA di qu lificationAo Ame bership,A he authorityAt Ainves iga om end tionsA w thAtheAS ate AElecti nAC mmiss onAw oAs allAsend AitsAre to th AGo ernorAofth ASt te.e.AInA he hierarchyAofA uncti nar esAunde AteAcon rolAofA ocalAbodis,Afun ti nsAshould be del gatedA oAtheAlowes Aappropriat Af nctio arAinAorderA oAfaci it teAaccesstociti ens.A .AEa hAloca Abod As ouldAhav AanAin-ho seA echanismA orredressalA fAgr eva cesAw th A etAnorms A or A ttending Aa dA espondingtoAcitizens’Arie ances.ernm nt g. AmustA AFor establ shingA obust social audit norms AeveryASta eAGostedA nA ara t keAim ed ateAsteps toA mpleme t AtheA ctionApoi ts sugg 5.9.5A fA heA eportA fAthe Ex ertAGroup on ‘Pl nning atAthAGrassAoo sA evel’.theARightAt h. A ItAshou dAbe ens redA hatAsuoAmot Adisc osu esAun er enteenAi em A Inf rmat on AAct A20 5 A hould An tA eAc nfinedAto A heAselicAin erestA provid d Ain Se tion 4(1 Aof thatA ctAbutAo herAs bjects whereApu xist As ouldAalsoAe covered. theAbasis . ofA AAAsuita le mechan s AtoAev lv AaAsystemAof be chm rking on.A ssistanceA identifie Aperforman eAi di atorsAm yA eAad ptedAb AeachAStatoAindependent profession lAe al atorsAm yA eAav iledAintisAregard. .AEva uat onAtoolsA orA ssessingAth Ap rform nceAof localA odesAshou dAbeAde isedAwhe ein Aci izen A hou dA ave aAsayAin Ath Aeval atio .A oolsAsuchA sA‘Cit zens’A epo tA ards’ AmayA eA ntroducedAt A ncorpora eAaAfeedb ckAmechan smAregardin Ap rform nceAof A107LocalAGove3.9 Accounting and Audit3.9.1 Capability enhancement of the institutions of local self-government through constitutional empowerment, increased raising of resources and governmental transfers implies the existence of a strong accounting machinery which is willing to follow rigorous accounting standards. In the budget speech for 2006-07, the Union Finance Minister had indicated that a large chunk of resources would go to eight flagship programmes, namely, Sarva Shiksha Abhiyan, Mid-day Meal Scheme, Drinking Water Mission, Total Sanitation Campaign, National Rural Health Mission, Integrated Child Development Services, National Rural Employment Guarantee Programme and Jawaharlal Nehru National Urban Renewal Mission (JNNURM). These schemes, with the exception of JNNURM, fall within the core functions of Panchayats with substantial allocation of funds during 2006-07 and 2007-0816. The details of allocation of funds for these schemes are given in Table 3.7:Table 3.7: Allocation of Funds to Flagship SchemesSl.SchemeMinistry /DepartmentAllocation inAllocation inNo.2006-2007 (Rs in Crores)2007-2008 (Rs in Crores)1.Sarva ShikshaDepartment of Elementary Education1004110671Abhiyan2.Mid-day MealDepartment of Elementary Education48137324Scheme3.Drinking WaterDepartment of46806500MissionDrinking Water Supply4.Total Sanitation CampaignDepartment of7201060Drinking Water Supply5.National Rural Health MissionMinistry of Health and Family Welfare8207108906.Integrated ChildMinistry of HRD – Department of Women and Child Welfare40874761Development Services7.National RuralMinistry of Rural Development1430012000Employment Guarantee Scheme (including SGRY)Total468485320610816AAS urce:A ep rtA fAtheA xpert Gr upAonA‘Pl nn ngA tAthe Grass rootsAL vel’, March 200 ,Aand UnionA udg t AforA2007-08Com onAIss1093. .2AE en in A heAc se of AJNNU M, it isAenvisa ed At atAfu dsAf om A heAUn onA ndASt teAGovernme ts Awo fldA ow Adirec ly to A he Ano alAage cy Adesigna ed byA heASta esA ndAfu dsA orAidefiti edAproje tsAacr ss Acit es Awo ld beAdisbur ed to A he AULBs/Parasta alAagenc esAthro ghAth se Ano alAagenci es Th7AT s, Aw thA heAla fleA ow ofAfu ds Aun erAvari us Aso ioAecono icAdevelopm ntAprogram es to A he Alo al Abod esA nd A heAgrow ng Arealisat on ofA heAimporta cf tf A heAth rd At er ofAgovernme t,Aaccountabil ty Aconce ns Aass meAcriti alAimportan e.AOw ng to A heAla geAnum er of Alo al Abod es in A he Acount y, it is Atheref re Anecess ry toAaddr ssA heAconce ns Aregard ngAmaintena ce ofAaccou tsA ndAaudi t.ts 3. .3AArti le A 4 AJ of A he AConstitut onAprovi es A or A heAau it ofAaccou ts ofAPanchay inA he ay: Afollow ngAwceTheALegislat re o AaASt teAm y, byAl w,Am keAprovisi nsAw thAresp ct toA heAmaintena of Aaccou ts byA heAPanchay tsA nd A heAaudit ng of As chAaccount s ”.ofA 3. .4AArti le A2 3Z of A he AConstitut onAma es Asimi arAprovisi ns Aw th Areg rd toAau it nsA accou ts ofAmunicipaliti s.AE en Atho ghAvari usASta esAh veAincorpora ed Agene alAprovisi s,A regard ngAau itA ndAmaintena ce ofAaccou ts inAth irAPanchay tiA ajA ndAMunici alAAc onA detai edAguideli esAh ve Agenera ly A ot Ab en Aissu d. TheAEleve th AFina ceACommiss(E C)A adAoccas on toAcomm nt onAths:A“Arti leA2 3J A ndA2 3Z of A he AConstitut onAexp ct A heASta es toAm keAprovisins heA byA ay ofAlegislat on A or Amaintena ce of Aaccou ts by A he Apanchay ts A ndA s’A municipalit es A nd A or A he Aau it of As ch Aaccoun s. AFollow ng Ath s, Am stAstat es legislat on do Am ke Agene alAprovisi ns A or Ath se Apurpos s, A ut Adetai edAguideli n dA or Aru es Ah ve A otAb en Al id Ado n, in Aseve alAcas s. In Am nyAStat s, A he Aform tsA reA procedu es A or Amaintena ce ofAaccou ts by Ath se Abod esAprescri ed Adeca esAa o,A ldA contin ed Awith utAmak ngA nyAimproveme ts toAt ke Ai toAacco nt A heAmanif ts incre se in Ath ir Apowe s,Aresour es A ndAresponsibiliti s.AM st Avill ge Ale elApanchay alA doA otAh veA nyAst ffAexc pt A o AaAf ll o AaApart-t meASecreta y,Abeca se of Afinanc toA constrain s. It Awou d, Atherefo e, be Arat er A oo Am ch toAexp c Aa Avill ge Apancha atgeh v AaAtrai ed Aper onAdedica edAexclusiv ly to Aupk ep ofAaccoun s. AW t AaApass seA ofAti e,A he Af ow ofAfu ds toA heApanchay tsA ndA heAmunicipalit esAw llAincre ts considerab y. ATherefo e, Ath re i AaAn ed to Aevo v AaAsys em of Amaintena ce ofAaccou nyA by A he Alo al Abod es At at Aco ld beAadop ed byA ll A heAStat s. AsArega ds Aaud t, inAm InA Stat s, A heAlegislat onAlea es it to A heASt te AGovernm nt toAprescr be A he Aauthori y. heA s meAStat s, A he ADirect r, Alo al AF nd AAu it o Aa Asimi ar Aauthor tyA as Ab en Agi enA AGA responsibil ty A orA heAau it ofAaccou ts ofApanchay tsA ndAmunicipaliti s.A he AC a Aa Ar le Ao ly i Aa A ewASta es A nd At at A oo A or A he Aau it ofAdistr ct Ale elApanchay tsA nd A or Av ry Ala ge Aur an Abodi s. In A ur Avi w, At isAa e A– ofAaccou ts A ndAau i A–Ane ds to be A etAri ht Aun er A heAcl seAsupervis on of A heAC AG A ndAsuppor edby7 AASour e:AOverv ewAdocume t,AJNNU M,Aretrie edAf omA. df on A5.07.2LocalAGospecific earmarking of funds from the grants recommended by us in respect of local bodies”18.3.9.5 The observations of the Eleventh Finance Commission (EFC) called for an enhanced role for C&AG of India in the accounts and audit of local bodies. The main recommendations of the EFC in this regard were:a.The C&AG should be entrusted with the responsibility of exercising control and supervision over the proper maintenance of accounts and their audit for all the tiers/ levels of panchayats and urban local bodies.b.The Director, local Fund Audit or any other agency made responsible for the audit of accounts of the local bodies, should work under the technical and administrative supervision of the C&AG in the same manner as the Chief Electoral Officers of the States operate under the control and supervision of the Central Election Commission.c.The C&AG should prescribe the format for the preparation of budgets and for keeping of accounts for the local bodies. Such formats should be amenable to computerisation in a networked environment.d.Local bodies particularly the village level panchayats and in some cases the intermediate level panchayats, that do not have trained accounts staff, may contract out the upkeep of accounts to outside agencies/persons.e.Audit of accounts of the local bodies be entrusted to the C&AG who may get it done through his own staff or by engaging outside agencies on payment of remuneration fixed by him.f.The report of the C&AG relating to audit of accounts of the panchayats and the municipalities should be placed before a Committee of the State Legislature constituted on the same lines as the Public Accounts Committee19.18Pa aA8.19 AR por AofAtheA leventh Finance ACom issio ,AJu110e,A200Comm3.9.6 AFinanceA 3.9.6ATheArecomm ndat on Ama eAb Athe EFCAwer As udied Ab Avari usAStatca ionsA Co mis ion AandAt eAground A ealities A ompe le AthemAtoAin orporate i Amod milANaduA to Athese Arecomme dati ns. Thus, At e ASec nd AStat AFinance ACo missi n,AT 2002-07)Are omme ded that Athe Di ector ofAL calAF nd AAud t A(DLF ) A houl Abe madeAtheADistrictA tatutory aud tors AforA unicipalACorp rations,AMunici alit es,ATownAPa chayats, co ti ueA P nch yatsAandA anchay tAUni nsAwh le aud tAofAth AVillageAP nchaya sAshould Awas Ath A t Ab Ado e AbyAt e AD puty ABD As bjec AtoAt st audit Ab AD FA20. AsAT mil Nad tAs hem A pion er State AinAin rod cingAth AaccrualAa counti gAsys emAafte A unnin AaApil ndedAtheA for AtenAMunic pal tiesAandA unicipalACorp rat ons, At e AS cond ASFCAre omm anchay tA pr gressive A xt nsi nAofAth Aaccrual Aa counti gA yst mAto allATownAP nch yatsAandAugge tedA Un ons Afrom A 003-2 04AafterA mparting tr ini g Ato Ath Astaff21. Ho ever AitAalsoA hatA“the AA countan AGe er lAmayAg Ath ough A heAaudi Ar portsAof Di ector ofALcalAF ndA lAi putsA udit Aand ind cate how At ey could Abe Aprofe sionally im rov dA yAway AofA echnic ector ofA andAs anda ds. The eAcan Abe A echnical gu dan e Aby Athe AA countan AG neralAto Di L calAF nd A dit Aon AaAc ntinu ingAbas s”missiheASecn,A 3.9.7AndAStat AFinanceACoinedAtheA Utta APra esh Aalso e x a Afor AtheA recomm ndat on Ama eAb Ath AEF of PRIs. str am iningAof acc unts A nd audit gre dAt A It An ted th t AtheAUPAG vernme tA nderAtheA get A he audit of Aloc lAbo iesAd neA AofAZilaA su er ision ofAC& G. A hileA he audi&E) AUP,A P nchay ts woul Ab Ado eAbyAA ,A( he auditAo AKs etra and AGramAPnchay ts wouldAbeAdi tribu edA mongAth Aprt esAof A GA di Ast ffA A&E , AU Aand Athe AP nch yati A aj Aaowi g Ato of A he AState AGo ernment. Howev r, theAv ryAlar e A umbe Aof PRI AandtheAv ryAs all siz Aand Al w Ainco e A evel Aof AGramAPa ch yats,AitAre omme de AthatA“a separateAorg nis tio AforA he audi Ao APR sAinA heASta eA houldAb Acr at dAandA t A hould Abe deli ked from A he audit AofAco perativeA oc eti sAasAperAp evailing Aarr ngem nt. ATh s A ho ld Abe AanAin epen entAb dy A nderAth Acntrol Ao AFinanceADe artm nt.A hisA ody Amust funct on A nder the over AallAsu erv sionAand gu dan eAof th AC&AGA sA gr ed A oAbyA he AState AGover ment 22.AWi hA egardAtoA unicipalAac oun ing AtheA FC An te Ath t Ait A as bas dAo Ath AageAo d A ystemAo ArevenueAa count ng Aw ich doesAno AprovideAm aningfulAin ormat onA boutAthe financialApe fo mance of ULBs AIt Aalso rejmPara 3.20 ara A3. ,A eportA fASec ndAStat AFinanceACo missi n,ATa ilA adu, A ayA200 ,AVo lume I.21 .7,Aib d. araA3e, A200 ,A22Pa aA11.1 ,A epo t AofAt eASec ndAStat AFinanceAC mmissionA(P nch yat ARajA ndAUr anALocal Bodies),AG ve nment ofAUttar Prade h,AJuVolume I.111112argument that Muncipalities follow the cash-based accounting system in order to maintain better budgetary control over activities. It referred to the development of detailed formats for maintenance of accounts for local bodies by the C&AG and recommended that “it should be mandatory to table a consolidated annual report on the audit and accounts of local bodies before the State Legislature every year and the report should be discussed in a specifically designated Committee of the Legislature which should function on the lines of the Public Accounts Committee”23.3.9.8 The Sixth Round Table of Ministers In-charge of Panchayati Raj held in November, 2004 at Guwahati agreed to recommend, inter alia, the following to their respective State Governments regarding audit of PRIs24:?DLFAs and other similar bodies should work in concert with the C&AG to upgrade their work to the level required by constitutional imperatives.?Audit and accounting standards should be established which are appropriate to the work of the Panchayats. The PRIs themselves should be associated with the preparation of standards.?Audit and accounting standards for the PRIs should be elementary, simple and easily comprehensible to the elected representatives. They should focus on:oWhen to look into a transactionoWhat to monitoroHow to document transactions, andoHow to disclose transactions?Arrangements should be made in the State Legislatures for establishment ofPublic Accounts Committees specifically for PRIs or for the accounts of PRIs to be submitted to Panchayati Raj Committees of the State Legislatures.?Such institutional arrangements should be complemented by legislating an appropriate Fiscal Responsibility Act for elected local authorities.3.9.9 The Ministry of Urban Development and Poverty Alleviation, Government of India (now Ministry of Urban Development) in association with the Indo-USAID FIRE Project has already formulated ‘Policy Options for Framing New Municipal Laws in India’. As a part of this effort, the Institute of Chartered Accountants of India (ICAI) has published a Technical Guide on Accounting and Financial Reporting by Urban Local Bodies. This guide also provides ‘Guidelines on the Formats of Financial Statements of Municipalities’.25 Some important guidelines are as follows:a)The financial statements of local bodies (viz. balance sheet and income andexpenditure account) shall be prepared on accrual basis.22 PaLo alAGov rnance3ParaA1 . 7,Aibid.24 ou ce:AAACompe di mAo AReso ution AofAth AS venARound TablesAof Mi istersAIn- harg AofAPanchayatiARaj,Ahttp //panchay t.ov.in,AretrievedAo A3.07.200725Source:A _Law/inde po .html, AreCommon IssuesheA ext.A b)AAcounting polic es shalAb AappliedAcon iste tly fromAonefinan ia Aye rAtoAAcurre tA A yA han eAin AtheAa counting polic esA h chAhasAa mater al effe tAinAth ds shallA eriod or which AisAr asonably ex ecte A o AhaveAa mater al effect inAlate Aperi al effe tA beAd sc osed AI A aseAof aA hange AinAa counting polic esA h chAhasAa mater inAth Acurren Ape iod,At eA mount byA hich an Ait m Ain Athe financialAsat mentsAe.AWfecteereA i AaAbyAsu hAcha geAs al AalsoAbeA is los dAtoAt eAextentAascer ainabndcated.su hA mou tAis AnotAascer ainabl , A ho ly Aor inA art, theAf ct shallAbeAieAamou c)A tA rovis on shal Abe mad AforA lAknownAli bil tiesAa dAlo sesAev nAt oughAt eAin A he annotAbe Ad term nedAwithA ert intyAand Ar pres n s Aon yAaAbest es imaArelatedA lightAofA vailableAinf rmation AReve ue A ha lAnotAbeAr cognis dAu lessAth ega dingA pe for ance has Abeen ach ev dAand AnoAs gnificantAun ertain yAexistsA ultimateA t eA mou tAofAtheAconsi era io ;A nd A t AisAnotAunr as nableA o Aexpect ll ct on. cocomeAandA d) ATheAa countingA rea mentAandApre en ati nAinAth Abala ceA hee Aand At eAi ubs anc A ex enditur Aa countAofAtra sac ions Aa dAeve ts shallAbe go erned by AtheirAgaAf rm.andAn tA ere yAbyA he AleAit m e) AinA AInAde erm ningAtheAa countingA rea mentAa dA annerAofAd sc os reAo Aaderat on th Abala ceAshe tAa d/or At eAi comeAandAex enditur Aam unt,AdueAcons shall be giv nAtoAtheAma er ali yAofA t heA it m. Akep AonA .9.10 It ne ds At Ab Akep Ain A ind that Athe ac oun s Aof A he ULBs, Ain gen ral, arthe Aca hA c sh A asis A nd th re Ais An Auniform pr ctice Aof Acer ifiation Aof A ccoun s. A ndertheyAare ystemAof Aac ounting Are enue AandAex end ture Aare re orded inAb ok Aonl AiferAha d,A actually re eived or Apaid, wha ev rAmay be Athe r A eriodAof Aac ou tin . AOn A heAot d Aa setsA nder Ath Aaccr al basis Aof Aac ounting Are enue Aand expen es Aa ong Awith acquirthey AareA are A dent fied Awit AspecifiAp riods of time. AThe A ec rding in Abo ks Ata es plac Aasig tionsA ncur ed.AThus, financialAtra sac ions Aget re ordedAonAo cu rence A fAc aims AandAob yAevent A i Ar spectAo Ai comesAorAexpe diture , A ssets AorAli bilit es based Aon A ap eni gAofAautionAi A p ssage of Atime, A en eringAof A ervi es AfullAo Apartial Af lfilmentAofAc ntracts,Ad minApl ce A val es,A tc.Aev nAthou hAactual re eiptsAor pa ments ofA one Amay notAh veAtak ofA LBs,A So e Aof Ath Ab nefit A fAsuch a A ystemAofAac ounting,Apar ic lar yAinAth Ac ntext areAs mmarisedelow:26 iR venueniser co ni ed asritd sne rned andcthus “income”tco stit tesebotrrevenuelAi come rec ived Aand Are ei able.AThAaccr al A asis notAonl Are ordsAt eAactu ssisting butAalso Ah ghl ghtsA heA evelAa d A fficacyAo Arevenue Aco lection AtherebyA decisi n A akersA nAtaking financialAdeisions.?uEx en itureniser co nis dhas and whenithey iab lityefo apayme tnaises an cthus AitAco stit tes Abo h Aam unt paidAand pa abl .AIn Ath Aaccr2 SourceA: NationalA unicipal Account AManual, Novem erA2004,AG ve nmentA f AIndia, Mi istry ofAUrbanADevelopment113LocalAGof accounting, expenditure incurred on repairs and maintenance will be recognised as expense of the period in which they are incurred and, if not paid for during the year, shall be treated as a liability (payable) and be disclosed as such in the Balance Sheet.?Expenses are matched with the income earned in that year. Thus, it provides a very effective basis to understand the true performance of the organisation for the operations that are conducted in that year.?A distinct difference is maintained between items of revenue and capital nature. This helps in correct presentation of financial statements, viz., the Income and Expenditure Statement and the Balance Sheet.?Costs which are not charged to the Income & Expenditure Accounts are carried forward and kept under continuous review. Any cost that appears to have lost its utility or its power to generate future revenue is written off.?It helps in providing timely, right quality nature of information for planning, decision-making and control at each level of management.?One of the distinct advantages of adopting the accrual accounting system is ease in financial appraisal by financial institutions. It also facilitates credit rating through approved Credit Rating Agencies, which is a pre-requisite for mobilising funds in the financial markets through debt instruments.3.9.11 Accordingly, the Ministry of Urban Development, Government of India in association with the Office of the Comptroller and Auditor General of India, National Institute of Urban Affairs (NIUA) and Indo-USAID FIRE-D Project have brought out a National Municipal Accounts Manual (NMAM) for the ULBs. The accounts of the ULBs are now to be prepared on accrual basis as prescribed under NMAM. The new standards are those of the ICAI and the Ministry of Urban Development has prescribed the procedure for formalising these standards. The Commission is of the view that this Manual should be adopted by the State Governments for use by the urban local bodies.3.9.12 The Model Municipal Law (MML) circulated by the Union Ministry of Urban Development, mentions that “The municipal accounts as contained in the financial statement, including the accounts of special funds, if any and the balance sheet shall be examined and audited by an Auditor appointed by the State Government from the panel of professional Chartered Accountants prepared in that behalf by the State Government.” [Clause 93(1)]27. This arrangement is similar to the arrangements for audit of Government Companies under the Companies Act, 1956. In order to ensure transparency, professional competence and accountability in the process of certification of accounts, the Commission is of the view that the C&AG should prescribe guidelines for empanelment of Chartered114overnance Source: AA ml.html,A et ieved AonA1Common IssuesAccountant Al ke,Aqual ficatio Ao Amembers, len thAofAexis en ieAand experi nc AofAfrms,numb r AofApar ne s, etc. Furt er,A tAi Aal o Afelt thatAfo At eAprop rAconduc Aof Aaudit, detai edAthe A ra tic Ain AtheA g id lines Awo ld al o Abe Arequi ed toA e Apr sc ib dAb AtheAC&A Aa Ais tAtoA e Ado eAby A he c seAo At eACom an es Act. It need AtoA eAk ptAin mi d A hatA he aud sAw ul AbeAdiffe en A Loc l AFu d A uditAorAt e A &AGAi Adischarge AofAth irAre po sibiliti and inAaddt io nAt At is Aaudit.ecommendedA hat theA 3.9.13 As A entioned above,A he AElevent AFi ance ACommis ionA adA edAwith Athe task ofA Com troller an AAudi or AGen ral Aof In ia A(C&AG) shou dAb Aent us eAtie sAof APRIsA ndA sup rvisionAove Ap oper Amai ten nceAo Aa cou ts Aan Aaudi Ao Aall thr LBs. Pr sentl , At eAC&AGA fAIndia Ah sAa readyAdev lopedAthe foll wingAf am workAwithAr ga dAtoAmai ten nceAo Aa coun sAa dAauditA fAPRIsAa dAULBs28: fAu itin aSt ndard GforePRIss ndr LBs?iiGuideli esdfo oC rtifcati n audit ofnacc un su–iP Is? Manua AofiA ditiforg RIs?lAu itr rain ngs odu essf riZP ,f Ssdan fGP ?uListoof, ode aforvfunct on ,Rand activi ies ofcPRIs? Budgets ndr ccoun sef rmatsaf rcPRIs?iNe sAccru luaccount ngr yste wsug estedlfo fULBstwi hrdetail doform ts PTr iningnMo ule ondPRI a c untss n tbudge a–d ppartsc–lth eo r y 4 nd pr c t ic l.3.9. 4 AAs A f A3 st Ma ch,A20 7, Aou Aof 24 AS ate Awhe e AtheA73rd Aand 74thAConst tut onalAAmendm ntsA reAapplicab e, ful Aent us mentAof At e AroleAofA roviding ‘Te hnicalAGuida ceAan ASup rvisi n’ A TGS) Aove Aa dit A ndA ccou ts ofAP IsA ndAU BsAt AC AG hasAbeenA adeAb A19 States29 AG ven the A no mityAof Athe ta kAof Amai ten nceAo Aa cou tsA ndAa dit ofAa lA he A RIsAan AUL sAi AtheAStates andAtheAc ncomitantAtec nic lArequirem nt , A heA upervision A ve AtheA ommissionA sAof theA ons deredAviewA ha AtheAentr stmentAofAt chni alAu ionalised th oug A mai ten nceAo Aa coun sAa d Aau it AofA RI AandAULBs Ashould A eAinsti Aac ountingAf rma sA a Aprovisi nAin theArespe tiv Alaws govern ngA he A ocal Abodie Aand Ath ndAstand rd Ama Ab Aprovi e dAby A ay AofARule .Acrib dAbyAC&A Aha 3 eA 9.15ASim lar y,Athe account Aan Abud etAformats fo APRI Apre tesAhave Apos ti elyA been accept d Aand A or al orders A ssuedA y A 1 AStat s,At ough A22ASt receipt an Apay entA re ponded30. The A orma Ad velopedAf r PRIs Ai Abasica lyA Asimple heAite sAo AaccruedA a countAonAca hA asi Aaccompani dAby keyA tate en sAt atAta e A areAofA Ah veA eenAde ol ed inc me andAex enditur .AThe for atA nsures Ath tAall theA unct onsAwhic lyAc as ified. AItAisA orAareAl ke yAt AbeAde ol ed A yAthe AStat sAt Athe APan hayats Aare pr peals AinA ync ronisationAwiicatiohAthe cl ssiAco esAat Ath AState anh28Source:A ml/localb di shtm, Are.7.2007.Aon tdreve A329ibid 30ibid115cal GovernanceLCommission would like to emphasise upon what has already been recommended in the Sixth Round Table of the Ministers in-charge of Panchayati Raj held in November 2004 at Guwahati – the formats for the Panchayats should be simple and comprehensible to the elected representatives.3.9.16 The Eleventh Finance Commission had also suggested that the Director, Local Fund Audit (DLFA) or any other agency responsible for audit of accounts of local bodies should work under the ‘technical and administrative’ supervision of the C&AG in the same manner as the Chief Electoral Officers of the States do under the Central Election Commission. The Commission is of the view that the role of the C&AG should be limited to technical guidance and supervision and not extend to administrative control. In fact, there is a case for institutionalising the independence of the DLFA so that it could function as a specialised body devoted to the audit of the accounts of the local bodies. This would enhance the stature of the DLFAs with a positive impact on the quality of audit and on accountability. The Commission feels that to achieve this, the head of the body responsible for Local Fund Audit should be appointed by the State Government after selection from a panel vetted by the C&AG. This would imbibe this body with the required independence and facilitate coordination with the office of the C&AG. Further, to strengthen the arrangements for providing technical guidance and supervision by the C&AG, the Commission is also of the view that release of Finance Commission Grants to local bodies be made conditional on the acceptance by the States of such arrangements.3.9.17 Apart from the statutory audit performed by the DLFA or such other designated authority of the State Government, audit of certain local bodies in a State would come under the purview of Section 14 of the C&AG’s (Duties, Powers and Conditions of Service) Act, 1971. In terms of this Section, where any body or authority is substantially financed by grants or loans from the Consolidated Fund of India or of any State or of any Union Territory having a Legislative Assembly, the C&AG shall audit all receipts and expenditure of that body or authority. For the purposes of this Section, if the grant or loan is not less than rupees twenty five lakhs and is not less than 75% of the total expenditure of such body or authority, it would be deemed to be substantially financed. In case of bodies receiving grants or loans not less than Rupees one crore in a financial year, the Section provides that the C&AG may, with the previous approval of the President or the Governor of a State or the Administrator of a Union Territory having a Legislative Assembly, audit all receipts and expenditure. In fact, in exercise of this authority, C&AG is already conducting audit of PRIs and ULBs in various States under Section 14 of this Act, wherever applicable. Further, Section 20 of the said Act provides for audit of accounts of certain bodies by the C&AG on the basis of mutual agreement with the concerned government. Some of the116Common IssuesStates have aStates haveAalre dyAen ru ted audit of Athe lo al A odie AtoAt eAC& G AunderAth sA rovis on AIn fact, A n A he ASta es Ao ABihar AWe t ABengalAa d A ha kha d,AitA s Athe AC&AG’Ainst tuti nA fAPa chay tsA hic Aacts asAt eALocal AF ndAE am ner. AEven A nAK rnat ka, the Afist twoAtiersAol Aaudito .A viz.AZi aAP nchay tsAandATal kAP nchayat Aa eAa dite Ab Ath AC&A AasAtheA APRIs to In theA A rip raAal o,AtheASta e AG vernment A as A ntrustedA heAst tu ory A ud tAoerAs ou dAbhe AAC&AG. A om iss on Ai AofA he A iewAinahatAthe AAde ision A n AtheA atleftAtoAthe A ta es rtsAofAC&AG.A 3.9.18A t Ais Aequa lyAi portan Athat A ro ptAac io Ais taken on AtheA ud tArep ep rtsAsoAa A A countabi ityA equiresAth tAcorr ct veAac ion AisAt ke Aprom tly AonA ud tAtheAEle enthA to increase Athe effcti eness ofAthe Aloca Ag vernment.AA Ar com ended AbydAbef re AtheA Financ ACo mission At e Are or s AofA &AGAon local A od esAsho ld AbeA lac re d scussedA Stat ALe islatu eAandApu licAi te estAwo ld Abe Ab tt rAser ed, AifA hes AreportsA licAAccou tsA yAa Asepar te com ittee of Athe AStat AL gis atur AonA he sam AlineA sAtheAPunch yati RajA Com it eeA(P C).AThASixt AR und Table AofA heAMinist rs in-chargeA fAPws.ATheA ud tA had Aals Ar com ende Aon Ath AsheACommisme Alines. Aion Ae dorses th seAviseAshouldA eA rep rtsAon localA od esAsho ldAbeA lac d Abef reAtheAStat ALe islat re Aand th lines A fAtheA o sideredA yAaAsepar te Com ittee of Athe AStat ALegislatur Ac nst tuted on the A/designa edA Pu licAAccoun s A ommitt e. TheAacces AtoArelevant Ainform ti n/recordsAtoADL uthority Af rAcon uc ing audi Aor Ath AC&A As ouldAal oA e AensuredAbyA ncorpora ingAsuitab e A rov sions inAt eAState AL ws Ago erningAoca lAb di s.Alocal Abodies 3. .1 AInAo der toAma chAtheAab ve As andard Aw thAregar Ato accoun sAand audit, rofession ls par icul rly A heAP Is wi l Aneed At AbeAsuitably st engthe edAbyAm kingAskilledA Aappropr ateA avail he A bl AtoAthem. A om iss onAi AofA he A iewAth t AtheA tate As ouldAtakeAu the Aa dit AofA capa ityAbuil in Amea ure Aso A hat the A RIs andA LB Aare able to A opeAw th theseAins tit tion .of Athe Aaud t 3. .20 AWith Ath Aprogres iv Aincreas Ai Aca acity of Athe loc l Abodies Aan Ar lia ility ed.AFor A hisA mechan sm Aa AsystemAo Aperf rmance audi As ouldAalso be Agraduall Ain rodu Af nct oning purp se,Asuitab e Apara et rsAshould A e Ad velop d.AThisAwou dAs rengthenAth of Athe loc l Abod es and Abrin Ai Aele ents Aof much AdesiredAacoun ta b li y.AionAofAs undA 3.9.21A sAsig ific nt Afu ds Aare Ab ingAplo ghedA hrough A oca Abodies, th AadopsAa A ine A uaAfinanci l Amanageme tApri cipl sAalongAwith Aa countabi ityAmea u esAb comh Afollowi non g: ATheseAsh uldAi clude Ain erAalia,Atoifngsystems ? Efective indsu tainedfsc lmonit o M inten nceiof' ocal bo ies’ede teatlp117calAGovernance?Prudent management of contingent liabilities and guarantees?Productive use of borrowingsThe Karnataka Government has already taken an important initiative in this regard by enacting the Karnataka Local Fund Authorities Fiscal Responsibility Act, 2003. The Commission endorses the view taken at the Sixth Round Table of Ministers in-Charge of Panchayati Raj at Guwahati in November 2004 that an appropriate Fiscal Responsibility Act for local bodies should be legislated by all the States.3.9.22 Recommendations:a. The accounting system for the urban local bodies (ULBs) as provided in the National Municipal Accounts Manual (NMAM) should be adopted by the State Governments.b. The financial statements and balance sheet of the urban local bodies should be audited by an Auditor in the manner prescribed for audit of Government Companies under the Companies Act, 1956 with the difference that in the case of audit of these local bodies, the C&AG should prescribe guidelines for empanelment of the Chartered Accountants and the selection can be made by the State Governments within these guidelines. The audit to be done by the Local Fund Audit or the C&AG in discharge of their responsibilities would be in addition to such an audit.c. The existing arrangement between the Comptroller & Auditor General of India and the State Governments with regard to providing Technical Guidance and Supervision (TGS) over maintenance of accounts and audit of PRIs and ULBs should be institutionalised by making provisions in the State Laws governing local bodies.d. It should be ensured that the audit and accounting standards and formats for Panchayats are prepared in a way which is simple and comprehensible to the elected representatives of the PRIs.e. The independence of the Director, Local Fund Audit (DLFA) or any other agency responsible for audit of accounts of local bodies should be institutionalised by making the office independent of the State administration. The head of this body should be appointed by the State Government from a panel vetted by the C&AG.118Common IssuesReleasf AR lease Ao AFinanceAC mmissi nA ran sAtoA he Aloc lAb di s Ama AbeAmadeAco di ionalAonAa ce tanceAofAarr ngementsA egardingA echnicalAsu er isi nAof theA &AGAo er auditAof ac ounts of Aloca b dies.g.AAudi Ar ports on Aloc lAbodi sA houldA e Aplac dAb foreA heAStateALe isl tureA ndAthes Arepor s A houldAbeA is u sed AbyAa separateA om itt eAofA heAStateALe is atu e Aon theAs me lin sAasAt eAPublic AccountsA ommit tee (PAC). .A ccessAto relevantAinformatio /r cordsAtoADLFA/d signatedA uth rityAforAc nduct ng aud t Aor the AC& GA houldAb Ae suredAbyAinco porating suitableAp ov sio sAinA heAS ateALawsA overn ng Alocabdies Ai. AE chA tateAm yAen ure thatA heAloc lAbo iesAhave adequate ca acity toAm tch withAtheA ta dardsAofAa cou tingAandudti g.AForAthiheAj. A A ystemAo Aoutcome auditi gA houldAbeA raduallyAin rod ced. vernme tA pu pos AtheAkey Ai di ators AofApe fo manceAi Ar s ectAof AaAg sc emeA il An edAtoAb Ade ided AandA nn unced Ainad an e.Ani oringA k.AToAc mplementAinst tutio alAauditAarra gements, ado tionAandAm houldAbeA o Aprudent financialAm nagementA ra tic sAinA he Aloc lAbodi sA rop ia eA institut on lis dAbyA heAStateAGo er mentsAbyAle is atingAanAap lawA nAFiscalARespo sib lityA or AlocaBod es.A3.10AT chn logyA ndALocalAGv e r n a n eA3.10.1AIn orm tionAandAComm nicationATe c h n o l o g could Abe 3.10.1.1AIn orm tion AandAComm nication AT chnology provi es Ato ls Awh ch Acontac ut A lis dAbyA heAlocalAgo ern entsAforAsi plifyingAc mbersomeAp ocesses, reducin lityAandA be weenAth Acut ingAedgeAfunc ion rie Aand Athe A itizens,A nhancingAaccou tab ices.ATheA tra spa encyAandA rovidi gAsing e Awindo Aservice del v ryAforA Av riety AofA erC mmiss on Awoul Adis uss Asu h A ssues A n A eta lAin Ai s A eportAonA‘eGov rn a nc e ’.3.10.1.2ARecommen ation:dAbyA heA a.AIn orm tion AandAComm nicationAT chnolo y A hould Abe ut lis encyAandA localAgo er mentsAi AprocessAsimpl fication,A nhancingAtra spa accou tab lityAandA roviding de iveryAof service Athrou hAsingl119ocal AGovernance3.10.2 Space Technology3.10.2.1 Space technology, involving Satellite Communication (SatCom), and Earth Observations (EO), has made tremendous impact in recent years by way of effectively addressing certain key aspects related to rural and urban development. SatCom provides the conduit information exchange/transfer; and EO provides the content/information on terrain features that are of relevance to development. In fact, India is taking lead in putting the finest of space technology, both SatCom and EO conjunctively, into effective use for rural and urban development and addressing issues at the grass roots.3.10.2.2 Satellite Communication (SatCom) has demonstrated its operational capabilities to provide the services relevant at the village/community level, such as, healthcare, development communication and education. On the other hand, the value-added, high-resolution Earth Observation (EO) images provide community-centric, geo-referenced spatial information useful in management of natural resources - land use/land cover, terrain morphology, surface water and groundwater, soil characteristics, environment and infrastructure, etc. The SatCom and EO segments, together, provide support to disaster management, also at community level.3.10.2.3 Satellites are providing communication infrastructure for television and radio broadcasting and telecommunication including Very Small Aperture Terminals (VSATs). In fact, the Extended-C band channels of INSAT-3B and EDUSAT are being used for the Training and Developmental Communication Channel (TDCC), a service that has been operational since 1995. Several State Governments are using the TDCC system extensively for distance education, rural development, women and child development, Panchayat Raj and industrial training. In Madhya Pradesh, space technology harnessed under the Jhabua Development Communications Project (JDCP) is an important initiative in this direction. The JDCP network consists of 150 direct reception terminals in 150 villages and 12 interactive terminals in all the block headquarters in Jhabua district in Madhya Pradesh. The areas addressed under the overall umbrella of developmental communication included watershed development, agriculture, animal husbandry, forestry, women and child care, education and Panchayat Raj development.3.10.2.4 Other areas where space technology is being harnessed to bring about a qualitative change in the rural areas are:i.Tele-education : The EDUSAT is specifically designed for providing audio-visualmedium, employing digital interactive classroom and multimedia multi-centric system.120Common Issuesay, ii. AtheA ATele- e icineA ATo edicine INS T-basedAt e l e s ita sA networkA onn ctsA235Ah e/ r u ralA - A195AD is tr ic t /remo hoseA nA h spitals Ai cludi gA ,ANo thA J mmu AandA as hmidamanA& East Reg on,Aand A Nicobar A sla ds AandA 0AsuperAsp cialityAh sp tals A nAmajoAc ties as w llA s Aa AfewAh sp tal AofAth AIn ianAAiFor e.Aiii.AInt grating A ervices through(VRC ):A VillageA esourc ACentre heseAare ‘single window’A eliveryAm cha i mAfor Aa va ietyAo fAspace enabled A erv ces AandAp oduc s, such Aas Atele-e u atio A-AwithA mp asisAon Aa arenessAc eation,Avo ationalAt ainin ,AskillAdev lop entAfor Ali elihood sup ort AandAsuppl mentaryAed cation;Atele e icin A- Awi h A ocus AonA rimary,A ura iveAandApr ventiveAhea thcare;Ainf rm tionAon naturalAr sou cesAfor A lan ingAandAdevlo mentA dAwaterA tAloca Alevel;Aint ractiveAad is ries AonAagri ulture,Afiheri s,A andAaners ipA r sourcesAman gemehese AareAimpt.Aem nted by AISRO throughAparwith repu edA GOsAandAGovernm nts.e-clockA iv. Wea her Aand A limat : ASpace Ate hn logyAis Ap ovidingAround-t Aar undA surv il anceAof weather systems Ai cludin Asevere weatherAco ditionArgion. th AIndianog v. ammeA A isasterAMan ge ent:ATheA isasterAMa agement Suppo tA(DMS)AP Cen ralA of AI RO/DOS, A mbar ed upon AinAass ciat onA ithAthe Ac ncerned Aremote a dAState Aa encies, empl ys A othAt e Aspa eAbased Acommu ica ionAan isasterA sensing Acapab lit es, Afor Astren the ing Athe Ac untry’s resolve towards A Cont olA man gement. A SRO DOS A re Aalso Ane wor ing Athe A ational AE ergencyVirtualoom Aa d AState Contr l ARooms through As tellit Abased, A ecured, Private Networ A(VP ), AwithAvideo-conf ren ingAandAinf rmationAxchangeAcapab lithisAVPNes. AAdu ingAth Ap riodAof natural Adi asters,Afac litate121Local Governanceconferencing and real-time information exchange among the different key institutions, disaster managers, and administrative offices at the highest level. Space technology is also utilised in flood mapping and damage assessment and drought assessment and monitoring.vi. Natural Resources Management: Satellite remote sensing through synoptic view and repetitive coverage, provides a scientific way of gathering information on natural resources for inventory and monitoring purposes. Several national missions in the key areas of socio-economic development have been carried out in the country under the aegis of the National Natural Resources Management System (NNRMS) with the active involvement of the user agencies. The areas of importance are rural land management, rural infrastructure, conservation of water bodies, groundwater mapping and providing drinking water, wasteland Mapping, participatory Watershed Development, geo-referencing of village maps etc.3.10.2.5 Most of the utilities/services mentioned above could be utilised for the urban areas also by the local bodies. Remote sensing has provided an important source of data for urban landuse mapping and environmental monitoring. In fact, ISRO’s CARTOSAT-2 satellite has the capacity to provide panchromatic imagery with one metre spatial resolution. Such imagery could be used by the local bodies in urban infrastructure and transportation system planning, monitoring and implementation; mapping individual settlements and internal roads, urban complexes and urban utilities, etc.313.10.2.6 In recent years, there have been tremendous advancements in data collection and their updation through satellite and aerial remote sensing, and organisation of spatial databases using GIS packages and other database management systems. GIS based studies for the Bombay Metropolitan Region; the National Capital Region (NCR); Ahmedabad Urban Development Authority (AUDA); Hyderabad Urban Development Authority (HUDA); Bangalore Metropolitan Region (BMR); towns of Pimpri, Indore, Lucknow, Mysore, Jaipur, and many other cities have been taken up. These projects and programmes have demonstrated the utility of the multi-parameter database in arriving at useful guidelines for planning. Specifically, remote sensing data can be used for urban land use/sprawl/ suitability analysis for preparation of regional plans; preparation of existing and proposed land use; preparation of sustainable urban development plan; zonal planning; optimisation of transport routes; integrated analysis for locating sewage treatment plant sites; macro level urban information system; GIS approach to town planning information system etc. The Union Ministry of Urban Development (MUD) has taken initiative to establish a ‘National Urban Information System’ (NUIS), with Town and Country Planning Organisation31Sour e:A s.(TCPO) as tt ibut A TCP )AasA heAnoda Aa ency. TheAmajorAo je tive Aof NUI Aar Ato: A(a AdevelopA eAmo ernA a Awell Aa AspatialAin orma ion base Afo Avario s A evels ofAurban A lan ing A(b)Au quipmentA data sou ces:A(c AdevelopA tand rdsAwi hA egard Ato Ad tabases,Amet odology,A Amo itorA oftw re,Adata exchang Afor at, etc;A(d Adeve opAurban in iciesAto A ete mine Aan Asuppo tA t e A eal hAofA heA owns Aan Aci ies:A e)AbuildA apa ity AandA(f Aprovide decisio and Am ps s stemAfor A lann ng ASo e Aof theAmai As urces Ao Aspa ial data for A ase maps andA Abe usedA woul AbeAfromA attlli e Aremot Asen ing data Aa d AaerialApho ograp s, Awh ch woul tAofAGISA forAin egra ionAwith Acon entio al maps Aa Awell Aas Ast tisti al A ata,AforAde el pme at base. In fact, anAUrbanAIn ormati nASys em A UIS) Af rAJa pur city Aand environs coveri gAJaipur ADe elop entAA ea (JDA Ao A2 00A qAkm Aha Aalr adyAbe e nAdone liseAtheA 3. 0.2.7 AThe AC mm ss on A sAof theA iew thatA heAlocal Ago ernmen sAshoul Aut iveryAof f cilities pr vided by Aspace At ch ologyAt Ap epareAanAin orma ion bas AandAfor de service Athrough resourcecentres.3.10.2.8ARecommendtions a.ASpaceAt chnolo y A houldAbeA ar ess dAbyA heAloc lA odiesAreateAanAin orma ion bas AandAforA rovidingAse vices rovidin b. A ALocalAgo ernmen s Ashou d Ab comeA neApoin Aservic Ace tresAforA Arequire va iousA ebA asedAandA atell teAbased A ervhisAwoulces.AAhoweve capacity bu ldi gAinA heAlocalAgov1234RURAL GOVERNANCE4.1 Institutional Reforms4.1.1 Despite steady urbanisation, over 70% of India’s population continues to live in its villages and about 60% of the nation’s workforce draws its sustenance from agriculture and related activities. Improved governance is therefore inexorably linked to the empowerment and efficient functioning of self-governing institutions in rural areas.4.1.2 Common major issues pertaining to constitutional, legal, financial and institutional reforms required for both rural and urban governance have been comprehensively examined by the Commission in Chapter 3 of this Report. The focus of this Chapter is on those issues which are specific to rural self-governing institutions.4.1.3 Size of the Gram Panchayat4.1.3.1 Under Article 243 B of the Constitution, all States and Union Territories to which Part IX of the Constitution applies shall constitute Panchayats at the district, intermediate and village levels. The Constitution does not stipulate any size for Panchayats, either in terms of population or in area. The district along with a well designed administrative infrastructure, has been a composite unit of government across large parts of the country since last two hundred years. In the last five decades, blocks and mandals too have grown into subsidiary governing units in the rural areas. But, the village Panchayat which is intended to be the lowest grass roots structure, the most active component of local governance, is of nascent origin. Its size becomes critical to its functioning. The demographic details of Panchayats in States and Union Territories given in Table 4.1 are relevant.124RuralAG125verna ce a leA4.1A:ADe ographi AD tai sAofAtheAP nc ayatsA nAS ates A ndAUnionATeanchatAS.N.nchayat AAverageAp ula ionAAperAAnsus) A AAAndhrillage AASt5A2528 ArunachaAAAPediate(2001- A APradeshteARuralDistrit AInterAVillageDistrit AInter55ulationA22 A198 A2182ediateA30A50106A251862 AAAPradeh A7007 A14136 A139 A68A5311493AAAssam231628 A20188 A222A116084A1245107834AABihar741679 A38531 A847A195573A139A8773A5AAChhttisgarh164806 A16146 A982A104054A110A182A6AAGa6709A2 A0 A1A3 384A3582A7AGujarat314077 A25 A24 A1381A126961A147A2297A8AHaryana152920 A19119 A617 A79104A122A2429A9A HimachaAPradesA58219A1A75 A323A45660A70 92 91691A10AAharkhand205208 A22211 A376 A95268A92 35593A11AAarnataka348903 A27176 A565A129216A199 56173A1AAKerala237449 A1A152 A99A168389A1557 93789A1 AAMadhyAPradesh448088A48 A13 A2301 A98622A1 48 22015A14AAMaarashtra557767A33 A51 A2791A169022A156 41953A1AAOrissa318742 A30314 A623A104214A99 75019A1AAPunjab169648 A17 A41 A1247 A94682A116 71294A17AAajasthan439283 A32237 A918A135290A1 84 54712A1AASikkm4098A4 A0A1A1202897A 9AATmil ANadu342161 A28 A85 A1261A120496A9702768A20ATripurA654534 A23 A53 A66333A113 65172A 1AAUttaAPradesh A315839 A70 A20 A5200A188083A16552532A22AAUtarakhanA61075 A1A95 A727A48506A64A873 23AAWet ABengal574896 A13341A335A320825A1 6 9rit ri s ANo. AofAP352A17218 availab e*De ailsAfo AMa ipurAareAunin/mop %A S urce: 1. BasedAon Mid-termA p raisa A- Sta eAofAthe AP nchayat A2006-0 A(Vol.I)A( Novem erA DirmapAp bicationA2007 2D08/) .A epo t AofAth AWork ng GroupAonAD mocraticADecentr l satio A& APRIs, 2006, PlanningAC mmi sionAand MiistryAof AP nchayati Raj.It Loc l A over ance State AtoAStat . A tAc nAbeAse n Ath t A heAaverage size Ao APanch yats varie Aw delyAf heAomdiate Pa chaya Ais clas ifiati n Aof A ta esAonAt e Aba is ofAa era e Asize Aof AGr mAandAInt rm giv nAinA able4.2A nd Aa leA4 3: abl A4.2 :ASizeAofancha attheA ramAAGramA ATnyAGra ASmal AGraAMedi mAsi chayatsAPa PopulationA )A500 AandA10dAGramALarayatsAAPanhayatsAAPahayatsAPanclati A n (Pop lationAPopulationA etweenAetwee A(PopA low A2 b00)A 000 and A50000)Aabove 10,000) A Arunchal APr desh A(31)AGu arat A(297)A rissaA(019)AAssam (1078) AUttar khanA(73)AHar anaA(229) A A WesABenga AAAA(172)ripura218)AP njabA(1 94) AAnhraAPrade h A(252)AJhar handA(593)AKera aA(2378 )AHimahalAP adeshA( 691) AUtarAPrade hA( 253AKarnatakaA( 173)AAhhatt sgar A(1822ATami ANaduA768)ABiharA 8773)AMahara htraA(3)ASik imA(289 )AAAMahya Prades015)AGoaA 3582)AARajast anA(47 2) ASo rce:ARe ort Ao At eAWorkingA roupAonADemocrat c Decen ralisati nA&A Is, ANove ber A2006, lan ingAComm ssonAandAMin stryofAP nch y tiAR j. abl A4.3A:ASizeA fAtheAIntrmed ateAPanchayaATiny Intermediate mediateAPaSmallA nterm chayatsAPanc AbelowA(Podiate MediumAsized ayatsAInte ulationAPan Popul tionAbetLargeAInteA(Populatio (Popula ionA5000)Abetwee A55000AmediateAPan hayatenA bove A15,000)A and 100000)Ahayats00000Aand 150,000 AArunahalAPradesh (6398)Attarak and A(6644)APun abA(11495)AKer laA(155 95)AAndraAPrade hA(5059 ) AHimacalAPradeshA( 3098)AChttisgarhA(18)AAMa haashtr AAAA 159821)TamilAN du A(9070)ATri uraA(11 368)AUttrAPradesh (160559 stABen al A(169AJhar hand A(9999) A ssamA( 24151)AW52)AOri saA(9964)AHaryana (126296)ajast anA(18260)AABihar (139956)arnatak A(198233Gujara A(14170 )A AAMadhaAPrade hA(141 92 Alan ingAComm ss onA So rce:ARe ort Ao At eAWorkingA roupAonADemocrat c Decen ralisati nA&AP Is,ANove ber A2006, of Panchayati and AMin Raj.stry126Rural Governance4.1.3.2 There is need for States to re-examine Gram Panchayat delimitation so as to aim for greater efficiency of scale in delivery of services. Though gains can be expected when small villages are clustered, the trade-off could be in terms of larger Gram Sabhas. The participation of the people is inversely proportional to the size of the Gram Sabha. For hilly regions, there may be justification for smaller Gram Panchayats on grounds of low population density, difficult terrain and weak communication links. But in the populous States of the plains too, Gram Panchayats generally are found to be small. The reason for this is perhaps historical, based on an idealised notion that there should be one Panchayat for each of the villages. Many of the Gram Panchayats are too small to function as autonomous institutions of local government. In order to be an economically viable administrative unit, capable of discharging multiple responsibilities, a Gram Panchayat needs to have a minimum population size. Since there is no data on this issue, it is difficult to give a definite recommendation as to what should be the optimum size of a Gram Panchayat. But it can be emphasised that a tiny Gram Panchayat will not be able to discharge the role envisaged for it under the present decentralisation plan. The factors that would have to be taken into consideration for determining the minimum size of a Gram Panchayat are: (a) potentiality for resource generation, (b) sustainability of the staff structure, (c) suitability as a unit of planning for core functions, (d) geographical cohesiveness, (e) terrain conditions and (f) communication facility within the Panchayat area.4.1.3.3 While undertaking any such re-organisation, the provisions of the Panchayati Raj (Extension to Scheduled Areas) Act, 1996, (PESA) in the States and districts to which they apply will need to be complied with, so that Gram Sabhas have primacy and tribal communities are not disrupted by any such attempt at delimitation. Terrain and isolation, particularly in sparsely populated areas would also be a significant factor in determining whether re-organisation can be attempted or otherwise.4.1.3.4 It is imperative that States with small-sized Gram Panchayats undertake a detailed exercise to reconstitute them after considering the factors mentioned above. It may be important to note that over sizing of Panchayats itself may give rise to problems with regard to popular participation. In such cases it may be appropriate to give emphasis on Ward/Area Sabha for encouraging local participation. The Gram Sabha will continue to remain the constitutionally mandated grass roots organisation.4.1.3.5 Recommendation:a.States should ensure that as far as possible Gram Panchayats should be ofan appropriate size which would make them viable units of self-governance and also enable effective popular participation. This exercise will need to take into account local geographical and demographic conditions.127Local Governance4.1.4 Ward Sabha – Its Necessity4.1.4.1 Under Article 243-B of the Constitution – a Gram Sabha is defined as “a body consisting of persons registered in the electoral rolls relating to a village comprised within the area of the Panchayat at the village level”. The Gram Sabha occupies a central place in the entire scheme of local governance because it is this body which provides an opportunity to the individual villager to participate in the local decision making processes. There is a direct relationship between proper functioning of the Gram Sabha and empowerment of the PRIs. The village plan which is dovetailed with the district plan through intermediate and apex tiers of the Panchayati Raj system emerges from this very institution.4.1.4.2 As long as a Gram Panchayat is small, such a two level formation works well. But when the Gram Panchayat becomes large as in Kerala, West Bengal, Bihar and Assam the concept of subsidiarity gets diluted. Because of the size, the relationship between the people and the Gram Panchayat becomes too distant; the partnership between the two weakens and the Gram Panchayat assumes the role of a superior Weberian structure. Often the problems of the smaller habitations tend to get sidelined. The apparent solution to this problem lies in reducing the size of a Gram Panchayat. However, reducing the size of a Gram Panchayat below a certain critical limit has its own limitations in terms of capacity and administrative viability. If the Panchayat as a unit of self government is intended to be effective and efficient, it must have an optimum support structure and financial resources. Creation of an intermediate body-Ward Sabha - would facilitate greater peoples’ participation and at the same time ensure administrative viability of the Gram Panchayat. Each Gram Panchayat area could be divided into several such Wards. A Ward Sabha would be in closer proximity with the people and would be in a position to prepare a comprehensive and realistic proposal for the ward as a whole with effective citizens’ participation. Such a two tier system of a Ward Sabha for each segment and the Gram Sabha at the Panchayat level already exists in Karnataka. The Ward Sabhas have been assigned the function of identification and prioritization of beneficiaries under various anti-poverty, social support and wage employment programmes. The list thus prepared is placed before the Gram Sabha for its approval. They have also been given a role in prioritisation of schemes pertaining to their area and in delivery of services such as water supply, sanitation and streetlighting. In order to encourage democracy at the lowest possible level, The Orissa Gram Panchayat Act, 1964, provides for citizens’ group called Palli Sabhas that function below the Gram Sabhas at a smaller habitation level and specific powers have been assigned to them. In Rajasthan too, the State Panchayat Act provides for a Ward Sabha headed by the Panchayat member elected from that area.128erowin APanchayatar par icipa ionA 4.1. .3 The Com issi nAis of theAv ew that in Aorder to Ahave effectiveApopu number of Awards/A at the micro leve ,Athe Alarg AGramA an hayat Asho l AbeAsp it intoAa aAwill Ap ovide aA ar a .ARe re enting A AunitAof As al erAhabit tio AorA luste ,Ath AWardAS beaAsp cialA plat orm whereApe ple Acan direc ly Adi cus AtheirA ee sAan ApreparAloicAanAaeAGr m ASaheAWard ASha Aand pl n.AbhaAcan exerci eAc rtainApow rs and func ions A fAtstedAtoAt em. IfA als AsomeApow rs and func ionsAofAth AGr m A anchayats ma AbeAe tr Amad AcoterminusA possible Athe Ater it r alAd visionAof a AGram Pan ha atAM mber AmayAb it Aju isdi tion Ao A he AWar ASabha. AA si ple amendmentA n Athe respectiv ASt teA anchayatA ct Ac nAintroduceAthis A rovision.4.1.menda ion:ldAtakeAst psAt A .AWA ereve Athe eAareAlarge GramAP nchaya s,AS atesA ho chayat ,Ac rtainA const tuteA ardA abhasAwh ch will exerciseAin suchAPa ram Pa chayatAas pow rs and func ionsA fAt eA ram Sabh AandAofAt eA ma AbeAent r u s edAto Athe .4.1.5 APer on elAMan a g e m e tAin PR sitsAact viti f s.AA.1.5.1AS afAi Aa resourceAtha Aan A rganiza io Amust Ap sse sAtoAperforio alAa tonomy.AC ntrolAove Ah ma Aresource Ais Aan A mp rtant AelementA fAorganis InAthisAre pect, A anc ayatsAa ross Aou A ountry Apres nt AaAdis ui ting pictureAInAmostAS at s,A rie ,Aall wancesA anch yat AdoAn tA aveAthe power toAr f cru tAtheirAs afAan Adetermin AtheirAsal es,Athe power toA and ot er Acondi ions Aof A erv ce ABe ides Ad e AtoAthe lack AofAfin nci lAres ur ut lisedAat Aal r .A cr itAs aff,Ae enAifA uchApow rAexist Arema nsAgross yA nde Autilise Ao AnoternmentA orTheAPanchAstaffAdepeyats At erefor , A ave tod A nAt e Aoffic alsAofAthe Sta eAGo ajorAw aknesses A su port.ARunnin AanA rganisation Awi h Adepu atio ist Asuffe sAfrom AtwoAowe .ASecondl ,AA First, Af eq ent trans ersAdo AnotA ll w developme t Aof AaAde icatedAma fA ont olAis oneA the emplo ees remain A nd rAt eAcontrolAof two authori ie .AThisAd al tyAriousAgovernm nt of Ath Am jorAobsta les Ain Aoptim lly coordinati g A heAacti itiesAofAv anchayatsA sA heA fun tiona iesAin th Arural Aare s. The Com issi nAis ofAtheAvie At atA fullAp we sAwithA overn entAat the Alo alAl vel, A hou d Ahav Ath ir Aown staffAThey should haveAb oadAf amew rkA rega dAt Arecrui mentAand As rv ce Aco ditions Ao Atheir e ploye sAwithinA fAState lawsAandAc er t a i n tandar s. . .5.2 APurelyA s AaAtran itio alA easure,At llAtheApe so nel A truct r Aof APRIi Atakes aAd fniteAsha e, the emplo eesAofAthe Sta e A overn en AmayAbeAtak n Ao Adep tation,Abu AsuchA ep tati nAsho ld A eAmade A ft rAt e Aconsent ofAtheAbor129LocreAcurr nt yA 4.1.5.3 An Aim or ant A ssue Ai AthisAa pe tArelatesA o Agovernm nt A mpl yeesAwhoA sAa Aeach ofA w rking in At e A RIs. The eAis An ed A oAasse s AandAre iewAmanpower re uire en Adist ibu edA the A hree A ev ls. Based AonAt e A ssese ent soAmade, thef A xistin As afAshouldAb sit onsAe.g A amongA he Ap sitions At us ident fiedAat A heseAleve s. Vaca ci sAi AsomeAofA heAp lable onAtheA for Ap imary Asch olA ea hers, A ayAb Ala ger Ath n A he Anumber ofAemploy es ava osi ions. OnA rol s Acu rent y. There wil AbeAne dAfor making Afres Are ruit ent Afor Asu hA .AGovernm ntA th AotherAhand Ao tsourcin Aof serv cesA ay Ama eAsomeApos sAredundanizations.A empl ye sAwor ingAi Athe eApo ts wi lAhaheAeAto be sentA ackAto theirAparentAo gag patt rnAon om iss on Ai AofA he vie Ath t AinAa l theAStat sAaAde ai ed A eview fi A f AtheAs af Parishads,32A a AzeroAb sed Aap ro chAshould A eAunde tak nAwi hin theAn xt oneA ear. ATheAZila Awork ng Afor articu ar y, Ashould A eAas ocia edAwith At is exercise. The owner hipAofA hosloca Abo iesA ust Al e AwithAth e seAb dies. alAG vernance4.1.5.4ARecmm ndations:Aconsti ut d.gulate A heirAA . APanc ayat Ashou d A ave Apow r Ato Arecr it A er onnel Aan Ato Arlai Adown byA servi e Acondi io s Asu ject to A uch Alaws A nd stan ards asbe Apro onged the AStat AGovernme t. Evol tion Ao Athis A yst m A hould Anot,Afor AdeAUn ilAthen,At eAP ncha atsAm yAd awAupoinedA beyond three years vernment,Ao f erio s,AstafAfrom Adepartm nt /ag ncies ofAthe AStat AGdpu ati n.tems, Awith b. AIA aA A ll AState , Aa Ade ai ed A eview A f Athe As affin Apattern and A y the A ex AoneA zero-b se Aap roach At APR As affing, Amay A e Aun ert ken A ver taf.ATheAZi aA ea AinAorder toA mpleme tA heA olicyAofA RI owner f hi AofAParishads,A articu ar y, AshouldA eAas ocia edAwithAt hi sAe erci e.4 1.6 PRIsA ndAtheAStateAGove nment overn entAorA .1.6.1A nderA ariousASta eAP nchay tiA aj AActs,At e Ares ectiveASta eA oAreview an A th irAnominatedA unction ries Acommand consi erab eApowe Aw thAreg rdA r to Asuspend revisi nAofA ct ons At ken Ahese coyAPRIs. Atro sAar Ai Ath Aform of (a)Apowancha at (c)A a A eso ution AofAt eAP nchay t, (b)Apow rAto inq ireAin o A heA ffairs AofA heA ditio s, (d)A po erAtoAr moveAelec ed APanchayatAre resen atives A nderAcer ainAspecifie Aco ndAf nct onsA pow rAt Ainsp ct AandAissu Adi ectives, A e) A rovisionAf r A ithdra alA fApowersA hayatA yAth A fromAt eAP nchayat, A f) Aprovis on Aregar in Aap roval A f A h AbudgetAo Aa Panh g erAti rAorAaASta eAauth o rity A tc.4. .6.2 AA los AlookAatAt eAP nchayatiAR j A nac ments Ao Athe ASt tes, reveal Ath tA lmos AallAof themA roa lyApl ceAtheASta eA o ernmentA nA Apositi nAofAcommis ndtheA PRIs.is-à-1303 The refe enceAtoA ilaAPa isha As ouldAalso be c nstruedAa Aa ref renceAto theADis ri tAC unci AasA ndA henAtheyAareRural GovernanceIn some of the Acts, such powers have been given to the District Collector or the Divisional Commissioner and in some cases such powers are exercised partly by the Collector and partly by the State Government. By all standards, the scope of these powers is very wide and largely depends on the subjective satisfaction of the empowered authorities. As an illustration, excerpts from the Bihar State Panchayati Raj Act, 2006, Karnataka Panchayati Raj Act, 1993 and Assam Panchayat Act 1994 are enclosed as Annexure-IV(1) to this Report.4.1.6.3 The power of the State Government to suspend or remove elected Panchayat representatives needs closer scrutiny. There have been many instances of arbitrary use of this power. In some States the higher tier of Panchayat is either consulted or given the authority to exercise this power in respect of office bearers or members of the lower tier. The Commission is of the view that this provision is inappropriate because all the tiers of Panchayats are institutions of self government and, as such, there cannot be any hierarchic relationship between them.4.1.6.4 As regards the power of the State Government to supersede the elected local bodies it is relevant to mention that in the first phase of the Panchayati Raj system (post 1960), the State Government used this power rather indiscriminately. But with the provisions of Article 243 E(1)(2) and (3), which make it mandatory to hold local body elections within six months of the end of its tenure/dissolution, any attempt to supersede a local body has become difficult. However, there may be a lurking fear that local bodies may be victimized by the State Government on narrow political considerations.4.1.6.5 The issue is to what extent such controlling powers of the State Government should exist in the statute. The spirit behind Article 243G is to install PRIs as constitutional entities with autonomous space. While State laws draw the boundaries within which the local governments have to function, the constitutional provision does not intend a relationship of ‘subordinate and superior’ between the two. There is no scope, in the post 73rd Amendment era, for exercise of overbearing powers mentioned in paragraph 4.1.6.1.4.1.6.6 Deviant behaviour, maladministration, violation of fiscal responsibility norms, irregular/illegal transfer of Panchayat property, abuse/ misuse of authority, corruption and nepotism are some of the situations which may warrant action against the PRIs or their elected representatives. The Commission is of the view that it is also the responsibility of the State Government to ensure that the Panchayats carry out their activities in accordance with law within their autonomous domain. But it is also necessary to ensure that this ‘responsibility’ does not translate into regular supervision or control over the functioning of the Panchayats. As far as election related issues are concerned, the Constitution itself provides for creation of a ‘State Election Commission’ in each State. For any grievance or complaint relating to131Local Governanceelection law infringements, this institution should be the authority to take a final decision and send it to the Governor. Further, the Commission has recommended establishment of an independent grievance redressal mechanism in form of ‘local Ombudsman’ for a group of neighbouring districts at Para 3.8.6 of this report. Whenever a complaint is made against a Panchayat or any of its members to the local Ombudsman, he will examine the matter and will send his report through Lokayukta to Governor of the State.4.1.6.7 There can also be a situation where there is an absolute breakdown of administrative and legal machinery at the level of a Panchayat and the elected body concerned needs to be immediately suspended or dissolved. The Commission is of the view that even in such cases, the State Government would need to place the records before the local Ombudsman for investigation and appropriate action as detailed above. In all cases of disagreement with the recommendations made by the local Ombudsman/Lokayukta, the reasons will need to be placed in the public domain.4.1.6.8 Recommendations:a.The provisions in some State Acts regarding approval of the budget of a Panchayat by the higher tier or any other State authority should be abolished.b.State Governments should not have the power to suspend or rescind any resolution passed by the PRIs or take action against the elected representatives on the ground of abuse of office, corruption etc. or to supersede/dissolve the Panchayats. In all such cases, the powers to investigate and recommend action should lie with the local Ombudsman who will send his report through the Lokayukta to the Governor.c.For election infringements and other election related complaints, the authority to investigate should be the State Election Commission who will send its recommendations to the Governor.d.If, on any occasion, the State Government feels that there is need to take immediate action against the Panchayats or their elected representatives on one or more of the grounds mentioned in ‘b’ above, it should place the records before the Ombudsman for urgent investigation. In all such cases, the Ombudsman will send his report through Lokayukta to the Governor in a specified period.132ural AGovernancetion.A .AI AallA as sAofAdisagree ents wit AtheArecommenda ions ma eAb AtheAocalAOmbudsman/Lokay kta Athe Are sons will ne dA oAbeAp ac dAi AtheApblicAdoma i n. .1.7 APos ti nAofAParastat a lsAandA 4. .7.1AParast tal AareAinstitutions/organiza ionsA hic AareAw ol y AorApart ally A wne rmedA ma ag dAby Agover mentA(e ther Aauton mo sAor Aquasi-governmen al) AThe Am yAbeAf die A e ther A nderAsp cificA tateAenact en sAor A nde Athe ASoci ties ARegistr tion Act. TheseAb sAorA are Agene allyAf rme AforAdel ve y AofAsp cificAserv ces,Aimplement ti n AofAsp cificAsc em inceA progr mmesAspon or dAb AtheAState/ nionAGovernment/internat onal A onorAagen ies.A AtheA activ ti sAof ma yAof A heseAorganisa ion Aa eAi AtheAma te sAi AtheAEle enth ASch du eAo sAanA Constitu ion,A heirAsep rateAexis ence withAconside able fun Aand fst fAatA heirAdisp sa ,A io n s. imped me t AtoAeffe tiveAfuncti nin AandAempowe me t AofA ocal Agover mentAinstitutDA),A 4. .7.2 So eAo Athe Aimpo tantAparast tal AareADis rictA uralADevelo mentAA encyA( D Athe Dis rictAH alth ASo iety A( HS),ADis rictA ate Aand ASanit tionAComm ttee A( WSC Aan tal A FishAFa mers ADevelo mentAA encyA(F DA .AA Athe Ah gherAle els, so eAo AtheAparastVIC A ar AtheA tateA a erA&ASew rageAB ard,A h diA&AVi lageAIndus riesACommi sionA( ocalA an AtheA tateAPr maryAEduc tionAB ard. TheirAfunc ions Aim inge Adir ct yAo AtheA institutio n s.AtheA 4. .7 3 AThe most Aimpo tantAparas at lAa AtheAdis rict A ev lAi AtheA RDA.AF rmed A nde nAtoA Soci ties ARegistr tionAAc (s ,Ai AwasAcr atedAessent al y asAa Asemi-auton mousAorganis ti tio A impl ment Ava iousAprogr mm sAof Alivel hood Adevelop ent, w geA&Aemplo mentAgener Aai A andAs cial Asu portAactiv ti sAo Athe A nio AandA tateAGovern en sAa AtheAdis rict Al ve .AThmes,A w sAtoAc e teAaAstru tureA hichAs ould have Aflexib li yAinA re s AofAimplement ti n AofAsch oredA heir Amonit rin Aand fund flow.ACurre tly AtheA und Afor mo tAo AtheACent allyASpon ojnaA Sch mes; ASamp orna AGr meenAR zgarA ojnaA(S RY),ASwarnja anti GramASwar zgarA utedA (S SY), AI diraA waasA ojnaA IAY) etc Aare Aall tt dAt Athe DRDA fromA he e A tAisAdistri ats,A mong Aimpleme tingAage ci sAa AtheA lockAl ve .AIn ma yAof A hese Asch mes,APancha.ATheA particu arly GramAPancha ats, haveAimplementat ona AandAmonit ringAresponsibili ie AnowA Commi si n A sAo Athe view thatA inc AtheApr ce sAof Ademoc atic Adecentralis ti nAilairmlyAestableAsh dAi AtheAdist ict AandAPanch yats withAel ctedArepresenta ivesA ei g AinADR AA a Aal Athe A hreeAle els,A he eA s AnoAjustific tio AforAh v ng AaAsep rateAa en yAa Athe haveA i AtheAdist ic . AIn someAS ates likeAKe ala,AKarn tak Aand WestABe gal AtheA RDAsould al eady beenAm rged wit AtheADis rictAPancha at .A tAis Anece sary that A therAS atesAs also takeAsi ilarAac133GovernaneLoca4.1.7.4 Similar is the case with the District Water & Sanitation Committee (DWSC) which deals with the rural water supply and sanitation schemes. The primary responsibility of providing drinking water facilities and sanitation rests with the State Governments. The Union Government has been extending policy, technological and financial support through a Centrally Sponsored Scheme – the Accelerated Rural Water Supply Programme (ARWSP) – under which funds are provided to the State Governments for implementing rural water supply schemes. Drinking water supply is also one of the six components of Bharat Nirman which has been conceived as an overarching action plan to be implemented in four years, from 2005-06 to 2008-09 for building rural infrastructure. The objective of the said component is “Every habitation to have a safe source of drinking water: 55067 uncovered habitations to be covered by 2009. In addition, all habitations which have slipped back from full coverage to partial coverage due to failure of source and habitations which have water quality problems to be addressed”. Though with the 73rd Amendment, drinking water and sanitation are included in the list of subjects to be devolved to Panchayats, so far their involvement in this programme has not been significant. The Commission is of the view that since as democratically elected institutions, Panchayats are responsible for these functions to the citizens in the rural areas, DWSC should be a committee of the District Panchayat. In view of the importance of this programme, there may be need to take up this work very extensively in the villages. A committee at the block level may also be needed to monitor this programme. If so, this committee should be a body of the Intermediate Panchayat. Besides, many of the States have also created a high level organisation called State Water and Sewerage Board to look after both urban as well as rural drinking water supply schemes. The Commission is of the view that barring a few large investment schemes which need high grade technical and professional support, the rural water supply system can be very conveniently handled by the Panchayats. Hence, the presence of the State Water and Sewerage Board in the rural areas needs to be substantially pruned.4.1.7.5 Currently, a district also has a District Health Society (DHS) to look after the programmes of the National Rural Health Mission (NRHM). A major part of its functions concerns the rural sector (e.g. running hospitals, primary health centres and dispensaries). These functions are listed in the Eleventh Schedule and hence this Society has to be responsible to the PRIs for these activities. However, management of district hospitals and specialised units and regulation of private nursing homes and healthcare organisations are some of the functions which need high level professional and technical competence. To that extent, the DHS will need functional autonomy. The Commission is of the view that since rural healthcare is a primary concern of the PRIs, DHS should have an organic relationship with the District Panchayat (Zila Parishad). Similarly the Fish Farmers Development Agency (FFDA) may have a separate existence, because its activities do not coinside totally with134Rural Governancethe mingAas AaA the A ct vit esAof theAPRIs AHoweve , A eepi gAi Aview AtheApo en ial tyAof AfihA a abor tionA ivelihood pr gra meAin the Aru al Aa eas, this bodyA ls Anee s A oAwor AinAcloseAcolwit Adiffe en AtiersAofA anchayatsA spe iall AtheAGramAPa n chay t. re Alo ke A .1. .6AAt the Ag assAro tsAlevel Aproj cts Aunder Centrally Sponsor dAS hemesAAoverseesA af erAbyAtw AparallelAorga isat ons. AOne Ac nsi tsAofAtheApr gramma icAbo ies Awhic teeA( EC)A impl men ationAan Ap ogress Ao Asc eme .ATheyAare Vidyalaya Education Commi itteeAf rA u derASa va ASiksh AAbhiya ,AVil age WaterAand A anitation A ommittee, Com sAt atAo A Mi -dayAMeal Pro ramm AandAI DS Acentre A om ittee. TheAsecond st uctu eA enefciaryA theA RIsA hich have also Abee Aass gned Aso e A spectsAofAimpl ment ti n Asuch i AasAlyAofAthe iden ification AHow ve ,Am stAofAtheApr gramma icAbodie AfunctionAind pe den inte rateA Panchayat A onc rned.AThi Aprac ic An edsAto Ab Ac anged.AThAmeasu es neededAtophA4 4AofA suc Aparal elAb die Awith Athe Pancha atAs stem haveAbeen di cussedAin par gr thisARepo t.llowedAto .1.7.7 AThe A om is ion is Ao Athe vie Athat AtheAp rastat ls A ho ld Anot A eA und rmineAthe fun tions Aand au hor tyAof theA RI .AS meAofAth AexistingA omm ttee Am yA eed Ato Ab As bsu edAinAtheA anc ayat Aa dAso eAo At emAmayAbeAre tr ctur dA o AhaveA vernme tsA nAorganic Are atio ship withAthemA(Pa ch yats) AThe Uni n Aand theAStateAG houldAno Ano ma ly AsetA pAspecial A ommitte sAo tside theAPRIs AH weve , AifAsuchAs ecialisedA ire en s,A omm ttees Aar Ar qu redAto be Aset- p A ecause Aof Apr fe sional Aor technicalAreqion underA an AifAtheir A ctivitie Acoi cide A ith Ath seA istedAand devo ved,At eyAshoul Afunc elAbod esA t e Aoverall As per isionAan Ag ida ceAof AtheAP nchayats.A imilarly, Commu ityAlenit ative ho ldAnot A eA reatedAby decis on Ataken atAhigh r A evels.AIf A onsidered nec ssary AtheA forAthei Acreat on As ould comeA rom belo AandAt ey should AbeAa co ntableAto APR s.4.1.7.8ARecommndtions:Aa.AP rastat ls A ho ldAnotA eA llowed Ato und rmine Athe au hortyAofth APRI .hereAntAAgenA .A yA sAn AneedAforAco ti uat onAofAth ADist ictARuralAD velopm tAB ngal, (DRDA). Fol owin AtheA ea AtakenA yAKerala, Kar atak AandAWe th ADRDA AinAot er AS atesAa so should beAm rge AwithAtheA espectiv ADistrictA ancha atsA(Zila A arishad .ASimi arAact on shoul Abe tak nAforAth ADist ict WaterAandA anitation Commit teADW C).ctur dA A oA c. AThADistr ct AHeal hASoc ety (DHS AandAF DA shouldAbeAre trhave A nAorganicAre atio shi Awith135Local Governanced.The Union and State Governments should normally not setup special committees outside the PRIs. However, if such specialised committees are required to be set-up because of professional or technical requirements, and if their activities coincide with those listed in the Eleventh Schedule, they should, either function under the overall supervision and guidance of the Panchayats or their relationship with the PRIs should be worked out in consultation with the concerned level of Panchayat.munity level bodies should not be created by decisions taken at higher levels. If considered necessary the initiative for their creation should come from below and they should be accountable to PRIs.4.1.8 PRIs and Management of Natural Resources4.1.8.1 The management of natural resources in the rural areas – land, water bodies and forestry and ecological concerns is of great importance to the villagers. Land records management including that of village commons is therefore , a pre-requisite for sustainable use of natural resources. Currently, this activity is in need of a complete overhaul. The Gram Panchayat being the most representative body at the village level, can play a crucial role in it. Forests play an important role in the life of rural people. With stringent and often heartless forest laws, even villages located in the interiors or on the periphery of forests have become alien in their own territory. There is need for providing more space to the PRIs in making plans for proper utilisation of these resources. Equally important are the village water bodies for enhancing rural livelihood. If managed properly, they can become a good source of revenue for the Village Panchayat. Involvement of people in the management and use of these natural assets would also ensure that the ecology is in safe hands. It is necessary that the local bodies are entrusted with the responsibility of conservation and development of these resources. This responsibility can be discharged by the Panchayats through a team of volunteers, who will work as ‘green guards’. All these issues will be analysed by the Commission in greater detail in its report on “District Administration”.4.2 Functional Devolution:The broad outlines of “devolution of functions to the local bodies” (both rural and urban) have already been indicated in para 3.3 of this report. However, in view of the State Government’s reluctance in the past to transfer the 3 ‘F’s (Functions, Funds and Functionaries) to the PRIs, there is a need to examine these aspects in greater detail.136Rural Governance4.2.1 AC rrentAPositi o nceAasA 4 2. .1 AThe A piritA ehi d Athe Apr posed A che eAforAdecentrali at onAof ruralAgove na leA fA env sa edA n Ath A73rdAAme dm nt AisArelec edAinAA tic e 243 GAa dAthe AEl venthASc ed uste A theAConsti ution whic As ek Ato Aest blish APanc ay ts Aas Aself-gov rning Ainstit tionsAent ocialA wi h AtheAprepa ati n Aand Aimplemen at onAof pla s Afor Aec nomic Adevel pme t AandA icl A ju tice.AHo ev r,AasAob ervedAea li r,Ai Amost pa tsA fAtheAc unt yAtheA nt ntAofAA ti ueA 243 G Aha AbeenAi no edAby Ad nyingAauto omous sp ce Ato localAb dies. APanc ayatsAco ain”, toAfu ction A ith nAtheAfra ew rkAo Awh t A ayAbe A a led AaA“perm ssiveAfunc ionalAd o sinc AveryAl mitedAfunc ional area Ahav AbeenAwit draw Afr mAth AlineAdepar me tsAof AbeenA StateAGover men sAand Atrans er ed Ato local Ab dies AOnly minor civicAfun tion Ahav pmentA exclu ivelyAas ig edA oAthe loca AselfAgove nmentAb die .AA l Athe otherAso- alledAdevel AlineA fun tionsAas ig ed A oAtheAdiferent ti rsAof APanc aya sAareAac ually deal Aw th A y Athemain depar me tsAof StateAGover me tsAor Aparast tals.ARes ur es Aa Aw llAa f Asta AalsoA nsAasA und rAtheAc nt ol A f Athe StateAGover ment.ATher fore,AeffctiveAdevo ut onAofAfun tiplac e . env sa edA nAtheAConsti uti nAh sAnot takenAed leA 4 2. .2AIn or erAt AmakeAdevo utionAfunct ona ,Athe Am tters A is ed A nAthe AEl venthASc otAbeA f AtheAConsti utio An ed toAbe A roke Adow AintoAdi creteAactiv ties,Ab ca seA tAm yA PR s.A appro ri teAto Atr nsf rAa lAtheAacti ities A i hin Aa broadAfu ct o AorAa As bj ct A o Athe imaryA The StateAGove nme tAmayA etai AsomeAacti it e AatAa macro A eve .AFor Aex mp e,AinAp educ tion,Aacti itie AlikeAdes gningAsyl abii,Amaint iningAstan ards,Aprepa at onAo Atextbooks137LocalAGoetc. ag mentA et .Awo ld ha eAto be A ithAt e AStateAGov rnmen ,Awhi eAtasks Aco cerningAma ma p ngA of sch ol Amay beA ithA heAGramAP nc ayat orAZilaAP rishad. WithoutAactivity Asc eme of aAbroad A un t onAor AaA ub ec ,Ai Ais AnotA os ible At A eviseAa A orkableAde olutio lead inA forAt e Alocal bo ies.ATheA in stryAofAPa chay tiARaj,AGo er mentA fAIn i Atoo Aa tryAandA this Ad re tionAbyAor an zing A n A200 ,Asev nArou dAtable Acon erence Aac ossAthe cou sp nde A l unc ingAtheA ational roa map AforA ffectiveAPa chay ti AR j.ASom ASta es AhaveArso far A nd Aev nAam ngAt e Aon yAaA ewAhave car iedAoutAi tensiveA ctivityAmapp i n g 4.2.1.3 Art c e A243AGAst pula es A hatAtheALeg sl t reAof aASt te may, by Ala ,Ae dowAtheAPa chay tsAw thAsuc Apo ersAand Aa th rit Aa AmayAbeAn ce sary At Aena le themAtoA un tionAasAinst tu ions ofAselfAgov rnment AAl ost allAth ASta esAhav Ac osenAt AassignAf nc ion Ato the PRIAnot through A tat te Abut AbyAd legatedAleg sl tio AinA he form A f A ulesAorAe e cutiveAorders 4.2. .4 Even A n Athos AStat s Awh ch Aha eAs ownAtheAp liti al will AtoAdecen rali e,ArealAde olu ion hasAn t Atak nAp aceA nd A nly Athe Aresponsi ili ies Afor Aimpl menting sch mesAandA ro ect Aof At eAU ionAa d AState AGo ernm nt Ah veAbeenAe tr sted A oAth m.ARealAde oluti nAwou dAim lyAthatAPa cha atsAareAe trus ed Awith design,A lan ing AandAimplem nt tio AofAthe sch mesAandA roje tsAbes As ited A oAtheir Arequ rem nts Aan Aneed .AUn ilAth sAtak sAplaceAPa chay ts A illAno AbecomeAinst tu ionsAofAself-go ern entA nd Awil Aremai AmerelyAimpl menting A ge cie AofAt e AStateAGovernm e n t 4. .1.5AThe presen As atus AofAde olu io A(as Aof A ovemb r A 006) Ais A eflcted A nATableA4 4.T b eA4.4A AS atusAofADe ol tionAofAF nc io sAasAofAN vembapping AAndhraPr desh A17u jects A9uject AAATa kAForceAcon titut dAu derAthe ecial AAChiefAS cre aryAforA ctivity MapingAhasA repared A etailedAformu ation .ADraftAGo ernmen AOrdersAincor oratingA ctivity ma ping AinAac ordaceA ithAthe Arecomme da ion Aof Athe ACmmitteer,A206AStateA raoveredAsitionderAALegslationivitysfer AofAthrouubjectsubject ALatestRural GovernanceTable 4.4 Contd.StateTransfer ofthroughSubjectsLegislationActivity MappingSubjectsunderCoveredLatest PositionAssamArunachal Pradesh29 subjects3 subjects29 subjectsare under the consideration of a Group of Ministers for finalisation. After the completion of these discussions, departments have been directed to finalise the Government orders for issue.Assam claims that it has done activity- mapping more than 3 years back. However, individual departments have not operationalised this order through executive orders transferring funds and functionaries. However, after the recent visit of the Minister Panchayati Raj to Assam, the State has renewed its efforts at activity mapping. It has now set out a road map for undertaking activity mapping in the current year and matching it with fiscal devolution by the time of the supplementary estimates to the States’ budget for 2007-08.The State Government has engaged one of its officers to carry out activity mapping with assistance from the NGO, PRIA. This Officer has submitted his report on Activity Mapping to the State Government in May 2006. It has now promised that work on Activity Mapping will be expedited. Currently, only selection of beneficiaries in respect139Local GovernanceTable 4.4 Contd.StateBiharChhattisgarhGoa25 subjects29 subjects6 subjectsTransfer ofthroughSubjectsLegislationwater supply27 subjects,25 subjectsexcept forestsand drinking18 subjectsActivity MappingSubjectsunderCoveredAlthough activity mapping has beenBihar had earlier undertaken activity mapping in 2001. However, these orders were not operationalised. Therefore, the State has again undertaken a detailed exercise in Activity Mapping with the assistance of an NGO, PRIA. Currently, a Committee chaired by the Commissioner and Principal Secretary Rural Development and Panchayati Raj is undertaking a detailed exercise on Activity Mapping, This exercise will also include devolution of finances and functionaries. In respect of finances, a separate Committee headed by the Finance Commissioner has been constituted to address the modalities on creation of a Panchayat Sector Window in the budget.Latest Positioncompleted for 27 subjects, therequisite executive ordershave not been issued so far.of Rural Development, Agriculture and Horticulture programmes has been devolved to the Panchayats.18 functions have been devolved to village Panchayats and to 6 ZPs. Goa needs to follow up with fiscal devolution.140Rural Governance4.4 ContC~tateATra sfrAof ASubStationAASubectsACoredAAthoughderAALegisltionAAct tyAAAMaectsAL testAPosar t A15 Asubya a A29 Asubch l A26 Asubta a A29 Asubra a A26 Asubec s A14 Asubec s A10 Asubec s A29 Asubec s A26 AsubectsAAct vity Ama pin Ahas been don Af rA14Asubj c s.A5 Asub ects have beenApartallyAdevo ved.AActiv tie Aar Ay t A oAbeAdev lved with Are pe t A oA10Afunct o s.AAAmtri AforAAct vity AMa pin Ahas beenApre ar dAb AtheASectsAAct vityAma pi gAinAre pe tA fA10Asub ect Awas Arel as d Aon A17-2 20 6Ai AtheA ointApre en eAo AtheA hief AMini ter,AHayan Aan Athe A nion AMin ste AforAPanchyat ict AA15Adepart ent AhadAi suedAosh AAAdeleg ting Ap we sAtoAPancha ats AA AAnoAacti ity- Ama pin Ahas AAAAAatte pt dAi AtheAf rmal A odelAm AA AAasAsugg st dAb Athe AMin st AAAAAPanch yatiectsAAct vity Ama pin Ahas beenAcomp et dAinAre pe tAo Aa l A29A te sAinAA gustA 003,Afol ow dAby Adevol ti nAofA undsAth oug AtheA tateAB dg t Ain AOc oberAects Athe AAct vityAma pin AwasAcomp et dAi fo m ofAa Aresponsib lity Amap ingANo AtheA ta eAis Arevis ting thisAresponsib lityAma pi g Aby Aprep r ngA AnewAact v it y Ama ping Am trix that alsoAc versAMunicipali ies. AU tiedA und AareGuate.AHaj.AAAHimersAAPraj.AAKarn04.AAK141calAGovernTable 4.4 Contd.StateTransfer ofthroughSubjectsLegislationActivity MappingSubjectsunderCoveredLatest Positionbeing devolved to Panchayats for the devolved functions.Activity mapping was undertakenin two stages–first, 7 subjects were covered, with assistance from an NGO, Samarthan. This NGO has now completed Activity Maps for the remaining 16 more matters that have been devolved. These are under discussions with the line departments concerned.There has not been much progress on activity mapping in the State. The State has recently decided to review the progress in this regard.Earlier, Activity mapping of 22 subjects were said to have been completed. However, since these were not operationalised, the state has reviewed matters once again and issued a notification for activity mapping for 16 subjects in January 2006. This is now being operationalised.Activity mapping in progress in respect of 9 subjects has been issued in the joint presence of the Union Minister for Panchayati Raj and the Chief Minister.Madhya23 subjects23 subjectsPradeshMaharashtraManipurOrissa18 subjects22 functions 22 subjects25 subjects7 subjects142Rural Governance4.4 ContC~StattateATra sfredAAthderAALegislionAASubtion ty AActA A A MappingrAof ASuboughectsACoectsAL testAPosar.AAPtionARajats.AAS06.AA amiln abA7 Asubth n A29 Asubkk mA28AfuncNa u A29 Asubec s A12 AsubThe scalA TheA ta e Ai Anow Aundert kingAf sAtoA devol ti nAt AtheAPanch yat Aand ai cialA com let Athe sa eAb Athe i nextAfna are cts A AA raftAact vityAma pin Ahas beenApre ion.A fo AallAdepart en s in AaAdet iledAfas ak nA Signiicant wo k Ais A eingAunder AandA inAce tainAse tors su h Aas AH alt ssed Educa io .ATheAm tri Ahas beenAdisc Aa dA wit Athe AMin st yAofAPanch yat ARaisA ead AforiAnotifcect AThe Aactivity-ma ping Aexe cis AwasAst rte Af rA18Adepart ent Aan Aha Anow been Acomp ete Afo A 2.AAACa i ne t Asub-comm tte AwasAc onsti u t dAinAA gust 20 4Ato Areco mendAmea ur sAtoAstren then A RIs AIts Ar portArecom ends full Adevol ti n Aby A 007, whe AtheAEle enth PlanAstonsAAAct vity Ama pin Ahas Ast rte Aa dAisAexp ct d A oAbe Aanno nc d AinAOc oberActsAA amil Nadu Ac ai s Ato haveAi suedAinstruc ion Afor Adevo vin AallAsub ec sAtoAPanch yat ARa Abut A heseAr ma nAonAp per. ASub ectsArel ti gAtoA uralAr ads, A ater Asu ply, Asanit tio Aand A143144LocalAGovernan e.4 Co ntd~StateveredunderAALegiitionAASStateAT anlationAAvityAAferAofAShrougbjectsbjects LatestAPUnion Territories:Dadra andNagarHaveli29 subjectsWest BengalTripuraUttarUttarakhandPradesh29 subjects29 subjects12 subjects14 subjectshousing schemes are now being taken up for discussion in respect of activity mapping.In 1994 orders were issued for devolving 21 subjects. With respect to8 subjects, orders are awaited because of operational problems related to the 6th Schedule. The activity mapping exercise is underway.Activity mapping was completed inrespect of 32 departments as part of the recommendations of a committee (Bholanath Tiwari report). However, this report has not been implemented.Activity mapping in respect of9 departments has been completed and is under consideration of the Government.Activity mapping has been completed and orders issued in respect of 15 subjects on 7.11.2005.Activity mapping has been completedin respect of all 29 matters in theEleventh Schedule throughamendments to the Dadra and Nagar Haveli Village Panchayat21 subjects9 subjects15 subjects29 subjectsRural GovernanceTabl A4. AContd.Source ABase Ao AMid-ter AAppraisa A AStat Ao Ath APanchayat A2006-0 A(Vol.I A( .in /mopr%2Dirmapublication2007%2D08/Transfe AoSubjectates APositioStatSubjectCovereAthrougndeLegislatioActivit AMapping1 Asubjectsubject2 Asubject1 Asubjectsubject2 Asubject(Amendment ARegulation A1994 Anotifie Ai A2002ATh AMinistr Ao AHom AAffair Ase AuAth AFinanc ACommissio At Astud Aan Arecommen Afo Adevolutio Ao Apower Aan Afunction At APanchayat AAfte Aapprova Ao Ath AMinistr Ao AHom AAffairs AActivitie Aan AScheme Ahav Abee Atransferre At Ath APanchayat Ai Arespec Ao A1 Asubjects Ai A2001Activit Amappin Aha Abee AcompleteA fo A Asubjects AInclude Ai Athes Aarmarin Afisheries Apovert AalleviatioAprogrammes Adisaste Amanagemen Aan Arura AelectrificationFollowin Ath Avisi Ao Ath AMinisterPanchayat ARa At ALakshadwee AiJanuar A2006 A Atea Afro Ath AMinistr Ao APanchayat ARa Aan AKeral Ahav Acomplete AActivit Amappin Afo th AUT Awhic Aha Asinc Abee Anotiife Ab Ath AAdministrationAActivit Amappin Aha Ano Abee Adone ASinc AChandigar Ai Agoin At Aabsor Ait Avillage int Ath Aurba Aarea AActivit AMappin Aha Abee Adeeme At Ab AunnecessaryDamaAan ADindamaAanNicobaIslandLakshadweeIslandChandigar145Local Governance4.2.1.6 The key objective of Article 243G of the Constitution is to ensure that Panchayats at all levels function as institutions of self-government rather than as implementing agencies. This is to be done through devolution of functions, funds and functionaries. This exercise has to cover the entire range of subjects as mentioned in the Eleventh Schedule of the Constitution. Most of the States have already assigned a majority of the important subjects to the Panchayats. Some of the States have even gone to the extent of devolving all the 29 subjects through the State Act itself. But, in practice such transfers have remained incomplete. Firstly, there has been lack of rational thinking as to which of the disaggregated activities, based on considerations of economies of scale, efficiency, capacity, enforceability and proximity, ought to be devolved. This has led to overlapping jurisdiction of different tiers of government. This situation seriously undermines accountability. Secondly, in many cases, while States assign responsibilities to local governments, they leave the performance of key activities and sub-activities necessary to deliver such devolved services with State line agencies.4.2.2 Basic Principles of Devolution4.2.2.1 The above account shows that the constitutional design of democratic decentralization has not yet been put into practice. Starting from the premise that a Panchayat is the local government closest to the people, enjoying financial and functional autonomy, the devolution exercise has to proceed on the following key principles:(i)There should be exclusive functional jurisdiction or an independent sphereof action for each level of the Panchayat. The State Government should not exercise any control over this sphere, except giving general guidance. If any activity within this sphere is presently performed by any line department of the State Government, then that department should cease to perform the activity after devolution.(ii) There may be spheres of activity where the State Government and the Panchayats would work as equal partners.(iii) There may also be a sphere where Panchayat Institutions would act as agencies for implementing Union or State Government schemes/programmes. (The difference between the partnership mode and agency mode of functioning is that the scope of independence in discharging responsibility is more in the former case compared to the other).Among the above three spheres, the first two should predominate. The agency functions as in (iii) should not be allowed to overshadow the other two spheres of the action, where the local government institutions will have autonomy.146Rural GovernancePanchayat t (iv) Panch ya Aa AeachAlevel is an Ain titutionAof local gover ment.A en e thereAcannot be AaAhierarc icalAre a ionshi Abetw enAaAhigh rAl vel Panch yatAa dAitsAlowerAleve l counterp rt.4.2.3AActiv ty AMappi gunitsAof Aw rk AandA 4.2.3. AActi ity AMappin AmeansAu bund ingAsub ectsA nt Asma ler greg tio Ap ocessA th reaft rAass gn ng Athese unitsA o A ifferentAlev ls AhisAdisafAgovernment. A arr nged. ASchem sA eed Anot Ab luenced by AthAu dul AinAw y Abudge Ait ms Aor Asch mes Aarever l Aactiv ti s.A may A pe ific lly Arela e A o Aone Aactivity A r A ub-ac ivities, or might Ac mprise Aof As An activity, A uchA This Amap ing A f A ctiv ti s Amust A e Adone Aon certain Aobj ct ve Aprinci les. it ms Ab t A t Am stA as Abe efic a y Aselectio Afo Aa Ap ogramme, can Aspferent budn Adiet linebe Aapplied to the be A one Aa At e Al west Alevel A f Athe APa chayats. AD fferent ya dsticks ca not assi nmentAof th A ame Aactivit Aon AaAsche m e- is Abas s.ional se tor AtoAaA 4. .3 2ATheAfirs Astep Ai AActi it AM ppingAwo ldAb AtoAunbund e Aeach fu c cA ducationA ou dA level ofAd sa gregationA hatA sAconsisten Awi hAdevolut on.AF rAinstanc ,Abas epairingA chools,A b Aunbundled toAs bA ctivitiesA uchAasAmo itoringAtea hers’ Aatt ndance,Aight be Au bundledpr curing Aequ pm nt, Ar cruiting A r Afir ng Ateachers, etc. A or icultureA ,Ap oviding Ap iceA into Aseed supply,Anur eriesApro uction,Atec nica Aassista ce,ApestA ontroed activitie AcanA andAmar eti g Ain ormationAa d ApostA arve ting supportAe c.ATheseAun und ning,A(ii )AAs etA e Ac assifiedAun er fiveAcate ori s AasAfo lows:A(i) A etti g Astandar s,A(i )APla creation, A( v)A mplementati nAa dAManageme t,A v)AMonitoringAand A valu tion.th mAtoAtheAt ersA 4.2.3 3AO ceAactivit es A reAu bund ed At eAnext step is to Aa si nAe ch AofuchAas economyAofA o APan hayat Aw ere A heyAcould be AmostAeffiientlyA erfo me . AFacto sAro ess.A cono ie A s ale,Ae ter ality, Aequity andA eter g neity will pl yAaA ajorArol Ain AthisA nversely Ai Asome of A cal Atend At ApushAt eAserv ceAtow rd AhigherAlev ls Aof Agover me t.AC ownAt Ath AlowestA activit Ai AscaleAneutral A nA mpl me tation,Ait ma Abe A re erab eA oAp shAitA pe. So e Aserv ce A level Af r Aimple entatio . A los ly Are at d Ais Athe A ss e Aof Ae onom esAofAscrnm nt to Ap ovid A may beAl nked A nA aysA hatAmak sAi Amo eAeffiie tAforAoneA ie AofAgovAofAm lti Avi lageA allAofAth mAmo e Aefficie tly, Awhen b ndle Atogeth r. AAgo d A xampl Ais Atha ernm nt A(suchAasA wate Asupp yAp oj cts,Awh ch canAbe manag dAbyA igherAlevel local go Ps Aor Aundertak n A yAass ciationsAof lo al Agovernme tsA rA ontracti gAoutAtoAr gi na Aprovide s.AIfAa Aa tivi yAimpa ts Aa Aar a AlargerAtha At e juris ictio Aof A Aloc lAbody,Ath nAsuc Aa ti itiesAough At A eAunde takenA tAa higherAle el.AForA nstance Aep de ic control ha A rAtransce ds AGramA o Abe Am naged at Aa high rAlevelAtha AGramAP nch yats, A ecauseAthe vect er ake Aeffici ntlyA Pan hayatAbou d ries.ASome imesAa Ap rti ul r Aacti ityAcanAbe indeedAuna Ath Alo al level,AandAhas noA xt rna ities, Abu Ai Athe Ain e estsAof equityh147GovernanceLocalpattern across jurisdictions is desirable. Such activities, for the purposes of equity, have to be dealt with at a higher level. The more heterogeneous the nuances of the activity, the lower down it ought to be performed. For instance, the contents of mid-day meals varies widely across States, because of local food habits. Therefore, it is better performed at the lowest level.4.2.3.4 Public accountability is another important factor which guides where an activity ought to be slotted. The following questions are relevant in this regard:(i)Is the activity discretionary? If so, it is best performed lower down, to enabletransparency.(ii) Is it transaction intensive? If so, again it is best performed lower down.(iii) Who can best judge performance? If performance appraisal requires technical skills, then it could be pushed higher up.4.2.3.5 The World Bank document on “India- Inclusive Growth and Service delivery” suggests three important conclusions on rural service delivery once the activities have been properly delineated at appropriate levels. These are as follows:(i) The same tier of government should not be responsible for operation and for (all) monitoring and evaluation.(ii) The capability and commitment of higher tiers of government to set standards for outputs and goals for outcomes and to monitor performance and evaluate the impact of alternatives should be strengthened by decentralization.(iii) There is enormous scope for increasing local control of asset creation and operation.4.2.3.6 The Union Government has significant influence on the devolution of functions and funds upon Panchayats, because of the large fiscal transfers it undertakes to States in the functional domain of the Panchayats, mainly through Centrally Sponsored Schemes and Additional Central Assistance (ACAs). The Ministry of Panchayati Raj has been examining guidelines of old and new Centrally Sponsored Schemes and suggesting changes to make them compatible with the functional assignment to Panchayats. However, at the conceptual stage itself, Ministries will need to undertake Activity Mapping delineating what is to be done at the Union, State and Panchayat levels.4.2.3.7 Activity Mapping can become a trigger for ensuring that Panchayats are on a sound footing. When Panchayats are assigned clear tasks, devolved funds and made accountable for their performance of these newly assigned responsibilities, they have a big incentive to demand the capacity required for effective performance. Thus role clarity catalyses capacity building from being supply driven to demand driven, which is a huge benefit. Empowered148Rural GovernancePanchayats with toA lsoA emandA ancha ats Aw th Aclear rolesAa signedAt rough Aa tivit Amapp ng woul Abegin urAapprop f ia eA th Ast fArequir dAforAeffecti e Aperfor ance.AThe eforeAa tiv tyAm ppingAcanAs placement Ao Afu ctiona iesAfor betterAservic eAd li ery.tateAan AUnio A 4 2. .8AInA rder At AensureAsm ot Acomplet onAofAa ti ityA appin Aat bothA exer is .ACar l v A ls,A he eAisA AneedAtoAavoidAm sun erstandingAandAmi in erp etationAo Athe ofAthe Asp il ’A m stAbe takenAto avoid Aa ti it Ama pingAt AbeA(a)Ae th r construe Aa AaA sharing ing approa hese er ise,AorA b)AanAexerciseA dise powering’Ali e A epartment .ATheAfollo mayAdispel an Amis ivingsAnAtisAregard:ayatsAand AL A neAi)AUndert kingAextensiv Aparticip to y Aexe cises AtoAb ing Panc tiesAsho ld beA depar me tsAtog th r to Aarrive at aA onse susAas AtoA hatAac ivto AP nchayatsdevolved AamongAdiferen (ii) AEnsuriAgA ran parency inA heAprocess andAde elopi g f Atrustsstak holders,tAsubject A(i AforA i)A onsidering th Acapacities ofAPanchayat , f Apriori isingAdi ereivit Amappi g,ste -wiseAacAreport, (iv) AwhA leA AS ri tAa herenceAt Athe Aobjec ive Aprinc pl sAde cribed A nAthi ivi yAmapping,pproac in AtheAmat erAofAaccit Abuildin A ,A (v) Simulta eously Al nkingAa tivi yAm pping Aw th (a) Amapp ngAofAcap hatAth reAis AaA (b) Afinanci lAr qui ementsAandA(c) administrativ Ar quir ments As Arati nalised,Asm oth transiti n AandAa tiv ty mappingAcan be AimmediatelyAoiv tyAmappingA i) A( A ncourag ng forAreason AofAstabili y,Alegis ati eAsancti nAforAac byAevent al yA nclu in Ait asApartAof A he law.Acompreh nsiveA 4.2.3. AThAC mmi sion isAo AtheA iewAt at Aeve yASt te should AtakeAucheduleAof Ath A a tivi yAmapp ng wit Aregard to Athe Ama te sAm ntionedA n AtheAEl ve thA ag aphs sh uldA Cons ituti n. Whi e Adoing Aso the Aprinc pl sAd scussed Ai AtheAprece ingApaan At erefore,A b Ak ptAinAmi d.AThAp ogr ss made soAf r A nAt isAa eaAis AfarAfr mAs tisfactoryle e this workA tAis desi ableA hat Aea hAStateAsh u d Aconst tute aAspe ia AtaskAfo ce At Acom ens velyAcar yA nAaAtim AboundAman er. Simil rly, Athe AU ionA inis ries wi l Aalso Aneed toAin ityAonAfags out Aa tiv ty A app ng AforAal Athe ACent ally ASp nsor d AScheme Aw th l ApriohipAprog ammes.4.2.3.10ARco mendat ons: a. AStates must Aundertak Acompreh nsiveAa tivi yAmapp ngwit Are ardAtoAllAthe Ama te sAm ntionedA n AtheAEle ent ASchedu e. AThis149LocalAGovernancecover all aspects of the subject viz planning, budgeting and provisioning of finances. The State Government should set-up a task force to complete this work within one year.b. The Union Government will also need to take similar action with regard to Centrally Sponsored Schemes.4.2.4 Devolving Regulatory Functions to the Panchayats4.2.4.1 Since Panchayats are an integral part of the government at the local level, their activities cannot be confined solely to development programmes. If public convenience and effective enforcement of a law or regulation warrants decentralization of regulatory functions, it would be most appropriate to devolve such functions to the local bodies. There are many areas where the rationale for devolving regulatory powers to the local governments is very strong. To begin with tasks like issuing birth, death, caste and residence certificates, enforcing building byelaws, issuing of voter identity cards, enforcing regulations pertaining to weights and measures would be better performed by local governments. The Commission in its report on Public Order – para 5.15 – stressed the importance of community policing in creating an environment which enhances community safety and security. The Gram Panchayats can play an effective role in community policing because of their close proximity with the people. In most of the developed countries, policing is a municipal job and there is no reason why it should not be so in India. The process of democratic decentralization cannot be complete without the gradual transfer of the functions and powers of the village police from the State Government officials in the village to the Village Panchayats. In due course, with the implementation of the reforms suggested in this Report, the PRIs would be in a position to efficiently handle many more such functions. Therefore, regulatory functions which can be devolved to the Panchayats should be identified and devolved on a continuous basis.4.2.4.2 Recommendations:a.Rural policing, enforcement of building byelaws, issue of birth, death,caste and residence certificates, issue of voter identity cards, enforcement of regulations pertaining to weights and measures are some of the regulatory functions which should be entrusted to Panchayats. Panchayats may also be empowered to manage small endowments and charities. This could be done by suitably modifying the laws relating to charitable endowments.150Rural Governanceb. AR gulat ryA un tions Awhi hA anA eAperforme Aby AthP nchayatsA hou dAiebeAide ti AandAdevol edAonaAc ntinuousA asis.4.3APan hayatA inance4.3.1AFiscalADece t alisa ionA24 C A24 D, A 4 E,A 4.3. .1 AAma or po tio AofAPartAIX A fAtheACo stitutio Acove ing AA ticle eArea As reng hAinA 24 AG Aa d A243AKAde ls AwithAstr ct ral empo erm nt A fAth APRIs Abu At Aon Athei AfinancialA ter sAo Aboth Aau on my Aan Aefficiency Aof th se Ainstit ti nsAis dependen ositi nA(inclu in AtheirAc pac ty AtoAgener te ownAreso rces).AInA en ral APancha atsAinA urAco nt yAr ceiveAfun sAinAhAfollo ingA ays A–AGr ntsAfrom At e AUni n A ove nmentAbasedAonA he recmmendat onsAofA heACentral Fi anc ACommis ion as per ArticleA280AftheAConsti utio mmend tionsAo AtheA – AA evolu ionAfrom At e ASta e A ove nment AbasedAonA he recAer AArticleA2 3AIState Fi anc ACommis ion aeStateAGovernment A ALo ns/gr ntsAfromAtnsoredASch mesAand – Programme-Apecif c Aallocat on Aunder A entrall ASp AdditionalCntralAAs istanceA AInternal A esou ce A eneration(tax Aa dAnon- ax) 4.3.1.2, cross A heAc unt y,ASt tes Ahave notAgiven ad iquate attentionAtAf cal empowermentof th APancha ats. It AisAe ide tAf om A igur sA4.2 AandA4 3At atAPancha ats AownAre ourcesA eAconsidere At Abe reAmeagre AKe ala, A arna aka and TamilA adu Aa eAt eAstatesAw ic Aa avilyAdepe dentAon progressive inA RIAe powerm ntA utAevenAth re, theAPan hayatsAar Ah gov rnm ntAg ant .AOneAcan drawA he AfollowingA road Acon lusions: a at ev lisw ak. ~Internal~ es urc ~generati nat he Panchhts ~ownreluc anceT~ s isp rtl ~duet ~a hinta ~do ai ~andpartly due toPanchayo lectingAre enu in .A A~ t om te Union~and?Pan hayatsar ~h avily epen ento ~gr ntsfGo ernment .~S ateGo ernments ? Am jorpo tion oft egra ts both fr mU iona ~wellasthilityAinAinc ic.APancisAschemeA peciayatsAhave lim ted l Adiscre io AandAfexie.151ocal AGovernance?In view of their own tight fiscal position, State Governments are not keen to devolve funds to Panchayats.?In most of the critical Eleventh Schedule matters like primary education, healthcare, water supply, sanitation and minor irrigation even now, it is the State Government which is directly responsible for implementation of these programmes and hence expenditure. Overall, a situation has been created where Panchayats have responsibility but grossly inadequate resources.4.3.1.3 For fiscal decentralization to be effective, finances should match expenditure assignments related to the transferred activities. This calls for a two fold approach – first demarcation of a fiscal domain for PRIs to tap resources directly both Tax and Non-tax and second devolution of funds from the Union and State Governments.4.3.1.4 In the Indian context, the concept and practice of local government taxation have not progressed much since the early days of the British rule. Most of the revenue accrual comes from taxation of property and profession with minor supplement coming from non-tax receipts like rent from property and fees for services. It is high time that a national consensus emerges on broadening and deepening the revenue base of local governments. The Commission is of the view that a comprehensive exercise needs to be taken up in this sector on a priority basis. The exercise will have to simultaneously look into four major aspects of resource mobilisation viz. (i) potential for taxation (ii) fixation of realistic tax152Rural Governancerates th AtermsA r tesA(iii Aw den ngAo Ata Abas AandA(iv Aimproved Ac lle tion. Thi Aco ld be A ne Aof of ref ren eAfor Athe Thirteen h AFinanceACom m i s s i n.sAaAmajor 4.3.1.5A ev lutio AofA und AfromA heAhi he Ati rsAofAtheA overn e tAfor co pon ntAof AtheAP nchayat’s A esourc s. AIssues regarding A ev lutio Aof fundsAandAf nc ioni g Aof SFCs Aha e Aal eadyAbee Ae amined A n Ch pter 3AofAthisARe ort 4.3.2AOw AResourceGen era t onovernment 4.3. .1 Though,Ai Aabsol te A erms,At e A uantu Aof fundsAtheAU ion/StateA tr n fersAtoAa Panch yat forms the Amajor co pon nt Aof Ait Are eipt, the PRI’sAow AresourceA ur es; itA en rat on Ai Athe As ulA ehindAit Afinancial st nd ng. ItAi A otAonly A Aq estionAofA es he affirsA isAthe ex s enceA fAaAloca Ataxat on Asy tem Awhi h Aensure Apeople’sAi vo vem nt AinAof A n Aele te Abod . AIt A lso makesAthe Ai stitution Aa co nta le AtoAitsAcitize s. vely Ai AaA .3.2. AI Ate ms Aof Aow Aresource Ac lle tion Athe AGram A anch yats Aare, Acom ar t tiers Aare bette Apositi n Abe ause t ey A ave Aa A ax domai Aof A heir A wn, while the other two depe de tAonly on At lls AfeesAa dAnon-t xAr venueAfor A eneratin Ainternal A1534.3.2.3 The taxation power of the Panchayats essentially flow from Article 243 H which reads as follows:“the Legislature of a State may, by law?authorise a Panchayat to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits;?assign to a Panchayat such taxes, duties, tolls and fees levied and collected by the State Government for such purposes and subject to such conditions and limits;?provide for making such grants-in-aid to the Panchayats from the Consolidated Fund of the State; and?provide for constitution of such funds for crediting all moneys received, respectively, by or on behalf of the Panchayats and also for the withdrawal of such moneys therefrom as may be specified in the law.”Loca AGov rnance4.3.2.4 State Panchayati Raj Acts have given most of the taxation powers to Village Panchayats. The revenue domain of the intermediate and District Panchayats (both tax as well as non-tax) has been kept much smaller and remains confined o secondary areas like ferry services, markets, water and conservancy services, registration of vehicles, cess on stamp duty and a few others.ionAofAVil Box:A ag .1: AA i AIncome-wi eA lassifctsAinATa ilANad Pan haya (A e ageAi comeofA3Aye rs fromA2003-04At A2005- 6)Sl.o. A nc meARangANo Aof AVilageA(InARu12A503.A15 l kh A7,424. A5–A0 A a hs 3,181. A10–A5 A a hs 1,489.A25AA5 llakh A 5 7.A50Aak89boveAAcror eATot lA12,6 8rnmen AofAT milA Sou ce:APoli yANoteA200 -0 , AGov d APnchayat Nadu,AR ral Developme t RajAaDepartment4.3.2.5 A study of various State Legislations indicates that a number of taxes, duties, tolls and fees come under the jurisdiction of the Village Panchayats. These interalia include octroi, property/house tax, profession tax, land tax/cess, taxes/tolls on vehicles, entertainment tax/fees, license fees, tax on non-agriculture land, fee on registration of cattle, sanitation/drainage/conservancy tax, water rate/ tax, lighting rate/tax, education cess and tax on fairs and festivals.p es) Pa chayas.Ap Ato A 0 0 A1000AA A akhA18–hs– 1 c oresA0.AA– A3A r reA24sA2154Rural Governance4.3.3 AExp oringAAddi ionalAS ur esAofAReve n u eur esA 4 3. .1AIn or er Ato widen the r Ata Aba e Ath APRI Awil An edAto Ae ploreAaddi ionalAs AlikeA ofAre en e.ATheA ndian Ae ono yAha Adon AwellA uri g Ath Apa tAfew A ears. AS ctor hAha A tran port, At uri m AandAinfrastr ctur Ahave grownArema kab y andA Ap rt Ao AthisA row ar asA also Aperc la ed A oAthe rural As ctor. Rural A odie An ed At Alook A eyo dAthe Atradi ional ctorsA of lan s AandAbui din sAandAa gment theirAres ur es AbyAope at ngAin newlyAem rgingAs ties,A t roughAinno ative Atax/n n-taxAme sure Ae. . A ee Aon At uristAveh cles,As ecialAamen it onA resta rant,Ath atre, cybe Acaf Aetc. Amo gAthe Acla sical it msA fAtax Acoll c ion A–Aimpo table of Aprof ssio Atax, A attle Aregist ati nAf eAandAv hicle Aregist ati nAf eAa eAthe threeAn toAb A areas whic Aha eAno AbeenAexp oitedAopt ma lyA yAtheAPanch ya s.ATheAPanc ayat An edmentsA more Aimagi ati eAandAass rt veAin At ppin AsuchAreso rc s. AThAr leA f Athe StateAGoverAlevy ho ld AbeAl mi edAtoApresc ibin Afloor rat s Afo Asuch tax s Aand Al vi s,As AthatAPanc ayat these ta e AatAa Area istic Arate.ationA 4 3.3. AM st A f Athe Stat AAct Avest APanc ayat Awith A ublic Aprop rtie As chAasAirri arg sA so rces, ferry A hats, waste land,Acom unity A ands,Aor har sAand A airs.AV hicle standAc iv lyA and Amarket/sho /car Afe s Aar As me A f Athe other As ctors whic An ed toAbe A apped f Aefec ho ldA y Athe PRIs AThu ,Aall A ommon Apr pertyAres urces A es ed A nAtheAV llage APanc ayatsAbeAide tifidAan AmadeAprod cti eAforAr venueAgenerati o n .ommonA 4 3.3.3 Apar Afrom Aexp ori gAnew are sAforAtaxation/ evi s AandAprod cti e A se AofA rtantA prope ties,Agra ual yAthe APanc ayats co ld AbeAenco ra edAtoA anag AsomeAimp tsAt A util tie .AThi Awi lAno AonlyA nsureA etterAs rviceAde ive yAbu Awil AalsoA ropelAPanc ay larlyA mak Asome proitAandAge erateAaddi ionalAr ven eAforAthems lve .AThis wo ldAbeApartic lAthe re eva tAf r AtheA igher ti rsAof APanch yats.AAccord ng y, A t Athe bl ckAorAdi trict lev yAand localA odies co ldAbeAenco ra edAtoA anageAuti itie As chAasAtran port, waterA upp arg sA powerAdistri ut o AonAaAcomm rcial A asi .AThe Awil An ed AtoAc llectArea isti AuserAc f r Aal AsuchAservic e s .sAandA 4 3. .4ATheAr yal y Aand otherA ncom AfromAmi eral As ch Aa Adead rent, fees Ace co ntA sur ha g Ais Aa majorA ou ceAofAr ven eAf r Athe StateAGover me t.ATheAr ve ueAonAadAandA of Ar yal y Afor majorAmi er lsAi Afied A yAthe UnionAGove nme t A nd AisAcol ectAhaveA re ai ed A y Athe StateAGovern en s.A nAth Ac se Aof minorAmin rals, StateAGover ment ymen A ower Ab th toA ixAand Ac llectAr yal yAan Adead rent. AConcep uallyAr ya t AisAaAp nsu eA m deA y AtheA ining A es eeA o Athe St te Aas Al ss r. It AisAc arg dAfor Al tti gAthe A esseeAc for ,A theA ealthAbel ng ng A oAthe A essor whe eAtheA ealt AgetsAde lete Aover h time.ATer the localAcom unity Arepre en ed A yAthe local APan hayatA houl Ahave prime righ Aov155Local Governanceincome from royalty accrued to the State Government for mining in that area. Equally important is the fact that the financial, ecological and health impact of mining activities is felt maximum in areas where such mines are located and hence the local inhabitants must be adequately compensated. State Finance Commissions should bear this in mind while finalising devolution of grants to the rural local bodies.4.3.3.5 Apart from allocating substantial share of royalty to the local bodies, the State Government may also consider empowering them to levy local cess on the royalty so accrued to the State Government. Some States like Tamil Nadu and Karnataka have such provisions in their Panchayati Raj Acts. In terms of Section167 of the Tamil Nadu Panchayat Act, 1994 “There shall be levied in every Panchayat development block, a local cess at the rate of one rupee on every rupee of land revenue payable to the Government in respect of any land for every fasli.Explanation: In this Section and in Section 168, “land revenue” means public revenue due on land and includes water cess payable to the Government for water supplied or used for the irrigation of land, royalty, lease amount or other sum payable to the Government in respect of land held direct from the Government on lease or licence, but does not include any other cess or the surcharge payable under Section 168, provided that land revenue remitted shall not be deemed to be land revenue payable for the purpose of this section.”Box: 4.2 : Royalty Accruals on Minerals in States with Significant Mining Activities(Rs. in Crores)State2002-032003-042004-05Chhattisgarh552.36637.17694.61Jharkhand797.65900.16916.2Karnataka83.89143.62210.94Madhya Pradesh590.69646.71733.72Orissa440.57547.2663.61Rajasthan399.68457.96589.79Maharashtra400.69475.96568.24Gujarat172.63217.90238.95Kerala1.6310.4512.61Goa14.8117.8717.44Tamil Nadu297.34324.5324.82Total Royalty Collection156Rural GovernanceBox: 4.2 Contd.State2002-032003-042004-05AndhAn hraAPraesh A76.93 A76.56A8 64.53Uttarakand A2.55 A3.65A35.6U tarAPraesh A26.42 A25.18A291.94Harana A11.08 A7.77A92.50Asam A.36 A1.64A13.36Sou ce:ARe or Aof theA ighAl vel Acommi teeAconstit te Aby the APlan ing ACommis io AonANati nalAMin ralAPo i yA–ADece berA200 6 .4.3 3. AInAaddi io Ato Ac ss, theAT milA adu ActA lsoAcont insAprovi ion for Aimposi io AofAlcalA oseA essAsurcha ge ATheACommis io Ai Aof theA iewA hat theAS ateAGovernme ts,Aparticul rlyAtrg A ha ingAsignifiantAmi ingAactivi ies may Aexp ore Apossibili ies for Aimposi io AofAcess/surchmy,A by theAl calAbo ie AonAroy ltyAcolle ted A rom the Ami es.A ith Aliberalisa io Aof theAecon ys,A r ralAa eas are Aope in Aup forAinfrastruc ureAdevelop entA uc AasAconstruc io AofAhighw i eA bri ges andAwareho ses andAerec io AofAp werAstati ns ATheAS ateAGovernm nts Ash uldAde herA a wa AsoA hat theAPancha ats g t AaA ar AofAearn ngs A romA uch Aventu es.AMi ing andAo herA infrastruct ralAactivi iesAc useAh avyA ear andA ea Aof the Aexis ingAfacilit es.AR ads andAo atsA sys emsA eed Agre terAmaintena ce ATheACommis io Ai Aof theA iewA hat theAl calAPanchash ul Abe Aempow re Ato Acol ectAadditional/spe ialAsurch rge A romA uchAactivities .4 3.4AIncentivi ingABe terAPerforman c ecalA 4.3 4.1 On Aof the Aeffec ive and A air At ol Ato Aimp ove Arev nue Acollec io Aof the Al us A bo ie Ai Ato Aincenti ise At eir Aeffo ts. APancha ats Aw ich A ave As own Aposi ive Ares lts A andA be Asuit bly Arewar ed. This ca Abe A on Aby Alin ing the AU ion AFin nce ACommis ion mayA S ate AFin nce ACommis ion Agr nt Ato At eir own Arev nue Agenera ion Aeffo ts. ASt tes edAA lso Apro oteAPancha at Ato Acol ectArev nu AbyAprovi ing Ab nusApaym nt AatAsipec ionA pre-annou cedAr te Ato APancha ats Aw ichA ave Ademonstr ted Aexemp aryAcollec AtoA performa ce.AHowe er, Aw ileAincentivi ingAbe terAperforma ce Ai AisAequ lly Aimpor an ion in tilA omeA in AofAfi calAresponsibi ityAmecha ismA ike theAsy temA hatAex stsAbet eenAU tedA and theAS ateAGovernm nt.A here areA omeASt tesAw ichA aveAencour ged andAsuppo wed t eir A RI Ain Aexplo ing newAa ea AofAtaxa ion and At ere are Aot ers Aw ichA ave notAsh uchA any Ainitiat ve.A her A s AaAst ong A as AtoA ive A omeA in AofAincen iv Ato the AirstAcateg ry.A hasA incentivisa ionA il Ain dueAco rse A lsoAmoti ate Aoth rs ATheAMini tr Aof APancha ati Raj evo v dAaAPancha ats AEmpower ent andAAccountabi ity A undA(P AF AtoAincenti iseothATotal Royalty Collection157Local Governanceempowerment of the Panchayats by the States, on the one hand, and accountability on the part of the Panchayats to Gram/Ward Sabhas on the other.4.3.5 Resource Generation by Higher Tiers of Panchayats4.3.5.1 As already observed, in most States it is the Gram Panchayat which is primarily endowed with tax and non-tax revenue raising powers. In the field of tax revenue, only a few insignificant tax items have been kept with Intermediate Panchayats and Zila Parishads. In Orissa, all taxation powers lie exclusively with the Village Panchayat. The Rajasthan Panchayati Raj Act assigns some taxation powers to the Intermediate Panchayat Samiti but this power is limited only to a few select items like the Panchayat samiti tax on land rent, vikas tax and education cess. The Zila Parishad in Rajasthan can levy a surcharge on the sale of land in rural areas and surcharge on market fee. In Madhya Pradesh, taxes levied by the Intermediate Panchayats are the business tax and entertainment tax, whereas the Zila Parishads do not have any taxation powers. The Bihar Panchayati Raj Act gives powers to the Zila Parishads to levy fees on registration of boats/ vehicles, on sanitary arrangement in fairs etc., on public street lighting and toll on ferries and Panchayat Samitis hold concurrent powers in exactly the same areas of taxation.4.3.5.2 The Commission is of the opinion that Village Panchayats must have primary authority over taxation within the tax domain assigned to PRIs. However, where a unit of assessment for imposition of taxes is larger or such taxation has inter-Panchayat ramifications, the higher formations – Intermediate Panchayat and Zila Parishad should be given concurrent powers subject to a prescribed ceiling. Running of small power projects, large scale mining activities, ferry services on a large river, are some of the areas which could be subjected to taxation by higher tiers. However, whenever a tax/fee is imposed by either the Zila Parishad or Intermediate Panchayat, such tax or fee should be collected by the concerned Village Panchayats as if it were a tax or fee imposed by them.158Rural Governance.3.5.3ARecommend ti n :ngAandA a. AAAcompreAensiveAe ercis An ed AtoAb At kenAupAre ardingAbro denlA aveA de pe ing ofAtheA even eA aseAo Alocal Agover men s.AThisAe erci eAwi nAv z.A toAsimulta eous yAlo kAin oAfou AmajorA sp cts AofAr sourceAmobil sati ing ofA (i)Apo ent alAforAt xati n A(ii) Aixa ionAofAre lis icAta Arate A(iii)Aw de eA his t xAb seAa d A(iv)Ai provedAcoll ction. AGov rnm ntAmayAinco pora as one ofAth At rmsAofAre er nce ofAtheAThi teenthA inanceAComm ss on. uld b. AbeA AAll commonAp opertyAre ources ve ted inAtheA illageAPan hayats sh ide tified, lis edAa d AmadeApro uct veAforA evenueAgene at on.Ac AStateAGove nments sh uld byAlaw exp ndA he Atax do ainAofAPanc ayats.ASimulta eo sly Ait sh uldA e AmadeAobl gat ry A orAtheAPan ha atsA oAlev At xesA nAt is AtaxAomin manageA d. AtAthe higher levAl, Ath Alocal bodie Ac uldAbeAenc ur ged A o Arun/AsoundA ut liti sA uchAas Atra sport Awater sup lyAan Apower Adistr bu i n AonAfiancia Aba isAandAviail tyionAofA e. ATheAeApan edAtax domai AcouldAin eraliaA nclude le iesAonAregis ra attle,Aresta rants Alarge shops, A otels,Acyb rca és AandA ouris AbussA tcheAandAo A A f.A oleAo AStateAGove nments sh uldAbeA im tedAtoApres r bing a ra esAfo Athes Ata esAandAev es.neralsAA .APRIs sh uldAb A ivenAaAsubs antia As are inAtheA oyal y AfromAm red byA co le ted byAth AStateAGove nme t.AThis aspect sh uld AbeAcon id t eASFC AwhileArecom ending gr nts toAthP Is.Ah AState AGove nments shouldAc nsiderAemp wer ngAt eA RIsAtoA olle tA ess onAtheA oyal y Afrom miningAacti it es.AIn Aa diti nAthey shou dA lsoAb Agive Ap wer Ato imp seAandA ollectAadditional/ pecialAsu char eAfr mAsuchAact vitiesA(mines/minerals/ pans).Ai.AInn vativ Astep At ken byAthe Sta esA ndAt eA RIsAtoA ugmen AtheirAreourc sA ustAbeAr wa dedAbyA inkingA entralA inance ACom iss onAan AStateA inance ACom ission gr ntsA oAsuchAme sures. Sta esAmay reward betterAper ormi gAPRIsA hroughA pecialAincentives.159Local Governancej.In the tax domain assigned to PRIs, Pillage Panchayats must haveprimary authority over taxation. However, where such taxation has interPanchayat remifications, the local government institutions at higher levels - Intermediate Panchayat and Zila Parishad could be given concurrent powers subject to a ceiling. Whenever a tax/fee is imposed by the higher tier, such taxes should be collected by the concerned Village Panchayats.4.3.6 Transparency/Transfer/Allocation of Funds4.3.6.1 With regard to devolution of funds to the local bodies from higher tiers of government, the Commission holds the view that such transfers need to be unconditional so that the PRIs are able to take care of the local priorities. The approximate quantum of funds to be transferred for a block of five years should be indicated to the local bodies in advance so that the Panchayats can set minimum standards for delivery of services and for attainment of certain minimum levels in poverty reduction, education, healthcare etc. for the period of the allocation. This is an enormous task as setting standards and attainment levels and costing them would be intricate and challenging. But such an exercise is necessary for ensuring results-based performance by the PRIs. Funds should be devolved according to a formula and their predictability and assuredness should be ensured through bringing out a separate budget document for transfer of funds to local governments.4.3.6.2 Apart from the quantum of funds devolved to the PRIs and the procedure for its release, it is also important to ensure objectivity and transparency in its allocation. Problems of regional disparity and development of backward areas deserve special attention. The State Finance Commission should try to evolve an index of backwardness for devolution of funds to PRIs. The recommendations of the SFC need to be substantially guided by such a backwardness index. Recommendations in this regard have been made at para 3.5.2.18 of this Report.4.3.6.3 Allocations available to Panchayats are function specific and could be divided into five broad categories (a) livelihood activities like agriculture, land conservation, minor irrigation, animal husbandry, social forestry, small scale industries etc., (b) infrastructure creation like drinking water facility, road, communication etc., (c) social sector activities like education and health, (d) poverty reduction programmes, (e) miscellaneous activities like public distribution, public asset maintenance, rural electrification etc.4.3.6.4 There is a view that one of the essential conditions of the PRIs’ financial empowerment is that they should be given untied funds to meet contingencies and mid-160Rural Governanceterm requterm Arequ r ment . AAAgoodA egi ning hasA ee Amad AinAthis A ir ctionAbyA aun hingAthe sAacr ssA Backwar ARegi nsAG antAFun A(heAscheRGF). Ae Ac versA250 backwardA istricAth oughA thre AS at s. AItAis de igned At Aredress regionalAim alan es;A his fu d A as At AbeAuseAforA( )A th Ap ocessAof district A la ning AThAfundAis in ended At Aprovide financial A eso rcendAilling Aof critiii)Aca AgapsAas A de tified by Aloca Abod es, A(ii) capacity bu lding ofA RIs,AilityAinA forA nlisting Apro essiona As ppo t AbyA he Aloca Ab dies. ATheAP ncha ats l AhaveAf xi ndA uditA el ctionAofAp ogr mmesA ndAtheir Apriori ization,Aiden ifiation AofAben fici riesAand Amo it rin .AIn A llAthese Aac ivi ies, the AG amA ab a A asAto beAfully A nv lve i.AIn rs Aye rAof its Alife 2 06- 7, aAs m Aof Rs. A5 00A rore Awas A ar ark dAin A heAUni nAb dget forAthis proje t,A hich has Abee As ep ed A p Ato Rs. A58 0 A rores AinA2007-0 .hem sAofA 4 3.6.5 AThe AC mm ss onA sAof theA iewAth tAexc pt AmajorA entrally A ponsore AS heAUnion AG ve nment Ao Aspecia ApurposeAp og amm s AofAth AStates,Aal oc tion Ato APR sA xi ilityA ho ldA eAin th AformA fAunt ed fund Aso that the PRIs canA aveAso eA l egreeAofAf jec ivesA inAexp nd ture.AThe Aa locat on Aord rAshoul Acon a n Aonl AaAbriefAde cr ptionAofAo nd tionsA and expected A utco es.AA so AwhileA eleasi gAf nds,At e AStat sAs ould An tAimposeAcofAuti isatio ,Aexc ptAthose Ap es rib dAbyAth AFinanceACommi ss on.Aof AFun s 4.3 7ABudgetA roc dureAand Tr nsfertAhea s, 4.3.7.1 Tr nsfer ofA unds AareA rese tl Amad AtoAP I Aunder a A umberA fAbudg gme tAofA often Ai Ap ckets of AsmallAal otme ts. The e may Abe aAd m ndAforAaAp rticula As tion mayA theAb nefici ry A(e.g AspecialA ompo ent plan Afor Schedu eACas s)AwhereAa loc o eAfrom a A umberAof separa e Abudg t Ahe d .ASuchAaAco plicatedA roc dure AforAa locat onA AdiverseA akes Athe Aa countingAb undariesAc nfus ng. Ev nAforAan auditor, A xami ingAsuc ind xingA al ocation A ecomesA Adiffic lt task.AThe AC mm ss onA sAof theA iew thatAt e Abudget ne ds AtoA andAa countingA roc dure AforAa lo ation of fun s AbyA heAState AG ve nmen Ato AP Is inAtheir beA imp ified and A ade userAandAaudit- ri ndly. ATheAP ncha ats A ls AneedAto maint anchay tA acco ntsAwithAtra sp r ncy at Aa A ow Acost. A herefo e, Athe e A h uld AbeAa separateA rth rAinA se to Ali e AinA heAstat Ab dget. AThe AC mmiss on Aw uldAals Aexa ineAth sAmatte Af i s A eport AonA“Stre gtheningA inancial AM nagementAS y s t e ms .loc tionA 4 3.7.2 The ASta eAbud etAu derA ach Ahe d A houldAb Adiv ded Ainto AS ate-wiseAa pa ate yA andADist ict-wise Aal oc tion. AThe Aa loc tion for Aeach distri t A hould be AshownAs houldAb A in Athe Adist ict-wise Aal ocation. District Aal ocati ns Aunde Avari us Ahea sA can Ahav A brought toget er Aw ich Awi l Aev l eAinto Aa distric Abu get.AThis distri t Ab dgetamountheA161Local Governancei.Control of departments at State level, for valid reasons based on established principlesii.Schemes transferred to the Zila Parishad for executioniii. Devolved funds at the disposal of Panchayats4.3.7.3 The mode of funds transfer to Panchayats from the State Government is also an important issue for effective functioning of the Panchayats. In 2005, the Ministry of Panchayati Raj set up a committee to examine the feasibility of electronic fund transfer to Panchayats. The committee recommended that it was indeed feasible to transfer funds rapidly to approximately 2.4 lakhs Panchayats across the country through banks. In Karnataka, the State Government has created an arrangement involving six nationalized and twelve Grameen banks in which all the 5800 Panchayats of States at all levels hold accounts. As of now in Karnataka, the Twelfth Finance Commission’s fund and the States untied statutory grants to Panchayats go from the Panchayati Raj Department to all the Panchayats through these banks without any intermediary. This arrangement has reduced the maximum time taken for transfer of funds from the State Headquarters to a Panchayat from two months to twelve days. The Ministry of Panchayati Raj has developed a software on this process. State Governments should be encouraged to adopt it and speed up their fund transfer procedure.4.3.7.4 At present, the State Governments do not adhere to a time frame for release of funds to PRIs. Often the allotment is released towards the close of the financial year, leaving very little time to the local bodies to carry out actual work. On many occasions their funds remain undrawn/unspent. The Panchayats have to indulge in a lot of paper work to get these funds revalidated in the next financial year. Such delays are due to the fact that the funds received from the Union Government for specific national schemes become a part of the ‘ways and means’ of the State Government. The State Government should take steps to release grants to the PRIs according to a pre-fixed time-table so that it becomes possible to utilise the funds during the currency of the year. The fund release could be in the form of equitably spaced instalments. The release could be made in two instalments; one at the beginning of the financial year and the other by the end of September of that year.4.3.7.5 Recommendations:a.Except for the specifically tied, major Centrally Sponsored Schemes andspecial purpose programmes of the States, all other allocations to the Panchayati Raj Institutions should be in the form of untied funds. The allocation order should contain only a brief description of broad objectives and expected outcomes.162Rural GovernanceState ialAbusines Ato b.ASAate AGo ernmen sAsho ldAmo if i Atheir Ar les AofAf an incorp ra e AtheAsy temAo Ase arateASt teAand District secorAbu gets,AtheA aterAindicati gAdistrict-wse allo ationshere AshouAc AdAbeAaAse arate A anch ya Ase torAl neAinAteA tateA udget.undAtransfe A AtoA d.AS ate AGo ernm nts sh uld makeAuse of theAs ftwareAo A“ stryAfor sp edyA Panc ay ts” prepa edAbyAtheA nio APanchay ti A ajAMin trnserAof funds.nAsu hAaAm nnerA e.ASAateAGo ernment Ashou dA ele seAfundsAt At e APa c ayatsAduringA he year thatAth seA nstituti nsAg tA deq ate timeAtoAus AtheAa loc tion ed insta me ts.A itself. The Afu d A el ase coul Ab AinAthe formAo AequallyAspa ofAt eAfi anc alA tA oul AbeAdoneAin A wo A ns alm nts;AoneA tA heA eginning ye rA ndA he A th r AbyAtheA nd ofAS ptemberAof that yea .4.3.8 PR s AandAcc essA oACr ditAbasics –Af od,A .3.8.1 Ove AtheAye rs Ath Adema dsAof A heAr ralAsec orAh ve A hifted f om Athion,Aedu ation,A sh lt rAand As fety to AqualityAl f Arequir mentsA Apota le A ater,Apower forAirrigandAs rvices. ATheA imp ovedAheal hcareAse vices, Aphysica Ain rastructureA ndAagr cul uralAinpu s A ncreaseArev nueA und req ireme tA orAall Ath se Ais enor ous.AA art Afr mA akingAeffrtsAtoAAbanks/financi lA r ali ati nA(bothAt xAand Anon- ax) APan haya sA ay Aals Anee AtoAborrowAfroSimu tane uslyheAA nstitutio s.A orr wingAmayAbe fo Aimprove en AinAdeliv ryAofAservices.,Athe ASan ha t amA eyAalso need toAcoll ctAu erAcharg sA rom ci f izens toApa Ao Athei Ade t.AInA196 ow rsAto borro A Committee onACentre Sta eArelatio sAha Asug estedA ha APRIs should be givenAralAsecto ). orATheA A aiseAloans (theA omme cial banksAwer At enAr lu tan AtoAl ndAtoAth ArAes ablish dAi ACom itte Asugg sted AthatA ocalAGo ernmentAFina ce ACor or tionsAshoul Abdies.AWhen ver the A StatesAf rAth sA urp se.AM nyAofAtheAS ate Gov rn ents didAset upAsuchAb veAna ure,Athe A PanchayatiA ajA nstituti nsAh d Aproj ct At at s emedAtoAbeAo AaAremu erat vantageA fAt isA cou dAapproa hAs chAage cies fo Afu ds.ASomeAo Ath APan hayatsAdi At keAa argesAwereAver A ac lityA ndAsetAup sma lApro ects,A utAthei AeffortsAto ar sAco lection ofAu erAc redit scenar o,A un atis ac oryA ndAm stAo AthemAwe t A nto default AIn AtheAcur entAli eralisedA li y.A ependingA ocalAb dies can borrow fr mAt e Amarket on theAs rength of AtheirAc editAviab uc Ain tiat ves onAth As sta nabilityA fAt eAp ogrammeAand theAPancinancayats’ AalAhealth,Asitiv Are ults, fA he PRIsAneed toAbeAliber llyA nco raged.AO ceAth Aprojec s AstartA howingAp eA omm ssio AisA banksA ndAotherAcre itAi stit ti nsAwi lAstepAu At eir A ctivity h in thisAsecto .A fAt eAvie AthatAtheA tateAG vernmentA houl AencourageAs ch init le at of the AThe StateAr ves163Local GovernanceGovernment should remain confined to fixing the limits of borrowing as per the guidelines of the State Finance Commission.4.3.8.2 Recommendation:a.For their infrastructure needs, the Panchayats should be encouraged toborrow from banks/financial institutions. The role of the State Government should remain confined only to fixing the limits of borrowing.4.3.9 Local Area Development Schemes4.3.9.1 In addition to the regular State Government departments and the three levels of Panchayats, the rural areas of many districts are also being serviced by Area Development Authorities/Rural Development Boards. These organizations receive sizeable grants from both the Union and the State Governments for schematic expenditure in their jurisdiction with emphasis on crop improvement, creation of minor irrigation facilities, upgradation of local infrastructure and other area specific needs. This arrangement is anomalous. With popularly elected grass roots institutions, Panchayats, in place to take care of the local development needs, there can be very little justification for existence of separate Development Authorities and Boards. Apart from ethical and broader governance issues, there are difficulties that such schemes create with regard to flow of resources to the grass roots level. The multiplicity of fund flow results in administrative confusion, economic inefficiency and ultimately ineffective governance.4.3.9.2 Next is the issue of MP and MLA Local Area Development Funds, which receive substantial allocation from the government. These schemes were created on the assumption that often the administrative system existing at the district level is not able to assess the requirements of the rural areas and sufficiently provide for them. It was thought that the popularly elected representatives (MLAs/MPs) on account of their proximity to the electorate would have a firmer knowledge of the ground realities in their constituencies and hence, they were given discretionary funds to initiate development programmes in their area. But now when the constitutionally mandated third tier of government is firmly in place, assigning any discretionary funds to MLAs and MPs goes against the very fabric of decentralization.4.3.9.3 The system is unethical from a different perspective as well. The fund gives the sitting MP or the MLA an added advantage over his rival candidates in brightening his electoral prospects and denies the opposition candidates a level playing field. In addition, the MPs and MLAs, by getting access over a discretionary fund, have virtually turned themselves164Rural Governancein he Ao A xecutive Af nc ion ries.A ommissi n A n AitsArepor Aon“Ethics A nAGo eance” Aha Aobse vedAtha A–AnaryApub ic funds at theirA “SeveralApa ty Al ade s Aan Ale islatorsAfeel theAne dAfor di creti sAofAthe rAcon tituenc es d A sposalA nAorde AtoAq ic lyAexec teA ublic wo ksAto satisfyAtheAnee Apowers, asAtheA egi latorA However, these sch mesAdo seiouslyAero eAhe Anoti nA fAs parationAo egisla ors Ado notAd rectl A dire tl Abecomes theAexec tive ATheAargumen Aa van edAthatA he Acontrol of theADi tr ctA hand eApublic fu ds Au der these sch mes,Aas th yAa eAunderA ic mony.AEvenAthlawed.AIn fact,AnAofficia sA Ma is rateAisAAMinis er Adir ctly han lesApubdoA otAper ona lyAhandlAdi bu sin Aofcers.A ak ngArovedAthe budget, AisdayAto Ad yAdec sio sAonAexpend tur AafterAt eAl gislatu eA a AapAaAkeyAexecu ive function.” ccordingly, theA ommissi n Are om ended A hat schemessuchAa AM LADSAandAMLALA DSA ho ld Ab Aa oli hed.the Aflo Aof funds Ato Apu li 4. A .9. AIn Aview Ao At e A bov , Ath ACom iss on A s A f Athe vi w Athatthrough Athe A Pbodi s Afor develo me t Aof Arural A reas Ash uld be Aexclusi elyanchaya iARajAInstitutios. .3 9.5 Re ommen ati ns:em sAin AruralAlowAofAfunds forAall pureas As ouldA a.ATheAlicAd velop entAscts.ALocalAAr aADevelo mentA be exclusively route Athr ughAPanchay AotherA rganizati nAhavi gA Author ties,A egi nal AD velopmentABo rdsAan und up Aand theirAfunct on A similarAf nc ions A ho ldA mmedi telyAbeAw an AassetsAtra sferr dA oAt eAappropri te le elAofAtheAP nc aya .onA EthicsAinA overnance”Ab. A AAsAre om end dAbyAt eA ommissi nA nAitsAreportchemes of MPLADAandAthe Com issionA ei erate Ath tAtheAMLA ADAsh uldAbeAabolishe d 4.4ARura4.4. AO erviewlADevel pm ntdAu banizat on A nAth AlastA 4.4. .1 A s A tate Ain Apar graphsA .1 ofAth sAreport,Ain pi eAo ArapyA5,93 000 villages spread fe Ad cadesAt e Ava t A ajority AofAIn ians Aliv AinAappr ximatehough,Aiac ossAth Acount y.AArecentAyeaance ofs, the Indinoveral AperforeconomyAcash,A xce tAthe Atrea uryAofficfi alsAan165Local Governancehas been impressive, the benefits of this growth have not travelled evenly to all sectors. The progress in many aspects of development like health, water, sanitation, nutritional status and literacy poses a major challenge to the systems of our governance particularly in the rural areas. According to the UNDP Human Development Report 2006, India ranks 126th among the countries of the world on a composite development scale. The 59th round of the National Sample Survey on household consumer expenditure and employment reveals that at the all India level three rural households per thousand do not get enough to eat during any month of the year, while thirteen rural households per thousand get enough to eat only during some months of the year.4.4.1.2 It is in this background that the development of rural areas and the rural people is a matter of primary concern for our planning. In the Tenth Five year plan, an amount of Rs.77,474 crores was earmarked for rural development programmes as against Rs.42,874 crores allocated during the Ninth Plan. The budget outlay for rural development also increased from Rs. 28,314 crores in 2005-06 to Rs.31,444 crores in the year 2006-07. This has been further scaled up to Rs.36,588 crores for the financial year 2007-08. The following table indicates the Budget estimates of Annual Plan 2006-07 for the Union, States & UTs:Table 4.5 : Budget Estimates of Annual Plan 2006-07 for Centre, States & UTs(Rs. in Crores)S.No.Head of DevelopmentCentreStates &Total1Agriculture and Allied ActivitiesUTs Outlay16162.788777.21BudgetIEBROutlaySupport112.387385.577273.192Rural Development15643.95015643.9515066.7430710.693Irrigation and Flood Control586.550586.5532602.8033189.354Energy8011.9661581.5569593.5120905.3590498.865Industry and Minerals5375.419157.9314533.343679.6218212.966Transport23756.5724857.2348613.8023440.8672054.667Communications593.0519290.7019883.75481.9620365.718Science, Technology and Environment8061.3408061.34333.398394.73166Rural Governanceoad.p fTa le A4.5 ACon d. Rs. AinACrorepmentOutlay SntreApor AAAutlayUTsotalBudgt AIEBResA& A0 29A eneral AE onomicASrvices11.74 A0171.74854.39A19 8rvices A5180.52757.16 A6937.68 A6050.83A1 31 5rvices60.25 A0630.25528.94rme0 A0 A0521.8921.89TOTALA13284.53 A12756.95 A24041.5A18244.00A44) S.N .A eadAofADeve.13 A10 SocialAS .51 A11A eneralAS.19 A12A peci lAAreaAPro1285.46 ource: Annual Report A 00 -07 ofAthe AP anningACommiss i on ro es,A .4 1.3 As can A eAse nAfro ATab e A4 5, o tAofA Atot l APlan bu ge Aof ARs A44 285.46Aop ent an am unt Aof ARs.3 710.6 Acr reAwasAea marked Aexcl siv ly A orAth AruralAdeve in Athe A2 06-07. AB sides,Asubs antia Afun s Aha eAbeenAal oc tedAtoAAgri ult reAandAlliedAActi ities,AIrr gat onAan AFlood AC ntrol, SocialAS rvi esAan AotherA elatedAs cto s.AAl AtheseA ecto s playAaAc iticalA uppo t A ole inAthe A vera l A lanAo Arural Adevel pm nt.AI AMarc A20 5,AtheAGov rn entAo AIndia Al unchedA Bharat NirmanAY ja a”:AanAover rching A oncep Awhi hA panA f ims AatAac i vingAaA uant m A ump inA ixAke Aa easAo Arural Ainfrast ucture d ring aAArural justA AyearsA etwe nA2005 A o200 .AThse Aare A ssuredAirri ation, Ad inkin Awater A upply roads AruralAh using AruralAelectriicat onAan AruralAconnecivit .AB x A4.4A: BharatA irman: Tasks vEverye il ag ptovbeep ovidedielect icity:ire a ining01 25,000ev ll ge ctoebed ov red9 ys 009l ss ellnast onn cto2. hcroreAhous holds hEverythab tati n 0ov ro1000tpop lat onoan (abo en 500li ahi lyiand tribal ar as ptovbeep ov ded-anaall- eathe rroad: Are aining 66,802Ahabi at on AtoAbeA ov redAb A2009 hEverythab ta ione o have aosafe so rcenofnd inking w ater: 55,067run overedthabi at on ctoebed ov red9b I2 09.iIn Aa dit onAallAhabi ation Awhi h AhaveA lipp dAba kAfr mAfullAc ve ageAtoA artialAc ver ge dueAtoA ai ure Aof sou ceAandAhabi ation Awhi hAhav AwaterA ualityAp ob em AtoAbeAadd essed e ~ 2 07 ~Every~ il ag ~tobeco ne tedbytel phone:re ain ing 66,822v ll ge ~tobe ov redbyN vembb ~2 09 ?10~ illionh c t ar s(100 la hs)ofadd tionalirr gationc pa it ~tobe re tedby20 9 ? 0lakh ho se ~tobecons ruc ed orth ~rur l oorgrammeA Wh leAthe ag nda isAn tAn w, Ath Aeffo t A er Ais Ato i part A As nseAofA rg ncyAt Athese goal ,Am keAtheApr en ialA time bound, Atran par ntAandAaccou tabl .ATheseAinve tm ntsAi Arural Ainfrast uctu eAwill unl ckAthe growthApo o AruralIndia. ource:A Governance4.4.1.4 Another significant programme of the Government of India is PURA, “Provision of Urban Amenities in Rural Areas”. Based on a concept promoted by the then President of India to bridge the rural-urban divide and achieve balanced socio-economic development, this programme was launched in August 2003. It aims to meet the gaps in physical and social infrastructure in identified rural clusters consisting of 10-20 villages around towns with population of one lakh or less to further their growth potential. The identified areas of intervention and support are:?Road, transportation and power connectivity;?Electronic connectivity in the form of reliable telecom, internet and IT Services;?Knowledge connectivity in the form of good educational and training institutions;?Market connectivity that would enable farmers to get the best price for their produce;?Provision of drinking water supply and upgradation of existing health facilities.At present pilot projects have been launched in seven States selecting one cluster of 10-15 villages in each of them. A proposal regarding implementation of PURA as a regular scheme covering all the districts in rural areas is under consideration of the Government.4.4.1.5 The Committee on Vision 2020 for India constituted by the Planning Commission in its report “India Vision 2020” recognized the importance of decentralization and people’s participation in the system of governance in the following manner:-“India’s economic and technological transition is accompanied by a multifaceted political transformation which may well be slower, less clearly defined and less visible, but will nonetheless have profound impact on the functioning of the government 20 years from now. The main consequences of that transformation are likely to include:1. Decentralisation and People’s Participation?Devolution of power to local bodies will continue at an accelerated rate. Pressure from the grass roots will increasingly supplant governance from the top down.?Local communities will come to depend less on state and central government action and more on their own initiative and organisational capacity.?Financial devolution will give local bodies more authority to levy taxes and greater control over the use of local natural resources. It will also make them increasingly responsible for financing local infrastructure.168Rural Governance?Direct dDirectAd mocracy thro gh AGram Sa has,Aas op osedAtoArepres ntativeAde ocra y,Awil Abec meAmoreAp ev len AatAt eAloca Alevel AP opl AatAt eAloc lAle el will be AmoreAanagi gA irectlyA nv lvedAin settingApr ori iesAfor Adist ib tion AofAr sou cesAandA r j cts. localApma din A ? AbetterA duc tedAan AbetterA nformedAel ctor te willAbeAincr asinglyAddAtheirA ofAit Ari htsAandAincr asinglyA ri ical Aof Anon-pe forming Agov rnm ntsAa in ividualA member .”4.4.2AAs es mentAof AC ntrallyAS onsored SchemesA(CSSs purpos A 4.4.2.1AC ntrallyAS onsored Schemes acc unt forAthe larges An mberAof special 7Ath reA grants A xt nde Aby At e AUnion AGo er mentAt AStat sAunder Arti le 282. AIn 2006- 3;Aw th w re Am re A han A2 0 ACSSs,Ai vo vingAa AannualAal oc tion of Aover AR .72,000Ac ores .A even som Aof A heAmost Ap omine tAam ng Ath m A ein AinAt e ARural ADev lopment Secto 08,AtheA ofAthemAa cou ted for ARs A46,84 Acror s A(par A3.9.1 Adur ng Ath t A ear. AInA 007 ibi ityA al oca ion Af r Athese scheme As a dsAatAaAst gge ing ARs A52,206 cr res. ATheArespon AofAt eA for Aimplem nt tion of most A f Athese Apr gramm sAu der At eAbroad Agu de ine sAbein A UnionAGov rnme t, Al es A ithAt e AState AGove nme ts, AtheAall ca ion AtoAth AStat cideAtoA m stl AinA he formAof gr nts. InAsom Aca es, At e AUnionA inistryAc nce nedAma Ad MidA ayA i ple ent AtheAp ogramm Aitself through Aprog ammaticAcom itte s. A rom the A over A Meal AP og ammeA o ASarv ASiksha A bhi an, A he listAof AC ntrallyAS onsored SchemeaAwi e A ange AofA ub ect AinAtheAant pov rtyAan AsocialASectors Awidel A 4. .2.2A n A pite Aof mas iv AflowA fA unds toAsuch sc eme Ain At eApas , A h re AisA m nts.AA shared conc rn A hat Athe resu ts A ave A ot Abeen Acomm nsur te A ithAtheAinv e alsAtheA AA ritical Aas es men AofAtheAper or anceAof AC ntrallyAS onsored Schemes rev f llowingiAdefci nc ie :? Mos sofethe schem sn xists nlsilos pla nedlandnimp em ntedd slsta dcalone schemes wit outAanyAho izontalAcon er enceAorA erticalAinte ration, Ar su tingAinA ultipleA wit outA istric Aplans,Au re ated toAeac Aothe ,AoftenA utuallyAconlicting, A reparedp ct ve. anyAin egrate Av sion AorApershredfor ?Te sch mesa eoften rigidly~ esi ne ~an ~donot lprovidefe ibility equl leve . ad ptation Aa co din Ato AtheAdiffrential Adev lopme tA eed AatAt eAlocah.OftenTe?eisnoco sistent pp oac ~inth ~d signof eliverymec anismpl city ind pendentAst uct resAare cre tedA orAeac Ascheme Ar su t ngAin AaAmult nAamo of AsuchAst uc ure AatAt e Aloc lAle el with AnoAint ra tion AorAco-or inati169ngA hem.33AA id-Ter ARe iewAandAA pr isa AofAt eA tat AofAtheAPan hayats AVol.I,A in stryAof APa chayati RajLocal Governance?Professional support to the design, implementation and monitoring of these schemes is quite weak at the national, state and local levels. Often line departments with a generalist approach control the implementation process without having the necessary competence or capability.?Often, there is too much effort on micro management without any mechanism to understand the local situation and respond to it effectively.?In spite of stated objectives of quality of outputs and visible outcomes, many programmes remain expenditure oriented.4.4.3 Centrality of PRIs in the Centrally Sponsored Schemes4.4.3.1 Most of the Centrally Sponsored Schemes deal with matters earmarked for Panchayats under Article 243 G and the Eleventh Schedule of the Constitution. Some examples are the National Rural Employment Guarantee Scheme, Sampoorna Gramin Rojgar Yojana, Sarva Siksha Abhiyan, National Rural Health Mission, Integrated Child Development Services, Mid-Day Meal Programme, Drinking Water Mission, Total Sanitation Campaign, Indira Awas Yojana, Swarna Jayanti Gram Swarogar Yojana, Pradhanmantri Gram Sadak Yojana, Rajiv Gandhi Grameen Vidyutikaran Yojana, Adult Literacy and the Remote Village Electrification Programme. Out of this long menu, nine major programmes take up nearly Rs. 65,875 crores during the current year 2007-08. Since a large quantum of resources flows through these schemes to the States, efficient implementation of these programmes is critical for the States’ economic development. In the long run, the schemes taken up under such programmes also need to find place in the overall development plan of the Panchayat body. It is, accordingly, essential that the centrality of Panchayats is recognized in fulfilling the objectives of these programmes. While some of the schemes do give a crucial role to the PRIs in their implementation, some bypass them and create separate structures. Even the schemes which allow the participation of Panchayats, often do not give them enough flexibility in decision making. Such flexibility is essential to take care of the local specificities, which strait-jacketed schemes designed from above cannot accommodate.4.4.3.2 The design of Centrally Sponsored Schemes should necessarily incorporate the following four vital ingredients:?At the stage of conceptualisation, care needs to be taken to ensure that the Panchayats feel assured that the scheme has been designed for local welfare.?There must be clear provisions for assigning implementational responsibilities to the PRIs particularly to the Village Panchayats.?Schemes should not be over structured with rigid guidelines and should leave enough flexibility in decision making at the implementational level.170Rural GovernanceEnough scope sEnoug bs opees ou dhb Pgivenytos he Panc ayat csolt atttheytc uldhntegrat wsuchn che esAwithin th Afram workAo AtheirAa eas’ Aholist cAdeve lopm e nt p ans. Aof A heA argeA .4.3. AA tas AforceAo AtheAPlann ngA ommissio Ahad obse ve Ath tAman onsAlikeAuser SSs AareAbei gAimplementedA ep rtmenta lyAor At rough Asupport orga izat associati ns,A genc es, ASe f AHelp Gro ps A SHGs)AandANo AGovernmental Organi ationsAAthat Aall A heANGO )Awitho tAan Ali kage A ith AtheAPRIs. Su seq ently,A tAwa Ade ideeAroleAofA he minist ies A perati gACSSs shoul Areview th seA chemesAinA he bac grou d A fAt ofA anc ay ti Panchayat Aa Aenvisa ed A n Ar icl A243 AG AofAthe CoheAMinistry stitutio . A ewAp ogr mmesA RajAw s to Abe givenAa A oda Aposition an Aco sulte Ain AallA as sAr latingAtoAfA igniAa eAsu p sedAtoA av AaAbearing A n A anchayats AThe Afo low ng issues AareAicanceA tha inntallo atio ? Cu ~ ren l ,the eare ~l rge umbero ~C Ssv ryin ~insize withdifferulate a yACSSA r nges AThreAis A eedA oAa ceptAtha AtheAM nis ry Ashould not fo rn eAinc udedAib low Aa Ace tain A ritical size.AS all r AschemesAma As raightaw yA StateApl ns.?eP ralleld od esncreatedlbyico di iona itiesd fe SSsns ou dnb mwoundupta dtmerged withAstand ng com ittee AofA he PRIs ASo eAof th m Ama AneedAt AhaveAo gani Ali kageAwithAth AP Is.ofAre ea eAo A 4.4.3.4 The Co mis ionA sAof th Avi wAthat inA ueAcour e Athe A re ent Asys em he al oca ionA fun s AtoAt e A SSs Ashould A eAsu s ituted withA AsystemA he eAm jorityAofA ve flexibilit A s A nAtheA ormAof A nt edAgr nts ATheAS ateAandAloc l Agove nmen s AshouldAh eAtheAover ll inAdes gning Aproj ctA omponentsAand A mplementa io Amechan sm A oAachieojectives ofAaAsectoralAp ogramme. .4 4 AAn lysis ofAsomeAm jor ACentr lly ASpo soredAS ch mesA( SS ):InAorder to A ppreciat AtheAconc rn Aexp es ed AbyAman Aon ACentr llyASpo soedASc em sAitAw ul AbeAuse u Ato exami e Aa AfewAmajorAs hemes.4. .4.1A ationa ARuralMissionA ealth(NRHM)AA hisA espect:? Ea hhM nistrymoft he Gover mentlo uIndiaash uldiunde takeiac ivit rmappi go ith rega dAt Aits ACSS Aan Aident fyAth AlevelsAwh re Aa ti it es AneedAoA eAl cated;Aa AtheAm ni try level AatAtheASt teAGo er me tAl velAorAat theAPa n hayat le el. aBase fionithe, bovemf dings,isch meeg id li esineedy oobefisui t blyrmodife.171Local GovernanceBox: 4.5 : National Rural Health Mission – The Vision?The National Rural Health Mission (2005-12) seeks to provide effective healthcare to rural population throughout the country with special focus on 18 states, which have weak public health indicators and/or weak infrastructure.?These 18 States are Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Jammu and Kashmir, Manipur, Mizoram, Meghalaya, Madhya Pradesh, Nagaland, Orissa, Rajasthan, Sikkim, Tripura, Uttarakhand and Uttar Pradesh.?The Mission is an articulation of the commitment of the Government to raise public spending on Health from 0.9% of GDP to 2-3% of GDP.?It aims to undertake architectural correction of the health system to enable it to effectively handle increased allocations and promote policies that strengthen public health management and service delivery in the country.?It has as its key components provision of a female health activist in each village; a village health plan prepared through a local team headed by the Health & Sanitation Committee of the Panchayat; strengthening of the rural hospital for effective curative care and made measurable and accountable to the community through Indian Public Health Standards (IPHS); and integration of vertical Health & Family Welfare Programmes and Funds for optimal utilization of funds and infrastructure and strengthening delivery of primary healthcare.?It seeks to revitalize local health traditions and mainstream AYUSH into the public health system.?It aims at effective integration of health concerns with determinants of health like sanitation & hygiene, nutrition, and safe drinking water through a District Plan for Health.?It seeks decentralization of programmes for district management of health.?It seeks to address the inter-State and inter-district disparities, especially among the 18 high focus States, including unmet needs for public health infrastructure.?It shall define time-bound goals and report publicly on their progress.?It seeks to improve access of rural people, especially poor women and children, to equitable, affordable, accountable and effective primary healthcare.Source: This mission is a comprehensive programme which seeks to make a qualitative change in the rural healthcare system through (a) improved performance of medical personnel, (b) upgradation of infrastructure and (c) unhindered availability of generic medicines. Initially it seeks to focus on 18 States, which have weak public health indicators and/or weak infrastructure. Its aim is to raise public spending on health from 0.9% of GDP to 3% of the GDP during this period. The principle goals concern reduction in Infant Mortality Rate (IMR)/Maternal Mortality Rate (MMR), universal access to public health services, women and child healthcare, sanitation and hygiene, immunization and nutrition and control of communicable and non-communicable diseases. It also aims at securing comprehensive primary health care, population stabilization, and popularisation of AYUSH (Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy). Though, one of the core strategies of this programme is to train and enhance capacity of PRIs to own, control and manage public health services, the actual implementation of the programme has led to a few distortions such as (i) creation of parallel structures like District & Village Health Committees and (ii) multiplicity of fund transfers. A correction is needed in the Scheme so as to integrate it fully with the three levels of Panchayats operating in the district. Under this programme each Sub-centre, Primary Health Centre and Community Health Centre172Rural Governance(CHC) gets an enanceA ran .A (CHC)Aget Aa Aal otment A f ARs. A 0,0 0; A25, 00 A ndA50 000 AperAann mAmain Aavailable toA Se en yAp rAcen AofAtheAto alAal oca ion Aunder the pr gr mmeA asAtoAbeA ad mp emen a ionA fo mat ons Ab lowAt e ABl ckAleve Ai. . AprimaryAa dA ub-centr . AAnAeffectiveA ofAthe Ape ple. o Asu hAa Alarge and Adispe sed Apro rammeAde andsAeffective pa tic pationA esA CHC, APHC)A 4.4.4. .2A onitor ng andArevie Aof Communi yAandA rimaryA ealth Cent gACo mittees.A a dASu -c nt e Aneed At AbeA Ar uti eAworkAofAt eAP nchayats AandAStandiS chA onitor ngAand revie Ash uldAcoverA llAparamet rs enu ciated A nAth Avision Ago l andut onsAin A RHMB x: 4.6A:ARole ofA anchayatiARa AI stitoesAfor PR s: The AMis ion envisages the Af llo ingAr rogram es for~?Stat s oind cate in heirMoUs he ommitment or devolu ionoffunds, fun tionaries nde lt Ato APRIs hhde ndman ge ?TeD strict~ ealth Mi si n( HM ~to bel dbythe hil ~Pa isha .TeDHM will~ ont ol,guP CsAand ACHC . all publicAhealt Ai sti utions Ain the Adistrict ASub cen res,AeotheVilla? Acc edited Social~Heal hActiv tists (A HAs)wou d es le tedbyand~ e cco ntableanchaya .l hintersectora ?Te illageHe lt ~Co mitteeof theP nchayat wou dprepa ethe illag ~He lthPla ,andpromote inte ration.?rE chlS b-ce tr Uwilld aved noU tiedl undifo @ oca 1actio p@r s.n10, h00s erna num. Ti dFundiwilib a eposi edni AaAjoin AB nkA ccountAof theAA xiliary Nurse M dwifeA(A M)A ASarpanc Aa dAo erat dAyAtheAANM, Ai Acon ult tionAwi h AtheA illageAHeal hAC mmittee.?nP In nvol ementn naRogis aly noSa itisifor goodghospita Pmanageme t. tProvisi no fetrain ng toImemberseo ~PRIs.Source:Ahtt p://mohfw.nic.i /NHRMaAcentre wiseA stra eg Ado ument Ao Athe ANR M.AThe Apr se t Apractice o Ainstalling ommi te sAf rA mana ing committe Ama Aco tinueAbu At e Apracti eAofAse arateAvill geA Child health)A eac Aof At eAthree Ama orAcomp nentsA( ublicAh alth,A ome ’s AHe lthAand ingleAvil ageA unde Adepart ental co ma dAneeds At AbeAd he spen ed Awit . A e Ashou dAbeAaA spect AofAtheA committ eA ons itut d Aby A he Gram Sabha to A ook after allAt eAabove th eeA ock Comm tteeA ru alAheal hc re A ystem.AAtAth Ain ermediat Aand Ad stri tAl velsA oo,AtheAB ncies.AA AtheA and ZilaAParis ad Athe se ves shouldAbeAth Aim lementingA ndAmonito in Aag AtoA uideAthed stric Aleve ,A he eAcouldA eAan advisoryAb dy consisti gAofAse to alAex ert Zila Pari ha Afrom time At Atime.4.4.4 2AAcc lerat dARura AWater ASu plyAProgrammeA(ARW P)3Aob ectiveAof 4.4.4.2.1 This prog am eAhasAbee AinAe istenceA in eA197 -73.ATheAb si AareasA f A h A th Ap ogramme isAt Aprovide safe A ri king Aw terAto pe ple livin Ain Aa l A ura i)Aens ring AaA countryAin aAs stainable andAequ ta leAmanne . ATheAint nde Aou comesAar A et er Aqu lity of Alife,A(i )A mprovem nt AinA eneral A eal hAsta us,AandA iii)AredcingAdrud eryA34 ource: AnnualAR portA200 -0 ,AMin stryAofARura ADevelopmenment of India Govert,173Local Governanceof women. Currently, the funding pattern is 50-50 sharing between the Union and State Governments.The entire programme was given a Mission mode in 1986 and brought under the Technology Mission on Drinking Water Management (NDWM) and was named as the Rajiv Gandhi National Drinking Water Mission (RGNDWM) in 1991. In 1999, a separate Department of Drinking Water Supply was created in the Government of India.4.4.4.2.2 To ensure that different aspects of Rural Drinking Water Supply are adequately addressed the funds budgeted for ARWSP have been divided into different components. The criteria for division of funds and the funding pattern are as indicated below:?Up to 20% funds are kept for the reform process. i.e. Sectoral Reforms introduced in 1999 in selected districts and later scaled up in the entire country through Swajaldhara – 90% GOI share, 10% Community Contribution.?5% funds are kept for States under Desert Development Programme-100% GOI funding, no State share.?5% funds are kept aside for meeting contingencies arising out of natural calamities-100% GOI funding, no State share.?The remaining funds are allocated to the States as per a laid down criteria. They are required to provide matching share under State resources. States can utilize 15% of the said funds for Operation and Maintenance (O&M). They can also utilize up to 20% of their annual allocation for taking up projects for Sub-Mission projects. The existing Sub-Missions are on control of Arsenic, Fluoride, Brackishness and Iron. 15% of the ARWSP funds are to be utilized on water quality and 5% on sustainability. The funding pattern for Sub-Mission projects is 75:25 between the Union and States.?To Tackle the increasing problem of water quality under revised guidelines since February 2006, it has been decided to retain up to 20% of ARWSP funds at the Centre for water quality for providing focused funding for projects approved by State Governments for water quality affected States only. This ceiling could be exceeded in exceptional cases for providing focused funding to tackle severe contaminations of water. The funding pattern from the current year is 50:50 between the Union and States.4.4.4.2.3 The States/UTs are required to earmark and utilize at least 25% of the ARWSP funds for drinking water supply to the Schedule Castes (SCs) and another minimum 10% for the Schedule Tribes (STs). A group consisting of 100 persons or 20 households is considered to be a habitation for the purpose of coverage under this programme. For Schedule Castes and Schedule Tribes, this limit may further be relaxed.174Rural Governance4.4.4.2.4 Sta4. .4.2.4 AStat AGov rnme tsAha e Ab en Agive At e Alibe ty A o Asele tAteAagency AforAi pl ment tionAof Ath s A rogra me AIt could A e AtheA ubl cAHealthAan AEngineeri gADepar men A(PHE ),AtheASta e A epart entAof ARura AD vel pment orAanyAothe Ap rast ta .AI Asome A fAth ASta esA his A ork Ahas A ee Aas igned toA heAWater andASew er ag eABo rd.4 4 4.2. AW thAa Aview toApromotin Ai volv mentAof AuserAgrou s/ ancayatsAin A heA electionAand Ai pl mentatio AofAd inking A ate Asc emes Aand Af rAsubsequ ntA perationAan Amaint nance (O&M),AStat AGov rnmen sA ereA sk dAto AsignA nA emorandumAofA nders andi gA( oU)Awith At e A overn entAof IndiaAbefore co men emen AofAt e AXIt APlan.AStat AGov rnme ts Awe eA lsoA sk dA oAdraw upAa AAction AP an A rameworkA orA nvolvingA as d Amanne .A he A ommu ity and APRIs and transfer the Ad inking wa er Aa se s to Athe Ain Aa Apman Atar ets;A The Ap rpo e Ab hin At e AMoU A as A o Acomm t A he AS ate Ato Ame t Athe A harat ANi nvergence A fA pro ide As ffici nt A unds Afo Ath AS cto ; A n Ato Aset Au Aa A echanism Afo Ac bje tiv s Aof p ogrammes Afor co serva ion of Awat r Aand ground Awa er recha ge. AThe Aoth r A em ower them th AMoU we e Ato Ahav Aan Aeffec ive Acapa ity Abuild ng A rogra me for APRI ; Ato user A roups/A to Alevy use Ach rge Af r AO&MAa dAto Aprov deA echnical and Afina ci lAsu portAtoP Is AHo ev r,Aso far no ASta eAh s As gned the MoUAw thAtheAUnionAGover ment. .4.4.3 SarvaAS kshaAAbhiyanA( SA) own rship Ao A .4.4. .1 SSAAseemsAto universali e Aelement ryAeduc tionAthro ghAcommun tyAc ntres all t e Asystem. TheAprogra meAaddr sses Apr mar Asc oolsAa d AnonAfor al Aeduc tio nAattem tA oA of Awhic Aa eAl catedAi At e A ill geAorAinAthe An ig bou ho d.AThAS AAis Aal oAgh provisionA provide Aa Aop ortunityA orAim roving Ahuman ca abi itiesAto A ll Achil ren,Athro ct veAi A(a A ofAco munity- wnedAqual ty e ucation in Aa A is ionAmode AThe Aultim te obj AensureA 00 A toAme tAt eAdeman Afor A ualityAba ic A duca ion allAover the co ntry,A b) At alAret ntio A coverag Aof childrenAf r Aelement ry schoo ing byA 01 ,Aand A c)AtoAatt inAuniverduringAthis Aper od 4.4 4.3.2AIt wasA xp cte Athat inAthe rural Aarea , A anchaya sAi Agen ral AandAGrmA anchayatsAfigure in the n Apar icul r Awould A ave Ac it cal A ol s Ato play Ain Ath s Aprogramm . A ancha at Ado textsAofAS A Ad cume ts Abu Athe Ad Anot seem toAha eAb enAgive Aany AcrucialArsp nsibili yA SAAenvisag sA nArespect Ao Amanagemen ,Am nitoring Aan As per ision A fAthe As hoo Asystem.A nAo AaAblockA hab tationAle el Aeduca io Apl nningAas the As ar i gApoint of AaAgradua Af r ulati infirmi ie AAA a dAeventu llyAdistr ctAed cat onA lan. But At eA lanA eems toAha e Asome Abas c Amicro-l ve A number ofACo munity ABased A rgani ati ns A(CBO) A re conceivedA oAfacilitat tion,Am therA pl nnin Ai Athe Af rmAofAscho lAmanageme t Acomm ttee, Ap rent Ateacher associ rAhab tationA teacher associa ion,Avill ge Aeducati nAcom ittee, Am croAp ann ngAteamsAfle elAeduca ionA lann ngA tc.ABut AtheAli kage bet een CBOs andPanchayatAthe AG amis175Local Governancemissing. Nor is there any role for Intermediate (block) and District level Panchayats in this programme. At the District level the entire task is being handled by the District SSA cell. It is a professional body supposedly constituted as a change management unit but the programme does not envisage its linkage with the District and Intermediate Panchayats.4.4.4.3.3 The Commission is of the view that integrating SSA with the PRI system is necessary not only for getting better outcomes from the project, but also for sustainability of processes and the institutions introduced by it.4.4.4.4 Integrated Child Development Scheme (ICDS)4.4.4.4.1 Launched in 1975 in 33 CD Blocks, ICDS is today one of the largest global programmes covering early childhood development. It is an inter-sectoral programme reaching out to children below 6 years of age, who reside in remote areas. The main objective of the programme is to improve nutrition and health care status of these children, to reduce incidents of mortality, malnutrition and the school dropouts rate and finally to enhance the capability of the mother and the family to look after the child.4.4.4.4.2 From the days of its initiation, ICDS has been a departmentally run programme. Each State has a separate management structure consisting of a State Coordinator/ Department Secretary, Child Development Project Officer (CDPO) at the Block level, Supervisors and the Anganwadi Centre Personnel. Involvement of the three tier Panchayats in ICDS has so far been nil. Inspite of this programme being in existence for such a long time, there have been conflicting views on its impact. There is a feeling that somehow the scheme has remained distant from the beneficiaries; people have not yet owned it. The guidelines of the programme therefore call for a review to give an effective role to the Panchayats, particularly the Village Panchayats in its functioning.4.4.4.4.3 The Commission is of the view that the ICDS programme has to be looked at as a part of the comprehensive healthcare delivery structure. By skilfully integrating other components of the system, namely immunization, ante-natal care, family planning and vector control in the mainstream of healthcare, a composite healthcare machinery for children and women could be built up in the rural areas. This can be done by transferring the responsibility of the local level activities of all these components and the management of the local institutions related to such components (for example, health sub centres, anganwadi centres) to the PRIs.176Rural Governance4.4 4.5A id-dayAMea lAProgra m cationAw sAA 4.4.4.5. AAAnation l A rogramme Aof nutriti na Asuppor Ato Aprima yAe rs lisatio A forma ly launc ed inA1995.Ahe A bje tiveAof At e A ro ramme Ai AtoAsupportAuniv improve Athe ofAprima yA ducation Ab Aincreasi gAe rolment Aa dAr tent on and Aals Ato alABo y AandA nutrit on lAstatus A f Achildr n, studyin AinApri ar Aclasses Aof Gover ment ALo AidedASchoo s.nagingAthi A 4. .4 5.2 ManyAo Athe Sta esAhave A ot A nvolved theAVillag AP nchayats inAm stitutio s. pro ramme, even th ughA ostA fAthemAh veAdevo vedAprima yA ducat onAto AtheseAi ndA he VEC A Ins ead,A tAthe loc lAlevelAtheAre pon ib lit Afor itAha Ab enA ivenAto the sch olsA hayatsA av A andAatA heAdi tr ctA evelAtoAth AC llector.ATheA nte mediateA ndADistric APan sAimporta tA n thin Ato A o AwithAthi Aprogramme.ADi as oci tionAofAth APan haya s AfromAth icro leve sA p ogramm Ah sAcausedAan Ai stituti nal Avacuum; A mplement ng age ciesA t AtheA ogramme.ATh ha A eAbeen left al ne AThereA sAn Aagency forAregula Am nit ringAofAth Ap Am nito ingA C mm ssi nAis of At e A iew that Ain th Aabsence Aof Ap rt cip tion A fAt eAPRIs,Ath chi dren isA ofAth sAp ogramme A as Are ai ed Aw ak.AIt goes A eyon Ado bt Athat th Awelfare of abhaAor theA on Aar a AwhereAal As ructuresA f A om uni yAbe itAthe Gra ASab a,Ath AW rdA Agui el ne A Villa eAPa ch yatAwil Ab Awil ingAtoA how Amaximum A oo heAprogramm eration.Aneed At AbeArevi ed ur en lyAso as toAbring itAdi ectly Aund r APanchayatAmoni or ng.mm nda ionsA 4.4.5AThACo missionAha Aseparat lyAex min dAN EGAAa dAh sAgivenAitsAreclementsAan A i Aits As cond Are ort Atitled A“UNL CKINGAHU AN ACAPITAL,A nti eAsomeAve yA o erna ceA-Aa A as Astudy .ATheA xp rtAgr up Aon grassAro tsA lann ngAh sAal oAma le ent tionA important su gestio sAt AensureAth Ac ntralityAo AP nchayats inA lanningAandAim of all ACentral programmes.ARec mme dationsA re attachedAasAAn nexure IV 2).Anot yetA nA 4 4. AThe roleAofAth APanchaya sAv s-a-visAt e ACentral y ASpons re ASc eme Ai irAsepar teA l ne AwithAth Ac mmi ment ofAtheA73r AAheAendm nt.A SSs A aveAt AshedAthRa Asystem.A verti alA de tity an Abe partAof theAoverall deve op ent planAofAth APa chayatico verge ceA ThAComm ssio Afeel Ath tA he eAhasAtoAbeAterritorial/jurisdictiona /functionalred if they in AtheirAimp em ntation. AThAc ntra it Aof AP IsAinAt ese A ch mes Amus Ab AensabhaAa AtheA areA oAdealA ith Ama te sAl stedAinA heAEleven h A ched le. TheAG amAan AW rdA eAtoAbeAth A owe tAl velAandAt e APanc aya ASam tiAandAZ la Par shadAa Athe Ah gher le el Aha Aand As ci lA struct res Al oki gAaft rAallAthei Aa tivit es inAtermsAofAimp ementation Amo itorin onsAbelow AaA a dit.AInAthe progr mme ,AwhereAth Aactiviti sA ercol te A o AareasAand habit tpportAthesePa chayat W rdAle el,Aa smallA ocalAcent e Acomm tt eAshou dA e Aforme AtoAsacti i ies.A uchAa Aloc lAco mitt e A i lAonly AbeAaA elib rati eAbody Awith Aresibility tpo177LocalAGovern nceoAit. EvenA prov de Aregul rA eed ackA o AtheAGram Sabha War AS bhaAandAbeA cc unt bleA eA lementsA whileA ormu atingAsuc Apr jects Ath AUnio AandAStateA over me tsAneed toAincluements.AThe of fle ibil ty As Athat th yAcould be mou dedAa AperAlocal con itionsAandAr e uiflexibi it A Ministrie Aconce nedA hould onlyAissue gui eli esAandAtheAimple entationaltAofAthese sho ld beA eftAt AtheAlo al bodie .A nAorde Ato assessAtheAsoc o-econ mi Aimpa Aplace.AprogrammesApe i dicall ,A AsystemheAofAoutcome moni or ngA us AbeApu AinedAc nAbe Nati nalASa pleASurvey AO ganisa io A(NSS ) AonAbei g AsuitablyAs ren th given AthisAresponsib lity.4.4.7ARecomen at ons:tAGroupA nA a. AThe CommiAsion Awhil Aen orsin At eAv ews Aof theAE pe lan ingAa AtheA rassA oo sALev lA sAgivenAatAAnn xu e-IV 2)AtoAtisAReport, reco mends tha At er AhasAto AbeAterritorial/juri dictional/functionalAon ergenceAinAi plementin ACentrall ASponsordA ch mes.reAt AdealA b.AThe ceAtral ty ofAPR s AinAth seAs he es Amust be ensu edA fA heyAw th Amat er Ali tedAinAt eAEleventASc ed le. (i)A n AallAsu hAs hemes,Ath AGram WardAS bh AshouldA eA cce tedA sAtheAmost Aimport nt/c ttingAedgeApa tici ato yAbodyAforAimpl mentation, mon torin Aa dAa ditAofAtheArogr mmes.A(ii AProgramme committ esAd alingAwit Afunc ion AunderAt eAEleven hAS heduleA ndAworkingA xc usive yAinA ural ar as need AtoA eA ubs medAbyAthe respective Pan hayat AandAthe r Astand ng Ab dies.A omeAot ersAh vingA ide Arol sA ay needAtoAbeAr st uctu ed toAhave anAorganicAr lati nsh pAwithAtheAancha at .A( ii)AInAtheA rogra mes AwhereAthe activitie Ap rcola eAt AareasAandA calAcentr A abita i nsAbelowAaAPan hayat/ a d Alev l, AaA mallAl ThisACentr A commi te Ashoul Ab Aformed toAsu portAthese A cti ities. on ibility commi te Asho l AbeAonlyAaAd libe ativ Abody AwithAres toAprov deAregul rA eed ackA o AtheAGram Sabha War AS bhaAandAbeA cc untbl Ato it.Ac. AT e AMinistry A anc ioningAth Aprogr mme As ould issue onlyAbroadAtoAe sureA guideli esAle vin AscopeAforAimple entational fle ib li yAsoAa loca Areleva ceAthr ughAactiveA nv lve entAofAthe ARural Governanced. All Centrally Sponsored Programmes should have properly demarcated goals and there should be a mechanism to assess their socio-economic impact over a given period of time. The NSSO may be suitably strengthened and assigned this task.4.4.8 Information Education and Communication – IEC4.4.8.1 Legislation by itself does not guarantee empowerment of the people. There has to be an enabling environment which allows the meaning and import of legislations to percolate to the lowest level in a form which is intelligible to the common man. It enhances grass root capability which in turn leads to robustness of the democratic institutions. The willing and active participation of the people in local bodies is a sine qua non for strengthening the democratic functioning of these institutions. This requires a massive exercise in generating awareness about these institutions.4.4.8.2 The importance of information in building and strengthening civil societyis well-recognised but the responsibility for this does not rest only with the officialmachinery. Information received from a variety of sources and knowledge creation usingmultiple technologies is essential for political empowerment in a democratic framework. Information, Education and Communication (IEC) are generally identified as powerful tools for creating awareness, mobilising people and imparting knowledge and skills to them. Thus, the print media, the electronic media and other modes of communication like folk dramas plays etc. are important tools which could be utilised for creating awareness about the Panchayati Raj Institutions, their functioning, importance of peoples’ participation, concept of social audit and for ensuring accountability and transparency. Further, convergence of such activities has to be ensured to achieve greater synergies in this field.4.4.8.3 As per the National Readership Survey 2006, the print media covers only 45 per cent of urban and 19 per cent of rural areas35. The limitation of the print media in generating awareness among rural people was fully recognised by the Standing Committee of Parliament on Urban and Rural Development17935Source3 Sour e: A araA30,A Worki gAGrou AR port ofA1 thAF ve AY ar APlan A( 00 -12)AonAInf rma ionAandABroad asting,A in stry AofAInf rma ionAandABroad asting, Janua yA2007;A Governance(13th Lok Sabha)36. Further, the visual media also is of limited utility in the rural areas on account of lack of rural electrification and the relatively higher cost of a television set. This underlines the importance of the medium of propagation through ‘Radio Broadcasting’ both in terms of reach (99.13% of the population),37 as well as the cost involved. In addition, this medium is not dependent on availability of electricity in rural areas, which is presently a major constraint as about 56.5% of the rural households in the country still remain without an electricity connection, more so in States like Bihar (94.9%), Jharkhand (90%), Assam (83.5%), Orissa (80.6%), Uttar Pradesh (80.2%) and West Bengal (79.7%).38 Thus, rural radio broadcasting provides an effective medium for reaching out to the people.4.4.8.4 To make people in rural areas aware about the functioning of the PRIs and their role in it, such rural broadcasting would have to be done in the local language(s) in use at the district level. This is basically due to low literacy levels prevalent in most rural areas (national rural literacy rate: 59.4%). Even in the case of rural literates, more often than not, literacy would mean simply the ability to read and write in the local language. The reason for this is that Census of India defines literacy to mean ‘ability to read and write in any language’.39 Thus, local language radio broadcasts would be equally effective in the case of both literates and illiterates. The issue of low literacy rate is of greater concern in the case of women and disadvantaged sections of the society in the rural areas. As a way of illustration, rural female literacy rate in some selected States is given in Fig. 4.4:18036Source: 36 ,A20 6,AVol. ourc :APa aA8.3,A 7thARe ort,A ugustA2002 Ar pro ucedA nA TheA tateAofAthe P nchayats AAAMid Ter AReview Aand Ap raisal’,A 2ANov mbe r entAofAIn ia I I, MinistryAo APan hayatiARaj AG vernm37 oadcast ng,A our e:AparaA 5,A‘W rkingA ro p ARe ortA fA11 hAFi eAYear APl nA 2007-12)Aon Inf rmationAandAB oadcasti g, MinistryAof Inf rmationAandAB anuaryA20 7; JnA etr i e vedAo 38Sour e: Minist yAofAPower AG vernme tAof AIndia;A eholds.ht ;A09.10. 00 39Cen sAofAI diaAAdefies lite acy AtoAm an ‘abi ity toAre d A ndA riteAinAan Alangua e’;Asource: A Governancehese igureT se Afgu es AassumeA mp rta ce Ain th AlightA f AAr icl A2 3D A 3) AofAtheACon titut on,Awhic Apr videsAfor Ar se vat onAo Anot less Athan on -th rd Aof the Ato al numbe AofAseatsA inc uding the Aseat Are erved forAwomen bel ngi gAt eAS s Aan At e A iTs) At Ab flled byAdirec Ae ectio AinAevery Pan hayat A orAwhus, as AonA1st Decemme . Aer, A2 06A36.7% A fAyatsAwer A electedArepre en ativesA nAVillageA anc ayats an A37.1%AinAIn ermediateA anchmidstAlo Awo en.40 AThsAfurther A nde line Ath AneedAfo Acreating aw renes Ain Ar ral Aar asAawa enessA lite acyArat s throug Aa Am diumA ike AradioAbro dcasting. AE powerme tAwithout en ratio A andAi forma ionA ou dAleadAto Adise chant ent amongA heA eopl Aand AevenAde seAatAth A of Alocal Ains it tion . InAsuch Aa sc na io, AitAisA mper tiv Athat the Aloca Al ngu ge inA oadcas sAA dist ic Alev lAi AmadeAt e A ehicleAof awareness A enerationAi iti tives andAr ral AradioA fact, theA sh uld Ac rry Atheir A ro ram es Ain the Aloca Alanguage pr val nt AinAthe Ad st ict.4 AIn ttingAitsA Unio AM nistr AofARuralAD vel pmentAh sAalrea yAad ptedAthi Aap ro ch AandA sAg Aregional rogrammes br ad astAi A19Alocal lan uages Aan Adial cts A partA rom Hin iAand Ate ver ment,A lang ages (see A ox A .7). AIn aAsi ila Away, A he vis on Aof theA hi dAt erAofAtheAg eA onductA t e A ontentAofA anc ayati ARajAleg sla ions,Athe A emocratic processes inv lved,At ressal ofA of A lec ions,A heA atureAa d A onduct ofAsoc al Aau it Ameans Aof A xpr ssion Aand re ARightAtoA publicAg ieva ce , AwaysA oAm asure AthficieAecyAof Athe Ains itu ion , A heA se Aof thyAt roughA I form tion Act, 2005A tc AcouldAbeAco mu ica ed Ato A he Ap ople f AmoreA fective he As ok nAw rd Ain theAlocal langu ge.AR ral AradioA roadcast Acar ying Asuc Amess gesA oul Aa s AactAa Aa mediumAofAcom unic tionAw th regardA oA oldi gAofA ramASabha meetings, Panchayat meetings, decis on Ataken Aat District, AIn erm diateAa dAVillage Panchay tAlev ls AauditAofA anchayat sAe c.view Atha A .4.8.5 AThe A om is ion is Ao Athe Alike theA diffe en Amodes Aof Acom unic tio lectro icA pr nt A edia, A he Avis al Amedia, A should Ab A m dia, fol Aarts Aan Athe tres Ae c. the AruralA u ilised to Acreate aware ess among it shouldA p pu ation. AAs mentione Ae rlier, rgenceAi A eAen uredA ha A hereAisAaAc nv Amaxim se a proachA oAachieve syn rgies Aan Athe viewA reach. AThe A om issi n A sAa so Ao ngAsho l tha A Adist ictAl velAruralAbr adcastAa tiv tyA become AaAf ll-fledged Ai dependen f Athe AllAIn ia Radio.A oAach eveAtis,A partAfro Acover ng Aissu sA elatedAtoA anc ayatiARajAIn tit tionsAan Apeoples’Apar ic patio AinAlocalAg verna ce, AtheseA roadca tsAs ouldA40Source:4 nchayatiAR j, So r e: A abl A1AA& 1B A‘ThAStateAofAt e Panchaya s:AAAM d-T rmAReviewAa dA ppraisal , A22A ovembe A2006,AV l. ,AMinistry ofAP me nt ofA ndia GoveriAand Magah ,A 41InAth A199 Acens s,A .31Acror Ahad Aret rn dABho puriAa AtheirA othe Atong e, 1.33Acrore A s ARa astha i,A1 05 croreAeachAas Chh ttisgar 7.66Alak sAa AMait iliAa dA 6.73Ala hs AasAMa wari A(Source:A)181Local Governanceon issues related to agriculture and rural development, which concern mainly with the rural areas and combine it with programmes on the citizens’ Right to Information. The mechanism for this should be evolved by the Union Ministry of Information and Broadcasting in coordination with the Union Ministries of Panchayati Raj, Rural Development, Agriculture and other related Ministries.4.4.8.6 Recommendations:a. A multi-pronged approach using different modes of communication like the print media, the visual media, electronic media, folk art and plays etc. should be adopted to disseminate information and create awareness about Panchayati Raj. It should be ensured that there is a convergence in approach to achieve synergies and maximise reach.b. The Union Ministry of Information and Broadcasting should devise a mechanism in consultation with the Union Ministry of Panchayati Raj, Ministry of Rural Development and Ministry of Agriculture and other concerned Ministries for effectively implementing this activity.c.Rural broadcasting should become a full-fledged independent activity of the All India Radio. Rural broadcasting units should be based in the districts and the broadcasts should be primarily in the local language(s) prevalent in the district. These programmes should focus on issues related to Panchayati Raj Institutions, rural development, agriculture, Right to Information and relevant ones on public health, sanitation, education etc.4.5 Role of Panchayats in Delivery of Services4.5.1 Development is not just a basket of new investments and programmes but it is also a means to deliver quality public services to citizens. A list of such services can broadly be classified into following distinct categories –?civic services like water supply & sanitation;?social services like health & nutrition care, family welfare and primary/ school education;?infrastructure e.g. construction of roads and culverts and rural electrification;?welfare services like social security, pensions and distribution of essential commodities;?extension services for conveying development messages to the stakeholders;?governance-related services like issue of certificates and licenses, providing information etc.182Rural Governance4.5.2 So al A rea A 4.5. ASo far, Ath Aq ality A f Apublic serv ces Amade A va lab e Ato Athe ci ize s Ain A he Aru of Athese has not Abeen Asati fact ry. AWi h Aprop r Ad sign Aand effective Adecentra izat on Amany servi es couldAbe improvedAsubst ntial y.A nderAth AcurrentAarr ngemen , AexceptApartB x: A4.9 A: Ap roa h Aof Athe n Planning Ain Athe AC mm ssion Ain A romoti g A ccess A o AH alth Aand A du atiElev nth A ive AYearAPlan e Aa ea .A chi ving theA 1thAPla Ata getsAf rAh althAand A ducation r quiresA Agreatly expa ded rol AforA he state inAthenA sAnotAThisAi Abecau eA ccess AtoA ssenti l Apublic serv ce AsuchAa Ahealth, Ae ucati n,Aclean drinki gAw ter, AandAs ni atier ic s.an A utomati Ao tcome A fArising in omes. It A alls AforAd libera eApublicAint rv ntionA oAensure de ivery ofAtheseA cessAandA ItAi Ain Athi Acon ext that Athe Natio alARur lAHealt AMi sion hasAbeen la nched in orderAt Aim roveAt eAaonsci us ava la ilityAo Aquali yAhea thAcare, Asa ita ion,Aand An trition. AAc ie ement ofAthes Atar etsAalso r quires AaAAThs AcanA effortAin capacityAmob li ati n AofA he state Aa Avario sA evels At Apro ideAsuch service Athrou hApubli Aac ion heA copeA beAsup lemented wherever po sibleAb Apriv teA ffortA utA he e A an Abe no Ad ubtA hat Ae enAafter all win AforA Area on,A for expand dA upp y AbyAth Aprivat Ase tor, th Abu kAof Athe Arespo sibi ityA il Afa l Aon At e Apubli Ase tor. ForAthi endi ure planAex en itureAin A duc tionAa dAhe lthA il AhaveAto increaseAsubst ntially. Howe er,AmereA nc eases AinAexduc tionA willA otAsuffieAunlessAaccou ta ilit Ais Aalso A mpr ved.AFo AlocallyA elivered A ervi es AsuchAasAe ementaryAAa Awe lA an Ahea th,Amo e Aactive Asu er isi n Aby the PRIs c nAmakeAaAd ffer nce. AForA eco daryAa dAhigher Ae uc tioncess ry. asAfor tertia yAhea thAca e,Aothe Am thodsAofAm nitoringApe for anceAandA nforcingAaccou tab lityAareAn ability. BothAt eAC ntr AandAt eASt te AhaveAtoA oo erate A nAfin in AwaysAt Aimprove Am nit ring Aan AenforceAaccoun y. ACivi A Me sures to Abr ng Aabout effective Ad vo utio Ato A RIs A ill Ahel Aimpr ve Alocal Ain olv ment Aand Aaccoun abili his Aare . Society Aorga iza ions c n Apla Aa Am jo Arole Ain A ssis in APRI Ain At Source: A atingActri ityct call A inAo casionalA amp igns Afo Adiseas Ac ntrolAorA nr lment Ain scho ls,A RIsAhaveApr tt rmentA n Arol Ai Ama yAofAthe Aa ti itie AinAthi As ctor AThe Amost A mpor antAste AtowardsAb ve PRIs A f Apubli Aservice deliv ry wo ldAbeA oAsec re Agr ssAroots Apart cipa io Ai.e.At Ainvo pon ibleA InAthi Ac ntext it wouldA eA sefulAt Aana ys Aso e AofAtheAs ructu esA hich AareArefor de ivery Aof se vic sAinA heAruralAarea .4.5.2.1A.2.1.1 .5.2.1.1 A ro isionA fAhe lthAcareAf cilitie Athroug APr maryAandA ommuni yAHealt ACentresA Athe A woA PHC CHC) Aand A osp tals Aand Ap ev ntion Aof disease Athrou h Ahealth A duc tio Aar Aprima yA major Ac mp nen s Aof At e Ahe lth Acare delive y A yst m Ain A he Arur l Aare s. AThoug Eleventh he lt A are Ais A Asub ect At at could Abe A nt usted to Alocal Ago ernme ts A nder Athe heAUnionA Sc edu e Aof AtheACons it tion, in orde A o AgiveA Aspeci lA hrus AtoAthi Ase tor,A ogr mmesA G ver ment Ahas dire tlyAbee A unnin AaAlar e A umberAofA entral y AfundedAp lAbodiesA a lAa rossAthe coun ry. ATheseAp ogr mmesA re Abeing Aim lemente Athroug Aspeci ncha at A fu ct oni g AatA he Stat Aa Aw ll A sAatAthe distri t A evel AI Amo t AofAt eASt tesAGramAP offiial ,A pla An Arol Ain A hisAar aAe ceptAfor Aparti ipati g, Aa ong with At eAhealth Ad partment dAtoAtheA in AIECA ampa gns Al ke APu seAPolioAimmu izat on. ASomeAP ncha ats AhaveAco tr but infra tru ture AandA me iti s Ain AtheASub-cen res/ HCsAlike A ro isionA f Awater,Ael183Local Governanceand toilets besides carrying out minor repairs. However, they do not have any power to set right anomalies, discrepancies, irregularities or non-availability of services either at the Sub-centre level or at the PHC level.4.5.2.1.2 The role of the District and Intermediate Panchayats too, has remained limited to providing occasional infrastructure and procurement support. All the key activities lie with the line department. Purchase of medicines has also been centralized at the State level except in times of crisis when ZP funds areused to meet emergency requirements.4.5.2.1.3 To sum up, currently, so far as primary health care is concerned, it must be addressed holistically to include preventive and promotive health care, water, sanitation, environmental improvement and nutrition under a common institutional umbrella and this can best be done by the PRIs.4.5.2.2 Water supply and Sanitation4.5.2.2.1 Like primary health, drinking water is also a subject that can be entrusted to the local governments under the Eleventh Schedule of the Constitution. Government of India has been funding substantially for execution of programmes in this sector. However, the guidelines for the implementation of rural water supply programmes under the National Drinking Water Mission leave the selection of the implementing agency to the State Governments. While in some States, the Rural Development/Panchayati Raj Department manages it through the Panchayats, in many others, implementation is directly through the State Water & Sewerage Board, or through a line department of the State Government like PHED. In most places, maintenance is still the responsibility of the same agency and very few community/user groups have volunteered to own the scheme.4.5.2.2.2 The normal sources of drinking water in rural India are open wells, Mini Water Supply Schemes (MWS), Piped Water Supply Schemes (PWS) and Bore Wells with Hand Pumps (BWH). In some States, maintenance of MWS and PWS are with the GPs and of the BWH with the IPs. Even when the responsibility for maintenance of BWH has been transferred to GPs, the engineering support for repairs comes from the Intermediate184Rural Governanceor ,A r ADistri tAPanchayat . AheAus rAcharg sAa eA o A eAlevi dAa dAcollect dA yAt e AGP ,Abu .A nAmo tAcase ,At eAwat rAtar ff Ah s Abe nAke tA t aAve yAl wAa d Ai sArealizati n A sAal oAwea nA Thu ,At e Asche eA s aAwho e Abecom sAn n Asustainabl . AheATwelf hAFinan eACommissieA h sArecommend dAth tAt e APR s Ashou dArecov rA t Alea t A5 % A fAt eArecurri gAco t A nAt fo m A fAus rAcharges.4.5.2.2 3 n n Aso e AState ,At eAresponsibili yAf rAplanni gAa dAimplementati n A fAdrinki gAwat r Aschem s A nArur lAare sAdo sAl eAwi hAt e ADistri tAPanchaya ,Ahoweve ,At eAVilla eAPanchaya sAa eAusual yAn tAconsult dA tAt eAformulati n Astag ThA e Abefiefcia yAgrou s As tA pA d A n Asever lAvillag sA o Aimpleme t ACentral yASponsor nA Schem s Athrou h Acommuni y Aparticipati nAoft eA a tA s Aparall l Abodie , Aindepende t A f At eAVilla sA Panchayat . AheAVilla eAPanchaya sAal oAfa eAproble nAmaintenanc ,A s Aprocureme t A sAt eAresponsibili yAfAt eAZi aAParish d A rAt e ASta e AGovernmen .AGovernme tA f AInd a Ah sAtak n Aso e Ainitiativ s A nAth sAregar .ASta eAGovernmen sAwe eAask dA o Asi n a AMemorand mA fAUnderstandi gAwi hAt e AGovernme t A f AInd aAbefo eAcommenceme t A fAt eAEleven hAFi eAYe r APl n A nAord rA o Ainvol eAt eAcommuni yAa d APR sAa dAtransf rAt eAasse sA oAth mA n a Aphas dAmanne . AImplementati nA fAth s Asyst mAmu t A eAensured.nA 4.5.2.2 4 AThe e A s aAdire tArelationsh p Abetwe nAWate , ASanitati nAa dAHealt .ARur lASanitati tA covera eAw s Aon y A2 % A n A200 . AHoweve ,Ad eA o Asustain d Aeffor sA yAt eAGovernme eA throu h ACentral y ASponsor d ASchem s Asu hA s ACentr lARur l ASanitati nAProgram )A introduc dA n A19 6Awhi h Ah sAn w Abe n Amodifi dA sAt eATot l ASanitati n ACampai nA(TS eA n A199 ,At e Apercenta eAcovera e Ah sAgo eA pA o A4 %A s Ap rAt e Alate tAavailab e Afigure4 . hA sA annu l Apl n Aoutl yAf rAt eAT C A sARs.1,0 0Acror sAf rAt eAye r A2007-0 . A oAf r A5 0Adistric eA fAt eAcount y Aha e Abe nAcover dAund rAth s Aprogram eAa dAt eAtarg tA sA oAachie eAt eA objecti e A fAtot l Asanitati nAcovera eA yAt eAye r A201 . ATh s Aprogram eAai sA oAchan wA t e Aearli r Asupp yAdrive , Ahi h Asubsi yAa dAdepartmental yAexecut d Aprogram eA o aAl yA subsid ,Adema dAdriv nAconce tAwi hAemphas s A nAhygie e Aeducatio .AProvisi n A fAsanita gA faciliti s A n Aschool ,Aanganwad sAa d Aindividu l Ahous sAwi lA o aAlo gAw y A nAinculcatihygien c Apractic sAamong t Abo hAt eAchildr nAa dAadult . AheAheal h Aindicato s A nArur lAare185sA42Sourc :AAnnu lARepo t A2006-0 ,AMinist yA fARur l ADevelopmentLoc lAGovernanceeA wou dAn t Ash wAa y Asignifica t Aimproveme tAunle s Ahundr d Ap rAce t Asanitati nAcovera sAensur dAalo gAwi h a Aprop r Asol dAwas e Amanageme tAsyst mAf rAt eAvillage.4.5.2 3Aimnry Education4.4.5.2.3 e 1 AheAk yAactiviti s A nAt eAdelive y A f Aprima y Aeducati n A nArur l AInd aAinclud ?lallocati gufunds ?esetti gtstandar susu hs sucurricul medesig sna delearni gcachieveme televel s ?lplanni gof rhphysic lxexpansi nna duquali ymimproveme tf fninfrastructur e ?rcreati gsasse s –uhuma ,osoci lna dhphysica ;nan ?poperati nna damaintenan eO (O& )f fht esasse shth srcreated.4.5.2.3 2AEnrolme t A f Astuden sAa d Apreventi n A fAdrop-out , Aprovisi n A fAte tAboo sAa dAlearni gAmaterial , Ahiri g A fAteacher ,Athe r Apre-servi eAtrainin ,Aassigni g A fAteache sA ,A o Aspeciic Aschools/classe , Aperforman eAevaluatio ,Ain-servi eAtrainin ,Acare rAprospect rA setti gAexaminati n Aschedule , Amaintenan e A f Ascho l Abuilding /Afacilitie , Asupervisi nAov eA teacher , Amaintenan e A fAdiscipli eAa dAmonitori g A f Ascho l Aprocess sAa e Aso e A fAt sub-activiti s Aessenti lAf rAdelive y A fAquali y Aprima yAeducation.yA 4.5.2.3 3A tA s aAConstitution l Aobligati n A fAt eAGovernme tA o Aprovi eAfr eAa dAcompulso sA elementa yAeducati nA oAa lAchildr nA pA oAt eAa e A f A 4Ayear . AheAUni n AGovernme tAh dA be n Asupporti gAt e Aeffor s A fAt e ASta e AGovernmen sAthrou h AspeciicACentral yASponsor sA Scheme . A oAf rAduri g a Asp n A fAthr eAdecad sAthe e Aha e Abe n Asev n Amaj rAschem lA coveri g Aelementa y Aeducati nA nAt eAcount yAname y AOperati n ABlackboar ,ANon-form ,A Educatio ,ATeach rAEducatio ,ANutriti n ASuppo tA oAPrima yAEducatio ,ALok-jumbis sA Shiks aAKar iAa d ADistri tAPrima yAEducati nAProgram e A(DPEP . AheAk yAingredien gA fAactiviti sAund rAthe e Aschem s Ainclud dAconstructi n A fAclassroom , Aprovisi n A fAteachi rA materia ,Atraini g A fAteacher , Aselecti n A fAvolunte rAteache sAa d Asupp y A fAfo dAgrai sAf aA nutrition l Asuppor .AA lAthe e Aschem s Aha eAn w Abe nAintegrat d Ain oAt e ASar aAShiks )A Abhiy n A(SSA . ATh s Asche eAai sA tAgivi g Aeducati nA oAa lAchildr nA(a eAgro p A6- 4Ayear .A pA oAcla s 8A y A201 .A tAal oAai sA o Abrid eAa lAgende , Asoci lAa dAregion lAga s A nAeducatio he Astrate yAdocume t A fAth s Aprogram eAcal sAf rAcommuni yAownersh pAthrou hfAefecti eAdecentralizati nA yAacti eAassociati n A fAt e APRI . A tAal oAenvisag s Ainvolveme t A fAt eAwomen sAgrou ,AVilla eAEducati n ACommitt eA(VE )Aa d Aso e Aoth rAextern lAstructur sAwhi hAa e Aoutsi eAt e APRIs.Rural GovernanceTable 4.6 : Progress Against Key Input Targets of SSASl. No.ItemsCumulative TargetsAchievementsincluding 2006-07(up to 31.3.2007)1. Construction of School Buildings183461Completed and in Progress157516 (85.85%)2. Construction of Additional Classrooms692678Completed and in Progress650442(93.90%)3. Drinking Water Facilities170267Completed and in Progress158361(93.01%)4. Construction of Toilets235041Completed and in Progress203577(86.61%)5. Supply of Free Texbooks6.69 croresSupplied6.40 Crore(96%)6. Teacher Appointment10.12 lakhsCompleted and in Progress7.95 lakh(78%)7. Teacher Training (20 days)3405615Completed and in Progress2952395(87%)8. Enrolment in EGS/ AIE Centres12689299 children69 lakhs54%9. Opening of New Schools240072Completed and in Progress193220(80%)Source: As per the recommendations of the Planning Commission, under the SSA, location of schools and construction of school buildings would be the function of the GPs. They would also select the teachers but their training programmes would be arranged by the Intermediate Panchayats. Teaching and training material would be arranged by Zila Parishad for which they should identify and promote resource centres. Nutritional programmes would be entirely managed by the GPs while the ZPs would arrange for linkages in respect of supply of food grains.4.5.2.3.5 Four years after the introduction of SSA, it was stated in the first meeting of the Governing Council of the National Mission for SSA held in February 2005 that only 47187Local Governanceof the 52. 9AA of A he A100 Ac ildren Ae ro led Ai A lass A Areac AC ass 8. AThs Ap ts At e Ad op Ao t A ate AalevelA p r Acen Aw ich Ais Aunacc ptabl Ah gh AIt Ais Aoficially stat d A hat at Athe A rimar ,ApoorA ( la sAI toA ),At e Ad opAo tA at Ais 34 Ape Acent. AUnfav urable Astudent- eacher rati uct reA att nd nce ofAthe As ud nts AinAs hoo s, Alow At achingAmoti ation,Aina equateAinfrast ncern.A a d Ahig Al vel AofAabse teeis Aam ng Athe At ach rsAare Aid nt fied Aa Amajo Aa eas AofAc ionA fA Universal za ion AofAele entaryAed cationA hro gh AS A Awi h suchAaAd tailedAall ca em AtoA ork AtoAd fferentAinsti ut onsAof Ad liv ry A as An tAbeenAac i ved.AAA rimary reaso As eAt atAthe Aow er hip ofAtheApr gra me A as An tAbee Ag ven toAtheAPanc ha y ats.4. .2.3.6A esp teA llAtheAdeli ea ionAo Ar les byAtheAP anning ACom is ionAas stated abo e,At eA School RIs doAn tAp ay AanyAefecti eA oleA n AthisApro ra me. TheAkeyA layers ap ea Ato beAthe AOfficer Deve opm ntAand AMan gementACom ittees A SDM s)A ndAth ABlockAEd catio schoolA (B O). At AtheA illage lev l, At e A DMCAis Aexcl sivelyAresp nsi leA or AallA sp cts Aof andingA administ atio ;A ithA oAr le A orAt eAGramAPan heAZila APha at. Ari had orAitsASon AorA Co mi teeAonAEd cati n At o, has no say Ain policyA ak ng, Ain schoolAadminist atAStateA inAproc rem nt Aand Adistr bu ionAofAu ifo msAandAschola sh ps. AIn effct Ait isAthEd cationADepa tment Aw ichAisAd rectlyAresp nsi leAforA unni g AthisApro gr a mme .sAbodyA 4. .2 3.7AThe ACom issio Afee sAtha At ere A sA eed AtoArest uct re Ath h ASD C.AT la ingA ho l , Aas A Arul , Ah ve Ath Al cal AGP Areprese ta i e Aas Aa A emb r. A or A ll Aits duties Ar should to Aenr lment, Aret ntion Alocal Apartic pat on Aan Aother Aim ortant A ssu s, At e ASDMC ustAbeA re ort to A h AGP.AA Ad tai edAan Aclear Aa tiv ty AandAr source A apping Ae erci eA dh redA unde taken,Aspe ify ng Ath Ar les Ao ASD CsAan APRIs Awhich sh uldAbeAs rictlyAtoAtherea f te .4 5.3A n A iew of Athe abo e, AtheAfo lowin Ast ps AareAr qu red Ato ens re AtheAcen ra ityA fA RIsAinA erviceAd liveryAprogra mes:-?lUnb ndl ngrthee ervi ecintotactiv ties.?iAs ignin rclearsresponsib lit esfffornd ferents sp ctsvofe ervicerd li eryntoea enciesiin ludi g PRI A– At e Arol Acoul Aran e Afrom Ap an ing AtoAsupe visonAandAfee back.?g lac ngsthecre ourceser qui edrfore ervicerde iver ,ubot ahu ianaandafn ncia,Rwith PRIs.~tobe? ettingst nda dsfors rvic sbothinstit tio alandoth rwihise. han ower. mo ulatedAac or ingAtoAav ilable Afac lit esAandAmaes ectPr? paring~ erviced liver ~p ans byt ePRI ~b sedo ~thesest nd rdsin f AeachAs rv ce,AinAconsu tati nAw thAthe Astake old rs andAinAacc rdan eAwthAtheAre our esAand Afac litiesAava lable.AMil st nesAinAupgr da ionAofAs rv cstermsAi188Rural Governanceof quality and quantity. Service Delivery Plans could be prepared by institutional committees consisting of stakeholders, officials, elected representatives and experts in respect of institutions like hospitals, schools and anganwadis. In respect of other services, the plans could be prepared in consultation with user groups.?Publishing the elements of Services Delivery Plans in the form of Citizen Charters which would indicate the levels of assured services; measurement and feed back systems and grievance redressal systems.?Putting in place a community based monitoring system including user groups, SHG networks and civil society groups to monitor the implementation of Service Delivery Plans and provide inputs for further improvement.4.5.4 Recommendations:a.In terms of the Eleventh Schedule of the Constitution, local level activities ofelementary education, preventive and promotive health care, water supply, sanitation, environmental improvement and nutrition should immediately be transferred to the appropriate tiers of the PRIs.b. State Governments need to prepare an overarching Service Delivery Policy outlining the framework within which each department could lay down detailed guidelines for preparation of Service Delivery Plans.4.5.5 Resource Centre at the Village Level4.5.5.1 Along with democratic empowerment in the form of local governments, there is need to create local information and resource centre at the levels of the Village and the Intermediate Panchayat. ICT and Space Technology have already prepared the ground for such a move. The time has come for augmenting national resource management and planning through creation, maintenance and flow of information from below.4.5.5.2 These Resource Centres at the Village Panchayat level should utilize the potential of educated local youths in documenting and mapping local resources; soil types; drainage pattern; cropping and animal husbandry practices; water resources; land and farm holding; susceptibility to natural disasters – documentation of impact, recurrence, rescue, relief and settlement requirement; rural infrastructure etc. This locally generated information base should be corroborated through satellite imagery and other space-enabled services. Such space-enabled services would thus, need to be provided at Village and Intermediate Panchayat levels and it could be digitised. The information generated at the Village and189Local GovernanceIntermediate levels should be collated and synthesized at the district headquarters and it could be used subsequently for preparation of a composite district plan.4.5.5.3 Once these Resource Centres become operational, they should also be utilized for documenting in detail, local traditional knowledge, especially about medicine, natural resource management and agricultural practices; local arts and crafts; folk memories – ranging from folk tales and lores to local memories about historical events, movements, people and monuments; community festivals, gatherings, events and folk cultural practices etc. before they vanish into oblivion. This would not only generate a database for posterity but also create a sense of collective identity in the Panchayats, which would further strengthen their democratic functioning and inculcate a sense of common destiny and vision.4.5.5.4 Government of India has recently launched a national level programme targeted at improvement in rural infrastructure in order to ensure better service delivery. The Government has approved a Common Service Centres (CSCs)43 scheme, wherein one lakh CSCs will be established in approximately six lakh villages spread across the country. The CSCs are envisaged as the front-end delivery points for Government, private and social sector services to rural citizens of India, in an integrated manner. These Centres would also function as a means to connect the citizens of rural India to the World Wide Web. Another similar initiative to Common Service Centres of GoI, is “Mission 2007 : Every Village a Knowledge Centre”. Mission 2007 was initiated in July 2004. Its goal is to take the benefits of Information and Communication Technology (ICT) - led development to every village by creating village knowledge centres. In order to achieve this ambitious mission, a National Alliance has been set up. The Government has supported this initiative by including it in the National Budget and providing Rs. 100 crores support out of the Rural Infrastructure Development Fund (RIDF).444.5.5.5 While appreciating such initiatives, the Commission feels that setting up space technology enabled Resource Centres at the Village and Intermediate Panchayat levels all across the country should be on the priority agenda of the government. This would require substantial capacity building at the local level. This would, in essence, also necessitate a shift from the currently available generalistic education at the post-school level, to a skill and technology based system which focuses on farm & animal husbandry practices, computer applications, commercial cropping and soil and water management. It will enable the rural youth to utilize their knowledge in the local environment, to earn better livelihoods and to manage their local resources in a productive and sustainable way.4343ht tp://. in44mission201n190Rural Governance4.5.5.6ARecommenatons:icationAA . AStep As ould A e A ake At Aset AupAInf rma ion AandACommu AatAthe Te hnolo yA( CT)Aa dASpaceATe hnology enabledA esource Ce tre Vil ageAandAInte mediateAP nchaya Ale elsAf rAlocalA esource map ingAandAge er tionA fAlocalAinf rmatinA ase.A .ATheseA esource Centre Asho ld also be A sedAforAdoc menti gAlocalAtra itionalAk owl dgeAandAhri age.hif ingA c.AA apacityA uildin As ould AbeAa te pte AatAt e Aloc lA evel AbyA illAandA theAc rrentlyAa aila leApos AschoolAgene alisticAe uc t onAto aAs sbandryA te hnolo yAbase Asyste Ahavi g A ocus o AfarmA AanimalAh dAwaterA pr ctices,A omputerAappli ations,Aco mercialA rop ingA ndA oilAamanage ent.4 6ALocalAGo er men AinAt eAF fthAa d ASixthA cheduleAAr as4.6 1 ALocalAGo er men AinAt e AFifthA cheduleAArea 4.6.1.1 SalientA ea uresAofAPa cha atiARajA(E te sionAtoAS hedule AAre s)AAc,A19PESA96,AfectiveA 4 6. .1.1 AIn Arec gn tio AofA he Af ct that Ain sever l A artsAo AIn ia, At e A ri ef AisAanA ionAhasA c mmu i yAandAa ve icle Aof Ap litical Aconsci usne s AP rt A AofAtheACons itu Apeopl A inco porated special Apr visi ns Awith re pect At Aso ial Aand A conomicApr te tion Ao Arti l A l vin Ain Athe AS hed led Aan Atrib l A rea AofAtheA oun ry. A orAthis A urpos ,Aunder du eA5 A 244,AaA eparateA nn xur Ato AtheACons itu ion A asAbeen cr ate AinA he formAofA c h 4(1)(5)A InAthe Aba kg ound A f Athei AstrongAi e tity, Aa specia Ac aus AinA he form Aof ArticleA2 AS ate A st pula esA hatAtheApr vi ions of PartAIXA el tingAto A re tionAofAPa chayat Aac ossAthdoAnotAautom tical yA pply A oAthe seAareas.specialA 4 6.1 1.2AForAdecentra iz tion AofAgo er ance A nAthes Aareas,Ago ernment e acted Aa ex end A leg s ati nA-AtheAPa cha atiARaj A(E te sion AtoAS hedule AAr as AAct A nA199 -Awhich Prad shA to allAthe notifiedAs hedul dAareas lo ated inAnin AS ate AofAtheA oun ry.A(i AAndhra Prade hA (ii) AChha tisga h A(iii) Guja at A(iv)A imachal Pra eshA(v)AJ arkh ndA(vi AMadhya(vii) AMah rashtr A(viii AOr ssaA ndA(ix) ARa191Local Governance4.6.1.1.3 The most significant feature, the essence of this legislation, is the acceptance of Gram Sabha as the most powerful unit of the Panchayat system. It recognizes that people living in these areas are acutely disadvantaged in terms of political education and empowerment. Also recognizing that the full-fledged multi-level Panchayat system as prevalent in the plains may marginalize the local people, PESA introduces a strong element of subsidiarity in the structure and provides for exercise of maximum power at the lowest level.4.6.1.1.4 The Act defines a village as ordinarily consisting of a habitation or a group of habitations or a hamlet or a group of hamlets comprising a community and managing its affairs in accordance with traditions and customs. It stipulates that every village will have a Gram Sabha, which will be competent to safeguard and preserve the traditions and customs of the people, their cultural identity, community resources and customary mode of dispute resolution. With respect to the manner of reservation of seats at each Panchayat level the Act stipulates that reservation for the Scheduled Tribes shall not be less than half of the total number of seats and that all seats of Chairpersons of Panchayats at all levels will be reserved for the Scheduled Tribes. It has also been provided that State Government would nominate persons belonging to such Scheduled Tribes as have no representation in the Panchayat at the intermediate level or the Panchayat at the district level, not exceeding one-tenth of the total members to be elected in that Panchayat.4.6.1.1.5 Article 4 of the Act provides details of the functions, powers and responsibilities of the Gram Sabha/Panchayat. These could be divided into the following three categories:-(a) Functions and responsibilities where the approval of the Village Gram Sabha is compulsory: (i) Approval of plans, programmes and projects for social and economic development (before they are taken up for implementation). (ii) Identification/selection of beneficiaries under anti-poverty/other programmes. (iii) Grant of certification of utilization of funds to Panchayats.(b) Functions and responsibilities which require compulsory consultation with the Gram Sabha/appropriate Panchayat: (i) acquisition of land for development projects, (ii) resettlement/rehabilitation of displaced persons.(c) Functions where prior recommendation of the Gram Sabha/Panchayat is necessary: (i) grant of prospecting license and mining lease for minor minerals, (ii) grant of concession for the exploitation of minor minerals by auction.4.6.1.1.6 This Act also directs the State Government that while endowing Panchayats in192Rural Governancethe shAthemAasA th Asche uled areasA ith powersAan Aa tho it AasAmayAb An cessary At Aest bl Gra ASa haA i st tuti nsAofAself A ove nment Athe AState Gover mentAs allA nsu eAth t Athe rcementAofA andAthe respective Pan hayat AareAgi enAspe ificA owersA it AregardAtoA nf agement ofA p ohibition Ao nersh pAofAm nor Afore t Aproduce, prev ntingAland A lienation, ma seAc ntrolA villa e Amar ets,Amo eyAl ndhe AActAalngA tc. AoAem owers Gr mASabha A oAexercaAplannin . over Ai sti utions AandAfu ctionarie Acon ected with localAareAPESA wi lA 4.6.1.1. AP ovi ion ofAany Al wA elatingAto Panch ya s AwhichAis Ai cons sten Awit cease toAop rat Aaft r A neA earAofAitsAenactmen .seAthat i A 4.6.1. .8AA ti le A4 n)AofAthi Ae ac ment Ais Aof Ac nsiderableA ig ific nceAi Athe se aseAshouldA insert AaAspe ificA lau eAthat theAh gherAlevel Pa chayatsAi ASche ul dA reas in AnoA hority ATheA arg nali e AtheAGramASa ha/Villag AP nchayatA yAass mingA hei ApowerAand au tate Ahave been givenAv ryApointed di ecti esAinAthisAresp ct.4 6.1 2AP SA AandAtheA nion/Sta t eALa sajAAc s Ato 4. .1. .1AAl Athe aboveA ineA tatesAh veA mendedAthe respective Pan haya iA Aregard toA matc Athem AwithAr qu remen sAofAPES .AHo ever, Am ch re ains to Ab AdoneA itpr visio sA s bje tAlaw AandA ules whic Aa so need Ato beAmodifid A uitablyAin acco dance Awithomatic llyA of APESA.A echni allyAun e AS cti n A5A fAt eAP SAAA t Aal Asuc AlawsAhaveAau lA oll wedA bec me Ain alid Aaft r AD cembe A12 A1 97.AButA nApra tice the e Alaw AareA eingAsti gisla ions b Athe AState Government machinery ASimi ar y there isAa Al rg Anumb rAof AUnionAl wh ch needAto Abe horm nis d Awith Ath Ap ovisi n Aof PESA.AMa yAp liciesAand pr gra mesAo Athe AUnion AMinistries/ epar mentsAw llArequi eAsuitableAamendmen .Athe AFift A 4.6 1.2.2 AP SA A erives Aits Acon titution l Ava idity Af om A r icl A24 AM A 4) A b) Aanpl itatio A Sc edule. AThs ASchedu e A rovides A n Aenablin Afr mework Afor pre enting Athe AeSi c APESA of tri al Aand Afo Aprov din Apea e Aand Agood go ern nce Ain At e ASche ule AA eas. Aca t Aupo is A Aa AUnion A egi l tion Aan Aa Alogica Ae ten ion Ao Athe AFift A ched le Aa Ad ty Ai In Acase Aof the AUnion Go ern ent A o As e Athat Athe pro isions Aa e Astrictly Ai pl ment d. ct onsAca A re uct nceAb Aa y AState Ain Ai ple enting Athe pr visio s AofAPE A, Aspecific dir che uleAofA b Ais uedAbyAthe Go ernme tAof A ndiaAun e AP ovis A Ao APa t AA Ao AtheAFif hAtheAConsti t utio .4.6.1.2.3ARecomen at ons:ES AshouldAA )AThAUnio AandAStateAl gisl tionsAt at impingeAon pr visi nsAofAbeA mmediat lyifimo dAsoA sAto br ngAthemAin confth rmithe yAct.Awi193Local Governanceb. If any State exhibits reluctance in implementing the provisions of PESA, Government of India may consider issuing specific directions to it in accordance with the powers given to it under Proviso 3 of Part A of the Fifth Schedule.4.6.1.3. PESA and Specific Policies of the Government/Centrally Sponsored Schemes4.6.1.3.1 There is a large number of Centrally Sponsored Schemes which are not compatible with PESA e.g. Policy on wastelands, water resources and extraction of minerals. These policies, as interpreted and implemented, have given rise, on occasions, to confrontations between the tribal people and the administration. Similarly, the National Policy on Resettlement and Rehabilitation of Project Affected Persons, 2003, National Water Policy, 2002, National Minerals Policy, 2003, National Forest Policy, 1988, Wildlife Conservation Strategy 2002 and National Draft Environment Policy, 2004 would also require detailed examination from the viewpoint of ensuring compliance to the provisions of PESA.4.6.1.4 Effective Implementation of PESA4.6.1.4.1 The PESA has been in existence since last eleven years, but the response of the States towards its implementation has been rather slow. The States have not gone beyond inserting broad amendments in their Panchayti Raj Act. In absence of a vocal leadership in these regions, compliance on other issues has been weak. Under the Fifth Schedule, Part A(3), special powers have been assigned to the Governors of the States concerned; they have to send annual report to the President regarding the administration of the Schedule areas. The report has to be analysed by the Union Government and if necessary, the Union Government has the powers to issue directions to the States. In fact the scope of the power given to the Union Government under this provision is comparable to its power under Article 256. But there have been very few occasions when the Union Government issued any direction to the State Government under this clause.The Commission is of the view that due importance must be given to regular annual reports from the Governors as stipulated in the Fifth Schedule, Part A(3) of the Constitution.4.6.1.4.2 In tribal areas, though, the society and economy is closely woven around womenfolk, their involvement at the Village Council/Gram Sabha level is minimal. Special efforts need to be taken to raise their status in this respect. There is need to make suitable provisions in the PESA Rules and Guidelines making it mandatory that the quorum of a Gram Sabha meeting would be acceptable only when out of the members present, at least thirty three per cent are women.194l Governance Rura4.6.1.4.3 rights, AtheA 4 6.1.4.3A or Aeffectiv Ac mplianceAto leg slationAan Ap otecti nAof Atr bal Ahave to beA ad in str tion A t AtheA ower A ev ls ought AtoAbe sensiti ed.ASpec alAm as re enh nceme tA taken At Ast ength nAtheAlocalAad inis ra ionAb th inAtermsAofA ntellectual chAS ateA oA andAskill A pgr dati n. AOneA uchAm as re AcouldAbeA o stitu in AaAg oupAi Ae AArea .AThsA lookAinto As re gth ning Aof AtheAad inistrati eA ach nery A n AtheAFi thASch dul eAcadres A fA group A anAconsid rAimportantAad inistr tive is ues Asuch as creation ofAsep ra eAandAother e plo ees Af r AtheAFi thASch duleAArea , A rovision ofAhardshipAp y/a lowan incentives,A referenti l A reatmentAin Aa com odation Aa d Aed cat onAe c.AandAm keAsuitableArec mm nda ionsA o AtheAState Government. Con ideringAth Ai port nce AofAth sAe ercis ,Athe Afu ds A equi edAfor A his Apu po eAsh uldAbeAma eA vai able A y AtheAUnio AGove nmentAu der Ar icl A275 AofAtheAConst i tuti n.4.6.1.4.4ARecoheAst ndingAme dations Astip lat A dA a. ARe ularAAn ual A epo tsAfrom A he Gover orAof ev ryAStateAa eAgivenAdue und rAtheAFif hASc e ule AP rtA A(3)AofAtheA onst tu ionAm stA impo tance.A uch Are or s AshouldA eApublished imm diatel Aa dAp acedAi AtheApuliAd main.ings of b. Athe InAord rAto ensur Ath tAw menAareAnotA ar inalised in mee GramA abha,A he e should Abe aA rov sion inAth APE AARulesAan AGui eli esAtha At e quor mAofA AGram AS bhaA ee ingAwillAb Aacc ptab eAo ly whe AoutAof theAmemb rs prese t, AatAleastA hir y-th eeA erAcena eAwo en.ningAofAtheA cA AEachA tateAshoul A onsti ut Aa Ag oupA oAlookAintoAs re gth pA il Anee A ad inistrati eA ach nery A n AtheAFi thASch dul AArea .AThi Agro )A rovisionto go Aint At eAi suesAof (i)AspecialAad inistrativeAa rang ments,A(i ofAh rdshi Apay, (iii)Aother inc ntiv s,AandA(iv)A referenti lA reatmentAinAa com odation Aan Aed cation.AAll ex endi ureAin thisAr ga dAshoul Ab Atreate Aas Acharged expen itureAu der Ar icl A275AofAtheAConst i t u ion.4.6. .5AEffectiveAIm le ent tionAo AtheATri alASub-pl a nA(T P)eldA nA2 -6- .6.1. .1 AThe APri eAMin ster, Awhil Aad ress ngAthe A 1s Ame tin AofA he NDCAh n-la sab e,A 200 Ahad sta edAtha Athe ATri alAsub pl nAsh uldAbeAmade Ano -di ertible AandAn eASched ledA wi h AtheAcle r A bjective ofA rid in AtheAgapAin Aso io-economic de elo mentAofAt ni gAf rmedA Tr b s, Awit in aAp riodAo At nAyear . ATheA xp rt AGroupAon AD centrali edAPla andr nAwe tA byAth APa chayatiA aj AMi ist yAunderAthe A ha rman hi AofAShri AV.A amacintoA his problemAa d sugges ed aAnumber of Am asures wi hAr gard to (i) roleAofA195Local Governancecommittee for social justice in the States, (ii) co-option of NGOs in such committees, (iii) implementational responsibilities to Panchayats, (iv) impact assessment and (v) criteria for central support to TSP.4.6.1.5.2 The Commission is of the view that since last many years, the tribal-sub plan has been a regular feature of the planning exercise in a State, it has been implemented in a ritualistic manner and treated just as an adjunct of the State budget. The performance has not been very encouraging, on account of both poor planning as well as weak implementation. Technically and professionally qualified personnel who are the sheet anchors of the development process, are reluctant to work in such areas. For government employees, a posting in these areas is considered to be a punishment. The situation is further compounded by lack of data; there has been little attempt in the past to have an impact assessment made. Then, finally, one has to contend with the problem of extremism which prevails on a large scale in some of these States. The Commission feels that both the Union as well as State Governments have to take special steps with regard to (i) creation of a special planning unit for scheduled areas in a State; (ii) special financial stipulation for the sub plans; (iii) incentivisation and capacity building of government employees; (iv) impact assessment of the past schemes; and (v) effective monitoring/social audit of the current programmes.4.6.1.5.3 Recommendations:a.Keeping in view the inadequacy of the past efforts, State Governments should form a special planning unit (consisting of professionals and technically qualified personnel) to prepare their tribal-sub plan.b. A certain portion of the allocation under TSP should be made non-lapsable on the pattern of the Non Lapsable Central Pool of Resources (NLCPR) created for the North-Eastern States. A special cell may be set up in the Ministry of Tribal Affairs to monitor expenditure from this fund.c. The government may consider preparing an impact assessment report every year with respect to the States covered under PESA. This exercise may be assigned to a national level institute which has done similar work in the past e.g. National Council for Applied Economic Research (NCAER), National Institute of Public Finance and Policy (NIPFP), National Sample Survey Organisation (NSSO) or some other suitable agency. This agency will rate the performance of the State on predetermined indices.196ural Governace RAdmin stration.4.6.2 ALo al Gov rnmen s Ain Athe SixthASchedu e A reasution Aw ll b AA 4 6.2.1 AThe Al cal Agover me t As ructu e Ain Athe Sixth Sc edu e AAreas Aof At e ACo stState/DistrictA co er d Aa Aa Apart of the ARepo ts Aon AConf ict Re olu ion Aand Aon Athe1975URBAN GOVERNANCE5.1 Urbanisation and Growth 5.1.1 Trends in Urbanisation5.1.1.1 Urban governance is a complex issue and poses a formidable challenge in today’s public management in our country. For those living in India’s metropolitan areas, daily living can be chaotic and trying, the unfortunate result of poor urban planning, creaking infrastructure and ineffectual governance. In smaller towns, at the intersection of rural and urban India, the situation is often worse – inadequate facilities, no urban identity and limited resources, both human and financial, to develop and maintain basic urban services.5.1.1.2 According to UNFPA’s State of World Population 2007:“...in 2008, the world reaches an invisible but momentous milestone: For the first time in history, more than half its human population, 3.3 billion people, will be living in urban areas. By 2030, this is expected to swell to almost 5 billion. Many of the new urbanites will be poor. Their future, the future of cities in developing countries, the future of humanity itself, all depend very much on decisions made now in preparation for this growth.”From the beginning of human existence till now, the number of people in rural areas, world-wide, exceeded those in urban concentrations. As stated above, by the end of 2008, it is expected that this position will be reversed. This huge demographic shift demands designing and implementing new systems and a redefinition of priorities and dramatic changes in the lifestyles of individuals and communities. Policy makers must acknowledge and plan for this paradigm shift.5.1.2 Urbanisation and Economic Growth1985.1.2.1 Urbanisation and economic development have a strong positive correlation which is indicated by the fact that a country with a high per capita income is also likely to have a high degree of urbanisation. However, some of the largest urban agglomerations are in poorer countries and this is mainly because of increasing population density in these countries and the incapacity of their rural economies to prevent rural to urban migration.Urban GovernancehtmlTa le: 5.1ADistribu io Aof theATo al,AU ban andAR ral APopulat on Aof theAW rl AbyADevelop ent AGr up:A1950-2045A PerAcen ag Aof theAW rldAPopulationDevelop ent Agoup A950 A975 A000A2030T tal ApopulaAAAA oreAdevel pedAregons A2.3 A5.7 A9.7A15.3 essAdevel pedAregons A7.7 A4.3 A0.3A84.7U ban ApopulaAAAA oreAdevel pedAregons A8.2 A6.4 A0.9A20.5 essAdevel pedAregons A1.8 A3.6 A9.1A79.5R ral ApopulaAAAA oreAdevel pedAregons A1.6 A3.59.7A7.1 essAdevel pedAreg 9 2 . 9ons A8.4 A6.5 A0.3Aal,A 5.1 2. AThe Aecon micAadvant gesAprov de AbyAu banAa eas areAm ny.AGenera ly, theAindustr easA commer ial andAser iceAsec orsA en AtoAconcent at Ain and Aar und Au ban Aar as. AheseAa ut A pro i e AaAla gerAconcentra io AofAmater al, Alab ur,Ainfrastruc ure andAserv cesArel tedAinon the oneAh nd, and A lso theAma ke Ain theA or Aof Aconsum rs Aon theAote r . AandA 5.1 2. AAsAI dia Aprogre sesAtow rdsAbeco i gAaAdevel pedAst te, theAs ar AofAindu try se.A serv c sA– Au ban Aorie tedAsec o sA Ain our AG oss ADome tic APro uct A( DP)A illAincre oreA Agricul ure nowAacco nts forA n y Aa Aift Aof our GDP and itsAs ar AisAdeclin ng AI AisAthere ralA neces aryA hatAwit outAta ingA way A rom the Aessen ial A ee Ato Asup ortAagricul ure andAr andA developm nt,AIn ianApolicy-ma ers A lsoAf cusAatten io Aon Au banAgro th,Aplan ing provisioni n g .5 1.3 AU banAGr wt AinAId i a Aio A 5.1 3. AThe Apopula io AofAI diaA rew 2.8 At mesAbet een A 951 and A2 01, A rom 361Amil Ato to A 027Amill on, Aw ile the Au ban Apopula ion Aexpa ded 4.6Ati es, A ro A62 Amil io herA 285Amill on ATheA ac Aof Aurbanisa ion has A lso A eenAsl we AinAI di AasAcomp re AtoAo AinA count ie Ain theAwo ld AAs pe AUNAestima es, theAde re Aof Aurbanisa io Ain theAw rl 950 was Aar un A30 perA entAw ichAincre se At A47 perA en Ain A2 00 AInAIn ia AitAincre sedA rom A 7.3 perA en Ain A 95 Ato A 7.8 perA en Ain A2 01. AC ina andAIndon sia Aw ich hadAl werAle el Aof Aurbanisa io Ain A195 46,A ave now Aovert kenAI diaA ith theApercen ag Aof Auban199sion 45Sou ce AUNAW rldAUrbanisa ionAProspe ts ATheA 003ARevi 46 Governancepopopulati n Abei g A32 1Aa d A40 9Arespectivel . A nAt eAdeca e A fAt e A1990 ,Athe eAwe eAnear yA tA 8Amilli nAn wAurb n AIndian ,A n Aincrea eAlarg rAth nAt e Aenti e AThailan . AIndia sAcurre tA urb n Apopulati nAexcee sAt eAwho e Apopulati n A fAt eAUnit d AState ,At eAworld sAthi dAlargecountr .A y A205 ,Aov r Aha f A f AIndia s Apopulati n A sAexpect dA o A eAurb nAdweller. AfA 5.1.3 2 AheAgrow h A f AIndia sAurb n Apopulatio , Aindicati gAt eAincrea e A nAt eAnumb r urb nAcentr sAa d A nAt e Apercenta e A fAurb n Apopulati n A sAgiv n A nATab eA5.2.Tab eA52 :AIndi :ANumb rAa dAPopulati nA( nAMillio )A fAUrb nAAgglomeratiosA(UA )Aa dATow sA(1 9 01-2 00)ACenssANumb rAfATotlAUrbnAUrb nAPopulatinAYerAUAs/TowsAPopulatinAPopulatinA s %A fATotAAPopulatinA191 A1,80 A238,396,37 A25,851,83A108A191 A1,85 A252,093,30 A25,941,63A103A191 A1,94 A251,321,23 A28,086,17A112A191 A2,06 A278,977,28 A33,455,99A120A191 A2,23 A318,660,50 A44,153,27A139A191 A2,82 A361,088,00 A62,443,94A173A191 A2,34 A439,234,71 A78,936,63A180A191 A2,57 A548,159,62 A109,113,97A199A191 A3,37 A683,329,07 A159,462,57A233A191 A3,79 A846,387,88 A217,551,82A257A201 A4,38 A1,028,610,38 A286,119,69A27.8eA Not AAUrb nAAgglomeration ,Awhi hAconstitu e a Anumb rA f Atow sAa dAthe r Aoutgrowth ,Aha. be nAtreat dA s Ao eAuni .ASo eA fAt eAda a Af r A198 , A19 1 Aa dA20 1A sAadjusteASourc :ACens sAfAInd aA200 1eA 5.1.3 3 AThr e A fAt eAlarge tAmetropolis s A nAt eAwor d –AMumba , ADel iAa dAKolka a –Aa n AIndi .A(Li tAgiv n A nATab e A5.3200Urban GovernanceTa le A. A: TheALarg stAMetropolisesR n snkANmeAPopulat on in A2 05A(millio s)A(Projectio1. ATok o,AJaan A35.322.AMex co ACi y,AMexco A1 9 .0 13.A ew AYork-Newa k, A U.SA. A18.494.AMumb i,AIna AA18.3 35.A aoAPau o,ABrail A18.336.ADel i,AInia A15.337.ACalcut a,AInia A14.2 98.ABue os AAir s,AArgentna A13.3 49.AJakar a,AIndoneia A1 3.1 9 40. AShangh i, AChna A12.665Sour e:Ahttp://w ww. esa/population/publications/wup2003/WUP2003Report.p d feeA 5.1. .4 AInteresting y, An ne of A heAth opA megacit esAf om AIn ia in A heAl st ofA“ asA t n” Aw re in A he Al stAe en as Arecen lyth 19 5. In At atAye r,AMum aiA as Ao lyA1 in A he Awo ld Ali t,A utA asA th in A19 5,And inA is Aexpec ed to be A he A2 d, Aaf er ATok o, thA 20 0. ADe hi A as A2 th in A19 5, A nd is A wnA now 47 AOt er Ala ge Acit es Ah ve Aa so Ash ofA phenome al Agrow h. The Apopulat on o m A Bengal ru A(earl er ABangalor ), Ag ew Af inA 0 17 Amill on in A1 01 to A0 80 Amill on enA 1 51 A nd A2 94 Amill on in A1 81 A nd At atA rocke ed to A5 68 Amill on in A20 1. ATh s, reA he A op of A heAur anAstruct re inAIn iaA s,A enormo s,Acomp exAur anAagglomeratio owA Kolka a,AMumb i,ADel i,AChen aiA ndA reA Bengal ruA ndAHyderab d. ATh se Acit esAamon st A he 50Alarg stAagglomerati nsin20147Based on Table 5.3 and United Nations Department of Economic and Social Affairs/Population Division : World Urbanisation Prospects: The 2003 RevisionLocal GovernanceA th Aworld AI Awil Ab Aincreasingl Anecessar Afo AIndi At Aorganis Aan Amanag Athes Ameg A citie Aan Athos Agrowin At Ajoi Atha Aleague Awit A Aspecia AfefortA 5.1.3. ATh Agrowt Ai Apopulatio Ao Alarg Acitie Awa Ahighe Atha Ath Aoveral Apopulatio Agrowt A AurbaiAIndi Aindicatin Ath Atendenc Atoward Aconcentratio Ai Alarge Aagglomeration sTh Agrowt Ao Amillio Aplu Acitie Ai Agive Ai ATabl A5.4:Tabl A5. AGrowt Ao AUrba APopulatio Ai AMillion-plu ACities/AgglomerationAi AIndi A19 0 1-20 0ACensuANumbeAPopulatioAPopulatio ApeA At AUrbaAYeaA(i AmillionAMillio APluAPopulatioACitA(i AmillionA190AA1.5A1.5A5 .8A191AA2.7A1.3A1 0 .6A192AA3.1A1.5A1 1 . 1A193AA3.4A1.7A1 0 . 1A194AA5.3A2.6A12.2A195AA11.7A2.3A1 8 . 8A196AA18.1A2.5A22 .9A197AA27.8A3.0A2 5 . 5A198A1A42.1A3.5A26. 4A199A2A70.6A3.0A32 .5A200A3A107.8A3.0A3 8 .60Source ACensu AoAIndi A2001.A Whil Ath Alarges Ametro Ahav Areache Agiganti Aproportions Ath Asecon Atie Acities Aincludin A man AStat Acapitals Ahav Areache A Astag Ao Adevelopmen Awher Athe Aar Ano Afa Abehind A Th Aestablishmen Ao Ane Aurba Aarea Anea Aa Aexistin Atown Abot Aa Aa Ainflu Afro Arura A area Aan Aa A Ashiftin Aou Afro A Adens Acit Acentre Aresult Ai Acontinuou Aan Acontiguou A urba Aareas Acreatin Aagglomeration Awhic Aar Adifficul At Adefine AI AIndia Ath Asiz Ao A A cit Aca Agro Asubstantiall Awit Ath Anotifyin Ao Aoutlyin Aarea Aa A Apar Ao Ath Acity hATerar A2 Astatutor Acitie Awit Aove Aon Amillio Apopulatio Aeach Aaccountin Afo A7 Amillio202Urban Governancepeople. There are 108 million people in 35 urban agglomerations which have over one million people each, indicating that as many as 35 million people are residing in towns and peri-urban areas outside, but close to the main cities.5.1.3.6 One of the paradoxes in urban India is the visible disparity between private wealth and poverty of infrastructure. Consumerism is booming, the economy is growing, and land values are rising. And yet, governments at the local and state level are not able to leverage urban strengths to raise resources to build infrastructure, which is not keeping pace with the rising population and aspirations. As a result, the urban dream that attracts vast numbers to the cities is becoming a nightmare.5.1.3.7 The National Commission on Urbanisation (NCU), in 1988, had expressed its anxiety thus:“(1) In 1981, there were 160 million people living in urban areas; by 2001 these will increase to 350 million. Where will these people go? How will they earn a living? How will they be housed? Can we really afford the infrastructure to service such large conglomerations of people?(2) Our urban areas, particularly the metropolitan cities, are in severe crisis. Our planning processes have proved to be intrinsically defective, the cities are overcrowded, urban land has become extremely scarce, services are breaking down, city management is often ineffective and human misery has increased beyond belief. How can we feel that we have progressed as a nation when, in just twenty years, almost every one of our major cities has been reduced to a virtual slum?(3) Just as the physical infrastructure and administrative systems have collapsed, so also have the processes for raising resources. For whatever reason, resource allocation in the urban field seems to follow a problem rather than anticipate it. The compulsions203Local Governanceof a situation determine its allocation. This again is evidence of a system which is in severe crisis.(4) The inefficiency of our cities and towns is being perpetuated by obsolete, rigid and inefficient laws, regulatory provisions and norms. The urban centres, with their concentration of diverse activities, should be generators of wealth; instead, they have degenerated into parasites looking elsewhere for support. This is a perversion of the economic system, because logically it is the urban markets which should trigger off prosperity in rural areas. Instead, the cities claim that they cannot even pay for their own upkeep, and constantly hanker for subsidies. This distorts profoundly, the basic relationship which should exist between the rural and the urban sectors of our economy.5.1.3.8. Nearly 20 years have passed since the first National Commission on Urbanisation submitted its report. During this period, the importance of the urban sector and its contribution to the national economy and employment has increased manifold while the infrastructural constraints in our cities have become more acute. While the urban growth has been slower than anticipated by the National Commission on Urbanisation, the problems identified still remain valid. Indeed the magnitude and complexities of urban problems have increased and with that the urgency to reform ‘urban governance’ The Commission is of the view that a new National Commission on Urbanisation should be set up to take a holistic and long-term view of the entire range of policy instruments required to deal with the rapid urbanisation, including the large cities and to bring about more balanced and efficient urbanisation in the country.5.1.4 Recommendation:a. A new National Commission on Urbanisation should be constituted by Government to suggest measures to deal with the rapid urbanisation, including the large cities and bring about more balanced and efficient urbanisation in the country.5.2 Structure of Urban Governance 5.2.1 A Broad Common Approach5.2.1.1 The structures required for civic governance are complex. Certainly, there is no single model which suits all towns and cities given the vast diversity in their geographical location, size and cultural and historical backgrounds. However, it is possible to identify certain common basic structural features which could be suitably modified to suit local204Urban GovernanceARe ort,A co ditions AK epin Ain viewAtheAp inci lesA hat A aveAbeenAe unciate Ae rlie Ain Athi toAfindA A nd Aw ich form A he bas sAof At eAreform measuresA ro osed, it wouldA eA sef l sAa dAtoA broad yAcommon ap roa h Ato Athe internalA tr ctu eAofA ur Aur anAlocalAgo ern en Abetwee A theAar an ementAof ext rnal Abut As pportingAinst tuti ns. The e A as AtoAb Alinkag eAcal edA variousAorga isa ionsAandAins itut ons with Athe A nt ntionAofAm ximi ingAw at mightA eractiveA civicA ffic ency. InAfact,Aadmin strativeA fficiency,Ad mocratic Afu cti ningAandAin Asystem A respo siven ss Awoul A equire Aa sui ab e mix AofAa Ahie arc i alAand aAmatrimend entA 5.2.1.2 Differ nt Types of AUr an ALocalAGov rn ents ATheA74thAConst tutionalA bo ays ies*:Ad wn Ath ee typesAofA unicipalalAar a,1.ANagarA anc ayatA(by what verAname cal ed :AThs isAfor AaAtra sitiobaAarea; which AisAtra sformi gAit elf Af o Abein AaAr ralA re Ainto anAurr e;Aand 2.A unicipal Cou ci :AThsA s AforA“ Asmal erAurb nAaanAarea”3. AA unicipalACor ora io :AThsA sAfor A aAlar erAur bnAof the Im lic tAinA heAaboveAclas ifiation of Aur anAlocal Ago er men sAis AtheAre og itieAofAtheA need Afor A ar ati nAinAtheAf nction lAd mainAandAreq irements A ep ndi g Aon th Asi p pula ionA he AneedAt oAserv .A– A2001).ent fed:A 5.2.1 3ACensusAca eg rie : AIn At e A ensusA f AInd a,A 001, A wo types of At wns Awere i Ai Anot fiedA (a)A tatuto yAt wns:Aa lApl c sAwithAaAmuni ipality,Acor oration, Ac ntonm nt board Ao esAwhich ownAarea Ac mmit ee Aetc.Aso de l redAb AaAS ate law AandA( )ACens s Atown ;Apla pe Acen A sat sfiedAtheA ollowing A ri e ia:Ai)A Aminimum Ap pu ation A f A5 00 ; Aii) at lea tA75 nsityAofA ofAmal Aworking Ap pulatio Ae gagedAin Anon-agr cultural A urs its; a dAiii)A Ad Ac ntres p pu at on Aof at A east A40 Ape son Aper A q. km.48ATheAcate ory-wi e A umber of Aurba in India is given inAT bl eA5 5.Aa le A5. A:AUrbanAAgglom ratio s/ TownsA y AClass/ A ategor :A ensus ofAIndiaA001ClassAP pulaion Si eANo.AofAUAs/T wsClass AI 1,0 ,000AndAabove 39Class A I 50,000–A99,999 401lass AI I 20,000–A4 9 ,999A1 15ClassA V 10,000–A19,999A1 34 Clas A A 5,009,999 88A–A Clas AVIA ess AtanAiUna s5,000A191sif dA A10 Al437849 classe* eenAusedA AThe At rmAUr anAL calABo yA(ULB),A unici alAbody,A unicipa AC u cilAin A Agene icA enseA ndAUr anALocalAG vernm ntA( LG)A ave eAReport. interc an eab yAinAthdia,A2001 48Ex lana or Anote AonA own CityA ndAUrbanAAggl er tionAAa Aa optedA nA ensusA fAI negistra A 49P pulatio ACen us,A2 01A ou dAno Ab AheldAi AcertainAtow s/ itiesAo AGuja at StateAo Aa countAof national A lamity. ASou ce AOffieAofAtheAG neralA f AIndia.A(P pulati nAt tals A o AIndia &AS ate AforAt eA ensus o AIndia205Local Governance5.2.1.4 theAu banA .2.1.4 ATheACo stit tio Ado sAno Ala AdownAtheA ara etersAfor Aca ego ising ationA ndA lo alAb diesA ntoANagarA anchayat, Municip lAC uncilAand MunicipalAC rpo AanAur an a lowsA ac AState A oAd cide, Afo Aexa ple,Aw at sho ldAbe Ath Acr teria Afor Ac as ifyin tion.AThi A c ntre asAa Atown municipa Acou cil, Acity municip l A o ncil Aor Aa municipalAco por eco nise A revents a Aunifo m A attern Aof Acate orisat on A cross At e A tates. AThe A ommissionA turesAan the A fac AthatAthe si uat onAinA heASta esA arie AandA ha A here isAaA id ArangeAofA tru sef lAforA s stems. AThe A ommis ionAwould r commendAa Acate orisa ionAw ic Amight beA he nat reA tw Areaso s. First AitAwo ld A educ At eAlackA fAcl rity At at exists Ain Aund rst ndingA tructure A of theAur anAbod esA cross At e AStates. Se ondly AitA ou dAhelp Ai Aa o tionAofAaA lutio AofA approa hA e ding toAaAmore A ystemati Anationa Aplanni gAp oc ssA ndAinAtheA ev orisa io A fun sAthroug ANa ional and ASta e AFinance ACo missions.AAc ord ngly,AtheAcategive Ain Ta le A5 6 A sAus dAin At is A eport AforAconveni nceT bleA5.6A:AR commended ACate or satio AofAU banALocalAGvernentsASizeANoencl anchatur ANos U Gs AwithAa A op la ion Aup AoA20 000:ATownAayat A243 U Gs AwithAa A opulati n Abetw nci sA1552andnA20,000A MunicipaAC ouA1,0 ,000 U Gs AwithAa A opulati n Abetwee oun i lA366andAA1,0 ,000 ACity MuniciplAC0,00 000: U Gs AwithAa A opulati n Abetween rat o nsA21andA10,00,000 MunicipalACop o0,00 000: U Gs AwithAa A opula ion Aabove A0,00,000: AMe ropolitanACop5.2. AProp sedABasic S ruct re A–AWard A omm ttee AandAAr eaASab as5..2. ANeedAf rAGreat rACitizenAPart icipa t i o Ast tu esA 5. .2.1.1 AThe A omm ssion Aha Aex mined At e Avarious A truc ures A hatAex st today,AiryAl ttle and Ain pr ctice. AThAexist ngA yst m AhasAtwo importan Alacun e. AFi st Athe eAisAv AthatAt eA rol AthatAt eAavera e Acit ze Aplays A nAh s/herAown Ag ve nance. The seco dAihisAoftenA electedArepre en ativ sA sAw ll AasAtficiaeAos Aare AnotA ufficiently Aa cou tabl AandA iewAwhile nder ines Abot Aeffiiency Aand Atra spar ncy.AThseAi sues have be nAke tAinAp oposing a Amodified str cture frAurbanAgovernance.oatio sA6 heseAn*Arm AcouldAb AsuitabyAm dified forAhil l yAa eas.206Urban Governance5.2.2.1.2 In rural areas, the proximity and small size of the Village Panchayat facilitates greater participation by the citizens, whereas in urban areas, especially in bigger towns and cities such participation becomes difficult. It is necessary to create a level of public participation which would be the equivalent of the Gram Panchayat in an urban milieu.5.2.2.1.3 The statistics given in Table 5.7 for Karnataka indicate how much more involved in democratic decision-making a rural citizen is likely to be than his/her urban counterpart:Table 5.7: Political Representation Ratios, 2000Rural Karnataka Population Urban Karnataka PopulationLevelNo. of unitsNo. of Reps.Level LevelNo. of unitsNo. ofReps.Zila Panchayat27890Metropolitan Corporations6410Taluk Panchayat1763,255City Municipal Councils401,308Gram Panchayat5,65980,023Town Municipal Councils811,919Town Panchayats891,373Total No. of Elected Representatives84,168Total No. of Elected Representatives.5,023Citizen: Representation Ratio380:1Citizen: Representation Ratio3,400:1Source: Based on report furnished by Janaagraha, Bengaluru.5.2.2.1.4 The representation ratio between citizens and their elected representatives is almost ten times larger in urban areas. The Gram Sabha - “a body consisting of persons registered in the electoral rolls relating to a village comprised within the area of Panchayat at the village level” - gives every rural citizen the opportunity to participate in local issues. In contrast, the Ward (or Wards) Committees, proposed for urban bodies have not yet been constituted in some States. And even where constituted, they are hampered by the combination of various factors like the nomination process, limited citizen representation and an ambiguous mandate. The Constitution makes creation of such Ward Committees mandatory in all cities exceeding a population of 3 lakhs. The intent clearly is to create a decentralised governance structure to ensure citizen participation and local decision making. There are Ward Committees combining several wards (in some cases 10 or more) in many large cities. Thus, the population served by a Ward Committee may exceed three to five lakhs in some cases. Such a perfunctory creation of decentralised structures clearly violates the letter and spirit of the Constitution. In any case, it is necessary to accept the direction207208Local Governancein which demography and habitation trends are moving and push to continue the steps initiated by the 74th Amendment towards citizens’ participation in urban affairs. It is towards this end that the following structure is proposed for urban local bodies.5.2.2.1.5 The three tiers of urban local body governance should be as follows:a.Municipal Council/Corporation (by whatever name it is called);b. Ward Committees; andc.Area Committees or Sabhas.However, in Town Panchayats, there should be no need to have three tiers, given the small size and population of these local bodies.5.2.2.2 Area Sabhas5.2.2.2.1 Though the council and the ward levels are commonly known, the proposed Area Sabha needs some detailing, especially because it would be the starting point for the other two upper echelons of urban governance. An Area Sabha would cover the citizens who are voters in one or more polling stations, but preferably not covering more than, say, 2500 voters, where 1000 to 1200 is the size of the electorate for each polling station (booth) as decided by the Election Commission of India. Including an average number of children in the area, the maximum population of a Sabha could be in the region of 4000 - 5000 residents, though this may vary according to the local situation. The footprint of these polling stations could define the boundaries of the Area Sabha.5.2.2.2.2 Role of the Area Sabhas: The role of the Area Sabha needs some consideration. An Area Sabha should be the functional equivalent of the Gram Sabha in villages. It should not be merely a political space for opinion formation, as that may happen if some responsibilities are not formally attached to it. The concept of neighbourhood groups looking after their own welfare, within a limited mandate needs to be explored. The Gram Sabha has certain functions that are performed within its area. The same approach could be considered for the Area Sabha, its urban counterpart. The Area Sabha should be a legitimate, formal space, which would need to be explicitly defined in terms of constitution, composition, functions, duties and responsibilities.50 The Area Sabha will perform functions similar to Gram Sabha such as prioritising developmental activities and identifying beneficiaries under various schemes.5.2.2.2.3 Members of the Area Sabha: Presently, in most States, the membership of the Ward Committee is by nomination. This is partly because of the propensity of the State Government to gain partisan advantage in nomination, and partly because of the genuine50 Union AMinis ryA fAUrbanADe e opmen AhasAcirc latedAaAmodel com unityA articip tio AlawA alled A hNA ARAAR JABIL,A2006”.A e ModelABi lAprescri es aAde ailed stru tur AofAAre ASabhaA ith AitsAr ght ,Apower , A uncti nsAa dAdu ies.ATheA odelABil AalsoAincl desAdetaiedAprovision Are ardingAstitution, compo iti n,A con ti utio AandAgovern nce AofAWa dAC mmitt es,Aembed ingA h Aabov Astructur Aint AaAlega Adoc men ,AwithAdetail AlikeAtheAco functions,Aro es and resp nsibilhas and Aof Ward Atiehe AAreaCommittees. ASabUrban Governancedificulty in iddifcultyA nAidentify ngAlegi imate AcitizenAr presen ati esAwi h nAthe A ar .AAAsste Ain A hichA system, Aev ryA heAArea Sab aAmember Aare A lected, A ould overcomeA hi Adiffiu ty. AIn A uch AanACom is i n,A re is e ed Avote Aof Aa A olli g Abooth,Aw th bounda ie Aas defined Ab AtheAElecti ableAsense ofA wou d A eAaA embe Aof Ath t A rea A abha. The AAr a ASa h AwouldAoffe AaAre so Afive A ears, AaA belong ng, inclusionAand A arti ipat on. AE ch AAr aASabh Awou d A lec ,Aonce iuldAel ct A neA s al ACommitteeAofARe re entatives AThACommitteeAofAR prese tativ sAwsentA he Are A pe sonAw oAw uldAchai At eAm etin s AofA heA reaAS bha AandAw uld repr t on(s AoffrsA SabhaAi Athe relevant AW rd Commhe AArettee. AAS bha,Aba edAon Apoll ng Astprese tati n. a AfairA nd Alegitima eA ppo tunity At Aal A itizens andA Au iformAmodeAofAr ACommitteeAofA Above all, AitAwo ld Afa ilitateAl calAcitizens’ A arheAeicipatio . A ectionAof thAt e AelectionA R presen at vesA ho ldA e Ahel Aby Athe A tateAElect onACo miss onA longAwit fAC uncil orsA nd Athe r A ermAshould be Ac term nu Awi h Athat Aof AthCounci lors A5.2.2.3AWa rdACommi te se Aconstitut dA 5.2.2. .1 ATheApresentA onstitut on lApo itio AisAthat AW rdAC mm tteesAmustA con is ingA fAoneA rAmore war s, AwithinAt e Ate ri o ial Aarea AofA AMunic p lityAhavin Aa popul tionA f A hree A akhs Aor Amor ”A Art.24 S).AAs As ated ea lier, A venAiASta es AwhereA nAexc ss Aof A AardA ommi eesAhaveAbee Aco stituted, A he po ulati nAis at times A el Athere Aare A22 A l k s Aserv dAby a Asingle AW rd A ommittee. Fo Ainsta ce,Ai AMumb iAc ty’AintoA24 AWa dA corporat rs’Adiv s ons Aservin Aa popu ation Aof 18. Ami lion.AThy Aar Ad viderel AtoAfulfilA Co mittees, Aeach co re ponding A oAan existin AWard AOfficer’s jurisd ct on, Am eAhas A9AorA1 A theA onstitutio al obligati nAof creatingAWa dACo mitt es.AEach A uch c mm t t AtoA11Alak s. corporat rs Adi isionsAinAits jurisdic i n, Acoverin AaApopu atio A an in Afrom A visions,A achA Similarly, in AHy era ad Athe e Aare A10 AW rd A omm ttees Afor A10 Acorporato s’AdeA sAdefeat dA com ittee s rvin Aabout A Al kh Ap ople. AThAv r Apur oseAofAa A ar ACommittf the Asi eAofA by Acl bbing Aseveral AWa ds/ ivisions A nd Ac eat ng A AbodyAfor A he pop lati nA sible inAs chA Anormal city.AN ither Acitizen par icipa ionAnor A ocal Ad ci ionAmaki g A sAfe ardA ommitteeA large AW rdA om itte s A nd Aat be t Ait Ahel sAinAintern l deleg tion AA AlargeA membershipAo a A soA einforce At eAtend nc A oAresort toAaA‘ po ls’Asyst mA yArotation ofch irmansh pAandAreducesA cco ntabilityAandtranspare cy AeAwardA sAn tA 5.2.2. .2AThe A re entAsy t mAof havingAa A ard Comm ttee for more th nAory Award, Ae chA lo ic lAand mus Abe A ivenA p.AThs, t ereA ust AbeAa A ard Commi teeAf rAevecti nAofAtheA effectivel Are resen ingAoneAl calApolit calAhereAshoundar . AuldAbe Ad re tAerd Commi te .A W rd Councillor or A orpor to Awh Awould Abe At e A hai pers n Aof AtheAW heACorpora or/ HeAw uld Aof Aco rse repr se tAt eAWard Ain theAMuni ipa ACo ncil. AThusAt Aan A xe uti eA C unci lor willA a e two ArolesA–AaA epre en ati eAro eAinAthe cit Ac uncil,Aanro e Ain Athe AW rd Committee. AThAC air erso s AofAt e AAreaAS bh sAi clude209Local Governancewould constitute the Ward Committee. The Commission is of the view that in smaller towns also, with populations of less than 3 lakhs, it is necessary to have formal mechanisms for citizen participation and local decision making through Ward Committees.5.2.2.3.3 The Ward Committee members must have regular meetings with the citizens they represent, through Area Sabhas, to review programmes, their planning and implementation. There must also be regular meetings of the Committee with elected members from Area Sabhas. The Committee must have legitimate functions and appropriate financial devolution. These should cover all the relevant activities that may be delegated by the Legislature or the Municipal Council. A suggestive functional and financial devolution to the Ward Committees is as follows (based on “Empowerment of Local Governments, Stakeholders and citizens”, a Discussion Paper for the National Advisory Council, March, 2005):a.The Ward Committee shall be empowered to exercise control over all such activities, which could be handled at the ward level such as street lighting, sanitation, water supply, drainage, road maintenance, maintenance of school buildings, maintenance of local hospitals/dispensaries, local markets, parks, playgrounds, etc.b.The employees, in respect of all functions entrusted to the Ward Committee, shall function under the Committee and shall be held accountable to the Committee. The salaries to all such employees shall be authorised/paid by the Committee on the basis of their performance.c.The funds allocated to those functions entrusted to the Ward Committee shall be transferred en-bloc to the Ward Committee.d.The budget adopted by the ward committee in respect to the functions allotted to it shall be taken into account in formulating the overall municipal budget.e.The meetings of the Ward Committee shall be widely publicised to ensure maximum presence and participation of the residents of the ward.f.The Ward Committees should be given a share of the property taxes collected from the ward, depending on the economic profile of the locality.g.The Ward Committee may raise funds through other sources.5.2.2.3.4 Non-residential Stakeholders: While the structure proposed would provide for the participation of residents, there is an increasing recognition that in urban areas, it is not only the individual voter who needs to be involved, but also non-residential stakeholders,210Urban Governancesuch as ceA fAre id nceA suc Aas bu i esses. This Ai AaAuniqu Aurba Ap oblem Asince inA uralA re s, AtheApl eApredomina tlyA a dAw rkAis of enAth Asame. In Aur anA reas, At ereA reA ockets AthatAa enta ionAatAth A ommercial. AThese non-resident al Ast ke older Acou dAbeAgivenAsom Ar preAlimit Afo Asu hA Ward A ommittee Al vel, Apr ferab y Athroug Atheir Abusine s A ssoci tio s.ATh ositionsAm yA e restricted to aAp oport on ofA heAs atsAinAtheWard ACommi tee.AonAof fun tionsA 5.2.2. .5 ADelineat on of A uncthreons Ain the A ATier :A ustAasAther Ai Adelineat ould ha eAto be am ng Ath Ad fferen Atier AinAruralAl cal Agov rnance,Asim larAd line ti nA id arityAsho l A doneA nAcas AofAur an Alo al Abo ies Aa so. Whi e Adoing As , A heAprinciple ofAsub APRIs As oul Abe be Afol ow d.AAApro ess AofA ctivity ma pin Asi ilar A oA he A neAt ken Aup fo car iedAo utAfor A llAULBs.5.2.2.4Re ommendatio s:tegor sation ofA a AGovernm nt A ayAconsi er t eAadop ionAof AaAcommo Acth ir denAb diesAac os AtheAco ntryAto im rove A larityAininition urb u ionAof Afunds.A s Aas Ato Aass st Aa Asys ematic A lan ingAproces Aa dAdevo Ac teg risat on Aon Ath Aline Ap opose Agi en Ain TaleA5.6Acou d Abeadopte .alAgov rn ent ,A b AThere shoul Ab AthreeAtiersAo Aa minis ratio AinAurbanAlo le elAwouldA ot ex ep AinA heAcaseAofA ownAP nch yats,A hereA heAmi dlebe ties Are should uired. Thbe: A211Local Governancei.Municipal Council/Corporation (by whatever name it is called);ii. Ward Committees; andiii. Area Committees or Sabhas.c.Each Area Sabha comprising all citizens in one or two (or more) polling station areas, should elect, once in five years, a small Committee of Representatives. The Committee of Representatives would elect one person who would chair the meetings of the Area Sabha and would represent the Area Sabha in the relevant Ward Committee. The State may, by law, prescribe the procedure and other details for such election.d. Ward Committees should be set up in every Ward/Corporator’s Division, The present system of having more than one ward in a Ward Committee needs to be given up.e. Ward Committees need to be given legitimate functions which can be handled at that level. These functions could include street lighting, sanitation, water supply, drainage, road maintenance, maintenance of school buildings, maintenance of local hospitals/dispensaries, local markets, parks, playgrounds, etc.f.Funds allocated for the functions entrusted to the Ward Committee should be transferred en-bloc to the Ward Committee. The budget proposed by the Ward Committee in respect to the functions allotted to it should be taken into account in formulating the overall municipal budget.g. Meetings of the Ward Committee should be widely publicised to ensure maximum citizens’ participation.h. Ward Committees should be given a share of the property taxes collected from the ward, depending on the locality.i.The allocation of functional responsibilities between the tiers must be clearly spelt out. While doing so, the principle of subsidiarity should be followed. Broadly, the Area Sabha should perform functions similar to the Gram Sabha such as prioritising developmental activities and identifying beneficiaries under various schemes.212Urban GovernanceA prj.AA A ro essAofAa tivityA appingA im lar to A heAon At ken upAf rAPRIs sh uldAbeA arr ed A utA orAa lAULBs wit inAoneAyea .5.2. AZonal Sys emAfo ALarge ACities emen –A .2he Ave3.1Ay A izeAo Alarge citie A osesAa Ach ll nge Ai Atheir Aorgan sat onAandAmanant ol.A f om Ath Ap intA f A iewAof space,Apop lat on AandAcom lexityAin lud ng At e A panAofAc cy AandA I AlargeA ities,Aex essiveAcentral sation wit inAt eAcityAgov rnmen Awoul fi AerodeAe cieob e sA effect ve essAin Ad li eryAofAse vices, ma ing AitA iffiult A oAco eAw th Athe Aci izens’ApeACi yA on Aa Aday to-day basi . AThere sh uldAbe litt eAn ed A orAthe A it zenA oA av At Ago toAt Azonal all to Aget A is/h rAwor Ad ne; Ait sh uld Abe Ap ss bleAtoAd lega eAmany Afu ct ons at Ath i,At eA level.A ol ataAisA ivid d AintoAbo ou hs,Aan Aadd tion l A ierAofAgove na ce.AInA umb publi A ward office sAhaveAde egatedAau ho ityA oAtake Adec sions,A rovideAs rvi esAandA xecute berAo A w rks inAth Aa ea.AThe ACom is io Ais of At eAvi wAthat wit inAon Alarg A ity, Aa nu er lly zona Aoffices sh uld be A etAu .ASuc Azonafices AdAoAe istA nAmany A itie ,Abut,Age ngAallA doAn tAhaveAa equateAde egated A ow rs.AThe po ers ofAt eAcityAgove nment,Ac verzones. decision mak ngAfor Aadminis rative Apu pos s, canAbeAde ega edAand Aex rc sed in Athe ed.AThe B oad y, Aon AzonficeAfolAoAev ryAfieAl khA(o Aless)Apopu ation Ac uldAbeAcons de syste Ac uldAbeAint od ced inAall AMu icipalACorpo ations wit inAt eAnex Athreeyears. .2.3.2ARecommenda ion:be asetA AZona Aoffic s Aw th Aall Aadminis rative powers Ade eg ted A o At em may ati nsA up Aimme ia ely Ain AMetro olitan ACorpo ati ns Aand AMu icipal ACorpo rvi esA and bec me At e Amai Ap int Aof A ont ct Afor pe ple Ain A es ect Aof Asuld AbeA and Aame iti s. AO e Az ne Afo Aev ry Afie Al kh A(o Aless) Apop latio Accities cons dered. A imila Azona Aoffices shou d A lso be se Aup Ai Aot er Abig wit inAt eAnex Athreeyear .he A5 2.4A ffice ofAtheAMayor/Chair perso n .2.4.1AE ect onAa dA ermA fA ffice ofAtheAMayor/Chair perso nrov deA 5. .4.1.1A rti leA243 A (2)(b)Ap ovid sAt at Athe Alegi la u e AofA ASta eA ay,A y Alaw,A leAandA the ma ner Aof Ae ec ion of Athe AChai pe s nAof Aa Amunici al ty.AThe AChairp rson sAr AM y rA fun tions,Ah weve ,Ah veAn tAbeenA learly A efined AWhil At er AisAno Are er nce toAth uldAbeo Aa Ab g A ity in AtheAConsti ution,A‘Chair er on’ AisA l arly Aa A eneri Ate m,Aand sh de medAtoA ncl deMayor.Athe213Local Governance5.2.4.1.2 j ysAprimari yA 5.2.4.1.2ATheACh ir erson Mayor inAurbanAl ca Agov rnment inAmos AStatesAe teA ove nme t,A aAcer mo ial A tatus. In A ostAcases,Ath ACommissi ne ,Aa point d Aby AtheASt ANetaji Subh has sA Aal AtheAex cutiveA owe s.AD spit AtheAfa tAth tA ecade Aago,A nA1924 uttaAMunici al C andra ABos Aw sAa point dAasAtheA hief A xe uti e AofficerA fAtheACal aAi A1924 (seeA Cor oration by Athe A lec ed A ouncil andAth AMa or,Aduri g At e A olon alAe lAc mm ssionerA B x A .3),Atoday, inAind pe de tAI dia, AitAi Anot e visaged At at AaAmunicip real Aexecu ive c nA eAa pointed A yAt eAC uncil, Aand At e ACha rpers n/AM yorA ouldAhaveolativ Ao AtheAauthorithisA. Ailut on of A heArole AofAtheAMa or Chairpe son AisAcl ar yAvn/M yorAcha rsA spiritAofA elf gover anceAandAloc lA mpowerme t.A nAgeneral,AtheACh irpers e.AHowev r,A nA theAc unc l Am etin s andAhas Aon yAaA er phera AroleAin Aur anAgover an rAchairing A heA Kolkata, A heA hairp rso Aan AMayorAa eAtwoAseparate fun tionar es,AtheA ormCorpor tio Ame tings, Aand AtheAM yor-in-Cou cilAexe cisingAce tainAexecu i veAfunct on .AonAva ie AfromA 5.2. .1 3 ATheAman erA fAel ct on Aa d A erm ofAoffice AofAtheAMa or/Cha rper ta eAto State AInAmos Ama orAStates, A he Chairperso AisAind re tly elected by Athe Aelect dACoun illors. A adhya Prad sh, Tamil NaduAan AUt arA radeshAare A heAex ept ons,AwhereA he Chairper on AisAd re tly electe Ab Ath AvotesAof Athe A it .AndhraAP adesh, 5.he A.4 1.4A erm ofAoffice AofAtheAMa or Cha rpers n A sAfiveA earsAinA ng l.AHow ver,A Kerala, A adhya APrad sh,AR jasth n,ATa ilANadu AUt arAP adeshAa dAWestAB he Chai per onA i AAssam,A elhi,AHa yana,AHi ach lAPradesh, and Karn ta a, A he AtermAofA yArotat on. InA is onl Aon Ayear, AandA he ACo n ill rsAelectAa A ewACh irpe so Aevery Aye rA halfA ea s, A sA GujaratAa dAM hara ht a, At e A erm of Aoffice Aof A he Chairperson Ais two-an -asho nAintheA able 5.8. ab eA5.8:AM de ofAElecti nAofAMunici al A hhair ersonandATirATermsStateAElec ionATerAndhraAPades AIndirectAveAyearsssa AAIndirecOneAyearelh AAInirectAOAyearA Guarat AAIndire tATwoand-halAyearsA Hrya aAIndirectAO eAyear Hachal APrdes AAIndirect AOnAyear Karata aAIndirectneAyear Krala AIndi214Urban GovernanceTaleA5.ACond. A ElectionTerm tateMadhya PradeshDirectFive yearsMaharashtraIndirectTwo-and-half yearsOrissaIndirectOne yearRajasthanIndirectFive yearsTamil NaduDirectFive yearsUttar PradeshDirectFive yearsWest BengalIndirectFive yearsSource: NCRCW, A consultation paper on Decentralisation and Municipalities.5.2.4.1.5 Some of the methods of appointing the executive head of city governments in other countries are given in Annexure V(1). Generally, a City Council is the most common form of elected government in a city or town, with the Mayor (from the Latin major, meaning larger, greater) being the elected chief executive in most cities. There is wide variation in local laws and customs regarding the powers and responsibilities as well as the manner of election of the Mayor. The Mayors of New York and London are popularly elected by direct vote every four years. The Mayor of Toronto is elected by direct popular vote once in three years. The Mayors of Tokyo, Sydney and Athens are also popularly elected. In Paris, the Mayor is chosen by proportional representation. The Mayor of Rio de Janeiro is popularly elected by a two-round majority system. In Mexico City, Bogota and Buenos Aires the Mayors are popularly elected. In Johannesburg, the executive Mayor is at the top of the list of proportional representative candidates of the Party that aims for the majority support. In almost all these cities, the city government is a powerful institution with very real and effective role in the management of most aspects of the city. The Mayor is usually the head of the executive branch of the city government. In most cases, the police, airports, ports, fire services, traffic and transport are under the city government’s control, in addition to roads, water supply, sanitation, drainage and sewerage.5.2.4.1.6. Several factors need to be considered in deciding whether the Mayor should be directly or indirectly elected.5.2.4.1.7 Stability: An indirectly elected Mayor survives in office so long as he enjoys the support of the majority in the Council. Such a system is prone to “horse-trading” and the Mayor’s authority is weakened, undermining the quality of administration. A popularly elected Mayor has a fixed tenure and cannot ordinarily be removed from office by the215Local GovernanceCouncillors. Given the rapid urbanisation and the complex challenges confronted by cities, a long-term vision and stability of leadership are vital to promote good governance.5.2.4.1.8 Accountability: One concern in respect of a directly elected Mayor/Chairperson is that abuse of authority by the Mayor with a fixed tenure cannot be easily checked. However, there are two mechanisms which can ensure that the executive Mayor with a fixed term of office does not transgress the prescribed limits. First, the Council will have the powers to approve the budget, frame regulations and major policies and exercise oversight. In a well-designed city government, the Council and Mayor, both enjoy greater authority and act as checks against each other. Second, in a city government, institutional checks, strong public opinion, and the free press are the best guarantors of fairness and efficacy.5.2.4.1.9 Cohesion: With an indirectly elected Mayor, by definition, the Mayor survives in office as long as he enjoys majority support in the Council. Therefore, there will be no logjam between the Council and Executive Mayor. But when a Mayor is elected by popular vote and the Council members are elected by a separate ballot, it is possible that the Mayor and a majority in the Council may belong to two different parties. This may lead to lack of cohesion between the two, causing delays and even paralysis. However, when the Executive Mayor is elected directly and a clean separation of powers is institutionalised, there are several inherent mechanisms to promote harmony. First, when the Mayor and Council are elected simultaneously, it is common for the Mayor’s Party to be the majority party in the Council or at least the largest group. Second, with clear separation of powers, the roles of both the Mayor and Council are clearly defined. Each acts as a check against the other, but cannot stop legitimate exercise of power. Third, in the event of a Council led by the opposing party, the Mayor has to exercise leadership to carry the Council with him. Such an effort to be bipartisan will actually strengthen city government and ensure implementation of long-term policies without disruption with each election. Fourth, an independent Ombudsman, as envisaged in the Commission’s Report on ‘Ethics in Governance’ as well as in this Report, will act as an effective check against abuse of authority at all levels.216Urban Governance5.2.4.1.10 Aelec edAasAtheA 5.2.4.1.10 Repr s ntation:AW enAaACo nc llorAelec e AtoA ep esentAa wa dAi it . Leaders ipA M yor Ai di ec ly, Aoftficult Ato enlargnA tAisAdiAhi /he Avisi nAfor theAwholeA tive. A lso,Ath A fAa Agro ingA nd Acompl x city Areq ires Aa hol s icAvisi n Aand AaAbroa erApe spekAfor theAwh leA direct popul rAm ndate giv s AtheAMayo At eAlegitim cyA o Arep ese tAa dAspe AhelpAd velopA A city. Di e tAele tion ofAaAMayo Awi lAenc mpas Ath Awho eAci yAan AthisAw l sAw ich Aconce nA br ade Avis on AforA he cityAins ea AofAcateri g Ato Asegm nted, A ub-lo alAissuthe resident Awh le Ael ctingAtheAlo cal ACounc llor.cal governme tsA 5.2.4. .11A eservationAw t AEmpo erment:AAA ar e Aper en ageAo AofficesAinAl man AStates A orA re A eservedAf r Athe AS heduled AC stes, AS hedule ATr be , Awo en,Aan Ain and Athe A ffice i A theAB ck ardA l sses.AIn As ch a situa io ,Aif Aa AMay r AisAind rec ly A lect d, nd d teAelectedA reservic AcategodAforAaAs eciy,Ath Ama ori y Apa t AmayAnot haveAaAsu tableAc illorAh dA oAb A s AaA oun illo . AThere Aar Aman Ain tancesAw enAth Aminority A art AC unectedAfro Atha A electedAas A he AChai per on, Abeca seAth Ama or tyApar y AhadAn Amem erAe maj rity party,A cat gory A venAwh n A uchAaAm mb r is Aelected asAa Cou cillor Af omAthe Aa ACo nci lo ’sA the be tAle dership Ai Ath tAc mm nityAma An tAbeAwi lin A o Acontest Afo ffice. A ut if AtheAM yor Ais Ad rec lyAel cted Athe pa tyA il Aha e Ato put AupAit Ab st A andi ateA hatAemerges ATh A nAth AcityAfr mAt at Aca eg ry Aand th re isAlik ly Ato Abe Ab tter leadersh p A eAdisadv nt g dA rese vati nAof office Aw ll At us AleadAt ArealApolit ca Aem owermentAofAt sect onsAin AaAd irectAele tion.freedomA 5.2.4 1.12ALeaders ip Dev lopment:ightersA AInAtheA re-i depen enceAer , Agreat5), Aen earinglyA pro id dAl aders ipAtoAtheAlo alAgov rnment . AC itta ARanjan A asA(1870-19ation. “Netaji A call dA‘Des ban hu’, becam At eAfistAMayor ofAtheACa cutta AMunici alACorpoocracies,A ocalA Sub asA handraA ose wasAe ec edAtheAM yo Aof AC lc tta Ai A1930.AInAma orAde neAto ASt teAan A govern en Aleadershi ,Ain particular A it Alead rsh p,AisAof enAth As eppin Ast AisApre ently AaA Nati na Alevel office. The for er AM yorAo ANew AYo kACity,A ud lphAGuili n 20 8.AThe A ayorsA le dingARepu lic nAc ndidate Afo At eAP esiden y AinAt e A nited St tesAin ,AoftenA olding fAPari ,AB en sAAires ARi AdeAJe eir Aand A ondon Aar i Amajor A ation lAfgure nation lA uli gA na ionalA ffice . AIn A hi a, AtheAM yo A f AShangh i AisA Ap wer ulAfigure inAthe AinAtheA reedomA e ite.AIn A ur ownAcount y,Aas A entione Aabov ,Asevera AmajorA at ona Aleader entAlead rship. s ruggleAacq ire Aexp ri nceAandAro eAtoApr minen eAthroughA ocalAgovernpA n Acities, isATherefore di ect electi nAofA heAMayor Awhich promote AstrongAvi ib eAleade shanA mp rtantAsourc Ao Arecru tmen Aof Ata entA nto publicAlif AandAleadersi pAdevelop en .AeAto Achoose AtheA 5.2.4.1.he A3 Aomm ssion AisAo Athe cons de ed view Athat it isAdes rabAaAM y r Ash uldA May rs/Chai persons through po u ar Aman ateAin Aa A irec A lecti n. ASucudgetAapp ova ,A ha e A Afix dAtenu e A f AfiveAy ars.AThACou cilAsh ul Ahave A owersAofAovers ghtAandAfra ing majorregul tionspolicies.Aand217Local Governance5.2.4.2 Role of the Mayor/Chairperson5.2.4.2.1 There are three issues which need to be resolved regarding the Mayor’s role. First, should there be a separate Chairperson to chair the meetings of the Council and a Mayor to head the executive branch of the city government? Kolkata city has such an arrangement at present. This is in keeping with the broad notion of separation of powers and is somewhat similar to the way our National and State Legislatures have their own presiding officers, while the executive government is headed by the Prime Minister/ Chief Minister. However, the Commission is of the view that such separation of the functions of Chairperson and Mayor at the city and local level is unnecessary and cumbersome. In all rural local governments, the Chairperson is also the executive authority. The Mayor acting as Chairperson will facilitate harmonious functioning between the council and the executive. In a local government, the focus of authority should be unified and clearly defined. Only then can people make informed choices while voting. The Commission therefore recommends that the elected Mayor should function as both the Chief Executive and the Chairperson of the Council.5.2.4.2.2 Second, who should be the Chief Executive - the elected Mayor or the appointed Commissioner? The Commission is of the firm view that executive power must be exercised by the elected Mayor/Chairperson because basic democratic legitimacy demands that power is exercised by the elected executive. The whole logic of local government empowerment is to facilitate people’s participation and democratic governance as close to the people as possible. Only when the elected executive exercises real authority can people understand the link between their vote and the consequences of such a vote in terms of provision of public goods and services. Such a clear link also ensures fusion of authority and accountability. If the elected local government has no real authority and if executive powers are vested in an unelected official appointed by the State government, then local governance is reduced to mere symbolism. The Commission is of the view that the Mayor/Chairperson should be the Chief Executive of a city or urban government, and the city government should have the power to appoint all officials including the Commissioner and to hold them to account.5.2.4.2.3 Third, in large cities, how should the Mayor’s executive authority be exercised? In smaller towns and cities, the elected Mayor can directly fulfil all executive responsibilities. But as cities grow larger, with vast population and an array of departments and complex functions, the Mayor needs the support and help of a group of persons to exercise executive authority under his overall control and direction. Therefore, some form of cabinet system with functionaries appointed by the Mayor exercising authority on his behalf in various departments of the executive branch is desirable. In systems where the chief executive is directly elected, and separation of powers is practised, the cabinet is often drawn from218Urban Governanceoutside the legislaoutsi eAt eA e isla ure.AButAin aAc tyAgovernme t, theAimpera iv sAofAs parati nA fApowers edAcou ci Aa dAtheA sh uld be At mpe edAbyAt e AneedA or Agrea er A armony A etween A heA lec itteeAtoA ischargeA May r. AItAisA he efor Ade irableA oAdraw A he Mayor’sAc bi et AorAcom ndsAthatAa Mayor’ A xecu ive functio sAfrom At e A lected Acou cil. ATheACo miss o Arecomm ul Abe constitut dA ‘ abi et’,Ach senAb Athe elect dAM yorAfromAamo g AtheA ou cillors,Ash enAperAc nt of A heA in AallAmuni ip l Aco po atio s.ATheAs ze AofA his cabine Ash uld notA xc edAAfunc ion directl A stren th of Athe A ouncil,Ao Afiteen, Aw iche e Ais Ahig er.A uchAaAca inet AwilyAonAa y Aexe utiv A un erAtheAcont ol and superv sio Aof theA ayor, Aand th Afin lAauthori m tte Ashallvest Ain theAMayor.A5.2.4.3 Re ommendati nsercisingA xe utivea. ATheAfu cti nsAofAcha ring Ath Amu icipal Acou cilAandAe autho ityAin Aurb nAloca Ag vernment sh uld beAcmbinedAinAt e Asa eAfunctiona y A .e.AChir er on Aor AMayor.Aby Apopu a AmandateA b. AThAChair er on/Mayor should A e A irectly electedhrough AaAci y- ideAelection.heAmunici alAbo y.A c.AThACha rp rso /Mayo AwillAbeA he chi f Aexecuti e Aof AExe utiv Ap werA houldAvestAinA ha Afuncti nary.fAbudgetA ppr val,A d. TheAele tedACou cil shouldApe fo mAtheA unctions ov rs ghtAandAfra ing ofAregulatins and Apolic es.,Athe AM yor shouldA e. AInAmun cip l Acorporatio sAand Am tro olita Acitie ACabin tA hou dAbeA ppoint Athe Ma or’s A‘C bi et’ ATheAmem ers Aof th hose Aby theAMay rAfromAtheAe hec edAcorp rators. TeAMa or’ ACabin tA ted ACor orationAo A hal Anot ex eed 10AperAc nt of A heAstre gthAofAtheA lexe utiveAa thorityA fiteen,Aw ic everAis high r.ATheACa inetAwill exerciseAverallAcono Am tter Ae tru tedAto themA y At eAMayor AunderA isAt rolAa dAdirecent S5.2.5.AM na ement Struc ureAofAUrbaALocal AG Thern en s 5.2.5 1. ATereAis a A road A niformity inA heirAstru tu eAandAfun tionsA a sAexpl Thn dAbelow.5.2.5 .2A5c 2.n Thu Munici5.2 5.2.1 ATe AMun cipal Co mis ioner todayAisA heA hi fAexec tiveandAisAve tedAwithAxecutive pow rs51.AAlt ough AtheAMunicipal A orpo atio /Council layAdown policies forA219rinci al Ex utiveA51F r A xa le ASectio A39 Aof AAThAKolkata AMu ici al ACorpora ion A ct A tipulates that Athe AMun cipal Co mis ioner Asha l Abe Atheof the Corporation. Officer ALocal Governancethe governance of the city, it is the Commissioner who takes bottom line responsibility for the execution of such policies. The powers of the Commissioner are those provided under the relevant State law and as delegated by the Corporation/Council. In most of the urban local bodies, the Commissioner (or the Chief Officer) is an officer of the State Government deputed to work in the municipal body. The Commission has already recommended that the Mayor/Chairperson should be the chief executive and the Commissioner/Chief Officer should discharge functions that are delegated to him/her.5.2.5.2.2. As regards appointment of the Municipal Commissioner, there are two viewpoints. One view holds that unless the Municipal Commissioner is an ‘outsider’ appointed by the State Government, he/she may not be able to resist pressures - a situation that is clearly not in public interest. The other view is, unless the Mayor/Chairperson, as the Chief Executive of the local government, has complete control over all staff including the Commissioner he would not be in a position to fully discharge his duties towards the electorate and the Mayor/Chairperson should, therefore, appoint the Commissioner/Chief Officer. The Commission is of the view that the elected Mayor/Chairperson is accountable to the electorate. This accountability should also have commensurate authority over the staff of the local government. The Mayor/Chairperson should, accordingly, have a final say in the matter of appointment of the Commissioner/Chief Officer. However, in order to ensure that the right person is selected, the State must lay down, by law, the procedure and qualifications for selection and appointment to this post.5.2.5.2.3 The responsibility for selection and appointment of the Commissioner may be given to the Metropolitan Corporations and Municipal Corporations within a period of two years. For all other ULGs, this should be possible in three years’ time. Selection could be done by the Mayor from a panel of names, which could be prepared by a bipartisan Committee to be set up by the Council/Corporation. Appointment should be for a minimum period to be extended based on performance. During such time as the Commissioners/Chief Officers are deputed by the State Government, selection of the Commissioner should be from a panel of names, from which the Mayor could select an officer.5.2.5.3 Staffing of Municipalities5.2.5.3.1 Generally, a municipality should have the following staffing groups – Conservancy and Waste Management, Engineering, Financial Management, Audit, Public Healthcare, Education and Culture, and Revenue. In larger municipalities, the staff is under the employment of the municipality except for some senior positions where officers/staff are given on deputation by the State Government. The Commission is of the view that ultimately all municipal bodies should have the power to appoint their own staff. State220Urban GovernanceGovernments may, however, lay down Aand Athe Aprin ip esAofAma ingAsuch Gov rnmentsAm y,A owe er,Alay Ado n A heApro edur sA ayAco tinueAforAth Apre en Abut a pointment .ATheAe ist ng AState wid Amu icipalA adr no fres Arecrui m ent sAnee AbeA adeAto such cadr s.AAAdminis ration. AThes ADir cto atesA 5.2.5.3.2 So eAStatesA lsoAhaveADirect rate AofAMunicipa imesAalso Aa tAa Aca re Acon rolli gA xercis Asu ervision A ver A heA oc lAbod es AandAsome .AI AisAenvis gedAth t, Ain future, uthoritie Afor Athe Ac mm n A adre AofAm nicip lA ersonne Aow Astaff,Athus obviati gAtheAnee A the munici alAbo ies would recr itAandAma age thei Ap esentAsys emAofAtheADire torateA f rAc ntral sedAco tr l Aexerc sed Aat th ASt te Alevel.ATh theAloca Ab die Aintr de Ainto of AtheA A unicipal AAd inis rat on Aex rcisin Asupervi ionA ver at organisat onsAlikeADirec orat sA ut no yAo Athe ULBs ATheACommissio AisA f AtheAviewAt fAM nic pa AAdm nistration Acome A nAt e AwayA fA rueAdecentralisat onAand AshouldAbeol shed..2.5.4 Re omm ndati ns:veAofAtheAmu icipal bodyAwh leA a. heAATheA ay rAs ouldAbeAt eACh efAEx cutCommis ionerAsho ld performAhe fu ctions Adelegat dAt Ahim/her.heAresponsibndA ppoin ment ofA he Commi si nerb. Ali yAf r AselectionAMetrop li anA f orpora ion Awith nAaA andAotherAst fAmayAbeAgiv nAtoAt e isAmay beAdone withinAt re Ayea s.A pe iodA fAt oA ears AForAo herAb diesAt Ad wn At e Aprocedure A nd A ond tionsAtate Ash uld, Ahowe er, by Alaw, Ala ratio Athat Athe Co mi sione /Chi fA of such app intment. AFor Athe Ad St ficer Acte AG ve nme t, Ase ecti n As ou O dntinues Ato A e Adrawn Af om Athe beAma eA yAthe Mayo Af omA utAofaApanelAofAna es sentAbyAtheA ta eAGovernm nt.at on,Awherev rA hey A xist, sho ldA c. ATheADirect ratesAof Muni ipalAA minist id Acadr sAof Amunicip lA mploy es,be Aabol shed.A nA aseAthere areAState- no fres Aap oin mentsAtoA heseAm yA eAmade Aa d A heAemploy es Asho ld AbeAa s rbe AinAmunicip lAbod esAthroughAaA ueAproce5.3 A rb n AFinance 5.3.1 AOvervi w5.3.1. AAsAmu ici alAinstitutionsA volved A uring theAss.re-indepe denceAper od,A hei AroleAin re sedA rad ally withAtheA ran ferAof mo eAand more funct onsAand A owersAt Athem.ALo dAMayo aA overnorResolutionAGe eralgivingA( 869-more 2)functionsAissued221Local Governanceto the elected bodies. Lord Ripon in 1882, further extended the scope of local governments. This was followed by devolution of certain taxation powers to local governments. Despite the transfer of several functions to municipal institutions, availability of adequate financial resources was always an issue. Gopal Krishna Gokhale had moved a resolution in the Indian Legislative Council on 13th March 1912, which read:That this Council recommends to the Governor General in Council that a Committee of officials and non-officials may be appointed to enquire into the adequacy or otherwise of the resources at the disposal of local bodies in the different provinces for the efficient performance of the duties, which have been entrusted to them, and to suggest, if necessary, how the financial position of these bodies may be improved (Manager of Publications, 1951, p.21)52.5.3.1.2 The Government of India Act, 1919, provided for clear demarcation of powers to the local bodies and included in its range of municipal taxes, tolls, land tax, tax on buildings, vehicles and boats, tax on animals, octroi, terminal tax, tax on trade, professions and callings, tax on private market and tax on municipal services like water supply, lighting, drainage and public conveniences.5.3.1.3 Sardar Vallabhbhai Patel, the then Chairman of Ahmedabad Municipality said: “It is being said that the franchise of the electorate has been enlarged and the local bodies have been given very wide powers. True, I accept it. But what good would come out of it unless and until the question of local finances is settled first. The extension of franchise and widening the scope of duties would be like dressing a dead woman.535.3.1.4 The Government of India Act, 1935, seeking to establish a two-tier federation, however, changed the entire approach to urban local governance and reduced the taxation powers of local bodies transferring these to the provinces. This structure was retained invedAon A15-8-07 52 ubey_ulb. df AretrietheAAhmedaba A 53 ubey_ulb.pdf APresid nt alAAdd essAofASard rAVall bh hai Pat l,A tAwhoAwa At eAC airmanAof Munici al tyA 1935),AatA heAPr vincia ALocalABod es SuratConfe ien e1935Aat222Urban Governanceour Constitution. ur AC nst tution AW th A heApow rsAo AtheA tatesA ver A oc lAbo ie AkeptA nALis AI A(S ateALis ) AofAthe Sev nth ScheduleA nd the authority A oA axAtes,AStat sA ereAestri ted toA heAUnio AandAt eASt onsAan Afi anc alA em ow red Ato Ade ide onAfunctpowersAof AtheAm uni c i p litie .54fA unicipa itiesA .3.1.5AThoug At eAperformanceA ngAlev lsAvari sA onArev nue mobilisa ionAan Aspend eAsai Ath t Aev nA cro sAStates, it can A ener llyA l AAmendm nt, AtheA afterAthe A74 hAConstitu ion pal insinaitutions cia Aposition of AtheAmunic urateAwit Ath irA has Anot Aimpr vedA ommen es.AFurt er Ath A functions AandA esponsib litimesAth yA Ai A positi nAofAtheA mallerAmunicindpa Ains ituti nsA sA uchAw rseA ndA tdiffiult At Aeven Ameet Ath irAes ta bl i s hm ntAcosts. .3.1.6AE tima esA ndica e A hatAtheAsareAofAmuni ip lAe pendi ure Ain theAto alApublicAs cto Aexp nditureA asAbeen Ast adil Adecre s ngA romA ea ly A8A p e Ac nt A n A1 60-6 At A4.5 Ape Ace tA nA1977-78Aand t Aap roxi at lyA2 Aper ce t Ain A199 -92. AIn A1 91-92, munici alAb die Arais dAonly Rs.A ,900A ror sAfromAthe rA wnAresou ce ,Aa Acompa edAto A s. 48, 60Acro esA yAt e AStat sA ndA gAtoAth ATwelfthA s. A83,320 byAtheACe tr .55 Accordi unicipal se tor,A Fi anc ACom is ion Athe Asize of AtheA sed andAspentAbyA ea ured AinAt rms Aof res urces ra Ace tAofAtheA DPA th Amu icip lit es, wasA us Aon Ape alAbodies, A hi hA a d Atran fe sAfro AStat s Ato Aur anAlo nl A3. AperAce tA constit tedAan im ortantAs urc Aof Ar venue Afor Aur anA ocal bod es, waso AtheAState’Aown resource .A .3.2AFinanc s A fAULBsofA he rAfina cesA 5.3. .1 TheAro ustne s Aof Au banAl ca Abodies A ou dAb Arefle te Ain At e Astate mentAofAfinanci lA andA nA heir capac ty Ato loo Aafter th irAow Aneeds. AThe A as c Arequir or una ely,A venA su ta nability Amu tAbe int rtwi ed A ithAtheA eedAfor financialApower .AUnasAthe ur anApopu at o AisA rowing at Aa rat AfasterA hanAt eAnat onalAr te,Au banAbodiesA223rievedAonA1 -8-07 54SeeA papers/ga g. df,Aret55Redefinin AState Municipal AF scal ARe ati ns.:AOptions and Per pecti es AforA heAStateAFin nce Commi sions,Local Governancehave become increasingly dependent on the Union and the States for financial resources. An example of the receipts and expenditures of a municipal body is shown in Figures 5.2 and 5.3.56 Receipts in case of an urban local body can be broadly classified as follows:?Tax Revenue - property tax, advertisement tax etc;?Non-Tax Revenue - income in terms of rent, royalty, interest, fees and profits/dividends, user charges for public utilities such as water, sewage etc;?Devolution of funds from the State Government;?Grants from Union and State Governments for development schemes;?Borrowings5.3.2.2. The All India trend in municipal resources is given in Table 5.9:Table 5.9: Trend in Municipal Resources (Rs. in Crores)1997-981998-991999-002000-012001-02RevenueOwn Tax6,060.346,582.777,235.658,261.898,756.10Own Non-Tax1,606.071,914.502,101.742,562.752,918.55Total Own Revenue7,666.418,497.279,337.3910,824.6411,674.65State Transfers3,275.014,281.285,225.635,423.335,629.58Total Revenue10,941.4212,778.5514,563.0216,247.9717,304.23Revenue Expenditure9,147.9110,722.1512,053.9112,849.1013,621.44Source : NIPFP56 Source: Website of Bruhat Bengaluru Mahanagara Palike; Governanceer, 5.3 2. The ata avail bl in the re or of the Twe fth Fin nce Commiss on, howeof indic t s a some hat diffe ent posit on. That re ort indic tes hat the own reve ue the municipali ie in 200 -02 was Rs. 876 .16 cro es, w ich ame own the ext eatoRs. 736 .28 cro es. That was possi ily incomp ete ata prov de by S ate Governmets. T ble 5 10: All I dia Rev nue and Expendi ur of U ban L cal Bo ies All Levels (As per Twe fth Fin nce Commissi n’s Report) Rsin Cro-99199-00200-01200-02200OwnTax 475.52515.01561.57588.814 9 41.1 Own NonTax 211.90222.84264.95287.352 4 19.1 Own Revnue 687.42737.86826.52876.167360.28Assign e 8.90Devolut + 220.32264.60298.84274.63222Aid 180.86225.21223.24267.65207ers 62.0389.30109.4597.769 3nue 464.22579.10632.52638.04523ue1151.641317.961458.041514.2012 5 9ure 905.471069.301166.881220.781 067ure 297.47376.36407.17370.51332ure 1203.951445.671574.051591.291399e s) 1992-03 Revtion Grants-in5.97 Ot1.35 T tal O her Rev6.22 T tal Rev6.50 Rev nue Expendi1.63 Cap tal Expendi5.40 T tal Expendi7.02Sou ce: Fi le in questionna res rece ve by the Fin nce Commis ion rom var ous S ate Governme n t sf 5.3 2. In s it of the variat on in the fig res comp le by diffe ent agenc es, for an ave a uni orm accoun ing and repor ing framew rk i is evi ent hat munic pal reve ues ue gener lly had lim ted buoya cy As per the ata ith NI FP, the gr wth r tes for reve of U Bs, rom 199 -9 to 2001 02, ar as follows Own Rev nue Rece pt of Municipalis – 1 .48 percen Tax Rev nue Rece pt of Municipaliis – .20 percentNon Tax Rev nue Rece pt of Municipaliis – 1 .93 percentS ate Trans er to Municipaliis – 1 .54 pr cent225Local Governance5.3.2.5 In comparison, the tax revenues of the Union Government grew from Rs. 187060 crores in 2001-02 to Rs. 442153 crores in 2006-07 (budget estimates), an annual average increase of 47.27 per cent. Tax revenues of the States grew in this period from Rs. 128097 crores to Rs. 252573 crores, which translates into an average annual growth of 39.44 per cent. Even though the two sets of data pertain to different periods, the trends brought out therein are clear enough.5.3.2.6 There is often a mis-match between functional responsibilities and resource generation capability of local governments. Such mis-match is generally the result of inadequate delegation of taxation powers or a matter of administrative convenience – some taxes are more efficiently collected if they are administered by a higher tier of government. Therefore, the lower tiers of governance would depend on the higher tier for actual devolution. The Union Government with its nation-wide jurisdiction is better placed to administer taxes like Income Tax, Customs & Excise Duty and the local government with its intimate knowledge of local conditions is best suited to administer taxes like the Property Tax. The taxes administered by the Union Government are elastic, buoyant and have a wider base. Therefore, appropriate transfer of funds from the Union Government to the State Government, Union Government to the Local Government and State Government to the Local Government becomes necessary. Keeping these factors in view, provision was originally made in the form of Article 280 of the Constitution for ensuring fair and equitable transfer of resources from the Union to the States. Following the 73rd and 74th Amendments, Article 243I of the Constitution now makes similar arrangements for transfer of resources from States to Local Governments through State Finance Commissions (The role of SFCs has been examined in detail in Chapter 3.5).5.3.2.7 Besides devolution of funds on the recommendations of the SFCs, there are several schemes of Union and State Governments, under which funds are released to the local bodies. In order to provide reforms linked central assistance for development of infrastructure, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), was launched in 2005, in 63 cities. For cities/towns that remain outside this Mission, the Ministry of Urban Development has launched another scheme – Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT).226Urban GovernanceEarlier sEarlie sc emes for Infra tructure De el pmen in Meg Cities, I tegrated De el pment of mall a d Med um Towns (IDSMT), Ac elera ed Ur an Wat r Supply rogra mm (A WSP) nd Urba Reforms I itia ive Fu d (U IF) ave been su sum d ithe newscheme .l ta es. 5 3.2. The LBs have ener lly been a th rise to levy and ap ropriat sever etc. The These are prop rty t x, taxes on advert sem nt , tax on animals, Ente tai ment Ta x, St mp rinci al St te taxes o whic a share is giv n to the ULB are the P ofes ion T some of Duty, Ente tain ent Tax, nd Moto Veh cl T x. It is te pting t sug est ha exis in th se taxes be oll cted and re ain d by the munici alities. Howev r, iven the ha lack lack of ca aci y at t e gro nd level in unicipal admini trati n, t ere s a ear ervices. f ffor s in the c ll ction of th se ta es c ul ead to a re kdown of unicipal oreover, Bes des, tax efficie cy mig t d mand the c ll ction of tax s at he Sta e level. have a tr nsf r of ll th se taxes en ire y to he u ban (a d rur l) loc l b dies may lsadver e mpact on fin nci g of he Stat e Plan .om ended 5 3.2.9 The National C mm ssion o R view th W rki g of the Con titution re asfo lows:chedul s The Co mission, t erefore, r comm nds that the Ele ent and th Twelfth nch yats hould be res ru t red in a ma ner tha reates a separa e fisc l d main for P d aking and Munici alities. Acc rdingly, Arti les 243H and 24 X hould b amend s to the it and tor for the Le is atu e of t e tate to ake laws evolvi g owe P nch yats and Municip al iti e s or local 5. .2.10 The C mm ss on s of the iew that c eating a sep rate t x d main s shou d gov rn ents, by ame ding the Cons it tio , is not pra ticable. Howeve , Stat are more en ure tha the aw gives sufficie t owe s to he loc l bodies egard ng t xes thatappr priately ol ected at loc al lev ls.5.3.3 Pro erty Tax Refor s5.3 3.1 With the bo ition f ctro by mos States, Pro er y T x is the most mporta t erty Tax ource o re enue or local gov rnmeherets.ave been su stantia r forms in Proo lev admin st ation n rece t years. Earlier ‘Annu l Rent l Value (A V)5 was he basi ment w s of his tax. Thi mode of a ses ment had many r wba ks – t e anner of a sesbu yant. o aque a d g ve a lot of d sc etion to ssessin offiia s a d it was nel stic and nonve nmentThSupr me Court dir cted the imp ov men s in the taxation met odology. G of India f rmu ated and c rcu ated the G ide ines for Pro erty Tax Re orms, in 198. As esult a lar e umber of unicip l bo ies have swit hed ver from the tr dit onalRV ba ed22757ARV s efin d as the r ason b e rent a pro erty ay fetch or actuallyLocal Governanceassessment to the ‘Unit area’ or the ‘Capital value’ methods. In spite of these measures, there are several additional measures which could be taken to improve the tax base and enhance the efficiency of its collection. Some of these are discussed in the succeeding paragraphs.5.3.3.2 Widening the Tax Base: It is estimated that only about 60%-70% of the properties in urban areas are actually assessed. There are several reasons for low coverage. The boundaries of municipal bodies are not expanded to keep pace with the urban sprawl; as a result, a large number of properties fall outside the legal jurisdiction of the municipal bodies. In larger cities, where City Development Authorities are in existence, the areas developed by such authorities and the buildings constructed in such areas are not assessed till such time these areas are technically ‘handed over’ to municipal bodies. In actual practice, this may take several years. State laws often provide for exemption to a number of categories of buildings such as those belonging to religious or charitable institutions, which often include almost all private educational and medical institutions. Unauthorised constructions which are quite common in almost all cities in India are not normally taxed by the municipal authorities for fear that levy of property tax on these buildings would strengthen the demand for regularisation. A large number of properties belonging to the Union and State Governments are not taxed because of the provisions of Article 28558. Local Governments provide services to the occupants of such properties and there are costs attached in providing these services like solid waste management, maintenance of approach roads and general civic amenities. Therefore, Local Governments should be empowered to collect ‘service charges’ in respect of these properties. Similarly, properties belonging to the municipal government which have been given on lease are not taxed. Such properties, though in possession of occupants for a long time, often generate very small incomes for the local government. Unsatisfactory standards of records of title of property, is a reason for poor tax collection efficiency. Last but not the least, collusion between the assessing authorities and property owners is also one of the reasons for properties escaping the tax net.5.3.3.3 The Commission is of the view that the Union Government should pursue the matter with the States to ensure that all States switch over to either the ‘unit area’ or ‘capital value’ method in a time bound manner. The categories of properties exempted from property tax need to be revisited and minimised. In order to ensure that unauthorised constructions do not escape the tax net, State laws should stipulate that levy of tax on any property would not confer any right of ownership in case the property has been constructed in violation of any law. Steps are already being taken under JNNURM for reforms of the property tax regime including use of GIS for the purposes of mapping of all properties in order to improve the efficiency of collection of property tax. Property tax details for all properties should be placed in the public domain to avoid any type of collusion between the assessing authority228"Article 285: (1)he p 58Arti le 285 (1) e prop rty f he Uni n hall, save in s f r as Parliamen may, by la , othe wise pro ide, e exemp f o all ax s i puthority within oa anyState. aUrban Governanceand the proand t e prop rty o ner. State aws hould a so rov de for tax on propertie b lon ing to th municipal a tho ities bu whic a e give on lease. Sim lar y, the law shold rovi e or levy of ser ic charge on propertie b lon ing t th Unio and State Gv e r n m e n s.s Process: 5.3.3.4 Ra ion lising he Appea a rop rty As ess ent of the tax ch r eable onistratio . s th fist step n p operty tax admiubstan ia E rlier, th asse sin fficer had antly there amount of dis retion and c nsequ ainst uch were l rg number of complai ts aasse see ffic r and, n numbe of cases, thtr ducti nw uld file an A pea . With the iea met od’ of ‘self a se sm nt’ be i the ‘unit a number of or t e ‘ca ital val e m thod’, thever, even appeal i lik ly to come dow . Ho hen t ere m y be c ses hich, whes bjected o detail d scr tiny co ld lead o evi ion f he t x. In suc cases th a sessee, ifaggri ved, woul obvio sl preferan appe l.the Chie 5.3 3.5 In he earl er ystem, the app al gainst th asse sin offic r l y witatives. The ExecOffi ti e e or with a Standin Committee compris ng elected repre eneal sh ulCo mi sio is f th v ew hat in t e nterest f f irness and bje tivity the aplie to an ndependent qua i-judicialauthori y.n fficiency 5.3.3. Improving Collectio ficieEcy: t has been xper enc d that the collectitud (vi e o muni ip l axe is i t e an e o 40 to 46% (N U , 19 3). A ore r cent f records Box 5.8) hows wider vari tion Poo data base anagemen , impr pe upkeep of the tax collus on etween tax payers a d reco ery office s nd lack of un er tan ing reg me a e the m in eas ns for l w reco ery r tes La t, ut not the least, the nforce ent ion of the owe s with t e reco ery officer ar oft n n t us d or fear o reprisal. I tr duc collectio ne si plified and ranspa en system f tax tion woul definit ly mprove the he should fficiency. A period c physical er fica ion of the pro ertie and t xe lev ed on rol o the be ar ied ut in eac mun ci a area by a se arate wi g dir ctl under he con udi ed by Chief Executiv . Beside , random y sel ct d cases of assess en should be s. s bot the governme t ud tors as is d ne by C AG in ca e o Unio and S at tax s of self- the ‘unit a ea eth d’ and t e ‘ca ital va ue ethod a e b sed on the pr ncipl sse sme t, the law sho ld rovide fo exemplar p nalti s n cases of up ressi n f facts y prope229Local Governance5.3.3.7 Making Property Tax Buoyant: One of the major drawbacks of property tax based on Annual Rental Value (ARV) was that it was non-buoyant. The tax fixed for a property would remain unchanged till such time an overall revision in the property tax was undertaken in the municipal areas. Such revisions in some places did not take place for several years or even decades. The Unit Area Method overcomes this problem to some extent as the various parameters for assessment of tax can be changed periodically so as to reflect the market values. Property tax based on ‘capital value’ overcomes this problem totally, as taxes are self-assessed by the property owner every year and while doing so the market value prescribed for that year are taken into account. This ensures that the property tax reflects the current market value and hence is buoyant.5.3.3.8 Recommendations:a.State Governments should ensure that all local bodies switch over to the ‘unit area method’ or ‘capital value method’ for assessment of property tax in a time-bound manner.b. The categories of exemptions from property tax need to be reviewed and minimised.c.In order to ensure that unauthorised constructions do not escape the tax net, State laws should stipulate that levy of tax on any property would not, in itself, confer any right of ownership, in case the property is found to be constructed in violation of any law or regulation.d. Tax details for all properties should be placed in the public domain to avoid collusion between the assessing authority and the property owner.e.The State law should also provide for tax on properties belonging to the municipal authorities which are given on lease, to be payable by the occupants.f.Law should provide for the levy of service charge on properties belonging to the Union and State Governments. This service charge should be in lieu of various services provided such as solid waste management, sanitation, maintenance of roads, streetlighting and general civic amenities.g. A periodic physical verification of the properties and the taxes levied on them should be carried out in each municipal area by a separate wing directly under the control of the Chief Executive.230Urban GovernanceA compuh.AAAco pute ised da aAb seAofAallA roper ies usingAG SAmapp ng shouldAb Apr par d AforAall municipaAareas.i ARandoml Asele te Acases AofA ssessm nt shouldA eA udi edAbyAtheonAta es.A overnmen Aa di orsA sA s Ado e A yAC& GA nAcas AofAUn5.3 .4AOct oi5.3. .1A ctr i Awa AtheAm in sourceA fAr ven eAforAthe munici al bod esAin th Apa t. AI Ahas Abeen ab lish d AinAm st AStat s A eca se AofAth Aobsol te meth dAo AlevyAandA ollectionA tat s. AI A ersist nt deman Aby trade Aand A ra spor . AThe Atax Ahowe er, Ast ll e ist Ain Aa Af w Aion Awh chA has Ab en Aa gued th t Alevy Ao A‘ ctroi Ai Ab sed Aon Aa Aoutda ed method Aof A ollec gone intoA breeds A orr ption Aa d Aha pers Afre Am vement of Agood . ASeveral A ommi tees have ough th sA t is Aissue. AM harashtr Acol ects we l Aove ARs A5,0 0 Acror s, mainly A n AMumba , AthoAO tro ,A tax. AThe A ov rnment Aof AM har sh r Aset A p Aa As ud Agroup A o Asuggest Aal er atives A istrative but A he report Ais A epo te ly yet Ato Ab Aac epted and Aa te Aupon AI Aterms Aof Aadmi arent Ano A efficien y, AOct oi Abre ds del ys Ain Ath Am vemen Aof go ds Aand A s Aneither At ansaAofA efficienAst ff. AMum ai Awhich Ais es imated A o Ac llect Rs. A3, 25 crores A n A2 0 -08 A as viewAt atA verA4,5 0 Ape so sAjust to A ssess Aa dAco lect th s Atax. AThe A om is ion is Ao AtheanismsAtoA Oct oi should Abe A bol sh d,A utAa Athe A ameAti e, ASta esAsho ld AevolveA ec omp nsate theAlo al A odi s Afo At eAlossA nA e enueAa Aa resu tAofAsuchAbolitio .A5.3.4.2ARecommedation a.AOct oi shouldAbeA bol she ,AbutA he ASta esAsho ldAevolveA ecanismsAtoA omp nsate theAlocalAg ver men sAfo At eAlossA fAreve ue causdAbyAsuchAaboli ion.5 3.5AOt he rATa esthe Alo al 5.3 5.1 ALocal A overn e t Abei g Aa AStat Asubject Adiffer nt AS ates Ahave A uth rised rtis mentA bodi sAtoAlev Adiffe en Akinds of At xe .ASom AofAt ese taxesAare APr fess onalATax,AAdv htin ATaxA Tax,AEnt rtai men AT x,ATa Ao AEntry Aof Touris s,AA imal A ax, A ater ATax ALi aryAces ,A etc ABe ides, theAlocalA overnm ntAlevi sAseve al Ac ssesAlike educa ion Aces ,AlibAPro ertyA be gary ce s Aetc. AThApro eeds A romAthe eA ourc sAis A uc AlowerAa Ac mparedAturc sAforTax AHowever, APr fes ion lAT x Ahas Athe po entialAof A eneratingA ignificant resunderAtheA the AlocalAgo er ments ATheAupp r A ei ing Ao AR A25 0,A nAth Atax Arate A rescr bed mendAth sA Co stitutio A{Artic e A276( )}A imits Athe po enti lAof this ta .AThe eA sAnee AtoAwo ld An t rticle A o Ae hance the Au pe Ali it Aon Athe Apr fess on l ATax. AThe A ommis ion go AintoA Adetailed Ae am nati nAo Aea hAtaxAbutA ecom endsAth t Acertain A es should rincip231Local Governancebe followed in the administration of these taxes. These principles are – (i) The levy of tax should be made totally transparent and objective, (ii) the cost of collection for the local body and the cost of compliance for the tax payers should be reduced to a minimum, (iii) there should be an independent unit under the Chief Executive to monitor the collection of all taxes, and (iv) as far as possible, all levies should be based on self-declaration of the tax payer but this should be accompanied by stringent penalties in case of fraud or suppression of facts by the tax payer.5.3.5.2 Recommendations:a.The following principles should be followed while administering alltaxes:i.The manner of determination of tax should be made totally transparent and objective;ii. As far as possible, all levies may be based on self declaration of the tax payer but this should be accompanied by stringent penalties in case of fraud or suppression of facts by the tax payer;iii. The cost of tax collection and of compliance should be reduced to a minimum;iv. There should be an independent unit under the Chief Executive to monitor the collection of all taxes; andv.The appeal against orders of assessing officers should lie with an independent quasi-judicial authority.b. Article 276(2) of the Constitution may be amended to enhance the upper ceiling on Profession Tax and this ceiling should be reviewed periodically.5.3.6 Non-Tax Revenues5.3.6.1 User Charges: The most important sources of non-tax revenues are the user charges, the payments a citizen has to make for the public services he/she uses. These would include water charges, sanitation and sewerage charges, waste collection charges, charges for street lighting, fees for parking, fees for use of congested roads by motorists, fees for use of local services etc. There has been a tendency to charge for various services at rates that are much232Urban Governanceower than e pre sed low r than the ct al cost of p ovis oning suc sehisvices.once n ha also beeas follo in s: the G vernment s Econ mic Sur ey 2006-07 r ha ges. n terms f financin pa terns, the fo ndati n of urban inf ast uc ur has to be us o fina ce a It s p ssibl for urban i st tution to a cess fun s from he capi al market ervi ed by la ge portion of capital xp nditu e on urban infr struc ure w ich can e place, th u er cha ges in he fu ure. Whil mun cipal ond ssues ave i deed t ken d a proach m gnitude o resou ce r ise is as yet in ig ificant. The i ser-cha ge fnanc re withou can f cilitat a massi e ncrease in capital xp nditu e on urban inf astructign allo s wo senin the fisc l roblem. I ad ition f the tarif re tr cturing or sub idy de for m re fficient a d targ te im act on the p or.nce n he 5 3.6 2 There re seve al easo s for th s state of affa rs. F rs , there is re uct un o ular. art of he el cted local ov rnment to harge fai rat s or fear f becoming et imited A a esult, th resource av ilable for ain aining nd ru ning the e s rviceswhere th and c nse uently he quality of servic de lines Ths leads t a vic ous c rclability f con umers lso resist a y ncr ase in he servi e charg s. S co d, lack of a ai of smaller requir d e onomic a d financia e per ise a the ocal level es ecia ly in case Thir , the muni ipalitie ) pr vent them fr m rriving at co rec ra es for the utili ies oor payi g a acity o a segment of po ulat on is used a an exc se for n t ch rging e en the s, ho can ands ho u ld aymined thi 5.3.6 3 The Union Gov rnm nt an the St te Finance ommi sions ha e ex s rov ded issue and ecom ended that pprop iate r te should be har ed for t e servic LBs in the by th munici al bodie . The Union Gov rnme t as made i ma dato y or astructure Jawah rlal Neh u Nat onal Ur an Rene al Missi n ( NNURM and Urban Inf nable u er evelop ent Schem fo Small and M dium Town ( IDSS T) to levy reascolle ted c arg s with th obj cti e th t th f ll cost o op ration and ai tenance i with in t e next fve yea s.riate u er .3.6.4 This Co mi sio is f th vi w th t t e levy and co lection of ppro cip li ies c ar es must be nco raged or this, a signific nt portio o gr nts to the mun e raisi g. ma be inked wit their ow efforts t resourthere a e 5.3.6 5 The User pays p inciple is ap l cable to a l rg number o se vices Bu ve natu e. ser ice where the indi id al ser is not den ifia le and t e s rv c s are of a collect ng d ne in In uch case , reco rs sho ld be made to Better ent le y’. This is al eady be created or s me citi s. The levy of anoth r ategory of ch rg s b sed on the ex ernalit es ‘Pol uters pay p incip e s still i a na ce t sta e i Indi b t eeds to be used ficiently. Au233Local Governancegood example of this could be the traffic congestion caused by large scale economic activities or even concentrated dwelling units. Such major developments create congestion not only in the neighbouring areas but also contribute to congestion in the city centre. It is, therefore, necessary to carry out an impact study for all such major developments, and a ‘congestion’ charge’ may be levied which could then be used to take steps to ease congestion.5.3.6.6 All municipal laws generally provide for imposition of fines for a large number of civic offences. Although the proceeds of such fines may not be significant, their levy has a salutary effect on compliance of various municipal laws and bye laws and this indirectly leads to increase in municipal resources. However, such fines are imposed in rare cases. One reason is that the power to impose fines is not given to the municipal authorities and proceedings in the court of a magistrate have to be instituted. The Supreme Court has held that:59“The normal rule of legislative drafting is that whenever it says that a particular act shall be ‘punishable with fine’, it contemplates its imposition by a criminal court only.”5.3.6.7 Thus even for imposition of a small fine, prosecution has to be launched in a criminal court. The municipal authorities rarely launch such criminal proceedings. This, in turn, has given rise to the feeling that the municipal authorities are ‘soft’ in enforcing the law and is a major reason for widespread violation of civic laws. The Commission is of the view that in several types of cases pertaining to the violation of civic laws the power to impose spot fines should be given to the municipal authorities (the Commission in its Report on ‘Public Order’ has recommended the creation of a municipal police service for better compliance of civic laws). Another reason for poor compliance of civic laws is the relatively non-deterrent nature of penalties prescribed. For example, there are a large number of offences where the prescribed fine is less than Rs.100. Therefore, the punishment prescribed for all civic offences need to be revisited and modified.5 Mu icipal C rpo at on of Ludhian vs. The, 1995(2)ommissi nerRRR P110a 9SC)iala234Urban Governance5.3.6.8e ommendatio s:st be lin ed wit a. A ig ificant po tio of grants to he m ni ipalit es m t eir own fforts atr so rce ra sing. . An i pa t study sho ld e c rried out for all aj r d velop e ts in the ity. A conges ion charge and/ r ettermen l vy i relatio to su h proj cts may e levied whe ev r war an ed.he pohould be iven to c. ineer o imposefor iola ion of ci ic la smuni ip l author ties The re evant la s may beis it bly odifed.ced The amhe unfiof d.es pr scribed for iv c ffences ne d o be e hacould be re ised fine s ou d be egula ed y r le und r he la s that i pe iod cally wit ou t e necessi y f a amem e n t o the law.5.3.7 Borro ings5.3.7.1 Ur an infrastruc ure trad tionall ha been plann d nd im lemented by tate Gove nments, mun ci al governmen s or pa ast ta s, th oug use of their ownre enue s rplu es r grants fr m the Union State Gov rnment Mu icipal bodi s an par stat ls have also een titut ons to und aising l ans from fina ci l inst f these lo ns their ca ital ex endit re. M are guara teed by the tte Go ernments. A aj r di adva ta e of th s typ of fundin (with gov rn ent ua antee) s t at it dilutes wer and they ar he res onsibilit of the orrve y through l vy not ery seri us abou rec e be eficiaries of of a pr pri te charges o t sense of fina ci l s ch projec s Thus, it brings ant. H wever, with in iscipli e to som ext fsc l manag ment State Go iernme ts enactinwo ld b r quir laws dfigre ter ed prudencee Governm nts and on art of both Sta uently Muni ipa Municipal bod es. Consefinancial eforms. b dies co ld find it difficu t o secur loans n future, w thout un ertaking look or improved oreover, fina cial inst tution hav also b com mor pru ent and they k nds o secur ties (lik esc ow ccoun s) from the loca bo ies. Al this has235Local Governancefor local governments to bring in accounting reforms so that their accounts reflect a clear picture of their assets and liabilities on the one hand and adoption of prudent practices to improve their finances on the other. Government of India is already persuading the States through JNNURM to introduce financial reforms in the urban local bodies. Such reforms should be extended to cover all local governments in a phased manner.5.3.7.2 At present, the borrowing powers of local governments are limited and they have to seek the approval of the State Government for any borrowing. This system should be replaced by one of automatic approvals provided certain norms are fulfilled. However, fiscal prudence would require that larger borrowings are scrutinised by the State Government.5.3.7.3 Accessing the Capital Market: The last decade has seen the emergence of the municipal bond market. Municipal bodies, especially in larger cities have taken recourse to raising resources by floating municipal bonds. The Bangalore Municipal Corporation was the first municipal body to raise funds by issuing bonds in the early 1990s backed by a State Government guarantee. On the other hand, the Ahmedabad Municipal Corporation floated bonds that were not backed by any State guarantee. Several municipalities have accessed the capital market so far and raised funds for infrastructure development. The fact that the municipal bodies have succeeded in raising resources on the strength of their own creditworthiness indicates the potential for raising resources for financing urban projects. An added advantage of this method of mobilising resources is that these bodies improve their efficiency and greater awareness about quality of service.5.3.7.4 The issuance of debt by municipalities is governed by a number of laws, such as the Public Debt Act, 1944, the Securities and Exchange Board of India Act, 1992, the Local Authorities Loan Act, 1914, the Security Contracts (Regulation) Act, 1956 and the Depositories Act, 1996. Besides, there are a large number of instructions/guidelines to be followed before the municipal bodies can access the capital market. The capacity in the municipal bodies is limited to handle these legal and financial requirements. Efforts should be made to ensure that responsible borrowing is encouraged and the capacity to do so enhanced.5.3.7.5 Successful implementation of projects based on municipal bonds would require strong financial and administrative capabilities in the municipalities in order to service the bonds. The municipalities would have to follow economic pricing for their services so that their actual costs are recovered from the citizens. Besides, professionalism in project formulation, objectivity in evaluation of alternatives and transparency in the decision making process would be a necessary pre-condition for success of a bond issue. Last, but not the least, the funds mobilised should be used for economically viable schemes.236Urban Governance5.3.7.6 sh uld b enco rag d.3.7. The Commi sion would rec mmend hat mu ic pal bodiesna cial i stitutions to raise the r own reso rc s. Any orrow ng, e i it ter loans from depending u on theirr mar et borrowi gs co ld be ado ted by the munic pal odiesdi y o thes bod es c pability. nitial y, borrowi gs appe r attra tiv as they mp ove t e liqu urces is in econo ic n he s or r n. But t ne d t be ensure t at the de lo me t of resbodi s. S ch bo ies acti ities. State su po t would, ho ever, b requ red by mall r locafinan ing ec an sms w uld n ed to be iv n tat guarantee r in t e altern tive poole wo ld have to be put in place.5.37.R commen at ons:es i a Sta e may a. be The lim ts of b rrowings or var ou unici al od fixed n he ecomen ation of he SFCw without G vernmentb. Mu ic pal bodies sh uld be encoura ed to borr es, pooled fina cing Gua antee . However, for mall m nicipalit me ha ism w ll ha e o b put n place bythS ate Gove nm nt.na cial requir ments . The capacity f he mun cipal tie i to hand e legal and of espo si le borrowi ng m st be enha ced. .3 8 Leveragin g Land as a Reso rce5.3 8.1 M nici a bod es of en have a wi e ran e of as ets on their b lanc sheets rangin fr m inf as ructur net works to p blic bu ld ngs, from housingo munic pa sho pi g cen er as el as land. In view f he r commendati n of this Commis ion that de elopme t uthori ies hould be erge wi h con erned ULBs and the r techni al/plann ng m npo er s bsu ed wi h t e DPCs and PCs; the subs an ial land holdin s of the de elopme t au horities s ould also ventually come under muni ipal owner hip. W th spir ll ng pric s f and in ci ies, it i ext emely necess ry hat the e assetsa re man ged p operly.assets, spec fically5.3 8.2 Asse managem nt i vo ve dec ding hat to o with thesehow t es can be re wheth r uch as ets ho ld e lea ed and if s , her is t e i su of ould go for o tr ght pri ed o th t users ay th t ue econ mic osts o w eth r they s Many cities n Ch sale na in order o gener te esources upfro t for inf astr cture re tion.rom and easing a d h ve fian ed mo e than half of their infr stru ture investm ntfund infras ruct re have lso borro ed agai st the v lue of and on th ir b lance sheets t g-term occu ancy an inve tm nts. L nd easing i China, or e am le, invol es sale o lonerated over US$1 .5devhus, Shlopment r gh s.nghai, in he period 1992 2004, gbill on fr m land l asing whi e S en han gener ted Government80% of itsrevenues loca237Local Governancefrom land leasing. Even in India, in the last three years, the Delhi Development Authority (DDA)60 has generated over Rs.6000 crores as revenue from sale of developed land, largely for commercial uses. The potential for revenue through land sales has been further heightened by India’s urban real estate boom. To cite another example, MMRDA in Mumbai in a single auction in January 2006 sold plots in the Bandra Kulra Complex for Rs.2290 crores.5.3.8.3 However, sale of public urban land in India is dominated by development authorities and has neither been instrumental in fiscal decentralisation to the local level nor have they contributed significantly to the municipality’s capital budget. The Government of Rajasthan has, however, made a progressive move in this direction by stipulating that 15% of the proceeds from land sales of the Jaipur Development Authority should be given as grant to the cash strapped Jaipur Municipal Corporation.5.3.8.4 In economic terms, municipalities have to not only leverage land as a resource but also avoid the fiscal risk of becoming dependent upon asset sales for covering their recurring costs (and delaying politically difficult decisions on users’ charges). They must use the proceeds of land sales mainly to finance investment and capital works.5.3.8.5 Most municipal bodies have a large number of properties given on rents or lease. However, the earnings out of these properties are quite low. This is primarily because of litigations by the current occupiers who neither pay the market rent nor vacate the premises. Such litigations generally go on for years. The Commission is of the view that the respective municipal laws should provide that any built up property of municipal bodies shall not be given on rent for more than a period beyond 5 years and after expiry of the prescribed period the property shall be given on rent only through a competitive process.5.3.8.6 A basic necessity for leveraging land for revenue generation is the proper upkeep of land records. This is all the more important for citizens, as at present the system of keeping2386 Sourc : ased o annua of r DDA.portUrban Governanceof s does n tf land a d prope ty r coronverge ens ce re a c ear it e. There is no ocess, t eetween the r gistrati n pth recor proper y taxa ion sys em and he revenue of rights ma nta ned by de art ent o the State Gov rnme t ( f increasing hey are at all m in ained). Theeting eal populat on ensity and s yroc rlines thees at pric s in rban areas und managem nt im ortanc of roper land Commi si n syste s in u ba areas. The ect in it would be d alin with t is subReport n District Admiistrati n.5.3.8.7 Recomm ndationsa Munic pal boies h uld have a p riodica ly updat d ata ase of its ro ertie . IT too s like GI sho ld e us d for th hs plidom in.b. Land bank ava lab e with the mun ci alit es as w ll s with theevelopment ipalitie . uthori ie should b le eraged for generatin re our es for the muniast ucture Ho ever, suc resou ce sho ld be used xc usivel to finance inf nd capital xpe dit re and ot to mee recurrig cos s.bodies, c a Until the evelopment uth rities are erged with rban lo a e of land pr por ion of he reven e eali ed by su h ag nci s fr m he sa ting their say, 5% sho ld be mad a ail ble to the mun cip lities or me inf iastructu e fnanci g eeds.p roperty d. The respectiv mun cipal aws sho ld p ovi e tha a y builtollowing a o munic pal b die s all n t e given on rent/le se withou ompetiti e pr c ss. S ch a l ase p rio shall not exceedirpose. T sdata as s oulbe in thepub239Local Governance5.3.9 Raising Resources through other Measures5.3.9.1 Apart from the traditional modes of revenue generation, there are many innovative levies which could be used to enhance the resources of municipal bodies. Several municipal bodies, for example, have used FSI as a resource, rationalised the fee structure for different services provided by the municipal bodies, levied congestion charges on vehicles in general or on vehicles entering a congested zone etc. It would be advisable that the Ministry of Urban Development gathers details about all innovative levies. This would bring out the potential of revenue generation and other implicationsof each of such levy and act as a guide for the municipal bodies for additional resource mobilisation.5.3.9.2 Another popular mode of resource mobilisation is Public-Private-Partnerships (PPPs). PPPs are an ideal model which brings together the social concerns of the municipal bodies and the professional competence of the private sector. Urban transport, waste management, housing and road and bridges are some of the sectors where PPP models have been successful. PPP models, however, require utmost care on the part of municipal bodies as inadequate scrutiny, faulty contracts, weak monitoring and evaluation mechanisms and above all financial weakness may lead to skewed arrangements in which the public interest may suffer in the long run. Therefore, the institutional capability of municipal bodies needs to be enhanced as a necessary pre-condition for successful PPP projects. Government of India has already circulated PPP guidelines on urban infrastructure.5.4 Infrastructure and Service Provision5.4.1 Types of Services Provided by Urban Local Bodies5.4.1.1 Deficiencies in urban infrastructure are a major bottleneck for economic growth. The stress created by inadequate services and facilities compounded by weak governance adversely affects the quality of life of all citizens. Urban services can be broadly classified into three categories:a.Regulatory services;b.Infrastructural services andc.Social servicesThe Commission believes that improvements in the availability and accessibility of these services would result in qualitative improvement in the daily lives of urban citizens.240Urban Governance5.4.2 egulatory Servi esy5. over .2.1 : The e brodac based iGranting p rmi sions fo c eation of r sid ntial and ommer ial sedlans;on pre- etermiarmful t i. Issuin l cense t carry on ommercial ctivi ies whi h are n t soc ety; iii Ensuring ad erenc t norms of ocial and civic be aviour as et rmi ed by the a thorit es acting on beh lf of all citzen ; and iv. egu ating and m intain ng publ c h alt , and the e vi onm nt ofthe urb na ea.In all these egulatory measures, imp oving t e uality o serv ces wou d requiread erencevity, (d) o certain f ndamental r nci les - (a) simp ific tion, (b) tra spa ency, (c) ob ect c nve gen e and e) speedydispos l.boun by 5.4.2.2 Simp ification: egulator service p ovide by local g ver ments ar mplex and rules and p oc dur s. I has bee obs rved th t mos of these roc dures a e c p b tween outdate , puttin c t zen t a lot of hard hi . The e is als a causal re ationsh this a e the om lexity of roc dur s and he degree of orruption invol ed Add d t involvin fa tors like nadequate el gation f powers, decis on-maki g through a process hat State multi le layers of hie arc y and r d apism. The om is ion is o the view si plify G vernme ts should compr hensiv ly re iew rules and ro edure i order tand demyst ify th m.ng ystem 5.4.2.3 Tra s arency: A t ansparent or an sat on is on in which it decis on mak ver ment a d working roc dure a e open to public scrutiny. Tr ns arenc in local g ici ation not on y induc s greater acco nta ility but help engende effect ve public par a d reduces arb tr riness in decisio n-maki g.en ctm nt 5.4 2.4 n ia to k a ajor st p towards tr ns arency in admi istr tio with the spects o of th Right to I form tion ct 2005. The omm ssion ha ex mined a l er K y to ‘ reedom of In or ati n’ in its Fi st Rep rt tit ed ‘Right to In ormati n: asGood Go ern nce’ and made com rehensive recomme ndati o s.degree of 5.4.2.5 Ob ec ivity: The extent of or up ion in an or an sation s ela ed to he iscreti n njo ed by its func io arie . n m st of the egulatory functions pe forme by local go er me ts, it i p ssible to mi imi e, if n t totally eliminate d scrtion.ssessment241Local Governanceof property tax based on ‘unit area method’ is one such example. Where it is not possible to eliminate discretion, then the exercise of such discretion should be bound by well-defined guidelines.5.4.2.6 Convergence: In a city, different services are provided by different departments of local governments, agencies of State Government and parastatals. This multiplicity of service providers, if not properly converged, forces citizens to access each one of these separately thereby increasing their hardship. Creation of ‘one stop service centres’ can address this problem besides expediting processing of requests of citizens. A successful example of ‘one stop service centres’ is the ‘E-seva’ model of Andhra Pradesh. By proper use of Information Technology, convergence can be brought among different service providers at such service centres.5.4.2.7 Speedy Disposal: Delays in processing requests of citizens is one of the major hurdles in good urban governance. Not only does this delay lead to harassment of citizens, it encourages use of ‘speed money’. All applications for regulatory approvals must be disposed off within a specific time frame. A citizen’s charter laying down specific deadlines for disposal of different categories of applications should be prescribed, wherever not already done, and thereafter scrupulously complied with. The charter should also specify the relief available to the citizens if the charter is not adhered to.5.4.2.8 In order to expedite decisions on various requests of the citizens it is necessary that decisions are taken on these applications at the zonal or sub-zonal level, under delegated authority. To avoid delays by the functionaries in processing applications, a system of deemed sanctions after the expiry of self imposed time limits should be adopted. A system of voluntary compliance backed up with stringent penalties for violations should be put in place. To give a specific example, in respect of approval of building permits, an activity that is notoriously prone to delays and corruption, a system of self-certification by registered architects (particularly for residential units) followed by approvals over the counter, should be made mandatory. This must be accompanied by test checks to curb misuse.5.4.2.9 Recognising the need to upgrade the quality of various services, including regulatory services offered by the ULBs, Government of India has launched the National Mission Mode Project for e-Governance in Municipalities (NMMP), with an outlay of Rs.787 crores which, over five years, will cover 423 Class I cities (with over one lakh population, - ‘35 million plus’ cities will be covered by 2008 itself). Several services of municipalities would be covered under the scheme including: Registration and issue of birth and death certificate, Payment of property tax, Utility Bills and Management of Utilities that come under ULBs, Water Supply, Grievances and suggestions, Building plan approvals, Procurement and242Urban Governancemonitoring of ammes ALice sesA monitor ng Aof Aprojects AE-procureme t, APro ect/wa d Aworks,AHe lthAprog tem,AGrie ancesA SolidAW steAManage ent,AAcc untingAsy tems,APerso nel AInf rmationASy ckn wledgement A han ling, Aincludin Ai ple entat on ofAtheARigh AToA nformationAAct,A ichAneedsAt Ab A and Aresol ti n Amonitori g AihisAis AaAweAe v saged.AcomeA nitia iv Aw mplemented inAaAtime-bou n d manner.5.4.2.10ec m endations: AallAregul toryA a.AAAtime bou dAprogra meA orAupdatingAa dA imp ification Ao ory.AEachA tateA pro is ons rela ingAto th AULB AshouldAbe made manda tA implificati nA G vernme t shou dAcre te aAtaskA orc AtoAexa ineAand Asugge oA ug estAs ep A fApro eduresAinAlo alA over ments AThisA askA orceAco ldAal eAfiel AofficesAofA toAbe takenAtoAr duc Adisc etionAandAb in Aob ecti ityAi AtAu dertake A uc A lo al gove nments. AThAcity Amunici al Aco porations coulanAe ercieAnAt eirAown one Aumbrella b. byA AAll AsArv ce Apro iders A n A ities As ould A e Ab ought Aun ereted A it in A woA e tabl shing A‘ ne Astop As rvi e Acen re ’. AThis Aco ld Abe A omp ed Ase vices an A year Ain A ll Acitie . ACall Acen res, Ael ctr nic Ak osks, Awe Aba l AULBs to AbringA other tools Aof Am dern At ch olog As oul Abe A se Aby Aaservices Aspe d, A ransparency Aan Aacc untabili y A nto Adeli er Aofcitize s.oA heAtime Alimi s AforA c. ACiAiz ns’ chart rs Ain all AUr an ALoc l ABodie Asho ld Aspe ifyand Ap rmits A nd ap ro als Arelati g Ato Areg lato y A ervices A uch as Alice sesldA lsoAsp cifyA these Ashould beAscru ulo sl Aadhere Ato.AThAcha terAshotheA el efA vailable to the A it zen AinAcaseAon n adhere ce sueAofA uildinAd.A A AsystemAofAs lf certificati nAbyAregis ere Aarch te tsAforAi effect Ato startA p rmits Ashou dA eAi trod cedA nAallAULB AwithA mm diate with Afor Aindivi ualAres ide n ialAunits.5.4. AInfrastr uct u r e Services . .3.1 ACreat ngAaAResponsi eAInstitut ion a lAFr mewor me iti s’,Asuch 5.4.3.1.1AUrba Ainfrastr ctureA ener lly co ers Awhat A ay beAdescribed asA‘ ageme tAand A(d) asA(a) dri king Awater A(b Asanitati nAa d Asew rage, (c)AsolidA ast Ama dA etter accessA urbanAtrans ortA anagemen .AWith Aecono ic Adevel pment, citize sAdemat Ath seAservicesA nd imp ovementsA nA heAst ndardsAof th sesic AseAThvices. approach Abof243Local GovernanceGovernment towards the provision of these services should be: (a) creating an accountable and responsive institutional framework for provision of these services; (b) full cost recovery for such services; (c) the preparation of benchmark norms for these facilities; and (d) the need for equity in this effort.5.4.3.1.2 Provison of basic amenities in cities is characterised by a multiplicity of agencies. Since Municipal Administration is a State subject under the Constitution, State governments control the regulatory and financial policies of ULBs. Functions in the Twelfth Schedule which have not yet devolved to local governments, are under the State Government through departments and quasi government organisations. While some States have devolved powers and functions to local governments, many State Governments have retained responsibility and authority for provision of certain services through parastatals. Such parastatals mushroomed in the 1960s and 1970s, in the hope that they would provide technical competence for the provision of various services and utilities. While the argument for this is greater capacity and professionalism, this structure also directs the accountability of these officials upward rather than towards local governments. Citizens as well as their representatives have no ability to hold parastatal officials accountable for their performance, which in turn limits citizens’ ability to hold local officials, and elected representatives, accountable. This has also resulted in atophy of the competence built up at least in some local bodies.5.4.3.1.3 In this context, allocation of responsibility and accountability between the urban local bodies and the State Government departments/parastatals has to be clearly demarcated. To an extent, the larger State Government agency may have a final responsibility and ownership, at least of those services and utilities which have a presence beyond the ULB jurisdiction. But wherever, and to the extent it is possible to demarcate the managerial and technical “boundaries” of a civic activity, it should be possible to earmark responsibility to a local body.5.4.3.1.4 In other words, all ‘downstream activities’ of a particular utility, within the jurisdiction of a ULB should ideally become the activity of the ULB. In a Metropolitan Corporation, for example the distribution of water should primarily be the responsiblity of the local body. This task could be undertaken by the local body itself or through an agency such as the Water Supply Board. In such cases, the head of the Water Supply Board should be responsible to the Mayor for all activities related to distribution of water. In other words, the functionaries of the parastatals have to accountable to the Municipal Council.6124461he term counc61 eAte mA ouncilA ereAi Ab oadly use ,AtoAco erAt eAcou cilAth tAw uldAg vernA ny urbanAbo y,Aby thh teve An me.A eAte mA s generic sense.Urban Governance1.5 me 5.4.3.1.5 da ions: Recoma eni ies . The local govern en should be esp nsible fo prov ding civi in its juridition.y, as soon b. In res ect of all downstream ac i ities of a parti ular Sta e tili f an rban a it enters the g ogr phical and adm nistrati e ou dary oca Body, the Government utility parast tal sh uld becomecc unt bleto the LB.5. .3.2 y5 .4.3.211 A5.4.3.2. A cor ing o the 2 01 en us, o t of 53 69 mi lion urban hous holds only 36 86 ill on ha tap wat r sour es. A very large pe cen age o the urba p or hav n acc ss to e m e, as on af water. The Governmen p ogramme of ccele ated rban w ter sup ly sc quate wh n 31. .2006, ha su ported 12 ch mes for Rs 95 ro es. This is absolutely inad omp red to the asse sm nt ade by he Cen ral Pu lic Health ngineeri g CP EEO) of s 1,72 905 cro es or 1 0 per ce t ove age o the urban popul tion under safe w terrban Bas c supply and sanitati n ervices b 2021.62 benchma k e tim te fo the t there is S rvi es f r the oor (UBSP p ogr mme t he urn of he centur ind cated th uppl es n significan v riati n in w ter su ply within th munic pal reas wi h very l wfu ds must sl m and poor ocalit es. Ofte l ss t an 25 l cd to slum d ellers). 3 Suffiiente rovided n rior ty o meet th ne essar M G nor s a lea t for safe wa t er suppl .is erni le 5.4.3.2.2 I sti ution for Wa er S pply: Three broad in titutional fra eworks are ULB where in UL s in India it rega d to w ter supply a d sewerag serv ces Fi st a e the t; se ond the en ir sys e is with a de a tment or a pa ast tal o the State overnme ge ci ies, whe e the ULBs themse ves handle the enti e ac ivity nd t ird, as in some la re pec ive wher excl sive w ter supply a d sewe age oard ha e een set up fo the city. I te servi e of the in titutional fra ework, he fai ure of the pu li sector to provi e adequni alde iver have be n scribe to publilawsmonopoly, org nisational nefficiency tecer as w ll n he f rm of hig lea ag s, lack of preventive m intenance, nacco nt d waf autonom . as ver staffig nd lack omuni ip l 5.4.3.2.3 Ma ageme t of w ter su pl sh uld be he prima y u ction of ect of all body. The Co mission i paragrap 5. .3.1.5 has ecom en ed that in res downstream ac i ities of a particul r tili y, as s on as the enter the g ogr phical and adm nistrati e ou dary f an rban oca body, the Government utility parast tal sh uld become cc unt ble o the U B. S udie that ha e c mpared the in tit ti na set up o2456anitatio : The dat is ain y from he web ite of t e inist y of Urban eve opme t a d fro the World ank R port ndia W ter Supply Andnd Se vice. rid ing The ap Between Inf ast ucture A6 Se Mukesh P. Ma hur Norms an st ndard for asic Urban Inf ast ucture an S rvic s, p. 26 , in Urban Gov rnment and M nageme t : Indian I iti tives, ed. P.S.N Rao IIPA,Local Governancelarge lka a large Water oa ds in Del i and C enna with Metrop litan Corpor ti ns of K cture and M mb i, o no l a to a d finite conc usio hat a Bo r or a cor orate str ed o neces arily e s red a igher le el of au ono y and aster de ision ak ng as co pa at in the Water upply Depa tm n of a Corpor ti n. t as to be recog ised, ho ever t igher ge eral, water upply oar s are finan iall more auto omo s an have bu lt up very ev ls of tec nical capa it es as co pa ed to Mun cipal Corpor tions othe th n th from large corpor tion s ch as M mbai. Ther for , the tr ns er of these responsibi itie ld ng paras at ls o th ULBs woul h ve to be appropr ately ha ed i with ca acity bu ntire f the ULB . Thus whi e the l rgest Corpor tions hould cer ainl take ha ge f the ga ut of water uppl from devel pm nt to distrib tio , fo most local o ies a hased tr ns er of responsibi iti s for mana em nt f the distri ution ne works ithin their terri orial jurisd ction while l aving ource devel pm nt o the para tatal gency wouldpp ar to e th most fe sible arrange ment .arif 5.4 3.2.4 ar ff: An lli d but e ually imp rtant is ue i t at of re ov ry of costfs/ctual Thre is understa dable relu ta ce n th p rt of local gover me ts t p ss n the ur s co ts to con u ers – this, ho ever, often r su ts in g ossly unecon mical f tarif strucional In a large um er of c tie , the re enu s a e no even sufici nt to cov r the opera ional osts. Apar fr m low t riff, t e gap b twe n th co t and r ve ue i al o ue to operae rage . ineffici nci s and pilfcipal 5.4 he gap b3. .5twe n the re enu s and co ts of water upply pr ven s the mun g the odie from aki g any subst ntial inves me ts on imp ov ng o even maint inihi s qu li y As a esu t the q al ty of water deterio ates. D cl ne n the q al ty of wate nking th poor mo t, s the econom call w f ll of eople es rt to othe safe mo es of dr water uppl like b ttled iater, flte atio n etc.SFCs 5.4 3. .6 The Comm ss on in par graph 3. .2. 8 ( ) has recom ende th t th crete hould car y out more th rough an ly is f the fian es of local odi s an make coclude recommend tio s for improv me ts in their wo kin . This hould neces arily idown de ailed an lyis of water upply s st ms f the local govern en s. ThSFCs hou d laroach prin ipl s for fiat on of waterfs aari d its pe iodic rev si n. The unde lying ap v ices . ho ld e the re ov ry of at leas full r nning co ts of these ser oning 5.4 3.2.7 Water upply s heme h ve to be environme tally sustai able ith a burg en s urban popul tio , the tradi ional water s urc s are inad qu te t me t the require odie As a r sul , new s urce h ve to be deve ope , bu this ais s th c st of ater. Local h the n ed to p epare infrastr cture devel pment plans which ho ld be inte rate wi CD s. In or er to edu e the tr in n the urban water upply sy tem , the emancould246Urban Governancebe tempered by adopting water harvesting measures and recycling of waste water for non-potable purposes. Municipal bye-laws should initially provide incentives for the adoption of such practices and progressively make them compulsory for all buildings.5.4.3.2.8 Recommendations:a.Urban Local Bodies should be given responsibility for water supply anddistribution in their territorial jurisdictions whether based on their own source or on collaborative arrangements with parastatals and other service providers.b. Metropolitan Corporations may be given responsibility for the entire water supply programme from development to distribution. For other urban local bodies, a phased transfer of responsibilities for management of the distribution networks within their territorial jurisdiction while leaving source development to the parastatal agency would appear to be the most feasible approach.c. State Finance Commissions may be entrusted with the task of developing suitable normative parameters for different classes of local governments for arriving at optimum tariff structure.d. Municipal bodies must focus on increasing operational efficiencies – through reduction in pilferage, improving efficiency of staff and use of technology.e. The municipal bodies should meter all water connenction within a time frame. Installing a hierarchy of metering system could help in identifying pilferage. Payment of water charges should be made hassle free through use of Information Technology. As far as possible all water connections should be metered, and if necessary targeted subsidy should be provided to the poorest sections.f.Infrastructure development plans for water supply should be integratedwith the CDPs.g. Municipal bye-laws should provide incentives for adoption of water harvesting measures and recycling of waste water for non-potable purposes. In larger cities, non-potable water (recycled treated water) should be used for industries.247Local Governance5.4.3.3. Sewerage Management5.4.3.3.1 Unlike in rural areas, where only about one in five persons have toilets, three out of four have this facility in the cities. However, the population covered by sewerage connections remains abysmally low, at about 28 per cent. According to World Bank field estimates, as against 90 per cent coverage in Hyderabad, 83 per cent in Chennai and 78 per cent in Bengaluru, coverage is as low as 52 per cent in Delhi and 56 per cent in Mumbai. Kolkata is not much better at 62 per cent.645.4.3.3.2 The reasons for the poor sanitation levels in our cities are many. These include a lack of awareness and appreciation of the need for proper sanitation and hygiene as also the inadequate public investment due to the dismal state of municipal finances. The National Commission on Urbanisation was ofthe view that, for this very reason, there should be “a disaggregated approach” to sewerage. According to that Commission, “This does not mean that no main sewerage projects are undertaken, but that there should be ready acceptance of alternative systems which may be cheaper and more appropriate to Indian conditions.”5.4.3.3.3 The problem of sewerage management has two aspects. First, as large parts of cities are not covered by underground sewerage disposal systems, the wastes find their way into storm water drains, natural water courses and ultimately into major rivers. The problem gets aggravated in case of rivers near major cities. Second, the sewage carried by the underground system has to be ultimately let off in the natural drains, but after proper treatment. In most of the cities the capacity of the treatment plants is much less than the sewage flow and in a large number of cities, there is no treatment of water.5.4.3.3.4 Sewerage systems along with treatment facilities are capital intensive. While granting approvals to new lay-outs, it should be ensured that adequate provisions for internal sewerage systems are made and enforced. Local bodies may even impose a cess on the property tax or development charges in order to raise resources for expansion and capacity enhancement of the existing sewerage systems. In order to motivate the local24864W rld B nk : I dia Water Supp y and Sa ita ion Bridgin the Gap Betwe n I frastruct re and Ser ice., er, Januaryackgrou d2006. PapUrban Governancegovernmengo er ments to generate a ditional eso rces for sewerage ma agement, matchi g g an s may be pr vid d by he nion nd State Gove rnm e nt s . aci ity. .4.3.3.5 Normal y it le or o harge s evi d by he loc l b dies for sewerage harge be This appr ach mus c ange. The C mmission r comm n s that a sepa ate us r rage, as i tr duc d in all munici alit es ven as mini um evy, for s nit tion and ew dist nct f om water ch rg s. It is ec ssary to mph sise th need to redep oy th se f nds into per tion and ma nt nan e of the sewerage system. needs no .4. .3. That the posi ion wi h egard to s ni ation in slum is m ch wo sein Taexp an tion. The posi ion wi h egard to these se vice in s um areas is given5.11.blehe slums .4 3.3.7 The C mmiss on n tes that the roision of ater and s nitati n w thin f eople s sk wed very strongl toward notifid lum . In th case of at ine , 17 pe cente of noied slu- i notis do not ha e ccess to atrin s, hile the p rc nt ge is 1 in th cascert in notifid lums In som St tes, the it ation is abyhis ima .a area of co cern, aba ic steps t prev nt human de radati n annot be based on no ifiationo f areas. pe iall .4.3.3. Sev ral NGOs nd civi socie y gr ups ha e se up ‘pa and use oilets’, e in sl m in sl m areas. Co–pro uc ion65 of sanitary ser ices has b en tried suc es full) at he reas. Thconcept include s tt n up of a CBO ( ommun ty Based Orga is tioinitia gra s roots, car yin out IEC ac ivities, c l ecting a s gnificant p rc nta e of th t bl ck. cap tal ost from the b neficiary fo low d by the con tr c ion of a c llecti e toilropriate Su h effrt n ed to be e co raged by unicipal go er ments by roviding aps by the in entives. Sewerage f cili ie h ve to be pr vide in s um a eas on a prior ty bas unicip al bodies. .4.3.3.9 Recommedaions: a. Sa it t on, as a atter o hy iene a d publi hea th must beiven due tion f r pri rity and em has s in ll urb n rea . In a l towns advan e a uf iency la ing down adequate infra tructu e hould be taken to fi avoid inoferices b. Each unic pal bo y shoul repa e a t me bound rogamme for ght in o roviding sewerage f ci itie in sl m a eas. Ths hould b brol b dies actio through ap ropriate a lo ati n in t e annua budg t. Loc m y impo e ce s on the pro er y tax or de elopmen c arges in order24965Co-p oductio imp ies that ci izens or on umers o service t emselves c nt ibute in p od ction of theseLocal GovernancePercentage ofModes of waterPer cent withPer centPer centhouseholdsAccess (per cent)undergroundwithout anywithoutliving inseweragedrainagelatrinesNS NNSNSNNSNS NNS NS NNS NS NNS2. According to the NSS data, a slum is a compact settlement with a collection of poorly built tenements, mostly of temporary nature, crowded together inunhygienic conditions usually with inadequate sanitary and drinking water facilities. Suchan area is considered as a ‘non notified slum’ if at least 20 householdslived in that area. ‘Notified slums’ are those areas notified as slums by urban local bodies or development authorities.Squatter settlements are excluded from the survey.Source: NSSO (2003a), reported in India Infrastructure Report, 200676529810030100100696853689395752551511734010069126106629483318156131110024906624441044959875392538732371Table 5.11: Access to Water and Sanitation Facilities for Urban Households Living in Slums (per cent) (2002)6734236161000000100153113121727247003002300001511113424341257000063008323030357700000100400604073Per centOther2100010044261622291825253553341TubewellPer cent02707257744677979859759371719171Per cent Per cent122600000000000651511TapOther57672200010006920300101111TubewellNotes: 1. NS—Notified Slum; NNS—Non Notified SlumPer cent34878410043100100089100683389100958531Per cent40.424.449.462.247.914.934.471.034.979.597.885.834.361.325.346.553.1Tap59.675.62.250.614.265.738.774.765.629.020.537.846.953.552.185.165.1Jammu & KashmirMadhya PradeshAndhra PradeshUttar PradeshChhattisgarhMaharashtraWest BengalPondicherryTamil NaduKarnatakaRajasthanGujaratPunjabOrissaDelhiBiharTotal250Urban Governanceto raise resources for expansion and capacity enhancement of the existing sewerage systems. In order to motivate the local governments to generate additional resources for sewerage management, matching grants may be provided by the Union and State Governments.munity participation and co-production of services should be encouraged by municipal bodies. This should be supplemented by awareness generation.d.A separate user charge should be introduced in all municipalities, even as a minimum levy, for sanitation and sewerage, as distinct from water charges. State Finance Commissions may be entrusted with the task of developing suitable normative parameters for different classes of local governments for arriving at optimum user charges.5.4.3.4 Solid Waste Management5.4.3.4.1 Urban sanitation is closely linked to solid waste management. The waste generated in urban India in 2000 was estimated to be over 33 million tonnes and is expected to nearly double by 2010 and double again by 2020.66 Waste collection and disposal is a statutory function of all municipal bodies. Indeed more than half of the staff employed by municipal bodies is engaged in this task. This big complement of staff performs tasks like street cleaning, collection of garbage, transportation and dumping of garbage. Besides, a substantial number of workers in the informal sector (rag pickers) are also engaged in recyling of certain components of garbage. Several municipal bodies have also started outsourcing garbage collection. Besides, civic society organisations are also involved in some municipal bodies. There is today an increased awareness of the need for adequate and efficient solid waste management in our cities. Serious Public health problems, such as the plague in Surat in 1994, have drawn attention to the dangers of neglecting waste management, which is a relatively inexpensive aspect of clean environment.5.4.3.4.2 However, in spite of deployment of such a large workforce for solid waste management, the results are not satisfactory. In a typical city, the ‘public dust-bin’ approach is very common for garbage disposal. This approach has several drawbacks. Not all households and other commercial units put the garbage in the dustbins. Thus the garbage collection efficiency is very low, and whatever garbage gets collected is not segregated. This composite garbage is transported by municipal vehicles to the outskirts and on open ground. Very few municipal bodies adopt technically sound garbage disposal techniques. The Ministry of Environment and Forests have issued Municipal Solid Wastes (Management and Handling)Rules, 2000. These Rules cover various aspects of solid waste management.25166World Bank : Improving Management of Municipal Solid Waste in India : Overview and ChallengesLocal Governance5.4.3.4.3 The weaknesses of the existing system of solid waste management are: (i) the professional and managerial capacities of the municipal bodies are limited and this is more pronounced in case of smaller cities; (ii) no charges are levied for garbage collection or disposal, nor are there any incentives for reducing garbage generation or recycling waste; (iii) no separate costing is done for this function; (iv) indiscriminate use of plastic bags and goods; (v) recourse to modern technology is rare and; (vi) segregation of garbage at the source is not enforced.5.4.3.4.4 The management of waste has three basic components: (a) collection (b) segregation for different types of disposal and (c) disposal. The first lends itself to community participation and also privatisation and must be made a part of the activities of Area Sabhas and local NGOs/CBOs who may charge for this. A large number of community based systems of garbage collection have been tried in different cities. These need to be scaled up. The second component requires segregation into categories for different types of disposal. Unfortunately, our pattern of disposal is mainly one of indiscriminate dumping. It is essential to initiate a civic programme especially in the larger cities to segregate household waste according to its degradability. This would ease the burden on civic authorities. The third component is that of efficient disposal, which can also be carried out either by the local bodies themselves or with private sector participation. The Municipal Solid Wastes (Management and Handling) Rules, 2000 prescribe the manner of disposal of solid wastes. It is important that before any task is outsourced, municipal bodies develop the capacity for managing such contracts.5.4.3.4.5 Commercial Exploitation of Waste: An important aspect of this civic service is the scope of commercial exploitation of garbage. This can come out of energy generation, compost heaping or other innovative uses. The conversion of waste into energy for local consumption could provide for a part of the finances of the city. According to the India Infrastructure Report 2006, there is potential for generating about 1500 MW of power from urban and municipal wastes and about 1000 MW from industrial wastes in the country while the installed capacity of waste to energy projects stands at 25 MW. Other disposal methods like composting also generate revenues. Scientific solid waste management will lead to reduction in the emission of green house gases, and could also be a source of revenue.5.4.3.5 Scavenging5.4.3.5.1 The practice of manual scavenging is an abomination. The fact that it is broadly caste based makes it particularly abhorrent. As local government and public health and sanitation are subjects mentioned in List-II (State List) of the Seventh Schedule, in pursuance of Article 252(1) of the Constitution, all the Houses of Legislature of the States of Andhra252Urban GovernancePradesh, oa, KarnatPrad sh, AGoa,AKar ataka,A aha asht a,ATri ura Aan AWestABenga Ap ssedAr sol tions toAenableA rs and Construc ionA he Union Gov rnmentAtoA na tAtheA mploymentA fAM nualAScaveng ,AthisA ctAc ul AbeA of ADry ALa rine A(Pr hibi io ) A ct, A1993 (No. 46 Ao A19 3).67 Bu dAthis AAied Aont AThe A ctAA notiy A nAJa uary, A 997 A68AEv nAto ay, all ASta esAh veAn t A doprAman allyAca ry ngA {Sect onA A(1)}Aproh bi sAtheAenga em ntA rAempl yme tAofAany personAf ine.AApartA romAtheA humanAexc et AorAconstru t ngA rAmaintain lush) lat ngAaAdry (non-Ahas Aap roac e AtheA l gislativ Af amew rkAp ovi edAby thisAAct,A heA nionAGover menAto dr Ala rine AbyA proble AwithAaAt o-pro ge Astrategy Afist,AbyAprov di gAa Aalterna ivtionA ch me (ILCSS)A wayAof low Ac stAsa ita ionAunitsA nde Athe Integrated LowACo tASanit Aa dArehabilit tionA w ich A s Ain Aop rat on Afrom 19 0-81AandA econd, Ab Apr vidingAtrainin dARehabili ati nAofA inAalt rnati eAo cupation Aunder th ANational A che eAofALiberatio Aa 99 -92.AI AtheA ase cavengersA nd Athei ADepe de ts (NSLRS)Aw ichAi Ain Aoper ti nAs nceA At eA EAwas reduce A ofAILC S,AwhileAt eAb dg t Aa locati nAwasA s A150 Acr res du ing 2002-07 AFurt er,Awh le the to Rs A 4.60Ac oresAandAth Aac ualA xp nditu eAwasAonl ARsA61.6 Acror s.6 sAesti ate AtoAbe 6A totalAnu ber of dr Alatrines ye Ato beA on erted Ab Ath Aend AofA2 06 07 w asedAon Aa 1989ANSSOA akhs Athe so rce ofAthisAda aAi An tAim eccab eA ndAin so e case AisA ep rt. 0ASi il rly,Ai Ath Acase A fANSLR ,AR .A747.11 cr re AwasAr e eas dAup A o A2 04-05AandA ,72, 681A cavenger AhaveAbe nAp ovide Atr ining Aan A4 43,A925Aassist dA nA ehabilit ti nAupA oA20 3-04.ANoA und Awe eAallo atedA or A he AAnnu lAP ans AforA0015 -06Aand A 006- 7. AfA anu lAscaven ersA 5.4 3. .2AThu , notA nl AisAther AaAl ck ofA eliabl Ad taAonA heAnumberA rAconvers onA fAdryA i At eAco ntry At ereAis Aa soAlackAof fo uss d Aatten ion. As AtheAsch me A(f Ath Afi ldA evelA asA atrine )Aa e AdemandAdrive Aan ASta e- entric AtheAlac Ao Aac iveA ntere tAa At eAP imeAMinister ledAtoAitsAt rdyAimple ent tion.AFollow ngAt eA nno nceme tAmadeAb prepar d AaA ati nalA inA isAInde en ence A ay A ddress Ao A2002, Athe Planning C mmission07.A Aa tionAp an A tionAPlanAf rA otalhisAE adicationA fA anu lASc vengi g Ab AtheAy arA2tifcationAo AmanualA als Alaid stress onAth Abas cA ss esAwhichA eedA oAbe i Aaddresse Av z.Aide in Aimpleme tatio ca .Aeng rs,Aa optionAof th Ale alAfra ewo kAbyAtheAStat s AandAincentiviadicationA fA anualTheAN tional AHum n A igh sAComm ssion Ai Ai sAreviewAme ti gAonAessio AisA fAthe Afir A scav ngin Ain AMarc A 007Aals Aproposed Aa si ilarAappro ch 72 TheA omm ndA anAn t Aco-h bitA view thatAna ion lAurba Arenewal Aa d Amanu lAs ave gin Ash uldAnotA rnment AtoAidenti yA theAs meAspac . AExte si eAsurve s As ou dAb Acarr edAoutAbyAt eA tateAGov AwithinAs xAmon hs.A m nual Asca eng rsAand es ima eAtheAnu be AofAdryAl trines inA xistenc essAandArem veAthi A Follow ngAthis,A epara elyAea ma kedAfunds sh uldAbeA llo atedAt Aadd bom nati nAwi hinAa A neAyear time Aframe AC ntral A ssista ceAt AState AA nual Pl nAsho ldAbe tied AtoAt is.AF nds alloca edAund rAth AJ NURMAs ou dAalsoAbeAli kedAtoAi .6 Sou ce:APreambl AofAtheAl gisl tion AextractedAfromAhttp:// w ww.reports/ 1 9 99/india/Indi 994-19 htm68So rc :AReviewAme ti gAonAe adicationAo AmanualA caven ing,AN tionalAHuma ARigh s ACom ission,AMarchA2007;A d isprchive.as ?fno 1396A 9Sourc :APara 13.5,AAn ual ARepo tA 006-07, M nistr AofAHou ing A&AUrban APoverty A llev ation 0Sourc e:APara 13.4,Aibid71Source:A upa/nsdp/ SL S.htm,AextractedAon 29.08.200772Source: A chive.aspracted o 29.08.2007 Aext fn =1396,253Local Governance5.4.3.5.3 Recommendations:a.In all towns and cities with a population above one lakh, the possibility oftaking up public private partnership projects for collection and disposal of garbage may be explored. This should, however, be preceded by development of capacity of the municipal bodies to manage such contracts.b.Municipal bye-laws/rules should provide for segregation of waste intodefinite categories based on its manner of final disposal.c.Special solid waste management charges should be levied on unitsgenerating high amount of solid waste.d.Extensive surveys should be carried out by the State Governments to identifymanual scavengers and estimate the number of dry latrines in existence within six months.e.Following the survey, adequate funds should be allocated for the purposeof eradication of manual scavenging within one year.f.Central Assistance to States Annual Plan should be tied to eradication ofmanual scavenging. Funds allocated under the JNNURM should also be linked to it.5.4.3.6. Power Utilities and Municipal Bodies5.4.3.6.1 Urban Local Bodies do not usually have a role in the supervision or operation of power utilities. Mumbai is an exception, where the premier power distribution utility (BEST) is with the Municipal Corporation. Power sector in India has been undergoing large scale restructuring for more than a decade. The main planks of this restructuring include enactment of new electricity laws, unbundling of utilities, constitution of regulatory authorities etc. At a conference of Chief Ministers/Power Ministers on Power Sector Reforms, in 2001, it was resolved that commercial viability has to be achieved in distribution in 2-3 years through any or all of the following:- Creating profit centres with full accountability- Handing over local distribution to Panchayats/local bodies/franchisees/users association, wherever necessary- Privatisation of distribution etc.254Urban GovernancegAupA 5.4. .6 2 AInA pi eAof A hese Aeffrts Anot muchAhe dwa Ahas been ma e AinAse tiages decentra isedA owerAdistrib tionAutili ies.A ocalAdistrib tionAutil ties have Ase eralAadvant kingA the Acan A da tAtoA ocalAcondi ion Aand Apro lems withAgr ater Aflexibi ity AtheAdec sionAmpAof author ties come Ac os rAt Athe Acons mers Aena ling Acit ze s Ato h veAa A en eAofAowne sh eAtoA suchAutil tie AandAg ving t emAaAgr ater A en eAof Aresponsib lity an , Ait Abe omesApos ibtion ac ieveAconver ence with A ther A ivicAamen ties like A ater Asu ply, As reet Aligh ing,Asanit et .AAnAo tionA ou dA eAto hand overAdistrib ti nAofA ow rAt AtheAmuni ipalAbo ies;Ahow ver, Ama A wit Athe Aexi tingAorganisat ona Aand Atech icalAcapabil ti sAo AtheAmuni ipal Abo ies, thi ee sA n t Abe Aposs ble. AThere or , asAa Apre-requi ite AtheAcap ci yAo Athe Amuni ipal Ab diesA oAbeAenha ced Aand th n inAa Ap asedAm nner theyA ould take ove AtheAfun ti n AofA owerAdistribu ion,Asta ting with A mallAmanag ableA reasAw thin A heirAjurisdict ion.5.4. .6.3AMuni ipal Ab die Acan also p ayAa A ajor ro e Ain Ap operApla ni gAo AtheAdistrib tionAnet orksA long with A therAnet orks like A ater As ppl Aand Atelecommunica ion.AC mmonA ou dA uctsA ou d AbeApl nn dAb Athe Amuni ipalAb die Afo Aall A heseAnet ork Aand evenAch rgesA tionA be Al vi dAo AtheA se sAof A heseAd ct .ATheA ocal Ab die Acan also he pAi AtheA owerAconserv fore s Aby Aincorpor ting A ower Aconserv tionAfea ur sAi Athe Abui dingAbye-laws.5.4. .6.4ARecommendat on :owerA a. AMuniAipalAb diesAs ou dAbe Aencou ag dAto take Aresponsib li y AofAuateA distrib ti nAinA heirAa eas. This,Ahow ver,As ou dAbe doneA fterAade cap cityAbui di gAin A heseAorganisaton .Ab. AMuni ipal Abui ding Abye lawsAs ould Aincorp rateA owerAconserv tionAmeasre.Ac. AMuni ipalAb diesAs ouldAcoord nat Athe Al youtA lan Afo AtheAdistribtionAnet or s AofA owe AandA therAutili t ies. .4.4ASer ice AforA umanADevelop ment5. .4.1Ation5 .4.45.4. .1.1 A ndi Aha Ao eAo AtheAla gestAeduc tionAsy te sAi AtheAw rld.AS i l,Aa veryAisigni cantAn mb rAofAchi dren Ae therAr mai Ao t Aof As ho lAor dro Aout Awi hout Acompl ting evenapr maryAeduca ion.ABe ween A19 0–5 AandA200 –05 Athe An mb r AofApr mary Asc ools morethan Atr bled from A20 ,6 1 Ato A76 ,520 Arespecti el ,AofA hich 90. Aper cent were Ama aged255Local Governanceby government or local bodies.73 But the role of private schools increases rapidly as the level of education goes up. The percentage of private schools (both aided and unaided) in secondary/ senior secondary education is 58.95 as against 9.79 in primary education.5.4.4.1.2 The National Policy of Education, 1992, has indicated three thrust areas in elementary education:(i)Universal access enrolment;(ii) Universal retention of children up to 14 years of age; and(iii) A substantial improvement in the quality of education to enable all children to achieve essential levels of learning.The ‘Sarva Siksha Abhiyan’ is a flagship scheme which seeks to achieve these objectives. The Mid-Day Meal Scheme is also complementing the ‘Sarva Siksha Abhiyan’.2565.4.4.1.3 The 7th All India School Education Survey by the NCERT, indicates that there was a substantial increase in the number of urban schools between the 6th and 7th Surveys (1993 and 2002 respectively). Though segregated data for urban and rural schools is not available, the trend of growth in schools also indicates that between the 6th and the 7th Surveys, growth in government schools was 2.6 per cent, while those of local bodies was 0.4 per cent. Interestingly, in the early 1990s, there was actually a decline in the number of local bodies’ schools, presumable because many such institutions were taken over by the State Governments. Incidentally, the numbers of private aided schools have also been on the decline, perhaps for the same reason. But, importantly, in a situation where much of the school level education should be at the local bodies’ level, 71 per cent of the new schools added between 1993 and 2001 were government schools and only 10 per cent were schools set up by the local bodies.5.4.4.1.4 Irrespective of whether schools for the common people are run by the government or the local bodies, the biggest challenge is to impart quality education. According to studies, a large percentage of urban poor school going children can barely read.74 Education depends73Source: `Sch73S urce:A‘Scho lAEducatio al AStati tic A2 04-0 ’ A(asAonA3 th ASep ember,A2 04 ;AMin stryAofA umanAResourc ADev e lop ent,A 00 .74 percenta eA fA Astu yAbyAthe NGO, Pra ham,Ai to theAstatu AofAe ucati n Aam ngAurban po rAchildr nAo ANorthe n AandA ester AInd a,A oundAthatA he nAMumbai-Pune. chi drenAinAur anAgove nme tAs hoolsA hoAc nAb relyArea At eAalp abe isAabo t A 0%AAexceptAi Governancenot lud ngA n t A ust onAthe nu berAofA cho ls but onAthe Afac liti sAt atAthe schoolAp ovidesAinoards,A theA ua ityAof Ateac ing.ThANCE T AdataAin icat s Atha Abasic Afac liti sA uchAasAblacknAmostA fu nit re AandArecre ti nal A sAalso toilet Afaci ities, Aesp cia ly Afor girl , AwereAina eq ateA cho ls runAbyAgov rnment Aa encies though Ainteres ingl , A o e AofAaA ro lemAinAgov rnmentA yAself- choo sA hanAin Amu icipa Ao es AItAis Ane essa yAt atAallA cho lsAa eAmadeAfunct onallinAalfici A su nt AinA sA uch asAth AbasicAfac lit es AandAcl ssroomArequi eme tsAareAp ov ded urban A chools wit inAt eAn xtAtwo Ayears. actoryA 5. .4 1.5AThASarva A iskshaA bhiy nA imsAtoA rovideAele entaryAed ca ionAofAsatis hools.A ual ty A or all Ab A20 0.AThs A u tAbeAa fa tor in Athe effrts ofAall Amu icipalAsach rsA Con inuing Aret ai ing AisAess ntial. AA temp s A ustA eAma eA lsoAto A ecruit betterAtersAtA andA r vide aAmoreAco ducive Aenvi on ent inAtheA ch olsAtoAen ourage betterAt ac singlyA join AS nce Aan Aappr priate sa ary AisA iffic lt A orAt eA LBsAtoAp ov de, Ait sh uldAbeAincre OsAandA ne ess ry A orAthe Amunicipa ities, Aesp cia lyAthe large Ao es, A oAs ekAt e A elp A fAN ent toA ind vidualAvolu teers. A nd ed,Ai Aw uld Abe us ful AtoAi i iateAaAvo untaryA erviceA leour social se tor AtoA mproveA erviceAdei very. AionAin 5. .4.1.6 AStakeh lders’ Aempo er entAisA quallyAim or ant Ato ensureA ualityAed ca rabl ,A public fundedA cho ls andAto secure Adeve opmentAentit eme tsAfo Ath seA hoAareAvuln er ityA p or AandAvoiceheAreal Achess.ll ng AisAt Acraft Ad liveryA yste sAt atAcan A ddressAdisedAbyA o Ane dsAa d giveA Av ice to Athe A oo est of Athe Ap or.Thi Ais ue can A eAbestAad re lA uchA fo terin Aloca AlevelApartn rshi sAwithAco munityAorgani at ons atAtheAhab tatio Alev ,At is asAorgani at onsAof women,Ase f-help gro psAandAstakeh ld rs. InAtieldAofAedue Aatio may AbeAa hi ved AbyAc eatingAem owered school Aman gementAco mitt e AwithAinvove entAofApa rents .mAthatA 5. .4.1.7 AC a tingAa Ac edibleA ervice Ad livery systemAr q ires A Ashi t fromAa syst erviceA p ovidesAemp oyment Agua an ees to AtheA erviceApr vi ers to Ao e AthatAp ovidesA AlocalA gua an ees to Athe Aci izens. AAccount bi ityA n suc AaAnew system sho ld Al eAwitha At A gove nme ts Aan AlocalAinstitutions/Societies/Man gementAcomm tt es.AThAfo usexibleA be Aon Ac eatingAd liveryA yste sAt atAar Ab s dAon AaA esp ct AforAcommuniti ation, lAesAandA fin ncing, Amon toringAsta dards,Ainno at onsAin Aeng ge ent Ao AhumanAre our c pacity Ab il ing atAallAl evels. .4.4.2 Health5.4.4.25. .4.2.1A ndia’sAachie em nts inAthe health se tor in Athe Apost-Indep nden eAer ,Aha eA een A nAsomeAr spectsAcredit orthy.ALo gev ty Ahas A oubl d A romA3 Ay ars A nA 94 AtoA6 Ay ars Ai A2004; Infant AMo tali y ARat A(I R)Ahas fa len At A5875; A ala iaAh257sAbeenA75 our e:ASRSAB l etinA-A ctobe A2006,ARe istrarA en ralAo258Local GovernancecatedAa dAA c nt ined atA20 A akhAcase ;As allpoxAand guin awor Ahave Abeen completely era usAc ncernA epros Aan Apolio A reAnearing Aeli ination. 6AHow ver Ather Aa e Aareas ofAseri eAthan AtheA ik AlevelsAof Am lnu ritio Aa d Arate Aof infant Aa dAmate nal death Aare wor Ades rable n ighbouring countries. In est entAin theAhe lt Asec orAi Amuc Ales At an Awhat Ai(see AT20Infra.p fbleA5 12).A ableA5 12:AHea thASe to :AIndiaAin Comp rison withAOthe s IndirACountrinkaAThail ndatorAndiACh naAUSASriALaIMR/1000Aiv-bits68A<30 A2 A A15 Under-5 Amor ality/1000AA37A8 15A26 Full AImiv-brhs8784A93A 9A 4 Births byAskilledunzeA() A7A97A99A 7A94 HealthA xp n it re Aatenens A3A4.6A3.7A4. Gover me tAshas A%of ADP A48 A58A19A48.7A69.7 xpee AofTotaA21.A33.A4 4.nditureA(% Govern entAheal hApeninAto A.A10A23.1A A17.1total governme tAspen ingA(% PerAcapi a A 274A131A321in ernatiopedinAinA6 A21A5nalADol ersy AWe fare, Sou ce ARe ort Aof At e ANational Co mission Aon AMac oec nomics and AHealt A( inistr Aof Health and AFami GOI, A200 )ArA ent andA 5 4.4.2.2AThe pe centage Aof Ad spe sariesAan Ah spita sAinA rba Aa eas wasA 6Ap 7Aper Acent Ar sp cti elyAo Athe Atotal fa iliti sAin A199 ,Aco erin A ess At an aAt irdAofAtheA opulatio .AH wever,A he quali y AofAu banApu licAheal h A ervicesAi Ag n rall Aof A AveryApoo of Aprivate sthis Aperhandard. As Ae plain Awh Aa out A80 Ao Ape ple Ain A ur Aco nt y Aavailhealthcare Afacilit es.77 ableA5 13 ANumb r Aof AUrban Hosp talABedsAand AAD spe saries A er A100,00076Source: dia, A 005)A76Sou ce ARe ortAofAt e ANational Co missionAonAMac oec nomics andAHealt A( inistr Aof Health andAFami y AWelfare, Go ernmen AofAIAThisA eA 7 “ThAim actA fAtheAp or quality ofAservi eA eliver AinApubli Ah spit ls Ai AseenAm re acu elyAinAthe Ah spit li edA areAofA heAriches Aqu iguntile portA2006.A too AatA 0 A erAcen AinApubli Ah spitals A nA1986-8 .A owever, byA1 95- 6Athis ha AfallenA oAsl gh lyA verA2 A erAce t”A:AIndiaAInf astruc ureAR esAYe178.79A .60Sour of e: AIndia, ACen ra A ABurea AofAHealthAIn ellige ce, AHealthA nfrmatio ret ievedAfromA 1. 541. 0Beds3.27.2199120011981.50.12.60Urban Governance5.4.4.2.3 According to the India Infrastructure Report, 2006, data on urban health infrastructure is not collected by the Ministry of Health and Family Welfare. In urban areas, public hospitals, dispensaries and clinics are generally more focused on curative aspects of medicine, rather than primary health care and dissemination of information. As a result, private health care plays a critical role in bridging a need gap for the urban population. The trend in urban areas to shift towards private healthcare needs to be seen as an opportunity by the city authorities. It gives them an opportunity to concentrate on public health as distinct from clinical services, and on preventive and not only curative aspects of healthcare.5.4.4.2.4 A fundamental shortcoming in the present arrangements for public health management in urban areas is lack of primary health care. The urban poor are even worse off than their rural counterparts because of the grossly inadequate primary health care arrangements. Municipal dispensaries, restricted as they are in numbers, do not extend facilities to urban poor which the PHCs do in the rural areas.5.4.4.2.5 Public health is dependent on primary health care systems, nutrition, safe drinking water, and sanitation and health education. The Commission, therefore, feels that convergence of these services is as important as upgradation of primary health care in urban areas. Therefore, there should be a task force in each local government responsible for all services which impact public health, with members from the State Government and other agencies in the field of public health.5.4.4.2.6 The points made in paragraph 5.4.4.1.6, about stakeholders’ involvement and the need to craft credible service delivery systems accountable to the local communities apply equally to the health sector.Schools and hospitals require more financial resources to improve performance but they also require institutional autonomy and flexibility to deliver guaranteed service outcomes.The role of the head of the institution has to be strengthened in a framework of decentralisation that allows for accountability to local communities. Flexibility in meeting local needs within a framework that guarantees certain minimum service delivery standards also requires a shift from non-accountable State level recruitment to accountable local government and local institution level recruitment.5.4.4.2.7 The Report of the National Commission on Macroeconomics and Health (Ministry of Health and Family Welfare, GOI, 2005) had this to say on devolution of power and the health sector:“In the health sector in India, decentralization has to be viewed in the context of devolving authority and power to the States by the Centre, to the districts by the States and from the districts to the mulitlayered local bodies. Such devolution of authority259Local Governancehas taken place only in Kerala, which invested time and resources in systematically building capacity for governance by local bodies. Leadership and governance means having the ability to plan, budget, implement, manage, monitor, review and accept responsibility for decisions taken.Devolution of power in the health sector has, however, not been easy, even in Kerala. This is because of the lack of technical guidance at the Panchayat level, lack of standardization of facilities laying down clearly the functions, duties, responsibilities and outcomes of health personnel and facilities located at different levels, and an absence of priorities in the interventions that need to be focused upon. Lack of integration between different systems of medicine, problems of compatibility between the highly educated doctor, and functionaries of the local government, dual control, multiplicity of bodies handling health budgets are other reasons that have complicated matters. As these issues were not resolved, fiscal devolution did not really make the desired impact. Because of these factors, utilization of local bodies as agents of change or in social mobilization has been minimal and perfunctory.While the 73rd and 74th Amendments do give us a great opportunity to foster a democratic system of governance in health, implementation has been tardy. In fact, besides functional delegation, fiscal devolution is more critical; it is more than the mere release of funds for carrying out public functions as an agent. It encompasses expenditure decisionmaking and responsibilities, as also revenue responsibilities and accountability to the community for service delivery.Applying these principles will mean having a clear-cut delineation of duties and functions to be carried out by the local bodies at different levels vis-a-vis the Government departmental hierarchies; the financial implications of those functions and systems for utilization and reporting; and, finally, the kind of authority, powers, or control they have on the functionaries responsible for discharging those duties. Without such a systems approach merely ‘orienting’ locally elected representatives to be ‘involved’ in health activities will be of marginal value.”5.4.4.2.8 The Commission agrees with the views of the National Commission on Macroeconomics and Health. The Commission has underlined the importance of clear-cut delineation of functions and duties of the local bodies in different chapters of this Report.5.4.4.2.9 The Commission is of the view that for all services provided by the local governments there is need to develop a set of performance indicators. The existing set of260Urban GovernanceantA perform nceAindicat rs, Awher verA hey Aex st, are not Asuffic en AtoAmon tor allAimpor ice asp ct AofAser iceAdeliv ry AThe Aemph si Ain At eseAindica ors ha At Ab AonAqua it AofAser andAreliabil t .AA Aclo elyAli ked Aas ect for Aimpro ing theAqua it AofAserv ce AisAmaintennc A nalA fAa Areli bleAdata ase Aa out all theAmunic palAserv ce Aat the ADistr ct,AS ate andANati antA le el. ThisAw uld A lsoA el AinAmonito in Aof At eseAserv ce AasA el AasAta ingAimpor po icyAdecisions.5.4 4.3ARecommendatins A here haor A a.AAt A eAaAs if AinAemph si Ain theAcru ialAser iceAdeli eryAsecon,A ofAeduca ion andAhe lthA romAcentral sedAcon ro AtoAdecentral sedAact romAaccountabi it Ato theAS ate Adepart en AtoAaccountabi it Ato theAl calAcommuni ies and A romAemploy entAguara te AtoAser iceAguaranee A AasA AIb AisAneces aryA hat allAsch ols areA adeAfunction llyAself-suffici nt Ai uc Aas Ab sicAfacili ies andAclass oomArequirem nts areAprov de AinallAu banAsch olsAwi hin theA ext twoAyersA AofA c AThe Amunicipalit es, Aespeci lly theAla gerAo es, Ash uldA eek theA elAinA N Os, theAcorpo ateAse tor andAindivi ualAvolunt ers for Aassist nc iceA run ingAscho ls.AInd ed AitAw ul AbeAus fu AtoAinit a eAaAvolun aryAser ele en Ain ourAso ialAse to Ato Aimp oveAser iceAdelivryA AbeA d ATheAt en AinAu banAa ea AtoAs iftAtow rdsApri ateAhealth areAn ed At ee Aa Aan Aopportu it Aby theA ityAauthori ie AtoAconcent at AonApulicAhe lt AasAdist nct A romAclin calAservi es, an AonApreven ive and notA nlyAcura ive Aasp ct AofAhe lthAcreAe. als AInstitu ionAspe ificAstand rdsAsh ul AbeAprescr bed forAsch ols andAhospi and At irdAp rty Aassessm ntsAcar ied ou AtoAmon torAperform nc AinAsericeAdeliv ry.APerform nce Ab sedAincent ves Ash ul AbeAprescr be Aat allAle el AbyAbrea ingAsa aryAceil ng AtoAguara teeAser iceAoutc mes andAlin ingAperman nc AinAser ic AtoAperformaceAf.ARecruit ent forAhospi als and Asch ols Ash ul AbeA ad At AanAinstitution/Soci ty,Amo ingA wayA rom nonAaccount bleAS ateAl velArecruitmntAg. AL cal Abo ies Ash uld Aen ure Aconverg nce Aa ongAhe lthAsystms,Asanita ionAfacili ies and Adrin ingAw terAfacilit es. APri aryAl vel Apulic261Local Governancehealth institutions in urban areas should be managed by the urban local bodies.h.For all services provided by local governments there is need to develop a set of performance indicators. The concerned Ministry should lay down broad guidelines for this purpose. Thereafter, the State Governments could lay down norms for this purpose.i.The concerned Ministry should maintain a State-wise database about the performance of various service delivery systems. Similarly, the State should have a database for such services covering all municipal bodies.5.4.5. Urban Transport Management5.4.5.1 Urban transport is a key component of urban infrastructure. It is also a visible manifestation of the efficiency of urban governance in a city. As the urban share of the GDP in India grows, GDP growth will be closely linked to how efficiently transport systems in urban areas are able to move goods and people. Travel demand depends on a number of factors - population growth and economic development being the major determinants. The rapid increase in travel demand has been met (to a large extent) by increase in the number of vehicles. But the expansion of road space has not taken place at the same pace. Moreover, the growth in the number of vehicles has been rather skewed – with personalised vehicles inceasing at a much faster rate than public transport vehicles. This has led to traffic congestion in almost all major cities in India. This issue is of major concern not only in the larger cities such as the metros but also in the tier II and tier III cities.5.4.5.2 With motorisation growing at over 15 per cent in larger cities, there are significant adverse effects on the urban quality of life due to road congestion, pollution and traffic accidents. In almost all our urban centres, bus transport is the only means of public transport. Rail based systems, in varying forms have been set up in Kolkata, Delhi, Mumbai and Chennai. Except Delhi, all others are run by the Ministry of Railways. The Delhi Metro and the Mumbai suburban rail system have significant passenger traffic. And the Delhi Metro is the only example among these of a modern mass transit system. A large number of tier II cities do not have an organised, properly planned public transport system, and the transport services are provided by a hetrogenous mix of private and State owned operators. Services like taxies, auto-rickshaws, cycle rickshaws also play an important role in the pubic transport system to fill the gap left by the formal public transport system.5.4.5.3 Some cities like Mumbai and Bengaluru have exclusive organisations for providing262Urban Governancecity bus services. In ityA usAserv ces.AnAsomeAc tie ,AtheseA y Aru Aby Athe AS ate’sAerv ce Aar Adirectr Aco porati n. OnlyA road At ansps Ain AMa aras tra andA a Afew A iti Aservices Arun A y AtheA Guja at A av Abu thems lves. AThe A tateA munic pa ities rt Acorpor tion AhaveA owned At ansp n Ar nnin Aon A eficitsg ne ally AbeAbeen Auna le to AfundAan Ahavities A o A he Adesir dA ex an ion in Acapaurce Acrun h Aha Aals A leve . AThAresfromAim ro ingAtheir prevente Athem ic s. AA Ala ge An mberq ality of Aser av e bee Arespo sibleA of Afactors A ather Aunsat sf cto yA for Athe A e Aof At e AState Ao nedA per orman rt A orpo ations A AadA public At a sp indisc pline Aamon stA hoc Afare policy, rialAand Aoperat onalA taff,Amanag ,Aunscien ific Aro teA ineffic encie omeAofAthe . ANoA el A planni g, Aunsou dAp rsonnelAp liciesAandAp lit calA nt rfere ce areA vices isAvi ibleAan A struct red effortAt Ainvol e A he A rivate Asecto Ai Ath Aprovisi ni gAof Abu Ase Ain anAund sciplinedA smallAsc le Apriva eA perator Aco tinu At Apr videAthe bu kA fAthe Aservicea d A nsaf Aenvir on me n tAi Am nyAcities.dedAby Athe Afac Ath tA 5.4.5 4 AThe Ainf as ruct ralApr ble s Aof Athis A ec or A reAc mpou sA s As Adi d Ath tA re ponsib li y AforA hisA ec or A n AInd a, A oth Aa Athe AS at Aa dAUnion leve fusntAle el, ti lA1996,A no Aone Aca Abe hel Aresponsi le for the Af ilings. AAt theAUn onAG v ernm was notAmentione AinA the e A asAno recogniti nA f urbanAtr nsportAa Aa sep rat Asubject; it aultAas A Ape iph ralA theAGo er ment’s AA locat onA fABusines ARul sA nd Ather fo e went AbyAde on usionAa dAne lectA functi nAfor Athe Am nis ries res onsi leAfor Arai AandAroad tra sport.A els.AWhil AtheAStatea Are ardsAth sAsectorAa eA urt erAco fou dedAa AtheASt te Aan Alo alAleme St tes,AinAo he sATr nsportADepa tme tAisA esponsibl AforAurb n A rans ortApla ni g AinAslingAwithAl ca ASelf- Ais Aeitrusted AtoA heAUrbanAD ve opmentADep rtmentA rAde artme tAdeaAwhileAthe Tr nsportA gov rnments AorAmuni ipa Aa min stration.AA dAat At eAope ati nalAlevel Acontr lAi Awit AtheA depa tme tAis Are ponsibleA or A ehi le Alicensin Aand A ax Acoll ct on,A raffi th theA unicipa ity.A policeA ndA oadAconstru tion and maint nan e A ithA heA tateAPWDAorAwIn manyAcit es,A ent alAagenc esA ike theARail aysAand y the Authority ANatio lareA alsoighw263Local Governanceinvolved. For the ULBs, managing the urban transport system is not a priority area. Another drawback of the fragmented approach towards city transport has been the non-integration of transport planning and urban planning.5.4.5.5 National Urban Transport Policy: The Union Government has formulated a National Urban Transport Policy which seeks to redress to some extent the neglect of this sector. It has the following objectives:-to bring about better integration of land use and transport planning so as to improve access to jobs, education, etc;-to encourage public transport and non-motorised transport so that the dependence on personal motor vehicles is reduced;-to offer Union Government support for investments in cycle tracks and pedestrian paths;-to offer Union Government support for investments in mass transit systems;-to have a more coordinated approach to urban transport management through Unified Metropolitan Transport Authorities;-to offer support for capacity building at the State level;-to design parking facilities in a manner that encourages greater use of public transport and non-motorised modes as also financial support for construction of parking complexes;-to provide concessions for the adoption of cleaner fuel and vehicle technologies so that the pollution caused by motor vehicles gets reduced.As is evident from above, addressing the public transport problems in cities requires a multi-pronged approach.264Urban GovernanceAtheA 5. .5.6AManag me t AofATransport tionADe an :AI AtheA ast AtheAapp oa h AtoAso vin A tcA pr bl mAofAconge tio Aw sAto A idenAr ads, A uil AnewAr ads Aand Acons ructAfly ver less – Abasi allyAfoc ss d Aon As pply sideAmanage ent. AImpo ta tAas A hese Amea ures are,Au ouldA the Aare Acomplem nt dAbyAd mandAmanag ment Ameas res,Aconge ti nAonA oadsAAm xA con in eAto A ro .AThAu e Aof Aper onal Aveh clesA ee s A oAbeAdiscou ag d byAa Ajudi ioupAofA ofAisca Aan AnonAiscal Ameas res.ASing pore Aim os sAanAaddit onal levy bo hAonAowne sh tion veh cl sAas we lAa Au eAofAvehi le . ATheACommi si n A sAo Athe view th tAin Aci i s, AaAconge lev Am y Abe Aim osedAwhe e er Aa Apersona ised Ave icle Ae t rs AaAcong sted A one.AAlt oughA her AareAimplement tionAis ues, Ap ope Au e A fAI Acan Afacil tateAimplementa ion.A part oughA fromAconge tion A evy, Amea ures su hAasAall wingA ntry intoAcong stedA reas onlyAth me tA p blicAtran portAsy tem, Acom lete Apedestrianis ti nAofAce tainAa eas, Afacilit tingAmov Aall of Ap ople Ath oughAwa kin AandAcy li g AbyAprov din AtheAreq iredAinfrastru tureA oul he pAin Alim tin Ath Au e Aof Aper onal Amoto ised A od sAofAtrans p ort .5. .5.7ASp tialApla ni g isAa A ajor to lAtoAco tainAt avelAde and. AInterspe singA mall workA rea Aand Areside tial A ones Athrou hou Athe city Ar ther than Ah ving workA re s Ai Aon Abig zon AfarAre oved fro Athe Areside tialAa eas,Apla ning highAcap cityAtran portAcorr dor AandApermi tingAincr ase AFSIA long the AandAprov dingAe oughA pac AforAtran portAinfrastru tureA ould Afacil tateAred cingAt avelAdem and .long 5. .5.8 ASp cific Apa king A orms As ou d Abe laid do n Ai Aall ACDPs/M ster A lans w th Aa onalA term Aperspe ti e Ain A rd rAto take into Aac oun AtheAincre sing A re dAi Ath Au e AofAper onalA vehi les.ADiffere tialA ormsAs ou dAbe laid dow AforAresiden ial,Acomme cia AandAinstitutkingA construc io s AtoAe sure tha Aall suchA nit Aare selfAsuffiie tAinAme ting A heirApafte A require ent Aand A heirApa king load doe AnotA pill over int Athe Ap blicA oa sA s AisA kingA the ca eA s Aat Apre ent.AC tiesAs ould A d pt Aa Ahol sticApa kingAp licy withAreal sticApa als A ch rg sAto A ete Au e Aof Aper onal Aveh cle Aand As reetApar in . ATheApa king Ap licyAs ould AforA lay downA orm AforApa king At riffsA hichAs ouldAr flec Athe co tAof land th tAis use nAonA par in . AI Ahas beenAobs rved that A ajor Adevelop en sAin city area le dAtoAconge ti suchA r ad .AAs Arecomm nd d AinApara raph A5. .6.8 (b), A“i pact fee”As ou dAbe Al vi dAo Aall videA developm nts. ABes de , Ait mu t AbeAen ure Aall such A ajorAbuildings/develop entsAprp operAconnect vi yAto A ajorAp blicA oa sAat A hei AownAc ost .portA 5. .5.9ADevel p ng AaA ultiA odalAInteg atedATran portAS ste AforACi i s:AA Ap blicAtran isedA sy tem,Av ew d Ai AitsAtota ity, Acomp ise AallA od sAofAtran portA ther thanApersona cityA vehi le . AThe mainAp blic Atran port A ode AareA etro A ail,Aele ated A ight A ail, highAcap us sAon Adedi atedAcorri ors, mono A ail, Aord nary Ab ses, A ini-A use Aand A ther paraAtr nsitA odes su hAas At xie Aand autoAricks aw .ANo cit Acan re y on AaAs ngle mo eAofAtransport.265Local GovernanceBox: 5.16 : The Mass Transit OptionsCharacteristicBuswayLRTMetroSuburban RailCurrent ApplicationsWidespread in Latin America for 20 + years?Widespread in EuropeWidespread, skewed to Europe and North AmericaWidespread, skewed to Europe and America?Few in developing with ‘high’ ridershipSegregationAt-gradeAt-gradeMostly elevated/ undergroundAt-gradeSpace2-4 lanes from existing road2-3 lanes from existing roadElevated or underground little impact on existing roadrequirementFlexibilityFlexible in both imp’n and op’s robust operationallyLimited flexibility, risky in financial termsInflexible and risky in financial termsInflexibleImpact on TrafficDepends on policy/designDepends on policy/designReduces congestion somewhatMay increase congestion when frequencies highPT IntegrationStraightforward with bus operations. Problematic with paratransitOften difficultOften difficultUsually existingIndia Cost US $ mn/km1-510-30?15-30 at-grade?30-75 elevated?60-180 undergroundPractical Capacity Pss/hr/direction10-20,00010-12,000? (no examples)60,000+30,000Operating Speed Kph17-2020?30-4040-50+(no examples)Source: World Bank Urban Transport Strategy Review – Mass Rapid Transit in Developing Countries; Final Report July 2000.Each mode has its advantages and limitations, and an ideal system would be a mix of multiple modes. The para-transit modes would also be required in all cities because of their flexibility and ability to access nearly all localities.266Ur2675.4.5. 10 At ansit mode 5.4 5.1 AApp oach Afor AM d ASel cti n: A Acity ha Ato deci e A n Ath Atype Ao Amas the e Ais onl it A would A ik Ato adop . AIt Ama Ahav Asevera Amass tra sit Amodes but Ag ne ally AtheAcar yingA ne Amode Af r A Acorri or AThe choi eAof Ath Amass A ra sit As st mAi Abased Ao asAtheA owes A cap cit Arequire Aand AeconomicAc ns dera ions.AThe hig Acapac tyA us A ystemART) atAgradeA in tialAcos A utAre ui es A Asha e AinAt e A oadAs ace. TheALigh ARail Tr nsitA (onAs rface) Agives Ab tter capac ty than HCBS AisAalsoAmo eAenviro men Af iend yAbutAi AmoreAcap tal intensi eA ndAsubject At Aa ailabi it AofAspac .AThe Elevate ARailATrans tASys emTableA5 14:ATech ica AFeature Aa dACap cityAofAU banATAPassansportAodesAFeatresAFr quencyAS/hr/ltemAcapacitAAVeh/hr/laneneti alAMximum ModesARig cAAAA oftARecomendedAAerageAOtimalAMaxi nceAAtr nAA peedumAPassngersAOA caay?fi Ad ied AAbet*AAAperA nistationsAiAA metre 00 rolBusANoArghA500 A0-20 A0 A6090A60-90A20 0 A7ley busAoAwaypidExcluive A50 A15-2A30-6A90-20A60-90A500010000 BusArdedicit@ tranted Alan000A900-1500 raLigt APariaA50 A18-2515 A60 A150***250A30 00-4ArighAofAA 00transitayRaid AGrde100 A25-35 A0 A40 A300-150A15000-30000A60000-80****AsepratedommuerAGrde200 A40-60 A2A30 A1240-250A30000-50000A6000-80000rail Asep ratedghe Aif thereA *In Hig ACapaci yA usASystem AonAd dica edAlanesAw th Aovertaki gAfaciliti s, capac tie AofA20000 ar Apossible. TheA ap citi sAcanA e A uchAh ea h Ad rection are twoAd di ated lanesAinAint rs ctions. * AThis inclu esAtim AspentAdu ingAboard ng, al ghtin AandAatAtrafficAyAcom ared A oA * *ATheAA erican APublicA ransporta ionAAu hority (APTA AdefiesA igh ArailAas A“AnAel ctri A ailway withAaAlight volume’ A rafficAcap ciAsingleAc rs.” hea yAra l.A igh ArailA ay useAshare AorAexclusive A ight -o -wa ,Ahigh Ao AlowApl tfo mAloading andAmu ti carAtr insAorhigh frequ ncy *** RapidAt ans t Asy temsAa eArailAbas d,Aco pletelyAg ade separat dA n Aope ateAatAa Ad catedAla es. @Bus ra i Atrans tAisAa A odern conce tAw ere bu esAareArunA nAexclusi elyAdedAits As burb . $ Co mu erArailA sA nAelec ricAorAdi selAp ope ledAtrai AforAcarry ng Apasse gersAno mal yAbe weenAt eAc ty A entreAan eren Aso Sourrces e: Ad ta f Ataken fromAdif does notA akeAaw y Ar ad As ace,AhasA ore ca acity, AandA sAenviro men Afri ndlyAbutA oreA fAu dergroun A xpe siv Ath nAthe AL T A atAgr de).AThe Metro Syste , A h chA ou dAbeAaAmixA facto s Awhic A and A lev ted rail, Ah sAtheAhi hes Acap cit Abut Aal oAthe highe tAcost. OtherofAWay (RfectAW),A ahoi eAofAm de are demandAin theAcorridor Aa ailab li yAo ARightcinityAof theA atu eAofA andAuse Aa ongAcorrido , A evelo ment of Amaj rA ork places Ai At eAv chno-economicA corr dor,Aexi tingA uild ngA in sAetc AB t A tAneedsAto be Ae pha ised AthatAtheAt s transit Afo A ons der tion Aare AtheA ostAimp rta tAfactor Af rAd cidi g A nAth Amode Ao Ama ular a corridor. AparticLocal Governance5.4.5.11 An Integrated Approach: Addressing the challenges of public transport would require an inter-departmental approach so that all efforts complement each other. For achieving this, it is necessary that a common platform be set up for urban transportation in each of the mega cities. This can be achieved only if there is a coordinated and empowered system of management, a special purpose vehicle which would build and then run, or coordinate all transportation needs of a major city. The Commission recommends that, in keeping with the national policy, in each Metropolitan Corporation, a Metropolitan Transportation Authority should be set up with appropriate powers, so as to integrate and coordinate city transport systems. Thus, a single Authority, by whatever name or structure, must become the repository of all responsibility and authority within the municipal limits for all transportation related activities and decision making. The national policy talks of a Unified Metropolitan Transport Authority (UMTA) in metropolitan cities for coordinated planning of urban transport. But what is also required is a common ticketing and fare system for different modes of public transport and their integration so that they complement and not compete with one another. To make that happen, UMTAs will need powers to regulate all modes of transport, decide on routes for each operator, fix fares, service standards, etc. In addition, UMTAs will need financial powers and resources to give financial support to operators on unviable routes.5.4.5.12 Introduction of mass transit systems has to be carefully conceptualised as the investments required are quite large as is their socio-economic impact. All such systems should be meticulously planned. This requires a high degree of administrative and professional competence amongst officials handling the project. Therefore, capacity building of concerned officials is extremely important. Moreover, mass transit systems should not be planned and implemented in isolation. A holistic approach is necessary. An integrated transport system has various dimensions. In its widest sense it requires:78?Coherence between transport, land use and other social and economic policies?Consistent resource allocation criteria between transport modes?Consistent budgeting across all modes and services?Rational pricing, including externalities?A coherent multi-modal system of regulation?Design of services and facilities to reflect their individual strengths?Facilities for easy interchange between modes and services?Common fares and ticketing?Co-ordinated timetabling where practicable?Multi-modal passenger information26878 World Bank Urban Transport Strategy Review - Mass Rapid Transit in Developing Countries Final Report July 2000Urban Governance5.4.5.13 Some Sta5.4 5.13 Some ASt tesAh veAal ea yAt kenAs ep Ain theAligh Aof Athe nationalAp lic .AKarnat ka, for ex m le, Ahas As t Aup Aa ABanga oreA etropo lit nALandATr nsp rtA uthorityA or Athe Bang lor Aregi n AwithAth AC ief Secretar Aas the ChairmanA nd AtheAMunic pal Commiss onerA nd various Ahe ds of Adepa tm nt Aa Am m ersAa Awell AasAaA ta eADir ctorate Ao AU banA ransport toAgive Af cu sed Aa tention At Aurban Atra sp rtA anagem en tAin A he Acit .rivate sector Ain .4.5.14 Public A–APr va eAPart ership AinA ublicATra spo t:AInvo vingAt eA iencie .A ariousA publi At ansport A el sAin Abr ng ng Ai Ac pitalAas Aw ll fi Aas Amanag rialAef AofAr ut s’, Aw tA modelsA f Apublic-pr vat Apartners ip Aa eAp ssible. AThe e A re A‘tend rin dhyaAPradesh hasA l aseAofAbuse Aa d Aoutso rcing Aof A pecific serv ce . AIndo eAcity A nAM of Amore thanAo eA successfull Aop rationa ised the Acon eptA hat A“Citie Aw th Ap pula ion Ape Acent of A tsA mi li nAsho ldA aveAan AUr an ABusATran port Corp ra ion that ow s A3 Aa d Ao era or . A ownAbu es and cont ac s A70 A erAc nt AofAb ses AfromApr vat Acontractor ocalAdevel pment It hasAset upAaAS VA oin lyAfu dedAbyAtheA oca ACo porat onAandAtheA Collector as AtheA aut ority, Aunder th Ach irman hipA fAt e AMayor A ith Athe AD st ict ASeveral simi arA Ex cu ive A ire tor,A oAmeet Ath Aurba At ans ortAn edsAofA he Acity uccessf lApublicA p ojects have A een Afun ed underAJNNURM. AheAp e requisites for AaA Ath Atwo Apar iesA pr vat A artnership Aa e Aa Ameticu ously Astr ctured A gre men Abetwee andAcomp ete transparenc Aa dAo jectivity in the selecti n Aof Atheprivate partner.5.4.5.15Re ommen ations:olitanATran po tA aA AUrbanATrans or AA thorit es,Ato beAcalledAUn fiedAMetro setA pAinAcitie A A thoritiesAin theAMetropoli anACor or tio s, sh uldAbe din tedAplanningA wit Apo ulation overAo eAm llion wit in AoneAyear AforAcoo rr dingAp iorityA a dA mplem ntation Ao AurbanAtr nspo tAsolution AwithAovtoAub icAtranspo t.gu ateAal AmodesA b.AA MT s/UTA Ashould Ab Agiven st tutoryAp wer AtoAr rAe ch opera or A ofA ublicA ra sport,Adecide on Acom lem ntar AroutesAf tion,A MT s/UTA A and fix faresAa AwellAasAs rvic As andards,A tc.AInAadd iveAor Ar commendA shouldA e Agive Afin ncialApow rs andA es urcesAtoA inanci lAsupport, wh re Anecess ry AtoAoper torsAonun iableAroute .A.AIn egr tion ofAlandAu eAwithAt anspor Ap anni gAshoul eAm deA anda or Afor al AULBsAas wellAa Apla ni gAbhe DPCdies sucand AasMPCs.At269Local Governanced. Demand for transportation in cities should be managed by adopting demand control measures like:i.Imposition of congestion levies;ii.Pedestrianisation of certain zones; andiii. Reserving access to certain areas only through public transport.e.Revitalisation of public transport services in cities should be taken up aspriority projects under JNNURM and by tapping other sources of revenue as has been done in Indore and other cities. The aim should be to promote well structured public-private initiatives for modernising and redefining public transport. At the same time the efficiency of the existing State owned transport systems needs to be improved.f.Public transport systems should generally be multi-modal. The modesshould be based on economic viability. High capacity public transport systems like metro rail or high capacity bus systems should form the backbone in mega cities spplemented by other modes like a bus system.g. While building transport infrastructure in cities, it must be ensured that the needs of the pedestrians, the elderly, the physically challenged and other users of non motorised means of transport are adequately met.5.4.6 JNNURM – A Reform Process5.4.6.1 The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) is one of the biggest reforms-linked development programmes taken up by Government. The programme is intended to (a) trigger reforms in the urban sector, and (b) stimulate private-public partnership and private investment into urban infrastructure and services.5.4.6.2 The Mission was launched by Government in December, 2005 for a seven year period beginning 2005-06 to undertake urban renewal projects in a mission mode. The Mission covers the development of infrastructural services in 63 selected cities. The Government of India’s proposed allocation of Rs. 50,000 crore in the form of Additional Central Assistance (ACA) to States/UTs, would be in the form of grants towards meeting a part of project costs ranging from 35 per cent for mega cities to 90 per cent for the North Eastern States. The overall funding pattern, except for urban transport projects, desalination projects etc., where special norms apply, is given in Table 5.15.270Urban GovernanceTable A5 15 AFund ng P a t t erAin ANNURMCity ABaisACe tral A ovt.Atat AGovt.ULB ARaised AClsifica ion AAhareAShaeF n nces A A AA4 AillonA5A15 A50% A B A-4AillonA0A 0 A30% A %A10%A10 C A<1 AMllin,AAHerit geAD AortAEat,0%A10 A0%JammuAan dAAKas m r5.4. .3 AArange Aof cond tion Ahave been bui t AintoAthe pro ramme,Afor governa ceAr fo msA to Ap epareA oth Aa Ath ASt te A nd Athe UL Aleve . AThe AState Governmen Aco ce ned Ahas agreements city A evelo ment plans Awi h Adetai ed Aproj ct A epor s Aand Asig Am moranda Aof indicating mil stonesAforAimp em ntationAo fArefo msanc A(UIG A 5.4.6. AThe JNN RMAhasAtwo Asu -miss ons:AUrbanAInf ast uctureAand Gover oAseparateA andABas cA ervic sAto Urban A oor A( SUP Awhic AareAbeing A mp eme ted AbyAt D re tor tesAinAtwoAM ini st r esits Ali el A 5.4.6.5 AThApr gram e Ahas A ee Aha led A s Ath Abe tAhop AforAu ban Ind a, AandA ime AthatA impa t AonAurb nAserv ce Acannot Abe Aover mph sise . A or one Ait A sAth Afirs eformsAandA Aconcer edA ttem t Aha Ab en Am de Ato Apush Asim lta eousl Afor Aur anA (CDPs)Aa dA inf astructure Ad velopmen .ABesi es Ath nksA o Athe ACityA evelo mentAP ans as essme tA Detai ed AProj ct ARepo ts A( PR ),Athis i Aper aps Aa Amor Adefinitive bottoms-upof needsAtha Aa tem tedAinAthe Ap stasp cts AofA 5.4.6.6ATheAimp em nta ionAofAth Ap ogra me AisAj st A ickingAu ;Ahowev r, Acert in lop entAofA th Apro rammeAneedAcon i erati n. AA st dy A oneAbyAt eA inist y AofAUrbanA ev id rati n.A th Aproposa sAre eiv dAti lAn w Afrom theASt te Athrows AupA nteres ing issuesAforAconeA6 Atowns TheAfistAaspe t, ind ed,AisAtheA eq ireme tAo Afu dsAandA heAfundi g h A at ern.A pop la ionA andA itie Atha AhaveAbe nAsel cted co er A nlyA 2 A er A entAo AtheA otalAurbanmm e worthAA an ARs A50 00 Acrores Aof additional as istance A sA xpectedA o generateA Aprog ingAof AtheA R . A1,25, 00 A rore .ABu Aeven this Al rge am un Amay A eAanAun er fun ntA ta es,A inf astru tu eAnee s A fAthe e A63 Aur an bodies ATheAJNNU MAovervi wAdocum Arequ re AaA “ItAi Aest mate A hatAoverAa seven-y ar A eriod AtheA rbanAL calABo ies A( LBs) Awo luctureAan A totalA nvstm ntsAofAR .A1,20, 36A rores.AThsAincludes in estme tAin AbasicAinf astser ice ,Athat is,Aann alAfundingA eqire entAof Rs.A17,29Acrores ”AH wever, Anot Aunxpectedly,271Local Governance(Rs in crores)46,72233,26719,69216,53212,9504,8073,0602,7244245,2784,2793,5731,8591,6851,4891,4891,3081,115959803163,965StateNo. ofPopulationUrbanWaterSewage/ Drainage/MRTSSWMOthers Totalcities(lakhs)TransportSupplySanitationSWD1,16778765002,8022285933530370932832810024010,239269535412137630661403737307644564331151099825395718(3)1,291 (1)870 (2)61Table 5.16 : Sector Wise Demand in JNNURM (based on the requirements submitted by the States)000000000000000009,4708,680(1)170 (3)620 (2)270132226400280130256001341061102203,156(2)3,733(1)1,771(3)1,0683651,53813,783Source: Report compiled by the Technical Cell, JNNURM Mission Directorate; status as on 1-1-20078402723064961741324618,3491,375325455488483509509309784,523(1)3,389(2)2,383(3)1,5712571,0772,7141,599190434236236316701623,729(2)7,186(1)2,843(3)1553751,68172140169125,5711,9878,4887,0302,0243,3597621,37450843837937955451940418382,09731,901(1)9,646(3)11,046(2)27584181.246.2726.6420.9210.5610.6770.77787.69658.196.582.51.451.98.08239.0(1)100.2(2)98.3(3)28.3124.017244222253431111111111Himachal PradeshChandigarh (UT)Madhya PradeshAndhra PradeshUttar PradeshMaharashtraWest BengalTamil NaduChattisgarhKarnatakaRajasthanNagalandManipurHaryanaGujaratTripuraPunjabAssamOrissaBiharTotal272Urban Governance11,40719,54440,93919,64925,43413,17416,98016,06217,07928,25215,95659,56012,259(3) 58,68413,700(1) 104,28620,81637,36311,3455,248(2) 99,241Total1,1271,187137937(3) 3,1172,7961,2822,780(1) 13,120-86-1,3006152,533(2) 4,5181,10535111171331OthersTable 5.17: Per Capita Investment Demand in JNNURM (based on the projects received) (all amounts are in Rs per capita)300(1) 1,589440249106409806380369(2) 1,480-90974566375(3) 1338468583263281871SWMMRTS-10,682-262-1,340--------------1,202Drainage/1,7671,3204,594-1,086789466(3) 7,3524,8841,1661,9762,424-(2) 9,0341,2565,5793341,7508481,571(1) 28,571SWDSource: Report compiled by the Technical Cell, JNNURM Mission Directorate; status as on 1-1-2007SanitationSewage/1,8921,2203,7362,0324,574(1) 20,3601,886(3) 10,1305692,3292,3782,1151,5981,8152,1757,53813,448(2) 16,2634,1719611,6315,3571,5604,3741,710(2) 13,1501,670(3) 10,5024,1109,4402,9623,2468,8432,7081,5585,6489659088,1582,005(1) 50,6219,091SupplyWaterTransportUrban13,34416,9947,1524,3747,01912,6093,64210,2697,72015,1605,192(2) 27,3163,92910,4459,6255,7234,148(3)26,138(1) 52,4682,26510423Population(lakhs)277723910046242-6598288388121111111No. ofcities72442222-531111111111Himachal PradeshChandigarh (UT)Madhya PradeshAndhra PradeshUttar PradeshStateMaharashtraWest BengalTamil NaduChattisgarhKarnatakaRajasthanNagalandManipurHaryanaAverageGujaratTripuraPunjabAssamOrissaBihar273Local Governancethis has turned out to be a gross underestimation. According to the CDPs prepared by 43 cities, that is just two thirds of the project cities, the cost of projects would be of the order of Rs 211,348 crores. On the same per capita basis, the total investment needs projected for all 63 cities and towns is Rs. 339,902 crores.795.4.6.7 The projections for 63 cities based on available CDPs for 43 indicate an average per capita investment proposal of a little over Rs. 28,000. In terms of the projected figures, Rs 267,629 crores would be spent on urban infrastructure and governance, Rs. 69,896 crores on basic services for the urban poor and only Rs 2377 crores for capacity building and institutional development. Out of the proportion of funds required for urban infrastructure and governance, which is Rs 163965 crores for 43 cities, the programmatic breakup is given in Table 5.16.5.4.6.8. The per capita project costs vary drastically across the States, both in total terms and under different infrastructure segments. Significantly, different degrees of emphasis seem to be given to different sectors of urban infrastructure as is seen from Table 5.17. True, this may not indicate the facilities already available, but it is hardly likely that the needs for water in one State would be very different from another. It would be seen that only three States have sent proposals for drainage/storm water drainage. This “variety” in felt need should be a matter of some significance because a balanced economic growth of the country will to some extent depend on the availability of balanced urban infrastructure.5.4.6.9 It can be a matter of debate as to why one State should get more than twice the amount per capita than another State. But that may happen if, say, the cost of supplying safe water per person is higher in one State than in another. The costs in hill States would indeed be higher. But the need to balance the distribution of scarce funds remains an imperative. And the first, essential priority must be certification by the States that drinking water and sanitation needs, on the lines of the millennium development goals, have been met. Thus, while a bottom-up approach is laudable, in certain aspects, a macro policy stand needs to be implemented.5.4.6.10 Another issue is the interest shown by the States themselves. Some States, such as Maharashtra, Gujarat and Andhra Pradesh appear to have been more active in proposing projects for funding. Regarding those States that have been somewhat tardy in this respect, the question arises as to whether the ULBs in these States have the professional capacity to conceptualise and produce the documentation required to approach the Government of India and private technical and funding agencies. Most States and ULBs are taking the assistance of professional consultancy companies for project preparation assistance. Special27479 JNNURM: eAof AFun s; 79 AJNNUR :AFinanc alA nalysi AandA re dsAbase AonACapita AInves mentAPla s,ADeta led Apro ect reports an ARelea compiledA yATec nicalA ell,AJN URMAMission Dir ctorateAandAPri ewathouse CoopersUrban Governancete ti nAnee sA o Abe given toAU Bs A hich have no Abeen Aable AtoA ubmit/pepareAproje ctAprop sa s.rly day , Aha A 5.4.6.1 AAn Ai po tant iss e AisAthat A he progr mme, A o A oub Astil AinAi sAe sAi tendedA nA not yet Aseen mu hAp ogressAin A he delega io Aof power AtoAthe lo alAbodie ,A itsAre for msAa enda. MAhas Am chAtoA .4. .12AWh leAthe demandAd iven approachA hat Aun erp nsAJ NU stud Are ealsA c mm nd itself,Ait it Ai per tive Athat Ai sAl mit tions tooA re A a enAno eAof.AA banAtra spo tA thatAt e Apre om nant Asha eAinA roj cts Aun erAthe Sc eme belon AtoAtheAu eAsanita ion A s ctor.AThi Ahas Aworryin Aim licat onsAfor otherAequ llyAimp rtan AsectorsAli of Ain estmentA Further, At e A tip latio AofAt e Aur anAloca Abo y Araising A he Apr sc ibed Ashare eref reA eelsA cost Ai res ective ofA heAsect r Ahas Asimilar im lications. The ACommis ionAt enef s, th reA th tAfo AsectorsAli eAsa itat on,Atha AhaveA roa erAsocialAand environm i ntalAneedAt AbeAear arke Aoutl ys Awith Alow r A equir me tAo Ashar eAof Athe ULBs.tationA f A heA 5.4 6.13ACap city Ab ild ngAw th nAthe AUL sAi AcriticalA orAsuccessfulA mp eme inAt e ASche eA scheme. The Co mis ionA sAof the A iew A hat eve AULBsAno Ay tAi cluded alAcost Aw t A mu tAbenefit fromAcap cityAbuildi gA niti tiv sAasAthi AhasAmargi alAad itio ben fitsAof i AaAv ryAsignifcan tA rder.5.4.6.14AReom en ati ns:dedAfor urbanA aA AO Athe Abasis Ao Apr jecti ns,Athe Ato al Ainv stm ntAne e.AG ver ment r ne al app ar AtoAbe fa Ain exces AofAtheAfu dsAavailab a meA–AJNNURMmus Afind A ay Aand mean AtoAfun AthisAflag h pAprog – A de uately.eAe for edAasA b.ATheAcoAditiona itiesAl nkin Aref rmsAlowsAshouith Afu d AdAmentAof IndiaA per theAsc edulesA gre dAbe wee Ath AULBsAandA he Gover with ut exceptionsAorlaxat ons.Ac AT ereAshou dAbe Asector lAa locations A or A anita ionAadAsolidAwaseAnagement Athe A ele A tedA d.AACap city Abui dingAm asu es shouldA ot beAc nfin d AtoAonlto ns andAshoul Abe ava lableAforAall275Local Governance5.4.7 A Critical and Urgent Area of Reform - Regulating the Real Estate Sector5.4.7.1 In different chapters in this Report, the importance of urban land management, land records, proper records of rights, leverage of public land for raising urban resources have been mentioned. In this chapter, the reform measures proposed under JNNURM for development of infrastructure and basic services in cities have been mentioned in the previous section. There is one critical and urgent area of reform without attention to which all others will not achieve the objectives and may, in fact, be brought to naught. This relates to the regulation of real estate sector by an independent regulatory authority. The most important obstacle to sustainable growth of cities is the total lack of regulation of this sector. The steep rise in land prices, speculation, illegal constructions, encroachment on public lands, ‘land grab’, ‘land mafias’ are all in the news all the time. It is also recognised that existing laws on land registry, transfer of property, contracts and related matters are themselves inadequate in this context, are implemented by different authorities and they cast no responsibility (or liability) on the builder/developer for observing certain core norms in the contracts with home-buyers. In recent years, considerable progress has been made in setting up empowered regulatory bodies for the financial sector for investments in corporates, companies and mutual funds. Similar legislation and setting up of a regulatory body for investment in real estate (which is one of the main avenues of investment now for unaccounted and ill-gotten moneys), is urgently necessary. Builders/Developers investing above a certain sum (say Rs.50 lakhs) in real estate (land and construction), in notified urban and urbanising areas, should be required to register and bind themselves to specified core norms of contract and for compliance with all relevant laws and regulations applicable to land and construction (including appurtenant services) in such areas. There should be civil and criminal liability for breach (including payment of compensation to public body/ home-buyers) and the regulatory body should also have power to impose fines, deregister and/or black list offenders and publish the names.5.4.7.2 Recommendation:a.There is urgent need to bring in legislation to regulate the Real Estate sectoron the lines mentioned in paragraph 5.4.7.1.5.5 Mega Cities - Metropolitan Corporations 5.5.1 Re-Forming Mega Cities5.5.1.1 In 1950, the only megacity in the world, that is a city with a population of over 10 million, was New York City. In 2006, there were 21, including India’s three biggest cities,276Urban GovernanceMumbai at thi M mbaiAa Athir Aplac ,AD lhiAsix h AandAK lk ta A eventh A n AtheAli t.80AChen ai, Hyderabad entialA oApayA and Bengalu uAare Ara idly reach ngA hat le el A nd A re Ain th At pA40.81 AI Ai Aes ies.A nAF rstA spe ia Aat ention A oAtheAgrowt ,Ad velopmentA nd manag ment Aof th seAci ber ofAsocia A orldA nd AThird AW rld Aco ntrie Aalike, Arapi Aur ani at o Ahas Al d A o AaAnu ,Aand Adisease and Aecon micAprobl ms,Aincl dingApo ert , Ahunger,Aand homele sne s,Acrim tr nsmission AIn addition, theAre ult ngAd man AforAland and res ur esAhasAl dAtoAnumerous ndAen rgy.AI A environme talAprobl ms, Ain lu ingAissues ofApollutio ,Asani ati n,Awate ,AnfnesAo Acity tAeffeir rts toAm nageA he well be ngAofAo erA10A illion peo le i Awith nA heAcfAtheAgrowi gA limits,AlocalA unic palit es haveAfo nd itAd fficul AtoA eepApac Aw thA emandsA elyAserv At eA opu at on.ATo A utA tAsi pl ,AtheAcostAo Aimplement ng f programmes toAef cti yA evelo mentA m jority AofAt e Ainhabita ts As yroc etsAw th AeachAadded indivi ual.TheAunru rba Aareas inA of thes Acit es Awi hAso eAof Ath AmostAden ely popula ed AbutAp orlyA ervic dAt eAwo ld, mu tA iveAwayA o AanAord rly,A lanned,Aurban wo ld.iveAand legal 5.5. .2 AThe A ar estAc ties of In iaAneed A o be Aprov dedAaAspecialA dmi istra Awhich Ah ve aA stat s.AA artAf om Awel Akno nA itiesAsuch asASi gap re,ADub iAand Mona o rgerAco ntry.A pos tionAa Asmall A ation Sta es,Ather Aa e Aex mples A fACity S atesAw thin AaAl erl n,ABrem nAa dAHamburgAa eAtradit on lAexampl s A nAGe many AIn lineAwith th AprincipleAof subsi iarity At ereAsh uldAbe lit leAre sonAwhyASta e AGove nmentsAs ou dAcontin eAtoAex rcis Acon ro Aov rAmost Aof A he activitiesAo AMetropolitanCorp rations.5.5. AMetropolitanACorpo at onsnAtenAm llion 5. .2.1AThe three A ar estAc tie AofAIndiaAareA gglo erat onsA achA ith moreAth tude, As me AofA peo le.A hileAtheAt rm “megacity Ais A ene ally Au ed for A ities AofAt isAm gn reAthems lve ndia’AAcit es Abe owAt at size, Asu h AasAChen ai, BengaluruA ndA yderabad,AEachA fAtheseA gi antic AandAar Ado estically Aand Ai te national y AofAeconomi Asig ifiance.oA eAg vernedA largeA gglom ra ions Acould b Aconsider dAa megac ty, too Al rg Aa dAbulkyA inAt eAtradit i o nalA anner. .5.2 2ACiti sAl ke AMumb iAand Kolkata Awield Adi proporti natelAeco omicAifue ceAwit inpool Ao Ahuman the AS ates of A hic Athey Aare the cap tals AThey A re A lso Aamo g Ath Al rgestAand c mplex,A be ngs living inAon AsingleAur an Ac ntinuum. AThirA ctivities Aa eAs ecialise Aclout, Athe rA ithAaAgrowing interna ionalAflvo r.ABe auseAof Ath irAincre singAe onomi eASt tesAthat equireme tAo Afinan ial AandAo her resource Afa Aoutstri At eAc pacity ofAtfA ahar sht aA theyAforma ly repr se t.ATheAc ty Aof Mumb i, Aap rtA rom Abei g A heAcapitalA isAals Athe Afin nc alAcapitalAof AIndia.27780 81ibidLocal Governance5.5.2.3 Indian megacities are bustling metropolises but the quality of living in these cities continues to deteriorate. The recent incidents of flooding and waterlogging in Mumbai have highlighted its creaking infrastructure even as it is set to become the second most populous city in the world, after Mexico city, by the year 2020 (with an estimated population of 25 million). There is constant influx of migrants into the city, taking the level of the informal sector to two thirds of the working population and putting further pressure on land and services. Less than a quarter of the population have the physical and financial access to good housing, and the shortage of housing stock makes it one of the most expensive cities in the world. At the same time, Mumbai is, according to one report82, the tenth most important financial hub in the world today. Government had set up a high level committee to suggest measures for development of Mumbai as an international financial centre. In addition to economic policy changes required to accelerate the development of the financial sector in the city, this calls for world class infrastructure and amenities for the city which can only happen through the reform process spelled out in this Report.5.5.2.4 Delhi is a mix of the old city, the new one created by Lutyens, and the large tracts of new developments, both planned and unplanned, which have come up after independence. Administratively controlled by three different civic bodies, the differences between the various constituents of the city are enormous. Kolkata, which had become a bye-word for urban decay is now experiencing a revival with rapid economic growth under-pinning a regeneration of the city. Other large cities like Chennai, Hyderabad and Bengaluru also have their new and old parts, where tradition and modernity, rich and poor, coexist.The Commission believes that some of the recommendations made in this Report would help in improving equity and efficiency in the functioning of these megacities.5.5.2.5 The problems that impinge on these sprawling metropolises, in a generic sense, are:i.Insecure and hesitant leadership resulting in lack of foresight and low qualityof governance;Mastercard822007 reportWorldwideAby278Urban Governanceii.he enormAii ATeA nor ous Asize Aan Apopu ation, which it elf AleadsAto coplexitiesAiAgov rnance;ic Aervices; A ii AShortage of resourc sAtoA mproveAciesio alism; ivA ATraditional bureauc atic systems with ge eralAlack AofAprozensAandAt A eA .AThApovertyAan Adepriv t on Aamong t AaAsiz ab eAsectio Aof citcontinu ng inabi ity AtoAso veAshor age Aa isingA ut AofAinwar dAmigr ti n.-u ban areasA 5. .2.6 The Ail sAtha Aaffli tAthes Ameg Aciti s Aals Aaffec Aot er Aurban Aa dApereAprocess AofA i Ath Aco ntry butAa e A ore acute Ai At eAmetros.AThAcontinuing Aineluc abdAt eAdemand ag lome isatio Awil AcreateAmo eAme aci iesA ver theAnext few dec des,Aa sati nAthereA forAsyste ic As lutions A illAsh rpe .ABey nd theAneeds of ApoliticalAde ocrat cityAan AforA will in r asin ly A e AaAnee AforAoptimu Au ili atio AofAthe be tAt lent Ain the mousAcities.A greater Acitiz n-governm nt A nte faceAf rAtheAbett r A overn nce Aof At eseAeno tedAholis icA Development/ ed velop entAof Athe eAmeg citiesA ou d Arequire A nAintegr su tain ble.A a proach AThese citi sA ou d AhaveAto beAsocially, eco omicallyAand ecologicallyes ablishi gATheAma n A hall nges Ain At is Adi ec io Awould AbeAo Astabilisi g Apopul tionAlevels,ally for theA an Aeficient Apub ic Atrans ortAnetwor ,Aa dressin Athe Aho sing Aprobl mAe pec Afor A ner y,A poor andAadoptin Aenviron entAfriendly te hnologi s AtoAdevelopAi fra tructur tr fficA ndAwa teAandAwaterAmanag men .pol t n AareaA 5.5.2 7 A or AIn ia Ait Awo ld be Aus ful to Adefie Aal A ities Awith a Arecognised metrMetropolita A and a A opu ation AfiAo e million A s a A ega ity A- Ai At e Aco text Ao At i AReport Aas Aast 30 Ayears A orp rati nA- and planAf rAit A utur Awit Aa AlongAter Ap rs ectiv Ao AatAle chAcombiningA TheAplannin Ape sp ct veAha At A e AbasedAo Aa A ntegated and Aholi ticAappro ollabora ive e vironment l,Aecono ic, cultur lAandAs cial a pects Awith A Ac mbinationAofA ss mination A planning and Alearn ngAproce sesAensuri gAwidespread A omm nicationAandAd egenerati n,A The Ame acityA isio Ashould Ah lp Atr nsfor Athese majorAc tiesAtowar sAecologicalA rAPl nA ou dA political A art cipation andAecono ic A ita ity. A or Aall A hes Acitie , Ath AMast ent.ASpa ialA needAt Ab A reparedAasAa pre onceivedAand A rede erm nedApathAfor develop AsurfaceAa dA pl nni g Ash uld AuseAhi hAreso ution Ar mot As nsingAandA3D A is alisati nAo plan ing andA su surfac AwithAmode nAsimulati nA echniqu sAt Aach ev Athe A oalAof As und e Ais An t AonA land Aus Am nag ment AAtAt e Asam Ati e,AsinceAth Ad velop entAof th seA it Acl an sla eAbutAi At eA ontext Ao AanAexi tingA“ ivingAcity”,A ed vel pmentAof theAexistin Aco munitiesAandAi fra tr ct re A asiAt Abe AtheAfr s tApri rity.qu ringA andA 5.5.2.8 A ed vel pmentAof theAExi tin ACit es:AFor Alan Ade elop rs AtheAease ofAa Aresu tAfromA inA reas outside cit Alimi s, Athe low rAc sts,Aand A he econo iesA fAs ale Ath tAca oAhugeAp ofi larg A Are identialAa dAcommerc al complexes inAgre nfie dAareas,A llAt ansl teAin ma gins. OnAth Aot er Ah nd AtheAcost Aof redev lopi g AinnerAci y propertie i279Local Governanceredevelopment – is much higher. At the same time, for the city, ‘brownfields redevelopment’83 is a fiscally-sound way to bring investment back to neglected neighborhoods, cleanup the environment, reuse existing infrastructure that is already paid for, utilise existing markets and labour pools, and relieve development pressure on our urban fringes and farmlands. Consequently, there must be incentives to encourage better development in the cities, rather than in the distant suburbs.5.5.2.9 Recommendation:a.Public-Private Partnership projects for redevelopment of inner city areasneed to be encouraged through a transparent and well structured regulatory regime of incentives and penalties.5.5.3 Developing 25-30 World Class Mega Cities in India5.5.3.1. India has to focus on developing at least 25-30 world class mega cities across the country in the next decade in order to give a boost to planned urbanisation in the country. The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) has in a sense, made a beginning in this direction by taking up urban renewal projects in mission mode in 63 selected cities. These include 7 cities that have been selected on the basis that their population exceeds four million and 28 on the basis that their populations were in excess of one million.The programme involves a quantum jump in resource allocations to the urban sector and has for the first time explicitly linked funds flow to governance reforms in order to promote democratic decentralisation.5.5.3.2 However, any such programme also has to be backed by a zero tolerance regulatory regime, one that enforces all civic laws, major and minor, in an impartial and unforgiving manner so that the present climate of impunity that prevails in our big cities can be brought to an end. The “Broken Windows” syndrome was referred to in the Commission’s Report on Public Order as an example of why law enforcement and civic regeneration must go hand in hand. That report also cited significant international examples, notably of Singapore and New York, showing how this can be achieved. This requires development of regulatory systems that can ensure that all violations of civic laws and rules, from the most minor to the most blatant, are punished without fail and for citizens to develop a culture built on civic pride and obedience to the rule of law,5.5.3.3 A zero tolerance strategy towards violations of civic laws will help to forestall the kind of widespread and blatant violations of building bye laws and land use norms that led to the Delhi demolitions. For this to happen, in addition to the decentralisation oriented8320 7ABrownfieldsA ed velo ment is use Ahere in theAsenseAofA e-dev lopin Aof derthe areascities.Ao280Urban Governancereforms is Ane d A oA r form Ath tAformAtheAcondi ion liti s Afo Afund flow Aunder A he AJN UR ,Ath re vi lat onsA focusAonA nco raging Aa dAindu in Aciti s toAmoun AaAmassiv Ac ackdo nAonAcivic AJNNURMA sA o Aa lAki dsAsoAthatAinf astructureA evelo ment Aun erAs he es A uch Aas th co bined Aw thAge uine Acivic Ar ge era ionA nAourAmegaAcit es.5.5.3.4ARecomenations:Aa. Govern entAsho ld prepar AanA ct onAplanAt Arede elop A boutA2-30Acit e A(havingAa po ulat onAo A oreAthan aA illion) toAachieveAin ernat onalAleve Aam nitiesAa dA ervice AasAmodern me aci iesAofAth Afutur .b.ARe ormAlinkedA niti tivesA ike JN URMAareAanA pp rtunityAto compleme tAphysicalA evel pmentAwithA nf rceme t Aof civ cAlawsA ndA eneralAlawA nf rceme tA nAord rA oAusher inAge uineAcivicAr ge era ionAinA ou Acities. nA dditionAtoAinf astructureA ev lop entAinA urAc ties, suchAla geAcapital investme tAp ogra sAforAcityA evelop en AshouldAbe invari blyA i kedA ithAaAzer Atoleran eAstrat gyAto ardsAcivicAvi la ions.c.AA Am nti nedAinAtheAC mmissi n’ Areport onA“Pub i AOrde ”,AaA“zer Atoleranc Ast at gy”AcanAbeAinstit ti nal sedAinAtheA nforcementA ep rtmen sAofAl ca Abodi sAbyAu ingAmodern te hnology toA onitor the levelsan AtrendsAsystemAof inAva io sAtyp sAof Aciv c Aoffnce .AThe e A anAthe Ab A inkedA oA g Ain AtheseA inc ntives Aan Ap nalt es Ato Ahold A cco ntable A he Aoffici ls workild be AusedA d pa tme ts. A n Ath Asp tAfine Aand Aot er Asummar Apenal ie Ashoviol tio sA t Aincu cate Acivic dis iplin Aan Adeter A nd Apr vent A inor Acivic hatAare atApres ntAlargel yAig ored.5.5.4 A uth rities AforAM tropolitanACo r p ora t ons5. .4. AGive Ath AscaleAand co ple ity Aof theAissu s A nvo vedAin Athe ma ageme tAofAth seAthem would ities, the manner an Aexte tAto Awh chAvariou Afunct on Ashould A eA evol ed Ato eAco binedA also differ fromA therAu banAareas. Democratic Adecen ralis tion wo ld have AtoA mec anismsA withAprofessi na isa ion to Afind AtheA ppr priateA ndAefficient Ain titutional hApro osed fo AprovidingAinf ast uctureA ndA unningAt eA erv cesAo AtheAapproa eAcity.A ervices A yA wo ld Alea Ato Abetter Ainf astructure Ap ovi ioni g Aand Am re Aefficie t A elivery A f A in Avari us creating Ain titutiona Apl tforms Afo Acohesive, int grated Aan Aproacti e A easures spher sAof Alocal governa ceAthroughApr fessional, autonomousA ut oritiesAor Co mitteesAs Adeta281Local Governance1.Metropolitan Police Authority2.Metropolitan Transportation Authority3.Metropolitan Planning Committee4.Metropolitan Environmental Authority5.5.4.2 Metropolitan Police Authority: In its report on Public Order, the Commission had recommended as under:a.All cities with population above one million should have Metropolitan PoliceAuthorities. This Authority should have powers to plan and oversee community policing, improving police-citizen interface, suggesting ways to improve quality of policing, approve annual police plans and review the working of such plans.b.The Authorities should have nominees of the State Government, elected municipalcouncillors, and non-partisan eminent persons to be appointed by the government as Members. An elected Member should be the Chairperson. This Authority should not interfere in the ‘operational functioning’ of the police or in matters of transfers and postings. In order to ensure this, it should be stipulated that individual members will have no executive functions nor can they inspect or call for records. Once the system stabilises, this Authority could be vested with more powers in a phased manner.5.5.4.3 The Commission would reiterate these views. Besides, as has been proposed for smaller urban bodies also, a Municipal Police Force must be set up to enforce municipal and civic laws.5.5.4.4 Metropolitan Transportation Authority: The need to set up a Unified Metropolitan Transport Authority to coordinate urban transport solutions for the metropolitan areas has already been explained in paragraph 5.6.7.11. These must be set up in the six largest cities within the next year on priority.5.5.4.5 Metropolitan Planning Committee: For coordinated urban planning in respect of the megacities, the Constitution provides for the setting up of Metropolitan Planning Committees (MPCs). While the Constitution requires the State Legislature to make provision, by law, for the composition of the MPC and the manner in which the seats in such Committees shall be filled, it also lays down that not less than two-thirds of the members of the MPC would be elected from among the elected members of the Municipalities and Chairpersons of the Panchayats falling in the metropolitan area. It has already been noted in paragraph 3.7.9.2 that despite the mandate of the Constitution, an MPC has been constituted in Kolkatta alone with the Chief Minister as the Chairman whereas for Mumbai, the proposal for constitution of an MPC is said to be at an advanced stage. The Maharashtra282Urban GovernanceMPC Act rson.ATheA MPC AActAs ipul tes thatA heAState AG vern entAwill nom nat AtheAMPCAcha rp C mm ss on A sAof theA iew tha AforAthe Ame ac ties, it wouldA eA sefulA oAf llowAthAKolkat Agive AtheA ex mple and have A he AChief Mi ist r Aas Athe ACh ir ers n Aof Athhis AwAMPC.uldtheAcityA equisit Aim etus Aand pr ori y AtoAth Ap ocessAofAfo mul ting AandAimp eme ting P/Mas er de elopm nt A lans forAsuchAm gac ties and A illAals Aob iate the nee Afor AtheAC Pl nsAto Abe A ub itt d AtoA heAState AG ver mentAfor A pp ov l, A sAisAth AcurrentA p r a ctic .5.5.4.6AMet opolitan AEnvionmentalAA th rit :AInAthe Am na eme tAofA heAurbanAenv ronme t,Aciv c Abo ies haveAn t playedAaA romi en Arol AsoAfar. Al hou hAi Am y Anot Abe po sibleAto nA asAto entirely dele ateAthis fu cti nAtoA heAur anAloca Ab dies, an effor AinAthatA ire ti onment lA be mad . AIn the Afirst A nstan e,At er Am stAbeAanAen ironm nt audit Ao Acities.AEnvi udit AinAthis conte t, wo ldAbeAanAov rarchingAa se smentAofAc mpli nceAwithAenvi onme tal sAinAth A law AandAtheAach eve entsAandAs or fal sAofAt eAcity’sAen ironmentAp f otecti nA for etAu AinA c ntextAofAsu tainable Adev lopment. Be ides,AanAen ironmentA uth ri y Am yA eA ironmentA achA i y AwithAa Ap pulat onA boveAfiv Am lli n Ain the Afirst A nst nce,A orAurbanAenACertainAma agem nt,Awi hA owers AasAap ro ri te AtoAbe A el gat d AbyA heAStateAGo ernmentin Ado nA a tiv ti sAcanAbe A eleg ted A ve AtimeAt Asmall rAbod esAalso.AB sical y, A hile At eAla ollutio A ofAthe Are ula ion AandAth Aoverall Ai specti nApow rsAwou dAre ain with AtheA ,A sA arA Cont ol Boa d AorA ny Aother Aap ropri te A ody,At e Aact al effo tAonAt eAgro nd musas Ais A ea ible,AbeAu de tak nAbyAtheAMunicipality/Co porationAitsel .5.5.4.7ARecommeda io s:Aa.AAs Are om end d Ain Athe ACom ission s A eport Ao A“Publi A rder”,AaAMet opolit nAPoliceA uthori y A hou dA e A etA pAin Aa lAci i sAwithAaAp pulat on A boveAon Am llion At AoverseeA ommunityA olicing AimproveApolic -citizenAi terface Asug ec AwaysAt Aimprov Aq alityAofA olicing Aappro e Aannu lApol ce A lansAa dAr viewAth Aw rkin AofAsuhA la s.opolitanA b. AAs AreAom ende Ain Apara 5. .5.1 Aof Athi A eport, aAUnifiedAMet rdinated ransportA uthori yA hou dA eA et upA n Aan allAme aAc tiesAforAcoerriding pla ningAandAimple en ation ofAurbanA ransportA olut onsAwithAo pr ority A oApublicAtanpor .sAwith cA AaA AForAallAMet opolitanACorp ratio s,A hi hAmayA eA efinedA sAci i heAChief p pulationA x eedingA5 mill on, MP sAmayAbeAco stit ted withA Mi ist rAas AtheACh ir erson in orde Ato giveAthe require Ai pet sAtoAth Ap ocess Aof pla ning for As chAurbanAagglomerations.283Local Governanced.In all cities with a population exceeding five million, a MetropolitanEnvironment Authority needs to be set up with powers delegated by the State Government from the State Pollution Control Board and related authorities. It should be vested with adequate powers for urban environmental management within the city limits.5.6 Urban Poverty 5.6.1 Overview5.6.1.1 Poverty is a pernicious and distressing feature of our country and in urban areas, it is excruciatingly visible. That eradication of poverty should receive the topmost priority of urban local bodies cannot be over-emphasised. The reasons are obvious. First, the development of the society would be skewed if large sections live in abject poverty. Second, the constant and daily struggle of the urban poor to earn their livelihoods prevents them from participating and contributing in a meaningful way in the democratic functioning of the local bodies. This results in silencing of the voice of the poor in urban local governments. Third, the upliftment of the urban poor would enable all citizens to contribute more meaningfully to the societal development. To sum up, incidence of poverty translates into deprivation, minimised role in decision-making, lesser access to infrastructure and services and truncated access to relevant information. As UNESCAP puts it, the urban poor “. . .are the least able, as individuals, to influence how cities are governed”.84 The Constitution recognises the important role of the urban local bodies in poverty alleviation and slum upgradation. Thus, the Twelfth Schedule to the Constitution includes ‘slum improvement and upgradation’ and ‘urban poverty alleviation’ in its list.5.6.2 Beneficiary Identification5.6.2.1 Alleviation of urban poverty necessarily calls for identification of the urban poor to be able to chalk out an appropriate strategy. About two-third of the urban population live in small towns, and according to a 1993-94 estimate, 43% of the population of towns with a population below 50,000 were below the poverty line, as compared to only 20% in larger urban centres with a population of over 1 million. In 1997-98, the figures were higher at 47% and 27% respectively.85 The Planning Commission had estimated that 23.62% of the population in urban areas in 1999-2000 was living below the poverty line based on the consumer expenditure data yielded of the 55th Round of NSSO survey.86 On the release of data by NSSO for its 61st Round, the Planning Commission has estimated the extent of poverty in 2004-05 using both the Uniform Recall Period (URP) and Mixed2848'UNESCAP /urban_pov r y.asp8 Pl nni g ACommiss on -ARep rtAofAtheAC mmi tee onAU b nADe elop entAfor AtheA10thA5Ay arAP an A (2 02-200 )8 Sou ce:A araA 1.1, Repo tAofAtheA 1thAFiv AYear Pl nA(20 7-12) AW rkin AGrou Ao AUrban HousingA it AFocusA nAS ums,A inistry ofAHousingAa dAUrb nAPovert AAlleviation;Ahttp:AplanningAcommission.ni .in/aboutus/committee/wrkgrp 11/wg11_housing.pdfUrban GovernanceRecall Period dist ibutio A ecall PeriodA(MRP AconsumptionAdis ri uti ns.87ATheAUR Aconsumption sAaAra io ofA ataAyie dsAaA ov rtyAr ti AofA2 .7%Ain urban are s,A hile theAMR A ataAy el mate of 1999- 1.7%. The AMRPAb se Aestima eAis Arough yAco par bleAwit Athe Apov rt Aesting pe iod. 82000 asAmenti nedAearlie , Ain icating so eAd cline in the ratioAin Ath AintervenA300 AClas AIA It Ai Aals Aa Afa t A hat 68.8% ofAt e AurbanAsl mAp pulationAwas co cen rated i onAis liv ngA c ties.89AThu ,Aprese tly, Arou hl Aone-fifthA o A ne- ourth of AtheAurb nA opulatedA nAsu hAaA belo Athe A ov rty Alin .AThAscheme AforApovert Aall vi ti nAhaveAt Ab Ades gayA hatA he AareA ble to reach out AtoAla r geAnu bers.fciarie AforA 5. .2.2AVario sAp rametersA reAcu rent yAb ing AusedAfo Aid ntifying i Athe ben (SJSRY) AtheA povert Aallevia ion A che es.AThu ,AtheAS arna AJa antiAS ahariA ozgarAYo anarban Apo ertyA flgs ip A chemeAof At e A overn ent ofAIndia Af rAa dressin At eApro lemAofAria approachA through Ase f-e ploy ent AandAwag Aemp o ment, Au esAa A omplexAs venAcritof A( ) Aroo ,A f r Abeneficiary Aide tifiation.90 This Arequir s A ssignm nt ofApoin s A nAa countloyme t,Aand (ii Afloor, (iii Awater,A(iv Asa itation, A(v Aeduca iona Alev l, (vi)AtypeAo Aem overnme t AofA (v i) Astatu Ao A hildre Ai Aa Ahous . AThe Apovert Aallevi ti n Am ssion Aof At e Ain A2000, wa A Kerala, A udumbash ee, A ombines nine Adiv rs Acriteria Aa Aindic to s, Awh ch, th n A5 Ac ntsA mo ified, on the Abasi Aof Afeedb ck receive , At Ai clud A( ) Ano land o AlesscessAtoA afeAAofAaAwidow,A d inking wat rAwithi A15 Amete s, A(v) women headed Ahouse Ah ld / resenc the Af mily,AA divor ee/abandon d Alady/ nwed mo her,A(vi) no Aregul rlyAem lo ed A ersonAi rAphysical yA ( ii) Asocially A isadvantaged Ag oups(S /ST), A(v ii Apresenc Ao AmentallyA ol urATV.A 1A challengedAperso /ch onical y A llA emberAi Athe family, A ix)Afam lies Aw tho tA rban HousiheA‘gAeport Aof theA leve thAF ve AYear AP an A(200 -12)A or ing AG oupAonA Al ys A tres A ithAFo usAon A lums’ A(U io AMinist yAo AHous ngAandA rbanAPoverty Alle iationu AthatA uchA on th AneedAforA n Aexha st veAsurve Ato ident fy the poor AIt Ahas bee Apoi tedArban poor inA aA ur ey As ouldAbe cityAspecifiAcor ela ingAwitic AAtheAspeci ond tions of At eA AtheAg ner lA hat areaAandAt e Apara et rsAs ould beA uch Ath tAareAeasily Ac mp ehe sibleAt lsoA ugges sA publ c A ndAs ould Ab AmadeA ublicAbefo eAc nductin Ath Asurve .AThi AReportA ileA gre ingA that Aafter Ai ent fication,Athe ben fic aries A ayAbe AissuedA ulti-uti ity Ac rds.92AW benefic ar esA wi hAt e Aabove, At eACom issi nAf elsAthatAt eAp rametersAfo Aid ntifyingAthe nerAdu ingAaA s ouldA eAsuc Aw ichAcould Ab Aa ce tainedAin an A bjecti e Aand A impleA a tAout Aat theA s rve Awithout AanyA iscretio ar Aelem nt.AThe Abas c Apara et rs Ash uld be spedAthe surveyna io alAlevel.dentifi ATheAat onAsh ul A eAbasedAonAa door-t -do rAs rveyAa teamsAs ou dAinc ude atAlea tAon Ape sonAfromA heAc ncerne hAA eaASa ha.Ae Aurb nAp orf A and, A(ii)AnoAhous /dilap dated ho se,A(iii AnoAsani aryA at ine, A( v) noAath referen eA 87On As tAofA at A sAbased onAaAunif rmAref rence period usingA 0-dayA eca lAp rio AforA ll theAitemsAof co sumpt on. The otherAse AisA btainedAw onalAmed cal toA3 5-dayA eca l Ap riodAforAfive infrequen ly Apurch sedAno -foodAi ems,Aname y,Aclothi g,Afoot ear,Ad rableAgoo s, A ducationAandA nstitut iformA ecall expens sAandA 0-dayA eca lAp riodAforA heAre ai ingAitemsAof cons mpt on.ATheseAtw AconsumptionA istr buti nsAhav Ab enAterm dAasAU respectiv ly. PeriodA(URP Aconsumption dis ribut onAand MixedA ecall PeriodA(MRP Aconsumption distribution A?relid=263 6A 88Sou ce:APlanni gACom ission A ressA elea eAdate A21st March,A2007;A. a sFebA15,A2 05. 89Nation lA onfere ceAonA“ rbanAPovert AAllevi tionAthroug ASustainable L vel hoods”A–AC I ABack rou d Ap per,A rn jayanti pdf 90Source:A ayanti /swa9 on A31. 8.200 Source: ht lAv rsi nAof AtheAfileA 0report.d c, retrievedA 92par A11.5; Ah tp:AplanningACommission.nic.in/aboutus/com ittee/wrkgrp A11/wg1285Local Governanceso identified should be issued multi-utility cards. These cards will help monitoring the impact of the poverty alleviation programmes on the beneficiaries as also in measurement of additions to the urban poor by way of immigration or otherwise.5.6.2.3 Recommendation:a. An exhaustive survey to identify the urban poor should be carried out within one year. The parameters to be used for such identification should be simple and easily comprehensible, allowing objective measurement without the use of discretion. The basic parameters should be spelt out at the national level. The identification should be based on a door-to-door survey with the survey teams including at least one person from the Area Sabha concerned. The urban poor so identified may be issued multi-utility identity cards for availing benefits under all poverty alleviation programmes.5.6.3 Measures for Poverty Alleviation5.6.3.1 The main reason for urban poverty is unemployment and low incomes. Therefore, the poverty alleviation programmes seek to address the problem by building capacity of the poor on the one hand and providing employment opportunities on the other. These programmes also seek to improve their quality of life by providing access to services and amenities.5.6.3.2 Employment5.6.3.2.1 With high poverty levels in both rural and urban India, reduction in unemployment becomes a major issue for planners and administrators. It is clearly at the intersection of the rural and urban divide that a strategy and special thrust is required. Poverty in small towns appears to be higher than in the largercities, at the first point of rural to urban migration.5.6.3.2.2 In the past, various programmes, like, the Nehru Rozgar Yojana, Urban Basic Services for the Poor etc. were designed for alleviation of poverty in urban areas. The286Urban GovernanceNehru)Athe Schem AofA Neh uARozgar Yoj naAta gete Athe Aur an Apo r Athroug Ath eeA chemes A( AandAsettingAup Urban AM cro AEn erpri es A(SUME Aw ichAassis ed Ain upgrad ngA heirAsk ll ntA(SUWE Awhi hA self-empl yme tAv ntures A( )Athe Sche eAofAUrban WageAE ploym )Athe AS hem AofA providedAwa eA ppo tuni ie Ato Athe Ap or Aby utilisi gAt eir lab ur,Aan A( nceAforAshel er Hou ingAandAShe terAUpg adati n A(SHASU Awh ch Ap ovidedAthe poo Aassist AaAfacilita ing upgra ation ATheAUrba ABasicASe vic sAPro ra meAwas Aa m dAat Acreatin ntly,Athe AUn onA environment fo Aim rovemen Ai Athe qu lit Aof Al fe Aof the Aurban A oor APres ra ion isAbas dA Gove nm nt’sAatt mpt Aa Areduci gAurban povertyAth oughAemplo me tAgenc edAi ADe emberA onAth ASwarna Jayant AShaha i ARozgar Yojan A(S SRY), Awhic Aw sAintrod oj n a,Al unc edA 19 7.AThisA ollowed variousAea lier pr gra mes As ch AasA heANehr ARozgarA Prog amm AalongA nA198 , Aand AtheA rime AMinis er’sA ntegrat dAUrbanAPov rty AEradi ationch meA sAfund dA wi hAt eApro ramme forAUrba ABa ic A ervic s A orAtheA oor. AThAp esentA)AThe AUrban SelfA b Ath ACentr Aa d the AS ates A nAa 75: 5Ar tioAand Ahas two co ponen s:A( Emplo men APr gr mme,A ndA( )AThe AUrban WageAEmplo yme n tAPr grammAthe A el ase ofA 5.6 3.2.3 Whil Athe ANinth Pla Aal ocati n Af r A he AS SRY Awas Rs A 009 Acro es A978.86 A ro es.A fu ds Aby Athe A nion Governm nt from A19 7-9 Ato A 005 06 Ahas been ARs 55. 88 Ac ore AinA Br adly, Aa Aamo nt A angin Afrom A s. 38.31 Ac or s Ai A2001- 2 Ato AR . A ent Ai A19 8-9 ,A 2 05 06 Aw s Aspent Aon thi Aprogramm , An t Ai cludin ARs. A 58 crores AsAof Athe Aea li rA wh ch Aw s Ath Afist A ull year Aof At e An w Ap ogramme and Ahad A ns ent balanceion Awas AR . A 50A progra mes Ato uti ise. ADur ng At e Afinanci l Ay ar A2006-07 Ath Aal oc aAtil ADe embe ,A cro es 93 AThe Anumber of Abenefiiar es Aassi te Afor Asetting Aup Am cro- nterprisehs 94 AThe An mberA 200 Awa A7. 5 Alakh Aa d Athe An mber Aof perso s Atr ined Aabo t A .80 Ala and AC ildre AinA o Awome ’s A roups Aund r A he Acomponen Ao ADeve opm nt Aof AWo en Aass sted Aun erA Urb n AA eas A DWCUA Awa Aonl A54050 and Ao ly A2 1412 Awom n Awerd Atill A ecemb rA this A chem . AFurt er, Aon y A1 8307 At rift Aand A redi Asocie ies A ere Aform ding Ais Afar to A 2 06.95 A in e Athe numb r A f Aur an poor Ais A ver A 0 Amil io , Athis A ev l Ao Afu done A o Aupgr deA inadhe Alquate. A wer An mbers Afor wome Aind cates th t A uch A ee s Ato Abe heirAsk lls A ndAprov de AthemAgai fulAemplo me t. A ccordin A oAthe UN PA’sA AStateAofA inatingAs cial,A orld P pul tionA 007 –A“asAwom nAa e Agener ll Ath Apoorest AofAtheA oor...eli AofAeradic tin cul A ura ,Apoliti alAandAeconomi Adiscri inati nA g instAwomenAis aA re-requisitas,Ac tiesAo...i AtheAcontex AofAsustaina le Adevel pmen .ACom aredAw thArur lAarferA povert AWomen stan Ato women Abe terAeducat ona Afac litiesA ndAmore Adi erseAemp oymen Aopti ns er,Asanita ion,A benefit Afr mAt eAproxi ityAand Agrea er avail bilityAof urba As rvices AsuchAasAwa sA ripleAburdenA e uca ion,AhealthAan Atransporta ion fa iliti s;A llAofA heseAca Areduc Awomen f Areproduc ive Aproducti eAan Acom un ty workAa d,Ain As Adoin ,Aimpr veAthe rAh alth st tusAa dAthatAo AthirAchildr enAandAfam lies.” erty AAllevatin3Sourc : AAnnual ReportA2 06 07,AMin str Aof AH usingAa dAUrban APov94ibid 95ibid287Local Governance5.6.3.2.4 Such schemes generally suffer from constraints such as low individual project ceilings (e.g. Rs. 50,000/- in case of SJSRY96) and less scope for innovative/special projects.97 Further, as the urban poor form part of the informal sector, they have difficulty in accessing finance through the formal system. Access to micro-finance, both through the formal system as well as through NGOs, can help in providing the much needed capital for the poor. The concept of ‘micro-finance’ essentially rests on the premise that (a) self-employment/ enterprise formation is a viable alternative means of alleviating poverty; (b) lack of access to capital assets/credit acts as a constraint on existing and potential micro-enterprises; and (c) the poor are capable of saving despite their low level of income.98 There is need to promote utilisation of micro-finance facilities through self-help groups (SHGs). Institutions and NGOs with good track record need to be encouraged to promote SHGs in availing of micro-finance and impart training for acquiring necessary skills. Group activity would assist in better capital utilisation and institutional guidance would keep the group attuned to market forces of supply and demand. The Commission is also of the view that once the poor have been identified in the manner described in paragraph 5.6.2.3 above, the issue of urban poverty alleviation would have to be addressed in a systematic and time-bound manner by adopting the mission mode approach. The success of the Kudumbashree model in Kerala serves as a good example. The main thrust area should be on providing skill upgradation and training to the poor. The urban local bodies should also have their own poverty alleviation schemes with adequate backward and forward linkages and convergence. The schemes should have adequate flexibility with regard to type of projects and amount of finance keeping in mind the forces of demand and supply. For training the urban poor, self-employment training institutes on the lines of RUDSETI’s ( see Box 5.18 ) may be replicated in urban areas.5.6.3.2.5 Recommendations:a. After identifying the urban poor through surveys, a mission mode approach would need to be adopted for alleviating urban poverty in a time-bound and systematic manner. The urban local bodies may also have their own poverty alleviation schemes with adequate backward and forward linkages converging with the other poverty alleviation schemes.b. The thrust of the urban poverty alleviation schemes should be on upgradation of skills and training. Training institutes may be set up on the lines of RUDSETIs for imparting training to the urban poor for self employment. These institutes could also help in developing wage employment related skills.96i id97 gAandAU banA ource AparaA 1. ,AR port ofAt eA11 hAFi eAYear APl nA(2007 12)AW rk ngAGr up Aon AU banA ousin Aw thAFoc sAonASlu s, Ministr Aof Housi _housing. df PovertyA llevi tion;Aht p:Aplanning ACommission.nic.in/aboutus/comm ttee/wrkgrpA11/wg1198Source:A para g_ud c.pdf,10.4288Urban GovernanceIn case poverty allevi Ac ti AI nA Ac seAofAsettingAupAo Ami ro-en erprise ,AtheAurbanAprovidingAlexibleAischem sA houldAbeAAse ectingApr i jectsAanassist ncena ci lAofASel -Help Gr A up d. A AToAitsAofAmicax miseAtheAbeneinance,Afoo-mationGOsAwi hAgood tr ckA (SHGs)Anee sAtoAbeAenco rag d.AI stit tion AandA recordA ho ldAbeAe cour ged toApromo eASHGsiAforAav ailin gA icro-fnan ce.5.6.3 ThA number 5. .3.3.1 ATeAn mb r Ao Ailli erate Ai AourA r anAarea Ai Aab utAaA uarterAof Aa lA rba Apo ulat on.AAs perAt eA2001Ac ns s Adat , Alite ac Ain A lum Asta dsAa A73. Ape Acen Awit A80 7Ape Acen Ama eAan Aonly A 4.4AperAc nt female A iteracy, as Aagain t A on slu Alite acyAof A8 Ap.r pen ,Aco eri gA87. Ape Acen Afo Amal sAa dA74.2 Ap r centA or femal s.AA third ofAu ban slumAw me Ahav Ano Alearn At Are dA nd Aw ite.A sAperAan A MR Ast dyAco ductedA n A he Ath rdAqua te AofA 005,Aaro nd A2 Ala h A hildre Aw reAou Aof As hool Ai Au ban areas A(4 34% AofAtheAlig bl A opula io ) Ao tAof aAtotal A f A1 4 A akhAch ld en A ut AofAsch oolAin At e A ountry.sa isf toryA s Amo tA 5.6. .3.2 ATheAed cat ona Afaci itie Afo AtheAurba ApoorAareAgen ra lyAu emium.AA Ame tione A o AtheAurbanAp or areAc ncent atedA n A lu s where Asp ce is Aat AaAp lyAar AalsoA oorA nA earlier Athe ci icAservices suchA sAsanit tion,Awater supply Ael ctri ityA up hes Aareas.A ost Ao At e Ad elli g Aunit AdoA ot Ahav Apr perAla dAt tlesA nd hardlyAan Asp ce AisAavaila le for Aco struction A fApu lic Afaci iti sAlike school .ALowA amilyAi comeAle els A reventA neousAnatu eAofA heA arent AfromAse di g Atheir A hildrenAtoAs hoo s.AFurthermo e,Athe he rog urers,Ar g Apickers A popul tionAwh ch AincludesAc rtain Adi adva taged sectionsAl keA hildAlab eApr blems ar Aeven pavemen Adwe lers, Amig ant Aetc.Ac mpoundsA he h problem A urt er.A moreA cut Ain areasAwhic Aa e Anot A ec gnis dAasA lums AInAsuchAar asA ityAautho it esAareA elu tant A oAprovideAa nyAcivic am nities.in Apoo Au ban Aar as 5.6. .3.3 AThe ACo missi n, At erefore, A eels Athat pr vidi g Aedu ation weenAsocio- con micA cannotAbe vie edAin iso at on andAthereAh s AtoAbe convergenceAbe heAlocalA odies. TheA develo men AandAeducat on. Thi Aconver en eAc nAbeA rought A y A videdAtoAsu hAa easA mun cipalA odie Ash uld Ae sure Athat the basic Aam ni iesA reApr ti g Aup Aof As hool .A mmedia ely A nd Aalso A nsure th t Aadequa e As ace Ais A ro id d Afor Asepl n Afor Athe city.AThe Ae ucat on plan Asho ld Af rm an A ntegral Apar Aof A he A eve opmenInAcongest dAareas,Ai novati eA pproach sAsh uldAbeA doptedA ik ArunninAschool AinAshi ts ArunningA choolsAin A ommunityA uild ngs, Aprovi ingAfre Atransp rt289Local Governanceholidays etc. Other issues related to ‘education’ are discussed in paragraph 5.4.4.1 of this Report.5.6.3.3.4 Recommendation:a. The education plan should form an integral part of the development plan for the city.5.6.3.4 Health and Nutrition5.6.3.4.1 Estimates indicate that 13 per cent of all urban poor reporting ailments do not receive treatment. Poverty is a major hurdle in receiving adequate medical care.99 The Report of the Task Force to advise the NHRM on “Strategies for Urban Health Care”, Ministry of Health and Family Welfare indicates, inter alia, that with regard to under-five children, infant and neonatal mortality rates are considerablyhigher among the urban poor than the national and State averages. About 60 per cent of the deliveries are at “home” in a slum environment and over half of urban poor childrenare underweight and/or stunted. For improving the lot of the urban poor, the Commissionfeels that urban local bodies should adopt the concept of providing Primary Health Care Centres as is being done in the rural areas. These should preferably cater to slum areas wherethe urban poor are concentrated and should include community based auxiliary health staff to focus on reduction of IMR and MMR. The main issues related to ‘health and nutrition’ are discussed in paragraph 5.4.4.2 of this report.5.6.3.4.2 Recommendation:a. Urban Local Bodies should adopt the concept of ‘Primary Health Care’ for providing health and medical facilities to the urban poor, particularly to women and children with the help of auxiliary health staff. These should specifically cater to the population living in slum areas.5.6.3.5 Slums in Urban Areas5.6.3.5.1 An NSSO survey of urban slums carried out in 2002100 indicated that about 8 million households, that is nearly 14% of urban households, lived in slums. Every seventh person in urban India is a slum dweller. An earlier nation-wide survey of slums conductedfyAt eA 9 “A out 72Ap rA ent ofAth Aurb nArich A scr beAnotAre eivingAtr at entAtoA‘ ilm ntAnotAse ious’,A here s A nly 48Ap rA ent ofAth Aurb nApoorAi ent orAnotA same A easo .A ackAofAfac liti sAal o Ad esAn tA ho A p Aas Aa Asig ifican Ac us AofAnoAtr atm ntA orAth Aurba Apo r.ANotAsurpri i gly,A Athir Aam ngAt eAp t, A20 6 ett ngAanyAtre tment, A sc ib Ait toAt eA ackAof fun s.AThi Afig reA orAt eA ichA sAonl AaboutAone- e th.”A AIndiaAInfrast uctureA epor 100The sampleA ove edA360AiedAotind A332Anon- otifie290Urban Governanceby NSSOof A hich byANS O Adur ng A1993, A sti atedA heAtot l A umber of Aur an sl ms Ato be 56311eA umber 36%Awer An tifidAby AtheAr spect ve Aurba Ab dies ATheA20 2 Asurvey A sti atedAt of sl ms Ato Ab A 2,000,Aa A educ ion from Athe pos tionA enAyears earli r. A bo tA5%AofA he fca tly,A slu s Ain theA2 02As udyAwere not fied, butAthe Aco er dA6 %AofAtheApo ulation. i ASign or A bo tA1 %AofAtheA we lings in Asl msA he eAwasAno drinki gAwater At iletsAorAelctricityAfacilities. Th6 3.5.2aTe Ap pu atio AofAslum dw l ers A s AaAgo d Ap oxy Ab tAnot anAexactAi dic tor,A orAurban pover y. ASo e,Awhose ear in sAmay A eAhi he Ath nA$ A er A ay A–AtheAm llenniumede elopm nt Ag als normAfo Apo ertyAa dA unger Aas A entione A arlie A-Awo ld stillA eA iving nyAur anA in A lums fo Awant Ao Abetter, A ffordableAaccom odation. AT levision an enna AinAm AI comesA slums indi ate thatAt eA wners ofAtheseAt levi ion set AareAn tA ik lyA oAbe ABPL personsy,A hileA i ADharaviAr porte lyAr ng Afr mA sA 00 Ato ARs 3 00,000 Aa A onth!101 i ASign fcant heAto al AurbanAp pulatonA elowAth Apov rty line Aha Adro pedA A1 87-8 A rom A75. Am llion Ai999 200 A to A67. Am llion AinA decl nedA and Ath Apove ty Aratio %Ain theA f om 38.2% to 23. l lAu banA sam Ape iod,Ath Aover asAg ow A slum Ap pul tionA Ato A46. A fromA2 Am llio Ai A198 Athe AtoA m llio Ain 1991 an A Arece tA 61. Am llion i A2001. Sewerage s rve Afor At e AMumbaiAth t A42 Disposa AProj ctAf un lin sAin pe Acen Aof AslumA wee s AthanA the ci yAha Aa Aare AofA lyA9 per 0Asqua eAm tres a dAo or AthanA ce tAha Aa Aare AofAost halfA 0 Asquar Ametre .AAl otAth irA theAh us holds in A lumsA ipes a dA w terAfr m AsharedAs and tA ccess o ly A5 per cent Ah dAdire ual taps. to Awate AthroughAi dividitu tion T e Acity’s As nitationA wasA venAmoreA la min :A73 pe Ace tAofAt e Aci y’sAslumAh291'oTharmi. A rsAFede ation, 101 hara i:AAAV ewAf omABelow,A oodAG vernanceA ndia m gaz ne AVol.A2 No.A ,AJan-F bA2005AJoc in,APres dent ANationa ASlumADwell Mumbai ASheelaAP tel,ADi ect r,A ocietyAfo AteAPr motionAo AAreaAR sourceAC ntersA( PARC), Mumbai ASundarA urra,AA vis r,A ocietyAfo At eAPr motionAo AAreaAR source(SPARC)AC, ntersMumbaiALocal Governancehousing 3.86 million residents – depended exclusively on public toilets. Moreover, overuse and poor maintenance had made public toilets a health hazard, especially in areas where the user group was undefined.Less than one per cent of the slum population had access to individual toilets or to payper-use toilets constructed by private agencies or NGOs.1025.6.3.5.3 The slum dwellers suffer several ‘urban penalties’.103 Essential services – health, sanitation, education – even when available, are grossly overstrained and the poor find it difficult to access them. The quality of housing is very poor as defective land titles make redevelopment difficult. The location of slums on the marginal lands makes them more vulnerable to disasters, which take a heavy toll whenever they strike, because of the high population density. Poverty prevents children, particularly girls from attending school as they have to work to earn. The poor conditions coupled with high rate of unemployment and weak governance, often make these slums breeding grounds for criminals. In spite of all these ‘penalties’ the slums contribute to the economic growth of the city by providing cheap labour for almost all kinds of activities.5.6.3.5.4 As stated in the UNFPA Report – State of World Population 2007 – running the poor out of town through evictions and discriminatory practices is not the answer. Helping the urban poor to integrate into the fabric of urban society is the only lasting solution to the growing urbanisation of poverty. The Report has brought out certain misconceptions– (i) rural-urban migrants are primarily responsible for urban poverty; (ii) the poor are a drain on the economy, and (iii) migrants would be better off remaining in rural area. In fact, attempts to control rural-urban migration not only infringe individual rights but also hold back overall development. The Report rightly concludes that lack of adequate shelter is at the core of urban poverty and that much can be done to improve the lives of people through better policies in this area.5.6.3.5.5 Slum Development: Till recently, two schemes pertaining to slum development existed in the Minstry of Housing and Urban Poverty Alleviation The first was the National Slum Development Programme (now discontinued), the second the Valmiki Ambedkar Awas Yojana (VAMBAY). VAMBAY and the discontinued NSDP have been subsumed in a new scheme, the Integrated Housing and Slum Development Programme (IHSDP), launched along with JNNURM in December 2005.5.6.3.5.6 Under the National Slum Development Programme (NSDP), launched in August 1996, Additional Central Assistance (ACA) was provided to the States/UTs for the development of urban slums. The objective of this programme was the upgradation of urban slums by providing physical amenities like water supply, storm water drains,0 UN-Habitat 102UN Ha itatA tate Ao AWorld CitiesA2006/ 103UN Ha itat A taeCitiesAo AWorld2006/7292Urban Governancecom unity bath, wcommuni yAb th,Awi en ngAand Ap ving Ao Aexisti g Alanes,A ewers,Aco munity latrin s,Ast eetAl ghts etc.,Aapa tAfrom Aim roving Acommuni yAi frastr cture Aand soci lAamenitie AlikeApre- choolAeduc tion,Anon forma Aeducation adultAeduc tion, matern ty, childAh althAa dApr mary Aheal h Acare Ainclu ingAm muni s a ti nAet .A.A3 89.63Acr re 5 A 6.3. .7A illAtheANSDP wa Adiscont n edAin 2005-0 ,A Ato alAamou tAofAR ts, an Aamou tAofA wa Arelea edA oAt eASta es Aa d AUTsAunde At is A rogramme AA AperAr po reaAsaid toAh veA R . A2 96.1 Acror sAh sAbee Aspe tAandA bo t A4. 8Acrores ofAs umAd el ersA 01Aproje tsA ereA b nefitedAfro Athis pro ramme. Un erAthe AI SDP, A y AD cemberA2 06,Aapp oved AandAC nt al Assist nce Aof RsA 08.52AcroresAwas Arelese .104A2001Ato provide 5.6 3.5.8AThe Valm kiAAmb dkar AAwa AYo anaA(VAMBA )A as Ai tr ducedAiThis Awa At e AfistA ad quate shel er Ato Aur an Aslu Adwel ers living A elow A he A ove ty A ine. of In ia A ubsid A s heme A f Aits Akind A ean Aexc usively A or As u Adwellers A it Aa AGo ernment Gover men , of AfromA 50 Aper A en ; At e Aba anc A5 Ap r Acent Aw s A o Ab Aarra ged Aby Athe A tateAunits/c mm nityAHUD O Aan Aelsewh re, Aw th Aceiling cost Apr scribed A oth Afor Adwellingencies Aof A ta eA t ilets. AThAsc eme Arequir d A he Asubmis io Aof propo als Aby At e A odal Ato At is AMi istryA Gov rnm nts Ato HU CO Awh Awould, in A urn, Apr cess an Afor ard AthemAthat A“Si ce A tsA with Atheir re ommendat ons. AThAEc nomic AS rvey Afo A200 -06 Are arkACe tra AsubsidyA in eption Aa d Au -to AD cem er A31, 2005, Rs. 866. 6 Acrore A ad been Are eased Aa Aseats A nde AtheA for Athe Aconstru ti n/upgrad tion Aof A ,11,4 8 Ad elling units A nd A64 247 At ile , Au Ato AD ce berA Sch me. Fo A20 5-06, Aout of Athe A entative AC nt al A llo ation A f A s. 249 Acror ng Auni s Aand A3 A 31 A2 05, Aan A mount of A s.96 4 Acrore A ad Abeen A elease Acoverin A60,3 5 Ad ell the achieveme ts toi et Aseats ” AAThese Anu ber , Aespeci lly A or Atoile s, Amake A at eti Areading, AasareAmin scu eAas Aaga nstAtheAnation alArequi em nts.oss yAin uffiientA 5 6.3.5.9AThe tot l Aalloc tio Afo Ahous ng Af r At e Aur anApoor has AbeenAg Ashel er Afo AtheA and A ust AbeAincrea ed subs ant allyAt Am ke A nyAimpa t A n AtheAp uci yAo approac Ato ard A urban poor. A overnm nt A hould Ar view At eAp ese tAscheme andAthe ve ent.AIt Aw ul A hous ngAfo Ath Apoor,A hichA ay ArequireAto al conc ntrationAon A lu Aimpr ndAonAind vi be ualA Aess nti lAtoAi prov AtheAen ir A reaA overed byAa slumA at erAthanAsp gramme.A fAit isA hhe Abastments.AcAapproachAne dsAr o ientation intoAaAcom os te prnAi Agi esAscopeA ac ep ed thatAther Ai Ano Aowne shipAofAprop rt A ndivi uall Ai AaAsl m,Ath onyAco ering th A fo At e Aauth ritiesA oA asilyAprepa e Aan Aint grated,As cially inclusiv Aco Ah s, of Acourse,A ent re A rea. ATheAn edAfor Atempor ry ac ommodatio AasAan Ae sent al facilit to Abe Acons de ed.eedAin all urbanA 5. .3 5.10 The Aval e Ao Areal Aestat Ah s Askyro ketedA nAIndia s Alarg r A iti s,Ain a ea . AThisAcreat sAa Aopportuni yAf rAG vernm ntAandAthe A rb nAautho293itiesAtoAi volveA 04Sour e: AAnnua AReportA 00 -07, AMi ist yAofA ousingA ndAUrbanAPov rtyA lleLocal Governancethe private builders to provide housing for the slum dwellers and use a part of the land for profit as shown in Box 5.18 and as is being attempted in Dharavi.5.6.3.5.11 The Commission has given due consideration to this complex issue and recommends that the following suggestions could be kept in view while preparing slum development policies or specific schemes:a.All projects for slum redevelopment must be finalised only after sufficientdisclosure and discussion with the slum dwellers and their representatives. This does not mean that all the demands of the residents must be accepted. The Commission is aware of the possibility of narrow or vested interests on “either side” and also that larger city issues of, say, environment management or traffic requirements must also be addressed. Nevertheless, the felt needs of the beneficiaries must be noted and no top down enforcement approach should be adopted.b.The maximum possible floor area may be provided to the beneficiaries. Thismust take into account the needs of privacy in a joint or even a unitary family system. The area per dwelling unit can be maximised by vertical housing, with relaxation if necessary in existing FSI norms in the area for the sole purpose of retaining as much space as possible for other facilities and greenery. The present limit of four floors on slum/poor housing reconstruction also needs to be reviewed.c.Only a small percentage of the land may be offered for profit based developmentand all needs of public spaces must be built into the scheme. The facilities to be provided should include total sanitation, adequate water supply, and depending on factors such as space, location, population and proximity to existing facilities; schools, crèches, libraries, dispensaries, cultural activities centres, transport shelters and relevant civic offices.d.A small percentage of the cost of the dwelling unit can be met by the beneficiary.There are benefits of redevelopment and the costs attached to it which to some extent must be paid for by the slum dweller, if he wishes to use those benefits.5.6.3.6 Land Use Reservation for the Urban Poor5.6.3.6.1 Apart from the realignment and redevelopment of existing slums, it has to be expected that further migration and population increase could create more slums. To avoid this, and to improve the housing stock for the poor, it is necessary to earmark and reserve a294Urban Governancecertain percentage of land oor AThisAmu t AbeAa Ap rtAofA ce tain perc nta eAof lan Ain eachA own Aa d Ac tyAf r A h Aurb nA t eAs atia Aplan in Apr cessAan Amust Aappl At Aall A ri a eAdevelopesAas Awell. AI AaApar icularAperAmus , AatAhis ownAcos ,A c nstruct on A ann t Aall cat Ahousing A orAth Ap or, the devel rov deAsu table Ahousi g AinA nyAother Aa pr pri teAplaceAacc ptble toAthe Aa thoritie .AInA 7,Ather Ai AaA rovisio AtoAhe Aprop sed Nationa AUrbanAHousi gAand Ha i atAPolicy 20oniesAa Ap rtion of A andAatA earma kAa Aal Alevels,Ainclu ingAthe new APubl c Private ho sing co ion AandA ow Income Grou ffor.A abl AratesAforAh usingA or Athe AE ono ica lyAWea erASec ingAun ts Afor AE ono ica lyA Thi Ac uldAbeA10-1 % Aland area AtoA ccomm dat A20-25%Adwel hoc Aa ti n, At eApoli yAan A Wea erASectio s Aan AL w AIncom AG oup 105AThus Ato preven Aad r les AinA his A egardAmust Abe A learlyA aid down.5.6 3.6.2AShe terAforA avementA wel ers: A aff ment dwel ersAareAw rse thAt anA lumAd elle s.AAn At eyAar Aoften Al st Asigh Aof whi e Apla Thi g AhousingA orAth Apo r. AT AC mm ssio AwouldAn t Al keAto Ago in o Adetai s, A utAp rallel Ato h usin Af rAs umAdweller , Aa A artAofA llAprog amm s Amust Ai cludeAhou in Afor Apave entAdweller .AAnA mm diateArequir me tAwou d AbeAcons ructi nAofA ig t Ashe te s, A hichA ouldAbeAbui tAb Ath AStat AGovern ent handAt eAci ic bodi s, and A a dedAover toANGOsAt Arun. AA et iledA ro ia meA eeds Ato beAdrawnA pAin allAc ties, A eginni gAwith Alarge cit esAhaving Metropolitan and MunicipalACorporationsAf rAimplementation5. .3.6 3 AR co me datio s:ar as. AWh le redevel ping A a. A AThere Aha At Abe A otal Ar devel pment Aof Aslum has Abe n Amade Af r Aschools, it Ashou d Abe Aensu ed A hat A dequ te A rovision healc ntr s,As nitationAetc.A b.A orAslumA edevelopm nt Athe approachAs gge te Ain AparaA5 6.3.5 11 AmayAbeAc nsider d A hileAfoi mulatingpoic Ao AspecifcA ch mes.certainA er enta e Aof lanAc. A ItA sAneces a yAtoAea markAandAr se veAa anApoo .AIf AaAc nstruct onA pro ect Ain eachA own Aa dA i yAfor AtheAur devel perAmus , AatAhis ownA ann t Aall cat Ahousing A or Ath Ap or, thepr pri teAplaceAac ccos , A rov deAsu tableAhousi g AinA nyAotherAato Athe authoriti s.pt b eAnight sh lt rsA eeds Ato beA A .AA detailed A ro ramme forAtheA rovis on of esAhaving MetropolitanA ndA drawnA pAin allAc ties,A eginni gAwithAlarge cit unicipalACorporations Afo Aimple en ati n.295tio Ab ASmt. Supri aA ule, 105This wa Astat dAbyAtheAMin sterAof Sta eA(Inde end ntACh rge)Afo AHousingAand Ur a APove ty A leviatio ,A nAaA eplyAto aAque MP,Ain Rajy ASabhaAo A26thAApril,A2007A(Sourc: A)Local Governance5.7 Urban Planning5.7.1 Specific Issues in Urban Planning5.7.1.1 The key concern when it comes to the urbanisation process in India is the fact that in the fastest growing cities in the country, urbanisation has taken the form of ugly urban sprawls, comprising slums and unauthorised colonies, which provide entry level housing to migrants from the rural areas who come to the cities in search of jobs and cannot afford to live in the planned layouts and authorised colonies. “Large parts of cities today completely escape mainstream planning. Half of the population of Delhi and Mumbai lives in unauthorised areas”.1065.7.1.2 How this indiscriminate process of urbanisation can be controlled and planned to take care of the demand and supply side when it comes to provision of both housing and infrastructure services for the rich and the poor, is a major challenge.5.7.1.3 The National Commission on Urbanisation in its report in 1988 made the following telling observation:“Several factors today prevent a city from developing along desirable lines. One is the plethora of laws, rules and regulations which restrict rather than encourage. Ahmedabad has few unauthorised colonies because the provisions relating to town planning schemes permit the owners of open land to get layouts approved, exchange land on an equitable basis where the planning norms so require, and develop housing layouts. Almost half the populations of Delhi and Bombay live in unauthorised colonies because the system of planning militates against landowners developing their own lands and therefore, when demand outstrips supply, people build unauthorisedly. Whether the restrictive laws relate to planning or whether they arise from misplaced social legislation, the Commission recommends that they be done away with so that new lands can come on the market at rates commensurate with demand.”5.7.1.4 The Commission further said“In order to professionalise the administration in both town and city, the Commission has further recommended a clear-cut codification of powers and functions between the deliberative wing (which will frame policy and generally oversee implementation to ensure that it conforms to the policy guidelines) and the executive wing (which will enjoy full autonomy and powers within the policy frame). The present conflict between Commissioner and Standing Committee, for example, is sought to be done away with by taking purely administrative and executive issues out of the purview of Standing Committees. Once106Pl nningAforAUrba A nfrastr ctureA- Oli i r AToutainA nd SAGop prasadAinAIndiure Repot,AInfras ruct2006296Urban Governancethe AretainA t eAurbanAadmini tr tionAis Areo ga isedA nAthes Al nes,A t Aw ul AnotAbe An ce saryAt oAlocalA fu ctionalA gen iesAand Adev lopmentAauth ritie ,Awhi h A ouldAb Amer edAin bo ies. gove nmen s,AthusAeli ina ingAthe prese t As opeAfor conflict betw enA hemAa dAlocal regio sA TheAonlyAe cepti n A ouldAbeA egionalA lanningAaut oriti s Awhi hAmig tAcover tionA oA which contain sever lAt wnsAand cit es.AB tAthe eA lso,Ab Agivi gAequalArepres nt eration eve yAlo al bod AinAtheA egionalAau ho ity,A nAeffo tA ould be madeAt AensureAo throughAc nsensu Arat erAthanAim ostionAofAa th r tyAbyAaA uperiorAbody” Th. .1.5 eT Am nnerA n Awhi h A paceAis Ao gan sed A nd u edAi Aa c tyAis AaA hysicalAex resio AofAitsA conomy,Aenv ron entAand Thq ity.AT Abe terAtheA la ningA f Aurba Asp ce, Athe grate AisA ss nce.A he ease Aof Aadmini tra ionAandAgov rnance. ANa u ally, Aa A olisticA pp oa hAi Aof AtheAheAInd a AUrb nASpace ACon eren e, hel Aa AGoaAinA ebrua y A200 , Amad ,Aint rAaia,AtheAf llowingAecommedat on:ic viewA “We AAd oca e Aa Anew A ara igm Afor A lan ing Aour cit es. Not A ne Ath t takes A AmyoAisuesA of A la ning Aa Azo ing A nd Al nd A s , Abut Aa Adev lopm nt Ap an that Ais A nf rme Aby Athanion A o Apublic Agov rna ce, A he A eed Afor Aconne tivity, Aenvir nmen al cost A f Aurban AexreentsA of Ath Ai pact Aon Ad pleting Ar sou ces Aand Av nishing Aec logical Adi ers ty, Athe Arequ fos ersA o Awate , Ap wer Aand Ainfrast uc ure. AOf A lann ng Athat ensure Asocial A ousi g, Athat ng. ATha A the A ui ding Aof Acomm nit es. A ne Ath t A ives Au Apubli Area ms A hat Aare Ai vit Ais AnotA allow Astreet ve dors to Aea n Athei Ali ing Aand p ovide Aa A aluable ser ice an Aye sses At A unre so able Aor Aincon eni nt. AThat Aa locat s As ace for Anew Ain ust ies Aand Abu in t wardsA th ive Abu Ab ilds Ain Afle ibi ity Afor A hanging Aec nom es. AThat A rov des Aa d AworksAvi i nAfo AaAc tyA hat allAitsA iti ensAc anAown 5. .1.6 AI AIndia, betw enA 901 Aa dA2 01, At e AurbanApo ulat onAg ew Aove Aeleve Atim s, overallA fromA25 mi lio AtoA285 A ill on; butAth An mberA fAurban cent es Aonly A ou led.AThe Ap rson avai ab lity ofA andApe Ap rsonA nAI diaAhasA eclinedAs eadi y,Af omA1.28A ect resApe tleme tA in 1901 to A0.32 A ec ares A n A 001.AThe averag An mber Aof per ons Ap r AurbanAse oday Ai A71 80 AandAis A xp cted At Ad uble in AfiftyAy e ars. 07gAAct(s .7.2 TheA ownAand CountryA lannin s)Apost- 5. .2.1AThAs stemAof A reating ACompr hensive ADev lopme tAPlans (Maste APlanAof the Inde en enceA nA ndiaAis deri edA romA heA ownAand CountryA lann ngAAc ,A 947 re tionA UK.AThatAleg sla ion AwasA ol owed Aby Aadmini trativeAinst uc ions in 195 Aon AtheA stedAi A f Agree Abe ts,Aand up at dAb Aa AAct A fA199 .AWh leACity AImp ovemen ATrusts ex ATrustsA Indi ,As nce A heA19thA en ury AitA as only in A1 4 Athat Aa Aco fe enceAof AImp ovemen ropo edA hatAa lAto n AwithAaApo ulati n Aabov A10,00 Asho ldAhav AMast rAP ans297andAallA10 Sourc :AUrb n ALoca ABo iesAandADecen ralis dAUrbanAP anning,Local Governanceschemes of the Trusts should be within the framework of these Master Plans. The model Town and Country Planning law of 1960, prepared by the Town and Country Planning Organisation (TCPO) under the Ministry of Urban Development, led to various State level Acts, which formed the basis for a certain momentum in urban planning during the early 1960’s. During the Third Five-year Plan, the Union Government provided full funding to the States to set up Town and Country Planning Departments which took up the process of preparing Master Plans. A 1995 survey by the TCPO put the number of Plans prepared under various relevant legislations such as TCP Acts, CIT Acts, City Development Acts existing at that point of time at 879 with 319 under preparation. At State level, urban planning is governed by respective State Town Planning Acts and other development Acts. State Town & Country Planning Departments in one form or the other have been established on almost all the States and Union Territories of the country. Although the role and functions of Town Planning Departments may vary from State to State by and large, preparation of Master Plans/Development Plans, Regional Plans, Town Planning Schemes, Zonal Plans, Development Scheme, Area Schemes, implementation of Central and State sector schemes, development control and planning permissions are their major functions. The Model TCP Law has provisions for (a) the preparation of comprehensive State level Master Plans for urban areas, (b) the constitution of a Board to advise and to coordinate the planning and plan formulation by the Local Planning Authorities, and (c) the implementation and enforcement of the Master Plans. This model law was revised in 1985 as the Model Regional and Town Planning and Development Law in which planning and plan implementation is proposed to be entrusted to the same agency, which would be in the nature of a Planning and Development Authority. This was further amended in 1991. Most States have enacted Town and Country Planning Laws. In some cities, urban development is governed by the State Development Authority Act (s).5.7.2.2 ‘Town Planning’ in the real sense is planning for the future development of a city including optimum utilisation of the available resources to provide the required civic amenities to the citizens. Thus town planning is a holistic concept. But in most cities, even today, town planning ends with preparation of zoning regulations. The enforcement of these regulations has not been up to the mark and in several cases the local bodies and other authorities as well as the citizens have violated these regulations. There is need to establish town planning as an important tool for future development of the cities.5.7.2.3 It needs to be emphasised that urban planning can be conceptualised at three levels, at the level of a broad perspective plan for a large urban or urbanising area (usually called the master plan), at the level of zonal plans within that area (where the actual detailing of land use patterns is done) and the layout level (where the focus is on neighborhoods and298Urban Governancethe heA74thA the A inka esAwithAinfras ructure serviceA etwork AbecomeAex li it. AInAthe co tex AofA tionAofA Am ndm nt,AtheAi fere ce thus is A hat A he A PCs and A heAM Cs ha eAt Ado AtheA un tApl ns p epari gAp ans forAtheA egiona Alevels (mas erA lanAa d Azona Aplan )Aw ileAth Alayo at ons). ha e Ato Abe A re are AbyAt e Aloca AbodiesA(Pa cha atsAandAMunicipalities/Corpo rAs oul AThe ACo mis ionAhas alre dy madeA t A lear Ain Cha terA .7 At atA PCsA nd AMPCdi ide A beA he AsoleA lanning Aaut ori ies Af rAurb nAar as A and AforA rid ingAtheArur l-urban inAtheAc ountry 5.7.2.4 AInex ricabl Al nke AtoAtheA lanning pro ess for At eAurb n A rea Ais Athe pr cess ofAlandAdev lo ment inAl ne A ith Ath AMas er A la AandAofAre ula ingAand Ae for ingAtheApa amet rsAl id dow AinAth Ap ans AA Afar Aas Adev lo ment of A and Afor Aurba is ti n Ao At Aput Ait simply,Aio al);A hang ngAl ndAfromAagri ul uralAto vario sAur anAusesA(resi ential,Acom ercial,Ainstit u Apubli A isAco cer ed,Ath Amodels A ol owed Ai AIndia Aciti sAra g Afro Aa ApureA on p lyAofA sA( ,g,A age cyA verAthe Aacqu sition,Ap anning, Adev lop ent AandA is osal of A andAf rAur anAus gulated t e ADelhi ADev lopment AAu ho ity) Ato laiss zAfair Am delsAof Aun lanned AbarelyAr privat Ase torAle Agr wthA inAman Ato n )AandA Amid le Apath wherei ApublicAaut orit esA ,AunderA DAsAand Housing Boards) deve opA and A ut Aal o Aallow private A ge ciesAtoA evelo hority,A reg lation, layoutsApart cul rlyAfor housingA Haryana Housing ADev lopmentAAu tAupAbyA B ngaluru ADev lopmentAA thorityAehere Ac).r Aal oAaAfewA xa plesAof At wns ip AsownshipA ind stries Am inl Ain Ath Apubli Ase tor andAoneAr dicallyA iffere t A o elAofAa privateA smsAforA d ve opedAby Ae stwhile fa mersAinAMag rpat a,Ane rAPune. Variou ApolicyAme han ent.AThe as em lage ofAl ndAh ve beenA nA orce as partA f AurbanA lan ingAandAdeve op sA( DR) cocept Aof AAccom odationARes rvat onA AR)Aand A ra sfer Aof ADev lopmen ARigh ss mbly are theAne ApolicyAins rum ntsAforAr sol ingAtheA ro lems ofAlandAacquisit on/landA heALandA toAsome exten . ALar eAscaleAacqu sition, Adev lop ent AandA is osal of Ala dAu derA entAandA Acq isiti nAAct’s Ame hanism,Ane otia edAland Ap rchas d Aunder HaryanaADev lop PradeshA Re ul tionA fAUrb nAAr as AA t, A 975 and At e Ajoin AsectorA pp oac AofAt eAUttar persAon Go ernmentAem owering Adev lopment Aaut or tiesAto prov de landAto privateAde el licen eAb sisAfor Adev lop entAandAcons ru tionAof A welli gAu itsA reAso eAotherAte hniquesA mesAfor oll wedA or AlandA sse blyAand Adeve op ent. AIn Aa diti n,ATownA lanning Sch en yAisA po ling of landAof Ai entifie Aow ersAfor Adev lo m ntAa Aa uni AbyAtheA lannin Aa entur .A anAi por ant Aand poolingAt ch iqueA n Avog e AsinceAb gi nin Aof Athe At entiethA reAlan - Un er AthisAte hniq e, landAis A dj stedAby sha ingA he s me Ain A Acom onApo lAwhe ofAcit A owner AbecomeA ar ner AinA heAcity A lanning A roces , Awh ch helpAinAimplem nt tionMast r A lans Ain variousAStates 5.7.2.5AEx erie ceAal oAsh wsAtha Apubli AsectorA onop lyA verA heAland Adev lopment proce sA eadsA o AunderAprov si ning Aof housi gAs ock Aa dAoth r Aurba Asp ce Aand to AoverAreg latio ,Aw ile AtheAsuppl -demandA ismat hA eadsA oAblackAm rke ingAandAcor uption. Aly, thedea299Local Governanceplanning authority of a city should be able to leverage land use as an economic resource to create physical and social infrastructure for its citizens and to redevelop its old and decaying portions through a combination of public investments and public-private partnership projects. In addition, the land banks of the development authorities and control over land use can be utilised to generate significant revenues for cash strapped local bodies.5.7.2.6 A public agency which focuses on provision of housing for EWS combined with development of major city level urban infrastructure and facilities while encouraging300public-private partneship in all other types of real estate development appears to be the golden mean when it comes to the urbanisation process in our cities. In all public sector housing projects an effort should be made to ensure that the principle of inclusive housing is followed on the same same lines as followed by Singapore Housing Board.5.7.2.7 Disaster Management in Cities: Natural disasters have become more frequent and impact a larger population. The United Nations Environment Programme (UNEP) reportsUrban GovernanceasA th t,Abetw en A1 80A nd A20 0, 75 A er Ac nt ofA he Aworl ’s Ato al Apopulat onAli ed inAar toA affec ed b AaAnatu al Adisast r. The Ap or Apeo leAliv ng in As umAar asA re Am stAvulnera le orA disast rs as Am st of Ath se Asl msA re Aloca ed inA owAly ngAare s, orAal ngAwa er Acour es slope s.keA 5.7. .8 APlann ng Apl y Aa Ama or Ar le in Adisas er Amanageme t. The Aspat al Aplann ng Asho ld At ngA c re of A he Anatu al Ageographi al A nd Ageologi al Aparamete s. A or Aexamp e, Aspat al Aplann itA sho ld At ke Ai to Aacco nt A he Anatu al Adrain ge Asys em of Aregi n, as A ny Aobstruct on Aw th ntA ay Al ad t AaAma orAcatastro he in A heAev nt o Aa Aflo d. AConstruct on of Adisas erAresistr s. buildings/hou esA an Ah lp in Amitigat ng A heAadve se Aeffe ts ofAdisastethA 5.7. .9 The ACommiss on inA ts A rd ARep r A–ACri isAManagem n A–A as Ade lt at Alen thAw teA he Ais ue of Apreparat on A nd Aprevent on of Acalam ty Arela ed Adama es Athro gh AappropriamA plann ng Ameasur s. The ACommiss on Awis es to Areiter te A he Aimperat ve An ed to Amainstr toA disas er Aspec fic Aconce ns in A he Aproc ss of Aur an Aplanni g. ASpec al Aattent on is Ainvi ed ofA he Arecommendat on Aab utAmak ng A heANatio alABuild ng AC de A(N C)Aavaila leAf ee ngA c stA nd toAprep reApamphl tsA ndAhandbo ks on Alo alAbuild ngAbye-l wsAe c.AMak erA munici alAbuild ngAbye-la s, A BC Acompli nt is anAurg nt Ane d. An Aasp ct ofAdisas veA prevent on At atAne dsAgrea er Afo us Awit in A heAproc ss ofAur an Aplann ng isA heArelat heA negl ct of Aaspe ts Al keAnatu alAdraina e,A ndApro erAc re ofAwa er Abod esA ndAvall ys inA lyA cl se Avicin ty ofAur anAare s. TheAexist ngAproces es ofAt wnAplann ngAn ed to beAsuita l,A upda ed so as toAt keAgrea er Acogniza ce ofAhydrologi alAimplicati ns ofAur anArenewexpans onA ndAurbanisatio n75.7.2 10 AM reAdraw ng up of Ag od Aspat alApl ns is A otffisufcie Th. TeAenforcem nt ofAth seApl n A– in Awhate er Af rm At eyAex s A– Alea esAm ch to be Adesir Th. Te Azon ngAregulati nse reAm n Aa At me A otAsacrosa c A– Aw thAauthorit esAgiv ng Apermiss on to Acha geA heAl ndA se t.A or Are ax A heAregulatio s. AM re Aof en At an An t,As chA‘conversio s’A re A otAba ed onAmer heA Violati ns of A he Azon ngAregulati nsA re Acom on inA ur Aciti s. The ACommiss on is ofA nyA v ew At atAo ceA he AC tyADevelopm ntAP an A(C P) isAfinalis d, noAauthor ty Asho ldAh veAve discret on toAgr ntA nyAexempt on orAwaiv r. The A DPAsho ldAh v Aa Athirty-y arAperspect to beArevi edAaf erAev ryA en Aye rs Athro g AaAparticipat veA ndAtranspar ntAproces s.ryA 5.7.2 11 AW thAl ndApri es in Acit es Asoari g,A he Atende cy toAencro ch onApub icAla ds isAv soA comm n.AS chAla dsAincl deAwa er Abodi s,Anatu alAdra nsAe c.AS chAencroachme tsAa s. threa enA heAecol gy ofA heAreg onA ndAaggrav teA heAprobl msAdur ngA nyAcri is orAdisaste s.A TheAmunici alAauthorit es Asho ld Aunder k Aa Aspec alAdr ve toAcl arAs chAencroachmenkeA Responsibil ty Asho ld beAfied on Aoffici ls in Awh seAjurisdict onAs chAencroachme tsAtplace.301Local Governance108Para 5.7.2.3.13.e of the Commission’s Fourth Report entitled ‘Crisis Management – From Despair to Hope’3025.7.2.12 Recommendations:a. The City Development Plan (CDP) and zoning regulations once approved should remain in force for ten years. No authority should normally have any power to change the CDP.b.Infrastructure plansshould be made an integral part of the City Development Plan (CDP) in order to ensure that urban planning in cities become a truly holistic exercise.c.The existing system of enforcement of building regulationsneeds to be revised. It should be professionalised by licensing architects and structural engineers for assessment of structures and for certification of safe buildings. The units of local bodies dealing with enforcement of building bye-laws and zoning regulations also need to be strengthened.108d. Prevention of Disaster Management must find a prominent place in spatial planning. Specific guidelines need to be framed by the Ministry of Urban Development. These should be addressed by including them in the zoning regulations and building bye-laws.Urban GovernanceasterA e.ATheAsta dardsApres ri edAbyA ur au AofA ndianASta dards (BI )AforAdi cos res .A stantAbui dingsA ho ldAbeAava la leA nAtheA ublicAd main Af eeAof nmentA They A houl Aa so AbeA os ed AonAwe si esA fAthe Acon ernedAgove ag nc esAtoAp omoteAcomplianc e.1 0 5.7.3 APeri urbanAAreasi idurban 5 7.3.1 APeri ur a Ais A Ater At at Ai Amost Aco monl Aus d Af r Athe Aout ki t Aof Aa large ssAofA area AmoreAaccu ately areas whi h Aare Ao tside urban Ajurisd cti nAb t A re A n AtheAp oc ar lyA urbani ati n Aan AhaveAc rtainAcharacter st csAof urban A reas ASuch are sAareAc eatedAAmo e y Athe influ Afr mAthe A eeperAcountr sid ,Abu Aals Afrom th seA nAthe A ities As ek ngAt AsomeA outA AsomeAmig atin Afrom Acon ested ar asAto A argerAresi en esA r Anew Aindu tri s AanusualA sh ftin Aawa AfromAexp nsiv Acity Al vi g.AI Athis Ap oc ssAofAurbanis tion, th re A sAthe lt esA unp anned A un leAof A iving As aces, Alife tyl sAandAfacil ties AThe eAareAc rtain fi Adifc AfromA inAma agi gAthe urb nAand ruralAinte face AThe e AareA ss esA fA(a Ala dAuseAc ange As chA agricu tu al AtoAresid nt alAor Aindus ria ,A(b)Ac an esA nAt e A seAofAn turalAres urce onAofA as wat rAand Afor str ,A( )Anew fo ms AofApol uti nAand wasteAmanag men ,A(d)Acr at ingA A infrastru tur ,Aa dA(e)Ama a ing aAnewAcu tural A thos.ATypi all ,AtheAvi lagesAadj iAlai A cityA ecomeAexte si nsA fAthe cit ,AbutAw tho tAtheA orms,Ah wever Ainsuffiient, beinssA fA d wn A nAth Aci yAfor civic Alife tyl s AandAinfrastru tu e. AAn Aappro riateApl nningAp oc t eAMPCAco eri g Athe Aperi urban ar as AisAessen tia l .5 7.3.2 AFu th r, to Ab Aa le AtoAc ntrolA ntidyAsp aw s, it Ais Anec ss ryAtoA llow,A ndeedAe sure Ath t AtheApl nnin Alaws Aappl ca l Ato Aa Ap esen Acit Aar aAar Aalso Aappl ca leAtoA uture ar asA fAthe ci y.AIt A an ot Ab A hatAaAv llage APan hayat gives Aperm ssi n forAaAc rtai At peAo Ala dAuse w ich aAfew years later wo ldAgoAa ain tAtheA ity’ Ala dAus Awhe Atha Aa ea AisAab orbe Ain oAthe ci y. AAt lea tAf rAthe Ametrop litan A reas, Apl nni gAf rAthe A arge Aare Amus Atak Ainto Aconside ati n AtheApr bl ms A f Athe Aperi urban A reas AWithAinc us o Ain aAMPC are ,Aand A ommo Ala dAu e AandAinfrastr cture Apl nni gAand Au iformAregul tionsAappl ca leAt Abo hAth Aci y AandAper urban A re s, AitA ho ld Abe Apo si leAt Atake Aperi urban area Ain oAtheApl nning Ap oc ss A f Athe A arger Ac ti s. It AisAess ntia A hat a A etAo Aland rule A ithAaAl mitedA obl mA isi nAan Ala dAuse Arequir me ts A n Athe Aperi urbanAPanc ay ts A oAnotA r ate AaAp Ain AaA f rAtheA uture Adevel pm nt A fAthe Ac tie .AAll Are ionalApl nnin Am st Abe Aimple en e gAfor an er so asAtoA nsur Athat th re is AnoA iatusAb tweenApl nni g Aand Aperm ssionA ivi urba AlandAuse.5 7.3.3AFi ally Aw en Ait co es AtoAregu ati g AandAenf rci g Ath Aplan dr wn up A yAt eAM CAf r AtheA ntire AMetrop litan A egionAinc udi g Athe Aperi urban A re s, itAis Ao viou Atha AsuchAenfor eme tA as to Ab Ad n AbyAaA ingleA genc Ai. .Athe Acon erned loca Abody A(Muncpaities3031 9ParaA5 . 7 .2.3 13.fLocal Governanceand Corporations or Gram Panchayat) since they already have the statutory powers to do so and since it ties in with their responsibilities with regard to enforcement of building bye-laws, etc.5.7.4 Regional Planning Focussing on Corridors and not Cities5.7.4.1 Efficient infrastructure with development of corridors together with liberalisation and harmonisation of transport markets are a pre requisite for economic growth today. It is increasingly accepted that static city specific planning processes and documents have to be replaced by dynamic regional planning models based on economic corridors and transport nodes.Corridor concept is land planning by design in a manner that maximises the quality of life for inhabitants, habitat for nature and easy transportation with faster links and profits for the developers and investors. Corridors integrate transportation, housing, utility services, industries, etc with reference to the most optimal land use. Corridor based development can help decongest urban areas, improve access to arterial transport systems, and promote balanced urbanisation and development. The government’s recent initiative to develop a Mumbai-Delhi Industrial Corridor is a timely recognition of this reality in which planning has to focus on regional growth corridors extending into the peri-urban areas and covering the Extended Metropolitan Regions (EMRs). Several States have also taken the lead with initiation of projects based on the corridor concept including the Hyderabad Knowledge Corridor and the Bangalore-Mysore Infrastructure Corridor both of which are focussed on the development of knowledge-based industries and residential townships along important link roads with laid down trunk infrastructure services like power, water, sewerage, public transport etc.5.7.4.2 The Commission’s recommendations with regard to the process of urban planning, for ensuring a single planning authority (DPC/MPC) for urban areas, encouraging public-private partnership in land development and strict enforcement of the plan through the concerned local bodies, and leveraging land as a resource, have already been spelt out in the earlier Chapters.5.7.5 Development Areas5.7.5.1 In many urban areas of the country, New Okhla Industrial Development Authority (NOIDA) and Delhi being prominent examples, development authorities were set up as the sole planning authority for ensuring planned development and were also simultaneously given monopoly powers with regard to development of land. This policy saw large tracts of land being declared as “Development Areas” wherein planning and development functions were made the exclusive responsibility of the development authorities. It has already been304Urban Governanceittee A me ti nedAin A h pter 3Ath tAw th AtheA et in AupAof AMetro olitan AP anningACom tionalA (M s)AandAD strictAP anningACom ittees (D Cs)AinAacc rdan eAw thAt eA74thAConstit areas A Am ndm ntAt e A askAof Ac art ngAout A lanned Adeve op entAof Ametropolita /urban ritie A would solely bec meAtheAp es rve of Athe ADP s/M Cs A ndAthe Adeve opmentAauth estateA would bec me Athe Ate hni al arm of Athe AMPC /DPC .AThe rA ole Aas Am nopo y Areal rivateA dev loper Awou d Aalso changeAsubsta tial yA ithAanAin rease Af cus AonApublic-partne rsh i p. byAtheA .7 5.2AIn Aad ition,Aw erever Ato nshipsAin ludingAsa ellit Atow s Aha e Ab en se AuplannedA deve opmentAautho i ies,A Acl ar Ac tAtim Ata leAforAt an ferAofAjuris ic ion Ao AtheseA Ato AbeA c loni sAf omAthe Adeve opmentAauth ri ies to AtheAco cerned Amu icipal bod es ha he A DAA e su ed.AThe ACom is ionAi Aawa eAtha Aw ileAin Del i, Athe Ac lonies Ade el ped byA ; suchA areAtran fe red toAtheAMu icipalACorp ra ion Ao ADel iAo ceAt e A reaAi AfullyAdev lope tAfal A aAt an fer Ai Aof enAnotA arr edA utAforA ec desAi Ao herAso calledA‘deve opment area ’Ath Aoth rA un erAtheAjuris ic ionAof Adeve opmentAautho hus,Ain AGitie . Argaon ANO DAAannueAto such A ities,Ap opert Ata es A re AnotAco lect dAf omAthe Are ide ts Aand Ac loniesAc nt remain wit inAtheAjuris ic ionAof Adeve opmentAauth rit esAfor A ecadesAult matelyA ea ingA o A ossAofA eve ue Aa d ApoorAservices. .7.5.3ARecommenaton Aa.AInA es ect ofAall Ato nsh psAand Asa ellit Atowns Ade elope AunerAtheAdeve opment Aautho it es, Ait sh uld Abe A nsur dA hat A sA oon asAtheAdeve opment A ro essAisAcom leted,Ajuris icti nAo erAthe At wnship sh uldAbeAtran fe red toAth AlocalAb odi e .5.7.6A rivateATow nship s anA neA .7.6.1A lannedAto nsh psAan Agated Aloc litie Aexist acr ss Athe wo ld. AI A196 ,Ale sAt Acent,A p r A ent of allAUS Ac tizen Al vedAinA rivateAcommu it es; Ai A200 ,Ath tA os Ato 18 Ape tion .A c verin Aa outA55 A illion peo leAwh Al vedAinA ariou Ak nds AofAhome wners’Aassociitie ,A Thre Aar Aabout A 00,000Apr vately Ade elo edAandApr marilyApr vatelyAop rated,Acommuso e Avery small, othersAr achingAth us ndsAofAace s.1 1 0A yAco eA .7.6.2A rivateAC lon esAan AGatedA itheAtermA“es:ArivateA iti s”AhasAincre singit es”A into com on use inAt eAl st Afew year .AThse Aare reallyA rivate Aco on es,Aor “gatedA icipalA sAt ey Aar AoftenA all d,Aand en age inAall Amu icipal Aact vit es but doAn t AhaveAmuauthority nment;A 110Se ALocalAGov rn e tAin A AW rldAof APos modernAPl r lismA– Ro ertAH. A lso .AAandA rivate C ti s A:AJ ABryanAPh llips;AAd oca esAf r ASelfAGove Private Cities: A good example of a private city in India is Jamshedpur, founded by Sir Jamshed N. Tata, which started out as an industrial township but has grown to be a large city of 1.6 million people.111 The city, privately built and “owned”, grew out of the need to house the employees of TISCO (Tata Iron and Steel Co.), and then other Tata companies, but has now evolved into a multi-dimensional city. Out of its needs came the Jamshedpur Utilities and Services Company (JUSCO), a wholly owned subsidiary of Tata Steel, which, according to the Tata Group, “is the first corporate in the private sector to provide comprehensive municipal and allied services to a township. These services encompass town planning and construction, municipal solid waste management, public health, water and wastewater management, power distribution, fleet management, education and hospitality.”1125.7.6.4 The new posh private housing colonies in Delhi/Noida/Gurgaon, Bangalore, Hyderabad and those that are likely to come up in the SEZs are not really in the direction of “private cities”. They are much smaller and are only private or gated colonies. Apart from bulk receipt of services and utilities, they have no other contact with the local civic authorities. All internal maintenance is done by the developer. These “townships” are an inevitable part of the process of increasing urbanisation and fulfil a need that the public institutions are unable to provide. However, it is necessary that the establishment of these colonies must be allowed only within the broad parameters of the larger regional urban planning process where the development plans must clearly indicate spaces for private expansion and integrated into the availability of water, sewerage etc. A part of the land must be earmarked for housing the poor who, in any case, would provide various services to the “township”. With underground water becoming a fast depleting public resource, such townships which cater to the urban rich, need to be allowed with caution. Most importantly, the gated townships must be placed squarely under the jurisdiction of the concerned local body and be subordinate to their rules and laws.5.7.6.5 Recommendations:a. Private townships and gated communities must be placed under the jurisdiction of the concerned local body and subject to its laws, rules and bye-laws. However, they can have autonomy for provision of infrastructure and services within their precincts and /or for collection of taxes and charges (para 5.7.7.2 ).b. The establishment of private, gated colonies must be allowed only within the broad parameters of the larger regional urban planning process where the development plans must clearly indicate spaces for private expansion30611 Muc AofAt eAear yAci il workAatAJa she pur A as doneAbyA awrenc ASamuelA urr ll,Ath Af the AofAtheAna uralis AGerald Dur ell andAtheA ovelistawrence ADurrell 112F omATa aAGb ouppages.Awemake m makeA andatoryA rov sio Afor lowAcos Aho singAa dA houldAbeAitegr ted withAtheAava la ilityAofAinfra tructureAs ervi es.e sA(SEZ ) 5.7. ASpecial Econo icAZony,A20 6.A 5 7.7.1AThASpecial Econo icAZ nes A ct, A 005A ame Ai to effec Aon A10th A ebrua ince AtheAann un eme tAo Ath Anew ASE Apoli y,A ndia h sAse n A ArushAof Ad veloperAw nti gA yAp licyA o AsetAu ASpecial Econo ic ZonesAin differ nt par sAof Athe coun ry. There areAma ndAStateA and Arehab litati nAissues re atin AtoA EZs thatA reAbeing A dd ess dAby A heA nionA Abet een Gov rnm nts AButA ne issueAof Ag vern nce At at ne dsAtoAbe re olv d Ais theAlin sideAtheA SEZsA ndAlocal Agov rnments. Cl arly, An Ais ands A anAexi tAw thinAth Acountr Aou nfor ity jur sd ctionAofAconstit tionall AelectedAgov rnments.Ahe efo e,Aa SE Am st Abe AinAc he AlocalA with the laws A nd Arules re ating to Alocal Agov rnments. AIn eg atio Ao ASE s Ain A h alleng . gov rnme ts Aeven as Atheir Af nctional au onomy Ais as u ed, is Aa Akey Acreated aA 5 7.7.2 A n AAndhra Pr desh, in A 996, Athe AI dustrial AInfra tructure ACo poratio A na eme tA v able Aand As ccessf l A odel. The Alocal Aentr pren urs Awe e Aha ded over Athe Am s’) fromA of Athe Ai dustria Aes ate, and Aw re A iven Athe A ut ority to Arais Aservic Acharges A ‘tax men AandA the Aun ts plo s Ain A he area. AAn A gre ment Awas A onclude Abe ween A he Alocal Ag ver ect, AtheA the Ai dustria Aestate, Atra sfe ri g A3 % Aof A he Atax s A ais d Ato Athe Amuni ip lity. f A n Ae auto omyA i dustrial townsh p Ah lped Athe Amun cipal ty Awhil Aq ality Aof ser ices A nd Alocalf or ASEZ . were Ap otec ed ASuch Aan appro ch would be A deal Aion Awit A 5 7.7.3 AThe AC mm ss on A s Aof the A iew At at Aloc l Abodi s Ash uld A ave Afull Ajur sdic th ASEZsA r gards Ato Aen or ement of Alo al Ac vi Ala s Ain A h ASEZs. A A egree Aof aut nom Afor oAen bl Athem At AprovideAinfra tru tureA nd Acivic se vices inAth ir Aar as wouldAbeAdsirab e.ATax sA ais d AbyA he Aloc lAbo ies fro Athe SEZ ar a AcanA eAsh red wit AtheASEZAM na emen Ai Alieu ofAcivic A menities pr vided by them AB Asuch AanAarr nge ent, Athe au ono yA f ASEZAis Ap ote ted,A heAlocal Agov rnment’sA ut ority Ais A reserve A ithou Aa dra nAon AtheA eve ues,Aand A eso rces AareA ob lisedAtoAs pplem ntAlocal Ag vernment rev nuesAfor buildingAaditionalAinfra tructureArequire .5.7.7.4ARecommeda io s: a.A sAin th AcaseAo Aprivate At wnships,A oncer edAloc lAbodi s Ash uldA aveAfullAjur sdic ionAwi hA egardAtoAen or ement ofAlo alAc vi Ala s AinAhe SEZs me iti A sA b. SE s Amay be Agiven aut nomy Afor A ro ision Aof Ainfra tru ture Aand ASEZ Aa ea i Athe A E Aarea. A Afo mula Afo Ash ring Athe A esourc s A ais d Ai Athe ne dsAtoAbeAd3075.8 Urban Local Bodies and the State Government5.8.1 The law governing Urban Local Bodies (ULBs) as prevalent in the States contains various provisions prescribing measures regarding governmental control over these bodies. Such controls are in the form of:i.Necessity to seek approval of major projects by the State Government.ii.Power of the State Government to require production of documents.iii. Power of the State Government to inspect the offices or works of the ULBs.iv.Power of the State Government to issue directions to the ULBs.v.Power of the State Government to suspend or cancel any resolution(s) passed by the ULBs.vi. Power of the State Government to dissolve or supersede the ULBs.5.8.2 Such powers are exercised through the District Collector, the Municipal Commissioner and other officials of the State Government. Excerpts from the Tamil Nadu District Municipalities Act, 1920; the Kolkata Municipal Corporation Act, 1980 and the Punjab Municipal Corporation Act, 1976 are provided in Annexure-V(2) for illustrating the point.5.8.3 The Commission is of the view that since local bodies (both urban and rural) constitute the third tier of governance, they must have full autonomy in the areas assigned to them. At the same time, it should also be the responsibility of the State Government to ensure that the local governments carry out their activities in accordance with law. But this should not translate into State Government exercising day-to-day control over the functioning of local governments. Thus, a balance has to be struck between the functional autonomy of the local governments and the State Government’s responsibility to ensure proper governance under law. The powers of the State Government should be confined to a few items like suspension or cancellation of any resolution and dissolution or supercession, of the local body under special circumstances. But even such powers should be used sparingly and only after a report from the local body Ombudsman. The Commission has already recommended the constitution of a local body Ombudsman for a group of districts in para 3.8.4 of this Report. It has also recommended that where a group of districts includes a metropolitan city within its fold, there should be a separate local body Ombudsman for it. In case of resolutions passed by the ULBs which are considered by the respective State Government to be beyond their purview or where the State Government is of the opinion that on grounds of absolute breakdown of the administrative machinery or financial bankruptcy or entrenched corruption etc. the ULB(s) needs to be dissolved or superseded, it should place the records before the local body Ombudsman concerned for investigation. The Ombudsman should308present fAtheAStat pre A entAhi /h rAr portAo At eAm tterAtoA he Gov rnorAo AtheASta e. Fur her,A dicate thatA Go ernmen Aha Awithin Aits possess on Arecords or Aadequ te Are sons,Awh chAi Ac ses Aal oA a ti n Ashould A eAiniti ted aga ns Aan AULBAor its AelectedArepr se tati es, Ai Asuc cas s Aalso,A itA hou dAplace theAre ord AbeforeAt eAO budsman Afor Ain es igati n.AIn theset e AOmbu sman sho ldAsen Aits Ar p rt Awithi AaAs ec fied time AtoAtheAGo ernor.5.8.4ARecome dations:A .AMunicipal govern ents shou dAhave Af llAa ton myAoverAth eAfunction /activit es devoled to the .Ab.A fAtheAStat AGove nmen Afeel Ath tAthereAareAc rcum tanc sA hatAmakeA tA ecessar At Asuspen Aor rescindAan Aresol ti nAp ssedA yAthe UrbanA oc lA odiesAor to dissolveA rAsup rs de Athe ,Ai As ou dAnot A oAsAunles Ath Amat erAhasAb en ref rredAtoAt eAcon erne Alocal Abo yAO bud manAandAt eAOmbudsma Arec mmendsAucAac io .Ac AIf,Aon Aa yAo casio ,AtheAStat AG ve nmentAisAi Ap ssessio AoAre ordsAorA lAB diesAor asAadeq at Areasons toAini iate Aac ion again tAthe UrbanA ocAlocalAbo its yA AelectedArepr se tative ,AitA hou dAplace theAre ord Abefo eAth Ombudsm nAc ncernedAforAinvestigation.309CONCLUSIONDemocratic governance and citizen sovereignty are the bedrock of our Constitution. Democracy flourishes and citizens get the fruits of good governance only when most decisions are taken closest to the people. Such a people-centred governance process not only enhances participation and legitimacy of our political system, but also ensures greater effectiveness in delivery of services and accountable governance. A democracy matures only when the link between the vote and public good is firmly established in the citizens’ mind. People would be willing to pay taxes only when the tax money is deployed for better services in the locality in a manner that the tax-payer appreciates where the public money is going. Unless authority at each level matches the responsibility, we will continue to preside over a dysfunctional system of alibis, and citizens will continue to be disenchanted with our democratic process. This report and the Commission’s recommendations are based on this clear and unambiguous logic of democracy, legitimacy and efficacy.Three basic issues need to be addressed while empowering local governments. First, democratic institutions need careful nurturing, abundant patience, and institutional designs that maximise the benefits and ensure constant self-correction. Second, transfer of power in any form is painful and difficult. Local governments are only now taking roots after 60 years of independence. As state governments have come into their own over the decades, there is a natural tendency to hold on to their turf, and resist empowerment of local governments. Giving up power is never easy, and is unsually resisted. The states should therefore be enabled to discover a new and vital role, even as local governments become stronger and more vibrant. In some ways, the union government discovered such a role in respect of the states over the past two decades. Political, economic and legal changes completed transformed the union’s role vis-à-vis states, and yet while union control has declined, its leadership and coordination role are more important than ever before. Such a transformation in the role of states vis-à-vis local governments is critical. Third, local government empowerment must ensure continuity and accountability. There cannot be a wholesale extinction of existing institutions and negation of current practices overnight. A careful transition and utilisation of the strengths of the present arrangements are important. Equally, decentralised power should lead to greater efficacy and accountability, not merely decentralised corruption and harassment.The Commission has attempted to balance all these considerations while making its recommendations. All democratic transformation is based on continuity and change. We believe India is ready for a fundamental governance transformation, and empowered, citizen-centric, accountable local governments are at the heart of this transformation. We310Summary of Recommendationsare oAa A oint Awher A a eAconfient that within theAne tAdecadeA ndia Ademoc ac A ill Am tureAnAstak hol ers’A mostAde isions Aaffcting citi en ’Aliv sA ill beAta en Aa Athe A ra s Aroot AlevelA in Aman gi gAt eA roupsAandAlo alAgover ment ; Aci i ensAwi lAh ve AaAdir ct Aa d A ffectiveA oleAeffctive, AfairA affairsAof the collect ve;AandA erv ceAdeliver Aand Aday-t -day go ernanceAw llAb re omm ndationsA d At hisAReport gives pranspar nt.AActic lAshape toA his vision, AandAtheo AtheAC mm ssionA houldAbeAvie ed holisti ofal ythsAin pursuitvision.311SEVENTH REPORT: Capacity Building for Conflict Resolution – Friction to FusionSECOND ADMINISTRATIVE REFORMS COMMISSIONFEBRUARY 2008CAPACITY BUILDING FORCONFLICT RESOLUTIONFRICTION TO FUSIONGOVERNMENT OF INDIASECOND ADMINISTRATIVE REFORMS COMMISSIONSEVENTH REPORTCAPACITY BUILDINGFORCONFLICT RESOLUTIONFEBRUARY 2008PREFACE“Better than a thousand hollow words is one word that brings peace.”– Lord BuddhaConflict is an unavoidable facet of human life. It is as much an internal process of the human mind when it evaluates the pros and cons of a decision, as it is a part of the individual’s daily interaction with others in society. Some philosophers have attributed all progress to the continuous process of conflict and conflict resolution. The absence of conflict may be an impossible condition to reach and it may often mean brutal repression or callous indifference by one section vis-à-vis the rest. The maturity of a society is thus measured not so much by the absence of conflict in it as the ability of its institutions and procedures for resolving it. The more broad based and impartial this mechanism, the less is the likelihood of discontent and disaffection festering in it. The State with its organised judiciary is the final arbiter of all conflicts, but there always exist traditional means of settling matters at the level of the family and the community and most issues do get resolved at these levels.We have been extremely fortunate in India in our rich and diverse heritage, which has contributed immeasurably to producing a vibrant culture and nation. We must recognise the importance of sustaining, in every way, the processes of democratic dialogue to enhance the quality of our society.Democracy is, in fact, essential for conflict resolution and nation building, particularly in pluralistic States. It is only within a democratic framework that the aspirations of all constituent elements can be fulfilled. It is only through mutual understanding, mutual respect and the processes of dialogue that genuine grievances can be removed and the miasma of misperceptions dissipated. Conflicts and differences cannot be removed by Government decrees nor can the energy of diverse elements be channelised towards nation building except through the means and methods available within a democratic framework.India was and is a mosaic of languages, cultures and ethnicities, not simply tolerating each other but accepting and harmonising all the diversities as part of the composite whole. Dr. Ambedkar’sito war ing w ile fra ing the constitut on in it e f a signifiant conlict resol ing docum nt, wari rge Ind ans no t be con ent ith ha he ca led ‘ ere polit cal democra y’. I dia had got lly of a ien r le, bu it was s ill dr ve by inequa ity and hierar hus,hy.nce the cou try formic be a e a repu li o 26 Jan ary 1 50 it was g in to e t r a if of contradicti ns. “In poli be we ill ave equa ity an in so ial and econ mic if we ill ave inequal ty In poli ic we il fe recogni ing the princ pl of one man one ote and one ote one va ue In our so ial and econ mic l man we sh ll by re so of our so ial and econ mic struct re, cont nu to eny the princ pl of one nu one va ue. How ong s al we cont nu to ive his if of contradicti ns? How ong s al we cont nl to eny equa it in our so ial and econ mic l fe I we cont nu to en it for l ng we il d so by put ing our polit cal democ ac in periil”.ithA ter Independe ce, the lea er of I dia ha to ive ser ous tho gh a to ho to eal the the trib ls, particul rl of the N rth E st. They ere gra ted auto om in any a eas u deria S xth Sche ul to the constitu io of I dia u ing the flexibi ity and con lict resol ing poten eir of hat docum nt. Pa dit Jawaha lal N hru nce s id, “a low the tri al to row accor in to t ira own geni ”. That was the b sic po icy frame or of the Govern en of In ia. hen mt. In on Ga dhi be ame P ime Minis er, she e t a tep fur he to say hat the democr tic aspirat ood of the pe ple us be recogn sed nd in s it of the act ha if hey ere gra ted state and t ere w uld no be econ mic viabil ty, Aruna hal Prad sh, Meghal ya, Trip ra, Mani ur, Mizo am, all s all Sta es, ere create .alsThe responsibi it of brin ing a ou an understan ing bet een the tri als and non-triout l es of cou se, ith the l cal leader hi in the reg on. uch leader hip us be ery c ear a its pol cy. ery o ten t er s a tend nc of capitali in on the i sue particul rly du ing electi ns, an in competi ion ith o her polit cal part es to pro ect ourse ve s a be ter cham io of the tr bal case Pt.n a remark ble discus ion hat A dre Mal aux had ith Jawaha lal Ne ru he a kedern N hru hat his princ pal ask as. And Pt. N hru repl ed: “My irst as i to cr a e a new mo the S at on the b si o an anc ent civiliza ion an my se ond as i to cr a e a sec lar S at on ie b si f a profou dly relig ous socie y”. N hru expre sed t ese v ew to Sa dar P tel an n a se he of let er he w ot to the c ief Minis er of var ous provin hree moes.ths a ter Parti ioremi ded hem that “We a e a Mu lim mino ity who ar so l rg in num ers hat hey can ot, ve if hey w nt go anyw ere e se. Tha s a b sic act a out w ich t ere ca b no argum nt. What ver the provocaionfrom Pakistan and whatever the indignities and horrors inflicted on non-Muslims there, we have got to deal with this minority in a civilized manner. We must give them security and the rights of citizens in a democratic State. If we fail to do so, we shall have a festering sore which will eventually poison the whole body politic and probably destroy it”. Panditji defined secularism in the following words:“It means freedom of religion and conscience, including freedom for those who may have no religion. It means free play for all religions, subject only to their not interfering with each other or with the basic conceptions of our State. It means that the minority communities, from the religious point of view, should accept this position. It means, even more, that the majority community, from this point of view, should fully realize it. For, by virtue of numbers as well as in other ways, it is the dominant community and it is its responsibility not to use its position in any way which might prejudice our secular ideal”. He stated further: “It is a question of building a secular order in a country which has profound religious beliefs. And, here again, religious beliefs, rituals, spirituality, and culture cannot be easily separated. This is true of Islam basically and also true about a great deal of other communities who come under the overall umbrella of Hinduism”.About disputes and discord in general, Panditji had said:“In ages long past a great son of India, the Buddha, said that the only real victory was one in which all were equally victorious and there was defeat for no one. In the world today that is the only practical victory. Any other way will lead to disaster”.In the Constituent Assembly (legislative) a resolution was moved on 3 April 1948 by M Ananthasayanam Ayyangar to ban communal parties. Ayyangar said that time had come to separate religion from politics, that for the proper functioning of democracy and for national unity and integrity, it was essential to root out communalism from the body politic of India. Any political party, the membership of which was dependent on religion, caste etc., could not be allowed to engage itself in any activities except those connected with the religious, cultural, social and educational needs of the community. It was some forty-five years later that a serious attempt to delink religion and politics was made with the introduction of the Constitution (Eightieth) Amendment Bill, 1993 on 29 July 1993.As Rajiv Gandhi had said, “Secularism is the basis of our unity. And any force that is out to counter secularism, any communal force, any religious force, any political force that relies on communalism or on religious interests must not be allowed to use this interest to weaken the nation... Communalism isiiia danger that is common to all in India. Our strength will lie not in allowing this to flourish but in seeing that everyone’s interest is fulfilled by reducing communalism”.In a BBC interview, the viewpoint that Rajivji put across on the Sikh militancy is worth mentioning:“Ever since Sikhism took root, it fought for India’s integrity and unity. Sikhs have played a part in building India and they are playing a part even today in taking India ahead”.The real problem in many of our States and regions is economic; the conflict is over resources but camouflaged in various forms of identity politics based on religion, on caste, on region, on ethnicity, on language and less frequently based on ideological divides. For example, the North Eastern region was neglected right from the very beginning. Nothing was done during British rule for many reasons, because it was a partially annexed territory and the tribals would not cooperate. After Independence, there was a composite Assam State. Due attention was not given to the tribal people. Real developmental work after Independence started only in the 1970s when the new States came into being.Economic development in the North Eastern region has lagged behind the rest of the country due to lack of major capital investments. There has been very little investment in the area by the private sector or in the form of foreign direct investment. The share of the entire North East in the central public sector in the country also remains extremely low. It is only the budgetary support given by the Union Government which is spent on infrastructure development, roads, education and health services thus leaving practically nothing to be spent on productive employment generating sectors.We have been all the way to the moon and back, but have trouble crossing the street to meet the new neighbour. (His Holiness, The Dalai Lama, The Paradox of Our Age)The questions that Indians have to find answer together are: What kind of country do we want to be? What are the essential characteristics of this nation that we aspire to have? What is the place we want to occupy in the community of nations? This must be a shared vision in order to motivate people to align their efforts to achieve it. Shared visions cannot be created by presentations of numbers and intellectual debates. Nor are they shaped by political negotiations. They require deeper dialogues. Moreover, these dialogues must include the wants of the many diverse stakeholders in the future of the country. Creating a shared vision is a first step, but notivenough. From ngeAunde ly ngA en ugh. FromA hi Afirs Ag ar,A e Aha e Ato Am ve Ain oAsec nd ge r, AwhichA sAtoAchall he rie Ai Aus AofAhowAwe canAac elerate cha geAtowadsAo r A i ion.Aations with utAThre is A Asa ing AinAth AOl ATe tame t A inAthe Abook Ao AEcc esiaste )AthatAnsAcan ot hav A visi nAwill A erish.A notherAe ually A ro ound sayingA sAt atAnations Aan Aorgan zati visio Ai Athe pe ple inAt em AdoAnotAha e vision .Such A Avis onAari e Afro Aw thinA–Afrom anAa pirati n, A r mAcari gAfo AaAcause,Afr mApassi n telyAw nt ng A Achange Ai At eA onditionAof A n A rganiza ThonA r A ation. A in Aof Gand i AHe Ahad su hAa vision. A oAdid Jam etjiATa a, the foun erAof Ath ATataAb sines Aemp re,Aab utAw omAG ndhiA ai Ath fiAwhile he A asAut ng Afor AIn ia’s Apolitica Aind pen fince, AT ta A asA ghtingAf rAits Anconomi Thind pendence. AT se Av sio aries A eekA heAanswe Athat AAmer can Atheo ogianAR inhold Ni buh Asought inA isAp ayer A“ hAG d,AgiveA eA heApat enc AtoAac e tAthe A hingsAI can otAchan e, theAco rag AtoAch n eAth Ath ngs IAcan, an Athe wis om AtoAknow AftheA if ren e”.Wha Ais AourAsh red asp rationAf rAou Ac unt y? AWhat is theA oun ryAw Awant nd willAc mmitAto build? ADiver eAstake ol ers Ame ting AinA aipu Ar cent yAc me AupAwithh Afol owin :gedAwa ,A‘a naA ? AAAmuc Amo eAeffectiveA ndAacc un ableAsystem o Agove nance. A Athe eAeme of Athis A‘ap iA pais ,Aap a Ahisa b’A ourAmoney Aou A ccount), AandA Acomple en ary Av riant mehna ,Aap afAhisa b’A ourAefor t, ourAaccount).u tAat AtheAt p. ? AE tre reneurship an Ale dership at A ll Alev ls AnotAme ely in A ocke sA nd A otAjr du eAresu ts. ?Aco le tiveAac ion AtoApA ndian values. ?A n A ndianAmodel A f Adev lo ment,A uiltAons achieveme ts. ? Indi As and ng Atal AinAthe Awo ld, rec gnisedAforAitv lAofAp ve ty. ? AInclus veA evelo mentAan Ar pidAremo AGrow h AofAtheA u al Aecono y.?AA Ato erantAsoc et ,As nsiti eAt Athe Anee s A ndAfeel ngs AofAdiverseA eo les.N thing inA heseAgoals Aare con ro ers al;Ac nA e Ano A greeAto suc Aa minimumAseAof obje tivesAand Awa ko chieveA and-in- andthem?AtvWe have sighted our targetAnd need to decide that if we move togetherNothing is hard to getLet us each one be specialBut knit our strengths aroundFor we want a countryThat’s first on the count*It is in this spirit that the Second Administrative Reforms commission (ARc) in its Report on capacity building for conflict Resolution has tried to examine the background and emerging facets of the many conflicts that plague India. These have been detailed in separate chapters ranging from left extremism to land and water related conflicts, to conflicts based on religion, regional disparities and social divisions (with particular focus on the Scs, STs and the Obcs) as well as conflicts based upon political identity and ethnicity such as the militancy in the North East. The Report thereafter looks at the extant operational and institutional arrangements for conflict management and how the capacity of these mechanisms can be strengthened so as to better manage and resolve conflicts in the country. It is our hope and prayer that the suggestions in this Report can contribute in some small measure towards our common goal of nation building.I would like to express my deep sense of gratitude to their Excellencies the Governors of Assam, Meghalaya, Manipur, Tripura and chhattisgarh and also to Hon’ble chief Ministers of Assam, Meghalaya, Manipur, Tripura, Nagaland and chhattisgarh for the extremely valuable suggestions given by them during the visit of the commission to their States.New Delhi(M. Veerappa Moily)February 06, 2008Chairmanvi*AE tract d Afrom:A‘Di cordantADem cr ts’, byAAru AMaira;A( ar a edAbyAa AP in i alAofA AS hoolAi AD l i,Aat AaAmeeting)Government Go ernmentAofAIn ia inistry Aof Person el,APublic G ievances&APension De artmentAofAAdm nistrat ve A eforms andAPublicGrievancesRe olutio New Delh ,AtheA3 stAAugu t,A2005of In uiryA No. AK-11022 9 20 4-Rc. A—AThAP esident is ple se A oAset AupAa co missiona Adetaile A t Abe called the AsecondAAdm nistrat ve AReforms commi si n A(ARc) t Aprepare bl eprint Afo Are amping theApublicAadm nistraton sy tem.Aollwing 2. : AThe comm ssionAw ll con istAofAthAhairerso A(i)ASh i AVee a paAMoilyA-AA-AMeber A ( i)AShriAV.AR m chandr A-AMmbe A A (ii )ADr. AA.P A ukherjoA-Mem er (iA )ADr. A H.AKal-AMeber* (v)ADr. AAayaprak s ANaraya A(vi) AS t.A i eeta ARai A-AMembe- S cr taryAcountable,A 3.AThe comm ssionAw ll Asugge tA easures t AachieveAa proactive, A esponsive,Aa ov rnment.A ust inableA ndAefficientAadm nis rat on AforA he cou tryAat al Ale elsAofAtheAollwingA: The commi sion A ill,A nter Aali ,Ac nsiderAth AtAof India (i) AOrgAnisationa As ruc ureAofAthe Go ernmegover ance A ii AEthicsAinnist ation (iii) ARAfu bishingAo APersonnelAAdmntA ystem A(iv)ASt en thening Ao AFinancial Managem tate level (A ) AStep Ato Aensu eAeffectiveAadm ni tra ionAa AtheA nistr tion (v ) AStep Ato Aensu e Aeffecti eADistrictAAdmstitut ons A vii)AlocalASelf-Government Pan hayatiARajAIeAde ivery (vA ii) ASoci lAcap tal ATrustAandAPa ticipa iveApub icAservinis ration (ix) AcitiAen-centricAadmgove nance (xA APromotingAealAPo ityA A xi AIssues ofAFedManage ent (A ii) AcrisisA(x ii)APviiSome of the issues to be examined under each head are given in the Terms of Reference attached as a Schedule to this Resolution.4.The Commission may exclude from its purview the detailed examination ofadministration of Defence, Railways, External Affairs, Security and Intelligence, as also subjects such as Centre-State relations, judicial reforms etc. which are already being examined by other bodies. The Commission will, however, be free to take the problems of these sectors into account in recommending re-organisation of the machinery of the Government or of any of its service agencies.5.The Commission will give due consideration to the need for consultation with theState Governments.6.The Commission will devise its own procedures (including for consultations withthe State Government as may be considered appropriate by the Commission), and may appoint committees, consultants/advisers to assist it. The Commission may take into account the existing material and reports available on the subject and consider building upon the same rather than attempting to address all the issues ab initio.7.The Ministries and Departments of the Government of India will furnish suchinformation and documents and provide other assistance as may be required by the Commission. The Government of India trusts that the State Governments and all others concerned will extend their fullest cooperation and assistance to the Commission.8.The Commission will furnish its report(s) to the Ministry of Personnel, PublicGrievances & Pensions, Government of India, within one year of its constitution.Sd/-(P.I. Suvrathan)Additional Secretary to Government of India*Dr. Jayaprakash Narayan – Member, resigned with effect from 1st September, 2007 (Resolution No. K.11022/26/207-AR, dated 17th August, 2007).viGovernmenG ve nmentAof AIndi Mi istry AofAP rsonne ,APublicAG i vances A&PensionsD pa tment AofAAdmin r strativiARe ormsAa dAPublicAGevan ces......RESO UTIONN wAD lhi, theA2 thAJuly A2006mAof At eA No. AK-11022/ /2004-Rc ( ol II) A– ATheA re ident Ai Ap easedA oAe tend th Atebm ssi nA secondAAdmin strativ AReforms Ac mm ssi nAby oneA ear Aupto A 1.8 2007 AforAsof Ait AR por s Ato Athe AGovernnt.Sd/ AA(Raharin)AAAAA ditionalA ec eta yAtoAtheAG ve nmentAofAIndiaG ve nmentAof AIndi Mi istry AofAP rsonne ,APublicAG i vances A&PensionsD pa tment AofAAdmin strativ ARe ormsAa dAPublicAGrievancesRESO UTIONN wAD lh ,Athe 17AJuly,A2007eAsecondA No.K-11022/2 / 00 -AR A– ATheA re ident Ai Ap easedA oAe tend th Ate m AofAt 2008AforA Admin strativ AReforms Ac mmiss on (ARc) by Asev nAmo ths AuptoA 1.3 s bm ssi nAof Ait AR por s AtoAtheAGovernnt.Sd/- A(Sh shiAKanarma)AAAAA ditionalA ec eta yAtoAtheAG ve nmentdiaInixCONTENT C apterA1AIntrductionA meworkA C apterA2 ConflictARe o u ionA–AAACo ceptualAFa C apte A3ALeftAEt remismA1 C apte A4ALand RelateAIssuesA3 C apter 5AWater RelateAIssuesA5 C apterA AIssues Re atedAtoAS heduleACastesA6 C apterA AIssues Re atedAtoAS heduleATribesA8 C apterA AIssues Re atedA oAOtherA ackwardClassesA9 ictsA C10apterA9 AR ligious l Ao n f ctsAA Ch12pterA10A oli icsl AandAnfi Ch pter A11A egionalADisa ritiesA13 EastA Ch14pter A12Alicton AinAt eANothA mentA18 Ch pterA13AOpe ationalAArra gem ntsAfor ConflictAMaa ge Ch pter ent A14 A185 AInsti utionalAArra gem ntsAfor ConflictAMaa geionA Co202 Aclu ionsSu20mary AofARecommedatFATAB ES LIST AOo.A T bleAN itlea nAives 2.1A onflctsAa dAHum00 3- A06 3.1ASt te-wis AE tentA fANaxalAi lenc A A2ta ionA 6 1ASte sA akenA y AState AGov rnm nts AforAImplem 9,AandA of Scs/STsA(PrAve tion AofAAtr citi s) AAc ,A1ct ,1955 PrA te tion A fAcivi ARig tsAAeduled 7.1A is osalA fAc sesAfo AcrimesAc mmitted againstAS AT ibesAb Acourt Aduri n g20069.1 A na ysi AofAtheA ommunalA iolenceA(Pre ention,ont olAAandARehabi it tionAofA ictimll, )2005Abix9.2Comparison of Provisions Related to Relief and Rehabilitation in the NationalDisaster Management Act, 2005 and the Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 200511.1Per Capita NSDP12.1Incidence of Violence in the North East12.2Summary Information of “Tribe Specific” AutonomousCouncils in AssamLIST OF FIGURES Figure No. Title2.1Stages of Conflict6.1Number of Cases Registered Under the Protection ofCivil Rights Act, 19556.2Number of Cases Registered Under the Scheduled Castes andSchedule Tribes (Prevention of Atrocities) Act, 1989.7.1Poverty Ratio (Rural)7.3Infant Mortality8.1Poverty Ratio (Urban)8.2Under Five Mortality Rate8.3No of Persons Unemployed/1000 according to theUsual Principal Status – Rural8.4No of Persons Unemployed/1000 according to theUsual Principal Status – Urban8.5Asset Ownership8.6IndebtednessLIST OF BOXESBox No.Title2.1Brains vs Bullets3.1The Godavarman Case3.2Naxalism in Pavagada, Karnataka3.3Government Policy to Deal with Naxalite Menace4.1Financial Payments for Rectifying Past Under-payments5.1The South African Example – The National Water Act, 19985.2The French Example – Integrated Basin Management5.3The Chinese Example – The River Basin Commission14.1Dispute Resolution at Village LevelxiLIST OF ANNEXURESAnnexure-I(1)Speech of Chairman, ARC at the National Workshopon Conflict ManagementAnnexure-I(2)List of Panelists and Participants at the National Workshop onConflict ManagementAnnexure-I(3)Brief Summary of Recommendations made at the NationalWorkshop on Conflict ManagementLIST OF ABBREVIATIONSAbbreviationFull FormACAutonomous CouncilARCAdministrative Reforms CommissionBBCBritish Broadcasting CorporationBRGFBackward Regions Grant FundCABECentral Advisory Board on EducationCADPComprehensive Area Development ProgrammeCMPCommon Minimum ProgrammeCPI(ML-PWG) Communist Party Marx – Peoples War GroupCPRCentre for Policy ResearchCrPCCriminal Procedure CodeCSOCentral Statistical OrganisationDDPDesert Development ProgrammeDONERDepartment for Development of North East RegionFDSTForest Dwelling Scheduled TribesFIRFirst Information ReportGDPGross Domestic ProductGNLFGorkha National Liberation FrontHaHectaresICSSRIndian Council of Social Science ResearchICTInformation and Communication TechnologyIFASIndian Frontier Administrative ServiceIIPAIndian Institute of Public AdministrationIPCIndian Penal CodeITIIndustrial Training InstituteJNUJawaharlal Nehru UniversityLAMPLarge Area Multipurpose Cooperative SocietiesxMCCMc-IAMao st Acommun stAcen r A–AIndia rsAHA AMinis ry of AH me fAAfaard MIcAMulti-purp seANatio alAIdent tyAc bAANarm daAbac aoAAandolanNMcANatio alAcri isAManagem ntAcommitteeNbAANatio alAcr me AReco dsAburea uDcANatio alADevelopm ntAcounciNE ANo thAEastEc ANo thAE stAcouncilNEFc ANo thAEast rnADevelopm ntA nd AFina ce Acorporat onAltd.NEEcO ANo thAEast rn ARegio al AElectri alAProje tsAcorporationNEIGRI MS ANo thAEast rnAInd raAGan hiAInstit te of AHea t A& AMedi alASciencesNEHDcANo thAEast rnAHandl omA ndAHandicra tsADevelopmntAcorporationNHu ANo thAEast rn AH llAuniversityNPA ANo thAE st APol ceAAcademyNERAAc ANo thAEast rn ARegio alAAgricultu alAMarket ngAcorporationGO A onAGovernm ntAOrganisationNRcANatio alAHu anARig tsAcommissio nIcANatio alAIntegrat onAcouncilNlPR A onAlapsa le Acent al AP ol ofAResources essPcANatio al APeopl ’sAcongrent NcRANatio al AResea chAcen re A orAResettlemAc t NRGAANatio alARu al AEmploym ntAGuaran eeAan d NcNANatio al ASocial st Acoun il ofANagaluc t NDPA etASt te ADomes icAProdi o n NSOANatio alASam leASur eyAOrganisatses OcsAOt erAbackw rdAclasies PFsAProj ct AAffec edAFamil cRAProtect on ofAci ilARightsPSAAPanchay tsA(Extens on to A heASchedu edAAre s)AA t,A1996OAAPrevent on ofAAtrocitiesPOlET APol ceANetwork&RANatio al ARehabilitat onA nd AResettlem ntAPolic yROsARi erAba inAOrganisatixiiiSCsScheduled CastesSCSPScheduled Caste Sub PlanSEZsSpecial Economic ZonesSHGsSelf Help GroupsSMRSuicide Mortality RateSPOsSpecial Police OfficersSTsScheduled TribesSYLSutlej Yamuna LinkTNVTripura National VolunteersTRIFEDTribal Cooperative Marketing Development Federation of IndiaLimitedUKUnited KingdomULFAUnited Liberation Front of AssamUPSUsual Principal StatusUSAUnited States of AmericaUTUnion TerritoryVATValue Added TaxWWFWorld Wildlife Fundxiv1 INTRODUCTIxv Ng 1 he Ter1s f Referen e f t e Seco d Administrati e Refor s commissi n pertainioPubl c Ord r cov r t o speciic issue , namel1y:( ) Sugge t a framewo k o strength n t e administrati e machine y o maintan publ c ord r conduci e o soci l harmo y a d econom c development.(i ) capaci y buildi g f r confli t resolution.F r reaso s indicat d n i s 5 h Repo t n Publ c Orde , t e commissi n h d decid dode l wi h t e abo e t o issu s n t o separa e report t h s alrea y submitt d i s Repot o n Publ c OrdeTh s Repo t n capaci y buildi g f r confli t Resoluti n s a sequ lt e Repo t n Publ c Order .s 1 2 n t e la t f w decade , conflic s ha e aris n n o r count y fr m multip e caus s su h a cas e a d trib l issue , religio , region l disparitie , povert , la d a d wate , ju t o na efeThe e h s be n considerab e resear h n w y conflic s occ r a d h w o resol e thes Su h researc , howeve , provid s on y a gener l treatme t f t e subje t a d t e ro t remai y mi e ridde . conscio s f thi , t e commissi n h s undertak n a comprehensi e stu n f t e probl m f confli t resoluti n includi g organisi g worksho s f r consultatio s m speciic conflic s n Ind a a d throu h discussio s wi h a lar e numb r f individua s fr differe t wal s f lif , w o ha e h d experien e n deali g wi h clonfict.t 1 3 Amo g oth r thing , th s Repo t disti s t e discussio s t a worksh p n clonfic resoluti n organis d t t e behe t f t e commissi n o delibera e n t e natu e f publt expectatio s a d t e kin s f refor s th t wou d ne d o e undertak n f r t e clonfie resoluti n mechanis s o e mo e responsiv .he weal h f informati n provid d y t. participan s n t e worksh p h s giv n valuab e inpu s f r t e preparati n f th s Repor he worksh p w s coordinat d y t e cent e f r Poli y Resear h (cPR , N w Del i ad Kanna a universit , Ham i a d w s he d t t e c R n 4 h a d 5 h Februar , 200.OCapacity Building for Conflict Resolution1.4 The Report is organised in four parts.The first part, which is this, is a very brief introduction. The second part provides a conceptual framework. The third part deals with conflicts arising out of issues related to caste, class, religion & region as well as land & water related issues. The fourth and the last part deals with the institutional framework for conflict resolution.i1.5 The Commission expresses its gratitude to Shri S.K. Das, Consultant and Shri Naved Masood for assisting the Commission in drafting this Report.1.6 The Commission is grateful to Shri K. Asungba Sangtam (former Member of Parliament) for preparing a Report on “Conflict Resolution and maintence of Public Order in the North East with central focus on Nagaland” which has been utilised in drafting this Report by the Commission. The Commission is also grateful to Shri P.K.H. Tharakan for his invaluable inputs.iIssues related to terrorism in Jammu and Kashmir are dealt with in the Report on Terrorism2ESOLUTION2CONFL CA CONCEPFRAMEW RKTUA– Per pective 2.1 Conflc Resolutionwho see thei 2.1 1 co flict h s e n defined s a sit ati n etwe n two o mo e p rties ion, but som p rspectives as ncompati le.1 c nflicts h ve a nega ive beneficia co nota re a te chan e. conflicts ar des rab e as t ey cane of itself . 2.1 2 J hn D nne, th 16th centur po t, ro e, ‘No ma is an is and enti sp n a n mber I dividuals ee themsel es a member o a var ety o grou s wh c often caste, cl ss, of th ir nterests F r example, a individual’ geogra hical o igin, ender,m a mem er of langu ge, politi s, ethnici y, rofess on and soci l co mit e ts mak h ngs, ten s to v riou g oups. Each of these c ll cti it es, t al of which he indiv dual elgive hi a particu ar dentity, b t t gether h has multiple id nt ties.has p opelled 2 1.3 The searc f r identity is a powerful psychol gical drivi g f rce which r an imag ned human ivilizat on 3 Ide tity is of en evoca ive. I dea s it a mythilisa io . Thec mmu ity whi h has all the power and poten ial necessary for political moindividu l’s sen e o identity an contrib te eno mously t th stren th an warmth of a w citi ens or elatio s wi h the s such as h s neigh ou s, embers of is com unity, f ll ted by obert peop e w o pr fess the s me religio .4 The con ept of s cial capi al advoc Pu nam ells u how a s ared identi y ith othe s in t e same so ial comm nit can ak th live o all those in ha com unit so much m re armonious a d eani gful. T th t ext nt the sens o be onging to the so ial com u ity beco es a valu ble re ourc ; almostli k e api al.5 cl sive sens .1.4 And yet ide tity c n a so k ll – and kill i h aban on. A strong and e the onfl cts o be ongin to o e roup does, n ma y ases, le d to co flic . Many on s ch as s, today are sus ain d throug t e illusi n o a unique nd choice es ide tity. power of ome the art of manufa turin ha red ak s the fo m o invokin the ma ined nstigati n, alleged y predom nant identit that tota ly verwhel s al others. With suitabl a os ered sen e of ide tity it one g ou of p ople is o t n made i to a pwerful w aponMSW and M nal 1conflct esolutio and Violen e Pr vention: From Mi un erstanding to nders anding lar y cohe , MSW, Rac el avis,df/confi t .pd Aboelata; 6), Al en lane 2Amartya Sen Identity an Violence ThIllusi ns of D stiny (200hnic Soc etie 3Kum r Rupesing e, overnan e and conflct Resolution i Multi-et Destiny (2006) 4Amartya Sen Identity an Violence ThIllusi ns ofican com unit 5 obert P tnam, ow ing Alon : Thco lapse a d he Reviv l of Amer 6Amartya Sen Identity an Violence ThDestiny Illusi ns(2006) of3capacit buildin fo conflic Resolutiohatred nd o bruta ise ano her an t e resu t i hatred a hed iolence.nten ity of sucvi l nce poses a veri ab e t reat to the ve y fabricof so ie y.7 e enerate. .1.5 We no live in an ncreasi gly vi lent wo ld be ause of he conflictsed thrhe twentugh.eth en ury as, by f r, the ost vi lent period t at hu anity lien ury than lmost th ee t mes as many people we e killed in conlicts in t e twent ethin he p evious fo r centur es combind tog therTable 2 1: onflic s and Lives Period ConHumanlict-rated lated World deathsl population, Con (mil ions) worl poict-re(millionsas share omid-ce tu y dea hspulation%)Sixtenthcentuy 1.6 493.3 0.3 Sevententhcentuy 6. 1 579.1 1. 5Eightenthcentuy 7. 0 757.4 0. 2Ninetenthentury9.41,172.9 1 65Twenteth cntury 19.7rs ty Press.2,519.5 4.352005; othe Sou ce: Co flict eaths ata, ivard 1991, 199 ; twent eth centur popu at on da a, UNpopu ation data, Human Develo ment Report Office i terpo at on ba ed oS y k e s 20 4 .ordering on 2. .6 I f ct, ev n n I dia b th end of the l st century tendenci s into eranc ha e grown and va ious group h ve shown a increasing red lection f r esorting to vi le ce ften at t e slightest pr o vo atio .od systems, 2 1.7 os of ife is only o e orollary f conflcts Others are de truc ion of fa surg of di in egrati n of publ c se vi es, los of income, islocation in e urity an cts, thou h ri es. What s mpor an to ote is th t imm diate c st imposed ly conftion ha to enormou , re r sent nly a sm ll fra tion f th pr ce that the affecte po ules f r long pay. In particular, i stitu io al costconflofct can have ebilitating ons quen s estroye te m growth of society. The physical in rast uc ure s ch s roads a d buildinst, but t e or da aged durlicts can be repaired or rebng onil , thoug at a hea y cthe tr uma reakdown of i sti utions the utu l trust and u ders an ing hat is ost an blood ill th t s h aped on th vulnerable popu at on, ake it very lik ly hat t e ba unremi ti g persist nd onflicts nd v olence wil rec r. They lock entire popu ations into arly st g s cycles of iole ce and that is wh p evention of confli ts or thei r solut on at becomes g pellin47 arsh Seth , ‘Mul ip e cri es in South Asi : Exploring Po si ilities’ in P rticipatory evelopme t, l arnin from South sia, Oxfor univeconflict Resolution – A conceptual Frameworkh 2. Stage o ConflictLif Cycl Approac2.2. conflic i no single-even phenomeno bu i dynami proces havin dfiferen stages Th objective o th partie involved thei approaches th intensit levels th likel damag et al chang betwee th variou phase o conflict’ lif cycle Therefor a optimu conflic managemen strateg differ fro stag t stage Thi make i necessar t hav thoroug understandin o th dynamic o conflic throughou it lif cycl fo applicatio o conflic preventio an managemen strategies5capacit buildin fo conflic Resolution2.2. Th potentia fo conflic wil alway exis isociet wit it member havindifferen mores interests an socio-economi condition an needs Thus i an society fo variet o reasons perception ma b conceive abou grou o communa interest bein harme o relativel deprived I fostered thes ma lea t expression o disconten agains th Stat o othe socia group(s)/communities I suc disconten i no attendet i th primar stage o deal wit imanne whic aggravate th alread prevailinfeelin o injustic don t th group/communitymajo conflic situatio ma ariseThus differen stage o conflic situatio ca b envisaged eac cause b intervention no bein take i tim o throug inep handlin o th situatio an eac cryin ou fo it ow mi o appropriat measures Thes ar presente i th Figur 2 . 12.2.Th representatio o conflic a give i Figur 2. ma b briefl describe i th followin manner:1 Individua an Societa Tensions Suc tension ar create wheneve a individua o grou feel tha he/i ha bee wronge o ha no go wha wa due Suc tension ma als aris du t historica socio-economi inequalities Poo governanc i majo caus o tensio amongs individual an th society.2 Laten Conflict Tension lea t feelin o injustic an giv ris t simmerin discontent However a thi stage thes tension ma manifes themselve i th for o request t authorities etc Fro th poin o vie o th Administration thi i th mos opportun tim fo managin conflic o rathe preventin colnfict However a th Administratio i pre-occupie wit ‘fir fighting measures th earl symptom o laten conflic ar ofte overlooked3 Escalatio o Tensions unattende grievances overlooke concerns neglecte tension b th Administratio lea t furthe aggravatio o th discontent h T stan take b th opposin partie begin t harden Hal hearte attempt i thi phas prov t b o littl help Th partie involve expres thei feeling throug mor aggressiv method suc a demonstrations processions strikes ‘bandhs an th like.4 Eruption Tension i no manage properl lea t situatio wher smal ‘sparklead t eruptio o violence Th ‘spark o th trigge ma b itsel no bmajoevent bu i lead t furthe polarisatio o th peopl involved an become a excus fo th violen eruption Normall th Administratio swing int actio a thi stag an trie t contro th violence I ha bee observe tha eve afte th6conflict Resolution – A conceptual Frameworkviolen e has be n cont ine , ade uat effo ts are oft n n t mae to a dr ss he flootca ses of the Thon ic . smtuntion simTis s si uation imilar t th ‘l ten tension’ an has he potenti l to eruptat r gu ar in er al .2.2.4 It eeds to be e phasis d tha at e ch stage, the e woul be gover ance ssue i volved. Whil lack of gove nm ntal ntervent on or inept han ling f th s tuat on fict, ppropria e and ould ten to push he eme gent situa io tol the ext stage o co ct situat on What is ti ely easur s wo ld in most ca es lea tol res lution of he c nf sit ation i re ched, mp rta t to ecognis i the abov ontext is that once a talemate s nd eruption . Suc t e conflic may e ter a c cl cal phase leading to rec rrent esca atio proach to alvage th an eve t alit would equ re a more com lex and ul i-prong d a ti g in de- sca ation situa ion, inc ud ng taking re our e to negoti tions and se tlement, resuof t ns ons and init ation i of post-conflct co fdence-bildi n peac processliv lih od A a d has 2.2.5 Jo an Galtun , D rector T ans end a d winner o the ighMeans (t e Tra scend ome outlict Tranith a manual “ onforma ion y Peacefu ts. The bas c premis s Meth d)”8 whi h deals wi h eacefull approache t reso ve confion of t e worb hind he approach ar ba ed n tho ghts of t e ix ajor r h ligi h l s that:l . Tusreator as aliour e of? on t is a de troyer as a ou c of vio en e it is a ns orming t e conflic de elopment; the ro e of pre er er can be ac iev d by trby avoiding iolence andp omoting evel pm nt.ws togethe i mutua ? conflcts ha e no beginning nd no end; eve yt ing grsi gle actorcaus tion; n si gle actor carries ll he respon ibili y and nall t e g ilt.c rrieswith individua s: on ? ultimate y, he resp nsibility for onfli t tr nsformation ie he r dec sio s o a t in peac a d on t e principl o hop .? Ever thing is good or bad; th re i hi h like ihood hat he ction ch sen also has neg tive conseq enc s and hat acti n not ch sen may haveositi e onse uen es; there is eed for evers bili y a d nly doinwhat ca be undo e.? eriving st ength fr m u mittin toge her to aommon goal, in lud ng esponsibil ty for7the well being of all.8Source: buildin fo conflic ResolutionTh trut lie les i verba formul tha i th dialogu t arriv a th formulaan tha dialogu ha n beginnin an n end.2.2. base o th above th manua propose proces wher th conflic formatio i mappe i totalit wit regar t al parties al goal an al issues forgotte partie wit importan stake i conflic ar brough in emphati dialogue ar hel wit al partie singly acceptabl goal ar identifie i al parties forgotte goal tha ma ope u ne perspective ar brough in an over-archin goal acceptabl t al partie ar worke out.2.2. I woul b necessar i societie emergin fro histor o huma right violation an atrocitie t formulat lon ter strategi actio pla t resolv conflict whic arosou o suc aberrationsThi woul necessaril requir tha trut i told tha justic idon an tha reparatio i provide t victim o suc excesses I wa i suc scenari tha countrie lik Sout Africa Peru Indonesi an Philippine etc se u commission calle “Trut commissions a temporar bu extremel effectiv fac findin bodie t investigat pas huma right violation an atrocitie usin victi centre approac i orde t promot bot justic an reconciliation Som Trut commission hav designe thei hearing t provid bot victim an th perpetrator o atrocitie wit foru fo reconciliation.2. Conflic Resolutio an th Constitution2.3. I Indi afte th violenc followin Partition th proces o conflic resolutio starte wit th integratio o th princel States whic wa achieve throug remarkabl peacefu means considerin th magnitud an dimensio o th problem Th draftin o th constitution whic followed an th wa i wa debated drafte an finall adopte make i on o th fines example o conflic resolution Thi i fo severa reasons h T constitutio opte fo th democrati proces an adul franchise I ha bee aptl observe b Shr P.V Narasimh Rao forme Prim Ministe o India tha thi wa th bes possibl choic becaus th experienc o larg multi-ethni State aroun th worl ha show tha democrac i on o th mos poten instrument fo containin an moderatin colnfict. Moreover th constitutio o India b providin fo pluralism federalis wit stron unio an fo economi an socia upliftmen o th underprivilege section o society create th spac fo divers group i th countr t acquir stak i th proces o nation-building T tha extent i wa expecte that withi th contex o democrac an development divers group residin i variou part o th countr woul becom thnecessar buildin block fo th developmen o th India natio awhole througmutua understanding.9ShrNarasimh Rao Inaugura Addres t Raji Gandhi’ IndiaGolde Jubile Retrospective Augus 20 1998conflict Resolution – A conceptual Frameworknorities ba ed on 2 3. W ile Article 30 o the cons itu ion e sh ines the r ght o m ne al, the ri hts rel gio to establ sh an ad inister the r own educati na institu ion , in g reli ion (Ar ic e to fre dom of c nscience an free pr fes ion, practi e nd propa ation of igh s provi ed to 25), freedom t managfairs (Arreligio s aicle 26) combin d with t ele 9), highli ht any s ct on of ci izens to conser e thei l nguage, script o cul ure (Arti ved by hri Ra iv the h ma ist c appro ch of he framers of th constit ti n. A obse ing the re ig ous Ga dhi, for er Prime ini ter of India, the c nstitutio , w ile provi nec ssa y spa e, minorit es i the co ntry with s ecia protec ion, als allowed hem th ity and rights. 0 like an ot er citiz n f he c un ry, t be a le to fully e joy their d ig on for ame dmen s Another onflict es lut on measure i th co stitution was the provis a tio in favour i keeping with he han ing times an t e enshrin firmativ ment o athe const tu ion of the tradition lly disa va taged se ti ns of soci ty The provisions i ation against he were ba ed o t e c nce t th t it was ot onl necessary to nd disc imi d thro gh spe ial dis dvantag d, it was eq ally im ort nt to empower the dis dvantag pub li e ploymentaccess t the legisl ture, educati nal opport nities andra ic polity wit 2.3.3 Thf und ng fathers o the const tutio wer ully aware that a demos. That is wh the an ineg litarian conom c t ucture co ld be a source l of int ns co fic he responsi ili y cons i ution on ained a nu ber of pro isi ns en rust ng he State with interv ne in the of reduci g and elimina in inequalit es. by em ow ring the ta e tthe c ns itutiocon my to pro ot th interests o the economica ly isadvantagedthe perpetra io , sou ht o ensure t at the de ocr tic ol t is not use as a vehicle for perpetuat on or aggra ation of econ3 t h N vembe , 1989omi c ne ualitie .cha ge th status 2 3.4 The framers o the cons ituti n we e als awar t at ste s t ken to of a tr ditiona , qu would themselve create co fli ts, especia ly in the con ex f transitiono manda ed by he un q al soc ety into a mode n emocra ic one. Thch nge in s at s qli y are examples variou R ght conferred b the ons ituti n nder the Rig t to Equtie als fall in o th s. Provision fo reserv tions for vario s underpriv lege com un principles o th he sa e c tegory. It i t e State’s du y to cru ulou ly guard t e oreman ate. owe er consti uti n and co tain an conflcts arising hil impleme ting itsocial reforms an the tate has to appl abun ant cau ion while f rt er leg slating on te on s ch issue modern sat on of ocie y and en ure that t ere is widesp ea pub ic deblso that confits ar mini isedthe constitu ion 2.3.5 Ap rt r m provid ng or a powerf l and inde end nt judiciary cts, or exampl , also i clu ed rovision f r the creati n o institut onsl for r sol ing conf water isputstween States dispu setc. b9Rajiv Gandhi, A m ori l lecture 10Rajiv Gand i, A contem or ry Perspec ive on awahar al Nehru’ Vision of ndia, Twen y-firs Jawahar al Nehru 1capacity building for conflict Resolution2.4 History of Conflict Resolution2.4.1 The history of conflict resolution in independent India is a story of both successes and failures. The resolution of linguistic conflicts was one of the major achievements after Independence. Notable writers like Ramachandra Guha have observed that the formation of linguistic States and evolution of the three-language formula succeeded in deepening and consolidating the unity of the country.11 continuance of a common language has provided the basis for administrative unity and efficiency within the State. Interestingly, the three major movements for secession in independent India, namely those in Nagaland, in Punjab in the 1980s, and in Kashmir, were organised around the issue of historical ethnicity, religion and territory and not around language.2.4.2 Among ethnic and secessionist conflicts the resolution of the Mizoram issue was a notable success. Armed insurrection had persisted in Mizoram for more than two decades. The movement by the Mizo National Front had racial and religious overtones, and its declared aim was secession of Mizoram from the Indian union. There was an armed uprising in 1966 and violent conflict continued well into the 1980s. The Mizoram Accord of June 1986 succeeded in bringing to a satisfactory conclusion, the violent conflict of the past decades. Three factors may be said to have contributed to this historic conflict resolution: firstly, Prime Minister Rajiv Gandhi’s sincere and positive gestures were greatly appreciated by the people of Mizoram and its leaders, which laid the initial foundation for negotiations; secondly, the maturity of the two Mizo political personalities of the time, namely, the undisputed insurgent leader Pu laldenga and the then chief Minister Pu lal Thanhawala’s unilateral offer of stepping down in favour of laldenga as the chief Minister and finally, the moderating influence and pressure of the Mizo civil society, especially the women who had been the most aggrieved and affected during the periods of violence.2.4.3 conflict resolution in the Darjeeling hills is another success story. The Gorkha National liberation Front (GNlF) who had demanded Indian citizenship for all Gorkhas resident in India, complained of discrimination at the hands of the Government of West bengal and accordingly, sought separation from the State. It also took up the cause of Gorkhas in other parts of the country, such as Meghalaya, where there had been trouble between Gorkha residents and the local population. The agitation acquired an increasingly violent colour over time. Finally, a tripartite agreement was negotiated between the union Government, the GNlF and the State Government (1998). The Agreement consisted of three main points:1011 amach ndra Gu a, India A te Ga dhi: The Historygest of theDemocracy, Wor d’sPicado larconflict Resolutio1.In the overall national . In the ove al nationa i ter st an in respon e to herime Minist r’ cal , t e GNlF agr e to drop the d ma d for a separte tat of Gor haland.2. F r t e social educationa a d c ltural advancemnt of he p ople es ding in th Hill are s f D rjeeli g istr ct it was ageed to ave a a ton mous counc l know as he Darje e l ng Gorkha Hill co nci .its e ecu ive powers w re 3. The omp sit on of he cou cil and t e exte t of spel o t e tensively, su jec to t e p ovisi ns ofthe nio an S a e la s.tion f e ce. curr n ly, .4. This l d to a hal in the nea ly 5-year o d onflict and restor t ere is a pr posal – and a deba e to inclu e the re io inthe Sixth Schco sti u ion.impleme t the Acco d nddule f heart t on, in t eir d ma d 2.4 5 The quest fo a separat Sikh i entit manifeste i self, after ate sta e of P njab, so e for sep rate tat in India E e after t e for at on of a sepa ei de and f r chandi arh related ssues rema ned u reso ve pert ining nte alia to ts further aggravat d when as he State capita , sh ri g of rive wa ers etc The situat on w tan’. Wh l terrorism was t rrorist e em nts dema de secession i the orm of ‘K ali ion o Decembe 1984 to q ell d, a dete mine effor wa launched s on after the e ecwas nextrica ly enmesh d fid an endur ng bas s for a resol tio of the conflct whichof the country The Ra ivw th iolence f in Pun ab and i s spi -o effcts in o he part Gand i-lo gowal A cord in July 19 5 r ught this turblenc to temporary end. With San ongow l’s a sas ina ion a month la er and the imlementa ion f the Accord a part of Punja and thunni g i to rough we ther over he q esti n f chan iga h ae c nflict was esolved b shar ng f river wa ers, ther was ren wal of viol nce Finally t eters: ecu ity actio to he gov rnmen fo lowin a poli y which was based on four p ra il tant t persuad th m contai and elimina e terror sm; ubterrane n ontacts ith he-table iscussio s w th to gi e u violence a d come to the negotia ing table; ver-t the basic en ts of th d ssident le ents w o were p epa ed to sch w vio ence a d cces democrati p ocess, andco stit tion in exc ange for full inte ration int the cou try sensitiv ty o reli ious, cult ra an ethnic sentiments offthe f ect d p pula ion.12lia incluhere water elated2. .6a e many co flict yet o be resolve . Thes internfi ts becau e o p verty onflct , conflicts ari ing ou of inequ ties l and social en ions, clution f one c nflic ha an conflicts d e o re ional mbalances. In som cases, rescre ted o he s. Thre has also be n, in some c ses failur to1112Manishanka Aiyar Raji Gandhi’ IndiaGolde Jubile Retrospective ubSPfor ConflitCapaci y ResolutonBuildingagreements faithfully and in the spirit in which they were arrived at. Above all, there has been a tendency to take a minimalist, wait and see, approach resulting in intensification of violence. This has led to a growing perception that it is only violent manifestation that will draw the attention of governments. Another result has been the need to approach Courts on every issue and at almost every stage and the Courts having to issue directions even for convening meetings!2.4.7 The Commission, in its deliberations, has concentrated on those areas where conflicts persist and has tried to suggest what needs to be done in respect of these conflicts. While doing so, the Commission has paid special attention to the genesis of these conflicts, the interventions required and capacity building measures to help mitigate them by early interventions.2.4.8 This Report also discusses several other issues that are sources of conflict and has suggested a possible approach to resolve them. For example, issues relating to Scheduled Castes, Tribes and Other Backward Classes have been a major source of conflict. The issues have arisen as these disadvantaged groups have been subjected to atrocities, exploitation, discrimination and alienation that have prevented them from exercising their rights freely, enjoying privileges due to them and leading a life of dignity and a feeling of self-worth. The resulting discontentment has largely remained simmering, with sporadic manifestations of violence and providing a ground for the growth and spread of extremist movements.2.4.9 Land has been another source of conflict. Added to the issue of inequality in land distribution are issues of dispossession, alienation and displacement-highly emotive issues that continue to inflame passions and generate conflict, especially in the context of rapid economic development. Issues such as indebtedness leading to farmers’ suicides have also been sources of conflict.2.4.10 Water conflicts continue to divide segments of our society - political parties, States, regions and sub-regions within States, districts, castes and groups and individual farmers. These conflicts range from contending uses of water, to issues of water quality and to inter-state conflicts on allocations that prevail across the country. Unless resolved with imagination and understanding, they pose a significant threat to economic growth, social stability and even national unity.2.4.11 The left extremist movement, which has so far claimed thousands of lives, has grown steadily over the years and spread across many parts of the country. In the tribal12hinterlandofthepr blems of po er y hinte land f he oun ry, whi h s n w the bas ion of t e ovement ec no ic mainstream and alienatio , f marg nalisation f en ire communit es from th d li eli ood sour es an of isp ssession of and nd dis lacement fro forest ha itats a have a l combine to cr ate a f rtile ro nd or the s read f the mov ment whi h olds ou promis s o equity, ju tice and liveliho d. Vi len e resort d to by the m vement a , ho ever, exacted a hug p ice because ho e a the vang ard of t e ex remi t movem nt ey iew as coming in ave also pposed and isr pted initia ives or d velo me t whic t d are s a e arg ably the w y of achi ving their olitical objec ive .f unfor unate y, he afect lope d n the co ntry. amon t e l ast devemm n and the scourge 2. .12 confli ts bet een relig ous roup and s cts ha e b en airly c etal fa ric i a way o relig ous sectarian ivi e ha threate ed the very sur ival o o r socrce f conflict that that no ther oci -poli ic l issu ha don . Thdivid h s been t e soalso locki g ntire h ve unl ash d violent vents a d troc ti s lea ing to l ss of l ves an op lations n t ysts of vi len e and destr ying the trust buil t ve th year .pparatu have tend dost n cont 2.4.13 In the No th Eas ern egion of I dia, many li es havethlictseenthe cou tr has bee have raged b tween gr ups through d cades. Thi se sitive egi n of y of the region t e plag ed y conflic s hic are embe ded in the eo rap y and h sto ion which h s beco m e lti-ethnic ty f i s populat on nd its p litical a d eco omi situa onfict dyna ics have t e feeding g ound for d ep- eated dis on entl and conflicts The s onsore terror sm r nge from ins rg ncy for se ess on to ins rgen y for aut nomy, fro us i flow of mig ants o thnic cl shes and o o flicts en rated as a resul o continu d hoc so uti ns ha e fr m cros t e bo ders s wel a fr m other ar s o the coun ry. ddedl to he cyc e of co nfic t s in the r gion.ver the ast seve al 2.4.14 egio al i equalit es hav b en anoth r so rce of c nflict. a-s ate i equal ties decades reg ona imbalances hav go accentu te and the pr blems of int ened in spite of the a d ur an r ral di ide ave al o b com more ac te This as hap the ne d or grea er qu ty-prom ting role of var ous plans/prog amm s an un erlines nd i fr struct re so efforts to b m de o remove ap in t e provis on f basic servic senefts of grthat no reg on or su -region and no g ou re ainsi de ri ed of hewth and velopmen .of v ol nt co flicts. 2 4.15 t resent, one sixth f Ind a’ po ulatio l ves in he shadowgo back t 1947. TheSo e of these c nflcts part cula ly n t e orth Ea t and J& f the St te o th se ultra-le t ex remist mo ement ame late . A stated ar ier the es onseconflcts has ee large y reacti e n rec nt eca es. The St te a d itsc nflict Reso ution – A13Capacity Building for Conflict Resolutionto view conflicts more in terms of breakdown of law and order – which, of course, it is, in a sense – and less in terms of the failure of the socio – economic, political, governance and development process. That a lack of responsive and good governance is often responsible for violent conflicts has not been adequately recognised and acted upon.2.4.16 What should the State do to resolve conflicts? Ideally, the State should pay adequate attention to the genesis of conflicts and find solutions to the problems before they become significant and deepen into conflicts. Once identified and recognised, appropriate administrative and institutional interventions need to be designed and assiduously followed to help mitigate the possibility of such conflicts. There are early stages in the development of a problem when through mechanisms such as early warning, timely analysis and appropriate response, problems can be prevented from escalating into conflicts accompanied by violence.2.4.17 That is why it is important to develop an understanding of the genesis of conflicts and to formulate long-term strategies that not only address immediate demands but also include attention to underlying issues such as alleviation of poverty, social justice and empowerment, and corruption-free development at the grass-root level. The State cannot allow itself the indulgence of treating conflicts as mere breakdown of law and order and adopt fire-fighting techniques to address such breakdowns. When the fault lines lie along identities of tribe, caste, region and religion, the State needs to create political conditions and institutions for mediating the conflicts of these diverse groups and integrating them so that the groups can function collectively and harmoniously. There is need to recognise that such conflicts are the touchstones for deep-seated grievances over the unequal sharing of benefits from the process of growth and development. It is fortunate, however, that such conflicts between groups and regions can be addressed. The surest way is to restore confidence through a process of multi-stakeholder dialogue. The approach ought to start from the simple principle that conflicts can be resolved peacefully – and on an enduring basis – only through trust and persistent and inclusive dialogue. The need is to build multi-stakeholder platforms or similar participatory processes that bring stakeholders together. There is need for inclusive frameworks – both institutional and administrative – within14tio – A conceptual conflct FramwrkResoluvenesswhich pe ple with diverg nt nterest an aspi at ons can dscu s and agre to c operateand co rdin te thei act on .n these in t t tions.l and econo ic r va ry s an 2.4.18 Thre i also need to rec gni e that p litical s ciwhat when and how. W etheunavoi able pa t of he d velop ent roc ss – who getti e d pends on the ca aci y these r valr es de pen into co flict tha prove nt act ble over interest and as ir tions of of he institutio s o the State to rticulate and understand he ries. ll of this d pe ds n ifferent grou s, o rbitrat between t em nd to m diate r va ive participato y, red bl havi g in tit tion a all levels f that are een as legitim te, efec promo e and butt es narr w and a co nt ble, and n t as tokens r a mechani ms thate capac ty and effectives ed int re ts. The t sk, then, i one of uil ing appropri153LEFT ExTREMISM3.1 Left Extremism: Spread and Intensity3.1.1 The left extremist outburst, later known as the Naxalite movement, started in March 1967 in the three police station areas (Naxalbari, Khoribari and Phansidewa) of Darjeeling district in West bengal. The ‘Naxalbari phase’ of the movement (1967-68) gathered momentum during May-June 1967 but was brought under control by July-August 1967. Today, the left extremist movement is a complex web that covers many States. According to the Ministry of Home Affairs, ‘at present, 76 districts in the nine States of Andhra Pradesh, bihar, chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Orissa, uttar Pradesh and West bengal are afflicted with ultra-left extremism forming an almost continuous Naxal corridor. cPI(Ml)-PWG and Maoist communist centre-India (Mcc-I) have been trying to increase their influence and operations in some parts of other States, namely Tamil Nadu, Karnataka and Kerala and in certain new areas in some of the already affected States.’13 The merger of the cPI (Ml)-PWG and the Mcc in 2004 has strengthened their combat capability. It is estimated that these extremist outfits now have 9,000-10,000 armed fighters with access to about 6,500 firearms. There are perhaps another 40,000 full-time cadres.14period 3.1. Ta le 3. sh ws the spr ad and in en ity f left ex remist v olence dur ng the 203-06Ta le 3.1 Sta e-wise Ex ent o Naxal V o ence : 2003 -06Nae 203 204 2005 2006ofStates InidentsDeaths InidentsDeaths InidentsDeaths Inidentsn d a t i nAndra771410743508Death183 46Pradehbiar5028237118696107 42chhatisgrh25674352838568715 388Jhrkhnd421779693121 0912416Affi s 1 Annual Report (20 4-05), M ni try f Home 14P V amana, O server R search Fouleft ExtremismTabl3.1Cont. Nae 203 2004 2005 206of Stats Incients Deats Incients Deats Incients Deats InciMadhya131Maha3113 4 203 6 1 Prades94 53Maarshra753184421598ris4138 42 4 44 9 utaraes1126 1 1 11Wsbngl15 14 72311Krl2-5 - 5 -1raaa46 1 8 8KHraa---- -- -Toal 1971533566ed se tio s.08677 1506781irs, 200 -07 So rce: A nu l Report of Minitry f of ome Afa in reasing Froiguthees iven n t e ab e 3.1 i is vident th t extrem st violence iof viole t an exphese figurnding.s, how ver, do not capt re t e f ct that th gravitent viole t i cident ha bec me far mor p on unced as is articul rly vide t from some re adequ tel inci e ts ta ing h avy t ll of lives in c hatti gar . Ta le 3 1 a so does no nhabit d by con ey t e fa t hat most of the afect d area are orest areas p edominant ytribalpop la ions.3.2 The ‘Na ure’ oft he M vement3 2 1 bar in a hase in th la e 196 s and arl 197 s’ the le t extrem st ovem nt has een larg ly agr rian n th s nse t at it seeks to mobiliz di content and m sg ver ance n the ru al area to achieve its obje ti es. Some f the ma or fea ures of the le t extrem st move ent include the fo low ng;a s cur ty. ? It ha em rged as he greate t hallenge to internfores and ? I has gai ed people’ confien e, grown in strength ar icular y it ib l areas, b mobilising isp ssessed and arginalis17Capacity Building for Conflict Resolution?It creates conditions for non-functioning of the government and actively seeks disruption of development activities as a means to achieve its objective of ‘wresting control’.?It spreads fear among the law-abiding citizens.3.2.2 While these features also form part of the activities of all terrorist organisations, due to its wider ‘geographical coverage’, left extremism has made a deep impact on the ‘conflict scenario’ of the country.3.3 Causes for Spread of Left Extremism3.3.1 While the goal of the left extremists was to actualise their own vision of the State through ‘revolution’, they chose to usher that revolution by enlisting the support of the deprived and exploited sections of society particularly in areas where such sections constituted a significant part of the population. It is, therefore, necessary to identify the reasons for such deprivation and consequent discontent. The Commission would like to refer to the causes exhaustively identified by the “Expert Group on Development and the Causes of Discontent, Unrest and Extremism” of the Planning Commission in its draft report. A summary of causes extracted from that Report is as under:Land Related Factors?Evasion of land ceiling laws.?Existence of special land tenures (enjoying exemptions under ceiling laws).?Encroachment and occupation of Government and Community lands (even the water-bodies) by powerful sections of society.?Lack of title to public land cultivated by the landless poor.?Poor implementation of laws prohibiting transfer of tribal land to non-tribals in the Fifth Schedule areas.?Non-regularisation of traditional land rights.Displacement and Forced Evictions?Eviction from lands traditionally used by tribals.?Displacements caused by irrigation and power projects without adequate arrangements for rehabilitation.?Large scale land acquisition for ‘public purposes’ without appropriate compensation or rehabilitation.18left Extremismlivel hood Re ated ca ses? la k of food sec r ty – corru ti n i the P blic Distrib tion S stem ( hic are ften non-functi on l).? Disru ti n of tradit onal occupa ion and la k of altern tive work opportunit es.? Depriv ti n of tradit onal r gh s in c mmon pro erty resources.S cial Exclu ion? D ni l of dign ty.? cont nued prac ic , in some a ea , of untouchab li y in va ious fo ms.? Poor implement ti n of sp cial la s on preve ti n of atroci ies, prote ti n of ivil r ght and abol ti n of b nded l er ance Re ated Fac ors? corru tio and poor provision/non-prov si n of esse tial p blic ser ices incl ding pr mary h alth car and educat on.? Incompe ent ill tr ine and p orly moti ated p blic pers nne wh are m stly a sent from heir la e of post ng.? M su e of p we s b the p lic and viola io s o the or s ofaw.? Perve si n of elec oral pol tic and unsatisfa tory wo ki g of ocal gover ment institutio s.I m y be highli hted gain that hese c use are most gl ri g in f rest reas predomin ntly inha it d by t ibal popula ion who thus b com the main instru ent and vi ti s of left extr mist violnc e. .3.2 hil the c uses out in d b the E pert roup re ui e no elabora ion, atte tion ee s s o o be ra n to so e of he e in gr ater de ai . The fir t i the pa adox tha the diag os that the pr bl m b the gover men an the left extre ist are sim lar. both ‘s des’ gree many conc aled ten ncy, ten rial insecu ity low wage ate and ling ring f udal prac ic s in ma y p aces have gene a ed a disco tent mon the ural p o – a disco tent that akes y of of them a tive partici an s in politi ally moti ated vi lent upsu ges. De p te a va ie land legisla ions en ct d to ad r ss a hole ho t of land re ated i sues like introdu ti n of ti n ceil ngs, distrib ti n of su plus and, consolid ti n of hold ngs, preve ti n of fragment the of and, prote ti n of r gh s of te ant and settl met of waste- ands etc, heir i pa t a is s g ound ev l is mar ina d e to ardy implementa ion Thi has en ble the left extre to ex loi the disappoin me t o the pro ises ma e to benefici ries particu ar y in reas19Capacity Building for Conflict Resolutionwhere there are large number of landless labourers and share-croppers. For example, in Andhra Pradesh, it is the common perception that land for which pattas have been issued to the landless is under de facto occupancy of affluent and powerful people and that even tribal leaders are working as agricultural labour in such lands.3.3.3 Another ‘cause’ which needs to be noted is the disruption of the age old tribal- forest relationship. Historically, tribal life was well integrated with the forest, but legislations and governance in the last century considerably altered this symbiosis. The Forest Act, 1927 and the Forest Conservation Act, 1980 along with stringent Supreme Court orders have turned forests into prohibited areas for the tribals, creating serious imbalances in their lives and livelihoods. This has turned the tribals against government’s methods of forest management, and gradually against government itself. This discontent has provided fertile ground for the spread of left extremism among tribals living in forest areas. Rampant alienation of the land rights of the tribals to non-tribals and the States’ measures to prevent and undo such transfers through legislations such as the Andhra Pradesh Land Transfer Regulation Act of 1970 have remained on paper, and have further accentuated tribal discontent. In fact, in Andhra Pradesh, there is a perception that even the talks held between the State Government and the Naxals failed primarily because forest land could not be distributed among the tribals as demanded by the Naxals.3.4 Resolution of Left Extremist Conflicts – Successes and Failures3.4.1 Many left extremist movements, notably the uprising in Naxalbari, could be resolved successfully. An analysis of what really happened in such areas particularly in Naxalbari may provide necessary insights for resolving the present problem of left extremism.153.4.2 From 1972 onwards, the Government of West Bengal adopted a slew of ameliorative measures in the Naxal-affected districts. The Comprehensive Area Development Programme (CADP) was introduced to supply inputs and credit to small farmers and the government5S ch an an ly is is p ovided in Sumant Banerjeebari20trmism left Etook the t Naxal ook the respon ib lity of m rketi g their roduce. N xal ari an De ra, t e wors es wer affecte are s, were ele ted for the pr gr mme. t a out he sa e time, di ectiissa t i sued to go ernment offiials in Sr ka ulam i Andhra Pra esh an G njam i Odv nced ens re th t debts nc rre by th tri al oor are c nce led and nstea , lo ns were , a ter to t em fr m b nks a d other sou ces for agri ultural impr ve ent. In West benga en ure he le t Front go ernm nt came o ower n 1977, O erati n b rga was st rted t minim m th r ght of the sharec oppers. Al ngside, si nificant i crea es w re mad in thef these wag s which b nefitt d large ec ion of t e rur l o r. As a res lt, the beneici riesprocess go ernment pr gramm s egan to istance th msel es from axa ism and the s gna led the b gi nin of th end of ax lism n thes area .s ive 3.4. A ca e stu y a out he left e tremism affected avagad t luka of K rn taka started in ox 3.2.he study reve ls t at nce the Admini tratio became co pla ent and in t e wit draw ng rom its p oacti e ro e, left e tremism ma aged t egain a f ot holt ure’ arhere are ia.portant le sons o le rn f om this ex e ience – he e is no ‘p rmanees ence to conflict si uat ons and an l t up in easur s whi h brin re ief c n cause recru l of co nfic s.tisga h 3.4. un ike the re atively su cessful stories utline ab ve, the s tu tion in chhabl cks today c nt nues o cause serious on ern. Thbasta r gio of th Stat , here 1, int r are s riously ffe te , is an ex mpl of ow left e tremis gaine ground ecaus fo ests a ia, the tr bal in he a ea were ep ived of fore t-based emp oyment. In tia ly, themporary o bas ar w re use by the ex remi ts fro Andhra Pra esh and Mah ra h ra as a t ip tion refug ; later p rmanent raini g ca ps ca e to be esta li hed. Thactive parti lihood, f local tribals ollo ed mu h ate in he wake of tre ses and st ains n their liv grow ng food in ecu ity and the growing despa r about impr ve ents n their socio- f localconomic si ua ion. The s tu tio in th re ion has ot bee h lpe by the ra singocks f re istanc group call d Sal a Judum started i it all in tw tribal dev lopmen b h Sal a sout ba tar and now xt nded t eleve b ocks in chhatt shga h. Eve thou , today udum is pu li i ed as a spo taneous a ak nin of th masses against ext emisted l fe t ou ands of tri als a e being p ot cted in ortifid camps oi tin to the d sturseveral hey ar f rced o le d. The e ca ps h ve been tt cke by the ex remists le ding to verei n de ths In the roc ss, he poor trib ls h ve bee caught bet een the le itimate sinstant owe of t e S ate and the ille itimate oerci e owe of the ex rem sts who deliver justice through eoples co rts a d other nformal e vic e . gada o 3.4.5 ppl ing he Wes beng l m del and the ex erime t t ie out in avcareful areas c rrently affcted by left e trem sm like chha ti g rh is matter r quiringconsid ra io . It s cl a that a j dic ou mix of dev lop ent and welfare ini iatives21capacity building for conflict Resolutionwith land reforms and well planned counterinsurgency operations is required to restore peace, harmony and confidence in the administration in such areas. It is a matter of satisfaction, therefore that this approach is now receiving wide endorsement. The ‘common Minimum Programme’ (cMP) of the united Progressive Alliance, for instance, recognised the multi-dimensional nature of this problem. based on the position taken in the “cMP” a ‘14-point policy’ to deal with this problem was presented in Parliament by the union Home Minister on 13th March, 2006. This policy outlines measures to be taken to deal with this issue at the political, social, developmental and administrative levels. Similarly, the Prime Minister, while addressing the chief Ministers of the States affected by violent left extremism, on 13th April, 2006, also emphasised that, “We must, however, recognize that naxalism is not merely a law and order issue. In many areas, the phenomenon of naxalism is directly related to under-development. It is not a coincidence that it is the tribal areas that are the main battleground of left wing extremism today. Large swathes of tribal territory have become the hunting ground of left wing extremists. Exploitation, artificially depressed wages, iniquitous socio political circumstances, inadequate employment opportunities, lack of access to resources, under-developed agriculture, geographical isolation, lack of land reforms – all contribute significantly to the growth of the naxalite movement. All these factors have to be taken into consideration as we evolve solutions for facing the challenge of naxalism.”16 The commission notes with satisfaction that a general consensus has now emerged on not treating violent left extremism only as a law and order problem but as a multi causal malaise with breakdown of law and order as its ‘ranking symptom’. In short, management of left16Prime Mi ister’ s eec at t e chief Mi iste ’s meet on N xalis , A ril 1 , 2 06, Ne22eft Extremismextremext emist vi lence would r quire t ppi g the ca ac ty f a l the el me ts f the govenme t and civil s ci ty as dis ussed la er i this chapt r.3.5 Ma agin Left Ext e ism – the Pol tical Para d i g n ed 3. .1 The ‘14 point p licy’ re er ed to n the pr vious par graph r ghtly under cor s th ional to context aliz left ext em s in a persp ctiv t at i much wide th n the conven t’ s isdom which laces tr s on a m xt re f the ‘ olice tic ’ a d the ‘devel pment c rrsize the p nac a for mi itant ext emism partic la ly f th left va ie y. It ne ds to be emph , its that whi e the ul imat g al f th left ext emist mo em nt is to c pture state owe gni y imm diate manifes at on is n th f r of a st ugg e for ocial ju tice, equ lity, d area and h ne ty in ublic ser ices. iewed thu , the pr ad f the mo emen ver widta ce si nifis th fac that ffo ts to emove those cond tions whic giv r se o the acce f the id ol gy of v olen left ext emis ha e no been partic larly succe sf l.n the circums an es it ho ld be po si le to vis aliz this mo eme t o as a hr at o the se ur ty ai ed f the Sta e but fight ith n the Sta e for obt inin wh t the ystem pr mis d but tion to de iv r. I that co text, the e ma a s be n ed t ke p th doo op n for negoti ar s. wit such rou s a d not neces arily ns st on precond tion s ch as ayin d wn of w and I w ll be reaso able, ther fo e, t ake vie that whi e the mo eme t has maj r lf the order dimen io s, it s not a ure y l w and order pr bl m. The v olent acti it es o th ‘foot sol i rs – as o po ed o its ideolog cally ha dened ha d ore – coul w ll e ueratic fac that their at em ts o get their grie ances red essed t rough non-vi lent, demo es i m tho s ma ha e not vok d due res on e. The temp at on to u ili e the olice orolice ver hi h ut it ho ld be reme bere that unaccou table olice cti n and ab se of power val dates vi lenc even amo g the hi herto non-in olved popul at i o ns 3. .2 o s m up left ext emism fe ds on pers ste t and s rious shortc mi gs n the om in of g ner l and devel pment administr tion, res lt ng n the f il re f the gove nm nt to a dre s the ne ds f th p or in areas pert in ng to land, food, wat r and pe sonal sec rity, e uity, ethnic/cu tural id ntit e c. I this dia no is is acc pted th n the ‘contai me t’ f the p obl m may inte alia r quire conside at on f the follo ing: M st f the ‘partici an s’ in vi lence perpe rated und r the an er o left ext emist organis tio s are ali nated se ti ns of s ciety athe than perpet at rs of ‘high tra on’ s c .the h ve to be t ea ed asaffe t ? A fo tiori olice ctio ver long er od is counter-produ ti e; it is ik ly to m ts. the in ocen mor th n the extres the ? Negoti tion ave a d finite amelio ativ role und r the circumst nces t is expe ien e the world23Capacity Building for Conflict Resolution?Faithful, fair and just implementation of laws and programmes for social justice will go a long way to remove the basic causes of resentment among aggrieved sections of society.?Sustained, professionally sound and sincere development initiatives suitable to local conditions along with democratic methods of conflict resolution have a higher chance of success.3.5.3 Actualisation of such strategy of ‘containment’ would require all round capacity building within the apparatus of the State and civil society, sincerity and perseverance of efforts and accountable and transparent administration as discussed in the following sections.3.6 Capacity Building to Deal with Violent Left Extremism3.6.1 Various instruments and elements of State and civil society need to be pressed into service to manage the situation brought about by left extremism. To achieve this, it is necessary that the capacities of such instruments and elements are suitably enhanced. These can be considered under the following categories:(i) Security Forces(ii) Administrative Institutions24le t Extremismt(i(ii ) Governme t Personn el(i ) loc l bodies( ) civ l Sociey Organisation s3.6 2 buildi g capaci y f Securi y Forc s (includi g t e Police )s 3.6.2 1he commissi n n i ” Fif h Repo t n “Publ c Orde s h s examin d n detai , vario s issu s releva t o poli e reforf a d ma e a lar e numb r n specif c recommendatio s e t e subjec . Therefor , t l commissi n wou d li e o de d wi h th s subje t on y briely ag dr w attenti n o t e followi aspects:( ) s Whe e the e. over , recurre t violenc , extremi m cann t e tackl d y negotiatio s alon n Whi e t e politic l a d oth r non-poli e metho s f handli g t e situatioa e dea t wi h late , t s cle r th t ‘dialogu ’ a d ‘accommodatio ’ a e easi r fie s wou d requi e suitab e leg l a d motivation l suppo t o a df efecti deployme t f t e securi y forces.( ) A satisfacto y sta e f l w a d ord r s al o a necessa y preconditi n f r developmen . Developmen , despi e bei g essenti l o mainta n pea e e n disturb d area , mu t e accompani d y vigoro s acti n f t e securi y forc s includi g providi g protecti n o personn l responsibd f r implementati n f developme t programme . n serious y disturboare s whe e agenci s involv d wi h developme t wo k fi d t difficu t operat , the e m y e a ca e f r temporari y entrusti g so e developmee d acceptan e wh n t e go d intentio s f t e Sta e a d i s wi l o resto , ord r a e concurrent y visibl . Th s subje t o t e limitatio s f poli e method . securi y forc s ha e a supporti e b t essenti l ro e n handli g t e situatio Th25Capacity Building for Conflict Resolutionwork to the security forces. This approach was tried successfully in West Bengal, where the local police helped in ensuring that schools and health institutions functioned effectively.(c) It goes without saying that even in the most difficult and trying situations, the operation of security forces must be strictly within the framework of the law. To enhance the capacity of the security forces to act effectively and firmly but within constitutional bounds, it is necessary that standard operational procedures and protocols are laid down in specific terms and detail.(d) Training and reorientation including sensitising police and paramilitary personnel to the root causes of the disturbances that they are seeking to curb are requirements that need no further elaboration.(e) Formation of specially trained special task forces on the pattern of the Greyhounds in Andhra Pradesh also form an important element of the strategy to build capacity in the police machinery for tackling left extremism.(f) Notwithstanding the large scale deployment of forces from outside the affected areas, experience of handling extremist violence of different types indicates that a police force comprising primarily of local people is of inestimable value in dealing with the situation. Local police forces have a huge advantage in intelligence gathering capacity because of their constant interaction with local populations. In terms of costs also, strengthening the local police station is far more cost effective and more viable in the long run than inducting central forces. In areas affected by left extremism generally the representation from the groups involved – mainly the tribals – is inadequate. Scrupulously enforcing the prescribed reservations from the relevant areas, filling up existing vacancies in the police and law and order agencies, employment creation by induction in Central and State police forces by launching special recruitment drives and raising tribal battalions of the Armed Police, and recruitment of local youth as Special Police Officers (SPOs) are some of the measures that require urgent attention.3.6.3 Building Capacity of Administrative Institutions3.6.3.1 The Commission in its Reports on “Public Order” and “Local Governance” has dealt in detail with the need to build institutional, in addition to individual, capacity to improve the quality of delivery of services. Filling the administrative vacuum in the regions26left Extremsming ppropriatof thetional cap city of the co ntry affected b l ft extremism is of param unt importanc . Instit ms withi wh ch re ers not only o o gani at ons but a so to the leg l fra ework nd no ke more efficien se vices are o e d livered I the context of left ex remi m, m tters lls nd endow ng i plem ntation o l ws mping ng n the live a d l velihoo of the tribs of particularthe deliv ry i stituti ns with grea er ffective ess and em at y are issur levancein the lif of 3.6 3.2 Men ion as a ready bee made a out the cr ci l impor an e o for st ights playe in the trib ls an the role whic e ting is ment f some of t eir tr dition lt extrem sm. The engend ring isco tent am ng this se tion eading o t eir upport for le rs (Recog ition ec ntly enac ed The che uled ribes and o her Tr ditional Forest Dwelle instit ti nal o For st R gh s Act, 2 06 is a welco e mea ur which eeks to enhan ribal area . It apac t to d al with a major aus tive fa to for support o l ft ext emism n ed Trib (FDST v st la d righ s o th extent f f ur hec ares per Forest Dw lling Schedu nerat ons r 7 nuclear fami y pr vide th y have be n the user of fore t land for ou g t n t alienable yea s f om t e ‘c t off’ da e i e. De emb r 13, 20 5. This ri ht s h ritable b ghts under t is a d tran fera le. Ve ted and an e used onl for live ihood urpos s. R al property and als i clude access to minor forest pr duce, om unity rights to intel ect ty. The d eller tradi ional k ow edge r lated to for st iodivers ty and cul ur l divers. p ovis on a e duty oun to prot cthethe fores s, iodivers ty and wildl fe in the arethe problems of of the Act if impleme ted ffe t vely wi l o a long w y i address ngto monitor thits tri als. It i als n cessary t at an Ove si ht committe i consti ute implementa io , consistin of indiv duals in luding trib ls, people wih comm tment to for st onservat on and wildl fe reser ati n an th se wh have he rightegree of s ci l com itmento these causes.ve alrea y ee3 6.3.3 Dep essed wage and inade uate employme t op ortunit es hural Empl yment refer ed o as c uses for tr ba discontent. The int oduction of th National ntry is a maj ruarantee ch me nit ally in the 2 0 most ba kw rd istrict o he co0 d stricts, 4 institut on l in ovat on to deal with these ca sat ve facto s. ut of thes 2 ti l dimension are s ri usly affected by left xtr mism. Given t e h terogen ity and sp n f the sch me o cons rai ts in t ese two undred bac war districts, th i ple entatipleme tat on of s a difficult and c al enging task Thco missio , n its Report o ii ple entati n N EGA has alr a y re om ended a lew of measu es for e suring effectivddress b th the f the scheme in hese districts Thse measures, if im lemente , wo ldproble s of inade uate employme t o portuniti s anddepre ss d wages.3.6.3 4 Instit tiona c pa ity needs to be simila ly str ngt ened within the lne departmen s, par icula ly w thin their fie d form tions inarea byetribalintrodu27Capacity Building for Conflict Resolutionmanagement practices to deal with the specific needs of marginalised groups and to make deployment of personnel qualified to cater to area specific needs. At the State level, a coordinated approach towards converging development programmes for backwards/areas affected by left extremism by setting up suitable institutional mechanisms should be considered. For example, in Andhra Pradesh, the Principal Secretary, Remote and Interior Areas Development (RIAD) department heads such a mechanism to identify problems and suggest measures to meet the development needs of vulnerable areas and groups in a coordinated and comprehensive manner. Norms of development schemes, particularly those where a village or habitation is the unit of implementation pose difficulties in being applied to the tribal hamlets in view of their scattered nature and often minuscule population. There is a case for providing much greater flexibility in the implementation of centrally sponsored and other development schemes in such areas for which decentralisation would appear to be the answer. Considering the nexus between food insecurity and disaffection with the State, it is necessary that the non-functioning public distribution system is revived by strengthening organisations like LAMP (Large Area Multipurpose Cooperative Societies) to replace privately owned fair price shops and to implement decentralised schemes for procurement and distribution of food-grains etc.3.6.3.5 Similar flexibility has to be introduced in the administrative and judicial set up so that dispute settlement at the local level is both timely and effective. Provision of local courts and giving judicial and magisterial powers to the officers of the revenue and developmental departments to effectively deal with local issues could also be considered.3.6.3.6 The above are only a few illustrative cases requiring institutional capacity building, innovation and managerial rationalisation. Left extremism and other endemic disturbances feeding on public discontent, require a combination of efforts by the police, development and regulatory agencies. An in-depth analysis of the history of left extremism reveals that there should be effective implementation of the provisions of the Constitution and the laws and policies already adopted by the Government alongwith efficient delivery of services to remove the support base of extremists.3.6.4 Capacity Building among Government Personnel3.6.4.1 Personnel management has been a neglected aspect of administration in tribal areas. Posting and deployment in such areas is usually looked upon as a punishment by officers who either work half-heartedly or remain absent for long periods from their place of duty. This underscores the need to identify those officers from the State, including from technical services, who view postings in these areas as a challenging and satisfying experience and have empathy and sensitivity to appreciate the problems of its people and the commitment to play a role in28lft Extremismted y seriousresolvin them. Stat Gov rnmentficers thsh uld gi i e uch obneft of eing rained atna iona le el nstituti ns like th lbS National ca emy of Adminisratio to ro essio al yheir expos re and unique equi them o se ve in ribal area . Suc office s could hen bring ex erienc in the m king of pu lic policie , s rat gies and sc em s forthe d vel pme t of theseecessa y to re ard th se ar as nd the we l ei g of its it zens. As an incent ve it wou d be retention of esi ential officers t rough bette e olume ts, reco nit on of the r ervices ander , if so e ired. The eac om odati n and ed ca ion of th ir children i t e tate hea quartate Gover ments for the is n ed fo a na ional p lic which coul prov de for reim urs ng fce s to vo untar ly opt ddi io al resou ce tha m y be requi ed ofi make it attractive or or serving un er d fficultc onditi ns in suc are s.o non-t ibal p rs nnel.6. .2 Whil firm data is not readily av il ble on the percentagong technic l pe so nel, in trib l rea , it appear that at he su ervisory evel and a that ser ice in a tri al non-tri als ten to redom na e. qual y we l known is t e fact are ( y non-trib ls) s ou of ompu sion i. . only ti l uch time as a posting r lternativees, t is not sur risingemplo me t i non-triba a eas is not availab e. In the circumstanthe norms in such reas, that ab ente ism der lict on of dut an po r wor s anda ds are as res such as for at on and hi , in turn, on ribut to disaffect on of lo al p pu ations. M nment of ssam for areas of reg onal cadres of te hn cal department t ken b th Gove iati g the situa ion but under the bod lan erritori l co nci are a po iti e step fo ob availabi it of willi g wi h ‘o tsiders do inating su h cadres, he problem o i adequatco miss on in ha ter 12 personne i not fully ddre se . Thsuggestio s ade by heern reg on cou d also e of this R port to r ta n c mpete t perso nel in the N rth as igh degree of mo ivation app ie in th pres nt case. The la g r is ue of ai taining aan prof ssional co petence am ng governmen pers nnel, p rtcularly hose s rvin i‘pro lem re s’ ill be dea t ith by he com is ion in gre tedetail in it R port on‘ efurbishing of Pe rs onn e A mini tration.ctions r su ting in oor 3.6 4.3 It als a pea s that th a athy in t e dischar e f fuf oversight fu cti ns by d liver of er ic s ha a reat deal o o with th relegati n ay be w despread, it as administrat ve and ‘ficiaine d par ment’ os. While the m la seng case fo ‘b ck to he sp cial refecteev nce or areas a here ib eft ex remi m.a str n. The ystem of pe iod c basics’ in the matter of dmi istrative mo it ring a d upervisib revitalis d. I ust offici l nspections and review of o ganis ti na performance ne ds t in ‘disturbed a ea ’ is b recog ise tha a major eason f r uch pr ct ces fallin in di us while on du y. It wou d t e apprehensio of s nior unctiona ies ab ut th ir perso al safet nistra ive a d echni al herefor be advi able to ro ide su table security to enior admwor ing out equire en sfficer while on tour, and hus sho ld be take in o account infor fsecurit f rces in areasviolence. afe29Capacity Building for Conflict Resolution3.6.5 Capacity Building in Local Bodies3.6.5.1 In an atmosphere of distrust of the petty bureaucracy and apparent inefficiency of the administrative apparatus in delivering services, one obvious solution is to strengthen local self-governing institutions to facilitate settlement of local problems. Enactment of the provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996 commonly known as PESA, is thus a welcome initiative for ensuring grass-roots management of community affairs. This enactment applies to areas under the Fifth Schedule, which coincidentally comprises many areas affected by violent left extremism. PESA brings the ‘general body’ of the village – the Gram Sabha – at the centre-stage of village affairs. It brings common village assets like water bodies, wastelands, and minor forest produce etc under the collective ownership of the village community with the power to approve implementation of development plans and to verify their implementation by ratifying, or not ratifying, decisions of the Panchayats. The community is likewise made the custodian of traditions, culture and identity of the village and is thus in a position to build consensus about various aspects of village life. There is no doubt that the policies initiated under PESA will contribute in inculcating a sense of participation and purpose within the village community – something that would surely make them less susceptible to subversive agendas. The problem, however, is that PESA is an ‘indicative legislation’; it lays down certain guidelines whose implementation depends on the States carrying out specific amendments (or enacting exclusive legislations) in their Panchayati Raj and other Acts. While many States have taken preliminary action on the lines suggested in PESA, there is a general impression that its implementation is, by and large, unsatisfactory. The Commission hopes that apart from taking the requisite legislative action, State Governments would also put in place mechanisms to monitor that the objectives set out therein are being met. It may be useful to link performance in this regard with allocation of untied grants for area development.3.6.5.2 If the view that making people actively participate in their own development leads to greater public contentment and satisfaction is to be upheld, then the health of cooperative institutions in these areas is as important as a robust Panchayat system. Corruption and inefficiency in the excessively controlled and bureaucratic cooperative institutions was arguably responsible for sowing the seeds of disaffection among the tribals particularly in livelihood related societies concerned with minor forest produce, handlooms and handicrafts and fisheries etc. Subsequent legal reforms in the cooperatives carried out by many States, too, did not restore the health of the cooperatives in the affected areas as by the time the reforms came about, serious disturbances had already inactivated these institutions. Apex level institutions like TRIFED have failed to provide the right guidance and leadership to the cooperatives in tribal areas. It is time that the needs of the cooperative sector in these areas30left Extremismare given r commendati ns ar g ven attenti n n the an logy of PE A. Thcom ission will giv o strengthen th co perati es in its eport on ‘Soci l c pital, Trustnd Par icipati e public se rvi c deliver ’.3.6.6 ap city uilding in civil Socie ty Org nisatione an i-extortigi g about peace 3.6. .1 Op nio s va y bout he role of civil soci ty organisa ions n brich rganisa io s in c nflict situat on part cu arly in cases f left xtre ism ecause many sring the v ol nt ar lleged o have a le tist ideolo ical ori ntation (wi hout ne ess rily sh ‘front’ f r the bjectives o the ex remi ts) an , i some cas s, t e N O’ may ven beuch as ociati ns extre ists the se ves Vot rie of t e ‘law an ord r ap roac ’ hold thats curit forces a e no be ter than pro ies for mi itan extremists wi h emoralis tion o extortion y he as hei pri ary im and th t t ey sidetr ck the iol nce, kill ng and ere is a gr wing extr mis s by ai ing th bogey of po ic pe secut on. O the th r hand, t , and tha their real sation that s ch o g nisat ons av a m jo role to play s i terl cutor polic and other v gil and c itic l l rtness cts as bulw rk again t bus of po er y the law W ile here st t f nctio aries – in ther words their acti iti s st en then the r le of t t at they h ve m y be s me ‘b ack s eep’ among the e org ni ations ther is ittl dou and in edu atingthe po e tial t act as a b idge betwe n t e e tremists a d t e overnment the situati n by the people a ou the fut lit of violen e and preve ti g a gravation of ays and m ans f v ntilating ublic rie ances within the legal-demo rati fr mewor . n rea er d tail involving s ch organis tions in c nflic man gement ha e een dis ussedin th las chapter o this R por .3.7 C tt ng the S urc of Financ es f r Na ali esmobi ises fu ds 3.7 1 like an other e tre ist move ent the axal te moveme t als loca peo le and wh ch s stain them. uc m bil sati n s in the orm f ext rtion rom side , fund are also from cont actors xecuting va iou projec s in t e affecte area . b ev lop ent f nds al o rais d t roug forest and min op ra ions. ne w y to ensure that gan sation like do not rea h he extremists is by entru ting these or s temporarily to o an ex cute thes the border R ads Organ sation and o her gove nment l a encies hicht to st fle local wo ks directly. Ths s recomm nded as a purely emp rar m asure and nprivatee ntre reneursh p.nother a ea tha3. .2 cla ping do n n the s urc s of funding fo l ft extr mist isst ne us a d its requires rg nt attent on. The extensive contractor-tran porte -ex rem egio affected y l nks wi h i legal mini g nd col ection f ore t prod ce in he enti eleft e trem sm yie ds a hug vo ume of funds foef extrem sts. An efection t31Capacity Building for Conflict Resolutionand economic offences wing that can curtail if not totally dry up such funding sources to extremists, has to be constituted.3.7.3 Left extremism is posing serious challenges in different parts of the country through exploiting the sense of deprivation and consequent discontent of marginalised sections of community. Arguably, the Indian state and society have dealt with this malaise with a greater degree of sensitivity and with a slew of non-police methods in tandem with the conventional methods of law and order enforcement with greater success than in many societies. At the same time, the fact that the phenomenon of left extremism is prevalent – and is in fact, endemic in several pockets – indicates that much more remains to be done. It is necessary that the approach to the problem must be balanced and multi-pronged with a judicious mix of development, political and police methodologies as indicated in the ‘14-point policy’ referred to in para 3.4.5.3.8 Recommendationsa. A long-term (10-year) and short-term ( 5-year) Programme of Action based on the ‘14-Point Strategy’ announced in Parliament may be formulated by the Union Government in consultation with the concerned State Governments to identify State specific action to be taken to implement the ‘Strategy’.b. While agreeing with the spirit of the ‘14-Point Strategy’, negotiations with the extremist outfits should be an important mode of conflict resolution.c.There is a strong case for ‘back to the basics’ in the matter of administrative monitoring and supervision. The system of periodic official inspections and review of organisational performances needs to be revitalised. It must be recognised that a major reason for such practices falling in disuse in ‘disturbed areas’ is the apprehension of senior functionaries about their personal safety while on tour. It is advisable that the need to provide suitable security to the senior administrative and technical officers while on tour, is taken into account in working out requirements for security forces in areas affected by serious violence.d. There is need to enhance the capacity of the security forces to act effectively and firmly, but in conformity with constitutional bounds; it is necessary that standard operational procedures and protocols are laid down in specific terms and detail.32Left ExtremismTraining and .ATrainingAan Areorient tionAinclud ngA ensiti ing theApoliceAa dAparamil ta yAp rson elAtoA he roo AcausesAofAt eAdi turb nce AthatAt ey areAs eki gAtoAcurb,eAnecessa y. .AForma ionAofA rain dAspec al tas Aforces on the patternAof th AGreyh undsAin Andhra Pr de hAshouldA eAanAim or ant elementA fA heAst ategyAto bu ldA apacit AinAtheAp lic Amachine yAfo AtacklingAletAextremism. qu telyA taffedA .AE tablishingAan Astre gthen ngAloc lAlevelAp liceAstati ns, AadeAanAimpo ta by tA A oc lAr cruits,Ai AtheAex remistA ffected re io sAshouldA ef Aex remism.A c mponentA fAtheApo ici gAstrate yAfo AtacklingAibesAand Aot erA h AFor Aeffective im lem ntation Ao Athe AS hed ledAT t,A2006,Amul i- Tra itionalA orestADwelle sA Recogni ionA f ARig ts)AAc nsureAthatAthe discipl naryAOvers ght Co mitteesAmay be consti uted toA dve selyA ffectA im leme tation AofAth sAameliorat ve Al gis ationAdoe AnotAcaAecosys ems. theAlocon titutiona i. AAeff Spe ial rt AareAne ded toAmonitorAthe im lementationAofmsA nitiatives andAstatut ryAsafeguar s,Adeve opm ntAs hemesAa dAlandArefo Apropag nda A fA for Acontai ing Ad scontent amongAsect on Avu nerableAto th violentAletA xtremism.ibilityA ay j beA AToAfac litateAl callyArelev ntAdevel pment lAadeq ate feardsAcent all A providedA oAimplem nt ng A gencies inAthfectedAaAaeasAasAreoduceAs itabl A spon oredAand ot er sc emes,A oAas to enableAth m AtoAintAr quirements. c anges basedAonAloca Acts Aand Aot er k. Per ormanc Ao Athe ASta es Ain amending At eir Panc aya i ARaj theAPancha at A regul tion At Abri gAth mAi Aline Awith th Apr visionsAof nAimp ementingA (E tensionAt AtheAS hedu edAA eas)AA t,A 99 A(PESA)AandA Un onAMinistr A t ese pr visionsAm yAb AmonitoredAa dA nce tivis dAbyAtheanha atiAR j.A ofAdAt ansportersAThl. AnexusA etweenAillega Amining/for stA ontractorsAa AtheAext emist andAe tremists whi h AprovidAfisAthe anc alA upportAfo -extortion andA mo em ntAneed At AbeAbro en. AT Aachiev Athis,Aspecial anteApolice/St anti-m neyA aunder ng cellAshould be est blish d AbyAtheASta .33Capacity Building for Conflict Resolutionm. For implementing large infrastructure projects, particularly road networks, that are strongly opposed by the extremists or are used to extort funds from local contractors, the use of specialised Government agencies like the Border Roads Organisation in place of contractors may be considered as a temporary measure.344LAN RELATE ISSUE S4.1 lan i perennia sourc o conflic i al societie an eve mor s i predominantl agraria economie wher apar fro bein th principa asset possessio an ownershi o lan i th sin qu no o socia respectability Whil successfu implementatio o lan reform i rura area i th 1950 an 1960 abolishe intermediarie an considerabl abate agraria unrest i resulte i th emergenc o ne clas o proprietors ceilin o agricultura holding ha ha limite succes i grantin landles labourer an smal an margina farmer acces t lan ownership Th benefit o consolidatio o lan holding visibl i fe State appea t hav petere ou a i eviden fro th stagnatio i agricultura productio an renewe agricultura lan fragmentation clearly lan i a th hear o th crisi bein face b ou agraria communitie an th issu ha th potentia o precipitatin majo conflicts Similarly th imperative o buoyan econom creat paralle demand fo land generatin it ow tension i countr wher th shar o agriculturi th GD ma hav shrun fro aroun 60 i 195 t 27 i 2002-0 bu wher mor tha 67 o populatio continue t b dependan o agriculture Th deman folan fo non-agricultura us includin developmen project an th growin impuls t urbanise creat furthe scop fo conflicts Thes an simila aspect ar discusse i thi chapter Issue lik triba lan alienatio an tenuria reform are however deal wit elsewher i thi Repor whil th publi orde implication o lan dispute ha receive th attentio o th commissio i it earlie Repor o “Publi Order ”4. Lan an th Agraria Conflict includin Farmers Suicides4.2.1 Whil th tragi spur i suicide b farmer i som o th State ha draw attentiot th brewin agraria crisis th ‘lan dimensions o th large malad need t b properl flagge t asses it tota ‘conflic generatio potential’ Attentio i thi connectio ma7b draw t th followin facts :1 Th averag siz o agricultura holding fo th countr a whol decline fro nearl Hectare (Ha i 195 t 1.41H i 199 t 1.3 H i 2000 I i wort notintha holding o les thaH ar considere t b onl marginall economical h Teri n reaso t believ tha thi downwar tren ha bee arreste an goin b th curren holdin size Indi ha on o th lowes averag holdin size anywher i th world.17Source “Agricultura Statistic aGlance (2006) Governmen o India Ministr o Agriculture35capacity building for conflict Resolution?The decrease in the average size is accompanied by an increase in the number of holdings - from 11.58 crores in 1995 to 12.08 crores in 2000, attesting to the fact that even larger number of families are tilling shrinking parcels of land.?The percentage of marginal (holding size of <1 Ha) and small farmers (holding size of 1-2 Ha) accounted for 82% of farmers in 2000.?With ceiling laws envisaging redistribution of 2 Ha of surplus land to each landless/ marginal/ small farming household, the total quantum of land required will be of the order of 6.72 crores Ha for small and marginal farmers and around 10 crores Ha for landless labourers18 while the net sown area in the country is no more than 14 crores Ha. In other words while land reforms need to be pursued with greater vigour for a variety of reasons; they have limits in the Indian context which must be properly understood.?Apart from being uneconomical, small and marginal holders are particularly vulnerable to uncertainties of weather, market fluctuations and even moderate increases in inputs costs etc - in short, small and marginal farmers and even the ‘small-medium’ farmers (holdings of 2-4 Ha) are in the throes of one crisis or the other all the time.4.2.2 The difficulties entailed by increased land fragmentation have been compounded by rising indebtedness of farmers due to a multiplicity of causes such as resort to non-formal sources like private money lenders for short term credit at usurious interest rates due to the long lead time taken by the formal institutions; inability of the farmers to deploy credit for productive purposes due to the necessity of utilising it to meet immediate consumption needs; failure to generate enough surplus from the activity for which loan was obtained to repay the debt etc. lack of resources to repay outstanding loans often forces the farmer to go in for fresh borrowings, creating a vicious circle which causes deep distress. This debt burden often drives the farmer to suicide. According to data of the National crime Records bureau (NcRb), during the period 2001-05, 86922 farmers committed suicide out of whom 54% were from four States, viz, Andhra Pradesh, Karnataka, Kerala and Maharashtra. Even more significantly, the ‘Suicide Mortality Rate’ or SMR, which indicates suicide death per 100000 of population for farmers in States is much higher than the national average of 17.5: Kerala (195), Maharashtra (51), Karnataka (41) and Andhra Pradesh (33). clearly, suicides by farmers in States are a reflection of the prevailing agrarian distress. Studies reveal that the causes for such large incidence of suicides are; indebtedness, crop failure, decline in economic status, crop failure, dent in social position and inability to meet social obligations etc.19 While measures for relief and rehabilitation of the bereaved families under the Prime Minster’s special economic package and the steps taken by the State Governments concerned have provided some succour, treatment of the root causes of agrarian distress need specific policy interventions.':Calculations levant ca ego ie 1 calcu at ons are base on ag icultu al ens s figures for the re stry of Fnance,19 ource a e to be fo nd n “Rep rt of th Expert Grou on Agricultu al Ind btedness” 20 7) Gov rnment o I dia, Min ivision. Ppan ing86-87 D36land Related Issues4.2.3 hough .2. ATough At e A roblem AofAIndianA gri ult reAand th Acauses A f A istress ofA arm rsAareA iesAofAt eA otAmat ers withinA he purv ewAofAthisA om is ion,A tAis cle r fi AthatAthe di cul pe tAGroupA agraria Acom uni y AhaveAth Ap tential AofA ngender ng Aseriou Ac nflicts ATheAE th AcausesA onAA riculturalAI debtednes Aa poi ted AbyAt e A inistry of AF nanc Awe tAinto icide Aand fAfarmer ’Ad stre sA nd A ameAtoAthe conc usion Atha Aphe omenaAli e Afarmer ’As AdecliningA their A ebt bur en Aare At e A y ptoms A f Aa Alar er Ama aise Awhic Amanif st Aitself Ai investment pr fitability, increa ing Arisks, A eg adation of Anatura Are ources A nd decline Ain meet A asic (inclu ing Apublic A nv stment) Ain A gric ltur Aet . AWith A he Afar er Auna le Ato ndAdespa rA needsAlik Aed catio AforAthe rAc ildren andAfa ilyAh alth care,Ade pAd stressA reAplaysAa rise.2 AThe A ep rt goesAon to Ae plain thatAwhile Ain tituti nal creditAforA gricu t adyAun essA sign fic nt AroleAin mit gating Athe dificul iesAofAt e A armer ,A tAfa ls A oAcure theAma dAtoAwidenA de per causesAa eAproperly ad resse . ATheAGroup implicitly rec gnis sA heAne lternative livelihoodAop or uni iesAtoA heA armer Abut note Athat th s AwouldAb Apossible,Apar do ically AifAhigherAa ricult ral growt A(at least Af urA ercent pe Aannum)AiAsus a nedA ever Ainclude: AaA on Aperi d AheAmeasuresAfAtime. Aecommend dAmargi alA AEx andingAtheAa ricu tu alAbas AbyA iving Am re suppo tAt AsmallAaoeratives. farmer Aprimar ly Ath ough ‘Self AH lp AGro ps’ (SHGs)AandAco s itutions. ? AT ansferri gAin or al Adeb Ato AformalAin A ed Aa eas. ? AR ju enation of Anatur l Are ource AbaseAp rt cula lyA nArain?AMo eAeffctiveAri kA overage toA rotectA heAf rmers from risks lik ApriceandAdemandAflctuation , A agaries ofA eatherA ndAnaturalc lamities. fca ion AofA AIncre sed Apublic inv stme t A ot Aonly Ain A gri ult re Abut i Afor Adiv rsoA ihoods Af t e Anon- arm Ase tor withi Athe A ur l Aareas A o Agenerate A lternative A ive farmer .? APoverty A lleviation pr gram es Ato Amore As ecifi al yAc ter At At eAneed AofApoo er Af rmers Awi h Afarmers’ Aor anisa ions Abei g A nvo ved Ain th Ades gnAofAsuchAprogr mm s.sA heA iewA 4.2.4 AThe A ommis ion, Awhil Aen orsin Athe AaboveArecom enda ions, A lso shar eAlinesAof o Athe GroupAth tAtenuri l Areforms Aincluding A mp wer ent AofA he ten ntsAo At rAfarmers,A ‘Opera io Abar a’ AofA est benga AareAs illAhigh yAr levantAforA mp werm ntAofApo singA he rA p rti ularly for A iving A he Aacces Ato A reditAfr m Afinancial Ai sti utionsAand incre dAhold ng A s akeAin th Agrowth AofAa ric lture.A or Asimil rAreasons,Aco so idat on AofAla ug AaAslewA should be Acarr ed for ardA o Athe A extAstag .APursuingAa ricult ralAgro t Athr f Ameasure AincludingA mp werme tAo AsmallAa dAmargi alA armersAand cont nuingAland372 c ap er A4A&for apaciConflict ABuidingResolution Areforms measures, apart from achieving the macro and micro economic objectives, would also go a long way in preventing major rural unrest.4.2.5 The recent decision of the Government to establish the National Council of Land Reforms with the Prime Minister as its head and to constitute an Expert Committee under the chairpersonship of the Minister for Rural Development to provide inputs to the National Council are welcome steps to bring land reforms back to the mainstream of public policy discourse. The proposed Expert Committee appropriately named “The Committee on State Agrarian Relations and the Unfinished Task in Land Reforms” will have experts from relevant subjects. Of particular interest would be the tasks assigned to the Committee to suggest a draft “National Policy on Land Reforms” and to discuss various ‘land related livelihood issues’. The Commission trusts that the issues outlined above will receive urgent and careful consideration of the Expert Committee so that a pragmatic, wide-ranging strategy to make land a source of strength of the entire agrarian community is worked out. Its success will depend on the extent to which State Governments are taken on board and their wholehearted commitment is obtained.4.3 Displacement4.3.1 Displacement of people from their lands has been a source of conflict, even when government acquires land for a public purpose under the provisions of the law. Lands may be acquired for small projects like installation of a small sub-station involving very little displacement or for large projects like the major hydel projects resulting in large scale displacement. Lands are acquired under the Land Acquisition Act, 1894 or similar State laws. The laws prescribe the procedure to be followed while acquiring lands and also lay down the norms for compensating the title holders.4.3.2 Acquisition of land is necessary for the larger socio-economic development of a country. Putting land to more economic use and thus increasing the economic returns to the society is the underlying principle for acquisition of land. But it has been experienced that the person who loses land feels that he has been given a raw deal while compensating him. Acquisition of lands is generally problematic as the persons dependant on the land are deprived of various benefits they derive from it – at times even livelihood.4.3.3 The land acquisition laws provide for a reasonable compensation to be paid to the land losers. But generally the compensation so paid is inadequate because the evaluation of the market value of land is based on techniques which do not reflect the actual value of the land to the land loser. Land Acquisition Officers follow the prevailing prices as indicated by the registered sale transactions. This ‘official’ value of land is a suppressed value of land.38landhis low comp TisAl w Acom ensatio Aoft nAc upled with AtheAusu l Aburea cratic h rdlesAb in sAa Afeeling ofAde riva ion Aam ngA andAl ser Aand Amark At eAbeginnlngAof c nfict.A stA heir Aland,A .3.4 AAAclo ely Aa so iat dAissue AisAthe re abilita ion ofAp rson Awho A aveAl abil tationA fA a dAcon equently Ath ir Al vel ho d. AThereAwasAn Acompr hen ive ApolicyAfor re APolicyAon At eA suc Aper ons A ntil A2003A he AGove nmentAofAI d aAformul ted AaA at ona tif dAin A2 04. R settlementAand Re abilita ion Aof Afected Famroject AAliesi Awh ch wasAnsA orA uidanceA Thi Apo icyA as inAth Aform Aof Ab oad guideline AandAexecuti eAi structio rA oreAen asseA o Aal Aco cernedAan Aw s Aavaila le AtoAproj cts displaci g A 00 Af miliesA mentA rogram eA nAp ain Aareas Aa d A250 Af mi iesAe masse A n Ahill Aareas, ADes rtADevelo nstitution ATh A ( DP) Ab ocksAand ar as A ncl ded inA heA5thAan A6 hAS hedulesAof Ath Ac ob ective AofAtheA ol cyAwere: a) AToAminimi eAd sp acementA nd AtoAidentify no -displacing AorAlast-displacinromA hisApap r.gAa te nati es; miliesA(P Fs),Ab)AToAplan At eAr settlementAand re abilita ionAof AfectedAF roject AAabl As ctions;in ludin As ecialAn eds ofATribals andAvulne ngA oA AFs; Aand (c)ATo provideA et erAsta da dAofA iviAbodyAa d (d APAFsATo Afacili ate Aharmonio s Arelat ons ip Abetwee Athe Req irin alAco pe ation.throughAmutuabi itation ofA .3.5 ATheApo icyA tip latedAthatA he A che e/planAfor At e Resettlement A& Re ectedA am liesA the AfecrojectAA ed AFamilies A nAco sultationAwith A ep esentat ves f Aof A rojectAA uire .AIt alsoA sho ld A eAprep re Aan Afun ed A yAthe bod Afor whi h Athe landAwas A ei gAac aid downAn r sAforAgivingAa rehabil ta ion fpackage toAtheAafcte dA amilies.AAnotAu ique toA 4.3 6 A isplace en AofApersons toAaccom oda eAprojects A nd ent rprise Ai il ,Ather fo eA India. Many countr esAhave solvedAs mila AproblemsAwi hAconsid ra leAsu cess;AitA be Au eful toA rieflyAn teAhow As mila Aproble s A ere Ah ndledAinAotherAcoun ries.21a: Starting in th A tarti g Ain At e Aearly A 990s, colombia Ab g nAallocati gA Aperfien ageA fAbenefts A romAhy ro owe Aplants AtoA he devel pm nt Aof are sAin Awhic AtheAdispla edAp pulations A er Arelo a ed. InA 993,Aa A aw A as Aenfic edAforA‘ben ft tra sfers’.A tA as Af ll wffidAin 1994AbyAofc alAre ulat onsA hic Alaid Ad wn theAde afflsA fA ivi gAefectAto At eA e gisl tion.AI A1996,Aanot erA egisla ion Aw sApasse Aw ichAcreatedA nA“Environme tAcomp fisation Fund”,A nancedA hrou hArevenue Af omAdevelo mentApr jects.AShor ly A hereafter,A he allo ationsAtoAth sAco pens tionAfund we e A ncr ased to 20AperA entAofAp hoj ctArevenu .ATeAcolo bianA39kly,Aar hA24,A 21 ichaelAce nia AFinancingAf rADevelopment: benefit-Sha in AMechanism Ain APopulatio Resettle ent AAEconomi AandAPo itica AWe 2007. The descrip ionAofAsy te s Aprevale t AinAco umbia, brazil Ach na, Ac na aAand Japa AisA akenAfC pac tynflictABuil ingResolutionAforAColaws also define the proportion of revenues to be returned to the ‘relocation areas’. For instance, 3.8 per cent of the revenue of hydroelectric plants is to be transferred to the region’s watershed agencies for new productive investments in water saving and local irrigation; 1.5 per cent of the project revenue must be transferred to the municipalities bordering the reservoir; and another 1.5 per cent is allocated to upstream municipalities etc.4.3.6.2 Brazil: In Brazil, the construction of hydropower plants led to large-scale displacements which the government was not equipped to handle – the social consequences were adverse and affected people were severely impoverished with many of them moving into slums around big towns. An amendment to the country’s Constitution in 1988 introduced the principle of reinvesting a percentage of royalties from hydropower projects in the resettlement areas. Subsequent to this, a series of laws were enacted in rapid succession to define entitlements and specific amounts of transferable royalties, together with procedures for assuring a regular timetable for such allocations. A 2004 assessment reveals that 137 hydropower plants with 145 reservoirs paid the requisite royalties and financial compensation to 22 of Brazil’s state governments and 593 municipalities. Of these, 252 municipalities received financial compensation, 16 received only royalties, and 325 municipalities received both royalties and compensation. Annually, the amount of financial compensation and royalties exceeded US $400 million.4.3.6.3 China: Some of China’s largest dams such as Xinanjiang, Sanmenxia and Danjiangkou, were built before 1980, each one displacing more than 3,00,000 people. Inadequate resettlement led to impoverishment, deep resentment and unrest among the affected populations. Learning from their mistakes, China embarked on a radically different course. Starting from the 1980s, China began to enact a series of governmental policies to regulate and improve resettlement, gradually increasing the state-financing of Development-caused Forced Displacement and Resettlement (DFDR) processes. Regulations were passed, starting in 1981 with the decree of the Ministry of Finance and of the Ministry of Electric Power that required each power plant to allocate 0.1 Fen /kWh to investments in the reservoir area for the life of the power plant. In 1985, China’s State Council decided to create a Post-Resettlement Development Fund in which contributions from power companies would be deposited. A comprehensive land law was adopted in 1986, the Land Administration Law (LAL), which contained detailed provisions regarding acquisition and displacement operations. Subsequently, regulations were issued in 1991 to specify and enhance the compensation norms of the LAL for re-settlers form medium and large reservoirs. The entire Land Administration Law was re-examined and improved in August 1998 by the Ninth National People’s Congress (NPC). The objectives of all these regulations were defined in terms of helping resettlers develop new forms of livelihood and40land Rproduction. p oduction As isti ct from lan Acq is tion cts in oth r count ies, chin ’s 998 land esettl ment law cont ins explicit and detail d p ovisi ns nd norms for people’ sustainable by the ta e rat er han only or acquiri g cult vate lands More recen legisl ti n a opted ts to r sort cou cil of chin has furth r r stricted the previ us autho ity of loca g vernme ed, spa king to land ac uisition, an a thori y tha these loca go ernme ts had ften abu ti s’ effo ts peas nt p otests. These re trictions on e propri tio s reflec the central author ting pea ant o re uc the l ss of rable land , count ract abusive and sei ures and he resu tlement . The pr test and to keep t gh er hecks on he a gr gate size o involuntary r se ach provi ce chinese nst tutional and a minist ative sy tem rov des for, nd r quir s, that sta lish its own nstituti nal capacity for es t lement, as “Provincial Resettl ment bur au” erations an q ipped with a large multi prof f ssio al staf w th expertise in resettleme t o ce. These re man at d to look at irtuall a l as ects of DF R pera ions in t at p ovi ven that t e impor an agen ies n their own, espite their mo est title s “bu eaus , g legisl ti n opul ti n in ea h of chin ’s pr vinc s s in tens of millions. ign ficantly, th opm nt funds con ers on t ese agencies the r spo sibility for managing he reservoi deve in mi d t at a d initiatin development nt rventi ns o benefit th resett er . Ke pingchina h s ncrease , in sever l succe siv stage , he amount of resour eshe e visagedchanneled asof fina cing “ om ens tion” to he displaced po ul tions, t is obv ous that th c mbinatio ruction post thr ugh mult ple cha ne s re ults in much mor support fo sustainable r cons la ed people ese tl men . This s o e r ason why he incidence of i po erishment of dis s reported y ecrea ing n chi a ver time a reported y evalu ti n s udies by t e W rld b nk and o her age cie despite th increa e n numbe s of perso ns disp aced.an nanada has e canada ha mbarked on a systema ic programm of b ildinmajor dam trIndi enous tribal popu ations, w th c stomar land righ s rec gni ed under the anadianentat on. I law, in abi some of th are s here many of uch proje ts are under im le he James bay 1971, ydro Que ec, c nada’ major ower util ty an oun ed lans or potential f p oject which ould include co st ucti n f s ma y as 20 ams with he ion. The c ee negati ely affecti g the en ir ho eland f th triba cree India p pula io as well organise themselv s, protes ed ntensely nd ublicly, an reso ted to le al acTh pr tests The ca adian c ur s dec ded in the r favou and st pped project on truction ng with NG s of he c ee, w o were la er oined by t e ind genous Inuit popul tion , al anges in th advocati g indi eno s rights and nvironmenta pr te tion, ledicao signi t c eeds of th s po ition of the canadi n g ver ment a d its publ c tilitie . T addr ss the developm nt, p pu ation and to re ognise their co tri ution to he country’s ydroelectric tne ing w th canada s g vernment and ydroelect ic util t es adopt d strategy f pa d enter in o the loc l indigenous commu ities. Hydro Que ec a no nced hat i wouag eem nts wit the affect d indi eno s groups for e ui y-s aring in41capacit bu lding f r cnflict Resolutionhydropower capacities. The key premise in these agreements is that local indigenous communities are also direct investors in hydro projects, by contributing their lands. Even though up-front compensation is being paid to the Inuit population for the land, and also for helping them to adjust their productive fishing activities, the option of equity-sharing was made available as well. This equity enables the tribal Inuit communities to receive a share of project benefits as a partner, for the long term, proportionately with their land share in the construction of the project. The power utility provides the full financing and constructs the dam and power plant, the indigenous populations provide the lands, and then they proportionally share in the profits. This approach avoided the economic displacement of local communities and the risks of impoverishment from under-compensated displacement, by recognising their shareholding status and financial entitlement as a part of the project’s benefits. This economic and financial arrangement is currently in full operation.4.3.6.5 Japan:4.3.6.5.1 In an attempt to minimise the tensions and conflicts inherent in land expropriation and population relocation, Japan has conducted land-leasing experiments. When the series of three Jintsu-Gawa small dams were built – the Jintsu-Gawa Dam Nos 1, 2 and 3 – the Japanese Government, rather than applying the country’s expropriation law, decided to only lease the land required for the reservoirs from its owners. Payment for the land lease was structured into two types of financial transfers, deliberately designed to keep revenue accruing to the affected people for a long period rather than to make only a one-time compensation payment and dislocate them.4.3.6.5.2 Two kinds of financial transfers were made:(i) Payment upfront to the land owners leasing land for the reservoir, which would enable those farmers to develop for themselves alternative livelihoods, and invest the money received into non-land-based income generating activities;(ii) Regular rent payments for the leased land, to be continuously paid to the local small holders for the life of the project. This way the leased land, although now deep under the reservoir waters, remains nevertheless a source of constant income for the affected farmers and their children. Rent payments supplement the initial upfront compensation and help to ensure livelihood sustainability even if the new alternative economic activities do not succeed from the outset or do not produce adequate returns.42owin mechan sms: l4.3.6.5.3 Such Such tw -prong d 4.3.6.5.edinao b effe ti ecing proime has va idat d an th test of reve ls that t e it. R cent datar stil payin p wer c mpanie y, 0 years afte t e ren s tod tion f he threet e c nstru ayments ar not a dam . Thrden on t e p wer si nifiant bnd hey accrue to ompani s he new gene at on f famil es of the i itial lan owners. Japan h s pursued nother i no ative st ate y in pl anni g the arge Numata Da , w osescaleas antic pated to reservo r ut 10,000 eop dis e. lace abure ew lands forTo pr oe populati n, t this e si eabent mad pla s togov rn0 He ta es f dry con er 15 e slo es o Moun an on t a d d y rice f elds, Aka i intoing irrigati n ati n t r d u s cost. Thdeov rnmentinefor the rese tled object ve was t achieve phy ical resettle ent with im rov d l velihoods com are to what peop e. ac resett er was o receive an rea a pr ximat ly twice as largto be sub erged, t ey had prev ousl o ned Whe p r of the land o a er ai family wa ubmerg d and wasov rnm nt p ann d t pay rent for the su me ged portion a if hetime comp nsa ion lea ed by he far ers to the tate, ather h n merely paying a one ns were ready f r [Nakaya a and uruyashiki 2 07] constructio and eset lemen pl ion of he Numata i ple entat on, but for ot er macr -ec nomic reason t e c nstruc Da was ance led n 1972. y t, this riginal, cr ative pproach n umata pl nni g is rel vant for po sib e repl cation and actual future te ting.tion of a pa t of 4.3.6.5.4 The benefi-sharing strat gy o tlined bove thus e ta l uti islve the folrevenue fro l nd acq isition to fin nc resettle ent. The pro esses inv43Capa ity buildinl ct forResolution Confi44?Establishment of revolving development funds through fixed allocations.?Equity sharing in the new, project-created enterprises and other productive assets through various forms of co-ownership.?Special taxes paid to regional and local governments, additional to the general tax system, to supplement local development programmes with added initiatives.4.3.6.6 New Zealand: New Zealand’s Public Works Act entitles private owners to be compensated for any permanent depreciation in the value of any retained land and damage to any land. Permanent depreciation in the value applies to situations where part of the land is acquired and the value of the rest of the land is reduced.224.4 New National Rehabilitation and Resettlement (R&R) Policy4.4.1 Government of India, in October, 2007, approved a new national policy on Rehabilitation and Resettlement. The new Policy and the associated legislative measures aim at striking a balance between the need for land for developmental activities and, at the same time, protecting the interests of the land owners, and others, such as the tenants, the landless, the agricultural and non-agricultural labourers, artisans, etc whose livelihood depends on the land involved.4.4.2 The benefits to be offered under the new Policy to the affected families include; land-for-land, to the extent Government land would be available in the resettlement areas; preference for employment in the project to at least one person from each nuclear family within the definition of the ‘affected family’, subject to the availability of vacancies and suitability of the affected persons; training and capacity building for taking up suitable jobs and for self-employment; scholarships for education of eligible persons from the affected families; preference to groups of cooperatives of the affected persons in the allotment of contracts and other economic opportunities in or around the project site; wage employment to the willing affected persons in the construction work in the project; housing benefits including houses to the landless affected families in both rural and urban areas; and other benefits. Special provisions for the STs and SCs include preference in land-for-land for STs followed by SCs; a Tribal Development Plan which will include a programme for development for alternate fuel and also a programme of development for alternate fuel and non-timber forest produce resources, consultations with Gram Sabhas and Tribal Advisory Councils, protection of fishing rights, land free of cost for community and religious gatherings, continuation of reservation benefits in resettlement areas, etc.4.4.3 A strong grievance redressal mechanism has been prescribed, which includes standing R&R Committees at the district, and at the project levels, and an Ombudsman duly22P yush Tiw ri, Tu sda , Aug st 28, 2007: wwwlaempowered in this a publ c urpose mpowere i this egar . The Pol cy a so p ovides t at a d acqu red for t too only wi h cann t e t ansfe red to ny t er pur ose but pu lic urpo e, a d th ain un utilize rio approval o t e Go ernment. If a d acqu red for a publi purpose ream sh ll revert fo th purp se f r fie ye rs from t e da e of taking ove pos essio , the a cons der tiono the Gove nmen con erned. W en land acquir d i ransferred forsha l b shared e ght pe cent of any ne u earned i co e s accruing t the ra sferor ropor io to the with the ers ns fr m wh m the lan s ere a quired o their hei s, inv lue of the lan s acquir d.er cent of the r 4.4.4 Entit ed p rso s shal h ve t e pt on to ake up t t enty if t e e uiring reh bil tation grant and co pe sat on a ou t in th f rm f shares, approval o the ody is a c mp ny au horise to issue share and deben ures; wi h rio tation grant and Government th s ro orti n an b as high as fift per cent of t e reh bilation to rovidecom ensation a oun . Gover ment ha a ready de ided to bri g n legis ta utor ba king to this n w R habilitation and Res ttl ment Po icy, andalso o s itab y amend the land A cquisiti o A t, 984.easure for those 4 4. In the lig t of t e l ss n learnt and as a c nflict r sol tion elopment-ind ce di plac d, there is eed to intr du e the concept f enefit-sharing in de ma e in 1984 to displ cemen i I dia. Whil it is true t at compreh nsiv a endm nts s ill bas d n the lan Acq isition ct have im rove matter to som e tent, the A t ion ba ed on th th concept of c sh comhe oldensatio .oncept of pa ing c mp nsaor all th se who mar et val e f land s ould be replac d w th a sessi g he t ue alu of l nd s, here is e d depe d on it and hen ompensating them deq ately. under t e cir um tanc ompensation lso f r enacting new legis atio that part from ay ng d wn norms of air incorporat s he principles f i come-sha in nd creation f a resettl ment de elopment ili at on shou d fu d in additio to comp nsat on ayment. Also the compensati n/reha hose who d rive no b co fined nly to he titl ho ders o land b t s ould ncl de all land Acquis tion su tenan e rom t e land. The uni n Governme t as i troduced The ill, 2007 i t e Amen men )he Rill, 2007 andhabilitation and R sett em ntAcqu si io A t, Parl amen . The or er bi l s eks to ame d he prov sions of The landt a d protect ng 189 o as to strike ba ance bet een he eed for lan fo developme eme t of Ob ect the interes s of he pe son whose land are stat to ily acqui ed The Sta an Rea ons for the b ll states, i ter al a:r re also reas “ ssues aroun t e u ilis tion of he and a quired a d t eir ransf lan acquired i f concern. Her , provis on a e pr po ed t be made so that he nd that too, ot n t t ansfe red to ny oth r p r ose ex ept for pu lic urpo e, witho t rio approval o the approp iate Gov rnme t. When45ca acity bu ldi g for c nflict Resolutionthereof, acquired under the Act remains unutilized for a defined period from the date of taking over possession, the same will return to the appropriate Government. Further, whenever any land acquired under the Act is transferred to any person for a consideration, a part of the net unearned income so accruing to the transferor, will be shared amongst the persons from whom the lands were acquired or their heirs, in proportion to the value at which the lands were acquired”.The Statement of Objects and Reasons for the Rehabilitation and Resettlement bill, 2007 states, inter alia:“In brief, the Rehabilitation and Resettlement Bill, 2007 will provide for the basic minimum that all projects leading to involuntary displacement must address the grievances of the affected persons. A social impact assessment of proposals leading to displacement of large populations through a participatory, informed and transparent process involving all stake-holders, including the affected persons will be necessary before these are acted upon. The rehabilitation process would augment income levels and enrich quality of life of the displaced persons, covering rebuilding socio-cultural relationships, capacity building and provision of public health and community services, Adequate safeguards have been proposed for protecting rights of vulnerable sections of the displaced persons.”4.4.6 The land acquisition and the subsequent rehabilitation processes often become time consuming. complaints of corruption and indifferent attitude of the officials involved do exist. Therefore it is necessary that the field machinery has the right skills and attitude so that the new policy could be implemented in letter and spirit. capability building measures and internal supervision mechanisms would need to be strengthened.4.5 Special Economic Zones4.5.1 With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view to attract larger foreign investments in India, the Special Economic zones (SEzs) Policy was announced in April 2000. This policy intended to make SEzs an engine for economic growth supported by quality infrastructure complemented by an attractive fiscal package, both at the centre and the State level, with the minimum possible regulations. SEzs in India functioned from 1.11.2000 to 09.02.2006 under the provisions of the Foreign Trade Policy and fiscal incentives were made effective through the provisions of relevant statutes.2323Ext acte fr m the w bs te of Mi is ry of co mer e and Ind46and Re4.5.2 To to stabl 4.5. To insti l onfidence n i vestor an signal the overnment’ c m itment he SE Ac , SEz p lic reg m and wi h a vi w to impa t tab lit to th SE re ime 2005, as enac ed. The mai o jec ive of theSEz Act are:(a g neration o additio al econom c a tivity; ( ) romotio o expo ts f goods andervices;( ) romotion o inv stment f om omestic and foreign sources; d) creation o employment op por unities;(e) de elopment of in rastructurefaci it es.of confl ct, 4.5.3 The e ta lishmen of Spec al Ec nomic one (SEzs as bec me a source re a SEz is leadin f equently o iolence. n Nan igram ( est bengal) or ex m le, wh th at empt pr posed to be st blished 14 er ons ied on 14th March, 20 7 f llowing de elopm nt b the p li e for es o ent r the area. is laceme t f p ople in the name of ent l ss o is q ite comm n, but what is u pr ced nted is he iol nce and th sub eq size SEz in liv s tha t ok plac to pro e t agains a pro os l to set up rela ivel sm ll e s t b nga . 4.5.4 The Spec al Ec nomi zon s c , 2005 is a c mpr hensi law whi h ta lishm e t rovide fo larger tax in entives. It rovides for sev ral sp cts such as e 2005 m kes of zone , o eratio and fi cal regime. The Spec al Ec nomi zon s Act quite a few increme tal han es ver th S z pol cy o 20 0. hey are ( ) co porate I. . exempti n n rease to a lo k eriod f 15 year : 100% I.ex m tion its or t e orye rs, 50% or t e nex fi e y ar and 50% of p oughed- ack proerv ce Tax las fi e yea s (b) ther fisca i cen ives in the form f ex mption romfr edom to an Securities Tra sac ion Tax (c) Greater operatio al fr edom, e g. gle-windo ’ fix ser charges e) Approv l c mmit ee f r ach zon to provide ‘si lea ance in all mat ers nd f) SEzs re declar d as publ c uti iti s under thIndustr al Disp tes Act 4.6 Chines Exp rience w th SEZrms in 19 8 4.6.1 E ta lish en of S zs in c ina tarte so n aft r he nset of th ref n china re an these have co tri uted o the ra id eco om c grow h f ch na The S zs ns of t e repo ted to h ve achieved onsider ble suc es be ause f (a) heir uniq e lo ati Hong K ng. five SEz , Shens en, Shanto an z uhai are n Guangd ng Provin e ad oinin Fou th X amen, s in Fuj an rovinc and n are Taiw n (b lar e size wit47cap cityconflict bu ldingResolution forand local authorities providing improved infrastructure with foreign collaboration (c) Investment-friendly attitude towards Non-resident chinese and Taiwanese (c) Attractive incentive packages for foreign investment (d) liberal customs procedures (e) Flexible labour laws providing for contract appointments for specified periods and (f) Powers to Provinces and local authorities to frame additional guidelines and in administering the zones.4.6.2 However, despite these successes there have also been negative fallouts of the chinese SEzs. These have been brought out in a study24 excerpts from which are reproduced as follows:The Chinese experiment with SEZs had, however, important implications in loss of agricultural land and speculation for real estate. The implementation of the SEZ scheme produced a speculative market in land rights followed by rapid transfer through speculators. Between January 1992 and July 1993, rights over 1,27,000 hectares of land were granted to real estate developers across, but only 46.5 per cent of this land was actually developed. Large-scale transfer of land to real estate developers was prompted by what was called ‘zone fever’; what it actually meant was the rapid multiplication of zones as a result of promoting the SEZ model. The Chinese National Government followed the initial zones with new technological zones eventually reaching 54 such zones in 2006. The provincial and local governments declared their own special zones providing land to the industries and real estate speculators. In fact, the zone fever was escalated to the level where. By early 1990s, there were no accurate numberson how many developmental zones actually existed. According to estimates made in 1993, there were 6000 to 8700 such zones and their total area was estimated to be 15,000 square kilometers, which was, in fact, more than the built-up area of the existing cities.The consequence of the growing ‘zone fever’ coupled with speculative activities in real estate was a sizable reduction in arable land in China. Between 1986 and 1999, about five million hectares of arable land were reportedly transferred for development of infrastructure and real estate expansion. Between 1990 and 1997, in Fujian province alone (with Xiamen SEZ) more than 3.50 lakh hectares of arable land were apparently diverted for industrial purposes. Similarly, Hainan SEZ (established in 1988) was referred by the Economist as the “world’s biggest speculative bubble with few industrial firms and little industrial output.” The ultimate result, of course, was disastrous. In June 1998, the Hainan Development Bank, the main banker of the provincial government closed down under bankruptcy, to be followed soon by the Guangdong International Trust and Investment Corporation of Guangdong province. These trends are reported to have become so alarming by 1997 that the government eventually imposed a blanket moratorium on land-use conservation. On the whole, the SEZ concept in China promoted4824Gopal rishnan N gative spects o Speci l Econom c z nes, Econ mic and Polit cal Weekl nd Relland develoland ev lopme t in Ch na witho t directly add essing it impact on cult vab e l nd and he natur l resour e base.4.7 Adm nistrative A ran ements or Conflict Res lution foS Zsplac me t, 4.7. Thsource of conflict in res ect of the SE poli y in I dia rises from dicri i ism loss of a ricu tur l l nd and th po enti l for eal estate s ecul ti n. Thre is alsal la d n that a s ramb e has bee gene ated among de elop rs to grab cheap a ricu tuac ievi g or er to make q ic profis or vad taxes and littl at enti n ha b en paid trt. t ha the rea o jective of generating industrial nve tments for emp oyment nd exp arge iz d also b en oint d out that hil china ha ermitte a lim te num er of very re only 0 SEz , in Ind a undr ds o SEz have be n approve inc udin so e th t also been ectar s n s ze. The 25% cap on processi g ctivity in mu ti-p odu t SE s ha this wo ld cr tic sed as too l tt e ince it i felt t at wit out tri t land use r gula ions, ctiviti s. lead to pecu ative eal esta e acti ity ath r than j b creating ma ufacturing Fin lly t has b en a leg d t at the tax b eaks ive which c n c nt nue or as long s 15 year w ll lead to r ve ue l ss as well as diversion/d sp acemen of units, p rt cular y IT nits whi h wi l ll m ve to S zs be ause the r existing tax-b eaks w ul e xp i e i 20 9. All t e lem nts of he hinese SEz oli y hat led o negative c nse uencs are a so the s cia pre ent in the Indian Ez po icy. It i therefor n ce sary to e vig lan about e Group o costs and c ns que ces of the SEz p li y s nce t ay lead t h c nflict . as already Ministers on tit ted by the Go ernme t f In ia t lo k i to the SEz policyth la dsecom ended that State overnm nts should n t norma ly cqui e he ulk oto privat fo th S z . Thi is a go d decis on because e tabl sh ng SEzs o al oc te land ssion also compa ie canno b termed as ur h rance f a publ c urpose. The comm f els th t a bett r app oa h ould b to hav a lim te numb r of large SEzs pr ferably n bac wa d ar as s tha t ey lead to inf astructur c eation. I a ditio ,t would b des rab e that the pr port on of l nd al owed to e used for ‘non- rocessing’ activi ie should beminim se .in conflict 4.7.2 The li eliho d of t ose ous ed shoul , owe er, b the pr me concern on pac age esolu ion Whil t e Group o Mi isters ha sug est d that the reh bilitat ion is no sho l in lud a job f r a least one ers n from he affec ed f m ly, such a ti ulakage , ut a equat . In fact, many en repr neurs h ve alrea y proposed reh bilitatio pa me-sharinhe do not go ar enough. Reh bilitati n pack ge shou d e ased on an inchapte . st ategy, he detai s of which h ve aheready bee descri ed ear ier n the th sather th n i ea, on the wh le s ould be o make he oust es primary takehold r part ers pr ject’s one-time biciaries or spnecta ors of SEz d velo men . Thus, th Ma galore SE &R pac age defies tenant d penda t on land, ncroac erf living of governm49apacity uil ing for conflic Resolutionland and rnat ve and and agri ultural l bor rs all as Project Affected Per ons wh a e to be llotted alt tion o la d ites of varyi g siz s al ng wi h thos losi g th ir lan to the ro ect. In dd ites in lieu f an , an e gratia housin rant, a transp rtatio rant, a sub istencrant, a rehabi itati n g ant or loss f land, vo ational rai ing and em lo men to on m mber of each affecte family co stit te par of thepacka e.ov sion .7. The SEz la sho ld also specify estab isment of vo ational raining enters. P iv tie o water, sa ita ion an health fa ilitie should pre ede th actual devel pmental ac ocat ng in the ic nit of the v llag s. Ther s o ld be a clear p ov sio in the SEz law al such respon ib lit to the entre reneurs se king to e tab ish the SE s. , it is .7.4 n rder to prevent conflict si uati ns from ari ing and le ding to v ol ncuse t e n cess ry that in ustrial ac ivi ies nd Ezs are lo ated n are s wh re th y c ds. For least disp ace ent and disl cat on an do n t usurp pr ductive agri ultura lah could the ur ose i may be d si able to prepare compr hens ve and u e pla s whi ver, t ndica e where in ustrial ac ivi ies nd SE s ould be oc te . It is ne essary, ow nvi ing ens re t at s ch and u e p ans areinali ed on y afte public consu tat ons and and u e an tak ng into account ob ec ion to the ropo ed and use p anni g. nce hepecife p ansfi are alis d, the s ould be fa thfully oll wed an s ould n ffec e fori an mber of y ars. .8 LandReco dsvi uals .8.1 The unsati facto y tate of land re o ds is a majo s urce of dispute between ind t urn. as also between ind vid als and the gov rnme t. Such isputes s meti e take a viole ravated The ro lems of disp ac ment of am lies y lar e scale acq isi ion are further ag ight to be aus of he poo s atus of land ec rds. The co mi sio in it R por on t eernance Inf rma ion has em has sed the im or ance of land records mai te anc in our go R port sy tem. The co missi n ould be deal ng w th th s ssue in furthe d tai in it on istrict Administra ion.4.9 Recommend ti nsg rarian a. The f llowi g s ep may e aken to a lev ate the is res in thsctor:i. Provide renewed im etus to lan reform easu es like redist ibion of surpl s land, vesti g itle in ten nts and arrying forward conso id tion of land old ngs etc for mai tai ing and p omo ing the sustai bi ity of agri50ii. In order to provide adequate and timely facilities to farmers, there is need to augment the banking system in the rural areas and make them more responsive to the farmers’ needs.iii. Redesign poverty alleviation programmes to make them more relevant to the needs of small and marginal farmers.iv. Step up public investment in order to expand non-farm and off farm activities to provide alternative livelihood opportunities for the poorer farmers within rural areas.v.Introduce measures to encourage formation of ‘Self Help Groups’ (SHGs) to improve access to credit and marketing and empower the disadvantaged.vi. Diversify risk coverage measures such as weather insurance schemes and price support mechanisms.b. A new legislation for land acquisition incorporating the principles laid down in the revised national rehabilitation policy needs to be enacted. The recently announced national policy on rehabilitation of project affected persons should be implemented forthwith for all ongoing projects as well as those in the pipeline.c. There is need to amend the present approach to SEZs on the following lines:i.In establishing SEZs, use of prime agricultural land should be avoided.ii. The number of SEZs should be limited, with a larger minimum size with locations preferably in backward areas so that they act as nuclei for economic growth.iii. SEZs promoted by farmers themselves should be encouraged.iv. The livelihood of the displaced should be a major concern of the SEZ policy.v.The SEZ regulations should clearly allocate social responsibility of rehabilitation to entrepreneurs seeking to establish SEZs. This should include provision for water, sanitation, health facilities, and vocational training centres.51capacity bui ding fo conflict Resolutionvi. The proportion of land that is permitted to be used by the promoters of SEZs for non-processing activities should be kept to a minimum and this should be ensured at the time of approval of their plans. The existing ratio between processing and non-processing activities needs to be re-examined in order to maximize the proportion of land put to productive use. Also strict adherence to environmental regulations should be ensured.vii. Comprehensive land use plans should be prepared and finalised after wide public consultations. Industrial activities in SEZs should be located only in areas earmarked for the purpose in the land use plans.viii. The extremely liberal tax holidays provided both to export units and to developers require reconsideration.525W TER REL TED ISSU Sul The P ime Mini ter has s id, “Ri ers a e a sh red heri ag of our cou t y ... hey shnow be the str ngs hat u ite us, not the str ngs hat di ide s. 25 Howe er, w ter conflctshin di ide e ery seg en of our soci ty: polit cal part es, sta es, regi ns, sub-reg ons wi t sta es, distri ts, cas es, gr ups and indivi ual farm rs. W ter confli ts, not wa er, ee be percola ing fa te to the grassr ots l ve in India. 2 5.1 Inter-S ate W terl Confi c t s5 1.1 constituti nal Provis ons and Impor antl a w son, 5.1 1. The constitu ion ays own the legisla ive and functi nal jurisdic io of the un and S ate and l cal Governm nt in res ec of wa er. W te is essenti l y a S ate sub ect the u ion c me in nl in the as of inter-S ate wat rs. is I of the Sev nth Sched le, dea ing ith subj ct in res ec of w ich St tes ave jurisdic ion has e tr 17 w ich re ds: Wa er, ha i to say w ter suppl es, irriga ion and can ls, drai age and embankme ts, w ter sto age and w ter p wer sub ec to the provis on of e tr 5 of is I; E tr 5 of i t I (u ion li t), re ds: Regula ion and develop en of inter-s ate ri ers and r ver val ey to the ex en to w ich uch regula ion and develop ent u der the con ro of the Un on is decl re by Parlia en by la to the exped en in the pu lic inter e s t .ith 5.1 1. The constitu ion cont i s a spe ific Art c e - Art cle 2 2 – w ich d als ds: adjudica io of disp tes rela in to mat er of inter-s ate ri er or r ver vall ys, hat re or Art cle 262 1): Parlia ent ma by law pro ide for the adjudica io on any dis ut ate compl int ith res ec to the se, distribu io or con ro of w ter of or in, any inter-s by r ve or r ver val ey. (2) Notwithstan ing anyt in in his Constitut on, Parlia ent ma law pro ide hat nei her the Sup eme C urt nor any o her C urt s all exer ise jurisdic io in res ec of any uch dis ut or compl in a is refe re t in clause( 1 ) .rds 5.1 1. The two aws ena ted u der Art cle 262 and e tr 5 of i t I are the R ver bo ted ct, 956 and the Inter-S ate W ter Disp tes ct, 1 56 The R ver bo rds Act was ena ith the objec iv of enab ing the u ion Govern en to cre te in consulta ion ith the S ate Governme ts, bo rd to ad is on the integr ted develop en of inter-S ate basns.005. 25P ime Minist r’s sp ec at the Inaugura io of the Nati nal confer nc of Irriga ion and W ter Resou ces Minist rs, Nove ber 30, 2, 26bik ham Gu j , K J ay, S has Paran pe, V nod oud and Sh uti Visp te, “Mil ion Rev lt in the Maki g”, Econ mic and Polit cal Wee Febr ary 18,53apacity uil ing for Conflic ResolutionThe River Boards were supposed to prevent conflicts by preparing developmental schemes and working out the costs to each State. No water board, however, has so far been created under the River Boards Act, 1956. The National Commission to Review the Working of the Constitution observed as follows:While a more radical suggestion has been made to place all the inter-State rivers under the jurisdiction of an authority appointed to administer them in national interest by law enacted by Union Parliament, it is a fact that in relation to regulation and development of inter-State waters, the River Boards Act, 1956 has remained a dead letter. Further, as and when occasions arose, different River Boards have been constituted under different Acts of Parliament to meet the needs in a particular river system according to the exigencies, facts and the circumstances. The Commission, therefore, recommends that appropriate Parliamentary legislation should be made for repealing the River Boards Act, 1956 and replacing it by another comprehensive enactment under Entry 56 of List I. The new enactment should clearly define the constitution of the River Boards and their jurisdiction so as to regulate, develop and control all inter-State rivers keeping intact the adjudicated and the recognized rights of the States through which the inter-State river passes and their inhabitants. While enacting the legislation, national interest should be the paramount consideration as inter-State rivers are ‘material resources’ of the community and are national assets. Such enactment should be passed by Parliament after having effective and meaningful consultation with all the State Governments.5.1.1.4 The Inter-State Water Disputes Act provides for an aggrieved State to ask the Union Government to refer a dispute to a tribunal. A water disputes tribunal is appointed by the Chief Justice of India and consists of a sitting judge of the Supreme Court and two other judges chosen from the Supreme Court or High Courts. The tribunal, so appointed, can choose assessors and experts to advise it and the Award, once given, is final and beyond the jurisdiction of courts.5.1.1.5 The Sarkaria Commission in its report at Chapter XVII on Inter-State River Water Disputes recommended that:?Once an application under Section 3 of the Inter-State River Water Disputes Act (33 of 1956) is received from a State, it should be mandatory on the Union Government to constitute a Tribunal within a period not exceeding one year from the date of receipt of the application of any disputant State. The Inter-State River Water Disputes Act may be suitably amended for this purpose.(Para 17.4.11)?The Inter-State Water Disputes Act should be amended to empower the Union54Water RelateGovernmeGo er ment to a point a T ibunal, s o- oto, if ne essa y, wh n it is s tisf ed t a such a disput e ists in fa t.(Para1 .4.14 l l vel ? Ther s o ld b a D ta ank and inf rmatio s ste at the ation . Ther and dequate m chiner s oul b se up or this pu pos at the e rlies s hall sho ld a so be a p ov sio in the Int r-Sta e Water isp tes ct tha Stat ves ed be eq ired to give n cess ry ata f r which pur ose the rib na may b 1 .4. 6) wit p w rs of Cour . (Para 1 .4.15 &e w rd ? The Int r-Sta e Water isp tes Ac s ould be am nded t ens re hat t it t on of a ribunal becomes e fectiv wit in fi e ye rs rom he date of cons e year of a T ibu al. If, owe er, or some e sons, a ribun l fe ls hat he fi mad by pe io h s to be e ten ed, t e Union Go ern en ay on a r fere ce1 .4. 7) the ribuna ex end its te m.(Parabunal ? s The Int r-Sta e Water ispu es A t, 195 s ould be am nded s that a Tr of the a ard has he sa e f rce and anctio b hi d t as n rder o d cre Supre e ourt t make a Tr bunal s awar really indin . (Para 1 b3-6. tm7 . 4 . 1 9 ) llowing 5. .1.6 The Int r-Sta e Water isp tes Act was am nded in 002 and the frmade: i portant chan es west by a ? Go er ment f ndia to e t blish a ribuna wi hin ne y ar on a re uState Gove nm nt.ithin ? The ri unal to inv sti ate the matters ef rr d t it nd ive it Repor ano her p riod f thr e years (Go er ment f I dia ma ex end th p riod byea s). twoby the ? The ec sio of the T ibuna , a ter its pub ic tio in th Official Ga ett central Gov rnmen , sh ll ave he sa e or e as n rder o d cre of theSupreme c urt.D isp u es 5.2 Lesson Lea nt from Int r-Sta e Riverr-Sta e 5.2 1 S nce the e ac men of the Int r-Sta e Water isp te Act n 1 56, five Intof the Water isputes T ibun ls h ve ee se up for adju icati g water is utes in re pec rishna, G davari, armada, cau ery and R vi-beasrivers 5.2.1.1 Kri hna ando dav a r iitu ion 5 2. .1.1 The ational co mis ion for th R vie of the Wo kin of the consver th h s aptly su mar sed the various deve op ent in he cas of the dispute aris ngw ter of the Krishnariver:272 Source: city bui din for co flict Reslution“5.8 The Krishna Water Disputes Tribunal (a) Krishna is the second largest river in the Penisular India. Rising near Mahabaleswar, in the Mahadev range of the Western Ghats, it flows down a length of 1392 km, through Maharashtra, Karnataka and Andhra Pradesh, before it drops into the Bay of Bengal. Out of a total catchment of 2,55,949 sq. km., 6821 sq. km lie in Maharashtra, 1,11,959 sq. km in Karnataka and 75369 sq. km in Andhra Pradesh.(b) In 1951, in the backdrop of major development proposals being formulated by the States of Bombay, Hyderabad and Madras (among the total of four riparian States, including Karnataka), an agreement was drawn up, apportioning the available supply among them. However, disputes arose with Karnataka refusing to ratify the agreement.(c) Notwithstanding the best efforts of the Union Government towards convening several inter-State conferences, the disputes could not be settled. Further, the States moved for reference of the matter to a Tribunal. Accordingly, the Krishna Water Disputes Tribunal was constituted in April 1969, and the matter was referred to it.5.9 Krishna Waters Dispute : Rival Contentions(a) The contention of Karnataka, in essence, was, that the 1951 understanding, not having matured into an agreement, was not binding, and therefore equitable distribution of the waters should be made. The implementation of Andhra Pradesh’s projects and Maharashtra’s proposal for West-ward diversion of Krishna waters in excess of 67.5 TMC, should be stayed.(b) Maharashtra too disowned the Agreement of 1951; further, it objected to implementation of other States’ projects without its prior consent. A fresh assessment of dependable flow as well as of equitable apportionment thereof, was sought.(c) In contrast, Andhra Pradesh affirmed the validity of the 1951 Agreement, and held Karnataka and Maharashtra guilty of its breach thereof. It sought an injunction, restraining them from undertaking works involving utilization of more waters than anticipated as their respective shares. It also sought to restrain them from intercepting flows to the delta, as well as to other irrigation works of Andhra Pradesh.?? ?56Water Related Issues5.11 Duration of the Krishna Tribunal (1969 - 76) The Krishna Tribunal was set up in April 1969 and forwarded its Report to the Government of India in December 1973, in less then five years time. Within three months, however, all the party States and the Government of India made further references to the Tribunal. A further Report of the Tribunal was forwarded in May 1976, giving therein, such explanation and guidance as it deemed fit, regarding regenerated flows. So, in all, it took seven years for the Tribunal, to consummate the process of adjudication.”Even though the Krishna Tribunal gave its award on the dispute in 1976, the dispute could not be resolved. A new Krishna Water Disputes Tribunal (KWDT) was constituted on 2nd April, 2004 for adjudication of the dispute relating to sharing of waters of Inter-State River Krishna and river valleys thereof. In case of an Interim Relief Application filed by the party States of Maharashtra, Karnataka and Andhra Pradesh, the KWDT passed orders on June 9, 2006 declining to give interim relief as sought in the application and at the same time indicating certain norms with a view to facilitate adjudication of the dispute before the Tribunal. Subsequently, the State of Andhra Pradesh filed Interlocutory Application under Section 5(3) of the Inter-State Water Disputes Act, 1956 seeking further explanation/ guidance on the Order of the Tribunal of June 9, 2006. The Tribunal in its hearing held in September and October, 2006 has framed 29 issues for adjudication of the dispute before it. On April 26, 2007, the Tribunal disposed of the Interlocutory Application under Section 5(3) of the ISWD Act, 1956 declining to give any explanation. Further hearings of the Tribunal are continuing on monthly basis.285.2.1.1.2 In case of dispute over the waters of the Godavari, even while the adjudication proceedings were going on, the party States viz. Maharashtra, Andhra Pradesh, Orissa, Madhya Pradesh and Karnataka entered into several inter-State agreements in 1975. Subsequently, bilateral and tripartite agreements with regard to various irrigation projects were also reached between the party States during 1978-79. The Godavari Water Disputes Tribunal took cognizance of all these agreements and having regard to the requests of the party States, included them in the Final Award in July, 1980.295.2.1.2 Narmada5.2.1.2.1 In July 1968, Gujarat asked the Union Government to refer the issue for adjudication under Section 4 of the Inter State Water Dispute Act. The Union Government constituted the Narmada Water Disputes Tribunal (NWDT) on 6th October, 19695728Source: Website of Ministry of Water Resources: , retrieved on 1.2.2008 29Source: Website of Ministry of Water Resources: , retrieved on 1.2.2008capaci y b ilding or Resolutonconflict58to adjudicate upon the sharing of the Narmada waters and the Narmada River Valley Development under the chairmanship of Justice V. Ramaswami. The tribunal gave its Award on 7th December, 1979, which was notified by Government of India on 12th December, 1979 whereupon it became final and binding on the parties to the dispute.30 This was facilitated by the prior settlement of the two major issues of allocation of waters between Madhya Pradesh and Gujarat and the height of the Narmada dam through informal discussions, under the leadership of the then Prime Minister, over a period of three years. conflicts arose subsequently, not on the question of allocation, but on the height of the dam, the issue of submergence, displacement of people and their rehabilitation. The Narmada bachao Aandolan (NbA), the NGO that spearheaded the issue, challenged the decision on the height of the dam in the Supreme court in a Public Interest litigation in 1994. The Supreme court gave its judgment on 18th October, 2000.5.2.1.3 Cauvery5.2.1.3.1 The dispute over the allocation of the waters of the River cauvery is more than 100 years old. In 1892, an agreement had been signed between the princely State of Mysore and Madras Presidency. In the 1892 agreement, a framework had been established for consultation and resolution of conflict, but both the governments had resented the agreement. In 1924, a new agreement was signed, specifying the capacity and extent of irrigation to be provided by the KRS dam in Mysore and Mettur reservoir in Madras. The 1924 agreement provided for review of certain clauses after 50 years, i.e, in 1974 but the review did not take place, nor was the agreement either terminated or renewed. Discussions held by the union Government and the dialogue between Karnataka and Tamil Nadu for over two decades produced no results. In July 1986, Tamil Nadu made a formal request to the union Government under the Inter State Water Dispute Act to set up a tribunal. The tribunal was finally set up in June 1990. The Tribunal passed an interim order in 1991 which caused a lot of violence. The final order of the tribunal which came recently has not been received well. The matter has again been taken up before the Supreme court in the form of a Special leave Petition.5.2.1.4 Ravi-Beal5.2.1.4.1 under the terms of the Rajiv-longowal Accord which provided that a tribunal should be set up to investigate the river water claims of Punjab, Haryana and Rajasthan, a tribunal was set up by an ordinance in January 1986. The tribunal gave its award in 1987, but Punjab contested the award on the ground that the tribunal had overestimated the free water available. Haryana approached the Supreme court on the ground that no clear decision had been given by the Tribunal. In January 2002, the Supreme court ordered that Punjab should complete the construction of the Sutlej yamuna link (Syl) canal within30Sour e: Website f inist y of Water Resources: sslid=392 r trievedWat12 months. In he Supre e c urt 12 m nths. In anuary 2 03, the dea li e ex ired nd n June 004, l. In uly 20 4, d rected the un on Govern ent to constr ct t e nfin shed p rt of S l can ating the ya una unjab assed the P nj b Terminat on o Agre ments Act, 200 , abro cha Prad sh and greemen of 199 between Punjab, Ha yana, Raj sthan, D lhi and Him eme court asking a l ther ccords. The unio overnmen filed pe ition b fore he Sup err d he unjab for fr s direc io s a a res lt o t e Punjab ct The P esident f I dia re court u held ts A t to he Supr me co rt in Jul 2004 In August 004, he Sup emeg p rtion f he earlie or er di ecting the un on Govern ent to constr ct the em iniSyllict is st an l. The con l l not es lved vern ent as notTh5.2.1.5icanmost igniles on from the past s that the uni n GTh oth r l sson been able o a t d cisively nd ha enerally tak n a ‘mini al st’ a titude is t at the ti e l st in delays due o wran lin both efore an during tri un l pr ceeding i very co tly, in terms of lo s of pr duction, loss o farme s’ nco e growh an t e rising cos of constr cting ir igation syste s. Inc eas n g ly , St tes are b co ing resist nt t compl ane with Aw rd of t ib nals in spite of e pr ssthe const tut on rovisions in finalit of suc rega di g th less n is th t a award . noth r en to con tit te l ng time is ta nd iv ng awards tri unalsronounc ments fand nds that ha e led in erim Awali ation . fter to furth r com given, t er are a Awar isf i terpretation problems ta io and ther a d i pleme ani m to en orce i no mec haracte of su the h in ing ourt are barr d A ards. he Supreme court f om rev ew ng he Awards f t e tribu als but atter a e s ill tak n to al y n t so mu h o r lated iss es. The questi ns aised b fore he upreme our a e us n the subj ct of allo ati n f waters, bu on questio s of i s sha in dur ng years of oo rain all and n hose relating to envir nmental aspe ts, displacement a59cap city Bui din for co flict Reslutionof people and human rights in the context of specific projects. Such references delay the settlement of disputes and implementation of projects for years.5.2.1.6 The commission would therefore like to suggest that the Union Government, through the Ministry of Water Resources should be made a party to proceedings before the Tribunals and there should be an enforcement mechanism to implement the awards given by the Tribunals. Article 262 (1) already bars the jurisdiction of the Supreme court but matters are still being taken there on related legal, jurisdictional, environmental and constitutional issues. Since Article 262 is the only Article in the constitution that bars the jurisdiction of the courts, it would be necessary for courts to take note of this constitutional provision.5.2.1.7. As a measure of conflict resolution in case of inter-State rivers, the commission would like to suggest that resource planning should be done for a hydrological unit such as the drainage basin as a whole. In this respect, the National commission for Integrated Water Resources Development that gave its report in 1999 had recommended setting up of River Basin Organisations (RBOs) as a body in which the concerned State Governments, local governments and water users would have representation and which would provide a forum for mutual discussions and agreement. The National commission had recommended that the60Wa er Rela ed IsserRBO bO sho ld cons st o a Gene al coun il consist ng o a Minis er a a representat ve of he St te Governme t, he lea er of he Oppositi n, representati es of selec ed Panchay ts ts nd ur an lo al bod es f om e ch distr ct in he ba in nd representati es of wa er distri in f om e ch distr ct in he bas n. The Natio al commiss on ad a so recommen ed th t, nt addit on to he Gene al counc l, th re sho ld b a stand ng commit ee w t a permansecretarit .or 5.2. .8 The commiss on fu ly endor es he suggest on of he Natio al commiss on as Integra ed Wa er Resour es Developm nt or establishm nt of R Os in he man erng suggest d. As he Fren h, Austral an nd chin se experie ce sugges s, river-ba in plann se nd implementat on is he id al sys em to foll w. The sys em as wor ed w ll in thThe countr es nd he experie ce in Austra ia is relev nt or us as it a a fede al set- p. er commiss on wo ld l ke to recomm nd he enactm nt o a legislat on in pl ce of he Ri l d boa ds A t, 1 56 t at co he provi e, in addit on to in establishm nt of Ri er ba er- Organisati ns or e ch intay St te riv r, he follow ng by of goa s, responsibilit es nd managem nt or he Rb Os A. Goas: a) E n u n c i a t o n of princip es or he developm nt ofhe basi b) Issu ng guideli esor ma or project c) Prescrib ng techni al standard d) nd Maintain nger improv ng wall qual ty orsebenefic al u e) Prescrib na framew rk or developm ntof gro nd wa61Ca aci y Buldflict ng forResoluti Conf) Controlling land degradationg) Rehabilitation of land resources to ensure their sustainable utilisation and conservation of the natural environment of the basinB. Responsibilities:a) Water allocation to the States and administration of various key natural resources strategiesb) Technical responsibility for water quality, land resources, nature conservation and community involvementc) Collection of dataC. Water Management Responsibilities:a) Regulation of inter-state rivers and a programme of water quality monitoring to maintain flows and water quality for a range of purposes including supply to domestic users and for irrigationb) Coordination of river management to encourage appropriate land-use practices, best practical means of waste-treatment and off-river disposalc) Responsibility for developing programmes for the preservation of the ecosystem and for coordination of management of wetlands.5.3 National Water Resources Council5.3.1 The National Water Resources Council was set up by the Government of India in March 1983 to discharge the following functions:(a) To lay down the national water policy and to review it from time to time(b) To consider and review water development plans submitted to it by the National Water Development Agency and the River Basin Commission(c) To recommend acceptance of water plans with such modifications as may be considered appropriate and necessary(d) To give directions for carrying out such further studies as may be necessary for full consideration of the plans or components thereof(e) To advise on the modalities of resolving inter-State differences with regard to specific elements of water plans and such other issues that arise during planning to implementation of the projects(f) To advise on practices and procedures, administrative arrangements and regulations for the fair distribution and utlisation of water resources by different beneficiaries keeping in view optimum development and the maximum benefits to the people62Wate RelatTo ma(g To ake s ch other recomm ndat ons t at wou d foster ex edi ious and enviro menta ly ound and e onomical de el pment of water es urces i variousregi nss is the 5.3.2 The Prime Mi ist r is the hai man, he union Mi ister of Water es urc inisters/ Vice cha rma and the Mi ister of tate or Water R sources, oncer ed union M in sters f Sta e, chief in ste s of a l S ates and l eutenant Governors/Admin st ators of Water of union Te rit rie are th m mbe s of the co ncil. The S cretary, Mi istry 1985 an es urc s is the ec eta y of the cou cil. Thi cou cil fir t met in Octo er,to e t dopted a Natio al Wat r olicy in 1987. Alt ough th c uncil is su pose ning and onc a y ar, his does ot ofte h ppe . s far as coo di ation of ri er basin plai pact. m nag ment and effect ve ate use are c nce ned, th co nci ha not had muche r tegra edsult has een t at ndia h s ailed t de elop ts water esource through ie beco ri e er basin dev lop ent, and in ernecine conflcts ov r river betwe n St tes hac mmon and cone nt i o u .in I diaposit ve 5.3 3. Si ce i s such a hig -powe ed ody, th counc l sh u d pl y a uch more oactive r le What s really re uire is that th co nci and its se retari t houl be more p ng in er- suggest inst tut onal and le islativ r forms i detai , devise m dal ties for esolvigu ati n St te water onflcts, a d dvise on pr cedures, admin strative arr nge ents and r elo ment f use of es urces by different ben ficiarie k epin in v ew thei optimum deer basin and ensurin maximu b nefis to th p ople. The ch irm n o all he RiOrgan sa ion , as and whe fo me , ma be mad m mbe s of thecou cil.5.4 N ed for a Nat on l Lawon W ter5.4. Indi ’s total prec pi at on s of he order of appr xim tely 40 millio hect re (mhm) nnually f lli g in th for of rai (97 er cent o sn w (3 er c n ) ov r a anma s of 32 million ectares. Appr xima ely 17.5 pe cen of t is total im ediately ev porates anot er 1.25 per cent t anspire throug fo ests and ve etat on, 12.5 per cent p rcola es ility n elow t e g ound nd 8.75 per cen become sur ace flow Surf ce water ava la or other In ia m st of it in akes an r ver , i 1 5 mhm of wh ch 5 .2 flo s t t e sea ly 7.83 c untr es, 4.87 per cent ev pora es, 4.88 per cen becomes gro ndw ter, and o 2 mhm of pe cent is vai able for con umpti n. n ia has a ot ntial of appr xima ely 45 l ised 31 gr un water of w ich 13. mhm are urrently ut’s fr sh 5. .2 Wh le nd a h s 16 pe ce t of th world’s po ula ion, ts sha e in th worl 700m3 is water ava la ilit s o ly 4 er cent. Nor a ive y, a p r capita ava la ility f as water re uired in or er t b free of wate stre s, while ava labil ty b lo 1 00 m3 s ermedcar ity. P r capita ava la ility in ndia w s 200m in 19 1 b t it h d allen o200m3 n6331Joh R Wood, The Po itics of Water Resource De el pmentCapaci y b ilding or ResolutonConflict1991 and further to 1820m3 in 2001, reflecting the effect of increases in population. It is expected to fall further to 1340m3 in 2025 and 1140m3 in 2050. The expansion of economic activities as a result of the robust growth process that the country is experiencing has led to an increasing demand for water for a variety of purposes. As a result of this development, average availability of water is likely to fall below the water-stress level in the near future and given the wide variation across the country, water-stress conditions already exist in many parts.32 Under the circumstances, there is need for much greater efficiency in the use of water and a greater public awareness on the criticality of water conservation. This would call for efforts to develop, conserve, utilise and manage water on the basis of a framework that incorporates national perspectives.5.4.3 A national water policy was formulated by the Ministry of Water Resources, Government of India in September 1987, but it is yet to be operationalised because of lack of guidelines. A better way to articulate and operationalise a national perspective on water will be through the instrumentality of a law. The Commission would therefore like to recommend that a national water law that keeps in view the interests and needs of the States should be enacted. It is necessary that the law, at the minimum, should incorporate the following :a.The national water law should be subject to and consistent with the Constitutionin all matters including the determination of public interest and the rights and obligations of all parties with regard to water.b.The use of all water, irrespective of where it occurs in the water cycle, shouldbe subject to regulation by prescribed bodies.c.The location of water resources in relation to land shall not in itself conferpreferential rights to usage.d.The unity of the water cycle and the inter-dependence of its elements whereevaporation, clouds and rainfall are linked to groundwater, rivers, waterbodies, wetlands and the sea, and where the basic hydrological unit is the catchment, needs to be recognised.e.Resource planning should be done for a hydrological unit such as a drainage unitas a whole or for a sub-basin. All projects and proposals should be formulated and considered within the framework of such an overall plan for a basin or sub-basin so that the best possible combination of options can be made.f.Subject to the provisions of the Constitution and relevant laws, responsibilityfor the development, apportionment and management of available water resources will vest with the basin or regional level in such a manner as to enable the interested parties to participate fully.32Planning ommissio , Mid-Ter A prais l of Tent Fiv64W ter Reg.Water nking at g. r Wa er requir d to ensure t at veryon h s access to suffici nt drrequired to should ehe quanteserved.ty, quality and re iabil ty of wa erpend sh uld aintain th ecologic l uncti ns on which uman b ings d vidually or also be rese ved so ha the se of wa er b hu an does not nd umulativel co prom se t e long term su ta nability of ec systems.regul to y . Prov si n sh uld be ade for the e ta lis me t of one or morroosed law. bodi s t ensure the im le ent tion of he ph net ork i. The e should be a tandardi ed national inform tion s stem wi tra , state o da a banks a d databases int grating and s ren thening he ce processing and basin-le el gencies a d i proving th qua ity of ata and thcpab lities.en ation5.5 Recomin cases of a. The Unio Gove nm nt need to be mo e p oactive nd decis ve inter State ri er isp tes nd ct with th pr mptness a d sustaind at enti n that s ch dispte dema d. b. S nce Ar icl 262 of the onstitut on p ovides hat neither the S pre e C urt n r any other Court sh ll exercise ur sdictio i respect of inter State riv r is utes, it s ne ess ry tha the s irit behind th s rovison is fullyap recia ed.c. River Basin O ganisa ions ( BO ) s ou d b set up for each inter- ta e river, rated Wat r as pro osed b t e R port of he Nationa Co mission fo Intee the iver Resources evel pm nt, 1999 b enacting a le islatio to repla s ct 1956. B oardhen fo me , d. The Cha rme of a l the River Basin Or an sat ons, as and es Cou cil. sh uld be ad me bers of he Na ional Wat r Resourplay a m re e. he Na ional Wat r Resou ces Coun il and RBOs s ould proact ve, po it ve role The Cou cil and its secret ri t sh uld be mor alities f r suggest i sti utional and legisla iv reform in de ail, devis moinistrative resolving inter State wat r c nflicts a d advise on procedures, ad enefcia ie rra gements an r gul ti n of use f esources by i different mu be efits kee ing i view t eir optimum dev lopment nd ensu ing maxt e eople to f. In order to develo , conse ve, utilis and an ge ater n h basis of a fr mework that ncor orat s long term p r pectives a na ion l wate l w shoul b enacted s ugge ted i para656ISSUES RELATED TO SCHEDULED CASTES6.1 Introduction6.1.1 In its Report on Public Order, the Commission has made a distinction between ‘Established Order’ and ‘Public Order’. Established Order may not always be as per the tenets of the rule of law. Exploitation of the under-privileged sections of society, may be considered by the exploiting sections as the established order. Laws and public policies aimed at desirable social change may sometimes lead to conflicts in the short term. Nevertheless, such laws need to be enforced firmly if the core values of the Constitution and human rights are to be protected. In the ultimate analysis, public order is strengthened by protecting the liberty and dignity of all citizens through social change.6.1.2 Members of the Scheduled Castes are among the poorest in the country and also, the most discriminated against. This discrimination often manifests itself in the form of socio-economic exploitation, denial of civil rights, social ostracism and even violence against them which sometimes assumes brutal proportions in the form of massacres, rape, burning of colonies etc.6.2 Constitutional Safeguards6.2.1 The scheme of the Constitution to safeguard the interests of the weaker sections of society reflects a three-pronged strategy for changing the status of Scheduled Castes and the Scheduled Tribes based on the traditional social order. This consists of:33a. Protection: Legal/Regulatory measures for enforcing equality and removing disabilities; Providing strong punitive action against physical violence inflicted on them; Eliminating customary arrangements which deeply hurt their dignity and person; Preventing control over fruits of their labour and striking at concentration of economic assets and resources and setting up autonomous watch-dog institutions to safeguard their interests, rights and the benefits guaranteed to them.b. Compensatory discrimination: Enforcement of reservation provisions in public services, representative bodies and educational institutions.663Report on Pr vention of Atrocit es agains Sched led CaIssues Re atedAtoAS heduled castesDevelc. ADeve opment: A ea uresAt Abr dgeA heA ideAgap bet een AtheAS hedule Aca tesAa dAother Acom un ties A n Atheir A conomic Aco dit onsAan Asocial status,A overingAal oc tion AofAr sou ces Aand Adist ib tioniAofAben fts.se ti gA ThisA tra egy AwasAsubs quently Aoperati nalised through Ae ac ment Aof vario s Alaws, lo men A up AofAe aborate A atchdog Ame han smsAan Ataki gAs epsAfor Asocio- conomicAdev of Athe AS heduledcaste .Afor AtheA .2.2 ATheAcons itution Are ogn ses A he A eedAfor Ap oviding specialAsa egu rds te tion S hedule Aca tesAand Ainco porates several A rticl s Awhich A rov des Af r AtheirApr Ar ic eA as well Aas Ap om tion A f Atheir social, Ae onomic, Aedu ati nalAandA ultural Ain erests. yAform. 1 AofAtheAcons itution Aa olishes Auntouc abi ityAand forb dsAthisA ra tic AinAa eAshall Ar icleA 6Au derAtheAD rectiveAPr nc ple AofAt eAStat APolicyAst pula es AheASta hatA“ Ape pl A prom te Awith speci lAc re, AtheAe uca ion AandA conomicA nt restAo AweakerA ec ion AofAth AsocialA andAin Apa ti ularAofAS hedule ACa tes AandAS hedule ATr besAa d Ashall prot ct At em Afro specialA i jus ice andAa lA ormsAofAexploi ation”. Artic eA15(4)A mpo ersAt eA tate to Amake andAforA pr vis onsAfor Aadv nc mentAofA ocially Aecon micallyA ackward cl ssesAorA iti ens atsAforA S heduled Acastes/S heduled Tribes.A rti les 330 andA332 pro ide AforAres rv tionA fAs AofAtheA S heduled Acastes/S hedule AT ibe Ain the Al kAS bhaAan AVidhan Sabhas. Art cl A33 Aca tesA cons itution A rov des forAthe se ti g upAof AaA ational Aco mis ion AforAS hedule torAall andAst pula es that A t A hal AbeA he dut Aof Athe Aco mi sion Ato Ainv sti ateAand mon matters A el tin AtoAtheAsa eguards A rov ded forAtheAS hedule Acast sAu derAtheAcons it tio Aor Aa yAo her law for A he Ati eA eingA n A orce A rAu derAa y A rde AofAtheAGo ern en AandAtoA val ateAthe wo king ofAsuchAsafgua ds.A6.3ALeg slativeAFame w o kAightAtoA 6.3.1 Ar ic eA1 AofAtheAcons it tion A f AInd a A(P rtAIII, AFun amenta A ights –A esA hatA E uality) Aa olishedA‘untouch bil ty’Aand for idsAitsA ra tic AinA nyA ormAandAst pula ableAinA the Aenf rc men Aof Aany Adi ability ari ing AoutA‘untouch bi it ’ AisAa AoffenceApu is ac orda ce A ithAtheAl w. tio AofA .3.2 A nA rder Ato enforce Ar ic eA1 Aof AtheAconst tution Awi hinAfie A ears AofA doiament.A theAconst tut on,Athe Auntouc ability A( ffenc s) AA t,A 955Awas en ctedAbyAPar re ame A Subse ue tly,Ato enl rge Ait Asc pe, the ActAwas re ised Ain A ovem erA 976Aand dia andA as AtheAPr te tion A fAcivi ARig ts AAc , A 955 ATheAAct ex end Ato At e A hole A fAI ATheA ct the offenc sAu der theA ctAw re AmadeAco ni able as well AasAnon-compo nd ble Aof AtheA madeAit Am nda ory forAth AS ates to Atake specific A ea ure AasAper Se t on A 5 A A(2Pr te tion A fAcivi ARig tsAA t. ASuch A easures inc udeAthe Afo6768apacityA uil ingAfor Conflic AResolution?provision of adequate facilities, including legal aid, to the persons subjected to any disability arising out of “untouchability” to enable them to avail themselves of such rights;?appointment of officers for initiating or exercising supervision over prosecution for the contravention of the Act;?setting up of Special Courts for the trial of offences under the Act.?setting up of Committees at such appropriate levels as the State Governments may think fit to assist the State Governments in formulating or implementing such measures; and?Provision for a periodic survey of the working of the provisions of this Act with a view to suggesting measures for its better implementation.6.3.3 Further, to check and deter crimes against the Scheduled Castes and Scheduled Tribes, the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989 was brought into force with effect from 30th January, 1990 with the main objective “to prevent the commission of offences of atrocities against members of the Scheduled Castes and the Scheduled Tribes, to provide for Special Courts for the trial of such offences and for the relief and rehabilitation of the victims of such offences and for matters connected therewith or incidental thereto”. The provisions of the Act extend to the whole of India except the State of Jammu and Kashmir. Comprehensive Rules were also notified under the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989 on 31st March, 1995, which among other things provide for relief and rehabilitation to the affected person.6.3.4 The provisions of the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989 are implemented by the respective State Governments/Union Territory Administrations concerned, which as per its Section 21(1)(2) are to take such measures as may be necessary for the effective implementation of this Act. Such measures include the following :?provision for adequate facilities, including legal aid, to the persons subjected to atrocities to enable them to avail themselves of justice;?provisions for travelling and maintenance expenses to witnesses, including the victims of atrocities, during investigation and trial of offences under the Act;?provision for the economic and social rehabilitation of the victims of the atrocities;?appointment of officers for initiating or exercising supervision over prosecutions for the contravention of the provisions of the Act;I sues Rela ed to005, 7 10 case?setting up of ? setting p f committee at ap ro ria e lev ls as the tat Gove nment may th nk nec ssa y to assis t e Governmen i for ulation of such meas res with a vi w ? to provisio for a per od c a sessmen o the wor ing f this Acl mentation; ansug est ng easure for its better impity p one areas.? dentifica ion o atroc .3 5 E aluation of the legislt i v e fr me ork:onsta t d cline 6 3. .1 The number of ases egi ter d u der the P R Act has hown a fter the 19 0s. The e figures coul , owe er, lead o the erro eouscon lusion haona commissi n the problem o u touc ab lit is also on the d cli e. In fa t, the Nat a eflection on for S he ule cast s, in ts ixth Rep rt has o se ve rather, i igures nd ca ed th i effe tiv ness of the law enforce ent ach nery”. iFrom thebe (Preventio a ove, it is a so vident th t the che uled cast s and cheduled Tr rassment o the of Atr cities Ac has become the mai instrumen for preve ti g h . The convi tion S he uled caste e Ac s has een rat und r b th t ection of c vi low. (unde t e Pro a to al of 10 Rig t Act, in 200 v i c ion w er as cases end d in cottal; und r the 385 end d in cqu che uled casts and cheduled Tr be (Preventio of tr cit es) ct, i the year6970c pac tynflict buil ingResolution for coended in l studie hav ende in con iction where s 17, 01 cases ended in acqu ttal). ever . St dies have co firmed tha the abh rr nt practice of untou hability till pe sist aw enforce en a so hi hl ghted case of reluctance an ne lige ce on he art of theu ed Trib s inmachine y. The Nati nal commissio for S hed led caste and S hel ck f faith a spec al rep rt h ve stated th t ig oran e f law, fe r o rep is ls anxisting un ust in he enfo cemen syste , often co pel victi s o a quiesce n the ituatio . lso becaus of pro racted tr als, w tnesses b co e reluc ant to estify a ainst po werf u l e em nts.regarding the 6.3.5 2 The ta ement giv n in Tabl 6. indicates the Stat -wise pos tio adm nistr tive and oth r m asures for the im lem ntation of th Prot ction f ci il R ght Act, 1 55 and Scs/ Ts (Prevention of A r oci ties) ct 19 9.Tab e No .1 Steps taken by St te overnments for Im lementaion of SCs/ Ts (Prevention of A rocit es) Act, 1989, an Prot ction f Ci il Rghts At, 1955 in pro St ess/ teSettin u of Wor Spec al Courts under SCf128 Shabilityf Sta e evel Actns ofce en isagedpecial S ssioSepaing of Specia I Cell in Police untou ST, D par ment araom ission; y s Totablishand Surv ysa co l rts essi et nsOA Act, 19 9.undertd its r port.SGP.)cohe Act. An hra 12 5 new Pra essuggesti gmeasurunderrts.im lementth pr visite cell Set pconstitutep ( 2 DSPs a d h s accepntific tionrone Vigivigororedomi antlyt ibal Sta e; Nr ported cas of atr cities gainst Scs/ArunachaP adeshsly.ye RA sam 18Sp gula c al courts ScS Protect onNonstance of atrociy.Mni oringset up cl functi ni g practi) A t,989 bihar The S at Government s i plementing th pr vis o s o the cs & STs andPcR Act, 195. chhatti garh 7Special courtsSecil Polic- yesciaPblicetStations anecuto s arecelfunctioni g.ad in alpeca courts elscGoaSpme cial cou tvulnerabln Stateset p.o provide ree le al w of aid. rocitiancome has beenrone appoi areas.formuleriodNo The e areteduntouhabilityIssues el ted to Sc eduledhe Act:1 Co nts.Statesess/ States et inup of or ing of Cour s ell in SC/ST, Depicaon of Stat prone Vilevel Ac ion in pagedpecialpecial IdentiunderPolice untouch biliteysP A Actrtmen ar as and1989. und rtaken sugngm as res to imntthe pro is ons of tilance enGujarat10 Special Courts set up.15 Dy. SPs for conducting investigation of offences._YesA proposal for more Special Courts and Investigating Officers.HaryanaSenior-most Addl. Sessions Judge in each District functions as a Special Court.Special Cell at Police HQs and districts funtioning.There is no prone area in the state. However, special cells established in districts.YesA proposal for moreSpecial Courts and Investigation Officers.Himachal PradeshDue to negligible number of cases, no Special Court set up.DSPs of the concerned Districts function as Investigation Officers.–YesRegular MonitoringJammu &Negligible number of casesVarious measures being taken.KashmirJharkhandCourt of Session in notified as Special Court in each district.A Special Police Station in each District under a Dy. SP.–YesRegular Monitoring.KarnatakaSet up in each district.Dy. SP asNoHigh Power State Level committee constituted.Regular Monitoring.Investigating Officer.Madhya30 Special Courts set up.All districts haveAreas have been identified and notified.–Appointment of Special Public Prosecutor. Investigation Trg. Centre.PradeshSpecial SC/STPolice Stations.MaharashtraCourt ofFunctioning424 villages identified as sensitive villages and are being closely monitored.High Power State Level committee constitued.Steps being taken to establish Speedy Trial Courts.session in each district specified as Special Court.71ca acityconflict b ildingResolutin forable C~1 Contd~StateSettin u oWorkin o SpeciaIdentificatio o untouchabilit pron area an Survey undertake suggestin measure t implemenStat leveActio i process envisageSpeciaCourtCel iPolicth provision o thActVigilancunde SC/ST PO Act 1989DepartmenMizoraPredominantl inhabitateb ScheduleTribesN inciden reporteo atrocitieoScs/ST i th recen pastOrissInvestigatio bAtrocitpronyeRegula MonitoringDyS o office oareahavbeehighe rankidentiifedPunjaSpeciacourtSpeciacelyeRegula MonitoringspecifiedI additionthcour oSession Judgaeacdistricdeclare aSpeciacourtRajasthaI1DistrictFunctionin sinc 1978Distric leve committee formedEstablishinseuphelplinaPolicHQsTamiNadcourt coverinDI (SociaIdentifie an anuall updated Survey als conductedyeRegula Monitoring14-districtseupJusticHumaI th remaininRights supervise th functionindistrictsexistino SH unitSessioncourtwit1DySPsdesignate aSpeciacourtsTripurSeu i alReporto incident arnegligibleAdequatmeasure takeupRegula MonitoringDistrictsuttarakhanSpeciacourt iProtectiooyeRegula MonitoringdistrictseuciviRightunde Pc AccelconstituteanSpeciaieacdistrictcour setuundeAS/S (POAActWes1courtyeTrainin o Policbengase upersonne etc.7ssues R la ed to Sch duledtion)Table 6.1 Contd.Action in process/ envisagedStatesSetting up ofSpecial Courts under SC/ST, POA Act, 1989.Working of Special Cell in Police DepartmentIdentification of untouchability prone areas and Surveys undertaken suggesting measures to implement the provisions of the Act.State level Vigilancerin .an s No n tified Sch duled as es n A&N Iands Sensiti fi ofA&N Ibeingarring.PuducT fep – – Pr hiposal R oved. Monither yep –– yes RMonitdone.weep The e re no Sch duled as es n t –TlakshThe ntire popu at on is Sch duledribe. S urce: Ba ed on infor ation fur is ed y the Stat s/ Ts o the Inter State C uncil Secret riat; Supp em nt o the A enda; Tenth M et ng f the Inter State Co ncil, De em er 9,2006.e pro- 6 3. .3 The comm ss on is f th vie th t the Administ ation ho ld b muc mor sure ct ve in d alin with ca es of exploi at on f the Sch duled c st s. t as to be e si n. th t all regi tered rimes a ain t S s are taken expedit ou ly to their l gical concl efo e The Di trict moni oring mec ani m has very imp rtan r le t p ay in h this. Te -motu the ap ro ch f the Administ ation ho ld be to etect ca es of vio at on o law, su athe tha wa t or n IR to beifled., the 6 3.5.4 Thou h t e Act pr vid s for s tt ng up of S ecial our s for f rying of nce been S preme cou t ha hel tha such our s ca take cogn za c of cas only af er t hasheet com it ed to it y the jurisdic ional Magis ra e As a r s lt, a com la n or a charg ce s. an ot b filed efo e the S ecial our . Ths has add d on mor s ep o the trial p ro t e The Na ional comm ssi n for Sch duled ast s has recom en ed an ame dm nt ho ld ct to emov this l cu a. The comm ss on i a so f th vie that S ecial ourts ect l y . be emp we ed t take cogn za ce of ofences und r th Act, dirce of 6 3.5.5 Apar fr m the above men ioned legisl tions d aling speciicall wi h the pr ct the e untouchab lity, other ocial legisl tion wer also e acted post-Indepen ence S me of tion are – (i) Empl ym nt of anual Scav nge s and constr ct on f Dry la rines (Prohib Act, Act, 1993 (ii) onded abour ystem (Abol tion Act, 1976, (i i) The M nimum Wage 1948 (iv) Equal Remune atio Act, 197 , (v) child abour (Prohi iti n and Regul7Ca aci yABuldflict ngAforResolutiAConAct, 1986, (vi) Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979. Besides, the States also have brought in Land Reforms Laws, Debt Relief Legislations and laws to deal with special problems and practices (for eg. abolition of the Devadasi system).6.4 Institutional Framework6.4.1 National Commission for Scheduled Castes6.4.1.1 The Constitution, earlier provided for appointment of a Special Officer under Article 338 to investigate matters relating to the safeguards provided for Scheduled Castes and the Scheduled Tribes. This Office was subsequently designated as Commissioner for Scheduled Castes and Scheduled Tribes. In 1978, a multi-member Commission known as the Commission for Scheduled Castes (SCs) and Scheduled Tribes (STs) was constituted. In 1990, Article 338 was amended vide the Constitution(Sixty-fifth) Amendment Act, 1990 and the first National Commission for SCs and STs was set up in March, 1992. Consequent upon the Constitution (Eighty-ninth Amendment) Act, 2003 which came into force on 19th February, 2004, the National Commission for Scheduled Castes and Scheduled Tribes has been replaced by (1) National Commission for Scheduled Castes, and (2) National Commission for Scheduled Tribes. The Constitution lays down that it shall be the duty of the National Commission for Scheduled Castes –a.to investigate and monitor all matters relating to the safeguards provided for theScheduled Castes under this Constitution or under any other law for the time being in force or under any order of the Government and to evaluate the working of such safeguards;b.to inquire into specific complaints with respect to the deprivation of rights andsafeguards of the Scheduled Castes;c.to participate and advise on the planning process of socio-economic development ofthe Scheduled Castes and to evaluate the progress of their development under the Union or any State;d.to present to the President, annually and at such other times as the Commissionmay deem fit, reports upon the working of those safeguards;e.to make in such reports, recommendations as to the measures that should be takenby the Union or any State for the effective implementation of those safeguards and other measures for the protection, welfare and socio-economic development of the Scheduled Castes; and74Is ue ARelatedA oAScheto welfare Aandf. A o Adi charg Asuch Aoth r A unctions in rel tion Ato Athe protect on, dev lopmentAand adanc mentAofAt eASche ul dAC stesAasAt eAPr sidentA ay Asu jectAtoAth Ap ovi ion AofA ny lawAmadeAby Pa lia ent, by AtheAruleAs ecify.6. .2 ANationa Aco missi nAfor ASafaiAKaramc ar sastesA NHRc)ugustA1 94 A 6.4.2.1 The ANationa Aco missi nAforASafai Kar mcharisAwas co stitut d AinA c har sAAct,A th ou hAanAAct Aof Parlia ent AnamelyA he ANationa Aco missi nAforASafai Kara Aten reAhasA 19 3Ai i ially A or aAper odAof A hr e A ear . ItAisAnot aApermanen Aco mis ionAbu Ait sonAand five b enAe tend dA romAt me to Atime. It c nsists Aof Aa A h irperson, AaAVice cha rpe a Awoman. AThA membersAa lA omi atedA yAtheAunion Go ernme t.A tAleas Ao e member is over eeA heA c mmission is s rvicedAby Aa Secret ri t headedAbyA ASe retary. A ts fu ction Ai Ato boliti nAofA laws Aan Aprogram es relat ngAtoASafai Kar mcharisAandA articular yAregardi gA ctivi y.ATheA manua Asc ven ing AandAfor im rovement Ao Ac nditi nsAofAt os Aeng gedAin Ath s A icyAmatt rsA unio AG vernment is require Ato consultA he ANationa Ac mmi sion Ao AallApoKar mcha isA affctingASafai A ar mch ris. AIt Acan inve tigate A nto AspecifiAg ievan esAofASafaimpow red toA nd At keAsuo motoAact on relat ngAtoAthe r A roblems. AThAc mmission A sAernmentsAorA callAfor info mation wi h Areg rdAtoASafai Kara cha is AfromAt eAconcerned go laid A n A heA ut orities. AThAc mmission is require At Aprepa eAan Aa nualA ep rtAw ic AisoAtheAStatet bleAof bo hAHousesAof Parli men .AWher At eAm tterAi AtheARe or Are atesA ernedA tat A G vern en , AaA opy Aof su hA ep rtAi At Abe laid Aby A he Gov rnorAofAt eAcone ortsA ithA beforeAthe le isl tureAo At e AState. AThAco mi sio AhasAsoAf rAsu mittedA ourAa A ar eAnumber AofArecommendatio s.34Righ sAAc ,A 6.4. .2 A eside ,AtheA uman ARights commission, estab ish dAund rAtheA uman dASche ul dA 1993Aals Ai tervenesAi Ac mplaintsAof A xp oit tion AofAt eASche ule AcastesAa nAfor AWomen Tri esA sAthe eAareAgros Av olati ns AofAh ma Arights. The ANationa Aco missi estab ish dAunderA he ANationa Aco missi nAfo AWom nAAct A1 90 AtakesAu Ac mplaintsA fA njust ce AtoAwo en re err dAtoAit Af r AredressalA rr specti e A fAcaste.A t Athe efor AlooksAint Acomplaint Ap rtain ng AtoAwom nA elo ging AtoAt e ASche ul dAcastesAa Awell.6.4. AE alu tionAof th AWo kingAofAtheAI stitutionalAFram wo knessA fAtheA 6.4.3.1 TheANa ionalA umanARight Aco missionA asA f nalysedAtheA fe tiv tutionsAare abo eAmention d Awatch-dog A nst tut onsAandAh sAco clude Athat AtheseA nst eirAlimi ed handica pe Abe ause ofAth Avery A ar e Anumber Ao Acomplain sArec ived,At AfildAstaff. capa ityA oAdea AwithAthes Aco plai tsA nd als AdueAto th Aabsence ofAa equat The ANationa Aco mis ion for Scs Aa dASTs fe ls thereA s Aan ur ent A eedA oAl okAintoAthe7534Ex racted fr mAReportAo AP evention Ao AAtroci iesAagain t ASche uledAc76capacit Abu lding Af rAconflictissue and empower the commission by giving it more powers under the constitution, to ensure the implementation of its recommendations35.6.4.3.2 In a report prepared by the NHRc on the Prevention of Atrocities against Scheduled castes, it was observed :“The prescribed drill on the reports of the statutory Commissions is that the nodal Ministry of the Commission circulates the recommendations of the Report to the concerned agencies of the Government whom they concern. The comments furnished by them are included in the Action Taken Report, which is placed before the Parliament indicating whether the recommendation is accepted or not accepted and, if accepted, what action is being taken. If no final decision has been taken on a particular recommendation, the comment inserted is that it is under consideration. With these comments on action taken, the report is placed before the Parliament. This explains why there is time lag between submission of the reports by the Commissions and their placement before the Parliament since quite sometime is taken in collecting comments of concerned government agencies. The time lag in case of National Commission for SCs and STs is as long as three years.”6.4.3.3 In the same report, the issue of non-acceptance of several recommendations made by these commissions was examined and it was observed :Usually, in respect of recommendations which are radically divergent from the existing processes/practices/approaches or decisions on the subject, the bureaucratic tendency is to deflect or reject it and some grounds are mentioned for doing so. Commissions, however, expect that during the discussion on the report, some MPs may raise the question of non-acceptance of important recommendations which the Minister concerned may have to answer and, if there is widespread support for the issue, non-acceptance may cause embarrassment. The matter may even be picked up by the Media or NGOs/public spirited citizens/pressure groups which may also build up public opinion for its acceptance. But the reality is that reports do not come up for discussion at all as the experience of National Commission for SCs and STs in respect of last few reports placed before the Parliament indicates. This is partly because by the time reports are submitted with ATRs they are dated and at times lose their contextual relevance. Reference to these reports also does not come up during discussions on the budgetary grants of the nodal Ministry as due to shortage of time and low priority, the budget is passed after guillotining. The discussion on the Ministries is not taken up. NCW would also be facing similar problem. It is not known whether National Human Rights Commission has fared better in this respect. Information is not available about specific recommendations made by differentResolut on35Si th Rep rtAofAtheAcommissionIssues Related to Scheduled CastesCommissions, which have not been accepted by the Government and the reasons assigned for such non-acceptance. While Government may have genuine difficulty in accepting some recommendations in view of their wider ramifications and other valid reasons, non acceptance of recommendations on a large scale is disheartening and even frustrating to the Commission because its efforts seem wasted.This subject has been further dealt with in Chapter 14 of this Report. 6.5 Advisories by the Ministry of Social Justice and Empowerment6.5.1 The Ministry of Social Justice & Empowerment has been addressing the State Governments/Union Territory Administrations to implement the provisions of the Protection of Civil Rights Act, 1955 and the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989 in letter and spirit with specific emphasis for taking necessary steps towards setting up of exclusive special courts, sensitisation of investigating officers, ensuring registration of First Information Report (FIR), timely registration of cases and filing of charge sheets in the courts, giving due attention to maintenance of law and order in the identified atrocity prone areas and use of electric printing and other media outfit to publicise provisions of the Act for creating awareness among the target groups and ensuring participation of Panchayati Raj Institutions and the civil society at large.6.5.2 Further as a follow up to the Inter-State Council Meeting held on 09.12.2006 on the subject matter of offences of untouchability against Scheduled Castes and atrocities on Scheduled Castes and Scheduled Tribes, the Minister for Social Justice & Empowerment addressed letters in 2007 to Chief Ministers suggesting specific measures as detailed below:a) Printing and distribution of booklets/leaflets in Hindi and local languages highlighting the theme of combating untouchability and atrocities.b) Mass awareness programmes to be organised for the general public and particularly in schools and colleges with the involvement of office bearers of Panchayats and Urban Local Bodies.c)Special campaigns in print media on the occasion of Independence Day,Republic Day, Sant Ravi Das Jayanti, Maharishi Valmiki Jayanti, Gandhi Jayanti, Babu Jagjivan Ram Jayanti, Dr B.R. Ambedkar Jayanti etc.d)Training of constabulary and police officers of police station level, both atinduction stage and in refresher courses, about the sensitivity of the issue and related legal provisions.77ca acityAbu ldi gAfor Ac nflict AResolutione)To finance research studies for identifying the forms and causes of untouchabilitymeasures required for its eradication.f)Identification of atrocity prone areas as an on-going process with clearly drawnup parameters for identification of exact locations/pockets within the District in a focused manner.g) Identification of reputed and emphatic NGOs in identified areas, which can play a lead role in getting the cases of atrocities registered and in their regular follow up. These NGOs will also counsel the victims and offer them support and legal aid to withstand pressures.h) Effective implementation of land reforms, redressal of land disputes involving SCs/STs on priority basis and stringent enforcement of Minimum Wages Act in atrocity prone areas.i)To evolve a special package for development of identified atrocity prone/sensitiveareas. The package may include appropriate income generating beneficiary oriented schemes. Promotion of Self Help Groups, especially for women, as well as upgradation of infrastructure facilities like link roads.j)Review of cases, which are pending disposal for over one year in courts so asto ensure award of exemplary punishment.k) Each case of acquittal to be thoroughly examined and in cases of apparent lapses on part of investigative agencies, appropriate disciplinary action to be taken apart from filing of appeal.l)Adequate flow of resources from the outlays earmarked by State Governmentsfor Scheduled Caste Sub Plan (SCSP) to ensure provision of basic minimum services i.e. health, education, infrastructural facilities such as link roads, irrigation, and drinking water.m) Priority to be given to key infrastructural facilities such as construction of roads to the nearest police station and linkage of roads to highways, out of Special Central Assistance Funds released by the Ministry.n) Beneficiaries from identified atrocity prone areas to be covered on priority basis under beneficiary oriented income generating Schemes of National Scheduled Caste Finance & Development Corporation and National Safai Karmchari Finance & Development Corporation.o) Special efforts to be made to spread elementary legal literacy among women about their rights and provisions of legal aid available. For this purpose,78Issues Related to Scheduled Castesformation of Self Help Groups should be promoted and reputed NGOs be involved.p) As a majority of SC population are wage labourers, the Minimum Wages Act be strictly enforced.q) Expanding the coverage of social security under the proposed Unorganised Workers Social Security Scheme of the Ministry of Labour & Employment.r)The Vigilance and Monitoring Committees, in association with StateCommissions for Scheduled Castes, to particularly review cases pertaining to dispossession of lands owned by SCs as well as instances where pattas have been issued but actual possession of land has not been given.6.6 Administrative Action Required6.6.1 The National Commission for Scheduled Castes has made wide ranging recommendations in the past. The Report on Prevention of Atrocities against Scheduled Castes (NHRC) has also made elaborate recommendations to ameliorate the conditions of the Scheduled Castes. Considering the magnitude of the atrocities and discrimination practices, the Commission is of the view that a multi-pronged strategy should be evolved that needs to include the following:6.6.1.1 Effective implementation of various laws enacted for the purpose: As stated in para 6.3.5, the reduction in the number of registered cases under the Prevention of Civil Rights Act may indicate that the number of such incidents is coming down. Several Civil Rights activists have however argued that this reduction is due to the apathy of the Civil and the Police Administration in reporting and registering cases. Studies conducted by these organisations have revealed that a large number of incidents of discrimination and atrocities against the Scheduled Castes never come to light because of the prevalent fear in these sections and also because of the non-registration of FIRs at the Police Stations. Tackling crimes directed at the most vulnerable sections of our society requires a combination of professionalism and sensitivity to ensure that deterrent action is taken against the perpetrators. The normal approach of beginning an investigation only on receipt of an FIR is not sufficient for dealing with crimes of atrocities against the Scheduled Castes. It is equally important that the enforcement agencies should themselves detect such violations and book the guilty. The Commission in its report on ‘Public Order’ has made the following recommendations:a.The administration and police should be sensitised towards the special problemsof the Scheduled Castes and Scheduled Tribes. Appropriate training programmes could help in the sensitising process.79Cap cit Abuildilict gAfrResolutionAConfb.The administration and police should play a more proactive role in detection andinvestigation of crimes against the weaker sections.c.Enforcement agencies should be instructed in unambiguous terms that enforcementof the rights of the weaker sections should not be downplayed for fear of further disturbances or retribution and adequate preparation should be made to face any such eventuality.d.The administration should also focus on rehabilitation of the victims and provideall required support including counselling by experts.e.As far as possible the deployment of police personnel in police stations with significantproportion of religious and linguistic minorities should be in proportion to the population of such communities within the local jurisdiction of such police station. The same principle should be followed in cases of localities having substantial proportion of Scheduled Castes and Scheduled Tribes population.6.6.1.2 Motivating the field functionaries: It has been observed that the field functionaries in State Governments including the police do not proactively enforce the provisions of various laws meant to protect the Scheduled Castes. Apart from issuing strict instructions that enforcement of such social legislations should not be downplayed for fear of further disturbance or retribution, it would be desirable to introduce a system of incentives wherein efforts made by these officials in detecting and successfully prosecuting cases of discrimination/atrocities against the Scheduled Castes are suitably recognised.6.6.1.3 Monitoring and review by District Level Monitoring Committees: Although District level Monitoring Committees have been constituted in most of the districts, their functioning is usually routine and perfunctory. It is, therefore, necessary that District Magistrates should be asked to ensure that these Committees become an effective forum for properly monitoring cases of violation of various social legislations. These Committees should evolve their own mechanism to identify/detect cases violation of various social laws apart from the inputs provided to them by the concerned departments/ agencies.6.6.1.4 Police reforms: The Commission has given comprehensive recommendations for police reforms and improvements in the Criminal Justice System in its Fifth Report-Public Order. It has also emphasised the critical need for sensitising through training the officers and other capacity building initiatives about the discrimination and atrocities committed against weaker sections of the society, many of whom belong to the Scheduled Castes and Scheduled Tribes. These reforms when implemented should go a long way in improving80ss esARelate AtoAScthe functionint e A unc ioning ofA he A olice Aan AtheAcr minal A ust ce Asystem Aand consequen ly, uphold ngA he Arigh s A nd A ignityAof theASche d u l e dA astes.sesAof AsocialA 6. .1.5AEngagi gAindepe de tAagenc es Ato conduct fi ldAsurve sAtoA de tifyAc Au ually come d sc iminat on:AAs As ated Aearl er Aincidents Ao Ae ploitatio Aof ASc eduledA aste fAca esAwhereA to lig t A hen Aa iled.AAFIRAisAow ve , Athere A s A nAi crease in the An mberAtionsA nd theA uchA ncid nts Ahav Ab en Abr ug tAto Alig tAby A igilant civilAsociety org nis eAindepe dent medi .AThe ADistrict A dminis ration A hou d Arealise theA mpor antAr leAthatAthesAto A de tifyA age cie Aplay andAuseA hei AservicesA or Aconducti g Ain ependen AfildAsurvec ses Aof AsocialAds c r i m i n tio n.AtonAri ts.AInAACom iss ons:A 6.6.1. ACoordina ion mec anism Af rAthe Ava iou ANati nalAa dAStateAleve heASch d ledAA The e Aare Asever lA ommi sion Ato Al ok into Acases Ao Ae plo tationAof tsA ommissio A cas esA–ANatio alA ommission forASch duledAca tes,A ationa AHumanARig nc esA xists A and ANatio al A ommiss on for AWom n. TheAproblem Ao Am ltiplici yAofAa ndAtoo li tleA atAth AStat Al vels Aal o. The A robl m AofAtoo A any enquiri sAa dAr portsA dAtoAevolve A A a tion A s A eal. AShort Ao A onstit ting Aa Asing e Acom is ion, th reAisA e nstitutio al/A coordina io Amec anism so th tAthereAis A o A uplicaforts AbyAtheseAc io Aof AeStat u t o r yA odies.tions andAt eA 6.6 1.7 AInvolv ngA anchayati ARaj Institutio s:A anchayati ARa AIn tit ecuteAvario sA urba Alo alAbodiesA reAgoverna ce Astru tu esA losest A oAt eApeopl ,AwhoAe dAbe Aact ve yA developm nt A rog ammesA orAthe Awe ker A ections.AThes AInsti ut onsAshou ariousAsocial invol edAinAvari us Aprogra mesA oncerned with Aeffecti e A nforcem nt AofA legisla ions.Ai n:AThe eAareA 6.6 1.8 AEffective A mp emen ation Ao Ala d Aref rmsAan AotherAsocia Aleg sla ourA rohi ionA Al rgeAnumber Ao A egisla ions A– bondedAla our A bolit onAAct AchildAla ferentAsoci lA Ac ,Alan ARef rm Alaw ,AD btA e ief AA t Aet A– whichAs ekf AtoAac ieveAd Aam lioratingA object ves. AEffecti e A nforc ment AofAthes Alegi la i ns Aw uld go aAlong Away Ai teeAshoul AbeA he con itionsAof the ASch du ed Acaste . AThe ADistr ct AMonito ingAco mi ntr sted Awith AtheA es onsibility of A verseeingAthe A mp ement tion ofAth eseAl ws also.AethnicAb se A 6 6.2AThe A nit dAKingdom hasAwit essed sever l A iots Ab se AonAra ial Ao ctedAtheA ace viol nc .AInA rder At Acheck Aracial A isc im nationAthe uKAParl ame tAen Re atio sAAct inA 965Awhi hAwasAf rt er Aa end d Ain A 965Aand 1968 ADespiteAth sAl gis ationAandAth Ac nst tuti nAofAtheA aceAR lat ons board Aand A he A ommiss onAforARa ialAEqual ty Aincid ntsAof A acialAte sio Aoc urre AandAoneAsuch man fes ationAw sAtheA ri81apacityA uil ingAfor Conflic AResolutionorder to further strengthen the positive duty of the public authorities, the Race Relations (Amendment) Act, 2000 was passed. The main provisions of this law are:a.Placing a positive duty on certain public authorities to promote racialequality.b.Extending vicarious liability of the Chief Constables to all activities of thepolice service.c.Outlawing direct and indirect discrimination in public authority functions.(a public authority is defined as ‘any person certain of whose functions are function of a public nature’).6.6.3 These are positive provisions, particularly those placing a specific duty on certain public authorities to promote racial equality because it puts an onus on them to actively check racial discrimination. While racial discrimination fortunately is not prevalent in India, some of the features of the UK legislation have relevance to our situation to check discrimination on grounds of caste and religion. In this context, there is a strong case to incorporate a provision in our relevant laws placing a positive duty on public authorities for promotion of social equality and checking discrimination on grounds of caste, particularly in view of the unsatisfactory track record of enforcement agencies in this respect.6.7 Capacity Building6.7.1 State governments have constituted civil rights enforcement cells for the effective promotion and monitoring of civil rights enforcement. State and district level committees have also been constituted to periodically review civil rights enforcement. While the civil rights enforcement cells have tended to become routine regulatory organisations, the functioning of the state and district level committees have atrophied in the absence of review at the highest level. Considering the importance of these cells and committees, it will be useful to have a high-powered review committee at the State level with the Chief Minister as the Chairman, and the Home and Social Welfare Ministers as the Vice Chairmen to review the functioning of the civil rights enforcement cells, and the State and district level committees and monitor the progress on civil rights enforcement.6.7.2 A Centrally Sponsored Scheme is in operation to ensure implementation of civil rights measures. Under the scheme, financial assistance is provided for strengthening of administration, enforcement and judicial machinery as well as relief and rehabilitation of the affected persons. Presently, the bulk of the expenditure under this Scheme is incurred on staff and related establishment expenditure including for the special courts under the PCR and POA Acts. Since discrimination is still practised, atrocities committed and civil82Issues Re ated Ato AS hedulerights ntrallyA rights Av ol ted, it willAbeAn ce saryAtoAapp opri te par AofAt eAfun sAu der AtheAc sAwhereA S onsored Sch mesAforAa arenessA uildingAac ivitiesApart cu arly Ai Aremo eArur lAare urthe ,A a arenes Ale els are lowAand vi tim Ado A ot Acome fo wardA oAlodge Acom laints.A cies soA fu dsA romAth ASchem As ouldAbeA til sedAforA rain f ng sta AinAtheAenf rcementA ge Aduty A&A t atA hey AareA uitably Ase si ise Ato AtheA ro lem Aof AtheAS hedule Aca tes Aa dAth irespon ib lityAin A nsur ng thatAno Adiscri inat onAgoesAun ete ted AandAunp unis h d.lack Ao A 6 7. AOn Aof Athe A robl msAthat sever l AunionAGo ernment A genc es fac AisA he Aannual timelyAinfo matio . AState AGov rnments Ar utin ly AsendA onthly,Aq art rly Aan re orts AofA trocit Aca es, Ab tAthese repor sAoft nAr ach At e AunionAGo ernmentA gen iesA ooA ra ion A ate forAanyA ffectiv Aa ti nAto Ab Atak n.A ithAthe Ain rea in Aus Ao AIc Ain AtheAop ndAtakeA ofAthe Agov rn ent,Ai Ash ul Anow Abe A os ibleAto col ectAand analyse Ar al-t meA ataA cationsA i mediate act on.AFor A xample, P lNET,Aa Asatelli e-base ApoliceAtelecommun Ashould et or ,A sAinAan A dvanc d A tage AofAco ple ionA nd AonceAco pleted APOlNE provide telecomAconn ct vi yAu Ato At e Avel.le el.A6.8ACon er enceAofARe ula oryAand ADev lopmentAPro g r a m e siedAou AnsAan AA 6.8. ASocial justice through Ae fective Aimplem nt tion Aof A xistingAlegi lat esAfromA other A eas resAforApr ven ing AandApr tecting me ber Aof AtheAS hedule Acas iveAandA at oc tie Ais Ano Aen ugh Afor Ar solvingA onflict Aunl ssA heyAareAacc mp nied f AbyA fec decadalA ti e-bound Aimplem nt tion Aof Adevel pmental A ch me .AIt Ais Arec mmen e AthatAa for AtheA per pect ve Apla As ouldA eA raw Aup Afor Aimplem nt tion Aof Adev lopment sch mesS heduledca tes.6.9AInv lv mentA f ACivil SocietyAOrgan sationsA(CS s)Aof AtheA 6. .1AMa y Acivil Society AOrgan sat ons AareAimpl mentingA roj cts forAth Ab nefi rn en .A S hedule AcastesAi clud ngAwithAinancialAas ist nceAandAgrant -in- idA romAtheAgov workAinA ItAis equallyAi port nt Ath t Ath se AcSO As ould AbeAen our gedAandAince ti ised to ence ofA inac ess bleAan Aremo eAare sAwhere Adev lopmentA roj ctsAareA equ red and AtheA re Ac stesA SOs Aa eAstill A in mal. TheAcSO Asho ld also AbeAen ou aged to A elp Athe AS hedule ithAtheA oArai eAthe rAvoice againstAat ocities Adiscri ina ion AandAexpl itation Afe rle slyA ndA c nfide ceAtha Aa tio Aas perAl w A ould AbeA rompt y A aken A nAtheirAcom pl a i ts.6.10AExp ditio sA rialAofA riminalACas s6 10. AI AmayAbeAn ce saryAtoAinstitut on lise AanA nternalAw tch-dog Am chani mAu derAthe co tr lAofAan AAdmini trati e A udg Aof AtheAre pect ve AHig Ac urt AAt th Aend of Aeac A onth,A Ar view ofAsu h Acases pendi gA ria Ain AtheAapp opriat Aco rtsA ay ha eAtoAbe car83capaci yAb ilding A or ResolutonAconflictto ascertain whether the postponement of the trial, which is very often the case, was due to justifiable reasons. More often than not, adjournments are sought by defence lawyers on flimsy grounds only in order to win over prosecution witnesses. Such review by an Administrative Judge of the High court would help in finding out whether any witness who has been summoned for examination and was actually present in the court had been sent away without being examined and cross-examined on that particular day of hearing.6.11 ernment should adopt a multi-pronged administrative strategy toensure that the Constitutional, legal and administrative provisions made to end discrimination against the Scheduled Castes are implemented in letter and spirit.b. To ensure speedy disposal of discrimination cases pending in subordinate courts, an internal mechanism may be set up under the control of the High Court Administrative Judge to review such cases.c.There is need to place a positive duty on public authorities for promotionof social and communal harmony and prevention of discrimination against the Scheduled Castes and Scheduled Tribes.d. There is need for engaging independent agencies to carry out field surveys to identify cases of social discrimination.e.There is need to spread awareness about the laws and the measures topunish discrimination and atrocities. It is necessary to launch well-targeted awareness campaigns in areas where the awareness levels are low. The District Administration should organise independent surveys to identify ‘vulnerable areas’.f.The administration and the police should be sensitised towards the specialproblems of the Scheduled Castes and Scheduled Tribes. They should also play a more pro-active role in detection and investigation of crimes against the weaker sections. Appropriate training programmes would help in the sensitising process.g. Enforcement agencies should be instructed in unambiguous terms that enforcement of the rights of the weaker sections should not be downplayed for fear of further disturbances or retribution.84Issu sA elatedAto Scheduh. he Admih.ATeAAdmi istrat on Ash ul Afo usAon AtheAreha il tat onAofAt eAv ctimsAa dAp ovide Aal Arequir dA uppo tAtoAthem includingAcounel ing Asta ionsA i. As AfarAa Apo sibleAtheA ep oyment ofApolice pe sonnel inApoliconAtoAtheA withA ignificant A ro ort on A fAS sAandA Ts sh uldAbeAinA ro ort llowe Ai A op lati nAofAsuchAco mu itie . ATheAsame princi le shouldAb Af religiousA casesAofA ocalit esAhaving As bstantialA ro ortionAofA ing isticAand minr ties.loitat on.Aeq alityA j. AA stat tor Ad tyAm yA eAc stAonA llApublicAa th ritiesA oApromotimna ion. an Aacti elyAch ckAsocialAdiscrinAe AIk sA AwouldAbe de irableAto i troduc Aa systemAofA ncentiv sAwher for in AcasesA mad AbyAthe eA fficialsAin det ctingAandAsu cessfullyAp osecuAsuitablyA of Adiscrimination/ trociti sAa ainstAthe Schedu edA astesAarow edge .ackenciesATh At A A l. re shouldAb AtrainingA rog amm sAf rAtheAlawAe forcemen AasAan Ath A suitably sens ti eAt emAtoAth Ap obl msAofAthe Schedu edA ast needA orAstrictAe fo cementA f A aws.Aactivel m AATheAlocalAg v rnmentsA–Amuni ipa itiesAandA a chayat A– shouldAbcementA fA i volvedA n AvariousA rogrammes conc rnedAwit AeffectiveAe fo sl ti ns.A vari usAsocialAleglem ntingA n.AThe corpor teA ecto Aand NG s A eedAtoAb Ai volvedAinAcom dACa tes.A he effortsAofA ove nme tAforAtheAd ve opm ntAofAthe Schedul nomicA ndA Such volunt ryAact onA houl An tAonlyAb Adirect dAtoward Aec AtoAr iseA socialAe po erm nt Ao Ath ASCs AbutAal oAtoward Aena li gAthet eirAvoi eAagainstAa rocities, Adisc imi ation AandAexp857ISSUES RELATED TO SCHEDULED TRIBES7.1 According to the 2001 census, the population of Scheduled Tribes in the country is 84.32 million which constitutes 8.2 per cent of the total population.36 Of these, about 1.37 million (1.57 per cent) belong to Primitive Tribal Groups (PTG). The Human Development Indices (HDIs) of the ST population are much lower than the rest of the population in terms of all parameters such as education, health, income, etc. Further, the gap in the infrastructure in the tribal areas vis-à-vis the rest of the areas is widening at a much faster rate.37 The position of the tribals lies at the very periphery of the social formation. Social inequalities of the tribal population are manifested in various forms of exploitation such as bondage, forced labour and indebtedness. They are also exploited by merchants, money lenders and forest contractors.7.2 Social Justice7.2.1 Like the members of the Scheduled Castes, tribals are also subject to atrocities. And, the position regarding the disposal of cases for crimes committed against members of the Scheduled Tribes by courts is no better than in the case of the Scheduled Castes, as the following table shows:8636Annual Report 2006-07, Ministry of Tribal Affairs, Government of India 37Annual Report 2004-05, Ministry of Tribal Affairs, Government of IndiaIs uesARel te Ato ASched ledATrAA AIn Aw ichATr alsAcompledAASlNo.AcimeATtal AcsesAcompoudedAconvitedAAcquitedATtalAPen orAAT ia edA the AA Aof AAAAgAAAeadANuberAwithdaworAA Aof Acse AbyAGvt.AwithdwnAADischaAAA for ATAAAAincluAAAApenAAAAc sesAAAAAprevAAAAeaA 1. AP. .R. Act A9552700 AA714A72ASTAA61AA40255761 A016A5A 2.ASfAAA P evAA ,A Atroci iesAAA1edAATr besAu der the AP. .R.A ct A fAaAt tal Apend nc Aof 217 Aca es,Atr alsA ere Acompl te AinA 145A nl A70 Ac ses and A n y A2 Ac ses Ae de Ain Aconvic io Ain the A ear A 006 an Aas A an AasofA c ses A ere Apen ing Atr al Aat the en Aof A2 06. For Acr mes Acommi ted Aaga nst the Amem erthe ASched ledATr besAu der theAprovison Aof the AS /STAPreven io AofAAtroci esAA ct, ou Aof A 621 Ac ses Apen ingAtr a l A40 Ac ses A ere Acompou de Aby theAgovernm nt,A nl y 255Ae de AinAconvic ion illA an Aas A an Aas A 565 Ac ses A ereAsAof pen ing At ia Ain theAco rt Aat the en theA earA200 6.7 2. AIn At rm Aof theAimplementa o n ofAA ws A nd AAcapa tyAAbu i ld n g , Arecommendat ons A ad Aby theAcommis io Ain A as Aof the ASched led Acas es, A old A ood for the ASched ledATr be Aalso.ibesT ble 7.1ADisp sa Aof AC ses forACr mesACommi tedAaga nstASched ledATr be AbyACo rtsAdu ing2006Nu be AofAC89.rce : Crir7 in rn,ra, 200r~ NCRr.7 .2.7 2. AAs Aindic tedAab ve, for Acr mes Acommi tedAaga nst Amem er Aof theASched87Capac ty A uildingl t forResolutionAConfic7.3 The Panchayats (Extension to the Scheduled Area) Act, 19967.3.1 The Panchayats (Extension to the Scheduled Area) Act, 1996 (PESA) is a landmark legislation that ensures involvement of tribals in their empowerment process not only as active participants but also as effective decision-makers, implementors, monitors and evaluators. Section 4 of the Act provides for the establishment of a Gram Sabha for every village. The Gram Sabha is empowered to safeguard and preserve the traditions and customs of the people, their cultural identity, community resources and the customary mode of dispute resolution. The Gram Sabha as articulated in PESA, has within itself an inbuilt capacity for conflict resolution.7.3.2 The tribal communities have a tradition of decision making that is often democratic in nature. If the tribal population is made aware of the provisions of PESA and the 73rd Amendment to the Constitution, it would result in greater participatory democracy in the tribal areas. This would call for organising awareness campaigns so that the tribals would be in a position to demand accountability of the elected representatives and government functionaries, particularly in respect of cases where the ultimate decisions are contrary to the resolutions passed by the Gram Sabha or Panchayat. To that extent, the tribals would be in a position to have a voice in deciding on the issues pertaining to the development of their villages, as envisioned by PESA.7.3.3 A comparative analysis of PESA and the legislations enacted by the States on this subject reveals that the provisions of PESA have been highly diluted in the process of ratification by the States and most of the powers of the Gram Sabha have been given to the district administration or to the Zilla Parishad. The main objective in enacting PESA was to enable the tribal society to assume control over livelihoods, have a say in management of natural resources and to protect the traditional culture and rights of the tribals. The information available indicates that the main objective of PESA has been diluted to the detriment of the tribal population. Critical issues such as access to natural resources, especially the definition and rights over minor forest products remain unresolved and, in general, the objectives of PESA have not been realized in any serious manner in any of the states with a large tribal population.7.3.4 The Report of the Expert Group on Planning at the Grassroots Level – An Action Programme for the Eleventh Five Year Plan – has indicated what needs to be done in such cases. PESA derives its constitutional basis from Article 243 (m) (4) (b) and the Fifth Schedule, and is a logical extension of the Fifth Schedule. A duty is cast upon the Union Government88I su s ARelated toASchto see that ito seeAthat Ai sAp ovisions are Astrictly im lem nted. If Aa yAS ate AdoesA otAmplementAt eA ssueAspecirovi io s AofAP SA A n Alette Aan Aspirit, At e A overn ent Aof India should AicA art AA ofAtheA irectionsA nAac ord nceAw th its Ap werAtoAiss eAdir ctions A n er prov s A3 ofA aysAin AwhichA Fi th Schedule. InA ddition, A heA ommitteeAha Arec mme de Ath tAon Ao AtheA t Aesta li hA i pl ment tionAof APE AAp ov sionsAc nA eAe sured at Ath Agras Ar ot AlevelAis entAcou d AbeA a forumAa Athe A en ralA evelAsoAt at vio ation Aof At e A rov sionsAofA heAen ct vesAappli d.A b ough Abefo eAt is A orumAand At e Adeviation Ahi hlightedA nd Anecessar Acorrect eryA ta eAtoA oreov r,AtheAF ft ASc eduleAofAthe constitu ion requires th AGove norAo Ae ommitteeAha s A ndAanAa nua Arep rt,AbutAthi Ar qui ement isA otAbeingAm t A egularly. TheA uld beAgivenA rec mme dedAthat th Apracti eAofAr gularAa nual reports Af omAGov rn rsAshdu Aimp rtance. SuchAr po tsAshould beA ublish d A nd A laced A nAtheApubl cAdomain.7.4 Di placemetAof A ribalsA .4.1 Trib lsAhaveAb en displ cedAinA ar eAnumbe s AnAaccou t AofA arious Alarg aAtoAp eventAAdevelop entA rojectsAli eAirr gation Adams,Ah dro electri Aand A hermal A ower plant ,Ac alAmines AandA jectAAffe tedA ineral-base A ndustrie .AA ANa io al APol cyA nARelief Aand AR ha ilitati n AofAPr nA ar metersA Fa ili sA(PAFs Aw sAnotified in AF brua y A2004A ithAaAr li f Apackage ofAseventeAin A ctober,A t AbeAfu filledAbefo eApermitting dislocatio .AThreafter,At e A overnm nt ofAIndiaAbut se ious 0 7Aa provedAa newANa ion lAPolicy AforAR hab litation Aand A ese tlement nd AnotAonlyA wo kAo AP FsAis ye Ato Ast rtAin A ribalAa eas ATribals A reAa ienat dAfro Ath irAl leAevictio ,A b Aa quis tio Aof Ala d Afor Apu lic purp se AbutAalsoA yAfraudule tAtransf rs,AforciasA stimat dA mort age , Aleases Aand A nc oachment AThAMini tryAof ARura ADe elopmentAlakh Aa res),Ahe Aextent A f A lienat on Ao At ibal Alan Ain Adiffrent As ates: AA dhra A rade h A(2.79lakh acres). M dhya A rade h A(1.58 lakh Aacre ), AK rnat ka A(1.3 lakh Aac es), A ujar t A(1.16 tisfactorilyA Most Atrib ls displaced Ab Adevelop en Aprojects A r Ain ust ies A aveAnotAbeenAs alsA ill A he r h bilita ed.AAAsur eyAconduc edAi dic ted Ath t A he Anumber ofAdisp aced tri seAd spla edA yearA 990Ai Aabou A8 .39A akh Aof who A6 %A reAyetAtoAbeAr h habi itated.AT yA ncroac edA hav Ab enAforc dA oAm grate toA ew Aa eas Aan Amor Aoften, Ahav Aunknowing dis lac me tA on for st landsAa dAo Arecord,Aa eA onsider d AasAilleg l Ao cupa ts AThis Atype Aof oca ionsAandA hasAledAto far-reac ingAne ati e Asocial andAeconomic A on equences. AThe dis tionAa Aea yA th Auncertain yAcon erning thei Afut reAh ve AmadeAs chAdis lacedAtrib lA opult rgetAforAt heAext emis s.adAas ed AtheA 7 4.2 APESAAha Aspecific lly provided Af r A revention A f A liena io Aof land. ItA he objectiveA State le isl ture Ain th Aare Ano Ato makeA ny lawAwhichAis inco sis ent AwithA fApreventi gA lienat onAof tr bal land.AIt A adAem ower d Aeve yA ramASab89C pac tynflictAbuil ingResolutionAforACoalienation of land in the Scheduled Areas and to take appropriate action to restore any unlawfully alienated land of the Scheduled Tribe. Paradoxically, however, PESA has been unscrupulously and indiscriminately used to promote industrial development at the expense of tribals. There have been many instances of manipulation by local power lobbies which have deprived tribal groups of resources, traditionally and constitutionally guaranteed to them, for furthering their personal monetary benefits.7.4.3 Different laws exist in individual States in respect of mining and industries in scheduled/tribal areas. It is imperative that these laws should be in conformity with the principles of the Fifth and Sixth Schedules of the Constitution.7.4.4 State Governments should enforce the existing laws on land ceiling. There is a provision in some States which says that if a land is fallow for five years, the government can take over such land. Government’s database should be up-to-date regarding all such lands lying fallow. If this is left alone, it is made use of by the extremists who in turn act as benefactors of the tribal people and distribute such lands to them, resulting in, the tribal population feeling indebted to the extremists.7.4.5 The dismal state of land records maintained by the local administration is another source of frustration and conflict. The non-availability of land records, and in many instances, the marked reluctance of the administration to provide information on the actual ownership of land has made it increasingly difficult for tribals to contest acquisition of land by the state to prove their ownership. A complete overhaul and systematic organisation of existing land records with freer access to such information would have a positive effect and avoid conflict situations.7.5 Lack of Harmony in Implementation of Laws and Policies7.5.1. The basic system of laws governing Tribal Rights is still extremely unclear. It is therefore imperative to create a task force that should undertake a “Harmonisation of Laws” – (a) between Central Acts and Local Land Laws, (b) between Forest and Revenue Records and (c) between Court judgments and other laws. The Committee that looked at planning at the grassroots levels had made a specific mention of the need for harmonious operation of such laws and policies to promote the interest of the tribals. A critical issue in the implementation of PESA is to harmonise its provisions with those of the central legislations and also to recast relevant policies and schemes of Union ministries / departments. No integrative exercise has so far been undertaken to examine the relevance of different central laws to90I suesARela edAtothese Fifth Schethes AFift ASc ed leAAreas A nd At Ahar oni eAth mAw thAtheAaim Aa dAobj ctiv sA fAPESA.A uc Aan Aexer ise Ai Aov rdue AAmon AtheAla s AwhichAwa rant Apart cul rAa tent onAare Athe A andA ion AAct,A 957,A cquis tio AAct, 189 , AtheAMi es AandAMiner lsA Development andA e g ula anAR gi tr tio A t eAIn ian AF res AAct, A 927, AtheAFor stAc nser ati nAA t,A198 AandAtheAInd sApertainin AtoA A t. AInAso far as ApoliciesA ndAcSSs cen ral AScheme Aare Acon erned,Apol ci AS hed le AA ea A w stelands, wat rAresource Aa dAextrac ion A fAmin ra sAfro AlandsAi AFiftinterpretedA ndA do Ano Ase m Ato Ar flec Athe Ain en Aand A urpo e Aof APESA AThseApolicies AasApeople AandAthe i pleme ted, ha eAgive Ar se AatAtimes, A o Aconfr nta ion Abe ween At eAt iba icy, 1988, AWildA Ad inistrat on.ATheAN tional A inera sAPolicy A2003, Nationa AFore tAPo A2004Awould AinA l feAconser atio ASt ategy, A2 02Aan ANational AD aftAEnv ronm nt APol cy com liance Awit A par icular, A equire Adeta led A xam nati n Afro At e Aview Ap intAof Aens ringt eAproisi nsAofAPE A.A7.6AC pa ity ABuildingAinAAdm ni trat onSchedu eAAreas Aib lApoheAmaiula ionA7.6.1 AAproble ,Awh le AdealilictgAwithAconAconce ningAtheAtctAthemAa eAnot isAt atAtheAexistin Aconstitut ona Apro isionsAa dA awsAdes gned toA rot Ainsensiti eAi A op imally A sed.AI Ace tainA rea , Ath AStateAha Ab en perce ved toAbeAtardy an Ab AtheAabsen eA protecti gA heA nterest Aof the tribalsAa dA heAsitu tionAisAfu th rAa gravate nAofAthe At iba A ofAgovernme tA uncti narie Aa AtheirAp a e AofApostiicang. AAAsi niAsectiremists.ATr balA populati n Aha Agradu llyA een A ean dAawayAfro At eAm instream Aby theAex Aalie ated fro A opul tions Ahave A ee Aan agonis d A y Athe mann r Ain whic Athey Ahav Abee requ re Ais At eA their A an Aan Aforests Aby the Aenfor em nt Aa encies. AIn such si uations A ha Ais Aadmi istrati nA task Ao AS ate buildin Ain At e A ite al Ase se of the Aterm. It Ai Ane essary Athat Ath s Ain At e A ri alA ta es special Ac re A o Aexc rcise Aits bas c Afunct ons A nd Aprovi e A ore servic nue, Aforest andA a eas. AIt Ai Aals Anecessary that A over ment posts Ao ly Asuch A olice, rev to Awo k Ai AsuchA dev lop ent A ffici ls Awho Ah ve Athe Ar qui ed Atrainin Aa d Aco mi ment ti ated to Awor A are s Aan Aem athise with Athe Atr bal Apopficilati n. AO ls also Aneed to be Amposts in Atribal in suc Aa eas. A ne Aw y Aof A oi g A his Awo ld Abe At Ase ect Aoffic als Af r A pecific areas Apr vidi g Ahardship Ap y,Aprefer nt alAtreatment A nAa commodati nAa dAe uc tionA tcAal AofAwh ch Awoul Ai duceAoffici ls A o Avo unteerAforAsu hA osting essAca Alead AtoA 7. .2 ANo amount AofAle al provision ng orA efinement ofAthe A lan ingA ro ribalApeopl Ao A b tt r Acompliance ofAleg sl tio s Aeither Ai At eAprot ct on A fArigh s Aof At eA ti gAlevel edg A de elopment A fAthe Schedu ed A reas AunlessAth Aa min stratio AatAt eAcu reforeAnee s toA isAtra nedAand att ned Atoward At e Aobj ctiv s AofA ESA.AEach State th hineryAi AFifth co st tute a Agr upAtoAlookAin o A tre gtheningAofAth Aadminist at veAma9192cap cit Abuildilict gAfrResolutionAconf7.7 Convergence of Regulatory and Development Programmes7.7.1 As in the case of Scheduled castes, steps for social justice for the STs through effective implementation of the existing legislations and other regulatory measures would succeed in resolving conflicts only if they are accompanied by effective and time-bound implementation of developmental schemes for the STs. For the purpose, a decadal developmental plan may be prepared and implemented in a mission mode.7.8 Tribal Policy7.8.1 There is no clear national tribal policy laying down the direction and imperatives for tribal development. The last one was the Panchsheel Programme for tribal development enunciated by the late Prime Minister Pt. Jawaharlal Nehru. It is time that a national plan of action for tribe-specific comprehensive development which could serve as a road map for the welfare of the tribals is formulated.7.9 Conflicts Related to Inclusion in the List of Scheduled Tribes7.9.1 There have been agitations –sometimes violent – by certain groups, while laying their claims for inclusion in the list of Scheduled Tribes. The agitation by Gujjars in Rajasthan, and a few groups in Assam are some recent examples of such conflicts.7.9.1.1 Article 342 of the Constitution stipulates:(1) The President may with respect to any State or Union Territory, and where it is a State, after consultation with the Governor thereof, by public notification, specify the tribes or tribal communities or parts of or groups within tribes or tribal communities which shall for the purposes of this Constitution be deemed to be Scheduled Tribes in relation to that State or Union territory, as the case may be.(2) Parliament may by law include in or exclude from the list of Scheduled Tribes specified in a notification issued under clause (1) any tribe or tribal community or part of or group within any tribe or tribal community, but save as aforesaid a notification issued under the said clause shall not be varied by any subsequent notification.7.9.2 In June, 1999, Government approved modalities for deciding claims for inclusion in or exclusion from the lists of Scheduled Tribes. According to these approved guidelines, only those claims that have been agreed to by the concerned State Government, the Registrar General of India and the National commission for Scheduled Tribes will be taken up forIss es RelatedAt ASchednA h Afor A co side ation and,Aaft r A pprovalAofA ov rn ent Ai AisApu AupAbefore Pa lia entA gA ollow dA o AaAbi lAt AamendAthe AP esiden ial A rde . AThus,Ath Aproc du eAw ich Ai AnowAbeisAte ds toA is Aquite elaborat . AHo ev r, A achAofAthe A uthoritie Acon ernedA ith f Atr balAa ai ook Aat theAissu sAin olv dAw th Aits AownA ers ect veAand A heAproce s A nvolved AiAbasicallyA ie Awhich,A eque tial. Thus At er A as AtoAbe A Am chani mAto Abri gAt geth rAall AsuchA uthori A rriveAatA in Ac nsul ati n Awit AtheAm jorA tatesA ith Atribal A opulat on,Asho ld attemp At stoodAtha A a Aco prehensiveA etho ologyAw th Acle rlyAdefined A ar me ers. ItAisAwell undenficts. The i clu ion Ao Aa yAt ibe A nAthe listAwoul Agen ra lyAlead toAfurt erA emands l Aan Ac purposeA f adoptingAaAc nsultativ Ame hanism Aa d evolving Aa Aco prehensiveAet od logyAi Ato reduc Ath AscopeA orA onflict an Aarrive Aa Adecis o sAwithin Aa reas nableAim eA rame.A7.10ARecomm ndati nsgistra ionAcomplianceA a AWhile al ASt tesAi Athe AFif hASc edul AAreaAh ve Aenacted Aby givin l A gislation Avis- -visA ESA,Atheir prov sion AhaveAb en dilute rAlaw Aa dA t eAp werA f Athe Gr mASab a Ato Aot erAbodi s.ASub ectA att eAno AalsoA rules in respe tAofAmon yAlendi g, Afor st, mining andA xci eAhaernme tAofA be n Aa ended AThs A eeds A oA eAdo e. InAcaseA fAdefault, Go Ao APa t AAA ndia wo ld Ane d Ato Ais ue Aspecific direc ions Aun e AP ovis Ato Alook Aat o Athe AFift AS hedule, At A stabl sh a Af rum Aat A he Ace tr l Ale el re- terateA vio ation AandAapplyAc rr ctives. AThe Commi sion wo ldAlikeAto AtheAFif hA the im ort nceAof the AAnn al Rep rtsAof Ath AGove nor Aunde che ule AofAtheACost tution.Ab AAwarenes Acampa gn Ashould Ab Ao ganis dA nAor erA oAmakethe Atribalend entAtoA popul ti nAa areAofAthe pr visi ns A fAP SA Aa dAtheA73r Aa hAthe Afina A theAC ns it ti nAsoAa AtoAdemandAacc un abili yA nAcas sAi Awhi de isionsAa eA ont aryAtoAth Ad cis onsA f Athe Gr mASabhaAorP ncha at.herga isationA c. AA hould Abe aAcomple eAo erhaul Aand systematicAre-o f Aex stingAl nd Ar cord Awith A re AaccessAto A nform tionaboutAlandA oldi gstApol ciesA d.AThre isAneedAt Aha moniseA heAvariousAl gis ationsAand governmeA.AThAlawsA beingA mp emente AinAt ibal are s Awith Athe pr visio s A fAPE 894 AMinesA t atArequireAha mon sat onAa eAthe ALand A cqui ition Act,A ianA orest a dAMineralsA( eve opmentAandA egul tion) Act A1957, theAIn Act A1927, theAForestAC nser ation Act A19 0, Aand theAIndianAR93capa ity buildinl ct AforResolutionAconfiAct. NationaA t.ANatio alAp li ies suchAasA heANa ionalAW terAP licy,A20 2,ANatio alAMine als AP licy,A20 3, ANat onalAFo estAP licy,A19 8,AWildlifeAonservati nASt ate y,A2002A ndANa ionalADraft Environ entA olicy A200 AwouldA lsoArequireAh rmon sationA ith APE A.e. MiningAlaw Aa plicableA oASche uledA ribalA re sA hould AbeAiAcon orm tyAwithAth Ap inc plesA fAt e AFif h AandASix hA che ulesAofAtheACon titution.offici lsA hoA f AGover mentAs ould selectA uchApol ce, revenu AandAfo estan Aas AwellA haveA he A rain ng andA ea Ato Awo kAinA rib lAareasAan Au ders sAem ath seAwithAth Apop lationt e Aserve.which wo l g A AAAn ti nalApl nAo AactionAforAc mprehensive devel pment reparedAandA ser eAa Aa A oad mapAfor th Awe fare Aof the Atr ba s Ashould beAmp emen ed.AAp ogr mmesA h. The eAshouldAbe co vergence Ao Are ulatory Aand developmen nAshould beA i AtheAt iba Aar as.AForA h Apurpos ,AaAdecadal deve opment pl reparedAand im l mented A nAaA issi nAmodeAwith appropriaeAm chanismAfo Ar solution of A onflictsAandAad us ments.nA fAt ibes i.AThe authorit es involvedAin det rminingAt eAi clusionAa dA xclusi onsu tat onA in theAlistA fASche uledAT ibesA h uldAadopt aA echanismAofA heAba i AofA wi hAtheA ajo AStat sAan Athose withAtribal A op lat ons,A nArameter AiswhichAaAc mprehensive meth dologyA ith Acl arlyAdefine Ap94ISSUES RELATED TO OTHER BACKWARD CLASSES88.1 Introduction8.1.1 There has been a great deal of resentment among people belonging to Other Backward Classes (OBCs) including minorities that they have not been given the benefit of comprehensive amelioration packages as has been done in the case of SCs and STs. This has often to led to conflicts culminating in violence.8.1.2 The Constitution refers to the term ‘backward classes’ in Articles 15(4), 16(4) and 340(1). While Articles 15(4) and 16(4) empower the State to make special provisions for any socially and educationally backward class of citizens, Article 340(1) authorises the appointment of a Commission to investigate the conditions of backward classes. The term ‘backward classes’ which had originally been in use during colonial times had multiple referrents, but lacked any clearly defined parameter regarding the inclusion and exclusion of groups described collectively as backward. In fact, the term, at least in its early usage, denoted an all-encompassing category that included the underprivileged and marginalised castes, tribes and communities.388.1.3 Even at the time when the Constitution was being debated and drafted, the definition of the term remained imprecise. In the debates of the Constituent Assembly, there were two broad ways in which the term was used. One was an inclusive group of all sections of society that needed preferential treatment. In such an usage the term ‘backward classes’ included the “untouchables”. In the other usage, the term that was used was ‘Other Backward Classes.’ But the fact remains that the category ‘backward classes’ was not defined as precisely as the categories of Scheduled Castes and Scheduled Tribes were, but denoted other categories of people who were underprivileged and marginalised.8.1.4 Article 340(1) empowers the State to investigate the condition of socially and educationally backward classes and appoint a Commission for the purpose. The First Backward Commission which was appointed under Article 340(1) submitted its Report in 1955. The Report presented a list of 2399 castes and communities considered as backward. Of these, 237 were considered as most backward, requiring special attention. Thus the category ‘backward classes’ was bifurcated into two categories – the Backwards and the9538TheA acharACo mitteAR portcapacit Abuildin Afo Aconflic AResolutionA mos Abackwards ATh ARepor Awa Arejecte Ab Ath Aunio AGovernmen Afo Ahavin Ause A‘caste an Ano Aa Aeconomi Acriterio Afo Aidentifyin Abackwar Aclasses.A 8.1. ATh ASecon AAl AIndi Abackwar Aclasse Acommissio A Ath AManda Acommissio A Asubmitte Ait Arepor Ai A1980 ATh Acommissio Aevolve A1 Aindicator A A Ami Ao Acast AanA clas Afeature A Afo Aassessin Asocia Aan Aeducationa Abackwardness AI Aarrive Aa Aa Aexhaustiv A lis Ao A347 Acaste Atha Awer Adeclare Aa Abackward ATh Atangibl Aindicator At Aascertai A A cast Ao Aan Asocia Agrou Aa Abackwar Ainclude Athei Alowe Apositio Ai Ath Aclas Ahierarchy A lowe Aag Aa Amarriag Awithi Ath Agroup Ahighe Afemal Awor Aparticipation Ahighe Aschoo A dro Aou Arate Ainaccessibilit At Adrinkin Awater Alowe Aaverag Avalu Ao Afamil Aassets Ahighe A existenc Ao AKutch Ahouse Aan As Aon ATh Arepor Ao Ath AManda Acommissio Awa Apartiall implemente Ai A19 9 1.A 8.1. ATh AOthe Abackwar Aclasse Ai Aterm Ao Ath AGovernmen Ao AIndi Anotificatio Ao A 8t ASeptember A199 Ainclud Acaste Aan Acommunitie Awhic Aar Aname Ai Abot Ath Alist A containe Ai Ath ARepor Ao Ath ASecon AAl AIndi Abackwar Aclasse Acommissio A(Manda A commission Aan Ai Ath Alis Ao Aindividua AStat AGovernments ATher Ais Atherefore A Amajo A limitatio Ao Ahistorica Adat Aabou Ath AObcs ATh ARegistra AGenera Ao AIndi Aan Ath Acensu A commissione Aha Adiscontinue Acollectio Ao Acaste-wis Ainformatio A(excep Afo ASc Aan A STs Asinc Ath A193 Acensus AA A Aresult Ather Aar An Atime-serie Adat Ao Ath Ademographi A sprea Ao AObc Aan Athei Aacces At Aamenities AEve Ath AManda Acommissio Awhic Aha A estimate Ath AOb Apopulatio Aa A5 Ape Acen Ao Ath Acountry’ Atota Apopulation Aha Ause th A193 Acensu Adata8. ASocio-economi ASurveyA 8.2. AN Asocio-economi Asurve Aha A bee Aconducte Ao Ath AOthe Abackwar A classe Ai Ath Acountry ASom AStat - Government Ahav Aconducte Asocio A economi Asurvey Ao Aparticula Asegment A o Ath AOthe Abackwar Aclasse Abu Ai Ai A difficul At Age A Acomprehensiv Apictur A o Ath Asocio-economi Acondition Ao Ath A othe Abackwar Aclasse Ai Ath Acountry AI A i Atherefor Anecessar Atha Agovernmen A immediatel Atak Au A Asocio-economisurve Ao Ath AOthe Abackwar Aclasses9Iss es RelatedA oABackw8.3 Socio-economic Indicators8.3.1 Since 1998-99 some data relating to socio-economic position/ status of development of OBCs has started appearing in various surveys viz,(a) 1998-99 – National Family Health Survey(b) 1999-2000 – Consumption Expenditure Sample Survey of NSSO(c) 1999-2000 – NSSO report on Employment(d) 1999-2000 – NSSO Report on Land Holdings(e) 2002-03 – NSSO Report on Household assets and liabilities or Asset and Debt Survey(f) 2004-05 – NSSO Draft Report on EmploymentAn analysis of NSSO data contained various Surveys and Reports and provides following picture of socioeconomic status of OBCs (Figures 8.1 to 8.6):?Poverty?The incidence of poverty among OBCs is intermediate to that among SCs/STs on the one hand and the non-SC-ST-OBC97capa ityABuil ing forAconlict AResolution(Others) on the other. In general poverty among Scs/STs is 3 times that of the ‘Others’, while for OBcs it is double that of the ‘Others’.?Health Indicators?As far as the health indicators are concerned, the OBcs are much closer to ‘Others’, than to Scs/STs, who are far behind.?Unemployment?Open unemployment, as measured by the Usual Principal Status (UPS), is more or less consistently higher among OBcs than among ‘Others’.?Unemployment, including underemployment, as measured by the current Daily Status (cDS) among OBcs is the lowest among all social groups in rural areas and not significantly less than the STs but less than ‘Others’ in urban areas.?Asset Ownership?Asset ownership (including land) per household of OBcs is double that of Scs and STs, but only about two-thirds of ‘Others’ in both rural and urban areas.?Indebtedness?However, the incidence of indebtedness, and consequently the debt to asset ratio, is highest among OBcs of all social groups. It also appears that OBcs borrow a lower proportion of their debt from institutional sources and have higher dependence on informal sources as compared to all the other social groups.98Issue ARelate At Abackwar Aclasse8. ASocia AEmpowermen9tA 8.4. Aclearly Ath Asocio-economi Acondition Ao Ath AObc Ai Asuc Atha Ai Awoul Arequir A intervention At Abrin Athe Ao Apa Awit Ath AOther Aan Apu Athe Ai Ath Amainstream A Scheme Asuc Aa Ath Acentrall ASponsore ASchem Ao APos AMatri AScholarship Awhic Ai A availabl At AScs Acoul Ab Aextende At AObc Aincludin Aminorities AVariou Aevaluatio Astudie A conducte Ao Ath Aschem Aby Aamon Aothers Ath Ababasahe AAmbedka ANationa AInstitut Ao A Socia AScience A(2000) ATat AInstitut Ao ASocia AScience A(1999) Acentr Afo AResearc AActio A an ATrainin A(2000 Ahav Arecommende Atha Athi Abenefi Ashoul Ab Aextende At Aotheeconomicall Aan Asociall Abackwar Acommunitie Aincludin Ath Aminorit Acommunities.A 8.4. ATh A200 Acensu Ashow Atha Ath Aliterac Arat Aamon AMuslim Aa A59. Ape Acen Ai A belo Ath Anationa Aaverag Ao A64. Ape Acent ATh Aeducationa Astatu Ao AMusli Awomen A wit A Aliterac Arat Ao A50. Ape Acent Ai Aver Alow AFo Ath Aeducationa Auplif Ao Ath AMuslims A particularl Ao Ath Agir Achild Ai Ai Aimportan At Aensur Atha Ai Alocalitie Awit Aconcentration A o Apopulatio Ao Ath AMusli Acommunity Aprimar Aschool Aar Aestablishe Ai Aadequatnumbers.8.4. AO Ath Awhole Aspecia Ascheme Ao Ath Aline Ao Ath Ascheme Afo ASc Aan AST Anee At Ab Atake Au Afo Asocia Aempowermen Ao Ath AObcs8. AEconomi AEmpowermentA 8.5. AA Amentione Aearlier Ath ANSS Asurvey Arevea Atha Ath Aincidenc Ao Apovert Aamon A Obc Ai Aintermediat At Atha Aamon AScs/ST Ao Ath Aon Ahan Aan Ath A‘Others’ Ao Ath A other AW Ahav Aals Asee Aho Aope Aunemploymen Ai Aconsistentl Ahighe Aamon AObc Atha A amon A‘Others’ AA Afa Aa Aasse Aownershi Aincludin Alan Ai Aconcerned Ath Aownershi Ai Aonl A abou Atwo-third Ao A‘Others Ai Abot Arura Aan Aurba Aareas ATh Aincidenc Ao Aindebtednesan Aconsequentl Ath Adeb At Aasse Arati Ai Ahighes Aamon AObc Ao Aal Ath Asocia Agroup s .8.5. Aclearly Ai Ath AObc Aar At Ab Apu Ao Apa Awit A‘Others Aan Amad A Apar Ao Ath Amainstream Athe Ahav At Ab Aempowere Aeconomicall Athroug Aemploymen Aan Aincom Ageneratio Aactivitie Aan Aalleviatio Ao Apoverty AWha Ai Arequire Ai A Acomprehensiv Apackag Ao Aschemes Ao Ath Aline Ao Athos Adraw Au Afo ASc Aan ASTs At Aenabl Ath AO bc At Adevelo Athei Apotentia Aan Acapacitie Aa Aagent Ao Asocia Achange Athroug A Aproces Ao Aplanne Adevelopment.8.5. AArticl A1 A(4 Ao Ath Aconstitutio Aempower Ath AStat At Amak Aspecia Aprovision Afo Ath Aadvancemen Ao Asociall Aan Aeducationall Abackwar Aclasse Ao Acitizens AI AArticl A469cap city Abui din Afor Aco flictAReslutioniety.an ona A an Aoblig tio Ahas been cast upo AtheA ta e AtoApr mote withAsp cial car AtheAeducat lin A andAeco omic Ainte es sAo AtheAw akerAsec io sAo Athe Ape pl .AS AtheA tate wi lAbe iAfulf hemeA its Aconstitut onal Aobliga io sAinAformul tin Aand Aimpleme t ng Aa Acomprehe siveAs heirA to ardsAcap cityAbui di gAo Athe ObcsAincl ding Aminor ties thatA ouldAim roveA iat A socio-eco omicAs atu Aand thusA ring th m Aa Apar with re t AofAsoc ety AThis will alsoAobthe Aconlic sAo Athe ObcsAvis- -vi AtheA‘Ot hrs’ A8.6ARecommendati nsa.AGover men Amay wor Aou AtheAmodal ti s ofAaAs rve Aand ta e upAaAs tate ould wiseAsocio-eco omicAs rv yAo AtheA“ therABac wardAClas es”,A hichA for AtheA as s Aof Apol cie AandAprogr mm s AtoAim roveA heirAstat.b.AAGover mentA ee sAtoAform lat AandAimpl m nt Aa Acomprehe siveAshem AforAcap cityAbui di g Aof OBCs thatA ouldA ring th m Aa Apar wit Athe re tAof Asoc100RELIGIOUS CONFLICTS99.1 Introduction9.1.1 The preamble to our Constitution clearly declares the intention to secure to all citizens ‘liberty of thought, expression, belief, faith and worship’. Article 25 guarantees freedom of conscience and the right to freely profess, practice and propagate religion. Article 26 ensures the right to manage religious institutions and religious affairs. Article 29 grants the rights to all citizens to conserve their language, script and culture. Article 30 provides for the protection of the interests of religious and linguistic minorities by giving them a right to establish and administer educational institutions of their choice and the State has been directed not to discriminate against the institutions of the minorities in the matter of giving aid. In addition, Article 350A directs the State to provide facilities for instruction in the mother tongue at the primary stage in education.9.1.2 After Independence, there have been instances of large-scale communal violence in the country. The Commission, while discussing communal riots in its Report on ‘Public Order’, has stated that:“2.2.1.1 Communalism in a broad sense implies blind allegiance to one’s own communal group – religious, linguistic or ethnic – rather than to the larger society or to the nation as a whole. In its extreme form, communalism manifests itself in hatred towards groups perceived as hostile, ultimately leading to violent attacks on other communities. General amity and the peaceful coexistence of various faiths in India have been the envy of the civilised world. Nonetheless given the diversity of our society and our complex historical baggage, we are often beset with communal tensions which occasionally erupt into violence. At times, either bigoted and fundamentalist leadership, or unscrupulous political operators with an eye on short term electoral advantage, have deliberately and maliciously engineered communal passions, hatred and even violence to achieve sectarian polarisation. Most of the communal flare-ups have been between Hindus and Muslims, though conflicts involving other communities101ca aci yAbuldflict ngAforResolutiAconhave also occasionally occurred. Similarly, there have been other ethnic clashes from time to time.2.2.1.2 Though a number of communal riots have been dealt with effectively, there have also been many serious failures on the part of the administration in dealing with communal situations in a prompt and effective manner. A number of Commissions of Inquiry such as the Justice Raghubir Dayal Commission (Ranchi riots, 1967), Justice P Jaganmohan Reddy Commission (Ahmedabad riots, 1969), Justice D. P. Madon Commission (Bhiwandi riots, 1970), Justice Ranganath Misra Commission (Delhi riots, 1984), Justice B N Srikrishna Commission (Bombay riots 1992-93) and also the National Human Rights Commission have gone into the causes of these riots and analysed the causes and response of the administration and the police in handling them.”9.1.3 This commission examined the reports of various commissions which have inquired into different communal riots and found that they pointed to the following problems and shortcomings (paragraph 2.2.1.5 of Report on Public Order):“Systemic Problems?Conflict resolution mechanisms are ineffective;?Intelligence gathered is not accurate, timely and actionable; and?Bad personnel policies - poor choice of officials and short tenures - lead to inadequate grasp of local conditions.Administrative Shortcomings?The administration and the police fail to anticipate and read indicators which precipitated violence;?Even after the appearance of first signals, the administration and police are slow to react;?Field functionaries tend to seek and wait for instructions from superiors and tend to interfere in local matters undermining local initiative and authority;?The administration and police at times act in a partisan manner; and?At times there is failure of leadership, even total abdication on the part of those entrusted with the maintenance of public order.102Religi leAcommuni y.Post-riot A eficiencies Post-rio AManagementl anger; A nd ? ARe ab litat on Ais Aofte Aneglect d, Abreedin Are entment A nd Ares dua ackness AandA ? Offic als A re not Ahel Ato accou t Afor Athe r Afa lures, Athus A erpetuati g As i nc o m pe en e.” .1.4AIn th AcontextAof ma ntenan e Aof Ap bli Aorder, Ath Acommiss on Aex minedA heseAissues Are orms Ai A exten ivelyA hile AmakingArec mm n ationsAi AaAhol stic manner wi hAregar At asAcapac tyA th Apo ice AandA heAcrim nal Aju ti e As stem Ai Ai s ARepor AonA‘Pu li AOr er .ASoAfar olvement of uildingAfo Ar solution of conflicts Ai Aconc rn d, At ere isAneed forAfurther in eseAcit zen- citizens Ai Adevelop ng Ainterna Ame hanismsA or Adiffu ingAconflict h situ tions.ATcentric initi tivesAw uldincludeA:i. coo erationAand A oord nat on Awit AtheApolic A(communi tyAplicing).ii. coo eration Aand A oord nat on Awith Athe Aad inistratioA(citizens’Acom ittees).9 2ACommuni tyAP li ingeAandAotherA 9.2.1Ahe A onfidence of Adifferent co mun tiesAin AtheA mp rti lity Ao Ath Apoli sAsugg st dA ad inistrati e A a hin ryAis A Akey Afactor det rmining th Asu ess AofAthe A initiativ Aco mun ty,A above. AThe Ap rt cip tion Ao At e police inAa Amanne Ar spo dingA o A heA eedsAof Ath eA olice isA and Ath Ac mmuni y,Ain Aturn,Ap rt cip tin AinAitsA wnA olicingAan Asu portin Atty policingA anAide lAs tuationA or Ahandl ng Acommun Ac nflicts. AThAconceptA fAcommunorm tyAwithA is A nc rpo ated AinAthe A on tit tionAof A he Repub icAofAS ut AAfrica. AI Acon aAp ovi ionA th Ap ovi ions AofAthe Ac nst tutio ,AtheA outh AA rica Poli eAAct, A1 9 Acontains ccordin At A forAtheAe ta lishmentA fAcomm nity po ice foraAa AtheApo iceAst ionAlevel AAiceAandAth S cti nA18 of Ath AAc ,A hes Aa eAtoAa tAa Aforums forAlia son betwee Ath Apo co munity. AThAlias on AieatAfor:AAA a. A sta lishing Aand m intaining Aa partner hip between At eAc mmuityAandAteApolice. .Apromoting Ac mmu icationAand coopera ion betwee Ath ApoiceAandAtheAommunity. .Ai proving At eA enderi g AofApol ce ser icesAinAth103104Ca acityAbu ldi gAfor AC nflict AResolutiond.improving transparency in the service and accountability of the service to thecommunity.e.promoting joint problem identification and problem solving by the police andthe community.9.2.2 Police-citizen Interface: The Police force in various countries which are conflict-prone have undertaken several programmes to sensitise the citizens. The main aim of such programmes is to develop the self-defense capability of citizens and reduce their vulnerability by familiarising them with the root cause of such conflicts and to enable them to realise that most of these situations can not be compartmentalised between ‘absolute rights and wrongs’. One such programme by the Ontario police in Canada is worthy of emulation. It is known as the “Ontario Police – Minority Interaction” and is aimed, in particular, at gaining the confidence of the minority community. The programme provides an opportunity, on a continuing basis, to members of the target population to interact with the police in an informal and non-threatening environment. The programme consists of eight sessions of 2-1/2 hours, duration with an open forum style format. Sessions include topics such as arrest, detention, community policing, treatment of women by the police, police services available, youth and police, the rights and obligations of the citizens. The sincerity of police officers who conduct such sessions goes a long way in helping to build confidence in the minorities about the equity-enhancing role of the police. It also facilitates the public to adopt a more balanced approach to lingering local conflicts.9.2.3 The Commission has also discussed matters related to community policing in its Report on ‘Public Order’; this is reproduced below:“5.15.1 Community Policing has been defined as:“Community Policing is an area specific proactive process of working with the community for prevention and detection of crime, maintenance of public order and resolving local conflicts and with the objective of providing a better quality of life and sense of security”.5.15.2 According to David H Bayley,39 community policing has four elements:(1) Community-based crime prevention;(2) Patrol deployment for non-emergency interaction with the public;(3) Active solicitation of requests for service not involving criminal matters; and39Source: Community Policing in Australia – An Appraisal: Working Paper: .aul ReAinAthe A ontextA(4)ACreat on AfAmechanis sAforAgr ssro tsA eedbackAfromAthe co munit .manA sAa Acit zen 5.15.3 AThAbasicApri ciple Aund rlyingAc mm nity po icingAisA ha A aApolic mun tyApol c ng’A w thAunif rm a d AaAcitiz nAisAaA oliceman A it outA niform’.AThAtermA‘cozensAinv lv dAinA hasAb com Aa bu zword,A ut Ai Ai An thingAnew AItAisA asically gettingA it creati gAanA nvironme tAwhichAe hances com unityAsafet yAan Asecurity 5.15.4AC mm n ty Apolicin Ai Aa Aph los phyAin whi hAt eApolice and th Acitizen Aa t AasApart ersAinAp ov din Asecurity toA heAcommunit AandAc nt ollingAc ime.A tAinvol esAclos Awo kin Abet eenAth AtwoAw thApolice At king sugges io sAf om A eopl AontheAo eAh ndAandAu in A heAc tize sA s AaAfirs Al ne A fAdefenc eAon the A ther.some Af rm or theA 5 15 5 AMan ASta es Ain In ia Ahave At ken Aup Ac mm nity poli in Ain il ANadu, AM ha laA other AB Ait A‘M ithri’ Ai AAndhra A ra esh, A‘F ie ds Aof Polic ’ Ain ATa stor es A rom AallA Commi tees Ain ABhiwan i A(Ma aras tra) Athere A ave Abee Asevera Asuc ess Comm ss on A ould ver Athe count y. AW thout Ag in Aint Ade ai s Aof Ae ch A ne Aof Athes , Athel keA oAayAdo nAa Afe Ai AfeelsAs ou dAbe Afoll wedAinAcom un tyApol ci g:ilos p yAa dA o A ?AItA houldAbe Ac earl Aundersto d Athat Ac mm n ty Apolicin Ais aAp A ew A nitiati es ju t Aa AsetAofAa eeli g tha At eyA ?AThe Asuc essAof Ac mmun ty policing lies Ain Aci i ens Adev lopi gAaAmuni yA heAfirst aveAaAsa Ai Athe A olicingA f At eirA ocalit Aan Aalso Amak ng A he Aco ublicAre ati ns’A line Aof Ad fence. Ac mmunit Apo icing A h uldA ot Abeco eAaAmereA‘ i enAinteract on. ex rciseAb t A houldApro ideAa Aef ectiveAforumAf rApolice-citAl aisonAgro ps’A ? Interacti nAwith ci izens,Ash uldAbeA rganised At rough A‘ ommunit hat these groupsA orAcit ze ’s Acommit eesAatA if erentA ev ls.AItA houl AbeAe suredA Aa succes Aif Ait are Atrul Are rese ta ive. ATheA deaAof Ac mmuni y A o icingAw ul Ab is Apeo le Ad iven Ar therAtha ApoliceAdri en.? Convergenc Aw thAac ivities Aof otherAgover men AdepartmentsA ndAorg ni ationsAsho ul dAbe attempted ”ApoliceA nd AtheA9.2.4 Ac mm nity p licing A sAthu Aa Aconcept whi h Avisu lis s Atro ctive pro essA citizens wo kingAto etherAto pr vid AsecurityA At e A o munity.AA t AisAaA n Ain Ap ov dingAA in which theA oli eAworks Aw th the Acommu ity AinAr sol in Aconflicts Athe prin ip esAA aA en eAo Ase urityAto A ll the Acitize s. AThe Acomm ssio Are terates Ath dAbeAfoll wedAinA laid A own Ain pa agr ph A5.1 .5 of Aits A eportA n A‘Pub ic Order’As ouc mmuni yApol cing which wouldAal oAb ingAsoci talAand Aco mu alA esilien105C pac tynflictABuil ingResolutionAforACoof religious conflicts.9.3 District Administration and Citizens’ Peace Committees9.3.1 Citizens’ peace committees in the districts have been found useful in many areas. In times of communal tension, administrators working in districts have formed peace committees, consisting of politicians and influential members of different communities who have participated meaningfully in the deliberations of the peace committees and in peace marches. In the process, peace committees have been successful in reducing tensions. Keeping in view the need for formalising district administration initiatives, encouraging civil society initiatives and recognising the importance of reconciliation efforts to promote communal harmony, the Commission is of the view that District Peace Committees should be made effective instruments of addressing issues likely to cause communal disharmony. These committees should be constituted by the District Magistrate in consultation with the Superintendent of Police. Representation from different communities should be such as to instill confidence in citizens about the effectiveness of the committee. In Police Commissionerates, these committees should be constituted by the Police Commissioner in consultation with the Municipal Commissioner. These committees should be institutionalised as an important forum for conflict resolution between groups and communities. Such committees should also identify issues of local relevance which have a propensity to degenerate into conflagration and suggest measures to deal with them. For example, these committees could look into matters related to finalisation of routes of religious processions and their regulation. Encroachment of public properties etc. could also be dealt with by these committees.9.3.2 On the lines of the District Peace Committees as suggested above, there is also need for organising ‘Mohalla Committees’. Generally, religious conflicts in India are urban centric, with a spill-over effect in adjoining rural areas. The successful experiment of ‘Mohalla Committees’ (locality level multi-community forums) in Bhiwandi in the aftermath of communal violence by an enterprising Superintendent of Police amply demonstrates the efficacy of this approach. While such committees were often constituted to defuse tensions precipitated by communal violence, the Bhiwandi approach institutionalised cross-communal interactions where issues of common concern were discussed regularly promoting mutual trust and confidence. Meeting regularly, rather than only when communal tensions ran high, brought different members of religious communites together to talk about common concerns. This mutual trust and understanding proved very effective in preventing occurrence of communal violence in Bhiwandi in 1992-03 when many other places in106lM harash raA xperience AsevereA ndAprolondAcom un lAviolen e. AAAc nst heAtution (NcR c)A 9.3.3 A ationa Aco mission to Rev ew Athe AWorki gAofAth eAresolut onAofAin tnAitsARep rt AmadeAtheAfo lowing Arec mm nda ion Apertai in AtoAthler-eligiou Ac nf cts:Ad ffere t Aco mu ities “TheA ettingAupAo A‘Mo all ACommittees’ A it Athe Apar icipationAo trat onAi Aprevent ngA to Atake note AofA arl Awarning sym tomsAandAalert ng theAadmini heAendeav ur Ama eAinA themA ave Aprodu edAendur ng beneficial Ar sul s.AIn Apart cula ,A hiandi,AinAthe state of A aharas tra,A fterAt eAtr gic AriotsA her ,Ahav Aephas zedAtheAv aue of Asuch Ame sures.”AheAco missionAeors s A hisAap roach.AAh94ATe A ac arACo mitt eeAmeasure Ato Aprovscertain the “Social,A 9.4. AInAM rchA2005 A AHi hAlevelAcom it ee AwasAco sti utedAtoAyAin AIndia” A nd r At eA Ec nomic A nd Edu ationa AStatus Ao At e AMusl mAcom uniasAess ntiallyAa fa tA chair anshipAo AMr.AJu ti eARajiAThdarASacha . ASacharAcom i teeApecifc aspectsAo A heA findin Aco mitteeA o A naly eAtheAva ie yAo Adatai Ar levantA o A heA oble sAappear ngA rom usli Ac mmunityA-A he AtaskA fA uggest ngA easuresA oAremedyA heAp eAc mmit ee,A owever such A Aanal sisAwasA ot exp essly in ludedAinAi sAt rmsAofAref rence;At AfromAits pa nstakingA has AmadeAmanyA seful recommend tionsAw ich A ogi allyAemergeAad ressed Aa most allnaly is. The Acom it eeAgaveA ts Are or Ain NovemberA 006. AI Aha asAmadeAcompreh nsi eA the Apr blemsAtha Ath AMus imAcom uni y Ah sAbe nAfacing AandAges ionsAtoA eal AwithA rec mmendations for t eirAem ow rmentA ndAaAnumber of poli yAsu otingAtheir int nsiveA th Ar lativ Adeprivatio AofA h se Ac mm nitiesAwi hAa Av ewAtoApro esAt e Arole Apl ye AbyA develop ent Aa d A ainstreami gAthem. ATheAc mmi sion acknow edlopmentAofthisAcom itt eAinAben hma kin AtheAc iteria AforA he fut reAdevthe Mu limAcomm nity.Alitat onAo9. ATheACommunal Violenc A(P evention,ACont ol ndARehabB ll,A20 5fAAVi tims)AdAa plethora AofAle alA 9.5.1 ADespite strong Acon tit t onalApr visio sAf r a Asecula AI diaAa hey continue toA ecurA and Aadm is rati eApr visionsA to Adeal A ithA ommunalA ffe ces,A untry.A ith AaAv ew A oA an Athreat nAthe sec larAfabr c,Aunity an Ain ernalAse urit A fAou Ac fur her empow rAtheAunion an ASta efAGovern ents AtoA ak Aefecti107ding for ConflictCa acityResolutionABuilfor a holistic approach to prevent and control communal violence, including rehabilitating the victims of such violence, mandating for speedy investigation and trial, and imposing enhanced punishment, the Government of India introduced a Bill in Parliament in 2005. This Bill:(i)provides for declaration of certain areas as communally disturbed areas by theState Governments;(ii) lays down measures for prevention of acts leading to communal violence;(iii) provides for enhanced punishments for offences relating to communal violence and for certain other offences;(iv) makes provisions for speedy investigation and trial of offences through Special Courts;(v) makes institutional arrangements for relief and rehabilitation measures for victims of communal violence;(vi) makes provisions for compensation to the victims of communal violence and provide for special powers to the Central Government in certain cases;(vii) provides for constitution of a National Communal Disturbance Relief and Rehabilitation Council, State Communal Disturbance Relief and Rehabilitation Council and District Communal Disturbance Relief and Rehabilitation Council; and(viii) prohibits any discrimination in providing compensation and relief to the victims of communal violence on grounds of sex, caste, community or religion.9.5.2 The proposed provisions in the Bill are comprehensive and cover various aspects of tackling communal violence ranging from preventive measures to rehabilitation of victims. Clause 3 of the Bill deals with the powers of the State Government to declare an area to be a communally disturbed area in certain circumstances. Clause 4 lays down the measures to be taken by the State Government to prevent and control communal violence in a communally disturbed area. Clause 5 lays down the powers of District Magistrate to take preventive measures in case of a situation which has arisen causing apprehension of breach of peace and creation of discord between members of different groups, castes or communities. Clauses 6 to 10 describe the powers of the competent authority to take preventive measures in a notified communally disturbed area.108Re igious Aclrea.A9.5.3 mmunalA 9he Abill Ap5.3 Aovi es A or Athe Apun sh ent Aof A arious A ffe ces A n A ase Aof Acteri gA vi lence. A la se A1 Ato A15 A rov de A or Athe Apun shm nt Afor A arious A ffenc s Alike Alo ithoutA near Apro ibited pl ces Ain Avi la ion Aof A rders Ab ing Ain Apos es ion Ao Aarm , Aetc. Aes AandA l cence, Aas isting Aoffnders, giving Afianc al A id A or Athe Acom is ion Aof A f ertain A fenor Aany thre tening Awit esses. cl use A16 Ap ovi es A or Athe Apun shm nt A or Athe A river Ao ner pe sonAin ch rge Ao Agoods Atr nsportA ehi leAfor Ac rryi g Amore A erso sAthanAauth ized.A ndAforA cl useA17Ap ovi esAfor Apun shm ntAfor publicAs rvants ac ingA n Am laAfide man erA ai ure AtoAdi charg Atheir dutiesA hrough wilful Acom is ion AorAom sion. A cl useA18Ap ovi esA iminalA orAthe Apun shm nt AforAvi la ionAof order Aunder A ect on 144 of At e A odeAofAc onAforA Pro edur , A 9 3Ain AaAcom unallyAdi turbe Aarea. cl use A19Apre cri esAtheAcr ter cl useA c mmunal offe ceAandAe hanced Apun shm nt AforAcom ittingAc mmunalAvi ence. A ofAtheA 20Ap ovid sAt atAtheAsc eduled A ffence As allAbeAcog izableA ffen es A orAthe A ur osep oposedAlegisl a t io .es AandA 9he Abil5.4 AAmakes Acompre ensive Apro isi ns Afor Aconst tu ion Aof review Acom ittfen esA invest gatio Ate ms Aand Aestabl sh ent Aof A pecial co rts Ato Afac litate speed At ial f Aof A ent AtoA and Aa arding Apun sh ent to Athe A ilty. A cl use A22 Ae pow rs Ath AState Agov rn en ral con t tute Aa Review Aco mittee he de Aby Aaficer of AthAoAl el of AAan AIn pector AAissue of Po ice Ato revie Ac ses Aof Asc eduled A ffence Awh re Ath Atri l A nds Ain Aac uit al and Atre ort ord rs Afo Afiing Aof Aa peals, Aw erever Are ir d. AAThe Aco mi tee Ais Ar qu red Ato s bmit Aacl useA on AitsAindi gsA ndAthe actio At kenA nAea hA ase toAtheAD rectorA en ralAof A olice. AStateA 23Ap ovi es A or Athe Aconst tu ion of oneA r AmoreA pecialAInvest gatio AT ams byAth ionAofA gov rn ent A nAc seAth AStateAgov rnmen Ac mes to AtheAcon lusi nAt atAtheAinvest ga aAf irA ffencesAco mi t dAin AaAcom unallyAdi turb dAa ea A asAnot A arr edAoutAp op r yAin ca ion andAim artialA nner.A cl useA24Ap ovid sAt atAth AStateAGov rnment sh ll, i AbyAnoti eduledA in Athe OfficialAG zette, Aes abl sh oneA r AmoreA pecial cou ts A orAth At ial AofAsc ariousA ffencesAco mitted dur ng Athe pe iod AofAdistu bance.A la se A2 Ato 33Al yAd wnAtheA speed A adminis rat veAandApro eduralA sp ctsAin Ar la ion to AtheA pecial co rtsAto Afac litate A– A(i)A t ial Aof A ffen esAand Aa ar ing AofApun sh ent toAtheA uilt .ATheseA spectsA n ludpecialA comp sit on AandAappo nt entAof Ju gesAofA pecial A ourt ; A(ii Ap aceAofA it ing AofA s;Aandourt ; A(vi Ap wer AofA uprem Ac urtAtoAt ansfer cases A(vii)Apro ec ionAofAwit essreAforA (viii Ap werAtoAt ansfe Ac sesAtoA egular A urts. AA la se A3 Ato 36Al yAd wnAtheApr ced asAandA i posing A ertain Arestr ct onsAon Am ve entAof A er onsAinAcom unallyAdi turbe Aar eali gAwith A ppeals A gain tAsuch Arestri ions. A cl useA37Ap ovi es AforAab li ionAofAertainA pecial cour s whenAaA otifidAarea ce se A oAbeAa Acom unallyAdi turbe109Capacit ABuildin Afo AConflic AResolution9.5.5 The Bill provides for mechanisms for relief and rehabilitation of victims of communal violence. Clauses 38 to 48 provide for establishment of institutional arrangements for relief and rehabilitation measures through constitution of State Communal Disturbance Relief and Rehabilitation Council, its composition and functions (Clauses 38 to 40), State Plan for promotion of communal harmony and prevention of communal violence (Clause 41); constitution of District Councils, their composition and functions (Clauses 42–44); constitution of National Council and its composition (Clause 45), terms and conditions of members of the National Council (Clause 46), the powers and functions of the National Council (Clause 47) and submission of Report by the National Council to the Central Government (Clause 48). Clauses 49 to 51 provide for the establishment of funds for relief and rehabilitation which include establishing- (i) State Fund, purpose and submission of annual report to the National Council (Clause 49); (ii) Scheme for grant of relief or immediate relief (Clause 50) and establishment of District Fund (Clause 51). Clause 52 lays down that the District Councils shall function under a State Council. Clause 53 lays down the modalities for payment of compensation to victims of communal violence through the District Council.9.5.6 One of the important provisions of the proposed Bill is the special powers of the Union Government to deal with communal violence in certain cases. In terms of Clause 55, the Central Government has been given power to give directions to the State Government in case of communal disturbances and to issue notifications declaring any area within a State as a communally disturbed area and to deploy armed forces wherever necessary (on the request of the State Government). Where it is decided to deploy armed forces, an authority known as Unified Command may be constituted by the Union Government or the State Government for the purpose of coordinating and monitoring such deployment. Every notification declaring any area within a state as a communally disturbed area by the Union Government has to be laid before each House of Parliament. Clause 56 of the Bill provides that such notification shall also specify the period for which the area will remain so notified which shall not exceed in the first instance, 30 days. The Union Government may extend this period by notification but the total period during which an area may be notified as a communally disturbed area shall not exceed a total continuous period of 60 days.9.5.7 Brief observations of the Commission on various sections of the Bill are indicated in the tabular statement (Table 9.1):110ConcictslObservations of the ARCExistence of more than one Competent Authority could dilute unity of command and responsibility. Moreover, the DMs are already vested with all powers of the Competent Authority.In instances of sudden flare up of communal violence, there may not be enough time to issue such a notification.The Section3. (1) Whenever the State Government is of the opinion that one or more scheduled offences are being committed in any area by any person or group of persons(a) in such manner and on such a scale which involves the use of criminal force or violence against any group, caste or community, resulting in death or destruction of property;(b) such use of criminal force or violence is committed with a view to create disharmony or feelings of enmity, hatred or ill-will between different groups, castes or communities; and(c) unless immediate steps are taken there will be danger to the secular fabric, integrity, unity or internal security of India, it may, by notification,(i) declare such area to be a communally disturbed area;(ii) constitute such area into a single judicial zone or into as many judicial zones as it may deem fit.(4) When a notification has been issued under sub-section (1), the State Government shall notify one or more officers of the State Government as the competent authority for the purposes of this Act and different competent authorities may be appointed for different provisions of this Act.(2) Notwithstanding anything contained in Sections 6, 7, 9 and 10, the District Magistrate shall also have the same powers as the competent authority has in the area under his jurisdiction in relation to the provisions of the said sections.Object of the Section/ClauseTable 9.1 : Analysis of the Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005Declaration of certain areas as communally disturbed areas1. Sl. No.Appointment of Competent Authorities under the ActPowers of the District Magistrate3.2. 111capa ity buildinl ct AforResolutionAconfiObservations of the ARCTable 9.1 Contd.All these are offences under existing laws.Since all these powers exist under the CrPC and Police Acts, there is no need to give such powers parallely.Moreover such powers, in this proposed legislation become operational only after an area has been declared Communally Disturbed.The SectionAnalysis of the Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005Object of the Section/ClausePowers given under the Act:a. Deposit of Armsb. Power to Searchc. Power to prohibit certain actsd. Power to make orders regarding conduct of personsOffences defined under the Act:a. Violation of order to deposit armsb. Disobedience of legal orders of competent authoritiesc. Loitering near prohibited placesd. Assisting Offenderse. Threatening witnessesf. Overloading passengers in vehiclesg. Violations of prohibitory orders under Section 144 of CrPC5.Sl. No.4.112ns.igisus ConflictsTable 9.1 Contd.Observations of the ARCAnalysis of the Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005It has been observed that Government sanction normally does not come easily. There should be a mechanism-an empowered committee to urgently process such sanctioThe Section17. (1) Whoever being a public servant or any other person authorised to act by a competent authority under any provisions of this Act or orders made thereunder,(a) exercises the lawful authority vested in him under this Act in a mala fide manner, which causes or is likely to cause harm or injury to any person or property; or(b) wilfully omits to exercise lawful authority vested in him under this Act and hereby fails to prevent the commission of any communal violence, breach of public order or disruption in the maintenance of services and supplies essential to the community, shall be punished with imprisonment which may extend to one year, or with fine, or with both.Explanation.—For the purposes of this section, any police officer who, wilfully refuses(i) to protect or provide protection to any victim of communal violence;(ii) to record any information under sub-section (1) of Section 154 of the Code relating to the commission of any scheduled offence or any other offence under this Act;(iii) to investigate or prosecute any scheduled offence or any other offence under this Act, shall be deemed to be guilty of wilfully omitting to exercise the lawful authority vested in him.(2) Notwithstanding anything contained in the Code, no court shall take cognizance of an offence under this section except with the previous sanction of the State Government: Provided that every request for the grant of sanction under this section shall be disposed of by the State Government within thirty days from the date of the request.Object of the Section/ClausePunishment for public servants for mala fide actsSl. No.6.113capacit Abuildin Afo Aconflic AResolutionObservations of the ARCTable 9.1 Contd.This would make punishments more deterrentThe Section19. (1) Whoever commits any act of omission or commission which constitutes a scheduled offence on such scale or in such manner which tends to create internal disturbance within any part of the State and threatens the secular fabric, unity, integrity or internal security of the nation is said to commit communal violence.(2) Notwithstanding anything contained in the Indian Penal Code, or in any other Act specified in the Schedule, whoever commits any act of omission or commission which constitutes communal violence shall, except in the case of an offence punishable with death or imprisonment for life, be punished with imprisonment for a term which may extend to twice the longest term of imprisonment and twice the highest fine provided for that offence in the Indian Penal Code or in any other Act specified in the Schedule, as the case may be:Provided that whoever being a public servant or any other person authorised to act by a competent authority under any provisions of this Act or orders made thereunder, commits communal violence shall without prejudice to the foregoing provisions be punished with imprisonment which shall not be less than five years.(3) Any person who is guilty of an offence under sub-section (1) shall be disqualified to hold any post or office under the Government for a period of six years from the date of such conviction.Analysis of the Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005Object of the Section/ClauseEnhanced punishment for communal violence7.Sl. No.114~ictslObservations of the ARCTable 9.1 Contd.This provision empowers the Union Government to establish Spe c i al Courts outside the State (On request of the State Government)The Section24. (1) The State Government shall establish one or more Special Courts for trial of scheduled offences committed during the period of disturbance by issuing a notification for the purpose.(2) Notwithstanding anything contained in sub-section (1), if, having regard to the exigencies of the situation prevailing in a State, the Government is of the opinion that it is expedient to establish, Additional Special Courts outside the State, for the trial of such scheduled offences committed in a communally disturbed area, the trial whereof within the State(a) is not likely to be fair or impartial or completed with utmost dispatch; or (b) is not likely to be feasible without occasioning a breach of peace or grave risk to the safety of the accused, the witnesses, the Public Prosecutor and the Judge or any of them; or (c) is not otherwise in the interests of justice, it may request the Central Government to establish, in relation to such communally disturbed area, an Additional Special Court outside the State and thereupon the Central Government may, after taking into account the information furnished by the State Government and making such inquiry, if any, as it may deem fit, establish, by notification, such Additional Special Court at such place outside the State as may be specified in the notification.Analysis of the Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005Object of the Section/ClauseThis would empower Executive Magistrates to remand or release the accused on bail.Setting of the Review Committee and Special Investigation Teams are more in the nature of administrative arrangements.Special Courtsa. Accused can be produced before Judicial or Executive Magistratesb. Constitution of a Review Committeec. Constitution of Special Investigation TeamsProvisions for investigations:8. Sl. No.9. 115apacityA uil ingAfor conflic AResolutionObservations of the ARCTable 9.1 Contd.The Section38. Every State Government shall, by notification, establish a Council to be known as State Communal Disturbance Relief and Rehabilitation Council.42. (1) The State Government shall, by notification, establish a District Communal Disturbance Relief and Rehabilitation Council in respect of each district in the State.45. (1) The Central Government shall, by notification, constitute, with effect from such date as it may specify in such notification, a council to be known as the National Communal Disturbance Relief and Rehabilitation Council, consisting of not more than eleven members, to exercise the powers conferred on, and to perform the functions assigned to it by or under this Act.53. (1) Whenever a Special Court convicts a person for an offence punishable under this Act, it may, by its sentence, also pass an order that the offender shall make such monetary compensation as may be specified therein to the person mentioned in sub-section (5) for any loss or damage arising from such offence.54. (1) The District Council shall entertain claims by or on behalf of persons affected by Communal Violence and the District Council shall decide the quantum of immediate compensation to be awarded to the victim or his dependents, as the case may be, after due inquiry within a period of one month from the date of the claim.Analysis of the Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005Object of the Section/ClauseThis would create an institutional mechanism for dealing with relief and pensation to victimsInstitutional Arrangements for relief and rehabilitation10. Sl. No.11. 116Religious ConflictsObservations of the ARCTable 9.1 Contd.This would imply that the Union cannot deploy its armed forces wit hout the consent of the concerned State.The Clause is silent about ‘Competent Authorities’. In case the Union Government declares an area to be disturbed, would they also appoint ‘Competent Authorities’?The Section55. (1) Whenever the Central Government is of the opinion that one or more scheduled offences are being committed in any area within a State by any person or group of persons in such manner and on such a scale which involves the use of criminal force or violence against the members of any group, caste or community resulting in death or destruction of property and such use of criminal force or violence is committed with a view to create disharmony or feelings of enmity, hatred or ill-will between different groups, castes or communities and there is an imminent threat to the secular fabric, unity, integrity or internal security of India which requires that immediate steps shall be taken by the State Government concerned, it shall(a) draw the attention of the State Government to the prevailing situation in that area; and(b) direct the State Government to take all immediate measures to suppress such violence or the use of criminal force within such time as may be specified in the direction.(2) The State Government shall take appropriate action to prevent and control communal violence on the issue of a direction under sub-section (1).(3) Where the Central Government is of opinion that the directions issued under sub-section (2) are not followed, it may take such action as is necessary including(a) the issue of a notification declaring any area within a State as a “communally disturbed area”;(b) the deployment of armed forces, to prevent and control communal violence, on a request having been received from the State Government to do so.Analysis of the Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005Object of the Section/ClauseSpecial powers of Central Government12.Sl. No.117capa ity buildinl ct AforResolutionAconfiObservations of the ARCTable 9.1 Contd.The SectionTHE SCHEDULE[See Clause (l) of sub-section (1)of section 2]1. Offences under the following provisions of the Indian Penal Code (45 fo 1860):—Sections 120B, 143, 144, 145, 147, 148, 150, 151, 152, 153, 153A, 153B, 154, 155, 156, 157, 158, 160, 295, 295A, 296, 297, 298, 302, 303, 304, 307, 308, 323, 324, 325, 326, 327 to 335, 341 to 348, 352, 353, 354, 355 to 358, 363 to 369, 376, 379, 380, 383, 384 to 387, 392, 402, 411, 412, 426, 427, 431, 435, 436, 440, 447 to 462, 504 to 506 and 509.2. Offences under the following provisions of the Arms Act, 1959 (54 of 1959) —Sections 25, 26, 27, 28 to 30.3. Offences under the following provisions of the Explosives Act, 1884 —Sections 6(3), 8(2) and 9B.4. Offences under the following provisions of the Prevention of Damage to PublicProperty Act, 1984 (3 of 1984) —Sections 3 and 4.5. Offence under the following provisions of the Places of Worship (Special Provisions) Act, 1991 (42 of 1991)—Section 6.6. Offences under the following provisions of the Religious Institutions (Prevention of Misuse) Act, 1988 (41 of 1988) -Section 7.Analysis of the Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005Object of the Section/ClauseScheduled Offences13.Sl. No.118R ligiousl9.5.8 The above brief analysis indicates that a separate legislation for dealing with communal violence is, perhaps not required since there are adequate provisions in the present statutes to deal with all aspects of communal violence. For example, there are several provisions in the Indian Penal Code (IPC) which deal extensively with offences relating to religious, racial, linguistic or regional groups, castes and community. Section 153(A) of the IPC for example prescribes the following:“153A. Promoting enmity between different groups on grounds of religion, race, place of birth, residence, language, etc., and doing acts prejudicial to maintenance of harmony.(1) Whoever(a) By words, either spoken or written, or by signs or by visible representations or otherwise, promotes or attempts to promote, on grounds of religion, race, place or birth, residence, language, caste or community or any other ground whatsoever, disharmony or feelings of enmity, hatred or ill-will between different religious, racial, language or regional groups or castes or communities, or(b) Commits any act which is prejudicial to the maintenance of harmony between different religious, racial, language or regional groups or castes or communities, and which disturbs or is likely to disturb the public tranquility, or(c ) Organizes any exercise, movement, drill or other similar activity intending that the participants in such activity shall use or be trained to use criminal force or violence or knowing it to be likely that the participants in such activity will use or be trained to use criminal force or violence, or participates in such activity intending to use or be trained to use criminal force or violence or knowing it to be likely that the participants in such activity will use or be trained to use criminal force or violence, against any religious, racial, language or regional group whatsoever causes or is likely to cause fear or alarm or a feeling of insecurity amongst members of such religious, racial, language or regional group or caste or community shall be punished with imprisonment which may extend to three years, or with fine, or with both.Offence committed in place of worship, etc- whoever commits an offence specified in sub-section (1) in any place of worship or in any assembly engaged in the performance of religious worship or religious ceremonies, shall be punished with imprisonment which may extend to five years and shall also be liable to fine.”9.5.9 In the same way, certain offences based on bias against religion, race, language or regional group, caste or community and which are prejudicial to national integration are dealt with in Section 153 B of the IPC.119rc pacityconflictA uildingResolutionAfo“153B. Imputations, assertions prejudicial to national-integration. Whoever, by words either spoken or written or by signs or by visible representations or otherwise, (a) makes or publishes any imputation that any class of persons cannot, by reason of their being members of any religious, racial, language or regional group or caste or community, bear true faith and allegiance to the Constitution of India as by law established or uphold the sovereignty and integrity of India, or(b) asserts, counsels, advises, propagates or publishes that any class of persons shall, by reason of their being members of any religious, racial, language or regional group or caste or community, be denied or deprived of their rights as citizen of India, or(c ) makes or publishes any assertion, counsel, plea or appeal concerning the obligation of any class of persons, by reason of their being members of any religious, racial, language or regional group or caste or community, and such assertion, counsel, plea or appeal causes or is likely to cause disharmony or feelings of enmity or hatred or ill-will between such members and other persons,shall be punished with imprisonment which may extend to three years, or with fine, or with both.Whoever commits an offence specified in sub-section (1) in any place of worship or in any assembly engaged in the performance of religious worship or religious ceremonies, shall be punished with imprisonment which may extend to five years and shall also be liable to fine.”9.5.10 In addition, sub-sections (1)(c), (2) and (3) of Section 505 of the IPc also deal with offences related to promoting enmity, hatred or ill-will between classes on grounds of religion, race, place of birth etc.“505. Statements conducing to public mischief. – (1) Whoever makes, publishes or circulates any statement, rumour or report, (c) with intent to incite, or which is likely to incite, any class or community of persons to commit any offence against any other class or community,shall be punished with imprisonment which may extend to three years or with fine, or with both.(2) Statements creating or promoting enmity, hatred or ill-will between classes.—Whoever makes, publishes or circulates any statement or report containing rumour or alarming views with intent to create or promote, or which is likely to create or promote, on grounds of religion, race, place of birth, residence, language, caste or community or any other ground whatsoever, feelings of enmity, hatred or ill-will between different religious, racial,120eligiouslA,A153b,Alanguage la guage Aor region l A roupsA r A astes AorAcom uniti s, shallAbe puni hed AwithAimp isonm ntA ith both. hichAm yA xtend toAthr e A ears AorA it Afine AorAwp,Aetc. – ( ) AOffe ce AunderAsu -se tion A(2)A om itted in placeAof wors iorAin Aan Whoeve Ac mmitsA nAoffence sp cifiedAinAsu -se ti nA( ) AinA ny place Ao Aw rs ip s, shallA assembl Ae gag d Ain AtheApe fo manceAofA eligiou Aw rshipAorA eligiousAce emoni eA iabl be puni hed Awith Aimp isonm ntA hichAm yA xteiveAdAtoAearsA ndAs al AalsoAtoAfine.AAion whenA Ex ep ion. AIt does An tA mo nt AtoAa Aoffenc ,Aw thin Ath Am anin AofAthi Asec ort,AhasA t eAperso Amaking,Ap bl shing AorAci cul ting anyAsuch As atemen , A umourAo Are dAmakes,A r asonabl Agr undsAforA elie ingA hatAsuch As atemen , A umourA rA epor Ais trueAa ub ishes AorAc rc la es AiAinAg odA aithAan Awi hout anyAsu hA ntentAasAa f o r e s a i .”atingAtoA 9.5.11 Further Ac ap er A V Ao AtheAIPc contains Ap ovisions A egardin Aoffences re Ai eligion clude: Abriely, AthesesultAthei ASe t onA295 A– In uring Ao Adefil ng place Ao Awor hipAwi hA ntentA oAi re igi nAofAanyAlass.ii ASec i n A295A A–AD lib rateAandA alici usAacts, in endedAt AoutrageAeligious fe lin sAof A ny classAby A nsu tingAits re igionAorA eligiousAbelefs.iii ASe t on A296A– AD sturbingA eligiousAassmbly.iv ASe t onA297A– ATr sp ssingA n Aburi lAplacsAetc.v ASe t onA298A–A tterin ,Awor s,Ae c.,AwithAd libera eA ntent toA oundAtheAeligious fe lin s AofAanyApers n.umber AofA 9. .12 From At e A bo e, Ait Ai Aevi ent that At e AInd an AP nal Acode c ntains a A in AotherA p ov sion Ato A eal Awith communal ffe ces. AI Af ct Ait Ais Ac mp rabl At AlawsmesAlike ountr esA hichA re thereA oAcomba Aoffences re er edAt AasAhat crim s.AAHa eAcr isation A communa Aoffnces Aare crim nalAacts A ommitte Aagains Apeople, pr pertyAorAorgaelongAorA b cau eAofA he group toAw ichAth y A elongAor ident fy wit , AorAare A er eivedA oA AAInAthe en ify. A TheAbasisA heref re could A eAeit er Arace Acolou ,Acreed, re igion Ao ge der crim na AcodeA f Aca adaAe.g ASe ti n A319Ai As milar At ASe ti n A2 8 Aof Ao rAInd anAP nalAcod Ab cause Ait pro ides Afor Ap nishmen Aagainst As at men s Ain Aa y Apub icApl ceAwhi hAinci eAhatre Aag instAanyi Aid ntifabeAgrou .Acommuna A 9.5 13ATho ghA hereAare adequate Ap ov sio s Ain Athe IP /crP AtoA eal Awithecti el A offnces an A ctsAofAa communa Anat re Aso e AofAthe Ap ovis ons have not f AbeenAeused Ai Ar s ectAof a A umberAo Aoffe ces Ae g.Athose Ap nisha le Aunder Secti nsA15121or apactyConflict BuildingResolution Af122295A and 505 IPC, as per provisions of 190 CrPC cognizance cannot be taken by a court of law except with the prior sanction of the Union or the State Government or of the District Magistrate (in case of offences under Section 153 B and sub-sections (2) and (3) of Section 505). Such sanctions are generally difficult to procure. The Commission had considered this issue in paragraph 6.1.7 of its Report on ‘Public Order’, and is reproduced below:“6.1.7.3 A suggestion was made before the Madon Commission that no sanction should be necessary for a prosecution under Section 153A of the Indian Penal code. The Madon Commission, however did not agree with this suggestion and stated that the power to grant sanction to prosecute should rest only with the Union Government or the State Government as now provided by Section 196(i) of the CrPc.6.1.7.4 This issue has been examined by the Commission. It is felt that the sanction prescribed under Section 196 crPc does not serve any useful purpose. Moreover, once a case is chargesheeted by the police, the magistrate would frame charges only if there is a prima facie case, and this is adequate and reasonable protection against any malicious prosecution. Moreover, with the checks and balances suggested in this Report with regard to police functioning, such a provision becomes even more unnecessary. Therefore, such sanction should not be necessary for prosecution.”9.5.14 Accordingly, the Commission recommended the following (para 6.1.7.9.a):“No sanction of the Union Government or the State Government should be necessary for prosecution under Section 153(A). Section 196 Cr PC should be amended accordingly.”9.5.15 In the light of these considerations, the Commission is of the view that a separate legislation is not necessary to combat communal violence and may even lead to restricting the use of the substantive provisions in the basic laws. It is better to strengthen the basic laws themselves, where necessary.9.5.16 In this context, there are some innovative provisions in the Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005 which would further strengthen the hands of the Government in dealing with communal violence and negating the ills associated with such violence in a social context, if they are incorporated in existing laws. The following are such provisions in the Bill:?Clause 19 (1): Whoever commits any act of omission or commission which constitutes a scheduled offence on such scale or in such manner which tends to create internal disturbance within any part of the State and threatens the secular fabric, unity, integrity or internal security of the nation is said to commit communal violence.?Clause 19(2): Notwithstanding anything contained in the Indian Penal Code, orifcation. Coiflictsin any ssionAorA inA nyA therAAct sp cifidAinAtheA chedule Awhoeve Aco mit Aa y AactAof omnAoffenceA c mmiss on Awhich Aco stitutes communal violen eAshal ,A xce tAin thAc se AofA ntAf rAaA p nish bleAw th deathAor Aimp iso ment A or life,Abe puni hed AwithAimp iso m Ahi hestA t rmA hichAm yA xtend toA wiceAth Alon es AtermAof Aimp iso mentA ndA wice AthdA fisp cifi ne pro ided for Ath tA ffen eAinAt eAInd an AP na AC deA r AinA nyA ther AAct AmayAbe: inAtheA ch dul ,Aas the cas dA o actA Prov ded Atha Awhoe e Abeing aApubli As rva t Aor A nyAoth rApersonAa th riz reunder A byAa A ompetentA uthor tyA nderAany Ap ov sion Aof th s AActA r Aor ersAmadeAthsionsAbe commits communal viole ceAshal AwithoutA re udi e AtoAtheA oregoingAp ov v Ayears puni hedAwithAimp isonm ntAwh chA ha lAno AbeA i ess thanAf shallAbeA ? AClau eA1 (3):AA yAp rs nAwhoA sA ui ty AofA n Aoffe ce AunderAsu -se tionA 1) ix Ay ars di qu lifie Ato hold an Aposfice AAorAonder AtheAG ver m ntAfor aA eri dAofAfrom thAdat Aof AsuchAcon iction ?AClau eA20(3) ASe ti nA1 7Aof the AC deAsh ll applyAin re a ionA oAaAcaseA n olvingAaA At ereofA chedul dAoffenc As bje t Ato AtheAmo ifica ion that AtheA ef renceAinAsu -se tionA(l trateAorA toA JudicialAMa istra e” shallAbeA on t ued AasAaA ef renceAtoA JudicialAM gi xecutiveAMa strate” A(‘Cod ’A efe sAto th ACodeAof CriminalAP oced re, 19 3AandAitApr ctica lyAm ans thatAth Aaccu ed could Abe produc dAbeforeA xecutiveAMagi s rates) urtsA or ?A laus A2 A(1): The AStateAG vernm ntAshallA sta li h Aon AorAmor ASpeci l AC ssuingAaA trialAofA chedule AoffencesA ommitt dAd ringAt eA eriod Aof Adi tu banceAb A A urpose no ific tio Afor Athe ?A laus A24A(2):ANotwit standing anythingA on ainedAinAsu -sec ion (1),Ai ,Ahavi gA sAof Ath A ega dAtoAtheAe ig nci sAofAthe A ituationAp ev i ingAin aAS ate,AtheAG ve nm ntA e AS ate A opi io At atAitAis A xp dientAtoAe tablish,AA ditiona ASpeci l ACourt Aou sideAt rea,A heA forA he tria AofAsuchA chedule AoffencesA om i tedAinAaAc mmunallyA istur edA eAS at A– tria Awhere fAw thinA hpat ;A r ( )AisAn tA ik ly At Ab AfairAor A mp rtialAorA ompl ted Awi hAutmostA isav Ari kA (b AAisAn tA ik ly AtoAbe feasibl Awithout Aoc a ioning aA reach of peace orAg Jud eA rA to At eA afe yAofAthe acc sed, AtheAw tne ses,At eAPublicAP ose uto AandA he At e ;A r any ofve nmentA (c ) AisAnotA th rwi eAinAtheA nt restsAof ju tic ,AitAma Are uestAth ACentralAG ASpec alA toAe ta lish,Ain re atio Ato AsuchAc mmunallyA istur ed area,AanAA ditiona rAta ingA Cour Aou sideA heA tateAand A her uponAth ACentralAG vern ent Am y,AaftingAsuch int Aac ount AtheAin ormationA ur ish dAbyA he AStateAG ver mentAa dAmaASpec al in uiry Ai Aa y,A sAit may deemAfit,Ae ta lish, AbyAnot ficat on,AsuchAA ditiona Cour AatAs ch Aplac Aou sideA he Sta eA s Amay Abe sp cifid Ain i AtheAnot123124ing for ConflictCap cityResolutonABuild?In addition, Clause 17(1) provides for penalties in case a public servant acts in a mala fide manner or willfully omits to excersice lawful authority.9.5.17 These may be incorporated in the IPC and CrPC themselves, particularly since there are several enabling and supplementing provisions relating to maintenance of public order which would facilitate effective implementation of the above provisions. This is also justified on the ground that several other measures to deal with crimes relating to public order are included in these two Codes.9.5.18 Another feature of the Bill is that it provides a detailed institutional structure for the purpose of providing relief and rehabilitation to persons affected by communal disturbances. Though this initiative is laudatory in its intent and purpose, in a way it tantamounts to establishing parallel structures for similar functions. To illustrate this point, a comparison of the structures created by The Disaster Management Act, 2005 (DMA) and those proposed to be created by the present Bill is presented in Table 9.2 below:Table 9.2: Comparison of the Provision Related to Relief and Rehabilitation in the National Disaster Management Act, 2005 and The Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005Sl. No.Authority/Body/The Disaster Management Act, 2005The Communal Violence (Prevention, Control and Rehabilitation of Victims), Bill, 2005Plan/Guideline/Fund1.National level authority/body2. National Executive Council with Secretary to Government of India in charge of Ministry or Department having administrative control of disaster as the ex-officio Chairperson and the Secretaries in the Union Ministries/ Departments having control over agriculture, atomic energy, defence, drinking water supply, environment and forests, finance (expenditure), health, power, rural development, science and technology, space, telecommunication, urban development, water resources and the Chief of the Integrated Defence Staff of the Chiefs of Staff Committee as ex-officio members.1. National Disaster Management Authority, with the Prime Minister as the ex-officio Chairperson and nine other members.National Communal Disturbance Relief and Rehabilitation Council, having eleven members, with Secretaries to Government of India in the Ministries of Home Affairs, Defence and Finance as ex-officio members, and others nominated by the Central Government (Clause 45).lTable .2: Crmparison oT ble 9.2:AComp risonAo At eAProv sio ARelatedAtoARe ie Aan ARehabil tationAi AtheANatio alAD sast rAM Tha ementAAc ,A2005Aa dATeACommuna AViolen eA( revention,ACon ro AandAReh bilit tionofAictims)ABill,A2teAcounci .A(clauseanagemen AAct,A20icACommunalAViole5ATh Sl.AAuth rity/Body/ TheAD sastr Aeven05ANo.APlan/G ideline AA(ims), A A A Alevelon, AControlAanll, A2005 Bnt AAu hority, A it Ath 1. A ASt te ADisaste AMan gem e A x-offic authoritation ofAVReh a2. AStateoAchairpe /bodyothers.Ason. chief AM nister Aas AthGovernmentmittee, Aw th the chiefA 2. ASta e AEx cut ve AcooAchairpers n A nd A ourA fi Se retary Aas At e Ae -ofcS cretaries A o A he AState AA undAAn gAas ex-officio members.e Acomm nal DisturbanceAStaehab litat on Acounci Re ,A ief Aand A ef ASe retary Aas At e Ae - ith chi pe son and AS cretariesA officio Achaitate AGovernment Ain Atheo A he Aes/ epartme ts A f AHom Mi A istrance and Ath se A ealingAand AFirehabili ation, socialA with Arel ef Aand al A elfar , Am norit esA w lfare, Atri and childAde elopmen ,A andAwomen r AGenera Aof APoli e AasA nd ADir ctmembers Aam ox-officiongA39).clausAlevel authorit te /bodyAasAex3. ADistrictgem ntAAuthority,Awith Distr ctADisaste AMantAcomm nal DisturbanceADistririctAMagistrDep tyA theAc ollec t o r/ D isRe iefAandArictAasAtheA x-o ficiocommi si ner ofAthe Adiseh ab li t t i o nAcouncil,AOfficertheAcollector/Dis rictAwiththerAme bersAincludingchair erson,A nd AsevenAt e Dep tyAcommi si nerMagistreAloc lAauthorityA(ex-el cte Arepr sentative ofAt ndAcEOAof A heADistrictA offic oAc -c air erson),A APoli e, chief AMe icalA Au ho ity,ASu erint ndentAoer AofA a bers.officio AmerictAasAtheA x-o ficioA ofAthe Adis on Aand ASu erint ndentA chairperifAam oet .AasAficerAoe,A hiefA edicalAOAPolid Aothe Ad str ctAlevelAoffi ntsAof SocialAW lfare,A th ADepartm are,A ino ityAW lfare,A T ibalAWelAand ch ldADevel pmentAWomex-ofcio memberspee others. A42). A clauslan/provedA at ona APl n, A reparedArdsAofA el ef.4. ANationalAG idelineslA oun il Ato Arecom endA Nation ap ropriat AGovernmentA to Athe ef,Arehabilit tionAan A on re l co msatioyA heA EcAand Aait . byAminimumAstandtheANati nalAAuthocommend guideline Af rA National AuthorityA oArause . A47). A(clASta eAPlan/ G idelines EcAan AapprovedAbyAth APl n, A reparedA yA heA St te ADi asterAMa ag menAState AA5. Acommu alAha mo y A lanAStatthority eA lan S t aAtoAb Aprepare AbyAthe (Sta125Ca acityConflictAB ildingResolutinAforTable 9.2 Contd.Table 9.2: Comparison of the Provision Related to Relief and Rehabilitation in the National Disaster Management Act, 2005 and The Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005Sl.Authority/Body/The Disaster Management Act, 2005The Communal Violence (Prevention, Control and Rehabilitation of Victims), Bill, 2005No.Plan/Guideline/FundState Council to advise the State Government on guidelines for compensation, relief etc. (Clause 40).6.District PlanDistrict Plan, prepared by the District Authority and approved by the State Authority.District Plan for Communal Harmony and Prevention of Communal Violence, prepared by the District Council and recommended to the State Council. (Clause 44).7.National Fund(s)1. National Disaster Response Fund, available with the NEC for meeting expenses for emergency response, relief and rehabilitation.N.A.2. National Disaster Mitigation Fund available with the National Authority exclusively for mitigation purposes.8.State Fund(s)1. State Disaster Response FundState Communal Disturbance Relief and Rehabilitation Fund. (Clause 49)2. State Disaster Mitigation Fund9.District Fund(s)1. District Disaster Response FundVictims Assistance Fund in each district at the disposal of the District Council. (Clause 51)2. District Disaster Mitigation Fund9.5.19 From this comparison, it is apparent that the Bill proposes to establish structures which are nearly identical to those already mandated under the DMA, envisaging the involvement of functionaries and authorities who are, in general, common. While one deals with measures related to disaster management, including relief and rehabilitation, the other relates to relief and rehabilitation precipitated per se by communal violence. The Commission is of the considered view that such parallel structures and duplication of roles hinder good governance. In fact, for similar reasons, while discussing issues related to disaster management, the Commission has recommended in paragraph 4.3.3.3 of its Report on126Relig ousAconflor:AterA ‘cr sisAManagem nt’A hat theANati nal AExecu iveAcou ci Aas Astipul tedAu der theADisa entA Manage entA ct, A 005 A eed no AbeAconstit ted and theANati nal Acr sisAManage theA commi teeA(N Mc) Ash uld Acont nu Aas he AA pex Acoordina ng AAb dy. ASimila ly Aat ionA S ateAle el, the Acommis ion hasArecomme ded theAcontinu nc Aof theAexis ingAcoordina ingA mecha ismAu der the Ac iefASecret ry ATheAcommis io Ai Aof theA iewA hat forAprovi At A re ief and Arehabilita io AtoAvic im AofAcomm nal Aviole ce, theAstruct resAenvis ge AtoA be Acre tedAu der ADisa ter AManage entA ct, A 005Ac ul AbeA sed Aw ich are Asuffic en Aof effecti elyA ealA ith At em AInAf ct, theA erm A‘disas er’ has A een Adeine AinASec ionA (d adeA theA MA, A 00 AtoAm an,Ai terAa i ,AaA‘g aveAoccurre ce’ Aw ich may Aa ise A romAman-AorA ca se Ao AbyAacci en AorAneglig nce Aresul in Ain Asubstan ial A os AofA if AorAh man Asuffe in AbeA da age to, and Adestruc io Aof Aprop rty and Aw ic Ai AofA u hAaAna ur AorAmagni ud Aa At AofA be ond the Aco ing Acapa it Aof theAcommu it Aof the Aaffe ted Aa ea ATheAadv rse Aim ac uldA comm nal Aviol nceAw uld Athere oreA omeAu der the Aa bi Aof A his Adefini ion Aw ichAw ingA b in AitAu der theApur ie Aof theAprovis onsAregar ing A‘disa terAmanagem nt’Ainclure ief and Arehabilita ionA{Sec ionA 2(e)(v ii Aof theA MA,A2 0}.A.6AARecommendatio sAby a. ACommu ityApoli ingAsh ul AbeAencoura ed ATheAprinci lesA aidA ow ul A theACommis io AinAparag aph A5. 5. Aof itsARe or AonA‘Pu licAOr er’Ashwe . beAfolloiveA b.ADist ictAP aceACommittees/Integra ionACoun ils Ash ul AbeA ade f Aefec ny. instrum nt AofAaddres ingAis uesAli el AtoAc useAcomm nalAdisharm AofA The ADist ictAMagist at Ain Aconsulta ionA ith the ASuperinten enes,A Po ice Ash uld Aconsti uteAt eseAcommitt es AInAPo iceACommissionera AinA t eseAcommit ees Ash ul Abe Aconstit te Aby theAPo ice ACommissi ne ul A consulta ionA ith theAMunic palACommissio er AThe Acommit eesAshemsA b AofAperma entAnat re. AheseAcommit ees Ash uldAiden ifyAl calAprob an A i h AaApoten ia AtoAdegene ateA ntoAcomm nalAconfl cts andAsug estAmls A toA ealA ithA he Aat theAearli st.AFurt er, AMoh llaACommit eesAsh uldAne. beAorgan se Aon the A ameAliich AInAconc lict Ap oneAar as, theApo ice Ash uldAformu ateAprogra me AinAw theAmem er Aof theAta get Apopula ion ge Aan Aopportu it AofAinterac ingA is . ith theApo ic A sAaAconfid nceAbuil ingAmechanTheAA . AA Asepa ate la AtoA ealA ith Acomm nalAviol nc Ais notArequi edureA exis ingAprovis on Aof theAIn ian AP nalA ode and theACrim nalAProce ingA odeA ee At AbeAstrengthe ed. This ma AbeAachi ve AbyAincorpora provis ons A127cap cit Abuildilict gAfrResolutionAconfi.Enhanced punishments for communal offences.ii.Setting up of special courts for expeditious trial of cases related to communal violence.iii. Giving powers of remand to Executive Magistrates in cases of communal offences.iv. Prescription of norms of relief and rehabilitation.Further, as recommended in para 6.1.7.9 of the Commission’s Report on ‘Public Order’, this should be accompanied by the deletion of the provisions contained in Section 196 of CrPC requiring prior sanction of the Union or State Government or the District Magistrate for initiating prosecution for offences under Sections 153A, 153B, 295A and sub-sections (1)(c), (2) and (3) of Section 505 of IPC.e.For providing relief and rehabilitation to victims of communal violence,the framework provided under the Disaster Management Act, 2005 could be effectively used.12810POLI ICS ANDACONFL ICTS 0.1AIntroduci o n A10 1.1 APolit calApar ies areAcru ial Aelem nt Ain theAdemocr tic Aproc ss, an AtoA hatAext nt,A ikeA ery Aimpor ant A rom theAperspec iv AofAconlict Aresolut on A n AaAheterogen ousAcou tryA mic In ia Ain Aw ich Adiffe entAsect on Aof Ape pleA ave Agrieva cesA hat Aa ise ou AofAsoc al,Aecon theA andApolit cal Ais uesA hat Are ai At Abe Aresol ed Ai Ais Aimpor antA hatA heyA ake us Aof eAaA democr ticAs ace for the Aresolu io AofA uch Agrievan es AInA his Aresp ct,Apolit calApar iesA a ateA cru ialA ol AtoAp ay.A hen theApolit cal Apro es Ais no A n AaAposi io AtoAarticu ateA uchAlegitiAis dema ds,Aconflcts Aeme ge AIn the Aa eas nowApla ue Aby the A eftAextre istAmovem nt Ai andA the Afai ur Aof the Apolit cal Apro essA hat hasAena led theAmove en Ato Amobi ise Ape pleandA en istA he Ain its Ara ks AIn the A1 60s and A19 0s,Apolit calApar ie AinASt tesA ikeAKe ala ing est Abe galA ereAsucces fu AinAunderstan ing and A henAarticula ing andAoperationali ionA theAinte est and Aaspirat on Aof Ape pleA ntoAconc ete Aprogra mesA hus Aaver i g AaAsitua da A w ereAsect on Aof A hemAw uldA aveA omeAu der the Ainflu nc AofAextre ist Aeleme ts.ATOneA it hasAbe omeA ore Adiffiult for Ademocr ticAs ac At Abe A sed for Aresol ingAconfli ts.ies re so AisAbec us AofAcompul iveApoli ics Aw ereA achApolit cal Agrou ing hasAmult pleAidenti nalA and Aw ereAconflcts Aimp ng AonAregi nal Ais uesAal ost all the Apolit calApar iesA ithAregin”.A inte es Ain At ese Ais uesA a eAaAr gidAs andAbec us Aof Aw ichAconflctsA en Ato get A“fro zereA Exam le AofAt ese are theAinter-S ate Adisp te AonAwa er,Aloca io AofAcen ralAproj cts etcAw theA polit calApar ie Aof oneAS ateAinclu ing theAnati nalApar iesA akeAco monAc useAaga nst o herAS ateA husAbeco i g AaAso rc AofAconlic Ain theAregi o n .forA 10 1.2Abec us Aof theAa oveAsituat on Ai AisAneces ar Ain theAinte es AofAconlict Aresolu ion ive democr tic Arestr in Aon theA ar Aof allApolit calApar ies andAt eir Afunctionar es AAn f Aefec forA wa Aof Ainstitutionali ing A hisAc ul Ab AbyAformula in AanAenforce bleA od AofAcon uct -up polit calApar ies Aw ichAw uld Ad fine theAf rm Aof Adis entApermiss bl A nAa Ademocr ticAse andAsug estAmeas res for Aensu ingA hat At ese areAcomp iedAw t h . AAbeA 10 1. ATheA ode A us AbeAd aw Au Aby theApolit calApar ies Athemsel es AItAc uld A he entA consid red forAincorpora ionA n o Aa law Aw ichAw uldAi ter A lia set out theAf rm AofAdis ionA permiss bl A nAa Ademocr ticAset up.AEnforce en Aof A hisA ode ca Ab Aby theAElec commis io AofAIn ia AIn Aesse ce, the law Ash uld Aempha iseA hat Aconstituti nalAprovis129Capa ity Buildinl ct AforResolutionAConfi130be strictly adhered to in public affairs. The perspective should be that our Constitution has created the space to resolve conflicts – as it was forged at a time of great conflict. The law could also stipulate punitive action against political parties and their functionaries resorting to violence in conflict situations, instigating violence and exceeding the prescribed forms of democratic dissent by providing for criminal cases to be filed against them and imposing fines as deterrents.10.2 Identity Issues10.2.1 In recent times, identity issues have had a significant influence on how conflicts arise and escalate. Identity issues are those in which collective identities such as those based on language, religion, sect, caste and tribe, assume preeminence.40 Identity issues are not unique to India, they are a worldwide phenomenon although they prevail in a particularly intense form in today’s India where communities based on language, religion, sect, caste and tribe have strengthened their identities. Conflicts based on such identity issues often lead to violence. A recent example is the increasing conflict generated by sections of society wanting to be counted as tribes, as evidenced in the agitation by the Gujjar community and its opposition by the Meena community in Rajasthan. Ideally, such issues should be adjudicated by the institutional mechanisms provided for the purpose such as the National Commissions for Scheduled Castes, Scheduled Tribes and the Backward Classes and the decisions of these Commissions should be final and accepted by all concerned.10.2.2 The matter is compounded by the fact that identity issues largely determine how political parties behave and function. Whether at the time of elections or in forming alliances in the legislatures or in and between political parties, the equations based on identity issues become the guiding consideration. The felicity with which the abiding loyalties of caste and community are harnessed for mobilizing political support is because of certain fundamental features of Indian society.10.2.3 Historically, the seeds of identity politics were planted in India during colonial rule. The British acted from a combination of motives. Some of them adopted a paternalistic, almost protective attitude towards the religious minorities and the backward communities and promoted their interests on humanitarian considerations. They were, at the same time, not oblivious to the opportunities for maintaining their authority in India through the archetypal policy of divide and rule.10.2.4 The seeds thus planted came to bear fruit during Partition and later in India as parliamentary democracy took roots. Democratic politics has played a crucial role in shoring up identity based on language, religion and caste because the primary concerns of democratic politics were centred on the distribution and redistribution of the benefits40Andre Beteille, “Classes and Communities”, in Economic and Political Weekly, March 17, 2007l Pand burdens of sociean Aburd nsA fAsocie yAamongAits variou Ac nsti uent Apa ts. ATo At atAexten ,Aide tity Apoliti sAwhi hA ssent allyA e ks At AbringAabo tAaAmoreAfavou able Ar dis ribution within theAexisti gAsoci l frame ork, bec me Aa AhandyA oo AforApoli t ici a sAtoAexp oit.eworkAth tAc nAkeepAlit calAparties wo A 10.2 5 AI entityA olitics Ahas induced fu dam ntal Achan esAinAh wAp to wooAall sectionsA th Aelec orat . A n Athe AearlyAd ys AofAInd pendenc ,Apo it cal par iesAused jectedAanAi clusi eA ofA oc ety Air espective of Acaste, re igion, com unity Aor A la s.ATheyApr sAusedAt eAneed AforA nati nali tAim ge rat er AthanAt atAofAany sectionalAi tere t.A olit cia pl ymentAp ogramm sA ve -all de elopmentAasAw llAas anti-povert , A uralAdevel pmentAorAe asteAgro psAcre ted to att a tAvote .AThe eAwa AaAchange whenAsomeAr lig ousAr vivali tsAandA tAwith A‘outsi er ’.A cohes on withinAth Ag oupAbyAstr ssin Aon separat l onAf omAandAconfi ionAof societ Aas aA co solida ionA f AtheseAgrou sAwe tAh nd-in-handAwi h A heAfrag en a tena ceA fAl nkag sA whole. To ay,A he Asurviv l AofAma yApolit ca Apa tiesAdepend Ao AtheAmai Anarr w Aidentities,A withAon AandAmo eAsegment d Agroup . APoli icalA artie Aopenl Aflaunt Athei .A Apo itive A sp ctA hes Apa ticu ar s s Aar An wAs enAas Aa pa tAofAtheApro e s AofAemp wermen interes s AthatAwere of AtheA tressA n Apartic la Asoc al As gm nts isAtha As meAofAthe grou sAor ith nAtheA olitical arli r Ama gina is d Ah ve Ab en Aab eAt AfindAmore A pace Af rAt emselvesA nAt e Apast, AandA reA and soci lAsy tems.ATheyA aveAm reAb rgai ing po erA han At ey A adA eenAthe Agro th Aof AaA n w A ncr asinglyApar Aof the mainstre m. Abut the nega ive aspect ha A ro p-b sedAappro a chAi AallAmatters. ation ofAnarrowA ndA0. .6 A ragmentat onAof the Apo itica Ap rty systemAbased A n A heApro ifees itsAsu -se ments ocalAide tities Acan cont nueAend essly. A achAsegmen Afu therAencoura sm’Ahas surfa ed inA to Asearch forAth ir A olit ca Aspace. AThi AtypeAof Afr gme tedA‘plu al nfi tAbetwee AMa asA everalAp rt AofAth Acountry AIn AndhraAP ade h, l AforA xample, theActoAtheAe ergenceAo AandAMa igas, twoAimporta t A ali Acommu iti s Ai At eAS ate,AhasA edstric Asens AofAtheA separateApoli icalA rgan sat ons AThoughAth y AareAn tA oli icalAp rties in the deAtheirA upportA oA term, the e Aorganisat ons AareAp litical yAim orta tAbe ause A hey Ahav Ampolitical pa tie Acondit ona AonAthe benefis A he Ap rt esAwoul Ab AableAto Apr vide A o Ath m Ain vitableAs ep inA 10.2.7 AWhil Asuc Aa dev lopmen Ac n, Ain A ne se se,AbeAvie edAa Aa s, it AcanA lso leadA theAinclu ion Aof ma gin lisedAgro ps AinAthe A ountry’s de ocr ticA roce fAviolence AWhat AisA to conflict andAend essAstrife Al a ingAultim tely A o A Arecurrin Acyc eA sAplayedA utAin theA i po ta t,Athe efor ,Ai Ato Aens re that Athe processA f A dentit Apo it csA opAintoA ntracta le po iti alAar naAwithi At eAspaceAp ovi edAb Ade ocracyA ndAd esAnotAdeveconflicts tai tedAby vi lence A ndAth eat toApubl i cAor er AandAunit .and the Acompulsi ns 10 2.8Aconsi eri gAtheAmagn tu eAa d Acompl xit Aof theAproblem uni iv Aaction ma AA andAprocl vitiesA fA olit cal partiesA oApla Athe identity card, A ere n t A eAenough. It may Abe ne essaryAto Acre teAanAins itut ona Afra131cap cit Abuildilict gAfrResolutionAconfa watch on the political parties playing the identity card and creating conflict at the district and sub-district levels. The services of such an institution can be utilised as a watchdog body at the district and sub-district levels to monitor and prevent activities of political parties in playing identity politics engender conflicts. The reports of this watchdog body would be an important input for the Election commission to take action under the law proposed earlier.10.3 Recommendationsa.Political parties should evolve a code of conduct on the forms of dissent permissible in our democratic set up. This could be incorporated in a law, which would apply to all political parties and their functionaries. Enforcement of the law could be entrusted to the Election Commission. The law should also stipulate punitive action against political parties and their functionaries violating the prescribed forms of democratic dissent, by providing for criminal cases to be filed against them and imposing fines as deterrent.b. There should be consensus that identity politics would be played within the space provided by democracy and not allowed to develop into intractable conflicts leading to violence. Political parties need to build capacity to arrive at such a consensus.1321REGIONALADI SPA ITIESeAProb emA 11. AC nto rsAofAtmentAofAaA 1 .1.1 AMan Aregiona Aco fli tsAareA n A utcomeAof Ad sp rit esAin AtheAd ve o hichAthatA articu ar Aregio Ac mpa ed AtoAthe remai in Apa ts AofAt e A oun ryAor th AStat AofA Aafford toA articu ar r gion A s AaA art. ASuc Aco flic sAareA ot unique to India Ano State ca for Aothe gnore A ts Aregi n AspecifiAconflic s Awh ther A he Aarise A n A ccount Aof Ad sp rit es AornAAfr ca, r asons. AsAJeferyASa hsApo nt Aou 41 AinAt e A ontextAo Aco flictsAandAba kw rdnessA thereAareA itu tionsA nd Apl ces AwhereAd spari ie A ould be a Afac Ao Ali e.AInA isAfam usAwords,A d”42.AThisA geo raphy Ahas cons iredAwith ec nomi sAto Ag v AAfricaAaApa ticu arlyAwea Aha ve tions A igh ight Ath AneedAforAd sp ri iesAto A e AtackledA referab yAthroughAa propriateAinte it ationsA o Aelse,A y A uttin Ain Aplac Asuitab eA‘sa ety nets’ A ndAbetterA ov rnanc AtoAavoidAfAc nflictAat r i f e. AAA Acom on yA 1.1.2A erAcap ta inc me AisAt e A easure Aof Ad vel pmentAan As andard of AlivinAcountry,A used AinAint r-country Ac mp risonsAto determine ex stenceAof Adi pariti s AWithin A nstit entA m asu ementAand A om ari onA f Athe NetAStat ADomest cAProd ct (NS P) AofAitsAceasonabl A ni s Aoffr A n AideaAofA revailing Ai al nces.AAThe follo ingATabl A rovidesAaAANS P AandA acc ra eAi eaAofAth AexistingAi ter-State Ad spariti sAthrou h A eta lsAofA er Ac pit the A tate-wis Aav ragesAfo AselectedAy ars: T ble 11.1: A er AC pi a f ANSDP Ai ADifernt ASttes A Staterage: AAA Average 1960-61, 961-62 A A A1962-6Average: 1970-71, 1971-72 & AA1972-AAverage A1987-88 1988-89 & 3A1989-996-97,97-98 A& A0 998- 9AIAAH ghAIcomHI)Aoa AAA364 A2383AGjart A40A821A602A1733AHryanA3711010A284A17804AMharshta A41A849A5369A192 8A& A188 208 1Jeffer AD A ach ,A TheAEndAof Pov rty” ANewAyork (Pen ui ) A200 A p A51-73 42133capa ityAbuil ing forAconlict AResolutionTa le A1 .1AContd.Ta le A11 1:A erACap taANDPAStteAAvera AAA1960- AAA1961 6 AAA1962e:AAvera , AA1970- & AA1971 7 3 AA1972:AAAvera , AA1987- A&A1988 8 73A1989e:AAvera 8,A1996- A& A1997 9 90 A1998Punjab4011127699618924Average (HI)*398952556318342II Middle Income (MI)Andhra Pradesh331626345512257Karnataka312705381013085Kerala292659353214448Tamil Nadu357674409315424West bengal399760375011769Average (MI)*338685372813397III Low Income (LI)bihar**22345221355465Madhya Pradesh**27953832999371Orissa24055129451556Rajasthan285601309211245uttar Pradesh**25254028678298Average (LI)*25653628688387IV Special Category (SC)Arunachal Pradesh467011643Assam35058731957918Himachal Pradesh740361811997Jammu & Kashmir26657535349916Manipur46334499096Meghalaya62033289678Mizoram409411950Nagaland540392912422Sikkim484610990134Regional DisparitiesTable 11.1 Contd.Table 11.1: Per Capita NSDPStateAverage:Average:Average:Average:1960-61,1970-71,1987-88,1996-97,1961-62 &1971-72 &1988-89 &1997-98 &1962-631972-731989-901998-99Tripura55837638567Average (SC)308583378310418Average of twenty-five States*324666387711936Max./Min. Ratio*1.872.503.283.52Coeff. of Variation*.197.257.263.309Note: *Excluding Goa. **Refers to the undivided State.Source: ‘Regional Inequalities in India: Pre and Post Reform Trends and Challenges for Policy’ by Amaresh Bagchi and JohnKurian; in The Politics of Economic Reforms in India edited by Jos Mooij, 2005; {Basic data from reports of the FinanceCommissions and Central Statistical Organisation (CSO)}Data on NSDP clearly establishes that in terms of the maximum-to-minimum ratio, as also coefficient of variation, the gap between the haves and have-nots, in so far as the States are concerned, has widened over the last four decades.43 Not only have the inequalities between States sharpened, there is also wide disparity between regions. State-wise data suggests that barring West Bengal, the Eastern region has lagged behind in growth compared to the West and South. What then emerges is a clear divide between regions – States in the west and south of India form a category clearly distinguishable from those in the East and North of the country.11.1.3 Governments have a crucial role to play in reducing regional disparities and promoting balanced development in which all areas and regions are enabled to develop. This equity-promoting role of the State calls for initiatives to identify and remove gaps in the provision of human development and basic services and infrastructure with a view to ensuring that all regions or sub-regions and groups have equitable access to the benefits of development. Such an equity-promoting role assumes even greater criticality in the changed environment in which, with the opening of the economy and removal of controls, the play of market forces usually exacerbates disparities. As the country’s economy integrates with the global economy, the State has to play a stronger equity-promoting role in order to remove the increasing regional disparities.13543Amaresh Bagchi and John Kurian, “Regional Inequalities in India: Pre and Post Reform Trends and Challenges for Policy” in Jos Mooij Ed. The Politics of Economic Reforms in IndiaCapaci yAB ilding A or ResolutonAConflict11.2 Intra-State Disparities11.2.1 Inter state differences are only one aspect of balanced regional development; equally important is the emergence of large disparities between areas within States that are otherwise performing well, suffering from severe backwardness. In Karnataka, for example, a High Powered Committee for the Redressal of Regional Imbalances (HPCFRRI) identified 35 indicators encompassing agriculture, industry, social and economic infrastructure and population characteristics to measure and prepare an index of development. The HPCFRRI identified 59 backward taluks in northern Karnataka, of which 26 were classified as most backward, 17 as more backward and 16 as backward. To reduce backwardness in these 114 taluks, the Committee recommended implementation of a Special Development Plan of Rs 16,000 crore to be spent over eight years.11.2.2 The Telengana region of Andhra Pradesh is another such example. Geographically, the State of Andhra Pradesh comprises three regions namely Telengana, coastal Andhra and Rayalaseema accounting for approximately 41.5 %, 34% and 24.5% respectively. It is estimated that Telengana is inhabitated by 40.5 per cent of the State’s population, while coastal Andhra and Rayalaseema account for 41.7 per cent and 17.8 per cent respectively. It is reported that the literacy rate in Telengana is only 55.95% as against 63.58% in coastal Andhra, 60.53 per cent in Rayalaseema and 79.04 % in the capital city.11.3 The Administrative Approach11.3.1 Balanced regional development is an important objective in the country’s planning and various measures including fiscal incentives, industrial policies and directly targeted measures have been used in the past to achieve this objective. In fact, adoption of planning as a strategy of State-led industrialisation with plans and policies designed to facilitate more investments in relatively backward areas, were intended to lead to a more balanced growth. It was expected that over time, with such measures in place, regional disparities would gradually disappear. Even though there is no historical consensus on the best mechanism for reducing regional disparities, there are two broad approaches. The first task is to fortify the backward areas adequately and target them with additional resources and investments to help them overcome structural deficiencies that contribute to their backwardness. The idea is that policy directions and strategies adopted would reduce iniquitous policies and support the innate strength of such areas. The other approach is to improve the overall environment for economic and social growth of less developed States and areas through a judicious combination of136Regionaracteri tics.major infrastrmajorA nfrastructure A nterventions, institu ion lAreforms Aa dAappropri teAincentiv sA tructu es.AIt Aw uld, however, Ab ar Ar pet tio Athat Anot A llA mbalance Aa eAamenab e AtoAposi ive solu ions A nd Athat under Acertain circumstan es Apalli ti eAm asur sA n AtheA ormA f As fety ne s Amay Aals Abe neces ary A orAq ui t eAso e Ati e.ckward Ahere Ais a Avereas A 1 3.2 Ay As rong Acase Afor strengthen ng governan e Ain A bempowered Aand Tow rd At is Aend, Ai Ais A ecess ry Atha Al cal Abodi s Ain A ack ard Aareas are itie AsuchAasA stre gthene . ASo eAState AhaveAalrea y Aconst tutedA pec alAboards Aa dAAu ho ceAwit Ath seA Ar a ADeve opm nt A oardsAfor At e A evelopme tAofAb ckw rdAareas,A utAe perie Ain achievi gA boardsAa d AAutho itie Asug estA hat they haveAnotAbee Aparticu ar yAeffectiv sultAo AwhichA the Ad si ed Aou co eAasAth re isAoverlap Aof jur sdictions an A unctio s A sAaArsAof A che es.A sc rce resourcesAa eAdis ributedA mongAdiffren Aag ncie Afor A he sameAtypsingAregio alA underAthe A irc mstances, A he Acommiss on Ar commen sAt at AeffortsA orAredre ila Parish dsA imb la cesAshou dAbe Adi ected through Alo alAgover ment ag nci sAsu hAas AtheA nd A thersAa dAnotAth ough A‘s ecialApur oseA ehic es’Alike AAr aADeve opm ntAboardsAa nAuth rities.dA5A(NREGA)A as 11. .3A nitially AtheA ationalARu alAEmploy entA uara teeAAct A20 het rogenei yA int od ced in A2 0 AofAthe mostAback ar Adi trictsAo AtheA oun ry.AGiven Athe tatio Ao A heA and Aspat al dimensionsA f A ons raintsAi AtheAselec edA istricts,AtheA mp eme ofA he ANREGA,A NREGAAi he Aa A hallenge. AA omm ssion, in its AreportAon A mp eme tation ement tionAofA h s Arecom endedAse er lAmeasu es Ato addressAthes Ac nstraints.ATheA mp heseA easuresAw uld Acer ainly Ai pr ve Ama tersAinA heseAbackw rdA istrct ,Abut Awh tAheAscheme. sTheA required isAaAri or usAprocess ofA onitoringAtheA mp eme tationA f AardingAS atesA co miss on Aw ul AalsoAlik AtoArecommend es a lishme t A fAaAsyste AofAreAreductionA nA (whet er prosperou Aor back ard)AwhoAhav Asuccess ullyAachie ed AsignifianAimb lances. AA intra- tateAregiondAArea AAAAAAA 11.4 Id ntificati nAofAno ,Aa alyse A 1 .4. AEcono icAand Asoci lA eve opmentA n Ao rAco ntry A s,Am re Ao tenAthanhAwell-deAth Alevel f At eAS ate.AA ut At e AState AalsoAinc ude distric sAan Aregions AwiinedA a Aleve Aof A heA phys cal Aecono ic AandAsocialAch ac eristi s. ATheA esultAis th tAa alysi Aa Ath tateAdoesAn tAneces ari yAcaptu eAthe Avaryi g Adevel pment A t andsAw hin A AStat .AAOv rAt me, A h re Aha Ab en AaA hift inA ocusA ro A he ASt te as A AwholeAt At eAd stric asAthe Au it AAHow ve , A t Anee sAto be A otedAthat the A istricts A lso Aen ompas Afair yAl rgeAareas Aa dApo ulation AwithAdiverse Ach137Capacity Bui ding Afo AConflict AResolution11.4.2 The first attempt to identify ‘backward areas’ was made by the ‘Committee for Industrialisation of Backward Regions’ (Pandey Committee) and on the basis of its recommendations, backward areas were classified into several categories: desert areas, chronically drought affected areas, hill areas including border areas, areas with high density of population and low levels of income and employment. The B. Sivaraman Committee which was set up to delineate a strategy for the development of backward areas, recommended in 1978 that the block should be the primary unit for identification of backward areas and these should be situated in drought prone, desert, tribal, hilly, chronically flood affected areas and in coastal areas affected by salinity. In 1994-95, the C.H Hanumantha Rao Committee evolved a new criteria for identification. The unit of identification was the Block.11.4.3 The EAS Sarma Committee which was given the responsibility of identifying the 100 most backward and poorest districts in the country for preparing a special action plan for infrastructure development submitted its report in November 1997. The Committee decided that the criteria should include direct indicators of human deprivation as well as indirect indicators which pertain to the quality of the life. The most direct indicator of development, the Committee suggested, is poverty. Other aspects of deprivation were also included. For education, the ratio of literate females to the total number of females was used as a measure of educational deprivation and in the case of health, it was the infant mortality rate. Indicators of both social and economic infrastructure were also included in the exercise. Thereafter, a sensitivity analysis was undertaken with different weights assigned to the poverty ratio relative to other indicators. However, the scheme suggested by the EAS Sarma Committee was not implemented.11.4.4 More recently, a Task Force was set up by the Ministry of Rural Development to identify backward districts where there is need to undertake programmes of intensive public works to generate wage employment during lean agricultural season. Several parameters were considered for the selection of backward districts by the Task Force which submitted its Report in May 2003. The Committee finally based the index of backwardness on three parameters with equal weights to each: (a) value of output per agricultural worker, (b) agricultural wage rate, and (c) percentage of SC/ST population in the districts. These were found to be the most robust parameters available at the district level.11.4.5 The recommendations of various Committees outlined above were meant to identify backwardness for specific policy interventions like further industrialisation and identification of areas stricken with acute poverty for special attention etc. Similarly, certain State Governments have undertaken exercises to identify more backward areas within their territory. Notable among them are the Hyderabad Karnataka Development138Committee (1981); the nces A 1983 AheadedAb AA committeeA 1981);Ath AM harashtr Acommittee on AReg onalAI ba Abackw rd Are s A( 984)A P of. V.M.ADa dekar;Aan Ath AGujaratAco mi teeAforA evelo ment Ao Aof criter a A romANSD A h aded by ADr.AI.G Ahese Aatel. Ao mitt es,Aa ai ,AusedAa wide rangpationsA ndAirrigat onA perA ap t AinAv ri us Apart Ao Aa AStateAtoAwor ersAinAnon- rad tionalAocc overa eAthrough ut the AStat Aconc rnedA oAiden ifyAareasAwh chAneeded pr feren ia Aatten ionAinAter sAo ApublicAinv stm ntAandAallo ations A orAdv e lopm nt sch mes Aet .Ao Abe A ar ed. A cl arly,A 1 .4.6 AOn A he whole, Athe A pproach A o Aide tifyi g A ac ward Aar s Aseems A area . AIt A s Anecessarythe e Ais Anee Ato Aform lat Astandard Ac iteria Af r Aiden if in Abackward talityAr tesAsh uld beA that Ahuman deve op entAindi ato s Asuch as Alitera yAand infant mo rit riaAa optedAbyA includ heA Aw t inAtheA ri eria.AAOnAaAbal nce ofAconsi eration ,A heAAhuman Ad privationA ndAEA ASarma Acomm tteeAw ichAencomp ss dAdir ct Aindicato sAole,AisAre mm ndedAfo A indirec Ai dic torsApe ta nin AtoA he qua ityAofA he lifeAofAthe peo Ai Ash uld AbeAfa oredA a opt on. A As Apov rtyAisAth Am stAdirect Ain ic tor Aof de elopment ndAoth rAi dicators in ofA theA ri eria.AAF ctorsA uchAas literacyA ates Ain antAm rtalityAra eAsocialAandA conomi Ainf as ructureAsh o uldA ls AbeAinc ude .,Anot Ain a Aposition,At eAco miss on is AofA 11.4.7 AAsAr gard Ath AgeograiningAbackwhicalAunit Afo Aderd eshaARa Acommi te s,A heA theAv ew tha Aa Arecommen edA y Athe Ab.AS var manAandAHan man lread Ar com ende Ath A b ock should AbeAthe Aicatit forAidenti on.AAThe commissionA adA of NREG AinAitsARe rtA blockAa Ath AunitAforAplan ing and impleme ta ionAf rA heA urposeAare sAandAp pulationsAn A hatApro ramme. AAThs Ais Abeca seAdis ricts encom ass fairlyAlargwithA ive se charact ristic Aa dAatAvaryingAstage AofAd vel pment nee A oAbeA ppl ed notA 11.4.8 A fterA heASt teAspec ficA lockAl vel A ndic sAar Aw rk dAout, A hey llo ati nAofAresour esA for Aa Ag venAset ofA ev lopment schemes Abu Aas generalAgu de ines AforA ndAdis rict Alev l AplanforAallA eve op entAinitia ives Aand Ain part cular all cationsA romAS ateA ionAforAthe purpo eAo A fund . Abackwaried AshouldAaAblock Athu Aidentiso A ece veAreco nishort, At eAs rategyAofA allocation AunderAth Aappropri teAcentr ll Aspons red schemes. Intarget ngAattent on toAeducingA ndAminimiz ngAregion lAimbal ncesAprim rily Athro ghoA eAf rmally Aa ceptedA block Aident fied as Aback ar Awit inAth Acont xt of each ASta eAneedsA byAth eAP anningA ommission.1 .5 A verallAEnvir nmentAforAG owt 11.5 1AA mittedly,A he need Af r Ainvest ent in AsocialAserv ce Aan Ainfrastru tureAinA heArel ti ely backwar ASta es is A ar Ag eaterAtha AinAthe more Adevelo ed Sta es.AGove nments inAt eAbackwar AStatesAa e, Agene ally spea in , fiscally wea Aa d Aas AaAre ul139capacity bui ding Afo Aconflict AResolutionmuster adequate resources to fund the huge investments required to catch up with the more developed States. backward States are usually unable to attract sizable private investment due to poor infrastructure which cannot be upgraded for want of resources. The challenge, in essence, is to break this vicious cycle.11.5.2 The union Government has launched a programme – the backward Regions Grant Fund (bRGF) in January 2007. In terms of the objectives of the scheme as described in the guidelines, the backward Regions Grant Fund is designed to redress regional imbalances in development. It will provide financial resources for supplementing and converging existing developmental inflows into identified districts, so as to a) bridge critical gaps in local infrastructure and other developmental requirements that are not being adequately met through existing inflows; b) strengthen, to this end, panchayat and municipal level governance with more appropriate capacity building, to facilitate participatory planning, implementation and monitoring to reflect local felt needs; c) provide professional support to local bodies for planning, implementation and monitoring their plans; d) improve the performance and delivery of critical functions assigned to Panchayats, and counter possible efficiency and equity losses on account of inadequate local capacity.44 For the untied portion of funds, the sharing pattern is (i) every district receiving a fixed amount of Rs. 10 crores per year; and (ii) the remaining portion being distributed on ‘50/50 basis’ as per the population and the geographical share of the district in the total population/ geography of all backward districts. For identification of target regions for bRGF, greater emphasis should be placed on human development indicators. Elimination of minimum normative gaps in local area development, physical infrastructure, social attainments in health and education, and in land productivity should be the prime objectives in financing interventions from bRGF.11.5.3 Additional funds should be provided to enable building of State infrastructure in a programme which could be a grant facility for providing viability gap funding that will allow resources to be leveraged for core infrastructure projects at inter-district level in less developed States and backward areas of developed States. This should include projects that would not be otherwise considered viable financially but are necessary for removing backwardness. The quantum of assistance under this scheme should be made available to the States in a manner that is proportionate to the number of people living in the backward areas.11.5.4 On the whole, however, the approach to all such funding should be outcome driven. Funding in such cases should be provided as a mechanism to achieve desired outcomes,44G ve nment ofAInd aA(2007) backwar ARegi nsAGr ntAFund:A rogramme AGu delines, Mi istryAofAP ncha atiARaj,AG ve nmentAof140Regioan An t AasAa Ae d Ai Aits lf Aa Ah sAb enAdo Ai AtheApas . AATheA tr te yAshoildAbe Ato Ad fneAacc ptabl Am nimum nor sAofAhumanAand infrastruct re Ad velop ent At at eve yAblock inAthe country sho ld A ttain, Aan AtheApolici s, A nitiati es andAman ers Aof fu dingAs ou dAb Adriven AbyAth Ac nsiderat onA fAbr dgi gAtheAg ps A ndAachiev At eAstand ia r d sAs Ad fn d. 1.5. AItAisA nAth s AcontextAt atAi it atives suchA s ANREG ,ASarva Sik haA bhi anA ndAt eAMidA ativeAapp oa hA ayA ealAScheme A re Acomm ndab eAb cause Ath y A re A xamplesAo AtheAnor gementA fAsu hA discuss d Ain Ap ragrap A11. .5 above. Wh tAisAneede Ais Aconver en Amans. AThis sh uld sch mesAthatAw uld Afacili ate Apro- quit Ar sourceAflws Ato Aba war Aregio beAdoneAby A he preparationAof distr ct lev l AplansA y AtheADi trictAPlannngAco mittee ,Awh ch Ashou d Aals Acl arl AspelliAou AtheAverifa bl Aoutcomes.11.6Re m endations the AB ock Aa Aa . AAA Acom osi e Acriteria A or Aident fying backw rd A reas A wi h unit)Abase Ao Aindi atorsAofAhu anAdevelo mentAinc udingApo ert ,Alite acyAandAi fantAm rtali yAra es,Aalo gA ithAin ice AofAsoci lAandAeconomicA nfrast uc ure,Ashou dA eAd velopedA yAtheAPlan ing Com issi nAfo Athe 12thAiv Year A lan Ab.AA nionAandASt teAGov rnmen s shouldA dop AaAformula forABlock- is Adevo utionAof fu ds At rgetedAa AmoreAck rdAareas.Ac.AAG ve na ceAneedsAtoA eAparticular y A tren thenedAi Amorebackwa d areasAAbackwardAa eaA it inAa St te. ATheAr leAof A‘ pecialApu pose ve icles’As chAa teAdi pa it esA dev lop entAboardsA nd authorit esAinAreduc ngAintra-St over ment AandA needsA oA eA eviewed.A tA sAadvisabl AtoAs rengthenAlo alA makeAt emA esponsibleAand c ountab e. tes)Aachie ingA .AAAAsyst mAofAr wardingASt tesA(incl dingAde elopedASt icasigni tAreduction in Aintra-St teAdis ar tiesAshould b introduced ructureAatAthee. AAA diti na Af ndsAneed to beApr vide AtoAbuildAcore in ras egionsA n A uchA inter di tric AlevelAin lessAd vel pedAStat sAand Ab ck ardA tionat At AtheA Sta es AThe Aquantu Aof Aas is ance shouldAbeAmad Ap opon mberAo Ap ople living141capac ty A uilding l t for Resolution AconficsoAdefne .riven.AA heA f.AA he app oach toAall A uch Afu di g Ashoul AbeAout meA fAhumanAandA str te yA hould beAtoAdefin Aaccept bleAm ni umAno msA oul Aattain in rastructure deve opmen Athat ev ryA lockAin theAco ntryAs eA heAnorm and Afu di gAshou dA eAd ivenAbyAthe Ac ns deratio Ato achiei1 2CONFLICTS IN THE NORTH EAST12.1 Introduction12.1.1 At the commencement of the Constitution, the present States of Nagaland, Meghalaya and Mizoram constituted a district each of Assam, whereas Arunachal Pradesh, (then NEFA), consisted of several ‘frontier tracts’ administered by the Governor of Assam and was, therefore, deemed to be a part of that State. The States of Manipur and Tripura were princely States which, after merger with India in 1948, became part C States, the earlier name for Union Territories. The Constitution-makers, recognising the significant difference in the way of life and administrative set up of the North Eastern region from the rest of the country, provided for special institutional arrangements for the tribal areas in the region, giving them a high degree of self governance through autonomous District Councils under the Sixth Schedule of the Constitution. Even critics agree that the Sixth Schedule has to some extent satisfied tribal aspirations and has thus prevented many conflicts. Similarly, the gradual administrative reorganisation of the region with the formation of the States of Nagaland (1963), Meghalaya (1972), conferring first, status of Union territory (1972) and subsequently Statehood (1987) to Arunachal Pradesh and Mizoram and elevation of Manipur and Tripura from Union Territories to States in 1972 attest to the considerable attention given to reduce conflicts in the region through increased empowerment. Following the large scale reorganisation of the region in 1972, a regional body, the North Eastern Council (NEC) was set up to provide a forum for inter-State coordination, regional planning and integrated development of the region to avoid intra-regional disparities. The “look-east” policy announced by the Government of India envisages the North Eastern region as the centre of a thriving and integrated economic space linked to the neighbouring countries such as Myanmar and Thailand by a network of rail, road and communication links criss-crossing the river. The policy tries to leverage the strategic geographical location of the region, with past historical links with South East Asia and its rich natural resources (hydel, gas, power etc.) to transform this region vast potential into reality. However, this requires not only massive efforts towards infrastructure links but also a major improvement in the security situation.143l apacityAbu6.i l d i n g forAconfict A eso utiothAEa t A asAseen an Aunend ngA 12.1 2 ANonetheless,A or A oreAt anAh lf- -cen ur ,AtheANo emandsArang ng fromAou rightA cycle A fA iolentAconfli ts Ad minated byAinsu genc esAwithA r entAmov me ts Ahave spawnedA sov reigntyAt AgreaterApo iticalAau onomy. AIn irec ly,Ains this A h pter AI surgencyA as Avari tyA fArelate Ac nflict Aw ich A reArefer ed AtoAlate Aintizens,Aas isAcletakenA Atol Ao Athousan sAofAl ves AbothAof A ec ri yAfor esAa dAcfAViencenAthANorAEasead A01AA02A2003AA 00 AAA2005A2006AcidenAof Avence A,335A,312 A,332AAA1,2 4AA1,3AA166Axtristkild AA572AA571 A523 AA404 A405AA5 ASuriApsonlAlldAA175 AA1 7AA90A10 A0 AAAciliaAkidAAASour e: Annu lARepor0AA454A 494 AA4 4AA393 AA 09AfAofAMinfromA heA st tisticsAb lo:AAATabl A1 .1: Incid nceAist r yA fAHom AAairs,A2006- 7AE ste nAregionAa e Aembed edA 1heAroo.1.3A oo s AofAInsur en y:AsAofAin urgenc Ain theANort Ninety- ig tAp rAcent ofA heA n its A eo raphy, Ahistory andAa Aho tAof Asocio-e ono icAf ct rs.egion’sAtenu us Ag ogr phic lA borders Aof theAregi n AareAin er ati nalAbord rs,Apoi tingAto AtheA ofAthe re i n Aat a oun A3.9 A onnect vityA ith the Arest Ao AIndi . A hil AtheAp pu ationA hare eAofAgr wth hasA xceeded twoA c ore AisAa Ame e A3 AperAcen Aof theA at onalAp pul tion, Ait Ara onAl velihoodsAand A dding A oA hundre Aper AcentA etwee A1951- 00 , Ageneratin Agr atAstr ss entAof theApo ulati nAofAt eA landAfr gmentat on.AWhile, no ina lyAt ib ls A onstitute A 7 A erA mainingA ta es. Percentage ,A ntire Areg on mi usA ssam Ait inc eases AtoA 8 Aper Ac ntAfor AtheAr theAtr bal Ap pul tion ofAt eA howe er, doAnot Aad quately Ar fle tAt eAexte siveAdiver it Ain ityA otAtoAbeA een in AStatesA r gionAwhi hAhasA ore Ath n 1 5Adistinc Atr ba Ag oups – A Adiverli eAJha khandA nd Achhattis arh AwhereAtre bal .A A opulatio sA redomina12. ATypolog Ao ACo flictsAAsecessio Ato A nsurgency A orA 2.2.1 conflcts AinAthe reg on Arange A ro Ainsurgenc Afonf ctsAgenera edAas a A esultA autonom ;A rom A‘s onsored A er orism’ l At AethnicAc as e ,AtoAc well AasA ro Aot er ASta es. 5A of cont nuous A nflo AofAmig an sAfr mA cros Athe A orders Aasonflicts inAthe A egion can be Abroadl AgroupedAunde AtheAfollo ingAcateg ries:mel nd’AasA Aslicts: AInpar te AnationA a. A‘ ational Ac nolving Acon ep A f Aa Adist nctA‘ha dofA thatursu tgoalAof thby itsAre listonvotaries. A45 rc ana upadh ay,A“ errorism inA heANorthAEast: linkages and Implicat ons”,AE onomicAa d A oliti144Conflicts in the North Eastb. Ethnic conflicts: Involving assertion of numerically smaller and less dominant tribal groups against the political and cultural hold of the dominant tribal group. In Assam this also takes the form of tension between local and migrant communities.c. Sub-regional conflicts: Involving movements which ask for recognition of sub-regional aspirations and often come in direct conflict with the State Governments or even the autonomous Councils.12.2.2 Besides, criminal enterprise aimed at expanding and consolidating control over critical economic resources has, of late, acquired the characteristics of a distinct species of conflict.46 It has been aptly observed that:The conflicts in the North East have some peculiar characteristics: they are asymmetrical; they are ambiguous, making it difficult to differentiate a friend from an enemy; they are fought in unconventional modes, deploying political and psychological means and methods; and the conflicts eventually tend to escalate into prolonged wars of attrition.47 Violence in the region is also caused by the failure of the State administration to provide security. This has led to the creation of alternative forces of ethnic militia for provision of security. From the perspective of its ethnic constituency, a private ethnic militia is considered a more reliable provider of security when it is threatened by another ethnic group that is armed with its own militia. This is usually the context in an ethnically polarised situation in which the State administration fails to provide security and the actions of the Army are seen as partisan.4812.3 State Specific Conflict Profiles12.3.1 While the region as a whole displays a variety of conflicts, it needs to be noted that in its acute form the problem is endemic in certain well defined areas The ‘variety’ of conflicts besetting the region will be evident from the short ‘conflict profiles of the region’.12.3.2 Arunachal Pradesh: The State has remained peaceful after the cease-fire with NSCN which was active in Tirap District. The policies initiated under the guidance of Verrier Elwin (a noted anthropologist) in the 1950s have resulted in considerable cohesion in the area with Hindi emerging as its lingua franca. There was some disquiet with the settlement of relatively more enterprising Chakma refugees from Bangladesh in the State in large numbers which appears to have subsided. Growing income disparities and constriction of employment opportunities could be a potential source of conflicts.12.3.3 Assam : A wide variety of ethnic conflicts prevail in the State e.g. agitations against ‘influx of foreigners’, perceived inability of the Government to deport them; occasional46Archana Upadhyay, Terrorism in the North East 47Archana Upadhyay, ibid 48Archana Upadhyay, ibid145for ConflitCapaci y ResolutonABuildingtensions between religious/linguistic groups and escalating conflicts involving tribal communities who seek local autonomy etc.12.3.3.1 National/Extremist Conflicts: Undivided Assam had the longest history of insurgency. Naga and Mizo insurgencies were the earliest to flare up. The affected areas formed two districts of the State. Even in the present truncated Assam, there are a number of extremist outfits led by the United Liberation Front of Assam (ULFA). It has also been argued that there have been several contributing factors for the youth to join the cadres of ULFA such as unemployment, corruption in Government machinery, influx of illegal migrants, dominance of non-Assamese in the business sector, perception of exploitation of Assam’s natural resources by the Centre and alleged human right violation by the Security Forces. It became active from the 1980s and till the late 1990s, enjoyed considerable public support due to a perception that ‘insurgency is causing secessions’ from Assam and that if only the Assamese had launched a violent counter-agitation, the situation would have been different. The average Assamese also regarded the six years of largely non-violent agitation for ‘expulsion of foreigners’ as having achieved very little ‘success’. With large scale criminalisation of ULFA cadres in the 1990s there was a rapid loss of public support particularly among the urban middle classes. Another factor for its decline was ULFA’s known links with the ‘agencies’ of certain foreign countries with interest in subverting the distinctive culture of the State and in causing unrest in the country. It also appears that repeated volte-face by ULFA during several abortive negotiations with the Government, affected its credibility. After the crackdown by the Bhutanese Army, ULFA has not recovered its past strength though the organisation tries to make its presence felt through kidnappings, bomb blasts and selective murder of migrant workers. In addition, almost all tribal communities have some armed outfits purportedly safeguarding their interests.12.3.3.2 Ethnic Conflict: The major ethnic conflict in the State is the grievance against the perceived influx of ‘foreigners’ i.e. people with a language and culture substantially different from the Assamese from across the border (i.e. Bangladesh). The ‘foreigners’ agitation’ of 1979-85 brought Assam to the centre stage of attention. The problem can be traced to the early years of the last century when the landless from the neighbouring overpopulated districts of East Bengal started arriving in the fertile and then substantially fallow Brahmaputra valley. Following communal rioting in East Pakistan in the 1950s and 1960s there were further waves of migration from the minority community of that country. Still later, growing unemployment, fragmentation of land and the war for the liberation of Bangladesh encouraged a renewed influx even from the majority community. With the fear of being culturally and politically ‘swamped’, resentment built up among the Assamese and escalated into one of independent India’s most prolonged and vigorous agitations. While both the Union and State Governments have accorded priority to the process of detection146co flictand deportation of to Asimmer A ith AtheA andAdep rtationA fAillegal Amig ant A(for igners), A he issue A onti ues tiveA teps A re notA ‘or ginal’ Ai habi ant Aclaimi g A hat Af r Are sonsAofA‘ ote f Abank polit cs’ efe -l ngu sticAprofileA be ng A akenAtoAdepor AtheA trespa sers’ Aw ile people AsharingAtheAr ligiou fAthe ‘for igne s’A laimAtha Ath yAareAharass dAandA nr asonabl Aforc dAto A“ rove”AtheirAn di anA itizensh p.A12.3.4A an ps :Ac rrent y,AitAisAt eA‘most insur ency ridde fiAStat AwithAa outfiff een AviolentA utfftsAre resenting Adiferent tribes co mun tiesA cti e Ai Athe AS a e Aand fihas Abec meAa Aself fnancing extortionAac iv ty A articul Thl AinAthe AVal ey.ATe com issio ,A uri g Aits A isi AtoA he State,A asAtoldAo Aseve alAinstance Awher Adev lopment A unf sA fireAsi honedAo AtoAfnan eAv riousAunla fulAandAdisheAdecis on ofA heAu pti veAa tiv ties.A nA eve ty AperAcen A 2. .4.1 AOn Afourt Ao AMa ipurA(wh ch is At eA alle ), Ai AhomeAt Amo eAth AM iteiA omm nity. ofAi sApopulationA hichApre om nan lyAconsist AofAtheA ultura lyAdistincThe AMeite Ai flue ceAThe S ateAwasA uledAa AaAmonar hyA(la er prince yAstate Ab AMeite Arulers.rib lsAcoming intoA declined Ain theAsoc o-eco omic Aspheres afte AIn ependen eAwith theA nAa Ase tionAof theA th Aforefr nt largelyAbecau e Aof res rvat ons. AThereA as a so Arese tm ntA aAr se tme tAwhic A M ite Asocie y A bou AtheA erge Aof theASt teAwi h t eAIndian Au ion A– thi tyAperA ent AofA ledAto Ath AMei ei A nsurge cyAfrom theA196 s. A ribals accoun Afo Aaro nd gr ups.AIns rge cyA the Sta e’s Apop lation an Abroa lyAbelong toA aga, Kuki-ch n AandAMizo stan e’A f Atriba sA inAN gala d AandAM zora Aa so A pilled ov rAto AtheA tate.AThe A cu turalAd Ach istian fold by from A he AM iteis A ide edA ith Aal ostAal Athe A rib sAcomingA nder thand Aboun aries Aa dA theA1930s. AThre Ais Ac nside abl Atensi nAam ngAt eAt ibesAover A andvio enc Abetw en AN g sAan AK kisA ookA Atol AofAm reAtha A20 0Aliv esAduring th A1990s.AS cialistA ouncilATh12 3.4.2 Ace se-fir AbetweenAt eAu ion Governme tAandAthe Nationa At Afr sh At nsionsA ofA agaland (NScN)Ah s A educ dAvio enc Ain Naga A reas bu Ahas A iven Aristri ts ofAMani ur.A s A h ANScNAi sistsAonA Agrea er A‘N galim’A hich wouldAinc ud AfourADitationAin 20 1.ATheAThis A sA tou ly Aresi ted byA heAMei e sAan AhadAca sedAaAver Av olent agtedAi Ac mpar tiveA ass ran eAtoAsafegua d AtheA‘te ri orial Ain egr tyAofAMa ip r’ AhasAresu Aoth r Atrib sAhaveA p ac Aon thisAsco e.AIn th Aso thern parts A fAthe sta e AHma s,APai eAan At eir ownA nc a eA eenAwagin Aviole tAs ruggl s Apartly for localA ege onyAa dAp rtlyAfo HillAareas areAn n- in A he Aform Ao AaAuni n ATerri ory Acall dA“zomi’ AD str ct Ac uncil Ain theA cilsA oAb Abrou htA fu ct onal si ce A 985 Aas most Aof Athe trib lAcom unitiesA an At eseAcou Ain Ath AValley AInA under A he A ixthAS he ule. AThis Adem nd Ais Av ci erous y A ppo edAbyAt osshort AM ni ur contin esAto be A n active Aarena fo Aa Amult plicityAolfAviolen Ac nf cts.12.3 4.3A tAisA eportedA hatAtodayAmil tan Aorganisa ionsAar A irtuallyrunningAaA ar llelgovernmen Ai AmanyAd str ctsA fAM nipu Aa d AtheyAalue eAa le Ato Ain ceA147for apaciConflict ABuidingResolution AState Government in awarding contracts, supply orders and appointments in government service. It is also reported that militant organisations indulge in widespread extortion and hold ‘courts’ and dispense justice in their areas of influence. Such a situation results in erosion of faith of the people in the constitutional governance machinery.12.3.4.4 Since there has not been any significant industrial development in the State, there are no major industries or manufacturing units which could provide employment for the educated youth. The biggest employer continues to be the State not only in Manipur but the entire region. The educated youth has, therefore, to look for employment in far off places like Delhi, Mumbai, Pune and Bengaluru, etc.12.3.5 Meghalaya: The State is fortunately free from violence of the intensity that prevails in many other parts of the region. Except violence against ‘outsiders’ particularly the Bengali speaking linguistic minority, there have been no major problems in the State. The following are some future areas of concern:a.Increasing clash of interest between the State Government and the Sixth Schedule District Councils – the entire State is under that Schedule.b.Increasing inter-tribal rivalry.c.Emerging tensions about infiltration from Bangladesh particularly in the Garo Hills.12.3.6 Mizoram: The State with its history of violent insurgency and its subsequent return to peace is an example to all other violence affected States. Following an ‘accord’ between the Union Government and the Mizo National Front in 1986 and conferment of statehood the next year, complete peace and harmony prevails in Mizoram. The State is recognised as having done a commendable job in the implementation of development programmes and making agriculture remunerative. The only potential areas of conflict are the growing income and assets disparities in a largely egalitarian society and the dissatisfaction of the three small non-Mizo District Councils with the State Government, on account of issues pertaining to identity and reservation as STs.12.3.7 Nagaland: Following the cease-fire with the dominant Muivah-Swu of the NSCN, the State is virtually free from overt violent unrest although as already noted, it is the original ‘hot spot’ of insurgency. The minority Khaplang faction which does not approve of the cease-fire has also, on the whole, remained peaceful. Certain areas of concern with regard to the future are:148confli ts Ai(a) Athe Adem ndAforA a) AThe li g ring issueAofA AfinalApoli icalAsett eme tAincl din ing disquietAinA ‘g ea erANagala d’ Aor ‘N galim’A hich A s A lreadyA otedAisA au cul ly AMani ur. he Anei hbouring Aare s, Aparti an Athe Aproblem(b) AAGro ing A omp tition A ver Athe Al mi ed A esour es A f At e AState of une ployment of Athe Aeduca edAyout .lopmentAthrou hA 1he ASt.3.8A ikk m: Ate Ah sAno Ao ly A one Awe l A nAtheAspher AofAdevnceAbet een Ath A decent ali ed A lanningAbut Ath Aconsti ut onal Aman a e AofAst ikingAa bal AalsoApre en edA vario s Aethni Agr ups A(mai ly AtheAl pch s, Abhuti asA ndAN palis)Aha em rgenceAoflmajor A onficts.f Athese A et odsmass mig ation A 12 3.9ATri ura:ATheASta e’sAde ogr phicApr fileAw sAal ered sinc A1947Awhen aAto Aone wi h AaA fromAt eAne lyAemerg dAEastAPa is anAc n erted Ai AfromA Alar el Atr balA r lturalAlan s AatA maj rityAofA engali Aspe king Apl insm n. ATriba s A ere Ad privedAofAth irAag ic orAviolenc AandA t row awayAp ic sAa dAdriven to the Afores s.ATheAre ultant tensi ns Acause Ama NV) em rgi g Aas w desp ead terror with Athe A ribalAd minatedA ripuraANat onalA olunteer A( Miz ram Ae po edA one Aof A he Amost Av olent Aits Ain the ANorth Eaxt emi t Aoutt. AProx mity AtolisationAinAth A he ASt te AtoAt e A side effects’ AofA hatAinsu gency.AH wever,AeffectiveA ec ntr tonomousA SixthA ‘non-s heduledA reas’, bring ng Atri alA reasAwi hi At eApurviewA f AanAa gricultureA av A Sc edule’ Acou cil, success ulA and Areform AandAsyst ma icApromotio AofA itionA fAtribalA contributed to Acons derableAco fli tAreduct on.ATheAch nging Arelig ou Acompo apprehens onAofA group A(p rticularly At eAJama iyas Ai Agivi gArise At Anew rAtensionsAw th Ad cline,A hereA increa ed Ainter-licts.Aribal conhile Athe At ibal Ano -tr ba Acl shesAare on Athfre domAtoA se’ is Agr wing A ese tmentAa ong th Atr balsAdueAtoA he restr ctionsAo At eirA the Af restsAa d Atheir Anomin l A articipa ionAinAdistrc tAdevel pment.A heAf ct A emainsA 2.3.9.1 ADe piteAim ress ve str desAm de by A heAS ateAin A he A astA ecade,A sAto banglad shA hat Athe vi tualAembargo onAtrans bo der Amo eme t AofAgoo s, andAservic ATheAMini tryAof f omATrip ra A aveAi pe edAthe At mpoAof ec nom c Agrow h A f Athe ASt teegotiatio sAforA Extern lAAffir Asho ldAtake up Athis Tripu aAspec ficAissueA uringAbilate alAin reasedAecon micA ooperationAwith bangl de h.l 12.4A odesAofACon fictA es lutioh;A(i) A ecurity12 4.1ATheA odes AofAco fli tAr solut onAi Athe Nort AEastAha eAb enAthrou sAconferme tAo A forces/A poli eAac ion’; (ii)Amor AlocalA utonomyAth ough me hanismsAsu hAAofAMan purAan A Stat hood,Athe SixthAS hed l , A rti le A371 AcAof A he cons it tion Ain cas entA utfits; AandA throug A‘tribeA pe ific Aa cord ’Ain A ssam Aetc; A(i i) An gotiation AwithAi sur iv)Adevelo mentAacti itiesAi cluding A pecialAec nomi Ap ckage . AManyA149Capac ty A uildingl t forResolutionAConfichave proved successful in the short-term. However, some of these interventions have had unintended, deleterious consequences as well. The manner of ‘resolution’ of conflicts in certain areas has led to fresh ones in others and to a continuous demand cycle. There is, however, no doubt that conflict prevention and resolution in the North East would require a judicious mix of various approaches strengthened by the experience of successes and failures of the past.12.4.2 In the context of the present Report, it may not be necessary to go into the details of the several initiatives taken under the various ‘modes’. In fact, the Commission has already considered, or is in the process of considering, some of these aspects in other Reports. Mention may, in particular, be made of the role of security forces in counter-insurgency operations dealt with by the Commission in its Fifth Report, on “Public Order”. That Report inter alia recommends that the Armed Forces (Special Powers) Act 1958 may be repealed in the North East with some of its provisions49 incorporated in the Unlawful Activities (Prevention) Act, 1967 to enable the Security Forces to have operational freedom consistent with human rights concerns. There are many other recommendations pertaining to Police reforms and toning up the local intelligence set up etc that would also apply to the situation in the North East. There are certain other aspects of dealing with the menace of insurgent outfits that will be dealt with in the report of the Commission on ‘Terrorism”.12.4.3 The Commission would, however, like to reiterate that even in dealing with the purely ‘law and order aspects’ of insurgency and violence in the region, much greater reliance needs to be placed on the local police than has been the case so far. While deployment of the Armed Forces of the Union may be required, there is a strong case for minimising their use for operational purposes in a region which still continues to harbour a sense of alienation. Similarly, utilising the ‘non-police components’ of administration and civil society organisations for handling conflicts needs much greater attention than has so far been given. The needed measures to achieve these and similar objectives have been dealt with elsewhere in this Report.12.4.4 The other mode of conflict resolution is the developmental approach. This approach embodies the thinking that if institutions of development are created in the region and plan outlays substantially increased, the problems of politics, society, ethnic strife, militant assertion and of integration will get minimised. From the 1980s, there has been substantial increase in public expenditure in the region and there is a stipulation that 10% of the spending of every Ministry/department in the Union Government should be earmarked for the North East. That the fruits of development have not adequately percolated to the beneficiaries is widely recognized. While a detailed analysis of the problem is beyond the remit of this Report, it must be conceded that the reasons for such failure vary from lack4 AParag ap A8. .17AofAtheAC mmissi n’ AReport onA‘Pub150confli tsAiof local Acorrupti n A ndA ofA ocalAabs rpt ve AcapacityAa dAinappropr ateAdevelo me tAstrategi sAt ernAis Athe wellA div rsion of fun s, Aoft n A o AtheAcoffer Ao Ainsurgent .AOfApa ti ula Acon AsystemAa A ar eA docu en ed Asiphonin AofAf od- rai s Amean AforAtheApub icAdis r butio rtualA xto ti nA pro ortio Ao Awh chAfa ls inA he AhandsAof A he Amilitan s.5 ASimila ly,AtheAv ralA ran itionsA racke Arun AbyA arious mi i antAgr up AatAaAn mberAof points, markingAsev tionAmon yAf omA f omAoneA ilit nt group’sA re Aof influe ce AtoAthe A ex , Acollecti nAofA rote sequently Aman A busin ssAand A ala iedA lass sAetcAhaveA eenAextensive y Adocumented. 1Aco stabl Aan rchy A obs rver Afeel th tAs me Apa tsAo Ath ANorth AEa t nowAr pr sentAaA tateAofA ctlyAorAt roughA w ere the rule A f Alaw Aand Aot er institutio sAo Agovernan eAareAsu ve tedAdircollusi eA rrang ments,At As rveApers nalA r A art sanAendsAofA52t he Ami itantsare, Ather fo e,A 1 .4.5 ARef rm Aand Ac pa ity Abui ding Aof Avari us institutio s Aof governancedisparitiesessentia Aif Ade elo me t Aeffrts Aa e Ato Apla Athe r A ntended A ole Ain Aredu ingalienat on.and12.5ACo flct A esolution –AtheAPol it i c a AP radigmorth AEas AI diasuppo tAtoA aveA 12.5. ATheA eal sation th tAt eApeo leAo AtheAN rth AEas Aneeded sp cial sAevident Asi ceA t ei A oiceA eard Ai AaAl rge Ap lity wit Awhich theyAha Ali tle Acon actAw fAdecentra ised Inde end nceAitself. This re lis tionA edAtoAthe S xthAS he ule, AaAmodelA gov rnanceA hatAwasAclear yAre olu ionary Afrom th Ape specti e Aof AtheA1 40s.ASubsequ ntAd velopmen sAli eAbr nging many AN ga areas Awith nAanAauto omousAf ameworkA( 95 ),A alASt te Awit inA ormat on ofAtheAS ate Aof A agaland A 19 3) AcreationA fAan Aa tonom usAtrite the keennessssa A(1971) Aand the Alarge-scal Ar org nisati n Aof At eAregion (19 2)AindicAth AN r h AEast of Athe Ana ionalApoli ic lAle ders ip Ato Adeal wit Adisconten Aa dAa ienat onAi pportuniti sAo not A AasAaAsim le ‘resto ationA fAo der’Ais ue,AbutAt ro ghAprov sionAofAgreat rA AofAi depe den A devolution Aa d A art cipationA n Athe Apoli ic l Aprocess s. AThe Ap li ical Ahistor AWhile ther Ais Ind a does notAoffe AaAmore ra icalAex mpleA fAmeeting Alo al Aas irati ns AregionA hr ughA alwaysAr om AforAcre tiveA‘poli ic lAs lutions’A f AtheApe en ial proble sAof Ath Ai Ais doubtfulA build ngA fAconsensus andAconti ual y Aenl rg ngAtheAscopeAof A‘d mo ra isation’ forAnow workin f AtheApoAitical paradig Aadmits furtherAradi al Ai no a ions AThe eAi Aa AcaseAfo Athe growt A to ards Amak ng Athe Aex stingApoliticalAi strumen aliti s Arealise the rAp tentia a dAwe l AbeingAo Athi Ai por antApartof Aour co ntr .Ain Aof the ruleA 12.5.2A tAthe A oliticalAl vel, th ref re,Awhat is now requiredAis At eA tre gthetical yAe ected ofAlaw Aan Aconstitu ion lApolitic ,At eAauthorit Aa dAl gitimacyAofAth Ademocr Aac ountabilit A StateAandAlo alA overnAThents. sAw uldA ati fyAtheAneed forAintroducinAEas . AIt Awo ld andAdem crat cAp acticeA nto AtheAco flict Areso ut on A achin ryAin th ANort alsoAinv lveA nAe han ed AroleAforAt e Aleg slatures,AStat Aad inistra ionAaSaAtchana Upadhy50A chanaAupad ya ,A“ error smAinAthe AN rthAE st” 1 jai ASah i AandAJAG org ,A“Security an ADevelo mentA nAInd a’ ANorthAEast AAnAAlternati veA e spectiv .”52SAKAPilla ,A Insur enci sAin AN151y Building for Conflict ResolutionCapacitgovernments in the region. Recent developments such as the establishment of elected village councils in the Sixth Schedule areas in Tripura, the successful initiative of elected VEC and AEC in Meghalaya to implement the NREGA, the effective involvement of the largely elected Village Area Development Committees in Nagaland and the initiation of communitisation are all testimony of how democratic processes in village governance and development can yield positive results. This would call for bringing elements of democratic processes in local governance and development in the North East. In particular, there is need for introducing village self-governance in the Sixth Schedule areas (as appropriate to the specific conditions in each State), strengthening and providing resources to the autonomous councils to carry out their assigned executive responsibilities and for making suitable changes in respect of the tribal areas outside the Sixth Schedule and the tribe-specific Councils of Assam. It would also require revamping of the existing system of delivery of public services by entrusting this responsibility to the local bodies. These aspects are dealt with later in this Chapter.12.6 Capacity Building for Conflict ResolutionThe complexities in the region and the successes and failures of past efforts at conflict resolution call for urgent and innovative efforts to build capacity in different wings and levels of governance. Against the background given in the preceding paragraphs, the specific areas needing capacity building in the region for conflict resolution are examined as under:-(i)Capacity Building in Administration(ii) Capacity Building in Police(iii) Capacity Building in Local Governance Institutions(iv) Capacity Building in Regional Institutions(v) Capacity Building in other Institutions12.6.1 Capacity Building in Administration12.6.1.1 While the issues related to personnel management of the All India Services including those serving in the North Eastern States will be dealt with by the Commission, in a subsequent report, the subject cannot be ignored in the context of conflict management in the region. Familiarity with the place and its issues, professional competence and a sense of empathy with the people are all essential pre-requisites for civil servants belonging to both the All India Services as also to the services under the State Governments. At present, a majority of the direct recruits to the All India Services are from outside the region. Till 1968, senior administrative positions in Manipur, Tripura, Nagaland and NEFA (as Arunachal152c nflict AinPradesh was dminist ativeA Pr deshAw sAth n Akn wn A ereAheld AbyAa A egion- pecific AI dian AFrontierA icsAandA the A ervice A(IF S) consis ingAo Aoffic rs A rawn A romAthe ArmedAFor es, acadetheAIAS fo AaA servicesAw oA olunt er dAt Aserv Ain theAare .AThsAServ ce Aw sAm rge Awi hppor unities.A vari tyAofArea ons includ ng the desireA fA tsAm mbers A oAhave betterAcareerA s.AThsA sAdueA Ev nAt ereafte , A he Apro lemAofA ffic rs Awi li gAt Aserve inAthe Are ion pe sis tedAn mber AofA bothAto A is nclinatio Ao Aouts de sAt Aserve inA he reg onAand A oAtheA im Arecruits Aan A p st Aavail bleAat senior lev ls Awith nAthe region. A ocal official ,Aboth Ad rec Aprofession lA ‘ rom tees’ Aon At eAot er Ahand, alsoA omplain aboutAlimited opp rtunities Afo gi n.A ember A evel pm nt A sAt eyAdoAno Aget Aadequate op ortun ties Ato ser eAoutsi eAtheAr ituatio s.ATheA ofAtheAS ateAservices, part cularly Ahave Ali it dAexpos re At Adiverse Awo k A to theAs stemA ex re e Ashor ag Aof officer Ain Athe NorthA as ernAStates is attr bu ed A y Amany li tle Ac anceA of Ac dr Aal otm ntAin theAAll A nd a AS rvice Aas AperA hich insi ersAha eAvery hasA ont ndedA ofA eingA llot edAthe r AhomeAsta e. Governmen Aof Nagaland Afo Aexample, dAtoA he home th tAthe A resent roster A yste Aen bled justAoneA ag Ac ndidateA oA eAa lott c dreAinA o verAa Ad ca e.be Aprov de .AorkingAin A heA 12.6 1.2AAs As atedAe rlier,Ai su s Arelat ng AtoAserv ce condit onsAof A ffic rsA AofAPersonnelA N rt -EastAwil Ab Adi cussed Ain Ath Acommi si n’sAReport Ao AR furbishin edAand AstableA A ministra ion.AH wever As n e,Ath re Ai AaAclos A ink Abetwe nAa commit rief Ae amine dmi istrationA ndA reventionA nd resolutio Ao Ac nflicts,Ai Ai Aneces l aryAtoA heAthen Auni nA someAof these iss es. Aun il Athe 1970 , Aofficer Afrom out ide Assa AandA o Ade utation err tories in At e Aregio Aw re Awi li g At Aserv Ain A he ANorth AEas Ap rticularly Aa Apunis men A –Afo Aexampl AfromA unjab, A adhy APrade h A tc AToday,A tA s regardedAa nAone Afo mA rA p sti g; Aone A f Athe reas ns Abei gAt at A lmost A llA he AStatefecteAa e Aa,AAinstitu ions another, by ins rg ncy Aor A ue AtoAlimited A professiona ”Aexperi nce.ARegiona Avib ant, areA inv lvedAwith At e A eve opme t Aof th Aar a As ch Aas theA EcAw ich Awere oncedAt Arever eA much less effctiveAnow AasAd sc ssed laterAi Athi AR po t.ATher Ais A nA rgentAnAin At e AN rthA thisAtre d. Govern en AofAIndia, A n A eco nitionA fAtheAdiffic lt con ition rkingAi AthisA Eas ,Ahas already given As veralAspec al A ncentives A nd facili iesAtoA ffic rsAw fcersAtoAh veA re ion. A erha s, th seAneed A oAbe enla ged Awit Amor Achoices Al ke fi Aper it ingA eAof Aposti g.A government ac o modat on at Aa A lace Ao Atheir choi eA ath rAth n AatA he lastApla ienceAis Aa soA Similarly, op ortu it esAto A orkAin lar er AStates for Aincrease Aprofessio al expe ersAi clud ngA advisable.AS multa eously At ereA houldAbeAmore opp rtuni ies fi Afo AlocalAof s.ASetti gAupA hose Afrom theATech ic l AServices on secon ment Ato serve outside theirAS atlAfunding forA reg onalAtrainin Ain titutionsAforA dmi istrative andAtech icalAoffiials,Al berentive Aw ichA ob aining Ahigher qu lifiationsA nAt eAcoun ryA nd Aa road A reAsomeAot erAinshoul153ding for ConflictC pacityResolutionABui12.6.1.3 Institutional capacity building within the administrative apparatus is as important as capacity upgradation of administrative personnel. The political executive, within the North Eastern States, too, needs to be sensitised to the imperatives of systemic reforms for peace, order and development. Initiatives for good governance in the region would include laying down a concrete charter for administrative reforms and good governance in the region in close association with the States and its systematic monitoring by the NEC. There is also a case for taking into account the performance of States in fulfilling their commitments under the charter of the NEC for determining their eligibility for special economic packages or other specified items of funding.12.6.1.4 Recommendationsa.Greater opportunities may be provided to officers serving in the regionto serve outside the North East to gain greater exposure to diverse work situations. Local and technical officers from the State should also be given opportunities to serve in larger States and to improve their professional qualifications through training in the country and abroad.b. Incentives available for officers working in the North East should be increased.c.Regional training institutions for various branches of administration,including the technical services may be operated by the North Eastern Council.d. NEC may initiate discussions with the States to examine the legal implications and feasibility of regional cadres for senior positions in technical and specialised departments under the States.e. NEC and the Ministry of Home Affairs may, in collaboration with the States, draw up an agenda for administrative reforms for the region with its implementation being monitored systematically. Satisfactory performance in implementation of this charter may qualify the States to additional funding including special economic packages.12.6.2 Capacity Building in Police12.6.2.1 The only regional level institution for training police officials is the North Eastern Police Academy (NEPA) near Shillong which caters to the induction level training of Gazetted police officers of all States in the region other than Assam. Due to limited intake capacity and non-availability of appropriately trained instructors, to which attention was154conflctsdrawn by the Ath Ain titutio Adrawn by theAco mittee A n APoliceARefo ms A(Padmana hia Acommittee)tution forAci il hasAha Alim ted imp ct.ANEPAA as th Apo entia AtoAbeAt eAnodalAtra nin AinstngthenedAthrficersAin Ahanug A police Aoli g Ainsurgenc .ATheA ns it tion AneedsAt AbeAstrour esAincl dingA augmentationA fAi frastruct re and Ainducti nAof instruc orsAfro AvariousA ancialAand oth rA t e AcentralAPol ce Organisati ns AonAattra tive Aconditi ns. i Acons der bleAf dAinAop ra iona A incenti es areAne essary to AindficersAce Ap liceAoithApr ve AtrackArecom tte sAtoAworAin Athe A ca emy Ah AEast, At e Asame 12.6.2 2 A n Athe Asub ec Aof sufficie cy Aof th Apo ice Af rce Ai Ath ANorco mittee Anotedraining A o A ivi AAis AhigherAin theA “ThAavailabi ity of Apoli emen Ap rAhundredA qu reAk lo etersA fA reaAth nApopul tionA Nor heastern St tes,Acomp redAtoAa l-Indi Aave age, Ata ing into accountAth rAhundredA qu reA and Ate rainAcon it ons.AComp redAtoA ll In ia Aaverag Aof 42 Apoli emenAf puA63. AInAter sA ki ometers ofA reaATripuraAh sA117Apo ic men ANagala dA9 Aa dAMan IndaAaverage ofA o Apopulation, th Aavailabi ityA s Acer ainly Ave yA igh ACompared toAtheA llA75 AManipu A593 36Ap liemenAperAla hAof Apop lat on,A agaland has 950,AMi ora artsAo AIndiaAi A an ATr pu aA341 AW Abeg to Adiffr A nAthisApo nt ATheAs tuati nA n Amaj rAtheA or hea ternA hig ly A ifferentAf omAt e Asituat on tha Apreva ls AinAtheA tat sAcomprisingloadAon diAo Aour cou try.A tA oes notAadmit Ao Aa yAco pari on AThe AworkferentA par gAtoAac ountAt eA spec sA fApo iceAw rkAin Ae chANo thA as er AstateAh sAtoAb Aa sessedA aki eeAyears Aan At eA various du ies perfor ed byAt eApo ice Ai Ae ch A uchA tateA nAthe las Ath oAbeAwor ed out.” re f uirem nt of stafAn edsA tAimpe at ve AthatA 12.6. .3AThe A ommi sio Aagrees wi hAt e Afindings A f A he committee. It Ai calA itu tion Aso no msA fAdepl yme tAa e Awo kedAo t Afor A achASt te hav ng Are ardAtoAth Al eAtoAthe largelyA thitsAofA(atAtAt e Abeneeast) Arelat velyAc mfortabl Apo iceAstren th are availabAasAimp rtantAas ins cureApopula ion.AInt r- tate Am vementAof po ice person el at all Alevel Ai ApoliceAoffici ls A si ilar A entures AinAcivi Aa ministratio .AIfA pp rtunity A ou d Abe Ap ovidedAt Ato Aser eAin At eA pa ticul rl Aat AtheAle elAo AInspector A( nd A quiva entAin A he armed po icegAfor Adeveloping centralAPoli eAO ganisat ons,At e A esultsAshoul AbeAparti ula lyArewardi professi nalism Abri ging Aoffiers fromAo tsid Athe regi n AwillA lsoAhaveisimilar benefts.12.6.2.4A co menda ionsaj r AupgradationA a. A The ANor h AEaste n APoli e AAca emy A( EPA) Aneeds A of Aofficers at Athe f Ai fras f ru ture A nd s af Ato A ater At Aa larger nu ber indu tio Alev l. NEPAAmayA lso beAdevelo edAforAi pa tingA155Capac ty A uildingl t forResolutionAConficpolice officers from other regions in dealing with insurgency. Financial and other incentives are necessary for attracting and retaining instructors in the Academy from the Central Police organisations and civil police particularly those with proven track record in counter-insurgency operations.b. Concrete steps are needed to introduce a scheme of deploying police personnel from the region to Central Police Organisations and to encourage deputation of police officers from outside the region to the North Eastern States.12.6.3 Capacity Building in Local Governance InstitutionsThe North East, for reasons of history and ethnic diversity, has a wider variety of local self-governance institutions than elsewhere in the country. Some of the more important institutions are discussed under the following heads:?Sixth Schedule Councils;?Village self-governance in the Tribal North East;?Tribe Specific Councils in Assam; and?Other issues of Local Governance.12.6.3.1 Sixth Schedule Councils12.6.3.1.1 It may not be necessary to deal with the details of this Schedule adopted under Article 244 of the Constitution beyond very briefly noting its essential outlines. It was adopted primarily to address the political aspirations of the Nagas (who, however, refused it on the ground that it offered ‘too little’). In essence, it lays down a framework of autonomous decentralised governance in certain predominantly tribal areas of undivided Assam with legislative and executive powers over subjects like water, soil, land, local customs and culture. Many aspects of local governance are entrusted to the largely elected autonomous District Councils mentioned in the table annexed to the Schedule while the manner in which the Councils are to function has been laid down in the substantive paragraphs of the Schedule. The subjects assigned to the Councils outside Meghalaya have been vastly expanded over the years – for the Bodoland Territorial Council established in 2003 the jurisdiction embraces almost all the items in Lists II and III. Except Tripura and Bodoland Councils, these bodies have also been given judicial powers to settle certain types of civil and criminal cases. Legislations passed by the Autonomous Councils come into effect only after the assent of the Governor. While the power to amend the Schedule vests in Parliament156c nfli ts Ain theStateAan Athrough an utonomou A hroughAa Aordinary Ale isl tion,Ath AGo ern r Ahas th Apower t Acr ateAa AnewA oin edAbyA d stric AorA ergeAsuch di tri ts AonAtheAreco me d tionAof Aa A om is ion AtoAbe ap asAw thinA th AGo er orAa dAt Avar At e Aar aAofAsuch di tr ctsAorA o A ncludeA r Aex ludeA uchAar nAis Aals A such distric sAw thoutAtheArecom en ati ns Aof Athe Ac mmi sion. AThisA om issie pected A oAe amine A nd A ubmit th Astate AofAadmi is rat onAinAtheA utonomousAi stri c t s .A eghalaya A 2. .3.1.2AThAorig nalAa eas underAth ASch dul Awere At e Apres nt States AofAAasAMi irA Na alandAa dAM zoram andANo thA achar andAKar iAAnglong A( rigin ll Aknow Aco ncil Hills) ditricts ofAAss m. While,A sAalre dyA oted AtheA agaAare sA efuse A oAelectA theAMi oAcouncilA( nitial y, A alledA he Alu haiAHill Aco ncil) Awas dissolved fol owingAthe Acou cilsA fo mat onAof theAunion Te ritoryA f A izora Ain A1972.ASub equ ntly AfiveAmor tyAtri esA we eAcr ated A iz;Athr eAsmalle Ac uncilsA nAMizoramAre resentin Anon-Miz Aminor Aall Aov rA –Ma a, A hakm Aan Alai; AoneA utonomo s AcouncilA traddl ngAtr balAar asA prea oAtrib s.A T i uraAand Aa AT rritori lAc uncil for Athree di trict AinA s amAwithA Am jori yAofAbo ater,A he pow rsAofA he A‘Assam coun ils’Awer Ae largedA o Ainclud Asub ectsAlieAprimaryAtAallA he ducati n,A ealthAan Aw lfare.AThAbodola d A ounci Ain fact,A ow Aenj ysA lmopower Ai Ali ts A I A nd A IIAofAt e ASeventhSchedule.A theAlo alA 2. .3.1. AThe ASixt ASchedul Acou cils have thusA eenA iven Am reAp wer Athan ry.A hileA bodi s A befo eAorA ven afterAtheASev nty-thirdAA en men ),Ai At eAr st AofAth Acoun ree AthatA anyAa eas underAth ASch dule haveAse nAt rmoilAand vi le ce, AitAis genera lyAa umAwit inA th Aautonom Aparadigm A rescr be Aun erAitAh s brough Aa degree AofAe uilibr AlawsAa dA tribal societiesApa ticular yAthro gh Aform lAdispute A esolu ion Aunder cust mar utonomou A throu h A ontrol AofAmon y-le di gAetc. InAAssa ,AT ipuraAan AMi oram,AtheA ete ceAofA cou cilsA av Apower to d cideA fAaAState Ale is a ion, Aon aAsub ect under AtheA om AbyAth seA th Aco nci ,Amay no Aapp yAorA nlyA pply with AsuchA xc pti ns as Amay A eA ecide udedAfro A bod es Awi hinAtheir Ate ritor es.Aunion Ale is ationsA n Asimila Asu je tsAcanAb Aexcrnm ntAin a plyin AtoAt es Aar asAby theAState A ov rnmen Ain Ass mAand theAunionA ov fact, Ath A the other At o ASt tes. A uch areas Aare A is alised Aas Aadmini tratively A‘self- uffiient’ AInas Abeca eA Sc edule has Am ant AS ate Alevel executiv Aagencies Aw thdr wing from A uc Aareas Apeculiar vid nt Ain At e A ontext Aof Adi tu bance Ain AKarb AAnglong. Meghalay A isplays A le Aof theA sit ation Aa , Ad spite Athe fo mat on Aof A he AS ate, A( nd Aunlike Miz ram), th Awh the AStateA State co ti ues At Abe under the ASixt ASchedu e Acausin AfrequenlictAconAwith overnm ntAwhich Ahowev r,Aenjo sAcertain A verrid ngAp wers A verAth seAbodiesinc udingAthe su remac AofAState Al gis a ion vis AaAvi A‘council Aleg slati n’. While AtheAc nt nuanceAofA utonomou Ac uncilsAin Me hala aA s Asa dAtoAhaveAc nt ibutedAtoAm in enanceAofAi ter-tribeA ov rnm ntA qua ions,Athe Aa ran ementAhasA requentl Ar sultedAilictAcon Awith theAStateA7.AIt A as asAwas ex lai ed Ato Athe A ommiss onA uring it AvisitAto Me halayaA n AJan ar A20 arg edAby theASta eAoffiial AthatAtheAa ra gem nt AofAtheAge grap ic lAa eaAof the157c pacityAb ild ng AforA onflict AResolutionthe CotheAco ncils beingAiden ica ,Awas Aunprece en ed A nAthe Ar gi n.A tAwa Aalso Acon ende At atA nAtheAcircums an e Aof Aa Apredomi antlyA ribal Stat AlikeAMegh laya,Adi trict levelAlegisativeA odie Aw re Ano A ongerAnece s sary .esA fA 12.6 3.1.4A uri gAthe Acommis ion’s vi it Ato Ass m AandAMegh laya,Arepresent ti mentsA theAco ncils Aexp essedAdissatisf ction about theirAinte -fac Awi h Athe StateAGover nsA fA con e ned A– the e was Aa Af elin Athat theseAauto omousA odi sAareAt ea edAasAexte si Ath tA theAGover ment. Whi eAthe Av rious Aprov si ns A f AtheASc eduleA re teAanAimpr ssio At atA theAGo ernor unde AthatASc ed le isA oA ct A tAhisAdiscr tio , Athe Ap esentApo it on Ai ter .A in A lmo tAall Am tte s AtheAGo erno Aa ts A nAt eAa dAandA dv ce A f AtheAc un il AofAMinihis isAanAimp eAf rArtant A ssue AThe e Aare Aprov si ns A n AtheASc edule which Aen i ageA ArorsA fA the StateAGover ment.APar graph A 4(3 , AforAins ance, Are uire Ath t A neA f AtheAMin stgra hA theAGove nm ntA e A ut AinA harg Awi h AtheAs bj ctAof Aauto omousAdist icts.ASub-par oAtheA 2) A f Ath AsameApro ision Are uire Ath tAtheA ep rt AofAcomm ssi n AforAinq irin AinStateA ffa rsAofAauto omousADis ric sAandAcr at onA f AnewADis ric sAet Aw llAb AlaidA efo e Athe onAofA legisl ture.ASimi arly,Apar gr ph A15Ad alin AwithAann lm nt AofAresol tio s AandAsusp nsoAtheA cou cil , AandApar gr ph A16 whichAe ables their Adisso uti n AareAs bject Arespec iv lyA alAorA ow rsAofArevo ati nAandAap ro al A f Athe State Alegisl tur .AForAm tters Areq iringAap rodAandA ratifiat onA fAtheAAss mb y, itAis Ao viou Ath t AtheAGo ernor wo ldAbe A ct ngA nAth A‘ation a A vice’A ith nAtheAm anngAofAA tic eA1 3A 1)A fAtheAconsti uti nAa dA otA nAhisAdiscrnAhisA The e Aare otherAprovi ions,Aho ever, where th reAis sco eAf r AtheAGo er orA o A ctA ment A ju gment after Aobt iningA nput AfromAsu tableAs urcesAinc udi g Athe StateAGover und rA S me Aof these Aprov sions wouldA pp ar to Abe Aconf rm ntAofA ow rs A n AtheAco ncils uncilA th Ac deAof civil APro edure (cP )Aa dAth AcrPc (pa a A5);A ow rs AtoAa proveAc enc sA legisl tio sAandAregul tionsA(para r phs 3 Aa dA8);Ares lvingAdi putes aboutA iningAli itA fA andA eases (p raA9 Ae c. AThe Acomm ss on is A fAth Avie Athat A avingA eg rd A o AtheA pimi edA th AwideAau onom AthatAunde lin s Athe SixthASch dule AthisA spect ne ds toAbeAex yAtheAMi is ryAo fAHomeAA fairs .cadesA 12.6 3. .5A tAthe Acommen em nt A f AtheAconsti uti nAa dAfo Amor Ath nAtwoAd tAwasA there fte ,Aa lAtheAAuto omousADis rict AwereAl cated A ith n Athe St te Aof A ss m.A quir A the efore qu teAin or er Ai Athat Sta eAf r AtheAGo er or Ato Aa p intAa Acomm ss onAtoAi io edA in o Athe st teAofAadminist at onAi AsuchAdis ric sA ndAto Ae amine other Am ttersAmen ervesA inApar gra hA14 AWit Afour A tat s Anow A avin AsuchAdist icts Athis Aarran ementAde edA tA reconsider tion.Abe id s, A nAth Ala tAtwoAd cade Athis Apro isi nAh s Ano AbeenAi vo onA fA all Ares lt ngAin lowerAsta da dsAofAgove na ce Ain these Asen itive A re s. A n AtheAo inricts the Acommi sion, th r Ais A Aca e for Aa A ommonAcomm ssi nAf rAallAAuto omousADis und r AtheASc ed leA yAthe unionAGove nme tAa d Afor Apro iding Aappoi tm ntAo A uchAaAcomm ss onAa AfixedAinte va s. AThe Acomm ssio Aalso note A hat AaAs milar Arecommen158Co flic sAinA heANhas been made by the Expert Committee of the Ministry of Panchayati Raj headed by one of its members (Shri V. Ramachandran).12.6.3.1.6 Another emerging area of conflict is the rising disparity between the autonomous Councils and the local bodies established in pursuance of the Seventy-third Amendment as the latter are being more liberally funded through the State Finance Commissions. This disparity is likely to become particularly important in Assam and Tripura where both categories of local bodies co-exist. Similarly, there is a feeling of discontent in the two older Councils of Assam over what is perceived as preferential treatment to the new autonomous Council viz the Bodoland Territorial Council, in the matter of procedures relating to release of funds as well as the basis of budget allocations etc. While Article 243 M (1) expressly exempts areas under the Sixth Schedule from operation of the Seventy-third Amendment, there is no bar on some of the arrangements introduced by it to be engrafted in that Schedule.12.6.3.1.7 Recommendationsa.To avoid complaints of less favourable treatment to ‘Scheduled Areas’ in certain respects, suitable amendment may be made in the Sixth Schedule of the Constitution to enable the Autonomous Councils to benefit from the recommendations of State Finance Commissions and the State Election Commissions provided respectively under Articles 243I and 243K of the Constitution of India.b. The Union Government, Government of Meghalaya and the Autonomous Councils in that State may review the existing pattern of relationship between the Councils and the State Government to evolve a satisfactory mechanism to resolve conflicts between the Councils and the State Government.c. Ministry of Home Affairs may, in consultation with the concerned State Governments and the Autonomous Councils, identify powers under the Sixth Schedule that Governors may exercise at their discretion without having to act on the ‘aid and advice’ of the Council of Ministers as envisaged in Article 163 (1) of the Constitution.d. Paragraph 14 of the Sixth Schedule may be suitably amended to enable the Union Government to appoint a common Commission for all autonomous districts for assessing their state of administration and making other recommendations envisaged in that paragraph. A periodicity may also be provided for the Commission.159Cap cit ABuildilict gAfrResolutionAConfe. Government of Assam should review the existing arrangements of determining budgetary allocations and release of funds to the ‘original’ Autonomous Councils with a view, as far as practicable, to bringing them at par with the arrangements for the Bodoland Territorial Council.12.6.3.2 Village Level Self-governance in the Tribal North East12.6.3.2.1 Another area of potential resentment and dissatisfaction is the virtual absence of elected representative bodies at the village level in most of the Scheduled areas. With Panchayati Raj bodies stabilising over much of the North East including Arunachal Pradesh (an area that was kept out of the Sixth Schedule, on the grounds that it was too ‘primitive’) there is bound to be a feeling of deprivation in areas left out. At the commencement of the Constitution, there was no village level elective element even in the non-Scheduled areas. Therefore, there was nothing unusual in the Sixth Schedule neglecting village self governance. The situation has, over the years, changed significantly. Within the Sixth Schedule areas some innovation like elected village councils in Tripura and the partially elected Village Executive Committees being tried in parts of Meghalaya for overseeing implementation of the National Rural Employment Guarantee Act attest to the realisation of the importance of village level representative institutions. In the non-Scheduled areas, Nagaland has formalised Village Area Development Boards as a ‘mix’ of traditional village leaders and elected representatives with a role in village governance. Mizoram and the hill areas of Manipur have no formal village level representative bodies. In some tribal districts of Assam, in fact, elected village Panchayats were in existence prior to these areas being brought under the Sixth Schedule; they have ceased to exist since then.12.6.3.2.2 An examination of the Sixth Schedule reveals that it gives ample scope for providing village self-governance. Clauses (e) and (f) of paragraph 3 (1) provide for establishment of, inter alia, Village Committees / Councils and investing them with powers and other functions relating to village administration including village policing, public health and sanitation etc. There is nothing in these clauses to suggest that these bodies cannot be elected. Given the scheme of the Schedule, establishment of elected village Councils will require suitable legislations by the Autonomous Councils concerned. To induce the Councils to adopt this ‘reform agenda’, it may be necessary to link discharge of this responsibility with release of part of the grants to the Councils. Whether elected village Councils should necessarily replace traditional village headmen is a ticklish question and has to be approached with tact, caution and patience.12.6.3.2.3 Wherever justice is administered by village level institutions, particularly in the Sixth Schedule areas, the laws applicable particularly in respect of land and boundary160conflct Ain theAN rthed.AAisA disp tes are Al cal Acusto ary Al ws AIn the Aabs nc Aof Acodifica io Aof A uch Al ws, At er age o ten Aambig ity Aa out At eir Aintegra ion Aresul in Ain Apar ies Ab ing Adis-sati fied and A his forA old Asy te AofAconlict Aresolu ionAbeco ing A ess Aeffect ve. ThisAundersc res the A eed theA codifica io Aof Acusto aryA awsAinclu ing At ose Ab se AonAl calAus ge ATheAcodifica io Aof A sA custo aryA aw Aby theAch kmaAAutono ousAcou ci AinAMiz ra AisAgener llyArecogn se ul A aAconspic ousAsucc ss AI Ais Aimpera iveA ha Ain allASt tes Aw er AbyAvi tu Aof theAS xthASche theA or Ao herAl ws,Avil ageAbo iesAadmini ter Ajust ce, the Aapplic bleA aws areA ulyAcod fie Abytr besA ith the A el Aof theAgovernmnt.A12.6.3 2.4ARecommendatio sassA a.AMeas resAsh ul AbeAt ke Ato Aen ureA hat all theAAutono ousACoun ilsAnedA suit bleAlegisla ion forAestablis in AofAvil ageAl velAbo iesA ithA ell iAdece .po ers a dAaAtranspa entAsy te AofAalloca io AofAresourb. theA AStipula ion ma AbeA ad Ain theAr lesArela in AtoArel as AofAgr nt Ato ion Autono ousACoun il Ato theAefectA hat Apas ag Aof Aappropr ateAlegisla theA forAele tedAvil ageAl velAbo ies and itsAimplementat on,A illAent tlein.Coun il AtoAadditi nalAfundiesA c AToAen ble theAAutono ousACoun il AtoAdisch rgeAt eirAresponsibili ie A satisfactor ly Ai Ais Aimpera iveA hat theArequire en Aof Af nd AbyAt eseAbo AofA isAwo ked outAnormati elyA ithArefer nc Ato the Amin mumAstand rd iseA ser ic At AbeAprov ded and Acapa it AtoAr iseAl calAresour es.A uchAexerio . c ul AbeAundert ke Aby theAS ate AFin nceACommissAofA d.ANaga and hasA ade Acommend ble Aeffrt Ato Au he A n Aa Apara igentA decentral sedAvil ageAself-govern nceAw ichAcomb nes theAelec iveAele ithAtraditi nalAp wer Acent rs. The AMini tr AofAR ralADevelop entAsh uldAform llyArecog iseA hisAarrange ent forAimplementa io AofAvar ousAdevelop ent andApov rtyAallevia ionAinitiative .e.AGovern en AofAMegha aya mayA akeAs eps forAexten io Aof theAexperi en Aof Aele tedAvil age Acommit ee Ain the A aroAH lls forAimplementa io Aof theANati nal AEmploy entAGuara tee ActAthroug out theAS ate forAimplementa io Aof allAr ralAdevelop entAprogramme.f AI Ais Aimpera iveA ha Ain allASt tesAw ereAvil ageAbo ies Aadmini terAjusiceAu derAcusto aryA aw AbyAvi tu Aof theAS xthASche ul AorAo herAl ws,A uchA aws areA ulyAcodii161for apaciconflict AbuidingResolution A12.6.3. ATrib ASpecifi ACouncil Ai AAssaAA 12.6.3.3. ASi Atribe-specifi Acouncil Astraddlin Atwelv Adistrict Ao AAssa Aexis Ai Aarea wher Athree-tie APanchayat ARa AInstitution Ahav Aalread Abee Aestablishe Aalon Awit correspondin Avillag Acouncils AA Aunusua Afeatur Ao Ath Acouncil Ai Atha Ai Aorde At cove Aa Aman Ahabitation Ao Ath A‘trib Aconcerned Aa Apossibl Athei Ajurisdictio Ano Aonl transcend Adistric Aboundarie Abu Aals A‘skips Aarea Alackin Ath Arelevan Apopulatio t Acove Apocket Ao Atha Apopulatio Ai Ath As Acalle A‘satellit Aareas’ AI Aothe Awords th Ajurisdictio Ao Asuc Acounci Ai Aofte Asprea Aove Ageographicall A‘non-contiguous A areas AThes Abodie Aar A Aculminatio Ao Aconflic Aresolutio Aexercise Aundertake Ab Ath Governmen Ao AAssa At Adea Awit Aassertio Ao Aidentit Ab Ath Atribe Aconcerned AI Afact eac Ao Ath Acouncil Ai Ath Aresul Ao A‘accords Aentere Abetwee Ath Agovernmen Aan Ath trib Aconcerne Adurin Ath A19 90 sTabl A12. A ASummar AInformatio AAo A“Trib ASpecific AAutonomou ACounci Ai AAssa(AC AAutonomou ACouncilACounciAPopulatio ATotaA(lakhs AS A(aADistrictACor AareaASatellit AareaA5.5A3.2 A(1.84ASout AKamru A AGoalparA77)Rabh –Hasan AAAASonowaA58.4A8.ADibrugarh,TinsukhiaA45 A(cA(cAKachar AAA(1.94ADhemaji AlakhimpurASibasaga A AJorhaAMisin AAA74.2A10.4ADhemaji ASonitpurA124A36A(5.30Alakhimpur,DibrugarhATinsukhia ASibsagarAJorha A AGolaghaAlalunA56.1A4.6AMorigaon ANagao A AKamruA26A15A(Tiwa AAA( 1 .63ADeor AAA48.4A16.7Alakhimpur ADhemajiA133(cA(cA(3.44ADibrugarh ATinsukhiAan ASibsagaAThengaA50.7A5.5 A(dAJorhat ASibsagar ADibrugarA(eA AeAKachar AAA AlakhimpurA Note A(a AFigure Ai A‘brackets Aindicat Ath Apopulatio Ao Ath A‘relevan Atribe Awithi Ath Aoveral AS Apopulatio Aa Ape A199 A censu A(Trib Aspecifi Afigure Aar Ano Aye Aavailabl Afo A200 Acensus) A(c AFo ASonowa AKachar Aan ADeor AAutonomou A Council Avillage Ahav Ano As Afa Abee Asegregate Ai A“Core Aan A“satelite Aareas A(d AThenga AKachar Atrib Awa Ano Aseparatel A enumerate Ai A199 Acensus A(e AVillage Aar Aye At Ab Anotifie Afo Ath AThenga AKachar AAutonomou ACouncilSourc A AReports/document Ao Ath AStat AGovernment16conflicts in the North East12.6.3.3.2 hayatsA ndA 12.6 3.3.2AThe eAc uncilsAr nA ara lelA oAthe Azil APari had AwhileA heAvillage Pan beAspecificA villa eAcou cil Aunder At eAc unc ls AvieAfo Avi tual y Athe A ameA pa e. A venAi AtheAtr Acer ainlyA a ran eme tsAandAthe Pan hayatiARaj str ctu esAareAn tAmutuallyAan agon stic,Athe AonATr ba A lackAcomplem nta ities AThi AissueAw sA xam ned byAthe OneAMembe Ac mmitteas A ollows:Affai sAinA ssam w ich Aga e A ARepo t A n A1996.AThAcommitt eA bservedAfABodoland “heABodoland Autonom us AC unci AcameAint Ae iste ce i A1993A sA AresultA edAinA1995 Autonom usAC uncil Ac , A199 .ATheA ther Athr eACo ncil AhaveAbeenA on titu the ALaungA co seq entAonA he passa eAofARbhaAHasang Autonom usAC uncil Act A1995, Act A19 5.A (Tiwa) AutonomusA ounc lAA tA1 95AandAheAMishing Autonom usAC uncil eseA odi sA A lAtheAfo rACo ncilsAh ve Ainteri Anomina ed ACounc lAmembers AE ectio s AtoAt enty-thirdA aveA etAtoA ak Apl ce.AIn Ath Am a time,A sA Are ultAofA he pas ageAofAtheASe ayat Ahav A Con titutiona AAme dment Act,A 99 ,A(copyA tAAnn xureAVI I)Aelected Panc n A otifid.A come into be ngAeve AinAt ib lAare s Ai AAssa AandAtheirAj ris icti n Ahas Abeate’sAfourATheAGaon Panc ayat AhaveAbeenA unc ioningAand collec ingA ax s,Aetc. The AScis bleAbyA le islations Ament oned Aa ov Aco fer AonAt e ACoun ils Apow rs simil rAtoAthoseA xe ndApiquan A the Panch yat Aunde AtheAAssa APan hayat Act, 19 2. AThus, Aa Aan malousA si uationAasemergedon accountAofAselfmanagemntduaity AonAth eAground. Athe AFif hA 12 6.3.3.3 AThAco mi tee was A f Ath Aview Ath t Abri ging Athe e Acou cil Aundeconce ned, Sch dule Awo ld Ar solve Ath s Adualit . A owe er Aas far Aas At e Abod lan Aareas Aare theseAh ve Aa ready b en Agive AaAspe ialAs atu Aunde Athe ASix hA c eduleAbyAaAcon titutiona AA endm etAin A2003.sAin areas 12 6.3. .4 InA iewA f A he Alack of Aspati lA ohesi n AofAth seAbo ies,Atheir pr gramm ind striesA likeAr ralAr ads,AminorA rrigati n, cont olAofAs ilA rosionA ndA illageA ndAcottagependentAonA are im ossibleAto im lemen .AInAfa t, fundi g Aof At es AbodiesAisA xclusivel Ad yAnoA ean A lloc tio sAfrom theAtrib lAs b-p anAandA heAoutlay Aava labl AfromA hi As urceA AfactAthat matchAtheAr quirement Ap oje tedAbyAth Ac uncils. AThe commissionA ppr ciat sAth compellingAsoci -po iticalAandAadm nistrat veA easonsA adAw igh dAwit AtheAStateGo ernmentAinAe tabli hingAth seAbodies.A sp ration Aof tribesAnot d minatingAaAgeo raphical yAdi crete rangemen ,A areaAco ld per apsA eAmetAo lyAthroug Aimperfec Asol tions A ik Athese.ATheAaisAconflict how ver, A ive AcauseA or co cer AasAtoAit Along-ter Avi bilityAand Aa preh nsio AthatAt su e At at A resolut on Ame sure A ould spawn Amor Aconflict . Aclea ly, A ffo ts Am st be Amad Ato Aep At ose AofA as Afar Aa Apo sibl , A he role Ato Ab Ap rform d Aby Atr be Aspe ific A odi s Adoes A ot Aov rl differen esA the Pan hayati ARaj AI sti utio s Aand Athat mecha is s Aexist to A reve t Aa d Airon Aout mposition A etw en Athe At o A treams AI Asho ld be Ak pt Ai Am nd Ath t A n Aare s Aof Am xed Aethnic Ac objec ives e istenc Aof A odies Awith A verlapping Aj risdi tion Acould exacerbat Ac nflict . AThe Abasicco ldAbestA e A chi vedAifAthe functionalArespo si ili ies ofAtheA woA trea sAareAkep163apa ityonflictAbui dingResolutionAforAC12.6.3.4 Other Issues of Local Governance12.6.3.4.1 Arunachal Pradesh is the only State outside the Sixth Schedule area to which provisions of the Seventy-third Amendment apply. Nagaland, Manipur and most of Mizoram while being outside the Schedule are also exempted from the purview of the said Amendment. Out of these three States, Nagaland has made significant progress to provide at least partly elected village level institutions and to bring community participation in the delivery of services through a highly successful ‘Communitisation Act’. Mizoram has abolished the hereditary village ‘chieftains’ and replaced them with elected Village Councils all over the State including the urban areas – the State capital Aizawl has a multiplicity of councils. Growing urbanisation requires provision of ‘integrated’ civic amenities for which the urban municipal model has proved very useful. It is understood that the State Government is contemplating a legislation to introduce a municipal body for Aizawl. This needs to be expedited.12.6.3.4.2 In Manipur, the situation in the hill areas is a cause for concern. While the valley districts are covered under the Seventy-third Amendment, hill areas are in the exempted category. Six statutory autonomous Hill District Councils consisting of elected members with a right of participation by the legislators from the district functioned till 1990 when the next elections were due. Elections since then have not been possible as there has been a demand from a significant section of tribal population for bringing these areas under the Sixth Schedule. The demand is strongly opposed by the valley areas on the ground that it would lead to dismemberment of the State. In the absence of these Councils, grassroots level services like primary education, veterinary care and local arts and crafts have been adversely affected and a forum for ventilating local problems has also been dispensed with. It appears that after hardening of attitudes on both sides, not much efforts have been made to break the stalemate. Manipur continues to be the only State where elected village councils have not so far been set up while the village authorities involved with regulation of village affairs are largely a body of traditional village principals. In the absence of representative grassroots level bodies, selection of beneficiaries and monitoring of poverty alleviation schemes and similar interventions has suffered considerably. While much greater efforts are required to build consensus on the issue of District Councils in the State, urgent action is needed to bring in suitable legislation to introduce elected village self-governance in the hill areas of the State.12.6.3.4.3 Recommendationsa. Government of Assam may apportion functions between the tribe specific Councils/village Councils and the Panchayati Raj Institutions in a manner164onflctsAi AtheFollowi gAthat ssi nedAto t atAscheme Ainvolving indivi ualAtribal Ab nefiia iesAmayA eA reA eftAtoA theA‘Tr be ASpecifiACoun ils’ whileAareaA evelopm ntA chem sAth Alatt r.ablis me tA b.AStateA ove nmentsAm y initia eA Asystem of meeti gAa AleastAtheAes dAbui dAinA c stsAofAt eACo ncilsAf omAsour es A utside the trib lAs bApla AaComissi n. theseAr qu remen s Ain AtheirA ro ect onsA oAthe An xt AFinanceAivesA hi c. hA AStateA ove nmen sAmay ta eAstepsA oAidentify innovativeA nitia ctingAareaA couldAb Ae tru tedAt AtheATricACouncbe ASpecils f Awitho tAaf evelopmentA oncerns. ctAandAs b- .ASuitable gui el nesAmayA eAp eparedAfor A re arationA fAD stribeASpeciri tAp ansAinAt eArel vant Aar asAth oughAj in AeffrtsAo AtheATricA Dis ti tions A C unc lsAandAthe Pan hayatiARajAInngAabout e. A A AAWhile con inuousAa dAvigoro sAm asures ar Aneed dAtoA r tA evi alAA consen usAbetw enAvario sA ections of society in AMa ipurAab f AtheAHil ADistrict ACoun ils As epsAmayA eAurg nt y Atak nA oAbringA nAsuitable A eg slationAt Aintrod ceAelec edAvi lageAl ve Abo iesA nAthe hi lAar asAofAh atASt te.A12.6 4 Acapaci y A uildingA n ARegionalAIn stitut i ns2.6.4 1ATheANo thAEaste rnACounci th AEast rnA 12 6.4. .1 AThe Amost signifiant A‘s pra AState’ A ns itu ion Aof th Are ion Ai Athe ANou nc i l Act A co nci A( Ec Aset A p Ain A1972 Afo lowing Ath Ae act ent Ao Athe ANo th AEast rn AcSta es Aan A 1971. AI s Ac eation Awas An ce sit ted Aby Athe Areo ga isa ion Aof the A egi n Ainto fiver-State/uTA two Aunion A err to ies Aand A n A esp nse A o Athe tw n Aneeds A f Aeffec ing Abetter AintintegratedA co rdi ation, Afor A ai tenance A f Aintern l As cur ty Aand Afor Af cilitati g Aplanned,dAadequateA ev lop entAo Athe A orthA ast AWhile th AaspectA fAsecurityAc ordinati nAreceivssamA iflsA co si era ion by the NEcAinA ts Aini i lAp ases A–Ath AInspec or Gen ral Ao AtheAmedAbyAt eA acted A s Aex-offic oASecur t AAdv ser A– Athis Ares ons bilityAwasAs bsequen ly res and AfinanceA inis ry Aof A ome Affa rs A nd the NEc Ais Ano Ap imaril Aa Aagency to A repare evelopm nt schemes AofA nter-State A mp rtan e.AI A lsoAru s A Anumber AofA ductionalAa dAtraining Ai stitutio sA ate ingAtoAthe Ar qu rem ntsAofAh eAregion.12. .4.1.2ANE Ainitiall Ac nsi tedAof A heA‘commo AG ver or’Ao AtheANo thAEaser ASt tesAasAi sAch irm nAwithAthe lieutenan AG ver ors ofA heA TsA ndAal AtheAchie AMnistersA sAmem ers AAfterAtheA pp intmentA f Aseparat AGovern rsA 1981), At e A ractic AofeitherAt eA overn r A fAA samAorAtheA enior-mo tAGove no Aac ingA sAi sAheadAwa Afollowed165166Ca aci yAbuldflict ngAforResolutiAConan amendment in the NEC Act in 2002, Sikkim has been added as a member and, due to its non-contiguity with other the member-States, ‘stand alone’ schemes can be sanctioned for this State. Through this amendment provision was also made for nomination of the Chairperson of the NEC by the President and for positioning some full-time members. In pursuance of that provision and on the recommendations of an expert Committee (2003), it was decided that normally, the Union Minister for Development of the North Eastern Region shall preside over the NEC. Two full-time members have also been inducted to the Council.12.6.4.1.3 In the absence of a systematic overall organisational appraisal of the NEC so far, it is difficult to be categorical about its successes and failures. It is, however, a fact that like many other high level bodies, transaction of purposive business by the NEC has been hampered, as its proceedings tend to be dominated by rhetoric with limited time devoted to deliberations. Similarly, increasing State plan outlays, coupled with ever increasing central subventions through statutory transfers, centrally sponsored schemes and ad hoc allocations have resulted in a ‘shift of attention’ of the member-States from this regional institution. It must however be acknowledged that NEC sponsored schemes have contributed significantly to improve inter-State road and air connectivity, substantially augment power distribution and harmonious regional cooperation. It is agreed by all that the inter-State institutions of medical, dental, technical and paramedical education established and maintained by it in different parts of the region have not only added to the development of human resources but have also enhanced better understanding between different areas within the region.12.6.4.1.4 To review the role of the NEC in conflict reduction, reference may first be made to the mandate given to it originally under Section 4 of its Act, and the present position. Initially, the Council had a three-fold mandate of (a) considering issues in which two or more States of the region had an interest and to advise the Central Government in the matter; (b) preparation of regional plans and (c) security coordination in the region. Following the amendments, its present charter is:(a) To function as a regional planning body;(b) To finance and implement projects of benefit to two or more States (except Sikkim);(c) To review the pace of development in the region particularly in the context of the regional development plans; and(d) To review measures taken by the States to maintain security and public order in the region.12.6.4.1.5 For the purposes of this Report, the role of the NEC in conflict resolution may be studied in three contexts – NEC as an inter-State coordinating body; NEC as a RegionalonflctsAi AthePlanning spects areA Pl nni g Ab dy Aa d A tsArole A nAensuringA ai tenanc AofAPu lic A rder.AThsebriefly co sid redAinAthe succeedingA a ragrap h s .revi w A heA 12. .4 1.6 One AofA heAprimar Af nct onsAof A he co nci Ai A oAact as aAforu Atoncil Awhi hA pace AofA ev lop entAin A he region. AThAa end entAinA he man ateAof A heAcoAto advis A w thdre At eApower toAdisc ss ‘issue AofAcomm nA nte es AtoA woAor A ore St tesAan nsi ility’A the Aunion Governme tAt ereon’A as Aa readyAbe nAr fe redAto.AThe ‘withdrawnAresp gani a t i on wa Ai ent calAtoA heAma da eAg ven At Athe Azon lAcou cil Aunder the AStatesAReo Act, A 956 AWhile Athe co mis ionAisAnot Ar com ending AtheAre uv nua ionAo AtheAzon lA in Am ttersA ounci sAin Aot er A egi ns AforA heAreason Am ntioned in A ha te A14,A tAis cl arAthat nAp licies li e A ovement Ao Asupplies Aincluding A ood grainsAand A assen ers,Aloc lAtaxati and Abord r Adi p tes Aetc,Aa Ac ord nating A nd Aprob em Aso vi g Afor mAisAs illAhigh yAr lev ntAfo AtheANo th AEast rn Reg on. AItAis, therefore, impe ati e Athat At e Aoriginal pro isionsAforA nter-StateAc ordi ati nAwith itsAd rect nexus Aw thAconflict re olution AifAregion lAArestored.eAsomewha A 12 6.4.1.7 AThe am ndm nts toA he NEc AA tA fA200 ,Aas Anot dAear ier,Awhi statesAitsA na rowin At eAs opeAof At e Aadvisory Aj ri dic ionAof A he Ac uncil Amore explic tly onsibili yA res on ibilit Ato AreviewA ai tenanceA fAs curity andApu licAorde .AEa lier, AthisAres heANEc, AitA de olvedAonly in irec ly as A art Aof Athe Ac ord nating Aa dAad is ry A ole A fA tr duct onA n verth lessAfou dAadequat Ar flec ionAin th Aag ndaAof At eAcounci .AExplicitAi th ADO ER,A of AthisAres onsibil tyA hrou hAtheA2002 amendme t,Acreat sAp obl ms Afor oleAin th A asAtheA‘adm nistrativ AMi ist y’ Af r Athe NEc ADON RAhasAbe nA ssig ed noA inis ry AofA sphereA f A ecu ityAin A he Ar gion. ANEc, the ef re,AhasA oAdi ectl Ade l AwithAt eArkAout Atheom AAffairsAin A isch rging Athis Aresp ns bility AThe Al rg r Ai su AisA owA oAw lAsecuri yA mo alitiesAof A isch rging Athis Aresp ns bi ity.A tAis cl ar A hat Ai At e AambitAo A‘internaria Aw ll r vi ws’Aha AtoA x endAev n AaAli tleAbey ndAholdin Ame tin s, AtheANEcA ecre meaningf lA need toAbeAmo e Aactive y A nvolvedA nAsecurity Ac ordinat on issues.ATo facilitate ntsAi AtheA r views,A he AcouncilA ecre ariatAm stAinv lveA tse fAwith At eAemergingAd ve opm curity andA fiel . A inis ry AofAfairs (MHA) alomeAAoAne d AtoA ake AaAv ew Awhethe A‘sAbe had Ab p A blicAord rArev ews Aunde At eAa gis of AtferAbee ANEc Aoefits Aw ic Aca nower ent ofA th AMHA’sAo n Ar view .AMHA Am st Afurth rAconsi er Awhet er AspecialA mp Abu den AonA theAN cA ntai ed Aby Athis Ares onsi ilityA il Aresult Ai AincreasedAadm nistra iv he region.A t e Aagenci s Anormal y A nvolvedAin mon tor ngA heAla AandAord r A cen rioAinA edA ssues,A To effectively co rdin te Aor A ve AassistAin Ade ib rationsA n Aintern lAsecur tyArela reparatoryA he AcouncilA ecret riat wouldAne dAsuitable Aau me tation AIn Ashor , AadequateA ty re ie sA a ran ements Aar An ces aryAifA heArene ed man ate of A heANEcAf r Aintern lAsecurisAtoAbeAm aningfullyAd i s c ha r g e d 12.6 4.1.8AWith Aint a-regional A isp rities and Auneven Ad st ibu ion Aof thAfruits AofA evelopme t AbecomingAi creasin ly Aevi ent withi AtheA ort AEas , A he AroleA167168Ca aci yAbuldflict ngAforResolutiAConplanning in anticipating and moderating grievances and ensuring sustainable growth has become more relevant. Factors like a common resource base, comparable agro-climatic systems and similar environment, all make the North East a logical unit of regional planning. It is beyond the scope of this Report to dilate on the conflict prevention benefits of planned development except for noting that this nexus is often neglected to the detriment of deriving optimal benefits from this process. Inter-State projects, particularly in communication and the many regional institutions imparting a variety of professional education, and services like tertiary health care have definitely promoted regional amity and cohesion. It is open to serious doubt, however, whether despite positive contributions of the organisation to the development of a very disadvantaged region of the country, it has been able to live up to its statutory mandate of being a ‘regional planning body’. With very similar resource bases and opportunities, the States of the region are increasingly in competition among themselves – a competition with a potential to escalate local conflicts, but which could be canalised on productive lines. Lastly, it needs to be noted that Section 4 of the NEC Act treats the responsibility of regional planning as distinct from holding reviews of development and financing schemes.12.6.4.1.9 The moot point is whether an adequate policy framework and resources have been provided to the NEC to enable it to prepare regional plans and to guide the member- States towards integrated regional development. A related issue is that of evolving suitable methodologies by the Council to carry out regional planning. Likewise, it needs to be addressed whether the different Ministries of the Union Government with a role in the development of the region have effectively involved NEC in their development initiatives. Devising and improving planning methodologies do not form part of terms of reference of this Commission. As, governance and development are so intertwined in the North East, a possible outline of a scheme to initiate the practice of regional planning may be indicated:(a) Regional Plans cannot supplant State plans – such an exercise will be counterproductive. Regional plans must, therefore, be primarily directed (at least to begin with) at reducing disparities and avoiding infructuous inter-State competition. Mechanisms of implementing such plans and the inter se responsibilities of the States, the NEC and the Union Government (including the Planning Commission) will need to be worked out in detail.(b) NEC can fulfil its role as a regional planner, in the sense outlined above, if the procedures and methods of formulation of plans are so amended by the Planning Commission that NEC becomes an active participant in all aspects of planning in the region and in the member-States.(c) Similarly, some of the ‘heads of development’ could be transferred out of the State plans and dealt with as part of the regional plan.c nfli ts Ain theinv lvin (d A AThe Aunion A over ment wi l Ane d At Awor Aou Aways an Ameans Aof Athat At eA NE Awith At e As hemes Aand A ro rammes A f Avar ous Anodal A in stri s As n Aspecifc c ntent Aan Ad live y Aof Asuch A rogrammes A dequat ly A eflect A he Aregi icocerns.long Ater AAation (e) AandA AInstitut onalisin Aregiona Apla ningAw llAentailAco siderableAu grapo n mentA diveicationAof expertsiseA ith n Athe ANEc As cretariat includingAayAA viser. ofA ASecurits’Aof A heA (f ARegiona Ap anningAisApa ticularl Ar levant to Ae sur Athat AtheA‘ tr ngt mfor ableA egion Aar Aproperly util sed.AThese strengt sAi cludeAtheA elativelyAc Aof AssamA land Aav ila ili yAan AtheAvastAhyd oelectric potentialA(pa ti ularl egaAWatts and Arunacha APra esh AwithAits po enti lAof more A hanA 0000A ARegiona A pr misi gAt Amake A he A egion A heA‘powe As ppl erAto Ath Anation’ rsAin AtheA p anningA sAequall Are evantAfo Arem ving A omeAmajor A nhibiti gA act osionAandA d ve opm ntAof A he Ar gionAlike A re ention of Aflood , A ontr lAof Aso lAe Apl nn ngA l rge-scale watershed Ade elop en s Aetc. In Ashor ,AcertainA su jects’ Ao desi a leA c nAbeAmore gainf ll At ken upAatAtheAs pr -StateAo Aregio al le el. AItAis ompas ingA that a A10-yearAp rspe ti e AplanAi Apr par d AforA he Aent reAregionAen overna ceA reas Alike Ad ve opmen Aof Ahuman res urcesAandAinfra t ucture.AAA siv Ap anA ref rm Aage daAs ould also fo mApa t Aof A his plan.AThisAcom rehemayAb Ar vie edAby theAPrim AMinister regu arl Awith theAchiefAM inister .12.6. 4. 2.4.2.1 2. .4.2.1AAn importantAorga isati na Ais ue AinAt e A ont xt Aof the A or hAE stAisAtheA rnARegi nAormation,A ni i lly,Aof Aa A epa tment Afor AD ve opm nt Aof the ANor hAEastd tion toA(DON R)A ithin Ath AM nist yAof AH me Affai sAi A20 1 Aand AitsA ubsequentAu grrnmen AofA aAf ll Afledge AM nistr Ain A200 .AD spiteAthe fo mati n Aof Athis Min stry,AtheA ov he regio India A A( ll cationAof busin ss ARu esAd AnotAgi eAover llA‘nodalArespo sib lit ’AforA yAdec ar A oADO ER A–Athis cont nue Awith Ath AM nist yAof AHo e A ffairs ATheA ulesAon rat onAo A D NER to Abe theAnoda AMi ist y Afo Ath ANEc; itsAot erAd tie Aare,A(i)Aadmi is rigati n,A the A‘No Alapsab eAce tr lAPoolAofA esources A(Nl PR), A(ii) Ad ve opmentAofAi dwaysAand ower AandA oadAwor sAfin ncedAfr mAcent al Afu ds,A(iii) Ad ve opmentAo Aro anc ionedA wa erw ysAin A he A egio AandA(iv)Aimpl me tationA f Aspecia Aeconomi ApackagesA issues AofA forA ndividu l A tates.ATheA oncurrent ex stenc Aof DON R Aa d ANEc has Apo ed esAofA heA co rdi ation Aand Ad pl cation A f A ffort .AItAals Ade rives the ANor h AEast rn Sta riesA aveA exper Ag idanc AofAnodalA inis ries A ike Power and AWater Re ource AasAtheseA inis iti sAareA o ten take Athe view Ath tA nso ar Aas the A or hAEastAis A oncer ed, AtheirArespon ibi vel pment now Asub tanti lly A ak n Aover by DO ER. A tAisA lsoA lea Athat Ath Ad vision AofAd and Aother Arespon ibiliti sAb twe nAt e AMHA an ADO ER AisAnot co duci eAto169170Capacit ABuildin Afo AConflic AResolutiogrowth and well being of the region – the chronic conflict scenario in the region requires that its territorial responsibility must continue to be with the MHA.12.6.4.2.2 During the visits of the Commission to the North East in January and July, 2007, it was strongly contended by a cross-section of public opinion and most of the State Governments that the existence of DONER, apart from compromising the efficacy of the NEC, has also no added advantage for the development of the region. There was consensus that meaningful monitoring of its development is more effectively achieved from Shillong (the NEC headquarters) than by DONER operating from Delhi. At the same time, it was also argued that the limited technical expertise available locally makes it particularly important that the nodal Ministries in Government of India renew their interest in development of its water and power resources and augmentation of infrastructure – these Ministries appear to have ‘distanced’ themselves from interaction with the North East States after formation of DONER. The responsibilities cast on DONER with regard to various sectors are difficult to discharge unless the Ministry acquires in-house expertise to enable it to systematically monitor the relevant projects and schemes. Similarly, while the NLCPR offers an innovative mechanism to enable development in a situation of limited absorptive capacity, there is no reason to believe that its operation is best carried out by an exclusive agency; on the contrary, it would be both advisable and expedient if the implementation of initiatives financed from this ‘pool’ are steered by the subject matter Ministries.12.6.4.2.3 After carefully taking into account all relevant factors, the Commission is of the view that continuance of a ‘stand alone’ Ministry with partial responsibility for the region is not in its long term interests. The Commission, therefore, recommends abolition of DONER. The Commission is further of the view that with the measures being recommended in this Report for making the NEC a more effective agency for the over-all growth of the North East through integrated regional planning and better inter-State coordination, some of the responsibilities of DONER like sanctions from the NLCPR and monitoring of special economic packages could be carried out by the NEC (along with the Ministries concerned with the initiatives being financed from the pool).12.6.4.2.4 The composition of the North Eastern Council as per the North Eastern Concil (NEC) Act includes the Governors and Chief Minister of States. After the establishment of DONER, the President under section 3(3) of the NEC Act has nominated the Union Minister in charge of DONER to be the Chairman of the North Eastern Council. In case DONER is abolished, a decision will have to be taken regarding nomination of a Chairman to this high-powered Board. Keeping in view the composition of the NEC, it is suggested that a senior Union Minister or an eminent person familiar with the region may be nominated as a Member of Council, with the rank of a Union Cabinet Minister and consequently as Chairman of the NEC.Norflsh East12.6.4.3om end tionhe ANreAtheAo iginalA a.AAC A ct,A1971 may Abe A ui ablyAam nde AtoArestscussA ssuesAof ‘co flictAresol tionAprov sio ’Arequi in Athe ACou cil Ato ‘d iseAtheACe tralA mu ual in eres AtoAtw Ao Amo eAstat sAi At eAregi nAa dAtoAad Governnt thereo ’.ischargeAofAitsA c AATo Aen bl Athe AC uncilAtoAas is Aef ectivelyA n A heA mber-States fo espA nsibiliti sAf rAreview ngAth Am asu esAtakenAbyAt eAm eAAff irs shouldA mainten nc Aof securit Ain AtheA eg on,A inistr AofAHo tyAcoo di ationA eepAtheACou cilASecre ariat A egu arlyAwith nAitsA‘secur ly strengthen dA l op’.ATheACou cilAS cret riat wo ld alsoAnee AtoAbeAsuitaty cofecrdinatio . to Ae ivelyAas ist AinAsecurifo Apreparati nA d. AThe APla ningA om iss onAn e sAto AlayA own a Aframework nAassor me tAo A ofAint grated regi nal Aplans, wit Apr or ti sAandAnotA sA Aw thAaAbearingA sch meheAregiAbyAtheA EC.AnalAp an shoul Afoc s onAareaialAofAa oid ngA on intra-regio al,Ainter- tateA rior tie AwhichAha eA heApotennaintegrat on. conflic sAand Apr motingAregioAtheA ECAi AtheA e. AAPla ningAC mmissi nAs ould Aensure th Aas oci ti nAoei Ag idelines. State A lanAform la ionAexer iseAbyAs itabl AamendingAtapsa leAThCentralA Af. Ar sponsibilit AofAs ncti nin Afun sAfromAt eA‘NonAeANorth Easter Po A lAofARe ources A( LCPR)Asho ld beA ntrus edAtoAt orAscruti isi gA Co ncilA( EC). NEC should Awor Aou AmechanismsA inAc ord nationA propo als A orA unding fro Athe A pool’ Aa dA heirAfundingwit AtheAMinistrsA on erned.Afor At e g.AAentireA It Ai A esirabl Athat AaA10- earA er pectiveA lan is A repare nAresourcesAand reg onAen ompa singAareasA ik Adeve opmentAof hum rmApa t Ao AthisA i frastructu e.AA Ag vernan eArefo mAag ndaA houl Aa soAfAPrimeAMi iste A plan.AThsAco prehe si e A lanAneed At Abe revie ed AbyAthpe dy follow-u . re ularl AwithAthe Chi fAMini tersAforAsio A(DONER)A ayA h. TheAMinistry fo ADeve opmentA fANort AEaster ARe AofAtheAr gio ,A eAa olished AandAth Are pon ibility Afor th Ade elopmen heAn n-laps bl A includingAth Ainfrast uct reAsectors, an Aut lisation AofA s,Awit At eAM AA fund Ash ul Abe restore AtoAth AsubjectAma terA ini tri nodal act ngAaMinistry.Athe171Capacit Abu lding Af r ACnflict AResolution12.6.5 Other Regional Institutions12.6.5.1 There are more than ten institutions of inter-State/regional technical , medical and vocational education run by the NEC and a North Eastern Central Agriculture University with campuses in all States (including Sikkim) except Assam which have, over the years, contributed significantly in upgrading human resources of the region and enhanced inter-State understanding and cooperation. Such institutions have served an important purpose, though they have little direct role in conflict resolution. There are, also regional level public sector units with marketing/promotional roles which were set up to facilitate peace and orderliness through economic development. Some of the important organisations are dealt with below:NEEPCO or the North Eastern Regional Electrical Projects Corporation is charged with the responsibility of developing the electricity generation potential of the region not only to meet the requirements of the North East but also to sell electricity outside the region – a feasible goal given its very significant hydro-power potential. While the organisation has created an installed capacity of around 150 MW, it has not been able to play the role that the region needs to ensure rapid development of the power sector. Limited generation of power has not only hampered economic growth but also deprived the States of a potentially remunerative revenue source. The Ministry of Power needs to explore the feasibility of establishing a competent Energy Authority for the region to more effectively, speedily and optimally develop its potential and for preparation of a road map for the region. Under the Authority, linked to NEC, NEEPCO itself would have to be strengthened for improving its operational capacity. This proposed Authority should be entrusted with the task of planning and implementing a regional grid linked to the national grid.NERAMAC or the North Eastern Regional Agricultural Marketing Corporation is a public sector company to promote marketing of agricultural and horticulture produce of the region including the processing of such produce. The Corporation has mainly tried to fulfil its mandate through running processing plants with very limited success. It is imperative that it concentrates on developing markets for the produce of the North East outside the region and facilitate entrepreneurs in setting up processing plants. The Corporation must also work towards reducing inter-State competition within the region by working out a mechanism of developing ‘niche products’ for every State in the region.NEHHDC or the North Eastern Handloom and Handicrafts Development Corporation is meant to promote the age-old handloom and handicrafts sector of the region which are172onflctsAi Athepart of its Aa feelingA art Aof A ts A ulture an Aethos. The decl ne Aof A his sector Ah s Aarguably A on r buted At he Adesi edof A is ffec ion Ain the reg on Abut Athe ac ivitie Aof A EH Dc A ave so A ar A ot Ahad A ake Aa vie A outcome of Atur ing A round Athi Adeclin ng sector. Ahe A inistry A f AT xtil s may Arevival orA about Ath Av abil ty Aof Athis Ao gan sation Aan Arecomme d Asuitab e Am asu es Afor A tswindi g A p.N DFIAo AtheANo thAEasternA eve opmentA nd AFinance A or o ationAi AaAcomp nyAjoint yA houses AandA r moted A y A Anumber A f Afinancial Ai st tutions to Apro id Afinance Ato indust ial eco omy Aof en re reneurs At Aestabli h Ac ncerns Afor A ev lopment of Avari us sec ors Aof A heth AregionAon commer ia Alines. AThe Ao gan sationAhas Ac nsiderable unrealisedpot ntia .AanAfor AtheEc Amay,Ain A ssoc ati n AwithAthe prom te s AdrawAup aAconc eteA cti nAp ac ivit esAofAthisAorhe Aregio .Aanisati n.A astly,Athe commi sion wo ldAl keAtoAdra Aa tent on toA omeAofAt eAreg onalAlevelAistitu ions regio .ATheA whic AneedAm chAgreate Aa tent onAso thatAth irA enefits ma Aac rueAto theAent retellectualA No th AE stern AHill univer ity (NE u) wa Aset up A nA1975Afo Anu turing AtheAi ev lop entAof theAent re Are ion. Whi eANEHu Aha Adev lopedAsome innovati eAacademicA additionalA rogrammes,Aes ab ishment Aof Au iv rsit es in A achA f Athe AH llA tat s,Aand Atwo Afor NE u A u iv rsiti s Ai AAssamAh s A esultedA nAd luting Ath A‘academicA eade shi ’ ArolAissuesAinTher Ais aAcaseAfor deve opingAthisA ns i utionA sAa centreAfor exc llenceAf rAregi na eA order .A economics Apolitic , Acultu e,A ociety AandA nviro ment Awhic AtranscendA nter-Stanis rat onA It coul A lso Ap ay Aa ma o AroleAas aAreso rce cent eAforAgood gov rnance AandAadmA fAHealt for A A heAregion. Sim larly AtheANo thAEas ernAIn iraAGand iARegiona AI stitut onedAafterA & AMedic lASciences A NEIGRIHMS AShil ong, apart from AbeingAc mmiss aryA e lth c nside abl Ade ay A as An tAye Ab enAabl At Aem rgeAas At e Areg ona A‘hub’Af rAtert ections of careA–A heAprimar Aobje tiv Aw ich ledAtoAit A nception A–Ac nsequ ntlyAlar eA soci ty Ain A his regionAar Avirtu llyAde ie Aacces Ato A‘superA pecialist’treatmen .A12.6.5.2ARecom end tioUAa centreA a.ANECA a AprepareAa Aco prehen ive scheme for A a ingANE toAaddr ssA f rAadv nc d AstudyAi AScien es,ASoci lAS iencesAand Hu anities oAactively div rseAis ue Aco monAto th A egionA sAa who e.AN CAmayAal coordinateAa rang men sAwit AtheAStateA ov rnme tsAtoAmak A EIGRIH SAa centreAf r Atert aryA ealth AcareAp rti ula lyA orAthe lowAin om Agr upsAinA173Capa ity buildinl ct AforResolutionAConfi12.6.6 National Register of Indian Citizens12.6.6.1 The Group of Ministers on Reforming the National Security System recommended that as illegal migration had assumed serious proportions, registration of citizens and non-citizens should be made mandatory. This should be introduced initially in the border districts or may be in a 20 km border belt and extended to the hinterland progressively. This recommendation was accepted by the Government and immediate steps were taken to launch a pilot project. The pilot project would help to understand and develop the processes for collection and management database of citizens is being implemented in several States. The Pilot Project on MNIC has followed the census approach for collection of particulars of each individual in the pilot areas. Along with the particulars of individuals, photographs and finger biometrics are also being collected of all those who are 18 years of age and above. This would ultimately lead to a credible individual identification system and speed up transactions between the individual and the service provider with greater efficiency. The Multi Purpose National Indentity Card (MNIC) will also function as a necessary instrument for e-governance. It will provide a user-friendly interface between the citizen and the government and will function as a deterrent for future illegal immigration. The Citizenship Act, 1955, has been amended and now a specific section on registration of citizens & issuing cards has been included:Section 14A(1) The Central Government may compulsorily register every citizen of India and issue national identity card to him.(2) The Central Government may maintain a National Register of Indian Citizens and for that purpose establish a National Registration Authority.(3) On and from the date of commencement of the Citizenship (Amendment) Act, 2003, the Registrar General, India, appointed under sub-section (1) of section 3 of the Registration of Births and Deaths Act, 1969 shall act as the National Registration Authority and shall function as the Registrar General of Citizen Registration.In addition the Citizenship (Registration of Citizens and Issue of National Identity Cards) Rules, 2003 has been notified in the Government of India Gazette Vide GSR No. 937(E) dated:- 10th December, 2003.12.6.6.2 Implementing the MNIC project is a challenging task. Government will first have to carry out a census-type survey to create a National Population Register, based on which the cards will be issued. With large illiteracy rates and people in several areas having little documentary proof, the implementing agencies would have to address174conflctsstrength Ao Ath Athis issue with the AMN c A rojec A this A ssue A it Autmost Aca e. The com issi nAis of A he Av ewAthathereA re A evera A s ou d be Ataken upAon A Ap iority Abas s. AThAcomm ssio Aalso not s AthatArds. AItAw ul AbeA union Aand State AGo ernme t Aage cies Awh ch Aissue simila Ai entit Ac the MNIc A ecomesA nec ssary Ato Aac ieve Aco ver ence amongst al Asuc Asy tems so Athat Ato Abe Aused Aa AaA t eAb sic Adocument A or i entific tio Aof a Ape son Aan Ac n A end A ts lmulti-p rposeindivid alAcard.12.6.6.3 Re omme dationsis ASinceA hereA a ATheAM IC pr jectA ee s A o beAtaken upAon A Aprio ityAb reAseveral Uni nAGov rnment Aand StateAGo ernme tAage ciesAwh chAissue simila Ai entit Ac rds,AitAw ul AbeAnec ssaryAtoAac ieveAco ver ence eAb sicAdocumentA amongst al Asuc Asy tems soAthat the MNIC A ecomesAt Aa Amulti-p rpose or i entific tio AofAa person an Al ndsA ts l AtoAbeAused Aa individu lAcard AP iorit As ouldA e Agive AtoAareasAhav ngAinter ati nalAborders,Af rA mple entationof Ath s AProjec .12.6.7A a acityAbuildin A–AMisc ellane o s AIs uestionAan ArelaheredA 2 6.7.1 A AareAaA umberAof Am ttersAconce ning Adevelopme tAa ministrfic s. Attent onA as ec sAwhichA ouldAifAp ope lyAaddre sedAandA esolvel Aminimise futureAcolyAinvitedAmayA eA rietoA heAf llo ing:(a) WithAt eAprimaryA ect r Aacc unt ng Af r A 5-6 Aper Ac ntA fAt eAincomeA nd Athe sec ndary sec orAf rA 5-6 AperAce tA fA heA ncome,Ait isAt eAcountr ’sAmos AbackwardAre ionAind str al yAlargel Adue to AwoefullyAwea Ai frastruct re AIn pursu nceAofAthe PrimeAMinist r’ Aann uncementAof ‘Ne AIn tiati esAforA lev lAcommiss onA he ANort AE stern ARe io ’ Aat A u ahat AinA1 96,Aa AHigh la,Athen Member,A wa Aap ointedAunder th Acha rman hipAofA hri A .P.AShu heANor hAE sternA Pl nn ngAcommi sion to identifyAgapsA n A nfr struc ure AinA nningAcommi si nA reg on AandAr com endAme sures fo Afilling A hem. ATheAPl e i entified AgapsA reco me ded Aan Aamou tAofA s.1 03,014 Ac ore forAbridg ngAtmmen ati nAalon A – aAre ommenda ionAthatAremai s Au implemented.AThsArecAI itiat vesA ayA w th A heAr portA f A he A ask Fo ceAof Athe AN c AonADevelo men At eAreq ire entA beAt ken intoAa coun Aan Ashou dAf rm Athe Aba is A or Aassessin nAt eA orthAEa t. of Af nds forAbridgingAth Ainf as ruc uralA apsAiam workAne dsA (b) oA AToApromoteAi d strialisation AaAcom rehensive polic Af erredAinvest e tA b Ae olved an AputAin pla eAto Ap om t AtheAregi n Aas AaApre des ination.A Amajor Aa are essAcampa gn A orAmarket ng the175cap cit Abuildil gAforAconfregion to potential investors as an attractive destination should be launched. For improving the limited entrepreneurial base, a major capacity building exercise for local entrepreneurs should be taken up. As a necessary first step, governments in the region should allow free movement and employment of professional/skilled workers from within the region and outside to provide managerial and technological leadership. The North East Industrial Policy, 1997 should be extended for 10 years after suitable modification. Tourism should be identified as a thrust area for industrial development of the region. Skills upgradation and skill creation will have to be given top priority through promotion of vocational education, setting up of ITIs and polytechnics, and hotel management institutes. Export of services such as medical and health care workers, and education (English teachers in particular) could play an important role.(c) There is need to have a systematic approach to road construction in the region. A region specific Transport Development Fund should be set up to which funds from all windows should flow and the fund could be utilised to finance construction of all-important corridors. The study commissioned by the North Eastern council for preparing a Perspective Transport Plan for Development of North Eastern Region has recommended certain road corridors for providing connectivity to neighbouring countries. The recommended corridors need to be examined critically, priorities taken into account and preparation of feasibility reports undertaken. Road construction and management practices in the region are different from those followed in other parts of the country due to its unique climate, topography, geology and administration. A separate unit for road research, under the central Road Research Institute, should be established in the region in order to provide technological support to road and bridge construction activities.(d) The rate of unemployment in the region is almost double the all-India figure. In the urban sector, male youth unemployment is phenomenally high at over 77 per cent compared to the national average of nearly 40 per cent.53 This calls for the preparation of an action plan for the region for generating employment opportunities which should cover industries and allied sectors. Special emphasis needs to be given to mass capacity building in order to enable the educated unemployed youth to find jobs in the private sector particularly in the service industry sector. For the purpose, special programmes need to be evolved by associating various reputed capacity building institutions throughout the country in the training of the youth of the region to enable them to findic AR solution5 AN. Sr vastav andAA.ADubey, un emplo mentAin NorthA as ernARe io AofAIndi:ateA n campanion.AInter-St176confli ts Aild Abe Ama e A orejobs in the AbeApro ided At A job AinAthe private sector.ASpeci lAo port ni ie AmayAhav At s. ITIsAneedAt t A aine Anu sesA oAmeetAtheAhu eAinte nat onalAde andA orAn rs eepingAwith th A be modernise ,Aa dAu graded, and Anew co rses Aad pted inA ntA f A he At me . re uirem eal,Au derta ingA (e)ATheAne d Ato Aad qua ely AexploitAt e Ahydroele tricApotentAdevelo ment AofAloodAargeAsc leAontrolAand As il Aconse vat onAmeasures anfAs re g heningA n tur l Are ources has Abeen A ri flyA iscusse Ai AtheAcontextA ureAmuch A ee edA N c AasAaAr giona Apla ning Abod .AThe e Ameas resA illAen Aincreasin AtheA res urcesAtoAen bleAsustain bl Ade elopme tAofA heAregion A hil AexploitingAt eA abs rp ive capac tyAof Athe A ocalAecon mies.ARo al ies Areceiv dAb sibleAonce A uchA hydroel ctr cAp tential Aan Athe Aad itio al incomesA illA eApo ewAnotAo lyAforA init ativ sAsucceed.AThes Acon id ra ions ne dAto be A eptA nAv stmentAp ojects r gional Ap ann ngAp rpose AbutAalso Aw ile Af rmulatingA ajorAinv rastructure andA (c ntralAsectorAor interna ion llyAfunded) fo AdevelopmentAo AinAin the Ar gion.A appr priate Aeco om cAa tivitienglyAin egrated(f) AWhi eAgeo-p lit cal factorsAand th Ai peratives Aof anAincreas econ myAdi ta e thatAIn ia Aas A Acount y Ashou dAen ageAitse fAmo eAactivel Aw thA nsAof Ag ographyA ount ie AonAit Aeast Ain tra e,Acomm rceAand fin nce,Areas AtheA orth EastA pres ntApartic larlyApromisi gA ppo tuniti s A oAt eASta esAi gionalAecono icA hich abut areas th t Ahav Abe unAtoA nj yAthe Afr its AofAr Ais, Athere ore,A d velo ment. Alo g Aterm ec nom c Agrow h Ao AtheAregio iesAt Amak AtheA inti atel AconnectedAwit Ai pleme tationAofA ou dAst ate on Aon A he Aeas A ‘l okAeast policy’ Ah pp n.A ynergies A f A heAecon mi sAo Anat At e ANort AEastA of this r gionAcan Ah ve AaA at lys ngAeffec Ao Ath Aecon myAo oAd alAwithAallA ifApro erA re arati nsA re Ain place Aa d A ocalAso ie yAis read edA curity,Aof Asu hA h Aimplicat onsA–Ae onomic,Aso ial,Apol tic l, Acultur l A ndAs ndaAinA rde AtoA transnatio al Aehega emen s. A eAisAnee AforAa co crete ag redAby Aacti ely achi veAtheArel v nt object vesA– anAa en a Awhich A us AbeAprep tAresumption ofA assoc atingAtheAS at AGo ernment Ao Athe Ar gion.ATheAr ce sAregion of AtheA tr ns-bord r Atrad Abe wee ASikkim andAtheATi etanAa to omo eA igh Al ss nsA P op es’ ARe ubli Aof Ach na,Aev n Athou h Asm ll, shoul AofferAt nt,Aappropria eA on how A oAgo A bout At is A ask. A ithinAtheAu ionAGovernm also nec ssary,A pportionment Aof A esp nsibilities for effectu ti gAth ApolicyAis triesApl ying AaA w th theAMini tryAof Ext rnal A ffairs andAother A odalAMi immo Aobje tive . mutual yAco plem ntar Arole A ith Awe l AdefinedAcoeAStat sAof At eA (g)AWhi e As me Ap ogressAh s A een Aachi ved in A ringin Aa lAt r gion wit in the rail Amap of At eAcountr , Athis ex rcis Asho177Capacity Bui ding Afo AConflict AResolutionmeaningful by providing broadguage connectivity and early completion of the projects.(h) In the absence of institutional finance mechanisms, the bane of money lenders continues. Under-banked areas display a larger deficit of unexploited potential. Much greater efforts are needed to establish bank branches and other credit disbursement outlets through further relaxation and incentivisation in policies of the Reserve Bank and other financial institutions. Similarly, the newly established economic activities require significant degree of risk coverage; while some progress has been made in the expansion of bank branches, the situation remains highly unsatisfactory in the insurance sector.(i)Nagaland has a system of village guards for guarding border villages adjoiningMyanmar. There are approximately 5,000 village guards who cover Mon and Tuensang districts and Meluri sub-division. They are paid a monthly salary of Rs.500 only and are issued a uniform once in a lifetime and are equipped with a firearm. The institution of village guard is said to have played an important role in protecting villages from militant attacks and providing security to their villages. It is felt that their effectiveness would be enhanced if their monthly remuneration is increased and they are equipped with better weapons.(j)Due to lack of higher educational infrastructure in the North East, a verylarge number of students migrate to other parts of the country for education leading to a drain of both manpower and financial resources. Thus it is estimated that as many as ten thousand students from Nagaland have to go to other parts of the country for their education. This re-emphasises the need for setting up of centres of excellence for professional and higher education in the North East.(k)In many of the tribal villages of the North Eastern States, disputes particularlythose relating to land are settled by the village Councils under customary laws. There is a need to make an in-depth study of the customary judicial system in order to achieve better understanding and dissemination of the prevailing norms and practices.(l) The system of maintenance of formal land records in the North East is weak and practically absent in tribal areas. This prevents the land-holders from approaching the banks and financial institutions for securing loans as also leading to a large number of land related disputes. It is necessary to evolve a credible system of maintenance of land records.178orthlEas12.6.7.AR co mendationsArAthe ANo th Eas .contai e AinAitsA a. AThAr com enda ionsA f AtheAHigh LevelACom is ionfA heATask AFor eA Repor A–A Trans ormin A he A ort AEast’ -A ndA heAr portAnA ouncil Ashou dA onADevelo ment AIni ia ive Aprep redAbyA he ANort AEaste re i Athe Aregion. e Ai ple ente At AfillAtheAgapsA nA nfr structu AputAin pla eAtoA b AAAcompre ensiv Af am workAne ds A o Ab Ae olved anme t destinati n. p om t AtheAregi n AasAaApre erredAinvestfAimporta tAroadc. AAATran port De elopme tAFundAtoAfin nc Aconstruc ionA sh uld AbeAset Aup co rid rsA ugh relevan Af r d.AComprehensi eA m lemen ation ofAaA‘ ookAea t’Apolic Ath lo gAt rm Agr wthA theAco nt yAasAaAwho e,AisAesp cia ly A mpor antA orAthe mu tAbeAp eparedA o AtheAagendaAforAieANort AEa t.AsAim le entationar apportionmentA inAa tive ass ciati nAwithAtheAS ateAG vernments.ACl fAr sponsibi ity forAplanningAa dA mpl mentat onAofAt eApolic AbetweenAv ri usA inist iesAof Athe Uni nAG vernmentAforAi sAimplme tationAshould ouly Au dertaken. be Aexpeditia Arior ty Abasi . e. A ail Aco ne tivity As ou d Ab Aimpro ed i Athe Areg on Aon Aand Aother Acr ditA f. AMu h Ag eater A ffo ts Aare Ane ded A o Aestabl sh A ank Ab anches ivisatio Ai Ath A dis ursemen Aoutlet Athrough Af rth r Arelaxation Aan Ai cen ia Ains it tion . polici s Aof the Reser e i ABank Aa d Aother Afnancprofes ional Aandg. There Ais ne d A or Asett ng up Aof Acent es A f Aexcellence for hi her educa ionAi At eANorth AE s .AInA dditi n,AaAlarg As aleAexpans onA eAcarr e Aout to f Afacilit esAforAtec nica Ae ucati n,Asuc Aa AITIs,A hou dA ne rial ca acityA createA Apoo AofAs ill dAworkAf rceAandAgenerat Aentrepr ll asAe pl y ent. asAwehereAAj dicia As stemA .AsA AneedAto makeA nA n-d pthAstudy ofAthe Ac stomarfAthe pre ailingA in orderA oAachieveAbet erA nderstandingA nd dis eminationAmsan Ap actices.norAof lan Areco i AI dsA AisAne e saryAtoA volveA Ac edibleAsyst mA fAma ntenanc fo17913 OPERATIONAL ARRANGEMENTS FOR CONFLICT MANAGEMENT13.1 There are several institutions – constitutional, statutory, and executive in addition to institutions in the civil society – who have the capacity to play a role for conflict prevention and resolution. Many of these institutions, for example, the police are first responders to conflict situations and, therefore, their action or inaction can, in fact either prevent or generate conflicts. The discussion in this Chapter is confined to the role of these agencies of State or instrumentalities of civil society in conflict resolution.13.2 Executive and Conflict Management – Police and Executive Magistracy13.2.1 The Commission in its Fifth Report on “Public Order” has dealt at length with the role of the Police and the Magistracy in maintaining order and preventing breaches of peace and has made extensive recommendations to enhance the effectiveness of the Police and Magistracy for maintaining Public Order. It is proposed to deal here briefly with capacity building in the police and executive magistracy to enable these agencies to be more effective in conflict resolution particularly as they are often the first responders in ‘conflict situations’.13.2.2 As the Commission has explained in its Sixth Report on ‘Local Governance’, capacity building is as much about stepping up the capacity of individual functionaries as enhancing the capacities of organisations that such functionaries serve. While the two are inter-linked, enhancing individual capacities will not necessarily add to its institutional capacity without concrete steps for achieving both the objectives. The Commission earnestly hopes that its recommendations on Police Reforms will enable the Police to play a major role that goes beyond the normal policing functions of crime prevention and detection and maintenance of public order to a more effective participation in conflict prevention.13.2.3 Despite considerable improvements and innovations in Police training, a great deal still remains to be done to sensitise police personnel in diagnosing emerging conflicts and devising ‘non-Police’ methods to forestall their exacerbation. In other words, there is need for their training and orientation to be so designed that inculcates in police personnel at all levels a consciousness that resolution of conflicts is a distinct and important element in their charter of responsibilities.180atiOpe or nal conflict AArr Management AfngementskAinAthisAr gard.AAAA13.2.4 he Executive M13.2.4ATe Ex cut veAMagi trac AatAt e Ac tting A dgeAlevel Aha AbecomeA ncre sin lyAisol te AfromAtheAproc ss ofAadmin stration ofAcr min l Ajustic . AWhileAth ADi trict Magist a eAmayA causeAofAhis overa lA ti l Aretain AaAde ree ofAparticipati n A nd A ccount bility A n A he A ystemAb e tri tedAroleAu derA c ordinatingAro e,AtheA‘s bordinate’A xec tive Magi t atesAareAl ft Aw thAaA Aaccomp ny ngAp lic A a Afe Ap eve tive se tions Aof the AcodeA fAc im nalAProcedur Aand AierA‘z minda i A reas’A part esAonA‘l w Aa d A rderAduties’ AThsA sAp rticul rlyAsoAinA heAfor an Aord rAm agemen A hereAther Ai AlittleA raditionAof Aeffctive ub- ivi ional levelAAlawAt e Ainductio AlevelA by both Ath AApolice anficihe AneAre enueAo ls.AAr sul AisAthat A othAacutive Ma istracy AinA or A n-ser ic Atra ni gs, Ather Ai Ala kAof em has sAonAtheA oleAofAthe Ex hatA he publicAin er- ac in AasAinter ocuto sAin Amedi ting Alo alA onfli ts,A esp teAthe factAtive.AWhat A s A eeded,A faceAof A xe utiveAM gistrat sAasAreve ue offiialsAco tinu s A oAbeAacproactiveAi Aco flictA theref re Ais encourage entAtoAthe A xe ut veAMagist at s Ato AbeueAofficers.A Awo ldA manag men ,AitsAprevhisntion andAre ul tionAwh le Aacti g Aa AReveAapproach A o Aco flictA necessit teAState Go ernmentsAd visingAan Ainn vativeAi st tutionaadigm.AsA resol tion Ai. .Aa proache A uts de A heA‘Po iceA–Alaw and Order’ pahis AaspectA ct m nagem ntA‘loo ’A urt erAcons de edAinAthe contextAof in uct ng l APanc ayatsAinAt eAconf nAaA aterAseconAof A hisAchapter.AA13.5AReco mendati nsifthAR port,A“Pu a. l cA AAPolic AR for sArecommen ed byA heACo mission inAitsA tut onalAc pa ityA f O de ”A( hapter A5 andA6)A reA ikelyAtoAaugm ntAtheAi st Ac nflictAresol tion.A theA oliceAtoA lay aAmoreAp oact ve and Aeffe tiveArole Aihe Arecom endatio s.TheAC mmission,A heref re,AreiteratesAtpro ision Ae tendingA b. AP liceAMa ua sAmustA e Aupdate AtoAcontai Asuitable eA onflic Aresolu io A theAscop Ao Arespo sibilit es of APoli eAofficia sAtoAinclu trai in Aformat Ama A inAthe rAcharte AofAduties AS itableAa endment Ain ubjec .AAc ieveme tsA a soAbe Ac rriedAou Ato Apr vi eAr levantAi putsAonAtheAvee llA Aevaluatingun er th sA‘he d’An edsAtoA eAtak nAintoAacc untAwhiperfor ance.AAc.AA xe utive Magistra es inAthei Aca acity asARi venueandAoth r Afe dAlevelAficialsAoaveAextens ve A ublic inter-faceAa dAenjoyA onsiderableA oo willA eAfieldA ituation AandA articu arly inAruralAar heir famias.AiarityAwi hAt leAtoAbeAinvo ve AasA enera Aacc ptability makesAth mA mi entlyAsu taAGove nm nts needAtoA inter oc torsA nAmediati gAinA ocalAconflic s.AS at bu ldA nAt e AmodalitiesA ndAtheAin ti utio alAfram181ding for ConflictC pacityResolutionABui13.3 Judicial Delays and Alternative Dispute Redressal13.3.1 In any civilised society, the forum par excellence of dispute resolution is the judiciary. While ‘disputes’ can be said to differ from ‘conflicts’ as the latter involve a larger number of ‘opponents’ in contending for rival claims – many conflicts are the result of non-settlement of disputes often due to judicial delays.13.3.2 Administration of justice efficiently, speedily and impartially is possible when it is carried out by those well versed in the laws. The ever burgeoning arrears of judicial cases in courts at all tiers of the judicial hierarchy is one of the key factors for persistence of conflicts in our society. It is beyond the remit of this Commission to go into the details of this chronic bane of judicial delays. The Commission would, however, observe that acute shortage of judicial officers and dilatoriness of some of the procedures governing judicial proceedings are among the basic reasons for tardy resolution of disputes through the judiciary. It is, however, heartening to note that successive Chief Justices of the Supreme Court have endeavoured to tackle the problem of delays through a number of innovations like establishment of fast track courts for certain classes of offences, application of ‘IT techniques’ to monitor the pace of disposals and strengthening the inspection machinery of the High Court to keep a watch on the functioning of the lower courts etc. The Commission hopes that the 13th Finance Commission gives priority to the issue of judicial arrears and considers adequate resource allocation for administration of justice so that upgradation of personnel and infrastructure is possible at a scale commensurate with the magnitude of the problem.13.3.3 The innovation of Lok Adalats has proved successful only to some extent. Barring cases of settling marital disputes, insurance and accident compensations and claims etc, this method has failed to reduce judicial arrears. Lack of support from sections of the Bar to the Lok Adalats is perhaps a cause for its limited success. Another aspect that deserves to be mentioned is the view consistently taken by the higher judiciary that the specialised quasi judicial tribunals are subject to the supervisory jurisdiction of the High Courts under Article 227 of the Constitution. This approach has stymied a major initiative of administering justice under specialised legislations that was initiated in a big way in the 1970s. Paradoxically, this judicial interpretation has adversely affected dispute resolution in many areas of our economy and has contributed enormously to the arrears of cases in the Supreme Court and the High Courts.13.3.4 Recommendationsa. Allocation of resources for upgradation of infrastructure and personnel of the subordinate judiciary needs to receive higher priority in federal fiscal transfers.182Operatio al A rrangeml ntsAforAcoMuch great r b.AMuch Ag eater at en ion A ee s Ato be A aid AtoAmake th ins itution ofAAL kAAda atsAserv AtheirAint nde Ao jective,Aa dA nApart ularAt AenlistAAac iv Aco peratio Ao Ath Ame be sAof theA arAtoAgi e thisAa pr achAaAchofAsuc es .an eAAtheAB r AofAtheA c. Min stryAofA a AmayAini iate aAd alogu Awi hAt eAB nc Aan re ter finality’A ig erAjudi iary to A xplor Aw ysAandAm ansAofAb ingingA‘ oA heAdecisionsAo Aquasi-judi ial authorit ies andAb dies.n fictA esolutio 13 4AC vill ASoc ety AandACoul rlyAamena leA 13. .1Aconflic sAnotAinv lv ng Aasserti nAofAconfli tin AidentitiesA reAparti ak nAb Afarmer A o Acomm nity Aand Asoci l inte ve tion. A A ase in ApointAi Athe A ni iativeA heirA‘upstre m’ ofAt e A auver Adel aA nATa il Na uAto AcomeAto A nAun ersta ding AwithA heAdeltaAare s. cou terpart Ao AtheAre easeAo Acau ery Awaters fr mAreservo rs A nAK rnata aAforA sAaAspon an ous Irr specti eAofAth Aa tual outcomeAofA hi Ai itiat ve,A tAis cle r thatAthisAw response Aof Ath Af rme s.lAinvolveme t.AArti anAc ncernsA 13.4.2 AI AallA oci ties, Ath reAareA le entsAc pable ofAris ngAabove narrowAp c udeA GOsAw thA a dAthusAb co ing AeffelictAsitutiveAin Aconti ns. AE amplesA f Ath seAikersA hoAhaveA a A Al ng trackAr cordAi Aconfli tAzones,Achur hAo ganisa ionsAan Aso ialA o nic AconflctsAi A ma or Ap es nce Aa dArole in Aareas A acing A ommunal, cas e,Amil tant Aand et sAinA ontrol ofA d ffer nt Aparts of our A ount y. It Amust Aal oAbe recognised A ha Acommun ti rtAout AifaiternalAheir Aa s A re Al kelyAto AbeAmo eAs lf c nfident and AinAa be terA osi ionAtoAs lAfo ma ionA ndA roblemsAbet een th ms lves.AThis is AanA mp rtantA spectAo AsocialAc pit will Abe Amore comprehen iv ly A iscussed Ab At e Ac mmissi n A nAit AreportAnAthat subjec .AnAmajor Acon.4.3A‘Track II’A niti t vesAh ve AalsoAa gr at Ap tentialAa A‘ ceAbr akers’AlictA 1lationA reAti eA s tua ions.AWhil At e Atechni ues Aof A uild ng A ridges A ith AtheAaffcte ApoporsAwithAoffici lA te te ,Athe e Aha ,A fAlate, be n Aan Aatt mptAtoAs pplantAin orma Amedia ul sAabout when nterloc tors Ain difficultAcon lictA itu ti ns ATher Aca Abe A oAhar AandA astA th reAi Aa Aneed to involv ANG sAor invok fices AAteAgoo Aof ATrackAII A oodAsa arita s; s ill,nA ase Ao AANG sA to Ahav AgeneralAp li yAg ideline Ain thhisAisAspAmatter.Aci lly A el antAvolvingAspeciAbeen insta cesA here Athere were Aco flicti g Asignals aboutAiicA as thereAhav n fictA itua io . r anisa ions l Ain a AgivenAco gAcivil Asocie yA 13. .4 There is n edAtoAdr w AupAa suitableA oli y Aframewo kAfor involvi eAinvolve Ain a o ganis tionsAandAothe Anon-go er mentAs urce AtoA nsu e AthatAt ey a ,Akn e-jer Aw y sustaine Aand Asy tema icAmanner Awhen A equi ed Ar th rAth nAin Aan Aa Aho when At ereA s AaAcr sis Aw th litt eAs opeAor At me Afo AplanningA heirAmeaning183apa ityonflictAbui dingResolutionAforAcThe need to involve Panchayati Raj institutions in prevention and resolution of local conflicts needs to be strongly encouraged because there is enormous capacity in these bodies to supplement the time tested roles of the police and the executive magistracy.13.4.5 Recommendationsa. While social capital formation needs encouragement to improve delivery of services and build community self reliance, it is imperative that such initiatives also attempt to involve communities in ‘in-house’ conflict resolution.b. General policy guidelines need to be formulated by the State Governments for involving both the Panchayats and urban local bodies along with ‘non-police’ instrumentalities of the State, in conflict resolution.c.Guidelines of Centrally sponsored and Central Sector Schemes may be suitably modified to require that beneficiary capacity building may also emphasise developing self-reliance in local conflict management.184SomeA14INSTIT TIONALAARRAN EME SAFORAAC NFLICTAMAN.14.1AIntrod uc t i o ofAth A 14.1 1AThreAareA everalAinstit tio s,AandAinstrument lities wit inAtheAfr me orkAtheseA Stat AwhoseA an at Ai AisA oAde l AwithApo ent alAand actualA onflictAsitu tion . A ome Ao tesAorA insti utio s have AaAconstit tional statu Awhile othe sAwereAcons itutedA hroughAs at ersAtoA ex cutive A rder . ATheseAinsti utionsA nclud Athos Awh ch AareAn rma lyAt eAfirstAres on nAthisA onflictAsit ati nsAa d Aal o play a A ole Ai AtheirAsub equentAmana emen .AThe r A oleAPublic con ect on Ah sAbeenAe am nedAin de ail by Athe Acom is ion in Ait AFifth Re ortAonA craticA Or er’A sA el AasAin A ha te A13 ofAtheA resent A eport.ASim lar y, At e A oleAofAdemsed inA insti ut onsAo Aloc lAselfAgover ments,Ain lu ing inAth Arural are s, Ah sAbeenAdi cu Abe Ao A the Acommi sion’ ASixth Re ort Aon “localAGover an e”. A n Athis Ac apter Afoc s A il ddressA thos AmajorAinsti ution Awh ch Aare Apos tioned A ec use Ao AtheirAa sign dA oleAto eitherA reventA cont ntious is uesAorA hroug Atheir Aintermed ation, Adisc ssi ns Aand Adelibe ationsAprecip ta ionlAofAcofict .A14.2A onflictARes lut onA ndAtheAConst tu ionAoersAanA xa pleAof Asucce sfullyAharm nisingAco petingAin ere tsAandA ip ing inA heA udAthe ntiou A ca sesAofApo entialAco flic s.AOneAillus ra ion is Athe Aco sensus A rr ve Aat on AtheAcont rtic l A i sue AofA OfficialAl ng age of Athe un on”Aby Are aining A nglis Aalo g Awit AHindiA( rtic eA 343),Aco ced ngAthe Apree in nceAofAr gionalAla gu ges Ai Athei Aa eas Aof Ai fluenceA(7).ATheA 345 AwhileApro ect ngAthe Ain er sts Ao AotherAla gu gesA nAsuchA egionsA( rticl A3 ituentA ro essAof A ork ngAo tAsuch Acomp om sesAisAade uatelyA rou ht out in AtheAconsAInte - A semblyA eb tesAonAla guag sA Vo A X App A- A1377 1515).ASim la ly, Aon issu s Alike lig onA Stat Atr de AandAco merce, taxing po ers ofAth Aun on A ndAthe A tates, A re dom AofAr aftingA and Aciti ensh pAetc, A eb tes in Athe AA sem lyAand Ab ckroom Adelibe at ons ofAtheAD A‘g veA co mitteeA rovid Aample Ae id nce of AhowAc nflic sAwere A voi ed A ndAthe A ro essAoan Atake’Ar su tedAinA urable Aso ut ons Ato Ap oble sAthatAa pe re Ato AbeAins lublfAIndi AtheirA 14. .1AAllAn tional Aconsti uti nsAl yAd wnAtheAgov rnance Apa adigmsApe ce ved AbndAa eA F am rs, A s Abest su ted AtoAm int inAandA romoteAn tional Ac hes onAandA arm nyA AIndi A thusAinst um nts AofA onflictAreso ut on. AThe A ro essAofA ram ng Athe Aconst tu ionAo f o185C pac tynflictABuil ingResolutionAforACoof the salient provisions of the Indian Constitution which seek to provide an institutional platform for conflict prevention or resolution are given below:a.Article 131 recognises the importance of resolving Union-State/s and inter-State disputes as being inherently vital to the smooth functioning of a federal polity and confers the exclusive original jurisdiction on the Supreme Court to try suits concerning such disputes. It is clearly a mechanism designed to authoritatively and judicially determine situations potentially injurious to the health of the Union as a whole.b. Article 262 empowers Parliament to exclude by legislation, jurisdiction of all courts, including the Supreme Court, in a sensitive area of conflict viz. inter-State Rivers or River valleys water disputes and to provide for adjudication of such disputes. In this sense, this provision is an exception to Article 131. Here again, the intention is to provide a special procedure for dealing with a dispute which may require resolution taking a variety of factors into consideration.c.Article 263 envisages inter-State Councils for resolution of disputes and todiscuss matters of mutual interest to the Union and the States as well as issues requiring coordination between them. This provision is dealt with in detail later in this Chapter.d. Article 280 provides for establishment, ordinarily for five-year periods, of a quasi-judicial Finance Commission to recommend the norms of distribution of certain central levies between the Union and the States and to generally assess the financial requirements of central subvention for carrying out the administration of the states efficiently. This Article clearly underscores the need to prevent disputes arising out of ‘financial grievances’ of States.e.Article 307 authorises setting up an authority to facilitate inter-State trade andcommerce.Besides, there are other provisions which establish mechanisms to investigate and redress grievances of certain vulnerable sections of society. These include – Article 350B which provides for a special officer to safeguard the interests of linguistic minorities, and Articles 338 and 338A which provide for Commissions to promote and protect the interests of Scheduled Castes and Scheduled Tribes respectively. Such provisions seek to narrow the scope for grievances escalating into conflicts.14.2.2 The actual working of various constitutional institutions like the Election Commission of India and the Finance Commission has demonstrated their important role186nstitutional Arr ngement AforAconflinecessarilyAin providing in ApromotingA in Apr viding A evel A lay n Afields Af r Aa Ahealthy Afunction ng A em cracy Aandmaint iningAederal-fical A egimes.AThese Ac nstitu iona Abodies A ave Are dered As gn l Aservice AiavourAof At eA u ityAwi hinAaAhigh yAd versifiedAand A ifferent at d A oli y. AItAisA he end practic sAt A ommissi n Ato Asug es Ameasure AtoAsuitab y Astr ngthenAother ins itutions A nd lAto A roduce improv At e Aproces AofAbuild ng consens sAonA atte sAw ichAhaveA he potenti riftsAwi thin society.1 .3 AImpficialAConflictAPreventirtantAOn/Resolution Age ciesso uti n.AItA Ther AareAsev ral agenciesAand inst t tion Aw th Aa Aro e AinAconfli tAp evention Aan Ar eAcommis io A isAno Ap acticable toA nume ateAallAs chA xecutiveAand deliber h ti eAbodies.A prop sesA o Aco er only so eAo AthemAin A heAfo lowingAbroadAategories;A. Institution Aesta lished AunderAc nstitutionalArovisions.b. Insti utionsAunde AlegislativeA nactments.c. In titutionsAor delibe ative A orums issuedAun erAexe ut verdersAofAthGove nment.e Aconstitu io A 14.3.1 Insti uti nsAunderAthea teACounci .A 14.3.1.1AThAInter-SerredA o,Ais 14.3. .1. AA tic e A263AofAthe const tut onAwhic Ahas alread AbeenAbr efly re qu tedAbelo AinAe tenso:A“26 .APr visions wi hA espectAtoAa AInter- t te Co nci A– AI Aa AanyAti eA tAa pearsAtoA heAP esi entAth tAtheApu lic Ai te estAwo ld be A erved AbyAthe A st b ishment ofAaACo ncilcha gedA it Athe duty AofA– twe nA isenAbea)Ai qui ingAinto andA dvisingA ponAd spu esAw ichAma AhaveAaStates;or the Un (b) onA A nve tigatingAa dAdiscus in Asubj ctsA nA hic As meA rAallAo At eAS ates, Ain erest; or o Ao eAo AmoreAo Athe S ates, A aveAaAcom on omm ndatio sA (c)AmakingAre omme dat onsA ponAany such su jectAand,Ai Aparticular,Are AitAsh ll A eA forAbetter co rdinat onA f Apoli yAan Aaction wi hAr spectAto th Asubj cteA heA atureA l wfulAforA he Presi en AbyAorder toAe t blishAsu hAa i Counc l,A ndAdef Aprocedure ”AfA he duties Ato be pe for edA y AitAand Aits org nisationAanearAthatAthe 4.3.1.1 2ATheA pe ingAwor s Aof Art cl A26 ,A“I Aa Aany ti eA...”A akeA tAc constitut onAe visa es th sAbodyAtoAb Acon titu ed from tim Ato time AandAno187capa ityAbuil ing forAconlict AResolutionas a continuing, permanent arrangement. It is also clear that the functions to be performed by the council, when in existence, are two-fold viz (i) inquiring and advising on inter-State disputes; and (ii) investigation, discussion on subjects of interest to all or some of the States or the Union with special reference to subjects involving ‘coordination of policy or action’. It may be noted that the role of the council in cases of disputes is confined to ‘inquiry and advice.’14.3.1.1.3 For a long time, Article 263 was not invoked. The First Administrative Reforms commission had recommended that the Inter-State council may be constituted, in the first instance, ‘on an experimental basis’ for a period of two years. This recommendation was not implemented. The commission on Union-State relations (referred hereinafter as the Sarkaria commission) further considered the matter and recommended that the Inter-State council be established to perform functions under clauses (b) and (c) of Article 263 i.e. investigation, discussion and recommendations on matters of interest to the Union and States, particularly those involving coordination of policy and action. In other words, the Sarkaria commission did not recommend the role of conflict resolution for the council envisaged under Article 263 (a). While that commission did not assign any specific reason for this omission, it noted that clause (a) did not confer any power of adjudication to the council. In any case, the recommendation was accepted and the Inter-State council was constituted on 28th May, 1990, with the mandate recommended by the Sarkaria commission.14.3.1.1.4 It may be noted that just before the Inter-State council was constituted, the Supreme court, while disposing of a tax dispute in Dabur India Ltd vs. State of Uttar Pradesh 1990 (4) Scc 113 had suggested that the dispute arising due to divergence of interests of the Union and States with regard to the power to levy excise duty on certain items under the central Excise and Salt Act, 1944 and the Medicinal and Toilet Preparations (Additional Excise Duty) Act, 1955 may be referred to the “council to be constituted soon under Article 263 of the constitution”. As the council constituted soon thereafter was not empowered in ‘inquiring and advising upon disputes’, the suggestion was not acted upon. It is however clear that the apex court expected that an Inter-State council, once established, may be utilised inter alia as a forum to reconcile competing revenue interests of the Union and States.14.3.1.1.5 The present composition of the Inter-State council is; The Prime Minister – ChairpersonChief Ministers of all States/UTs – (Governors of States where Article 356 is in operation)188Inst tutionalAArr nge ents Afo Aconflict AMheAChiefAsse bly;A AdminAst ato s Ao AUTsAn t havingAaALe islativeAdAby A heA SixA in sters Ao ACab ne Ara kAin A he AUnio AC uncilAofA in st rs AtoAbeA om nat ermanentA Prime A iniste .A(OtherA in ste sAof A he AUnionAG ver me tAmayAb Ai vitedAasA nvte s, AifAsoA om nat dAby Athe Chirm nAofAthe Co nc l,A rAas and when anyAitem re a ingAtoA Asubj ct Aun erAthe rA ha ge isAtoAbeAdis cus s e d ) .ttee’Ato 1 .3 1.1.6AThAcouncil Asub equentl Ad cide A o Ahave A Asmaller A StandingAc mm co siderAi Adetail, subjects re er ed toAi Aso thatA heA‘full counc l’A ould no AneedAtAexa ine ini tersA eachA ndAe er Ait mAof Ait Aag nda.AThis A ommittee co sist Aof As me AunionA Aco nci A and selec ed AchiefA ini te s AandAis pres de Aov rAby theAHomeA in ster.ATh mportantA ha Amet A en Ati esA ince Aits Ai ce tion AorA essA h nAon eAa year an Aso e Aof AtheA vernmen A recomm nd tio s AofAtheAIn er-Stat Acouncil toge her withAthe de isi n Aof AtheAGt ereonAin Apa ent es sAareAas under:ccpted ) g. Tr nsferAofA‘ esiduar Apow rs’ fromA he Uni nAtoAtheAC ncur entAistA(NotAA h. APrior Acon ulta ion Awit AState , A xcept in cases Aof urg ncy,AforAleg slatinsAunderA inipl e). ist-III. A Ac epted Ain Aprto Aavoid i. AAp ropriate As fe uar s Ain Athe ACo mi sions Ao AInq iry A ct A1952 possib eA isu eAbyAth ACentralAG ve nment inAcases re ati gAtoAth Ac nductAofA in ste sAofA he AStateAGov rnment .A(UnderAconsidertion).j. A na t ent Aof A AcentralAle is ation toAal ow Aur an Aloc lA odi sAtoAaxAUnionAG vernment Ap op rties Aof Ai dus rial Aand Ac mmercia Anatu r .A(UnderAconsidertion).k. Art cle A20 AadA2 1AofAtheACon tituti nA houldAb Aamend dAla ingAownAti eA velyAforA i its Ao A1 A onth Afor Gov r or Aand 4 Am nth AforAthe A residentAres ect Apas ed.A ss ntingA o ABills Afail ng A hich the AB ll wouldA eA eeme AtoA aveAbee cc pted). (NotAationsA oA l.A etainin AAr icle A365 (dea ingAwi hA owe sAof A he Union to AissueAd re tates Ai AmattersA ollowi g Aw thinAitsA xecutiv Apowers As bje tAtoAit AsparingAapp ication.A(Acc pted).m. AO ligatoryAcons ltat ons Aw th AStteAChiefA iniste sAbefore Aa pointingAG vern rs.A(NotAaccpt d).n. A oAperm tAse ond term AforA overnor As b ect to aAbar on A heir AnotAet rningA o Aactive politi sAexcep Aseeking el ctionAas A re iden AorAViceAP esidnt.A(NotAaccpted) o. AWhile c oosin Aa AChiefA ini ter,At eA ead r AofA he Apar y A avingAanabsolutema ori yAin Athe Assemb y Ashould Aauto at cally be asked A oAb comeA189rc pacityconflictA uildingResolutionAfoMinister and if there is no such party, the Governor must select a Chief Minister from among the parties or groups in the following order of preference:?An alliance of parties that was formed prior to the elections.?The largest single party staking its claim with the support of others, including “independents”.?A post-electoral coalition of parties, with the partners joining government.?A post-electoral alliance of parties with some of the alliance-parties joining the government and the remaining parties including “independents” supporting the government from outside. (Accepted).p.Article 356 may be invoked only sparingly. Safeguards contained in the Bommai Judgement, which have already become the law of the land, are adequate to prevent misuse of that article. (Agreed in principle, but no amendment in the Constitution was deemed necessary in view of Article 141).q.Interchange of officers between the Union and State Armed Police Forces provided it does not involve large-scale transfers. (Accepted)r.The Council approved an alternative scheme of devolution of share in Central Taxes to States. {The Constitution (Eightieth) Amendment Act, 2000 enacted in pursuance of this recommendation}.s.Early revision of the royalty rates on coal. (Implemented).t.Increasing representation of States on the Board of Directors of NABARD. (Accepted).14.3.1.1.7 A perusal of the above list indicates that most of the discussions in the ten meetings of the Inter-State council, since it was set up, were confined to discussing and reviewing the recommendations of the Sarkaria commission. This commission, after careful consideration, is of the view that the Inter-State council must be given the ‘complete’ role provided to it under the constitution i.e. both conflict resolution and for better coordination of policy and action in matters of interest to the union and States. For resolution of conflicts, whether inter-State or union-State, the mechanism of ‘inquiring and advising’, even without having the power to adjudicate, envisaged by clause (a) of Article 263 can be an effective method to resolve disputes as has been demonstrated by the conspicuous success of the committee of State Finance Ministers (Ashim Das Gupta committee) constituted by the National Development council in achieving consensus on the once highly contentious issue of Value Added Tax (VAT).190Ins itutional AAr ang mentsAf r AconflicthACouncil.14.3.1.1.8 eAcou cilA 4. .1.1.8AThASarkaria A omm ssio Ahad A lsoA ope Athat Ath Am eti gs AofAtssApol cy wou dAo viat Ath AneedAfo Af equ nt Aad AhocAc nf rence AofAchief Mi isters A oAdisc den Afro A issues or Areview importantAp ogr mmes AThi Aho e Aha AnotAbee Ar al sed AasA sAev oAdiscu sA the fa t Ath tAinA 00 Aalon Aat A eastAnin Am eting AofAchief Mini ters we eAheldA eA o ncilA vario s A ssues AInAot er wor s, A t Aha AnotA eenAfoun Af asi le A o AuseAtheAI ter-Sta sA Aforum toArevi w A attersA fAgener lAc ncernAandA mp rta ceAto the uninAand A heAStae sAalike.A 4.3.1.1 9 A eepi gAi Aview Athe A ro isionsA f AA tic eA2 3Aand the AaboveAd scusion,AtheA edAa Aan A om is ion is Ao Athe vie AthatAtheAI ter-Sta e Acoun il should AbeAc ns itutuity.ATheA whe At eAne d AinAt atAbeh lf A rise Aan AthatAt eAco nci Aneed no AexistAinAp rp sA u pos Aom ission A s A urt er Ao Athe vi w Athat AanAI ter-Sta eAcou cil A ouldA est serveAieAprese as tA aApr Atem b dyAwith aAflexibleAc mposit on sui edAto it AtermsAofA h ef rence.Ari ci lesA omnib sAc un il AmayAbeA is olve ,A fAnee AbeAafte Ad cid ngAon theAba icAcommonA .AItAal oA toAb Af llo edAbyAtheA ov rnmen Ao AIn ia AinAthe fo mation of Aad-hoc co ncilo ncilA tA fo lowsA ha At ere is noAba Aor AotherA mpe imentAforAco stit ting mor AthanAo eA AorAoth rA aA i en At me A– Awit Adifferent Ac mpo itio A or each A–At Aconside Adifferen Ad spute acilitateA attersA fA oncern At Adiffer ntA tat sAand A he A nion. AThi Aappr ach A ouldAalsoA acilitateA m aningful,Aresul -oriented Ad sc ssions A yApartie Adirectly A nt re tedA nAa AitemAandA ime-boundAsolut i o n s .1 .3.1.1.10ARecomme at onscilAundheAconflict ArA a.AAesol tionArole env sag dAforAtheAI ter-Sta eACouedAtoAfind A tic eA 63A a) AofAtheACo stitut on shouldAbeA ffectivel Au ili so utionsAt Adisp tesAam ng StatesA rAb tw en Aa lA rAs meAofA heA tat sAandAhe Un on.Aen Abo y.A b. AThe AI ter-Sta e AC unci Amay Anot Ahowe er A xist Aas Aa perma er Amay beA A A nd Awhen a Asp cific Ane d arises, A Asuitable APr siden ial or ispute AorA issued Aco sti uting Aand con ening At e A ouncil At A onsider a A Union Aand co rd nation of policy or action A n A atters Ao Ai ter st Ato the rpose fo A concern d AS ates AThi Abody ma AceaseAt Afun tio Aonce At eApco pl ted. wh ch AitAwasAc ns itutedAisAAsuitAtheA c. ATheAc mp si ionAof AanAI ter-Sta e AC un ilAmayAlexibeAeAt ti le 263.xi enc esAofA heAmatte Ar fe redAt AitAund rAArceAa d. AtheAIf A eces ary, mor AthanAoneAI ter-Sta eACou ci Ac uldAbeAin ex ste war ante A same timeAwit Adiffe en AtermsAof ref renceAandAc mp sitionAas forAeac191Capacit Abu lding Af r ACnflict AResolution14.3.1.2 The National Commission for Scheduled Castes and The National Commission for Scheduled Tribes14.3.1.2.1 These Commissions established respectively under Articles 338 and 338 A of the Constitution can be discussed together. In fact, before the passage of the Eighty-ninth Amendment to the Constitution, there was a composite Commission for Scheduled Castes and tribes established in 1990 following the Sixty-fifth Amendment to the Constitution. Another reason for considering these bodies together is the fact that the constitutional provisions concerning the two bodies are mutatis mutandis the same. The broad areas of responsibility of the two bodies are:(a) Investigation and monitoring of implementation of safeguards for SC/ST provided under the Constitution or other laws;(b) Inquiry into specific cases of violation of safeguards provided for these groups;(c) Participation in planning and socio-economic development and evaluate the impact of such programmes in the Union and the States;(d) Presenting annual reports to Parliament about the working of the safeguards for SC/ST; and(e) Making recommendations for better implementation of safeguards and for the socio-economic development of the relevant groups.14.3.1.2.2 The Reports of the Commissions are to be presented annually to Parliament alongwith a statement of action proposed to be taken on the recommendations contained therein. These reports are ordinarily binding on government; where government is unable to accept any recommendation of the Commissions, it is necessary to place reasons for non acceptance before Parliament. The Commissions enjoy powers of a civil court in the discharge of their functions. These powers include summoning of witnesses and documents, recording evidence and issuing of summons for extra-mural inquiries.14.3.1.2.3 Parliamentary debates on the Sixty-fifth Constitutional Amendment reveals that these Commissions were intended to function as watch-dogs for assessing the status and quality of implementation of the safeguards provided for the concerned sections. These Commissions are thus meant to adequately address grievances and to recommend measures that might minimise grievances. In other words, the underlying purpose of these bodies is to prevent conflicts by removing their root cause i.e. non-implementation of safeguards.192nstitutional Arr ngement AforAconflinistersAeachA14.3.1.2.4 So iesAhasAbee A 4.3 1. .4ASo Afar An Aindepende t A sse smentAofAth Af nctio ingAof the eAbo AAper sal AofA undertaken AAppa ently,A heir Repo ts A aveAalso notA eceived Amu h attenti n. nAaddressi gA t eseARepo ts,Ahowe er,A uggests Athat cons der ble At forme andAe AisAtakenA es bel ngingA individu lAc mplaintsAa d A rievancesA fAg vernme t Aand A ublicAsec orAemploy T, including to theArelevan Acate ories.AWh leA eviewingAt eAsafegu rds provid dAforASc/ ssaryAthat A A in Aperson el po icies,Ais anAi po tant A ask Aof Athese co mi sions, Ait isAn c Apromotion ,A d stinc ionAis A rawnA etweenAgro pAg ievancesAa dAindi idualAcl im ArelatingAt ionsA eed AtoA transf rs, A os in sAet .AItAis also evi entAthatAthe se ret ria s Aof Athe Atw Acom is gA onitori gA b ild Asuit ble capacity Af rAm nitoring Aa d A valuation Ao Aprogramm s,Aincludi us ofASc/ST.A ofA‘acti nAresea ch’ Ac rried out AbyAother in tit tions AonAthe As cio-ec no icAsta ly consider,A TheAa ministrati eAministrie Are ponsi le Afor Athes Acom issions Am stAcarefu oAeffectiv lyA in cons lta ionAwith Athe comm ssi ns,Aw ys andAmean Aof A na lingAthemAdi charge AtheirAc nstitutionalArespnsibi l itie .A14.3.1.2.5AReco en ationsAT ibesAhavea. ATheANationa ACo missionsA orASch dul d ACastesA ndASch dule anAimpo ta tAman ateAto gui eArevie Aan AmonitorAtheAi pl mentationA udingA nA heA f Asafegu rds provid d A orASC/S s AinAv riousAfiel s, incfoc s AofAtheA ma terAofA heirAservic Ac nd tions.AItA sAim era iveAt at the plemen atio A tw ACommis io s Arema nsA nApoli yAandA ar erAissuesAofAi oke AintoAbyA r therA ha Ao AcasesAofA nAindi idual nat re whichA anAb Al ACommis i nsA theAa ministrativeAMinistrie /appr pria eAf rum AwithAthrs ht role. playi gAaAcriti alAovmissionsA A ayb. AATheAa ministrati eAMinistr esAc nne ted withAthe Atw ACo es, workAou A undertake an A xe cise,AandAin cons ltati nAwith A hese bod chargeAtheirA t eAd tails of Ahow these bo iesAco ldAbeAb tt rAenabled toAdi c nstitutionalAm ndate.t uto ryAb di s 14. .2ASta 14.3 2.1 ATheAZona lACounc lslt prim rily 4.3. .1. ATheAneed Afor establishin Ainter-S at A ouncil Aon AaA zon lAba is’ AwasAf t i cAb sisAinA toAdeal A ithApro lem Aa isi gAoutAof Athe Ar or anisat on of AStatesA nAlin ui fA19 6)Adeal 1 56 AS ct on A15 toA22 A fAtheAStates AR orga isat onAA t, 19 6 A Act AN A37A West Azones.A with Ava io sAa pectsAof Ath Af nct onin Aof Athe fourA( orth ASo th, AE st AandheseAcou AactsAas theci s consi t AofAaAu ionAMinis er nom nated Aby A heA resi en Awhcha rman A ndAtheAch ef Minist rs of A tates A nAthe regi nAa ong AwithA woAM193C pac tynflictABuil ingResolutionAforACofrom the member-States, nominated by the Governor as members. The Council is aided by a number of ‘Advisers’ i.e Chief Secretary and one Officer of each of the member-States and an official nominated by the Planning Commission. The Act requires that regular Council Secretariats funded by the Union Government be located in one of the States of the region with Chief Secretaries of the States acting as its Secretary on rotational basis. Sub-section (2) of Section 21 of the Act prescribes the following duties for the Council:(a) any matter of common interest in the field of economic and social planning;(b) any matter concerning border disputes, linguistic minorities or inter-State transport; and(c) any matter connected with, or arising out of, the re-organisation of States.14.3.2.1.2 In the years immediately following the States’ reorganisation, the Zonal Councils were very active and helped resolve many issues. The Sarkaria Commission calculated that there were 33 meetings of the Councils between 1959 and 1963.14.3.2.1.3 Over time however, the Zonal Councils met only occasionally. The Secretariats have ceased to be operational and the practice of State Chief Secretaries acting as Secretaries of the Councils on rotating basis, too, has hardly ever been acted upon. These bodies have become a peripheral responsibility of the Ministry of Home Affairs through the Inter-State Council Secretariat. There is no doubt that the Zonal Councils played a significant role in ironing out problems arising out of States’ reorganisation, but once these problems were settled, there was a definite decline of interest on the part of the member-States. The recent creation of the States of Uttarakhand, Jharkhand and Chhattisgarh through bifurcating the States of Uttar Pradesh, Bihar and Madhya Pradesh respectively has not resulted in reactivation of the appropriate Zonal Councils and necessary coordination has been carried out bilaterally by the State Governments concerned. In short, the Zonal Councils are not only dormant, but there appears to be a lack of interest in their reactivation.14.3.2.1.4 Recommendationa. The system of Zonal Councils may be dispensed with. Important issues of inter-State coordination or disputes between States in the same region may, wherever necessary, be entrusted to an Inter-State Council with appropriate composition and terms of reference so that any given issue is considered in depth.194Institutio al A rrangeml nts Afor Acode Aa Asignif ca tA14.3.2.2 g hts ACommi sio A 1 .3.2. ANatio al AHuman ARu man Rig ts ActA 14. .2. .1 AThis A od Awas creat d Ai A1994 Aunde At e APro ection of A Amem ers out A fA 1993 and A s A r sided A ver Ab Aa Aform r A hief A usti e Aof India Aw th A ou of Athe ANati nal ho Atwo Ah ve Ato A e A orm r AJudge Aof Ath AS preme Aco rt AThe chairmen ardAclas es AareA commissio sAforAS heduledAc stes, AS heduledATr bes AMinorit es AandA ackof these bo ie Ax-offii Amembe s AwhenAaAm tter Ao din rilyAwithin A he jur sd ction of AanydAun er Sec ion is taken up byAth AN Rc. The As opeAof theAter A“ uman i Ar ghts” asAdefn itution asAthey 2( )Aof A heAA tAi AwiderAthan theAfu damental Ar gh sAg aranteedAin A he cons du lAg aranteedA includeA ri hts Ar latingAt Alife, Al ber y,Aequa it Aan AdignityAo AtheAindiv orceab eA yAtheA by A he Constitu io Aor embodiedAin At eAInterna ion lACovenants an AenedAhuman A ig tsA c ur sAin AIndia .AThAcom iss on Ac nAtakeAsuo mo uA ognizan eAofA nAalleAvic ims.AWhileviola io AinAaddit onAtoArece vi gA om laints by orA nAbehal AofAtheA llege ies,Ai Aha Ath A NHRc Ao di arily Arelies A nAinves igat onAre orts Af omAStateApol ce aut ori Aon its A wn.ATheA powers Aa d AtheArequisit Ai frastruct reAt AundertakeAsuc Ai ves igat on nesA sAthe A HRcA Ac Aalso envis gesAS ateAle el AHuman ARi ht Aco miss onsAo At eAs meAl ithAf rmerA igh Acour Achief A ustic sAheadi n gAthose Ab diesariety ofAhuma A 14. .2.2.2 Ove Athe yea s,At eANHRcA asAmad Av s bleA mpactAo Aa wideA muAan AKas mir right A Are ated iss esAallA verAtheAc un ryAinclud ngAinA ensi iveAs ate AlikeAJa Acom issionAha A North East Aa dAP njab du ingAtheAp ak of Ami itancyAi At ese Aregion . ATh ns in AaAvarie y b enAproacti eAi Asupp rt ng AtheA au e AofA ictims of Ahuman Ar gh s violati ofA ituationsA–A tsAsuc ess ullyAmo ingAt eAS preme Acourt A or A ransf rringA heA‘b stA ak ryA ase’A ut ofAtheA ta e Aof Guj rat Ai Ajus AoneAamon Am nyAi stancesAinA h isAconnec ion.A daAof Athe ANH c,A 4.3.2.2 3AWhileAco flict res lutionAd esAno Af rma lyAfigu e A nAt eAage ndAdesp ir fromA i st tuti n Alike itAhaveAaA ajor pr ventive Aro eAin Adispell ngA elpless essA ictim AofAma or Ahuman Ar ght Aviolati nsAa dAdiss ade A uch Agroup Af omAresorting AtoAv olence.1 .3.2.3ANat onal AMinor tie ACommiss on AandANat ona ACommiss onAforB ackwardAC assedAca tes TribesA 14.3.2 3.1AThese bodi sAf nctionAl ke Athe ANati nal commissio s AforASchedulslat onsAratherA wi hAth AdiffrenceA hatAt eyAderi eAth irAmandateAfr mAparliament ryAleg‘constitutio alA tha Aconstituti nal Aprovisio s.AO serv tionsAmad Aw th A eferenceAto Athe Ahas so Af rA otA c mmiss on ’Aals Aapply in theirAca es.AThe A ackward Acl sse Ac mmi sio bodiesAl ke AtheA beenAa le Ato Aop ima ly Acomme ceAits A ssigned Adutie . A stabli hmen Aof jur sdiction Ao A Nat on l Acommissio AonAMinor tie ’AEdu atio A asAt ke Aaw y AaApartAof A hetheAMinor t es commiss on A– it A ppear Athat Athe A lde Acom i sion AhadAmi195or apactyConflict BuildingResolution Afcontribution to address education related concerns of religious minorities. The desirability of multiplying bodies concerned with issues relating to the same sections of society needs to be seriously reviewed.14.3.3 Institutions Established under Executive Orders 14.3.3.1 The National Integration Council (NIC)14.3.3.1.1 The NIC owes its establishment to the initiative taken by the then Prime Minister, Pt. Jawaharlal Nehru, who in the wake of major communal conflagrations in Jabalpur and certain other places in Central India, convened a National Integration Conference in September, 1961 to find ways and means to combat the evils of communalism, casteism, regionalism, linguistic chauvinism and narrow-mindedness etc. The underlying idea was to build a consensus to rid the country of communal violence and other divisive evils through formulation of cross-party consensus and identifying suitable policy and other initiatives.14.3.3.1.2 One of the important conclusions emerging from the Conference was the setting up of a National Integration Council (NIC) to review all matters pertaining to national integration and to make recommendations thereon. The NIC was constituted accordingly and held its first meeting on 2nd and 3rd June 1962.55 It represented a wide spectrum of political opinion and membership, including eminent Gandhians, veteran journalists and eminent academics. In the wake of the Chinese aggression, the focus was primarily on building national solidarity. The spontaneous response of all sections of Indian society to external threats gave rise to hopes of a well knit polity and society. Escalation of communal violence in West Bengal, Bihar and Orissa and subsequently in parts of Gujarat caused much more attention to the issue of communalism relegating to the background other, equally important but somewhat less urgent issues of other fissiparous tendencies. The Council’s concern during the 1960s and 70s with this issue was reflected in its composition. While it is difficult to categorically assess the contribution and effectiveness of the NIC, it is generally agreed that it engendered considerable sensitisation about the baneful and disruptive consequences of communalism. Specific policy measures like broad-basing recruitments to central paramilitary forces, issue of guidelines to deal strictly with outbreaks of communal violence and insertion of stricter penal provisions like Sections 153A (Promoting enmity between different groups on grounds of religion etc) and 153B (Imputations, assertions prejudicial to national integration) of the Indian Penal Code were the result inter alia of consensus arrived at in the Council. Thus while the Council has provided a useful forum for airing of grievances of sections of society55.in/N196Institut ona AArrangl mentsAforand led to a ence,Aits A onfli tA a dAledAtoAaAbe te Aun erstand ng of Athe Ap oblem Aof A omm nal Avio r solution roleAhasArei nedArestr ct d.Aontent.asp?id 174AAofAnAyea s,A 14.A .3. .3AThAcouncil Awas A as Areconst tuted in AFe r ary 20 ifte5, Aaft rAaAgaTheyAinclu e A nionA with A he Pri e AMinister A sAi sAch irp rson Aand wit A141Ame bers. tures,Al ade sAofA Mi ister Aof Ac binet Aran , A hiefAM nis ers of AS atesAandAuTs A ithAleg sl missi ns,Aemin ntA nat onal AandA egional A oliticalApar ie ,Achairp rsons Aof ANat onalAco guresAandAwomen’ A mediaAperson , A epresent tiv sAof Abu iness Aa d Alabo r, i Aemi ent publicANewADel iAonA 1s r A preshe ntative Afi.A stAmeetingAof the rec nsti ut dAN cAwas he dAinlAHarmony Ath oughA Augus , A2 05. The A genda AsetAout for deliberat onsAwas ‘communhil Ainauguratin AGov rnmental A arm ny,AEdu atheAPrionAan AMedia’.Ae AMinister,Ais ’AasAthe banesA theAproc edings,Aident fied A‘comm nalism,Acas eis ,Aregiona is Aan Aling onfe enc Ao A19 1A ofAna i nal integ atio A– At e AevilsAt atAwere As mi arl Aidentified by theA ssio sAitA ppear A tha Al dAt Athe Ab rth A fAt e ANIc.5 AFromA he sum ary ArecordA f A heAdisc keAe genderin AofA th t whileA he eAwasA Ade ire At Ae tendAtheAscop Ao Adelib rati nsAtoAissue Al on Ainter-re ion lA co eAn tionalAvalu sAa d Avisu li ing At eAimpact ofArap d A conomicAgrowth nAcommun lism AandA dis ar tie Aand Auni yAo Athe Acou try,Athe A mp as s A ontinued Ato beA o mmu na lAvi lence.AeA Amajor As gmentA14.3 3. . Acomm nalismAi AaAmaj rAd visiveAfa to Aand i A o tinue AtoAdefAare onAt eArise.of id nti yApoliti sAinAthe Ac un ry. AA serti nsAofAother grou Aid nt tie ,Atoo ,Ath refore, needA These Ahave equallyAimpo ta tAimplic tionsAonAna iona Aintegrati nAan A(uni n Aand AState much A reat rA ttention AW th A nAincr as Ain Athe A umber A fAa encie cs, ASTs, AO cs Aa dA lev l Acommission Aand corporatio s Awith A‘ea mark d Acl ente e’ Al ke A is a Ade te Ane dA minori ie Aetc) A atering A o A‘group spe ific’ Aconce ns Aan Ag i vances AinhereseAtheAl gi imateA oAha eA Afo um Ato Alo k AatAth Aho isticAp ct reAand Aat emp AtoAharmon sAandAth Aequ ll A con ern AofApromo in Athe Ainter stsAof Av lne able Asecti nsA ndA inoriti ut allyAexclusi eA press n AneedAtoAfo terAa Asu erveningA atioheseAgoalal Aid nti y.AAareAnotAort.ANIc Aoff rs Aan o Aanta onisticAbu Atheir A oncurren ApursuitAreq ires f Ac nsi erabl Ae appro riat AforumAwh reAthis Aimporta tAna ion-b il ingAgoalAcould Abe A ursue . 4.3. .1.5 Whi eAaAbo yAw thA heAvaried Aan AallAen om ass ngA anda eAof AtheANI Awil A ecess rily Ahave Aa la ge membershi ,Ait is Ade ir b e AthatAth reAis aAn rma iveAbasis Afo i sAcompos tio .AAnAexer is Amay Athere or Abe Aunde taken to Aid ntif Aareas Awhich An ed Aar a’ Afrom Awh chA rep ese tat on inA heAN cA ndAtoAlayA ownAan Aind cativ A‘ca chmen factionAabout A on it Am mbersh p Ac uld A e Adrawn AThisAwill ob iate Acriticism A rAdis atis represe tation Ao Aspecifi56 ty A uildingl t forResolutionAConfic14.3.3.1.6 The emphasis laid by the Sarkaria Commission on discussions of specific agenda items instead of delivery of general addresses by the NDC is also relevant to this body. Important issues of national and societal cohesion admit of a diversity of opinions and perceptions. Issues of national cohesion and harmony considered by the NIC are best discussed through structured exchange of views. Development of mutual understanding and cooperation is particularly necessary for maintaining collegiality and tolerance in a body with the varied composition of the NIC. This objective will be considerably facilitated if much of the substantive business of the NIC is carried out through smaller, subject matter specific committees where more in-depth consideration may precede broad discussions in the ‘full’ NIC. Similarly, deliberations in the NIC are not an end in themselves – it is necessary that the conclusion worked out in its forum is utilised for wider consensus. Placing of NIC discussion and their conclusion in Parliament would seem to be a step in that direction.14.3.3.1.7 Issues concerning the unity and emotional integrity of the nation also need to be gone into by academics from multi-disciplinary angles – this approach enables understanding and dissecting the multiple layers of factors inhibiting the emergence of a socially integrated nation despite the mosaic of diversities. Valuable contributions have been made towards this direction by historians, political scientists, sociologists and economists. These efforts require much greater focus through a common platform so that the intellectual underpinnings of the task could be properly understood and translated into sound policies and processes. There is, therefore, need to create such a platform either in an existing institution or setting up a new autonomous organisation to carry out research and to function as a ‘think tank’ on matters conducive to promotion of national integration. The Indian Council of Social Science Research – ICSSR – and the Planning Commission may take a lead in the matter.14.3.3.1.8 Recommendationsa. The mandate of the National Integration Council (NIC) requires consideration of all factors impinging on national cohesion, and not only communalism or communal violence. The agenda of the NIC needs to be diversified.b.Substantive issues before the Council may be considered in detail in smaller, subject-matter specific committees.c.The composition of the NIC may be rationalised to facilitate consideration of a wider variety of issues. Broad guidelines may be framed by the Ministry198I stitutionalA rra gements forAconflicsAonAissuesAof Home trea sA ha A of Hom AAffairsAfor identify ngAint res AgroupsAa dAspeci ltyA on he NIC.A needAtoAbe re res ntedttee Ac uldA d. AThe Coun il mayAm et Aa A eastA nceAa yea , Awhile AtheAsu -comm Atime-b m et asAoften as required to A ompleteA heAa si n dAtask AinA un manner.e.AASummary pr cee ing Aof th ANIC mayAbe laid before bohAHousesAofAPli ment.heAPlannin AAThe AInf A ia ACounc lAofASo ialAScie ceARese rch (IC SR)AandA ingAa Amulti- Co miss o Amay ta eAa leadAi At e Amatter AofA s ablish cussAissue A isciplin ry A esearc AandApol cy Aanaly is platfor AtoAdi utionAorA y concern ngAnational integr ti nA itherAin anAexisting in ti pro otingAaAnew in ti u ionAorAa sAa Anetw rk.14.3. .2 ANational Develop entACo uncilA(ND )fAtheAPr meA 14.3.3.2.1 Es abli he Ai A195 AasA nAape Abody (ND )AunderAtheA ha rma shipA ers,AitAwa A M niste Awith State Achi fAM nistersAa dAimp rtantAuni nA inisters as mem AtoAprom teA origina ly intendedA oA‘ obilis At eAnatio Ai Asu portAofA heAfiv -ye rA lansAan ntlyAbec meA econo ic A olicies A orA alanc dAandAra id growth’ AThe AmandateA ubsequ oval toAt eA s mewhatAmor Astr ctu ed A ithAth AND Ahaving At eA uthori yAtoAacc rd app AThe AN c AhasA Fiv Aye rAPlansAa dAimportant development initiati esA mainly,An w A che es) Aco mi teesA oft nA ucceeded inAbuildi g A onsensusAonAc ntrove sialAp licy Ais ues throughAititationsAofA an AinAea lie Ayears, Athe di cus ion Ain Ath ANDc itselfAwere A ub tantive.AThe li nstructured dis ussionsAand A tr nsactionA fAbusi ess” Ama nlyAthro ghAprepaedAsp ec esAeAND A ould oted in the cas Aof theANIc Aand Inter-S ate Ac unci Aa ply also h to the NDc.A Aopini nAon playAaAmfecre Ae iveArole in Abuildi gA onsen usAto Aa oid Aseriou Ad fference Ao gAbalanced, issuesAl keAeconomic developme tAincludin Aa locationA fAr sourcesAandA acilitati sustainable devel pmentAwhil Aaddress ngAc ncernsAl ke AregionalAi spa r i ti s.A14.3 3.3ACent al AAd is ryABoard A nAEduct ionA(CABE A14.3 3.3.1 Whi eAth reAare Aman A‘advi ory’Abodie Aconcer ingAdiv rs Amatte sAofAmu ua Aco cern A oAt eAu ionAa dAtheAState A over me ts, AcA EA sAun que Ai Ath sAgr upAnot A nl Ab cau e AitAi Athe ol est body ofAits kind hav ng be n Aset up as Ae r y Aa A192 A- Abut A ls Abe auseAi A asApl yedA Am jorAroleA nAresol ingAseri usA onflictsA ndAbuild ngAnation lA onsens199Capaci yAB ilding A or ResolutonAConflictconcerning education particularly for the period before 1976 when ‘education’ fell within the exclusive domain of the States. Highly complex and emotive issues like the ‘Three Language Formula’, ‘National Curriculum Framework’ and even National Policy on Education were sorted out through the instrumentality of CABE. Unfortunately, this important consensus building forum was allowed to lie dormant for most of the 1990s; its revival from 2004 is a happy augury. It is important that to ascertain responses of the States to major policy initiatives in education and allied fields CABE resumes its earlier pro active role.14.3.3.3.2 Recommendationa.Specific rules of procedure for the National Development Council and otherapex level bodies may be drawn up to ensure focussed deliberations.14.4 Other Institutional Innovations14.4.1 While there is a need to broad base, strengthen and effectuate the existing institutions and fora for conflict reduction and resolution, there is also a case for extending the existing framework of some of the institutions so that certain proven methods of negotiations and deliberations could be more widely applied. Attention may, in particular, be invited to the following.14.4.1.1 Establishing State level Integration Councils to discuss State-specific conflict situations, including potential conflicts, and providing a mechanism of networking such Councils with the NIC. This networking may be achieved through bringing some of the important issues discussed in the State level body to the NIC (with recommendations made thereon) for its advice and for a national consensus on such issues wherever required. Similarly, while formulating guidelines for deciding the composition of the NIC, the Union Government may provide for some representation to the State level bodies. Similar bodies may also be visualised for the District level with linkages to the State Integration Councils. It may be added that in some of the chronically strife prone Districts a system of ‘Peace Committee’ was in vogue (District level Peace Committee have been dealt with in Chapter 9 of this Report). Such Committees had proved very effective in quickly bringing parties to conflicts to the negotiating table. The system needs to be revived and made less ad hoc by making it a normal ‘peace time’ activity as well.14.4.1.2 Conflicts involving States, parts of the same State or even sizeable section of people agitating for redressal of specific grievances or fulfilment of demands can be solved through arbitration of people commanding respect and acceptability within the community. Such200Institution lAA rangemel tsAforAconictAsituation .approaches have usefulAthr ughA pproach s Ahave alread AprovedsAin Asect rianA ‘T ac -II’AeffrtsAof Ae in ntAcitizegAou Aprobl ms conflict , A articul rly inAsorti ons,Atimi g AofA likeArout s AofAreligio sAproc ss uesAc ncerningA relig ous ceremo ies AandAis Ther Ais Aa AcaseA ma or Aeducationa Ains it t ons. proachAthrou hA for Ains itut onalisin AthisAa es Aconsis ingA cons itutingA‘Pe ceAcommitt Av rious walksA of Ae inent citi ensAdra nAfro blic Atrus Aan of A life,Aenjo ingAwi espre dAptyAa d Awisdom.A confienceAforAthe rAi partial inAthe Af rm AofA uch Ac mm tt es A ould benApla eAb Ath A standi g Aa ra gemen s A utA sibilitie Aa dA unio Aand Athe ASt te AG vernment AwithAadequ te orien ation Aof AtheirAr spo uralAand Aot erA fu ctions s AthatAd ringAa Ac isis Ap eci usAt me isAnotA ost inAworking out proce tionA arrants.A mhesdaliti s.A AbodiesAm yA e Aact vatedA tA hor Anot ce A s AandAwhe AtheAsitu oralAau ho ityAi steadAofAlegal enfor ea ili y Awou d A e Athe AbasisAof im lemen ationAofAthe irA‘adv sories’.14.4.2Remmend tionsof AStat AlevelA a. AASt te AInteg ati n A ouncils Amay be cons itute At Atake stock . AIn Aimplict Asirta tA conuations A aving Asu tabl Ali kage Aw th Athe ANIbe Abrought Afor matt rs Athe A eport of ASta e Al vel A od es Amay A lso consid rat on,AadviceAand A ec mme dati nsAofAtheA IC. Guidelin sAf rAdeciding th Ame bershipA oAtheANatio al AInte rat onAC unci AmayAals AgiveAsui ab eAweightag Ato Aadequate yAr prese tingAtheAStteAInteg at onA AnionalAbo y.ouncilsA nAtheittees)A avingA b.A DistrictAle el Ainteg ationACou cilsA DistrictAPe ceACom dAp rticularl A su tabl Ali kages withAthe Sta eACo nc ls AmayAals AbeAconsider s.AThese A houldA for D stricts wi hAaAhist ryAof Avi lent, l Adiv sive confic llAsecti nsAo A c mprise Aemin ntAindiv duals Aenjo in Aco fidence A fA lesAinAconflheseAsocie y.AodiesAmay pla Amediato yAand ad isoryAr201CONCLUSIt has been said that peace is not the absence of conflict but the presence of creative alternatives for responding to conflict – alternatives to passive or aggressive responses, alternatives to violence.In this Report on Capacity Building for Conflict Management, the Administrative Reforms Commission (ARC) has tried to outline measures that can be taken to improve the institutional capacity of the country to manage and resolve conflicts of all types. It is well recognized today that the Indian Constitution provides ample scope to resolve conflicts between different social groups, contains fissiparous tendencies across regions, and provides hope to disadvantaged sections of our society, while remaining part of the diverse mosaic that India represents.During the course of our post Independence history, we have been faced with many types of conflicts, some of which have been successfully resolved whereas some are still simmering. A combination of political liberalism, strong governance structures and a resolute insistence on adherence to our constitutional norms has enabled India to successfully rise above the political tumult in our neighbourhood and protect our fledgling democracy to the point that it has grown to become a mature and respected emerging power. Creating an institutional context wherein conflict management is done in a democratic manner keeping the interests of all sections of society in mind rather than resorting to short term fire fighting is the focus of the Report.The issue assumes paramount importance because increasingly in our country it has become a disturbing truism that resorting to violent agitation is the preferred strategy for aggrieved groups to articulate their grievances as compared to constitutional methods of democratic agitation and dissent. The irony is that the father of the Indian Nation, Mahatma Gandhi, was humanity’s torch bearer for non-violent and peaceful methods of agitations against injustice. Satyagraha, civil disobedience, peaceful non-cooperation, there were all his contributions to the arena of political mobilization of people for a cause.India needs today to return to the paradigm of political agitations that remain peaceful, to a political discourse that retains civility and humility , to a politics centred on mutualIONf Recondationsaccommodation ining Awitho tA acc mmodatio Aa d Ar pect Ato the A gi e Aand Atake f Ademocrat c AAbargof Astica gr ssion, Aa d Ato onflct Athat Aar Aof Aidea Aand At ough s A ather A hanks andAstones.etailAi th sA The institutio al Am cha isms thatA an Ah lp Abr ngA his Aabout re discus ed AinA canAbringAal A eport AAIt is A opedAt at Athe sh r d Avision of A ApeacefulA ndApr spe ous AI dia fu lyA sApart stakeho de sAto etherAonAt isAco lec ive Aquest for resolving A ur Adifferen es peac ofAour An tionAbui.SU MARY AOFARECOMME1. (Para 3.8) Left Extremisma. A long-term (10-year) and short-term ( 5-year) Programme of Action based on the ‘14-Point Strategy’ announced in Parliament may be formulated by the Union Government in consultation with the concerned State Governments to identify State specific action to be taken to implement the ‘Strategy’.b. While agreeing with the spirit of the ‘14-Point Strategy’, negotiations with the extremist outfits should be an important mode of conflict resolution.c.There is a strong case for ‘back to the basics’ in the matter of administrativemonitoring and supervision. The system of periodic official inspections and review of organisational performances needs to be revitalised. It must be recognised that a major reason for such practices falling in disuse in ‘disturbed areas’ is the apprehension of senior functionaries about their personal safety while on tour. It is advisable that the need to provide suitable security to the senior administrative and technical officers while on tour, is taken into account in working out requirements for security forces in areas affected by serious violence.d. There is need to enhance the capacity of the security forces to act effectively and firmly, but in conformity with constitutional bounds; it is necessary that standard operational procedures and protocols are laid down in specific terms and detail.e.Training and reorientation including sensitising the police and paramilitarypersonnel to the root causes of the disturbances that they are seeking to curb, are necessary.NDASummary Af ARecondationsf.Formation AG eyhoun sA .A ormatio AofAtra nedA pecial ta kAf rcesAon th Apa ternAofAthgyAtoAbu ld inAAn hra APr de hA houldAbeA nAimpor an Ael mentAofA he strat cap cityAi Athe Apoli eAm chineryA orAt cklingAleftAxtremism.g.A sta lishingAandAs rengt ening localA evelApoli eAstations Aadequf te yAsta edA byAloc lA ecr its,AinAt eAextre istAaffe ted Are io sA houldAbe nAimporta tA omp nentAofA heApolic ng A trategyA orAt ckling AlefAe tre ism.Ah. AF r Aeffective Aim le ent tion Aof At eASche ule ATrib sAandAother Tradit onalAFor stADwellers A Re ognitio AofA ights AAct,A 2006,Amulti- reAthatAtheA isciplina yAOversigh ACo mi teesAmayAbe co stitut dAto ens rse yAaffe tA im le enta ionAof AthisA meliorative legi lat onAdoesAn t Aadveosystem . theAlocalsti utionalA i. ASp cia Aeffort Aa eAneede Ato monitorAtheAim le entationAofAco ini iativesA a d Astatutory safeguards, develop ent sche esAandA andAreforms opagand AofA fo Acontainin Adisc ntent Aam ngAsection Av lne able AtoAth Ap iolentAleftAxt emism.2 5lityAmay j. be AT Afacili ateAloca lyArelevant developm l ntAadequat Afe ib sAcentral yA providedAtoA mplement ng age ciesAin theAa fec edAarea AasAregar ceAsuit bleA s onsor d AandAot er sc em s, AsoA sAto en bleAthemA oAintrod qu rements.A c an es Aba edAonAlocalArsAandAother k. Pe for anceAo At eAStates inAam ndingAthei APa chay tiA ajAAc APanchayat A re ulati nsAt Ab ing A hemA nAl neAwithAth Ap ovi ionsAofAth mplem ntingA ( xte sionAtoAt eASche uled Area )AAct, 199 A( ESA)AandAinA on MinistryA thes Apr vi ionsAmayA eAm nitoredAandA nc nti isedA yAtheAUnhaat ARaj. o APanran portersA l.AThe An xus Abet een AillegalAm ning/forest con ractors AandA eAextrem stA an Aextr mistsAwh ch A rovidesA heAfinan ial sup ortAforAt tortionAan A mo em nt needsAt Ab Abroken ATo Aa hieve At is,AspecialAan i-e olice/State anti-mone Alau dering ce lAshouldAbe es abl shedA y AtheAStateAG ver ment.m.AForA mplem ntingAlargeAin rastructu e Aprojects,A arti ularlyAro dAne wor s,AthatA reAstro gl Aop osedAbyAth Ae tre ists or areAus dAtoA xtor Afund AfromAlocal A ont act rs AtheAuseAof specialise AGovernm ntAa enc esAlik AtheA orderARoads A rg nisat on in AplaceAof con ra tors AmayAb Ac n ideredAas aAtemporCapacity Building for Conflict Resolution2. (Para 4.9) Land Related Issuesa.The following steps may be taken to alleviate the distress in the agrariansector:i.Provide renewed impetus to land reform measures like redistribution ofsurplus land, vesting title in tenants and carrying forward consolidation of land holdings etc for maintaining and promoting the sustainability of agriculture.ii. In order to provide adequate and timely facilities to farmers, there is need to augment the banking system in the rural areas and make them more responsive to the farmers’ needs.iii. Redesign poverty alleviation programmes to make them more relevant to the needs of small and marginal farmers.iv. Step up public investment in order to expand non-farm and off farm activities to provide alternative livelihood opportunities for the poorer farmers within rural areas.v.Introduce measures to encourage formation of ‘Self Help Groups’(SHGs) to improve access to credit and marketing and empower the disadvantaged.vi. Diversify risk coverage measures such as weather insurance schemes and price support mechanisms.b. A new legislation for land acquisition incorporating the principles laid down in the revised national rehabilitation policy needs to be enacted. The recently announced national policy on rehabilitation of project affected persons should be implemented forthwith for all ongoing projects as well as those in the pipeline.c. There is need to amend the present approach to SEZs on the following lines:i.In establishing SEZs, use of prime agricultural land should beavoided.206Summary of Recondationshe i.ATeA um erAo ASEZsA ho ld AbeAli ited A ithAaA argerAm nimu Asiz AwithAloc tionsApref ra lyAinAba kward ar asAs Atha Ath yA ctAasA ucl iAfor Aec nomicAgrowt.iii ASEZsApr mo edAbyAf rmers Athem elvesA ho ld AbeAencourag d.eASEZAv.ATheAlive ih odA fAtheAdis lacedA ho l Abe Aa majorAc nc rnA fAtpol cyheASEZAregulil yA v.AtionsA houldAc earlyAal ocateA ocialAresponsi.AThisA ofAArehabili at onAtoAentrepr neursAs ek ngAtoAest blish SEZ ouldAAi cludeApro isi nAforA ater,Asanit tion,A ealthAfacil tie ,AandAvoca ionalAtr iningAcentr s.ot rsA i. AThe Aprop rt on Ao Alan At at Ais Aper it ed to Ab Au ed A y Athe Apro nim mA o ASE s Afor Anon-proc ssing Aacti ities A ho ld Ab Ak p Ato Aa Am s. ATheA an Athis A ho ld Abe Ae su ed A t Ath At me Aof Aap ro al Aof their A la ne ds ex sting ratio Ab tween Aproc ssi g Aand Anon-proc ssing Aacti ities toAbeAre-ex mi edAin or erAtoAma imi e Athe Aprop rt onAo Ala dA utAtoAprod ctiv Ause AAlsoA trictAadh re ceAtoAenviron entalAregul tionsA ho ldAbeAensure .lised vii.ACompreh nsiv Ala d Ause plansA ho ldAbeApr par d i AandAfn afte AwideA ublicAconsulta ions.AIndu trialAacti it esAi ASEZsA ho ldAbeAl cate Ao lyAin areasAear ark dAf r Athe Ap rp seA nAth AladAuseAplans s vi ndA ATheAextA i.emelyAl ber lAtaxAho idaysApr vide Ab thAtoA xport unitoAdeve opersAr quireAreconsiderat on.3. (Par A5.5) WaterAR latedIs ueca esA a.AThe UnionAGove nment ne ds toAb AmoreApro cti eAand Ade is veAin ainedA ofAinter State riverAdi put sAa dAac Awi h Athe Aprom tne sAandAsus att ntio Atha AsuchAdi putesAdma d.Ab. SinceAA tic eA 62A fAtheAConsti utionApr vide AthatAn ith rAtheAS preme Cou tAn rAany other Court shallAex rcise Ajurisd ct onAinAr sp ctAofA inter State riverAdis ut s, itAis Anec ssar Ath tAtheA pirit A ehin AthisApro is onAis fullyAappreciated.207Capacity Building for Conflict Resolutionc.River Basin Organisations (RBOs) should be set up for each inter-Stateriver, as proposed by the Report of the National Commission for Integrated Water Resources Development, 1999 by enacting a legislation to replace the River Boards Act, 1956.d. The Chairmen of all the River Basin Organisations, as and when formed, should be made members of the National Water Resources Council.e. The National Water Resources Council and RBOs should play a more positive role. The Council and its secretariat should be more proactive, suggest institutional and legislative reforms in detail, devise modalities for resolving inter-State water conflicts, and advise on procedures, administrative arrangements and regulation of use of resources by different beneficiaries keeping in view their optimum development and ensuring maximum benefits to the people.f.In order to develop, conserve, utilise and manage water on the basis of aframework that incorporates long term perspectives, a national water law should be enacted as suggested in para 5.4.3 above.4. (Para 6.11) Issues Related to Scheduled ernment should adopt a multi-pronged administrative strategy toensure that the Constitutional, legal and administrative provisions made to end discrimination against the Scheduled Castes are implemented in letter and spirit.b. To ensure speedy disposal of discrimination cases pending in subordinate courts, an internal mechanism may be set up under the control of the High Court Administrative Judge to review such cases.c.There is need to place a positive duty on public authorities for promotionof social and communal harmony and prevention of discrimination against the Scheduled Castes and Scheduled Tribes.d. There is need for engaging independent agencies to carry out field surveys to identify cases of social discrimination.e.There is need to spread awareness about the laws and the measures topunish discrimination and atrocities. It is necessary to launch well-targeted208Rummary ~~~ ~~~~~~~~~~~~~awareness reAlow.A awarenes Ac mpaig sAinAheArea AwhereAth Aaware ess leve s ADistrictAAdm nistra ionAshou dAorganiseA ndepend nt surveysA oAidentifyA vulnerabl Aa eas’.heAspeci lA f.ATheAadm nis rat onAand the Apo ic AshouldAbe sensiti ed A owardsA houl A lsoA rob emsAofAth ASched led CastesAan ASchedu edA ribes. TheyA esA gainst lay AaAmore pro- ct veAroleAi Ade ectionAandAin es igatio AofAcri theAweake Asections.A ppropria e Atraining progr mmes wo ldA elpAinAtheA ensitising process.g.A nforceme tAagen ie AshouldAbe in tructedAinA nambi uous termsAthatA nf rce entAof th Ari htsAof theAweak rAsect ons sh uldAnotAbedow play dAorAfear ofAfurtherAd st rbancesAorAret ib tion.ictimsA ndA h.ATheAAdm nistra ionAs ou dAf cusAonAtheAreh bi ita ionAofA he rovideAa l Arequi ed supp rt AtoAthe AincludingAcouse lin .islatio s.eAst tionsA i AAs AfarA sAp ssibleAthe de loymen AofApolic Ap rsonne AinApoli ionAtoAthe with significant pr por ion ofA CsAand ST As ould AbeAin pr por ollow dA nA po ulat on AofAsuchAc mm niti s.ATheAsam Aprinc pl AshouldA eA AreligiousA casesAof locali iesAhavingA ubstantial pr portionAof lin uisticAanmio ities.j.A Asta uto y A utyA ay beA astAon allApublicA ut orities toApromoeAe ualityAa dAact velyAc eck AsocialAdiscri in tion. einA ffo .A tsA tAwouldAb Ad sirableAt A ntrodu eA AsystemAof incenti es Awhe ti gAcasesA ma eAbyAth se officialsAi Ade ecting AandAs ccessfullyA rosec eAsuitablyA ofAdiscrimination atrocit es A gainstAth ASched led CastesAano ledg d.achergenciesA A oA l.A AshouldA e Atraining pro ram esA orAtheAlawA nforceme tA esAa dAt eA suitabl Asen it seA hem AtoAt eA rob emsAofAth ASched led Cas need forAstrictA nf rcement of laws.eAactive yA.ATheAlocalA o ernmentsA–Amun cip litiesAand p nchaya sA AshouldArcement ofA nvolved inAvarious programme Acon ernedAwi hAeffectiveA nf var ousAsocial Ale209Capacity Building for Conflict Resolutionn. The corporate sector and NGOs need to be involved in complementing the efforts of government for the development of the Scheduled Castes. Such voluntary action should not only be directed towards economic and social empowerment of the SCs, but also towards enabling them to raise their voice against atrocities, discrimination and exploitation.5. (Para 7.10) Issues Related to Scheduled Tribesa. While all States in the Fifth Schedule Area have enacted compliance legislations vis-à-vis PESA, their provisions have been diluted by giving the power of the Gram Sabha to other bodies. Subject matter laws and rules in respect of money lending, forest, mining and excise have not also been amended. This needs to be done. In case of default, Government of India would need to issue specific directions under Proviso 3 of Part A of the Fifth Schedule, to establish a forum at the central level to look at violations and apply correctives. The Commission would like to re-iterate the importance of the Annual Reports of the Governors under the Fifth Schedule of the Constitution.b. Awareness campaigns should be organised in order to make the tribal population aware of the provisions of PESA and the 73rd amendment to the Constitution so as to demand accountability in cases in which the final decisions are contrary to the decisions of the Gram Sabha or Panchayat.c.There should be a complete overhaul and systematic re-organisationof existing land records with free access to information about land holdings.d. There is need to harmonise the various legislations and government policies being implemented in tribal areas with the provisions of PESA. The laws that require harmonisation are the Land Acquisition Act, 1894, Mines and Minerals (Development and Regulation) Act, 1957, the Indian Forest Act, 1927, the Forest Conservation Act, 1980, and the Indian Registration Act. National policies such as the National Water Policy, 2002, National Minerals Policy, 2003, National Forest Policy, 1988, Wildlife Conservation Strategy, 2002 and National Draft Environment Policy, 2004 would also require harmonisation with PESA.e. Mining laws applicable to Scheduled Tribal Areas should be in conformity with the principles of the Fifth and Sixth Schedules of the Constitution.210ummary Aof ARecondationssioner A nAcial Awh A f.A overnm ntAsho ldAs lectAsu hApolic ,Ar venueA nd fi Afore tAo dA sAwellA have Ath Atr inin Aa dAze l A oAwork inAtr bal areasAandA nd rsta as empa his AwithAtheA opul tionAthe A erve.g.A Anat on lAplan ofA ctionAforAcom rehensiveAd velop entAw ichAw ul A erve asA Aro dAm pAforAt eA elf reAofAt eAtrib ls shouldAb AprparedAandAimle ente .Aro ram esA h.AThre shouldAbeAc nv rgenceAofA egu atoryAandAd velopmentAshouldAb A inA heAtri alA rea .AForAth A urpose, aAdecadalAd velo mentAp an mec anismA pr paredAandAi pl m ntedAin aAmi sion modeAwithAa propriatejutm nts. forA es lutionAo Aco flictsAandAadof tri esA i.ATheAa thoritie Ai volvedAinAd ter iningAthe inc usionAand ex lusion sult tio i A At e AlistAof Schedu edATri esAsh u dAadoptAa me hanismAofAco Abasi A fA with theAma or A tates andA hose Aw thAtribalApo ul tio s,Aon th metersA sA which AaAcom rehensiveAm thod logyAwi hAclea lyAdefinedA ararr vedAa .6.A ParaA8 6)AIssu sA elate AtoAOthe ABackward Classesa.A ove nmen Ama Awo kAoutAtheA od l tiesAo AaA urve Aa d takeAu pAa A tate-wiseAsoci -econo ic sur eyAofA heA“Othe ABackward Class s”,Aw ichA oul Aform th AbasisAo Apo iciesAandA ro rammesA oAimp oveAtheirtatus.b.AA overn en AneedsAto for ulateAand i plementAaAcom rehensveA chemeAfo Acapacit Ab ildi gAof OBCsA hatAw uldA ri g At emAa Apa AwitAt e ArestAofA ociet .7.A ParaA9.6) ReligioulsA onfictsdAd wn AbyA a. Communit Apolic ng shouldAbeAe co raged.ATheA rinc ples la r’ shouldA theA om issionAin paragr ph 5.1 .5AofA ts ReportA nA‘Pub icAOrd bef llowed.AeffectiveA b ADist ictAPeaceACommittees/I tegratio ACounc ls shou d AbeAmad sha mony.A i st umentsAofA ddress ngAiss es likel AtoAcaus AcommunalAd endent ofA Th ADistrictA ag strateAinAco sult tio Awith AtheASupe in onera es,A Pol ce AshouldA onsti uteAtheseAc mm ttees. In APoliceACommisstheseA ommitt es shouldAbeAc ns itu edAbyA he APoliceACo mi211Capacity Building for Conflict Resolutionconsultation with the Municipal Commissioner. The committees should be of permanent nature. These committees should identify local problems with a potential to degenerate into communal conflicts and suggest means to deal with them at the earliest. Further, Mohalla Committees should also be organised on the same lines.c.In conflict prone areas, the police should formulate programmes in whichthe members of the target population get an opportunity of interacting with the police as a confidence building mechanism.d. A separate law to deal with communal violence is not required. The existing provisions of the Indian Penal Code and the Criminal Procedure Code need to be strengthened. This may be achieved by incorporating provisions for:i. Enhanced punishments for communal offences.ii. Setting up of special courts for expeditious trial of cases related to communal violence.iii. Giving powers of remand to Executive Magistrates in cases of communal offences.iv. Prescription of norms of relief and rehabilitation.Further, as recommended in para 6.1.7.9 of the Commission’s Report on ‘Public Order’, this should be accompanied by the deletion of the provisions contained in Section 196 of CrPC requiring prior sanction of the Union or State Government or the District Magistrate for initiating prosecution for offences under Sections 153A, 153B, 295A and sub-sections (1)(c), (2) and (3) of Section 505 of IPC.e.For providing relief and rehabilitation to victims of communal violence,the framework provided under the Disaster Management Act, 2005 could be effectively used.8. (Para 10.3) Politics and Conflictsa.Political parties should evolve a code of conduct on the forms of dissentpermissible in our democratic set up. This could be incorporated in a law, which would apply to all political parties and their functionaries.212f Recondations Summary Aorms AsoA ef ed.Enforcement of n A omm ssion. nfo cem nt Aof th Alaw Acoul Ab Aen rusted At Athe AElecti l Apar ies AandA The Al w Ashould A lso Astip late Ap nitive A ction Aaga nst Apol tic at c Adissent A their functiona ies violating A he Apr sc ibed Aforms of Ademoc im osing Afines by providin Afor A ri in l Aca es Ato Ab Afile Aag inst Athe Aandas dete rent.AhereAshouledAwi hinAtheA .AAbeA onsensus thatAide tityA ol ticsAw uldAbe pla oAintrac ableA pa eAprovide Aby dem cracyAa dA otAallo edAt AdevelopAindAcapa it AtoA co fli ts Aleadin AtoAviole ce.APol tica Ap rties needAtoA ui r ive AatAsuchA Aconsnsus.al i parities.A(ParaA 1.6)ARegionheABl ckAas a aA AAAAcomp sit AcriteriaAf rAidenti yingA ackwa dAa easA( it A rty Aliter cyA nit)Abased on indic torsAofAhum nAdevelop entAincl dingApov AandAeconomicA andAin antAmo talit Arat s, Aalon Aw th Aind ces ofAsocia ssio Afor theA i frastr ct re,Ashoul Ab Ade elopedAb Athe APlann ngA omm 2thAF ve earAP an.orABlock-w seb. AAU ionAand ASta eAGove nment A houldAa opt aAformulaA devol tionAofA un sAta getedAat moreAbkwdAareas. AA ackwar A reasA . AAGo er an e AneedsAtoAb Aparticularl As reng henedAin moreAbackwardAar w aA th nAaA ta e.ATheAro eAofA‘s ecialApur oseA eh cles’Asu hAas eAdis ar ti sA deve opm ntAboardsAa dA uthoriti s AinAreduci gAintra-Sta vern ents andA needsAt Ab Ar viewed.AI Ai Aadvisable to Ast engthenAloc lAgmakeAth mAr sponsibleAandA c untabl .es)Aachiev ngA d AAAAsyste AofAre ardingASta esA(inclu ingAdev lopedAStasignifian AreductionA nAintra-Sta eAdisp ri iesAshouldAbe ntroduced. .AAAd itio al fu dsAneedA oA eApro ided toAbuildAcoreA nf astuctureAatAtheA gionsAi As chAnter- is rict levelAinA essAde elo edAState AandAba kw rdArionate to theA Stat s. The Aquantum ofAass st nceA hould Abe Amade pr pornu berAof pe pleA ivingAnA ch areas.AheAaf AA proa hAtoAal AsuchA un ingAsho ldAbeAo hco eAdrivenAATeAs ra eg Anfrastructu eA shouineAaccedAbeAtoAdetable mi imumA orm AofAhumanAandAnAandA un ingA de elopm ntAth tA ver AblockA nAtheA ountry sho ldAatta sh ul Abe drivenAbyAthe co siderat onA o Aach ev AtheAnoi213Capacity Building for Conflict Resolution10. (Para 12.6.1.4) Capacity Building in Administration in the North Easta.Greater opportunities may be provided to officers serving in the regionto serve outside the North East to gain greater exposure to diverse work situations. Local and technical officers from the State should also be given opportunities to serve in larger States and to improve their professional qualifications through training in the country and abroad.b. Incentives available for officers working in the North East should be increased.c.Regional training institutions for various branches of administration,including the technical services may be operated by the North Eastern Council.d. NEC may initiate discussions with the States to examine the legal implications and feasibility of regional cadres for senior positions in technical and specialised departments under the States.e. NEC and the Ministry of Home Affairs may, in collaboration with the States, draw up an agenda for administrative reforms for the region with its implementation being monitored systematically. Satisfactory performance in implementation of this charter may qualify the States to additional funding including special economic packages.11. (Para 12.6.2.4) Capacity Building in Police in the North Easta. The North Eastern Police Academy (NEPA) needs major upgradation of infrastructure and staff to cater to a larger number of officers at the induction level. NEPA may also be developed for imparting training to civil police officers from other regions in dealing with insurgency. Financial and other incentives are necessary for attracting and retaining instructors in the Academy from the Central Police organisations and civil police particularly those with proven track record in counter-insurgency operations.b. Concrete steps are needed to introduce a scheme of deploying police personnel from the region to Central Police Organisations and to encourage deputation of police officers from outside the region to the North Eastern States.214~ ~~ ~~~~~~~~~~~ ~~~~~~12. (P ra 12.6.3.12.A ParaA12. .3.1.7)A ap cityA uildingAin LocalAGovern nc AIn titut onsA n theAN rthAEast – ASixthASc ed leACo ncilsa. ATo av idAc mplaintsAo AlessAfav ur bleAtreatm ntAtoA Sc eduledA reas’AinA eA ixt AScheduleA ertainAr spects,As ita le amen me tAm y AbeA adeAinAt sAt AbenefitAfromA of th AConst tut onAtoAenab eAtheAAu on mous AC unci eAState AEle tionA th Ar comme dations ofAStateAFi anc ACo missi nsAandAt AandA243KAof th A Com issionsAprov dedAr spective yAun er A rtic es 243Constit ti nAof A ndia.dAtheAAu on mous b.ATheA nionAGover me t,AGovern ent ofA eghalayaAa Counc lsA nAthat Sta eAmayAre iewAthe ex stingApatter AofArel tio shipAbet een the Counc lsAandAthe St teAGov r mentAtoAevol eAaAsatis ac oryAmec anism AtoA esolve A onf icts Abet een the Counc lsAand AtheAGovern en .ionAof A es urces.St eAAconcernedA c. tat A A Minist yAof Ho eAAffairsAmay AinA ons ltationAw thAth power AunderAt eA Go ernments Aa d AtheAAut nomousAC uncils Aiden ify screti nA ith ut Si thASchedu eAt atAGover or AmayA xerciseAat theirAd hav ngAt Aac AonAthe ‘a dAa dAadvic ’AfAtheACou ci AofAMinis er AasAenv sag dAi AA tic eA163A(1)AofAth AConstitu io .d APa agrap A14AofAt eAS xt ASchedul AmayAbe su tablyA men edAto enableAthe rAallAaut nom usA Un onAGove n entAto appoint AaA omm nAC mmissionAf andAmakingAothe A distri tsAfo Aasse si gAtheirAstateA fAa minist ation cityAmay als Abe recommen at onsA nvisaged Ai A hatAparagra h.A Aper od provided Afoth Commission AA .AAGo ernmen Aof AAs am A houldAre iew Athe Aexis in Aarrangemen sAofAdete miningAbudg tar Aalloca io sAand re eas AofAfundsA oAthe A‘ori inal’AAu onom u ACoun il Awi hA Aview,AasAfa Aa Apractic ble, to bri ging the AatAparAwith the arr ngements forAtheABod landATeri to ialAC uncil.A13.A ParaA12. .3.2.4)A ap cityA uildingAin LocalAGovern n eAInsti ution A–AVillageALeve AS lf- overna ce Ain theATr balANort AEastusACounc lsApassA a AM asure As ouldAb Atak nAt Aen ureAthat Aa l AtheAAu onomwithAw ll A eabl Alegislation fo Aestabl shing of Avil ageA evel bodiesinedA sui powersA ndAaAt an parentAsys em ofAallocatCapacity Building for Conflict Resolutionb. Stipulation may be made in the rules relating to release of grants to the Autonomous Councils to the effect that passage of appropriate legislation for elected village level bodies and its implementation, will entitle the Councils to additional funding.c.To enable the Autonomous Councils to discharge their responsibilitiessatisfactorily, it is imperative that the requirement of funds by these bodies is worked out normatively with reference to the minimum standards of service to be provided and capacity to raise local resources. Such exercise could be undertaken by the State Finance Commission.d. Nagaland has made commendable efforts to usher in a paradigm of decentralised village self-governance which combines the elective element with traditional power centers. The Ministry of Rural Development should formally recognise this arrangement for implementation of various development and poverty alleviation initiatives.e. Government of Meghalaya may take steps for extension of the experiment of elected village committees in the Garo Hills for implementation of the National Employment Guarantee Act throughout the State for implementation of all rural development programmes.f.It is imperative that in all States where village bodies administer justiceunder customary laws by virtue of the Sixth Schedule or other laws, such laws are duly codified.14. (Para 12.6.3.4.3) Capacity Building in Local Governance Institutions in the North East – Tribe Specific Councils in Assam and other Issuesa. Government of Assam may apportion functions between the tribe specific Councils/village Councils and the Panchayati Raj Institutions in a manner that schemes involving individual tribal beneficiaries may be assigned to the ‘Tribe Specific Councils’ while area development schemes are left to the latter.b. State Governments may initiate a system of meeting at least the establishment costs of the Councils from sources outside the tribal sub plan and build in these requirements in their projections to the next Finance Commission.216S mmary Aof ARecondationsideline .State esAwh chc. AStateAGo ern ents mayAt ke stepsAto identifyAi novativeAin tiati ingAareaA couldAbeA nt ust dAtoA heATrib ASpecific Council f Awithout afec de elopmentAco cerns.d. Suitable Ag ide in s AmayAbe pre ared AforApr pa ationAof Dis rict AandAsub ASpecific Distr ct pla sAinAthe relev ntAarea Athro gh Ajoi tA ffor sAofA heATrib Cou cil AandAtheAP nch yatiARajAInsttu ons.A .AAWhileAc nti uousAand vigorous mea uresAa eA eeded toAbr n AaboutAaA re iva A onsensu Abetwee Avarious se tions Ao As ciety Ai AMani ur Aabou bring Ain of the AHill A istricts A ounci s, A te s Amay Abe urgen ly taken to suitableAle is ation AtoA ntroduc Aelecte Avill ge Alev lA odi s Ain theAh ll area AofAthatA tate. 5. A(ParaA 2.6.4.3) Capacity Bu ldingAin RegionalAIns it tio sAinA heAN r hAE stA ANECAan DO ERoriginal a AAThe NEC A ct, 19 1 AmayAbe suitabl Aa ended At Are toreAthe ssuesA fA ‘conflict Ar solutionAp ovision’A equ ring Ath AC uncilAto ‘discu sA ACentralA mutual in ere tA oAtw AorAmo eA tat sAin At eAr gi nAand A oAa viseAth G vernmentAth eo ’.eAof AitsA c. AA oAe able Ath AC uncil A o AassistAef ec ive yAinAtheA is har atesAforA respons bil tiesAforA evi wing Athe measu es tak n AbyAtheAmemb r-S sAsh uld ma nt nanceAof se uri yAinAth Aregion, Mi istr Aof f AHo eAAfai dinati nA keepAth ACouncilASe retariatA egular yAw thinAitsA securityAcoong henedA oop’.AThACouncilASe retar atAw uldA ls An edAtoAbe suitablyAstrfectivetoAeyA ssistAin securityAcoordi at on.pa ationA d. AThe PlanningAC mmiss on nee sAto l yAdownAaA ram work AforApr tmentAo A ofAi tegrated region lApl ns, Awith Ap ior tie Aa dA ot AasAanAa so Ab aringA s hem sAby th ANEC.AThe regi nalApl nAsho ld focus onAa e sAwithA avoiding onAintra- egional,Ain er-StateAp iorit esAw ich haveAtheA ot ntialAoflicts AandAconromoting regionalAinteg tion.e.A PlanningAC mmissi nAshou dAe sure AtheAas oc ati nAo At eAN CAinA heAS ateAplanAfo mulation ex rciseAby suitably amend ngAtheirAgu217Capacity Building for Conflict Resolutionf. The responsibility of sanctioning funds from the ‘Non Lapsable Central Pool of Resources’ (NLCPR) should be entrusted to the North Eastern Council (NEC). NEC should work out mechanisms for scrutinising proposals for funding from the ‘pool’ and their funding in coordination with the Ministries concerned.g.It is desirable that a 10-year perspective plan is prepared for the entireregion encompassing areas like development of human resources and infrastructure. A governance reform agenda should also form part of this plan. This comprehensive plan needs to be reviewed by the Prime Minister regularly with the Chief Ministers for speedy follow-up.h. The Ministry for Development of North Eastern Region (DONER) may be abolished and the responsibility for the development of the region, including the infrastructure sectors, and utilisation of the non-lapsable fund should be restored to the subject matter Ministries, with the MHA acting as the nodal Ministry.16. (Para 12.6.5.2) Capacity Building in Other Regional Institutions in the North Easta. NEC may prepare a comprehensive scheme for making NEHU a centre for advanced study in Sciences, Social Sciences and Humanities to address diverse issues common to the region as a whole. NEC may also actively coordinate arrangements with the State Governments to make NEIGRIHMS a centre for tertiary health care particularly for the low income groups in the region.17. (Para 12.6.6.3) National Register of Indian Citizensa. The MNIC project needs to be taken up on a priority basis. Since there are several Union Government and State Government agencies which issue similar identity cards, it would be necessary to achieve convergence amongst all such systems so that the MNIC becomes the basic document for identification of a person and lends itself to be used as a multi-purpose individual card. Priority should be given to areas having international borders, for implementation of this Project.218y ff Re dofdRecdationsEast.Is 18. (Para ue A12. .7.2)ACa acityABu ld ng A nAthe Nort A ast A–AMiscell neousA nAitsA a.AThe Arecommend ti nsA f Ath AHigh LevelAComm ssionAcon ai edA e ortA– A‘Transf rmi gAthe North E st’ -Aa dAtheA ep rt A fAth ATask Fo ceAonADevel pmentAIniti tivesApr pa edA yAthe NorthAE sternAC uncilAho ldAbeAimple en edA oAfilAth Ag psAinAinfrastr ct re A nAtheAreg o .b.AAAcompreh nsiveAfra ework ne ds toAbeAe olv dAa dA utAin pl ceAtoAp omo eAthe A eg o AasAaApre erredAinve tmentAdestinat o .AroadA c.AAATra sportADevel pmen AF ndAtoAinanceAconstr ct onAofAimp rtancor idorsA ho ldA eAset up.d.ACompreh nsiveAimplemen at o AofAa ‘look east’A olicyA houghAre eva tAf rAtheAc un r AasAaA ho e,AisAespe iallyAimp rta tAf rAth Alon AtermA ro thA pa edA fAthe North Ea t.ATheA gen aAf rAitsAimplemen atio Am stAbeApr nm ntA inA ctiveAassoc atio Awi hAthe StateAGovern ents. ClearAapporti tweenA of Aresponsi ili y Afor Apl nni g AandAimplemen at onA f AtheA olicyAb ho ldA v riousAMini tr esA fAthe UnionAGove nme tAf rAitsAimplemen ationAbeAexpedit ouslyAunderta en.e ARailAconnec ivityA ho ldAbeAim ro edA nAthe A eg o AonAaApr orityba is.reditA f AMuchAg eaterA ffor s AareA ee edAtoAest blis AbankAbr nch sAand othernAtheA disbur ementAo tletsAt roughAf rtherArela ati n AandAincentivi at onpo ic esA fAtheAR serv ABa kAand otherAfin ncialAinstituti ns.lAandA g AThreAi Ane d AforAs tt ng upAofAc nt esAofAexce len e AforAprofes ion igherAedu at onA nAthe North Ea t.AInAadd t on,Aa large scaleAexpns onAofAfaci iti sAfor Atec nicalAeduc tion As chAas ITIs,A ho ldAbeAc rri dA utAtoA r ateA Ap olAofAs ille Awork for eAandAge erateAentrepren urialAca ac tyAa Aw llAasAemploym nt.ys emA h AThr AisA An edAt Am ke AanAin depth st dyA fAthe Acus omaryAju icialAiling in or erAtoAa hieveA etterAunderst ndi gAandAdissemi atonA fAtheAprev nor s AandApracties i. ItAisAnec ss ryAtoA v lveAaAcr dibleA ys emAofAmaint na ceAo AlandArcor sAf rAthe North2192 0or Conflict Resolutio19. (Para 13.2.5) Executive and Conflict Management – Police and Executive Magistracya. Police Reforms recommended by the Commission in its Fifth Report, “Public Order” (Chapters 5 and 6) are likely to augment the institutional capacity of the Police to play a more proactive and effective role in conflict resolution. The Commission, therefore, reiterates these recommendations.b. Police Manuals must be updated to contain suitable provisions extending the scope of responsibilities of Police officials to include conflict resolution in their charter of duties. Suitable amendments in training formats may also be carried out to provide relevant inputs on the subject. Achievements under this ‘head’ needs to be taken into account while evaluating overall performance.c.Executive Magistrates in their capacity as Revenue and other field levelofficials have extensive public inter-face and enjoy considerable goodwill particularly in rural areas. Their familiarity with the field situation and general acceptability makes them eminently suitable to be involved as interlocutors in mediating in local conflicts. State Governments need to build on the modalities and the institutional framework in this regard.20. (Para 13.3.4) Judicial Delays and Alternative Dispute Redressala. Allocation of resources for upgradation of infrastructure and personnel of the subordinate judiciary needs to receive higher priority in federal fiscal transfers.b. Much greater attention needs to be paid to make the institution of Lok Adalats serve their intended objective, and in particular to enlist active cooperation of the members of the Bar to give this approach a chance of success.c. Ministry of Law may initiate a dialogue with the Bench and the Bar of the higher judiciary to explore ways and means of bringing ‘greater finality’ to the decisions of quasi-judicial authorities and bodies.21. (Para 13.4.5) Civil Society and Conflict Resolutiona. While social capital formation needs encouragement to improve delivery of services and build community self reliance, it is imperative that suchof RecondationsSummaryi itiativ sA lsoAatt mpt Ato Ainvo ve communitie AinlA‘inhouse’Aconfic Aresolu ion.b. GeneralApo icyA ui el nesAneedAt Ab Afo mulat dAbyAtheASt teA overnment Afor inv lvingAboth the Panch yatsA nd Aurb nAloc lAbo iesAa longAwi h A‘non-police’Ain tr men alitie Ao AthelASt te, AinAconficAresolutio .SchemesA ay c AbeA AGuidelin sAofACent all Asponso edAand Central Sec or ldingAmay alsoA s it blyAmod fiedA oArequireAiciaryAcahat Abeneaci yAbuempha iseAdevelopin As lf-re iancelAi AlocalAconfict manag ment.anagementA– TheA 22. A(Pa aA14.3.1.1.10 AInstitution lAA rangemeli tsAforACon tInter- at ACounciACounci AunlictAerA a.AATheAconesolution rol Aen isaged AforA he AInte -Stat tilisedAt AfidA rt cle 263 A(a)AofAt eACons it tionAshoul AbeAeffec iv lyA Aof the States soluti nsAto disput sA mongASt tes or betw en all orAsom an At eAUnion.Aer ane tAbo y b. ATheAInte -St teAC uncilAma Anot, ho e er,Aexist asAaAlAorde AmayAbeA AsAand when aAspeciic needAari es,AaAsuitab eAPre ide ti rAaAdispute A rA issu dAc nstitutin Aan Aconven ng theACoun i AtoAcon id AtheAUnio AandA oordin ti nAof Ap li yAorAac io AonAmatt rs ofA ntere tAt heApu po eAf rA co cer ed AS ate .AThis bo yAmayAce se At Afu ction Ao ceA whichAitA as constitutedA s A ompleted.leAtoAsuit th A c. The co positionAof an AInte -St te l Council ma AbeA exi ex gencie AofAtheA at er refer edAtoAi AunderAr icleA263.iste ceAa AtheAIfAdeces ary AmoreAthanA ne AInte -Stat AC un ilAcouldA eA nAe nAa Awar antedA sameAtimferentAterAwith disAo Areference A nd compositiforAe chACo ncil.anagemen A– ATheA 23. A(P ra A14.3.1.2.5 AInstitution lAA rangemeli tsAforACon t ACommissio AforA Nati nal ommission for AAS hed le ACastesA nd AThe ANati nal Sch ul dATribesed TribesAha .AATheANatioeAalA ommission AforAS hed ledACaste AandAS heduim lementatio A anAim or antAm ndateA oAg ideArev ewA ndAmonitorAtheofAsafe uar s Aprov de Afor ASC STsAin various Afild ,Aidincapacity bui ding Afo Aconflict AR222matter of their service conditions. It is imperative that the focus of the two Commissions remains on policy and larger issues of implementation rather than on cases of an individual nature which can be looked into by the administrative Ministries/appropriate forum with the Commissions playing a critical oversight role.b. The administrative Ministries connected with the two Commissions may undertake an exercise, and in consultation with these bodies, work out the details of how these bodies could be better enabled to discharge their constitutional mandate.24. (Para 14.3.2.1.4) Institutional Arrangements for Conflict Management – The Zonal Councilsa. The system of Zonal Councils may be dispensed with. Important issues of Inter-State coordination or disputes between States in the same region may, wherever necessary, be entrusted to an Inter-State Council with appropriate composition and terms of reference so that any given issue is considered in depth.25. (Para 14.3.3.1.8) Institutional Arrangements for Conflict Management – The National Integration Council(a) The mandate of the National Integration Council (NIC) requires consideration of all factors impinging on national cohesion, and not only communalism or communal violence. The agenda of the NIC needs to be diversified.(b) Substantive issues before the Council may be considered in detail in smaller, subject-matter specific committees.(c) The composition of the NIC may be rationalised to facilitate consideration of a wider variety of issues. Broad guidelines may be framed by the Ministry of Home Affairs for identifying interest groups and specialty streams that need to be represented on the NIC.(d) The Council may meet at least once a year, while the sub-committees could meet as often as required to complete the assigned task in a time-bound manner.Re~~~~~~~~~ ~~~ SummarySummary e)AASummary pr cee ing Aof th ANIC mayAbe laid before bohAHousesAofPa ia ent.heAPlannin AAThe AIn(f A ia ACounc lAofASo ialAScie ceARese rch (IC SR)AandA ingAa Amulti- Co miss o Amay ta eAa leadAi At e Amatter AofA s ablish cussAissue A isciplin ry A esearc AandApol cy Aanaly is platfor AtoAdi utionAorA y concern ngAnational integr ti nA itherAin anAexisting in ti pro otingAaAnew in ti u ionAorAa sAa netwo k.A–ANational26.A(Para 14.3.3.3.2)AI stitutionalA rra gements for AConflic A anagemen Develop ent Counc lAan AOthe AApexALeelABodi slAan Aothe a. A AS ec ficArulesA fAp oce ureAforA heANational Develop ent Counc apexA eve Ab diesA ay be drawnA pAtoAens reAfocussedAde lib ratio s .entA–AOtherA 27. A( araA14.4.2) AI stitutionalA rra gements for AConflic A anage I stitutionalovati nsStateAl a. velA AAState Integrat onA ou cilsAmayAbe co stit tedAt At keAst ckAof nAimport ntA conflic Asitua ionsAhav ng Asuita leAl nka es Aw th the ANIC.A atters At e Arep rtAof State A eve Abod es may Aals Abe broughtAforAco sidera ion AadviceAandArec mm nda ions ofAtheANIC AGu delinesA orA ecidingAth Am mbe ship AtoA heANational Integra ion Coun ilAm y AalsoAg veAsuitab eA eightageAt AadequatelyA epr senti gAtheAState Integrat onCou cilsAinA heAnatialAbody. ees)Ahav ngA.AADi trictAlevel integrat on ACounci sA(Di trictAPeace Commit art cularlyA suita leAl nka esAwi hAtheASt teA ounc ls mayAalsoAb AconsideredA These Asho ldA f rADi t ictsAwi hA Ahistory ofAviole t, Adivisi e Aco flicts. sections ofA comp iseAeminent individu ls Aenjoyin Ac nfi enceAof A ll AinAconflict s ciety. Thes Abod esAmayApl yAm diatoryA ndAad is ry AroletuaC pacity Aonflict uildingResolutionAfoAnnexure-I(1)National Workshop on Conflict Managementheld atCentre for Policy Research, New Delhi4th-5th February, 2006Speech by the Chairman, ARC“Enforcing rule of law, and maintaining public order, are inseparable and they form the bedrock of a civilised society and sound liberal democracy”.In a democratic polity, which is founded on the bedrock of rule of law, maintenance of peace and order assumes paramount importance. Public order is synonymous with peace, safety and tranquility of the community. Maintenance of public order is a core function of governance. The Indian Constitution, while according a pre-eminent position for the fundamental rights of citizens, recognises the importance of public order, by providing for legislation imposing reasonable restrictions in the interest of public order. Under the Constitution of India, the Union and the federating units, that is, the States have well-defined areas of responsibility. ‘Public Order’ and ‘Police’ are essentially the responsibilities of State Governments. However, the Central Government assists them by providing Central Paramilitary Forces (CPMFs) as and when required.The Administrative Reforms Commission is looking at ‘Public Order’ with a view to suggest a framework to strengthen administrative machinery to maintain public order conducive to social harmony and economic development and also to build capacity for conflict resolution. ARC is looking into all aspects of the subject therefore the focus is on studying the causes of public disorder, how early symptoms of disorder should be detected and addressed well in time, what should be the role of various stakeholders in maintenance of public order, how the enforcement machinery should be made more effective to deal with public disorder. The Commission is examining the subject by focusing on its components, namely, causes of conflicts and their resolution, secondly the role of civil administration, media, society, Judiciary and NGOs in maintaining public order, and thirdly the role of police and the need for reforms. Accordingly, each one of these is being discussed in great length in three separate workshops. In the first workshop which is being organised jointly with the Centre for Policy Research (CPR), the role of civil administration and other stakeholders would be discussed; in the second workshop, which is being organised jointly with CPR and ther AC224IW Contd. Kannada ty wouldA Kannada Aun versit ,AH mpi, Athe differ nt types Aof co flic s Ain At e AIndia ASoci lAPolice beAd scu se ,Aa dAinA heAthird works opAbeingA rganise Ajoi tly withAthe Nation Aca emy, th ARoleA fAPol ce wouldAbeAd is uss d.heAa anAl a nAm Aof theAfirst wo kshop A n Apub ic or erAisAto ide tify Ath Asalien Al sso s AweAhel At eA fromA Av rietyAofAex er encesAi Adea ing Awi hApublicA is rder. AThe work opAw ll A ic ord rA ARc to Athin Athr ug Aso eAofAtheAc allen es A ose Afor AtheAma nt nance A fApub ent ons,A by th Aro eAof theAfour agenci sAn mely A heAcivilAadmini tra ion, Athe judicialAinter he Acivi Aso iet AandAt e Am dia AHow A anAthese ag nciesAbeAstr ng hene AtoA akeAthemA ctors inA ro o ers A f Aa Amo e Ahuma e Apubl c Aor er? What ar Aso e Aof Athe Ad fficul ies Ath t A of AtheseA these differen Adoma ns Af ce? What ar Aso e Aof Athe commonl Aleveled Ac it cisms ainsAth A ge cies? DoAthese Ac itic smsA eed AsomeAadmin st ative or Alegal A espo se? AWhat exp work ho A s ccessAo Af ilure ofAthese ag ncie AonAsomeAo casions. Alt oughA he foc sAofAthe eA ssu sA w llAbeAo Aref rms th t Acan AbeAimp emen ed,Athis works op Aw ul AlikeAt Adisc ssAthe en nced in A At e Awidest possibleApe sp ctiv Aso tha AnewAandAi novat veA de sAcanAbeAcoun The A ai Ata kAofAthe work ho Aw llAbeAto identify pro lemsAandAc al enges in Athese dom in ,Aand AtoA ecommend possibleAsol tions.Ain freeA ThAp rpo e Aof At eAsecond work ho At at Ais Aon ‘conflictAre ol ti n”A s AtoA( ) A ngag nclus onA nd Afrank Adi cussi ns A bout At e A auses Aof co flicts A nAI dia,A( )A rriv Aat AsomeAcuance ofA bout the role AandAi po tanceAof differe tAethni Af cto s AinAt eAo iginAandAco ti p-root dA these co flict Aso thatA(c) Afu damentalA olu io s Acan Abe pr posed At Aad ress AtheAde omin AupA c use AforAtheAsu tainableAma nt nance A f Apubl c A rder.AThe emph si Aw ll AbeA nAwit AspecificArecomm ndations Ap rt iningAtoAadmin strativeAreform. imi arlyA he Athird A orksh p, which isAbeing A rganise Ajoi tly with Athe Nation lAPolice Acade y, Awo ld foc sAon th AroleA fAp liceAa dApoliceArefor s be oreA Ago into th Arole Ao AvariousAstak h lders AI Aw ul Alike At Acl rifyAth Am ani gAofA heAwor s Apubl cAo der. AAny A io ati n A f law Ais A Ap obl mAo Alaw Aa d AO der,A utAe eryAsuchA A‘Publ cA io ati n isAn t A AcaseAofAdi tu bance A f Apubl c A rder.AThe divi ingAlin Abetwee fApubl cA O der’ and ‘lawAa dA rder Ais Av ry thin ATheAA exA ourtAhas A xpl inedAth Ac nceptA ommun tyArd r. A t Ais AtheApot nt al tyA fA nAactAt Adi turb theAe en tem o Aof th Ali eAofAtheA nti nAinA wh ch makes Ait A“pr ju ici lAtoAtheAma nt nance A f Apubli or er” AAIfAtheAcont av mAa Awide ts effectAiineAcon A nly toAaAfewAin ividuals directlyA nv lved, Aas dist n tAfr sp ctrum Ao Ap blic, itAwo ldA aise Ath Ap oble ofA lawAAa d Aord225cap city ABui din Afor Aco flictAReslutionAnnexure-I(1) Contd.Importance of Maintaining Public OrderIndia today is poised to emerge as a global economic power with all its high growth rate of economy and all-round economic development. For realising our legitimate aspirations of economic development, it is essential that the problems of peace and order are managed efficiently in the country. No developmental activity is possible in an environment of insecurity and disorder. Failure to manage the multifarious problems arising out of violent conflicts based on religious, caste, ethnic, regional or any other disputes, can lead to unstable and chaotic conditions. Such conditions not only militate against realisation of our economic dream, but also would jeopardise our survival as a vibrant democracy. We have to look at the problem of public order management and the role of law enforcement in that regard, in this perspective. We should not forget that it is the weaker sections which suffer the most in any public disorder.Whose Responsibility is to Maintain Public Order – Role of Civil AdministrationUndoubtedly, it is the role of the police, as the principal law enforcement agency to preserve public order. The magistracy and the judiciary also have a vital role in preserving public order. But there are other agencies within the governmental set up which have to contribute towards preserving public order. It is the police which bears the brunt of violations of the Laws and also the ensuing violence. But in a large number of cases, addressing the root cause is much beyond their purview. The case of recent demolitions in Delhi is an example. The main cause there has been the non enforcement of the building regulations by the officials who were entrusted this task. Another example is the ‘Ulhasnagar demolitions’.If one looks at the causes of public disorder, there are a host of reasons. These may be broadly classified into socio-economic, political, historical and administrative. I am not going into the details of each one of these but I would like to highlight that a large number of public disorders have administrative reasons as their root cause. Therefore we have to bring in change in our mindset. Our response to public disorder should commence at the very initial stage, and it is here that the role of entire civil administration including both regulatory and developmental agencies, becomes important.The period after Independence has seen a tremendous increase in spread of education and alongside has increased the awareness among the people and so also the aspirations. And when these aspirations are not met, tensions prevail within the society, which if not redressed have the potential of erupting as a problem of public disorder. Increasingly, and226Annexure-I(1) Contd. rightly so, alis ngA hatA rightlyAso, Aa mi ist ation isAnotAbe ng p rceive AasAa A ulingA las .APeopleA reAr ngAdoingsAofA the AareAservi e A roviders.ATheAa mini trat on Amust also reali eAthi Arole. Wr longerAbe ng ad inist at on, whic Ain theA ast mayAh veAgotAmute Aac ep ance, A re Ano r,A bjectiveA tol rated by AtheAc il soci ty AAWeAha eA oAprovideAan Aa minis ra ionAw ich AisAfaand tra sp rent.AH wAto ac i ve AthisAi AaAcha le ngeAb fo eAu .RoleAofAtheAJu ic arys A o Ajusti eA Acce s A o Ajustice Ai Af nda ental to the A‘ ul Aof law”. AIf the A itiz ns Afee At at Aacce is met d Aout s A ela ed Aor Ais Afectot Aeve, Athey Ag Aa iena ed. A If At ey Afeel Ath t A unish enthemAwith theA to Ath Awro g A o rsA nly Ain aAfe Acas s AtheyAha eA Atendency Ato disa soci teA AorAaApan h . jud cia Apro essAan AstopAta in A nterestAasAa c mplaina t, a witness gApr te tionA Sometim sAa Alan lo dAl o ingAtoAgetAa recalc tran A enant A ut, Aa At nantAseeki hinkingAt atA fromA nAavarici usAlandl rd,Afami ie Ainvolve Ain Aprope tyAdi pu es, Astar AbyA tak Aa es At A gangst rsA goonda )Acan settleAt eir Ap obl ms Awhi hAt eAcou ts areA oing to .AWeAh veAt A do.AIf thisAbe omesAcommon Acri in l tyAwillAbe aAs bstit te forA‘ ul AofA aw Ai timi atedA e su e At at Awe doAn t reachAsuch a Aprecario s Asituati n. Acri in ls AshouldAb ill beco eAaA by Awha AShake pear Acall d A“theA wf lAm jesty ofAtheAla ”,Ao herw se Athe A the crimi alA lawAunt Athemse ves AVarious Ala Acom issionsAh ve Asugg st dAr forms AinandA ivil Ajustice Aa ministr tionA yste ,A hi hAnee AtoAb eAac ed upo .RoleAo Athe AMediahe Aasised.AMorem orta ceAof A Afr e press,A or Aa Aheal hyAdem cr cyAcannotAbeAov remp im or a tly, it isAaA ort ofAchec Aand balan eAt atAkeepsAth Aa thori iesA nA heiAto sAon the o eAha d A nd AaAt pe Ao Amirror that Ae ab esApeople in aut o ity AtoAget aAcontiuousAr al tyA eAincreas ng heck,A n At eAother AThsAremains an Ai por ant role Af rAthe Am dia AdespiteAtnes AAm rtyaA pressuresAof Acomme ci lisa ion. TheAfactAth t Adem crati AIndi AcouldAa oidAfam Aa tho itiesA Sen Ah sAs ggeste ,AwasAal ost en ire yAdu At Ath Arole of theAmediaAi Asensitisin ct,Ao rAbestA t At e Aurgency ofAprov dingAr lie .AIn eed our AfreeA nd Aen rge ic media is, inAf arlyAwa rni gAsy te .bs rvedAt a A butAwhat is esse tia AisAt at Athe medi A hould AplayA Aresp ns ble role AIt Ahas A eenA ometi esAt eA atA im s, A Apart ofA he A edia has An t AbeenAqu te objec ive AinAthe r Areporti g.A nterestedAi A med a also pl ys AaArole inAspreadin Ap ejud ces,Aas A he Anee les AtoA ay,Aare Amo eA he poten ial sen atio alAnewsA hanAsensible const uc ive news.AWeAm yA el ber teA sAtoAhowA of mediaA an beAtapped Ai Amaint iningA227c pacityAB ild ng AforA onflict AResolutioneIIC1) Contd.Role of the Society, NGOsA democratic society cannot function properly if everything in it is left only to the State or even to statutory bodies. Because of the increasing complexities of societies everything cannot be taken care of by the Governmental institutions. The gap has to be filled up by the civil society. Government intervention itself will be in fructuous if it is not underpinned by voluntary action. Moreover the exercise of political power through civil society opens the way for democracy in real sense of the term. civil society consists of open and secular institutions that mediate between the citizen and the State. In the absence of civil society, the State machinery and civil servants becomes the dominant and the only repository of power. The modern idea of civil government requires emergence of civil society which would make people self-reliant rather than remain dependent on State institutions. Participation by the civil society makes the citizens active agents instead of becoming merely passive recipients of welfare.We, especially in the Government, need to realise that in a healthy growth model of a free democratic society, the Government is just one of the participants. The Government exists as one of the servitors in the service of the society. Indeed, the awareness that Government alone can neither solve all the problems of the society nor it is the only crucial actor in addressing major societal issues has dictated the need to look beyond Government. Interdependence and need to find solutions to societal problems call for greater collaboration between the Government and civil society.A large number of Non Governmental Organisations (NGOs) are working in the developmental fields. But the number of such NGOs dedicating themselves to preservation of public order is limited. We can perhaps learn from experiences of some of these NGOs and recommend measures to pave the way for their greater involvement.Role of the PoliceI should have taken up the role of police first, as they are the main actors in this process. But as I have mentioned that we will be discussing this issue at great length in the third workshop, which we are organising at the National Police Academy. But I would suggest that aspects of police administration which require interaction with other governmental agencies and stakeholders may be discussed in this workshop.228e-ICI) Contd.ConDlvsionDeve opm ntAandAs cur tyAar AtrulyAm tually Ainter-r la ed. A eAneedAthe ef re, Ato e olveAa Ac mbined As ra egyA o AdealAsimulta eous yAw thAt e Atwin Acha le gesAofAdeve opm ntAandAs curity wit inAtheAfr me o kAof AaAdem cratic polityAco mi ted AtoA esp ctA orAallAfund menta Ahuman Af eed msAa dAalsoAco mi ted AtoAup old ngAt e A uleA f Alaw.AI terflalA onfict Aman ge ent isA he key toAthe A uc essAofApartic pativeAdem cracy,Astreng heningAn tionalAsol dar ty Aand Ac hes finAand fr ing upAtheAn tion’sA eso veAand Acap bi ityA oAm etAanyAe ternalA hr ats toAitsAs cur tyAandAterr torialAint Thr tyfiATe Adefc en ies A nAthi Avit lAar aA ee AtoAbeA luggedA hrough Aj dic al Aand police Ar forms, better A itizenApartic pa ionAinAgove nance, Atrans are cy Aa d ffmoreAe ect veAandAint gratedAa pr ach Ato publiAorderAmaintenance.Vio at onsAof public order Agive AtheirAsocio-ec nomic,Apo iti alAandAadminis rativecausesnA hisA d mandAaAco certedAr spon eAfrom Ad fferen Aw ngs ofAth Acivil Aadminist atio .AWh Amajor sA one atAtheA ascen AstageA tself AminorAd sco ds canAbe Apr vent dAfromA urni gAint ngs ofA publicAdis rd rs.AThe Ach llen eA ies AinAinstitution l sing AaAme ha ismA oAt at Aal Aw IAho eA th Acivil Aadminis ra ionA sA ell Aa Aother Astake olde s A o kAinAa Acoor inated Af s ion. n AforA tha Ath se Atwo Awo kshop Aw uld A eA bleA oA omeA p AwithAsubs antialArecommen atiaAfr mew r AandAaA oad apAforAmain aining public229Capacity Building for Conflict ResolutionAnnexure-I(2)National Workshop on Conflict Managementheld atCentre for Policy Research, New Delhi4th-5th February, 2006List of Panelists/ParticipantsA. Panelists1.Dr. D. Bandyopadhyay, IAS (Retd.), former Secretary to Govt. of India, Kolkata2.Dr. Nandini Sundar, Delhi School of Economics, University of Delhi3.Prof. Radha Kumar, Jawaharlal Nehru University4.Prof. Abusaleh Shariff, Principal Economist, National Council for Applied Economic Research (NCAER)5.Dr. Ranbir Samaddar, Director, Calcutta Research Group, Kolkata6.Dr. Samir Kumar Das, Reader in Political Science, University of Calcutta7.Prof. Surinder S. Jodhka, Centre for the Study of Social Systems, JNU8.Dr. D. Shyam Babu, Fellow, Rajiv Gandhi Institute for Contemporary Studies9.Prof. B.A. Viveka Rai, Vice Chancellor, Kannada University, Hampi10. Prof. T.P. Vijay, Deptt. of Studies in History, Kannada University, Hampi11. Prof. H.C. Boralingaiah, Deptt. of Tribal Studies, Kannada University, Hampi12. Prof. T.R. Chandrashekar, Deptt. of Development Studies, Kannada University, HampiB. Participants13. Dr. Pratap Bhanu Mehta, President & Chief Executive, CPR14. Mr. Justice Rajinder Sachar15. Lt. Gen. V.K. Nayar (Retd.), Honorary Research Professor, CPR16. Shri Ved Marwah, Honorary Research Professor, CPR17. Dr. Ajit Mozoomdar, Honorary Research Professor, CPR18. Shri Sanjoy Hazarika, Honorary Visiting Professor, CPR230nxxIre-I(2) Contx.PR 1 . ASh iARamaswa yA .AIye ,AHonora yAResear hAProfesso ,AcP R 2 .APro .APart aAMukhopadya , ASeni rAResear hAFello ,Acta 2 . AD .AA. . ASamant , AI SA(Retd. ,AKolkaal 2 . ASh i AK. . ADhillo , AI SA(Retd. ,AbhopPA 2 .APro . ASush aAyada , AD .AAmbedk r Acha r A n ASoci lAJustic ,AIIai 2 . ASh i ASure hAKhopad , Acommission r A fAPolic ,ARailway ,AMumbst 2 . ASh i Achand a Abh nAPrasa ,AJournalier 2 . AM .APri aAParkNu 2 . ASh i ASiddhar h AMallavarap , AScho l A f AInternation l AStudie ,AJRc 2 . ASh i Ay. .ARa , Aconsultan ,AA2 . ASh iA .AViswanatha , Aconsultan ,AARc on .AAdministrati eARefor sACommissiR c 3 . ASh i A .AVeerap aAMoil , Achairma ,AARc 3 . ASh i A .ARamachandra , AMembe ,AA Rc 3 . AD .AA. .AMukherje ,AMembe ,AA3 . A sAVinee aARa ,AMember-Secretar ,AA231apacityA uil ingAfor Conflic AResolutionAnnexure-I(3)Brief Summary of the Recommendationsmade at theNational WorkshopI. Issues Relating to Tribal Populations1. Legislations like the Indian Forest Act, Wildlife Protection Act, Forest Conservation Act, etc. do not take into account the needs and sensibilities of the tribal populace and have created widespread resentment and discontent. These legislations, formulated with the intent of increasing State revenue and protecting State property have made it illegal for tribals to draw livelihood from forests; an activity that these people have engaged in, in a symbiotic and harmonious manner, for generations. Deprivation of the only resources available to them by a faceless and obdurate bureaucracy resulting in increased poverty and marginalisation has played a major role in the greater tribal participation in Naxalite activity.2. There should be a re-examination of the powers vested in the Governor by the Fifth and Sixth Schedules vis-à-vis PESA. The Panchayat (Extension to Scheduled Areas) Act transfers, in many ways, the power of the Governor of State over areas protected by the Scheduled Areas Act to the Panchayats and has left quite a few grey areas pertaining to control and authority between Panchayats and gubernatorial authority.3. There should be a grassroots level mechanism for redressing grievances along the lines of Nyaya Panchayats at Gram Sabha levels based on the rationale that adjudication of local problems at the local level would provide a more practical and expedient system of justice.4. There should be a “Harmonisation of Laws” (a) between Central Acts and Local Land Laws (b) between Forest and Revenue Records and (c) between Court judgements and other laws.II. Issues Relating to Conflict Areas1. The peace process must be separate from a ‘political process’, emphasising the objectivity and professionalism of dialogue.232e--C~) Contd.~ There . ATere sh uldAbeAin reased Acoord nation A etweenA ari us AlawAenfocementAag cies. AGi en AtheAlo g-term na ure ofAthe Aenga emen , AsuchAstr ctur sA ee Ato be putAinp ace.3. AP es nce Ao AArmed Forces sh uldAbe Acompl me tedAby acti e A oleAo AcivilAadminis rat on AandAno -StateApla er .at AallA 4. AThApeace A roce s A ust be Aall Aencom assing Ain olving Aparti ip nts vels. AlocalA uppo t A ustAbeA at hed to AtheA entralAincl na ionAofAega ing in Ath ApeaceAproce s.III. Issues AR la ing to Ath ANort h East1. ATerrit riall Abased Aso ution Aal ne A re Anot li elyA o A ork in Ath ANort xati nA Ea t.AATheAstr ct res Aof Areprese tati nA eedA oAmo eAaw y i fromAaA petingA withAterritor ality, ma ing Ait ea ierAto Aacco modateA ariousAco inter st .nAfromA 2. It Aw sA ime At AthinkAcre tivel Aabout Am nag ng AtheAmi ratiformedA bang de h. AAThAissu A eedsAa Asyst matic, Acon inu us AandAiapp r ac .AInn rA 3.AThAArmed Forces A( pecial A owe s)AAc An ed Ato Abe Aabo sh d.AAThide ed.line Permit Arestr ctio sA ee AtoAbeAreconsel IV. gion IssuesAR la ingAtoARsh uldA 1.AOpport nit esAforAed cation sh uldAbeAin rea ed AforAmin rit es and AitbeA nsur dAthat Ad li ery Aof publicAs rv cesAto Amin ri ies AisAenha ced.V. IssuesAR la ingAtoA as end 1AtheA AAs ofA owAt o Act A–AtheAPro ec ionAo Acivil Righ s AAc ,A1 55A)AAc , Sc eduled cas es A ndAtheASc eduled Tribes A(Pre en ionAofAAtro itie oAde lA 198 A–Aare A nv kedAin Aa rocity asesherAA Ais A oAn edA orAt oA ctsAionAtoA w thAoneA rob em andAi Aw uld Abe us fulAto d viseAaA niformAlegi la ddressAvio at onsAo Ahu anAan Acivil A ight ,Aw thAtheAs ro ger ofAtheApnitiveA easur Abeing Aa233Capacity Building for Conflict ResolutionAnnexure-I(3) Contd.2. The two National Commissions on SCs and STs, may be restructured to make them more effective.VI. Recurring Themes in Conflict Resolution1. The principle of ‘Subsidiarity’ should be adopted to make the administration reach out to the people.2. There is an urgent need to harmonise laws and to make sure that they are clear and transparent so that a general faith in the rule of law could be restored.3. Accountability should be increased in the Government.234Second Administrative Reforms Commission Government of India2nd Floor, Vigyan Bhawan Annexe, Maulana Azad Road, New Delhi 110 011 e-mail : arcommission@nic.in website : REPORT: Combating TerrorismINTRODUCTION11.1 In its Third Report, on “Crisis Management”, the Commission had stated that crisis situations caused by hostile elements like terrorists and extremists involving taking of hostages, hijacking of airplanes or severely disrupting public order and administration would be dealt with in its subsequent reports.1.2 In its Fifth Report, on “Public Order”, the Commission observed that in view of the growing incidence of terrorist violence in the country there is an emerging consensus in India that a strong legal framework should be created to deal with terrorism. The Commission pointed out that there is a “felt need to strengthen the hands of security forces in the fight against terrorism even as human rights and constitutional values are protected”1. Accordingly, the Commission had decided that it would deal with issues pertaining to terrorism in a separate report particularly since terrorism today has transcended pure crisis management or public order issues and is enmeshed in an intricate web of organized crime, illegal financial transfers and trafficking in arms and drugs, which poses a grave threat to national security. The existence of sleeper cells, the spread of modern communications and the increasing use of modern weapons, technology and tactics have enabled the merchants of terror to spread their tentacles far and wide subjecting the entire country to their nefarious designs. A multi-cultural, liberal and democratic country like India, given its geopolitical situation, is particularly vulnerable to acts of terror with statistics showing that Indians have suffered the maximum casualties at the hands of terrorists. The menace of terrorism is thus an unprecedented threat which requires extraordinary and multi-pronged action by all organs of government and society.1.3 This Report on capacity building to combat terrorism has been prepared accordingly and comprises seven chapters:Chapter 1 :IntroductionChapter 2 :Terrorism - Types, Genesis and DefinitionChapter 3 :Terrorism in IndiaChapter 4 :Dealing with Terrorism: Legal FrameworkChapter 5 :Measures against Financing of Terrorism11Paragraph 2.2.2.6 of the Fifth batting TerrorismChapter 6 :Institutional and Administrative MeasuresChapter 7 :Civil Society, Media and Citizens1.4 The Commission has benefited greatly from interactions with a large number of experts both within the Government and outside while preparing this Report. The Commission is grateful to Hon’ble Mr Justice R.C. Lahoti, former Chief Justice of India, for his valuable suggestions. A workshop was organised jointly with Sardar Vallabhbhai Patel National Police Academy, Hyderabad on ‘Public Order’, and one working group examined the measures to deal with terrorism (Annexure-I). The Commission discussed issues related to terrorism with the State Governments during its visit to the States. The Commission is grateful for the considerable assistance provided by Shri P.K.H. Tharakan, former Secretary (R&AW) who worked as Advisor with the Commission and prepared a well researched paper. The Commission is grateful to Shri P.C. Haldar, Director, IB; Shri Vijay Shanker, Director, CBI; and Shri K.T.S. Tulsi, eminent advocate for valuable inputs. The Commission is also grateful to Shri Shastri Ramachandran, Associate Editor, The Tribune for his contribution on the ‘Role of Media in dealing with terrorism’.2TERRORISM – TYPES, GENESIS AND DEFINITION22.1 History2.1.1 Terrorism is as old as the Roman Empire and it existed in some form or the other, be it the Zealots in Judea or the Assassins in the 11th to 13th century with religion being a strong motivating factor behind terrorist activities until the French Revolution. In fact, the term “terrorism” originated from the Reign of Terror (Regime de la Terreur) of 1793-94.2.1.2 Following the Second World War, there was a shift in the nature and locale of terrorist activities around the world. The focus of terrorist activities shifted from Europe to the Middle East, Africa and Asia with the emergence of various nationalistic and anti-colonial groups in these regions, notably in Israel, Kenya, Cyprus, Algeria, Palestine and Malaya. The first major act of terror, considered as the most deadly and spectacular terrorist operation till then, was carried out by the Jewish Irgun (then led by Menachem Begin) when the King David Hotel in Jerusalem was bombed in July 1946, killing nearly a hundred people.2.1.3 Left wing extremism, based on their belief that terrorism is the only strategy of revolutionary movement for the weak in the Third World (e.g. in Malaysia, Vietnam etc.), surfaced in Europe and elsewhere as well, especially since the late 1950s. The Red Army Faction in West Germany (also known as the Baader-Meinhof Group), the Red Army Faction of Japan, the Wheathermen and Black Panthers in the USA, the Tupamaros of Uruguay and several other left-extremist terrorist groups sprang up during the 1960s in different parts of the world, including Naxalites and Maoists in India.2.1.4 The Irish Republican Army/IRA, traced its origin to the period around 1919-21. Its later incarnation, known as the Provisional Irish Republican Army was formed in1969 and has carried out extensive terrorist attacks not only in Northern Ireland but in England as well. A historic peace settlement was arrived at through the Good Friday Agreement of 1998 between the contending Irish groups and the UK Government.2.1.5 International terrorism today is marked by the large number of transnational terrorist groups, mostly motivated by the Islamist fundamentalist ideology with Osama bin Laden’s Al-Qaeda at the forefront, and the Taliban in Afghanistan as its close ally. The rapid rise3Combatting Terrorismof the Talibans during the anti-Soviet militant movement was made possible largely because of extensive patronage by USA’s CIA and Pakistan’s ISI, with billions of dollars in cash and in kind having been poured into the region via Pakistan. For a few years in the recent past, it looked as though the Taliban was effectively decimated in the wake of the ‘war against terror’ waged in Afghanistan by the USA in collaboration with its allies. But during the past couple of years’ the Taliban appears to be fast regaining their lost ground. This is already having serious security implications not only in Afghanistan but also in Pakistan and India.2.2 Types of Terrorism2.2.1 Terrorists are motivated by different goals and objectives. Depending on the objectives of the group/groups, the nature of terrorism also differs. The major types of terrorist operations commonly identified globally include:2.2.2 Ethno-Nationalist TerrorismTerrorism motivated by ethno-nationalist and separatist aspirations became prominent only after the Second World War and dominated the terrorist agenda around the world for more than 50 years until religious terrorism came to occupy the centre stage. Ethnic terrorism can be defined, according to Daniel Byman2, as deliberate violence by a subnational ethnic group to advance its cause. Such violence usually focuses either on the creation of a separate State or on the elevation of the status of one ethnic group over others. Tamil Nationalist groups in Sri Lanka and insurgent groups in North East India are examples of ethnonationalist terrorist activities.2.2.3 Religious TerrorismPresent-day terrorist activities around the world are motivated largely by religious imperatives. According to Hoffman3, the practitioners of terrorism motivated either in whole or in part by a religious imperative consider violence as a divine duty or a sacramental act. It embraces different means of legitimisation and justification compared to other terrorist groups, and these distinguishing factors make religious terrorism more destructive in nature.2.2.4 Ideology Oriented TerrorismAny ideology can be used to support the use of violence and terrorism. Ideology oriented terrorism is generally classified into two: Left-wing and Right-wing terrorism.(a) Left-wing Terrorism-Violence against the ruling elite mostly by the peasant class motivated by what are called leftist ideologies have occurred time and again in history.2Source: Refer to Annexure II of this Report where the readings and general references are provided separately. 3Source: Refer to Annexure II of this Report.4Terrorism – Types, Genesis and DefinitionHowever, the ideological basis for the left and subsequent violent movements was provided by the writings of Marx and Engels. This was supported by the writings and speeches of later communists like Lenin and Mao Tse-tung (Mao Zedong). Leftist ideologies believe that all the existing social relations and state structures in the capitalist society are exploitative in character and a revolutionary change through violent means is essential. Examples of leftist ideologies that have resorted to the use of terror are numerous. These include; the Red Army Faction or Baader Meinhof Gang in the former West Germany, the Red Brigades in Italy, the 17 November Movement in Greece, the Shining Path of Peru, Peoples Revolutionary Army and the Motoneros of Argentina. The Maoist groups in India and Nepal are the most easily identifiable groups closer home.(b) Right-wing Terrorism- Right-wing groups generally seek to maintain the status-quo or to return to some past situation that they feel should have been conserved. Sometimes, groups espousing rightist ideologies might assume ethnic/racist character too. They may force the government to acquire a territory or to intervene to protect the rights of an ‘oppressed’ minority in a neighboring country (i.e : the Nazi Party in Germany). Violence against migrant communities also comes under this category of terrorist violence. It is to be noted here that religion can play a supportive role to rightist violence. Examples of these are: Nazism in Germany, Fascists in Italy, white supremacy movements in the US known as Ku Klux Klan (KKK), the Green Jackets of Denmark in the 1980s etc.2.2.5 State-sponsored Terrorism2.2.5.1 State-sponsored terrorism or warfare by proxy is as old as the history of military conflict. Walter Laqueur notes that such established practices existed in ancient times; in the Oriental empires, in Rome and Byzantium, in Asia and Europe.4 However, state-sponsored terrorism on a massive scale reappeared in international politics in the 1960s and 1970s, and today along with religious terrorism, state-sponsored terrorism has considerably altered the nature of terrorist activities around the world.2.2.5.2 In recent times, some countries have embraced terrorism as a deliberate instrument of foreign policy. One distinction of state sponsored terrorism from other forms of terrorist activity is that it is initiated to obtain certain clearly defined foreign policy objectives rather than grabbing media attention or targeting the potential audience. Given this character, it operates under fewer constraints and causes greater casualty on the target (Hoffman, 1998). In a cost-benefit analysis, state-sponsored terrorism is the most effective means of terrorism from the perspective of the perpetrator.54Source: Refer to Annexure II of this batting Terrorism2.2.5.3 State-sponsored terrorism was widely employed in Central Asia in the nineteenth century. Russians supported their fellow Slavs in the Balkans. Bulgaria used the Macedonian revolutionary terrorists against Yugoslavia after World War I. The Western powers under the auspices of the US supported all kinds of nationalist and anti-communist rebels throughout the Cold War. The Soviet Union was no different in its operations during this period. Countries like Iran, Iraq, Sudan, Libya North Korea have been engaged in sponsorship of political violence of different nature in their ‘enemy’ countries. India has been facing this problem from Pakistan since Independence.2.2.6 Narco-terrorism2.2.6.1 Narco-terrorism is an interesting concept, which can fall in the category of either ‘Types of Terrorism’ or ‘Means of Terrorism’, depending on how it is defined. The term was first used in 1983 by the former President of Peru, Belaunde Terry to describe campaigns by drug traffickers using terrorist methods such as the use of car bombs, assassinations and kidnapping against the anti-narcotics police in Coloumbia and Peru. Though initially used in the context of drug trafficking related terrorism in South America, the term has come to be associated with terrorist groups and activities around the world and more so in the Central and South-East Asia. Narco-terrorism has been defined by the Canadian Security Intelligence Service as ‘the attempt by narcotics traffickers to influence the policies of the Government by systematic threat or use by violence’. However, it is also possible to view narco-terrorism as a means of terrorism or at any rate as a means of funding terrorism. As the term itself suggests, narco-terrorism combines two criminal activities; drug trafficking and terrorist violence. Narcoterrorism is motivated mainly by economic reasons as it helps the terrorist organizations raise huge sums of money with minimum cost for their activities. Thus the political, ideological, religious and the ethno-nationalist motives generally associated with terrorism are secondary to the economic gains associated with it.2.2.6.2 In a survey conducted by the United Nations, links between drug traffickers and terrorist groups were observed in 19 out of 38 countries. These countries include Algeria, Colombia, Comoros, Ecuador, Germany, Guernsey, India, Italy, Japan, Kenya, Kyrgyzstan, Lithuania, Mauritius, Saudi Arabia, Turkey, the United Kingdom, the United States of America, Uzbekistan and Yemen. Major terrorist groups operating on these lines in these countries are: Al Qaeda, the Colombia-based AUC (United Defences of Columbia), ELN (National Liberation Army), Colombia, and FARC (Revolutionary Armed Forces of Colombia), the tri-border Islamic Group in Argentina, Paraguay and Brazil, the Shining Path in Peru, the PKK (Kurdistan Workers Party) in Turkey, IMU (Islamic Movement of Uzbekistan) in Uzbekistan, the Islamic Jihad in Palestine, Hizballah in Lebanon, and the RIRA (Real Irish Republican Army) in Northern Ireland5. Islamist terrorist groups in India5Cited in Y von Dandurand and Vivienne Chin, “Links Between Terrorism and Other Forms of Crime” April 2004.6Terrorism – Types, Genesis and Definitionsupported by the Pakistan ISI are reported to be active in drug trafficking along the Kashmir Valley and also in other parts of the country.2.3 Definition of Terrorism2.3.1 There are two reasons why it is important to define the word ‘terrorism’. Firstly, its definition is one way of understanding the problem. But more importantly, in the context of this Report, which deals with the governance aspects of combatting terrorism, a workable or working definition would be required with a view to have special laws for tackling terrorism within the country and to get terrorists extradited from abroad.2.3.2 It is somewhat surprising that despite terrorism being recognised as a global phenomenon, attempts in the past for arriving at an internationally accepted definition of terrorism have proved futile. According to some observers, this ambivalence is primarily due to two reasons : firstly, a ‘terrorist’ in one country may be viewed as a ‘freedom fighter’ in another; secondly, it is known that some States resort to or encourage various kinds of criminal acts, clandestinely, through their own agencies or hired agents to subvert or to otherwise destabilize another lawfully established government or in extreme cases get important political or governmental personalities of another State assassinated. History is replete with instances of acts of this nature. Hence, there is an obvious lack of political will, if not resistance to any universally acceptable definition of terrorism.2.3.3 While Member-States of the United Nations have not arrived at a consensus regarding the definition of terrorism; the UN’s ‘academic consensus definition’ given by Alex P. Schmid is perhaps the most widely accepted one. According to him, “terrorism is an anxiety-inspiring method of repeated violent action, employed by (semi-) clandestine individual, group or state actors, for idiosyncratic, criminal or political reasons, whereby - in contrast to assassination - the direct targets of violence are not the main targets. The immediate human victims of violence are generally chosen randomly (targets of opportunity) or selectively (representative or symbolic targets) from a target population, and serve as message generators. Threat and violence-based communication processes between terrorist (organization), (imperiled) victims, and main targets are used to manipulate the main target (audience(s)), turning it into a target of terror, a target of demands, or a target of attention, depending on whether intimidation, coercion, or propaganda is primarily sought”.6 The short legal definition proposed by Schmid to the United Nations Crime Branch (1992) is that Act of Terrorism = Peacetime Equivalent of War Crime.7 This, as discussed in the following chapters, is a significant definition with implications for an anti-terrorism strategy.2.3.4 Schmid himself had, however, wondered - after listing out 109 different definitions of ‘terrorism’ in his monumental survey, ‘Political Terrorism: A Research Guide’ - whether that6Source: Schmid, Jongman et al. Political terrorism: a new guide to actors, authors, concepts, data bases, theories and, literature; 1988; quoted in entry on ‘Alex P. Schmid’: : quoted in entry on ‘Alex P. Schmid’: Terrorismlist contained all the elements necessary for a good definition. However, some illustrative definitions are produced below, which would contribute to an understanding of the issues involved in terrorism.League of Nations Convention (1937): describes terrorism as “all criminal acts directed against a State and intended or calculated to create a state of terror in the minds of particular persons or a group of persons or the general public”. .Article 2(1) of the UN General Assembly’s Draft Comprehensive Convention on International Terrorism (fifty-fifth session, 2000) provides that;(1) Any person commits an offence within the meaning of this Convention if that person, by any means, unlawfully and intentionally, causes:(a) Death or serious bodily injury to any person; or(b) Serious damage to public or private property, including a place of public use, a State or government facility, a public transportation system, an infrastructure facility or the environment; or(c) Damage to property, places, facilities, or systems referred to in paragraph 1(b) of this Article, resulting or likely to result in major economic loss, when the purpose of the conduct, by its nature or context, is to intimidate a population, or to compel a Government or an international organization to do or abstain from doing an act.The General Assembly Resolution 51/210 contained a provision describing terrorism. It maintained that “criminal acts intended or calculated to provoke a state of terror in the general public, a group of persons or particular persons for political purposes are in any circumstance unjustifiable, whatever the considerations of a political, philosophical, ideological, racial, ethnic, religious or any other nature that may be invoked to justify them”. On March 17, 2005 a UN panel described terrorism as any act “intended to cause death or serious bodily harm to civilians or non-combatants with the purpose of intimidating a population or compelling a government or an international organization to do or abstain from doing any act”.The European Union uses a definition of terrorism for legal/official purposes which is set out in Article 1 of its Framework Decision on Combating Terrorism (2002). This provides that terrorist offences are certain criminal offences set out in a list comprised largely of serious offences against persons and property which, “given their nature or context, may seriously damage a country or an international organisation where committed with the aim of: seriously intimidating a population or unduly compelling a Government or international organisation to perform or abstain from performing any act, or seriously destabilising or destroying the fundamental political, constitutional,8Terrorism – Types, Genesis and Definitioneconomic or social structures of a country or an international organisation.”2.3.5 In the USA, there are three different sets of the definition of terrorism. The US Department of Defence defines it as “the unlawful use of - or threatened use of - force or violence against individuals or property to coerce or intimidate governments or societies, often to achieve political, religious or ideological objectives”. The US State Department uses the definition of terrorism contained in Title 22 of the United States Code, Section 2656F (d), i.e. “premeditated, politically motivated violence perpetrated against non-combatant targets by sub-national groups or clandestine agents”. The US Federal Bureau of Investigation defines terrorism as the unlawful use of force or violence against persons or property or segment thereof in furtherance of political or social objectives. It is apparent that each of the above three definitions reflects the priorities and particular interests of the specific agencies.2.3.6 By distinguishing terrorists/terrorism from other types of criminals and other forms of crime, Bruce Hoffmann8 argues that terrorism is?ineluctably political in its aims and motives?violent - or, equally important, threatens violence?designed to have far-reaching psychological repercussions beyond the immediate victim or target?conducted by an organization with an identifiable chain of command or conspiratorial cell structure (whose members wear no uniform or identifying insignia) and?perpetrated by a sub-national group or non-state entity.2.3.7 By and large, these factors cover the relevant aspects of terrorism which are necessary for understanding the phenomenon of terrorism. However, for formulating a definition of terrorism which could be used for legal purposes, it is necessary to look at the constructs adopted by various other States.2.3.8 The definition of terrorism proposed by the Secretary General of the UN in September 2005 was accepted by France. According to him, terrorism is “any act meant to injure or kill the civilians and the non-combatants, in order to intimidate a population, a government, or an organization and incite them to commit an act against the perpetrators or on the contrary stop them from doing so”.2.3.9 The Canadian Anti-Terrorism Act defines terrorist activity in its Criminal Code as “an action that takes place either within or outside of Canada that is taken for political, religious or ideological98Source: Refer to Annexure II of this batting Terrorismpurposes and intimidates the public concerning its security, or compels a government to do something, by intentionally killing, seriously harming or endangering a person, causing substantial property damage that is likely to seriously harm people or by seriously interfering with or disrupting an essential service, facility or system.”2.3.10 According to the UK Terrorism Act, 2000, terrorism means the use or threat of action where the use or threat is designed to influence the government or to intimidate the public or a section of the public and is made for the purpose of advancing a political, religious or ideological cause, and that; (a) involves serious violence against a person, (b) involves serious damage to property, (c) endangers a person’s life, other than that of the person committing the action, (d) creates a serious risk to the health or safety of the public or a section of the public, or (e) is designed seriously to interfere with or seriously to disrupt an electronic system.2.3.11 The Australian Anti Terrorism Act 2005 uses the definition given in the Criminal Code of the country. It defines terrorism as an “action or threat of action that (a) causes serious harm that is physical harm to a person, (b) causes serious damage to property, (c) causes a person’s death, (d) endangers a person’s life, other than the life of the person taking the action, (e) creates a serious risk to the health or safety of the public or a section of the public, (f) seriously interferes with, seriously disrupts, or destroys, an electronic system including, but not limited to an information system or a telecommunications system or a financial system or a system used for the delivery of essential government services or a system used for, or by, an essential public utility or a system used for, or by, a transport system. The action or the threat of action is made with the intention of advancing a political, religious or ideological cause and is made with the intention of coercing, or influencing by intimidation, the government of the Commonwealth or a state, Territory or foreign country, or of part of a state, Territory or foreign country; or intimidating the public or a section of the public”.2.4 Position in India2.4.1 Terrorism as an offence does not figure in the Indian Penal Code of 1860 as amended from time to time. In India, the first special law which attempted to define terrorism was the Terrorist and Disruptive Activities (Prevention) Act, 1987, which was followed by the Prevention of Terrorism Act, 2002 (POTA). With the repeal of the latter in 2004, the Unlawful Activities (Prevention) Act, 1967 was amended to include the definition of a ‘terrorist act’.2.4.2 (The) Terrorist and Disruptive Activities (Prevention) Act, 1987 mentions that “whoever with intent to overawe the Government as by law established or to strike terror in the people or any section of the people or to alienate any section of the people or to adversely affect the harmony amongst different sections of the people does any act or thing by using bombs, dynamite or other explosive substances or10Terrorism – Types, Genesis and Definitioninflammable substances or lethal weapons or poisons or noxious gases or other chemicals or by any other substances (whether biological or otherwise) of a hazardous nature in such a manner as to cause, or as is likely to cause, death of, or injuries to, any person or persons or loss of, or damage to, or destruction of, property or disruption of any supplies or services essential to the life of the community, or detains any person and threatens to kill or injure such person in order to compel the Government or any other person to do or abstain from doing any act, commits a terrorist act.”2.4.3 According to the Prevention of Terrorism Act, 2002, a terrorist is whosoever “(a) with intent to threaten the unity, integrity, security or sovereignty of India or to strike terror in the people or any section of the people does any act or thing by using bombs, dynamite or other explosive substances or inflammable substances or firearms or other lethal weapons or poisons or noxious gases or other chemicals or by any other substances (whether biological or otherwise) of a hazardous nature or by any other means whatsoever, in such a manner as to cause, or likely to cause, death of, or injuries to any person or persons or loss of, or damage to, or destruction of, property or disruption of any supplies or services essential to the life of the community or causes damage or destruction of any property or equipment used or intended to be used for the defense of India or in connection with any other purposes of the Government of India, any State Government or any of their agencies, or detains any person and threatens to kill or injure such person in order to compel the Government or any other person to do or abstain from doing any act; (b) is or continues to be a member of an association declared unlawful under the Unlawful Activities (Prevention) Act, 1967 (37 of 1967), or voluntarily does an act aiding or promoting in any manner the objects of such association and in either case is in possession of any unlicensed firearms, ammunition, explosive or other instrument or substance capable of causing mass destruction and commits any act resulting in loss of human life or grievous injury to any person or causes significant damage to any property, commits a terrorist act”. Further, according to POTA, a terrorist act also includes the act of raising funds intended for the purpose of terrorism.2.4.4 The Unlawful Activities (Prevention) Act, 1967, which was amended in 2004, defines a ‘terrorist act’ thus –”whosoever, with intent to threaten the unity, integrity, security or sovereignty of India or to strike terror in the people or any section of the people in India or in any foreign country, does any act by using bombs, dynamite or other explosive substances or inflammable substances or firearms or other lethal weapons or poisons or noxious gases or other chemicals or by any other substances, (whether biological or otherwise) of a hazardous nature, in such a manner as to cause, or likely to cause, death of, or injuries to any person or persons or loss of, or damage to, or destruction of, property or disruption of any supplies or services essential to the life of the community in India or in any foreign country or causes damage or destruction of any property or equipment used or intended to be used for the defence of India or in connection with any other purposes of the Government of India, any State Government or any of their agencies, or detains any person and threatens to kill or injure such person in order to compel the Government11Combatting Terrorismin India or the Government of a foreign country or any other person to do or abstain from doing any act, commits a terrorist act”.2.4.5 From the above, it is evident that while the laws of some countries (e.g. the USA, Canada, the UK and Australia) speak of the intention behind the terrorist act being for the purpose of advancing a ‘political, religious or ideological cause’, the Indian laws have avoided any such intention or purpose being incorporated to define or describe a terrorist act. The definition of terrorism is an important aspect of the legal framework to deal with terrorism. The efficacy of the existing definition of terrorism is examined in detail in the Chapter, Dealing with Terrorism: Legal Framework.2.5 Means of Terrorism2.5.1 The traditional tactics used by terrorists are attacks on persons and property using weapons, bombs, IEDs, grenades, landmines etc, apart from hostage-taking, hijacking and forcible take-over of buildings, especially Government/public buildings. These could be classified as conventional means of terrorism. In addition, there is increasing resort to suicide attacks and kidnapping. Besides, there are looming threats of terrorists acquiring Weapons of Mass Destruction (nuclear, chemical or biological) and of cyber terrorism as well as environmental terrorism.2.5.1.1 Environmental Terrorism: While eco-terrorism is in protest against the destruction of the natural environment, environmental terrorism is the premeditated damage caused to the natural world for example during the Gulf War of 1991 when Saddam Hussein ordered the detonation of more than 1000 oil wells which engulfed Kuwait in smoke.2.5.1.2 Weapons of Mass Destruction: Weapons of Mass Destruction (WMD) are weapons that can inflict heavy and indiscriminate damage on a given target. Nuclear, chemical and biological weapons are the commonly identified weapons of mass destruction. Although the term WMD has been in use for a long time, the possibility of acquisition of such weapons by terrorist organizations, the perceived Iraqi possession of it and the US led war on Iraq brought WMD into focus. The NATO Glossary of Terms and Definitions defines WMD as a weapon that is capable of a high order of destruction and of being used in such a manner as to destroy people, infrastructure, or other resources on a large scale. Most of these definitions consider WMD as nuclear, biological and chemical weapons (NBC).2.5.1.3 Chemical Weapons: A chemical attack could be the release of toxic gas caused by attacking an industrial facility, or releasing a chemical that has been stolen from its legitimate12Terrorism – Types, Genesis and Definitionusers to inflict heavy damage on the enemy (Archer, 2005). Chemical weapons are different from conventional weapons or nuclear weapons as the destructive effect of chemical weapons are not primarily due to any explosive force. According to the Chemical Weapons Convention signed in 1993, any toxic chemical, regardless of its origin, is considered as a chemical weapon if it is used for purposes that are prohibited. Toxins such as ricin, botulinum toxin, nerve agents, lewisite, sarin etc are examples to this. Aum Shinrikyo’s attack with Sarin in a Tokyo subway is the most notable example of a chemical weapons’ attack in recent times. Very recently, Al-Qaeda claims to have acquired chemical weapons that can cause serious damage to its potential enemies.2.5.1.4 Nuclear weapons: It is argued that the engineering skills and equipment needed to build the simplest form of nuclear weapon, a “gun” style bomb using highly enriched uranium (HEU) – are not particularly complex; any well organized group can develop such a weapon. However, what makes it difficult for terrorist organizations and non-State actors is the non-availability and the complicated process and the cost involved in enriching uranium. Although, there are no accounts of terrorist attacks using nuclear weapons, there are clear indications that from the late 1990s onwards, Al-Qaeda has constantly been trying to acquire it with the help of different State agencies9.2.5.1.5 Biological Weapons:2.5.1.5.1 Bio-terrorism is a relatively new form of terrorist activity that has emerged as a result of the advancements in biotechnology being accessible to terrorist groups. The American Center for Disease Control and Prevention, (CDC) defines bio-terrorism attack as “the deliberate release of viruses, bacteria, or other germs (agents) used to cause illness or death in people, animals, or plants”. These natural agents are changed to “increase their ability to cause disease, make them resistant to current medicines, or to increase their ability to be spread into the environment.” These are spread though air, water or food. Terrorists use biological agents “because they can be extremely difficult to detect and do not cause illness for several hours to several days.”2.5.1.5.2 History of Bio-terrorism: There is historical evidence that some form of bio-terrorism was resorted to by the ancient civilizations (Greeks, Romans and Persians) by polluting the drinking water to cause serious harm to their enemies. The bio-terrorism tactics today are, however, much more sinister and include biological weapons using germs to spread life-threatening diseases among the targeted groups. The idea and concept of biological weapons got greater attention in the late 19th and 20th century10.2.5.1.5.3 During the First World War, Germany is believed to have used biological agents1139Archer, 2005 (refer to Aneexure II of this Report)10Kietmann and Ruoff 2001 (refer to Aneexure II of this Report)Combatting Terrorismsuch as Bacillus anthracis and Burkholderia mallei mainly against the livestock and military personel of their enemies. France and Germany, in the 1930s, introduced disease causing potato beetle to degrade the food crops of enemies’ civilian population. Many countries engaged in serious research to develop biological warfare agents and defence mechanisms in the post-World War I period (Nath, 2004). While countries like Japan, USSR, US and UK were the frontrunners, several other countries made covert attempts to develop biological weapons. During the conflicts arising from Cold War in several countries it was alleged that chemical and biological weapons were widely used. This was reported during the Yemen War (1963 67), the Vietnam War (1959-1975), the Iran-Iraq War during the 1980s and the Gulf War of 1990-91. Soviets and the Mujahideen groups are alleged to have employed biological agents during the Afghan crisis and the Communists were accused of using them in Laos and Cambodia.2.5.1.6 Cyber-terrorism2.5.1.6.1 The term ‘cyber-terrorism’ is of very recent origin in comparison to other forms of terrorist activities. Although different scholars and agencies have tried to define the term, a commonly accepted definition is yet to evolve. Dorothy Denning’s testimony before the Special Oversight Panel on Terrorism has been a major reference point on the subject. In her words, cyber-terrorism is the convergence of terrorism and cyberspace. It is generally understood to mean unlawful attacks and threats of attacks against computers, networks, and the information stored therein when done to intimidate or coerce a government or its people in furtherance of political or social objectives.2.5.1.6.2 According to the Federal Bureau of Investigation (FBI), cyber-terrorism is a criminal act perpetrated by the use of computers and telecommunications capabilities, resulting in violence, destruction and/or disruption of services to create fear by causing confusion and uncertainty within a given population, with the goal of influencing governments or people to conform to a particular political, social, or ideological agenda.2.5.1.6.3 Rod Stark defines cyber-terrorism as ‘the purposeful or threatened use of politically, socially, economically or religiously motivated cyber warfare or cyber-targeted violence, conducted by a non-state or state-sponsored group for the purposes of creating fear, anxiety, and panic in the target population, and the disruption of military and civilian assets.’ Thus, cyber-terrorism is the most advanced means of terrorist strategy developed with the advancement in information and communication technologies that enables terrorists to carry out their operations with minimum physical threat to themselves.2.5.1.6.4 Peter Flemming and Michael Stohi identify two components of cyber-terrorism11:11Source: Refer to Annexure II of this Report.14Terrorism – Types, Genesis and Definition?Computer technology as a facilitator of terrorism: It is used for political propaganda, terrorist recruitment and financing, intra and inter-group communication and coordination, intelligence gathering etc. This enables the terrorist groups to maintain anonymity in routine activities and tactical operations, and also carry out their operations in a cost-effective manner.?Computer technology as a specific component of terrorist weapons or targets: This includes computer technology based attacks or threats on public utilities and transportation, commercial institutions and transnational corporations, individuals, political or ethnic groups, security forces, nation-states or for that matter any ‘perceived enemy’.2.5.1.6.5 The US Army Training and Doctrine Command, DCSINT Handbook 1.02, CyberOperations and Cyber-Terrorism points out the outcome of cyber attacks in four categories:?Loss of Integrity- unauthorized changes made to the data or IT system can result in inaccuracy, fraud or erroneous decisions that bring the integrity of the system under suspicion.?Loss of Availability- An attack on a mission-critical IT system makes it unavailable to the end users.?Loss of Confidentiality- The consequences of unauthorized disclosure of information ranges from loss of public confidence to national security threats.?Physical Destruction- Ability to create actual physical harm or destruction through the use of IT systems.2.5.1.6.6 Incidents of Cyber Attacks: In 1998, Sri Lankan embassies were swamped with e-mail bombs by ethnic Tamil militants. This is believed to be the first cyber-terror attack in the world. Prichard and MacDonald list out a number of recent cyberterrorism incidents. During the Kosovo conflict in 1999, a number of websites run by NATO were subjected to different types of cyber attacks. It is also believed that Russian, Chinese and Serbian hackers tried to deface the NATO and especially US websites during the conflict. In October 2000, some Israeli youngsters launched DoS (Denial of Service) attacks against the computers maintained by the terrorist groups in Palestine, and this was reciprocated by attacks on websites belonging to the Israeli Parliament, Defence Forces, the Foreign Ministry and the Bank of Israel. In 2001, Chinese and American groups engaged in a series of cyber attacks against each other. Both China and America accused each other of sanctioning these attacks which led to a series of diplomatic rows. The reported cyber attacks emanating from China are nowadays posing a major threat.15Combatting Terrorism2.5.1.7 Suicide Terrorism2.5.1.7.1 The most ominous aspect of the emerging terrorist tactics is suicide terrorism. The first manifestation of this tactic in recent times took place when US Marine barracks in Beirut were attacked by a vehicle-borne suicide bomber in 1984. It was not long before the LTTE started resorting to the same tactic. An LTTE cadre drove a truck filled with explosives into the Sri Lankan Army camp at Nelliady in Jaffna on July 5, 1987 marking the beginning of LTTE’s suicide bombing campaigns. Thereafter, the Deputy Defence Minister of Sri Lanka Ranjan Wijeratne was assassinated in 1990 by LTTE terrorists in a suicide mission. The assassination of Shri Rajiv Gandhi took place on May 21, 1991 which brought into focus the capability and ruthless brutality of LTTE in suicide terrorism. Since then, there have been several instances of suicide attacks by the LTTE, the most notable of which was the killing of the Sri Lankan President Premadasa in 1993.2.5.1.7.2 Jehadi terrorists took to suicide terrorism in the 1990’s. In Kashmir, the first suicide attack by the Fedayeen was on July, 13 1991 on a Border Security Force Post. The attack on the J&K Legislative Assembly complex in October 2001 was also a suicide attack in which the driver of the explosive-laden vehicle which rammed through the gate was killed. Since then, the Fedayeen had been involved in attacking the Indian Parliament in 2001 nearly leading to a face-off between India and Pakistan, in storming the Akshardham Temple in Gujarat in 2002, and in an abortive attempt at Ayodhya in July 2005. There have been numerous other Fedayeen, attacks within Jammu & Kashmir, mostly on the premises of the Police and Security Forces.2.5.1.7.3 It is important to note that the term ‘Fedayeen’ does not exactly mean a suicide terrorist in the sense that his death is not vital or inevitable for the success of the mission he undertakes. However, in many of these operations, the Fedayeen have taken on the Armed Forces against almost impossible odds knowing fully well that they had little chance of retuning alive. A majority of the Fedayeen who have operated in Jammu & Kashmir have been Pakistanis several of whom had fought in Afghanistan against the Soviets in the 1980’s. Many Kashmiris argue that the reason why very few local people volunteer for suicide attacks is because of the Sufi Islamic traditions of this region which embody peace and tolerance.2.5.1.7.4 There have been only three acts of suicide terrorism in the hinterland of India outside Jammu & Kashmir in recent times. The first two were the Rajiv Gandhi and Beant Singh assassinations. The third one took place outside the Special Task Force Office in Hyderabad in 2005.16Terrorism – Types, Genesis and Definition2.5.1.7.5 In our neighbourhood, the LTTE has consistently been able to find large numbers of volunteers from amongst Sri Lankan Tamils to carry out suicide missions. Among the concepts that have been popularized and used by the LTTE are stories from Silappadikaram, a stirring tale of the woman warrior Kannagi, a tale, which as Prof. Basham says, “has a grim force and splendour un-paralleled elsewhere in Indian literature”.12211712A.L. Basham: ‘The Wonder that was India’3TERRORISM IN INDIA3.1 Jammu & Kashmir3.1.1 The roots of insurgency in Jammu & Kashmir can be traced to the later part of the 1940s when Pakistan attacked India with a view to capture Jammu & Kashmir. Ever since there has been a section of population which believes in secession from India. These groups aided and abetted from across the border have often indulged in insurgent activities. Following the 1971 India-Pakistan war there was a lull in the secessionist activities. However, the eighties witnessed large scale infiltration across the border and a sudden increase in insurgency. Innocent persons, were targeted and forced to flee from the State. The decade of the 1990s saw large scale deployment of security forces in the State. An idea about the extent of violence can be had from Figure 3.13.1.2 The rise of Islamist fundamentalism and emergence of Al-Qaeda has added another dimension to the insurgency in Jammu & Kashmir. From India’s point of view, the real threat vis-à-vis Islamist fundamentalism emanates not so much from the Al-Qaeda and the Taliban per se but from their regional affiliates who, though sharing the former’s philosophy and18Terrorism in Indiaoutlook, have by now developed separate networks capable of undertaking jihadi onslaughts on their own. Thus, the Pakistan-based terrorist organisation called Laskar-e-Tayyaba (LeT) is known to have developed cells not only in India but also in about 18 countries, including the USA, the UK, France, Singapore and Australia.3.1.3 Other affiliates of Al-Qaeda which continue to pose a serious threat to peace and security in India are the Jaish-e-Mohammed (JeM), HUM, HUJI and Al-Badr. It may be mentioned that JeM was formed by Masood Azhar, a former senior leader of Harkat-ulAnsar who was released and handed over by India to the Talibans at Kandahar (Afghanistan) in exchange of the IC-814 hijacking hostages. JeM’s declared objective is to unite Kashmir with Pakistan. JeM cadres are known to have been involved in several suicide attacks in Jammu & Kashmir including the one on Jammu & Kashmir Legislative Assembly in October 2001, the attack on Indian Parliament in December 2001 besides a few other terrorist attacks inside India during 2005-06. Despite the fact that this organisation was believed to have been implicated in two attacks on President Musharraf and was banned in Pakistan in 2002, it continues to operate fairly openly in parts of Pakistan.3.1.4 The nature of terrorist threat in Jammu & Kashmir has changed in some ways. Suicide terrorism has made its presence felt in the State just as the Jammu region has also become a special target for attacks in the last few years. The Annual Report of the Ministry of Home Affairs for 2006-07 shows that there has been a change in the violence profile after April 2006 with soft targets like minority groups, tourists and migrant labourers - all innocent citizens - being targeted by the militants, with grenade attacks having increased by 49% over the previous year. The threat from the terrorist groups may also be said to have increased with the formation of United Jehad Council, an umbrella organisation of 14 militant groups led by the Hizbul Mujahideen along with the Lashkar-e-Tayyaba and the Jaish-e-Mohammed acquiring the most modern and sophisticated weapons and known support from international terrorist groups.3.1.5 Government of India has been endeavouring to tackle the problems of the troubled State through a multi-pronged strategy with a holistic approach calculated to address areas of concern on the political, security, developmental and administrative fronts. On the political aspect, primacy has been given to political dialogue with emphasis on political-democratic processes and emphasis on the rule of law. In specific terms, the following steps may be mentioned13 :(a) emphasis on comprehensive confidence building measures not only within Jammu & Kashmir but also with Pakistan;1913Source: Annual Report, 2006-07; Ministry of Home Affairs; Terrorism(b) facilitating people-to-people contact between residents of Jammu & Kashmir and those of POK;(c)initiatives taken to reunite separated families from both sides of the border by opening the Srinagar-Muzaffarabad and Poonch-Rawalakot bus services;(d) considerable relaxation in movements across the LOC in the immediate aftermath of the devastating earthquake in the POK region; and(e)Government of India initiative in holding periodic dialogues with groups representing different shades of opinion, including the separatists.3.1.6 Of the internal security related measures, mention may be made of14 -(a) revitalising the Unified Command mechanism (introduced first during 1997) under the chairmanship of the State’s Chief Minister and having senior representatives of the Army, Central Police Organisations stationed in the State and senior officers of the State’s civil and police administration;(b) banning nine terrorist organisations reported to be operating in Jammu & Kashmir under the Unlawful Activities (Prevention) Act, 2004 including JeM, LeT, HM and HuM;(c) setting up Village Defence Committees and appointment of Special Police Officers in selected areas after careful screening; and(d) providing for reimbursement of the State’s security related expenditure.3.1.7 On the developmental front, the main initiative has been the Prime Minister’s Reconstruction Plan for Jammu & Kashmir, as announced in November 2004, with an outlay of a substantial amount of Rs.24,000 crores15.3.1.8 On the administrative front, the following steps deserve mention :(a)relief measures for victims of militancy;(b) encouraging and facilitating return of Kashmiri migrants; and(c)special facilities and concessions provided to Central Government employees posted in the Kashmir valley.14Source: ibid15 1 Crore = 10 million20Terrorism in India3.1.9 India has been fighting the menace of cross-border terrorism in the State of Jammu & Kashmir for over 16 years. More than 13,000 civilians and 4,000 men of Security Forces (SFs) have lost their lives. The security situation in the State has evolved positively since 1989 on account of the sincere efforts of the SFs and institutions of governance and above all, the people’s yearning for peace and normalcy16. The efforts of the Union Government and the State Government and especially those of the security forces have helped in controlling the militant activities. The successful conduct of general elections as well as elections to local bodies are a positive indicator of the people’s faith in the Indian democracy. Another positive development has been the increasing influx of tourists in the valley.3.2 North Eastern States3.2.1 The States in India’s North East region have a long history of conflict and violence among the tribal groups within the same State, and also neighbouring States. A major part of the geographical area of this region was initially within the ambit of the State of Assam but the manifestation of ethno-nationalism quite often expressed through violence, led to the formation of some of the present States through various stages of evolution during the post-Independence period.Table 3.1: Security Situation during the Years 2003-07 (North East)Head20032004200520062007Incidents13321234133213661489Extremists arrested/ killed/surrendered21922797245932312875SFs killed90110707679Civilians killed494414393309498Source: Annual Report 2007-08; Ministry of Home Affairs3.2.2 Although the founding fathers who framed the Indian Constitution had taken into account the special nature of the problems in this region and had provided for innovative models of Autonomous Councils and other measures, the complex pattern of conflicts in the North-Eastern States still continues. As a result, there have been serious impediments to the economic progress as well as other developmental activities in the region much to the detriment of the people living in these areas. The Commission has dealt with the problems of this region, including aspects of terrorism, in its Report on ‘Capacity Building for Conflict Resolution’.2116Annual Report 2006-07, Ministry of Home Affairs; Government of batting Terrorism3.2.3 Illegal Immigration in the North East* 3.3 Punjab3.3.1 The quest for a separate Sikh identity manifested itself, after Partition, in their demand for a separate State in India. Even after the formation of a separate State of Punjab, some related issues remained unresolved pertaining inter-alia to their demand for Chandigarh as the State capital, sharing of river waters etc. The situation was further aggravated when terrorist elements demanded secession in the form of ‘Khalistan’. While terrorism was quelled, a determined effort was launched, soon after the elections in December 1984, to find an enduring basis for the resolution of the conflict which was inextricably enmeshed with violence in Punjab and its spin-off effects in other parts of the country. The Rajiv Gandhi-Longowal Accord in July 1985 brought this turbulence to a temporary end. With Sant Longowal’s assassination a month later and the implementation of the Accord running into rough weather over the question of Chandigarh as a part of Punjab and the sharing of river waters, there was a renewal of violence. Finally, the conflict was resolved by the Government following a policy which was based on four parameters: security action to contain and eliminate terrorism; sub-terranean contacts with militants to persuade them to give up violence and come to the negotiating table; over-the-table discussions with dissident elements who were prepared to eschew violence and accept the basic tenets of the Constitution in exchange for full integration into the country’s democratic process, and sensitivity to religious, cultural and ethnic sentiments of the affected population.17 There are isolated embers even now and the problem mainly emanates from sections living abroad.3.4 Ideology-oriented Terrorism : Left-Wing Extremism (LWE)3.4.1 Left-wing extremists in India, as elsewhere, are known for resorting to violence in pursuance of their ideology of peoples’ revolutionary movement. In West Bengal, this movement was started in 1967 by an extremists’ break-away faction of the CPM. This extremist faction had a fairly good following among the tea garden labourers besides the peasantry of the area. Being convinced that the objective condition was ripe in India, this faction commenced its so-called agrarian revolution from 3rd March, 1967, the very next day of the formation of the United Front Government in West Bengal. The initial outburst was followed by groups occupying vacant lands in parts of Naxalbari, Khoribari and Phansidewa police station areas of Siliguri sub-division on the plea that such lands were in excess of the permissible ceiling on land holdings or that these were supposed to have vested22*The contents of this Paragraph have been classified as ‘Confidential’ and hence are not included in this printed version. 17Manishankar Aiyar, Rajiv Gandhi’s India: A Golden Jubilee Retrospective, UBSPDTerrorism in Indiain the Government which the latter never cared to distribute among landless and marginal farmers as provided for in the West Bengal Estate Acquisition Act of 1953 and other allied laws.3.4.2 Exercising utmost restraint, the local police and administration did not pursue a grossly punitive and retaliatory path but sought to arrange redressal by the Government of the long-standing grievances, especially in respect of the hapless and poor tea garden labourers and landless or marginal farmers. As a result, the extremist faction could not mobilise these people for further organised militant activities. The police leadership was convinced that if police operations are properly planned and timed, ‘the fly-swatters would be more appropriate and effective than sledge-hammers’. This should be an important lesson one can ill afford to ignore in the handling of the current spate of Naxalite/Maoist militancy in different parts of India.3.4.3 The first flush of the Left Extremist movement in the Naxalbari region was effectively controlled without much bloodshed and within a relatively short span of time. The highlights of subsequent developments of this movement, known since then as the Naxalite movement and its later reincarnation as the Maoist movement since 2004, may be briefly summarised as below:?May, 1968 : Formation of the All India Co-ordination Committee of Communist Revolutionaries (AICCCR) to carry forward the militant movement in different parts of India.?22 April, 1969: Formation of a new Marxist-Leninist party to be known as the CPI (ML), which was formally announced in a rally at Calcutta on 1 May, 1969.?Overt acts of violence in the name of ‘annihilation of class enemies’ started surfacing thereafter in parts of different States led by the CPI-ML leaders and their cadres in West Bengal, Andhra Pradesh, Kerala, Bihar, UP besides Orissa, Madhya Pradesh and Punjab.?From about May 1971, inner-party contradictions within the CPI-ML had started and the authority of the leadership of the extremist faction was being questioned, if not openly opposed for fear of liquidation by party cadres themselves. When the leaders of the extremist faction were known to be supportive of Pakistan during the Bangladesh liberation struggle of 1970-71, the defiance against Charu Majumdar gathered momentum. This culminated in his arrest from a hideout in Calcutta on 16 July, 1972.23Combatting Terrorism3.4.4 Various splinter groups of Naxalites started resurfacing in various parts of India during the early 1980s. Thus, the Naxalites of Andhra Pradesh regrouped as the CPI-ML (Peoples’ War Group/ PWG); likewise the Bihar Naxalites rechristened themselves as the Maoist Communist Centre (MCC). Of all the newly organised Naxalite groups, the CPI-ML (PWG) turned out to be the most active not only in Andhra Pradesh but also in Orissa, in the tribal belt (Bastar-Dandakaranya) of Madhya Pradesh (now mostly in the State of Chhattisgarh) and Maharashtra, causing considerable violence in these States.3.4.5 The PWG in Andhra Pradesh succeeded in mobilising a fairly large section of the rural population in the outlying districts and also in the urban areas of some other districts. The PWG also succeeded in enlisting the support of a vocal section of the civil society. In addition, some of its programmes could create a climate of wide public support. Thus, the leaders openly started holding ‘Praja Courts’ (peoples’ courts) in which complaints against land-owners, money-lenders and even against Government officials were being entertained and ‘swift justice’ meted out. Even elected representatives like MLAs and sarpanches were being given ‘directives’ by such courts, which were generally obeyed because they were scared of retaliatory actions by the cadres of the PWG. In other words, for quite sometime the people in these areas of PWG influence could witness the utter lack of good and effective administration. At the same time, reckless and indiscriminate actions of the PWG squads (‘dalams’) in the shape of forcible collection of funds from land-owners, businessmen and others alienated a section of the people who started mounting pressure on the State Government for firm action against the PWG.3.4.6 This was followed by strong police actions which led to killings by both police and the Maoists. This had another consequence which the Maoists had not anticipated. Police operations created a sense of insecurity among sections of the Maoist cadres which prompted them to resort to brutal murders and tortures of villagers on the slightest suspicion of being police informers. This created further alienation among the local villagers when they saw that those who claimed to be their saviours could be so ruthless and indiscriminate in their conduct.3.4.7 Thus, at a later stage, when the State Government commenced large-scale police operations, spearheaded by the specially-trained police units called Greyhounds, it did not take long for the latter to score spectacular victories against Maoist bases, obviously with substantial support from the villages which were earlier considered to be their strong base areas, especially in the Nallamala forest and its adjoining areas. This forced the Andhra Maoists to vacate these areas and get dispersed in adjacent pockets in the Dandakaranya belt of Chhattisgarh and in some of the adjacent districts of Orissa.24Terrorism in India3.4.8 Meanwhile the Maoists developed some expertise in the use of landmines and IEDs which caused very significant casualties among police and other security personnel operating in Chhattisgarh. Another significant development in this State has been the creation of resistance groups from amongst the tribal people known as the Salwa Judum.3.4.9 The Bihar Naxalites, namely the Maoist Communist Centre/MCC, found that their greatest adversary was not so much the administration and the police but the armed gangs (senas) of the landlord class - the Ranbir Sena, the Bhumihar Sena et al. There were quite a few massacres of the Dalits who formed the backbone of the MCC and this led to a series of revenge killings by MCC cadres and retaliatory killings by the landlord senas. In other words, instead of assuming the characteristics of class struggle as propagated by Maoist ideologues, the skirmishes took the shape of caste warfare. With the creation of Jharkhand with the tribal majority districts of erstwhile Bihar, the Maoists naturally emerged as a strong ally of the exploited tribal poor. Some of the tribal leaders who had ‘prospered’ during the past decades as ministers, MLAs, MPs and also as political leaders or otherwise through dubious means as perceived by the common people are also becoming targets of Maoist violence.3.4.10 In West Bengal, the Naxalites seem to be repeating some of their tactics of the 1969 72 period of attacks on their political opponents in addition to the police. Thus they have started targetting specific CPM party functionaries at local levels where such local leaders were mobilising support against the Naxalites. Their targets are not confined to the known Naxalite affected districts of West Midnapore, Purulia and Bankura only. During 2005-08 so far, a number of CPM party functionaries have been attacked and killed in the districts of Nadia, Burdwan, Birbhum, Murshidabad etc. where the Naxalites were known for their presence during the 1970s. It shows that they have been regrouping in some of their earlier areas of influence of the 1969-72 phase. This trend is likely to extend to some other areas also. It is hoped that the state administration in general and the police and the intelligence apparatus in particular are alive to this new development and would be in a position to counter the menace without further delay.3.4.11 It appears now that, barring a few splinter groups; Naxalites have largely completed their process of merger and consolidation with the formation of the CPI (Maoist) on 21 September 2004. This was followed by their increasing militarisation and simultaneous acquisition of sophisticated firearms and ammunitions. Their arsenal now boasts of self-loading rifles (SLRs), AK series of rifles and INSAS rifles. It is believed that currently the Maoists have also gained access to the technology of fabricating rockets and rocket launchers.25Combatting Terrorism3.4.12 The threat from the Maoists has increased on account of their developing expertise in fabricating and detonating Improvised Explosive Devices (IEDs). Unlike in J&K where landmines are detonated with remote-controlled device, the Naxalites so far have been using wire-controlled detonations which cannot be neutralised electronically. The lethality of the Nxalites’ attack on the security forces and the resultant enormity of the fatalities were demonstrated in the 3 September 2005 attack on a Mine-protected Vehicle in Dantewada district of Chhattisgarh, killing 24 policemen (CRPF). On 5 January 2005, the police chief of Munger district (Bihar) KC Surendra Babu was killed in an IED attack. The police chief of Prakasam district (Andhra Pradesh) survived an IED attack in April 2005. The former Chief Minister of Andhra Pradesh (Chandrababu Naidu) had a providential escape from an IED attack while he was on his way to Tirupati. Likewise, another former Chief Minister of Andhra Pradesh (Janardhan Reddy) also narrowly escaped from an IED attack on 7 September 2007. All these incidents show that the IEDs have come to be used by the Naxalites for well-planned attacks on even high-security personalities apart from other targets like police stations and police vehicles. On a rough estimate, the Naxalites have so far been causing nearly 100 landmine explosions every year with considerable loss of lives of security personnel of state and central police, quite a disturbing phenomenon.3.4.13 A further heightening of the Naxalites’ militarisation phase was witnessed in the following incidents, among others:?On 6 February 2004, a few hundred Naxalites laid seige to the district headquarters town of Koraput (Orissa), brought it to a complete halt for a few hours, attacked the district headquarters complex, made an abortive attempt to storm the jail, but successfully raided the district police armoury, looting all the 500 weapons and several thosand rounds of ammunition.?On 13th November, 2005, there was a massive, well organized and audacious Naxalite onslaughts on a number of government buildings in Jehanabad (Bihar) known as the ‘Jehanabad (Bihar) Raid’ or ‘Operation Jail Break’. During these raids, lasting for several hours at night, the extremists conducted highly synchronised attacks on the district jail, district court, police lines, police quarters, district armoury and police stations - all of which went unchallenged. The miscreants looted several hundred rifles and a huge quantity of ammunitions. The focal point of the raid was, however, the district jail from which they could take out not only their top leader Ajay Kanu but also set free 341 other prisoners, including many of their cadres. The rebels also abducted a number of their class enemies belonging to the26Terrorism in IndiaRanvir Sena, at least nine of whom were later executed. It is reported that nearly 1000 persons were mobilised for this spectacular operation, the hard core being armed party cadres and aided by a large number of, what they call, the ‘peoples’ militia’.?11 November 2006: Armed Naxalites and members of their peoples’ militia numbering a few hundred raided the Home Guards Training Centre in Giridih (Jharkhand), looted 185 rifles and 25,000 rounds of ammunition.?15 March 2007: 55 policemen were killed in Rani Bodli (Chhattisgarh)?7 July 2007: 24 policemen were slaughtered in the forests of Dantewada district (Chhattisgarh).?16 December 2007: A well-planned jail break was organised by the Maoist inmates who were lodged in the district jail of Dantewada (Chhattisgarh) in which almost all the prisoners were set free, including many of their party cadres. This operation too went unchallenged in spite of the fact that Dantewada district had been known to be the most Naxalite affected in Chhattisgarh.All the above onslaughts, in addition to several others in some States, bring to the fore the urgent need for considerable capacity-building among the police and other security forces (State and Central) in the areas of training, leadership planning of counter-terror operations as a part of a comprehensive policy, including reform and development.3.5 Terrorism Based on Religious Fundamentalism3.5.1 There have been several terrorist incidents in India which were motivated by religious fundamentalism. Some of these activities overlap with political ambitions – like separatist elements in Jammu & Kashmir. Some of these incidents have been aided and abetted by external forces inimical to India. The ISI launched an initiative in 1991, even before the Babri Masjid demolition to forge an alliance between Khalistani terrorism that prevailed in Punjab and the terrorist groups in Jammu & Kashmir. However, the initiative did not yield results because the key figures were arrested soon after their arrival in India. Thereafter, in January, 1994, Mohammed Masood Azhar Alvi arrived in India with the task of working out the reconciliation of the cadre of Harkat Mujahiddin and Harkat-ul Jehad Islami whose parent organizations had merged to form the Harkat-ul-Ansar. His organisation’s main objective was to liberate Kashmir from Indian rule and to establish Islamic rule in Kashmir. He also interacted extensively with the leading figures of the Deoband Ulema.276966725-2369-3-65171574822007Incidents Casualties13515659489582191327676784542-1388-5-17-91243102006Incidents Casualties10715099826715-11-2310446779653-3168-1-78141193122005Incidents Casualties186160894-20385-1021484256617115-483-26-15181693792004Incidents Casualties323153384513352-15-1163551512831-174-8-1-151173422003Incidents Casualties-159725075121325613-6449Andhra PradeshSource: Annual Report 2007-08, Ministry of Home Affairs.Table 3.4: State-wise Number of Incidents and Casualties during the Period 2003-07 (Naxalism related Violence)TotalStateBiharMaharashtraKeralaMadhya PradeshChhattisgarhTamil NaduUttar PradeshHaryanaWest BengalKarnatakaOrissaJharkhand451384718320853574310140577Combatting Terrorism28Terrorism in India3.5.2 The next initiative in Islamist terrorism by the Pakistani Intelligence was the setting up of the Jammu & Kashmir Islamic Front. Its task was to work together with the mafia figures who had executed the Mumbai serial bombing of 1993. JKIF was responsible for the Lajpat Nagar blasts in New Delhi in 1996. However, the case was quickly detected and the accused arrested.3.5.3 In 2001, several Islamic terrorist attacks took place in New Delhi, the most important being the attack on the Parliament House in December 2001. The attack on Akshardham temple and the killing of Haren Pandya, the former Home Minister of Gujarat State, were the major operations of Islamist terrorists in 2002 and 2003. In July 2005, there was an attack at Ayodhya which the Security Forces succeeded in repulsing. This was followed by the Sarojini Nagar market blast in November, at New Delhi. The heinous serial bomb blasts in Mumbai took place in July 2006. A suicide attack (in which only the Bangladeshi suicide killer died) near the Office of the Commissioner of Police, Hyderabad; an attack on the Indian Institute of Science in Bangalore in which an eminent scientist was killed and the Aurangabad arms seizure case were the other major terrorist incidents of 2006. The latest in the spate of such terrorist attacks has been the serial bomb blasts in Jaipur on 13th May, 2008 in which a number of innocent lives were lost.3.5.4 It is important to take a look at the role played by the Students’ Islamic Movement of India (SIMI) in the promotion of Islamist extremism in India. Funded generously by various Islamist charities, but particularly the World Assembly of Muslim Youth with its headquarters in Riyadh, SIMI spread its activities to various States in India. SIMI cadres were linked to the abduction of five foreign nationals who were rescued from Saharanpur in 1994. (One of the accused in this case was the British national Syed Mohammed Omar Sheikh, who was later released in exchange for the IC-814 hostages. He is currently in prison in Pakistan for his role in the killing of the American journalist, Daniel Pearl). SIMI’s then President CAM Basheer, hailing from Kerala, was the first Indian Muslim known to have gone to Pakistan for arms training. SIMI was banned by the Government of India under the Unlawful Activities (Prevention) Act, 1967, in September, 2001.3.6 Emerging Threats3.6.1 While terrorism was largely a local phenomenon until recently, in today’s world terrorist networks have taken advantage of the communications revolution to develop transnational links, making terrorism a global threat. Thus, Al Quaeda is a global terror network which is a loose federation of terror-cells spread across the world but operating autonomously with very little operational linkages among them other than adherence to a particular form of2930Combatting Terrorismextremist ideology. Another feature of the spread of terrorism is the ability of many terrorist outfits to cooperate with each other and build operational links in the form of supply of arms, logistical and even operational support without necessarily sharing ideological bonds. Such networks are also able to obtain support from organized crime outfits to further their destructive objective.3.6.2 The impact of modern technology, particularly communication technology combined with increasing globalization, rapidly increasing trade in goods and services as well as faster movement of people across borders means that terrorism in the 21st century has acquired newer and deadlier dimensions. The accessibility to material and technology that have much greater destructive potential compared to the past also magnifies the nature of the threat posed by terrorism. The existence of a large migrant population and porous borders in an increasingly multi-cultural world means that sleeper cells spawned through propagation of terrorist ideology, often by using the internet, can become the fifth column threatening the national fabric of democratic countries. Integration of national economies, banking and financial systems coupled with faster movement of money across national borders also make it easier to fund terrorist activities around the globe.3.7 Strategy to Counter Terrorism 3.7.1 A Multi-pronged Approach3.7.1.1 A strategy for fighting terror in India has to be evolved in the overall context of a national security strategy. National security, in its broadest sense, means security of life and property of every citizen in the country, as well as the common wealth of the nation, which belongs to all. The objective of the national security strategy has to be the creation and maintenance of a security environment which would enable the nation to provide opportunities to all individuals to develop to their fullest potential. Much of the discourse on national security strategy has been based on the premise that national security can be achieved by ensuring protection of life and property for all. However, it needs to be clearly understood that socio-economic development and providing a secure environment have to go hand-inhand as one cannot survive without the other.3.7.1.2 Our national security strategy needs to be built round the concept that nothing must impede our drive towards the goal of eradicating poverty and raising everyone in the country above the poverty line. Any threat which could slow down this process has to be considered a threat to national security. Among other causes, such threats could emanate from war, terrorism, organized crime, shortage of energy, shortage of water and food, internal conflict which may be armed or not or from natural or man-made disasters.Terrorism in India3.7.1.3 To tackle the menace of terrorism, a multi-pronged approach is needed. In this context, socio-economic development is a priority so that vulnerable sections of society do not fall prey to the propaganda of terrorists promising them wealth and equity; and the administration, particularly the service delivery mechanisms need to be responsive to the legitimate and long standing grievances of people so that these are redressed promptly and cannot be exploited by terrorist groups. Strong measures are required to deal with criminal elements but with respect for human rights. To ensure this, the law enforcement agencies have to be supported with an appropriate legal framework, adequate training infrastructure, equipment and intelligence.Box 3.1: Balancing Counter-Terrorism Effortsand Human RightsAs members of the legal fraternity the questions that beg to be addressed by us revolve around the conflict, consequential to counter-terrorism efforts, between human rights and the concerns for defence of the State of which we are part. The conflict stems from the necessity felt for entrusting the law-enforcement agencies with extraordinary powers to meet what is genuinely perceived as an extraordinary situation. The irony is that the first and foremost impact of such measures is felt by law-abiding citizens on account of inroads they make into individual liberties. Civilized people do not expect their governments to enact laws that turn into mere “scarecrow” for the “birds of prey” to use as their “perch”, as Shakespeare would put it. In this scenario, the role and attitude of the judicial apparatus assumes great importance, in which context we have certain responsibilities.Former Chief Justice of India H’bl Mr. Justice Mr. Y K Sabharwal; new_links/Terrorism%20paper.pdf.3.7.2 Dealing with the menace of terrorism would require a comprehensive strategy in which different stakeholders – the Government, political parties, security agencies, civil society and media – would have an important role to play. This strategy should amalgamate political, social, economic, administrative, police and other measures. The necessary elements of such a strategy are listed below:Political consensus: Political parties must arrive at a national consensus on the need for the broad contours of such a planned strategy. Based on this national strategy, each of the States and Union Territories should draw up its respective regional strategies, along with the required tactical components for the implementation of the strategy. Just as the Union Government should have intensive interactions with the States and Union Territories while drawing up the national strategy, the latter would be required to do their part in close consultation with the nodal ministry of the Government of India (possibly the Home Ministry). While attempting such a national consensus on an issue of considerable criticality for the nation’s security, integrity and develop-mental thrusts for the most backward regions, it deserves to be borne in mind that the people of our country have a right to expect that our national as well as regional parties will rise above their sectarian and petty electoral compulsions.31Combatting TerrorismGood governance and socioeconomic development: This would necessitate high priority being given to development work and its actual implementation on the ground for which a clean,corruption-freeandaccountable administration at all levels is an imperative necessity.Respect for rule of law: Governmental agencies must not be allowed to transgress law even in dealing with critical situations caused by insurgency or terrorism. If an extraordinary situation cannot be dealt with by the existing laws, new laws may be enacted so that law enforcement agencies are not provoked or tempted to resort to extra-legal or illegal methods. Police and all other governmental forces must adhere to some basic codes of conduct.Countering the subversive activities of terrorists: Government must give priority to defeating political subversions (e.g. by terrorists and Maoists). The emphasis should be on civil as opposed to military measures to counter terrorism and insurgency. Psychological ‘warfare’ or management of information services and the media, in conjunction with the intelligence wing of the police, can play an important role in achieving this objective.Providing the appropriate legal framework: Terrorism is an extraordinary crime. The ordinary laws of the land may not be adequate to book a terrorist. This may require special laws and effective enforcement mechanisms, but with sufficient safeguards to prevent its misuse.Building capacity: The capacity building exercise should extend to the intelligence gathering machinery, security agencies, civil administration and the society at large. As was highlighted in the Report on Crisis Management, the strategy should encompass preventive, mitigation, relief and rehabilitative measures.Box 3.2: Development and ExtremismIn many ways, development and internal security are two sides of the same coin. Each is critically dependent on the other. Often, the lack of development and the lack of any prospects for improving one’s lot provide a fertile ground for extremist ideologies to flourish. A large proportion of the recruits to extremist groups come from deprived or marginalized backgrounds or from regions which somehow seem disaffected by the vibrant growth in many other parts of the country. I had mentioned yesterday that I am concerned about the unevenness of our development process and the various development divides that are opening up in the country – the inter-regional divide, the rural-urban divide and the inter-sectoral divide. These divides and disparities lead to disaffection, large-scale migration, and also to discord. I notice that in many cases, internal security problems arise out of the uneven development and we also need to address this issue if we are to make any long-term headway in combating extremist ideologies and extremist elements.Prime Minister Dr. Manmohan Singh’s speech at the Chief Ministers’ Conference on Internal Security; December 20, 2007; New Delhi. Source: http:// pmindia.nic.in/speeches.htm32Terrorism in IndiaBox 3.3: Global Counter-Terrorism Strategy adopted bytheUN General Assembly in September, 2006The United Nations Global Counter-Terrorism Strategy was adopted by Member States on 8 September 2006. The strategy, in the form of a resolution and an annexed Plan of action, is a unique global instrument that will enhance national, regional and international efforts to counter terrorism. This is the first time that all Member States have agreed to a common strategic approach to fight terrorism, not only sending a clear message that terrorism is unacceptable in all its forms and manifestation but also resolving to take practical steps individually and collectively to prevent and combat it. Those practical steps include a wide array of measures ranging from strengthening state capacity to counter terrorist threats to better coordinating United Nations system’s counter-terrorism activities. The adoption of the strategy fulfils the commitment made by world leaders at the 2005 September Summit and builds on many of the elements proposed by the Secretary-General in his 2 May 2006 report, entitled ‘Uniting against Terrorism: Recommendations for a Global Counter-Terrorism Strategy’.The plan of action includes the following four measures:i. Measures to address the conditions conducive to the spread of terrorism, including but not limited to prolonged unresolved conflicts, dehumanization of victims of terrorism in all its forms and manifestations, lack of rule of law and violations of human rights, ethnic, national and religious discrimination, political exclusion, socio-economic marginalization, and lack of good governance.ii. Measures to prevent and combat terrorism, in particular by denying terrorists access to the means to carry out their attacks, to their targets and to the desired impact of their attacks.iii. Measures to build States’ capacity to prevent and combat terrorism and to strengthen the role of the United Nations system in this regard.iv. Measures to ensure respect for human rights for all and the rule of law as the fundamental basis of the fight against terrorism, reaffirming that the promotion and protection of human rights for all and the rule of law is essential to all components of the strategy, recognizing that effective counterterrorism measures and the protection of human rights are not conflicting goals, but complementary and mutually reinforcing , and stressing the need to promote and protect the rights of victims of terrorism.Source: Adapted from (extracted on 29.05.2008)3.7.3 If the above basic countermeasure principles are built into the national strategy, the end results will be18 - Government =legality + construction + resultsTerrorists/insurgents = illegality + destruction + promises.3.7.4 The Commission would like to reiterate that any form of extremism with faith in a dogma ending in violence has the potential of escalating from hate campaign, violent hooliganism and murders of perceived enemies to terrorist activities affecting national security and citizens at large. While the Commission in this Report has dealt with some forms ofextremism which have degenerated into terrorism, it needs to be highlighted that it is necessary to deal with all forms of extremism in their early stages through measures of conflict resolution accompanied by firm action against hate campaigns and local violence in order to prevent their escalation.18Defeating Communist Insurgency by Sir Robert Thompson, 1967, based on his comparative analysis of the British handling of the Malaya insurgency(1948- 1960) where he was an officer of the Government of Malaya and the South Vietnamese and American practices in their dealing with the Vietnamese insurgency where he was the head of the British Advisory Mission (1961-1965).334DEALING WITH TERRORISM : LEGAL FRAMEWORK4.1 The Legal Framework4.1.1 The Laws to Deal with Terrorism4.1.1.1 With the spurt in terrorism in recent years, many countries have enacted appropriate and stringent anti-terrorism laws. India too has had various enactments for dealing with terrorism in the past – (i) The Terrorist and Disruptive Activities (Prevention) Act, 1987 (allowed to lapse in 1995), and (ii) The Prevention of Terrorism Act, 2002 (repealed in 2004), Unlawful Activities (Prevention) Act, 1967 {as amended by the Unlawful Activities (Prevention) Amendment Act, 2004}and the National Security Act, 1980. However, some of these legislations were allowed to lapse/repealed as it was contended that the powers conferred on the law enforcement agencies had the potential, and in fact, had been misused. The Law Commission in its 173rd Report (2000) examined this issue and highlighted the need for a law to deal firmly and effectively with terrorists. It also drafted “The Prevention of Terrorist Activities Bill”. The constitutional validity of anti-terrorism laws has also been upheld by the Supreme Court. Many have urged that a strong legal framework needs to be created to deal with terrorism. Clearly, there is a felt need to strengthen the hands of security forces in the fight against terror, even as human rights and constitutional values are protected. The legislative measures adopted in India are dealt with briefly in the following paragraphs.4.1.2 The National Security Act, 19804.1.2.1 The National Security Act, 1980 empowers the Union Government or the State Governments to detain a person to prevent him from acting in any manner prejudicial to the defence of India, the relations of India with foreign powers, or the security of India, or with respect to any foreigner with a view to regulating his continued presence in India. Such preventive detention can also be made with a view to preventing a person from acting in any manner prejudicial to the security of the State or from acting in any manner prejudicial to the maintenance of public order or from acting in any manner prejudicial to the maintenance of supplies and services essential to the community. The Act also constitutes Advisory Boards which have to approve any such detention.34Dealing with Terrorism : Legal Framework4.1.3 The Terrorist and Disruptive Activities (Prevention) Act, 1985 and 19874.1.3.1 The Terrorist and Disruptive Activities (Prevention) Act, 1985, was enacted in May 1985, in the background of escalation of terrorist activities in some parts of the country. It was expected then that it would be possible to control this menace within a period of two years and, therefore, the life of the said Act was restricted to a period of two years. However, it was subsequently realised that on account of various factors, what were stray incidents in the beginning, had become a continuing menace especially in States like Punjab and it was not only necessary to continue the said law but also strengthen it further. The aforesaid Act of 1985 was due to expire on 23rd May, 1987. Since both Houses of Parliament were not in session and it was necessary to take immediate action, the President promulgated the Terrorist and Disruptive Activities (Prevention) Ordinance, 1987 (2 of 1987) on the 23rd May, which came into force with effect from the 24th May, 1987. Subsequent to the promulgation of the Ordinance, it was felt that its provisions needed further strengthening in order to cope up with the menace of terrorism and the Terrorist and Disruptive Activiities (Prevention) Act. 1987 (commonly known as TADA) was enacted.4.1.3.2 TADA, 1985 created two new offences, namely, “terrorist act” and “disruptive activities”. To try these offences, TADA, 1985 established a system of special courts (“Designated Courts”). The Law placed restrictions on the grant of bail by stipulating that unless the Court recorded the existence of “reasonable grounds for believing” that the accused was “not guilty”, bail should not be given. The police were given enhanced powers for detention of suspects; provision was made for protection of witnesses and at the same time it was provided that trials under the law should be accorded precedence over other cases. TADA, 1987 strengthened the mechanism that had been provided in TADA, 1985. In the new law, certain offences were re-defined (e.g. harbouring or concealing terrorists; being a member of a terrorist gang or terrorist organization; holding of property derived as a result of terrorist acts etc.). It provided for a new offence of “possession of unauthorized arms in notified areas”. It also provided for enhanced penalty for certain specified offences. The police officers were given more powers in the matter of seizure of property regarding which it was believed that it had been derived as a result of terrorist acts, besides provision for attachment and forfeiture of such property was also made. It extended the possible period of detention of a suspect in police custody pending investigation. It made confession before a police officer admissible. Executive Magistrates were granted powers under Section 167 CrPC. As a safeguard against abuse of powers given by TADA, 1987, it was stipulated that the “First Information Report” (FIR) cannot be registered except after “prior approval of the District Superintendent of Police”. The Courts were empowered to make certain presumptions (Section 21).4.1.3.3 The constitutional validity of TADA, 1987 was challenged before the Supreme Court in Kartar Singh vs State of Punjab [(1994) 3 SCC 569: AIR 1995 SCC 1726]. A Constitution35Combatting TerrorismBench of the Supreme Court upheld the law but asked the Government to provide certain safeguards with a view to prevent any possible misuse of the stringent provisions of TADA, 1987. The provision regarding the admissibility of evidence adduced before police officers was tempered and it was laid down that immediately after any such admission the accused should be produced before a Judicial Magistrate. The Supreme Court also directed the Government to constitute Review Committees for periodical “scrutiny” of the cases registered and also to review the prevailing situation in the areas notified as ones affected by terrorist activities.4.1.3.4 The validity of TADA, 1987 was extended in 1989, 1991 and 199319. However, after a series of complaints about its abuse, TADA, 1987, was allowed to lapse in 1995. Subsequently, the country witnessed several terrorist incidents –including hijacking of the Indian Airlines flight IC-814 to Kandahar in 1999 and the assault on Parliament on December 13, 2001. As a consequence, the Prevention of Terrorism Act, 2002 came into force.4.1.4 Prevention of Terrorism Act, 20024.1.4.1 The Statement of Objects and Reasons of the Act stated:“The country faces multifarious challenges in the management of its internal security. There is an upsurge of terrorist activities, intensification of cross-border terrorist activities and insurgent groups in different parts of the country. Very often, organized crime and terrorist activities are closely inter-linked. Terrorism has now acquired global dimensions and has become a challenge for the entire world. The reach and methods adopted by terrorist groups and organisations take advantage of modern means of communication and technology using high-tech facilities available in the form of communication systems, transport, sophisticated arms and various other means. This has enabled them to strike and create terror among people at will. The existing criminal justice system is not designed to deal with the types of heinous crimes with which the proposed law deals with.In view of the situation, as stated above, it was felt necessary to enact a legislation for the prevention of, and for dealing with terrorists’ activities. However, sufficient safeguards are sought to be provided in the proposed law to prevent the possibility of its misuse. Parliament was not in session and the circumstances existed which rendered it necessary for the President to promulgate the Prevention of Terrorism Ordinance, 2001 on 24th October, 2001. During the Winter Session of Parliament in December, 2001, steps were taken for the introduction of the Prevention of Terrorism Bill, 2001 in the Lok Sabha. However, the Bill could not be introduced and considered in the Lok Sabha as Parliament adjourned sine die on 19th December, 2001. The terrorist attack on Parliament House on 13th December, 2001 and the prevailing circumstances rendered it necessary for the President to promulgate the Prevention of Terrorism (Second) Ordinance, 2001 on 30th19Amended by by Act 16 of 1989, by Act 35 of 1991,and by Act 43 of 199336Dealing with Terrorism : Legal FrameworkDecember, 2001 with a view to give continuity to the Prevention of Terrorism Ordinance, 2001 promulgated on 24th October, 2001.The Prevention of Terrorism Bill, 2002 seeks to replace the Prevention of Terrorism (Second) Ordinance, 2001".4.1.4.2 The salient features of the Prevention of Terrorism Act, 2002 (POTA) were:a.Definition of ‘Terrorist act’: The part of the definition stipulating the mens rea wasamended. As per the new definition the offence of terrorist act required, as the first and foremost ingredient, the “intent to threaten the unity, integrity, security or sovereignty of India or to strike terror in the people.” Raising funds for the pupose of terrorism was included in the definition.b.Arrest Provisions: Although an arrested person was permitted to meet a legalpractitioner during the course of interrogation, the legal practitioner was not entitled to remain present throughout the period of interrogation (Section 52).c.Seizure and Forfeiture of Proceeds of Terrorism: The officer investigating an offenceunder POTA could order seizure or attachment of property if he had reason to believe that the property represents proceeds of terrorism. The Special Court could also order forfeiture of such property if it was satisfied that such property constituted proceeds of terrorism (Sections 6 to 17).d.Interception of Communication: The Act provided for interception of wire, electronicor oral communication at the request of the investigating officers after being authorized by the competent authority. This could be done if it was believed that such interception might provide or had provided evidence of any offence involving a terrorist act (Sections 36 to 48).e.Unauthorised Possession of Firearms: If any person was in unauthorized possessionof certain arms or ammunition specified in the Arms Rules, 1962 in a notified area, or, explosive substances and leathal weapons capable of mass destruction or biological or chemical substances of warfare in any area, whether notified or not, he would be guilty of committing a terrorist act (Section 4).f.Enhanced powers to Investigating Officers: Apart from the power to make an orderregarding seizing of property representing proceeds of terrorism and interception of certain communications as mentioned in item (c), police officers not below the rank of a Superintendent of Police could also record the confessions of a person37Combatting Terrorismeither in writing or on any mechanical or electronic devise, which were admissible in the trial for any offence under the Act (Section 32). The safeguards introduced by the Supreme Court Judgement in ‘Kartar Singh case’ were incorporated in the law.g.Increased Period of Police Custody: Although Section 167 of the CrPC was applicable, the reference to ’fifteen days’, ‘ninety days’, and ‘sixty days’, as mentioned therein with regard to police custody was replaced by a reference to 30 days, 90 days and 90 days respectively. The period of custody could be extended by the Special Court upto 180 days [Section 49(2)].h.Constitution of Special Courts: The Act provided for constitution of one or more special courts for notified areas or group of cases by the Union Government or the State Government both for trial of cases under the Act (Sections 23 to 35).i.Chapter on Dealing with Terrorist Organizations: A separate chapter to deal with terrorist organizations was included. The Schedule to the Act gave a list of terrorist organizations. The Union Government was authorized to add or remove an organization from the Schedule or amend the Schedule. The activities which made an organization a terrorist organization were also listed (Sections 18 to 22).j.Constitution of Review Committee: The Central and State Governments were to constitute one or more Review Committees for the purposes of the Act (Section 60).4.1.4.3 The Constitutional validity of POTA was challenged in the case, People’s Union for Civil Liberties vs Union of India, on the ground that the law violated basic human rights.Box 4.1: Findings of POTA Review Committeein a Case‘After appreciating the evidence made available to us and considering the respective arguments of the learned counsel of the accused persons and the learned Special Public Prosecutor, this Committee is of the considered view that this incident had taken place on the date, time and place as alleged by the prosecution but certainly not as a part of conspiracy envisaged under the provisions of POTA. This Committee, therefore, is of the view that the accused persons may be tried under the provisions of IPC, Indian Railways Act, Prevention of Damages of Public Property Act, Bombay Police Act etc., but not under the provisions of Prevention of Terrorism Act,(POTA) 2002.’Source: The Committee reviewed the case case bearing FIR No. 09/02 Godhra Railway Police Station in terms of the POTA Repeal Act, 2004 and decided on 16.5.2005; source: pr210605.pdf38Dealing with Terrorism : Legal FrameworkThe Supreme Court upheld the Constitutional validity of the law while stipulating some restrictions on the arbitrary use of certain powers.4.1.4.4 Government repealed POTA as it felt that its provisions were misused by some State Governments and also that the Act had failed to serve its intended purpose. This was done through the Prevention of Terrorism (Repeal) Act, 2004. After repeal of POTA, 2002, some provisions to deal with terrorism were incorporated in the Unlawful Activities (Prevention) Act, 1967 as amended by the Unlawful Activities (Prevention) Amendment Act, 2004.4.1.5 The Unlawful Activities (Prevention) Act, 19674.1.5.1 This law was enacted to provide for more effective prevention of certain unlawful activities of individuals and associations and for matters connected with it. It empowered appropriate authorities to declare any association as ‘unlawful’ if it is carrying out ‘unlawful activities’. This law was comprehensively amended by the Unlawful Activities (Prevention) Amendment Act, 2004 to deal with terrorist activities. Like POTA, it defines a ‘terrorist act’ and also defines a “terrorist organisation” as an organisation listed in the Schedule or an organisation operating under the same name as an organisation so listed. It further provides a mechanism for forfeiture of the proceeds of terrorism apart from providing stringent punishments for terrorism related offences.4.1.5.2 Thus, at present the only Union Legislation dealing specifically with terrorism is the Unlawful Activities (Prevention) Act, 1967 (ULPA) as amended by the Unlawful Activities Prevention (Amendment) Act, 2004. Although ULPA incorporates provisions regarding seizure and forfeiture of property, enhanced punishments and listing of terrorist organizations, it does not provide for special courts or enhanced powers of investigation and provisions regarding confessions made before police officers.4.1.6 Need for a Comprehensive Anti Terrorist Legislation4.1.6.1 It needs to be mentioned here that the Law Commission of India, in its 173rd Report on Prevention of Terrorism Bill, 2000, had recommended a separate legislation to deal with the menace of terrorism. The draft bill as recommended by the Law Commission of India included provisions such as definition of terrorist acts, enhanced punishment for such acts, possession of certain unauthorized arms, special powers of investigating officers regarding seizure and attachment of property representing proceeds of terrorism, constitution of special courts, protection of witnesses, confessions made to police officers to be taken into consideration, enhanced police custody, constitution of review committees, protection of action taken in good faith etc.39Combatting Terrorism4.1.6.2 The need for a comprehensive anti-terrorism legislation cannot be better illustrated than by the judgement of the Apex Court in the Rajiv Gandhi assassination case [State vs. Nalini and ors. (1999) 5 SCC 253]. While the provisions of the Terrorist and Disruptive Activities (Prevention) Act, 1987 have generally been decried as being harsh, none of these could be applied to the perpetrators of the act as the Apex Court held that neither was it a terrorist act u/s 3(1) nor were the activities of the perpetrators ‘disruptive’ u/s 4 of the TADA Act. The relevant paras of the landmark judgement are reproduced below:“61. From the aforesaid circumstances it is difficult for us to conclude that the conspirators intended, at any time, to overawe the Government of India as by law established.62. Nor can we hold that the conspirators ever entertained an intention to strike terror in people or any section thereof. The mere fact that their action resulted in the killing of 18 persons which would have struck great terror in the people of India has been projected as evidence that they intended to strike terror in people. We have no doubt that the aftermath of the carnage at Sriperumpudur had bubbled up waves of shock and terror throughout India. But there is absolutely no evidence that any one of the conspirators ever desired the death of any Indian other than Rajiv Gandhi. Among the series of confessions made by a record number of accused in any single case, as in this case, not even one of them has stated that anybody had the desire or intention to murder one more person along with Rajiv Gandhi except perhaps the murderer herself. Of course they should have anticipated that in such a dastardly action more lives would be vulnerable to peril. But that is a different matter and we cannot attribute an intention of the conspirators to kill anyone other than Rajiv Gandhi and the contemporaneous destruction of the killer also.63. Alternatively, even if Sivarasan and the top brass of LTTE knew that there was likelihood of more casualties that cannot be equated to a situation that they did it with an intention to strike terror in any section of the people.64. In view of the paucity of materials to prove that the conspirators intended to overawe the Government of India or to strike terror in the people of India we are unable to sustain the conviction of offences under Section 3 of TADA....69. If there is any evidence, in this case, to show that any such preceding act was perpetrated by any of the appellants towards killing of any police officer who was killed at the place of occurrence it would, no doubt, amount to disruptive activity. But there is no such evidence that any such activity was done for the purpose of killing any police personnel.70. However, there is plethora of evidence for establishing that all such preceding activities were done by many among the accused arrayed, for killing Rajiv Gandhi. But unfortunately Rajiv Gandhi was not then “a person bound by oath under the Constitution to uphold the sovereignty40Dealing with Terrorism : Legal Frameworkand integrity of India”. Even the Lok Sabha stood dissolved months prior to this incident and hence it cannot be found that he was under an oath as a Member of Parliament....74. We are, therefore, unable to sustain the conviction of appellants for offences under Section 3 or 4 of TADA....555. In the present case applying the principles set out above on the interpretation of Section 3(1) and analyses of this subsection of the TADA we do not find any difficulty in concluding that evidence does not reflect that any of the accused entertained any such intention or had any of the motive to overawe the Government or to strike terror among people. No doubt evidence is there that the absconding accused Prabhakaran, supreme leader of LITE had personal animosity against Rajiv Gandhi and LTTE cadre developed hatred towards Rajiv Gandhi, who was identified with the atrocities allegedly committed by IPKF in Sri Lanka. There was no conspiracy to the indiscriminate killing of persons. There is no evidence directly or circumstantially that Rajiv Gandhi was killed with the intention contemplated under Section 3(1) of TADA. State of Tamil Nadu was notified under TADA on 23.6.1991 and LTTE were declared an unlawful association on 14.5.1992 under the provisions of the Unlawful Activity (Prevention) Act, 1957. Apart from killing of Rajiv Gandhi no other terrorist act has been alleged in the State of Tamil Nadu. Charge may be there but there is no evidence to support the charge. Mr. Natarajan said that prosecution might refer to the killing of Padmanabhan in Tamil Nadu, leader of EPRLF, which fact finds mention in the confession statement of Santhan (A-2). But then he said it was not a terrorist act. It was killing of a rival Sri Lankan and in any case killing of Padmanabhan is not a charge in the case before this Court. Mr. Altaf Ahmad said that when he earlier mentioned the killing of Padmanabhan, it was only to show that LTTE was an organization which brook no opposition and anyone opposing its objective was eliminated. Mr. Natarajan said it was the case of the prosecution itself that Prabhakaran had personal animosity against Rajiv Gandhi developed over a period of time and had motive to kill him.”4.1.6.3 Thus, even a specific law to fight against terrorism proved to be ineffective in a case which involved a former Prime Minister of the country. While the audacity and designs of various terrorist organizations actively engaged in terrorist activities inside the country (and also outside) have been on the increase, the anti-terrorist legislations have not kept pace with these developments. On the other hand, several countries are now increasingly aware of the dangers of not having specific legislation to counter terrorism and specific incidents of terrorist acts. This has galvanised them to pass stringent and effective laws. Thus, a number of countries now have legislations which are comprehensive and effective in dealing with various facets of terrorist activities including provisions regarding counter-terrorist measures along with41Combatting Terrorismprocedures and mechanism for speedy criminal justice. Thus, the United States have armed themselves with the Uniting and Strengthening America by Providing Appropriate Tools for Interpreting and Obstructing Terrorism Act (USA PATRIOT ACT), 2001 which was further amended in March, 2006 by integrating the Financial Ant-Terrorism Act. The British Parliament has also passed a Terrorism Act in March, 2006. The Australian Anti-Terrorism Act, 2005 and the Canadian Anti-Terrorism Act, 2001 are other such examples. It needs to be appreciated that terrorism is a global phenomenon. The case of India cannot be seen in isolation. Hence, there have to be certain common elements in laws dealing with terrorism internationally.4.1.6.4 This issue was discussed at the National Workshop organised by the Commission and the Sardar Vallabhbhai Patel National Police Academy, Hyderabad with various experts, police officials, administrators and civil rights activists. It was noted that the country has suffered huge losses of civilians as well as police and army personnel, besides colossal damage to private and public property, in terrorist incidents, including the assassination of a serving Prime Minister, a former Prime Minister, several political leaders, including a Chief Minister, besides thousands of innocent civilians and security personnel. In the State of Jammu & Kashmir alone, it has been reported that during the period from 1988 to 2001, more than 30,000 people were killed, including about 11,000 civilians, due to terrorist violence. Terrorism and low intensity warfare have imposed new challenges on law enforcement that we are yet to accommodate even at the conceptual level.4.1.6.5 The Law Commission, while examining the Prevention of Terrorism Bill, 2000 (173rd Report), observed as follows:Law Commission is of the opinion that a legislation to fight terrorism is today a necessity in India. It is not as if the enactment of such a legislation would by itself subdue terrorism. It may, however, arm the State to fight terrorism more effectively. There is a good amount of substance in the submission that the Indian Penal Code (IPC) was not designed to fight or to check organised crime of the nature we are faced with now. Here is a case of organised groups or gangs trained, inspired and supported by fundamentalists and anti-Indian elements trying to destablise the country who make no secret of their intentions. The act of terrorism by its very nature generates terror and a psychosis of fear among the populace. Because of the terror and the fear, people are rendered sullen. They become helpless spectators of the atrocities committed before their eyes. They are afraid of contacting the Police authorities about any information they may have about terrorist activities much less to cooperate with the Police in dealing with terrorists. It is difficult to get any witnesses because people are afraid of their own safety and safety of their families. It is well known that during the worst days in Punjab, even the judges and prosecutors were gripped with such fear and terror that they were not prepared to try or prosecute the cases against the terrorists. That is also42Dealing with Terrorism : Legal Frameworkstated to be the position today in J&K and this is one reason which is contributing to the enormous delay in going on with the trials against the terrorists. In such a situation, insisting upon independent evidence or applying the normal peace-time standards of criminal prosecution, may be impracticable. It is necessary to have a special law to deal with a special situation. An extraordinary situation calls for an extraordinary law, designed to meet and check such extraordinary situation. It is one thing to say that we must create and provide internal structures and safeguards against possible abuse and misuse of the Act and altogether a different thing to say that because the law is liable to be misused, we should not have such an Act at all. The Supreme Court has repeatedly held that mere possibility of abuse cannnot be a ground for denying the vesting of powers or for declaring a statute unconstitutional. In State of Rajasthan v. Union of India (1978 1 SCR p.1), the Supreme Court observed “it must be remembered that merely because power may sometimes be abused, it is no ground for denying the existence of power. The wisdom of man has not yet been able to conceive of a government with power sufficient to answer all its legitimate needs and at the same time incapable of mischief” (at page 77). Similarly, in Collector of Customs v. Nathella Sampathu Chetty (AIR 1962 SC 316), the Court observed, “The possibility of abuse of a statute otherwise valid does not impart to it any element of invalidity”. In Kesavananda Bharati v. State of Kerala (1973 Supp SCR p.1), Khanna J. observed as follows at page 755: “In exercising the power of judicial review, the Courts cannot be oblivious of the practical needs of the government. The door has to be left open for trial and error. Constitutional law like other mortal contrivances has to take some chances. Opportunity must be allowed for vindicating reasonable belief by experience.” To the same effect are observations of Krishna Iyer J.in T.N. Education Department v. State of Tamilnadu (1980 1 SCR 1026 at 1031) and Commissioner H.R.E. v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (AIR 1954 SC 282). All these decisions were referred to and followed by a recent nine-Judge Constitution Bench in Mafatlal Industries v. Union of India [1997 (5) SCC 536].4.1.6.6 A comparative analysis of the provisions of the anti-terrorism laws in India is given in Annexure IV(1), and a comparison of certain provisions of anti terrorism laws in some other countries is at Annexure IV(2). From these it is evident that most countries have been adopting tough anti-terrorism measures whereas the provisions of similar laws have been diluted in India over a period of time.4.1.6.7 There can be no doubt that there is serious threat to the security of the country from terrorists who are highly organized, motivated and possessing links with international terrorist groups or organizations. The existing penal laws in India were not enacted to deal with this situation and there is ample evidence to indicate that terrorists have been able to escape the law either by exploiting the loopholes in the ordinary law and/or by intimidating witnesses to subvert justice. The Commission has, therefore, carefully considered how this situation can be best tackled. There is definitely a need to have stringent provisions to deal with43Combatting Terrorismterrorists. The Commission also recognizes that there could be a propensity to abuse such provisions. However, when faced with the need to protect national security and integrity, there is ample justification for having strong anti-terrorism provisions in the law. In fact, many western countries with strong traditions of democracy and civil liberty have enacted such legislations to deal with the threat of terrorism and their laws contain provisions pertaining to constitution of special fast track courts, making release on bail extremely difficult for the accused, enhanced penalties cutting the source of funding for terror activities etc. The Commission is of the view that while terrorism is indeed an extraordinary threat which requires special legal provisions to deal with it, there is also need to provide sufficient safeguards to prevent its misuse.4.1.6.8 After the repeal of POTA, as mentioned earlier, a number of provisions from that Act have now been incorporated in the Unlawful Activities Prevention Act either in toto or in a modified form. The Commission has examined whether the Unlawful Activities Prevention Act is the appropriate legislation to incorporate provisions to combat terrorism. After due consideration, the Commission is of the view that instead of the Unlawful Activities Prevention Act, it would be more appropriate if a new chapter on terrorism is made a part of the National Security Act, 1980. A prime consideration which weighed with the Commission in making this recommendation is that the Unlawful Activities Prevention Act deals primarily with the effective prevention of certain unlawful activities of individuals and associations and connected matters, whereas the National Security Act deals with prevention of those activities which are prejudicial to national security and integrity and also contains provisions for preventive detention which do not find place in normal laws. Terrorism as has been stated earlier in this Report is much more ominous than a mere unlawful activity: it is a grave threat to national security and integrity. The National Security Act is therefore more relevant for incorporating provisions to deal with terrorism. It was for the same reason that the Commission in its first report on ’Right to Information’ had recommended that provisions of the Official Secrets Act dealing with official secrecy required in the interest of national security and integrity, be included in the National Security Act. The Commission has also examined the adequacy of the existing legal provisions to deal with terrorism in the subsequent paragraphs of this chapter.4.1.6.9 Recommendationa. A comprehensive and effective legal framework to deal with all aspects of terrorism needs to be enacted. The law should have adequate safeguards to prevent its misuse. The legal provisions to deal with terrorism could be incorporated in a separate chapter in the National Security Act, 1980.44Dealing with Terrorism : Legal Framework4.2 Definition of Terrorism4.2.1 Although TADA, 1987 did not define the term ‘terrorism’, it defined a ‘terrorist act’ as follows:“3. Punishment for terrorist acts. – (1) Whoever with intent to overawe the Government as by law established or to strike terror in the people or any section of the people or to alienate any section of the people or to adversely affect the harmony amongst different sections of the people does any act or thing by using bombs, dynamite or other explosive substances or inflammable substances or lethal weapons or poisons or noxious gases or other chemicals or by any other substances (whether biological or otherwise) of a hazardous nature in such a manner as to cause, or as is likely to cause, death of, or injuries to, any person or persons or loss of, or damage to, or destruction of, property or disruption of any supplies or services essential to the life of the community, or detains any person and threatens to kill or injure such person in order to compel the Government or any other person to do or abstain from doing any act, commits a terrorist act”4.2.2 The Law Commission (173rd Report), examined this definition and suggested certain changes. It proposed inclusion of sabotage of computer systems and other equipment used for the defence of India or used by any other agency of Government of India. It also recommended that memberships of banned organizations, raising funds for or fostering activities of banned organization should be construed to be a ‘terrorist act’. The following definition of terrorism was recommended:“3. (1) Whoever, (a) with intent to threaten the unity, integrity, security or sovereignty of India or to strike terror in the people or any section of the people does any act or thing by using bombs, dynamite or other explosive substances or inflammable substances or fire arms or other lethal weapons or poisons or noxious gases or other chemicals or by any other substances (whether biological or otherwise) of a hazardous nature in such a manner as to cause, or as is likely to cause, death of, or injuries to, any person or persons or loss of, or damage to, or destruction of, property or disruption of any supplies or services essential to the life of the community or causes damage to or destruction of any property or equipment used or intended to be used for the defence of India or in connection with any other purposes of the Government of India, any State Government or any of their agencies, or detains any person and threatens to kill or injure such person in order to compel the Government or any other person to do or abstain from doing any act, (b) is or continues to be a member of an association declared unlawful under the Unlawful Activities (Prevention) Act, 1967 or voluntarily does an act aiding or promoting in any manner the objects of such an association and is either in possession of any unlicenced firearm, ammunition, explosive or other instrument or substance capable of causing mass destruction and commits any act resulting in loss of human life or grievous injury to any person or causes significant damage to any property, commits a terrorist act.”4546Combatting Terrorism4.2.3 The definition adopted in the Prevention of Terrorism Act, 2002 was as follows: “3. Punishment for terrorist acts -(1) Whoever,—(a) with intent to threaten the unity, integrity, security or sovereignty of India or to strike terror in the people or any section of the people does any act or thing by using bombs, dynamite or other explosive substances or inflammable substances or firearms or other lethal weapons or poisons or noxious gases or other chemicals or by any other substances (whether biological or otherwise) of a hazardous nature or by any other means whatsoever, in such a manner as to cause, or likely to cause, death of, or injuries to any person or persons or loss of, or damage to, or destruction of property or disruption of any supplies or services essential to the life of the community or causes damage or destruction of any property or equipment used or intended to be used for the defence of India or in connection with any other purposes of the Government of India, any State Government or any of their agencies, or detains any person and threatens to kill or injure such person in order to compel the Government or any other person to do or abstain from doing any act;(b) is or continues to be a member of an association declared unlawful under the Unlawful Activities (Prevention) Act, 1967 (37 of 1967), or voluntarily does an act aiding or promoting in any manner the objects of such association and in either case is in possession of any unlicensed firearms, ammunition, explosive or other instrument or substance capable of causing mass destruction and commits any act resulting in loss of human life or grievous injury to any person or causes significant damage to any property, commits a terrorist act.Explanation- For the purposes of this sub-section, “a terrorist act” shall include the act of raising funds intended for the purpose of terrorism.”Thus, a major change in the definition of ‘terrorist act’ was the substitution of ‘with intent to overawe the government’ with the phrase “with intent to threaten the unity, integrity, security or sovereignty of India’. With this amendment the definition of ‘terrorist act’ became more precise. Another major change in the definition of ‘terrorist act’ was clause 3 (1) b which stipulated that being a member of an ‘unlawful association’ or promoting any such association and possessing substances capable of causing mass destruction and committing any act resulting in loss of human life or grievous injury, would also amount to a ‘terrorist act’.4.2.4 After the repeal of POTA, 2002, part (a) of the above mentioned definition was adopted in the Unlawful Activities (Prevention) Amendment Act, 2004 -Section 15:Section 15: Terrorist Act -Whoever, with intent to threaten the unity, integrity, security or sovereignty of India or to strike terror in the people or any section of the people in India or in any foreignDealing with Terrorism : Legal Frameworkcountry, does any act by using bombs, dynamite or other explosive substances or inflammable substances or firearms or other lethal weapons or poisons or noxious gases or other chemicals or by any other substances (whether biological or otherwise) of a hazardous nature, in such a manner as to cause, or likely to cause, death of, or injuries to any person or persons or loss of, or damage to, or destruction of, property or disruption of any supplies or services essential to the life of the community in India or in any foreign country or causes damage or destruction of any property or equipment used or intended to be used for the defence of India or in connection with any other purposes of the Government of India, any State Government or any of their agencies, or detains any person and threatens to kill or injure such person in order to compel the Government in India or the Government of a foreign country or any other person to do or abstain from doing any act, commits a terrorist act.4.2.5 The definition of ‘terrorist act’ was scrutinized and upheld by the Supreme Court (in the Kartar Singh case). However, as mentioned earlier in paragraph 4.1.6.2, in the Rajiv Gandhi assassination case, the Apex Court had come to the conclusion that this was not a terrorist act and the accused were sentenced for murder under section 302 read with section 120B IPC. The Supreme Court stated:552. Under Section 3 of TADA in order there is a terrorist act three essential conditions must be present and these are contained in Sub-section (1) of Section 3 - (1) criminal activity must me committed with the requisite intention or motive, (2) weapons must have been used, and (3) consequence must have ensued.Having stipulated thus, it agreed with the arguments of the counsel of the accused that: “... in the present case though the evidence may show that weapons and consequence as contemplated by Section 3(1) is there it is lacking so far as the intention is concerned. Prosecution had to prove that the act was done with the intention to overawe the Government or to strike terror in people or any section of people or to adversely affect the harmony amongst different sections of people. There is no evidence that any of the accused had such an intention.” (para 552)4.2.6 The Commission is of a different view and believes that the assassination of the former Prime Minister along with 18 other persons was in itself sufficient to conclude that this heinous act was done with a view to strike terror in people. Besides it has been observed that many a time terrorist outfits target personnel belonging to the security forces or enforcement agencies in order to demoralize them or to avenge any strict action taken by them. The basic purpose behind these acts is to terrorise other personnel from taking action against terrorists. The Commission, therefore, feels that assassination of important public figures, as also murder of public functionaries by way of revenge or with a view to subdue others in the organization, should be categorized as a terrorist act.47Combatting Terrorism4.2.7 Inclusion of Terror Financing in the Definition of a ‘Terrorist Act’4.2.7.1 Any counter terrorism strategy can succeed only if the sources of terrorist funding are blocked which is why recent trends in anti terror legislation worldwide focus on this aspect of the fight against terrorism. In India also the legislations to deal with terrorism had made provisions for tackling terror financing activities.4.2.7.2 POTA: In the Prevention of Terrorism Act, 2002 (POTA), the phrase ‘act of raising funds intended for the purpose of terrorism’ was included in the definition of the term ‘a terrorist act’ provided in Section 3(1), by way of an Explanation to it. Thus, the penalties provided in offences mentioned in Sections 3(2) and 3(3) (maximum penalty of death and life imprisonment) of the Act became applicable to such financing activities also, if associated with the commission of these offences. Further, fund raising for a ‘terrorist organization’ was also made an offence (Section 22). This included:i.Inviting others to provide money or property with the intention of using it or having reasonablecause to suspect that it may be used, for the purposes of terrorismii.Receiving money or property with the intention of using it or having reasonable cause tosuspect that it may be used, for the purposes of terrorismiii.Providing money or property knowing or having reasonable cause to suspect that it may beused, for the purposes of terrorismiv.The provision of money or property in the above mentioned situations referred to its beinggiven, lent or otherwise made available, whether or not for consideration.A person guilty of an offence under Section 22 was liable on conviction to be imprisoned for a term not exceeding fourteen years or with fine or with both.4.2.7.3 ULPAA: The current anti-terrorist law in operation, i.e. the Unlawful Activities (Prevention) Amendment Act, 2004 (ULPAA) provides for imprisonment for a term extending to life for raising funds for the purpose of committing a terrorist act (Section 17). Section 40 of the Act makes the raising of funds for a terrorist organization an offence (the provisions are similar in nature to those provided in Section 22 of POTA mentioned above). However, it does not reckon the ‘financing of terrorist activities’ as a ‘terrorist act’ as was done under POTA. This, in effect, is a dilution in the penal law as the commission of a ‘terrorist act’ resulting in death of a person was earlier punishable with death or imprisonment for life. In cases where it did not result in the death of a person, the punishment could extend to life imprisonment {Section 3(2)}. In addition to the above, as conspiring or attempting to commit, advocating, abetting, advising, inciting or knowingly facilitating the commission of a ‘terrorist48Dealing with Terrorism : Legal Frameworkact’ or any act preparatory to a ‘terrorist act’ was an offence punishable with imprisonment for a term which could extend to life imprisonment under POTA {Section 3(3)}, this provision was applicable in case of ‘raising funds intended for the purpose of terrorism’ also, as under POTA this constituted a ‘terrorist act’.4.2.7.4 The Commission is of the view that providing material support, including raising or channelising funds for terrorist activities is as serious an offence as the terrorist act itself and deserves severe punishment. This could be ensured by the inclusion of ‘raising funds intended for the purpose of terrorism’ in the definition of a ‘terrorist act’.4.2.8 Certain Acts Committed by Members or Supporters of Terrorist Organizations4.2.8.1 POTA had contained a paragraph in the definition of a ‘terrorist act’ which provided that the possession of unlicensed fire arms etc. and commitment of an act resulting in loss of human life or causing damage to property by any member or a supporter of an association declared unlawful under the Unlawful Activities (Prevention) Act, 1967 was also a ‘terrorist act’. This provision was included on the recommendation of the Law Commission of India in its 173rd report on Prevention of Terrorism Bill, 2000. The Law Commission had occasion to look at international legislations and it was of the view that the legislation in the United Kingdom defined ‘terrorism’ and ‘terrorist’ in more extensive terms.4.2.8.2 Thus the UK Terrorism Act 2000 defines ‘terrorism’ as follows:“1. – (1) In this Act “terrorism” means the use or threat of action where-(a) the action falls within subsection (2),(b) the use or threat is designed to influence the government or to intimidate the public or a section of the public, and(c ) the use or threat is made for the purpose of advancing a political, religious or ideological cause.(2Action falls within this subsection if it –(a)involves serious violence against a person,(b)involves serious damage to property,(c ) endangers a person’s life, other than that of the person committing the action,(d) creates a serious risk to the health or safety of the public or a section of the public, or49Combatting Terrorism(e)is designed seriously to interfere with or seriously to disrupt an electronic system.(3) The use or threat of action falling within subsection (2) which involves the use of firearms or explosives is terrorism whether or not subsection (1)(b) is satisfied.(4) In this section –(a)“action” includes action outside the United Kingdom,(b)a reference to any person or to property is a reference to any person, or to property, wherever situated,(c ) a reference to the public includes a reference to the public of a country other than the United Kingdom, and(d) “the government” means the government of the United Kingdom, of a Part of the United Kingdom or of a country other than the United Kingdom.(5) In this Act a reference to action taken for the purposes of terrorism includes a reference to action taken for the benefit of a prescribed organisation.”4.2.8.3 Further, Section 3 of the UK Act prescribes for ‘proscribed organisations’. Sections 11 to 13 relate to offences pertaining to membership and support of ‘proscribed organisations’. Sections 15 to 18 relate to offences pertaining to fund raising and money laundering related to terrorism. Section 40 defines a ‘terrorist’ to mean a person who has committed certain offences under the Act or has been concerned in the commission, preparation or instigation of acts of terrorism. Section 54 pertains to weapon training, while Section 56 pertains to directing a terrorist organization and Section 57 pertains to possession of an article for terrorist purposes.Box: 4.2 Membership of and Fund Raisingfor a ‘Terrorist Organization’“Sections 20, 21 and 22 of POTA is similar to that of Sections 11, 12 and 15 of the Terrorism Act, 2000 of United Kingdom.Such provisions are found to be quite necessary all over the world in anti-terrorism efforts. Sections 20, 21 and 22 are penal in nature that demand strict construction. These provisions are a departure from the ordinary law since the said law was found to be inadequate and not sufficiently effective to deal with the threat of terrorism. Moreover, the crime referred to herein under POTA is aggravated in nature. Hence special provisions are contemplated to combat the new threat of terrorism. Support either verbal or monetary, with a view to nurture terrorism and terrorist activities is causing new challenges. Therefore Parliament finds that such support to terrorist organizations or terrorist activities need to be made punishable. Viewing the legislation in its totality it cannot be said that these provisions are obnoxious.”Source: Supreme Court’s decision in the case of People’s Union for Civil Liberties & Anr., W.P. No. 389 0f 2002; ? filename=25734; extracted on 17.04.200850Dealing with Terrorism : Legal Framework4.2.8.4 On a careful consideration of such provisions in the UK Act, the Law Commission was of the view that provisions to make membership of terrorist organizations and raising funds for terrorist organizations a terrorist act, should be included in the new law. Accordingly, the Law Commission introduced paragraph (b) to Section 3 (1) in the Draft Bill. As mentioned above, this paragraph was also included in the definition of a ‘terrorist act’ in POTA. After the repeal of POTA, the new law i.e. ULPAA did not include such a provision while defining a ‘terrorist act’. However, it provided for a punishment extending to life imprisonment in case of a person who is a member of a ‘terrorist gang’ or ‘terrorist organisation’ which is ‘involved in terrorist act’ (Section 20).4.2.8.5 The Commission feels that including provisions which make the possession of certain arms etc. and commission of certain acts by members or supporters of ‘terrorist organizations’ a ‘terrorist act’ would strengthen the law enforcement authorities in their fight against terrorism. However, the Commission feels that although paragraph (b) of Section 3(1) of POTA equated the commission of a ‘terrorist act’ with an act committed by a member or supporter of a terrorist organization on possession of certain arms etc., its subjection to the qualifying condition that such an act should result in ‘loss of human life or grievous injury to any person’ or cause ‘significant damage to any property’ substantially reduced its intended impact. The Commission is of the considered view that whether such an act results in the loss, injury or damage mentioned above is inconsequential, what is paramount is the commission of the act by members or supporters of terrorist organizations on possession of certain arms etc. Accordingly, paragraph (b) of Section 3(1) under POTA which was not included in the Unlawful Activities (Prevention) Amendment Act, 2004 should be included in the definition of a ‘terrorist act’ in the proposed new legislation. However, it should cover not only the acts committed by members or supporters of terrorist organizations resulting in ‘loss of human life or grievous injury to any person’ or causing ‘significant damage to any property’, but also acts which are likely to cause such death, injury or damage.4.2.8.6 The extradition of accused persons assumes significance in case of terrorism related offences, as such persons often either flee from India or conspire from their bases in other countries. The Extradition Act, 1962 governs the extradition of such accused persons. Apart from this law, extradition is also governed by bilateral treaties between countries. Extraditions are generally governed by the ‘principle of double criminality’- which stipulates that the alleged crime for which extradition is being sought must be criminal in both the demanding and the requested countries20. It has been observed that in a number of cases, India’s request for extradition was either turned down or avoidable delay and legal complications were created in the Courts of some foreign countries on the plea that the person to be extradited5120 Terrorismcould not be unequivocally held to have committed or been wanted in any criminal case, which will have to be a crime in the laws of both countries. Such an eventuality can be avoided, at least so far as our law is concerned, by suitably wording the definition of ‘terrorism’ or ‘terrorist act’ in the Indian laws.4.2.9 Recommendationsa.There is need to define more clearly those criminal acts which can beconstrued as being terrorist in nature. The salient features of this definition should inter alia include the following:i.use of firearms, explosives or any other lethal substance to cause or likely to cause damage to life and property and essential infrastructure including installations/establishments having military significance.ii.assassination of (including attempt thereof) public functionaries.The intent should be to threaten the integrity, security and sovereignty of India or overawe public functionaries or to terrorise people or sections of people.iii. Detention of any person or threat to kill or injure any person to force the government to act or abstain from acting in a particular manner.iv.Providing/facilitating material support, including finances, for the aforesaid activities.mission of certain acts or possession of certain arms etc. by members or supporters of terrorist organizations which cause or are likely to cause loss of life, injury to a person or damage to any property.4.3 Bail Provisions4.3.1 Under Section 167 of CrPC, every person who is arrested, should be produced before the nearest magistrate within a period of 24 hours of arrest. The magistrate is authorized to52Dealing with Terrorism : Legal Frameworkextend the detention for a maximum period of 15 days if the investigation cannot be completed within 24 hours. After the expiry of 15 days, the accused must once again be produced before the magistrate who may, after justification, extend the detention for another 15 days, but such detentions cannot be extended beyond 60 days. Sections 436 to 450 of CrPC deal with the bail provisions.4.3.2 In laws dealing with terrorism, the bail provisions are made stringent so that the accused does not get easily released on bail. Under TADA, Section 20(8) made grant of bail to the accused difficult by providing that bail should not be given unless:a.The Public Prosecutor has been given an opportunity to oppose the application for such release, andb.Where the Public Prosecutor opposes the application, the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail.4.3.3 Similar provisions existed in POTA. Sections 49(6) and 49(7) of POTA laid down:(6) Notwithstanding anything contained in the Code, no person accused of an offence punishable under this Act shall, if in custody, be released on bail or on his own bond unless the Court gives the Public Prosecutor an opportunity of being heard.(7) Where the Public Prosecutor opposes the application of accused to release on bail, no person accused of an offence punishable under this Act or any rule made there-under shall be released on bail until the Court is satisfied that there are grounds for believing that he is not guilty of committing such offence:Provided that after the expiry of a period of one year from the date of detention of the accused for an offence under this Act, the provisions of sub-section (6) of this section shall apply.4.3.4 This provision does not find place in the Unlawful Activities (Prevention) Amendment Act, 2004. Those who have opposed these provisions have argued that even in the most heinous cases, the general position is “bail but not jail”, which should also be the case in terrorism related matters. Moreover, the stipulation that the “court has to be satisfied that the accused has not committed any offence” has been perceived as being too strict. In fact, one of the main reasons cited for the repeal of POTA was the prolonged periods of detention as the accused were not able to get bail.53Combatting Terrorism4.3.5 Investigation agencies have put forward the argument that persons accused of terrorism are not ordinary criminals and witnesses are afraid to depose against such persons. Therefore gathering evidence against them is difficult and time consuming, and if such persons are let out on bail they are bound to adversely influence the investigation.4.3.6 The Law Commission examined this issue in its 173rd Report and observed as follows:One set of objections was that the provision in sub-clause (6A) to the effect that no bail shall be granted unless the court is satisfied that “there are grounds for believing that he is not guilty of committing such offence” makes it almost impossible for any accused to get bail. In our opinion, there is no substance in this objection inasmuch as this is the very language which was used in subsection (8) of section 20 of TADA and which has been the subject-matter of elaborate discussion and decision by the Supreme Court in Kartar Singh’s case. The Supreme Court has pointed out that the language of sub-section (8) of section 20 of TADA is in substance no different from the language employed in section 437(1) of the Code, section 35 of the Foreign Exchange Regulation Act, 1976 and section 104 of the Customs Act, 1962. The Supreme Court accordingly upheld the validity of sub-section (8) of section 20 of TADA holding that the respective provisions contained therein are not violative of Article 21 of the Constitution. Be that as it may, having regard to the purpose and object underlying the Act and the context in which the Act has become necessary, these restrictive provisions may not be likely to be assailed on any reasonable basis. The objection, therefore, is unacceptable. However, certain other useful suggestions were made to which a reference is necessary. Justice J.S. Verma, Chairperson, National Human Rights Commission suggested that for the purpose of bail, the offences in the Act should be classified on the lines indicated by the Supreme Court in its decision in Shaheen Welfare Society’s case [1996 (2) JT 719 (SC)]. This view was supported by Shri P.P. Rao, Senior Advocate, who emphasised that a routine refusal of bail was unacceptable. He added that since the normal rule was bail, any restriction placed thereon in an anti-terrorism law should not be disproportionate, making the very provision for bail meaningless. Several other participants also supported this line of reasoning which we find eminently reasonable and acceptable. In Shaheen Welfare Society’s case (supra), the Supreme Court has suggested categorisation of offences under TADA into four categories for the purpose of bail. The following observations are relevant: “For the purpose of grant of bail to TADA detenus, we divide the undertrials into four classes, namely, (a) hardcore undertrials whose release would prejudice the prosecution case and whose liberty may prove to be a menace to society in general and to the complainant and prosecution witnesses in particular; (b) other undertrials whose overt acts or involvement directly attract sections 3 and/or 4 of the TADA Act; (c) undertrials who are roped in, not because of any activity directly attracting sections 3 and 4, but by virtue of sections 120B or 147, IPC and; (d) those undertrials who were found possessing incriminating articles in notified areas and are booked under section 5 of TADA. Ordinarily, it is true that the provisions of sections 20(8) and 20(9) of TADA would apply to all the aforesaid classes. But54Dealing with Terrorism : Legal Frameworkwhile adopting a pragmatic and just approach, no one can dispute the fact that all of them cannot be dealt with by the same yardstick. Different approaches would be justified on the basis of the gravity of the charges. Adopting this approach we are of the opinion that undertrials falling within group (a) cannot receive liberal treatment. Cases of undertrials falling in group (b) would have to be differently dealt with, in that, if they have been in prison for five years or more and their trial is not likely to be completed within the next six months, they can be released on bail unless the court comes to the conclusion that their antecedents are such that releasing them may be harmful to the lives of the complainants, the family members of the complainants, or witnesses. Cases of undertrials falling in groups (c) and (d) can be dealt with leniently and they can be released if they have been in jail for three years and two years respectively. Those falling in group (b), when released on bail, may be released on bail of not less than Rs.50,000/- with one surety for like amount and those falling in groups (c) and (d) may be released on bail on their executing a bond for Rs.30,000/- with one surety for like amount, subject to the following terms:(1) the accused shall report to the concerned police station once a week;(2) the accused shall remain within the area of jurisdiction of the Designated Court pending trial and shall not leave the area without the permission of the Designated Court;(3) the accused shall deposit his passport, if any, with the Designated Court. If he does not hold a passport, he shall file an affidavit to that effect before the Designated Court. The Designated Court may ascertain the correct position from the passport authorities, if it deems it necessary;(4) The Designated Court will be at liberty to cancel the bail if any of those conditions is violated or a case for cancellation of bail is otherwise made out.(5) Before granting bail, a notice shall be given to the public prosecutor and an opportunity shall be given to him to oppose the application for such release. The Designated Court may refuse bail in very special circumstances for reasons to be recorded in writing. These conditions may be relaxed in cases of those under groups (c) and (d) and, for special reasons to be recorded in the case of group (b) prisoners. Also, these directions may not be applied by the Designated Court in exceptionally grave cases such as the Bombay Bomb Blast Case where a lengthy trial is inevitable looking to the number of accused, the number of witnesses and the nature of charges unless the court feels that the trial is being unduly delayed. However, even in such cases it is essential that the Review Committee examines the case against each accused bearing the above directions in mind, to ensure that TADA provisions are not unnecessarily invoked. Although the Court observed in the said judgment that the aforesaid directions were “a one-time measure meant only to alleviate the current situation”, the55Combatting Terrorismspirit and principle behind the said observations should serve as guidelines to the Special Courts while dealing applications of bail of persons accused of offences under the Act, for the purposes of bail. Though we would like very much to incorporate the said classification in sub-clauses (5) to (7) of clause 18, we find it difficult to do so in view of the difficulty in incorporating the various ideas contained in the above judgment”.4.3.7 Thus, the Law Commission did not suggest any modification to the somewhat stringent conditions for release of the accused on bail, which were present in TADA. It is generally known that persons accused of terrorist acts are not ordinary criminals and that witnesses are afraid of deposing against them for fear of physical harm to them or members of their family. Therefore, collecting evidence against them is both difficult and time consuming; if such persons are to be treated on par with other criminals the course of justice will be seriously jeorpardised. The Commission is of the view that there is no need to dilute the provisions of bail as they existed in POTA. A closer scrutiny of the provisions would reveal that the test whether there are grounds for believing that the accused is innocent, has to be applied only when the prosecutor opposes the release of an accused on bail. Since there is a tendency for investigation agencies and the prosecution to oppose bail, a responsibility may be cast on both the investigation as well as the prosecution that bail applications should not be opposed in a routine manner and there must be application of mind to ascertain whether detention of an accused is required or not. This should be further fortified by an independent application of mind by the Review Committee (paragraph 4.7) which should advise the prosecution whether a bail application needs to be opposed or not and also on whether bail may be granted under certain circumstances.4.3.8 Recommendationsa.Regarding grant of bail, the law should provide that:i.Notwithstanding anything contained in the Code, no person accused of an offence punishable under this Act shall, if in custody, be released on bail or on his own bond unless the Court gives the Public Prosecutor an opportunity of being heard;ii.Where the Public Prosecutor opposes the bail application of accused to release on bail, no person accused of an offence punishable under this Act or any rule made there under shall be released on bail until the Court is satisfied that there are grounds for believing that the accused is not guilty of committing such offence.56Dealing with Terrorism : Legal FrameworkProvided that after the expiry of a period of one year from the date of detention of the accused for an offence under this Act, the provisions of sub-section (i) of this section shall apply.iii. A Review Committee should review the case of all detenus periodically and advise the prosecution about the release of the accused on bailand the prosecution shall be bound by such advice.4.4 Period of Detention (Remand) during Investigation4.4.1 Section 167 of the CrPC provides that whenever any person is arrested and detained in custody, and it appears that the investigation cannot be completed within a period of twenty-four hours and there are grounds for believing that the FIR is well founded, the officer in-charge of the police station shall produce the accused before the nearest Magistrate. On production of such accused, it has been stipulated that such Magistrate may authorize the detention of the accused in such custody for a term not exceeding fifteen days.(a) the Magistrate may authorize the detention of the accused person, otherwise than in the custody of the police, beyond the period of fifteen days, if he is satisfied that adequate grounds exist for doing so, but no Magistrate shall authorize the detention of the accused person in custody under this paragraph for a total period exceeding -i.ninety days, where the investigation relates to an offence punishable with death, imprisonment for life or imprisonment for a term of not less than ten years;ii.sixty days, where the investigation relates to any other offence, and, on the expiry ofthe said period of ninety days, or sixty days, as the case may be, the accused person shall be released on bail if he is prepared to and does furnish bail, and every person released on bail under this sub-section shall be deemed to be so released under the provisions of Chapter XXXIII for the purposes of that chapter.(b) No Magistrate shall authorize detention in any custody under this section unless the accused is produced before him;(c)No Magistrate of the second class, not specially empowered in this behalf by the HighCourt, shall authorize detention in the custody of the police.4.4.2 From the above provisions it is clear that a magistrate may order that an accused may be kept in police custody for a maximum period of fifteen days. Beyond this period, the accused may be kept in judicial custody for a maximum period of ninety days or sixty days57Combatting Terrorismdepending upon the nature of the alleged crime. In TADA, the time periods of “fifteen days”, “ninety days” and “sixty days” are replaced by “sixty days”, “one hundred eighty days” and ‘one hundred eighty days’ respectively. Thus, the period of remand under TADA was extended beyond what has been stipulated in the CrPC. Similarly, Section 49 of POTA provided that the references to “fifteen days”, ninety days and “sixty days”, wherever they occur, shall be construed as references to “thirty days”, “ninety days” and “ninety days”, respectively. Provided further that if it is not possible to complete the investigation within the said period of ninety days, the Special Court shall extend the said period up to one hundred and eighty days, on the report of the Public Prosecutor indicating the progress of the investigation and the specific reasons for the detention of the accused beyond the said period of ninety days. After the repeal of POTA, similar provisions have not been incorporated in the Unlawful Activities Prevention Act.4.4.3 Thus, the provisions of both TADA and POTA provided for extended periods of remand. It has been argued that these provisions enabling extended periods of remand could result in unnecessary detentions and therefore the provisions of CrPC should be adhered to. On the other hand, the investigating agencies are of the view that these provisions of extended remand are necessary in cases involving terrorist related offences as people rarely come forward to depose because of fear of retribution. Also, there are complex crime networks sometimes involving transnational links and therefore these may require longer period of remand for successful investigation.4.4.4 The Commission agrees that in terrorist related offences, witnesses are generally reluctant to depose because of fear of reprisals and also that investigating such cases are usually more complex and time consuming than ordinary crimes.. This could necessitate a more intense and prolonged investigation by the police. Therefore the time limits specified under the CrPC may not be adequate. At the same time the limits prescribed under TADA were longer than required. POTA tried to achieve a fine balance as far as these time limits were concerned. Therefore, the Commission feels that the provisions of POTA regarding remand and completion of investigation may be restored and incorporated in the new law.4.4.5 Recommendationa.For terrorist and other related offences, it should be provided that Section167 of the CrPC shall apply subject to the modification that in sub-section (2), the references to “fifteen days”, “ninety days” and “sixty days”, wherever they occur, shall be construed as references to “thirty days”, “ninety days” and “ninety days” respectively.58Dealing with Terrorism : Legal Framework4.5 Confession before a Police Officer4.5.1 Protection against self incrimination is a basic principle of the Constitution and our criminal justice system. This has been enshrined in Article 20 (3) which provides:“No person accused of any offence shall be compelled to be a witness against himself”.4.5.2 Section 25 of the Indian Evidence Act, 1872 makes all confessions made to a police officer inadmissible. It is felt that this provision was made because of the possibility of police resorting to force and torture to extract confessions. Another argument in support of this provision is that the police represents the State in the trial of an accused, and therefore, has a vested interest in seeing that the accused is punished. Therefore, an evidence of confession before the police is not taken to be objective and reliable. While this may hold true in dealing with ordinary crimes, in dealing with terrorism the issue needs reconsideration.4.5.3 TADA had made certain confessions to police officers as admissible, thus making a departure from the ordinary criminal jurisprudence . Section 15 provides as follows:“Certain confessions made to police officers to be taken into consideration:- (1) Notwithstanding anything in the Code or in the Indian Evidence Act, 1872, but subject to the provisions of this section, a confession made by a person before a police officer not lower in rank than a Superintendent of Police and recorded by such police officer either in writing or on any mechanical device like cassettes, tapes or sound tracks from out of which sounds or images can be reproduced, shall be admissible in the trial of such person or co-accused, abettor or conspirator for an offence under this Act or rules made thereunder:Provided that co-accused, abettor or conspirator is charged and tried in the same case together with the accused.(2) The police officer shall, before recording any confession under sub-section(1), explain to the person making it that he is not bound to make a confession and that, if he does so, it may be used as evidence against him and such police officer shall not record any such confession unless upon questioning the person making it, he has reason to believe that it is being made voluntarily”.4.5.4 As stated earlier, the validity of Section 15 of TADA and other provisions were examined and upheld by the Supreme Court in Kartar Singh vs State of Punjab. While upholding the law, the Supreme Court laid down certain specific guidelines as safeguards to ensure that confessions made before the police are not violative of the Constitutional provisions. These guidelines are as follows:(1) The confession should be recorded in a free atmosphere in the same language in which the59Combatting Terrorismperson is examined and as narrated by him.(2) The person from whom a confession has been recorded under Section 15 (1) of the Act, should be produced before the Chief Judicial Magistrate to whom the confession is required to be sent under Rule 15(5) along with the original statement of confession, written or recorded on mechanical device without unreasonable delay.(3) The Chief Metropolitan of the Chief Judicial Magistrate should scrupulously record the statement, if any, made by the accused so produced and get his signature and in case of any complaint of torture, the person should be directed to be produced for medical examination before a Medical Officer not lower in rank than of an Assistant Civil Surgeon.(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, no police officer below the rank of an Assistant Commissioner of Police in the Metropolitan cities and elsewhere of a Deputy Superintendent of Police or a police officer of equivalent rank, should investigate any offence punishable under this Act of 1987.This is necessary in view of the drastic provisions of this Act, more so when the Prevention of Corruption Act, 1988 under Section 17 and the Immoral Traffic Prevention Act, 1956 under Section 13, authorise only a police officer of a specified rank to investigate the offences under those specified Acts.(5) This police officer if he is seeking the custody of any person for pre-indictment or pre-trial interrogation from the judicial custody, must file an affidavit sworn by him explaining the reason not only for such custody but also for the delay, if any, seeking the police custody.(6) In case, the person, taken for interrogation, on receipt of the statutory warning that he is not bound to make a confession and that if he does so, the said statement maybe used against him as evidence, asserts his right to silence, the police officer must respect his right of assertion without making any compulsion to give a statement of disclosure.4.5.5 POTA also had provisions similar to TADA for dealing with the admissibility of confessions made before the police. It also incorporated the salient features of the guidelines laid down by the Supreme Court in the case Kartar Singh vs State of Punjab.(1) Notwithstanding anything in the Code or in the Indian Evidence Act, 1872 (1 of 1872), but subject to the provisions of this section, a confession made by a person before a police officer not lower in rank than a Superintendent of Police and recorded by such police officer either in writing or on any mechanical or electronic device like cassettes, tapes or sound tracks from out of which sound or images can be reproduced, shall be admissible in the trial60Dealing with Terrorism : Legal Frameworkof such person for an offence under this Act or the rules made thereunder.(2) A police officer shall, before recording any confession made by a person under sub-section (1), explain to such person in writing that he is not bound to make a confession and that if he does so, it may be used against him:Provided that where such person prefers to remain silent, the police officer shall not compel or induce him to make any confession.(3) The confession shall be recorded in an atmosphere free from threat or inducement and shall be in the same language in which the person makes it.(4) The person from whom a confession has been recorded under sub-section (1), shall be produced before the Court of a Chief Metropolitan Magistrate or the Court of a Chief Judicial Magistrate along with the original statement of confession, written or recorded on mechanical or electronic device within forty-eight hours.(5) The Chief Metropolitan Magistrate or the Chief Judicial Magistrate, shall, record the statement, if any, made by the person so produced and get his signature or thumb impression and if there is any complaint of torture, such person shall be directed to be produced for medical examination before a Medical Officer not lower in rank than an Assistant Civil Surgeon and thereafter, he shall be sent to judicial custody.4.5.6 The issue of admissibility of confessions made before the police has been examined by several Law Commissions. The Law Commission in its Forty-Eighth Report favoured the admissibility of confessions made before the police. The Law Commission in its Sixty-Ninth Report revisited this issue and reaffirmed the suggestion made in the Forty-Eighth Report. Once again, the Law Commission examined the subject in great detail in its One-EightyFifth Report and recommended that confessions made before the police should not be admissible under ordinary laws but could be admissible in case of grave offences like terrorism. The Committee on Reforms of the Criminal Justice System, 2003 recommended that Section 25 of the Indian Evidence Act should be amended to render confessions made before a police officer, admissible as evidence.4.5.7 Those opposing the admissibility of confessions before the police have argued that if an accused is willing to make a voluntary confession, then he could easily be produced before a Magistrate rather than being produced before a senior police officer. It is also argued that61Combatting Terrorismpolice may resort to coercive methods in order to extract confessions. The amended UAPA,therefore did not provide for making confessions before the police as admissible evidence.4.5.8 The Commission has examined this issue in its report on ‘Public Order’ and has suggested wide ranging reforms in the structure and functioning of the police. It has recommended that the investigation agency should be supervised by an autonomous Board of Investigation. This would ensure that the Investigation Agency is insulated against any extraneous influences and would function in a professional manner. It has also recommended that the staff of the investigation agency should be specially trained for their job with emphasis on collecting evidence through use of forensic tools and eschewing coercive methods. Moreover, the Commission has recommended the setting up of a District Complaints Authority and also a State Police Complaints Authority which would effectively deal with cases of any misconduct by the police. The Commission was of the view that with these elaborate safeguards there should be no reason to continue to distrust the police with regard to admissibility of statements made before them.4.5.9 However, till such time that comprehensive police reforms are carried out, the Commission is of the view that confessions and admissions whenever required may be made before the judicial magistrate. There was provision in POTA which made certain confessions admissible before the police. However it also stipulated that the person from whom a confession has been recorded, shall be produced before the Court of a Chief Metropolitan Magistrate or the Court of a Chief Judicial Magistrate along with the original statement of confession, written or recorded on mechanical or electronic device within forty-eight hours. Under the circumstances it would be better if the accused is produced directly before the judicial magistrate as criminal courts/magistrates are normally available at the taluka levels.4.5.10 Recommendationa.Confession before the police should be made admissible as recommendedin the Report on Public Order. But this should be done only if comprehensive police reforms as suggested by the Commission are carried out. Till such time confessions should continue to be made before judicial magistrates under Section 164 CrPC.4.6 Presumptions under the Law4.6.1 In all crimes the burden to establish the guilt of the accused is that of the prosecution. In other words an accused is presumed to be innocent unless his guilt is established beyond62Dealing with Terrorism : Legal Frameworkall reasonable doubt. However, TADA Section 21 specifies the circumstances wherein it could be presumed that the accused is guilty:21. Presumption as to offences under Section 3 – (1) In a prosecution for an offence under subsection (1) of Section 3, if it is proved –a.that the arms or explosives or any other substances specified in Section 3 were recovered from the possession of the accused and there is reason to believe that such arms or explosives or other substances of similar nature, were used in the commission of such offence; orb.that by the evidence of an expert the fingerprints of the accused were found at the site of the offence or on anything including arms and vehicles used in connection with the commission of such offence.(2) In a prosecution for an offence under sub-section 3 of Section 3, if it is proved that the accused rendered any financial assistance to a person accused of, or reasonably suspected of, an offence under that section, the Designated Court shall presume, unless the contrary is proved, that such person has committed the offence under that sub-section.4.6.2 A similar provision was made in POTA.Section 53. Presumption as to offences under section 3(1) In a prosecution for an offence under sub-section (1) of section 3, if it is proved -(a) that the arms or explosives or any other substances specified in section 4 were recovered from the possession of the accused and there is reason to believe that such arms or explosives or other substances of a similar nature, were used in the commission of such offence; or(b) that the finger-prints of the accused were found at the site of the offence or on anything including arms and vehicles used in connection with the commission of such offence, the Special Court shall draw adverse inference against the accused.(2) In a prosecution for an offence under sub-section (3) of section 3, if it is proved that the accused rendered any financial assistance to a person, having knowledge that such person is accused of, or reasonably suspected of, an offence under that section, the Special Court shall draw adverse inference against the accused.63Combatting Terrorism4.6.3 This provision has not been included in the Unlawful Activities (Prevention) Amendment Act. According to one school of thought, shifting the burden of proof to the accused is violative of the basic principles of jurisprudence. Another viewpoint is that there are certain facts which are only within the knowledge of the accused and establishing such facts by the prosecution becomes difficult and the benefit generally passes on to the accused.4.6.4 The Commission is of the view that because of the nature of the crime and the potential it has to threaten the security and integrity of the country on the one hand and spread terror among people on the other, it is necessary that the person who has indulged in the terrorist act is not able to make use of the protection which is provided to an accused person under the normal laws. In several cases, laws have provided for presumptions which may be drawn by the court if certain facts are established. However, such presumptions are not conclusive proof but can be rebutted by the accused by adducing evidence to the contrary. Both TADA and POTA had provisions wherein the court was under an obligation to draw adverse inference provided certain facts were established. The Commission feels that such presumptions should be made a necessary part of the new anti-terror law.4.6.5 Recommendationa.The following legal provisions should be included regarding presumptions:If it is proved –i.that the arms or explosives or any other dangerous substance were recovered from the possession of the accused and there is reason to believe that such arms or explosives or other substances of similar nature, were used in the commission of such offence; or that by the evidence of an expert the fingerprints of the accused, or any other definitive evidence were found at the site of the offence or on anything including arms and vehicles used in connection with the commission of such offence the Court shall draw adverse inference against the accused.ii.If it is proved that the accused rendered any financial assistance to a person accused of, or reasonably suspected of, an offence of terrorism, the Court shall draw adverse inference against the accused.4.7 Review Committee4.7.1 As stated earlier, laws dealing with extraordinary and complex crimes64Dealing with Terrorism : Legal Frameworklike terrorism require extraordinary provisions which place special tools in the hands of the concerned agencies to successfully investigate and prosecute such crimes. Therefore, while the need for special provisions cannot be doubted, as stated earlier there can be a propensity for theirmisuse (as happened in the case ofPOTA in some of the States).4.7.2 This underscores the need to provide adequate safeguards and checks and balances in the concerned legislation to prevent misuse/abuse of the stringent provisions contained in these Acts. It is also for this reason that the National Security Act which provides for preventive detention has a provision for an Advisory Board as an institutional safeguard to prevent /stop misuse of the detention provisions. Thus, all cases of preventive detention have to be placed before the Advisory Board and the further detention or release of the detenue depends on the opinion of the Advisory Board. COFEPOSA also has similar provisions to check wrongful detention/misuse.4.7.3 TADA did not have a safeguard mechanism similar to the one provided in the National Security Act. While upholding the constitutional validity of TADA, the Supreme Court suggested the setting up of a Screening or Review Committee. Several States set up Screening Committees comprising senior officers of the Government.4.7.4 However, POTA provided for constitution of review committees (Section 60).(1) The Central Government and each State Government shall, whenever necessary, constitute one or more Review Committees for the purposes of this Act.(2) Every such Committee shall consist of a Chairperson and such other members not exceeding three and possessing such qualifications as may be prescribed.(3) A Chairperson of the Committee shall be a person who is, or has been, a Judge of a High Court, who shall be appointed by the Central Government, or as the case may be, the StateBox 4.3: Review Committees“In order to ensure higher level of scrutiny and applicability of TADA Act, there must be a Screening Committee or a Review Committee constituted by the Central Government consisting of the Home Secretary, Law Secretary and other Secretaries concerned of the various Departments to review all the TADA cases instituted by the Central Government as well as to have a quarterly administrative review, reviewing the States’ action in the application of the TADA provisions in the respective States, and the incidental questions arising in relation thereto. Similarly, there must be a Screening or Review Committee at the State level constituted by the respective States consisting of the Chief Secretary, Home Secretary, Law Secretary, Director General of Police (Law and Order) and other officials as the respective Government may think it fit, to review the action of the enforcing authorities under the Act and screen the cases registered under the provisions of the Act and decide the further course of action in every matter and so on.”Source: Kartar Singh v. State of Punjab, [(1994) 3 SCC 569: AIR 1995 SCC 1726]65Combatting TerrorismGovernment, so however, that the concurrence of the Chief Justice of the High Court shall be obtained in the case of a sitting Judge:Provided that in the case of a Union Territory, the appointment of a person who is a Judge of the High Court of a State shall be made as a Chairperson with the concurrence of the Chief Justice of the concerned High Court.4.7.5 From the above, it is evident that Section 60 did not define the powers of these review committees. However, Section 19 gave review powers to these committees (Section 19 deals with notification of terrorist organizations). Further, Section 46 empowered these Committees to review the orders passed by competent authorities under Section 39 under POTA ( Section 39 dealt with authorization for interception of communications). Thus, these committees did not have any powers to go into the investigation or prosecution of a case under POTA.4.7.6 The Law Commission which recommended the ‘Prevention of Terrorism Bill, 2000’ proposed constitution of a review committee headed by the Chief Secretary, to review all cases at the end of each quarter and give directions as appropriate.4.7.7 In order to give more teeth to these committees POTA was amended by way of the Prevention of Terrorism (Amendment) Act, 2003 and the following provisions made:“(4) Without prejudice to the other provisions of this Act, any Review Committee constituted under sub-section (1) shall, on an application by any aggrieved person, review whether there is a prima facie for proceeding against the accused under this Act and issue directions accordingly.(5) Any direction issued under sub-section (4),-(i)by the Review Committee constituted by the Central Government, shall be bindingon the Central Government, the State Government and the police officer investigating the offence; and(ii) by the Review Committee constituted by the State Government, shall be binding on the State Government and the police officer investigating the offence.(6) Where the reviews under sub-section (4) relating to the same offence under this Act, have been made by a Review Committee constituted by the Central Government and a Review Committee constituted by the State Government, under sub-section (1), any direction issued by the Review Committee constituted by the Central Government shall prevail.(7) Where any Review Committee constituted under sub-section (1) is of opinion that there is66Dealing with Terrorism : Legal Frameworkno prima facie case for proceeding against the accused and issues directions under subsection (4), then, the proceedings pending against the accused shall be deemed to have been withdrawn from the date of such direction.”.4.7.8 After the repeal of POTA, the Unlawful Activities (Prevention) Amendment Act, 2004 provides for constitution of review committees headed by a person who is or has been a Judge of the High Court. The role of the review committees is however limited to Section 36 which provides for notification/denotification of a terrorist organization.4.7.9 The Commission is of the view that while stringent legal provisions regarding investigation, bail and trial etc. are necessary for prosecuting persons charged with terrorist acts, it is equally necessary to provide for an effective statutory institutional mechanism to check any misuse / abuse of these provisions. The Commission, therefore, recommends that the proposed new chapter in the NSA should provide for constitution of an independent review committee before which all cases should be placed for review within 30 days of the registration of a case. This Review Committee should carefully examine the evidence collected and other relevant material and come to conclusion whether a prima facie case has been made out against the accused. Such a review should be carried out every quarter till such time that the charge-sheet is filed in the special court constituted to try cases of terrorism. If the Review Committee concludes at any stage that no case exists against the accused, the prosecution will be bound by such a decision. The Review Committee should be chaired by the Home Secretary of the State with the Law Secretary and the Director General of Police as its members.4.7.10 Recommendationa. A statutory Review Committee should be constituted to examine each case registered, within 30 days of its registration. The Review Committee should satisfy itself that a prima facie case has been made out by the investigation agency. This Committee should review each case every quarter.4.8 Witness Protection4.8.1 The Commission has examined the issue of witness protection in its Report on Public Order. The Supreme Court of India in its observations in the case of NHRC vs The State of Gujarat (2003) regretted that “no law has yet been enacted for giving protection to witnesses”. Later, the Court while transferring the Best Bakery case (2004) from the Gujarat High Court to Mumbai also ordered protection to the witnesses in the matter. The Apex Court again observed in Zahira Habibullah Sheikh and another vs State of Gujarat and Ors. (2006) 3 SCC 374 that:6768Combatting Terrorism“Time has come when serious and undiluted thoughts are to be bestowed for protecting witnesses so that ultimate truth is presented before the Court and justice triumphs and that the trial is not reduced to a mockery.”The need for legislation on the matter was again felt by the Court which stated: “Legislative measures to emphasise prohibition against tampering with witness, victim or informant have become the imminent and inevitable need of the day. Conducts which illegitimately affect the presentation of evidence in proceedings before the Courts have to be seriously and sternly dealt with. There should not be any undue anxiety to only protect the interest of the accused. That would be unfair, as noted above, to the needs of the society.”4.8.2 In its Report on Public Order, the Commission had observed that the problem with implementing a US type witness protection program in India is that an individual Indian’s identity is so inextricably linked with his social milieu and place of origin that it may be practically impossible to extricate him from the same and relocate him with a fresh identity somewhere else in the country. It is also extremely costly. Consequently, witness protection programs of that type and scale may not be feasible except in a small number of very rare cases. Nevertheless, there is need for a statutorily backed witness protection provision.4.8.3 It needs to be mentioned here that TADA had a provision concerning protection of witnesses (Section 16). Apart from providing for holding of proceedings in camera at the discretion of the Designated Court, it also empowered the Designated Court to take appropriate measures for keeping the identity and address of the witness secret, on its own or on an application made by a witness or the Public Prosecutor. Such measures could, inter alia, include holding of proceedings at a place to be decided by the Court, avoiding mention of the names and addresses of the witnesses in orders/judgments or in records accessible to the public, issuing of directions for not disclosing the identity of witnesses or not publishing the proceedings of the Court. The draft Prevention of Terrorism Bill, 2000 as recommended by the Law Commission also contained similar provisions (Clause 25) with the additions that the Court should be satisfied that the life of the witness is in danger and reasons have to be recorded in writing for such a decision. POTA, 2002 contained similar provisions. ULPAA, 2004 also has similar provisions.4.8.4 Several measures are adopted to offer some protection to the witnesses and victims during trial.Use of screen while recording of statement of victim – This is done to ensure that the witness is not overawed by the presence of the accused. Even the Law Commission in its 172nd Report (2000) had recommended such a measure so that the victim or the witness is not confronted with the accused. The Supreme Court of India in Sakshi vs Union of India, 2004 observed:Dealing with Terrorism : Legal Framework“The whole inquiry before a Court being to elicit the truth, it is absolutely necessary that the victim or the witnesses are able to depose about the entire incident in a free atmosphere without any embarrassment... The mere sight of the accused may induce an element of extreme fear in the mind of the victim or the witnesses or can put them in a state of shock. In such a situation he or she may not be able to give full details of the incident which may result in miscarriage of justice. Therefore, a screen or some such arrangement can be made where the victim or witness do not have to undergo the trauma of seeing the body or face of the accused”Recording of statement through video conferencing – This is another method by which a victim may avoid direct confrontation with the accused while adducing evidence.Providing physical protection to the witnesses/victim: The Courts often direct the police to provide adequate protection to the witnesses/victims.4.8.5 Witness protection programmes in several developed countries are quite comprehensive and include changing the “identity” of the witness. In a country like India where the bonds of a person to the place where he/she has been living is very strong, giving a new identity to a person could be difficult. But this option should be kept open and be exercised if the witness requests and the court is convinced of the need for such a move.4.8.6 Another way of protecting the identity of a witness may be by disallowing the accused to see the witness or conceal the witness’s identity. However, this brings to the fore the issue of the right of the accused to cross-examine the witness which would tend to disclose his identity to the accused. The Law Commission had also examined this aspect and it was of the view that this right could not be taken away. The Commission is of the view that in view of the emerging threat to national security, the court may allow the identity of the witnesses to be concealed and instead of cross examination by the accused, carry out such cross examination itself in the rarest of rare cases.4.8.7 Without going into the details of these measures the Commission would like to reiterate its recommendations in its Report on ‘Public Order’ that “A statutory programmme for guaranteeing anonymity of witnesses and for witness protection in specified types of cases, based on the best international models should be adopted early.”4.9 Special Courts4.9.1 Section 9 of TADA provided for constitution of one or more Designated Courts for the trial of notified cases. Section 17 of TADA provided that the trial of any offence under the Act by such Designated Courts would have precedence over trial of other cases against the accused in any other court and would be concluded in preference to the other cases. The Law69Combatting TerrorismCommission in its 173rd Report had also recommended the constitution of Special Courts for trial of cases. Section 23 of POTA also provided for constitution of Special Courts for trial of cases specified by notification. Further, Section 31 provided that trial of such cases would have precedence over the trial of other cases against the accused in any other court. However, the present law (ULPAA) does away with such Special Courts. Thus, trial of cases presently takes place as in any other criminal case.4.9.2 The Supreme Court of India had occasion to comment on the principle of speedy trial associated with such Special Courts in the case of Kartar Singh v State of Punjab {(1994) 3 SCC 569: AIR 1995 SCC 1726}. As mentioned earlier, the Apex Court in the referred case was examining the validity of various provisions of TADA, inter alia. In paragraph 83 of their judgment, the Court mentioned that such constitution of Designated Courts etc. postulate the concept of speedy trial. It mentioned that:“85. The right to a speedy trial is not only an important safeguard to prevent undue and oppressive incarceration, to minimise anxiety and concern accompanying the accusation and to limit the possibility of impairing the ability of an accused to defend himself but also there is a societal interest in providing a speedy trial. This right has been actuated in the recent past and the courts have laid down a series of decisions opening up new vistas of fundamental rights. In fact, lot of cases are coming before the courts for quashing of proceedings on the ground of inordinate and undue delay stating that the invocation of this right even need not await formal indictment or charge.86. The concept of speedy trial is read into Article 21 as an essential part of the fundamental right to life and liberty guaranteed and preserved under our Constitution. The right to speedy trial begins with the actual restraint imposed by arrest and consequent incarceration and continues at all stages, namely, the stage of investigation, inquiry, trial, appeal and revision so that any possible prejudice that may result from impermissible and avoidable delay from the time of the commission of the offence till it consummates into a finality, can be averted. In this context, it may be noted that the constitutional guarantee of speedy trial is properly reflected in Section 309 of the Code of Criminal Procedure.”It further mentioned in paragraph 145 that:“145. ...The provisions prescribing special procedures aiming at speedy disposal of cases, departing from the procedures prescribed under the ordinary procedural law are evidently for the reasons that the prevalent ordinary procedural law was found to be inadequate and not sufficiently effective to deal with the offenders indulging in terrorist and disruptive activities, secondly that the incensed offenses are arising out of the activities of the terrorists and disruptionists which disrupt or are70Dealing with Terrorism : Legal Frameworkintended to disrupt even the sovereignty and territorial integrity of India or which may bring about or support any claim for the cession of any part of India or the secession of any part of India from the Union, and which create terror and a sense of insecurity in the minds of the people. Further, the Legislature being aware of the aggravated nature of the offences have brought this drastic change in the procedure under this law so that the object of the legislation may not be defeated and nullified.”4.9.3 After discussing the arguments advanced for and against setting up of Special Courts, the Court summed up in paragraph 368 that the “challenge on the validity of Section 9 of TADA on the ground of lack of legislative competence has no merit.” It went on to conclude that:“369. Keeping in view the doctrine of ‘speedy trial’ which is read into Article 21 as an essential part of the fundamental right to life and liberty guaranteed and preserved under our Constitution and which concept is manifested in the Special Courts Act, 1984 and TADA Act, 1987, the Designated Courts should dispose of the cases pending before them without giving room for any complaint of unreasonable delay. The Government concerned should ensure that no vacancy of Presiding Officer of the Designated Court remains vacant and should take necessary steps to fill up the vacancy as soon as any vacancy arises and also if necessitated, should constitute more Designated Courts so that the under trials charged with the provisions of TADA do not languish in jail indefinitely and the cases are disposed of expeditiously.”4.9.4 The Commission is also of the view that the new law should include provisions for constitution of Special Courts to expeditiously try terrorism related offences. These Special Courts should be well equipped and fully staffed with personnel including presiding officers and prosecutors who should be specially trained to handle terrorism related cases. Presiding Officers and Prosecutors for such courts should be carefully selected on the basis of their integrity, independence, professional competence and track record. Since terrorist incidents are relatively few and far between and geographically dispersed, instead of setting up permanent special court/courts in every State it would be more appropriate and useful to set up fast track courts for trial of such offences. Other specific provisions related to such Special Courts may also be incorporated.4.9.5 Recommendationa.Provisions for constitution of Special Fast Track Courts exclusively fortrial of terrorism related cases may be incorporated in the law on terrorism. Other specific provisions related to such Special Courts may also be incorporated. Such Courts may be set up as and when required.71Combatting Terrorism4.10 Possession of Arms etc.4.10.1 Section 5 of TADA had made possession of any arms and ammunition which were specified in Columns 2 and 3 of Category I or Category III(a) of Schedule I to the Arms Rules, 1962 or bombs, dynamite or other explosive substances unauthorisedly in a notified area, an offence. The Law Commission in its 173rd Report had also retained this provision (Clause 4). POTA retained and expanded the scope of this provision. Thus, Section 4 had two separate paragraphs, (a) and (b) – while paragraph (a) applied to persons in unauthorized possession of certain arms and ammunition specified in Arms Rules, 1962, in a notified area, paragraph (b) on the other hand was applicable in case of persons in unauthorized possession of not only bombs and dynamite but also hazardous explosive substances, weapons of mass destruction or biological or chemical substances of warfare in any area, whether notified or not. Under POTA, a person having unauthorised possession of these objects in both the cases was guilty of terrorist act punishable with a term extending to life imprisonment. The State Government was empowered to specify ‘notified areas’ by way of notification in the Official Gazette.4.10.2 Such a provision is not present in the ULPAA. The Commission is of the considered view that the deterrent effect of having such a provision, which is applicable in some instances to both notified and non-notified areas is substantial. Thus, the new legal provisions on terrorism should include a provision to this effect.4.10.3 Recommendationa.Provision for penalizing unauthorized possession of certain specified armsand ammunition in notified areas and unauthorized explosive substances, weapons of mass destruction and biological or chemical substances of warfare in notified as well as non-notified areas, may be incorporated in the law on terrorism.4.11 A Federal Agency to Investigate Terrorist Offences4.11.1 The Commission has examined this issue in detail in its Report on ‘Public Order’ and observed as follows:“8.3.11 The Commission notes that all the offences proposed to be included in the category of socalled ‘Federal Crimes’ are already included as offences under the Indian penal laws.However, as the gravity and complexity of such offences have increased, it would be necessary to put in place appropriate procedures for dealing with such offences. This would necessitate the enactment of a new law to deal with a category of offences which have inter-state and national72Dealing with Terrorism : Legal Frameworkramifications. This would also facilitate their investigation by a specialised State or Central agency. The following offences may be included in the proposed new law:?Organised Crime ?Terrorism ?Acts threatening national security?Trafficking in arms and human beings ?Sedition?Major crimes with inter-state ramifications?Assassination (including attempts) of major public figures ?Serious economic offences8.3.12 The Commission agrees with the approach suggested by the Padmanabhaiah Committee that such crimes should be investigated by a specialised wing in the Central Bureau of Investigation. Entry 8 of List I deals with ‘Central Bureau of Intelligence and Investigation’. The Central Bureau of Investigation presently functions as a Special Police Establishment under the Delhi Special Police Establishment Act, 1946 as amended from time to time.8.3.13 Most of the offences mentioned in para 8.3.11 are of a relatively recent origin and the state police with its restricted territorial jurisdiction and limited resources is likely to find it difficult to investigate such crimes effectively. Even though “Police’ and ‘Public Order’ figure in the State List in the Constitution, it is felt that this category of crimes with inter-state and national ramifications would fall under the ‘residuary’ powers of the Union. The Commission learns that the need for a separate law for CBI was considered on earlier occasions during 1986-89 and a draft Bill was prepared. The Commission is of the view that enactment of a law using the ‘residuary powers’ and Entry 8, List I, to define the constitution of CBI, its structure and jurisdiction is overdue and has to be enacted expeditiously. The changes made in the Delhi Special Police Establishment Act in 2003 should also be incorporated in the new law. Under the new law, the State Police as well as the CBI could be given concurrent jurisdiction over investigation of all such crimes. The empowered committee recommended for monitoring serious economic offences in this Commission’s Report on ‘Ethics in Governance’ (para 3.7.19) may decide on the transfer of such cases to the CBI. Once the CBI takes over a case, investigation by the State Police would cease but the latter will be required to provide assistance to the CBI as may be needed. These offences should be tried by specially designated courts.73Combatting Terrorism8.3.14 Recommendations:a.There is need to re-examine certain offences which have inter-state or nationalramification and include them in a new law. The law should also prescribe the procedure for investigation and trials of such offences. The following offences may be included in this category:anised Crime (examined in paragraph 8.4)2. Terrorism3.Acts threatening national security4. Trafficking in arms and human beings5. Sedition6. Major crimes with inter-state ramifications7. Assassination of (including attempts on) major public figures8.Serious economic offencesb. A new law should be enacted to govern the working of the CBI. This law should also stipulate its jurisdiction including the power to investigate the new category of crimes.c.The empowered committeerecommended in the Commission’s Report on ‘Ethics in Governance’ (para 3.7.19) would decide on cases to be taken over by the CBI.4.11.2 The Parliamentary Standing Committee for Personnel, Public Grievances and Law and Justice, in its Twenty Fourth Report, proposed reconstituting the CBI as Central Bureau of Intelligence and Investigation, by creating a separate Anti-Terrorism Division (Box 4.4), and a mechanism for transfer of investigation in major cases such as terrorism to theBox 4.4: Federal Agency for Combatting Terrorism16.9.16.1. The Committee is of the view that the internal threats posed by divisive forces are equally important as external aggressions and that technology has facilitated the exponential escalation of the danger and threat levels posed by organized crimes and terrorism. Therefore, they should be dealt with very stringently and while doing so, prevention of incidents which threaten the security of our nation should be given prime thrust and priority. In this regard, the Committee strongly feels that the Central Government should be given adequate powers to take prompt and effective action on the intelligence available to them. The Committee is of the opinion that in order to ensure proper management and prevention of such incidents which threaten the security of the nation, the CBI should be envisaged as an enforcement agency also which would mean that apart from investigation and prosecution, CBI should be given mandate to ensure prevention of crimes. The Committee recommends that a separate Anti-Terrorism Division should be created in the CBI.Source: EnglishCommittees/Committee%20on%20Personnel, %20PublicGrievances,%20Law%20and%20Justice/24th% 20Report%20-%20Working%20of%20CBI.htm74Dealing with Terrorism : Legal FrameworkCBI. The Commission has already recommended creation of such a mechanism in its Report on ‘Public Order’ as highlighted above.4.11.3 The Commission is also of the view that mere setting up of new agencies and structures would not suffice unless such agency/agencies are staffed by personnel whose integrity and independence cannot be doubted, who are professionally competent and have developed the required expertise in investigation of terrorism related offences. The autonomy and independence of such agency should be ensured through a laid down procedure of appointment and assured tenure of its personnel.4.11.4 Recommendationsa. The Commission would like to reiterate the recommendations made in its Report on ‘Public Order’ (paragraph 8.3.14) on the creation of a specialized Division in the CBI to investigate terror offences.b. It should be ensured that this Division of the CBI is staffed by personnel of proven integrity and who are professionally competent and have developed the required expertise in investigation of terrorism related offences. The autonomy and independence of this agency may be ensured through a laid down procedure of appointment and assured fixed tenure for its personnel.4.12 The Commission has already recommended in paragraph 4.1.6.9 above that the legal provisions to deal with terrorism could be incorporated in a separate chapter in the National Security Act, 1980 (NSA). Accordingly, various recommendations made in this chapter on different aspects of the legal framework to deal with terrorism may be incorporated in the National Security Act.755MEASURES AGAINST FINANCING OF TERRORISM5.1 Introduction5.1.1 Terrorist activities in most cases require substantial financial support. Such activities generally involve the propagation of an ideology advocating militant action to achieve their goals, increasing the number of devoted followers willing to carry out militant action in furtherance of such goals, acquisition of and training in use of arms and explosives, planning and execution of such militant action etc. All these necessarily require significant funding. Apart from the proceeds of illegal operations, such funding could be sourced even from the proceeds of lawful activities. Supporters of a militant ideology could well make financial contributions to terrorist organizations from their known sources of income. Such contributions could also be made to some non-profit or charitable institutions acting as a front for terrorist organizations, knowingly or un-knowingly. Funds may also be provided to such front organizations by laundering the proceeds of crime. In fact, terrorist organizations could also finance their activities by either resorting to or working in concert with cartels involved in drug trafficking, smuggling etc. – without having to resort to money-laundering per se. Funding could also involve counterfeiting of currency. In all the scenarios mentioned above, the end result is that money reaches the persons involved in carrying out terrorist acts. This brings into focus the crucial issue of transfer of funds – both within and without the national boundaries. International organized crime makes use of a wide range of methods and networking to transfer funds with a view to launder the proceeds of crime. Many of these methods are utilized by terrorist organizations in order to transfer funds required for financing their activities. Apart from using the facilities provided by international trade, such organizations also take recourse to bulk cash smuggling and use of informal channels of transfer of money (like hawala). This is the reason that internationally, there has been a tendency to merge the anti-money laundering and counter-terrorist finance (AML/CTF) regimes. However, two features distinguish the activities related to money laundering operations with those related to financing of terrorist activities, which have a bearing on the nature of strategy to be adopted in a counter-terrorist finance regime. These are:a.In case of money laundering, the activity begins with the generation of proceedsfrom unlawful activities/crime and ends with their conversion into legal assets76Measures against Financing of Terrorism(movable or immovable). On the other hand, financing of terrorist activities could be from legal or illegal funds and it culminates when it reaches the perpetrators of a terrorist act. Even if it involves money laundering activity in between, the money trail has to continue to its final destination. This widens the scope of investigation in cases involving terrorist finance.b.In the case of money laundering, even if the proceeds of unlawful activities/crime get ‘laundered’, enforcement authorities could undo the effect on the basis of post-facto investigation. In case of terrorist finance, once the finance chain is completed and an act of terrorism has taken place, post facto investigation is limited to generating evidence leading to conviction of the perpetrators; loss of life and damage to property and public confidence is already done.It follows from the above that the law enforcement and investigation regime has to be wider in scope while dealing with terrorist finance as compared to money laundering operations. Further, in dealing with financing of terrorist activities, the emphasis has to be more on obstructing such activities while in progress. The success and failure of a counter-terrorist finance regime would thus depend on the manner in which these two elements are incorporated in its strategy.5.1.2 The main planks of a strategy to deal with the financial aspects of terrorist activities tend to involve:i.Asset recovery and obstruction powersii.Legal penalties against persons/organizations involved in financing terrorismiii. Adoption of diligent customer identification programmes and standard record keeping procedures by financial institutions/agenciesiv.Reporting of suspicious financial activity by individuals and institutionsv.Anti-money laundering measuresvi. Capacity building and coordination mechanisms between agencies involvedvii. International cooperationTo highlight the issues involved in dealing with financing of terrorism, the Commission studied the measures taken in the US and UK in their fight against terrorism and the prevalent set-up in India. The discussion, for the sake of convenience, is organized under two separate77Combatting Terrorismheads, viz. ‘anti-money laundering measures and due diligence in the financial system’ and ‘measures to block the flow of funds for financing of terrorist activities’.5.2 Anti Money-laundering Measures and Due Diligence in the Financial System5.2.1. USA: In the USA, these measures could be categorized as those taken before the events of September 11, 2001 and those undertaken thereafter.Measures undertaken before September 11, 20015.2.1.1. Anti-money laundering provisions are included in ‘The Money-Laundering Control Act of 1986’ and are contained in Sections 1956 and 1957 of Chapter 95 of Part I of Title 18 of the US Code. Section 1956 pertains to laundering of monetary instruments while Section 1957 pertains to engaging in monetary transactions in property derived from specified unlawful activities. The following constitutes the offence of money-laundering under Section 1956:(i)With regard to property involved in any financial transaction, the conduct orattempt to conduct a financial transaction which involves the proceeds of specified unlawful activity –(a) with the intent to promote the carrying on of that activity; or(b) with the intent to violate certain tax evasion provisions of the Internal Revenue Code; or(c)knowing that the transaction is designed to conceal or disguise the nature,the location, the source, the ownership or the control of the proceeds of such activity; or(d) knowing that the transaction is designed to avoid a reporting requirement under any law.(ii) Transportation, transmission, transfer of a monetary instrument or funds or attempt to undertake such activity from a place in the US to or through a place outside the US or vice versa:(a) with the intent to promote the carrying on of specified unlawful activity;(b) knowing that such instrument or funds represent the proceeds of such activity and knowing that such transportation, transmission or transfer is78Measures against Financing of Terrorismdesigned either to conceal or disguise the nature, the location, the source, the ownership or control of the proceeds of such activity;(c) to avoid a reporting requirement under any law;(iii) Conduct or attempt to conduct a financial transaction involving property represented to be proceeds of specified unlawful activity or property used to conduct or facilitate such activity with the intent:(a) to promote the carrying on of specified unlawful activity;(b) to conceal or disguise the nature, the location, the source, the ownership or control of the proceeds of such activity;(c) to avoid a reporting requirement under any law.5.2.1.2 From the above, it is evident that the US law lays stress on financial transactions involved in promoting specified unlawful activity; perpetrating tax evasion; concealing the nature, location, source, ownership or control of proceeds of specified unlawful activity; avoiding transaction reporting requirements under different laws; actual transportation, transmission or transfer of instruments or funds from or to the United States as related to specific unlawful activities and property transactions for the same purpose. Financial transaction has been defined in Section 1956 to mean:(A) a transaction which in any way or degree affects interstate or foreign commerce –(i)involving the movement of funds by wire or other means, or(ii) involving one or more monetary instruments, or(iii) involving the transfer of title to any real property, vehicle, vessel, or aircraft, or(B) a transaction involving the use of a financial institution which is engaged in, or the activities of which affect, interstate or foreign commerce in any way or degree;The predicate offences21 which are covered under this Act have a very wide span. Measures undertaken after September 11, 2001: 7921‘predicate offence’ means any criminal offence by way of which the proceeds used in money-laundering were generatedCombatting Terrorism5.2.1.3 The ‘Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001’: This significant piece of legislation contains a number of provisions related to financial transactions and terrorist activities. Some of these are being described below:i.Interception of wire, oral and electronic communications relating to terrorism(Section 201): Law enforcement authorities in the US may intercept wire, oral or electronic communications under a judicially supervised procedure. However, this authority is only available in connection with the investigations of specifically designated serious crimes. Section 201, inter alia, adds to the list the offences of (a) engaging in financial transactions with the government of a country which is designated as country supporting international terrorism (18 USC 2332d) and (b) providing material support (including any property, tangible or intangible, or service, including currency or monetary instruments or financial securities, or financial services) to terrorists (18 USC 2339A) or terrorist organizations (18 USC 2339B).22ii.International Money Laundering Abatement and Financial Anti-terrorist Act(Title III): Title III of the USA PATRIOT Act emerged out of certain congressional findings. Briefly, these were (Section 302):1.money laundering provides the fuel that permits transnational criminalenterprises to conduct and expand their operations,2.money laundering and the defects in financial transparency are critical tothe financing of global terrorism,3.legitimate financial mechanisms and banking relationships are subvertedby the money launderers to move the proceeds of crime,4.certain national jurisdictions offer ‘offshore’ banking and related facilitieswhich are designed to provide anonymity. Coupled with weak supervisory and enforcement regimes, these are suited to the movement of funds related to narcotics trafficking, terrorism, etc. They also pose challenges to tracking the trail of money.5.2.1.4 The main provisions of Title III are as follows23:(i)Special measures targeted towards international primary money laundering issues(Section 311): The Secretary of Treasury is authorized to require domestic financial8022 This has been made permanent under the USA PATRIOT Improvement and Reauthorization Act, 2005 {Section 102(a)}23 Source: USA PATRIOT ACT 2001; aid has been taken of ‘Terrorism: Section by Section Analysis of the USA PATRIOT Act, CRS Report for the CongressMeasures against Financing of Terrorisminstitutions and agencies to take ‘special measures’ upon finding that (a) a jurisdiction outside the US, or (b) a financial institution outside the US, or (c) a class of transactions involving a jurisdiction outside the US, or (d) a type of account is of primary money laundering concern. Such ‘special measures’ involve (1) recordkeeping and reporting of certain transactions, including format of such records and reports, information regarding identity and addresses of participants and originator of funds, legal capacity of participants, identity of beneficial owner of funds etc. (2) obtaining and retaining beneficial ownership of any account of a foreign person or his representative (3) identification of customers and obtaining information comparable to domestic institutions in case foreign financial institutions which are permitted to use payable-through accounts in the US or in case of such institutions who have correspondent accounts in the US. (4) prohibition or attaching conditions to opening or maintaining of correspondent accounts. In arriving at such finding, the Secretary of the Treasury shall consult with the Secretary of State and the Attorney General.(ii)Section 312 requires every financial institution with a private banking orcorrespondent account for a foreign person or bank to establish controls to detect and report money laundering.(iii) Section 313 prohibits US banks, foreign banks and branches operating in the US and others from maintaining correspondent accounts for foreign shell banks.(iv) Section 315 includes bribery of a public official etc. to the list of offences under foreign law, the proceeds of which may form a federal money laundering prosecution.(v)Section 317 provides jurisdiction over foreign persons, including financialinstitutions under 18 USC 1956 and 1957, provided there is a valid service of process and the offence involves a transaction in the US or the property has been the subject of a forfeiture judgment or a criminal sentence.(vi) Section 318 amends 18 USC 1956 to cover laundering money through a bank.(vii) Section 326 requires minimum standards to be prescribed for financial institutions to identify their customers.(viii) Section 352 requires each financial institution to develop an anti-money laundering programme. Sections 351, 356, 359 extend the Suspicious Activity Reporting Regime.81Combatting Terrorism(ix) Section 361 institutionalises the Financial Crimes Enforcement Network (FinCEN) as a statutory bureau in the Treasury Department.5.2.1.5 Thus, the USA PATRIOT Act, 2001 is basically an exercise in capacity building in order to create an information-rich environment enabling the law enforcement agencies to effectively trace and obstruct terrorist finance and protect the financial systems from money laundering and terrorist abuse. Thus, the focus is now on protecting the financial system from abuse through customer identification programmes, maintenance of records by financial institutions and reporting of suspicious transactions to FinCEN.5.2.1.6 Section 405 of Title IV of USA PATRIOT Improvement and Reauthorization Act, 2005 makes money laundering through hawalas an offence by incorporating it into Section 1956 of 18 USC.Additional provisions for dealing with money laundering5.2.1.7 Presently, apart from the reporting regime administered by FinCEN, information on financial transactions is also provided by financial institutions, their regulators and certain offices within the Department of Treasury to the Internal Revenue Service, Bureau of Customs and Border Protection, Bureau of Immigration and Customs Enforcement, US Secret Service, FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Drug Enforcement Administration (DEA), which take action as per their own codes and charters.24 In case of investigations related to money laundering, the agencies authorized to investigate into violations of Sections 1956 and 1957 as described above, are such components of (a) Department of Justice as the Attorney General may direct, (b) Department of the Treasury as the Secretary of the Treasury may direct and (c) with respect to offences over which the United States Postal Service has jurisdiction, the Postal Service. The authority has to be exercised on the basis of an agreement between the three offices. Further, offences related to pollution may be investigated by the Department of Justice and the National Enforcement Investigations Center of the Environment Protection Agency [Sections 1956(e) and 1957 (e)]. This list of authorized agencies has now been expanded vide Section 403 of Title IV of USA PATRIOT Improvement and Reauthorization Act, 2005 by inserting the phrase ‘with respect to offenses over which the Department of Homeland Security has jurisdiction, by such components of the Department of Homeland Security as the Secretary of Homeland Security may direct’ and consequently, the aforesaid agreement is now to be entered into by four parties.5.2.1.8 The Federal Bureau of Investigation (FBI), Immigration and Customs Enforcement (ICE), Internal Revenue Service-Criminal Investigation (IRS-CI) and Drug Enforcement8224Source: Terrorist Financing: US Agency Efforts and Inter-Agency Coordination; August 3, 2005; CRS Report for CongressMeasures against Financing of TerrorismAuthority (DEA) are the main US agencies involved in the fight against money laundering. The following Table gives details of results achieved by them in the years 2003 to 2005:Table : 5.1 Anti-Money Laundering Statistics (USA)AgencyActionFY 2003FY 2004FY 2005FBIArrests342353253Convictions512459440DEA (Office of Financial Operations)Investigations236253319Arrests76112156IRS-CIInvestigations initiated159017891639Indictments/Informations104113041147Sentenced667687782ICE (under 18 USC 1956 and 1957)Arrests314421340Indictments360499378ICE (bulk cash smuggling under 31 USC 5332)Arrests875832Indictments12413375Convictions125142101Source : Appendix B: Anti-Money Laundering Statistics; 2007 National Money Laundering Strategy, USA5.2.2 UK: The United Kingdom has also put in place a sound anti-money laundering system. This includes25:i.legal provisions outlawing money launderingii.application of financial safeguards by industry Some of the measures taken are outlined below: 5.2.2.1 Legal provisions outlawing money laundering5.2.2.1.1 The Proceeds of Crime Act 2002 (POCA) provides for a single set of money laundering offences, applicable throughout the UK to proceeds of all crimes. Thus, law enforcement agencies no longer need to show that illicit money has been derived from one particular kind of crime.26 Some of the offences mentioned in Part 7 of POCA which deals with money laundering, are as follows:Section 327: Concealing etc.(1) A person commits an offence if he –8325‘The Financial Challenge to Crime and Terrorism’; HM Treasury, February, 2007 26 ibidCombatting Terrorism(a) conceals criminal property;(b)disguises criminal property;(c)converts criminal property;(d) transfers criminal property;(e) removes criminal property from England and Wales or from Scotland or from Northern Ireland.(2) But a person does not commit such an offence if-(a) he makes an authorized disclosure under section 338 and [if the disclosure is made before he does the act mentioned in subsection (1)] he has the appropriate consent;(b) he intended to make such a disclosure but had a reasonable excuse for not doing so;(c)the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct.(3) Concealing or disguising criminal property includes concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it.Section 328: Arrangements(1) A person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person.(2) But a person does not commit such an offence if-(a) he makes an authorized disclosure under section 338 and [if the disclosure is made before he does the act mentioned in subsection (1)] he has the appropriate consent;(b) he intended to make such a disclosure but had a reasonable excuse for not doing so;(c)the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct.84Measures against Financing of TerrorismSection 329: Acquisition, use and possession(1) A person commits an offence if he-(aacquires criminal property;(buses criminal property;(c)has possession of criminal property.(2) But a person does not commit such an offence if-(a) he makes an authorized disclosure under section 338 and [if the disclosure is made before he does the act mentioned in subsection (1)] he has the appropriate consent;(b) he intended to make such a disclosure but had a reasonable excuse for not doing so;(c)he acquired or used or had possession of property for adequate consideration;(d) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct.(3) For the purposes of this section –(a) a person acquires property for inadequate consideration if the value of the consideration is significantly less than the value of the property;(b) a person uses or has possession of property for inadequate consideration if the value of the consideration is significantly less than the value of the use or possession;(c)the provision by a person of goods or services which he knows or suspects may help another to carry out criminal conduct is not consideration.5.2.2.1.2 The penalties for such offences are provided as under: Section 334: Penalties(1) A person guilty of an offence under section 327, 328 or 329 is liable -(a) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both, or85Combatting Terrorism(b)on conviction on indictment, to imprisonment for a term not exceeding 14 years or toa fine or to both.5.2.2.1.3 Definitions applicable to this part are: Section 340: Interpretation(1) This section applies for the purposes of this Part.(2) Criminal conduct is conduct which -a)constitutes an offence in any part of the United Kingdom, orb)would constitute an offence in any part of the United Kingdom if it occurred there.(3) Property is criminal property if –a)it constitutes a person’s benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), andb)the alleged offender knows or suspects that it constitutes or represents such a benefit.(4) It is immaterial –a)who carried out the conduct;b)who benefited from it;c)whether the conduct occurred before or after the passing of this Act.(5) A person benefits from conduct if he obtains property as a result of or in connection with the conduct.(6) If a person obtains a pecuniary advantage as a result of or in connection with conduct, he is to be taken to obtain as a result of or in connection with the conduct a sum of money equal to the value of the pecuniary advantage.(7) References to property or a pecuniary advantage obtained in connection with conduct include references to property or a pecuniary advantage obtained in both that connection and some other.(8) If a person benefits from conduct his benefit is the property obtained as a result of or in connection with the conduct.86Measures against Financing of Terrorism(9) Property is all property wherever situated and includes –a)money;b)all forms of property, real or personal, heritable or moveable;c)things in action and other intangible or incorporeal property.(10) The following rules apply in relation to property –a)property is obtained by a person if he obtains an interest in it;b)references to an interest, in relation to land in England and Wales or Northern Ireland, are to any legal estate or equitable interest or power;c)references to an interest, in relation to land in Scotland, are to any estate, interest, servitude or other heritable right in or over land, including a heritable security;d)references to an interest, in relation to property other than land, include references to a right (including a right to possession).(11) Money laundering is an act which –a)constitutes an offence under section 327, 328 or 329,b)constitutes an attempt, conspiracy or incitement to commit an offence specified in paragraph (a),c)constitutes aiding, abetting, counselling or procuring the commission of an offence specified in paragraph (a), ord)would constitute an offence specified in paragraph (a), (b) or (c ) if done in the United Kingdom.5.2.2.1.4 Thus, with one stroke, POCA ‘opens up new legal avenues to prosecute those associated with criminal finance and to deprive them of any benefit they might enjoy from criminal assets’27. It has been claimed that POCA “delivers one of the world’s most powerful legal tools against money laundering.”285.2.2.2 Application of financial safeguards by industry5.2.2.2.1 These involve procedural mechanisms and monitoring measures to be adopted by8727ibid28 ibidCombatting Terrorismplayers in the financial system. The Money Laundering Regulations 2007 provides that due diligence measures be undertaken in the case of customer identification; record-keeping, procedures and training; supervision and registration of high value dealers, money service businesses and trusts or company service providers; etc. These Regulations apply to (i) credit institutions, (ii) financial institutions, (iii) auditors, insolvency practitioners, external accountants and tax advisers, (iv) independent legal professionals, (v) trust or company service providers, (vi) estate agents, (vii) high value dealers, and (viii) casinos.29 Thus, a very wide spectrum of service providers is covered under these Regulations. The information is to be provided to the UK FIU, (which is now a unit housed within Serious Organised Crime Agency), which in turn analyses the information and makes it available to law enforcement agencies. The FIU also has a specialized Terrorist Finance Team.305.2.2.2.2 Further, in case of persons convicted for certain serious offences, the Court may make a Financial Reporting Order under Section 76 of the Serious Crime and Police Act 2005 which requires continuous disclosure of financial records provided the court is satisfied that the risk of the offender committinganother such offence is ‘sufficiently high’.5.2.2.2.3 POCA also contains provisions for making confiscation orders in cases where the offender has been convicted under any other law. Under these orders, the offender is required to pay back the value of the benefit derived from a given crime. As mentioned earlier, it is not necessary under POCA to link a particular crime with a particular benefit. Further, provisions for making Restraint Orders are also available in POCA to prevent the disposal or disappearance of property that may ultimately need to be sold to satisfy a confiscation order.315.2.3 Measures in India5.2.3.1 Anti money-laundering measures5.2.3.1.1 The provisions related to money laundering are contained in the Prevention of Money-Laundering Act, 2002 (PMLA) as amended by the Prevention of Money-Laundering (Amendment) Act, 2005. As per Section 2(p) of the PMLA, money-laundering has the meaning assigned to it in Section 3 of the Act which defines the offence of money-laundering as follows:“Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-launder.” (emphasis added)5.2.3.1.2 Thus, money-laundering is confined to activities/offences connected with ‘proceeds of crime’. ‘Proceeds of crime’ has been defined in Section 2(u) of the Act to mean any property29Regulation 3(1), The Money Laundering Regulations 200730‘The Financial Challenge to Crime and Terrorism’; HM Treasury, February, 2007 31‘The Financial Challenge to Crime and Terrorism’; HM Treasury, February, 200788Measures against Financing of Terrorismderived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a ‘scheduled offence’ or the value of any such property. ‘Scheduled offence’ has been defined in Section 2(y) to mean the offences specified under Part A of the Schedule to the Act or those offences specified under Part B of the Schedule to the Act, if the total value involved in such offences is thirty lakh rupees or more.5.2.3.1.3 Money-laundering will be an offence under the Act only if it relates to any activity connected with the proceeds of crime which find mention in the Schedule to the Act. Transactions not related to these scheduled crimes will be beyond the purview of the Act. Further, such activity connected with the proceeds of crime should be projected as untainted property to come under the purview of this Act. Although ‘property’ has been defined in the Act, the term ‘untainted’ has been left open for interpretation. It is apparent that the effectiveness of this Act is dependent on the inclusions and exclusions in the Schedule to the Act. The Schedule has two parts viz. Part A and Part B. Part A consists of Paragraph 1 which describes certain offences under the Indian Penal Code. Paragraph 2 contains certain offences under the NDPS Act, 1985. Part B of the Schedule contains 5 Paragraphs which pertain to offences under the IPC; the Arms Act, 1959; The Wildlife (Protection) Act, 1972; The Immoral Traffic (Prevention) Act, 1956 and The Prevention of Corruption Act, 1988 respectively. A glance at the offences listed in the Schedule reveals that offences related to organised crime and racketeering; terrorism, including terrorist financing; trafficking in human beings; illicit trafficking in stolen and other goods; fraud, especially financial frauds; counterfeiting and piracy of goods; smuggling and insider trading and capital market manipulations etc. are not listed therein. This limits the effectiveness of the Act as far as dealing with complex money laundering and terrorist financing operations is concerned.5.2.3.1.4 Even the offences mentioned in the Schedule have various short-comings in the present scope of the application of the law. Thus, Paragraph 2 of Part A of the Schedule lists out Sections 15, 18, 20, 22, 23, 24, 25A, 27A and 29 of the NDPS Act, 1985 while leaving Section 21 of the same Act untouched which deals with punishment for contravention in relation to manufacture, possession, sale, purchase, transport, interstate trade or use of ‘manufactured drug’ or any preparation thereof. It may be mentioned here that this is one of the major areas of criminal activities related to offences under the NDPS Act attracting punishment in the form of rigorous imprisonment for a term not less than 10 years.5.2.3.1.5 Similarly, paragraph 4 of Part B of the Schedule lists out offences described in Sections 5, 6, 8 and 9 of the Immoral Traffic (Prevention) Act, 1956 but conspicuously leaves offences contained in Sections 3 & 4 of this Act which relate to keeping a brothel and living on the earnings of prostitution. The omission of this section from the purview of the PMLA removes the proceeds of crime related to this area from the pale of money-laundering legislation.89Combatting Terrorism5.2.3.1.6 In the same vein, paragraph 5 of Part B of the Schedule lists out offences contained in Sections 7 to 10 of the Prevention of Corruption Act, 1988 but significantly, leaves out the provisions of Section 13 which pertain to criminal misconduct by public servants. The provisions therein cover cases of habitual offence and more importantly, cases of ‘property disproportionate to known sources of income’. Sections 7 to 10 deal with offences related to taking gratification other than legal remuneration in respect of an official act, or to influence a public servant or for exercise of personal influence with a public servant or abetment by a public servant in some cases. Once the provisions related to offences pertaining to acquisition of ‘property disproportionate to known sources of income’ have become divorced from the list of predicate offences, the PMLA would be attracted only if the nexus between a laundered property and any particular predicate offence is established, an arduous task in itself. As Part B of the Schedule pertains to offences which would attract the provisions of the PMLA only if transactions are equal to or more than Rs.30 lacs, to pin down any particular property as laundered property associated with offences coming under Sections 7 to 10 and involving transactions of Rs 30 lakhs or more would be rather difficult.5.2.3.1.7 Apart from the lacunae in the scope and application of the law in the present Act, there are also some procedural enforcement issues which could impinge on the overall effectiveness of the Act. These are discussed in the following paragraphs.5.2.3.1.8 Attachment of property involved in money-laundering: Section 5(1) of the Act empowers the appropriate authority to provisionally attach property which he has reason to believe are related to proceeds of crime, provided the possessor of the property has been charged of having committed a Scheduled offence (Part A and Part B of the Schedule as mentioned supra). But, the proviso mentions that “no such order of attachment shall be made unless, in relation to an offence under:(i) Paragraph 1 of Part A and Part B of the schedule, a report has been forwarded to a Magistrate under Section 173 of the Code of Criminal Procedure, 1973 (2 of 1974); or(ii) Paragraph 2 of Part A of the schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under sub-section (1) of Section 36 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985).”Thus, except for offences under the NDPS Act, 1985, action regarding attachment of property under PMLA in case of all other offences finding mention in the Schedule can only be initiated when proceedings under Section173 of the CrPC have been completed. Section173 of the Cr.P.C. casts a mandatory obligation on a police officer to file a report on completion of investigation. This Section mentions that:90Measures against Financing of Terrorism“(1) Every investigation under this Chapter shall be completed without unnecessary delay.(2) (i) As soon as it is completed, the officer in charge of the police station shall forward to a Magistrate empowered to take cognizance of the offence on a police report, a report in theform prescribed by the State Government”. (emphasis added)This would mean that no action for attachment of any property, which is believed to be related to the proceeds of crime, can be initiated until the offence is registered with the police, investigation has been completed by the competent authority and a report to that effect has been made to the Magistrate.5.2.3.1.9 Search and Seizure etc.: Section17(1) of the Act empowers the Director (appointed under Section 49 of the Act) to authorize any officer subordinate to him to carry out search and seizure proceedings if he has reason to believe that any person has committed an act, which constitutes money-laundering or is in possession of proceeds of the crime or records related to money-laundering. But the proviso to this Section lays down the same pre-conditions as mentioned in Section5(1) above meaning thereby that the requirements of Section173 of the CrPC have to be fulfilled before any search could be conducted.5.2.3.1.10 Attachment of assets and search and seizure action are the two means by which proceedings can be initiated under the PMLA and both these proceedings are encumbered by the provisions of Section173 of CrPC. Thus, these proceedings will remain non-starters until and unless a complaint has been lodged with the respective authorities and a report has been submitted to the Magistrate.5.2.3.1.11 Once the proceedings under the PMLA have been initiated, the appropriate authorities are required to file a complaint before the adjudicating authority within a period of 30 days. The adjudicating authority will then decide whether such property is involved in money-laundering. If it confirms such attachment, then such attachment or retention of the seized property or record shall -“(a) continue during the pendency of the proceedings relating to any scheduled offence before a court; and(b) become final after the guilt of the person is proved in the trial court and order of such trial court becomes final.”The order of attachment of any property or retention of the seized property or record will become final only after the guilt of the person is proved in the trial court and the order of such91Combatting Terrorismtrial court becomes final. Thus, the punishment under this Act is predicate on conviction under the offences mentioned in the Schedule to the Act.5.2.3.1.12 It is understood by the Commission, that Government of India, Ministry of Finance, has already taken cognizance of most of these infirmities in the Act and is proposing to introduce amendments to include offences under the SEBI Act, the Customs Act and those related to counterfeiting and printing of currency as well as offences covered under Section 21 of Narcotic Drugs and Psychotropic Substances Act, Section 12 of Prevention of Corruption Act and offences under Sections 10,11,13, 15 to 21, and 38 to 40 of the Unlawful Activities (Prevention) Amendment Act. The Commission would urge that the Bill containing these amendments, which will substantially strengthen the country’s ability to fight the menace of money laundering, be expeditiously placed before Parliament.5.2.3.1.13 As mentioned earlier, although the law enforcement agency (i.e. the Directorate of Enforcement) has been empowered to attach property and conduct search and seizure operations in relation to money laundering activities, except in the case of offences under the Narcotic Drugs and Psychotropic Substances Act, such action under Section 17(1) of the Act can only take place after the submission of the completion report of investigation under Section 173 of CrPC to the Magistrate with regard to the offences mentioned in the Schedule to the PMLA. However, in many cases, waiting for the investigation to be completed by the police officer and filing of the report by him could provide ample opportunities for obliterating the money laundering trail, destruction of evidence, movement of assets etc. Thus, the Commission is of the view that there is a case for advancement of the stage at which the search & seizure action or attachment of property could be undertaken under the PMLA, especially in cases which may have wider ramifications. Nonetheless, while allowing for the same, adequate safeguards may also be provided in the Act in order to reduce the scope for any possible misuse.5.2.3.2 Investigation of Money Laundering Offences: The Prevention of Money Laundering Act incorporates two sets of measures to counter money laundering: (i) it describes the power and authority available with the officers enforcing the law; and (ii) it also provides for a transaction reporting regime which is administered by a separate financial intelligence unit. The Directorate of Enforcement is the law enforcing agency in the case of PMLA. It draws its strength from officers with proven investigative and related skills from various Services, for example the Income-tax, Customs and Police, etc. through an objective selection mechanism for all officers above the rank of Deputy Director. The Enforcement Directorate enforces the law through its 22 offices across the country, including 10 zonal offices. The present composition and structure of the Directorate of Enforcement is sound but it may be examined whether institutional coordination mechanisms between the Directorate of Enforcement and other92Measures against Financing of Terrorismintelligence collecting and coordinating agencies, could be strengthened and some provisions of the PMLA delegated to them with the Enforcement Directorate, of course, remaining the nodal agency.5.2.3.3 Financial Intelligence Unit5.2.3.3.1 After the PMLA was brought into force from 1st July, 2005, the reporting regime with regard to financial transactions as envisaged in the Act also came into force. This also led to the creation of the Indian Financial Intelligence Unit (FIU-IND). The formats for the reporting transactions to the FIU-IND were notified by March, 2006. Reporting could start only in the financial year 2006-07.32 The regulations include maintenance of record of prescribed transactions, furnishing information to FIU-IND in the prescribed format, and verification of clients in the prescribed manner. Every reporting entity is required to furnish to FIU-IND, inter alia, monthly information relating to cash transactions of value of rupees ten lakhs or its equivalent in foreign currency, series of integrated cash transactions valued below rupees ten lakhs or equivalent foreign currency taking place in a month; information on transactions which appear to be complex or which raise the suspicion of involving proceeds of crime, within seven days of being satisfied regarding this etc. FIU-IND analyses these reports and disseminates the information to appropriate enforcement/intelligence agencies.33 The recipients of such information are the Ministry of Home Affairs, Research & Analysis Wing, Intelligence Bureau, National Security Council Secretariat, Central Board of Direct Taxes, Central Board of Excise & Customs, Directorate of Enforcement, Narcotics Control Bureau, Central Bureau of Investigation, Reserve Bank of India, Securities and Exchange Board of India and Insurance Regulatory Development Authority.34 Presently, all banking companies including private foreign banks, co-operative banks, RRBs, financial institutions including insurance companies, hire-purchase companies, chit funds, non-banking financial companies and intermediaries mentioned in Section 12 of SEBI Act constitute a reporting entity.35 The reporting regime needs to be extended to high risk sectors such as real-estate as is the case in the UK.5.2.3.3.2 As the volume of transactions reported would see a continuous growth accompanied by an increase in their relative complexity, the FIU-IND would have to be strengthened organizationally to meet the challenges. Presently, FIU-IND has a sanctioned staff strength of 43, out of which only 24 are managerial or specialist personnel.36 Compared to this, the Financial Crimes Enforcement Network (FinCEN), which is the US-FIU, consists of about 300 full-time employees, a third of whom are analysts, another third are administrative and managerial professionals, with the remaining third including regulatory specialists, technology experts and Federal agents. In addition, there are approximately 40 long-term detailees from32Source: FIU-IND; Annual Report, 2006-07 33Source: ibid 34Source: ibid 35Source: ibid 36 Source: ibid93Combatting Terrorism20 different law enforcement and regulatory agencies.37 There is need to strengthen the FIU-IND urgently and to build capacity to meet its present and future challenges as required.5.2.3.4 Co-ordination: Apart from the specific inputs provided by FIU-IND on transactions suspected of being related to money laundering, the main forum for co-ordination and cooperation among various agencies dealing with economic offences available to the Directorate of Enforcement is the Regional Economic Intelligence Councils (REICs). The REICs, constituted in 1996, are the nodal regional agencies for ensuring operational coordination amongst different enforcement and investigation agencies dealing with economic offences in their respective regions. These REICs are located at 18 regional centres throughout the country and consist of designated officers of CBDT, CBEC, CBI, ED, heads of related agencies of the Union and State Governments in the region, RBI, SBI, Registrar of Companies, etc. The REICs not only share information related to tax matters but also cover all areas of economic intelligence focusing on real time dissemination of information. The functioning of the REICs is coordinated by the Central Economic Intelligence Bureau (CEIB) which is under the administrative control of the Department of Revenue, Ministry of Finance. The CEIB acts as the nodal agency for economic intelligence. As the Directorate of Enforcement is a member of the REIC, it would be useful if the platform provided by them is also utilized to coordinate among agencies in cases which are suspected to be linked with money laundering. Further, owing to the complexity of cases involved, it would also be useful if the FIU-IND, apart from disseminating agency specific information, furnishes overall region-centric information to the CEIB for disseminating it to the respective REICs with a view to expanding the information regime.5.2.4 Recommendationsa. The Prevention of Money-laundering Act (PMLA) may be suitably amended at an early date to expand the list of predicate offences to widen its scope and outreach.b. The stage at which search and seizure action may be taken under the PMLA may be advanced in cases involving wider ramifications. Adequate safeguards may also be put in place in such cases.c.It may be examined whether institutional coordination mechanisms between the Directorate of Enforcement and other intelligence collecting and investigating agencies, could be strengthened and some provisions of the PMLA delegated to them by the Enforcement Directorate.37Source: ; extracted on 17.03.200894Measures against Financing of Terrorismd. The financial transaction reporting regime under the Financial Intelligence Unit (FIU-IND) may be extended to cover high risk sectors such as real-estate. There is also need to strengthen the capacity of FIU-IND to enable it to meet future challenges.e.It would be useful to utilize the platform provided by the Regional Economic Intelligence Councils (REICs) for increased coordination among various investigation agencies in cases which are suspected to be linked with money laundering. Further, owing to the complexity of cases involved, the FIU-IND, apart from disseminating agency specific information, should furnish overall region-centric information to the Central Economic Intelligence Bureau (CEIB) for disseminating it to the respective REICs with a view to expanding the information regime.5.3 Measures to Block the Flow of Funds for Financing Terrorist ActivitiesWhile an effective money laundering regime is an essential element of the fight against terrorist finance, certain additional measures are required to prevent financing of terrorist activities. Steps taken in this connection in the USA and UK are detailed below.5.3.1 USA5.3.1.1 Making terrorist finance an offence : US Code, Title 18, Part 1, Chapter 113B, Sections 2331 to 2339D deal with offences related to ‘terrorism’. Section 2332d relates to ‘Financial Transactions’, wherein engagement in financial transactions with the government of a country designated as a country supporting international terrorism has been made an offence. Under Section 2339A, the provision of material support or resources or concealment of the nature, location, source or ownership of such material support knowing or intending their use in certain acts etc. is made an offence. Here ‘material support or resources’ has been defined to include any property, tangible or intangible, or service, including currency or monetary instruments or financial securities and financial services, inter alia. Section 2339B makes the provision of such material support to designated foreign terrorist organizations an offence. Section 2339C makes the provision or collection of funds, directly or indirectly, with the intention of using or knowing that they would be used to carry out an act to intimidate a population or to compel a government etc. to do or abstain from doing any act, or which is an offence under some treaties, an offence.5.3.1.2 Asset freezing: In the aftermath of the events of September 11, 2001, terrorist assets and fund were dealt with by way of Executive Order 13224, dated 24.9.01. It is aimed at all9596Combatting Terrorismindividuals and institutions linked to global terrorism and allows the US to freeze assets subject to US jurisdiction and to prohibit transactions by US persons with any person or institution designated pursuant to the Executive Order based on their association with terrorists or terrorist organizations. This is achieved by naming such individuals or organizations specifically. It also authorizes the imposition of blocking orders on additional domestic or foreign institutions that support terrorism.38 This Order immediately froze the financial assets situated in the US of 27 listed entities and prohibited transactions of US citizens with these entities. The list included entities which were terrorist organizations, individual terrorist leaders, several non-profit organizations and a corporation which served as a front for terrorism.39 The scope of these sanctions was broader than the existing sanctions against terrorist activities. The list has been subsequently expanded to include many more individuals, charitable organisations, businesses etc.405.3.2 UK5.3.2.1 Making terrorist finance an offence: Part 3 of the Terrorist Act, 2000 creates offences related to fund-raising (Section 15), use and possession of property and money (Section 16), funding arrangements (Section 17) and money laundering (Section 18) in connection with terrorist activity. The offences related to terrorist finance are as follows:(i) Fund raising15.–(1) A person commits an offence if he -(a) invites another to provide money or other property, and(b)intends that it should be used, or has reasonable cause to suspect that it may be used,for the purposes of terrorism.(2) A person commits an offence if he -(a) receives money or other property, and(b)intends that it should be used, or has reasonable cause to suspect that it may be used,for the purposes of terrorism.(3) A person commits an offence if he(a) provides money or other property, and38Source: Contributions by the Department of the Treasury to the Financial War on Terrorism: Fact Sheet; United States Treasury Department, September, 200239Source: ‘The merging of the counter-terrorism and anti-money laundering regimes’, Bruce Zagaris; is_200210/ai_n9108489; extracted on 05.03.200840Source: ibidMeasures against Financing of Terrorism(b) knows or has reasonable cause to suspect that it will or may be used for the purposes of terrorism.(4) In this section a reference to the provision of money or other property is a reference to its being given, lent or otherwise made available, whether or not for consideration.(ii) Use and possession of money and property16.–(1) A person commits an offence if he uses money or other property for the purposes of terrorism. (2) A person commits an offence if he -(a) possesses money or other property, and(b)intends that it should be used, or has reasonable cause to suspect that it may be used, for the purposes of terrorism.(iii) Funding arrangements17. A person commits an offence if -(a) he enters into or becomes concerned in an arrangement as a result of which money or other property is made available or is to be made available to another, and(b) he knows or has reasonable cause to suspect that it will or may be used for the purposes of terrorism.(iv) Money laundering18.–(1) A person commits an offence if he enters into or becomes concerned in an arrangement which facilitates the retention or control by or on behalf of another person of terrorist property -(a) by concealment,(b) by removal from the jurisdiction,(c)by transfer to nominees, or(d) in any other way.(2) It is a defence for a person charged with an offence under subsection (1) to prove that he did not know and had no reasonable cause to suspect that the arrangement related to terrorist property.197Combatting TerrorismSection 22 of the Act provides for penalties for offences under Sections 15 to 18 which are similar to Section 334 of POCA as mentioned earlier in this Chapter. Section 23 provides for forfeiture order by the court by or before which a person is convicted under sections 15 to 18. Thus, the legal apparatus for dealing with terrorist finance have been put in place.5.3.2.2 Asset freezing: HM Treasury can direct freezing of assets and funds on grounds of suspected involvement with terrorism. This action is also taken in concert with other Governments.41 The Anti-terrorism, Crime and Security Act 2001 provides for making of ‘freezing orders’ with respect to certain funds. The relevant provisions are being cited below:“4 Power to make order(1) The Treasury may make a freezing order if the following two conditions are satisfied.(2) The first condition is that the Treasury reasonably believe that –a)action to the detriment of the United Kingdom’s economy (or part of it) has been or is likely to be taken by a person or persons, orb)action constituting a threat to the life or property of one or more nationals of the United Kingdom or residents of the United Kingdom has been or is likely to be taken by a person or persons.(3) If one person is believed to have taken or to be likely to take the action the second condition is that the person is –a)the government of a country or territory outside the United Kingdom, orb)a resident of a country or territory outside the United Kingdom.(4) If two or more persons are believed to have taken or to be likely to take the action the second condition is that each of them falls within paragraph (a) or (b) of subsection (3); and different persons may fall within different paragraphs.5Contents of order(1) A freezing order is an order which prohibits persons from making funds available to or for the benefit of a person or persons specified in the order.(2) The order must provide that these are the persons who are prohibited –a)all persons in the United Kingdom, and9841ibidMeasures against Financing of Terrorismb)all persons elsewhere who are nationals of the United Kingdom or are bodiesincorporated under the law of any part of the United Kingdom or are Scottish partnerships.(3) The order may specify the following (and only the following) as the person or persons to whom or for whose benefit funds are not to be made available –a)The person or persons reasonably believed by the Treasury to have taken or to be likely to take the action referred to in section 4;b)any person the Treasury reasonably believe has provided or is likely to provide assistance (directly or indirectly) to that person or any of those persons.(4) A person may be specified under subsection (3) by –a)being named in the order, orb)falling within a description of persons set out in the order.(5) The description must be such that a reasonable person would know whether he fell within it.(6) Funds are financial assets and economic benefits of any kind.”Further, Section 7 of this Act provides that the Treasury must keep a freezing order under review. As per Section 8, a ‘freezing order’ is effective for two years starting from the day on which it was made. Section 10 stipulates that a ‘freezing order’ must be laid before Parliament after being made and it would cease to have effect at the end of 28 days from the date of the order unless each House of Parliament approves it by a resolution before the end of the period. However, this does not affect anything done under the order or the power of the Treasury to make a new order. Thus, in the UK, the Treasury is empowered to make freezing orders on the basis of a reasonable belief that action detrimental to the country’s economy or which constitutes a threat to life and property of UK nationals is ‘likely to be taken’ by person or persons. Such orders prohibit all persons in the UK and all nationals of the UK including bodies incorporated under any UK law etc. from making funds (financial assets, economic benefits etc.) to persons named or described in such orders. The order has to be laid before Parliament within 28 days for approval by a resolution of each House of Parliament, and once approved, it can have effect for two years. The order is subject to constant review by the Treasury.99Combatting Terrorism5.3.3 Measures undertaken in IndiaAnti-terrorist legislations in India always contained provisions pertaining to financing of terrorist activities and proceeds of terrorist acts. These are described below in brief:5.3.3.1 Making terrorist finance an offence5.3.3.1.1 TADA: Under TADA (as mentioned in Chapter 4 earlier) holding property derived or obtained from any terrorist activity or acquiring them through terrorist funds was an offence. The Act also provided for seizure of such property. Section 7-A empowered the investigating officer to seize or attach any property about which he has reasons to believe that it is derived or obtained from the commission of any terrorist act under investigation, albeit with the prior approval of the Superintendent of Police. However, he was also required to duly inform the Designated Court within 48 hours of such attachment for confirmation or revoking of the order. The Designated Court was empowered to order forfeiture of such properties in the event of conviction. (Section 8)5.3.3.1.2 POTA5.3.3.1.2.1 Under POTA also, holding property derived or obtained from any terrorist activity or acquiring them through terrorist funds was an offence. As mentioned earlier in this Report, the Prevention of Terrorism Act, 2002 (POTA) also included the phrase ‘act of raising funds intended for the purpose of terrorism’ in the definition of the term ‘a terrorist act’ itself. This was achieved by way of an Explanation to Section 3(1) which gave the definition of ‘terrorist act’. POTA also made the holding of proceeds of terrorism illegal {Section 6(1)}and provided that such proceeds “whether held by a terrorist or by any other person and whether or not such person is prosecuted or convicted under this Act, shall be liable to be forfeited to the Central Government or the State Government, as the case may be...” {Section 6(2)}. Further, fund raising for a terrorist organization was also made an offence (Section 22). This included inviting others to provide money or property and receiving money or property with the intention of using it or having reasonable cause to suspect that it may be used, for the purposes of terrorism and providing money or property knowing or having reasonable cause to suspect that it may be used for the purpose of terrorism.5.3.3.1.2.2 Section 7(1) authorized an officer (not below the rank of Superintendent of Police) investigating an offence committed under this Act to seize or attach any property representing the proceeds of terrorism. However, prior approval in this case was to be obtained from the Director General of Police of the State Government before making the order. This authority extended to seizure or attachment of any property which is being used or is intended to be100Measures against Financing of Terrorismused for the purpose of any organization declared as a terrorist organization for the purposes of the Act {Section 7(2)}.5.3.3.1.2.3 Further, the investigating officer had the power to seize and detain cash, including postal orders, traveller’s cheques, banker’s drafts and other specified monetary instruments, if had reasons to suspect that it was intended to be used for the purposes of terrorism or it formed a part of the resources of a terrorist organization {Section 7(6)}. As in the case of TADA, the investigating officer was required to inform the Designated Authority within 48 hours, who had the authority to confirm or revoke the order. Section 8 empowered the Special Court to pass an order regarding forfeiture of such property or otherwise. The Special Court was also empowered to order the attachment of movable and immovable property belonging to a person accused of any offence under POTA during the period of the trial (Section 16).5.3.3.1.3 ULPAA5.3.3.1.3.1 The Unlawful Activities (Prevention) Amendment Act, 2004 also provides for punishment for knowingly holding a property derived or obtained from the commission of a terrorist act or acquired through terrorist funds (Section 21). Like POTA, this Act also prohibits the possession of any proceeds of terrorism and provides for forfeiture of such proceeds (Section 24). Besides, raising funds for a terrorist organization has also been made an offence (Section 40).5.3.3.1.3.2 The Investigating Officer is authorized to seize or attach property representing the proceeds of terrorism with the prior approval of the Director General of Police of the State in which such properties are situated. He is required to duly inform the Designated Authority within forty-eight hours of the seizure or attachment who in turn is empowered to confirm or revoke the same {Section 25 (1 to 4)}. The Investigating Officer is also authorized to seize and detain any cash to which the Chapter on ‘Forfeiture of Proceeds of Crime’ applies including traveller’s cheques and banker’s drafts etc. if they are related to terrorism or a terrorist organization {Section 25 (5)}. The forfeiture of such proceeds is to be ordered by a Court of law (Section 26). The Court is also authorized to order attachment of properties of an accused (Section 33).5.3.3.2 Blocking the channels of financing terrorist activities5.3.3.2.1 Owing to the fact that carrying out of any terrorist act would necessarily involve financial backing, any strategy to counter financing of terrorism should not only contain measures regarding investigation and prosecution of the offence after the commission of any terrorist act, but also measures providing legal and institutional basis to gathering of intelligence/information leading to carrying out of investigations and blocking of funds and101102Combatting Terrorismmaterial support essential for the commissioning of such acts. In other words, apart from making the raising of funds for terrorism an offence, focus has to be on prevention of such acts also. For example, in the US, one important development in the aftermath of the events of September 11, 2001 was the operationalisation of a Terrorism Financing Operations Section (TFOS) by the FBI which “works not only to identify and track financial transactions and links after a terrorist act has occurred; it exploits financial information to identify previously unknown terrorist cells, to recognize potential terrorist activity or planning, and to predict and prevent potential terrorist acts”.42 In fact, to strengthen the efforts against terrorist financing activities, various investigation agencies in the US have separately created their own anti-terrorist finance units or cells apart from increasing their participation in inter-agency efforts.435.3.3.2.2 In India the provisions in the ULPAA (the anti-terrorist law in operation today) regarding attachment and seizure of property leading to forfeiture (Sections 24 to 34) are applicable only in the case of ‘proceeds of terrorism’. For the purposes of this Act, the term ‘proceeds of terrorism’ has been defined in Section 2(g) to mean “all kinds of properties which have been derived or obtained from commission of any terrorist act or have been acquired through funds traceable to a terrorist act, irrespective of person in whose name such proceeds are standing or in whose possession they are found, and includes any property which is being used, or is intended to be used, for the purpose of a terrorist organization”. Thus, attachment and forfeiture could only be in the case of properties which are derived or obtained from the commission of any ‘terrorist act’ or are acquired by using funds traceable to a ‘terrorist act’. This means that, except in the case of a ‘terrorist organisation’ {which is specifically defined in Section 2(m), ULPAA}, the attachment and forfeiture provisions become operative only after the ‘terrorist act’ has already been committed. Even the seizure and detaining of cash etc. {provided for in Section 25(5) as mentioned above}, is subject to the pre-condition put by the phrase ‘to which this Chapter applies’. When taken together with the fact that Section 25(5) is contained in Chapter V, which pertains to ‘Forfeiture of Proceeds of Terrorism’, it follows that this provision is also linked with ‘proceeds of terrorism’ and is further dependent on the prior commission of a terrorist act as mentioned above.5.3.3.2.3 Under POTA also, attachment could be done of only that property which represented proceeds of terrorism {Section 7(1)}. ‘Proceeds of terrorism’ was defined to mean “all kinds of properties which have been derived or obtained from commission of any terrorist act or have been acquired through funds traceable to a terrorist act, and shall include cash irrespective of person in whose name such proceeds are standing or in whose possession they are found”. Further, even under POTA, the seizure and detaining of cash etc. for which there is reasonable grounds to suspect that it is either intended to be used for the purpose of terrorism or it forms the whole or part of the resources of an organization declared as ‘terrorist organisation’ {provided for in Section 7(6) as mentioned42Report to the National Commission on Terrorist Attacks upon the United States: The FBIs Counterterrorism Program since September 2001; April 14, 200443Anne L. Clunan: ‘US and International Responses to Terrorist Financing’; in ‘Strategic Insights’, Volume IV, Issue 1 (January 2005); http:// c.nps.navy.mil/si/2005/jan/clunanJan05.pdf (extracted on 19.03.08)Measures against Financing of Terrorismabove}, was subject to the pre-condition put by the phrase ‘to which this Chapter applies’. However, the Chapter in this case pertained to ‘Punishment for, and measures for dealing with, terrorist activities’. Thus, this provision was not restrained by limiting its application to ‘proceeds of terrorism’ as is the case presently under ULPAA. Thus, under Section 7(6) of POTA, cash etc which was suspected to be intended for carrying out a terrorist act could be seized even before the commission of such act. This was also facilitated by the fact that the phrase ‘the raising of funds intended for the purpose of terrorism’ was included in the definition of a ‘terrorist act’. The Commission is of the view that in order to thwart the menace of terrorism and block the financing of terrorist activities, apart from the provisions already mentioned above, the new legal provisions on terrorism may also incorporate provisions regarding freezing of assets, bank accounts, deposits etc. while investigating the financial trail in cases where there is reasonable suspicion of their intended use in facilitating the commission of terrorist acts. Such actions may be undertaken by the investigating officer with the prior approval of a designated authority and subject to adequate safeguards.5.3.3.2.4 Information/intelligence on terrorist financing activities could be, and are actually being, generated by different intelligence and investigation agencies which are engaged in general or specific fields of activities. Financing of terrorist activities can be done through a multitude of modes, like: (a) value transfers through trading transactions, (b) hawala transactions, (c) currency smuggling, (d) counterfeiting, (e) defrauding financial institutions and the public at large, (f) false claim of exemptions, (g) false claim of refunds, (h) using nonprofit organizations and charities as a vehicle (i) drug trafficking and narcotics trade, (j) investments and trading in capital and commodities markets (including foreign investments), (k) transactions in real estate etc. The Commission is of the view that owing to the scope for their abuse, the investigation agencies having the authority to inquire into such activities as mentioned above, need to devote more resources and manpower to identify suspected terrorist financing activities so that information could be provided to intelligence agencies and authorities empowered to investigate terrorism cases.5.3.3.2.5 Another important source of information in this regard is the financial reporting regime administered by FIU-IND. This regime has been strengthened recently, in the sense that the Prevention of Money-laundering (Maintenance of Record of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time of Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005 have been amended in May, 2007 to include reporting to FIU-IND of any transaction which “gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to terrorism”.44 Thus, the entities covered by the transaction reporting regime are now required to report such specific10344Notification No. 4/2007 dated 24.05.2007, Department of Revenue, Ministry of Finance; Source: no4amendments.htm (extracted on 26.03.2008)Combatting Terrorismsuspicious transactions also. However, for concerted action on the financial leads provided by information gathered by various sources, a specialized cell may be created in the proposed National Counter-terrorism Centre drawing upon expertise from the Union Ministries of Finance and Home Affairs and the Cabinet Secretariat. Further, different investigation agencies dealing with financial transactions may set-up anti-terrorist finance cells within their organizations to augment the efforts of intelligence agencies involved in counter-terrorism activities and facilitate coordination among agencies.5.3.3.2.6 While financing of terrorist activity through ‘conventional’ methods such as currency smuggling, counterfeiting, drug-trafficking, frauds, use of informal channels of money transmission (‘hawala’) etc. continues, methods such as online payments, trade-based money-laundering, abuse of charities, false claims etc. have increasingly assumed centre-stage in the recent years. As investigation of transactions related to such activities requires specialized investigation techniques and skills, there is need to develop multi-faceted investigation teams in the agencies charged with the responsibility of conducting investigations under the antiterrorist law. However, apart from the present system of deputations to such agencies, it would be useful to commission dedicated teams within these investigating agencies with a view to investigate financial aspects of specific cases/group of cases by inducting officers having specialization in different aspects of financial investigation for short periods. The objective would be speedy and focused completion of the financial aspect of the investigation in such cases within, say three to six months. The placement of officers belonging to different agencies/organizations for such short periods and for specific cases would thus require arriving at an understanding between the jurisdictional ministries of the Union and State Governments and the organizations from which such officers would be sourced. A protocol for achieving this may be arrived at to facilitate such capacity building, thereby strengthening the effectiveness of counter-terrorist measures.5.3.4 Recommendationsa. The new legal framework on terrorism may incorporate provisions regarding freezing of assets, funds, bank accounts, deposits, cash etc. when there is reasonable suspicion of their intended use in terrorist activities. Such actions may be undertaken by the investigating officer with the prior approval of a designated authority, subject to adequate safeguards. These provisions may be incorporated in a separate chapter in the National Security Act, 1980 as recommended in paragraph 4.1.6.9.b. A specialized cell may be created in the proposed National Counter-104Measures against Financing of Terrorismterrorism Centre drawing upon expertise from the Union Ministries of Finance and Home Affairs and the Cabinet Secretariat for taking concerted action on the financial leads provided from information gathered by various sources. Further, different investigation agencies dealing with financial transactions may set up anti-terrorist finance cells within their organizations to augment the efforts of intelligence agencies involved in counter-terrorism activities.c.For speedy investigation into the financial aspects of specific cases/groupof cases related to terrorist activities, dedicated teams may be formed within the agencies charged with the responsibility of investigating into offences related to terrorism. This may be accomplished by inducting officers having specialization in different aspects of financial investigation for short periods, say three to six months. A protocol for achieving this may be arrived at between the concerned Union and State Ministries/Departments to facilitate such capacity building and strengthening the effectiveness of the counter-terrorist measures.105Summary of RecommendationsAnnexure-IRecommendations made at ‘National Workshop on Public Order’ March 11th-12th, 2006Sardar Vallabhbhai Patel National Police Academy, HyderabadI. Organised Violence, Terrorism & Extremism: Role of the State and Reforms?A national forum should be set up for formulation of policy and strategy for dealing with terrorism.?A stable, comprehensive, all India anti-terrorist legislation, having adequate safeguards against abuse, must be put in place.?While terrorist violence has to be effectively dealt with by the security forces, people’s grievances – genuine and perceived – which get exploited, have to be redressed by concerned agencies with a sense of urgency.?A stable, effective and responsive administration is an antidote to terrorism. ?For effectively dealing with violence, outdated laws (eg., The Explosive Act), containing irrelevant provisions resulting in delay in investigation and prosecution of offenders, must be amended.?Developmental activities should be planned and executed with due regard to problems of displacement of people, resettlement etc., so that violent eruption of conflicts on such issues can be avoided.?For tackling the root causes of Left Wing Extremism, relevant socio-economic issues such as land reforms, alienation of tribals from forest land etc. should be addressed and relevant laws must be strictly enforced.?An all-India legislation should be enacted for tackling the growing menace of organised crime.?Terrorism has to be fought by the security forces with the cooperation of the people. Appropriate sensitisation training should be given to security forces for avoiding alienation of the people and for enlisting their cooperation.119Combatting TerrorismAnnexure-IIReadings and ReferencesBooksBjorgo, Tore (Ed.), Root Causes of Terrorism: Myths, Reality and Ways Forward, London, Routledge, 2005Hoffman, Bruce. Inside Terrorism, New York, Columbia University Press, 1998.Laqueur, Walter. The New Terrorism: Fanaticism and the Arms of Mass Destruction, New York, Oxford University Press, 2001Lutz, James M and Brenda J. Lutz, Global Terrorism, London, Routledge, 2004Gupta, Rakesh. Terrorism, Communalism and other Challenges to Indian Security, Delhi, Kalpaz, 2004.Sir Robert Thompson. Defeating Communist Insurgency, 1967.Bharagava, Pushpa M. “Biological Warfare, Bio-Terrorism, The World and Us” in Adluri Subramanyam Raju (Ed.) Terrorism in South Asia: Views from India, New Delhi, India Research Press, 2004.Lal, A K Neo-Terrorism: An Indian Experience, Gyan Publishing House, New Delhi. 2005Nath, Ravinder A. “Bio-Terrorism: A Threat to National Security” in Adluri Subramanyam Raju (Ed.) Terrorism in South Asia: Views from India, New Delhi, India Research Press, 2004.Latham, Robert (Ed) Bombs and Bandwidth: The Emerging Relationship Between Information Technology and Security, New York, New Press, 2003.Lewis, James “Cyber Terror: Missing in Action”, in David Clarke (ed), Technology and Terrorism, London, Transaction Publishers, 2004.Joseph, Josy, “A Comparative Study of Suicide Terrorism in Kashmir and Sri Lanka” July, 2006 – The Fletcher School, Tufts University).Coll, Steve, “Ghost Wars”, The Penguin Press, New York, 2004Government Document: Fact Sheet on National Counter Terrorism Centre provided by Colonce Bill Wing, Liaison Officer, NCTC, April 2006120Readings and ReferrencesAnnexure-II Contd.ArticlesAkcam, Bahadir K. and Victor Asal, “The Dynamics of Ethnic Terrorism”, Available at: , Emma. “Nacro-Terrorism: The Merger of the War on Drugs and the War on Terror” Global Crime, Vol.6, No. 3&4, August-November, 2004. pp. 305-06Byman, Daniel. “The Logic of Ethnic Terrorism,” Studies in Conflict and Terrorism, Vol.21, No.2, (April-June 1998), pp. 149-169Dandurand, Yvon and Vivienne Chin, “Links Between Terrorism and Other Forms of Crime” A report submitted to “ Foreign Affairs Canada and The United Nations Office on Drugs and Crime, April 2004, Available at: “Drug trafficking and the case study in nacro-terrorism” Available at: , Stephane. “Perspectives On Ethno-Nationalist/Separatist Terrorism” Conflict Studies Research Centre, England, Available at , Alex P. “Links between Terrorism and Drug Trafficking: A Case of “Nacro-terrorism”? Available at: , Toby “WMD” Terrorism: How Scared Should We Be?’ Finnish Institute of International Affairs, May 2005, Available at: document.php?DOC_ID=31Carus, W. Seth “Defining Weapons of Mass Destruction”, Centre for the Study of Weapons of Mass Destruction, National Defence University, Washington, Available at http:// ndu.edu/WMDCenter/docUploaded//OP4Carus.pdfChyba, Christopher F. and Alex L. Greninger, “Biotechnology and Bioterrorism: An Unprecedented World”, Survival, Vol.46, No.2, Summer 2004, Pp.143-162.Phillips, Michael B. “Bioterrorism: A Brief History” Department of Internal Medicine, Mayo Clinic. Available at: bioterrorism_history.pdf121Combatting TerrorismAnnexure-II Contd.Klietmann, Wolfgang F. and Kathryn L. Ruoff, “Bioterrorism: Implications for the Clinical Microbiologist” Clinical Microbiology Reviews, Vol.14, No.2, April 2001, Pp.364-381“Introduction to Biological Weapons”, Federation of American Scientists, Available at: , Daniel M. “Environmental Terrorism: Analyzing the Concept” Journal of Peace Research, Vol.35, No. 4, 1998, Pp.483-496.Taylor, Francis X. “Bioterrorism and Homeland Security” U.S. Department of State, Atlanta. Available at: , Rasheed “WMD Terrorism in South Asia: Trends and Implications”, Available at: Perception_RashedUzZaman.pdfPutting the Tea back into Cyber Terrorism, BlackHat Briefings, Internet link https:// presentations/bh-usa-03/bh-us-03-sensepost/bh-us-03-sensepostpaper.pdfDenning, Dorothy E. Is Cyber Terrorism Coming?, Internet link materials/58.pdfFlemming, Peter and Michael Stohi, “Myths and Realities of Cyberterrorism”, Available at: of%20Cyberterrorism.pdfGordon, Sarah and Richard Ford, Cyberterrorism?, Internet link avcenter/reference/cyberterrorism.pdfJuhnke, Deborah H. Cyber Terrorism or Cyber Crime? Internet link pdf/Cyber.pdfMitliaga, Varvara Cyber-Terrorism: A Call for Governmental Action?, Internet link http:// bileta.ac.uk/Document%20Library/1/Cyber-Terrorism%20- %20A%20Call%20for%20Governmental%20Action.pdfPollitt, Mark M. Cyberterrorism: Fact or Fancy? Internet link ~denning/infosec/pollitt.htmlPrichard, Janet J. and Laurie E. MacDonald, Cyber Terrorism: A Study of the Extent of Coverage in Computer Security Textbooks, Internet link and ReferrencesAnnexure-II Contd.Rathmell, Dr. Andrew. “Cyber-terrorism: The Shape of Future Conflict,” Royal United Service Institute Journal. October, 1997.Rod, Stark, Cyber Terrorism: Rethinking New Technology, at MIL_C4I/stark/ Cyber_Terrorism_Rethinking_New_Technology1.htmlTucker, David The Future of Armed Resistance: Cyberterror? Mass Destruction? Internet link , Stephen “The Mappilla Outbreaks: Ideology and Social Conflict in 19th Century Kerala” Journal of Asian Studies, (Vol. 35, No.1, 1975), Pp. 85-98.Douglas Hart and Steven Simon: “Thinking Straight and Jacking Straight: Problems of Intelligence Analysis”; Survival (Journal of USS) Vol 48, No. Spring 2006Internet ResourcesThe Free DictionaryWikipedia: the free encyclopediaDenning, Dorothy E. Testimony before the Special Oversight Panel on Terrorism,Internet link Handbook 1.02, “Cyber Operations and Cyber Terrorism”,Internet link: TerrorismWhole ofIndiaAmax IV(1)Same as POTA, 2002The Unlawful Activities(Prevention) AmendmentAct, 2004Whole of IndiaThe Prevention of Terrorism Act, 2002A. DEFINITIONSWhole ofIndiaApart from this provision, it also mentions:Sec.1 (3) Every person shall be liable to punishment under this Act for every act or omission contrary to the provisions thereof, of which he is held guilty in India.(4) Any person who commits an offence beyond India which is punishable under this Act shall be dealt with according to the provisions of this Act in the same manner as if such act had been committed in India.Same as TADAThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Whole ofIndiaADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaTerrorism and Disruptive Activities (Prevention) Act,1987“also applies to” :a. to citizens of India outside India;b. to persons in the service of the Government, wherever they may be; andc. to persons on ships and aircraft registered in India, wherever they may be. (Section 1(2)ItemApplicationExtent1. 2. Sl.No124Comparison of Anti-Terrorism Legislations in IndiaSection 15: Terrorist Act Whoever, with intent to threaten the unity, integrity, security or sovereignty of India or to strike terror in the people or any section of the people in India or in any foreign country, does any act by using bombs, dynamite or other explosive substances or inflammable substances or firearms or other lethal weapons or poisons or noxious gases or other chemicals or by any other substances (whether biological or otherwise) of a hazardous nature, in such a manner as to cause, or likely to cause, death of, or injuries to any person or persons or loss of, or damage to, or destruction of, property or disruption of any supplies or services essential to the life ofSame as Law Commission Draft Bill. It adds the following: (1) The phrase ‘or by any other means whatsoever’ in Section 3(1)(a) and (2) adds an explanation to Section 3(1) which extends the meaning of a terrorist act to include the act of raising funds intended for the purpose of terrorism.Section 3(1): whoever, - (a) with intent to threaten the unity, integrity, security or sovereignty of India or to strike terror in the people or any section of the people does any act or thing by using bombs, dynamite or other explosive substances or inflammable substances or fire arms or other lethal weapons or poisons or noxious gases or other chemicals or by any other substances (whether biological or otherwise) of a hazardous nature, in such a manner as to cause, or likely to cause, death of, or injuries to any person or persons or loss of, or damage to, or destruction of, property or distribution of any supplies or services essential to the life ofSection 3(1): Whoever with intent to overawe the Government as by law established or to strike terror in the people or any section of the people or to alienate any section of the people or to adversely affect the harmony amongst different sections of the people does any act or thing by using bombs, dynamite or other explosive substances or inflammable substances or lethal weapons or poisons or noxious gases or other chemicals or by any other substances (whether biological or otherwise) of a hazardous nature in such a manner as to cause, or as is likely to cause, death of, or injuries to, any person or persons or loss of, or damage to, or destruction of, propertyDefinition of Terrorism Act3.Annexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004ADMINISTRATIVE REFORMS COMMISSIONThe Prevention ofComparison of Anti-terrorism Legislations in IndiaTerrorism Act, 2002The Prevention of TerrorismBill, 2000 (Draft Bill asrecommended by the LawCommission of India)Terrorism and DisruptiveActivities (Prevention) Act,1987ItemSl.No125Combatting TerrorismAnnexure-IV(1) Contd.ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention ofTerrorism Act, 2002The Prevention of TerrorismBill, 2000 (Draft Bill asrecommended by the LawCommission of India)Terrorism and DisruptiveActivities (Prevention) Act,1987ItemSl.Nothe community in India or in any foreign country or causes damage or destruction of any property or equipment used or intended to be used for the defence of India or in connection with any other purposes of the Government of India, any State Government or any of their agencies, or detains any person and threatens to kill or injure such person in order to compel the Government in India or the Government of a foreign country or any other person to do or abstain from doing any act, commits a terrorist act.(The phrase in emphasis is new. However, the provisions pertaining to associations declared Unlawful under thethe community or causes damage or destruction of any property or equipment used or intended to be used for the defence of India or in connection with any other purposes of the Government of India, any State Government or any of their agencies, or detains any person and threatens to kill or injure such person in order to compel the Government or any other person to do or abstain from doing any act;(b) is or continues to be a member of an association declared Unlawful Activities (Prevention) Act, 1967, or voluntarily does an act aiding or promoting in any manner the objects of such association and in either case is inor disruption of any supplies or services essential to the life of the community, or detains any person and threatens to kill or injure such person in order to compel the Government or any other person to do or abstain from doing any act, commits a terrorist act.126Comparison of Anti-Terrorism Legislations in IndiaSame as TADAAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004ULPA, 1967 as included in Section 3(1)(b) of POTA, 2002 have been excluded. Further, the explanation to Section 3(1) of POTA, 2002 is also missing which includes the raising of funds for the purpose of terrorism as a terrorist act.Same as TADAThe Prevention of Terrorism Act, 2002Same as TADAThe Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)B. ENHANCED PUNISHMENTSpossession of any unlicenced firearms, ammunition, explosive or other instrument or substance capable of causing mass destruction and commits any act resulting in loss of human life or grievous injury to any person or causes significant damage to any property, commits a terrorist act.ADMINISTRATIVE REFORMS COMMISSIONComparison of anti-terrorism legislations in IndiaTerrorism and Disruptive Activities (Prevention) Act,1987Death or imprisonment for life and also liable to fine [Section 3(2)(i)]ItemPunishment, if terrorist act has resulted in the death of any person1.Sl.No127Combatting TerrorismSame as TADAAnnexare-IV(1) Contd.Same as TADAThe Unlawful Activities(Prevention) AmendmentAct, 2004Same as TADAThe Prevention of Terrorism Act, 2002Same as TADASame as TADAThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Same as TADAADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaTerrorism and Disruptive Activities (Prevention) Act,1987imprisonment for a term not less than five years which may extend to life term and also liable to fine.Imprisonment for a term not less than five years which may extend to imprisonment for life and also liable to fine.ItemPunishment in case of Whoeverconspiresorattemptstocommit,oradvocates, abets, advises or incites or knowingly facilitates the commission of, a terrorist act or any act preparatory to a terrorist act,Punishment, for committing a ‘terrorist act’ in a case other than that resulting in the death of any person.2. 3. Sl.No128Comparison of Anti-Terrorism Legislations in IndiaSame as POTA, 2002Annexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004Minimum punishment not mentioned, term may extend to life imprisonment and also liable to fine.Same as POTA, 2002, except that there is a mandatory fine for which minimum limit is not prescribed.Same as Law Commission Draft Bill.The Prevention of Terrorism Act, 2002Minimum punishment not mentioned, term may extend to life imprisonment or with fine which may extend to rupees ten lakh or with both.Punishment is for ‘knowingly” holding such property; minimum term not prescribed, imprisonment may extend for life or with fine which may extend to rupees ten lakh or with both.Same as TADAThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Imprisonment for three years extending to life term and also liable to fine.Same as TADAADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaTerrorism and Disruptive Activities (Prevention) Act,1987imprisonment for five years extending to life term and also liable to fine.Imprisonment for five years extending to life term and also liable to fine.Imprisonment for five years extending to life term and also liable to fine.ItemPunishment for holding property dervied orobtained from Commission of any terrorist act or acquiredthrough terrorist funds.Punishment for being a member of a terrorist gang or a terrorist organisation involved interrorist acts.Punishment for harbouring or concealing any other person etc.5. 6. 4.Sl.No129Combatting TerrorismAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004Nil.Imprisonment for a term not less than five years extending to life term and also liable to fine. For abetment same.Imprisonment extending to three years and fine.Nil.The Prevention of Terrorism Act, 2002Imprisonment extending to three years and fine.Further elaborations with regard to explosiveandhazardoussubstances; applicable to areas which have notSame as TADAThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Imprisonment for a term extending to one year or fine or both.Imprisonment extending to three years and fine.ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaTerrorism and Disruptive Activities (Prevention) Act,1987Nil.Imprisonment for a term not less than five years extending to life term and also liable to fine. For abetment etc. the reference to life term is construed as ten years.Nil.ItemPunishment for not disclosing any information to the police which a person knows to be of assistance in preventing a terrorist act or apprehending etc. a person involved in such an act.Punishment for threatening a witness or in a person whom a witness may be interested.8. 7.Sl.NoPossession of certain unauthorised arms in certain areas.9. 130Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004Similar provision as in the previous column (Section 43)Imprisonment for a term not less than five years extending to life term and also liable to fine.C. INVESTIGATING OFFICERS AND THEIR POWERSThe Prevention of Terrorism Act, 2002Similar provisions as in previous column (Section 51)Raising of funds intended for the purpose of terrorism is included in the definition of ‘a terrorist act’.been notified; but minimum punishmentnotprescribed,punishmentmaybe for imprisonment extending to life term or with fine extending to rupees ten lakh or with both. For abetment sameNil.The Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaClause 32: Notwith-standing anything contained in the Code, no police officer below the rank -(a) in the case of the Delhi Special Police Establishment,Terrorism and Disruptive Activities (Prevention) Act,1987Nil.Apart from officers authorised under the Cr.PC, the Central Government may by notification confer on any officer of the CentralItemPunishment for raising fund for terrorist act.10.Investigating officers.1.Sl.No131Combatting TerrorismAnnaxura-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002Generally, the provisions are similar to that of the Law Commission Draft Bill. The new provisions are as follows:(1) Section 7(2):For theADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Generally, the provisions are similar to that of POTA, 2002 except the following:(1) The designation of the officer passing the order of seizure or attachment is notSection 7(1) -- If an officer (not below the rank of Superintendent of Police) investigating an offence committed under this Act, has reason to believe that anyof a Deputy Superintendent of Police or a police officer of equivalent rank;(b) in the metropolitan areas of Mumbai, Calcutta, Chennai and Ahmedabad and any other metropolitan area notified as such under subsection (1) of section 8 of the Code, of an Assistant Commissioner of Police;(c) in any other case not relatable to clause (a) or clause (b), of a Deputy Superintendent of Police or a police officer of equivalent rank, shall investigate any offence punishable under this Act.Terrorism and Disruptive Activities (Prevention) Act,1987ItemGovernment the powers exercisable by a police officer under the Cr.PC and all officers of police and the government are required to assist him.Section 7-A :If an officer investigating an offence committed under this Act has reason to believe that any property in relation to which an investigation is beingPowersofinvestigating officer regarding attachment and seizure of property2.Sl.No132Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004mentioned, thereby meaning that officers mentioned in Section 43 of the Act are authorised to pass such orders.(2) Provisions regarding property used or intended to be used for the purpose of the terrorist organisation as appearing in Section 7(2) of POTA, 2002 are not included.(3) The Designated Authority has to either confirm or revoke the order of seizure or attachment within a period of sixty days from the date of production of a copy of such order before it.(4) The person aggrieved by an order of the designated authority may prefer an appeal to the court within a period of thirty days from the date of receipt of the order. The term ‘Court’ has been defined toThe Prevention of Terrorism Act, 2002removal of doubts, it is hereby provided that where an organisation is declared as a terrorist organisation under this Act and the investigating officer has reason to believe that any person has custody of any property which is being used or is intended to be used for the purpose of such terrorist organisation, he may, by an order in writing, seize or attach such property.(2) Section 7(4): It shall be open to the Designated Authority before whom the seized or attached properties are produced either to confirm or revoke the order of attachment so issued: Provided that an opportunity of making a representation by the person whose property is beingADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)property in relation to which an investigation is being conducted, constitutes proceeds of terrorism, he shall, with the prior approval in writing of the Director General of Police of the State in which such property is situated, make an order seizing such property and where it is not practicable to seize such property, make an order of attachment directing that such property shall not be transferred or otherwise dealt with except with the prior permission of the officer making such order, or of the Designated Authority, or the Special Court, as the case may be, before whom the properties seized or attached are produced and a copy of such order shall be served on the person concerned.Terrorism and Disruptive Activities (Prevention) Act,1987conducted is a property derived or obtained from the commission of any terrorist act and includes proceeds of terrorism he shall, with the approval of the Superintendent of Police, make an order seizing such property and where it is not practicable to seize such property, he may make an order of attachment directing that such property shall not be transferred or otherwise dealt with except with the prior permission of the officer making such order, or of the Designated Court and a copy of such order shall be served on the persons concerned : Provided that the investigating officer shall duly inform the Designated Court within forty-eight hours of the attachment of such property and the said Court shall eitherItemSl.No133Combatting TerrorismAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004mean a criminal court having jurisdiction under the CrPC to try offences under this Act.The Prevention of Terrorism Act, 2002attached shall be given.(3) Section 7(6): The investigating officer may seize and detain any cash to which this Chapter applies if he has reasonable grounds for suspecting that(a) it is intended to be used for the purposes of terrorism;(b) it forms the whole or part of the resources of an organisation declared as terrorist organisation under this Act:Provided that the cash seized under this sub-section by the investigating officer shall be released not later than the period of forty-eight hours beginning with the time when it is seized unless the matter involving the cash is before the DesignatedADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in India(2) The investigating officer shall duly inform the Designated Authority or, as the case may be, the Special Court, within forty-eight hours of the seizure or attachment of such property.(3) It shall be open to the Designated Authority or the Special Court before whom the seized or attached properties are produced either to confirm or revoke the order of attachment so issued.(Thus the power of making an order of seizure or attachment has been given to an officer not below the rank of an SP. The approval has to be obtained from the DGP of the State).Terrorism and Disruptive Activities (Prevention) Act,1987The Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)confirm or revoke the order of attachment so issued.ItemSl.No134Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002Authority and such Authority passes an order allowing its retention beyond forty-eight hours.Explanation.—For the purposes of this sub-section, “cash” means(a) coins and notes in any currency;(b) postal orders;(c) traveller’s cheques;(d) banker’s drafts; and(e) such other monetary instruments as the Central Government or, as the case may be, the State Government may specify by an order made in writing.(4) Further, provision for appeal against the order by the designated authority is also provided in the form of Section 7(7):ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)Terrorism and Disruptive Activities (Prevention) Act,1987ItemSl.No135Combatting TerrorismArrexure-IV(1) Cortd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002Any person aggrieved by an order made by the Designated Authority may prefer an appeal to the Special Court and the Special Court may either confirm the order of attachment of property or seizure so made or revoke such order and release the property.ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Terrorism and Disruptive Activities (Prevention) Act,1987ItemSl.No136Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004No such provisionThe Prevention of Terrorism Act, 2002Similar provisions as in the previous column (Section 27).ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaTerrorism and Disruptive Activities (Prevention) Act,1987The Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Clause 22: (1) When a police officer investigating a case requests the Court of a Chief Judicial Magistrate or the Court of a Chief Metropolitan Magistrate in writing for obtaining samples of handwriting, finger prints, foot prints, photographs, blood, saliva, semen, hair, voice of any accused person, reasonably suspected to be involved in the commission of an offence under this Act, it shall be lawful for the Court of a Chief Metropolitan Magistrate to direct that such samples be given by the accused person to the police officer either through a medical practitioner or otherwise, as the case may be.No such provisionItemPower to direct for samples etc.3.Sl.No137Combatting TerrorismAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004D. FORFEITURE OF PROCEEDS OF TERRORISMThe Prevention of Terrorism Act, 2002Similar provisions except, in case of Designated Authority the powers are with the Special Court. Appeal lies with the jurisdictional High Court.The Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Clause 8: Where any property is seized or attached in the belief that it constitutes proceeds of terrorism and is produced before the Designated Authority, it shall, on being satisfied that the said property constitutes proceeds of terrorism, order forfeiture of such property, whether or not the person from whose possession it is seized or attached, is prosecuted in a Special Court for an offence(2) If any accused person refuses to give samples as provided in sub-section (1), in a trial under this Act, the court shall draw adverse inference against the accused.Similar provisions as POTA, 2002 except the powers are, in this case with the Court. The term ‘Court’ has been defined to mean a criminal court having jurisdiction under the Cr.PC to try offences under this Act. Accordingly, the appeal lies with the jurisdictional High Court.No separate provision. Omnibus provision (Section 8).ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaTerrorism and Disruptive Activities (Prevention) Act,1987ItemForfeitureof proceeds of terrorism1.Sl.No138Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)under this Act. Clause 9 provides for a show cause has to be issued in writing before making any order forfeiting proceeds of terrorism. If the person establishes that he is a bona fide transferee of such proceeds without knowing that they represent proceeds of terrorism, order of forfeiture cannot be made. In case of perishable property the Designated Authority may direct to be sold and the provisions of Section 459 of the CrPC shall generally apply. In case of other properties it may nominate any officer of the Central or State Government to perform the function of the administrator of such property. As per clause 10 appeal lies with theTerrorism and Disruptive Activities (Prevention) Act,1987ItemSl.No139Combatting TerrorismProvisions are there.Arrexure-IV(1) Cortd.Same as POTA, 2002The Unlawful Activities(Prevention) AmendmentAct, 2004Provisions are there.The Prevention of Terrorism Act, 2002Generally same as the Draft Bill.No specific provisions.The Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Clause 16 is same as Section 8 (1) and (2) of TADA Act. Further, Clause 17 is same as Section 8(4) of TADA Act.jurisdictional High Court. In case of modification or annulment of the order of forfeiture by the High Court, the property has to be returned or a price has to be paid as if the property has been sold to the Central Government along with reasonable interest. As per clause 11 order of forfeiture does not interfere with other punishments. As per clause 12 the Designated Authority has the power to consider claims by third parties.No specific provisions.ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaTerrorism and Disruptive Activities (Prevention) Act,1987Section 8:(1) Where a person has been convicted to any offence punishable under this Act or any rule madeItemForfeiture of property of certain personsCertain transfers to be null and void2. 3. Sl.No140Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)Terrorism and Disruptive Activities (Prevention) Act,1987thereunder, the Designated Court may, in addition to awarding any punishment, by order in writing, declare that any property, movable or immovable or both, belonging to the accused and specified in the order, shall stand forfeited to the Government free from all encumbrances.(2) Where any person is accused of any offence under this Act or any rule made thereunder, it shall be open to the Designated Court trying him to pass an order that all or any properties, movable or immovable or both belonging to him, shall, during the period of such trial, be attached, and where such trial ends inItemSl.No141Combatting TerrorismAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Terrorism and Disruptive Activities (Prevention) Act,1987conviction, the properties so attached shall stand forfeited to Government free from all encumbrances.(3) (a) If upon a report in writing made by a police officer or an officer referred to in subsection (1) of Section 7, any Designated Court has reason to believe that any person, who has committed an offence punishable under this Act or any rule made thereunder, has absconded or is concealing himself so that he may not be apprehended, such court may, notwithstanding anything contained in Section 82 of the Code, publish a written proclamation requiring him to appear at a specified place and at a specified time not less than fifteen days butItemSl.No142Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Terrorism and Disruptive Activities (Prevention) Act,1987not more than thirty days from the date of publication of such proclamation.(b) The Designated Court issuing a proclamation under Clause (a) may, at any time, order the attachment of any property, movable or immovable or both, belonging to the proclaimed person, and thereupon the provisions of Sections 83 to 85 of the Code shall apply to such attachment as if such attachment were made under that Code.(c) If, within six months from the date of the attachment, any person, whose property is, or has been, at the disposal of the Government under subsection(2) of Section 85 of the code, appears voluntarily or isItemSl.No143Combatting TerrorismAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Terrorism and Disruptive Activities (Prevention) Act,1987apprehended and brought before the Designated Court by whose order the property was attached, or the Court to which such Court is subordinate, and proves to the satisfaction of such Court that he did not abscond or conceal himself for the purpose of avoiding apprehension and that he had not received such notice of the proclamation as to enable him to attend within the time specified therein, such property or, if the same has been sold, the net proceeds of the sale and the residue of the property, shall, after satisfying therefrom all costs incurred in consequence of the attachment, be delivered to him.ItemSl.No144Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004Same as POTA, 2002.E. DESIGNATED AUTHORITY/DESIGNATED COURT/SPECIAL COURTThe Prevention of Terrorism Act, 2002Designated Authority has the powers of a Civil Court. Designated Authority has been defined to mean such officer of the Central Government not below the rank of Joint Secretary or such officer of the State Government not below the rank ofThe Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)As per clause 13, the Designated Authority has the powers of a Civil Court for making a full and fair enquiry into matters placed before it. Designated Authority has not been defined.There is no Designated Authority.ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaTerrorism and Disruptive Activities (Prevention) Act,1987Item(4) Where any shares in a company stand forfeited to the Government under this sub-section, then, the company shall, notwithstanding anything contained in the Companies Act, 1956, or the articles of association the company, forthwith register the Government as the transferee of such shares.Powers ofDesignatedAuthority1.Sl.No145Combatting TerrorismAnnaxura-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004No provision for Special Courts.No such provision.Same as Draft Bill.The Prevention of Terrorism Act, 2002Similar provisions as in Law Commission Draft Bill.ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaSecretary as specified by the respective Governments by a notification.The Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Instead of Designated Courts, Special Courts have been provided for. Provisions similar to TADA Act. Clause 18(9) further mentions that a Designated Court constituted under Section 9 of the TADA Act, 1987 shall be deemed to be a Special Court.Similar provisions have been provided for (Clause 24) except that the Special Court is not empowered to take cognizance of any offence without the previous sanction of the Central or State Government, as the case may be.Terrorism and Disruptive Activities (Prevention) Act,1987Section 14: (1) A Designated Court may take cognizance of any offence, without the accused being committed to it for trial, upon receiving a complaint of facts which constitute such offence or upon a police report of such facts.(2) Where an offenceItemProvisions for constitution of one or more Designated Courts by the Central Government or State Government by way of notification for such area or areas or for such case or clause or group of cases as specified therein.Procedure and powers of Designated Courts/Special Courts.DesignatedCourts/Special Courts.2. 3. Sl.No146Comparison of Anti-Terrorism Legislations in Indiatriable by a Designated Court is punishable with imprisonment for a term not exceeding three years or with fine or with both, the Designated Court may, notwithstanding anything contained in sub-section (1) of Section 260 or Section 262 of the Code, try the offence in a summary way in accordance with the procedure prescribed in the Code and the provisions of Section 263 to 265 of the Code, shall, so far as may be, apply to such trial:Provided that when, in the course of a summary trial under this subsection, it appears to the Designated Court that the nature of the case is such that it is undesirable to try it in a summary way, theAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004ADMINISTRATIVE REFORMS COMMISSIONThe Prevention ofComparison of Anti-terrorism Legislations in IndiaTerrorism Act, 2002The Prevention of TerrorismBill, 2000 (Draft Bill asrecommended by the LawCommission of India)Terrorism and DisruptiveActivities (Prevention) Act,1987ItemSl.No147Combatting TerrorismAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Terrorism and Disruptive Activities (Prevention) Act,1987Designated Court shall recall any witnesses who may have been examined and proceed to re-hear the case in the manner provided by the provisions of the Code for the trial of such offence and the said provisions shall apply to and in relation to a Designated Court as they apply to and in relation to a Magistrate:Provided further that in the case of any conviction in a summary trial under this section, it shall be lawful for a Designated Court to pass a sentence of imprisonment for a term not exceeding two years. (3) Subject to the other provisions of this Act, a Designated Court shall, for the purpose of trial of any offence, have all the powers of a Court ofItemSl.No148Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Terrorism and Disruptive Activities (Prevention) Act,1987Session and shall try such offence as if it were a Court of Session so far as may be in accordance with the procedure prescribed in the Code for the trial before a Court of Session.(4) Subject to the other provisions of this Act, every case transferred to a Designated Court under subsection (2) of Section 11 shall be dealt with as if such case had been transferred under Section 406 of the Code to such Designated Court. (5) Nothwithstanding anything contained in the Code, a Designated Court may, if it thinks fit and for reasons to be recorded by it, proceed with the trial in the absence of the accused or his pleader and record the evidence of anyItemSl.No149Combatting TerrorismAnnaxrrra-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004No such provision.Section 45: No court shall take cognizance of any offence-(i) under Chapter III without the previous sanction of the Central Government or any officer authorised by the Central Government in this behalf;(ii) under Chapters IV and VI without the previous sanction of the Central Government or, as the case may be, the State Government, and where suchProvisions exist (Section 31).The Prevention of Terrorism Act, 2002Section 50: No court shall take cognizance of any offence under this Act without the previous sanction of the Central Government or, as the case may be, the State Government.Provisions exist (Clasue 26).Clause 31: (1) The police officer recording information in respect of an offence under this Act shall promptly forward copies of all thematerialincludinginformation given to the police under section 154 of the Code and its accompaniments to the Director General of Police and the Review Committee.(2) It shall be open to the Director General of Police orThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Provisions exist (Section 17).ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaF. COGNIZANCE OF ANY OFFENCE/PRESUMPTION AS TO AN OFFENCETerrorism and Disruptive Activities (Prevention) Act,1987Section 20 A (1) Notwithstanding, anything contained in the Code, no information about the commission of an offence under this Act shall be recorded by the police without the prior approval of the District Superintendent of Police.(2) No court shall take cognizance of any offence under this Act without theItemwitness, subject to the rightof the accused to recall thewitness for cross-examination.Cognizance of offenceTrial by Special Courts to have precedence1.4.Sl.No150Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in Indiathe Review Committee to call for such further information, as they may deem necessary, from the police or any other person before approving or disapproving the action taken by the subordinate authorities.(3) If the Director General of Police does not approve the recording of the aforesaid information within ten days, or the Review Committtee does not approve the same within thirty days, the recording of the said information shall become null and void with effect from the tenth, or as the case may be, the thirtieth day and all proceedings in that behalf shall stand withdrawn and if the accused is in custody, he shallTerrorism and Disruptive Activities (Prevention) Act,1987The Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)offence is committed against the Government of a foreign country without the previous sanction of the Central Government.previous sanction of the Inspector-General of Police, or as the case may be, the Commissioner of Police.ItemSl.No151Combatting TerrorismAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004No separate provision.The Prevention of Terrorism Act, 2002Section 53:(1) In a prosecution for an offence under sub-section (1) of section 3, if it is proved (a) that the arms or explosives or any otherADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Clause 34: (1) In a prosecution for an offence under subsection (1) of section 3, if it is proved-(a) that the arms or explosives or any other substancesbe released forthwith unless required in connection with some other offence.(4) Any action taken or any order passed under this section shall be in addition to and independent of any action taken by the Review Committee under section 39.(5) No court shall take cognizance of any offence under this Act without the previous sanction of the State Government, or as the case may be, the Central Government.Terrorism and Disruptive Activities (Prevention) Act,1987ItemSection 21: (1) In a prosecution for an offence under sub-section (1) of Section 3, if it is proved – (a) that the arms or explosives or any other substancesPresumption as to an offence2.Sl.No152Comparison of Anti-Terrorism Legislations in IndiaAnnaxura-IV(1) Contd.ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention ofTerrorism Act, 2002The Prevention of TerrorismBill, 2000 (Draft Bill asrecommended by the LawCommission of India)substances specified in section 4 were recovered from the possession of the accused and there is reason to believe that such arms or explosives or other substances of a similar nature, were used in the commission of such offence; or(b) that the finger-prints of the accused were found at the site of the offence or on anything including arms and vehicles used in connection with the commission of such offence, the Special Court shall draw adverse inference against the accused.(2) In a prosecution for an offence under sub-section(3) of section 3, if it is proved that the accused renderedspecified in section 3 were recovered from the possession of the accused and there is reason to believe that such arms or explosives or other substances of a similar nature, were used in the commission of such offence; or(b) that by the evidence of an expert the finger-prints of the accused were found at the site of the offence or on anything including arms and vehicles used in connection with the commission of such offence, the Special Court shall draw the adverse inference against the accused.(2) In a prosecution for an offence under sub-section (3) of section 3, if it is proved that the accused rendered any financial assistance to aTerrorism and DisruptiveActivities (Prevention) Act,1987ItemSl.Nospecified in Section 3 were recovered from the possession of the accused and there is reason to believe that such arms or explosives or other substances of similar nature, were used in the commission of such offence; or(b) that by the evidence of an expert the fingerprints of the accused were found at the site of the offence or on anything including arms and vehicles used in connection with the commission of such offence.(2) In a prosecution for an offence under sub-section 3 of Section 3, if it is proved that the accused rendered any financial assistance to a person accused of, or reasonably suspected of, an offence under that section, the Designated153Combatting TerrorismAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004No such provision.However, there exist separate provisions for admissibility of evidence collected through the interception of communications (Section 46).G. CONFESSIONS BEFORE POLICE OFFICERS/PROTECTION OF WITNESSESThe Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in Indiaany financial assistance to a person, having knowledge that such person is accused of, or reasonably suspected of, an offence under that section, the Special Court shall draw adverse inference against the accused.(In case of finger prints, Section 53 (1) (b), POTA, 2002 does not mention the phrase ‘by the evidence of an expert’)Similar provisions as in Law Commission Draft Bill exist in POTA, 2002 (Section 32).The Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Clause 27: (1) Notwithstanding anything in the Code or in the Indian Evidence Act, 1872, but subject to the provisions of this section, a confession made by a person before a police officer not lower in rank than aperson, having knowledge that such person is accused of, or reasonably suspected of, an offence under that section, the Special Court shall draw the adverse inference against the accused.Terrorism and Disruptive Activities (Prevention) Act,1987Court shall presume, unless the contrary is proved, that such person has committed the offence under that subsection.Section 15: (1) Nothwithstanding anything in the Code or in the Indian Evidence Act, 1872, but subject to the provisions of this section, a confession made by a person before a police officer not lower in rank than aItemCertain confessions made to police officers to be taken into consideration.1.Sl.No154Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Terrorism and Disruptive Activities (Prevention) Act,1987Superintendent of Police and recorded by such police officer either in writing or any mechanical device like cassettes, tapes or sound tracks from out of which sound or images can be reproduced, shall be admissible in the trial of such person for an offence under this Act or rules made thereunder. (2) A police officer shall, before recording any confession made by a person under sub-section (1) explain to such person in writing that he is not bound to make a confession and that if he does so, it may be used against him. Provided that where such person prefers to remain silent the police officer shall not compel or induce him to make any confession. (3) The confession shall be recorded in an atmosphere free from threat or inducementSuperintendent of Police and recorded by such police officer either in writing or on any mechanical device like cassettes, tapes or sound tracks from out of which sounds or images can be reproduced, shall be admissible in the trial of such person [or co-accused, abettor or conspirator] for an offence under this Act or rules made thereunder: [Provided that co-accused, abettor or conspirator is charged and tried in the same case together with the accused].(2) The police officer shall, before recording any confession under sub-section (1), explain to the person making it that he is not bound to make a confession and that, if he does so, it may be used as evidence against him and such policeItemSl.No155Combatting TerrorismAnnexare-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)and shall be in the same language in which the person makes it. (4) The person from whom a confession has been recorded under sub-section (1), shall be produced before the Court of a Chief Metropolitan Magistrate or the court of a Chief Judicial Magistrate along with the original statement of confession, written or recorded on mechanical or electronic device within 48 hours. (5) The Chief Metropolitan Magistrate or the Chief Judicial Magistrate, shall, scrupulously record the statement, if any, made by the person so produced and get his signature and if there is any complaint of torture, such person shall be directed to be produced for medical examination before a MedicalTerrorism and Disruptive Activities (Prevention) Act,1987officer shall not record any such confession unless upon questioning the person making it, he has reason to believe that it is being made voluntarily.ItemSl.No156Comparison of Anti-Terrorism Legislations in IndiaAnnaxura-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004Provisions similar to POTA, 2002 except that in place of mentioning a Special Court reference is made to ‘a court’.Same as Law Commission Draft Bill (Section 30).ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Officer not lower in rank than an Assistant Civil Surgeon and thereafter, he shall be sent to judicial custody.Clause 25: (1) Notwithstanding anything contained in the Code, the proceedings under this Act may, for reasons to be recorded in writing, be held in camera if the Special Court so desires.(2) A Special Court, if on an application made by a witness in any proceeding before it or by the Public Prosecutor in relation to such witness or on its own motion, is satisfied that the life of such witness is in danger, it may, for reasons to be recorded in writing, take such measures as it deems fit for keeping the identity and address of such witness secret.(3) In particular, and without prejudice to theTerrorism and Disruptive Activities (Prevention) Act,1987Section 16: (1) Nothwithstanding anything contained in the Code, the proceedings under this Act may be held in camera if the Designated Court so desires.(2) A Designated Court may, on an application made by a witness in any proceedings before it or by the Public Prosecutor in relation to such witness or on its own motion, take such measures as it deems fit for keeping the identity and address of any witness secret.(3) In particular, and without prejudice to the generality of the provisions of sub-section (2), the measures which a Designated Court may take under that subsection may include, a. the holding of the proceedings atItemThe Prevention of Terrorism Act, 2002Protection of Witnesses.1.Sl.No157Combatting TerrorismAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)generality of the provisions of sub-section (2), the measures which a Special Court may take under that sub-section may include—(a) the holding of the proceedings at a place to be decided by the Special Court; (b) the avoiding of the mention of the names and addresses of the witnesses in its orders or judgments or in any records of the case accessible to public; (c) the issuing of any directions for securing that the identity and addresses of the witnesses are not disclosed; (d) a decision that it is in the public interest to order that all or any of the proceedings pending before such a Court shall not be published in any manner. (4) Any person who contravenes any decision or direction issued under sub-Terrorism and Disruptive Activities (Prevention) Act,1987a place to be decided by the Designated Court; b. the avoiding of the mention of the names and addresses of the witnesses in it orders or judgments or in any records of the case accessible to public; c. the issuing of any directions for securing that the identity and addresses of the witnesses are not disclosed. d. that it is in the public interest to order that all or any of the proceedings pending before such a court shall not be published in any manner. (4) Any person who contravenes any direction issued under subsection (3) shall be punishable with imprisonment for a term which may extend to one year and with fine which may extend to one thousand rupees.ItemSl.No158Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004No such provision.H. GRANT OF BAIL/MODIFIED APPLICATION OF PROVISIONS OF CrPC/ARRESTSections 49 (6) to 49 (9) : Provisions similar to Law Commission Draft Bill, except for Section 49(7).49(7): Where the Public Prosecutor opposes the application of the accused to release on bail, no person accused of an offence punishable under this Act or any rule made thereunder shall be released on bail until the Court is satisfied that there are grounds for believing that he is not guiltyClause 30(6): Notwithstanding anything contained in the Code, no person accused of an offence punishable under this Act shall, if in custody, be released on bail or on his own bond unless the Public Prosecutor has been given an opportunity to oppose the application for such release.Clause 30(7): Where the Public Prosecutor opposes the application of the accused to release on bail, no person accused of an offenceThe Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in Indiasection (3) shall be punishable with imprisonment for a term which may extend to one year and with fine which may extend to one thousand rupees.Terrorism and Disruptive Activities (Prevention) Act,1987Section 20: (8) Notwithstanding anything contained in the Code, no person accused of an offence punishable under this Act or any rule made thereunder shall, if in custody, be released on bail or on his own bond unless, –a. the Public Prosecutor has been given an opportunity to oppose the application for such release, andb. where the Public Prosecutor opposes the application, the Court isItemThe Prevention of Terrorism Act, 2002Grant of Bail1.Sl.No159Combatting TerrorismAnnaxura-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002of committing such offence:Provided that after the expiry of a period of one year from the date of detention of the accused for an offence under this Act, the provisions of sub-section (6) of this section shall apply.ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)punishable under this Act or any rule made thereunder shall be released on bail until the court is satisfied that there are grounds for believing that he is not guilty of committing such offence.Clause 30(8): The limitations on granting of bail specified in sub-sections (6) and (7) are in addition to the limitations under the Code or any other law for the time being in force on granting of bail.Clause 30(9): Notwithstanding anything contained in sub-sections (6), (7) and (8), no bail shall be granted to a person accused of an offence punishable under this Act, if he is not an Indian citizen except in very exceptional circumstances and for reasons to be recorded therefor.Terrorism and Disruptive Activities (Prevention) Act,1987satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail.(9) The limitations on granting of bail specified in sub-section (8) are in addition to the limitations under the Code or any other law for the time being in force on granting of bail.ItemSl.No160Comparison of Anti-Terrorism Legislations in IndiaAnnexitre-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004No such provision.The Prevention of Terrorism Act, 2002Provisions similar as to the Law Commission Draft Bill (Section 49).ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaClause 30 provides that Section 2( c), 268, 366, 367, 371 and 438 shall have modified application. Further Clause 30(2) provides that Section 167 of the Code shall apply in relation to a case involving an offence punishable under this Act subject to the modification that, in sub-section (2), - (a) the references to “fifteen days”, “ninety days” and “sixty days”, wherever they occur, shall be construed as references to “thirty days”, “ninety days”and“ninetydays”,respectively; and (b) after the proviso, the following provisos shall be inserted namely:- “Provided further that if it is not possible to complete the investigation within the said period ofThe Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)Terrorism and Disruptive Activities (Prevention) Act,1987ItemSection 2(c), Section 21, Section 164, Section 268, Sections 366 to 371, Section 392, and Section 438 of the CrPC have modified application.Further, Section 20(4) of the Act provides that:“Section 167 of the Code shall apply in relation to a case involving an offence punishable under this Act or any rule made thereunder subject to the modifications that,a. the reference in sub-section(1) thereof to “Judicial Magistrate” shall be construed as a reference to Judicial Magistrate or Executive Magistrate or Special Executive Magistrate;b. the reference in sub-section(2) thereof to “fifteen days,” “ninety days” and “sixty days,” wherever they occur, shall beModified application of certain provisons of the Cr.PC especially Section 167.2.Sl.No161Combatting TerrorismAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)ninety days, the Special Court shall extend the said period upto one hundred and eighty days, on the report of the Public Prosecutor indicating the progress of investigation and the specific reasons for the detention of the accused beyond the said period of ninety days: Provided also that if the police officer making the investigation under this Act, requests for police custody from judicial custody of any person, for the purposes of investigation, he shall file an affidavit stating the reasons for doing so and shall also explain the delay, if any, for requesting such police custody”.Terrorism and Disruptive Activities (Prevention) Act,1987construed as references to “sixty days” {one hundred and eighty days] and 8{one hundred and eighty days], respectively; and(bb)sub-section (2-A) thereof shall be deemed to have been omitted.{(bbb) in sub-section (2), after the proviso, the following proviso shall be inserted, namely:-“Provided further that, if it is not possible to complete the investigation within the said period of one hundred and eighty days, the Designated Court shall extend the said period up to one year, on the report of the Public Prosecutor indicating the progress of the investigation and the specific reasons for the detention of the accused beyond the said period of one hundred and eighty days.”ItemSl.No162Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002Section 49(5): Nothing in section 438 of the Code shall apply in relation to any case involving the arrest of any person accused of having committed an offence punishable under this Act.Section 52: (1) Where a police officer arrests a person, he shall prepare a custody memo of the person arrested.(2) The person arrested shall be informed of his right to consult a legal practitioner as soon as he is brought to the police station.(3) Whenever any person is arrested, information of his arrest shall be immediately communicated by the police officer to a family member or in his absence to a relativeADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Clause 30(5): Nothing in Section 438 of the Code shall apply in relation to any case involving the arrest of any person on an accusation of having committed an offence punishable under this act. Clause 33: (1) Whenever any person, who being a citizen of India, is arrested, information of his arrest shall be immediately communicated by the police officer to a family member or to a relative of such person by telegram, phone or by any other means which shall be recorded by the police officer under the signature of the person arrested.(2) Where a police officer arrests a person, he shall prepare a custody memo of the person arrested.Terrorism and Disruptive Activities (Prevention) Act,1987ItemSection 20(7): Nothing in Section 438 of the Code shall apply in relation to any case involving the arrest of any person on an accusation of having committed an offence punishable under this act or any rule made thereunder.No provision.ArrestSl.No3.163Combatting TerrorismAnnexare-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002of such person by telegram, telephone or by any other means and this fact shall be recorded by the police officer under the signature of the person arrested.(4) The person arrested shall be permitted to meet thelegalpractitionerrepresenting him during the course of interrogation of the accused person:Provided that nothing in this subsection shall entitle the legal practitioner to remain present throughout the period of interrogation. (Thus, while the person arrested has to be informed of his right to consult a legal practitioner, the legal practitioner is not entitled to remain present throughoutADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)(3) During the interrogation, the legal practitioner of the person arrested shall be allowed to remain present and the person arrested shall be informed of his right as soon as he is brought to the police station.Terrorism and Disruptive Activities (Prevention) Act,1987ItemSl.No164Comparison of Anti-Terrorism Legislations in IndiaAnnexitre-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004Specific provisions under Chapter VI of the Act regarding(1) identification of a terrorist organisation (2) denotification of a terrorist organisation (3) setting up of review committees for considering issues related to denotification etc. (4) offences relating to membership of a terrorist organisation (similar to POTA, 2002) (5) offences related to support given to a terrorist organisation (similar to POTA, 2002) (6) offences related to fund raising for a terrorist organisation (similar to POTA, 2002)The Prevention of Terrorism Act, 2002Specific provisions under Chapter III of the Act covering(1) declaration of an organisation as a terrorist organisation (2) offences relating to membership of a terrorist organisation (3) offences relating to support given to a terrorist organisation and (4) offences related to fund raising for a terrorist organisation.the period of interrogation reversing the position in the Law Commission Draft Bill).No separate provisionThe Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)I. TERRORIST ORGANISATIONSTerrorism and Disruptive Activities (Prevention) Act,1987No separate provisionADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaItemTerroristOrganisation1.Sl.No165Combatting TerrorismAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004J. INTERCEPTION OF COMMUNICATIONSThe Prevention of Terrorism Act, 2002Separate chapter 5 containing provisions regarding(1) description of communication meant for interception(2) appointment of competent authority by theCentralorStateGovernment for this purpose(3) authorisation of such interception(4) review of order of interception issued by the competent authority by a review committee(5) duration of an order of interception etc.No such provisions. However, Section 46 provides the following:Admissibility of evidence collected through the interception of communications.-“Notwithstanding anything contained in the Indian Evidence Act, 1872 (1 of 1872) or any other law for the time being in force, the evidence collected through the interception of wire, electronic or oral communication under the provisions of the Indian Telegraph Act, 1885 (13 of 1885) or the Information Technology Act, 2000 (21 of 2000) or any other law for the time being in force, shall beNo separate provisionThe Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)No separate provisionADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaTerrorism and Disruptive Activities (Prevention) Act,1987ItemInterception of communication in certain cases1.Sl.No166Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004admissible as evidence against the accused in the court during the trial of a case:Provided that the contents of any wire, electronic or oral communication intercepted or evidence derived therefrom shall not be received in evidence or otherwise disclosed in any trial, hearing or other proceeding in any court unless each accused has been furnished with a copy of the order of the competent authority under the aforesaid law, under which the interception was directed, not less than ten days before trial, hearing or proceeding:Provided further that the period of ten days may be waived by the judge trying the matter, if he comes to the conclusion that it was notThe Prevention of Terrorism Act, 2002(6) description of authority competent to carryout interception(7) interception ofcommunicationinemergency situations(8) protection of information collected(9) admissibility of evidencecollectedthroughinterceptionofcommunications(10) prohibition of interception and disclosure of certain communication(11) annual report of interceptions.ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)Terrorism and Disruptive Activities (Prevention) Act,1987ItemSl.No167Combatting TerrorismAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002possible to furnish the accused with such order ten days before the trial, hearing or proceeding and that the accused shall not be prejudiced by the delay in receiving such order.”Section 37 provides for constitution of one or more Review Committees for purposes of review of an order of the Central Government rejecting an application for denotification of a ‘terrorist organisation’.Same as Law Commission Draft Bill except that provisions of Clause 14 (4) of the Draft Bill have not been included.K. REVIEW COMMITTEESThe Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)Section 60 provides that the Central and State Governmentsshallconstitute one or more review committees for the purposes of the Act.L. OBLIGATION TO FURNISH INFORMATIONClause 39 provides for setting up of review committees by the Central and State Governments to review, at the end of each quarter in a year, cases instituted by them under the Act.Clause14:(1)Notwithstanding anything contained in any other law, the officer investigating any offence under this Act, shallTerrorism and Disruptive Activities (Prevention) Act,1987No separate provisionADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaNo such provision.No separate provisionItemObligation to furnishinformationReviewCommittee1.1.Sl.No168Comparison of Anti-Terrorism Legislations in IndiaAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of Terrorism Bill, 2000 (Draft Bill as recommended by the LawCommission of India)have power to require any officer or authority of the Central Government or a State Government or a local authority or a Bank, company, or a firm or any other institution, establishment, organisation or any individual to furnish information in their possession in relation to such offence, on points or matters, as in the opinion of such officer, will be useful for, or relevant to, the purposes of this Act.(2) Failure to furnish the information called for under sub-section (1), or furnishing false information shall bepunishablewithimprisonment for a term which may extend to three years or fine, or with both.Terrorism and Disruptive Activities (Prevention) Act,1987ItemSl.No169Combatting TerrorismAnnexure-IV(1) Contd.The Unlawful Activities(Prevention) AmendmentAct, 2004The Prevention of Terrorism Act, 2002ADMINISTRATIVE REFORMS COMMISSIONComparison of Anti-terrorism Legislations in IndiaThe Prevention of TerrorismBill, 2000 (Draft Bill as recommended by the LawCommission of India)(3) Not withstanding anything contained in the Code, the offence under subsection (1) shall be tried as a summary case and the procedure prescribed in Chapter XXI of the said Code [except sub-section (2) of section 262] shall be applicable thereto. (4) Any officer in possession of any information shall furnish the same suo motu to the officer investigating an offence under this Act, if in the opinion of such officer such information will be useful to the investigating officer for the purposes of this Act.Terrorism and Disruptive Activities (Prevention) Act,1987ItemSl.No170Some Salient Features of Anti-terrorist Legislations in Other CountiriesAustraliaArrexure-IV(2)Criminal Code Act, 1995 Section 100.1 Definitions (1) In this Part:...“terrorist act” means an action or threat of action where:(a) the action falls within sub-section (2) and does not fall within subsection (3); and(b) the action is done or the threat is made with the intention of advancing a political, religious or ideological cause; and(c ) the action is done or the threat is made with the intention of:(i) coercing, or influencing by intimidation, the government of the Commonwealth or a State, Territory or foreign country, or of part of a State, Territory or foreign country; or(ii) intimidating the public or a section of the public.(2) Action falls within this subsection if it:UKTerrorism Act, 2000 Section 1:(1) In this Act “terrorism” means the use or threat of action where-(a) the action falls within subsection (2),(b) the use or threat is designed to influence the government or to intimidate the public or a section of the public, and(c) the use or threat is made for the purpose of advancing a political, religious or ideological cause.(2) Action falls within this subsection if it –(a) involves serious violence against a person,(b) involves serious damage to property,(c ) endangers a person’s life, other than that of the personcommitting the action,(d) creates a serious risk to thehealth or safety of the public or asection of the public, orUSAUS Code; Title 18; Part 1; Chapter 113B; TerrorismSection 2331 Definitions As used in this chapter—(1) the term “international terrorism” means activities that(A) involve violent acts or acts dangerous to human life that are a violation of the criminal laws of the United States or of any State, or that would be a criminal violation if committed within the jurisdiction of the United States or of any State;(B) appear to be intended(i) to intimidate or coerce a civilian population;(ii) to influence the policy of a government by intimidation or coercion; or(iii) to affect the conduct of a government by mass destruction, assassination, or kidnapping; and(C) occur primarily outside the territorial jurisdiction of the United States, or transcend national boundaries in terms of the means bySome Salient Features of Anti-terrorist Legislations in Other CountriesDefinition(s)Description1.Sl.No.171Combatting TerrorismAustraliaUKUSADescriptionSl.No.(a) causes serious harm that is physical harm to a person; or(b) causes serious damage to property; or (c ) causes a person’s death; or(d) endangers a person’s life, other than the life of the person taking the action; or(e) creates a serious risk to the health or safety of the public or a section of the public; or(f) seriously interferes with, seriously disrupts, or destroys, an electronic system including, but not limited to:(i) an information system; or(ii) a telecommunication system; or(iii) a financial system; or(iv) a system used for the delivery of essential government services; or(v) a system used for, or by, an essential public utility; or(vi) a system used for, or by, a transport system.(e) is designed seriously to interfere with or seriously to disrupt an electronic system.(3) The use or threat of action falling within subsection (2) which involves the use of firearms or explosives is terrorism whether or not subsection (1)(b) is satisfied.(4) In this section –(a) “action” includes action outside the United Kingdom,(b) a reference to any person or to property is a reference to any person, or to property, wherever situated,(c) a reference to the public includes a reference to the public of a country other than the United Kingdom, and(d) “the government” means the government of the United Kingdom, of a Part of the United Kingdom or of a country other than the United Kingdom.(5) In this Act a reference to action taken for the purposes of terrorismwhich they are accomplished, the persons they appear intended to intimidate or coerce, or the locale in which their perpetrators operate or seek asylum;(2) the term “national of the United States” has the meaning given such term in section 101(a)(22) of the Immigration and Nationality Act;(3) the term “person” means any individual or entity capable of holding a legal or beneficial interest in property;(4) the term “act of war” means any act occurring in the course of(A) declared war;(B) armed conflict, whether or not war has been declared, between two or more nations; or(C) armed conflict between military forces of any origin; and(5) the term “domestic terrorism” means activities that(A) involve acts dangerous to human life that are a violation of the criminal laws of the United States or of any State;Annexare-IV(2) Contd.Some Salient Features of Anti-terrorist Legislations in Other Countries172Some Salient Features of Anti-terrorist Legislations in Other CountiriesAustralia(3) Action falls within this subsection if it:(a) is advocacy, protest, dissent or industrial action; and(b) is not intended:(i) to cause serious harm that is physical harm to a person; or(ii) to cause a person’s death; or(iii) to endanger the life of a person, other than the person taking the action; or(iv) to create a serious risk to the health or safety of the public or a section of the public.(4) In this Division:(a) a reference to any person or property is a reference to any person or property wherever situated, within or outside Australia; and(b) a reference to the public includes a reference to the public of a country other than Australia.UKincludes a reference to action taken for the benefit of a prescribed organisation.USA(B) appear to be intended(i) to intimidate or coerce a civilian population;(ii) to influence the policy of a government by intimidation or coercion; or(iii) to affect the conduct of a government by mass destruction, assassination, or kidnapping; and(C) occur primarily within the territorial jurisdiction of the United States.DescriptionAnnexure-IV(2) Contd.Some Salient Features of Anti-terrorist Legislations in Other CountriesSl.No.173Combatting TerrorismAustraliaTerrorism Act, 2000Section 102.6 Getting Funds to or from a terrorist organization(1) A person commits an offence if:(a) the person intentionally receives funds from, or makes funds available to, an organization (whether directly or indirectly); and(b) the organization is a terrorist organization; and(c) the person knows the organization is a terrorist organization.Penalty : Imprisonment for 25 years.(2) A person commits an offence if:(a) the person intentionally receives funds from, or makes funds available to, an organization (whether directly or indirectly); and(b) the organization is a terrorist organization; and(c) the person is reckless as to whether the organization is a terrorist organization.Penalty : Imprisonment for 15 years.(3) Sub-sections (1) and (2) do not apply to the person’s receipt of funds from the organization if the person proves thatUKTerrorism Act, 2000 Terrorist Property14.-(1) In this Act “terrorist property” means-(a) money or other property which is likely to be used for the purposes or terrorism (including any resources of a proscribed organisation),(b) proceeds of the commission of acts of terrorism, and(c) proceeds of acts carried out for the purposes of terrorism. (2) In subsection (1)(a) a reference to proceeds of an act includes a reference to any property which wholly or partly, and directly or indirectly, represents the proceeds of the act (including payments or other rewards in connection with its commission), and(b) the reference to an organisation’s resources includes a reference to any money or other property which is applied or made available, or is to be applied or made available, for use by the organisation.USAUS Code; Title 18; Part 1; Chapter 113B; TerrorismSection 2332d Financial Transactions(a) Offense.— Except as provided in regulations issued by the Secretary of the Treasury, in consultation with the Secretary of State, whoever, being a United States person, knowing or having reasonable cause to know that a country is designated under section 6(j) of the Export Administration Act of 1979 (50 App. USC 2405) as a country supporting international terrorism, engages in a financial transaction with the government of that country, shall be fined under this title, imprisoned for not more than 10 years, or both.(b) Definitions.— As used in this section(1) the term “financial transaction” has the same meaning as in section 1956 (c)(4); and(2) the term “United States person” means any(A) United States citizen or national;(B) permanent resident alien;DescriptionArrexure-IV(2) Cortd.Some Salient Features of Anti-terrorist Legislations in Other CountriesFinancing of terrorism2.Sl.No.174Some Salient Features of Anti-terrorist Legislations in Other CountiriesAustraliahe or she received the funds solely for the purpose of the provision of:(a) legal representation for a person in proceedings relating to this Division; or(b) assistance to the organization for it to comply with a law of the Commonwealth or a State or Territory.Note: A defendant bears a legal burden in relation to the matter in subsection (3) (see section 13.4).103.1 Financing Terrorism(1) A person commits an offence if:(a) the person provides or collects funds; and(b) the person is reckless as to whether the funds will be used to facilitate or engage in a terrorist act.Penalty: Imprisonment for life.Note: Intention is the fault element for the conduct described in paragraph (1) (a). See subsection 5.6(1).(2) A person commits an offence under subsection (1) even if:(a) a terrorist act does not occur; or(b) the funds will not be used toUKFund raising15.-(1) A person commits an offence if he –(a) invites another to provide money or other property, and(b) intends that it should be used, or has reasonable cause to suspect that it may be used, for the purposes of terrorism.(2) A person commits an offence if he-(a) receives money or other property, and(b) intends that it should be used, or has reasonable cause to suspect that it may be used, for the purposes of terrorism.(3) A person commits an offence if he-(a) provides money or other property, and(b) knows or has reasonable cause to suspect that it will or may be used for the purposes of terrorism.(4) In this section a reference to the provision of money or other property is a reference to its being given, lent or otherwise made available, whether or not for consideration.Use and possession16.-(1) – A personUSA(C) juridical person organized under the laws of the United States; or(D) any person in the United States.Section 2339A. Providing material support to terrorists (a) Offense.— Whoever provides material support or resources or conceals or disguises the nature, location, source, or ownership of material support or resources, knowing or intending that they are to be used in preparation for, or in carrying out, a violation of section 32, 37, 81, 175, 229, 351, 831, 842 (m) or (n), 844 (f) or (i), 930 (c), 956, 1114, 1116, 1203, 1361, 1362, 1363, 1366, 1751, 1992, 1993, 2155, 2156, 2280, 2281, 2332, 2332a, 2332b, 2332f, or 2340A of this title, section 236 of the Atomic Energy Act of 1954 (42 USC 2284), section 46502 or 60123 (b) of title 49, or any offense listed in section 2332b (g)(5)(B) (except for sectionsDescriptionAnnexure-IV(2) Contd.Some Salient Features of Anti-terrorist Legislations in Other CountriesSl.No.175Combatting TerrorismAustraliafacilitate or engage in a specific terrorist act; or(c) the funds will be used to facilitate or engage in more than one terrorist act.(3) Section 15.4 (extended geographical jurisdiction – categoryD) applies to an offence against subsection (1).UKUSAcommits an offence if he uses money or other property for the purposes of terrorism.(2) A person commits an offence if he-(a) possesses money or other property, and(b) intends that it should be used, or has reasonable cause to suspect that it may be used, for the purposes of terrorism.Funding Arrangements17. A person commits an offence if-(a) he enters into or becomes concerned in an arrangement as a result of which money or other property is made available or is to be made available to another, and(b) he knows or has reasonable cause to suspect that it will or may be used for the purposes of terrorism.Money Laundering18.-(1) A person commits an offence if he enters into or becomes concerned in an arrangement which facilitates the retention or control by or on behalf of another person of terrorist property-(a) by concealment,(b) by removal from the jurisdiction,2339A and 2339B) or in preparation for, or in carrying out, the concealment of an escape from the commission of any such violation, or attempts or conspires to do such an act, shall be fined under this title, imprisoned not more than 15 years, or both, and, if the death of any person results, shall be imprisoned for any term of years or for life. A violation of this section may be prosecuted in any Federal judicial district in which the underlying offense was committed, or in any other Federal judicial district as provided by law.(b) Definitions.— As used in this section(1) the term “material support or resources” means any property, tangible or intangible, or service, including currency or monetary instruments or financial securities, financial services, lodging, training, expert advice or assistance, safehouses, false documentation or identification,DescriptionArrexure-IV(2) Cortd.Some Salient Features of Anti-terrorist Legislations in Other CountriesSl.No.176Some Salient Features of Anti-terrorist Legislations in Other CountiriesAustraliaUK(c ) by transfer to nominees, or(d) in any other way.(2) It is a defence for a person charged with an offence under sub-section(1) to prove that he did not know and had no reasonable cause to suspect that the arrangement related to terrorist property. 22. A person guilty of an offence under any of sections 15 to 18 shall be liable-(a) on conviction on indictment, to imprisonment for a term not exceeding 14 years, to a fine or to both, or(b) on summary conviction, to imprisonment for a term not exceeding six months, to a fine not exceeding the statutory maximum or to both.USAcommunications equipment, facilities, weapons, lethal substances, explosives, personnel (1 or more individuals who may be or include oneself), and transportation, except medicine or religious materials;(2) the term “training” means instruction or teaching designed to impart a specific skill, as opposed to general knowledge; and(3) the term “expert advice or assistance” means advice or assistance derived from scientific, technical or other specialized knowledge.Section 2339B. Providing material support or resources to designated foreign terrorist organizations(a) Prohibited Activities.(1) Unlawful conduct.Whoever knowingly provides material support or resources to a foreign terrorist organization, or attempts or conspires to do so, shall be fined under this title or imprisoned not more than 15 years, orDescriptionArrexure-IV(2) Cortd.Some Salient Features of Anti-terrorist Legislations in Other CountriesSl.No.177Combatting TerrorismAustraliaUKUSAboth, and, if the death of any person results, shall be imprisoned for any term of years or for life. To violate this paragraph, a person must have knowledge that the organization is a designated terrorist organization [as defined in subsection (g)(6)], that the organization has engaged or engages in terrorist activity (as defined in section 212(a)(3)(B) of the Immigration and Nationality Act), or that the organization has engaged or engages in terrorism (as defined in section 140(d)(2) of the Foreign Relations Authorization Act, Fiscal Years 1988 and 1989).(2) Financial Institutions. Except as authorized by the Secretary, any financial institution that becomes aware that it has possession of, or control over, any funds in which a foreign terrorist organization, or its agent, has an interest, shall(A) retain possession of, or maintain control over, such funds; andDescriptionAnnsxuts-IV(2) Contd.Some Salient Features of Anti-terrorist Legislations in Other CountriesSl.No.178Some Salient Features of Anti-terrorist Legislations in Other CountiriesAustraliaUKUSA(B) report to the Secretary the existence of such funds in accordance with regulations issued by the Secretary.(b) Civil Penalty.— Any financial institution that knowingly fails to comply with subsection (a)(2) shall be subject to a civil penalty in an amount that is the greater of(A) $50,000 per violation; or(B) twice the amount of which the financial institution was required under subsection (a)(2) to retain possession or control.(c) Injunction.— Whenever it appears to the Secretary or the Attorney General that any person is engaged in, or is about to engage in, any act that constitutes, or would constitute, a violation of this section, the Attorney General may initiate civil action in a district court of the United States to enjoin such violation.(d) Extraterritorial Jurisdiction-(1) In general.— There is jurisdiction over an offense under sub-section (a) if—DescriptionAnnaxura-IV(2) Contd.Some Salient Features of Anti-terrorist Legislations in Other CountriesSl.No.179Combatting TerrorismAustraliaUKUSA(A) an offender is a national of the United States (as defined in section 101(a)(22) of the Immigration and Nationality Act {8 U.S.C. 1101 (a)(22)] or an alien lawfully admitted for permanent residence in the United States (as defined in section 101(a)(20) of the Immigration and Nationality Act {8 U.S.C. 1101 (a)(20)];(B) an offender is a stateless person whose habitual residence is in the United States;(C) after the conduct required for the offense occurs an offender is brought into or found in the United States, even if the conduct required for the offense occurs outside the United States;(D) the offense occurs in whole or in part within the United States;(E) the offense occurs in or affects interstate or foreign commerce; or(F) an offender aids or abets anyDescriptionAnnexure-IV(2) Contd.Some Salient Features of Anti-terrorist Legislations in Other CountriesSl.No.180Some Salient Features of Anti-terrorist Legislations in Other CountiriesAustraliaUKUSAperson over whom jurisdiction exists under this paragraph in committing an offense under subsection (a) or conspires with any person over whom jurisdiction exists under this paragraph to commit an offense under subsection (a).(2)Extraterritorialjurisdiction.—There is extraterritorial Federal jurisdiction over an offense under this section.(e) Investigations.—(1) In general.— The Attorney General shall conduct any investigation of a possible violation of this section, or of any license, order, or regulation issued pursuant to this section.(2) Coordination with the department of the treasury. The Attorney General shall work in coordination with the Secretary in investigations relating to—(A) the compliance or noncompliance by a financial institution with theDescriptionAnnexitre-IV(2) Contd.Some Salient Features of Anti-terrorist Legislations in Other CountriesSl.No.181Combatting TerrorismAustraliaUKUSArequirements of subsection (a)(2); and(B) civil penaltyproceedings authorizedunder subsection (b). (3) Referral.— Any evidence of a criminal violation of this section arising in the course of an investigation by the Secretary or any other Federal agency shall be referred immediately to the Attorney General for further investigation. The Attorney General shall timely notify the Secretary of any action taken on referrals from the Secretary, and may refer investigations to the Secretary for remedial licensing or civil penalty action....(g) Definitions.— As used in this section(1) the term “classifiedinformation” has theDescriptionAnnsxuts-IV(2) Contd.Some Salient Features of Anti-terrorist Legislations in Other CountriesSl.No.182Some Salient Features of Anti-terrorist Legislations in Other CountiriesAustraliaUKUSAmeaning given that term in section 1(a) of the Classified Information Procedures Act (18 USC App.);(2) the term “financial institution” has the same meaning as in section 5312 (a)(2) of title 31, United States Code;(3) the term “funds” includes coin or currency of the United States or any other country, traveler’s checks, personal checks, bank checks, money orders, stocks, bonds, debentures, drafts, letters of credit, any other negotiable instrument, and any electronic representation of any of the foregoing;(4) the term “material support or resources” has the same meaning given that term in section 2339A (including the definitions of “training” and “expert advice or assistance” in that section);(5) the term “Secretary” means the Secretary of the Treasury; andDescriptionAnnexare-IV(2) Contd.Some Salient Features of Anti-terrorist Legislations in Other CountriesSl.No.183Combatting TerrorismAustraliaUKUSA(6) the term “terrorist organization” means an organization designated as a terrorist organization under section 219 of the Immigration and Nationality Act.DescriptionArrexure-IV(2) Cortd.Some Salient Features of Anti-terrorist Legislations in Other CountriesSl.No.184List of Reports Submitted by the Second Administrative Reforms Commission upto May 20081. First Report:Right to Information: Master Key to Good Governance2. Second Report:Unlocking Human Capital: Entitlements and Governance – a case study3. Third Report:Crisis Management: From Despair to Hope4. Fourth Report:Ethics in Governance5. Fifth Report:Public Order – Justice for All . . . Peace for All6. Sixth Report:Local Governance – An inspiring journey into the future7. Seventh Report:Capacity Building for Conflict Resolution – Friction to Fusion185Second Administrative Reforms CommissionGovernment of India2nd Floor, Vigyan Bhawan Annexe, Maulana Azad Road, New Delhi 110 011 e-mail : arcommission@nic.in website : REPORT: Social Capital – A Shared DestinySECOND ADMINISTRATIVE REFORMS COMMISSIONSOCIAL CAPITAL- A Shared DestinyAUGUST 2008GOVERNMENT OF INDIASECOND ADMINISTRATIVE REFORMS COMMISSIONNINTH REPORTSOCIAL CAPITAL– A Shared DestinyAUGUST 2008PREFACE“A government builds its prestige upon the apparently voluntary association of the governed.”– Mahatma Gandhi“Government control gives rise to fraud, suppression of truth, intensification of the black market and artificial scarcity. Above all, it unmans the people and deprives them of initiative; it undoes the teaching of self-help.”– Mahatma GandhiRobert Putnam, one of the pioneers in the use of the term “social capital”, has defined it thus:“Whereas physical capital refers to physical objects and human capital refers to the properties of individuals, social capital refers to connections among individuals – social networks and the norms of reciprocity and trustworthiness that arise from them. In that sense social capital is closely related to what some have called “civic virtue”. The difference is that “social capital” calls attention to the fact that civic virtue is most powerful when embedded in a sense network of reciprocal social relations. A society of many virtuous but isolated individuals is not necessarily rich in social capital.”– Putnam 2000“Social capital is not just the sum of the institutions which underpin a society – it is the glue that holds them together.”– (The World Bank 1999)iIndia ndi as a rich hi tor and trad ti n of both volu tary a tio and philant ro y aswe lfa e s of Profess onal B die and coopera ives f rm d to pr mot the s cia and eco omic we the o its mem ers. hile ma y of hese tradit onal institu ions dec ined nder col nial ule e of Indepen ence str ggl aw a re iv l of int re t in hese B dies nde the s rong l inf en fore Gan hij wh as a lif long adv ca e of volu tary a tio and mall govern ent, much b this b c me a par digm esp us d by le ding econo is s i theWe t.me tI the I dian con ext th key institu ions tha c n be sa d to contr bu e t the develofare of s cial ca ital ange from rass oots evel comm nity ased initia ives like Resi ents We ons, Associa ion and Self Help Gr ups and Coopera ivs of va ious yp s to Volu tary Organisat ical Chari able Soci tie and T us s as we l as Self-Regul ting Profess onal B dies su h a the Me t of Co nc l of I dia Bar Co ncil et . A f r a the corp rate s ct r is conce ned the alig me lity bus ness opera ions with s cial va ues, hi h i the es en e of Corp rate S cial Responsib omic ( SR , s a the ea t o its ab li y to contr bu e to s cial develo ment alon side eco cie develop en . It akes into ac oun the int re t of stakeho de s i the comp ny’s bus ness pol d by and act ons. Corp rate contrib ti n to soc ety, enviro men and bus ness when g id nta enligh ened self-int rest imp oves qu li y of lif for all CSR fo us s o the so ial, environm ieve and fina cial su ce s of a co p ny the so-c lled t iple b ttom l ne – wit th a m to acess. s cial develo ment hile achi ving bus ness sucd’ –ive the mil io s of In ians l ving elo the po erty l ne the ‘b tt m o the pyr m a ly “the r cent UNDP initi tive foc si g on comp nies tha can pr vide ser ic s t the nness 4 bi lion p opl who su vi e on a d l ar a day a d i the pro ess, also c eat new bus port opportun tie for thems lv s s of reat impor an e in In ia’s fight ag inst pove ty . The R gie ent tled ‘Cre ting alu for all: strat gie for oing bus ness wit the oor’ also ffers strat ld’s and ool for comp ni s to e pand b yond tradit onal bus ness prac ice and ri g i the wo po r as par ne s in g owt and w alth creati n.ion,The R port conc udes tha “The poor h ve a la gely unt pped pote tia for consumpfor produc ion, innova ion and entreprene rial acti ity a d it ffers signiicant ins ght lin coun ries like ndia here approxima ely 2 % o the popul ti n is elo the po erty the an the gover me t is t ying ha d to pr mote incl sive g ow h in rd r to ring them int mainstre eThe R port out ine five strat gies that pr vate busin sses have success ully us d to oves t obst cles hile oing bus ness wit the oor. These in lude ada ting pro uct and ser ic nts; the ee s o the oor; inve ti g in infrastru tu e or tra ni g to r move m rket constra roft lever gin the stre gt s o the oor; wo king with simi arly m nded busin sse and nointa organisat ons and eng gi g in p licy dialo ues. These strat gies acknow edg the ne d tthe inh rent stre gt s o the oor, heir entrepreneu sh p as we l as heir tradit onal s illai As * A pe the re ea e o the Gover me t of I dia, Po erty Est mat for 20 4-05 (rel as d in arch 2 07), 7.5% popul ti n is elow po erty li e o URP (Un form R call Pe iod and 1. % o MRP ( ixed R call Pe iod) basis.social networks, to help them stand on their own feet. In a sense this strategy seeks to leverage the social capital available in Indian society, particularly among these underprivileged groups, to lift them out of poverty.In the corporate sector the concept of a shared destiny is increasingly used with the objective of bringing together all stakeholders and to move beyond the traditional management philosophy of strategy-structure-systems to purpose-process-people. In fact, the concept of a ‘a shared destiny’ must be infused in the society as a whole to generate a wave of social capital which can transform India not only into an economic powerhouse but also into an integrated, peaceful, caring and giving society.The diverse strands that form the social capital of India underpin the material wealth and progress of the nation and contribute to the economic and social well being of its people in a broader, more real, sense. There is also some evidence in academic research which indicates that– within India, a State’s endowment of social capital does affect the ability of that State to reduce poverty and successfully implement development programmes.In this Report on Social Capital, the Commission has explored the evolution and growth of institutions that lie at the base of social capital in India; with particular reference to Societies, Trusts/ Charitable Institutions, Waqfs and Endowments, Voluntary Organisations at the grass roots levels such as Self-Help Groups, Self-Regulatory Authorities and Co-operatives. The Commission has examined these institutions in the context of their present legal underpinnings, their institutional designs, their interface with government and with other stakeholders; their respective roles and functions, their strengths and weaknesses and the reform agenda that should be charted out for these institutions. The recommendations made by the Commission spell out the changes required in the legal framework, as well as in the administrative structure and government policies to bringabout independence, integrity, transparency, credibility and dynamism to these institutions.New Delhi(M. Veerappa Moily)August 08, 2008ChairmanGovernment of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reforms and Public GrievancesResolutionNew Delhi, the 31 August, 2005No. K-11022/9/2004-RC. — The President is pleased to set up a Commission of Inquiry to be called the Second Administrative Reforms Commission (ARC) to prepare a detailed blueprint for revamping the public administration system.2.The Commission will consist of the following :(i)Shri Veerappa Moily - Chairperson(ii)Shri V. Ramachandran - Member(iii)Dr. A.P. Mukherjee - Member(iv)Dr. A.H. Kalro - Member(v)Dr. Jayaprakash Narayan - Member*(vi)Smt. Vineeta Rai - Member-Secretary3.The Commission will suggest measures to achieve a proactive, responsive,accountable, sustainable and efficient administration for the country at all levels of the government.The Commission will, inter alia, consider the following :(i)Organisational structure of the Government of India(ii)Ethics in governance(iii)Refurbishing of Personnel Administration(iv)Strengthening of Financial Management Systems(v)Steps to ensure effective administration at the State level(vi)Steps to ensure effective District Administration(vii)Local Self-Government/Panchayati Raj Institutions(viii) Social Capital, Trust and Participative public service delivery(ix)Citizen-centric administration(x)Promoting e-governance(xi)Issues of Federal Polity(xii)Crisis Management(xiii) Public OrderivSome ov ome of Athe is ue AtoAbeAe amine Aund r Aea hAh adAar Ag ven inAth AT rmsAofARe erenceAa ta h d Aas AaAS he uleA oAthisAResolu io .ra ionA 4.AThe ACom iss onAmayA xclu eAf omAitsA urv ewAtheAd tailedAexam na ionAofAadminis uchAasA ofAD fence,ARa lways,AE ternal A ffairs, AS cur tyAandAIntell ge ce, A s AalsoAs bjec sA AotherA Centr -State Arel tions, Aj dicial A efor sAetc Awh ch AareA lread AbeingAe am ned Ab s AintoA od es. AThe ACom issio Awill, Ah we er, A e A ree A o At ke Athe Ap ob ems Ao Athese A ecto of any cc unt Ain Arecom ending Are-organ sa ion of Athe Ama hi ery of Athe AGov rn en AorofAitsA erviceAage n ie .AStateA 5. AThe ACom issi nAwi lAg ve AdueAconsid ra ion to At eAn ed AforAconsu tati nAw thAth Governm nt .thAth A 6.AThe ACom issi nAwill dev seA tsAownApro eduresA(in lud ng AforAconsul atio sAw ppointA State AGov rn ent as mayAbeAcon idered Aappr pr ate by Athe ACommi sio ),A nd AmayA ntAtheA comm ttees, Aconsultants/a vi ers Ato ass st it. AThe ACom iss onAm y Ata eAintoA cco eAsame e isting Am ter al AandA eportsAav il ble onAtheA ubj ct AandAc nsider Ab ildi gAu onAt rath rAthan Aatt mp ingAto A ddr ssA ll Athe is ues AabA in ti .mat onA 7.ATheAMin str esAandADepa tm nts ofAtheAGov rn entAo AInd aAwill A urni hAsuchAinfo on.ATheA and Ado ume tsAandA rovid AotherAass st nce as mayAbeAr qu red by AtheAComm ss exten A Gov rn entAo AIndia trus sAt atAth AStateAGove nme tsA ndAall othersAco cern dAwill their A ullestAcoop rat on AandAass st nce to AtheACommis io .v ncesA 8.AThe ACom issi nAwill A urn sh Aits Are or (s) toAtheAM ni tryAofAPer onnel, PublicAGri & APe sions,AGov rn entAof India, wit inAo e A ear of Aits Aconstitution. S. -(P.I.ASuv rathan)Add tionalASe re aryAtoAGov rn entAo fAIn iar,A2007 *Dr.AJaya rakashA a ayan A–A ember,Ar sign dAwit Aeffe t Af omA1stASep embe(Res lut on ANo.AK.11022/26/ 07-AR Adat dA17th A 2007).ugust,Government of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reforms and Public GrievancesRESOLUTIONNew Delhi, the 24 July, 2006No. K-11022/9/2004-RC (Vol.II) – The President is pleased to extend the term of the second Administrative Reforms Commission by one year upto 31.8.2007 for submission of its Reports to the Government.Shc-(Rahul Sarin)Additional Secretary to the Government of IndiaGovernment of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reforms and Public GrievancesRESOLUTIONNew Delhi, the 17 July, 2007No.K-11022/26/2007-AR – The President is pleased to extend the term of the second Administrative Reforms Commission (ARC) by seven months upto 31.3.2008 for submission of its Reports to the Government.Shc-(Shashi Kant Sharma)Additional Secretary to the Government of IndiaviiiGovernme tA fAIndiaMinist yA fAPersonne ,APubl cAGrievanc s &APensionsDepartme tA fAAdministrati eARefor sAa dAPubl cAGrievancesRESOLUTIONN w ADelh ,At e A 4AFebruar ,A2008dA No.K-11022/26/2007- R – AheAPreside t A s Apleas dA oAexte dAt eAte m A fAt eAseconA Administrati eARefor s ACommissi nA(AR )A y As x Amont sAup o A30.9.20 8Af rAsubmissi f Ai sARepor sA oAt e AGovernment./(D(Dhr vAVij iASingh)Addition l ASecreta yA oAt eAGovernme tA fAIndiavORGANISATIONSecond Administrative Reforms Commission1.Shri M. Veerappa Moily, Chairman2.Shri V. Ramachandran, Member3.Dr. A.P. Mukherjee, Member4.Dr. A.H. Kalro, Member5.Smt. Vineeta Rai, Member-SecretaryOfficers of the Commission1.Shri A.B. Prasad, Joint Secretary2.Shri P.S. Kharola, Joint Secretary3.Shri R.K. Singh, PS to Chairman4.Smt. Ruchika Choudhary Govil, Director*5.Shri Sanjeev Kumar, Director6.Shri Shahi Sanjay Kumar, Deputy Secretary* This post of Director was temporarily transferred from the Department of Personnel & Training for a period 04.02.2008 to 08.10.2008.ixCONTENTSChapter 1 Introduction1Chapter 2 Evolution and Growth72.2 Social Action Groups and Self-Help Movement72.3 Corporate Foundations82.4. Socio-Political Movement and Growth of Constitutionalism8and Equity2.5 Cooperatives92.6 Existing Laws92.7 Social Capital Organizations and India’s Constitution102.8 Government Policy112.9 Civil Society as a Major Economic Force132.10 Voluntary Sector – Its Classification142.11 Legal Standing of Social Capital / Civil Society15Institutions in other CountriesChapter 3 Societies, Trusts/Charitable Institutions,17Waqfs and Endowments3.1 Legal and Institutional Framework173.2 Revenues of the Third Sector433.3 Charitable Organisations and Tax Laws503.4 Regulation of Foreign Contribution56Chapter 4 Third Sector Organisations at the Local Level –68Self-Help Groups4.1 General684.2 Financial Inclusion – Current Status in the Country684.3 Evolution of the SHG Movement in India724.4 International Experience864.5 Impact on Rural Life884.6 Issues of SHG Movement91xiChapter 5 Self-Regulatory Authorities1135.1 Introduction1135.2 Separating Professional Education from114Self-Regulatory Authorities5.3 Professional Updation1215.4 Ethical Education and Training1225.5 Enrolment in the Profession1225.6 Renewal/Revalidation of Registration1235.7 Disciplinary Mechanism1245.8 Compostion1275.9 Accountability and Parliamentary Oversight131Chapter 6 Cooperatives1336.1 Introduction1336.2 History of Cooperatives in India1336.3 Existing Weaknesses1356.4 Constitutional Context1386.5 Legislative Framework1436.6 Producer Companies1486.7 Cooperative Credit and Banking Institutions153Chapter 7 Towards an Integrated Social Policy160Conclusion164Summary of Recommendations166LIST OF TABLESTable No.Title3.1Comparison between Trust, Society and Section 25 Company273.2Year-wise details of Foreign Contribution received65by Organisations (2001-05)x4.1Number of Farmer Households (HH) in Lakhs not accessing69Credit from Formal Sources4.2Proportion of Non-Indebted Farmer Households (State-wise)704.3Proportion of Indebted Farmer Households714.4SHG-Bank Linkage Programme - Regional Spread of73Physical and Financial Progress as on 31 March 20074.5Year-wise details of SHGs Financed754.6Trends and Progress of SHG-Bank Linkage Programme in India764.7RMK Performance - A Bird’s Eye View774.8Assistance under Micro-Credit by SIDBI794.9Status Report of NHGs and Thrift & Credit in Kerala844.10Loans under Linkage Banking Programme of NABARD in Kerala 844.11Expanding SHG Movement to Credit Deficient Areas of the92Country4.12Estimates of Migration in Delhi based on Birth and Death95Rates and total increase in Population4.13Composition of Migrants in Delhi (2006-07)964.14Quantum of Credit Made Available to SHGs985.1Disciplinary Committee Meetings held, Cases Disposed of and125the Nature of Orders from 1st April, 2006 to 31st March, 2007 (Bar Council of India)5.2Structure and Composition of the Regulatory Authorities127LIST OF FIGURESFigure No.Title4.1Model I : Bank-SHG Link with Active Support of SHPI974.2Model II : Bank-SHG Direct Link984.3Model III : Bank-SHPI-SHG Link99xiii4.4Model IV : Bank-Federation-SHG Link99LIST OF BOXES Box No.Title3.1Definition of CSR464.1SEWA’s Eleven Questions724.2Some Features of the Self-Help Group Movement in the75Country (Year 2005-06)4.3SHG-Bank Linkage in Andhra Pradesh804.4SHG and Empowerment of Women904.5Role of SHPI974.6Rate of Interest and Recovery Practices of MFIs1055.1Professional Revalidation in USA and UK123LIST OF ANNEXURES Annexure No. TitleAnnexure I(1) Speech of Shri M Veerappa Moily, Chairman, ARC at the178National Colloquium on Social Capital, Trust and Participative public service deliveryAnnexure I(2) List of Participants in the National Colloquium on Social183Capital, Trust and Participative public service deliveryAnnexure I(3) Recommendations made by Working Groups at the186National Colloquium on Social Capital, Trust and Participative public service deliveryAnnexure I(4) Questionnaire on Social Capital, Trust and201Participative public service deliveryAnnexure III(1) Laws for Societies, Trusts, Waqfs and other Endowments212Annexure III(2) Comparative Analysis between various State220Legislations on SocietiesxiLIS AO AABBREVIATION SAbbreviatio AFul AFormADAAre ADevelopmen ASocietyAICTAAl AIndi ACounci Afo ATechnica AEducationAPAAbov APovert ALineARAAdministrativ AReform ACommissionASSEFAAssociatio Ao ASarv ASev AFarmsASSOCHA AAssociate AChamber Ao ACommerc Aan AIndustr Ai AIndiaBCABa ACounci Ao AIndiaBPABelo APovert ALineBRABan ARakya AIndonesiACAChartere AAccountantCAACharitie AAi AFoundationCAPARACounci Afo AAdvancemen Ao APeople’ AActio Aan ARura ATechnologyCBACommunit ABase AOrganisationCDACommunit ADevelopmen ASocietyCACohesio AFoundationCIAConfederatio Ao AIndia AIndustryCOATh ACounci Ao AArchitectureCPACivi AProcedur ACodeCPAContinuin AProfessiona AEducatioACRISIACredi ARatin AInformatio AService Ao AIndi ALimitedCSACorporat ASocia AResponsibilityCSWACentra ASocia AWelfar ABoardDANIDADanis AInternationa ADevelopmen AAgencyDCCBADistric ACentra ACooperativ ABankxvDFIDDepartment for International Development (of the UK)DRDADistrict Rural Development AgencyECSElectronic Clearing ServicesFCRAForeign Contribution Regulation ActFICCIFederation of Indian Chambers of Commerce and IndustryFMSFFinancial Management Service FoundationFWWBFriends of Women’s World BankingGMCGeneral Medical Council (of the UK)GOIGovernment of IndiaGTZDeutsche Gesellschaft fur Technische ZusammenarbeiHDFCHousing Development Finance CorporationHUDCOHousing and Urban Development CorporationICAIInstitute of Chartered Accountants of IndiaICSIInstitute of Company Secretaries of IndiaICWAIInstitute of Cost and Works Accountants of IndiaIFADInternational Fund for Agricultural DevelopmentIRAHEIndependent Regulatory Authority for Higher EducationIRMAInstitute of Rural Management, AnandITInformation TechnologyITCIndia Tobacco CompanyJCSJan Chetna SansthanKVICKhadi and Village Industries CommissionLPGLearning Guarantee ProgrammeMALARMahalir Association for Literacy, Awareness and RightsMCIMedical Council of IndiaMFDEFMicro Finance Development and Equity FundxvMFIsMicro Finance InstitutionsMOAMemorandum of AssociationMOUMemorandum of UnderstandingNABARDNational Bank for Agriculture and Rural DevelopmentNACNational Advisory CouncilNBFCNon-Banking Finance CompanyNBJKNav Bharat Jagiriti KendraNBTANational Board of Trial Advocacy (of the USA)NGONon-Governmental OrganisationNHGsNeighbourhood GroupsNIPCCDNational Institute of Public Cooperation and Child DevelopmentNMFSPNational Micro Finance Support ProgrammeNORADNorwegian Agency for Development CooperationNPANon-Performing AssetsNPONon-Profit OrganisationNREGSNational Rural Employment Guarantee SchemeNSSONational Sample Survey OrganisationPACSPrimary Agriculture Credit SocietiesPRADANProfessional Assistance for Development ActionPRFPortfolio Risk FundPRIAParticipatory Research in IndiaPTRPublic Trusts RegisterRMKRashtriya Mahila KoshRRBRegional Rural BankRTGSReal Time Gross Settlement SystemRTIRight to Informationxviii veBanksA CBs AState AC operaled Aastes SCs Schedual APvert SE P AS ciety Afor AE im natio Aof ARurssocation SEWA ASel AEmploy d AWomen’s AAc ro Aedit FMC ASIDBI A oun ation for AMiar AojanaA SG Y AASwar a AJa anti AGram SwarojHelpGroup SHG Self-nstition SHPI Self-Help Promoting AIion AAncy SID AASwedish AInt rnational AD velopment AC operatk AoAIndia SI BI AASmall A ndustries AD velo me t ABanshiSanga KS ASwa am AKriEnteprise SME Small A nd AMedium Ae ASerces SRFS AS ngham tra ARur l AFinancAStucture STCCS AA hort- erm ARural AC operat ve ACreditled Aribes STs Scheduent AAency UDA AS ate AUrban AD velopmAProgamme TANWA Tamil ad AWomen Ain AA riculturet APrject TNWDP Tamilna u AWomen’s AD velopmeansation TSOs AThrd ASector AOrged Aingdom UK AUnitofAmerica SA AUni ed States Agansatio VO Voluntary AOrWTO AW rld ATrade AOrganisationxviiiINTRODUCTION11.1 Collective efforts and cooperative action have been a part of human behaviour right from the early days of civilisation. Gradually such collective action led to formation of small habitations, communities, villages and thereafter large cities and metropolises. They in turn, created complex social groups and governmental organisations. In course of time, government and society became too big and formalized and somewhat distant from the common man. Thus evolved a need for mutual networking and interaction for solution of issues.1.2 The term ‘Social Capital’ was first used by L.J. Hanifan, a State Supervisor for Rural Schools in Virginia in 1916. He used it in the context of the community’s involvement in the successful running of schools.1 As a concept, it received entry in social science literature in the 1980s. Soon it assumed an economic connotation and came to be accepted as a factor of production in the development theory. It refers to those institutions, relationships, and norms that shape the quality and quantity of a society’s interaction. It consists of trust, mutual understanding, shared values and behaviour that bind together the members of a community and make cooperative action possible. The basic premise is that such interaction enables people to build communities, to commit themselves to each other, and to knit the social fabric. A sense of belonging and the concrete experience of social networking (and the relationships of trust and tolerance that evolve) can bring great benefits to people.Social capital now stands accepted as a necessary element of development theory. In many cases it provides a cogent explanation for the failure of economic policies. The notion that a set of macro-economic policies supported by appropriate institutions would necessarily transform an economy often does not work in actual practice. Policies and institutions operate in an ensemble which is strongly conditioned by sociological parameters. Sociocultural elements influence political and economic factors to behave in ways that considerably change the pace of the economic processes. Social Capital and Trust are elements of cohesion in society and entrepreneurship and are vital for setting in processes that expand social, economic and political opportunities. They lead to formation of specialised groups and organisations generally known as Social Capital Institutions or the third Sector.1Robert D Putnam – “Bowling Alone”12o i lACapi alA–AA1.3 Theoretically, social capital organisations are supposed to play four crucial roles in society:2(i)The Service Role:- It encourages people to cope with a public problem atthe primary level. People tend to let non-profit organisations lead the way in responding to critical public needs. The non-profit sector thus functions as a first line of defense, a flexible mechanism through which people concerned about a social or economic problem can begin to respond, without having to convince a majority of their fellow citizens that the problem deserves a more general, government response. Non-profit organisations are also available to sub-groups of the population who desire a range of public goods that exceeds what the government or society is willing to support. Non-profit organisations have a readymade role in planning hospitals, universities, social service agencies and civil organisations.(ii) The Value Guardian Role:- The role of the non-profit sector is to function as a “value guardian” in society, as exemplar and as embodiment of a fundamental value emphasizing individual initiative for the public good just as private economic enterprises serve as vehicles for promoting individual initiative for the private good. In the process, non-profit bodies foster pluralism, diversity and freedom. These values go much beyond purposes such as improving health or enhancing school enrolment. They are important as expressions of what has come to be regarded as a central feature of modern society – a sphere of private action through which individuals can take initiative, express their individuality, and exercise freedom of expression and action.(iii) The Advocacy/Social Safety-Valve Role:- Non-profit organisations also play a vital role in mobilizing public attention to societal problems and needs. They are the principal vehicle through which communities can give voice to their concerns. In fact, most of the social movements that have animated western society over the past century – the movement for women’s suffrage, protection of civil rights and the initiative to protect environment, all took shape within the non-profit sector. By highlighting social and political concerns, by giving voice to under-represented people and by integrating these perspectives into social and political life, these organisations function as a kind of safety-valve that helps to preserve democracy and maintain a degree of peace in the contemporary polity and society.(iv) The Community Building Role:- Finally, non-profit organisations play a vital role in creating and sustaining social cohesiveness through bonds of trust2y Johns AHopkinsAIN2NON-PROFIT A RGANIZATI NS:AAMERI A’SI IBLEAS CT R A-ALest rAM.AS lam n,ACe terAfor Civil ASo ietyA tudies,Universitynd reciprocity that societ Aa dAaAmark tA and re ip ocityAt atA e mAtoAbeApi otalAfo AaA e ocrati f economyAtAfu ctio Aef ctively Avernme tA erf rmance. 1.4 The eAare severa AwaysAi Awh chAsoci lAcapitalA an AimproveAg es onsiv AtoAci izen A First,AitA anAbroaden Agove nmentAacco ntab li y; Agovernm nt must AbeA itateAagr ement Awhere a Alarge ratherAth n Ato Anarro Asectaria Ai ter sts. ASecon ly,Ait Aca Afaci cymaking AFi ally,Aitpol ticalApref rences A re polariz d.AThirdly, it inducesAinnov tionAin A ol lA hroughAinv ficienen ancesAth Aey AofAdel ve yAo Amany servi es AatAt e AlocalAlevl v e entAof Aresiden s.AwhichAso ial AcapitalA 1.5 Accountabi it Aof the A overnment is Ath Am stAim ortant meansAb AimproveAgo er mentalA nfluen es A erfor ance. A rust Aand A ivi Aminded attitudes Aca ation,Ar duc ngA“rent- p rfo mance byA ffectingAt e A evelAandA haracter Aof Apo iticalAp rticip eeking” Aand Aenhan ingApublic i nt rested behavio r.A AonAimpor antAiss es A .6ASo ialAcapital can Ab ing Aconv rgenceA mo g Adifferen Aplayer ro iseAwithAt eAvie Po sA iticalAle dersAin the deve opedAre io sAareAmore will ngA oAcomposing si es A re AmoreAof A ppo ents. Wh re AtrustAan Ano msAofArec procityA re Ast ong r,Ao ike yAto Asi Atoge her Aand Ar so ve A heir A isput s. AOn theAo herAhand AwhreAfewer A it z nsAar Am tivat d Aby AaAsen eA f Aci icAoblig tio At Astay Ainfor ed andAtoApa ticip teA nApolit ca A ife,Ath Achances Ao AaAdisp teA ettlemen Abetw en Atwo opposi te sidesA ecome Aw ak.polic making. The A ore 1 7 ASoc al capital also Aleads to A reater Ainn va ion Aand Aflexib li y Ain esp ndingAtoAp ob ems civi AregionsAa eAfa Amo eAsu cessf lAthanA he lessAcivic re ionsAinA and Achall nge Aof theAcom un tyAand theASta e.Anetwork Ag oup Aare inA 1.8AP bli As rviceAdelficiveryAcanAbe Ae ntly Aa ministe ed, Aif soc al ’sASelf-Help GroupsA/A opera ion Aan Athey A obilis Apeople around A ommon Aiss es.AWo e Kud mba hriAin AK ra aA Mic o- reditA nstitut ons inAAn hraA rad shAand ATami AN du Aand terAimpleme tationAofA areAfineA xamples AofAco lecti eApa tic pa ionAwh ch Ahave AledAto be ev lopme tAprogr m m e Ai Athese AS ates.A healthy Aciv lA o ietyA .9 A nAconc et Aterms AtheAgr wthAo As cialAcapi al l adsAtoA volut on Aof Aa A(govern ent)Aand A h A man festin Aa AaA istin t Aentit Ain Ath Aspace between Apubl cAs ctotor.ADep ndi gAonAthe busi essA(m rke s)A–A ftenAc ll d Athe Athi d Asecto Aor Anon-p ofiAseAass meAth Afoll owst ength andAviva ity Ao Acivil society,Athir Ase tor Aor ani ationsAca fourA ajor Aform :-inge.g. AResident Welf r A (a) SmallAcommu ityA ased Ai itiativ s Awi hAmodest funding Associ ti ns.ASuc Aa Anetwor Ai Ausu llyAdepen entAon pu3o i lShared al A– Destiny A~ ~the group. But, if the group seeks to expand its activities, it will need external financial support.(b) Large structured groups with well defined organisational patterns and goals. They do not have an apparent profit motive, but generally work on financially sustainable basis. Such an organisation does have a financial base of its own, but often gets considerable support from external agencies as well e.g. Societies, Trusts, and Waqfs.(c) There is a third category which is in business, but for certain well defined social objectives. In such organisations, surpluses are ploughed back and reinvested in the activity itself. They may need to interact with the government also e.g. Cooperatives.(d) The fourth set of social capital institutions are regulatory professional groups/ associations consisting of qualified people who join together to run their profession in accordance with certain laid down principles and policies e.g. the Bar Council of India and the Institute of Chartered Accountants.1.10 Though, social capital as an element of human entrepreneurship came into focus in the western world only during the last two decades, cohesiveness and community institutions have been part of life and culture in our country right from the early days of Indian civilisation. The archeological remains at Mohenjodaro and Harappa indicate existence of an advanced form of community life where people were linked extensively both socially as well economically with one another. The management of village commons, streets, irrigation tanks, ponds etc. was based primarily on a spirit of cooperation and mutual assistance. The Maurya and Gupta empires saw emergence of effective community organisations in the form of Sabhas and Village Councils, where local citizens could sort out many of their problems through mutual understanding and consultation. In the far South, it was the Sangam era lasting for about seven centuries between 200 BC to 500 AD when the first signs of organised inter-community and intra-community systems and the concept of State sector appeared. During the later periods, under the rule of the Chalukyas, Pallavas, Cholas and Pandyas, merchants, artisans and peasants jointly participated in the activities of the ‘nadu’ and ‘periyanadu’ and created new community and social formations that were explicitly visible till as late as the 15th century under the Vijayanagar rule.1.10.1 Through the rise and fall of empires, this environment of mutual interaction and cooperative behaviour continued and to a large extent it may be given the credit of sowing the seeds of social and cultural nationalism across the sub-continent.4ChapterA5 Ao1. 11 In its apital,ATrust andA 1. 1AIn AitsA ermsAof Are er nce A ert in ng Ato A( ORANo.A8 A“Soc alA call Areq ire AtoA Pa ticipat ve Apublic A erv ce Adeliver ”,A he AC mmission i Aha AbeenAsp ci lookAintAthe fo lowing:a) Way AofAinves ingAan Apromot ng soc alAcap ta AatAallAle elAo Agovernmen Aa A an Ainstr mentAof Aenha cingAgovernmefntlAefect ven ss.b) AImpr ve A ndAstrengt en the capabilityAof A he administratonAtoAp oact velyA artner Awit AlocalAcommu it ,Apart cularlyAn Aremo eAareas c) ABett rAs nergyAbetw enA he A overn entAand the ACivilASocieyAInstit tio s.d) AIncrease A he Ap op e-c ntricAnessAofA heAadministraiveAappr aches.e AEnsuring Ag ea erAinvol ement AofApeople sAr presentat veAandA om uni yAatAlarge AinAthe con eptualisa io AandAexecuti o nA f A rogrammes.lAi Athis Re ort.A.12 TheACommi sionA asAe ami edA tem A( ),A(b)AandA( )AinAc ns dera leAdetaeAbas sAofAeithe A A lAforms ofAsocialAca italA nst tutionsAw ic Aare Acurr nt yAi Aexis en e AonAt itutionalA esign,A S ateAe actm ntsA rAUn onAlawsAh ve bee Adiscus ed inAth AcontextAofAt eirAins A3 Aof this Report regu ato yAenv ronmentAa dAth irA nterfaceAwi h AtheAg v rn ent. Chapte e tedAd aft ngAof dealsAwith issuesAco cer ingASoc et esAandATru ts. TheACommis ionAhasA ug no Amodifiatio s.A aAmod lA awAwhic Ac uld beAen ctedAbyAthe Stat AGove nmentsAwithAm xempti nAofA heseA TheARe ortA lsoAsug ests someAc an esAwithArega dAt Aregistra io AandA has also Aex minedA Bo iesAunderA ar ous provis ons ofAt e A ncome ATax A ct. TheAC mmission eignAContr butio A theAFo eignAContr but on ARegu atio AAc A(F RA), A19 6AandAtheAFo r.AOneAofAtheAk yA Reg la ionABi l,A 006 inAdetail andAhasAsu ge ted amendme tsA nA heA att quiv len tAto less recommen atio sAstipulatesA hatAorgan sations receivingAfo eignAcontr bu ionA Asho ld Abe Aexempt th n Rs.1 .0Al khAin aA ea A(theAfig reAt AbeA ev ewedA rom Ati e A oAtime nstea ,A hou dA eA fro Aregi tration Aa dAother Arepor in Arequirements. TheAorgan sation ,A tsA til sa ion atA aske AtoAfil Aa Aannual returnAofAfor ignAcont ib tion Are eiv dAbyAthemAa dAAonAorgan sation A th Aen Aof A he Ay ar.AThsAs epAwillAall wA he Aauthorit es At Ac ncentrateAmoris needAtoAset upA receiv ngAlarge Af re gnAf nding.AI Ai Aals Apropos dAin thisA ha terA ha Ath re Athe Rep rtAdea sA an Aindepen ent Aac red tat on Aagency forAthe volunta y se tor AChapt rA4Ao nAIndia.AH reAtheA w thAthe Agr wt Aan Aexpansion ofASHG (Self-He pA roup) A ovem ntAroupsAinAt eAlessACom issionAr co mendsAfortte ping up AeAtoA ormA ore Aan Am reA uchAionAofAt e A ABARDA fiancial yA ncl de Aa eas. AItAhas to beAaccom aniedAbyA ui abl AexpanAbyAvariousAcivilAnetw rk. TheAC mmiss on Ah sA lso taken Anote ofAthe Ase ti entsAex ressetAand Regu ati n)A so iety/s ak hol ersAgroupsAonAt e AMicr -Financial AS cto A(Developme Bill, 2007 and As gg stsA ha Athere is An ed toA odifyAsome A fAitsAp o is onsSocial C p talA–A DestinyReport covers the functioning of Self-Regulatory Authorities like the Bar Council of India (BCI), the Medical Council of India (MCI), the Institute of Chartered Accountants of India (ICAI), the Institute of Cost and Works Accountants of India (ICWAI) etc. The Report has suggested that there is need to hive off professional education from their domain. In order to bring transparency and credibility in their functioning, there is a suggestion to nominate ‘lay’ members in the Governing Bodies of these organisations. In Chapter 6, the Commission has dealt with Cooperatives. The Report extends full support to various measures suggested by the Vaidyanathan Committee. The Commission has also gone into the issues of Producer Companies and suggested that they need to be strengthened so that more and more of existing cooperative societies and other joint venture organisations could convert themselves into Producers Companies in due course.Items 8.3 and 8.4 of this TOR (d and e of Para 1.11) of the terms of reference primarily concern issues of citizens’ involvement in governance; they will be dealt separately by the Commission in its Report on ‘Citizen Centric Administration’.1.13 In order to ascertain the views of various stakeholders on issues connected with the functioning of social capital institutions in India, the Commission organized a National Workshop on this subject in December, 2006 at Anand in collaboration with the Institute of Rural Management, Anand (IRMA), Gujarat. The details of this Workshop are at Annexure-1. The Commission was greatly benefited by the inputs provided by the participating academicians, intellectuals, activists and government representatives. The Commission would like to place on record its gratitude to all of them. Later, the Commission and its officials held separate discussions with the Medical Council of India, the Bar Council, Charity Commissioners of Maharashtra and Gujarat, and several representatives of charity organisations. Their views and suggestions have been of immense help to the Commission in formulating its recommendations. The Commission is thankful to the Secretary and officers of the Department of Financial Services, Ministry of Finance for their valuable inputs. The Commission also thanks the Ministry of Home Affairs for their inputs on the issue of foreign contribution to voluntary organisations. The Commission appreciates the efforts made by the two nodal institutions – (a) Institute of Rural Management, Anand and (b) Institute for Social and Economic Change, Bangalore in identifying the core issues which have been utilized in preparation of this Report. In this connection, the Commission would like to acknowledge the contributions of Mrs. Neelima Khetan and Prof. Debi Prasad Mishra (both from IRMA) and Dr. Satyanarayan Sangita (from ISEC, Bangalore). The Commission would also like to express its thanks to Shri Vijay Mahajan, BASIX, Shri Rama Reddy, Cooperative Development Foundation, Hyderabad and Shri N.V. Belavadi, National Dairy Development Board who provided significant inputs to the Commission on Micro-Finance, Cooperatives and Producer Companies respectively.6SO3SOCIETI S,ATRU T A/ACHARITA LEAINSTITUTIOS,AWA FSA NDAENDOWMENTS r k A .1ALe alA nd AInstitutio alAFramewe x t 3. .1ALe alAContan 3.1. .1 TheA aw Aconcern ng ASocieti s,ATrus s,AWa fsA ndAot erAendowme ts inAIn iaA beApla ed inAth eeAbr adAgroupings:i)ASociet es Aregiste edAun er A he ASociet es ARegistrat onAA t, A1 60 A ndAvariusASta es Aamendme ts on itAaf erA1947;( i) heA AThse Aenga ed inAp re Areligi us A nd Acharita le Aw rk Aregiste ed Aun erAt ,A Religi usAEndowme tsAA t, A18 3; A he ACharita le A ndAReligi usATru tsAA 19 0; A heAW qfAA t, A1 95A nd Asimi arAot erASt teAAcs;A(i i)ATru tsA nd Acharita le Ainstituti ns Aregiste edAun erA heAInd anATru tsAA t,A18 2;ACharita leAEndowme tsAA t, A18 0;A he ABom ayAPub icATru tsAA t, A19 0;A ndAsimi arAot erASt teAActsTheAm inAfeatu es of Ath seAenactme tsA re Aindica ed in A heATa le at AAnnex re A IIA( 1 ) .atA 3.1. .2 InAaddit on to Ameet ng A he Arequireme ts ofAlegislat on as Alis ed in A heATa le aw Annex re A II A( ),Acharita leAorganisati nsA re Aa so Arequi ed to Afol ow A heAprovisi ns ofA as Aapplica le to Ath irAfunctio alAare s. A orAexamp e, Ath se Awork ng in A he Ahea th Asec orAn ed to Afol owA heAl ws Aapplica le to At atAsect r.ASimilar y,Aorganisati ns Awork ng onAenvironm ntAprotect on Aw llAh ve to Aab de byA heAWa erA(Prevent onA nd ACont ol of APolluti n)AA t,A19 4,A he A irA(Prevent onA nd ACont ol of APolluti n)AA t, A1 81 A ndA he AFor stA(Conservati n)AA t, A1 80Aec. A3.1. .3ASocieti e sesA 3.1.1. .1 AModel ed onA heAEngl shALiter ryA ndAScient ficAInstituti nsAA t, A18 4,A heASociet ryA Registrat onA ctA asAenac ed inAIn ia in A18 0.ATowa dsA he Amid le of A he A1 thAcent coincid ng Aw th A he A1 57Aeve t AaAnum er ofAorganisati ns A ndAgro ps Aw re Aestablis17So i l Capitaared A–AADestinyAShin the country on contemporary issues of politics, literature, arts and science. The above law was enacted partly to give such organisations a legal standing and partly, to enable the colonial government to maintain a watch on them. But, the Act was not intrusive at all and it gave full freedom to the Societies/organisations which chose to register with the government.Purpose for formation of Societies under the Societies Registration Act, 1860 :It provides for formation of a Society for any literary, scientific, or charitable purpose, or for any such purpose as is described under Section 20 of the Act. In terms of Section 20, the following Societies may be registered under this Act:“Charitable societies, the military orphan funds or societies established at the several presidencies of India, societies established for the promotion of science, literature, or the fine arts for instruction, the diffusion of useful knowledge, *[the diffusion of political education], the foundation or maintenance of libraries or reading-rooms for general use among the members or open to the public, or public museums and galleries of paintings and other works of art, collections of natural history, mechanical and philosophical inventions, instruments, or designs.”3.1.1.3.2 Many States created separate authorities for registering and supervising such Societies. According to the Act, any seven persons who subscribe to a Memorandum of Association (MOA) can register a Society. The Memorandum should include the names of the Society, its objectives, the names, addresses and occupations of members subscribing to it as well as the first Governing Body to be constituted on registration. The MOA should be accompanied by a set of Rules and Regulations – this should include details such as the procedure for enrolment and removal of members, procedure for formation of the Governing Body, conduct of meetings, election and removal of office bearers, procedure for conducting annual General Body meetings, etc. The membership of the Society may be kept open (or by invitation) to anybody who subscribes to its aims and objectives, for which a fee may be charged. Although the Society can sue and can be sued, the liability of the members is limited, as no decree can be enforced against the members’ private assets. The Society has a perpetual existence and a common seal, and can sue or be sued in the name of the office bearer as prescribed under its rules. This enables its effective participation in public life.3.1.1.3.3 A strong tenor of democracy runs through the entire Act. Alteration, extension, or abridgement of purpose of the association or any decision on amalgamation can be effected only when any such proposition is approved by three-fifth of the members present in the special meeting convened for this purpose with due notice. For dissolution of the18Societies, Trusts / Charitable Institutions, Waqfs and EndowmentsSociety also,ASocietyA ith theA Soc ety Aalso As milar Aapp ova Ais required. All A he doc ments Afied Ab Ath cyAand Ad mocrati A eg strar Aare A pe Ato inspect on A y Aany Ap rson. AThis Aen ble AtranspareeApunishable wi hA contr l. Members guilty Afences AagfAoin tAt e Aprope tyA f Athe ASoci tyAai imr i s o n m e nt or Af e.Astratio A emainedA 3. .1.3 4AT ll A 947 AthisAA tAd dAnot undergo anyAmajorAch nge;Areg periodAh d AaApoor l rgely A Avol nt ry A ffort. AMos AofAtheASoc etiesA onst tuted A uri g thisyAof Athe foundingAfina cial standi g AandAwer Ad ive Aprima ilyAby the strong Ai te tAa dAtenacisAbutA he over llA memb rs.A ccasi nal y, AtheyA ould Age Afina cial supportA rom som Aquarte ns wh chAwer Aset health ofAsu hASocie ie AstoodAnow ereA n AcomparisonA ithAo gani ati te A ndependence A up Aas ATrusts withAc nsi erab e Aweal h AandAreal A state endowments.AA AtheAstatut , Abut a Aa A onsequence ofAthe adaptati nAo der A1948/50 At eAA t Aremain d Ao iveAc mpetence AofA “ ocietie ”Abei gAa subje t Aund r A heAS ateAl st, itAcameAund rAtheAlegi lat a t eAGove nment .Aucing anyAformAofA 3 1.1.3.5A hil Ath AoriginalA ct Awa Ar mar ablyAclearA nAn tAin ro sAofAfiling A nnua A tate interf re ceAi toAaffairs Aof A uchAin titutio s,Aexce t A outin Amatte Aam ndments) Aw ntA s ate ents, many AofAtheA tateAleg slationsA(through post-Indepe denc ndAnonfeas nc AofA forAwides readAgov rn enta Acon rols Ato dealAwithAa use ,Amalfeasan eA io ;Acancellati nA S cieties. TheAlegal measure Aincl de AState’ Apo erAof Aenquiry A ndAinvestiga eAGoverning oBo y;A Aregistrat on AandAcons qu nt Adissolu ion Aof ASocie ie ;As persessio AofAtanisations. A ta eAappointment of Aadministr tor Adissolu io ;AandAd letion AofAdefu ctAoraA ct and Sectio islatiole AsAon thisAsu jectA aryAwid ly AU der SectionA2 Aof the KarnatanA he A pplicati nA 32Aof A heAM dhy APradeshA ct Ath ARe istrar A nAh s A wn A otion,AandA Aone-th rd of A heA fAt e Amajor ty of A heAmember AofA he Go ern ng AB dyAo AofAnot Al ss tha tit tion,Awo kingA membe sAo Athe So iety, Acan ho d AorAau hori eAa AenquiryAinto theAcon inaand A cia AconditinAof Athe A ocie y.As Ai Ath Aorigi alA 3. .1.3.6 Some A ther States A hic Ahave carried Aou Am jor amendmen Uttar APrad sh. AThe Act Aa e AAndhra AP adesh ARaja than ATamil Nad , AWes ABengal A nd amendme ts A ainlyAcon ernA heAfollo wngAfour iss es:ieAcanAbeAfo medA 1. Purpose Af rAw ic ASocieAof Aassoc ation,AA 2. Regu atoryA ow rs Awit Ar gard AtoAch ng Ain Amemorandl un ionAAA nd issoby -l ws, Aalie ati n AofAproper yAandAinvest ent Aamalgamatiof theA ody3.A ow rsAwith Are ar AtoAsu mission19c a ACpithared l A– Destiny A~ ~~4.Powers of the State Government with regard to supersession, dissolution orcancellation of registration3.1.1.3.7 In contrast to the original 1860 Act, the State amendments have considerably expanded the list of purposes for which Societies could be formed and the scope of State intervention in the affairs of the Societies. For example, the Karnataka Act goes much beyond the original purpose of promotion of science, literature, or the fine arts for instruction, diffusion of useful knowledge and includes many other activities connected with conservation and use of natural resources and scarce infrastructural facilities like land, power, water, forest etc. Similarly, with regard to change in the memorandum of association, bye-laws, alienation of property, investment, amalgamation and dissolution; submission of annual returns; and in matters of supersession, dissolution or cancellation of registration, the State has appropriated vast powers. Madhya Pradesh, Andhra Pradesh and Kerala are the other three States which have converted this enactment into a strongly State centric Act. A detailed comparative analysis of the State laws is given at Annexure III (2) of this Report.3.1.1.4 Trusts, Religious Endowments and Waqfs3.1.1.4.1 Trusts, Endowments and Waqfs are legally created as modes of property arrangement/settlement dedicated for definite charitable and religious purposes. The details with regard to their incorporation, organisational structure and distribution of functions and powers are governed by the provisions of the specific law under which they are registered. Broadly, such organisations can assume a legal personality in the following five ways:1.By way of formal registration before the Charity Commissioner / InspectorGeneral of Registration under the respective State Public Trusts Act e.g. the Bombay Public Trusts Act,1950, the Gujarat Public Trusts Act, the Rajasthan Public Trusts Act etc;2.By invoking interference of civil courts to lay down schemes for governing aTrust under Sections 92 and 93 of the Civil Procedure Code;3.By registering the Trust deed of a Public Charitable Trust under the RegistrationAct, 1908;4.By notifying an organisation in the list of Charitable Trusts and ReligiousEndowments which are supervised by the Endowments Commissioner of the State or by a Managing Committee formed under the Charitable Endowments Act, 1890 or under other State laws on Hindu Religious and Charitable Endowments; and20Societies, Trusts / Charitable Institutions, Waqfs and EndowmentsBy c5.AByAc e ting aAWaq Awhic Ac uldAbeA anage Aun erAtheApro is ons ofAt eAWa fAA c t,A1995..t trtsts3.1.4.43.1. .4.2. AT u t AisAaA peci l A ormAof Aorgan satio AwhichA mer es o tAof A Thw ll.A eAwil AmakerAexcl sivelyAtr nsf rsAthe Aow er h p Aof AaAp op rt Ato A eAu e AforAaApar icular Ap rp se.IfAtheAsAsomeA ur os AisAto benefitApar icular Aindiv du ls,AitA e omesAaA rivat ATr st an AifAitAc ncer ur ose of Athe common pu lic or AtheAco mu ityAat la ge Ait Ais c lled Aa PublicTrust.Indian 3.1. .4he 2.2 Afi Ast law Aon Trus s Aca e Aint Af rce Ai AI dia A n A188 Ak own as AtheTrus s AAct A1 82; itAwasAba ica lyAfor Aman ge entAofA rivateAT r u s t s.ergingA 3.1. .4 2.3ATheA mende ACivilAPr cedur ACod ,A19 8Aal oAtookAcog iz nce ofAtheAe cedur A harityAs enarioA hrough AS ct ons 92 A nd 93.AI At rmsAof A ec io A92 ofAth ACivilAPr che esA Code A1908,Ainter er nceAo ACivil Court Acou d A lsoAbeA nvo edAfor layi g AdownA eA one forAgo e ningAa Tr t AifAAa br achAofAo igina AtrustAcon it onsAisAa his canA leg d.A ingAanA by w y Aof a AsuiledAby eittAerAtheAAdvocate- en ral or twoA r AmoreA ersons haiginalA i te est inAthe Trust AWhile Ad cidi g Asuch sui s, Ath AC urt Ais Aem ow redAt Aal erAtheAo inAth A p rp ses ofAth ATr st Aan Aal owAtheAp op rtyAor in omeA fAsuch Tr st Ato Abe ve ted Court.A other pe sonAor A rus eeA or AitsAefective Autil sa ion inAthe mann rAla dA own by Athe pr val ec ion A93Ae pow rs AtheACo le tor Ato Ae ercis Athese po e sAinAa Ad stri t Awit ApriorAa ofAth AStateAGoven m e n t .Astee ’A 3.1. .4.2. AUnderAS h du eA7 ofAthe Indian AConsti uti n,AtheA ubject ‘Tr stAandATr tions,A finds A en ionAa AEntr AN .10 in AtheACon urren AList. A‘Ch r tiesA&ACha itableAInstit AN .28A Cha ita le Aand Are igious Aend wme ts Aand Are igiousAinstit tio s’Afin Ap aceAa AEntr b a yAi A fAthi Al heAfirst Alegist. Ala ion A n AthisA ubj ctAwas A na ted byAt e Athe AS ateAof Boxp essA 1950 AK own as Athe Bombay Public Trus s AAct A1 50, it Awa Am antA oAde lA ith AanA c udedA orAconst uctiv ATr stAfor either A ublic, Are ig ousAorAcha itable Ap rp sesA rAb thAandAi ociety a A e ple, A A ath,A AW qf, orAan Aother Are ig ousAorAcha itableAen owm n Aand AaA formed eit e Afor Aa Are ig o sAorAaAcha itable A ur ose or Af rAb th AandAreg stere Aun erAtheASo ietiesARegis rati n AAc , 1860A– A ectionA2(13).raAandA 3.1. .4.2 5AW enAtheAer twhile BombayAp ovi ce AwasAbif rcat d AintoAMaha ash itableA G ja at, Ai A196 ,Ab thAthe States A dopt dAth sAv ry lawAto govern Tru tsAan AotherAcha erAtwo insti utionsA al ing Ai AtheirAjurisd ction. Madhya A rad shAandARa ast anA reAth Aot St tes in AtheA ountr Awhi h Ahave A nacte Ath irAown Public Trust Alaws AOther St tes doAn t Aha e AsuchA pecific Public Trusts Alegisl tions. Andhra AP adesh ATam lAN duAand21SocialA a i alA–AA SharedADestinyhave separate Religious Endowments Acts to govern temple properties. Many States have specific legislations to manage particular endowments / charities. In all other cases, Section 92 of the Civil Procedure Code dealing with public charities prevails.3.1.1.4.3 Religious Endowments3.1.1.4.3.1 Religious Endowments and Waqfs are variants of Trusts which are formed for specific religious purposes e.g. for providing support functions relating to the deity, charity and religion amongst Hindus and Muslims respectively. Unlike Public Trusts, they may not necessarily originate from formal registration, nor do they specifically emphasise on a triangular relationship among the donor, Trustee and the beneficiary. Religious endowments arise from dedication of property for religious purposes. The corresponding action among the Muslim community leads to the creation of Waqfs. Waqfs tie up the property and devote the usufruct to people.3.1.1.4.3.2 The first legislation in this direction came up in the later half of the nineteenth century. The Religious Endowments Act, 1863 was basically a law on private endowments which placed a property under the management of Trustee/Trustees under a will for a predefined set of beneficiaries. It was a type of contract between the will maker and the Trustee. During the later part of the British Rule, many Zamindars and merchants created such endowments. In many cases, with the passage of time, such arrangements became hazy and generated a series of civil disputes. The government intervened by introducing a new law called Charitable Endowments Act, 1890. This enactment brought in some element of regulation by establishing a post of treasurer in each State to oversee the functioning of charitable endowments. It was the first step in the direction of State regulation over charities. Towards the beginning of the 20th century, many of the temples and mathas across the country had acquired considerable landed property and funds; often comparable to the holdings of a zamindari. It led to incidents of social tension and civil disputes in the adjoining areas. To deal with this situation, the government enacted a new law in the form of the “Charitable and Religious Trusts Act, 1920” which recognised the existence of such religious bodies as entities different from Endowment Trusts formed for social and charitable purposes. Trustees of such bodies were made accountable for disclosure of the income and the values of the Trust. Civil courts were given proactive powers with regard to management of the property. But any direct intervention of the government through its own functionaries viz. Deputy Commissioners/Collectors and other officials was not yet on the cards.22Societies, Trusts / Charitable Institutions, Waqfs and EndowmentsAab se of Afun sA 3.1.1.4 3.3AThe A cenar o Acha gedA f er A1 47 AWithAaAvi wAto A re entin Asu hAreligiou A and At Aensure Aunifor Aorganisa ion lAf amework Afo At e Ama agement Ao own A ndo mentsAA andAcharitab eAin titut ons, Amany AS ateAGov rnmen sAe actedAthei tAoffici lsA sAA Ac s Aan Avir ually tookAover A heirAmanag ment Ainsta ling Agove nm AandAChari able Truste s A ndAmanag rs. The A xample AareA he AMadras Hin u AReligiou Endow ent AAct,A1951; Athe AT avanc re-Cochin Hindu AReligi usA n s t it tio sAAc A195 ;AtheA odh A aya AT mpl AAct,A 949,Ath AAndhraAPr des AChar tableAand HinduAReligi usA nstitution Aand Endow ent AAc ,A1966;Aa d Athe Karnataka HinduAReligi usA nstitution AandAChari able E ndowm e n t sAAct, A 99 .iou AaAasAA 3.1.1 4.3.4ATheAInd an AConstit tion Are og izesAf eedomAtoA anageAfairelbjectA o Apublic oneAof theAfu da ent lArights ofAitsAci iz n.AAcco di g to AArtic eA 6 A-A“S reo Ashall Aha eA ord r, Amora ity Aa dAhealth, everyAreligi us den minatio Aor Aany secti nAthhe Aright:ita le purpos s; a)A o Aestabl shAandAmaint in A nstitutio sAf rAreligiou AandAcharers of rel gio ; ( )At AmanagfaiAi sAown Aa sAinAmatteAp op rty; AandA (c)Ato ownAand acq ire Amovab e AandAimm vabrdance wit Alaw.( ) Ato administ r A uchAproper yAin accohough, Athe above provisi nA ivesAf eedomA o createATru tsA/Acharita leA nstitutio sAforArel gi usAp rpos s, Ait pu sAsome Arider Ao Aa mini trationA f As chApropert A“in acco d nceAwit Alaw” AArticle A 6(d).3. .1.4.4AWaqfs Ain A ndialy compreh nded 3 1.1.4. .1AU de AMusli Aru eAinAIn ia Athe con eptA fAWaqf wasAmoreAwid sA heAendowm ntA asA ligned wi hAthe As irit Aof A ha ity endors dAby the AQur n. A aqfAimpli slim,Au derA heA ofApr pe ty, Amoveab eAorAimm va le,Atangib eA r Ai ta g ble Ato A od Aby aAM Waqif A(s ttler)A remise At at At e Atran it the Anfer will Ab needy. AAs Aa Ale al A ransa tion, Athe pp intsAhi self Aor Aano herAtr st orthyAper onAasAMut wa li (manager)in Aa AendowmentAee A(Waqfnama )At Aadm nister Athe A aqfA(c hr i t a b leATru t) A3 1.1.4.4 2 AsAit Aimp ie AaAsurrend rA f Apr p rtie AtoA od AaAWaqfAdee Aisirrevocabl23Soc a A apital –Ashiny3.1.1.4.4.3 In consonance with the spirit of Islam, Indian Muslim rulers generously dedicated property such as land and its revenue rights to Waqf created with the purpose of maintaining mosques, tombs, orphanages (yatimkhanas), madrasas etc. Land could also be Waqfed for the creation of a graveyard. In many cases, donations to a Waqf were made with the intent of promoting the tenets of Islam. Under Muslim rule, the presence of Islamic courts overseen by Qazis ensured that the Mutawallis discharged their duties fairly. Mismanagement of Waqf property was considered breach of the trust reposed in them for which they were duly punished.3.1.1.4.4.4 In the 14th century, Sultan Allauddin Khilji came down heavily on a number of Mutawallis. During the Mughal rule, Akbar appointed an Inquiry Officer to go into the allegations of misappropriation of Waqf funds by Shaikh Hassan and removed him from Mutawalliship. Ain-e-Akbari records an instance when Akbar dismissed many Qazis who had taken bribes from the holders of Waqf lands9.3.1.1.4.4.5 After the collapse of the Mughal Empire, for a long period, the Waqf administration remained loosely controlled. During the first phase of the British Rule in India, the colonial administration too, apart from maintaining oversight over endowments, did not give much attention to this issue as they had a very scanty knowledge of the Islamic legal system. After 1857, when the British started expanding the Comman law regime in the country, they began exercising control over Waqfs. Their interference was mostly on charges of corruption in management of Waqf properties. Immediately after the revolt of 1857, the British Government confiscated Waqf properties such as the Jama Masjid and the Fatehpuri Mosque in Delhi. They were restored to the Trustees (Mutawallis) only after the enactment of the Charitable and Religious Endowments Act by the government in 1863. Another practice the British came down heavily on was the attempt to create family Waqfs by wealthy Muslim families desirous of keeping their property within the family yet safe from future sell-off by irresponsible progeny. In 1894, the Privy Council spoke of such efforts as concealed means for the aggrandizement of family, and noted that their provision for charity is so illusory that as long as the lineage of the donor family continues, the poor do not have any chance of receiving even a rupee from the Waqf.3.1.1.4.4.6 The first specific law on the subject came only in 1913 when the British Government enacted the Mussalman Waqf Validating Act, 1913. Thereafter, a succession of laws came up to streamline Waqf management in India. The following is the list of important legislations enacted on the subject between 1913 and 1995:(i) Mussalman Waqf Validating Act, 1913, (ii) Mussalman Waqf Act 1923, (iii) Bengal Waqf Act 1934, (iv) The Hyderabad Endowment Regulation, 1939, (v) U.P. Muslim Waqf24''What is W9“Wh tA sAWaqf AbyAI tiaz Ahm dAKha Aand “Wa fALawsAandAAdm ni tratio Ai AIndia AbyAAkh ar A ussanhalid andRasidAKSocieties, Trusts / Charitable Institutions, Waqfs and EndowmentsAct, 1 36, (v A t, A19 6,A(vi ADel iAMu lim AW qfAAc , A194 ,A(v i)AB har AW qfAAct A1947, (viii) Bombay Publ c ATru tsAA t,A195 ,A(ix) Darga AKhw ja ASa ebA ct,A195 ,A(xACen ralAW qfAA t,A1 54,A(xi)A aqfA mendm ntAAc , A19 9,A(xi )AU. . AMus imAAct A1960, (xiii ADarghAKw jaASahebA aqfA mend entaqfA mendm ntAAc ,A19 4,A(xiv)A aqf A mendm ntAA t,A1 69, A(xv)AAct, A 98 Aand (xvi ATheAWa q fAAct, A19 5.under Avari us 3.1.1.4. .7 ACur ently A3 0000 A aqf Ain AI dia Aare Abein Aadmi istered oun ryAex eptpro isio sAof theAW qfA ct, 19 5.AThisAAct isAapplica leA hrougho tAtheA entAs ruc ure for AJam uAa d AKash irAand Dargah Khwaja Sa eb,AAjmer. TheAmanage under Ath AA t cons stsAo Aa Wa fABo rd Aa Aa Aape Abody A nAeac ASta e. AEv ry W qfABoardAisAaA uasi judicial A od Aemp were AtoArule Aove AWaqf-rel te Adi putes.AA AtheAn tiona Al vel,Ath reAi ACentra AWaqf Coun il wh chAactsA nAanAadvi so r yAca acity.3.1 1.5ANon-P ofitAComp ni sA Sec ionA25Aof theA o mpani e sAAct, A 956)anism th oughA 3.1 1. .1 Sec ion A25Aof theA ompa iesAAct, 195 A rovides Af rAaAmec dA iabi ity,AA which A n AA so iation Acan be r gistere Aas A A ompany A ith AaAlimi igion or Aany A ifAsu h A ssocia ion isAformed for Apromo ing A ommerce, art, Asci nc ,Ar sAobjects AThA other use ulAobje tA nd Ain end Ato AapplyAits pr fits/incom Ain promotin Ai oc ati nsAb tA obj ctiveAof A hi Ap ovision is Ato Apro ideAcorpora eA erso alityAtoAsuc AAs equ rements AA at the Asame A ime A xemp ing A he Afr mAsomeAof A he Acu bersome Alegal This Se tionAre dsAas –nmentAthatAa“ 5( ) AWher Ai Ais proved AtoAth As tis action A fAtheACent alAG venA ssoci ti n:ommerce, art,A s Aabou At A eAforme AasAa Al mit d Acompany for Apromo ing A scie ce, Arel gi n,A harit AorAan AotherAusefulA bj ct,Ao jects, Aa dA In end AtoAapp y A tsAp ofis,Aif any, Ao Ao her Aincom Ain promotin Aitt Aprohib tA heA ayment Ao Aa y Ad videndAtoA tsAmemb rs,iationAmay beTheACent alAG ve nmentAma ,AbyAl cens ,Ad rect Athat At eAa so r gistere AasA Acompan Awith Alimi ed Aliab lity,Awi ho t Aa diti nAoAi s Ana eAofAthe A or A“L mited AorAtheA ordsA‘Pri va t eALimit d’ ”heA rivil ge A 3.1.1.5.2 A nAAssociat onAre ist redAu derAtheAa oveAp ovisi nAs all enjoy AallA hese en itiesA and Awo ld beA ubj ct AtoAall At e A bligati ns AofAlimi edAcompa ies. A owever,A otife AbyAtheA wi lAbe exem te Afr m Asuch Aof A he pro isions Aof the Co panies i A ct asA Un onAGo ern entAunderA he provisi ns Aof Se tio A25( ) A fAtheAAc . AThe Aex25So ial ACap t l –Aared Desr~e~~~~~companies can also be transformed to a non-profit company under Section 25(3). The companies registered under this provision are subject to such conditions and regulations as the Government thinks fit and on being directed, they would be required to insert such conditions in their memoranda. Their memoranda can not be altered without the prior approval of the Union Government. The Union Government also has the powers to revoke the registration granted under this section after giving an opportunity of being heard [Section 25(7)].3.1.1.5.3 The non-profit companies registered under this provision have been exempted from several provisions of the Companies Act by way of notification issued under Section 25(6) of the Act which inter alia covers the following:-?exemptions from publication of names etc. (Section 147);?liberty to hold general body meetings on public holidays or outside business hours [Section 166(2)];?reduction of time length of meeting notice to fourteen days instead of twenty one days [Section 171(1)];?requirement to keep books of account of the past four years instead of eight years [Section 209(4A)];?exemption from the requirement of government’s permission for enhancing the number of directors (Section 259);?relaxation in holding Board meetings once in six months instead of three months (Section 285) and its quorum (Section 287);?competence of the Board to decide about borrowing of money, investing of funds or granting of loans by circulation (Section 292);?exemption from the requirement of intimating to the Registrar the particulars of change in the composition of the Board (Section 303);?relaxation in matters regarding the amount of loan or purchase of shares that can be made by the company without the government’s prior approval (Sections 370 and 372).3.1.1.6 The main difference between a Trust, a Society and a Section 25 Company can be summarised in the following manner and as indicated in Table 3.1.26Societies, Trusts / Charitable Institutions, Waqfs and Endowments3.1.1.6.1 withAs meA 3 1.1.6.1 A A ocietyAis ba ically Aan Aa sociat on forme Ab Asev n Aor Amo eApe sonsrA ay An tA common A bje tives Afor pr motionAofAl ter ture, fine Aart ,Asc ence etc AThreA ayAbeAs meAco mo Aasse AtoA tart wi hAbut, in cours Aof time, At eAS ciety Ac nAacquireAas ets. ableA3.1:A omparis nAbetw enATrus ,AS cietyAa d A ection5AComp nyAPulicATrutASocie yionA25ACompanyStatute/Lgislat onAPub icA rustAAct Alike SocietiesARe istationAAct Com an esAAtAo A1956A he ABomay P ublcAof A1 60A ru tsAActAof A1950Ju is ict onA fAtheAAct ConcenedAState ConcenedAState Conce nedASateAw ereAwhere Aegist redAwhereAegisteredAegisteredAuthori yACharity ACo missioner Re istrarAofSocieties Re istrarAofCompaniesReis ratioAA ATrustA sASo ie yA(andA yAdefaultA emodumA nd AAals AaTrustAin AA ticles AofAAociationAAM har shtraAanGujar t)AAtamp requiredA uty A ru t Aee AtoAb ANo As ampApapeAr quire ANo As ampApape ndumAand eA ecutdAo Anon-Afor A emand mAof AAforA emoso iation judiAial Asmp ApaperAAAs oci tionsdARules A AA ticles AofAAAof A rescredA alueAAandARegulat on NumberAfAperso sAMimumAtw AAMinium Aseve ;AMini umAseven An neededAtregister A Tr stees AnoAu pe Alimi AnoAuper Al mitAupperA im tBoardAofA anagemenTrusteesA Gove nig ABod Ao ABoardAofArectors A CouncilA AMnaging Ao AManagingommitteeA ExecutiveACom it eeModeAofAuccessi nA suallyAby Aa pointme tAUsuall AectionAb AAUsuall Aele tionA yooardAof AA embrs AofAt eA embrsAofAtheAnagemen AAGeeralABo yAGeneralAo ySourceA:Aasianphi lanth opy orgAprop rtyI At e caseAo AaA rust AtheA er Aba isAofAits fo mat onAisAthe ex st nceAof anAasset whic AhasAbe nA ona ed Ab Athe A ill m kerAforAaA articula Apurpo e, social AorA eligious.A siastic lA har tableAand religious Ain tit tionsAa eAspe iaAkinds ofATr stsA hichA aveAclearAecclAo AwhichA in en .AWaqf A sAanoth r Aarian AofAT ust where th A onorAis a A uslim.AThAs bjectact call an A Ai sti ut on AcanAbeA egist red under Athe SocietiesARe istr tion Act A1860AareApt eAsam Aa Athos A nAwhi hAaAT ust A ou dAalso A e A ormed.AThASoci ty,Apr ma f27apital – A Shared ocialDestinyACdemocratic entity, as all its members (at least seven in number) have an equal say in its running whereas in a Trust, control over the property remains fully in the hands of the Trustees and depending on the clarity of the will, such a management continues to be in existence for a long time. Government intervenes only when Trustees change or the Trust becomes too old to be managed as per stipulations (cypres) of the original will, or on grounds of malfeasance or abuse of trust.3.1.1.7 Trade Unions3.1.1.7.1 In terms of Section 2 of the Trade Unions Act, 1926, a “Trade Union means a combination, whether temporary or permanent, formed primarily for the purpose of regulating relations between workmen and employers or between workmen and workmen or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions.”3.1.1.7.2 The objective of the Trade Unions Act is to provide a legal existence and protection to the Trade Unions as defined above. A Trade Union can be registered under this Act along with the rules formed by them with regard to its objects, use of funds, maintenance of a list of members, manner of appointment of its members and executives, manner of dissolution etc. The concerned Registrar can not refuse registration if all the technical requirements have been fulfilled at the time of filing application and the Union is not held to be unlawful.3.1.1.7.3 In the original Act, any seven or more members of a Trade Union were eligible to apply for registration under this Act. This however led to multiplicity of Trade Unions in the same establishment over a period of time. In order to address this problem an amendment was made in 2001 and it was provided that no Trade Union of workmen shall be registered unless at least ten per cent, or one hundred of the workmen, whichever is less, engaged or employed in the establishment or industry with which it is connected are the members of such Trade Union on the date of making of application for registration. A new Section 9A regarding minimum requirement about membership of a Trade Union was also inserted according to which a registered Trade Union shall at all times continue to have not less than ten per cent, or one hundred of the workmen, whichever is less, subject to a minimum of seven, engaged or employed in an establishment or industry with which it is connected as its members.3.1.1.7.4 The office bearers and members of the Trade Unions have been given immunity from criminal and civil liabilities for their activities undertaken in order to further the objectives of a Trade Union. However, in case of willful contravention of the provisions of the Act, or fraud or mistake in obtaining registration penal provisions could be invoked and28Societies, Trusts / Charitable Institutions, Waqfs and Endowmentsthe strarAisA theAreg strationAcicarti eAcanAbeA ith rawnAand A an ell dAby AtheAR gi trar. ATheA eg pp int dAbyAthe Aap ropriateAg vernm nt A(b thA nionAa d A tate) Ai Ar spec AofAea hA ta e.AHe Ais as istedAbyAA dit onalAa dADeputyARei s t r a rs. A rsAto AbeA . .1.7. AAAmajor A ro isi nAo AtheAAct pe tai s Ato Athe Ap op rtio AofAoffic Ab ar terms Ao A once n d AwithAaAp rticular indus ryA hereA he ATr deA nion hasAbee Af rmed. In lA umbe A S ct on A 2AofA heATra eAU ions AAct in erted in A 001, notA essA ha Aha fAofA heAtot Apersons ofAoffic Ab arers of AeveryAr giste ed ATr de Un on AinAan Aun rganiz d Asec or shall Ab cted. InA actuall Ae gagedAor em lo edAin Aan indu try Aw thA hichA heATr de Union AisAc nn ne thi dA oth rAc ses, allAoffic Ab a ersAofAaAr giste ed ATra eAUnio ,Ae cept notA ore thanA actuall A ofA heAtot lA umb rAof theAoffic Ab arer AorAfive,A hi hever isAle s, shallAb Apersons y,Ai AisA e gag d AinAthe Aesta lish ent Aw th A hichA heATr de Union Ais Ac nnected.AImp rt nt Aa Aoffice also prov de AthatA o A emb r AofAth AC uncil AofA in s ersAor a Aperso Ah ldin tryAw thA ofAp ofit A( ot beingAan Ae ga ementAor Ae pl ym nt Ain Aan Aesta li hment Aor indu hichA he ATr de Union Ais Aco ne ted ,Ain A he U ionAor a ASta e, s allAbe aA embrAofAtheA xe utive or Ao herAoffie A e rerAofAaAr giste edATradeAUnio .3.1.1.8AInte nationalAPe sp ctiveAonC h a r i t i e s oluntaryA .1.1.8.1A egin ingAw thAsmall A uc sho s AinA he Aearly Ase tl men s Aof theAUSA,A rnAw rld orga isat onsA av AbeenAinA xi tenc AinA om Afo m Aor A he oth r AinAt eAentir Awest evelope A over the lastAtw Ahundr d Ayear .ADu ingAthi Ap riod,A nAactiveArel tionshipA ACanad ,A be ween Athe Ag ver men AandAtheA oluntar AsheAUnited Kinctor.Adom, theAUSAgul tionA F ance A nd Aother A ou tries A fAEu o eAhave aAfa rlyAwellA evelop dAs stemAforAr s ct and r A 10 ro otio AofAthisAetheran ?Ina ma ority ofthesec untries ~firevenu ~ofcials nitial ydecid ~wArevenu A org ni ation Ais Ach rit ble.AThis ap roach is bas dAon Athe A sser ionAthatha AtheA offiials AareAnon pa tisan in AtheirAdete mi ation Ao AcharityAregi tra ions andibility,A taxA ut or ty A s Ain the Abest po ition AtoAa min sterAt e A yst mAofAtaxAdeduc ncludingAde ermin ngAwhichAorga isa ionsAare eli ibl AforAtaxAex mp ion.hd ale ? .T ~CharityC mmissionad ini tersthe har ti sActi ~En land~aoverAal A TheAAct emp wersAtheAC mm ssionAto exercise Ar gulatoryAjur sdic ion matters Ac ncerningAch ri ies litybut ?I ~th ~USAan ~Canada,reg st a ionof ~c a ityi ~aStaterespo sibAfedera fina cia AandAtax Ar gu ationAi Ath oughAt eAInland Reven e, w ichAisA29ag ncy.A1 AA eviewAo ACharityAAdmin st ationA nAIndi :A eportAofA ampradanA po sor dAbyAthe Planning ACS c a ACpit hared l A– Destiny AA AS?There is easy access to data on charities: (i) there is a Public Register of charities and (ii) it is mandatory for a voluntary organisation to supply information on demand.?An effective grievance redressal system is in place. There are provisions for appeals against decisions, and graded sanctions for violation of laws.3.1.1.8.2 Charity Laws in the USAited AK ngdom.3.1.1.8.2.1 In the United States, charities are created under the State Law but they are subject to control by both Federal and the State Governments. The charity administration is managed at the Federal level under the Federal Tax Code by way of preferential tax treatment. Charities are granted tax exemption status under Section 501(c)(3) of the Federal Tax Code subject to organisational and operational conditions. Organisations claiming tax exemption must adhere strictly to their intended charitable objectives as provided in the governing document. The Tax Code makes a distinction between Public Charities and Private Foundations for the purpose of regulations. Private Foundations are more strictly regulated as compared to the Public Charities. The Internal Revenue Service (IRS) is responsible for enforcing federal regulations with regard to the administration and governance of charitable organisations.3.1.1.8.2.2 As stated above, charities are created under State laws which provide detailed guidelines for their incorporation and regulation (Provisions may vary from State to State). The State laws are mainly concerned with (a) the purpose of charities, (b) their organisational structure, and (c) their internal governance. The definition of charitable purposes under State laws is by and large aligned with the definition provided under the Federal Tax Code. State Attorney Generals have been given powers to enforce laws relating to charitable organisations.3.1.1.8.3 The U.K. Law113.1.1.8.3.1 The Charities Act, 2006 has completely changed the government-voluntary sector interface in the United Kingdom. The Act provides for the establishment of an autonomous body called Charity Commission to regulate and support the functioning of Charity organisations across England and Wales. There is also a Charity Tribunal to entertain appeals against the orders of the Charity Commission. The law has prescribed guidelines with regard to formation and registration of charities, their fund raising"Based on a irdASe tor,AA 11BasedA nAa Adoc mentAtitle ,A“C arit e AAct A2006A–A hatA ru teesAn edAtoAkno ”, pub ishedAb AtheA abin tA ffice h AOffic AofAthe Un30Societies, Trusts / Charitable Institutions, Waqfs and Endowmentsactivities, ntA eat res ofA activit es, Aaccoun ing procedures A nd submissi ns ofAretu ns.ATheAs li the Ala AareAdiscussed below:AaccountChar ty,Acha ita leApur ose Aand publicAbenefit Aregis ration,Aa dits,A dAreturns: A) AC ari yrAaAcha itab eA (i) AThA K AActAdefies a ‘Char ty AasAa ‘body or tru t which AisAfiesAw ich comeA purpos Athat A ro ide Abenefit A o A he Apu li ’.AItAlist A13Aa tivi unde At e definitionA f AaAcharitab e A urpose.he ApurAown Agove ni i) A( gAos s (or Aaim ) Ao Aa AChar ty A re A su lly set out Ain Aitpose A(kno n Aas d cumen . AIn A he Ap st, A here A er Afour Atype Aof Acha itable pu education; A he ‘hea s’) AThese A er Athe Arel ef A f Apoverty; A he advancemen Aof theAcommu ity.A advanceme tAo Areli ion; Aand oth rAp rposes fo Ath Abenefit Aof Aw reApre ume A Char tiesAre ie ingApover yAorAadva ci gAeducat onAo Areligio ion.ANo Aever A to Aben fit the A ubl c. ATheA2 06 AA t Aremoves Ath sAp esump C arityAneeds toA em nstr teAhowi itA illAben eft heApublic. B)AACharitbl APur osea Acharitabl(i) AThe A: lis Adescribe Athe Afollo in Aactivitie Arpreve ti noorrreli fdofnpovert ;? advancement ofveducatio ;? advancemen aofareligio ;? advanc me tho shealt oo lthessa ingaofelive ;? advancement of citizensh peorlcommunit adevelopmen ;? adv nceme tuofuthe arts,acu tu e,iherita edornscienc ;? advance entrof31tal – A SharedSoc alDestinyACapi?advancement of human rights, conflict resolution or reconciliation, or the promotion of religious or racial harmony or equality and diversity;?advancement of environmental protection or improvement;?relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantage;?advancement of animal welfare;?promotion of the efficiency of the armed forces of the Crown, or of the efficiency of the police, fire and rescue services or ambulance services; and?other purposes that are currently recognised as charitable or are in the spirit of any purposes currently recognized as charitable.(C) Registration(i)Generally, only Charities with an annual income above ?5,000 need to registerwith the Commission. This threshold has gone up from its previous level of ?1,000. The registration requirements for ‘exempt’ and ‘excepted’ Charities have also undergone change.(ii) The existing registered Charities with an annual income below the ?5,000 threshold can ask to be removed from the register, but they will still remain Charities and will have to abide by Charity Law.(D) Audit, Accounts and Annual Returns(i) A Charity that is not a company must have a professional audit of its accounts if the following conditions apply:?its gross annual income is above ?500,000; or?it has an annual income over ?100,000 and assets exceeding ?2.8 million;or, regardless of these conditions, if:?its governing document states that it must have a professional audit; or32Societies, Trusts / Charitable Institutions, Waqfs and Endowments?sthen ommiss one rdersnth oa cou tsaoftt eo ha ityftosbenprof ssionallyiau i ed.(ii)AAA haritab eAco pa yAwith anAann al inco eAof moreAtha A? 00,000 or asse sAof m re A han A? A2 8Ami lion m stAhave AaApr fessionalAa dit (iii)AAllA egistered Char ties th t Ahave to Asub itAannu lA etu ns Ato AtheA ommi si nA ial Ayear.A ust Ado so A ithin A en mon hs A f A he A nd Aof Athe i Charity’ Afnan it Aannua A P eviously AT uste s Aof Asuch Cha ities Awho Ape sisten ly failed to Asub vi ted Aof retur s; Aannu l A eports Ao Aa cou ts Ato Athe A ommis io Acould Abe co At Aap lyA an A ffence an Afin d. AThe AA t Ac anges Athe de init on Aof A he offenc , A het erA to Aa y AT ustee wh Afai s A o As nd in Ao e A r Amor Aof Athese A ocument fence. The r Anot At e A ailure Ais Ap rsi tent, Aand inc eases At e Ap nalt f Afor Ath t A taken AallA offence Ai Ac ndo ed Aif Ath ATr stee Aa e Aab e Ato show that they A ave eason bl Aste sAt Ameet Athedea li e.or AabuseA (iv) AThAa ditors Aof Aunin orporated Char t es Ahave aAspicAduty toAre cieadyAhave orA ignifican Ab eachesA fAC ar ty A aw Ato Athe AC mmi sion.AThyAalefama ionA statutory A rotecti nAaga nstAle al A ctionA or breachAof co fidenceAorA Abot Ath A he e At ey doA heAnewAAct Ao.Aecog ises tha AdutyAa d Aex endhar ties’A du yAandAthe A ssociated A ro ection At Aa ditors Aof Aunin orporatedA tantsAandA andA haritableA ompanies’ ac ount ,A sA ell AasAto reportingAa cou i dependent ex minersA fAcharityac ounts.(E)AIns itutionalAArran em ntsheACharity(a)ACom issio iss on Ao (i) A Under Athe A ro isions Aof Char ties A ct, 1992, At e ACharity A om Char ties th AU.K Aw s Aable A o Ad velo Ai s role Aa Aa Amodern A eg lator. AThe rkAwhich A Act,A20 6 Afurthe Asup or s Athis Aby Aes a lishing Aa frame iss onA sA cl rifiesAits A bje tiv s A nd Ahow it Ashoul Ao erate. ATheA omefectA heo AledAb Aa A arge Aand Amo e Adiv rseA oar Athat A anl Abet erA secto AitAworks wi h.ions, an A (i )AThA2006A ct A efines Athe ACo mission’s A bje tivesAandA uncerf rmingA giv sAit Aso eAgene alAdu ies which ar Amean At Agui e AitAwhenA its A33o i lShared al A– Destiny A~ ~(iii) The Commission has the following objectives:1.The public confidence objective: To increase public trust andconfidence in Charities.2.The public benefit objective: To promote awareness andunderstanding of the operation of the public benefit requirement.3.The compliance objective: To encourage Charity Trustees tocomply with their legal obligations in exercising control and management of the administration of their Charities.4.The charitable resources objective: To promote the effective useof charitable resources.5.The accountability objective: To make Charities more accountableto donors, beneficiaries and the public.(iv) The Commission has been assigned with the following general functions:?decide whether institutions are, or are not, Charities;?encourage and facilitate the better administration of Charities;?identify and investigate when Charities are being mismanaged or misused and take action to put things right or to protect Charity property;?carry out its new role in issuing public collections certificates;?maintain an accurate and up-to-date register of Charities, and use this and other information to support its work and help achieve its objectives; and?provide information and advice or make proposals to the Minister concerned on matters relating to its objectives and functions.34Societies, Trusts / Charitable Institutions, Waqfs and Endowmentshe dut (v) Te its eorAI Ait Awork, Athe Comm ssionA ustA omplyAw thAcert in duties,Aa Afo lows:?sthe Commi si nam st ia pfartasaisep act ca l ,aa thinh iwyowhichbis:c pati le: AAwithAits obj ctive Aa dAwhichAisA ppr priateAfo Aachi vingAthoseA bjec ves; andipation – inA AAwithA ncouraging charit ble givingAan AvoluntaryApa ti cha it Awork.heneedfo ~ ?Te Commi si nmust,in ppropr atecase ,c nsid rtichAaffect A C ar ties to beAableA o A nn vate Aor toAsupport innov tionAw Charitiesen rally.hctice.T s ?Te Comm ssio ~must~ av ~reg rdtobest regulator h prAshouldAbeA includ sAa plying Athe prin iples Athat regulatory activi ie dAta ge edA pro ortionate,Aa countable, con istent Aand At ans arent,Aa on y A tAcas sAin Aw ic AactionsA ee ed.pr ncip ? esAsanor ani ation,the Comm ssio ~must~ av ~re ardtothesou cesA nA of Agoo Acorporate gov rn nce andA oA he A eed to AuseAit Arthe Amo t AefficienfectiveAand econ,Aeomic l A ay.nAexpa dedA (vi) AThe Com ission h sAb come aAnew ABody Corp ra e,AwithAeAfromAthB ar . There is Aa Aclea As ate ent Aof AitsAi depe denMin st r. eA-exec ( ii) tiveAAThe Act allowsAthe Co mission to re ruit upA oAfourAnewAnoholeA asAaA Boa d AheAAct Aalemb rs. AoAre uir s Atha At e Board asA A re ulationA ro dArangeAo Akn wledgeAand ex eri nce AofAth Aop rationAandAl ast oneA o ACh ri ies andAo AtheAlega Af amewo kA nAwhic Ai Awork . AA co dition A o Athe ABo rdAm mber Amust Ahave A pecialise Ak owledge Aof ver ityAofA in Wale . AThi Aw llAhel AtoA nsu e Atha AtheABo rd A eflects Ath Adthe charitaleAsec or AdAaApu (vAThlicA ii) AA t makesAitA AstatutoryA equi em ntAt atAi A ustAhoPa liamentA Ann alAGene alAMee ing Ad rin Awhich its Aan ua AreportAto is35So ial ACap t l –Aared Desr~e~~~~~(ix) The Commission must report annually to Parliament on its work, its progress in meeting objectives, the performance of its general duties and the management of its affairs.(x) The Act preserves the Commission’s independence from Ministers and government departments. This contributes to public confidence in Charities.(b) Its ManagementCurrently, the governance responsibilities for the Commission in the UK rest with a Board consisting of 9 non-executive members. Corporate decision-making that affects the day-to-day operations of the Commission has been delegated to the Executive group consisting of a Chief Executive who in turn is assisted by four Directors and Functional Heads.(c) The Charity TribunalIn the past, the Charities, if dissatisfied with some decision of the Charity Commission, could go in appeal to the High Court. This was prohibitively expensive and complicated, particularly for small organisations. The 2006 Act has established a Charity Tribunal as a first level of appeal. It is convenient, cheaper and less formal. This arrangement allows smaller Charities an accessible means of grievance redressal. Access to the High Court is still possible as second appeal.3.1.2 Need for a New Legal Framework for Charities in India3.1.2.1 The multiplicity of charity laws in India has prevented evolution and growth of a proper institutional framework in this sector. While, voluntary organisations often feel harassed in complying with various legal obligations, institutions of the government too have not been effective in regulating the sector and securing legal compliance. Instances of misuse of tax provisions, fraud and poor governance have become frequent. There is need to create an effective institutional mechanism which would provide a supportive environment for the growth and development of charities in this country. In this respect, one could learn from the governance structures as described at Para 3.1.1.8. India being a federal Union, a decentralized institutional setup for charities similar to that existing in the USA, seems to be appropriate. The power of registration and oversight needs to lie with the State Governments.36Societies, Trusts / Charitable Institutions, Waqfs and Endowments3.1.2.2 In 2004, uctedAa As udyAonA 3.1 2.2AInA20 4,Athe Sampra an A ndianACentreA or APhilan h ophyA on gACom ission.AThA chariti sA dmini trati nAi AIndia Aunde At eAs onsorshi AofAtheAPla nistudyAsu gest d Afoll wi gAfo rAmodelnAthi A e ard:AeiM del 1A–AMa ntai AtheAst tus quo,Akee ingAtheAexist ngAingtituti na Aarr ngem nts as Athey Aa e, Abu AenhancingA he rApe rfor anceAby adoptingAcertai Are o mend tionsAforAaA oreAfacil tati eAi terface with Ath Apublic,Agre te Atr nsparencyA f AtheAre ulatoryA roc ss, Ameas resAfo AsecuringAb tte A omplia ce,Aand a Abetterppeal A r cess.e M del A2A– ACrea eAaAfunc ionallyAe hancedAChar ti sAD rector teA nAtheAIncom ATax depar ment, plusAStateA evel Aregi teri g age cies,AlusAaAN OAS ctorAAgen y.ATheAChar tiesA ir cto ateA ould AbeAth AmainAr gulator Aagen y,Alooking aft rAmonitorin Aa d A omplia ce, as A nACa adaAa dAt eAUSA Awhil AtheAStateA evelAreg steri gAage cies wou dAexistAonly forAregis ra ionAfunct on.AI waddi io , A her Awould be anANPO Age cy Ato Aadv se AtheAChari ie ADir ctorate. ndAp of ssional A It wil AcompriseAof Ath Ar pre ent tives Ao Ath ANPO Asector,A policy guidance A su hAasAlawy rsAand AChart re AAcco ntants. It Awou dAprovidesmAforAachiobt in A eedbac Afr mAt eA ector A ndAset Aup rev ewAmechanc m l ance.e M del A3A–AC eateAaAChar tie A irectorat Aan AaAman e ingAatoryAN OAS ctorAAgenc . ATheAd ffer nceAb twe nAt is A odelAandA he Aon Am ntio edA NPv Ais Ath tAtheA PO ASe to Aagency wo ld A eAcreated A yA he government as Aan au onomo sABo y.A t Aw uldAhaveA ts Aow AGo erningABody, andApr fes ional staf ,Aa dAwould faveAthe ge eral Afunc ionAofApr mot ng effectiveA seAofAcha it bleAresourc s AbyAe couraging A et erAmanagementA f Ao ganisatio s, AandAimp ov ngAgovern nceAbyAp ovid ngATrustees wit Ainform ti n Aand advi e. ItAwould Aal oAb Aresponscb eAforAcom liance Aed ca ion Af nc i n. AIt AwoudAbe A Ape manentAf rumA orAd alogue tha Athi Asector Ah s Ab en Ade an ing andAwould beAtheA nte faceAbetwe nAt eAg vernm enndAth Ae tor.A? Model 4A–AC eateASt te AlevelACh rity AComm ss o sAs pporte AbyAaAN ThASe torAA en y. TereAwo ldAbeAan Appe ThsA ribun lAtoo. AT sAmodel su g stsAsetti gAupAaACha it es A om ission on the AU Am del.AIt Aw uld beAc ncer fidAnotAo lyAwithAfn nci l Are ulat on A utAalso Aw th A he Apromotio Aa dAd velopme37– A ocialSharedA apialDestinyA3.1.2.3 A Model law for Societies and Trusts3.1.2.3.1 Non-Profit / Voluntary Organisations in our country operate on a wide variety of issues covering almost all aspects of socio-economic development and polity. There are separate laws under which Societies, Trusts, charitable institutions, religious endowments and Waqf etc. can be set up. For illustration, the Societies Registration Act, 1860 is the law under which Societies of different hues are registered in India. ‘Societies’ being a State subject, the 1860 law has been adopted with some amendments by twelve States. The States such as Rajasthan, Karnataka, West Bengal, Madhya Pradesh, Tamil Nadu, Manipur, Meghalaya, Jammu and Kashmir and Andhra Pradesh etc. have enacted their own law on this subject. Kerala, Andhra Pradesh and Tamil Nadu and many other States have exclusive laws for governing religious endowments. Maharashtra, Gujarat, Rajasthan and Madhya Pradesh have specific Public Trusts laws to govern all kinds of Trusts and endowments (religious / non-religious) under their jurisdiction. Then, there are endowment specific laws such as the Bodh Gaya Temple Act, 1949. In spite of all the above legislations, if any ambiguity crops up, the Courts take recourse to Section 92 of the CPC.3.1.2.3.2 Diversity of laws across the States has given rise to emergence of nonuniform practices in the management of voluntary organisations. If an institution registered in one State desires to expand its activities to any other area, it needs to comply with a different set of legal requirements. The Commission is of the view that the management of civil society organisations will be far less complicated if a uniform legal regime for regulation of charity institutions is put in place for the entire country. Currently, ‘Societies’ is a subject under the State list (Entry 32) of Schedule 7 of the Constitution, whereas ‘Trust’ is in the Concurrent list (Entry 10). “Charities and charitable institutions” are also covered under the concurrent list (Entry 28). In order to create a uniform legal environment across States, the Commission suggests that the Union Government should formulate a comprehensive model law covering both Societies as well as Trusts. This model law could be sent to the States who could adopt it with suitable modifications. While, it will not be possible here to suggest a detailed draft, the broad framework and the views of the Commission on some illustrative issues are indicated in the following paragraphs.38Societies, Trusts / Charitable Institutions, Waqfs and Endowments.1.2.4 AK y A lem nts oft h eANew AL weApr3 1.2.4.1 AThAfoll win AthreeAk yAele ents wo ld need AtoAb Ae pla ned AinAtopo edAlaw:bleA urposei) ADefin ngA harityAand CharitalAMec anism (ii)AIn titutionaAGo ernment (iii AInt rfa e Awit AtheAStatele Pur ose i)ADefin ng A harityAand CharitaeAorigina A The An w Ala Aw llAne d to AdraftA Acomposit Adefin ti nAb sedAon At e A ont ntsAofAticAT ustsA Societies AR gist ation Act, A18 0, Avari usAam nded A tat AActs, the ABo bayAPu Act,A19 0, Se tio A92Ao AtheACivi APro edu e ACode A nd ASe ti nA2 15)Aof theInco e ATaxAUKALawAa Ac ,A1961.AThAd finitionAo A“C arity”AandA Charitab e APurpos ”A rov de Ain th i dicatedAi Aparagraph A .1.1.8 3.1Aco ers alm stAallAthe object ve Ali tedAin theAe tanAUnio Aand Sta eAl wsAa dAt eA ame A an be Ak ptAin mindAwhileA orm lat ngAtheAnew Al gislation.Experi ncele Aissue.A acros AtheA orld shows At at Adefinin A‘C arity’ AandA Charitab eA u pose’Ai AaAcom ttee whichA The Co mi sio AisA fAth Aview th tAth re isA ee At AsetAupAa AInclusiv ACommhichAwould w llAe amine this AissueAcomp ehe sively A nd suggestAanA ppropriat Adefin tionA inter- liaAsoften Acharities governmentAre ationship,Ap rt cul rlyAinAtaxAm tters.(ii)AIn titutionalA echan sm issionerA A nAp ace AofA he Apres ntAcharityAadm nistration co s sting Ao Aa ACharityAC m ldA r vid A Inspec or GeneralAof ARe is rationsA s A xis ingAin A he A tates, At eAp opose AlawAwomiss onAin for Aa Anew governanc As ruc ureA n A h Aform Aof Aa At ree-membe ACharities Co w.AI Awil A each State Awit Anecess ryAsu po tAst ff. It will Abe Aan auto omousAB dy crea ed byAl eAassem l A hav AlaidAdow Afu ctionsAand Arespo sib liti s A ndAwillAbeA cc unt bleAt AtheAStafcer dra nA thro gh Aa Anoda AMhe Anister.A hai manAof Athe Commis io A hou dif Abe A AlawAfro At e AcadreA fADistr ctA ud es. OutAo Ath AotherAt o Am mbers, on AshoudAbe dra nArnment.ATh A fromAth Avolun ary sec orAan AtheAo he As ouldAficerAoe A nAoAthe AStateA ovf ncti ns Aof Athis Commi si nA ouldAbeA oAr gulateA nd A upportA he sec or.ATh Alaw wouldAa so A rovide Af r A r ation Aof A AChariti s A ribu alAin eachA tate whic AwillAhav appellateAj risd cti n Aover th Aor ersAofAth ACharities A39So i l Capitaared A–AADestinyAShThe functions of the Charities Commission would include:?Registration of Non-Profit Organisations (NPOs).?Maintaining a public register of NPOs.?Receiving reports from NPOs.?Audit and monitoring.?Disseminating information on good practices / methods of management among voluntary organisations.?Holding public discussions / consultations.?Bringing out simple publications to educate the public about NPOs.?To review periodically the social and economic environment of the charities.?Acting as a permanent forum for dialogue with the sector on issues of policy and regulation.?Administering sanctions and penalties for non-compliance.?Resolving grievances.The Charities Commission should be free to recruit its own staff like any other non-profit corporation and train them, and pay remuneration according to non-profit sector practices. This will give stability to the organisation and also make it possible to hire staff who have a commitment to non-profit work.(iii) Interface with the State GovernmentAt present, a non-profit organisation’s interaction with the State authorities consists of the following – (a) Government’s power with regard to grant of permission for alteration of the memorandum, alienation of property or inclusion of the change report; (b) Government’s powers of inspection; (c) Powers to cancel registration; (d) Powers to appoint an administrator; (e) Powers to modify / anull a decision of the Governing Body; (f) Powers to dissolve the institution; and (g) Powers to impose penalty. In view of such vast powers available to the State machinery, there is a feeling among the NPOs that the sector has virtually become a subordinate formation of the State Government. The Commission is of the view that the NPO sector should have freedom in their functioning (as per the intent of their memorandum). Government’s interface with these organisations should be minimal and the government should work only as a facilitator and developer.40Societies, Trusts / Charitable Institutions, Waqfs and Endowmentshe discre TeAdi cretio aryApowe sA cquired byAva ious AStateA overnm nts during th Acou seAo At me need Ato Ab Adispe n s edAwit .3 1.2.4.2A nA ddi ionAto the above,At eAp opos dAla Aw llAn edAt At keA areAofAthAfollowin Aimportant functi nal Ai sue AwhichAa eA r ticalAtoA AvoluntaryAorg nisation’sA orking:ASocietiesA (a) Al era ion AinAthe m mo and mA– AsAper Athe pr vis ons AofAth me orandumA R gis rat on AActA(as ap licable toA ujaratA ndAva iousAoth rAS ates),Athe p ortedAby ofA ss c ationAo AaA oc etyAcan beAa teredAo l Athroug AaAspecial resolutio As as bro ghtA a A ajo ity A fAno Aless th nA3 5thAo Athe Atotal me ber hipAofAt eA oci ty. AItAAaA o ietyA to th Ano iceAof Athe Comm ssio AthatAthi Ap ovisio Ais AhighlyAi pr c ical. AI asA Alarge A nd Adiverse member hipA p eadAo er AaAlargeAg ograp icalAara,Aseeking sio AisA fA at endan e A fA3 5thAo Athe Atotal me bers ip AisAve y A ifficult. AThe Co mi Apractic lA th Avi w Athat At eAproposed A egisla ionA houl At keAc re Aof A h sAis ue.AAAmor ajo ityA fA app oa hA ould Ab AtoA nsis A hatAsuc AaAspecial re olutio Ai A assedAby aA eetin .A tA no Aless th nA3 5thAo Athe Ato al mem ersAofA heASoci ty pre ent Aat At eAAaAspecial ould be Ai Ali e Awith Athe pr vis ons Aof Ath ACom anies Act,A 9 6, Awher res lu ion Aca Ab Apass d A yA3 4thAofAtheAs arehold rs pre entAatAtheA eeting.( )A pprova Aon Ach n e Arepor A– Se tio A22Aof the ABo bayAPu lic Trus sAAct (BPT sterA(PTR) Act), 1950 dealsAwi h A cha ge’Ain A he ent ies Aof theAPu licATrus sARegpertyAet .A pe taini gAto Aname, Ac mposition, Aorg nisational structure Aimmovab eApr cum erso eA heneverAan A nstitut on A p lies Af rA Ach ngeA n A heA TR AitA a Ato Aface AatAgetsAt eA andA ime Ataki g A roc ss. AI Amay oftenA akeAmo ths beforeAth Aapp ica sio AisA fA appr val A ett r Afr m A he A fficeAofA he ACharityACo mi sioner. AThe Co mieAp oposedA th Avi wAthatA heApr ce sA eedsAto Abplifi AsidAan AmadeA h im Abound.AngeAr port newA egisla ionA h uldAhaveA Aprov sionA nde AwhichAt eA pprova AonAch wo ld need A oAbe Ag v n Awithin Aa prescribed reas nable time li itA(s ayA6 Adays).AAct, 1950 (c) Al enation Ao Aimmovab e propert A– Se tio A36 of At e ABP nAaAP blicA deals Awith A al enation Ao Aimmovab e A r perty A fAaAPub ic AT u t’.AWh heACharityA Tr s Asubmits aAp oposalAf r A ran fer Aof Ai sAp opertyAf r A ppr valAofA eesA houl A Co mis ioner, Ai sAdis osal A akes ti e ATher AisA Avi wAthat At eATrus ani ati n.A haveA ul Apower Ato manageAthe pr per ies A n AtheAbes Ai ter stsAof AtheAor sAnotAo ly ButAt eAcontra y Aargument emph sis sAtha At e Ade ayAin su hAc sesA untAof Ath A bec useAofAthe A ntractab e A tti udeAofAthe aut or ty Abut it is Aalso on accmi sio AisA Truste s’ attemptAto und rvalue At eAp opertyA orApri at Agains. AThe Co fAth Av ew A hat in Athe Ane Aenac mentA he e A e dsAto Ab Aa Abala ceA etwenAtheAtwoA pp oaches. AThAAut orit Amust Ahave reasonableA pp rtunityAto critica41So i l Capitaared A–AADestinyAShsuch proposals in order to check misuse. At the same time, there is need to make the disposal of such matters time bound.(d) Contribution by Public Trusts to the State Government – Section 58 of the currently applicable Bombay Public Trusts Act deals with ‘contribution by Public Trusts to Public Trusts Administration Fund.’ Currently, Trusts have to pay 2% to 5% of their gross revenue to the State Government under this clause. For many of the organisations, this amount appears to be excessive. The Commission is of the view that there is need to have a relook at this issue.3.1.2.5 Issue of giving priority attention to larger Organisations – India has a large number of voluntary sector organisations, a majority of whom are very small in terms of their scale of operations. Currently, the overseeing authorities spend a disproportionately large amount of time and staff on routine matters relating to smaller charities and the attention given to larger organisations is inadequate and ineffective. Thus, many important and urgent matters of such institutions remain unattended or take inordinately long to get settled. Such delays often stifle fundflow to ongoing projects. The Commission is of the view that there is need to introduce provisions which would take away the burden of routine work relating to smaller charities from the authorities. This could be in the form of prescribing a threshold annual income for the voluntary sector. Charities having incomes below this level will have fewer compliance requirements with regard to submission of returns, reports, permissions etc. However, in case any irregularity is detected, they will be liable for punitive action as prescribed under the law. To start with, the cut off limit could be set at Rs. 10 lakhs which could be reviewed for upward revision once in five years. Such a provision, on the one hand, would create a conducive atmosphere for smaller charities and on the other, would enable the authorities to find time to attend to the needs of institutions engaged in major works.3.1.2.6 Recommendations:a) The Union Government should draft a comprehensive model legislation covering both Trusts and Societies in lieu of the existing laws on Societies, Trusts, Endowments and Charitable Institutions etc.b) In place of the present charity administration consisting of a Charity Commissioner / Inspector General of Registrations as existing in the States, the proposed law should provide for a new governance structure in the form of a three member Charities Commission in each State with necessary support staff for incorporation, regulation and development of42Societies, Trusts / Charitable Institutions, Waqfs and EndowmentsCharitable Ash uldAb AaA Charitable AO ga isations AThACh irmanAofAt eAComm ss oheAother two la Aoffic rAd awnAf om theAcadr AofADis ric AJ dge .AOut ofA ndAth Ao he A member , A neAsh uld A eAd awnAfromA heAvol nta yAs ctorA Stat Asho l A woul Ab Aan officer ofAtheAStat AG vernment. In A dditi n, Athe Apo ersAov rA alsoAhav AaAChari iesAT ibuna AwhichAw uld Aexerc seAapp llat he A rdersAofA he ACharitie C mm ssion.AAw th A egardA c AThe Ap oposed Amode Alegis ation Ash u d Ai di f ate Aa cut A f Alimi nnual inco eA o Athe Aa nu l revenue A f Aa ACharity. A rganis ti ns Ahav ng Aan A wi h ArespectA below At is At resh ld Awill have Alight r Acompliance requ rements reg larities oA ubmissi n ofAretu n A/Areports /Ape missionA tc AHowever,AifAi leA orAle alA ar Adete tedAinAtheir fun tioning,AtheA rgan sa ionsAw ll A eAlia ARs.1 Alakh A andA en lAact on.AT Ast rtA it f ,Athe cutAo Al mit co ldAbe setAaw ichAcoul Abe review dAfor Aup ardA ev sioi AonceAnA ve A ears.AeAwhich AwillA d) AT e Agove nme tA ho ld Aset Aup an AInclus veACo mitt A‘Charit ble co prehens vel Aexam ne the Aiss e AofAdefin ngA Charity’Aan Purpose Aand Asug es Ameasure AtoA“soften”Achariti s-governmentA elationship, pa tic larlyAint xAm tters e)ATheAmode Alegis atio Asho ldAtakeAintoA ons derat onA heAviewsAan Asug estio sAma eAabov Aw thA egardAtoA he Afol ow ngAissu sAofAcharityAadmistration: .AAI ter aceAw thAtheAStateA vernmentii AA lte ationAinAt heAm orandumi i. AAppro alAonA cha eAreportiv AA lienation ofAimmovabApropertyv. A Co tribut onAbyA ub ic A rusts toAtheAStateA overnmen 3. ARe henue AofAtheATir ASec orsources Aviz. 3.2. AThird ASector A rg nisat ons Ai AIndi Araise Afu ds Ap imar ly Afr m Afour A ajor individ als,Aprivat Afoundati ns (nat onal Aas A ell Aglob l),Abu ine sAhouses Aan Ag vernme t.AIn A ece tAyears, th Adia poraAis a so Aplay ng Aa le dingAroleAin co tribut ngAto As43A S cil Shared AC pital Destiny A–3.2.2 The character of funding to voluntary organisations is highly skewed. Organisations which take up contemporary issues and are able to project their requirements articulately through the media are able to secure the bulk of funding, leaving the residue for smaller and not-so-savvy organisations.3.2.3 Funding also depends on the nature of activity - some sectors like conservation of environment, nutrition supplement and creation of urban facilities are more popular and “glamorous” and therefore attract more funds, while others like human rights, gender equality and cultural preservation often have to suffer for want of resources. A survey conducted by the Consumer Education and Research Centre in Ahmedabad in the early 90s found that out of over 8,000 Trusts and 2,000 Charitable Societies registered in the city, only 144 had annual incomes of over Rs. 100,000 (US$2,173) whereas the combined total was Rs.1,440 million.123.2.4 Individual Donationsce cindia. r3.2.4.1 In India, individual donations to charity organisations has been meagre. While the quantum of donation to the voluntary sector from government and foreign donor sources has increased considerably during the past decade, private philanthropy by individuals, Trusts, foundations, and corporates has not expanded commensurately. This kind of fund raising consists of direct donations by the public (either a one time act or a recurring transaction). Donations may also come through by patronizing sales of items like greeting cards, diaries, handlooms and handicraft products and by organizing events like art auctions, music programes etc.3.2.4.2 Individual donation is more prevalent during major crisis situations. During the earthquakes in Gujarat and Maharashtra, and the cyclone in Orissa, there were generous donations from individuals as well as corporate organisations.3.2.5 International Aid3.2.5.1 Bilateral Assistance3.2.5.1.1 Many agencies such as the Department for International Development (DFID) (British Government), Swedish International Development Cooperation Agency (SIDA) (Swedish), Norwegian Agency for Development Cooperation (NORAD) (Norway), and Danish International Development Agency (DANIDA) (Denmark) are permitted to support NGOs directly without seeking specific project approval from the Government of India. However, some of the agencies need specific project approval of the Government before they can finance an NGO. In addition, bilateral fund support to the Government of India4412Societies, Trusts / Charitable Institutions, Waqfs and Endowmentsor to nt geA o AtoAa StateAGove nm nt orAto otherAgove nmentAage cies, A ften, Asp cifis AtheApercre seA of fund Atha Am st Abe spentAt roughAnon-govern ental Aorganisa io s. ATheA ecentAin inAbil teral Af nd ng A oAtheAgove nme t Ahas Ainc eas d AtlowAof fue Ads AtoNGOs 3.2.6 ACor orateAPhilanthropy3 2.6.1ADona tio n sst ryA 3.2 6. .1AThe A ys em Aof Acor orateAdo ati n AforAphilant ropicAacti iti s has AaAhs Aof A in A nd a.AIn Ae rlier A imes, Amer hants Asup orted A eliefAacti ities A uri g Athe tiui s.A flodAor Af min . AThey builtAte ples, Apr moted Asc ool , AandAenco raged Aar isticApur n Athe Apre-Indepe denc Aera Ama y AbigAbu iness A ous sA etAupA rus sAandAFound tinsAtoAs pport Asc ools, Aco leg sAand Achar table Ahosp tals.A ater As meA f Athe Amultinat onal AalsoA oindAin.AeA647A 3.2 6. .2AAn A cti n AAid study found th t, A nAthe Acor orateA ront Aon y A 6% A fAt ani s com aniesAsu vey d Aha Asom As rt AofA olic A( 1% Aof th se or 8% A fAthe totalAcom whic A had AaAw ittenAp li y) A o AgetAin ol ed AinA ocialAdevel pmentAactiv ti s. ATheAcom anies lo edA wereAin ol edAinAdevelop entalAactiv ties,Apri aril Amad AcashAcontribu ions,Afo ludedA by Ah lpi gAtheAdisadva tage AwithAempl ymentAopportun ties. OtherAacti itiesAin edAby do at onAofAc mpanyAa sets,Ado atin f Asta Ati eAandApurc asingAmat rialsApr du ectl A NGOs AOn y A1 % Aha Asom Ak ndAofApartn rshi Awi h Athe NGOs, whi eA80% dealtAdi s.ATheA wi h Athe Abene iciaryAcomm nity AM stAof theseApartne shipsAe is edA nAthe urbanA re tion A partne ship Awer Aal oAno AwithAdevelop ental NGO ,Abu Awer Amore ofte AwithAinstit likeA ota yAand LionsAC lubs .3 2.6.2 ACor orateA ocial AResponsi ilityA(CSR)ity’sA 3.2 6.2.1 A‘Cor orateA ocial AResponsib lit ’ A ay Abe Ad fi e Aas Aa Acor orateAen s.AThA comm tm nt AtoAw lf re Aof As cie yAandAcom uni y Aa dAitsAadh re ceAtoAe hicalAv lu ti nsA te m A ay AbeArela ive y A ew A n AtheA ndianAl xic nAb tAthe Ac nc pt AisAcer ainl Anot.ATrad nc ptA of A“trustee hip”,A“g vin ”AandA“we fare AhaveAe isted sinc Al ngA n Aour Aso ie y. ATheAc A20thA ofA ocia Ago dAhasA lway Abee Ap rt A f AtheA ndian Ap yche AFr m Athe Abeg nn ngA f Ath onAto ce tury, Abu ine sAand Ain us ryAin Indi Ah ve AinAdiferen Away Abeen A ayingAatt nt erAofA theirAobli ati nAand Acomm tmentAt wards As cie yAa dAtheAcomm ni y.AThe largeA um A20thA sc ools, Acol eges,Ahos ita s Aand otherAchar tableAestablish ents, whic Awe eA et up A n Ath c nt ry AinAdiferent pa ts A fAtheAco ntr , Aa eAfine Aex mp esAo AsuchA ocialAcommi m ent.A3.2 6. .2AInA ecent A ear , AC R AhasAs ifte Afr mAtheA om in Aof Ac ar ty A oAtheA ominAofAst ndardAbu inessAprac ices.ATo ethe AwithA‘ rofi’AandA‘gr wt ’, itA s A neA f AtheAess45Social C p talA–A ~~~~~~~ Destinypment” Aparameters which define a business. Stakeholder awareness, increasing power of civil society, intensity of competition and environmental challenges are some of the factors which have increased the emphasis on CSR in recent times.3.2.6.2.3 Companies in India now explicitly recognize their social responsibility and many of them allocate sizable resources to it. The TATAs, ITC and the Azim Premji Foundation are among major corporate entities which have linked their business plans with ethical and social commitment. The TATAs have fully dedicated Foundations / philanthropic establishments through which they take up important issues of social / economic empowerment of the community and society as a manifestation of their commitment towards citizens. Besides, their manufacturing units too take up development work in the local areas. ITC has a dedicated social development team which anchors all corporate social responsibility initiatives. Instead of having a separate Foundation for taking up standalone philanthropic activities; ITC integrates it with its regular business plans. It fulfils its social responsibility by forging public-private partnership as a business link in the areas of social forestry, integrated watershed development, web enablement of the tobacco farmers, e-choupal’s farm extension services and livestock development. Another notable example is the Azim Premji Foundation started in the year 2001. It is a non-profit organisation which works extensively on “enhancing the quality of primary education being imparted in the government schools in the rural areas”. The Foundation firmly believes that merely creating islands of excellence in few pockets is not of much consequence and hence it aims at bringing multi-dimensional systemic changes in the whole environment of primary education across the country. Currently, it is carrying out a Learning Guarantee Programme (LPG) in five States viz. Karnataka, Madhya Pradesh, Gujarat, Rajasthan and Uttarakhand. It also provides technology support to 16,017 primary schools located in 13 States of the country.3.2.6.2.4 The Commission acknowledges that over the years, many of the corporate houses have undertaken significant work in sectors like primary/adult education, livestock development, tank irrigation, sanitation, women and child nutrition and provision of drinking water. The Commission feels that while taking up such activities, the Corporates should take into account the prevailing needs of the local people. It also needs to be ensured that there is no overlap/clash with other similar programmes in the area.Refinition of CSR~ ~ W~rldhe AWo ibili yAldABan AdefinesAc rporat AsocialAresponbuteAtoA ( SR) A s, A“the Aco mi ment Aof A us nessAtoAco tr plo eesA sus ainableA conomic Adev lopment work ngAwithAe tA argeA a dAtheirAf mil es,At eAlocal Ac mmu ityAand so ietyA thA oodA to impro eAtheir qu lityA f A ife, inAw ysA hatA reAbfor A usi ess A nd A oodAforAdeve l46ocieti s ATrustsA/A haritableAIns ituti ns, WaqfsAand3.2.6.2.5ARecommen atio s ty,Ath rea) AWhenAa communitAtyAbene rojec Ai At k nAup AbyAa corpora eAent shou d AbeAs me AmutualAco sultati nAb tweenAt eAc mpa yAandtheAlocalA ov rnme tAsoA ha At ere AisAnoAu necessa yAov rlapA ithAoth rAsimilarAd velopmentA ro ram esAinth Aarea.Ab)A overnm ntA ho l AactAasAaAf cil tatorA nd create AanAe viron entAwhichA ncourage Abu inessAan Ai dust yA o AtakeAu Apr jectsAandA ctiviies whichA re like yA oAhave an imp ctAonAt eA uali yA fAl fe Aof the AlocalAc ommu ity.lity Aetc.An tAFund ng 3.2.7A overnmeyA upportA 3. .7. ABoth the Union andAStateAG vernmen sAprovideAco siderable budgeta Ac ncerns to voluntaryAorg ni a ions onAaA id ArangeAofA ctiv tiesA ikeAruralAt chnology ducation,A of Asocia Awelfar , Aprimary A ducation Ama ernal andAch ldAhe lthAc re,AadultA ngAdirectA e po ermen Aof women AandAreha il tat on Aof Athe disab ed. A part Af omAmak specially di bu sement of grantsAto voluntary agencies,A ov rnmen Aof Indi Aha Aa soAsetAupA rd ASectorA empowered A utonom us Bodies A o Aprovi e A upp rt Ato Athe A ct vit es h Ao Athe AT In titute Org nisatio s Ahe ACentTSOs). Aal ASoci l AWel are ABo rd A CSWB) Aan ANationalntABodi sA of APublic AC ope ation andAChild AD velopmen A(N PCC ) Aar AtwoAsuch promin eAC uncilA de ling AwithA o ern entA–ANGO in erf ce AinA heAsoci l Awelfa eAsec or, whileAt ncyAwhi hA for AA va cementAo APeopl ’sA ction andARuralA echnolog A( AP RT) Ais anAag ur gemen A finances voluntaryAorg ni ationsAto stimu ate Ag assArootsApar ici ationAandAenc nctio ingA ofAruralAt chno ogy ATher Aare mor Atha A437 AsuchA utonomousAorg nisationsAf ScientificA und r Avarious A in str esAofAtheA ov rnmen AofAIndia exclu ingAt ose Aunder No.1Ai.e.A De ar ments. AThe A ommi sionAwi lAex mineA hi Ais ue AinA ts rep rt Ao ATOR“Orga isational St uct reAofAthe A ov rnmentAofAIndi ”.roughAtaxA A ot er Awa Aby which theAStat Aprovid sA upp rtAto At e Achar ty sectorA sAt graphA3 3. c nc ssionsA fAvari us A inds. This issu AhasAbeen di cussed in detailAat p ar a 3.2.7.2AAcc ed tationAof VoluntaryAOrga nisatio n 3.2.7.2.1AAcc ed t tionAi Aa Aformal Ar co nit onAofAthe Aac ie em ntsAof AanAorg isatio ,A link d Ato Asom A nternalA Aexte nalA or sAsuchAasA om itme tAto long ter Aaims AandAo jectives, Aorga isationa Aability, ad erence Ato financ al Anorms,Atr nsp rencyAandAacco ntab47Socia A a italA–d ADestinyAShare3.2.7.2.2 A large number of voluntary organisations receive grants from government for a variety of purposes such as social and welfare services, surveys, studies, monitoring, evaluation etc. These organisations vary greatly in their capability and credibility. In the absence of any system of accreditation / certification, the government agency at both Union and State level have found it extremely difficult to distinguish between organisations who value for quality and those which have been set up almost solely for the purpose of receiving government grants. In this context, it is widely recognized that there is need to have a system of accreditation and certification for Voluntary Organisations, which would facilitate and bring transparency in the Government-NGO partnership, particularly in the work of funding agencies. The procedure adopted for accreditation / certification should not be so complex as to lead to harassment, delay and corruption.3.2.7.2.3 It is generally agreed that accreditation could be best done by the voluntary sector itself. However, attempts to form a Self-Regulatory Body of voluntary organisations in the country have not succeeded so far. There is a feeling that government needs to be involved in this process.3.2.7.2.4 The process of accreditation and certification undertaken for the voluntary sector should be based on the following principles:-a. Accountability and transparencyb. No ranking or ratingsc. Norms will have to be compatible to the sector3.2.7.2.5 The Steering Committee on the voluntary sector for the Eleventh Five Year Plan set up by the Planning Commission considered this issue and recommended setting up of a National Accreditation Council (NAC) with five regional centres in the West, North, East, North-East and South India and major metros in due course. The NAC could consist of academics from schools of social work, leaders of the voluntary sector networks, retired bureaucrats who have worked in NGOs after retirement for at least five years and corporate association members from CII, ASSOCHAM, FICCI etc. and NGO leaders of repute. The Assessors would be invited from different fields such as schools of social work, the schools of management like Institute of Rural Management, Anand (IRMA), accounting firms like Grant Thornton, CRISIL, Deloitte and Price Waterhouse Coopers, or Financial Management Service Foundation (FMSF) or Account Aid or Foundations such as GIVE INDIA etc. Audit firms cannot accredit their own clients as this would lead to a conflict of interest. The National Accreditation Council would empanel them on the basis of criteria such as organisational assessment capacity, exposure to voluntary sector and reputation for48Societie , ATrustsA/ ACh ritab eAI stitutionsindependence and dA wardAaccr ditationA indepen en eAandAcr dibility.AThe A ational Accre itati nACouncilAwou to AV lunta y A rganisations A ase AonAdocume ta ion andAevaluai onAof Ath Aa ses ors.as ,AwhenAtheAco ce tA 3.2.7.2 6AIt AhasAbe nAfu th rAr commend d Atha AinAth Aini ial pilotAp borne AbyAtheA ational ofAa cr di ationAisAsou htA oAbe popula iz d,Ath Ac stA houldAbe nted byAco tributi nsA Acc ed tat onA ouncil A utAof itsAo nA orpus,Awhich co ld AbeAsupplem Abe two Abro dAo tionsA fr m A arge do or . ALat rAonAwhenAit is Afir ly Aes ab ish d,Ath re Acoul ita ionA ee lin edAtoA fo Am eti g AtheA xpensesAo Ath Asocia Aa ditors: A(i) Ac arg AanAac re rAv ry Asm ll AVOs, A heAheAsiz Ao Ath Aann alAbu ge A f Ath ANGO, A ased on Aa slabA yste A(f h rgeAtheA xpens s A nA NACAcoul Aco sider Asu sidizing Athe exp nses comple ely ;AandA(i )A aAbasis Ao At e Adonors. a pro-rateAan Aagre3 2.7 2.7ATheACo mission Aha Aca efull Acons der dAthe A hole isssAw th AtheAview Ath t:to Athis Aor anisat o .A(a)AAccounta ili yAtoAstakeho de sAa dAtranspare cy inA heAfuncti ningAo At eAvoluntar Asector Ais essen ia ; ther for ,Athere AisAa A ee Afo Aaccred ta ionAofAVOsA dita ionAC un il. Thi A hrough an Ai dep ndent Aag ncyAlikeAthe A ationalA ccruld beAsetAupAby A aw.AB dyAc VOs.AItAisAaA tampAofA b)A ccredi at onAdoes no Aamoun At Aran in Ao A ating oflit Aa d Acre ibili y.Atransp ren y,Aaccountabpr ate corpus Ao Af c)AToAstarndAAwith At e Agov rn ent AneedsAt Aplace an appr emented Aby don tions.A tAth Adisp salAo At e ANAC, Awhich co ld AbeAsupphereaf hargingA eesA rom Ait Aer,Ath ACo ncilAcould fin nceAitsA ctiv ties byAbe Aap licable Aonly A oA c ients.ASuch AsystemAofAaccr ditati n/ ertificatio Asho ld ntAa enc es.AIn Aord rA tho e Aor anisati nsAw ichAseek Af ndingAfro Ag vernm an Ath Aac ions AtakenA that A heA arame ers adoptedAare cle rAa dAtrans arent uti nAofAthe A oun il,A b AN C A reAindepe dent Ait is Aadvisable th tAt eAconstiitsAfu cti nsAandA roced res ar Acl arlyspelt Aou AinAtheAlaw.3.2.7. .8AR commen at o s:ifcationAof Av lunta yA a)AThre shouldAbeAaAs s em Aofi Aaccred ta ionA/Aceror anisati nsAw ichAseekAf ndingAfrogo ernment Aag ncies. AsetA p anAindep ndentA b)A overnmentA ho ld Ata e ini ia ive to en ctAaAlawAto AupAthisAw rk.AInAthe BodyA– A ational A cr dita io ACou cilA– to takAt meAc rpusAofAfundsbeg nnin ,A overnme t may need to Apro id AaAon49S c al Shared ACap tal Destiny A– A~d Ain At e Atotalhe above law )ATeAa oveAlaw shouldA rovi eAdeta ls wit AregardAtoAt eA ons itutionA fAt eACouncil, its functi ns Aits powers AtoAl vyAa prop iatAfeesAfrom A heA pplic nts,Aan AotherArlat dAmatters.3.3ACharitabl AOr ani ation sAan AT x ALawsAallAvoluntar A.3. AThe A ncom AT x Act, A 961Ais AaAUni nAleg slation Aw ich appliesAtAAnyAvolunt ryA organi ationsA Tr st,ASoci ty Aor ACom any) Aunifo mlyAth oug outAIndiaAforAthe Ap or,A (non-profi)Aorgan sa i nAengagedA nAaAc aritabined as AeA ork, AderelieicAutilit Ano A edu ation,A edi alA elief,AandA he adv ncement of anyAobj cts Aof general pub eftsAu der theA involvi gAa y Aactiv tyA or Apr fit” AcanAclaim tax exemp ionsi Aan Aothe Abe a i n ed therein. ncom ATax AAc ,A 961 subject Ato the conditions Aa dArestric ionsAcon sationsAi AtheA 3.3 2 ABroa ly, the IncomeAT x AAct Ap ov desAbenefit AtoAcharitabl Ao gan ollowinAthreeA ays:I.A ert inA ncomesAa eA otA nclud d AinAteA otalAin om A1. ASecti n A10 Ade cribe Ai com sAwh chAd An tAf rm Apa t Aof Ath Ato alAincome; At eAsub-s ct onsArelate AtoAcharitabl Aor an sationsAare Aa Aunder:stablished forecti nA1 (23 ) A(iv) andA v) Asta es thatAincomeA f Ainstituti nsA,A hallAnot to chari ableA urp ses,Awhi hA re A pproved Aby theAprescr bedAa tho it dAshall no AbeA be A ncludedAin A he compu ationA f A ota AincomeAof A heA nstit tio Aa ubjec At Atax AionsA as bei gA Prio Ato AJune 200 ,Aapp ov lAfor Agra tAofA xempt on Aunder the eASec fAthr eAyea s.A giv n Aby Athe AU io AGo er ment AbyAway A fAn t ficatio , A or Aa A eriodA een del gated A A te AJune,A200 Ato streamline the Ap ocedur ,Ath se Ap wers AhaveA theApresc ib dA and Athe AChie A ommissio ersA/ADi ectorAGen ral Aco cer edAareAnow tionA nderAtheA autho ityAt Aa prov AgrantAof As ch Aexemp ion .AApprova AforA xem hallAb Apasse A boveA ro isionAs al Ab Agran edAorAanA rde Arejecting A he Aap li ationA pplicatio Aw sA withi Atwe ve A ont s A rom theAe d A fAthe mont Ain Awhich As chA as Athere A s A oA rec ived. The order sha lAb AvalidAfo At eAl fe-ti e A f Ath AT ust As Al ngv olationAof theAstat te 2. Se tions A1 Ato 13 A rovide Afor thAasses ment ofA rustsA hat areAwholly fo Acharitab eAorAreli iousA urpos s.AUnderAth seAprov si ns,ASect onA1 Aprovi esAt atAincom Afro Apr pertyAheld fo Acharitab e Aor Arel gious pur os s Ashall A ot beA nclud50Societies, Trusts / Charitable Institutions, Waqfs and Endowmentsincome of the Trust etc. if the income is applied as per the provisions of the Act. This shall apply if the income derived from property held under a Trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application later, the income so accumulated or set apart is not in excess of fifteen per cent of the income from such property.The non-profit organisation must utilize 85% of its income in any financial year, on the objects of the organisation. In case the organisation is unable to spend 85% of its income in the financial year due to late receipt of income or any other reason, the Trustees may exercise the option to spend the income during the immediately following twelve months. Income can also be accumulated for a period ranging from one to five years (prior to 1-4 2002 the maximum period for which the income is to be accumulated or set apart was ten years), for specific projects, subject to the following conditions:i.The funds of the organisation are invested / deposited only in approved securitiesspecified under Section 11(5) of the Income Tax Act.ii.No part of the income or property of the organisation is used or applied directlyor indirectly for the benefit of the Founder, Trustee, relative of the Founder or Trustee, or a person who has contributed in excess of Rs.50,000/- to the organisation in a financial year.iii. The organisation files its return of income annually within the prescribed time limit.Section 11 also provides that income of the Trust etc. in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the Trust or institution shall not be treated as income of the Trust etc.Section 12 provides that voluntary contributions received by a Trust/Institution created wholly for charitable or religious purposes shall be deemed to be income derived from property held under Trust and shall not be included in the income of the Trust as provided in Section 11.Section 12A (1) (aa) importantly provides that the provisions of Section 11 and Section 12 are applicable to the income of any Trust or Institution only if the Trust has made an application for registration of the Trust or Institution in the prescribed form and manner to the Commissioner and such Trust or Institution is registered under Section 12AA.51Soci l C pital~d A~DestinyUnder Section 12AA, the authority for grant/ rejection of the registration is the Commissioner of Income-tax. Every order granting or refusing registration is by statute required to be passed before the expiry of six months from the end of the month in which the application was received. No order refusing the permission shall be passed unless the applicant has been given a reasonable opportunity of being heard. The Commissioner may examine the documents submitted and conduct an inquiry on the objects and activities of the Body. The following documents are required to be submitted for obtaining registration under this Section:i.Copy of the instrument by which the Institution has been created;ii.Other documents in support of the above.iii.Copies of accounts of the Institution since its inception or for the last three years whichever is less.II. Deductions to be allowed from the profit and gains of business and profession1. To encourage expenditure on scientific research, Section 35 of the Income Tax Act provides for weighted deductions to a tax payer to the extent of 125 per cent of the sum paid by him to an approved scientific research association, approved university, college, company doing research or other institution to be used for scientific research subject to certain specified conditions. The Union Government is the authority that approves the companies, institutions, universities etc. An order approving/rejecting the application under this Section is required to be issued by the Union Government within the period of twelve months from the end of the month in which such application was received. With effect from 1st April, 2006, recognition granted to the organisation, institution etc. is valid till its existence, unless withdrawn by the Union Government.2. Section 35 AC of the Income Tax Act also provides for deductions to be allowed to a tax payer in respect of expenditure on eligible projects or schemes from the business incomes of the assessee where the assessee incurs any expenditure by way of payment of any sum to a public sector company or a local authority or to an association or institution approved by the National Committee for carrying out any eligible project or scheme. Approval for the project or scheme is given by the Union Government, on the recommendation of a National Committee.52S cietie , TrustsA/AC aritableAInst tutio s,A aqfsAandAEisAless.heAI n-membercome A axAR les Ahav Aspecific Ap ovis onsAwi hA e ardAto AaAfourteo A 1-O.AA National A omm tte Aand At e A ann rAofAitsAfu ction ngAun er AR le A11-F tsAu derA The Ap ovis ons Aals Asp cify A he typesAof proje tsAwhic Aqu lifyi Afo Abene )Aon AtheA this section.A ppr vals Aar Ag antedAby AG vernmentA Mi istryAof Fi anc ear .A tA recom en ati nAofAthe NationalA omm t eeAforA Amaxim m A eriod of Athr eA approvalA can Ab Afurther extende As bje t Ato AtheAsat sf cti n AofAthe A omm tte AandAthet er aft rAby A heAUnionAGov e nment.Aa lowedA 3 AS cti n A 5 AC A Aof At e AI com ATax Act Aalso pro ides Afor Ad du ti ns Ato Ab from Athe i Ar spect Aof Aex end ture Afor car ying A ut Arural Ade elopment Ap ogra mes eAi cursA busines Ai comes Aof Aa sessees AS cti n A35ACC Abroadl Astat s, where Aan assess ituti n,A anyAex en itu e A y Away Ao Ap yme t Ao Aa yA um AtoAanAas oc ation AorAins ent,Athe hi h Ah s Aas Ai sAo ject AtheAun er aki g AofAanyA ro ramme ofAruralAdev lop asses ee shallAb A llowedAa A ed cti nAofAt e A moun Aof AsuchAex enditure incurr dAd ringAthe previousA ear.III.AD du ti nsAt Ab AmadeAinA omput ngAtot lAi com Afor Athe pu posesAofAca cul tingAtaxA ia ili yAonA heAtota l income .ADonorsA(ind viduals,Aasso iations, Ac mpan es, etc) Aare ent t edAforAaA ed c ti nA fA50%AofA onat on Ama eAto AtheAr gistered Ac aritableAorga isations enj yingAtaxA ereAi Aa xempti nAsta us Aunde ASe ti nA8 G Aof At eAI come TaxAAct. Howev r, t the Act.A li it Aup toA hich AtitAcan AbeAb neAa ail dAby A he donor Aas pr vid dAini ThnA8 G AofAt eAI comeTa AAct.aritableA In order A oAe able A he donor to Aavaiits AuAbeneder Athis S ction,AaAccord nceA org nisation requires ap rov l AbyAthe ACom is ioner A fAI co eATaxAinAa ollowingA ith A ul A11 A Aof At eAI comeAT x A ules. ATheA pplic nt needsA oAs bmitAtheA ocu entsAforA btai ing AsuchAaprova :nAiss edA i ACost AofAreg stratio Agran edAunde ASe ti nA12 Ao Acopy i AofAno ifcati under Sectio s A 0(23) Aor1023C); i. NotesAon Aa ti ities AofAin titut onA ince Aits A nc ptionA rAd ring theAlstAthr eAyears, A hi heveris Aess;ii .A opiesAof ac oun sAofAtheAin titut onA inceAitsA nc pti nAo Afor theAlstAthr eAyears, A hi hevers A eneft Ai As bject Ato Ac ndition Aimpo edAunderAsu - ec ionA5 Ao ASe ti53c a ACpithared l A– Destiny A~ ~~On being satisfied, the approval will be granted by the Commissioner and no order of rejection shall be passed without giving an opportunity of being heard. The validity of such approval is for a maximum period of five years. Rule 11AA provides time limit for decision on the application which should not exceed six months from the date of application. However, in computing the period of six months, time taken by the applicant in complying with the directions of the Commissioner is excluded.3.3.3 To sum up, there are four areas of interface between voluntary organisations and the Income Tax Act. First is getting the exemption approved by the prescribed authority under Section 10(23C) of the Income Tax Act. Second is the process of getting registered as a charitable institution under Sections 12A and 12AA (in order to claim benefits under Sections 11 and 12). Third is getting 80G exemption certificate status. And fourth is claiming deductions under Sections 35, 35 AC, and 35 CCA. The procedures to be followed for availing of the benefits under the respective provisions of the Income Tax Act have been discussed briefly in the above paragraphs.3.3.4 Simplification of Procedure under Section 12AA and Section 80G3.3.4.1 As indicated above, approval under Section 80G needs to be granted within six months provided that in computing the period of six months, the time taken by the applicant in complying with the directions of the Commissioner shall be excluded. Several organisations brought to the notice of the Commission that the actual grant of an 80G exemption certificate sometimes takes longer due to this proviso. In fact, there have been instances where, by the time a certificate is made available to the applicant, the case becomes due for seeking renewal. Suggestions have been made that under Section 80G the exemption certificate should be granted to a Charity in perpetuity; there should be no need for its renewal. The tax authorities in any case have the powers to cancel the registration if any misuse/malfeasance is detected. The contrary argument is that as there are a large number of such institutions in the country (with many of them obtaining substantial donations every year), and as only a limited number of cases are now being taken up for scrutiny, it may not be physically possible for the Income Tax Department to keep a continuous track of their transactions. The necessity of securing renewal of the 80G certificate at a prescribed interval would require an organisation to apply afresh to the department with all details. A periodic revalidation clause is thus necessary to keep the organisation on the radar of the income tax authorities.3.3.4.2 The Commission recognizes the need for simplifying the administrative procedure. To reduce the time taken for granting registration to organisations under Sections 80G and 12AA, the Commission is of the view that the order giving approval or rejecting the54S cieties, AT usts A/ ACharit ble AI sti utions, AWaapplication under appli ationAun er Ath se sectio sAcoul A eApa sed Aw th n AaAti eAli it ofA inetyAdays byAtheApre cr bed A ut ority.AIn A ase of Arejec ion Ath Aasses ee ha At eAopti n Ato Ag Ain appealAbe oreAtheAA pellate Tr bunal Aagain tA nAo der Apassed Ab AtheA ommissi nerA nde ASectio A12 AA nd A ection 80G ofAt eAI n cm eATa AAct,A196 .A3. .5 AEx end ngATimeALimi Af r AAccum lationAof ASur lusAI com tedAfo Aa max mumA 3.3.5.1A nderAthe Aex sting Ap ovisio s,A ur lusAincome A an A e accumul edA ncome, du ingA p rio AofAfive years Afor sp cificA roje ts.ATo Aav ilA hisAfacilit , AtheAa cumula Aun er Sec ionA11 theAperio Aof ac um lation, A as t AbeAin es edAinAa Ama nerAa Aprescr be (5) ofAt eAIncom AT xAA t.Ave Ayears A( nsteadustsA/Achari abl A 3.3. .2 ItA as Abro gh Ato theAnotice of At eACo mi sio AthatA a yAofAtheAT e.A t A ay, Aofte ,A instit ti nsAareAe gage AinAprojec s Awith si nificantAoutlay A nA nfra tructu imi .ARestrictin A ot AbeApo sibl AtoAc mpleteAs ch Alar eAp oject Awit in Athe givenAtimeA nAfactAim edeAtheA t e Aaccum lati n Aof As rp u Afrom A nc meA oAaAp rio Ao Afive yearsA ayAes,AbuildingsA ndA pro ec ’s Acomplet on AThACo miss onAi Ao Athe Av ew Atha Ain Amoder Ati s,AoldAage A omes/A nfrastru ture Aare Ac it c lAcompone tsAofAa Acha ity’s Afunct oni gA( ospitamu ationAneeorpha ages, Aeducat onal Ai stitution Aet .).AThe ef re,AtheAperi dAofA ccdsAtobeAenhanced.3.3 6 A ationalis tionA f AProce ureu n d erAS ctio A35ACierAparag ap s,AaA 3 3. .1AWith rega d A oAS ctionA 5AC ofA he Income Ta AActAas statedAinAe rdAbyAthe A at ona A deduct on onAexpe dit reAisAal owed Afor el gi le projectsAif it isA ecommendeACo mi s on At atA Committ e A oAthe AMi is ryA f AFi ance. AItAha AbeenA epr sented Abef reAtar AaAo easAw ichA this Ai AaAtime consumingA roc ssAespecially forAorga is tio s A f ituat dAinA rg Aan Ar sourc sA ishAtoAava l At isAd du tion. TheyAhaveAto A pend A onside abl Atime,Aento putAup the rAcaseAb foreAtheANt i o nalA om ittee.AApr visio Ao AtheA 3.3 6. AThACo miss on Ai Aof Athe Avi w Athat exemp ions sought Aun er thiRegionalAN ti na A lawA ou dAb Aexpedit dAifAtheA at onalACom it eeAi Areplace AbyAfour ta.AThAmembers Ao A Commit ee Ato Abe located in ADelh ,AM mbai,ACh nn i AandAK lk Apresent AN tio alA thes AC mmittee Aw uld AbeAp rs nsAofA mine ceA nA ubl c AlifeA asAin Ath tAreg onal Alev lsA Comm ttee Abut A erhapsAw thAfew r Amembers. Ha ingAComm tteesA ccurAwhileAmakin wo A ldAexped teA uick dispos lAan Aalso ensure th tAS ateAb asesA oAnotA wo ld Acontin eA oA rhe Acommendations. A eco mendatio s Aof Athe AR giona ACommitt es erA uggestedAthatA b Aforward d A oAthe AM nis r AofA inance Afo Aa fin lAdecis on.AIt Ais furt t eA eco mendations of Athe Co mitte sAs o ldAbe A al diAf rAaAp riod AofA55o i lShared al A– Destiny A~ ~of the present three years). Subsequent approval if required, would be granted only if the National Committee is satisfied about the activities of the association or institution during the preceding period of approval but here also the final decision would be that of the Ministry of Finance. The necessary administrative support to these Regional Committees would be provided by the Office of the Chief Commissioner of the city in which the Committee has its headquarters. A Commissioner of Income Tax could act as Secretary of the Committee.3.3.7 Recommendations:a) Under Section 12AA and Section 80G, the registration or approval should be granted or an order rejecting the application should be passed within a period of ninety days from the date of filing of the application instead of the present one hundred and eighty days.b) In view of the fact that infrastructure projects are a critical component of charitable institutions, the period for accumulation of surplus which is currently five years needs to be further enhanced.c) The present National Committee may be replaced by four Regional Committees to recommend “deduction on expenditure” to the Union Government under Section 35AC of the Income Tax Act.3.4 Regulation of Foreign Contribution 3.4.1 Legal Framework3.4.1.1 The Foreign Contribution (Regulation) Act, (FCRA) 1976 has the primary objective of regulating the acceptance and utilisation of foreign contribution or foreign hospitality by certain persons or associations, with a view to ensuring that Parliamentary and political associations, academic and other institutions as well as individuals working in important areas of national life may function in a manner consistent with the values of a sovereign democratic republic. The Act prohibits acceptance of foreign contribution by election candidates, journalists, public servants, members of the legislature, and political parties or their office bearers (Section 4), and allows Associations having definite cultural, economic, educational religious or social programme to accept such contributions after complying with certain requirements (Section 6).3.4.1.2 The requirements are: (i) that the Association shall register itself with the Union Government in accordance with the Act; (ii) shall agree to receive such foreign56Soci t es,ATrusts / ACharitable A nstit tio s,AWaqfsAacontribution Aap licationA cont ibution o lyAthrough a Apart cu a Abra ch of Aa ABan Aa Asp cified Ain Ath ntAasA o A heA for A egi trati n, Aan A(ii )A hall Agive A nA nti ation toAthe AUni nA ov rnm ece ved,Aa dA a ount Aof eachAforeign contribut on A eceive ,Ath Asour e A rom whichAit A asA n AG vern entA he Ama ner A n Awhich such Aforeign A ont ibutions A as utili ed. AThe AUni cceptin AanyA may also require Asuch As ociati ns A o Aobt in Aits Apri r Aperm ssion Abef re A trib tion AbyA foreign co tr bu ion Aif Ai Ais A ati fied Athat At e A cceptan e Aof Aforeign co Aof India A rA suc AA sociat on is Ali ely Ato Aaffect A rej dicially Ath Aso ereignty A nd integ it with Aforei nA the Apu li Aint res Aor A ree Aand Af ir ele tions Ato Aany le islature Aor A elation s,Acastes Ao ountrieA; AorAha mony Abetwe n Arelig ous,Aracia , A inguisti Aor Areg onalAg oulso req iredA communi ies A Secti n A10). APri r A erm ssion ofAthe AUni n A over ment AisA onA )Aor AforA forAany or anisation ofApoli ica Anatu e Anot Abein AaApo itical Ap rt A( ect AanyAforeignA an AAs ociationAn tAreg ster d Aunder A CRA A[S cti nA6(1a)] A orA cceptin contrib tionxisting AAc .Aon ributi ns 3.4 1 3AFCRA Ah s Aa Ari oro sAscheme Af rAc mpelling At e A ecipien sAofAforeignA to A dhere A o Athe As ate Apurp seAf rAwhich Asuch con ribu ionAhas Ab en ob ained.AIt is mandato yAt Arec iveA heAfund on y Athrough anAint ma e Abran hA fAa Ban ,AtouseA heAfundund only AforA only throughAt atAi timated Ba k Ab anch,A oAfileAan ua Are urn ,Ato useA heA the Apow rAt A theA ssociat on’ Apu po e Aa dA ot AtoApay toApolit calApartie . AG ver ment A as returns,A ndA insp ctAand As ize accounts andAr cords, Aaudit asso iati ns thatAfa lAtoAfur ish confis ate articles andAcurr nc Areceived Ain A on rav ntioAof Athe Ac .AatAtheAUni nA 3.4. .4 ATheAcl use (Sect on A 0)Aunder the exis ing A CR AA t, A 976At inAits Apri rA Go ernme tAmay,A nderAcertain Ac rcumsta ces,ArequireA rg nisati nsA oAobt veA owers AtoA perm ssion Abef reA cceptin AanyAforeign contr b tio Ag vesAa AlotA fAsubj ct nciesAleaves the auhe Aprocehoritie . AsAof Ainqu ryAinvolvin Av rification Aby intellig nceAagconsi era le Asco e A orAmisu eAofA owe s,Adelay AanAharass en .AContribution 3.4 1.5AThe AUni n AG vernmentAh s int oduc dAaAne AB ll Acall d ATheAForeign ropos dA illA (Regu atio ) A ill, 2006 Aon A1 th AD ce ber A2006 Ain Ath AP rliament ATheA regulate Ath A see sAt Areplace theAexi tingAForeign Contribution (Reg lati n) Act,A197 Ato eAof Aforeig A acceptance Aut lisation Aa d A ccounti gAofAforeign con ributionAa dA cceptan eAsignifican h A s italit Ab Aa personAorAan As oci tio .AAsAperA he Statemen Aof Objects,At se Ainfluence d vel pmentA f Ath Arec nt p st Asuc Aa A– A hangeAin the Ainter alAscenar o, Aincre Atechno ogy,of AvoluntaryAo ganisa io s, A pr ad AinAuseAof A omm nicationAan Ainformatio qu ntu Ajump A n A he Aamou tAofAforeign contr butionAb ing recei edAan Alarge sc leA eAc angesAin rowth A n A he Anumber A f Aregistered A rgan sations Ahave neces itate AlargeA cathe A57Socia A a italA–d ADestinyAShare3.4.1.5.1 The Foreign Contribution (Regulation) Bill, 2006 provides, inter alia, to -(i)consolidate the law to regulate, acceptance and utilisation of foreign contributionor foreign hospitality and prohibit the same for any activities detrimental to the national interests;(ii) prohibit organisations of political nature, not being political parties from receiving foreign contribution;(iii) bring Associations engaged in production or broadcast of audio news or audio visual news or current affairs through any electronic mode under the purview of the Bill;(iv) prohibit the use of foreign contribution for any speculative business;(v) cap administrative expenses at fifty per cent of the receipt of foreign contribution;(vi) exclude foreign funds received from relatives living abroad;(vii) make provision for intimating grounds for refusal of registration or prior permission under the Bill;(viii) provide arrangement for sharing of information on receipt of foreign remittances by the concerned agencies to strengthen monitoring;(ix) make registration to be valid for five years with a provision for renewal thereof, and also to provide for cancellation or suspension of registration; and(x) make provision for compounding of certain offences.A critical comparison of the changes proposed in the existing legal framework by Foreign Contribution (Regulation) Bill, (FCRB) 2006 is given below:-3.4.1.5.2 Salient features of the Foreign Contribution (Regulation) Bill, 2006 and the existing law (FCR Act 1976)1.Purpose(a) The preamble of the proposed Bill reads as –“to consolidate the law to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or58Socie ies,AT u tsA/AChari ableAInstitut ons,A aqf AandAEndowfer.Ati nA comp nie Aa d Ato Apro ibitAaccep anc AandAutilis ti n AofAfo eignAcontrib Aan A orAfo eign Ahospit lit Afo Aany Aactiv tiesAdetrim nt lAt Athe Anat onal Aint res forAma ters Aconn ctedAther wi h AorAincid ntalAthe reto.”Wh rea AtheApre mb eAo AtheA CRA, 1976A ea sAasAunde :eignA “A AA tAto Areg lat AtheAaccep anc AandAutilis ti n AofAfo eignAcontrib ti n AorAfo taryA hospit li yAbyAce tainApe so sAor Aassociat ons, w thAa vi wAto Aens ring thatAparliame io sA institut ons, Apoli ical Aassocia ion AandAaca emi Aand A ther Avolu taryAorganisa ti n as we l Aas Aindivi uals Awo ki gAi Athe Aimpo tantA re s Aof Anat onal lif AmayAfun in Aa Am nnerAconsi tent wit Athe Av lu s of Aa Asove eign Ademoc atic Arepu lic Aan AforAma ters Aconn ctedAther wi h AorAincid ntalAthe reto ”(b) F omAa A lainAre di gAo AtheAa ov ,A tAisAev dent tha Athe Apu po eAo Ath AFCRA ill, nt lA 20 6 Ais Aprohib tiveAr ther thanAregula or .ATheAexpre sionA“activ tiesAdetrim t Athe Anat onal Ainte est”Al aves A cop AforAsubjectiit.A2.AProhib ti nAtoAA ceptAFo eignAContributi nuals (a) ASe t on 4Ao AtheA CRA, 1976Acon a ns Aa li tAo AtheAorganisa ion AandAindivi tha Aare Aprohi ited from Aacce ting Afo eignAcontribu io .AI AtheAproosedA icalA ill Afew Aaddi ions have been made su h asA A(i)Aorganis ti n of AaApolint;A n tur Anot A e ng Aa Apoli icalA ar y AasAspe ifidAb Athe A nionAGovernudio (ii)AAssoci ti nAorAco panyAen ag dAi AtheAprodu ti nAorAbroa ca tAofA onicA ne sAorA udioAv sual ne sAorAcu rent Aa fairsAprogr mmes Ath oug AanyAelect i o n A od ,Ao Aany A therAelect onic fo mAasAd fin dAinAc aus A( ) AofASub-se mo eA ( ) AofASe t on 2Ao Athe AInform tion ATechn logy Act, 20 0Ao Aany A therof massAcommunicaion AsAofA ( ) AThe BillAho ever doe AnotApr vid AanyAguide in sAorAdefin ti nAo AtheA as tur A hi h AanAorganis tio Ac nAbeAtr at dAa A“anAorganis ti n of Aa Apoli icalAn er dA notA e ng Aa Apoli icalApa ty .AThe A nionAGover men Ahas beenAempo AtheA to An tify suchAorganisa ion A ndAaAprov sio AforArepresent tion Ab for dAin nion AGover men Ahas been A de. AAApprehen ions have beenAexpr ss ose,A someAqua ters th tAi AtheAab en eAo AanyAspe ifiedAcri eri Afor thisApur hoseAorganisa ionsA hich Aartic lat AtheAcon er sAo Athe Aunder-privi ege AandAmargina ise Amayf As59AS cilSharedAC pitalDestinyA–3. Restrictions on Utilizing Foreign Contribution(a) Under the proposed Bill, contributions shall be utilised only for the purpose for which the same have been received (provided that any foreign contribution or any income arising out of it shall not be used for speculative business). Also the receiver shall not defray, such sum not exceeding 50% of such contribution received in a financial year, to meet administrative expenses. The Union Government has been authorized to prescribe the element which shall be included in the administrative expenses. Such provisions were not there in the FCRA, 1976.(b) The Bill does not define “speculative business”. Incidentally the Income Tax Act, 1961 allows the voluntary sector to invest funds in the modes specified under Section 11(5) which include government securities and mutual funds. Trusts have also been allowed to invest through such modes under the Indian Trusts Act, 1882. Therefore, the term “speculative business” needs to be spelt out clearly.(c) As regards the administrative expenses, the Bill gives considerable discretionary powers to the government. One may visualise situations where it would be difficult to differentiate between the administrative and project related expenses. For example, for an organisation engaged in health care projects salaries and other expenses on doctors/paramedics should be treated as a part of the core project cost and not as administrative expenses. This should be ensured by issuing clear guidelines rather than leaving it to the discretion of individual officials.4.DefinitionsApart from the ambiguity in the concepts of “speculative business” and “administrative expenses” the definition of the following two terms needs reconsideration:(i)Foreign Hospitality – “Foreign Hospitality” means any offer, not being apurely casual one, made in cash or kind by a foreign source for providing a person with the costs of travel to any foreign country or territory or with free boarding, lodging, transport or medical treatment. The term “purely casual” needs to be explained further.(ii) Foreign Source – The definition of “Foreign Source” includes a company within the meaning of the Companies Act, 1956 in which (i) more60S cieties, AT usts A/ ACharit ble AI sti utions, AWathan 1/2 of the Ae the AsinglyAo A thanA /2Aof th Ano inalA alue Aof it Asha eAcapi al AisA el (ii) Acorpora io s i Ath Aaggrega e A y theAcit zensAofA Afor ignAcountry, Ac mpany AThe Afirst incorpo ated Ain a A oreig A ountryA rA(iii)A Af reig of At eseAc iter a Awill cover Amany AInd anAmulti- ationalAc mpani sAin lu ing Ab nks A uch asAICICIAB nkAan Ath re ore, the eAmayAbeAneedAf r A econ iderationAofthisAprovision. AAy oigsrasitn(a AAny Ao g nifiatio AhavingAa defniteAc ltural, Aecon mic,Aeduc ti nal,Ar ligiousAo AsocialA ro ra meArequire AtoAb Are ister d Aun er A heA CRA,A197 Aand thfopr posed ABill be ore accepta ce AofAanyAfor ig Acont ibut on.AIn Acase,A uch org nisations A re An tAre iste ed theyAw llAha e AtoAobtai Apri rAp rmiss onAfromAth AUn onAGovernm nt for acceptance Aofany contr bution Aave Abeen Ag anted.ABill, A 006 AgivesA (b AGoing Abey nd the provisi nsAo Ath Apr sent A ct, A heAFC Aregistrat on. TheA mm nse discretion to the Govern en AinAtheAmatte AonA rg nisation ifAGov rn entAc nArefuseAto A ra t Aregistra io Ao Apermission A oAmedAatA onversionA i Ais satisfiedAtha Ath Aorganis ti nAhasAindu gedAi Aa tivitiesAaromAo eA eligioushr ughAin ucemen AorAforc , A itherAdirec lyAo Ain irectly,Afai h to Aanothe .A(c) AAAn ces aryAcond tion AforAsecuring Aregis ra ion/ erm ssion Ais hatAthe Aappl cantAo gani ationAshou dAhaveAund rtaken Am an ngf lAacti iityAnA ts Acho enAfeAp ople Afo AwhomAl AorAshould have AaA ean ngf l Aproj ct for the Abe efit ofAtinAis AaAma terAofA theAfo ei n Acontri ut on isApropos d At AbeAu il z d.AThis ag subje tiv As tisf ct on AandAis AopenAtoAisi te pretation.rAaAp rio Aof AfiveA (d)AThe A ertifiate granted A nder theA ro osed A ill w ll Abe A al d Afatio Af rAre ewalA ye rs andA here ft r A tAwillAh ve to Abe Arenew heAappli d. Am stA eAmade wi hin sixAmonths of theiAexpirat hon ofAcertfcat .ATeAre e alAa soAcarri sAa fee. AHow ver,A he Ae istingAF RA, 197 Apro idesAforAone timeA nAinc eas d Acost,A eg stration only.AThe Ap opo edApro is ons Aar Al kelyAto Ar sultAryA rg nisa ions.ffortAand Ap ss ble Aharas mentAtoAvolunt tAorArefus l A fAaA (e) No At meAlimit Ah s A een prescrib d Ain the propo ed BillAfo Ag aquired n Ace tainA certifica eA f Ar gistrat on or A tsAre ewalAor Afo ApriorAp rm ssionAr ays isApr sc ibedA ase .AABut,A nderAheAex s ingA CRA,A 97 ,AaAti eAli it ofAninetyA or Agrant Aof prior Ap rmiss on, failing Awh ch At e A ermiss on illA e Ade medAtoAA61tal – A SharedSoc alDestinyACapi(f) Government has also been given powers with regard to suspension and cancellation of the registration certificate in the proposed Bill. The cancellation of the certificate can be ordered, if the holder has made an incorrect or false statement at the time of application, has violated any of the conditions of the certificate, the Government considers that the cancellation is necessary in the public interest and the holder of certificate has violated any of the provisions of this Act or Rules or Order made thereunder. Once the certificate has been cancelled, the person / organisation shall not be eligible for registration or grant of prior permission for a period of three years from the date of cancellation of such certificate.6. FinanceThe FCR Bill, 2006 allows receipt of foreign contribution in a single account only through one such branch of a Bank as may be specified in the application for grant of certificate. However, the recipient has been allowed to open one or more accounts in one or more Banks for utilizing the foreign contribution received by him. This is an improvement over the provisions of FCRA, 1976.7. AppealThe proposed Bill contains provisions for appeal before the High Court / Court of Sessions against the order on adjudication of confiscation. (Section 31). This section provides that any person aggrieved by any order made under Section 29 (adjudication of confiscation) may prefer an appeal. However, no appellate provisions are there over government’s powers to restrict acceptance of foreign hospitality, to prohibit receipt of foreign contribution in certain cases (Section 9 of the Bill), to grant registration under Section 12(3) of the Bill, or to order suspension / cancellation / renewal of certificate etc.8.Offences and Penalties(a) The scope of punishable offences have been substantially enlarged to cover offences such as making of false statement, declaration of delivering false account, penalty for article or currency or security obtained in contravention of the provisions of the Bill etc. It is observed here that while prescribing the quantum of punishment, the element of mens-rea should be taken into account.62Societies, TrustsA/AChar table Ins itutions,ces Apunishab e Awit (b) AThe AB ll A owever Aprov de f Afor Aco pounding Ao Aofeimprison en Aonl .AresAandAre Atapis .AingAperce ved Aahe ABillAAa A 3 4.1.5. Aas become A Asubje tAo Ai tense debateAan Ai AbngAfo eig AdonationA intrusive A ieceA f Alegis at on Awh ch Aintends to AplaceA haritie ,Areceiv A ai Aar um nts nder are: Athe su jec iveAscrutiny of the A uthoritie .ATheha ceptanc ~anduseTe?aimof th ~Bi l,asst te ~i ~thepre mbl ~istopro ibi ~thAinterest’.A A ermA ofA ore gnAcontrib tionheAforAac iv tiesAdetr mentalAtoA na ionai e Ain erp etation A “det imental At Anatio alAin ere t”AleavesA cope AforAsubjechn ould ere used.~ ?Tere ar ~seve a ~grouindso ~w ichacertif ateo ~r gistratile’Apu posesAorAn tAThe Aw rd AlikeAlik li oodAo Adi ersion AofAfun s AforA‘u de iraeparedA Ame nin fulA havingAund rtaken A‘ ea ing ul’Aac ivityAor n tAhavingAp A dm t Asubject vit . proj ct for the A‘b nefit’ ofAtheApeople~ hea ~to arass ent ?Tep ovisi inf rren wale ery ve yearscouldhca celacertif at ~ ?TeBill ives theexecutive ~wide~ is retion r ~poweirstoAopenAto Asubjec iveA of registr tion Ain Ath A‘p bl cAi terest .AThs Ais to Abroad,AanyAbeAp rm ttedAup nA interpre at on. Cancellatiicate Ashoun AofAt e Ace tidAonc le alAobl ga ions. i bre ch AofAspecifusin ~ha assm ntt?Thep~ werso ~in pection, sea ch ands izu esmay etoolsfo ~cA o A heAauthor tie . NPOsAand pu s themAvir ua lyAinAa Aposit on of A ubordinationhisa bitra yan ~in ~Te pr v is on foracapof50 ~on‘admi is rativeex ens s’ichAhave highAhum m nyAcasesAwill stifle Ao ga isations worki g Aon proj ctsAwre ource Aco tent Anhrc s ndinvestment ?Te pr posed Billtries oplaceunne es aryrestr cti nsonresoo Aa Aorganisa io .Ahualsfr mreceivingTep?ovisionof heB llprohibi in ~somecateg ries ofindivif reig Acontri uti nsAgoes Aa ai stAtheA rinciple of Ana ural Aj st ce.A3.4.2ARe orm AofAReg istra t on Pro edureco cern Awi h A egardA 3. .2 1AInAthe Aco te t Aof Ad velopmen Aof socialA apital, theA rimary ganisati ns are An tA t AreceiptAof Af reign A on ri utions shou dAbeAto ensure Athat Ag nui eAo harassedA r Atheir fu ctioningA mpededAby A yza tin Aproced63S c alShared talDestiny3.4.2.2 The Commission is of the view that the process of registration under the proposed law on foreign contribution needs to be kept simple and there is a need to fix a time limit for issue of registration certificate / prior approval by the competent authority.3.4.2.3 At the same time, the Commission is aware that a large number of voluntary organisations are receiving donations from foreign sources and it is quite possible that at times the funds could be used for purposes which could adversely affect national interest. Against this background, creating an effective monitoring system to track such funds becomes necessary. The Commission is of the view that there is a need to maintain a fine balance between ‘national interest’ on one side and free functioning of the voluntary sector on the other. To that extent, there is need to clarify and amend the proposed Bill and clear the misgivings which are agitating the voluntary sector.3.4.2.4 The changes required in the proposed Bill to provide such a balance are discussed below:3.4.2.4.1 An organisation working on cultural, economic, educational or religious programmes which intends receiving foreign donation will need to be registered or required to seek prior approval under Section 11 of the FCR Bill, 2006. Even after registration, it is mandatory to furnish returns and details which enable competent authority to examine and check whether funds have been utilized in accordance with the provisions of this law.3.4.2.4.2 The Bill prescribes no time limit for a procedure under Section 11. This is far more stringent than the provisions of the existing FCRA, 1976 which provided an outer time limit of ninety days. There is a deemed clause as well. Having such an open ended law may lead to delay and harassment. In a similar provision under the Income Tax Act (Section 12AA) too, which deals with registration of charitable institutions, there is a time limit of six months. There, it has been recommended that the period of six months should be further reduced to ninety days.3.4.2.4.3 The existing Act FCRA, 1976 primarily intended to regulate receipt of foreign contribution in a manner such that the funds are not used (a) against the sovereign interest of the State, (b) for supporting political activities and elections and (c) for personal benefits of public servants. But, the FCR Bill, 2006 goes much beyond and tends (i) to prohibit receipt of foreign contribution by certain class of individuals or organisations; and (ii) to regulate foreign contribution received by voluntary organisations. It places extensive emphasis on national interest and issues such as not taking up meaningful activity [Section 12(3) (b)]; or not preparing a meaningful project [Section 12(3) (c)]; have been placed under the domain of the proposed law. The Commission feels that the term “national64Societies, Trusts / Charitable Institutions, Waqfs and Endowmentsinterest" or rope ly A ould int rest”AorAoth rA equirement Aa Aen nciat dA nAt eABill AifAnotAd finedA s Afor Abon AfideA lead Ato Aa A ide Asubjective int rpreta ion Aand Acre te fi Aunneces ary difc lti voluntaryorgan sations.A3.4.3A at onalisationAof APr ce ure eAAffairs AF RA 3.4 3.1AAs perAth AAn ual Repo tAforAt eA earA2005 06 ofAM nistryA fAHo Divi ionAas on A31 t AMarc ,A2006,A32,1 4Aas ociations A ereAr gist redun er AFC A AoutAedAnilAr t rn)A fAwhichA18,5 0Aassociat ons A( ncludingA6,8 7Aass ciat ons i A hic AhaveAf enAb low sho sA r ceivedA Atotal Aforei n A ontribution ofARs.7 87 .57 Ac ores. The ATa leAgi heAM nistry th ofA t Af rAtheA ast fiveAyear ,A heA ajorityAofAt eAAssociat onsA egi teredAwi hA H meAAffair AhaveAreceiv d Acon ributi nAbelotionOrg a nisae w enAAbRs. 1-5 A rores As. A -1 AcroresARs. A1Acrore200-0A14,761A71 A77 A5200-0A15,650A78 A76 A6200-0A16,187A88 A83 A5200-0517,37 3A98A112 A72005-6A1,2Rs.1 0Acr re.A Table n 3.2: Areceived AYe r- Aby ise A Adet ilsAofAForei nAContri utA(200-05) YeaABelowAetweeve A s. A Acrore5 8A1,07 A1 3 A99ctAis Along andATh3.4.3 2 Aproc du e forAgrantAof aAregistraicationAc rtiAun er theA CRAof the subj ctA cumber omeAandAca se Aharassment to applican s. The Adiv si nAi Acharge with At e A argeA in Ath AH meAMini tryAis Agros lyA nder taffed Aand Ath sA ll-e uipp dAt Adeal AtheAapplicant number A fA pplicati nsAit recei es A very Ayear. A or verification of ant cedentsAo or anisat ons,Ait Ar li s Aprim rilyAon A np tsA rovided AbyAt eAintelli enc Aagen ies.AFor A hese agen ie , thi AworkAis a Alo Apr ority A tem and Ah nce,Ath Awhol A roc ss takes a Alot Aof ti e.AArecipi ntsAofA urt er,Aas pe Ath Aint nt A fAthe AAct, A heAA th rities have toA nsure Athat th utionAhas bee A forei nAcont ib tio Aadher AtoAthe sta ed Apu pose forAwhichAsu hAc ntri sAgran ed, A heA o tained.AB tAin practice, th sAme hanis AisA ery weak. AOnceAt e A egistrat onA Ao ganisati ns m tte AgoesAinto theAside in s. A crutiny ofAt e AreturnsAfil dA ubsequently Ab is reportedAtoA eA e functor .AA Aa A esu t, the FCR AAct is A otAmeeting the objec iv sAf rAwhich A65Social C p talA–A Destiny3.4.3.3 Often, cases are selected by the FCRA Division of the Home Ministry for inter-agency consultation. In the absence of transparent rules / guidelines with regard to the procedure to be adopted for such consultations, the inter-agency reference leaves considerable scope for harassment, delay and corruption. The Commission is of the view that provisions of the Act need further elaboration with regard to (a) the minimum amount of donation which would require inter-agency consultation, (b) the level of the Authority which would authorize it, and (c) setting up time limits for such procedures.3.4.3.4 Currently, the entire work under the FCRA is being handled by a Division of the Home Ministry headquartered at New Delhi. The State Government and its machinery particularly the District Administration which are in a position to observe and monitor the activities of the NGOs in their areas are not involved in the process. The Commission is of the view that if some of the functions under FCRA are decentralized and delegated to the State Government/ District Administration, it will help in (a) speedy disposal of registration petitions, (b) close monitoring of their activities, and (c) scrutiny of returns.3.4.3.5 Moreover, many organisations are in receipt of meagre funds but they have to undergo full compliance requirements under the provisions of FCRA, 1976. This leads to delay and harassment besides putting a strain on the administrative capacity of those charged with the task of scrutinising their returns. The Commission feels that a threshold limit with regard to the amount of foreign contribution received in a year by voluntary organisation needs to be fixed. Organisations receiving contribution below this limit in a year would be exempted from registration and other provisions of this law. At the end of the year, these organisations could simply file an annual intimation with the appropriate authority indicating the details of the amount of foreign contribution received and utilized by them during the period. If the authority has reasons to believe that the declarant has suppressed or misstated certain facts with the deliberate intention of remaining within the threshold limit, activities of such an organisation can be probed further. Such a scheme is operative in other enforcement laws e.g. the provisions regarding Small Scale Industries under the Central Excise Act, 1944. In the background of the Table 3.2, such a threshold at present could be fixed at Rs.10.00 lakh. This figure could be revised from time to time. This step will enable the Authorities to concentrate on larger contributions.3.4.4 Recommendations:a) The Foreign Contribution (Regulation) Bill, 2006 needs to be amended to include inter-alia the following suggestions:i.There should be a fine balance between the purpose of the legislationon one side and smooth functioning of the voluntary sector on66Societies, Trusts / Charitable Institutions, Waqfs and Endowmentsthe other. he the Aother. Te obje t vesAofAsuc AaAregulato yAlegi la i onAshou dAbe Aprope ly enunc ated Ato Aav id AsubjectiveA te pre ati nAA sib e Ami use.A f AlawAan AitsApoheun erASecti i nA .A eAsh uldAb AaA imeAlimitA orAproc dures falling ivingAforeignA 11A(seekin Ar gistr tionAor Apr or A ermission forArec cont ibution).ii .ATransparent Aru es/gui el ensAshould beA rescribedAfo Ainter-agenc Aconsultatio Ap rticula ly inA esp ct Aof A( )AtheA inmumAamou tAofA tion, (b Ath A onati nAwhich wouldArequir Ainter-agency con ult c)As ttingA pA levelAof theAA thori yAwhichAw uld aut ori e Ait,Aa dAch A ro edures.t meAl mitsAforAsuorApermis iv. ionA ToA acilit teA(a)As ee yAdisposalAo A egist ationA/Apr monit ringAofA peti ions receivedAfrom A rga isations A(b)Aeffect vefiled by the ,A the rAa tiv ties,A ndA(c)Ap op rAscrut nyAo Ar turns A(R gulati n) someAof theAf nct onsAund rAtheAForeig AContributio ActAshouldAbe dec ntralised an Adele atedAtoASta e Governme tsA/ADistrictAAdmnistr tion.v. A th r Aconc rn AasAstate Ain Aparag aph A .4.1 5. AasoAneedAtoAbeconsidered.b) Organisat on Arecei ingAanA nnualAforeig Acontribut on equi alen Ato Aless timeAt At me)A than Rs 1 .00A akh A n AaAy ar (t eAfigureA oAbe revi we AfromAr qui emen sA shou dAbe exemptedAfro Are istra ion AandAo herAreportin returnA fAtheA o AtheAl w. TheyAsh uldAbeAa ke , Ai st ad,Ato fileAan an ualheAen Ao Ath A foreig Acontrib ti nAre eiv dAb AthemAandAi sA til sat on atA estig te , ifA ye r.ATheAl wAma Apro ide th tAthey ma Ab AliableAtoAbe in ion ofAfa ts,A thereAi AaAreason bl AsuspicionA f suppressionA/Amis ep esenta as AviolationA andApe al pro isi nsAo At eAla Awill Ab Ause Aa ains AthemAinAi67SO3SOCIETI S,ATRU T A/ACHARITA LEAINSTITUTIOS,AWA FSA NDAENDOWMENTS r k A .1ALe alA nd AInstitutio alAFramewe x t 3. .1ALe alAContan 3.1. .1 TheA aw Aconcern ng ASocieti s,ATrus s,AWa fsA ndAot erAendowme ts inAIn iaA beApla ed inAth eeAbr adAgroupings:i)ASociet es Aregiste edAun er A he ASociet es ARegistrat onAA t, A1 60 A ndAvariusASta es Aamendme ts on itAaf erA1947;( i) heA AThse Aenga ed inAp re Areligi us A nd Acharita le Aw rk Aregiste ed Aun erAt ,A Religi usAEndowme tsAA t, A18 3; A he ACharita le A ndAReligi usATru tsAA 19 0; A heAW qfAA t, A1 95A nd Asimi arAot erASt teAAcs;A(i i)ATru tsA nd Acharita le Ainstituti ns Aregiste edAun erA heAInd anATru tsAA t,A18 2;ACharita leAEndowme tsAA t, A18 0;A he ABom ayAPub icATru tsAA t, A19 0;A ndAsimi arAot erASt teAActsTheAm inAfeatu es of Ath seAenactme tsA re Aindica ed in A heATa le at AAnnex re A IIA( 1 ) .atA 3.1. .2 InAaddit on to Ameet ng A he Arequireme ts ofAlegislat on as Alis ed in A heATa le aw Annex re A II A( ),Acharita leAorganisati nsA re Aa so Arequi ed to Afol ow A heAprovisi ns ofA as Aapplica le to Ath irAfunctio alAare s. A orAexamp e, Ath se Awork ng in A he Ahea th Asec orAn ed to Afol owA heAl ws Aapplica le to At atAsect r.ASimilar y,Aorganisati ns Awork ng onAenvironm ntAprotect on Aw llAh ve to Aab de byA heAWa erA(Prevent onA nd ACont ol of APolluti n)AA t,A19 4,A he A irA(Prevent onA nd ACont ol of APolluti n)AA t, A1 81 A ndA he AFor stA(Conservati n)AA t, A1 80Aec. A3.1. .3ASocieti e sesA 3.1.1. .1 AModel ed onA heAEngl shALiter ryA ndAScient ficAInstituti nsAA t, A18 4,A heASociet ryA Registrat onA ctA asAenac ed inAIn ia in A18 0.ATowa dsA he Amid le of A he A1 thAcent coincid ng Aw th A he A1 57Aeve t AaAnum er ofAorganisati ns A ndAgro ps Aw re Aestablis17So i l Capitaared A–AADestinyAShin the country on contemporary issues of politics, literature, arts and science. The above law was enacted partly to give such organisations a legal standing and partly, to enable the colonial government to maintain a watch on them. But, the Act was not intrusive at all and it gave full freedom to the Societies/organisations which chose to register with the government.Purpose for formation of Societies under the Societies Registration Act, 1860 :It provides for formation of a Society for any literary, scientific, or charitable purpose, or for any such purpose as is described under Section 20 of the Act. In terms of Section 20, the following Societies may be registered under this Act:“Charitable societies, the military orphan funds or societies established at the several presidencies of India, societies established for the promotion of science, literature, or the fine arts for instruction, the diffusion of useful knowledge, *[the diffusion of political education], the foundation or maintenance of libraries or reading-rooms for general use among the members or open to the public, or public museums and galleries of paintings and other works of art, collections of natural history, mechanical and philosophical inventions, instruments, or designs.”3.1.1.3.2 Many States created separate authorities for registering and supervising such Societies. According to the Act, any seven persons who subscribe to a Memorandum of Association (MOA) can register a Society. The Memorandum should include the names of the Society, its objectives, the names, addresses and occupations of members subscribing to it as well as the first Governing Body to be constituted on registration. The MOA should be accompanied by a set of Rules and Regulations – this should include details such as the procedure for enrolment and removal of members, procedure for formation of the Governing Body, conduct of meetings, election and removal of office bearers, procedure for conducting annual General Body meetings, etc. The membership of the Society may be kept open (or by invitation) to anybody who subscribes to its aims and objectives, for which a fee may be charged. Although the Society can sue and can be sued, the liability of the members is limited, as no decree can be enforced against the members’ private assets. The Society has a perpetual existence and a common seal, and can sue or be sued in the name of the office bearer as prescribed under its rules. This enables its effective participation in public life.3.1.1.3.3 A strong tenor of democracy runs through the entire Act. Alteration, extension, or abridgement of purpose of the association or any decision on amalgamation can be effected only when any such proposition is approved by three-fifth of the members present in the special meeting convened for this purpose with due notice. For dissolution of the18Societies, Trusts / Charitable Institutions, Waqfs and EndowmentsSociety also,ASocietyA ith theA Soc ety Aalso As milar Aapp ova Ais required. All A he doc ments Afied Ab Ath cyAand Ad mocrati A eg strar Aare A pe Ato inspect on A y Aany Ap rson. AThis Aen ble AtranspareeApunishable wi hA contr l. Members guilty Afences AagfAoin tAt e Aprope tyA f Athe ASoci tyAai imr i s o n m e nt or Af e.Astratio A emainedA 3. .1.3 4AT ll A 947 AthisAA tAd dAnot undergo anyAmajorAch nge;Areg periodAh d AaApoor l rgely A Avol nt ry A ffort. AMos AofAtheASoc etiesA onst tuted A uri g thisyAof Athe foundingAfina cial standi g AandAwer Ad ive Aprima ilyAby the strong Ai te tAa dAtenacisAbutA he over llA memb rs.A ccasi nal y, AtheyA ould Age Afina cial supportA rom som Aquarte ns wh chAwer Aset health ofAsu hASocie ie AstoodAnow ereA n AcomparisonA ithAo gani ati te A ndependence A up Aas ATrusts withAc nsi erab e Aweal h AandAreal A state endowments.AA AtheAstatut , Abut a Aa A onsequence ofAthe adaptati nAo der A1948/50 At eAA t Aremain d Ao iveAc mpetence AofA “ ocietie ”Abei gAa subje t Aund r A heAS ateAl st, itAcameAund rAtheAlegi lat a t eAGove nment .Aucing anyAformAofA 3 1.1.3.5A hil Ath AoriginalA ct Awa Ar mar ablyAclearA nAn tAin ro sAofAfiling A nnua A tate interf re ceAi toAaffairs Aof A uchAin titutio s,Aexce t A outin Amatte Aam ndments) Aw ntA s ate ents, many AofAtheA tateAleg slationsA(through post-Indepe denc ndAnonfeas nc AofA forAwides readAgov rn enta Acon rols Ato dealAwithAa use ,Amalfeasan eA io ;Acancellati nA S cieties. TheAlegal measure Aincl de AState’ Apo erAof Aenquiry A ndAinvestiga eAGoverning oBo y;A Aregistrat on AandAcons qu nt Adissolu ion Aof ASocie ie ;As persessio AofAtanisations. A ta eAappointment of Aadministr tor Adissolu io ;AandAd letion AofAdefu ctAoraA ct and Sectio islatiole AsAon thisAsu jectA aryAwid ly AU der SectionA2 Aof the KarnatanA he A pplicati nA 32Aof A heAM dhy APradeshA ct Ath ARe istrar A nAh s A wn A otion,AandA Aone-th rd of A heA fAt e Amajor ty of A heAmember AofA he Go ern ng AB dyAo AofAnot Al ss tha tit tion,Awo kingA membe sAo Athe So iety, Acan ho d AorAau hori eAa AenquiryAinto theAcon inaand A cia AconditinAof Athe A ocie y.As Ai Ath Aorigi alA 3. .1.3.6 Some A ther States A hic Ahave carried Aou Am jor amendmen Uttar APrad sh. AThe Act Aa e AAndhra AP adesh ARaja than ATamil Nad , AWes ABengal A nd amendme ts A ainlyAcon ernA heAfollo wngAfour iss es:ieAcanAbeAfo medA 1. Purpose Af rAw ic ASocieAof Aassoc ation,AA 2. Regu atoryA ow rs Awit Ar gard AtoAch ng Ain Amemorandl un ionAAA nd issoby -l ws, Aalie ati n AofAproper yAandAinvest ent Aamalgamatiof theA ody3.A ow rsAwith Are ar AtoAsu mission19c a ACpithared l A– Destiny A~ ~~4.Powers of the State Government with regard to supersession, dissolution orcancellation of registration3.1.1.3.7 In contrast to the original 1860 Act, the State amendments have considerably expanded the list of purposes for which Societies could be formed and the scope of State intervention in the affairs of the Societies. For example, the Karnataka Act goes much beyond the original purpose of promotion of science, literature, or the fine arts for instruction, diffusion of useful knowledge and includes many other activities connected with conservation and use of natural resources and scarce infrastructural facilities like land, power, water, forest etc. Similarly, with regard to change in the memorandum of association, bye-laws, alienation of property, investment, amalgamation and dissolution; submission of annual returns; and in matters of supersession, dissolution or cancellation of registration, the State has appropriated vast powers. Madhya Pradesh, Andhra Pradesh and Kerala are the other three States which have converted this enactment into a strongly State centric Act. A detailed comparative analysis of the State laws is given at Annexure III (2) of this Report.3.1.1.4 Trusts, Religious Endowments and Waqfs3.1.1.4.1 Trusts, Endowments and Waqfs are legally created as modes of property arrangement/settlement dedicated for definite charitable and religious purposes. The details with regard to their incorporation, organisational structure and distribution of functions and powers are governed by the provisions of the specific law under which they are registered. Broadly, such organisations can assume a legal personality in the following five ways:1.By way of formal registration before the Charity Commissioner / InspectorGeneral of Registration under the respective State Public Trusts Act e.g. the Bombay Public Trusts Act,1950, the Gujarat Public Trusts Act, the Rajasthan Public Trusts Act etc;2.By invoking interference of civil courts to lay down schemes for governing aTrust under Sections 92 and 93 of the Civil Procedure Code;3.By registering the Trust deed of a Public Charitable Trust under the RegistrationAct, 1908;4.By notifying an organisation in the list of Charitable Trusts and ReligiousEndowments which are supervised by the Endowments Commissioner of the State or by a Managing Committee formed under the Charitable Endowments Act, 1890 or under other State laws on Hindu Religious and Charitable Endowments; and20Societies, Trusts / Charitable Institutions, Waqfs and EndowmentsBy c5.AByAc e ting aAWaq Awhic Ac uldAbeA anage Aun erAtheApro is ons ofAt eAWa fAA c t,A1995..t trtsts3.1.4.43.1. .4.2. AT u t AisAaA peci l A ormAof Aorgan satio AwhichA mer es o tAof A Thw ll.A eAwil AmakerAexcl sivelyAtr nsf rsAthe Aow er h p Aof AaAp op rt Ato A eAu e AforAaApar icular Ap rp se.IfAtheAsAsomeA ur os AisAto benefitApar icular Aindiv du ls,AitA e omesAaA rivat ATr st an AifAitAc ncer ur ose of Athe common pu lic or AtheAco mu ityAat la ge Ait Ais c lled Aa PublicTrust.Indian 3.1. .4he 2.2 Afi Ast law Aon Trus s Aca e Aint Af rce Ai AI dia A n A188 Ak own as AtheTrus s AAct A1 82; itAwasAba ica lyAfor Aman ge entAofA rivateAT r u s t s.ergingA 3.1. .4 2.3ATheA mende ACivilAPr cedur ACod ,A19 8Aal oAtookAcog iz nce ofAtheAe cedur A harityAs enarioA hrough AS ct ons 92 A nd 93.AI At rmsAof A ec io A92 ofAth ACivilAPr che esA Code A1908,Ainter er nceAo ACivil Court Acou d A lsoAbeA nvo edAfor layi g AdownA eA one forAgo e ningAa Tr t AifAAa br achAofAo igina AtrustAcon it onsAisAa his canA leg d.A ingAanA by w y Aof a AsuiledAby eittAerAtheAAdvocate- en ral or twoA r AmoreA ersons haiginalA i te est inAthe Trust AWhile Ad cidi g Asuch sui s, Ath AC urt Ais Aem ow redAt Aal erAtheAo inAth A p rp ses ofAth ATr st Aan Aal owAtheAp op rtyAor in omeA fAsuch Tr st Ato Abe ve ted Court.A other pe sonAor A rus eeA or AitsAefective Autil sa ion inAthe mann rAla dA own by Athe pr val ec ion A93Ae pow rs AtheACo le tor Ato Ae ercis Athese po e sAinAa Ad stri t Awit ApriorAa ofAth AStateAGoven m e n t .Astee ’A 3.1. .4.2. AUnderAS h du eA7 ofAthe Indian AConsti uti n,AtheA ubject ‘Tr stAandATr tions,A finds A en ionAa AEntr AN .10 in AtheACon urren AList. A‘Ch r tiesA&ACha itableAInstit AN .28A Cha ita le Aand Are igious Aend wme ts Aand Are igiousAinstit tio s’Afin Ap aceAa AEntr b a yAi A fAthi Al heAfirst Alegist. Ala ion A n AthisA ubj ctAwas A na ted byAt e Athe AS ateAof Boxp essA 1950 AK own as Athe Bombay Public Trus s AAct A1 50, it Awa Am antA oAde lA ith AanA c udedA orAconst uctiv ATr stAfor either A ublic, Are ig ousAorAcha itable Ap rp sesA rAb thAandAi ociety a A e ple, A A ath,A AW qf, orAan Aother Are ig ousAorAcha itableAen owm n Aand AaA formed eit e Afor Aa Are ig o sAorAaAcha itable A ur ose or Af rAb th AandAreg stere Aun erAtheASo ietiesARegis rati n AAc , 1860A– A ectionA2(13).raAandA 3.1. .4.2 5AW enAtheAer twhile BombayAp ovi ce AwasAbif rcat d AintoAMaha ash itableA G ja at, Ai A196 ,Ab thAthe States A dopt dAth sAv ry lawAto govern Tru tsAan AotherAcha erAtwo insti utionsA al ing Ai AtheirAjurisd ction. Madhya A rad shAandARa ast anA reAth Aot St tes in AtheA ountr Awhi h Ahave A nacte Ath irAown Public Trust Alaws AOther St tes doAn t Aha e AsuchA pecific Public Trusts Alegisl tions. Andhra AP adesh ATam lAN duAand21SocialA a i alA–AA SharedADestinyhave separate Religious Endowments Acts to govern temple properties. Many States have specific legislations to manage particular endowments / charities. In all other cases, Section 92 of the Civil Procedure Code dealing with public charities prevails.3.1.1.4.3 Religious Endowments3.1.1.4.3.1 Religious Endowments and Waqfs are variants of Trusts which are formed for specific religious purposes e.g. for providing support functions relating to the deity, charity and religion amongst Hindus and Muslims respectively. Unlike Public Trusts, they may not necessarily originate from formal registration, nor do they specifically emphasise on a triangular relationship among the donor, Trustee and the beneficiary. Religious endowments arise from dedication of property for religious purposes. The corresponding action among the Muslim community leads to the creation of Waqfs. Waqfs tie up the property and devote the usufruct to people.3.1.1.4.3.2 The first legislation in this direction came up in the later half of the nineteenth century. The Religious Endowments Act, 1863 was basically a law on private endowments which placed a property under the management of Trustee/Trustees under a will for a predefined set of beneficiaries. It was a type of contract between the will maker and the Trustee. During the later part of the British Rule, many Zamindars and merchants created such endowments. In many cases, with the passage of time, such arrangements became hazy and generated a series of civil disputes. The government intervened by introducing a new law called Charitable Endowments Act, 1890. This enactment brought in some element of regulation by establishing a post of treasurer in each State to oversee the functioning of charitable endowments. It was the first step in the direction of State regulation over charities. Towards the beginning of the 20th century, many of the temples and mathas across the country had acquired considerable landed property and funds; often comparable to the holdings of a zamindari. It led to incidents of social tension and civil disputes in the adjoining areas. To deal with this situation, the government enacted a new law in the form of the “Charitable and Religious Trusts Act, 1920” which recognised the existence of such religious bodies as entities different from Endowment Trusts formed for social and charitable purposes. Trustees of such bodies were made accountable for disclosure of the income and the values of the Trust. Civil courts were given proactive powers with regard to management of the property. But any direct intervention of the government through its own functionaries viz. Deputy Commissioners/Collectors and other officials was not yet on the cards.22Societies, Trusts / Charitable Institutions, Waqfs and EndowmentsAab se of Afun sA 3.1.1.4 3.3AThe A cenar o Acha gedA f er A1 47 AWithAaAvi wAto A re entin Asu hAreligiou A and At Aensure Aunifor Aorganisa ion lAf amework Afo At e Ama agement Ao own A ndo mentsAA andAcharitab eAin titut ons, Amany AS ateAGov rnmen sAe actedAthei tAoffici lsA sAA Ac s Aan Avir ually tookAover A heirAmanag ment Ainsta ling Agove nm AandAChari able Truste s A ndAmanag rs. The A xample AareA he AMadras Hin u AReligiou Endow ent AAct,A1951; Athe AT avanc re-Cochin Hindu AReligi usA n s t it tio sAAc A195 ;AtheA odh A aya AT mpl AAct,A 949,Ath AAndhraAPr des AChar tableAand HinduAReligi usA nstitution Aand Endow ent AAc ,A1966;Aa d Athe Karnataka HinduAReligi usA nstitution AandAChari able E ndowm e n t sAAct, A 99 .iou AaAasAA 3.1.1 4.3.4ATheAInd an AConstit tion Are og izesAf eedomAtoA anageAfairelbjectA o Apublic oneAof theAfu da ent lArights ofAitsAci iz n.AAcco di g to AArtic eA 6 A-A“Sreo Ashall Aha eA ord r, Amora ity Aa dAhealth, everyAreligi us den minatio Aor Aany secti nAthhe Aright: ita le purpos s; a)A o Aestabl shAandAmaint in A nstitutio sAf rAreligiou AandAchar ers of rel gio ; ( )At AmanagfaiAi sAown Aa sAinAmatteAp op rty; AandA (c)Ato ownAand acq ire Amovab e AandAimm vabrdance wit Alaw.( ) Ato administ r A uchAproper yAin accohough, Athe above provisi nA ivesAf eedomA o createATru tsA/Acharita leA nstitutio sAforArel gi usAp rpos s, Ait pu sAsome Arider Ao Aa mini trationA f As chApropert A“in acco d nceAwit Alaw” AArticle A 6(d).3. .1.4.4AWaqfs Ain A ndialy compreh nded 3 1.1.4. .1AU de AMusli Aru eAinAIn ia Athe con eptA fAWaqf wasAmoreAwid sA heAendowm ntA asA ligned wi hAthe As irit Aof A ha ity endors dAby the AQur n. A aqfAimpli slim,Au derA heA ofApr pe ty, Amoveab eAorAimm va le,Atangib eA r Ai ta g ble Ato A od Aby aAM Waqif A(s ttler)A remise At at At e Atran it the Anfer will Ab needy. AAs Aa Ale al A ransa tion, Athe pp intsAhi self Aor Aano herAtr st orthyAper onAasAMut wa li (manager)in Aa AendowmentAee A(Waqfnama )At Aadm nister Athe A aqfA(c hr i t a b leATru t) A3 1.1.4.4 2 AsAit Aimp ie AaAsurrend rA f Apr p rtie AtoA od AaAWaqfAdee Aisirrevocabl23Soc a A apital –Ashiny3.1.1.4.4.3 In consonance with the spirit of Islam, Indian Muslim rulers generously dedicated property such as land and its revenue rights to Waqf created with the purpose of maintaining mosques, tombs, orphanages (yatimkhanas), madrasas etc. Land could also be Waqfed for the creation of a graveyard. In many cases, donations to a Waqf were made with the intent of promoting the tenets of Islam. Under Muslim rule, the presence of Islamic courts overseen by Qazis ensured that the Mutawallis discharged their duties fairly. Mismanagement of Waqf property was considered breach of the trust reposed in them for which they were duly punished.3.1.1.4.4.4 In the 14th century, Sultan Allauddin Khilji came down heavily on a number of Mutawallis. During the Mughal rule, Akbar appointed an Inquiry Officer to go into the allegations of misappropriation of Waqf funds by Shaikh Hassan and removed him from Mutawalliship. Ain-e-Akbari records an instance when Akbar dismissed many Qazis who had taken bribes from the holders of Waqf lands9.3.1.1.4.4.5 After the collapse of the Mughal Empire, for a long period, the Waqf administration remained loosely controlled. During the first phase of the British Rule in India, the colonial administration too, apart from maintaining oversight over endowments, did not give much attention to this issue as they had a very scanty knowledge of the Islamic legal system. After 1857, when the British started expanding the Comman law regime in the country, they began exercising control over Waqfs. Their interference was mostly on charges of corruption in management of Waqf properties. Immediately after the revolt of 1857, the British Government confiscated Waqf properties such as the Jama Masjid and the Fatehpuri Mosque in Delhi. They were restored to the Trustees (Mutawallis) only after the enactment of the Charitable and Religious Endowments Act by the government in 1863. Another practice the British came down heavily on was the attempt to create family Waqfs by wealthy Muslim families desirous of keeping their property within the family yet safe from future sell-off by irresponsible progeny. In 1894, the Privy Council spoke of such efforts as concealed means for the aggrandizement of family, and noted that their provision for charity is so illusory that as long as the lineage of the donor family continues, the poor do not have any chance of receiving even a rupee from the Waqf.3.1.1.4.4.6 The first specific law on the subject came only in 1913 when the British Government enacted the Mussalman Waqf Validating Act, 1913. Thereafter, a succession of laws came up to streamline Waqf management in India. The following is the list of important legislations enacted on the subject between 1913 and 1995:(i) Mussalman Waqf Validating Act, 1913, (ii) Mussalman Waqf Act 1923, (iii) Bengal Waqf Act 1934, (iv) The Hyderabad Endowment Regulation, 1939, (v) U.P. Muslim Waqf24''What is W9“Wh tA sAWaqf AbyAI tiaz Ahm dAKha Aand “Wa fALawsAandAAdm ni tratio Ai AIndia AbyAAkh ar A ussanhalid andRasidAKSocieties, Trusts / Charitable Institutions, Waqfs and EndowmentsAct, 1 36, (v A t, A19 6,A(vi ADel iAMu lim AW qfAAc , A194 ,A(v i)AB har AW qfAAct A1947, (viii) Bombay Publ c ATru tsAA t,A195 ,A(ix) Darga AKhw ja ASa ebA ct,A195 ,A(xACen ralAW qfAA t,A1 54,A(xi)A aqfA mendm ntAAc , A19 9,A(xi )AU. . AMus imAAct A1960, (xiii ADarghAKw jaASahebA aqfA mend entaqfA mendm ntAAc ,A19 4,A(xiv)A aqf A mendm ntAA t,A1 69, A(xv)AAct, A 98 Aand (xvi ATheAWa q fAAct, A19 5.under Avari us 3.1.1.4. .7 ACur ently A3 0000 A aqf Ain AI dia Aare Abein Aadmi istered oun ryAex eptpro isio sAof theAW qfA ct, 19 5.AThisAAct isAapplica leA hrougho tAtheA entAs ruc ure for AJam uAa d AKash irAand Dargah Khwaja Sa eb,AAjmer. TheAmanage under Ath AA t cons stsAo Aa Wa fABo rd Aa Aa Aape Abody A nAeac ASta e. AEv ry W qfABoardAisAaA uasi judicial A od Aemp were AtoArule Aove AWaqf-rel te Adi putes.AA AtheAn tiona Al vel,Ath reAi ACentra AWaqf Coun il wh chAactsA nAanAadvi so r yAca acity.3.1 1.5ANon-P ofitAComp ni sA Sec ionA25Aof theA o mpani e sAAct, A 956)anism th oughA 3.1 1. .1 Sec ion A25Aof theA ompa iesAAct, 195 A rovides Af rAaAmec dA iabi ity,AA which A n AA so iation Acan be r gistere Aas A A ompany A ith AaAlimi igion or Aany A ifAsu h A ssocia ion isAformed for Apromo ing A ommerce, art, Asci nc ,Ar sAobjects AThA other use ulAobje tA nd Ain end Ato AapplyAits pr fits/incom Ain promotin Ai oc ati nsAb tA obj ctiveAof A hi Ap ovision is Ato Apro ideAcorpora eA erso alityAtoAsuc AAs equ rements AA at the Asame A ime A xemp ing A he Afr mAsomeAof A he Acu bersome Alegal This Se tionAre dsAas –nmentAthatAa“ 5( ) AWher Ai Ais proved AtoAth As tis action A fAtheACent alAG venA ssoci ti n:ommerce, art,A s Aabou At A eAforme AasAa Al mit d Acompany for Apromo ing A scie ce, Arel gi n,A harit AorAan AotherAusefulA bj ct,Ao jects, Aa dA In end AtoAapp y A tsAp ofis,Aif any, Ao Ao her Aincom Ain promotin Aitt Aprohib tA heA ayment Ao Aa y Ad videndAtoA tsAmemb rs,iationAmay beTheACent alAG ve nmentAma ,AbyAl cens ,Ad rect Athat At eAa so r gistere AasA Acompan Awith Alimi ed Aliab lity,Awi ho t Aa diti nAoAi s Ana eAofAthe A or A“L mited AorAtheA ordsA‘Pri va t eALimit d’ ”heA rivil ge A 3.1.1.5.2 A nAAssociat onAre ist redAu derAtheAa oveAp ovisi nAs all enjoy AallA hese en itiesA and Awo ld beA ubj ct AtoAall At e A bligati ns AofAlimi edAcompa ies. A owever,A otife AbyAtheA wi lAbe exem te Afr m Asuch Aof A he pro isions Aof the Co panies i A ct asA Un onAGo ern entAunderA he provisi ns Aof Se tio A25( ) A fAtheAAc . AThe Aex25So ial ACap t l –Aared Desr~e~~~~~companies can also be transformed to a non-profit company under Section 25(3). The companies registered under this provision are subject to such conditions and regulations as the Government thinks fit and on being directed, they would be required to insert such conditions in their memoranda. Their memoranda can not be altered without the prior approval of the Union Government. The Union Government also has the powers to revoke the registration granted under this section after giving an opportunity of being heard [Section 25(7)].3.1.1.5.3 The non-profit companies registered under this provision have been exempted from several provisions of the Companies Act by way of notification issued under Section 25(6) of the Act which inter alia covers the following:-?exemptions from publication of names etc. (Section 147);?liberty to hold general body meetings on public holidays or outside business hours [Section 166(2)];?reduction of time length of meeting notice to fourteen days instead of twenty one days [Section 171(1)];?requirement to keep books of account of the past four years instead of eight years [Section 209(4A)];?exemption from the requirement of government’s permission for enhancing the number of directors (Section 259);?relaxation in holding Board meetings once in six months instead of three months (Section 285) and its quorum (Section 287);?competence of the Board to decide about borrowing of money, investing of funds or granting of loans by circulation (Section 292);?exemption from the requirement of intimating to the Registrar the particulars of change in the composition of the Board (Section 303);?relaxation in matters regarding the amount of loan or purchase of shares that can be made by the company without the government’s prior approval (Sections 370 and 372).3.1.1.6 The main difference between a Trust, a Society and a Section 25 Company can be summarised in the following manner and as indicated in Table 3.1.26Societies, Trusts / Charitable Institutions, Waqfs and Endowments3.1.1.6.1 withAs meA 3 1.1.6.1 A A ocietyAis ba ically Aan Aa sociat on forme Ab Asev n Aor Amo eApe sonsrA ay An tA common A bje tives Afor pr motionAofAl ter ture, fine Aart ,Asc ence etc AThreA ayAbeAs meAco mo Aasse AtoA tart wi hAbut, in cours Aof time, At eAS ciety Ac nAacquireAas ets. ableA3.1:A omparis nAbetw enATrus ,AS cietyAa d A ection5AComp nyAPulicATrutASocie yionA25ACompanyStatute/Lgislat onAPub icA rustAAct Alike SocietiesARe istationAAct Com an esAAtAo A1956A he ABomay P ublcAof A1 60A ru tsAActAof A1950Ju is ict onA fAtheAAct ConcenedAState ConcenedAState Conce nedASateAw ereAwhere Aegist redAwhereAegisteredAegisteredAuthori yACharity ACo missioner Re istrarAofSocieties Re istrarAofCompaniesReis ratioAA ATrustA sASo ie yA(andA yAdefaultA emodumA nd AAals AaTrustAin AA ticles AofAAociationAAM har shtraAanGujar t)AAtamp requiredA uty A ru t Aee AtoAb ANo As ampApapeAr quire ANo As ampApape ndumAand eA ecutdAo Anon-Afor A emand mAof AAforA emoso iation judiAial Asmp ApaperAAAs oci tionsdARules A AA ticles AofAAAof A rescredA alueAAandARegulat on NumberAfAperso sAMimumAtw AAMinium Aseve ;AMini umAseven An neededAtregister A Tr stees AnoAu pe Alimi AnoAuper Al mitAupperA im tBoardAofA anagemenTrusteesA Gove nig ABod Ao ABoardAofArectors A CouncilA AMnaging Ao AManagingommitteeA ExecutiveACom it eeModeAofAuccessi nA suallyAby Aa pointme tAUsuall AectionAb AAUsuall Aele tionA yooardAof AA embrs AofAt eA embrsAofAtheAnagemen AAGeeralABo yAGeneralAo ySourceA:Aasianphi lanth opy orgAprop rtyI At e caseAo AaA rust AtheA er Aba isAofAits fo mat onAisAthe ex st nceAof anAasset whic AhasAbe nA ona ed Ab Athe A ill m kerAforAaA articula Apurpo e, social AorA eligious.A siastic lA har tableAand religious Ain tit tionsAa eAspe iaAkinds ofATr stsA hichA aveAclearAecclAo AwhichA in en .AWaqf A sAanoth r Aarian AofAT ust where th A onorAis a A uslim.AThAs bjectact call an A Ai sti ut on AcanAbeA egist red under Athe SocietiesARe istr tion Act A1860AareApt eAsam Aa Athos A nAwhi hAaAT ust A ou dAalso A e A ormed.AThASoci ty,Apr ma f27apital – A Shared ocialDestinyACdemocratic entity, as all its members (at least seven in number) have an equal say in its running whereas in a Trust, control over the property remains fully in the hands of the Trustees and depending on the clarity of the will, such a management continues to be in existence for a long time. Government intervenes only when Trustees change or the Trust becomes too old to be managed as per stipulations (cypres) of the original will, or on grounds of malfeasance or abuse of trust.3.1.1.7 Trade Unions3.1.1.7.1 In terms of Section 2 of the Trade Unions Act, 1926, a “Trade Union means a combination, whether temporary or permanent, formed primarily for the purpose of regulating relations between workmen and employers or between workmen and workmen or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions.”3.1.1.7.2 The objective of the Trade Unions Act is to provide a legal existence and protection to the Trade Unions as defined above. A Trade Union can be registered under this Act along with the rules formed by them with regard to its objects, use of funds, maintenance of a list of members, manner of appointment of its members and executives, manner of dissolution etc. The concerned Registrar can not refuse registration if all the technical requirements have been fulfilled at the time of filing application and the Union is not held to be unlawful.3.1.1.7.3 In the original Act, any seven or more members of a Trade Union were eligible to apply for registration under this Act. This however led to multiplicity of Trade Unions in the same establishment over a period of time. In order to address this problem an amendment was made in 2001 and it was provided that no Trade Union of workmen shall be registered unless at least ten per cent, or one hundred of the workmen, whichever is less, engaged or employed in the establishment or industry with which it is connected are the members of such Trade Union on the date of making of application for registration. A new Section 9A regarding minimum requirement about membership of a Trade Union was also inserted according to which a registered Trade Union shall at all times continue to have not less than ten per cent, or one hundred of the workmen, whichever is less, subject to a minimum of seven, engaged or employed in an establishment or industry with which it is connected as its members.3.1.1.7.4 The office bearers and members of the Trade Unions have been given immunity from criminal and civil liabilities for their activities undertaken in order to further the objectives of a Trade Union. However, in case of willful contravention of the provisions of the Act, or fraud or mistake in obtaining registration penal provisions could be invoked and28Societies, Trusts / Charitable Institutions, Waqfs and Endowmentsthe strarAisA theAreg strationAcicarti eAcanAbeA ith rawnAand A an ell dAby AtheAR gi trar. ATheA eg pp int dAbyAthe Aap ropriateAg vernm nt A(b thA nionAa d A tate) Ai Ar spec AofAea hA ta e.AHe Ais as istedAbyAA dit onalAa dADeputyARei s t r a rs. A rsAto AbeA . .1.7. AAAmajor A ro isi nAo AtheAAct pe tai s Ato Athe Ap op rtio AofAoffic Ab ar terms Ao A once n d AwithAaAp rticular indus ryA hereA he ATr deA nion hasAbee Af rmed. In lA umbe A S ct on A 2AofA heATra eAU ions AAct in erted in A 001, notA essA ha Aha fAofA heAtot Apersons ofAoffic Ab arers of AeveryAr giste ed ATr de Un on AinAan Aun rganiz d Asec or shall Ab cted. InA actuall Ae gagedAor em lo edAin Aan indu try Aw thA hichA heATr de Union AisAc nn ne thi dA oth rAc ses, allAoffic Ab a ersAofAaAr giste ed ATra eAUnio ,Ae cept notA ore thanA actuall A ofA heAtot lA umb rAof theAoffic Ab arer AorAfive,A hi hever isAle s, shallAb Apersons y,Ai AisA e gag d AinAthe Aesta lish ent Aw th A hichA heATr de Union Ais Ac nnected.AImp rt nt Aa Aoffice also prov de AthatA o A emb r AofAth AC uncil AofA in s ersAor a Aperso Ah ldin tryAw thA ofAp ofit A( ot beingAan Ae ga ementAor Ae pl ym nt Ain Aan Aesta li hment Aor indu hichA he ATr de Union Ais Aco ne ted ,Ain A he U ionAor a ASta e, s allAbe aA embrAofAtheA xe utive or Ao herAoffie A e rerAofAaAr giste edATradeAUnio .3.1.1.8AInte nationalAPe sp ctiveAonC h a r i t i e s oluntaryA .1.1.8.1A egin ingAw thAsmall A uc sho s AinA he Aearly Ase tl men s Aof theAUSA,A rnAw rld orga isat onsA av AbeenAinA xi tenc AinA om Afo m Aor A he oth r AinAt eAentir Awest evelope A over the lastAtw Ahundr d Ayear .ADu ingAthi Ap riod,A nAactiveArel tionshipA ACanad ,A be ween Athe Ag ver men AandAtheA oluntar AsheAUnited Kinctor.Adom, theAUSAgul tionA F ance A nd Aother A ou tries A fAEu o eAhave aAfa rlyAwellA evelop dAs stemAforAr s ct and r A 10 ro otio AofAthisAetheran ?Ina ma ority ofthesec untries ~firevenu ~ofcials nitial ydecid ~wArevenu A org ni ation Ais Ach rit ble.AThis ap roach is bas dAon Athe A sser ionAthatha AtheA offiials AareAnon pa tisan in AtheirAdete mi ation Ao AcharityAregi tra ions andibility,A taxA ut or ty A s Ain the Abest po ition AtoAa min sterAt e A yst mAofAtaxAdeduc ncludingAde ermin ngAwhichAorga isa ionsAare eli ibl AforAtaxAex mp ion.hd ale ? .T ~CharityC mmissionad ini tersthe har ti sActi ~En land~aoverAal A TheAAct emp wersAtheAC mm ssionAto exercise Ar gulatoryAjur sdic ion matters Ac ncerningAch ri ies litybut ?I ~th ~USAan ~Canada,reg st a ionof ~c a ityi ~aStaterespo sibAfedera fina cia AandAtax Ar gu ationAi Ath oughAt eAInland Reven e, w ichAisA29ag ncy.A1 AA eviewAo ACharityAAdmin st ationA nAIndi :A eportAofA ampradanA po sor dAbyAthe Planning ACS c a ACpit hared l A– Destiny AA AS?There is easy access to data on charities: (i) there is a Public Register of charities and (ii) it is mandatory for a voluntary organisation to supply information on demand.?An effective grievance redressal system is in place. There are provisions for appeals against decisions, and graded sanctions for violation of laws.3.1.1.8.2 Charity Laws in the USAited AK ngdom.3.1.1.8.2.1 In the United States, charities are created under the State Law but they are subject to control by both Federal and the State Governments. The charity administration is managed at the Federal level under the Federal Tax Code by way of preferential tax treatment. Charities are granted tax exemption status under Section 501(c)(3) of the Federal Tax Code subject to organisational and operational conditions. Organisations claiming tax exemption must adhere strictly to their intended charitable objectives as provided in the governing document. The Tax Code makes a distinction between Public Charities and Private Foundations for the purpose of regulations. Private Foundations are more strictly regulated as compared to the Public Charities. The Internal Revenue Service (IRS) is responsible for enforcing federal regulations with regard to the administration and governance of charitable organisations.3.1.1.8.2.2 As stated above, charities are created under State laws which provide detailed guidelines for their incorporation and regulation (Provisions may vary from State to State). The State laws are mainly concerned with (a) the purpose of charities, (b) their organisational structure, and (c) their internal governance. The definition of charitable purposes under State laws is by and large aligned with the definition provided under the Federal Tax Code. State Attorney Generals have been given powers to enforce laws relating to charitable organisations.3.1.1.8.3 The U.K. Law113.1.1.8.3.1 The Charities Act, 2006 has completely changed the government-voluntary sector interface in the United Kingdom. The Act provides for the establishment of an autonomous body called Charity Commission to regulate and support the functioning of Charity organisations across England and Wales. There is also a Charity Tribunal to entertain appeals against the orders of the Charity Commission. The law has prescribed guidelines with regard to formation and registration of charities, their fund raising"Based on a irdASe tor,AA 11BasedA nAa Adoc mentAtitle ,A“C arit e AAct A2006A–A hatA ru teesAn edAtoAkno ”, pub ishedAb AtheA abin tA ffice h AOffic AofAthe Un30Societies, Trusts / Charitable Institutions, Waqfs and Endowmentsactivities, ntA eat res ofA activit es, Aaccoun ing procedures A nd submissi ns ofAretu ns.ATheAs li the Ala AareAdiscussed below:AaccountChar ty,Acha ita leApur ose Aand publicAbenefit Aregis ration,Aa dits,A dAreturns: A) AC ari yrAaAcha itab eA (i) AThA K AActAdefies a ‘Char ty AasAa ‘body or tru t which AisAfiesAw ich comeA purpos Athat A ro ide Abenefit A o A he Apu li ’.AItAlist A13Aa tivi unde At e definitionA f AaAcharitab e A urpose.he ApurAown Agove ni i) A( gAos s (or Aaim ) Ao Aa AChar ty A re A su lly set out Ain Aitpose A(kno n Aas d cumen . AIn A he Ap st, A here A er Afour Atype Aof Acha itable pu education; A he ‘hea s’) AThese A er Athe Arel ef A f Apoverty; A he advancemen Aof theAcommu ity.A advanceme tAo Areli ion; Aand oth rAp rposes fo Ath Abenefit Aof Aw reApre ume A Char tiesAre ie ingApover yAorAadva ci gAeducat onAo Areligio ion.ANo Aever A to Aben fit the A ubl c. ATheA2 06 AA t Aremoves Ath sAp esump C arityAneeds toA em nstr teAhowi itA illAben eft heApublic. B)AACharitbl APur osea Acharitabl(i) AThe A: lis Adescribe Athe Afollo in Aactivitie Arpreve ti noorrreli fdofnpovert ;? advancement ofveducatio ;? advancemen aofareligio ;? advanc me tho shealt oo lthessa ingaofelive ;? advancement of citizensh peorlcommunit adevelopmen ;? adv nceme tuofuthe arts,acu tu e,iherita edornscienc ;? advance entrof31tal – A SharedSoc alDestinyACapi?advancement of human rights, conflict resolution or reconciliation, or the promotion of religious or racial harmony or equality and diversity;?advancement of environmental protection or improvement;?relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantage;?advancement of animal welfare;?promotion of the efficiency of the armed forces of the Crown, or of the efficiency of the police, fire and rescue services or ambulance services; and?other purposes that are currently recognised as charitable or are in the spirit of any purposes currently recognized as charitable.(C) Registration(i)Generally, only Charities with an annual income above ?5,000 need to registerwith the Commission. This threshold has gone up from its previous level of ?1,000. The registration requirements for ‘exempt’ and ‘excepted’ Charities have also undergone change.(ii) The existing registered Charities with an annual income below the ?5,000 threshold can ask to be removed from the register, but they will still remain Charities and will have to abide by Charity Law.(D) Audit, Accounts and Annual Returns(i) A Charity that is not a company must have a professional audit of its accounts if the following conditions apply:?its gross annual income is above ?500,000; or?it has an annual income over ?100,000 and assets exceeding ?2.8 million;or, regardless of these conditions, if:?its governing document states that it must have a professional audit; or32Societies, Trusts / Charitable Institutions, Waqfs and Endowments?sthen ommiss one rdersnth oa cou tsaoftt eo ha ityftosbenprof ssionallyiau i ed.(ii)AAA haritab eAco pa yAwith anAann al inco eAof moreAtha A? 00,000 or asse sAof m re A han A? A2 8Ami lion m stAhave AaApr fessionalAa dit (iii)AAllA egistered Char ties th t Ahave to Asub itAannu lA etu ns Ato AtheA ommi si nA ial Ayear.A ust Ado so A ithin A en mon hs A f A he A nd Aof Athe i Charity’ Afnan it Aannua A P eviously AT uste s Aof Asuch Cha ities Awho Ape sisten ly failed to Asub vi ted Aof retur s; Aannu l A eports Ao Aa cou ts Ato Athe A ommis io Acould Abe co At Aap lyA an A ffence an Afin d. AThe AA t Ac anges Athe de init on Aof A he offenc , A het erA to Aa y AT ustee wh Afai s A o As nd in Ao e A r Amor Aof Athese A ocument fence. The r Anot At e A ailure Ais Ap rsi tent, Aand inc eases At e Ap nalt f Afor Ath t A taken AallA offence Ai Ac ndo ed Aif Ath ATr stee Aa e Aab e Ato show that they A ave eason bl Aste sAt Ameet Athedea li e.or AabuseA (iv) AThAa ditors Aof Aunin orporated Char t es Ahave aAspicAduty toAre cieadyAhave orA ignifican Ab eachesA fAC ar ty A aw Ato Athe AC mmi sion.AThyAalefama ionA statutory A rotecti nAaga nstAle al A ctionA or breachAof co fidenceAorA Abot Ath A he e At ey doA heAnewAAct Ao.Aecog ises tha AdutyAa d Aex endhar ties’A du yAandAthe A ssociated A ro ection At Aa ditors Aof Aunin orporatedA tantsAandA andA haritableA ompanies’ ac ount ,A sA ell AasAto reportingAa cou i dependent ex minersA fAcharityac ounts.(E)AIns itutionalAArran em ntsheACharity(a)ACom issio iss on Ao (i) A Under Athe A ro isions Aof Char ties A ct, 1992, At e ACharity A om Char ties th AU.K Aw s Aable A o Ad velo Ai s role Aa Aa Amodern A eg lator. AThe rkAwhich A Act,A20 6 Afurthe Asup or s Athis Aby Aes a lishing Aa frame iss onA sA cl rifiesAits A bje tiv s A nd Ahow it Ashoul Ao erate. ATheA omefectA heo AledAb Aa A arge Aand Amo e Adiv rseA oar Athat A anl Abet erA secto AitAworks wi h.ions, an A (i )AThA2006A ct A efines Athe ACo mission’s A bje tivesAandA uncerf rmingA giv sAit Aso eAgene alAdu ies which ar Amean At Agui e AitAwhenA its A33o i lShared al A– Destiny A~ ~(iii) The Commission has the following objectives:1.The public confidence objective: To increase public trust andconfidence in Charities.2.The public benefit objective: To promote awareness andunderstanding of the operation of the public benefit requirement.3.The compliance objective: To encourage Charity Trustees tocomply with their legal obligations in exercising control and management of the administration of their Charities.4.The charitable resources objective: To promote the effective useof charitable resources.5.The accountability objective: To make Charities more accountableto donors, beneficiaries and the public.(iv) The Commission has been assigned with the following general functions:?decide whether institutions are, or are not, Charities;?encourage and facilitate the better administration of Charities;?identify and investigate when Charities are being mismanaged or misused and take action to put things right or to protect Charity property;?carry out its new role in issuing public collections certificates;?maintain an accurate and up-to-date register of Charities, and use this and other information to support its work and help achieve its objectives; and?provide information and advice or make proposals to the Minister concerned on matters relating to its objectives and functions.34Societies, Trusts / Charitable Institutions, Waqfs and Endowmentshe dut (v) Te its eorAI Ait Awork, Athe Comm ssionA ustA omplyAw thAcert in duties,Aa Afo lows:?sthe Commi si nam st ia pfartasaisep act ca l ,aa thinh iwyowhichbis:c pati le: AAwithAits obj ctive Aa dAwhichAisA ppr priateAfo Aachi vingAthoseA bjec ves; andipation – inA AAwithA ncouraging charit ble givingAan AvoluntaryApa ti cha it Awork.heneedfo ~ ?Te Commi si nmust,in ppropr atecase ,c nsid rtichAaffect A C ar ties to beAableA o A nn vate Aor toAsupport innov tionAw Charitiesen rally.hctice.T s ?Te Comm ssio ~must~ av ~reg rdtobest regulator h prAshouldAbeA includ sAa plying Athe prin iples Athat regulatory activi ie dAta ge edA pro ortionate,Aa countable, con istent Aand At ans arent,Aa on y A tAcas sAin Aw ic AactionsA ee ed.pr ncip ? esAsanor ani ation,the Comm ssio ~must~ av ~re ardtothesou cesA nA of Agoo Acorporate gov rn nce andA oA he A eed to AuseAit Arthe Amo t AefficienfectiveAand econ,Aeomic l A ay.nAexpa dedA (vi) AThe Com ission h sAb come aAnew ABody Corp ra e,AwithAeAfromAthB ar . There is Aa Aclea As ate ent Aof AitsAi depe denMin st r. eA-exec ( ii) tiveAAThe Act allowsAthe Co mission to re ruit upA oAfourAnewAnoholeA asAaA Boa d AheAAct Aalemb rs. AoAre uir s Atha At e Board asA A re ulationA ro dArangeAo Akn wledgeAand ex eri nce AofAth Aop rationAandAl ast oneA o ACh ri ies andAo AtheAlega Af amewo kA nAwhic Ai Awork . AA co dition A o Athe ABo rdAm mber Amust Ahave A pecialise Ak owledge Aof ver ityAofA in Wale . AThi Aw llAhel AtoA nsu e Atha AtheABo rd A eflects Ath Adthe charitaleAsec or AdAaApu (vAThlicA ii) AA t makesAitA AstatutoryA equi em ntAt atAi A ustAhoPa liamentA Ann alAGene alAMee ing Ad rin Awhich its Aan ua AreportAto is35So ial ACap t l –Aared Desr~e~~~~~(ix) The Commission must report annually to Parliament on its work, its progress in meeting objectives, the performance of its general duties and the management of its affairs.(x) The Act preserves the Commission’s independence from Ministers and government departments. This contributes to public confidence in Charities.(b) Its ManagementCurrently, the governance responsibilities for the Commission in the UK rest with a Board consisting of 9 non-executive members. Corporate decision-making that affects the day-to-day operations of the Commission has been delegated to the Executive group consisting of a Chief Executive who in turn is assisted by four Directors and Functional Heads.(c) The Charity TribunalIn the past, the Charities, if dissatisfied with some decision of the Charity Commission, could go in appeal to the High Court. This was prohibitively expensive and complicated, particularly for small organisations. The 2006 Act has established a Charity Tribunal as a first level of appeal. It is convenient, cheaper and less formal. This arrangement allows smaller Charities an accessible means of grievance redressal. Access to the High Court is still possible as second appeal.3.1.2 Need for a New Legal Framework for Charities in India3.1.2.1 The multiplicity of charity laws in India has prevented evolution and growth of a proper institutional framework in this sector. While, voluntary organisations often feel harassed in complying with various legal obligations, institutions of the government too have not been effective in regulating the sector and securing legal compliance. Instances of misuse of tax provisions, fraud and poor governance have become frequent. There is need to create an effective institutional mechanism which would provide a supportive environment for the growth and development of charities in this country. In this respect, one could learn from the governance structures as described at Para 3.1.1.8. India being a federal Union, a decentralized institutional setup for charities similar to that existing in the USA, seems to be appropriate. The power of registration and oversight needs to lie with the State Governments.36Societies, Trusts / Charitable Institutions, Waqfs and Endowments3.1.2.2 In 2004, uctedAa As udyAonA 3.1 2.2AInA20 4,Athe Sampra an A ndianACentreA or APhilan h ophyA on gACom ission.AThA chariti sA dmini trati nAi AIndia Aunde At eAs onsorshi AofAtheAPla nistudyAsu gest d Afoll wi gAfo rAmodelnAthi A e ard:AeiM del 1A–AMa ntai AtheAst tus quo,Akee ingAtheAexist ngAingtituti na Aarr ngem nts as Athey Aa e, Abu AenhancingA he rApe rfor anceAby adoptingAcertai Are o mend tionsAforAaA oreAfacil tati eAi terface with Ath Apublic,Agre te Atr nsparencyA f AtheAre ulatoryA roc ss, Ameas resAfo AsecuringAb tte A omplia ce,Aand a Abetterppeal A r cess.e M del A2A– ACrea eAaAfunc ionallyAe hancedAChar ti sAD rector teA nAtheAIncom ATax depar ment, plusAStateA evel Aregi teri g age cies,AlusAaAN OAS ctorAAgen y.ATheAChar tiesA ir cto ateA ould AbeAth AmainAr gulator Aagen y,Alooking aft rAmonitorin Aa d A omplia ce, as A nACa adaAa dAt eAUSA Awhil AtheAStateA evelAreg steri gAage cies wou dAexistAonly forAregis ra ionAfunct on.AI waddi io , A her Awould be anANPO Age cy Ato Aadv se AtheAChari ie ADir ctorate. ndAp of ssional A It wil AcompriseAof Ath Ar pre ent tives Ao Ath ANPO Asector,A policy guidance A su hAasAlawy rsAand AChart re AAcco ntants. It Awou dAprovidesmAforAachiobt in A eedbac Afr mAt eA ector A ndAset Aup rev ewAmechanc m l ance.e M del A3A–AC eateAaAChar tie A irectorat Aan AaAman e ingAatoryAN OAS ctorAAgenc . ATheAd ffer nceAb twe nAt is A odelAandA he Aon Am ntio edA NPv Ais Ath tAtheA PO ASe to Aagency wo ld A eAcreated A yA he government as Aan au onomo sABo y.A t Aw uldAhaveA ts Aow AGo erningABody, andApr fes ional staf ,Aa dAwould faveAthe ge eral Afunc ionAofApr mot ng effectiveA seAofAcha it bleAresourc s AbyAe couraging A et erAmanagementA f Ao ganisatio s, AandAimp ov ngAgovern nceAbyAp ovid ngATrustees wit Ainform ti n Aand advi e. ItAwould Aal oAb Aresponscb eAforAcom liance Aed ca ion Af nc i n. AIt AwoudAbe A Ape manentAf rumA orAd alogue tha Athi Asector Ah s Ab en Ade an ing andAwould beAtheA nte faceAbetwe nAt eAg vernm enndAth Ae tor.A? Model 4A–AC eateASt te AlevelACh rity AComm ss o sAs pporte AbyAaAN ThASe torAA en y. TereAwo ldAbeAan Appe ThsA ribun lAtoo. AT sAmodel su g stsAsetti gAupAaACha it es A om ission on the AU Am del.AIt Aw uld beAc ncer fidAnotAo lyAwithAfn nci l Are ulat on A utAalso Aw th A he Apromotio Aa dAd velopme37– A ocialSharedA apialDestinyA3.1.2.3 A Model law for Societies and Trusts3.1.2.3.1 Non-Profit / Voluntary Organisations in our country operate on a wide variety of issues covering almost all aspects of socio-economic development and polity. There are separate laws under which Societies, Trusts, charitable institutions, religious endowments and Waqf etc. can be set up. For illustration, the Societies Registration Act, 1860 is the law under which Societies of different hues are registered in India. ‘Societies’ being a State subject, the 1860 law has been adopted with some amendments by twelve States. The States such as Rajasthan, Karnataka, West Bengal, Madhya Pradesh, Tamil Nadu, Manipur, Meghalaya, Jammu and Kashmir and Andhra Pradesh etc. have enacted their own law on this subject. Kerala, Andhra Pradesh and Tamil Nadu and many other States have exclusive laws for governing religious endowments. Maharashtra, Gujarat, Rajasthan and Madhya Pradesh have specific Public Trusts laws to govern all kinds of Trusts and endowments (religious / non-religious) under their jurisdiction. Then, there are endowment specific laws such as the Bodh Gaya Temple Act, 1949. In spite of all the above legislations, if any ambiguity crops up, the Courts take recourse to Section 92 of the CPC.3.1.2.3.2 Diversity of laws across the States has given rise to emergence of nonuniform practices in the management of voluntary organisations. If an institution registered in one State desires to expand its activities to any other area, it needs to comply with a different set of legal requirements. The Commission is of the view that the management of civil society organisations will be far less complicated if a uniform legal regime for regulation of charity institutions is put in place for the entire country. Currently, ‘Societies’ is a subject under the State list (Entry 32) of Schedule 7 of the Constitution, whereas ‘Trust’ is in the Concurrent list (Entry 10). “Charities and charitable institutions” are also covered under the concurrent list (Entry 28). In order to create a uniform legal environment across States, the Commission suggests that the Union Government should formulate a comprehensive model law covering both Societies as well as Trusts. This model law could be sent to the States who could adopt it with suitable modifications. While, it will not be possible here to suggest a detailed draft, the broad framework and the views of the Commission on some illustrative issues are indicated in the following paragraphs.38Societies, Trusts / Charitable Institutions, Waqfs and Endowments.1.2.4 AK y A lem nts oft h eANew AL weApr3 1.2.4.1 AThAfoll win AthreeAk yAele ents wo ld need AtoAb Ae pla ned AinAtopo edAlaw:bleA urposei) ADefin ngA harityAand CharitalAMec anism (ii)AIn titutionaAGo ernment (iii AInt rfa e Awit AtheAStatele Pur ose i)ADefin ng A harityAand CharitaeAorigina A The An w Ala Aw llAne d to AdraftA Acomposit Adefin ti nAb sedAon At e A ont ntsAofAticAT ustsA Societies AR gist ation Act, A18 0, Avari usAam nded A tat AActs, the ABo bayAPu Act,A19 0, Se tio A92Ao AtheACivi APro edu e ACode A nd ASe ti nA2 15)Aof theInco e ATaxAUKALawAa Ac ,A1961.AThAd finitionAo A“C arity”AandA Charitab e APurpos ”A rov de Ain th i dicatedAi Aparagraph A .1.1.8 3.1Aco ers alm stAallAthe object ve Ali tedAin theAe tanAUnio Aand Sta eAl wsAa dAt eA ame A an be Ak ptAin mindAwhileA orm lat ngAtheAnew Al gislation.Experi ncele Aissue.A acros AtheA orld shows At at Adefinin A‘C arity’ AandA Charitab eA u pose’Ai AaAcom ttee whichA The Co mi sio AisA fAth Aview th tAth re isA ee At AsetAupAa AInclusiv ACommhichAwould w llAe amine this AissueAcomp ehe sively A nd suggestAanA ppropriat Adefin tionA inter- liaAsoften Acharities governmentAre ationship,Ap rt cul rlyAinAtaxAm tters.(ii)AIn titutionalA echan sm issionerA A nAp ace AofA he Apres ntAcharityAadm nistration co s sting Ao Aa ACharityAC m ldA r vid A Inspec or GeneralAof ARe is rationsA s A xis ingAin A he A tates, At eAp opose AlawAwomiss onAin for Aa Anew governanc As ruc ureA n A h Aform Aof Aa At ree-membe ACharities Co w.AI Awil A each State Awit Anecess ryAsu po tAst ff. It will Abe Aan auto omousAB dy crea ed byAl eAassem l A hav AlaidAdow Afu ctionsAand Arespo sib liti s A ndAwillAbeA cc unt bleAt AtheAStafcer dra nA thro gh Aa Anoda AMhe Anister.A hai manAof Athe Commis io A hou dif Abe A AlawAfro At e AcadreA fADistr ctA ud es. OutAo Ath AotherAt o Am mbers, on AshoudAbe dra nArnment.ATh A fromAth Avolun ary sec orAan AtheAo he As ouldAficerAoe A nAoAthe AStateA ovf ncti ns Aof Athis Commi si nA ouldAbeA oAr gulateA nd A upportA he sec or.ATh Alaw wouldAa so A rovide Af r A r ation Aof A AChariti s A ribu alAin eachA tate whic AwillAhav appellateAj risd cti n Aover th Aor ersAofAth ACharities A39So i l Capitaared A–AADestinyAShThe functions of the Charities Commission would include:?Registration of Non-Profit Organisations (NPOs).?Maintaining a public register of NPOs.?Receiving reports from NPOs.?Audit and monitoring.?Disseminating information on good practices / methods of management among voluntary organisations.?Holding public discussions / consultations.?Bringing out simple publications to educate the public about NPOs.?To review periodically the social and economic environment of the charities.?Acting as a permanent forum for dialogue with the sector on issues of policy and regulation.?Administering sanctions and penalties for non-compliance.?Resolving grievances.The Charities Commission should be free to recruit its own staff like any other non-profit corporation and train them, and pay remuneration according to non-profit sector practices. This will give stability to the organisation and also make it possible to hire staff who have a commitment to non-profit work.(iii) Interface with the State GovernmentAt present, a non-profit organisation’s interaction with the State authorities consists of the following – (a) Government’s power with regard to grant of permission for alteration of the memorandum, alienation of property or inclusion of the change report; (b) Government’s powers of inspection; (c) Powers to cancel registration; (d) Powers to appoint an administrator; (e) Powers to modify / anull a decision of the Governing Body; (f) Powers to dissolve the institution; and (g) Powers to impose penalty. In view of such vast powers available to the State machinery, there is a feeling among the NPOs that the sector has virtually become a subordinate formation of the State Government. The Commission is of the view that the NPO sector should have freedom in their functioning (as per the intent of their memorandum). Government’s interface with these organisations should be minimal and the government should work only as a facilitator and developer.40Societies, Trusts / Charitable Institutions, Waqfs and Endowmentshe discre TeAdi cretio aryApowe sA cquired byAva ious AStateA overnm nts during th Acou seAo At me need Ato Ab Adispe n s edAwit .3 1.2.4.2A nA ddi ionAto the above,At eAp opos dAla Aw llAn edAt At keA areAofAthAfollowin Aimportant functi nal Ai sue AwhichAa eA r ticalAtoA AvoluntaryAorg nisation’sA orking:ASocietiesA (a) Al era ion AinAthe m mo and mA– AsAper Athe pr vis ons AofAth me orandumA R gis rat on AActA(as ap licable toA ujaratA ndAva iousAoth rAS ates),Athe p ortedAby ofA ss c ationAo AaA oc etyAcan beAa teredAo l Athroug AaAspecial resolutio As as bro ghtA a A ajo ity A fAno Aless th nA3 5thAo Athe Atotal me ber hipAofAt eA oci ty. AItAAaA o ietyA to th Ano iceAof Athe Comm ssio AthatAthi Ap ovisio Ais AhighlyAi pr c ical. AI asA Alarge A nd Adiverse member hipA p eadAo er AaAlargeAg ograp icalAara,Aseeking sio AisA fA at endan e A fA3 5thAo Athe Atotal me bers ip AisAve y A ifficult. AThe Co mi Apractic lA th Avi w Athat At eAproposed A egisla ionA houl At keAc re Aof A h sAis ue.AAAmor ajo ityA fA app oa hA ould Ab AtoA nsis A hatAsuc AaAspecial re olutio Ai A assedAby aA eetin .A tA no Aless th nA3 5thAo Athe Ato al mem ersAofA heASoci ty pre ent Aat At eAAaAspecial ould be Ai Ali e Awith Athe pr vis ons Aof Ath ACom anies Act,A 9 6, Awher res lu ion Aca Ab Apass d A yA3 4thAofAtheAs arehold rs pre entAatAtheA eeting.( )A pprova Aon Ach n e Arepor A– Se tio A22Aof the ABo bayAPu lic Trus sAAct (BPT sterA(PTR) Act), 1950 dealsAwi h A cha ge’Ain A he ent ies Aof theAPu licATrus sARegpertyAet .A pe taini gAto Aname, Ac mposition, Aorg nisational structure Aimmovab eApr cum erso eA heneverAan A nstitut on A p lies Af rA Ach ngeA n A heA TR AitA a Ato Aface AatAgetsAt eA andA ime Ataki g A roc ss. AI Amay oftenA akeAmo ths beforeAth Aapp ica sio AisA fA appr val A ett r Afr m A he A fficeAofA he ACharityACo mi sioner. AThe Co mieAp oposedA th Avi wAthatA heApr ce sA eedsAto Abplifi AsidAan AmadeA h im Abound.AngeAr port newA egisla ionA h uldAhaveA Aprov sionA nde AwhichAt eA pprova AonAch wo ld need A oAbe Ag v n Awithin Aa prescribed reas nable time li itA(s ayA6 Adays).AAct, 1950 (c) Al enation Ao Aimmovab e propert A– Se tio A36 of At e ABP nAaAP blicA deals Awith A al enation Ao Aimmovab e A r perty A fAaAPub ic AT u t’.AWh heACharityA Tr s Asubmits aAp oposalAf r A ran fer Aof Ai sAp opertyAf r A ppr valAofA eesA houl A Co mis ioner, Ai sAdis osal A akes ti e ATher AisA Avi wAthat At eATrus ani ati n.A haveA ul Apower Ato manageAthe pr per ies A n AtheAbes Ai ter stsAof AtheAor sAnotAo ly ButAt eAcontra y Aargument emph sis sAtha At e Ade ayAin su hAc sesA untAof Ath A bec useAofAthe A ntractab e A tti udeAofAthe aut or ty Abut it is Aalso on accmi sio AisA Truste s’ attemptAto und rvalue At eAp opertyA orApri at Agains. AThe Co fAth Av ew A hat in Athe Ane Aenac mentA he e A e dsAto Ab Aa Abala ceA etwenAtheAtwoA pp oaches. AThAAut orit Amust Ahave reasonableA pp rtunityAto critica41So i l Capitaared A–AADestinyAShsuch proposals in order to check misuse. At the same time, there is need to make the disposal of such matters time bound.(d) Contribution by Public Trusts to the State Government – Section 58 of the currently applicable Bombay Public Trusts Act deals with ‘contribution by Public Trusts to Public Trusts Administration Fund.’ Currently, Trusts have to pay 2% to 5% of their gross revenue to the State Government under this clause. For many of the organisations, this amount appears to be excessive. The Commission is of the view that there is need to have a relook at this issue.3.1.2.5 Issue of giving priority attention to larger Organisations – India has a large number of voluntary sector organisations, a majority of whom are very small in terms of their scale of operations. Currently, the overseeing authorities spend a disproportionately large amount of time and staff on routine matters relating to smaller charities and the attention given to larger organisations is inadequate and ineffective. Thus, many important and urgent matters of such institutions remain unattended or take inordinately long to get settled. Such delays often stifle fundflow to ongoing projects. The Commission is of the view that there is need to introduce provisions which would take away the burden of routine work relating to smaller charities from the authorities. This could be in the form of prescribing a threshold annual income for the voluntary sector. Charities having incomes below this level will have fewer compliance requirements with regard to submission of returns, reports, permissions etc. However, in case any irregularity is detected, they will be liable for punitive action as prescribed under the law. To start with, the cut off limit could be set at Rs. 10 lakhs which could be reviewed for upward revision once in five years. Such a provision, on the one hand, would create a conducive atmosphere for smaller charities and on the other, would enable the authorities to find time to attend to the needs of institutions engaged in major works.3.1.2.6 Recommendations:a) The Union Government should draft a comprehensive model legislation covering both Trusts and Societies in lieu of the existing laws on Societies, Trusts, Endowments and Charitable Institutions etc.b) In place of the present charity administration consisting of a Charity Commissioner / Inspector General of Registrations as existing in the States, the proposed law should provide for a new governance structure in the form of a three member Charities Commission in each State with necessary support staff for incorporation, regulation and development of42Societies, Trusts / Charitable Institutions, Waqfs and EndowmentsCharitable Ash uldAb AaA Charitable AO ga isations AThACh irmanAofAt eAComm ss oheAother two la Aoffic rAd awnAf om theAcadr AofADis ric AJ dge .AOut ofA ndAth Ao he A member , A neAsh uld A eAd awnAfromA heAvol nta yAs ctorA Stat Asho l A woul Ab Aan officer ofAtheAStat AG vernment. In A dditi n, Athe Apo ersAov rA alsoAhav AaAChari iesAT ibuna AwhichAw uld Aexerc seAapp llat he A rdersAofA he ACharitie C mm ssion.AAw th A egardA c AThe Ap oposed Amode Alegis ation Ash u d Ai di f ate Aa cut A f Alimi nnual inco eA o Athe Aa nu l revenue A f Aa ACharity. A rganis ti ns Ahav ng Aan A wi h ArespectA below At is At resh ld Awill have Alight r Acompliance requ rements reg larities oA ubmissi n ofAretu n A/Areports /Ape missionA tc AHowever,AifAi leA orAle alA ar Adete tedAinAtheir fun tioning,AtheA rgan sa ionsAw ll A eAlia ARs.1 Alakh A andA en lAact on.AT Ast rtA it f ,Athe cutAo Al mit co ldAbe setAaw ichAcoul Abe review dAfor Aup ardA ev sioi AonceAnA ve A ears.AeAwhich AwillA d) AT e Agove nme tA ho ld Aset Aup an AInclus veACo mitt A‘Charit ble co prehens vel Aexam ne the Aiss e AofAdefin ngA Charity’Aan Purpose Aand Asug es Ameasure AtoA“soften”Achariti s-governmentA elationship, pa tic larlyAint xAm tters e)ATheAmode Alegis atio Asho ldAtakeAintoA ons derat onA heAviewsAan Asug estio sAma eAabov Aw thA egardAtoA he Afol ow ngAissu sAofAcharityAadmistration: .AAI ter aceAw thAtheAStateA vernmentii AA lte ationAinAt heAm orandumi i. AAppro alAonA cha eAreportiv AA lienation ofAimmovabApropertyv. A Co tribut onAbyA ub ic A rusts toAtheAStateA overnmen 3. ARe henue AofAtheATir ASec orsources Aviz. 3.2. AThird ASector A rg nisat ons Ai AIndi Araise Afu ds Ap imar ly Afr m Afour A ajor individ als,Aprivat Afoundati ns (nat onal Aas A ell Aglob l),Abu ine sAhouses Aan Ag vernme t.AIn A ece tAyears, th Adia poraAis a so Aplay ng Aa le dingAroleAin co tribut ngAto As43A S cil Shared AC pital Destiny A–3.2.2 The character of funding to voluntary organisations is highly skewed. Organisations which take up contemporary issues and are able to project their requirements articulately through the media are able to secure the bulk of funding, leaving the residue for smaller and not-so-savvy organisations.3.2.3 Funding also depends on the nature of activity - some sectors like conservation of environment, nutrition supplement and creation of urban facilities are more popular and “glamorous” and therefore attract more funds, while others like human rights, gender equality and cultural preservation often have to suffer for want of resources. A survey conducted by the Consumer Education and Research Centre in Ahmedabad in the early 90s found that out of over 8,000 Trusts and 2,000 Charitable Societies registered in the city, only 144 had annual incomes of over Rs. 100,000 (US$2,173) whereas the combined total was Rs.1,440 million.123.2.4 Individual Donationsce cindia. r3.2.4.1 In India, individual donations to charity organisations has been meagre. While the quantum of donation to the voluntary sector from government and foreign donor sources has increased considerably during the past decade, private philanthropy by individuals, Trusts, foundations, and corporates has not expanded commensurately. This kind of fund raising consists of direct donations by the public (either a one time act or a recurring transaction). Donations may also come through by patronizing sales of items like greeting cards, diaries, handlooms and handicraft products and by organizing events like art auctions, music programes etc.3.2.4.2 Individual donation is more prevalent during major crisis situations. During the earthquakes in Gujarat and Maharashtra, and the cyclone in Orissa, there were generous donations from individuals as well as corporate organisations.3.2.5 International Aid3.2.5.1 Bilateral Assistance3.2.5.1.1 Many agencies such as the Department for International Development (DFID) (British Government), Swedish International Development Cooperation Agency (SIDA) (Swedish), Norwegian Agency for Development Cooperation (NORAD) (Norway), and Danish International Development Agency (DANIDA) (Denmark) are permitted to support NGOs directly without seeking specific project approval from the Government of India. However, some of the agencies need specific project approval of the Government before they can finance an NGO. In addition, bilateral fund support to the Government of India4412Societies, Trusts / Charitable Institutions, Waqfs and Endowmentsor to nt geA o AtoAa StateAGove nm nt orAto otherAgove nmentAage cies, A ften, Asp cifis AtheApercre seA of fund Atha Am st Abe spentAt roughAnon-govern ental Aorganisa io s. ATheA ecentAin inAbil teral Af nd ng A oAtheAgove nme t Ahas Ainc eas d AtlowAof fue Ads AtoNGOs 3.2.6 ACor orateAPhilanthropy3 2.6.1ADona tio n sst ryA 3.2 6. .1AThe A ys em Aof Acor orateAdo ati n AforAphilant ropicAacti iti s has AaAhs Aof A in A nd a.AIn Ae rlier A imes, Amer hants Asup orted A eliefAacti ities A uri g Athe tiui s.A flodAor Af min . AThey builtAte ples, Apr moted Asc ool , AandAenco raged Aar isticApur n Athe Apre-Indepe denc Aera Ama y AbigAbu iness A ous sA etAupA rus sAandAFound tinsAtoAs pport Asc ools, Aco leg sAand Achar table Ahosp tals.A ater As meA f Athe Amultinat onal AalsoA oindAin.AeA647A 3.2 6. .2AAn A cti n AAid study found th t, A nAthe Acor orateA ront Aon y A 6% A fAt ani s com aniesAsu vey d Aha Asom As rt AofA olic A( 1% Aof th se or 8% A fAthe totalAcom whic A had AaAw ittenAp li y) A o AgetAin ol ed AinA ocialAdevel pmentAactiv ti s. ATheAcom anies lo edA wereAin ol edAinAdevelop entalAactiv ties,Apri aril Amad AcashAcontribu ions,Afo ludedA by Ah lpi gAtheAdisadva tage AwithAempl ymentAopportun ties. OtherAacti itiesAin edAby do at onAofAc mpanyAa sets,Ado atin f Asta Ati eAandApurc asingAmat rialsApr du ectl A NGOs AOn y A1 % Aha Asom Ak ndAofApartn rshi Awi h Athe NGOs, whi eA80% dealtAdi s.ATheA wi h Athe Abene iciaryAcomm nity AM stAof theseApartne shipsAe is edA nAthe urbanA re tion A partne ship Awer Aal oAno AwithAdevelop ental NGO ,Abu Awer Amore ofte AwithAinstit likeA ota yAand LionsAC lubs .3 2.6.2 ACor orateA ocial AResponsi ilityA(CSR)ity’sA 3.2 6.2.1 A‘Cor orateA ocial AResponsib lit ’ A ay Abe Ad fi e Aas Aa Acor orateAen s.AThA comm tm nt AtoAw lf re Aof As cie yAandAcom uni y Aa dAitsAadh re ceAtoAe hicalAv lu ti nsA te m A ay AbeArela ive y A ew A n AtheA ndianAl xic nAb tAthe Ac nc pt AisAcer ainl Anot.ATrad nc ptA of A“trustee hip”,A“g vin ”AandA“we fare AhaveAe isted sinc Al ngA n Aour Aso ie y. ATheAc A20thA ofA ocia Ago dAhasA lway Abee Ap rt A f AtheA ndian Ap yche AFr m Athe Abeg nn ngA f Ath onAto ce tury, Abu ine sAand Ain us ryAin Indi Ah ve AinAdiferen Away Abeen A ayingAatt nt erAofA theirAobli ati nAand Acomm tmentAt wards As cie yAa dAtheAcomm ni y.AThe largeA um A20thA sc ools, Acol eges,Ahos ita s Aand otherAchar tableAestablish ents, whic Awe eA et up A n Ath c nt ry AinAdiferent pa ts A fAtheAco ntr , Aa eAfine Aex mp esAo AsuchA ocialAcommi m ent.A3.2 6. .2AInA ecent A ear , AC R AhasAs ifte Afr mAtheA om in Aof Ac ar ty A oAtheA ominAofAst ndardAbu inessAprac ices.ATo ethe AwithA‘ rofi’AandA‘gr wt ’, itA s A neA f AtheAess45Social C p talA–A ~~~~~~~ Destinypment” Aparameters which define a business. Stakeholder awareness, increasing power of civil society, intensity of competition and environmental challenges are some of the factors which have increased the emphasis on CSR in recent times.3.2.6.2.3 Companies in India now explicitly recognize their social responsibility and many of them allocate sizable resources to it. The TATAs, ITC and the Azim Premji Foundation are among major corporate entities which have linked their business plans with ethical and social commitment. The TATAs have fully dedicated Foundations / philanthropic establishments through which they take up important issues of social / economic empowerment of the community and society as a manifestation of their commitment towards citizens. Besides, their manufacturing units too take up development work in the local areas. ITC has a dedicated social development team which anchors all corporate social responsibility initiatives. Instead of having a separate Foundation for taking up standalone philanthropic activities; ITC integrates it with its regular business plans. It fulfils its social responsibility by forging public-private partnership as a business link in the areas of social forestry, integrated watershed development, web enablement of the tobacco farmers, e-choupal’s farm extension services and livestock development. Another notable example is the Azim Premji Foundation started in the year 2001. It is a non-profit organisation which works extensively on “enhancing the quality of primary education being imparted in the government schools in the rural areas”. The Foundation firmly believes that merely creating islands of excellence in few pockets is not of much consequence and hence it aims at bringing multi-dimensional systemic changes in the whole environment of primary education across the country. Currently, it is carrying out a Learning Guarantee Programme (LPG) in five States viz. Karnataka, Madhya Pradesh, Gujarat, Rajasthan and Uttarakhand. It also provides technology support to 16,017 primary schools located in 13 States of the country.3.2.6.2.4 The Commission acknowledges that over the years, many of the corporate houses have undertaken significant work in sectors like primary/adult education, livestock development, tank irrigation, sanitation, women and child nutrition and provision of drinking water. The Commission feels that while taking up such activities, the Corporates should take into account the prevailing needs of the local people. It also needs to be ensured that there is no overlap/clash with other similar programmes in the area.Refinition of CSR~ ~ W~rldhe AWo ibili yAldABan AdefinesAc rporat AsocialAresponbuteAtoA ( SR) A s, A“the Aco mi ment Aof A us nessAtoAco tr plo eesA sus ainableA conomic Adev lopment work ngAwithAe tA argeA a dAtheirAf mil es,At eAlocal Ac mmu ityAand so ietyA thA oodA to impro eAtheir qu lityA f A ife, inAw ysA hatA reAbfor A usi ess A nd A oodAforAdeve l46ocieti s ATrustsA/A haritableAIns ituti ns, WaqfsAand3.2.6.2.5ARecommen atio s ty,Ath rea) AWhenAa communitAtyAbene rojec Ai At k nAup AbyAa corpora eAent shou d AbeAs me AmutualAco sultati nAb tweenAt eAc mpa yAandtheAlocalA ov rnme tAsoA ha At ere AisAnoAu necessa yAov rlapA ithAoth rAsimilarAd velopmentA ro ram esAinth Aarea.Ab)A overnm ntA ho l AactAasAaAf cil tatorA nd create AanAe viron entAwhichA ncourage Abu inessAan Ai dust yA o AtakeAu Apr jectsAandA ctiviies whichA re like yA oAhave an imp ctAonAt eA uali yA fAl fe Aof the AlocalAc ommu ity.lity Aetc.An tAFund ng 3.2.7A overnmeyA upportA 3. .7. ABoth the Union andAStateAG vernmen sAprovideAco siderable budgeta Ac ncerns to voluntaryAorg ni a ions onAaA id ArangeAofA ctiv tiesA ikeAruralAt chnology ducation,A of Asocia Awelfar , Aprimary A ducation Ama ernal andAch ldAhe lthAc re,AadultA ngAdirectA e po ermen Aof women AandAreha il tat on Aof Athe disab ed. A part Af omAmak specially di bu sement of grantsAto voluntary agencies,A ov rnmen Aof Indi Aha Aa soAsetAupA rd ASectorA empowered A utonom us Bodies A o Aprovi e A upp rt Ato Athe A ct vit es h Ao Athe AT In titute Org nisatio s Ahe ACentTSOs). Aal ASoci l AWel are ABo rd A CSWB) Aan ANationalntABodi sA of APublic AC ope ation andAChild AD velopmen A(N PCC ) Aar AtwoAsuch promin eAC uncilA de ling AwithA o ern entA–ANGO in erf ce AinA heAsoci l Awelfa eAsec or, whileAt ncyAwhi hA for AA va cementAo APeopl ’sA ction andARuralA echnolog A( AP RT) Ais anAag ur gemen A finances voluntaryAorg ni ationsAto stimu ate Ag assArootsApar ici ationAandAenc nctio ingA ofAruralAt chno ogy ATher Aare mor Atha A437 AsuchA utonomousAorg nisationsAf ScientificA und r Avarious A in str esAofAtheA ov rnmen AofAIndia exclu ingAt ose Aunder No.1Ai.e.A De ar ments. AThe A ommi sionAwi lAex mineA hi Ais ue AinA ts rep rt Ao ATOR“Orga isational St uct reAofAthe A ov rnmentAofAIndi ”.roughAtaxA A ot er Awa Aby which theAStat Aprovid sA upp rtAto At e Achar ty sectorA sAt graphA3 3. c nc ssionsA fAvari us A inds. This issu AhasAbeen di cussed in detailAat p ar a 3.2.7.2AAcc ed tationAof VoluntaryAOrga nisatio n 3.2.7.2.1AAcc ed t tionAi Aa Aformal Ar co nit onAofAthe Aac ie em ntsAof AanAorg isatio ,A link d Ato Asom A nternalA Aexte nalA or sAsuchAasA om itme tAto long ter Aaims AandAo jectives, Aorga isationa Aability, ad erence Ato financ al Anorms,Atr nsp rencyAandAacco ntab47Socia A a italA–d ADestinyAShare3.2.7.2.2 A large number of voluntary organisations receive grants from government for a variety of purposes such as social and welfare services, surveys, studies, monitoring, evaluation etc. These organisations vary greatly in their capability and credibility. In the absence of any system of accreditation / certification, the government agency at both Union and State level have found it extremely difficult to distinguish between organisations who value for quality and those which have been set up almost solely for the purpose of receiving government grants. In this context, it is widely recognized that there is need to have a system of accreditation and certification for Voluntary Organisations, which would facilitate and bring transparency in the Government-NGO partnership, particularly in the work of funding agencies. The procedure adopted for accreditation / certification should not be so complex as to lead to harassment, delay and corruption.3.2.7.2.3 It is generally agreed that accreditation could be best done by the voluntary sector itself. However, attempts to form a Self-Regulatory Body of voluntary organisations in the country have not succeeded so far. There is a feeling that government needs to be involved in this process.3.2.7.2.4 The process of accreditation and certification undertaken for the voluntary sector should be based on the following principles:-a. Accountability and transparencyb. No ranking or ratingsc. Norms will have to be compatible to the sector3.2.7.2.5 The Steering Committee on the voluntary sector for the Eleventh Five Year Plan set up by the Planning Commission considered this issue and recommended setting up of a National Accreditation Council (NAC) with five regional centres in the West, North, East, North-East and South India and major metros in due course. The NAC could consist of academics from schools of social work, leaders of the voluntary sector networks, retired bureaucrats who have worked in NGOs after retirement for at least five years and corporate association members from CII, ASSOCHAM, FICCI etc. and NGO leaders of repute. The Assessors would be invited from different fields such as schools of social work, the schools of management like Institute of Rural Management, Anand (IRMA), accounting firms like Grant Thornton, CRISIL, Deloitte and Price Waterhouse Coopers, or Financial Management Service Foundation (FMSF) or Account Aid or Foundations such as GIVE INDIA etc. Audit firms cannot accredit their own clients as this would lead to a conflict of interest. The National Accreditation Council would empanel them on the basis of criteria such as organisational assessment capacity, exposure to voluntary sector and reputation for48Societie , ATrustsA/ ACh ritab eAI stitutionsindependence and dA wardAaccr ditationA indepen en eAandAcr dibility.AThe A ational Accre itati nACouncilAwou to AV lunta y A rganisations A ase AonAdocume ta ion andAevaluai onAof Ath Aa ses ors.as ,AwhenAtheAco ce tA 3.2.7.2 6AIt AhasAbe nAfu th rAr commend d Atha AinAth Aini ial pilotAp borne AbyAtheA ational ofAa cr di ationAisAsou htA oAbe popula iz d,Ath Ac stA houldAbe nted byAco tributi nsA Acc ed tat onA ouncil A utAof itsAo nA orpus,Awhich co ld AbeAsupplem Abe two Abro dAo tionsA fr m A arge do or . ALat rAonAwhenAit is Afir ly Aes ab ish d,Ath re Acoul ita ionA ee lin edAtoA fo Am eti g AtheA xpensesAo Ath Asocia Aa ditors: A(i) Ac arg AanAac re rAv ry Asm ll AVOs, A heAheAsiz Ao Ath Aann alAbu ge A f Ath ANGO, A ased on Aa slabA yste A(f h rgeAtheA xpens s A nA NACAcoul Aco sider Asu sidizing Athe exp nses comple ely ;AandA(i )A aAbasis Ao At e Adonors. a pro-rateAan Aagre3 2.7 2.7ATheACo mission Aha Aca efull Acons der dAthe A hole isssAw th AtheAview Ath t:to Athis Aor anisat o .A(a)AAccounta ili yAtoAstakeho de sAa dAtranspare cy inA heAfuncti ningAo At eAvoluntar Asector Ais essen ia ; ther for ,Athere AisAa A ee Afo Aaccred ta ionAofAVOsA dita ionAC un il. Thi A hrough an Ai dep ndent Aag ncyAlikeAthe A ationalA ccruld beAsetAupAby A aw.AB dyAc VOs.AItAisAaA tampAofA b)A ccredi at onAdoes no Aamoun At Aran in Ao A ating oflit Aa d Acre ibili y.Atransp ren y,Aaccountabpr ate corpus Ao Af c)AToAstarndAAwith At e Agov rn ent AneedsAt Aplace an appr emented Aby don tions.A tAth Adisp salAo At e ANAC, Awhich co ld AbeAsupphereaf hargingA eesA rom Ait Aer,Ath ACo ncilAcould fin nceAitsA ctiv ties byAbe Aap licable Aonly A oA c ients.ASuch AsystemAofAaccr ditati n/ ertificatio Asho ld ntAa enc es.AIn Aord rA tho e Aor anisati nsAw ichAseek Af ndingAfro Ag vernm an Ath Aac ions AtakenA that A heA arame ers adoptedAare cle rAa dAtrans arent uti nAofAthe A oun il,A b AN C A reAindepe dent Ait is Aadvisable th tAt eAconstiitsAfu cti nsAandA roced res ar Acl arlyspelt Aou AinAtheAlaw.3.2.7. .8AR commen at o s:ifcationAof Av lunta yA a)AThre shouldAbeAaAs s em Aofi Aaccred ta ionA/Aceror anisati nsAw ichAseekAf ndingAfrogo ernment Aag ncies. AsetA p anAindep ndentA b)A overnmentA ho ld Ata e ini ia ive to en ctAaAlawAto AupAthisAw rk.AInAthe BodyA– A ational A cr dita io ACou cilA– to takAt meAc rpusAofAfundsbeg nnin ,A overnme t may need to Apro id AaAon49S c al Shared ACap tal Destiny A– A~d Ain At e Atotalhe above law )ATeAa oveAlaw shouldA rovi eAdeta ls wit AregardAtoAt eA ons itutionA fAt eACouncil, its functi ns Aits powers AtoAl vyAa prop iatAfeesAfrom A heA pplic nts,Aan AotherArlat dAmatters.3.3ACharitabl AOr ani ation sAan AT x ALawsAallAvoluntar A.3. AThe A ncom AT x Act, A 961Ais AaAUni nAleg slation Aw ich appliesAtAAnyAvolunt ryA organi ationsA Tr st,ASoci ty Aor ACom any) Aunifo mlyAth oug outAIndiaAforAthe Ap or,A (non-profi)Aorgan sa i nAengagedA nAaAc aritabined as AeA ork, AderelieicAutilit Ano A edu ation,A edi alA elief,AandA he adv ncement of anyAobj cts Aof general pub eftsAu der theA involvi gAa y Aactiv tyA or Apr fit” AcanAclaim tax exemp ionsi Aan Aothe Abe a i n ed therein. ncom ATax AAc ,A 961 subject Ato the conditions Aa dArestric ionsAcon sationsAi AtheA 3.3 2 ABroa ly, the IncomeAT x AAct Ap ov desAbenefit AtoAcharitabl Ao gan ollowinAthreeA ays:I.A ert inA ncomesAa eA otA nclud d AinAteA otalAin om A1. ASecti n A10 Ade cribe Ai com sAwh chAd An tAf rm Apa t Aof Ath Ato alAincome; At eAsub-s ct onsArelate AtoAcharitabl Aor an sationsAare Aa Aunder:stablished forecti nA1 (23 ) A(iv) andA v) Asta es thatAincomeA f Ainstituti nsA,A hallAnot to chari ableA urp ses,Awhi hA re A pproved Aby theAprescr bedAa tho it dAshall no AbeA be A ncludedAin A he compu ationA f A ota AincomeAof A heA nstit tio Aa ubjec At Atax AionsA as bei gA Prio Ato AJune 200 ,Aapp ov lAfor Agra tAofA xempt on Aunder the eASec fAthr eAyea s.A giv n Aby Athe AU io AGo er ment AbyAway A fAn t ficatio , A or Aa A eriodA een del gated A A te AJune,A200 Ato streamline the Ap ocedur ,Ath se Ap wers AhaveA theApresc ib dA and Athe AChie A ommissio ersA/ADi ectorAGen ral Aco cer edAareAnow tionA nderAtheA autho ityAt Aa prov AgrantAof As ch Aexemp ion .AApprova AforA xem hallAb Apasse A boveA ro isionAs al Ab Agran edAorAanA rde Arejecting A he Aap li ationA pplicatio Aw sA withi Atwe ve A ont s A rom theAe d A fAthe mont Ain Awhich As chA as Athere A s A oA rec ived. The order sha lAb AvalidAfo At eAl fe-ti e A f Ath AT ust As Al ngv olationAof theAstat te 2. Se tions A1 Ato 13 A rovide Afor thAasses ment ofA rustsA hat areAwholly fo Acharitab eAorAreli iousA urpos s.AUnderAth seAprov si ns,ASect onA1 Aprovi esAt atAincom Afro Apr pertyAheld fo Acharitab e Aor Arel gious pur os s Ashall A ot beA nclud50Societies, Trusts / Charitable Institutions, Waqfs and Endowmentsincome of the Trust etc. if the income is applied as per the provisions of the Act. This shall apply if the income derived from property held under a Trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application later, the income so accumulated or set apart is not in excess of fifteen per cent of the income from such property.The non-profit organisation must utilize 85% of its income in any financial year, on the objects of the organisation. In case the organisation is unable to spend 85% of its income in the financial year due to late receipt of income or any other reason, the Trustees may exercise the option to spend the income during the immediately following twelve months. Income can also be accumulated for a period ranging from one to five years (prior to 1-4 2002 the maximum period for which the income is to be accumulated or set apart was ten years), for specific projects, subject to the following conditions:i.The funds of the organisation are invested / deposited only in approved securitiesspecified under Section 11(5) of the Income Tax Act.ii.No part of the income or property of the organisation is used or applied directlyor indirectly for the benefit of the Founder, Trustee, relative of the Founder or Trustee, or a person who has contributed in excess of Rs.50,000/- to the organisation in a financial year.iii. The organisation files its return of income annually within the prescribed time limit.Section 11 also provides that income of the Trust etc. in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the Trust or institution shall not be treated as income of the Trust etc.Section 12 provides that voluntary contributions received by a Trust/Institution created wholly for charitable or religious purposes shall be deemed to be income derived from property held under Trust and shall not be included in the income of the Trust as provided in Section 11.Section 12A (1) (aa) importantly provides that the provisions of Section 11 and Section 12 are applicable to the income of any Trust or Institution only if the Trust has made an application for registration of the Trust or Institution in the prescribed form and manner to the Commissioner and such Trust or Institution is registered under Section 12AA.51Soci l C pital~d A~DestinyUnder Section 12AA, the authority for grant/ rejection of the registration is the Commissioner of Income-tax. Every order granting or refusing registration is by statute required to be passed before the expiry of six months from the end of the month in which the application was received. No order refusing the permission shall be passed unless the applicant has been given a reasonable opportunity of being heard. The Commissioner may examine the documents submitted and conduct an inquiry on the objects and activities of the Body. The following documents are required to be submitted for obtaining registration under this Section:i.Copy of the instrument by which the Institution has been created;ii.Other documents in support of the above.iii.Copies of accounts of the Institution since its inception or for the last three years whichever is less.II. Deductions to be allowed from the profit and gains of business and profession1. To encourage expenditure on scientific research, Section 35 of the Income Tax Act provides for weighted deductions to a tax payer to the extent of 125 per cent of the sum paid by him to an approved scientific research association, approved university, college, company doing research or other institution to be used for scientific research subject to certain specified conditions. The Union Government is the authority that approves the companies, institutions, universities etc. An order approving/rejecting the application under this Section is required to be issued by the Union Government within the period of twelve months from the end of the month in which such application was received. With effect from 1st April, 2006, recognition granted to the organisation, institution etc. is valid till its existence, unless withdrawn by the Union Government.2. Section 35 AC of the Income Tax Act also provides for deductions to be allowed to a tax payer in respect of expenditure on eligible projects or schemes from the business incomes of the assessee where the assessee incurs any expenditure by way of payment of any sum to a public sector company or a local authority or to an association or institution approved by the National Committee for carrying out any eligible project or scheme. Approval for the project or scheme is given by the Union Government, on the recommendation of a National Committee.52S cietie , TrustsA/AC aritableAInst tutio s,A aqfsAandAEisAless.heAI n-membercome A axAR les Ahav Aspecific Ap ovis onsAwi hA e ardAto AaAfourteo A 1-O.AA National A omm tte Aand At e A ann rAofAitsAfu ction ngAun er AR le A11-F tsAu derA The Ap ovis ons Aals Asp cify A he typesAof proje tsAwhic Aqu lifyi Afo Abene )Aon AtheA this section.A ppr vals Aar Ag antedAby AG vernmentA Mi istryAof Fi anc ear .A tA recom en ati nAofAthe NationalA omm t eeAforA Amaxim m A eriod of Athr eA approvalA can Ab Afurther extende As bje t Ato AtheAsat sf cti n AofAthe A omm tte AandAthet er aft rAby A heAUnionAGov e nment.Aa lowedA 3 AS cti n A 5 AC A Aof At e AI com ATax Act Aalso pro ides Afor Ad du ti ns Ato Ab from Athe i Ar spect Aof Aex end ture Afor car ying A ut Arural Ade elopment Ap ogra mes eAi cursA busines Ai comes Aof Aa sessees AS cti n A35ACC Abroadl Astat s, where Aan assess ituti n,A anyAex en itu e A y Away Ao Ap yme t Ao Aa yA um AtoAanAas oc ation AorAins ent,Athe hi h Ah s Aas Ai sAo ject AtheAun er aki g AofAanyA ro ramme ofAruralAdev lop asses ee shallAb A llowedAa A ed cti nAofAt e A moun Aof AsuchAex enditure incurr dAd ringAthe previousA ear.III.AD du ti nsAt Ab AmadeAinA omput ngAtot lAi com Afor Athe pu posesAofAca cul tingAtaxA ia ili yAonA heAtota l income .ADonorsA(ind viduals,Aasso iations, Ac mpan es, etc) Aare ent t edAforAaA ed c ti nA fA50%AofA onat on Ama eAto AtheAr gistered Ac aritableAorga isations enj yingAtaxA ereAi Aa xempti nAsta us Aunde ASe ti nA8 G Aof At eAI come TaxAAct. Howev r, t the Act.A li it Aup toA hich AtitAcan AbeAb neAa ail dAby A he donor Aas pr vid dAini ThnA8 G AofAt eAI comeTa AAct.aritableA In order A oAe able A he donor to Aavaiits AuAbeneder Athis S ction,AaAccord nceA org nisation requires ap rov l AbyAthe ACom is ioner A fAI co eATaxAinAa ollowingA ith A ul A11 A Aof At eAI comeAT x A ules. ATheA pplic nt needsA oAs bmitAtheA ocu entsAforA btai ing AsuchAaprova :nAiss edA i ACost AofAreg stratio Agran edAunde ASe ti nA12 Ao Acopy i AofAno ifcati under Sectio s A 0(23) Aor1023C); i. NotesAon Aa ti ities AofAin titut onA ince Aits A nc ptionA rAd ring theAlstAthr eAyears, A hi heveris Aess;ii .A opiesAof ac oun sAofAtheAin titut onA inceAitsA nc pti nAo Afor theAlstAthr eAyears, A hi hevers A eneft Ai As bject Ato Ac ndition Aimpo edAunderAsu - ec ionA5 Ao ASe ti53c a ACpithared l A– Destiny A~ ~~On being satisfied, the approval will be granted by the Commissioner and no order of rejection shall be passed without giving an opportunity of being heard. The validity of such approval is for a maximum period of five years. Rule 11AA provides time limit for decision on the application which should not exceed six months from the date of application. However, in computing the period of six months, time taken by the applicant in complying with the directions of the Commissioner is excluded.3.3.3 To sum up, there are four areas of interface between voluntary organisations and the Income Tax Act. First is getting the exemption approved by the prescribed authority under Section 10(23C) of the Income Tax Act. Second is the process of getting registered as a charitable institution under Sections 12A and 12AA (in order to claim benefits under Sections 11 and 12). Third is getting 80G exemption certificate status. And fourth is claiming deductions under Sections 35, 35 AC, and 35 CCA. The procedures to be followed for availing of the benefits under the respective provisions of the Income Tax Act have been discussed briefly in the above paragraphs.3.3.4 Simplification of Procedure under Section 12AA and Section 80G3.3.4.1 As indicated above, approval under Section 80G needs to be granted within six months provided that in computing the period of six months, the time taken by the applicant in complying with the directions of the Commissioner shall be excluded. Several organisations brought to the notice of the Commission that the actual grant of an 80G exemption certificate sometimes takes longer due to this proviso. In fact, there have been instances where, by the time a certificate is made available to the applicant, the case becomes due for seeking renewal. Suggestions have been made that under Section 80G the exemption certificate should be granted to a Charity in perpetuity; there should be no need for its renewal. The tax authorities in any case have the powers to cancel the registration if any misuse/malfeasance is detected. The contrary argument is that as there are a large number of such institutions in the country (with many of them obtaining substantial donations every year), and as only a limited number of cases are now being taken up for scrutiny, it may not be physically possible for the Income Tax Department to keep a continuous track of their transactions. The necessity of securing renewal of the 80G certificate at a prescribed interval would require an organisation to apply afresh to the department with all details. A periodic revalidation clause is thus necessary to keep the organisation on the radar of the income tax authorities.3.3.4.2 The Commission recognizes the need for simplifying the administrative procedure. To reduce the time taken for granting registration to organisations under Sections 80G and 12AA, the Commission is of the view that the order giving approval or rejecting the54S cieties, AT usts A/ ACharit ble AI sti utions, AWaapplication under appli ationAun er Ath se sectio sAcoul A eApa sed Aw th n AaAti eAli it ofA inetyAdays byAtheApre cr bed A ut ority.AIn A ase of Arejec ion Ath Aasses ee ha At eAopti n Ato Ag Ain appealAbe oreAtheAA pellate Tr bunal Aagain tA nAo der Apassed Ab AtheA ommissi nerA nde ASectio A12 AA nd A ection 80G ofAt eAI n cm eATa AAct,A196 .A3. .5 AEx end ngATimeALimi Af r AAccum lationAof ASur lusAI com tedAfo Aa max mumA 3.3.5.1A nderAthe Aex sting Ap ovisio s,A ur lusAincome A an A e accumul edA ncome, du ingA p rio AofAfive years Afor sp cificA roje ts.ATo Aav ilA hisAfacilit , AtheAa cumula Aun er Sec ionA11 theAperio Aof ac um lation, A as t AbeAin es edAinAa Ama nerAa Aprescr be (5) ofAt eAIncom AT xAA t.Ave Ayears A( nsteadustsA/Achari abl A 3.3. .2 ItA as Abro gh Ato theAnotice of At eACo mi sio AthatA a yAofAtheAT e.A t A ay, Aofte ,A instit ti nsAareAe gage AinAprojec s Awith si nificantAoutlay A nA nfra tructu imi .ARestrictin A ot AbeApo sibl AtoAc mpleteAs ch Alar eAp oject Awit in Athe givenAtimeA nAfactAim edeAtheA t e Aaccum lati n Aof As rp u Afrom A nc meA oAaAp rio Ao Afive yearsA ayAes,AbuildingsA ndA pro ec ’s Acomplet on AThACo miss onAi Ao Athe Av ew Atha Ain Amoder Ati s,AoldAage A omes/A nfrastru ture Aare Ac it c lAcompone tsAofAa Acha ity’s Afunct oni gA( ospitamu ationAneeorpha ages, Aeducat onal Ai stitution Aet .).AThe ef re,AtheAperi dAofA ccdsAtobeAenhanced.3.3 6 A ationalis tionA f AProce ureu n d erAS ctio A35ACierAparag ap s,AaA 3 3. .1AWith rega d A oAS ctionA 5AC ofA he Income Ta AActAas statedAinAe rdAbyAthe A at ona A deduct on onAexpe dit reAisAal owed Afor el gi le projectsAif it isA ecommendeACo mi s on At atA Committ e A oAthe AMi is ryA f AFi ance. AItAha AbeenA epr sented Abef reAtar AaAo easAw ichA this Ai AaAtime consumingA roc ssAespecially forAorga is tio s A f ituat dAinA rg Aan Ar sourc sA ishAtoAava l At isAd du tion. TheyAhaveAto A pend A onside abl Atime,Aento putAup the rAcaseAb foreAtheANt i o nalA om ittee.AApr visio Ao AtheA 3.3 6. AThACo miss on Ai Aof Athe Avi w Athat exemp ions sought Aun er thiRegionalAN ti na A lawA ou dAb Aexpedit dAifAtheA at onalACom it eeAi Areplace AbyAfour ta.AThAmembers Ao A Commit ee Ato Abe located in ADelh ,AM mbai,ACh nn i AandAK lk Apresent AN tio alA thes AC mmittee Aw uld AbeAp rs nsAofA mine ceA nA ubl c AlifeA asAin Ath tAreg onal Alev lsA Comm ttee Abut A erhapsAw thAfew r Amembers. Ha ingAComm tteesA ccurAwhileAmakin wo A ldAexped teA uick dispos lAan Aalso ensure th tAS ateAb asesA oAnotA wo ld Acontin eA oA rhe Acommendations. A eco mendatio s Aof Athe AR giona ACommitt es erA uggestedAthatA b Aforward d A oAthe AM nis r AofA inance Afo Aa fin lAdecis on.AIt Ais furt t eA eco mendations of Athe Co mitte sAs o ldAbe A al diAf rAaAp riod AofA55o i lShared al A– Destiny A~ ~of the present three years). Subsequent approval if required, would be granted only if the National Committee is satisfied about the activities of the association or institution during the preceding period of approval but here also the final decision would be that of the Ministry of Finance. The necessary administrative support to these Regional Committees would be provided by the Office of the Chief Commissioner of the city in which the Committee has its headquarters. A Commissioner of Income Tax could act as Secretary of the Committee.3.3.7 Recommendations:a) Under Section 12AA and Section 80G, the registration or approval should be granted or an order rejecting the application should be passed within a period of ninety days from the date of filing of the application instead of the present one hundred and eighty days.b) In view of the fact that infrastructure projects are a critical component of charitable institutions, the period for accumulation of surplus which is currently five years needs to be further enhanced.c) The present National Committee may be replaced by four Regional Committees to recommend “deduction on expenditure” to the Union Government under Section 35AC of the Income Tax Act.3.4 Regulation of Foreign Contribution 3.4.1 Legal Framework3.4.1.1 The Foreign Contribution (Regulation) Act, (FCRA) 1976 has the primary objective of regulating the acceptance and utilisation of foreign contribution or foreign hospitality by certain persons or associations, with a view to ensuring that Parliamentary and political associations, academic and other institutions as well as individuals working in important areas of national life may function in a manner consistent with the values of a sovereign democratic republic. The Act prohibits acceptance of foreign contribution by election candidates, journalists, public servants, members of the legislature, and political parties or their office bearers (Section 4), and allows Associations having definite cultural, economic, educational religious or social programme to accept such contributions after complying with certain requirements (Section 6).3.4.1.2 The requirements are: (i) that the Association shall register itself with the Union Government in accordance with the Act; (ii) shall agree to receive such foreign56Soci t es,ATrusts / ACharitable A nstit tio s,AWaqfsAacontribution Aap licationA cont ibution o lyAthrough a Apart cu a Abra ch of Aa ABan Aa Asp cified Ain Ath ntAasA o A heA for A egi trati n, Aan A(ii )A hall Agive A nA nti ation toAthe AUni nA ov rnm ece ved,Aa dA a ount Aof eachAforeign contribut on A eceive ,Ath Asour e A rom whichAit A asA n AG vern entA he Ama ner A n Awhich such Aforeign A ont ibutions A as utili ed. AThe AUni cceptin AanyA may also require Asuch As ociati ns A o Aobt in Aits Apri r Aperm ssion Abef re A trib tion AbyA foreign co tr bu ion Aif Ai Ais A ati fied Athat At e A cceptan e Aof Aforeign co Aof India A rA suc AA sociat on is Ali ely Ato Aaffect A rej dicially Ath Aso ereignty A nd integ it with Aforei nA the Apu li Aint res Aor A ree Aand Af ir ele tions Ato Aany le islature Aor A elation s,Acastes Ao ountrieA; AorAha mony Abetwe n Arelig ous,Aracia , A inguisti Aor Areg onalAg oulso req iredA communi ies A Secti n A10). APri r A erm ssion ofAthe AUni n A over ment AisA onA )Aor AforA forAany or anisation ofApoli ica Anatu e Anot Abein AaApo itical Ap rt A( ect AanyAforeignA an AAs ociationAn tAreg ster d Aunder A CRA A[S cti nA6(1a)] A orA cceptin contrib tionxisting AAc .Aon ributi ns 3.4 1 3AFCRA Ah s Aa Ari oro sAscheme Af rAc mpelling At e A ecipien sAofAforeignA to A dhere A o Athe As ate Apurp seAf rAwhich Asuch con ribu ionAhas Ab en ob ained.AIt is mandato yAt Arec iveA heAfund on y Athrough anAint ma e Abran hA fAa Ban ,AtouseA heAfundund only AforA only throughAt atAi timated Ba k Ab anch,A oAfileAan ua Are urn ,Ato useA heA the Apow rAt A theA ssociat on’ Apu po e Aa dA ot AtoApay toApolit calApartie . AG ver ment A as returns,A ndA insp ctAand As ize accounts andAr cords, Aaudit asso iati ns thatAfa lAtoAfur ish confis ate articles andAcurr nc Areceived Ain A on rav ntioAof Athe Ac .AatAtheAUni nA 3.4. .4 ATheAcl use (Sect on A 0)Aunder the exis ing A CR AA t, A 976At inAits Apri rA Go ernme tAmay,A nderAcertain Ac rcumsta ces,ArequireA rg nisati nsA oAobt veA owers AtoA perm ssion Abef reA cceptin AanyAforeign contr b tio Ag vesAa AlotA fAsubj ct nciesAleaves the auhe Aprocehoritie . AsAof Ainqu ryAinvolvin Av rification Aby intellig nceAagconsi era le Asco e A orAmisu eAofA owe s,Adelay AanAharass en .AContribution 3.4 1.5AThe AUni n AG vernmentAh s int oduc dAaAne AB ll Acall d ATheAForeign ropos dA illA (Regu atio ) A ill, 2006 Aon A1 th AD ce ber A2006 Ain Ath AP rliament ATheA regulate Ath A see sAt Areplace theAexi tingAForeign Contribution (Reg lati n) Act,A197 Ato eAof Aforeig A acceptance Aut lisation Aa d A ccounti gAofAforeign con ributionAa dA cceptan eAsignifican h A s italit Ab Aa personAorAan As oci tio .AAsAperA he Statemen Aof Objects,At se Ainfluence d vel pmentA f Ath Arec nt p st Asuc Aa A– A hangeAin the Ainter alAscenar o, Aincre Atechno ogy,of AvoluntaryAo ganisa io s, A pr ad AinAuseAof A omm nicationAan Ainformatio qu ntu Ajump A n A he Aamou tAofAforeign contr butionAb ing recei edAan Alarge sc leA eAc angesAin rowth A n A he Anumber A f Aregistered A rgan sations Ahave neces itate AlargeA cathe A57Socia A a italA–d ADestinyAShare3.4.1.5.1 The Foreign Contribution (Regulation) Bill, 2006 provides, inter alia, to -(i)consolidate the law to regulate, acceptance and utilisation of foreign contributionor foreign hospitality and prohibit the same for any activities detrimental to the national interests;(ii) prohibit organisations of political nature, not being political parties from receiving foreign contribution;(iii) bring Associations engaged in production or broadcast of audio news or audio visual news or current affairs through any electronic mode under the purview of the Bill;(iv) prohibit the use of foreign contribution for any speculative business;(v) cap administrative expenses at fifty per cent of the receipt of foreign contribution;(vi) exclude foreign funds received from relatives living abroad;(vii) make provision for intimating grounds for refusal of registration or prior permission under the Bill;(viii) provide arrangement for sharing of information on receipt of foreign remittances by the concerned agencies to strengthen monitoring;(ix) make registration to be valid for five years with a provision for renewal thereof, and also to provide for cancellation or suspension of registration; and(x) make provision for compounding of certain offences.A critical comparison of the changes proposed in the existing legal framework by Foreign Contribution (Regulation) Bill, (FCRB) 2006 is given below:-3.4.1.5.2 Salient features of the Foreign Contribution (Regulation) Bill, 2006 and the existing law (FCR Act 1976)1.Purpose(a) The preamble of the proposed Bill reads as –“to consolidate the law to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or58Socie ies,AT u tsA/AChari ableAInstitut ons,A aqf AandAEndowfer.Ati nA comp nie Aa d Ato Apro ibitAaccep anc AandAutilis ti n AofAfo eignAcontrib Aan A orAfo eign Ahospit lit Afo Aany Aactiv tiesAdetrim nt lAt Athe Anat onal Aint res forAma ters Aconn ctedAther wi h AorAincid ntalAthe reto.”Wh rea AtheApre mb eAo AtheA CRA, 1976A ea sAasAunde :eignA “A AA tAto Areg lat AtheAaccep anc AandAutilis ti n AofAfo eignAcontrib ti n AorAfo taryA hospit li yAbyAce tainApe so sAor Aassociat ons, w thAa vi wAto Aens ring thatAparliame io sA institut ons, Apoli ical Aassocia ion AandAaca emi Aand A ther Avolu taryAorganisa ti n as we l Aas Aindivi uals Awo ki gAi Athe Aimpo tantA re s Aof Anat onal lif AmayAfun in Aa Am nnerAconsi tent wit Athe Av lu s of Aa Asove eign Ademoc atic Arepu lic Aan AforAma ters Aconn ctedAther wi h AorAincid ntalAthe reto ”(b) F omAa A lainAre di gAo AtheAa ov ,A tAisAev dent tha Athe Apu po eAo Ath AFCRA ill, nt lA 20 6 Ais Aprohib tiveAr ther thanAregula or .ATheAexpre sionA“activ tiesAdetrim t Athe Anat onal Ainte est”Al aves A cop AforAsubjectiit.A2.AProhib ti nAtoAA ceptAFo eignAContributi nuals (a) ASe t on 4Ao AtheA CRA, 1976Acon a ns Aa li tAo AtheAorganisa ion AandAindivi tha Aare Aprohi ited from Aacce ting Afo eignAcontribu io .AI AtheAproosedA icalA ill Afew Aaddi ions have been made su h asA A(i)Aorganis ti n of AaApolint;A n tur Anot A e ng Aa Apoli icalA ar y AasAspe ifidAb Athe A nionAGovernudio (ii)AAssoci ti nAorAco panyAen ag dAi AtheAprodu ti nAorAbroa ca tAofA onicA ne sAorA udioAv sual ne sAorAcu rent Aa fairsAprogr mmes Ath oug AanyAelect i o n A od ,Ao Aany A therAelect onic fo mAasAd fin dAinAc aus A( ) AofASub-se mo eA ( ) AofASe t on 2Ao Athe AInform tion ATechn logy Act, 20 0Ao Aany A therof massAcommunicaion AsAofA ( ) AThe BillAho ever doe AnotApr vid AanyAguide in sAorAdefin ti nAo AtheA as tur A hi h AanAorganis tio Ac nAbeAtr at dAa A“anAorganis ti n of Aa Apoli icalAn er dA notA e ng Aa Apoli icalApa ty .AThe A nionAGover men Ahas beenAempo AtheA to An tify suchAorganisa ion A ndAaAprov sio AforArepresent tion Ab for dAin nion AGover men Ahas been A de. AAApprehen ions have beenAexpr ss ose,A someAqua ters th tAi AtheAab en eAo AanyAspe ifiedAcri eri Afor thisApur hoseAorganisa ionsA hich Aartic lat AtheAcon er sAo Athe Aunder-privi ege AandAmargina ise Amayf As59AS cilSharedAC pitalDestinyA–3. Restrictions on Utilizing Foreign Contribution(a) Under the proposed Bill, contributions shall be utilised only for the purpose for which the same have been received (provided that any foreign contribution or any income arising out of it shall not be used for speculative business). Also the receiver shall not defray, such sum not exceeding 50% of such contribution received in a financial year, to meet administrative expenses. The Union Government has been authorized to prescribe the element which shall be included in the administrative expenses. Such provisions were not there in the FCRA, 1976.(b) The Bill does not define “speculative business”. Incidentally the Income Tax Act, 1961 allows the voluntary sector to invest funds in the modes specified under Section 11(5) which include government securities and mutual funds. Trusts have also been allowed to invest through such modes under the Indian Trusts Act, 1882. Therefore, the term “speculative business” needs to be spelt out clearly.(c) As regards the administrative expenses, the Bill gives considerable discretionary powers to the government. One may visualise situations where it would be difficult to differentiate between the administrative and project related expenses. For example, for an organisation engaged in health care projects salaries and other expenses on doctors/paramedics should be treated as a part of the core project cost and not as administrative expenses. This should be ensured by issuing clear guidelines rather than leaving it to the discretion of individual officials.4.DefinitionsApart from the ambiguity in the concepts of “speculative business” and “administrative expenses” the definition of the following two terms needs reconsideration:(i)Foreign Hospitality – “Foreign Hospitality” means any offer, not being apurely casual one, made in cash or kind by a foreign source for providing a person with the costs of travel to any foreign country or territory or with free boarding, lodging, transport or medical treatment. The term “purely casual” needs to be explained further.(ii) Foreign Source – The definition of “Foreign Source” includes a company within the meaning of the Companies Act, 1956 in which (i) more60S cieties, AT usts A/ ACharit ble AI sti utions, AWathan 1/2 of the Ae the AsinglyAo A thanA /2Aof th Ano inalA alue Aof it Asha eAcapi al AisA el (ii) Acorpora io s i Ath Aaggrega e A y theAcit zensAofA Afor ignAcountry, Ac mpany AThe Afirst incorpo ated Ain a A oreig A ountryA rA(iii)A Af reig of At eseAc iter a Awill cover Amany AInd anAmulti- ationalAc mpani sAin lu ing Ab nks A uch asAICICIAB nkAan Ath re ore, the eAmayAbeAneedAf r A econ iderationAofthisAprovision. AAy oigsrasitn(a AAny Ao g nifiatio AhavingAa defniteAc ltural, Aecon mic,Aeduc ti nal,Ar ligiousAo AsocialA ro ra meArequire AtoAb Are ister d Aun er A heA CRA,A197 Aand thfopr posed ABill be ore accepta ce AofAanyAfor ig Acont ibut on.AIn Acase,A uch org nisations A re An tAre iste ed theyAw llAha e AtoAobtai Apri rAp rmiss onAfromAth AUn onAGovernm nt for acceptance Aofany contr bution Aave Abeen Ag anted.ABill, A 006 AgivesA (b AGoing Abey nd the provisi nsAo Ath Apr sent A ct, A heAFC Aregistrat on. TheA mm nse discretion to the Govern en AinAtheAmatte AonA rg nisation ifAGov rn entAc nArefuseAto A ra t Aregistra io Ao Apermission A oAmedAatA onversionA i Ais satisfiedAtha Ath Aorganis ti nAhasAindu gedAi Aa tivitiesAaromAo eA eligioushr ughAin ucemen AorAforc , A itherAdirec lyAo Ain irectly,Afai h to Aanothe .A(c) AAAn ces aryAcond tion AforAsecuring Aregis ra ion/ erm ssion Ais hatAthe Aappl cantAo gani ationAshou dAhaveAund rtaken Am an ngf lAacti iityAnA ts Acho enAfeAp ople Afo AwhomAl AorAshould have AaA ean ngf l Aproj ct for the Abe efit ofAtinAis AaAma terAofA theAfo ei n Acontri ut on isApropos d At AbeAu il z d.AThis ag subje tiv As tisf ct on AandAis AopenAtoAisi te pretation.rAaAp rio Aof AfiveA (d)AThe A ertifiate granted A nder theA ro osed A ill w ll Abe A al d Afatio Af rAre ewalA ye rs andA here ft r A tAwillAh ve to Abe Arenew heAappli d. Am stA eAmade wi hin sixAmonths of theiAexpirat hon ofAcertfcat .ATeAre e alAa soAcarri sAa fee. AHow ver,A he Ae istingAF RA, 197 Apro idesAforAone timeA nAinc eas d Acost,A eg stration only.AThe Ap opo edApro is ons Aar Al kelyAto Ar sultAryA rg nisa ions.ffortAand Ap ss ble Aharas mentAtoAvolunt tAorArefus l A fAaA (e) No At meAlimit Ah s A een prescrib d Ain the propo ed BillAfo Ag aquired n Ace tainA certifica eA f Ar gistrat on or A tsAre ewalAor Afo ApriorAp rm ssionAr ays isApr sc ibedA ase .AABut,A nderAheAex s ingA CRA,A 97 ,AaAti eAli it ofAninetyA or Agrant Aof prior Ap rmiss on, failing Awh ch At e A ermiss on illA e Ade medAtoAA61tal – A SharedSoc alDestinyACapi(f) Government has also been given powers with regard to suspension and cancellation of the registration certificate in the proposed Bill. The cancellation of the certificate can be ordered, if the holder has made an incorrect or false statement at the time of application, has violated any of the conditions of the certificate, the Government considers that the cancellation is necessary in the public interest and the holder of certificate has violated any of the provisions of this Act or Rules or Order made thereunder. Once the certificate has been cancelled, the person / organisation shall not be eligible for registration or grant of prior permission for a period of three years from the date of cancellation of such certificate.6. FinanceThe FCR Bill, 2006 allows receipt of foreign contribution in a single account only through one such branch of a Bank as may be specified in the application for grant of certificate. However, the recipient has been allowed to open one or more accounts in one or more Banks for utilizing the foreign contribution received by him. This is an improvement over the provisions of FCRA, 1976.7. AppealThe proposed Bill contains provisions for appeal before the High Court / Court of Sessions against the order on adjudication of confiscation. (Section 31). This section provides that any person aggrieved by any order made under Section 29 (adjudication of confiscation) may prefer an appeal. However, no appellate provisions are there over government’s powers to restrict acceptance of foreign hospitality, to prohibit receipt of foreign contribution in certain cases (Section 9 of the Bill), to grant registration under Section 12(3) of the Bill, or to order suspension / cancellation / renewal of certificate etc.8.Offences and Penalties(a) The scope of punishable offences have been substantially enlarged to cover offences such as making of false statement, declaration of delivering false account, penalty for article or currency or security obtained in contravention of the provisions of the Bill etc. It is observed here that while prescribing the quantum of punishment, the element of mens-rea should be taken into account.62Societies, TrustsA/AChar table Ins itutions,ces Apunishab e Awit (b) AThe AB ll A owever Aprov de f Afor Aco pounding Ao Aofeimprison en Aonl .AresAandAre Atapis .AingAperce ved Aahe ABillAAa A 3 4.1.5. Aas become A Asubje tAo Ai tense debateAan Ai AbngAfo eig AdonationA intrusive A ieceA f Alegis at on Awh ch Aintends to AplaceA haritie ,Areceiv A ai Aar um nts nder are: Athe su jec iveAscrutiny of the A uthoritie .ATheha ceptanc ~anduseTe?aimof th ~Bi l,asst te ~i ~thepre mbl ~istopro ibi ~thAinterest’.A A ermA ofA ore gnAcontrib tionheAforAac iv tiesAdetr mentalAtoA na ionai e Ain erp etation A “det imental At Anatio alAin ere t”AleavesA cope AforAsubjechn ould ere used.~ ?Tere ar ~seve a ~grouindso ~w ichacertif ateo ~r gistratile’Apu posesAorAn tAThe Aw rd AlikeAlik li oodAo Adi ersion AofAfun s AforA‘u de iraeparedA Ame nin fulA havingAund rtaken A‘ ea ing ul’Aac ivityAor n tAhavingAp A dm t Asubject vit . proj ct for the A‘b nefit’ ofAtheApeople~ hea ~to arass ent ?Tep ovisi inf rren wale ery ve yearscouldhca celacertif at ~ ?TeBill ives theexecutive ~wide~ is retion r ~poweirstoAopenAto Asubjec iveA of registr tion Ain Ath A‘p bl cAi terest .AThs Ais to Abroad,AanyAbeAp rm ttedAup nA interpre at on. Cancellatiicate Ashoun AofAt e Ace tidAonc le alAobl ga ions. i bre ch AofAspecifusin ~ha assm ntt?Thep~ werso ~in pection, sea ch ands izu esmay etoolsfo ~cA o A heAauthor tie . NPOsAand pu s themAvir ua lyAinAa Aposit on of A ubordinationhisa bitra yan ~in ~Te pr v is on foracapof50 ~on‘admi is rativeex ens s’ichAhave highAhum m nyAcasesAwill stifle Ao ga isations worki g Aon proj ctsAwre ource Aco tent Anhrc s ndinvestment ?Te pr posed Billtries oplaceunne es aryrestr cti nsonresoo Aa Aorganisa io .Ahualsfr mreceivingTep?ovisionof heB llprohibi in ~somecateg ries ofindivif reig Acontri uti nsAgoes Aa ai stAtheA rinciple of Ana ural Aj st ce.A3.4.2ARe orm AofAReg istra t on Pro edureco cern Awi h A egardA 3. .2 1AInAthe Aco te t Aof Ad velopmen Aof socialA apital, theA rimary ganisati ns are An tA t AreceiptAof Af reign A on ri utions shou dAbeAto ensure Athat Ag nui eAo harassedA r Atheir fu ctioningA mpededAby A yza tin Aproced63S c alShared talDestiny3.4.2.2 The Commission is of the view that the process of registration under the proposed law on foreign contribution needs to be kept simple and there is a need to fix a time limit for issue of registration certificate / prior approval by the competent authority.3.4.2.3 At the same time, the Commission is aware that a large number of voluntary organisations are receiving donations from foreign sources and it is quite possible that at times the funds could be used for purposes which could adversely affect national interest. Against this background, creating an effective monitoring system to track such funds becomes necessary. The Commission is of the view that there is a need to maintain a fine balance between ‘national interest’ on one side and free functioning of the voluntary sector on the other. To that extent, there is need to clarify and amend the proposed Bill and clear the misgivings which are agitating the voluntary sector.3.4.2.4 The changes required in the proposed Bill to provide such a balance are discussed below:3.4.2.4.1 An organisation working on cultural, economic, educational or religious programmes which intends receiving foreign donation will need to be registered or required to seek prior approval under Section 11 of the FCR Bill, 2006. Even after registration, it is mandatory to furnish returns and details which enable competent authority to examine and check whether funds have been utilized in accordance with the provisions of this law.3.4.2.4.2 The Bill prescribes no time limit for a procedure under Section 11. This is far more stringent than the provisions of the existing FCRA, 1976 which provided an outer time limit of ninety days. There is a deemed clause as well. Having such an open ended law may lead to delay and harassment. In a similar provision under the Income Tax Act (Section 12AA) too, which deals with registration of charitable institutions, there is a time limit of six months. There, it has been recommended that the period of six months should be further reduced to ninety days.3.4.2.4.3 The existing Act FCRA, 1976 primarily intended to regulate receipt of foreign contribution in a manner such that the funds are not used (a) against the sovereign interest of the State, (b) for supporting political activities and elections and (c) for personal benefits of public servants. But, the FCR Bill, 2006 goes much beyond and tends (i) to prohibit receipt of foreign contribution by certain class of individuals or organisations; and (ii) to regulate foreign contribution received by voluntary organisations. It places extensive emphasis on national interest and issues such as not taking up meaningful activity [Section 12(3) (b)]; or not preparing a meaningful project [Section 12(3) (c)]; have been placed under the domain of the proposed law. The Commission feels that the term “national64Societies, Trusts / Charitable Institutions, Waqfs and Endowmentsinterest" or rope ly A ould int rest”AorAoth rA equirement Aa Aen nciat dA nAt eABill AifAnotAd finedA s Afor Abon AfideA lead Ato Aa A ide Asubjective int rpreta ion Aand Acre te fi Aunneces ary difc lti voluntaryorgan sations.A3.4.3A at onalisationAof APr ce ure eAAffairs AF RA 3.4 3.1AAs perAth AAn ual Repo tAforAt eA earA2005 06 ofAM nistryA fAHo Divi ionAas on A31 t AMarc ,A2006,A32,1 4Aas ociations A ereAr gist redun er AFC A AoutAedAnilAr t rn)A fAwhichA18,5 0Aassociat ons A( ncludingA6,8 7Aass ciat ons i A hic AhaveAf enAb low sho sA r ceivedA Atotal Aforei n A ontribution ofARs.7 87 .57 Ac ores. The ATa leAgi heAM nistry th ofA t Af rAtheA ast fiveAyear ,A heA ajorityAofAt eAAssociat onsA egi teredAwi hA H meAAffair AhaveAreceiv d Acon ributi nAbelotionOrg a nisae w enAAbRs. 1-5 A rores As. A -1 AcroresARs. A1Acrore200-0A14,761A71 A77 A5200-0A15,650A78 A76 A6200-0A16,187A88 A83 A5200-0517,37 3A98A112 A72005-6A1,2Rs.1 0Acr re.A Table n 3.2: Areceived AYe r- Aby ise A Adet ilsAofAForei nAContri utA(200-05) YeaABelowAetweeve A s. A Acrore5 8A1,07 A1 3 A99ctAis Along andATh3.4.3 2 Aproc du e forAgrantAof aAregistraicationAc rtiAun er theA CRAof the subj ctA cumber omeAandAca se Aharassment to applican s. The Adiv si nAi Acharge with At e A argeA in Ath AH meAMini tryAis Agros lyA nder taffed Aand Ath sA ll-e uipp dAt Adeal AtheAapplicant number A fA pplicati nsAit recei es A very Ayear. A or verification of ant cedentsAo or anisat ons,Ait Ar li s Aprim rilyAon A np tsA rovided AbyAt eAintelli enc Aagen ies.AFor A hese agen ie , thi AworkAis a Alo Apr ority A tem and Ah nce,Ath Awhol A roc ss takes a Alot Aof ti e.AArecipi ntsAofA urt er,Aas pe Ath Aint nt A fAthe AAct, A heAA th rities have toA nsure Athat th utionAhas bee A forei nAcont ib tio Aadher AtoAthe sta ed Apu pose forAwhichAsu hAc ntri sAgran ed, A heA o tained.AB tAin practice, th sAme hanis AisA ery weak. AOnceAt e A egistrat onA Ao ganisati ns m tte AgoesAinto theAside in s. A crutiny ofAt e AreturnsAfil dA ubsequently Ab is reportedAtoA eA e functor .AA Aa A esu t, the FCR AAct is A otAmeeting the objec iv sAf rAwhich A65Social C p talA–A Destiny3.4.3.3 Often, cases are selected by the FCRA Division of the Home Ministry for inter-agency consultation. In the absence of transparent rules / guidelines with regard to the procedure to be adopted for such consultations, the inter-agency reference leaves considerable scope for harassment, delay and corruption. The Commission is of the view that provisions of the Act need further elaboration with regard to (a) the minimum amount of donation which would require inter-agency consultation, (b) the level of the Authority which would authorize it, and (c) setting up time limits for such procedures.3.4.3.4 Currently, the entire work under the FCRA is being handled by a Division of the Home Ministry headquartered at New Delhi. The State Government and its machinery particularly the District Administration which are in a position to observe and monitor the activities of the NGOs in their areas are not involved in the process. The Commission is of the view that if some of the functions under FCRA are decentralized and delegated to the State Government/ District Administration, it will help in (a) speedy disposal of registration petitions, (b) close monitoring of their activities, and (c) scrutiny of returns.3.4.3.5 Moreover, many organisations are in receipt of meagre funds but they have to undergo full compliance requirements under the provisions of FCRA, 1976. This leads to delay and harassment besides putting a strain on the administrative capacity of those charged with the task of scrutinising their returns. The Commission feels that a threshold limit with regard to the amount of foreign contribution received in a year by voluntary organisation needs to be fixed. Organisations receiving contribution below this limit in a year would be exempted from registration and other provisions of this law. At the end of the year, these organisations could simply file an annual intimation with the appropriate authority indicating the details of the amount of foreign contribution received and utilized by them during the period. If the authority has reasons to believe that the declarant has suppressed or misstated certain facts with the deliberate intention of remaining within the threshold limit, activities of such an organisation can be probed further. Such a scheme is operative in other enforcement laws e.g. the provisions regarding Small Scale Industries under the Central Excise Act, 1944. In the background of the Table 3.2, such a threshold at present could be fixed at Rs.10.00 lakh. This figure could be revised from time to time. This step will enable the Authorities to concentrate on larger contributions.3.4.4 Recommendations:a) The Foreign Contribution (Regulation) Bill, 2006 needs to be amended to include inter-alia the following suggestions:i.There should be a fine balance between the purpose of the legislationon one side and smooth functioning of the voluntary sector on66Societies, Trusts / Charitable Institutions, Waqfs and Endowmentsthe other. he the Aother. Te obje t vesAofAsuc AaAregulato yAlegi la i onAshou dAbe Aprope ly enunc ated Ato Aav id AsubjectiveA te pre ati nAA sib e Ami use.A f AlawAan AitsApoheun erASecti i nA .A eAsh uldAb AaA imeAlimitA orAproc dures falling ivingAforeignA 11A(seekin Ar gistr tionAor Apr or A ermission forArec cont ibution).ii .ATransparent Aru es/gui el ensAshould beA rescribedAfo Ainter-agenc Aconsultatio Ap rticula ly inA esp ct Aof A( )AtheA inmumAamou tAofA tion, (b Ath A onati nAwhich wouldArequir Ainter-agency con ult c)As ttingA pA levelAof theAA thori yAwhichAw uld aut ori e Ait,Aa dAch A ro edures.t meAl mitsAforAsuorApermis iv. ionA ToA acilit teA(a)As ee yAdisposalAo A egist ationA/Apr monit ringAofA peti ions receivedAfrom A rga isations A(b)Aeffect vefiled by the ,A the rAa tiv ties,A ndA(c)Ap op rAscrut nyAo Ar turns A(R gulati n) someAof theAf nct onsAund rAtheAForeig AContributio ActAshouldAbe dec ntralised an Adele atedAtoASta e Governme tsA/ADistrictAAdmnistr tion.v. A th r Aconc rn AasAstate Ain Aparag aph A .4.1 5. AasoAneedAtoAbeconsidered.b) Organisat on Arecei ingAanA nnualAforeig Acontribut on equi alen Ato Aless timeAt At me)A than Rs 1 .00A akh A n AaAy ar (t eAfigureA oAbe revi we AfromAr qui emen sA shou dAbe exemptedAfro Are istra ion AandAo herAreportin returnA fAtheA o AtheAl w. TheyAsh uldAbeAa ke , Ai st ad,Ato fileAan an ualheAen Ao Ath A foreig Acontrib ti nAre eiv dAb AthemAandAi sA til sat on atA estig te , ifA ye r.ATheAl wAma Apro ide th tAthey ma Ab AliableAtoAbe in ion ofAfa ts,A thereAi AaAreason bl AsuspicionA f suppressionA/Amis ep esenta as AviolationA andApe al pro isi nsAo At eAla Awill Ab Ause Aa ains AthemAinAi6768THIR ASECTO AORGANISATION AA ATHLOCA ALEVE A ASELF-HEL AGROUPS4. AGeneralA 4.1. ASelf-Hel AGroup Aar Ainforma Aassociation Ao Apeopl Awh Achoos At Acom Atogethe A t Afin Away At Aimprov Athei Alivin Aconditions AThe Ahel At Abuil ASocia ACapita Aamon A th Apoor Aespeciall Awomen ATh Amos Aimportan Afunction Ao A ASelf-Hel AGroup Aar A (a At Aencourag Aan Amotivat Ait Amember At Asave A(b At Apersuad Athe At Amak A Acollectiv A pla Afo Ageneratio Ao Aadditiona Aincome Aan A(c At Aac Aa A Acondui Afo Aforma Abankin A service At Areac Athem ASuc Agroup Awor Aa A Acollectiv Aguarante Asyste Afo Amember Awh A propos At Aborro Afro Aorganise Asources AConsequently ASelf-Hel AGroup Ahav Aemerge A a Ath Amos Aeffectiv Amechanis Afo Adeliver Ao Amicro-financ Aservice At Ath Apoor hAT A rang Ao Afinancia Aservice Ama Ainclud Aproduct Asuc Aa Adeposits Aloans Amone Atransfe an AinsuranceAy 4. AFinancia AInclusio A ACurren AStatu Ai Ath ACountrA 4.2. AOn Ao Ath Areason Afo Arura Apovert Ai Aou Acountr Ai Alo Aacces At Acredi Aan iAfnancia A services AA Ape A Asurve Arepor Ao Ath ANSS A(59t Around) A45. Amillio Afarme Ahousehold A i Ath Acountr A(51.4% Aou Ao A Atota Ao A89. Amillio Ahousehold Ad Ano Ahav Aacces At Aan A for Ao Acredi Afro Ainstitutiona Ao Anon-institutiona Asources AOverall A73 Ao Ath Ahousehold A d Ano Ahav Acredi Alink Awit Aan Afinancia Ainstitution AThi Aapart Ath Aoveral Acredi Alinkag - portfoli Awhe Atake Aa A Awhol Afo Ath Acountry Aappear At Ab Ahighl Askewe Awit Ath ANorth A Eastern AEaster Aan ACentra Aregion Alaggin Afa Abehin Aothe Apart Ao Ath AcountryA 4.2. AI A2006 Ath AReserv ABan Ao AIndi Ase Au A ACommitte Aunde Ath Achairmanshi Ao A Ms AUsh AThorat Ait ADeput AGovernor At Asugges Amethod At Aexpan Ath Areac Aan Aconten A o Afinancia Asecto Aservice Ai Ath ANorth-East ASubmitte Ai AJul A2006 Ath ARepor Ao Ath A Committe Aemphasize Ao Alarg Ascal Aexpansio Ao Afinancia Aintermediatio Ai Ath Aentir A region AThi Acoul Ab Adon Ab A(a Aopenin Ane Abranche Ao ACommercia ABank Ai Athes A areas A(b Aincreasin Ath Anumbe Ao Aaccount Ai Ath Aexistin Aunits A(c Aadoptin Ath Abusines A corresponden A Afacilitato Amode At Aincreas Ath Areac Ao ACommercia ABanks A(d Aextensiv A us Ao AInformatio ATechnolog A A(e Aimprovin Acurrenc Amanagemen A Aavailabilit Ao Aforeig A exchang Afacility A(f Aprovidin Ainsuranc Aan Acapita Amarke Aproduct Athroug ABanks (g Aintroducin AElectroni AClearin AService A(ECS Aan ARea ATim AGros ASettlemen ASysteThird Sector Organisations at the Local Level – Self-Help Groups(RTGS); (h) abli hedASHGsA (RTGS);A(h) str ngthenin AtheA egiona ARu al ABanks;A i) Ac nverting Awe lAes mme dations; A into coo eratives;A(j Aim lementingAth AVaidyanath nACommittee’sAre the ARegistr rA (k)Arelax ng insistenceAo Aco lat rals;Aand (l) enhancin AtheArec ve yAc pacityAof erati eAdues A coopera iv Aso ieties in theASta esAtoAcolle tAcooirm ns ipAofAA 4 2.3 AA a n, Ain A200 , Aa Committee Aw s Acon tit ted Aunder Ath Ac th ACountry’ Dr. A C. Rangara a AtoAprepareAa compre en iveAreport onA‘Finan ia AIn lusionAiningAin rem teATheA ommi t e Awen Ainto A Al rge Anu ber AofAis uesA onn ctedAwi h A a)AbanAin tit tionsA areas,A( ) A mpowermen Aof ASe f-H lpAGr upsAand A heir linkages withAfinancia andA(c) A ev tal zatioAof th ARR s.Aacce s AshowedA O e Aof Ath Am in Afidings Aof A his Comm tte Awas Atha At eAscen rioAof creditwid Ain er-regionAa dAinter-Sta e A ariations AThe Afo lowing A abl s AexplainAtheApo iton13:Acros AReg ons LevelAof ANon indebt dness:Ation to AtotalA 4.2.4AF rm A ouseholds not Aac essi gAcred t Afrom A or a AsourcesAa Aa propo orth-Ea ter ,A f rm households is Ae pe ially Ah gh Aat A 5.9 %, A81. 6% and 77.59% Ain AtheA regions A akenA Easte nAand AC ntral ARegions re pecti el .AIn Ater sAof Aabs lute A umbers, these alAsourc s AasA to eth r Aa co ntAf r A64%AofAf rm A ouseholds not Aac essi gAcred t AfromA ordromalAourceA RegionAo A%Ato alndeb HHs l AHHs At Ae A%toAANon- nd btedAt AAHHsAH% to talAt s AH talAbIndebted Af rmalAt sAsourc% toExcudeormotalAsAHtalHsAsourcrtherA109.6 A5626 A5140 A53.A48.6A27.43A25.05A82 04A74.9NorthEastrn A3540 A7.4 A19.0 A28.6 A8010 A1.48A4 .09A33.9A95.91asterA210.1 A84.2A40.0A126.3A60.0A39.46A1 8.74A171.1A81.26entral271.3A113.0A41.6A158.2A58.4A60.81A22.41A210.5A77.59esterA103.6A55.4A53.0 A47.9A46.3A45.56A43.98A58.07uthern161.5A117.5A72.0 A44.1A27.3A69.02A42.75A92 49 57.p AofUTs A148 A049 A3310 A099 A6690 A015A10.14 1.33AAIndia893.5A434.2A48.6A459.2A51.4A243.9A27.30A6 9 5 A.70NE,C A& AE A517.3A204.3A39.4A313.0A60.5A101.7A19.66A415.61A80.3 Re ionsShareto AAlA57.947.0568.1641.7 AA6etail dAbe ow: Tab eA .1:ANu berAofAFar erAH us holds (HH AinALakhs notAac essi gACred t Afroms AHHs N56.02 S5 Gro 9.86 Al3.99 IndiaA(%)*NE= North-E st rnARegi n,AC= AC nt alARegi n,AE=69EasternA eg on13Report ofARangar ja ACommitte AonAFinacion, alJanA nclu2008.sSocialA a i alA–AA Shared AThe southern region, at the other end, exhibits relatively better levels of access to formal/ non-formal sources (72.7%) mainly on account of the spread of banking habits and a more robust infrastructure.Level of Non-indebtedness: Across States4.2.5 The proportion of non-indebted farmer households was most pronounced in Jammu and Kashmir (68.2%) and Himachal Pradesh (66.6%) in the Northern Region, all States in the North-Eastern Region (61.2% to 95.9%) except Tripura, in Bihar (67%) and Jharkhand (79.1%) in the Eastern Region, and Chhattisgarh (59.8%), Uttar Pradesh (59.7%) and Uttarakhand (92.8%) in the Central Region, as per details given below:Table 4.2: Proportion of Non-indebted Farmer Households (State-wise)Northern53.2148.7West Bengal34.5349.9Haryana9.1146.9Central158.2958.4Himachal Pradesh6.0366.6Chhattisgarh16.5059.8Jammu & Kashmir6.4368.2Madhya Pradesh31.0949.2Punjab6.3834.6Uttar Pradesh102.3859.7Rajasthan25.2647.6Uttarakhand8.3292.8North Eastern28.3680.4Western47.9246.3Arunachal Pradesh1.1594.1Gujarat18.2048.1Assam20.5181.9Maharashtra29.7245.2Manipur1.6175.2Southern44.1127.3Meghalaya2.4495.9Andhra Pradesh10.8418.0Mizoram0.6076.4Karnataka15.5238.4Nagaland0.5163.5Kerala7.8235.6Tripura1.1950.8Tamil Nadu9.9325.5Sikkim0.3661.2Eastern126.3960.0Group of UTs0.9966.9Bihar47.4267.0Jharkhand22.3479.1All India459.2651.4Orissa22.0952.2@ refers to non-indebtedness to bothState / RegionNon-indebtedState / RegionNon-indebtedFarmer HHs@Farmer HHs @Lakh%Lakh%70Thi d ASect r AOrganisatio sA tAt eALoc lALev l – ASelf-He pAGroupsLev lA fAIndebtedne sA oAInstitution lASources4.2 6 ADeriv dAda a Aindica eAth t Aon y A27. % A fAt eAtot lAfa mAhousehol sAwe eAindebt dA oAinstitution l Asourc sA sAdetail dAbelow:Tab e A4. :AProporti nA fAIndebt dAFarm rAHouseholdsReginATot lAn .AfAInciden eA fAindebtednesAIndebtedne sAoAH sA(lak)A o Abo hAform lAadAinstitution lAsourcAAnon-form l AsourcALa h AH sA %A oAtot lALa hAH sA %A oAtotAAHHAAHHs)Northen A109.05Nor hAEasten A35.09Easten A210.74CentrlA271.41Westen A103.98Southen A161.75Gro p A fAUs A1.14A lAInda A893.3 06 A56.6 A51.9 A27.2A2 5.0 A7.4 A19.8 A1.5A4.1 A84.2A40.1 A39.7A1 8.3 A113.4 A41.6 A60.1A22 .6 A55.4 A53.7 A45.9A43 .6 A117.5 A72.0 A69.7A42.8 A0.9 A33.0 A0.10A1 0 .0A434.4 A48.0A243.6A27.nA 4.2 7 AheARangaraj n ACommitt eAca eA o a Afindi gAth tAcurrent yAthe eAa e A2 6Adistric sA rA t eAcount yA(o t A f aAtot l A61 ) Aspre dAacro s A 7 AStat sAa d 1AUni nATerrito yAwhi hAfsuf rA fr mAacu eAcred tAexclusi nAwi h aAcred tAg p A fAov r A95 . AheACommitt e Aidentifi dAfomaj rAreaso sAf r Ala k A fAfinanci lAinclusion: ,A. AInabili yA o Aprovi eAcollater lAsecurit,A i.APo rAcred tAabsorpti nAcapacitdA ii . AInadequa eArea h A fAt e Ainstitution ,Aai .AWe kAcommuni yAnetwor.AheAexisten e A f Asou dAcommuni yAnetwor s A nAvillag sA sAincreasingl , Abei gArecognis dA yAdevelopme tAexper sA s Ao e A fAt e Amo t Aimporta tAelemen s A fAcred tAlinka e A nAt eArur lAarea .AParticipato yAcommuni y Aorganisatio s A(Self-Help/Joi tALiabili yAGroup )Ac71Soci lACapit l – Shared Destinybe extremely effective in reaching credit to the poor and can thus, play a critical role in poverty alleviation.4.3 Evolution of the SHG Movement in India4.3.1 Community Networks (Self Help / Joint Liability Groups) – Beginning4.3.1.1 The first organised initiative in this direction was taken in Gujarat in 1954 when the Textile Labour Association (TLA) of Ahmedabad formed its women’s wing to organise the women belonging to households of mill workers in order to train them in primary skills like sewing, knitting embroidery, typesetting and stenography etc. In 1972, it was given a more systematized structure when Self Employed Women’s Association (SEWA) was formed as a Trade Union under the leadership of Ela Bhatt. She organised women workers such as hawkers, vendors, home based operators like weavers, potters, papad / agarbatti makers, manual labourers, service providers and small producers like cattle rearers, salt workers, gum collectors, cooks and vendors with the primary objective of (a) increasing their income and assets; (b) enhancing their food and nutritional standards; and (c) increasing their organisational and leadership strength. The overall intention was to organise women for full employment. In order to broaden their access to market and technical inputs, these primary associations were encouraged to form federations like the Gujarat State Mahila SEWA Cooperative Federation, Banaskantha DWCRA, Mahila SEWA Association etc. Currently, SEWA has a membership strength of 9,59,000 which is predominantly urban. In the 1980s, MYRADA – a Karnataka based non-governmental organisation, promoted several locally formed groups to enable the members to secure credit collectively and use it along with their own savings for activities which could provide them economically gainful employment.4.3.1.2 Major experiments in small group formation at the local level were initiated in Tamilnadu and Kerala about two decades ago through the Tamilnadu Women in Agriculture Programme (TANWA) 1986, Participatory Poverty Reduction Programme of Kerala, (Kudumbashree) 1995 and Tamilnadu Women’s Development Project (TNWDP) 1989. These initiatives gave a firm footing to SHG movement in these States.Box 4.1: SEWA’s Eleven Questions:1) Have more members obtained more employment? 2) Has their income increased?3) Have they obtained food & nutrition?4) Has their health been safeguarded?5) Have they obtained childcare? 6) Have they obtained or improved their housing? 7) Have their assets increased? (e.g. their own savings, land, house, work-space, tools or work, licenses, identity cards, cattled and share in cooperatives; and all in their own name. 8) Have the worker’s organizational strength increased? 9) Has worker’s leadership increased? 10) Have they become self-relianct both collectively and individually? 11) Have they become literate?72hirdASe torAOrganisat on Aat theAL calAL v l A–ASelf- elp AGroupsTodaTo ay, Aar und 44 Aof theAt talABank-li ked A HG Aof theAcou try ar Ain theA ourAsout ernASt te AofAAn hraAPrad sh,AT milAN du,AKarna aka andAKerla. Anc A 4.3 1. AThe Aposi ive Aexperi nceAga ned A rom theAa ove Aprogra mes has le Ato theAemerg ndA fAaA eryAst ongAconse susA hat the A winAconc pt Aof (a)As all Ag oupAorganisa ion ralA (b) Aself-manage ent areApo ent At ols for Aecon mic andAso ial Aempower en Aof theArsAaA p or. AEffrtsA ave A eenA adeAal os Ain allAp rt Aof theAcou tr Ato Aa opt A hisAm de Aneces aryAcompo en Aof theApov rtyAallevia ionAprogrames.AT bleA .4:ASHG- ankALin ageAProgramme-Regi nalASp ea AofAPhys calandAFinan ialAProg es Aa Ao A31AM rchA200 Rs AinAmillion SI.ARegion/Sate ACumula ive No Aof new NoAofACumula iveACumul lieAan AOf A ol A8,AComulativo.A no AofA HGsAGsAAexising NoofAA ankA oanAanAAreeatA ankAanAAprovdedAprovdedAHGs AHGSA pt31AAdringA ankA oanA p t31AA ithA nakA ithA ankAprovdedAprovdedAM rch A 006A200-0 AtoAexis ingAMchAA ptA31A oanAdu ingA ith Are eatA ithAk AAAHGsA007A(8)AAM rchA 006 A200-07A ankA oanA aonAAAAAdrin A31AMAAAA200-07A007A(34123456789gesh A22920A4879 A2282 A27799 A86.98 A38.27 A15.60A1,252han A98171 A39666A3692A137837A2,44.94A1,44.40 A19.53A3 ,895ana A4867 A1966A1821 A6833 A31.01 A18.31 A6.86A499jab A4561 A1893517A6454 A23.86 A11.74A2.24A356mir A2354405199A2759 A10.48A4.25 A1.83A144lhi22412 A336 A1.58A65AA2AT TAL(A) A133097A48921 A8511A182018 A3,98.85 A2,18.62A46.05A6,175AAsam A56449 A25005160A81454A1,42.98 A79.40 A.91A2,218aya73546 A0 A1211 A1.19 A1.40 A.00A33ura A199691A57 A2906 A3.12 A1.40A.48A49 .2 .kim12A3 AC160 A.86 A.12 A.00purA1468 A125 A0A26S3 A7.85 A4.80 A.00A112.esh34611A0447 A1.49A.72 A.00A19 .and42257A10998 A3.38 A3.50A.97A67.ram97491 A0 A1895 A6.14 A7.56 A.00A13AT TAL(B)A62517A29237227A91754 A1,65.01 A98.89A.36A2,6373Social C p talA–A AShared4.3.2 SHG Development since 1992 and NABARD4.3.2.1 Forming small groups and linking them to bank branches for credit delivery has been the most important feature of the growth of the SHG movement in our country. The SHG-Bank linkage programme was started as a test project in 1989 when NABARD, the Apex Rural Development Bank in the country, sanctioned Rs.10.0 lakhs to MYRADA as seed money assistance for forming credit management groups. In the same year, the Ministry of Rural Development provided financial support to PRADAN to establish Self-Help Groups in some rural pockets of Rajasthan. On the basis of these experiences, a full-fledged project involving a partnership among SHGs, Banks and NGOs was launched byC Eastern Region15 Orissa180,89653,55528,806 234,451 4,754.65 3,274.27 1,409.33 8,028-9216 Bihar46,22126,1181,30672,339 1,052.19960.28211.15 2,012.4717 Jharkhand30,8196,4981,15337,317 1,114.60391.9684.21 1306.5618 West Bengal136,25145,31222,014181,5632,424.522,060.64888.404,485.1619 UT of A & N Islands16447302118.234.583.4012.81TOTAL (C)394,351131,53053,309525,8819,354.196,691.722396.50 16,045.91D Central Region20 Madhya Pradesh57,12513,7871,72670,9121,666.86499.2365.122,166.0921 Chhattisgarh31,29110,4121,33041,703337.81218.4427.51 556.2522 Uttar Pradesh161,91136,6762373198,5875,153.541,778.48192.436,932.0223 Uttarakhand17,5883,9391,26821,527891.86382.69225.64 1,274.55TOTAL (D)267,91564,8147,217332,7298,050.072,878.84510.69 10,928.91E Western Region24 Gujarat34,1609,4126443,5721,244.51885.464.69X\ 29.9725 Maharashtra131,47094,38619,382 225,856 3,951.67 2,983.86841.01 6,935.5326 Goa6243951421,01955.2128.289.0383.49TOTAL (E)166,254104,19319,583270,4475,251.393,897.60854.729,148.99F Southern Region27 Andhra Pradesh587,23896,381262,895683,61943,455.1827,754.5523,536.74 71,209.732S Karnataka224,92892,70856,717 317,636 9,927.53 8,163.89 3,239.26 18,091.4229 Kerala86.9SS30,92513359 117,913 4,821.48 2,889.40 1,067.68 7,710.8830 Tamil Nadu312,77887,69935,387400,47727,121.8710,984.483,721.5538,106.3531 UT of Pondicherry2,4992,499350.86350.86TOTAL (F)1,214,431307,713368,5581,522,14485,676.9249,792.3231,565.24 135,469.24GRAND TOTAL2,238,565686,408457,410 2,924,973 113,975.43 66,431.99 35,994.56 180,407.42Source: NABARD74Th rd ASec orAOrganisati ns atA he ALo alALe e A–ASelf-H lpAGroupsNABNAB RD in A19 2. In A19 5,Aact ng on A he Arep rt o Aa Awork ngAgro p, A he A BIAstreamli edA edA heAcre it Adeliv ryAproced re by Aissu n Aa A et ofAguideli es to ACommerc alABan s. ItAenab asA S Gs to Ao enAB nkAAccou tsAba ed o Aa Asim le Ainter seAagreeme t. TheAsch meAceA furt erAstrengthe ed b AaAstand ng Acommitm ntAgi en byANAB RD toAprov deiArefna geA nd Apromotio al Asupp rt to ABa ks A or Acre it Adisbursem nt Aun er A he A H A– AB nk Alink to program e. ANABAR ’s Acorpor te Amiss on A as to Am ke Aavaila le Amicrofina ce Aservi es 20 Amill on Ap or Ahousehol s, orAone-th rd of A he Ap or in A he Acount y, by A heA nd ofA2 08. In A heAinit al Ayea s, A heAprogr ss in A heAprogra meA a AaAsl w;Ao ly A32 95Agro psAco ld beAcre it Alin edAdur ng A he Aper od A1992- 9.AB t, Athereaft r, A heAprogra meAg ewArapi lyA n AA ndA heAnum er of AS Gs Afinan edAincrea edAf om A81 80 in A1999-2 00 to Am reAt orA 6 20Ala hs in A2005 06 A nd A6 87Ala hs in A2006- 7.ACumulative y, A32 98 Amill onAp alA househo ds in A he Acoun ryAh veAb en Aa le toAsec reAacc ss to Amicro-fina ceAf omA heAforbank ngAsystemarA o. of ofAS GsAfinan edAdur A heAy arA inAlangACumulat veAnum erh) AS GsAfinan edA inAla02 A18 AA403 A26 AA704 A362 A1005 A539 A1 606 A620 A2 207 A687 A2914. Ta le A4 5:ADeta ls of AS GsAFinance Ykh) 2001.61 2002.17 2003.79 2004.18 2005.38 2006.25rce: NABA4D4 . 34.3. .2ANABA D, inAassociaton Aw th ADeuts he AGesellsch ftA urATechnis heAZusammenar eiA(G T ),Aconduc e Aa Astu y, in A20 5,onA he Acomparat ve Aperforma ceofAmeA H A–AB nk Alink geAprogra tyA vis-à- is Aot er Amo es ofAprior reA sec or Alendi g. A he Afindi gsA 27A ba ed on A heAd taArecei edAf om n d A Commerc alABan s, A 92AR BsAn g 14 ACooperat veABa ksAparticipat in A he Aprogram e. A ne of AoxA4 2:AS nt me AFeatu es ofA heASelf-H lpAGr upAMovem0 )inA he ACoun ryA(y arA2005-in ? HGmo el is hedomin ntvehi le orMi roFina cei . Ind0 . ?2 24mill onS Gsun erB nklink ge o n ~31 .03.20e . ?Initia lyN Ospionee ed he HGpromot onprocesse . ?Governm ntemer ed as helarg st HGpromotH . ?Vari usgovernm ntsubs dyprogr mslin ed toS? n)9 64l khS Gs(6 20l kh ew nd3 44l kh orrep atlo0 . ot Afinan ed inA2005-at ?Aver gel ans ze t ~a ew H ~– s.37 , 61~ ndaver gerep1 . l anA er A H A– A s.A6 2 ,9re ?Approximat ly 4% of hecountr ’sBank-lin edS GswinA he Asouth rnAStatheA75es.14NAB RDAD ta A2005-Soc a A apital –AAAShyimportant observations of the study was that 1.44 million SHGs had loans outstanding of Rs.4,200 crore with the banking system. 2.63 million SHGs had saving accounts with the banks and the savings outstanding was Rs.2,391 crore.Table 4.6: Trends and Progress of SHG - Bank Linkage Programme in IndiaMarch 1993March 1996(INR Rs. Million) March 2006 March 2007SHGs linked2554,75722,38,52529,24,973% women’s groups70749090Families assisted (m)0.0050.0832.9840.95Population covered (m)0.0250.40164.90204.75Banks participating1495501498SHG promoting partners321274,3234,896Districts covered26157572587Cumulative bank loan2.5853.321,13,974.011,80,407Source: NABARD4.3.2.3 At first glance, the above figures; 40.95 million families and 204.75 million people having been covered under this programme and the cumulative loan figure standing at 18040 crores as on 31-03-2007 appear to be impressive. But in the context of the magnitude of poverty prevailing in the country and the overall quantum of the fundflow available under various anti-poverty programmes of the Government, the size of the SHG movement could be described only as modest. In the years 2003-04, 2004-05 and 2005-06, the average loan available to newly formed groups from external financial institutions was Rs.32005, Rs.32012 and Rs.37581 respectively. The figure for per capita disbursement works out to be less than Rs.4,000/-; whereas under Swarna Jayanti Gram Swarojgar Yojana (SJGSY) (a scheme meant exclusively for BPL families in the rural areas), it stood at Rs.21,818 (2005-06).4.3.3 Other Agencies Involved in SHG Development4.3.3.1 Apart from NABARD, there are four other major organisations in the public sector which too provide loans to financial intermediaries for onward lending to SHGs. They are (a) Small Industries Development Bank of India (SIDBI), (b) Rashtriya Mahila Kosh (RMK), and (c) Housing and Urban Development Corporation (HUDCO). Then, there76ThrdASectorAOrg ni ati ns Aat theAL c l ALevelelpA– GroupsSelf-Hare public re ApublicAse tor/otherA ommer ial Ab nks whic Aa eAfr eA oAt ke AupAa yA end ng AasperAth irAoli yAand ARBIAguidelin s.4.3.3.2 Rashtr ya AM hilaKo s hA(RMK Ain A ar hA 4. .3.2.1AThe Rashtr ya AM hil AKo hA as set upAbyAtheA ov rnmen Ao AIndi 993Aas AanA uton mousABody A egist redAunder SocietiesARe istr tion Act, A 860underAtheAveAwas AtoAepar ment A(now Mi istry Aof Women andAChildADe el pment.AThe obj ct acilit teAcred tA uppo tAto A oor women forAtheir Asoci -economicAupl i ft ment organiz dA 4. .3. .2 AI Awas fel Athat A heAcr di Anee sAof Ap or Awomen, speci ll Ath seAinAtheAu Aco ntr se .A tor AwereAnotA dequately ad res edAbyA heAforma AfinancialAin ti uti nsAofAthechan sm AThs ARMK Awas Ae ta lishedA oApro id A oans A nAaAqu siAfor al Acredi AdeliveryApea edly,A whichAisAclient fri ndly,A asA impleAa d Aminimal A rocedure, disburs sAq icklyAandAr ivelyAlowA h sAflexible repayment A chedu es,Alin sAt riftsAa dAsa ingsAw thA red tAandAhasA ela loa At atA t ansac ionA ost Abo h AforAth Abo row rAandAt e AheAmaxiender.Aum amou tAof0,000 forA ca Ab A iven Ato AaA en fiiary at aAt me Ais A s. A 5,000 A or Aincome Ag neration, Rs.hous Abu ldi g Aand A s. A 0 000Afo AaAfamilApurpose.–ANGO-SHG- 4. .3.2 3 ATheA oshA e ds Awit AaAuni ue Acredi Adeli ery A o el A“RMKAorati icins,A Bene he Aries”.A upportAi Aextend d Athro ghANG ’s,AWomenAD velopmentACorStateA overnmen Aage ciesAli e ADRD ’s,ADairy AFe erations, Municipa ACoucilsA tc.A abl A4.7:ARMKAP r o manceA AAA ird’sAE eA iew(As AonA31.03. 008)Loans Aanctio edARs.250Ac oresLoansdisbur edARs.197Acror sRecoveryAercen ageAbo eA90%IMOsA(In ermediaryAOrgaisatons)1375ASHGsA6 ,600iWomeAb e neftedA6 19 230No Aof AnodaAagenciesA31ranchis s 5St tesA/AUAcoveredA 25 eili gA fA oanAtoAanAndividualAR .25,00 /- AIncomeene r at ionAR .50,000 -AHosin gAloanAR .10,00 /- AFamilyAc nsumptionAo nSourceA: Mashlr KaAMa77Socia A a italA– DeStiny4.3.3.2.4 A corpus of Rs.31 crore was provided to the RMK at its inception. During the intervening period of 15 years, this corpus has been increased only marginally and as on 31.03.2008 it stood at Rs. 76.15 crore. The Kosh does not have Regional / branch offices anywhere in the country and operates only through its corporate office located at New Delhi.4.3.3.2.5 The Kosh has a small organisational set up having a total staff strength of less than 30 with the Minister of Women and Child Development as the Chairman of the Governing Body and an Executive Director as its functional head. Its area of operation extends to the entire country. The process of loan sanction to voluntary organisations consists of five main steps viz. (i) issues of guidelines / inviting applications; (ii) desk evaluation of the proposal; (iii) pre-sanction visit / assessment; (iv) sanction and implementation, monitoring and (v) post- completion reporting. In the year 2006-07, the organisation provided credit of Rs. 30.71 crores benefiting 34,692 women. The cumulative figure for the last 15 years stands at 5,83,403.4.3.3.2.6 The Commission is of the view that it is difficult for a small Delhi based organisation like RMK to function effectively and monitor projects spread over the entire country. If this organisation is required to play a significant role in this sector, then some urgent measures need to be taken by the government. The corpus of the Kosh should be enhanced substantially so that the coverage of its programmes goes up. In order to give it an enhanced geographical reach, the Kosh should be allowed to open regional offices with adequate staff at selected places in the country. It will help in speedy processing of applications and effective monitoring of the sanctioned schemes. Since the States of the North-East, Bihar, UP, Orissa, Jharkhand, Uttarakhand, Madhya Pradesh, Chhattisgarh and Rajasthan have been identified as credit deficient, the Kosh may be given a special mandate that the focus of its activities will be in these areas for a period of next five years.4.3.3.3 Microfinance Programme of SIDBI4.3.3.3.1 Small Industries Development Bank of India (SIDBI) launched its micro finance programme on a pilot basis in 1994 using the NGO / MFI model of credit delivery wherein such institutions were used as financial intermediaries for delivering credit to the poor and unreached, mainly women. Learning from the experience of the pilot phase, SIDBI reoriented and upscaled its micro finance programme in 1999. A specialised department viz. ‘SIDBI Foundation for Micro Credit’ (SFMC) was set up with the mission to create a national network of strong, viable and sustainable Micro Finance Institutions (MFIs) from the informal and formal financial sectors. SFMC serves as an apex wholesaler for micro finance in India providing a complete range of financial and non-financial services78he ThirdLocalA ectorLevel – Self-HelpO ganisatio sAatGroupsAtto the MFIs so as to facilitate ly Asustain b e Aentit es Abeside to A At e AMFIs Aso Aa Ato A i acilitate A heir Adevelo ment Ainto fnanciafor app opriatedevelopi g Aa network Aof ser ice Aprovide s Aand A dvocatingor Athe Asecto .ApolicyAfr mewo kAAMicro AF na ceASupp rt AP og ammeA 4 3.3.3.2A FMC Ai Aimplem nting At e ANationaAsu stantia Apoverty Aelim na ionANM SP . AThe A veral AgoalAofANM SPAisAt AbringAaboua dAreduc dAvul er bilityiAinAIn ia Aamongs AusersAofAmiro-fna ce servi es Apart cularlyAonA ith AtheAGo ern entAof AIndia,wom n. The ANMFSPAis Ab ingA mpl mentedAinA ol aborat),A KAandAtheAIn ernationalA undA the ADepartm nt Afor A nt rna ion l ADevelopment (DFI for Agricul t ur a lAD ve opmentA(IF D), ARome.SIDBI s Am croAfina ceAiniti tive A 4 3.3.3.3 AThe cumul tive Aas istan e Asanc ioned Aunder gatesAtoAR .A1946.82Acro e Awhi eA unde Ait Avar ousAproduc sA pto March A3 ,A200 Aaggr umu ativeAd sburseentsA tand at ARs.A166 .77Ac ore.ATableA4 8: AssisMiro-CreditAblarsA006-0s.Acrortanc AunderA200708ACu)Sr.APartiulatie AASan.ADi b. ASac. ADis.ASancADisb.ATerm Aoans A38.00A348.2A745.95A 95.80A182063 A165.22 ALiuidiyAMaagemntA3.20 3.07A0A1.4 A .40A0. 0A0.00ApporA(LM)3 ATansfrmatinALoa.05 14.05A(TL)A/ACrATrasforation4 AEqityASpport0.00A0.0 A13.71A5 71A151 A6.75 ACapcityBuiling AGant3. 4A19.MFIsARisAFunAforSmalerAMFsA0.0 A0.00A2. 8 A2.98A2 98A2.97AOterACpaciy ABuldingG rant3.553.23A074A2.2A22.09otal A41.99A376.0A76 .74A713.73 A946.821661.738 9Ao.Ao7ALo n A utstandingA5 8.44A950iciarABeneesAAs istedA8.60 l khA12ASIDBI (00A0.00A6.60A6 47 ASusASup ortA Afo8A5. 6A7. 0A6 .76A48. 0 Ato17.69 A.88AlakhA 6.33 A ak Sour eA:ASIDB nanc AinAtheAwe kerASt te Awhich 4. .3.3.4ASIDB Ai Aalsoi Afocus ng onA evelop entAof microUttar AP adesh,ABihar, Jharkh nd,A haveAina equateAa cess to forma Afinancia Aservi esAsuchAas Oris a,AChhatt sga h, A adhya APradesh ARajast79So i l Capita A–Atiny4.3.3.3.5 Government of India (GOI) has committed support of Rs. 150 crore under the Portfolio Risk Fund (PRF) Scheme which is being utilised by the Bank for meeting a part of the security cover requirements under the Micro Credit Scheme for providing loan assistance to MFIs. The PRF corpus is available for a period of five years with effect from the Financial Year 2007 and aims to cover an additional fifty lakh beneficiaries throughout the country. Cumulatively, as on March 31, 2008 disbursement to eligible MFIs under PRF stood at Rs. 709.37 crore covering 11.83 lakh clients.4.3.4 Some Success Stories in States4.3.4.1 Poverty eradication through social mobilization and empowerment of women in Andhra Pradesh:4.3.4.1.1 The Government of Andhra Pradesh has been successfully implementing poverty alleviation programmes in the State through extensive social mobilization. Women have been placed in the fore-front of the development agenda through formation of women’s Self-Help Groups. Multi-level SHG federations formed at the block and district levels have further benefited the growth of SHGs and institutionalized this mobilization. The State Government assists the groups by providing Revolving Fund / Matching Grant under various programmes. Society for Elimination of Rural Poverty (SERP), a registered autonomous Body, is playing a key role in this process by providing facilitation support to groups and by sensitizing line departments of the government, Banks and insurance companies towards the needs of the poor.Box 4.3: SHG-Bank linkage in Andhra Pradesh?Bank loans to SHGs – Rs.5900 crores in 2007/08?Per member linkage: Rs.11000?Repayment rates > 98.5 %?From savings linked lending to lending based on micro credit planning by S.H.Gs?Bank finance for debt swapping, social needs and income generation – 3000 villages covered, balance 32000 villages in 3 years?From 2004 – interest subsidy for on-time repayment - ‘Pavala vaddi’ scheme: Rs.250.0 crores outlay for 2008/09Key ImpactLeadership development:– 14,00,000 women leaders– 180,000 para-professionals working for SHGs and V.Os– 20,000 community resource persons fuelling the social mobilisation process across the StateSavings and loaning:– Accumulated corpus of Rs.3000 crores– Bank loans to SHGs – Rs.200 crores in 01/02 to Rs.5900 crores in 07/08 – 30-fold increase in 8 years– Low interest loans to SHGs – freedom from exploitative debt80Thi dASectorAOrga is tio sAatA heALo a ALevelA– A elf-Help GroupsLessons fLes onsAfr mAAndhr APradeshAEx erie ce g Aa Amu t ARole of AState AG vernment c itic l A- A ong Ater Apoverty Aer dicaiton s ratel sation – AS ate Awid Asupport A tr cture A o Aindu e Asocial Amobc mmunity – ASocia Acapital c itical A– building Ains it tio s Aof the poor and Abest Aprac it one s Aof Athe Ar vider A – Pro-poor Aor en ation Ao Aservice AA f Apoo A – Fai h Ain Athe Ac pa ilitA he Apoor – AL arn fromp ssib eA – Transfer A wn rship Ato Ains it tion Ao Apoor as early Aascritica A ARoleAofA ommunity resourc A ersonsA–A(SERP),A Source: APre enta ion Ama eAb fore AtheAC mm ssi nAby A heAChiefA xecuti eAOfficer ASo ietyAforAEr diationAo APovert D patment ofARuralADev lopment,AG venmentA fAAndhraAPrade h4.3.4.2A elf-He pAG oupsA orARural ADev lop ent:A heAT mil ANaduAEx p r im en t1 5 A it ativeA .3 4.2.1 In ATa il A adu, Athe AD pa tment of ARural ADe elo ment A as Ataken Ai securingA to org nise A he Ar ral A oor Ainto A elf-He p AGro ps Awhich Acol ecti ely work Aforegu arlyA l velihood Ae plo men Afor Athe me bers. AThAm mbe s Aof A he Agr up agre Ato Asave AAfun Ai A an Aconv rt Athei Asav n s Ainto a Aco mon Af nd kno n Aas A he Agrou Aco pus. Thi view AtheA us d Aby A he Agrou A hrough a Acommon Am nagement A tr tegy. The Agr up keep Ain ollow ngAbroadAguid e lines: Adiffic ltA .3.4.2.2AG n rally,AaA elf-H lp AGroup co si ts of 10 Ato A20 persons. Ho ever,Ai p/sh .htmA5. But,A are s Ahaving A cat eredAa d Asparse Apo ula ion, At e An mber ma Aeve Ag Ad wnAt ationAisA he Aa ea An edAtoAbe A de tifid AbyA heASt te AL vel ASGSYAC mmittee ASimilarAr la va lable A oAgroups Ac ns sting Aof disable Ap rson Aa Aw llAas A oAgro psAw ic AtakeAuAs hemes ofAminorAirri g ation. elowAth A .3 4.2.3ATheA ssential A on itio Ais thatA he Agro p Ashou dA elong Ato famil esA A, Awhere pove tyAline. Ho ever, AifAn c ssary,A Am xim mAo A2 %Aand Ain Aex eptio a Acase kenAfrom es entially A equi e ,AuptoA Am xim m A fA3 %Aof Ath Am m ers Ai AaA ro pAmay beAt tA as At A families Am rgina ly A bove Ath Apov rtyAli eAliving Acon iguo sly withABPL A am lie .A pation lA beAwit Ac nse t Ao Athe ABP Am mbe sAofAt e Aghis Aoup. Aelps Athe fa ilies AofAoccboveAth A gr upsAlikeAagr culturalAl bourers, margina Afa mers Aand artisansAm rgina lyA sAofAtheA pove ty lin , Ao Awho may A aveAbeen excl ded fro Athe BP AlistA oAbecom Am mbe nderAth A elf-He p AGroup. How ver Athe AAP Ame ber AareAnot eli ibl Afor Ath Asubs dyA Ais Aals A s heme. The Ag oup does A ot Aa mitA ore than Ao eAme ber from the Asam Af mi y. AI .ATheABPL imp ied that theAsa e Apers nAs ou d notAbe a A embe AofA ore thanAo e A rou fam liesAare activelyAe co raged Ato Apa ti ipa e AinAtheAm nag ment Aand decisi nA aki gAofAt eAg oup; AAP Ame ber AareAno Aa lowedAto A ominate. Fur her, AAP Am mbe15.in/dt81o i lACapi alA–AASelf-Help Groups are not encouraged to become office bearers (Group Leader, Assistant Group Leader or Treasurer) of the group.4.3.4.2.4 The group has its own code of conduct (group management norms) to bind itself. This is further strengthened by regular meetings (weekly or fortnightly), functioning in a democratic manner, allowing free exchange of views, participation by the members in the decision making process.4.3.4.2.5 The group is expected to draw up an agenda for each meeting and take up discussions as per the agenda.4.3.4.2.6 The members are required to build their corpus through regular savings. It is expected that a minimum voluntary saving amount from all the members will be collected in the group meetings. The savings so collected will be the group corpus fund.4.3.4.2.7 The group corpus fund is used to advance loans to the members. The group tries to develop financial management norms covering the loan sanction procedure, repayment schedule and interest rates.4.3.4.2.8 The members in the group meetings are encouraged to take all the loaning decisions through a participatory decision-making process.4.3.4.2.9 The group prioritises the loan applications, fixes repayment schedules, determines appropriate rate of interest for the loans advanced and closely monitors the inflow of repayments from the loanees.4.3.4.2.10 The group operates a group account in their service area Bank branch, so as to deposit the balance amounts left with the groups after disbursing loans to its members.4.3.4.2.11 The group is encouraged to maintain simple basic records such as Minutes book, Attendance register, Loan ledger, General ledger, Cash book, Bank Passbook and Individual Passbooks. These could be used with changes/modifications wherever required.4.3.4.2.12 As per government notification, 50% of the groups formed in each block should be for women. In the case of disabled persons, the groups formed should ideally be disability-specific wherever possible, however, in case sufficient number of people for formation of disability-specific groups are not available, a group may comprise of persons with diverse disabilities or a group may comprise of both disabled and non-disabled persons belonging to the BPL category.82Thi dA ect rAOrg nisat evel o – s Aat Self-Help Athe A ocal Groups AL4.3.4 3A udumbashre eAMissi n A n AKer la16eeAwa AlaunchedA y A heA 4.3 4.3.1 ATheASt teAPove t AEradication Mis ionA-AKu um ash overnm e t A f AIndiaAa dA Sta e A over ment of A eralaA n A1998A it Athe Aactiv As pport ofA sA nderAthe Al adershipA N BA D.AThe Aobj ctive Awa AtoAera ic te absol teApo ert AinA10Ayea ofALoc al-S el AG vernments.experimen ation of AtheA .3. .3.2 AThe Am tiv tion Afo Ala nch ng Athe Apro ect Awas Athe Asuc es ful AMalapp ram Ad stric s,A c mm nity Aba ed Aapproach of poverty Aa lev ation Ain AA appuzha Aan that Aall Ad velopmen al throu h AUrban ABa ic AServices A rogramme. A udum ash ee Aemphasises C/S ADev lopmen ,A PEP programmes relatin AtoANutritio ,APo ertyA lleviation,A CH,A an ASGSYAsho ldAbe runAby Acommun ty Ab sed Aorg ni ationsAwit AsupportA f APanchaya iARaj/LocalAGvern anceA nstitutions A4 3.4.3 3ADev lopme tAof AGras ARoot ALevelACommu ityABas e dAOrgani at on A(C O)16 ww.kud up ,A(NH s) Aco sist n A 4 3.4.3.3.1 TheAw men Aare Aorgan sed Aint ANeigh ourhoodAGr althAVolun eer,AIncom A ofA20-40A omenAwithA5 functiona Avolun eers-AComm nityAH ident.AThese gr ups areA GenerationAVo unteer, AIn rastructu eAV lunteer,AS cret ryAand Pre yA(A S), Ab Af deratingAoordi ated Aat the A ardAlevel At roughAA eaADev lo mentASocie levelAisAth ACommun tyA 8-1 ANHG . AThe co rdi ating AApe ABody at the PanchayateACharitable SociDev lopme t A o iety A(CDS) Awhi hAis A Are isteredABo y AunderAtet i esARegis ra ion AA t.er.ATheA spirati ns Aand 4.3 4.3. . AThe A ro pAm etsAo ce a week Ain th AhouseAof Aa mem ”,A ndAare Ascru in zedA ge uin Ade andsAvoi ed Ai Ath ANHGAmeetings A orm the “micro-plan n Aprioriti ed to A ormAa mii-pl n atAtheAle elAofAADS.AA Aj dicious pr ori izati nA roc ss Aat i-p vertyAsub- lan” AofA th Alevel Aof AC S A e ds At Afinali at on ofA A“CDSAPlan”.A t Ais AtheA an nsAfacilitate effcti eA the Local-Self A ov rnment APre ara ion ofAmi ro,AminiAa d ACDSApl yAmonitorsAthe ov rall pa ti ipa ionAofAt e Apoor Ai At eApla ning process. TheA ocalAboenta tion A f Athi Aplan. imple ra t ion s Ain A udumb shr e 4.3.4.3.4 A ic o Afinance AOpeAenc ura e A he Apo r Ato 4.3.4 3.4.1 AThri t Aa d AC ed t A oci ties A re set Aup Aat NHG leve At into A nfo mal ADoorstepsave Aand to Aa ail Aeasy Ac edit . AThese Afa iliti s Aha e Agradua ly Agrown BanksAfo83Soci lACapit l – AAShar dADesti56Tab eA4. :AStat sARepo tA fANH sAa dAThri t &ACred tA nAKera08 oADistritAN .A AAGfAN .AAAN .AfAFamilisAFamili dAStart dAThrisAThri tA(Rs)ALo nA(RssANGAASACover1AThiruvananthapurmA8 A1674 A129 A34425 A34187 A95624202A2105278872AKollm A1 A1213 A124A22350A22350A67067550A148 8 810073APathanamthitaA4A647 A70 A13660 A13645 A32763200A603642524AAlappuzaA3 A1325 A113 A26052 A26052 A75612918A17244 2 2135AKottaym A5 A1096 A113A22065A22069 A53474559A1027567286 AIdukiA2 A910 A70 A16667 A16604 A58581431A146 4853767AErnakulm A8 A1298 A132 A21740 A21741A64237075A206 2 614498 AThrissrA2 A1569 A130A28395A28395 A86642639A3 23 5 712 789APalakkd A1 A1988 A145 A33759 A33759 A98107466A262 7 81 555 39 70AMalappurm A12 A1429 A185A32197A32197A77269911A1 21552381 71AKozhikkoe A8 A1434 A139A29667A29394 A101113815A2 53542 2 95 02AWayand A5 A736A44 A12028 A12028 A31866468A100578 431 13AKannr A1 A1093 A124 A21625 A21625 A65139715A216656 0 54AKasargoe A9 A551A66 A11864 A11918 A34621818A1 37 1 41825 4Totl A99 A16963 A1584 A326504 A325944A942122787A24 63542743 15AUrb n A( 8AULBAA1339 A106 A34791 A34791 A55527689A639794 06ATrib lANH sA 9 ADisAA23AA4060 A3826 A5754933A1 2 2198 7AGra dATotAA18539 A1690A365365A364571 A1003405409A253974202a A s A nAMar hA20464.3.4.3 5 ALinka eABanking4.3.4.3.5 1AGrou sAwhi hAa eAmatu e Aenou hA oAava lAloa sAa e Alink dAwi h ABan sAund rAt eABank-linka e Aprogram e A fAt eANABA R.ATab eA4.1 :ALoa sAund rALinka eABanki gAProgram eA fANABA DA nAKerala s A nAMarc ,A20dALo nADisburs AA(R .A nALakh4A3922.8A7 1 15.4A379 6 .08N.ANa eA fADistritANH sAGraddANH sALinkAA(NoAA(Nos1 AThiruvananthapurm A1359 A9842AKollm A936 A9343APathanamthitaA445 A2684Third A ectorAOrganis ti nsA tAthe Local L velA– ASel -Hel AGroups4Alappuzha10227101605863.425Kottayam433840622792.076Idukki468044703241.787Ernakulam1027288614331.648Thrissur813475464669.169Palakkad14240116215380.0810Malappuram517445931859.8411Kozhikkode1166667404680.3512Wayanad602954294229.9713Kannur843745511933.0614Kasaragode430430591590.86Total1147619297855406.714.3.4.3.6 Micro Enterprise Development4.3.4.3.6.1 Kudumbashree views micro enterprise development, which fosters the economic status of women as a powerful tool for poverty eradication. Both individual and group initiatives, which generate income to meet their livelihood needs, are promoted. Canteens/ Catering units, IT units, group farming, units of solar dried fruits etc. are some examples of micro-enterprise units initiated by the women.4.3.4.3.7 Kudumbashree as State Urban Development Agency (SUDA)4.3.4.3.7.1 Kudumbashree has also been associated with urban development projects in the State. Implementation of the Swarna Jayanti Sahari Rozgar Yojana SJSRY (an anti- poverty programme for urban areas), the National Slum Development Programme NSDP, (a programme of urban infrastructure development) and the Valmiki Ambedkar Awas Yojana VAMBAY (a programme of housing development in slum areas) is being done and monitored by Kudumbashree.4.3.4.3.8 Special Interventions in Tribal Areas4.3.4.3.8.1 Kudumbashree has organized 2340 NHGs among 5 primitive tribal groups, namely Koragas of Kasargod, Paniyas and Kattunaikans of Waynad and Malappuram, Kadar of Thrichur and Kurumbar of Attappadi-Palakkad Districts.85c a ACapit lA–AAAS4.3.4.3.9 Women’s Empowerment - A Route to Poverty Reduction4.3.4.3.9.1 In the Kudumbashree model, Womens’ Empowerment is being projected as a strategic route towards the ultimate goal of Poverty reduction. Because of their active involvement in various income generation activities, women who in the past, were regarded as voiceless and powerless, have now started asserting and articulating their innate power, their strengths, opportunities for growth and their role in poverty eradication. This empowerment is also getting transferred to their children (particularly the girl child), the family and ultimately to society.4.3.5 Private Initiative in SHG Development4.3.5.1 Though, government efforts have played a major role in advancing the SHG movement in the country, there have been a large number of voluntary organisations (NGOs) which too have facilitated and assisted SHGs in organizing savings and credit in different parts of India. SEWA in Ahmedabad, MYRADA in Karnataka, Nav Bharat Jagriti Kendra and Ramakrishna Mission in Jharkhand, and ADITHI in Bihar are some of the names which took the lead in promoting Self-Help Groups (mostly of women) around income generation activities using local skills. From organizing villagers into groups which could work on viable activities, to making a project and securing funds (own contribution or through a tie-up with the financial institution), these VOs have worked with involvement and dedication. PRADAN (Professional Assistance for Development Action), DHAN Foundation, ASSEFA (Association of Sarva Seva Farms, MALAR (Mahalir Association for Literacy, Awareness and Rights), SKS, Janodaya, Cohesion Foundation and Jan Chetna Sansthan are some of the other major non-governmental institutions which are promoting and nurturing a large number of SHGs of poor people, mostly women into effective organisations which could leverage credit from formal sources, and develop local resources and skills to increase productivity and income. It is thus, due to the combined efforts of the government and these private voluntary agencies that the SHGs have come to occupy a place of prominence in the socio-economic fabric of rural India.4.4 International Experience4.4.1 A major micro-finance experiment was initiated in Bangladesh by Mohd. Yunus in 1974-76 when he began lending to groups of poor people in areas neighbouring Chittagong. That was the period when the country was in the grip of a major famine. He realised that the only way out of poverty lay in going beyond the existing norm of the market and providing the very poor with non-guaranteed solidarity-based loans which could enable them to develop gainful economic activities. In 1976, after repeated resistance and refusals86Thi d ASectorAOrga is tio sAatA heALo a ALevelA–A elf-Heby ach evedA byABa glades iAban s,AYunusA uc eededAin fou dingAthe ‘Gram en ABa k’Awhich directl A t e A ta usAof AanAin epen en Abank in 1983. By A1 94, A his Apoor peop e’s bank Awas sedAintoA se vingAtw Amillio Aphe Aople.A wne s Aof theA ank Aw re Awo enA(94%)A rgan nApa ingA solidar ty-bas d A roup AofAfive. Co traryAtoAexpe tatio s,Athe eAgr ups Awe eA romptAtsAgrou A b ck At eir Aloan Ains al ents. AThAsuccessAe cou agedAth AGra ee ABank A o Ae pandActionAo A lending A rogramm Afu ther an AalsoAtoA iver ifyAi toAother Aa tivi ies AlikeAcon tr sc oolsA ndAruralAd welling .17lp AGroupsionApo rA 4.4.2AC rre tly, Ath AGra ee AB n Ais Ain aAcreditArel tion hipAwi h An arlyA7. Amil dvancingA peop eAspre d Aacro sA73,000 vi lages Ain ABa gla es ,A97 Aof whomAa eAwomen.A heAb nk A collat ral-f ee A oans Af rAincome Ag neratio Ascheme Are ains theAcore ac ivi y AofA Be ides, But AitAa so Agives housing Ast dentAand Amicro-e terpr se loa s Ato theApoor A amilies. membe s.A i Aoffe s A AhostAofAa tractive savings Apens on A undsAandA nsurance pr duc s Ato Aits heAlegalA Si ce A1984 Ahous ngAl ansA aveA ee AusedAtoA onstruc A640,0 0Ahou es A hereA ncrease A wners ip Ar sts with At e women AaAm jorAste Atowa dsAtheir Aem owe mentAandAb nefisAto AthAfami y.Ai nAwithA 4.4.3ACumu ati ely,A he AtotalA is ursa Aof loan ha Abe nAto th At n Aof USA$A6. Abil Ais Asel - aA epay en Arat Ais 99%;Ath AGra eenABankA outin lyAmak sAprofit.AFin nc al y, Ait esAtod re yA ian Aan AhasA otAta enAdo orAmo eyAsi ceA 995.AIts dep sit AandAownA esour As rve ,A mou t At A143 pe Ace t Aof AallAou standi gAloans.A cc rdi g AtoAt e ABank’s interna tiatedA A 58 pe Ace t AofAtheA orro ers Ahav Acr ssed Ath Apove ty line AThe Bank has AalsoA n Afinan edA stu ent AloanAp og amme. AAt prese t,A here Aa e A13,000 stu ents who A aveAbeeu der Athi Asche e; Aab ut A7 000 more A reAbe ng adde AtoAth sAnum erAeveryAy ar 4.4. ASo fa ,A8 %Aof theApoor famil es have AinAs meAform, receivedAmic o-cr ditfromAthGra een Ban Aand theABa kAcl ims that Athe co erageA sA ik ly At Ab A100%by A20 0.tAin Athhe AA 4.4.5A ffor sAofAth AGra eenA ankAhaveA e erat dAaAhugeAm f ltipl er efe men .AItA cou tryAwi hA egardAt Awomen’sAorgan sationalA bil ties A ndAthei AoverallAemp we ilityAto ha Aena le Athem toAbuil Aassets, increa eAfamil Ain ome,Aa dAred ceAtheirAvuln ra economi Astress, vio enceAandAexpl itati n.tAin At eA 4.4.6 AThAs cces Aof ASHGs A rog amme has al oAled AtoAcon iderableAim ro emeno ledgeA h althAand Anu rition l A tatus ofA omenAand A hi dren. In orderA oAupdat Awomen’sA anAdri kA nAis uesAli eAdowr , Afamily A lanning AprimaryAhe lthcare, Anu ritiona Astat s,Acl or sho sA water, As nit tion AandAc ildren’s Ae uca ion,Ath AGra eenABank A rganise AregularA ringAtheA in Athe inter or are sAofAthe coun ry.AThese A orks ops A ave Abee Ah lpfulAin alt tti udesAandA eh viour of Arur8717grameen-Soc a A apital –Asuiny4.4.7 Apart from Bangladesh, Bolivia, Indonesia and Mexico are some of the other developing countries which have a mature MFI sector. In all these countries, micro-finance is used as a synonym for providing financial services to the poor. The goal is to help the poor gain more control over their lives by giving them the same financial services which middle and upper class individuals enjoy. In Indonesia, which has a long history of informal village banking through the rural units (Unit Desas) of BRI, the official definition of microcredit covers all loans of less then Rp.50 million (approx US $ 5500), regardless of the conditions attached to these loans. This definition also covers a range of loans that are more commonly considered small and medium enterprise (SME) lending. In comparison, first-time loans from a non-bank microfinance institution (MFI) are usually less than Rp.800,000 (US $ 90). The Bank Rakyat at Indonesia (BRI) has been providing rural credit since the 1970s. But the sanction of credit is dependent on submission of an appropriate collateral and this, in effect, precludes the poorest of the poor from the domain of microfinance.4.4.8 Bolivia has been one of the leaders of the micro-finance movement in South America. In 2005, their MFIs had 544,544 clients and their portfolio stood at US $ 620,878,160. The informal sector in this country is a source of major employment for the impoverished population (63%) and for them, the microcredit institutions are of great value. The State has put in place an adequately empowered financial regulatory authority called ‘Superintendencia de Bancosy Entidades Financieras’ (SIBEF) to develop and govern this sector. It regulates institutions like private financial funds, cooperatives, mutual funds and banks which operate in this field.4.4.9 Micro-finance in Mexico has adopted an altogether different model which works competently in both rural as well as urban areas, which does not insist on collaterals but operates on high interest rates. Compartamos, the most prominent MFI of the country, was born out of the same social concern that inspired Mr. Yunus in Bangladesh. It uses a group-lending model similar to Grameen’s. But it believes in the principle that by pursuing profits, it will be able to provide financial services to many poor people far more quickly than it would if it had continued to act as a charity. As a result, the micro-finance facility is provided to the borrowers at a high rate of interest (at least 79% per annum).4.5 Impact on Rural Life4.5.1 A random impact evaluation study covering 560 members of 223 SHGs linked to Banks located in 11 States was carried out by NABARD. A three year period was selected for this study. The results of this survey released in 200018 indicated that (a) 58% of the households covered under SHGs reported an increase in assets; (b) the average value of assets per household increased by 72% from Rs.6,843 to Rs.11,793; (c) majority of the"Puhazendi 8 uhazendi &ASa88Thi dAS ctorlA Levelrgani a– ionsSelf-HelpAat At eGroupsALocamembers s Aa Athr efo d increase in membe s Adevel ped savings A abi Aagai st A 3 Aearlier; (d) Ather Aw sh re A f Aconsump ion A oanA savings Aan Aa A oubling Aof bor owi gs Ape Ah usehold; A(e Athe eAloan Atak nAinApo t-SHGA nAth Abo ro ing A ent dow Af om A 0% Ato 25%; A f) 70% AofAtloy ent expande Aby 18%;AAeriodAwent towards Ai com Ageneratio Aventure ;A g)Ae Aw s AR .2 ,177 Awh chA ose h) A he Aaverag Anet Ai comeApe A ous hol Abefore Aj ining aASHedAwere belowAt eirA ta eA by A33 Ato A2 ,8 9; A nd A(i)Aab utA41.5 AofA he Aho sehol Astud ow Ato A2 %.AParti ipationA s ecific Ap verty Alin AinAth Ap e-SH Aenr lm nt As age;Ait AcameA Aself-co fid nceAamon AtheA inAg oupAactivit As gnificantlyA on ributed AtoAimp oveme tAo embers. In A eneral,Agrou Amemb rs Aand part cular yAw menAbecam Am re Avoc lAa dAasse tiveAonAsoci l A ndAfamily is uesrtAtoAhe Astrhe Apar icipantsA n 4.5 2 Act reAof At e ASHGA s Ameant to pro ideAmutualAs pp saving mone ,Ap eparing AaA ommonA lanAforAad iti nalAinc meAgneration andA penin Aban Aacc un sAthat Awou dAhelp themAin Adeve opin A reditAr lationship Aw th aAlendingA nstituti n.AI Au timatel As pports AthemAinAse ting upAmicro-ent rprises A .g.Apers nali edAbusines Aventure Ali eAta loring Agroce y, andAtool rep irAshop .A tApro otesAtheAconce tAofAgro pAac oun abili yAe suri gAtha At eAloansA r ApaidAba k. ItA rovidesAa platf rmA oAtheAc mmu ityAwhe eAt eAmembe sAcanAdis uss Aan Ar solveA mportantAissu sAofA utua Ac nce n.lAco mu itie Athe selv s,A 4. .3AW ile A ome AofAth AS Gs A aveAb en Ainitiate Aby AtheAloc A(ei herAg vernment orAanA many ofA hem A av A omeAth ough the Ahel AofAaAment r A odAthem. AS ch supportA ftenAN O) AwhichApr vid dAinitia Ai forma ionA ndAguid nce AtAtoAasses As all busin ssA c ns sts of traini g Ape pleAonAho Ato ma age ABa k Aacc unts,Aho eAen , A tAcreate Aa Alocal pote tia Aof th AlocalA arket Aand Aho At Aup rade th irAskil s AInAt team A f Ares urce Apers ns.A4.5 4 Group Aform tion Abe ome AaAcon enient Av hi leAfo Acredi AdeliveryA n Arur lAa eas.A Ar ceptiveAtoAt e AdemandsA ommercial ABa ks Aan Aot erAinstit tio sAwhichAa eA the wiseAno heirApo enti lAcustomers.A of margi alizedAindi idua s,Asta tA onsid ring Asuch groupsAasA he mi ro-financ Apro rammeA Ov rallAs chAJoi t-L abilityA ro psA xpand AtheAou reachAofA ess Asharecr ppers,As allA in anA ffe tiv Away,Are chingAou Ato A heAexclud d Asegments Ae.g Alandan Amargin lAfarm e r s Aw men, ASCs ST Aetc.bers AThereAi Ae iden eA nA 4.5. AThe Ama orityAof Se f-Hel AGroups A ompr se ofAwomen me ps has AaAmul iplierA ffectA this Aco ntry as Awell Aa Ae sewhere At atAfor ati n ofASelf-He p AGro.Avol ementA i Ai proving wo en’s st tu Ain society as AwAactiveAiheirllAasA nAtheAfamilyAlea s Ato Aimproveme tAinA i Amicro-financeAan Arelated Ae tre rene arial ac ivities Anot on thei Aso io-e onomicAc nditi n Abut Aalso Ae hance At e rAsel89Socia A a italA– DeStinyearne s.environment become more articulate in voicing their concerns and a change occurs in their self-perception. They start to see themselves not only as beneficiaries but also as clients / informed citizens seeking better services. On the home front, their new found awareness and the confidence generated out of their entrepreneurial skills make them more confident vis-à-vis their menfolk.4.5.6 The SHG programme has contributed to a reduced dependency on informal money lenders and other non-institutional sources.Box 4.4: Box 4.4 ASHGAandAE pw rment Ao AWome ASH sAinA In A 00 ,A4 % AofA he Ato al Aw medesh.ATheA th Acou try Aw re basedA nAAndhra Pr ese SHGsA evolvi g A orp sAin the A ea A2005 ofAt ores.AThA wasA st ma edAtoA eAaround Rs.2,00 Ac Asee in A m mbe s Aof the SHGsAareAinn vativel rA tat sA waysA oAcha geAth ir live Aa Awell asAthe orts ATheA inAt eAfamil Athr ughAsuchAc f llectiv Ae oAbecomeA SHGs Ae per enceAh sAta gh AthemA pact AofA ind pen en .AO e Aof the Amos Avisibl Ai nA nsistA this Aem ow rmen Ais tha AnowA heAwom instAth A o Asend ngAtheir ch ldren A oA chool Aa Aagearlier pr ctice Aof trai in Athe AasAwage4.5.7 It has enabled the participating households to spend more on education than non-client households. Families participating in the programme have reported better school attendance and lower drop-out rates.4.5.8 The financial inclusion attained through SHGs has led to reduced child mortality, improved maternal health and the ability of the poor to combat disease through better nutrition, housing and health – especially among women and children.4.5.9 But the SHG movement has certain weaknesses as well:?contrary to the vision for SHG development, members of a group do not come necessarily from the poorest families;?the SHG model has led to definite social empowerment of the poor but whether the economic gains are adequate to bring a qualitative change in their life is a matter of debate;?many of the activities undertaken by the SHGs are still based on primitive skills related mostly to primary sector enterprises. With poor value addition per worker and prevalence of subsistence level wages, such activities often do not lead to any substantial increase in the income of group members.?there is lack of qualified resource personnel in the rural areas who could help in skill upgradation / acquisition of new skills by group members.90ThirdASectorA rg nis tions atAth A ocalf-HlpALeve A–GroupsASel4 6A ssu sAofASHGAMove entrecordedA 4.6 1AThoug , durin Aa As or Aspan A fAfift en A ear Athe ASHG mov ment Ahas iv AloanA r markable progre sA(29 24 Al kh ASHGsAin A pe ation Aon A3 .03. 0 7AwithAaAc mula AtheABPLA of A1 0,407,42 Am llio s), Am ch Astil Ar ma ns Ato beAd ne AE en Aif Awe cons der onl nu cule.A p pu ati nAofAth Acount y (2 .2% A- A26 cro es),A heAaboveAac ievem nt se msAtoAbeAm adequat A The movem ntAsh ws AsteepAte ritorial Ava iati ns.AM ny are sAofAth Acou try Alack romA hi A bankingAs ructu e.A rban Aand As mi-urb nA r as,At AaAlarg Aexte t,Astand excl dedA quacyA fA mode A fAcreditA elivery AFurth r A rowt AofAthis movem nt Afac sAth eatAfromAi ad ated.ATheAkil sAinA heArur lAa eas.AA dAfially th Apa e AofAthe movem nt ne dsAtoAbeAacc lemov me tA C mmi sion AhasAcompre ensivelyAc nsi ered Athe str ngthAand Aw ak esse AofAthis and itAf els thatAtheA ollow ng Aeig t A ssue AofAth sAsecto Adeserve priorityAat ntion:A?iMa nta ningitheapart cipatoryr c arac er radesh ~A~Need~ oe pan ~theSHG mo ement oSt te ~such~ sBih r,UttarAthe ASHG Madhya Pradesh AOrissa,A aja th nAa dAinAtheAN rth-Ea tA( her mov mentAandAmic o-finance Aentrepr nu rship i Awea )A eNeedd omext ndosm llggrouptorga isatio so SHGs)utoap ri- rbann ndeurb noar as SMo eeoflSHGede elo imentcand fnancialiinterm diation?p elf-He pnG oupsoand Regio alnRu r lsBank ?f ssuesiofbsustan bilityi?l inancialca si tance tod HPIsr ndpothe isupportiinst tuti ns MRole-ofnMicr -FinanceiInsituti nsi4.6.2AMa nta ningAthe APart cipatoryA ha acterAof ASH sty-basedA 4. .2.1 AThe st e gth Aof Aa A elf-H lp AG oup Alies A ri ari y Ain AitsAsolid ar externa A part cipatory Ac ara te , Aa dAin Ait Aa ilityAt Asurviv Awi hout AanyAs gnificant hindAtheA s pportAor Ainv lv men . AIn A he Aear y A has sAof Aits Ae ist nce, At e Ainte tAb ver mentA co perative mov mentAto Af cused Aon Astak holders’ Aparti ip tion. ATheAg Aprovid A an AbankingAins itut ons Awer At ou ht Ao AasA om Asort Aof catal st Awh chAwouls ppo t AtoAth Ase tor.AButA radua lyAthes AprimaryAins itutio s Abecame Asu or9192c a ACapit lA–AAASCooperative Banks, Apex Unions, and Marketing Federations. Election of the office bearers of these large organisations became big ticket events. Very soon, the cooperative sector became a springboard for political aspirants. Though the SHG movement is relatively new, government interventions and subsidies have already started showing negative results. The patronage and subsidies provided to the SHGs by government and the Panchayats often lead to their politicization. Therefore, due care must be taken to ensure that government initiatives do not erode the fundamental principles of self-help and empowerment of the poor.4.6.2.2 The Commission is of the view that there is need to learn from the experience of the cooperative sector. The mutually participatory, solidarity-based character of SHG movement needs to be retained and protected. SHG movement should be recognized as a people’s movement and the role of government should be only to facilitate and create a supportive environment, rather than ‘manage’ the movement directly.4.6.3 Expanding SHG Movement to Credit Deficient Areas of the Country4.6.3.1 As already discussed in para 4.2.5, overall 73% of the farmer household (in rural areas) have no access to any formal source of credit. In March, 2001, 71% of the total linked SHGs of the country were in just four States of the southern region viz. Andhra Pradesh, Karnataka, Kerala and Tamil Nadu. The figure went down to 58% in 2005, 54% in 2006 and to 44% in 2007. But even the current figure is a cause of concern when one talks of financial inclusion for the whole country. The States which are particularly deficient in this respect are Bihar, Uttar Pradesh, Madhya Pradesh, Orissa, Rajasthan and those in the North-East. NABARD itself has identified 13 States which have large rural population but are performing unsatisfactorily in utilization of Micro Finance Development and Equity Fund (MFDEF). Currently, the Bank has 28 regional offices which are located at the State headquarters, but its presence at the district level is skewed with only 391 branches in the whole country. The density of such offices in Madhya Pradesh, Rajasthan, Bihar, Jharkhand, West Bengal and Assam is inadequate.Table 4.11: Expanding SHG Movement to Credit Deficient Areas of the CountryRegion/StateNo. of SHGs financedMarch March March March March March March2001200220032004200520062007NE Region4771490406912278342386251791734KBK Region4192986918934313724597664550N.A.Orissa8888205534227277588123256180896234451Thir AS cto AOrga isativel – Aat Self-Hlp Athe ALncalGroupsALeinantsAo Aemp oymen ,A 4 6.3.2AAv ilabilit Ao Afin nc al A ervicesA sAoneAofAthe cr ticalAdeter AforA he Am rginal ze A e onomic wellAbeing A nd socia Aempo ermentAinA ura Aar asAespeciall end Aon twoAf cto sA–A poor. TheirAacc ssA oAcredi Adeliver AandAre ated Ase vi esA roadlyA e heApresence Ao Aso ialA (a) At e A eac AandAexp nsionAofAtheAfin nci lAi fra tructure Aa d A(b)A ve the benefitsAofferedA orga isations A nd Acu tur l A ttitudes A hi hAareAi Are dinessA o Arece yAthe Ai frastruc ure.Aexpansion Aof A co o icA 4.6 3.3ABuildingAfian ia Ainfrastr ctur AisAanA mportant A te Atowardsported byA oopera iveA oppor uniti s Ain aA ackwa dA re . ABut Ait Aneeds to be AfirmlyAsu ia has Aa Ari h Ahisto yA action Aa d A oci l Amo il zatio AonAthe Apart A f Aloc l As a ehol ers.AIn hangeAlabo r, Avill geA o Aeconomic A ystem Aa dAtradition Abased A nAcooper tive Aac ion,Aex om on .AThACom issi nA rrigationAnet orkAandApa ti ipatory manageme t A fAvillageA Aa AaA entralAfeat is reA AofAt eA iewAth tAexpansion ofAsoc al cooperat on s ouldAbe regardekeASelf-HelpA/A therAA of At eAd velopm nt Aproce s Aand Ahence, A eopl ’s Aorgani a ionsA oint Li bi ityAGroupsAee dAto A e A ncourage .AS), A urrently, isAtheA 4.6 3.4 ATheANat onalARura AEmplo ment AGua antee ASche eA NRE ral se tor.AThe sche eA mos Aimportan Al vel hood Aprogr mm Aof theAg vernmen Ai AtheAr lpA roups AR ght from canAbeAh ndledAm re Aeffecti el Athroug Aformatio Aof Avil ageAS lf-H toA ts impleme ta ionA theAsta eA f AjobAcar Am k ng, Ato se ect on AofAa A ch meA n Athe Avillage,a dA oApayment ofAwage A o Ala oure s A h oughA Apo tAofficeA r AestAB85A9298 A1625118156246A2801A4138 A23392647A 1531A2802 A3717UttrAPra0A119648A1643A19887Ut090 8A1404A1600 A2157Raja846A6000 A98171A3783Himahal A3228A1 798A2290 A2799Mahya AP7095A45105A591A7092Chh9796A18569A9504 A1703Mharas35A7114A13170 A25856G597 A2471A3416043572Al AIndi61 4 6A2238565 A2 2497 NEA=ANorth-East,AKBK= AKala andi-Bola gi -Ko aputA*inc udedngal A739A1143A3247A516A45923957 A161A1harkhnd A0*4198A765A1esh A2152 A3314A5366A7 9 21arakhndA0*3323 A853A1thanA616 A1564 A2742A33radesA25455069A875A1adesh5699 A981 A1271A2ttisarh A0A37636763tra A1468 A1619 A2865A3 85jarat4929 A496 A1875A1A263825461478 A17360 A179091A13 BihanAtheAn ividedAStateA Availab iNABA D93Soci lACapit l – Shared Destinythe identified group can take up execution of the NREGS projects with competence and responsibility. If needed, the local Self-Help Groups can even take up impact assessment / social audit of such programmes. Such local Self-Help Groups can also be encouraged to take up programmes of horticulture and development of assigned lands.4.6.3.5 The Commission is of the view that the pace of SHG movement needs to be accelerated in the credit deficient areas of the country such as - Madhya Pradesh, Rajasthan, Bihar, Jharkhand, Orissa, West Bengal and States of the North-East. This is possible only by rapid expansion of financial infrastructure (including that of NABARD) and by adopting extensive IEC and capacity building measures in these States.4.6.4 Extension of Self-Help Groups to Urban / Peri-Urban Areas4.6.4.1 According to the 2001 census, 314.54 million persons changed their place of residence (vis-à-vis the situation in the 1991 census) within the country and out of this 29.90 million or 9% changed their place of residence in search of better prospects elsewhere. This migration can be divided into two broad categories: (i) movement from villages to the neighbouring middle grade towns; and (ii) movement to metropolitan cities. The first category, often called transient migration is in the nature of temporary movement where the worker stays in the new location intermittently for shorter periods and maintains close links with his home village through his colleagues, relatives or through his own frequent visits. But when he moves to a metropolitan city, his stay in the new location is for longer durations. This class of workers mostly stays in tenements and slums. Since issue of any form of identity card is invariably linked with the possession of an immovable property, such migrant workers do not have any formal document to prove their domicile in the city. But the overall economic and social well being of the city is closely linked with the condition of this section of the city dwellers.4.6.4.2 Taking the case of Delhi as an illustration, in 2006 the city saw an increase of 2.33 lakhs in its population on account of migration.4.6.4.3 The estimates of migration in Delhi are based on birth and death rates and total increase in population. It is revealed from the estimates that percentage of migration was 47.61% in 2005 whereas percentage of natural growth in 2005 was 52.39%. In absolute terms, natural increase in population during 2006 was 2.24 lakhs whereas migration has been estimated at 2.33 lakhs. The trend of migration from 1991 to 2006 is given in the following Table.94hirdASector AOr an sat onsAa AtheA o alALevHelpA GroupsASelf-Table 4.12: ableA4.12 AE timatesAo AM grati nAinA el iAbas dAo ABirt AandA ath Rates AandATot lA ncreaseAinPoplationYear AI cr ase AMig (Col.A3PopulatinAInceaseAotalATo irthADea ionAo er AAalANaturarAAa Aon A1 ationA ulyAt AinAopu-AhAincreas6)A(lakhsks(col. 4-5)prevousAAyel2A3 AA5 A6 A199195.5A3.8A2.7A0.61A2.1 A1.7199299.3A3.8A2.7A0.62A2.2 A1.75993 A03.3A4.0A2.7A0. 64A2.6 A1.95994 A07.5A4.1A2.6A0 . 68A1.4 A2.18995 A11.7A4.2A2.7A0 . 69A2.6 A2.18996 A16.1A4.3A2.8A0.76A2.7 A2.29997 A20.5A4.4A2.8A0.71A2.8 A2.29998 A25.1A4.5A2.8A0 .80A2.4 A2.52999 A29.8A4.6A2.8A0 . 79A2.9 A2.59000 A34.6A4.7A3.1A0. 80A2.7 A2.41001 A39.5A4.9A2.9A0.81A2.5 A2.75002 A43.8A4.3A3.0A0 . 86A2.5 A2.18003 A48.5A4.6A3.0A0.88A2.3 A2.47004 A52.7A4.3A3.0A0 . 85A2.1 A2.15005 A57.1A4.3A3.2A0.94A2.0 A2.09006 A61.7A4.5A3.2A0.99A2.24A .33So rce:ADelhiAG vernme t’sAAn ualARepor tA200 -0ensusA200 A 4.6.4.4AThAmig ationAda aA ele sedAbyAth ARegist ar Gener lAo AIn ia Afor theAlakhs A romA ind cat sAtha AtheAtotal po ulati n A f ADelh AisA1 8.5 Alakhs Aa d A onsis sAof A 2.04 pe centageA w thi ADelh Aand A 3. 8Alakhs as Amigrant popu ation Af omAvari us States.ATheoAmig ation Af omAvar ou AS ates AisAa Ai dicat d Ain A95Soci l C pitalA AAASharable A4.13: A om ositionA f A igran sAinADelho r tA200 -0 Ape pleA oA 4.6 4.5 AInA he abs nceAof AanyA ocumen ar Aproof, it Aa pear Athat th s Aclas Ao rovision not ,A A av Aaccess At Aorganis d Afinancia As rvi es. AsAper At e Aexistin AstatutoryA banAarea .A NABAR ’s ma dateAis to AprovideAm cro-finance faci it esAon yAt AruralAand semi-u ran hes AofAthe mains ream BanksAt o,Athoug ,Aeq ippedAwi hAm npower AandA ech olo y,AoAt em. AThe a eA ot Akeen to As rvice At isAs ctor. EvenAmo eyA endersAar Ar luct nt to Ale d A tAhawkers,A ne Ares lt Ai Athat At is seg ent Ao AtheAurban popu ation Ae. . Apaveme t Asell rs,Astre adesh, A heA c nstruct onAw rkers Ae c.Aremains financiall Ae cluded. AIn An ighbouringA ang rowe s. AsA G amee ABa kAdo sAn tAmake Aany A istinct onAbe wee Aurba AandArural bo overty AandA ong Aas the group Aa e Aready to A atisf Athe Abasic cond tions A it Aregard to A gra me. AI A pa ti ipatio Aof A ome , Athey Aare en ouraged Ato A ar ici ate Ain its Acredit pr commercialA the ALat n AAme ican model Atoo, Amic o-financial Ai sti uti ns are Aru Aon Apurely for Aloa s.A cons de a ions. If Aa Agroies Acertain Ap Asatison itions, it Abecom s Ae titledAInclu io A .6.4. AThi Aiss e Aha Aalso Abeen co sid red Aby Ath AC mmittee Ao AFinancia t A cena ioA he de Aby ADr. AC. A an arajan. AThe Co mi sio Ais A f Ath Av ew A hat Ain A he Acurre a AholisticA of Aever increasing Au baniza io A(27. % Ain A2 01 Al kel At Abe A50 Aby 2 40), Aforgeneratio A ev lopme tAofAu ban areas AallAr und Aeffrt Asho ld beAmade A o Aincr aseAincomeonsAofAthea ili iesAo AtheA rb nApoor.AThe Commis ionA gre sAwithAtheAreco me dat ghbour oodA Rangaraja ACom ittee th tAth re isAneedA oAor anize th s Aclas AofA eopleAintoANe nce NAB RDA Gr up A(N Gs)A n AtheAs me pat ern A sAhasAb enA dop edAfo AtheA uralA oor.AS lAroleAfo A has Ath Anecessar Ae pert se Ain At is secto , A t Awo ld be bestA f itAplays AaA romo ion .AThisAw ll Self- elp Groups AandAm cro-finance ac iviti s in Aurban A/ peri- rban are sAto requireAa Aa end entA fA heA ct,AasA heAcurr nt mandat AofANA AR Aa lowsAitA oAfu ct onAon yAi AruralAandrban areas.semi-uiA 2006- 7)1.AUtarAP rade hA43.562.AHary a aA10.6%3.ABih rA13.87%4AR a jas t anA5.1%5.APun abA4 72%6.AestABen alA3.1 %7.AMadyaAP ra d shA1. 5%8.AOherAStatesA17 39%So rce:ADelhiAG vernme t’sAAn ualARep96Third Sector Organisations at the Local Level – Self-Help Groups4.6.5 Mode of SHG Development and Financial Intermediation4.6.5.1 Establishing stable linkage between a SHG and a local financial institution is one of the key elements of the SHG movement. Currently, four distinct models of financial intermediation are in operation in various parts of the country namely;1.SHG-Bank linkage promoted by a mentor institute2.SHG-Bank direct linkage3.SHG-Mentor Institution linkage; and4.SHG-Federation model4.6.5.2 Linking SHGs to Banks for credit requirement is the most effective model of financial intermediation which allows an SHG, promoted either by a third sector organisation (NGO) or by a government agency, to obtain loan funds or a cash credit limit, without giving any collateral, from a local rural/commercial Bank – often in multiples of its own savings. The fund that the SHG secures from the Bank is transferred to its members for a commonly identified and accepted gainful purpose on explicitly settled terms. The bank linkage model is a savings-led mechanism, which insists on a minimum savings ofBox 4.5: Role of SHPIUsually, a SHPI provides initial training and guidance to the participating members before launching them into a formal thrift and credit management group (SHG). In some cases, the members of the group may be economically too weak to contribute even the initial seed money to the group funds to start an activity. The promoter institution in such cases may have to provide financial support to the groups. MYRADA was effective in setting up several Self-Help Groups in rural areas of Karnataka in 1989 by providing (a) sustained guidance and (b) by granting seed money to them from the corpus of 10 lakhs which was given to it by NABARD under a demonstration project.97Socia A a italA– DeStiny98six to ancheA fA sixA oAtwel e Amont sAb foreA he Agrou Abecomes eli ible Afor externa Ac edit.AThAtnc e sesA cre it g ven toAaAS GAstartsA ni i lly atAaA owAratio A is- -visAit Asa ingsAandA raduallyA oAaAmu h Ahig er Al ve A(mayAb Aseve al A imesAt e A mou t AofA heA HG’s Aow Asaving As b ectAtoAa A ei ing).A nAIn ia,A hi Aform A f AcreditAint racti n, A hereA heAB nksAdeal diretlyAwithAi divi ual SHGs has be nAo e Aof theAmostAs ccessfuAmode s.AsAAmount*992-199 A2,995578,482 A18999-200A11,775 A1329,242A55itutio s.A26,825 A41A8000-2004,9 3 9A143001-202 A46478 A106A117352A267002-203 A71360 A209A165429A454003-200A107091 A390A231000A750004-200A161456A680A2 612 4A 018As Aon A4 08.200 ; A mountAinACrore .4 6.5. ASo far, Athe SHG-Ban Alink geA odel h s AbeenAa A referred A ech nismAforsecur ngAtherAlo A undsA or Alo alASHGs. How ver,A heAtot lAou flow A romAthi Ach nnel hasAbe nAr rth r,AaA b ca se AitAisAi herent yAli ked withAtheA ag itu e Aof A heA HG’s Aown savings. Fropria eA SHGAc nsisti g A ostl Aof poorAandAmar inalize Amembe sAo ten Am yA ot Abe AanAap er ices A gency A o Aha dl Ama y Aof Athe Aco munit ’s A eeds Afor fina cial Aand Anon financial Agathered In Aso e A ases, in order A o Aobtain economic Asusta n bility A Ac uste Aof A HGs AhaveAtoAha eA to ethe A oAformAa Afe era ion.AThsA cales upAtheir Aa tiv ties andAals Aena le Athe ccess Ato A ncreased A esou cesAfro AfundingAinsteAtoTa leA4.14SHGs AQ antumA fACr ditAMadeA va lablAPra Y arA esh IndaA(cum )AAndhrASHGAAmont*ASHGThirdAS ctorAOrganisa io sAa AtheA ocalA e elA–ASelf HelpAG4.6.5.4 A somewhat modified form of Model 1 also exists in which Banks provide financial support directly to SHGs which have grown without help of any promoter institution. Such SHGs are usually formed on the basis of some common activities. The cases of such financial intermediation are of course not very common.4.6.5.5 In the third model, the SHPI takes the role of a financial intermediary between a Banks and the SHG. Usually, a SHPI (Self-Help Promoter Institution) takes up this responsibility only in respect of the groups promoted / nurtured by it and not for others. The SHPI accepts the contractual responsibility for repayment of the loan to the Bank. In this respect, it is an example of indirect linkage between the SHG and the Bank.4.6.5.6 There is yet another model in which a federation provides financial intermediation to the SHG.19 An examination of some of the SHG federation models reveals a variety of innovations. These include linkage to the parent NGO-MFI linkage with external MFIs, community ownership of a Non-Banking Finance Company (NBFC) and SHGs being reconstituted into mutually aided credit and thrift cooperatives. Some of the federations are99roups19Refer nce: A ndiaAAPRAC -GTZ Areg onalAwor shop A 994 AtheAli kageAprog a me A– Y.C.ANandao ialACa italA–now in a position to access funds even from large MFIs. However, many of these innovations are stand alone initiatives, not capable of easy replication or, as in the case of the mutually-aided cooperatives, are specific to the State in which they have been introduced.4.6.5.7 Another model that has emerged is a combination of the SHG-Bank linkage concept and credit programmes where loan assistance is given to the individual members of the group and not to the group per se. It is also not directly connected to the savings of the group. The loans in these cases are usually given only for income generation and investment activities. The SHG and the SHPI help the Bank in identification, preparation of loan application, monitoring, supervision and recovery of loans.4.6.5.8 Since the borrowing SHGs consist mainly of low income members who cannot afford to miss even a day’s wages, a hassle-free transaction with a Bank which is ready to come to their doorsteps with appropriate credit products is of great value to them. The Commission is of the view that the SHG – Bank Linkage Model with a mentor SHPI in tow (Model I above) would be the most appropriate one for delivery of financial services to the SHGs.4.6.5.9 Innovation: Innovation is critical for financial inclusion. This would mean developing newer financial products in terms of loans, savings, insurance services etc. which are tailored to the needs of the poor. Currently, most public sector Banks and micro-finance institutions have a narrow product offering, which limits the choice of the SHGs and also constrains them in terms of utilizing the loans productively.4.6.6 Self-Help Groups and Regional Rural Banks (RRBs)4.6.6.1 As on 1st April, 2007, out of a total of 622 districts in the country, 535 have a network of Regional Rural Banks; the rest 87 districts have no RRB presence. Currently, 14494 branches, in all, are operating in rural areas of these 535 districts. These branches have been created by the Regional Rural Banks Act, 1976 primarily for providing institutional credit to the marginalized sector of the rural economy (small, marginal farmers, landless labour and rural artisans). The Commission is of the view that extension of the RRB network to the remaining 87 districts would considerably speed up the process of inclusive banking and help in extending micro-finance to local SHGs.100ThirdASectorA rg nis tions atAth A ocalf-HlpALeve A–GroupsASel4. .7AIssues Aof ASu tainabil ty, ACapa ity Bui di gAandAuseAofATech ol gyAa eAmattersA 4.6.7.1ATheA nstitutional As sta nab lityAan At e AqualityA f A per tion Aof theASHGpAGr up AareA of conside ab eA ebate.AIt is Ag nera lyAh l AthatAon y A Ami ority AofA heASel -He preneur hi .A ble Ato Arai eAth m elves fr mAaAlevelAof mi ro-fian eAtoAthatAofAmicro-entrrAtheA ank’sA Ne ther do AsuchA ankA in agesAlea At Asanct onAofAlarg rAind vidua Alo nsAund artAfinan ia A n rmalAlendin Ap ogrammes AThe Aultim te obje t ve AofA uc Aa tie-up isAtoAim calAfinancial st engt At Athe SHGs soA hatAt eyAc n enter A nto AaAstable rela ion hipAw thAtheAl ence, A yAan i A stituti nsA Awithout anyAexte nalA uppor .AEv nAaft rA anyAyearsA fA xis nt agencies.A la ge,ASHG Aare Aheav ly depen ent AonAt eir A ro oter ANGOsA rAgovernmhe A GsAhaveAbe nAithd a alAofANGOs /Agovern ent A genc esAev nAfro Aare s Awh reASAofAmost ASH A f derat d, A as often ledAto Ath ir collapse. AheAl adershipAa d A anag men federat on Ac nt nue toAbe in theAhn d sAof A GOs.AcomponentAofA 4.6 7.2 ACapa it Abuil ing Aof s all Agro ps /A embersAis an Aimport nt erin Ai sue A o ganisational A ffe tiveness AI AconsistsAofA articipa oryAtra ning Amet odsAco echnique AofA suchAas AS G Af rmation,AitsAs reng hening, boo Akee ing AandAso eAelementa yA p rsonnelAi A financia Amanagem nt. ACapa it AbuildingA fAgovernment A unc iona iesAandAB nk ,AgovernmentA a Anece sa yA lementAof anAequitab eAtriangular relations ipA nvolv ngAtheASHG theAtrai in A unc ion riesA ndAth Alo al ABa ks a d AthereA sAaApositiv Acorrel tio Abetween tudeA owardsA receivedA yAgovernment Afunct onaries/B nkA erson elAandA heir Aove allAatt oopera iveA/A localAo gahe Aisations. A om iss on Ai AofA he A iewAtha Af r Asu cess AofAsuc A eAp llars AofA s cialAcapi al Ave tu es, A he e AisAne dAto Aprov deAexten iv Atr ini gAto A ll AtheA hr heAself-hlpAmove ent.Amicro-finance 4.6.7. AU ilization Ao ATechnolog : ACu rently Amany A ublic sec or Abanks Aandof Aserv cingA ins itutions A re unwilli g Ato Apro ideAfinan ia Ase vice At Ath Apoo Aa Athe Acostof AA heAv ewA ema ns high. AUseAo Aappropria eAt chnolo yAc he An A educeAit. A om ssi nAisatestAmobi eA thatAhig Ap netrati nAofAtelecom co nectiv ty AinAIn ia,A oge herAwi h AtheA tec no ogyA ou d AbeAus d AtoAenh nceAfinanc al inc usionAinthe Ac untry.A4. .8 AFinanci lA ssist nce toASH IsAandA therASupportAInstit tionsa eAloca edA 4.6. .1 A orty fiv Ape Acent ofAthe to al Anumb r Aof wo en’ ASHGsAo Ath Acountr in AAn hra Pradesh. ThisAenvi bl Apo ition of theAState isA ri ari y Adue AtoAt e Aini101S cialAC pitalA–by promoter NGOs often known as Self-Help Promoting Institutions (SHPIs) / mentor organisations. The Commission is of the view that if the SHG movement is to spread across the entire country, there is need to provide major incentives to SHPIs / promoter NGOs. Currently, the financial support to SHPIs comes from the Micro Finance Development and Equity Fund (MFDEF) of NABARD. It is limited to an amount of Rs.1500 per SHG (formed and activated). To attract more and more SHPIs to the rural areas, this quantum of support needs to be revised.4.6.9 Role of Micro Finance Institutions (MFIs)4.6.9.1 As mentioned earlier, (a) organizing thrift and savings and (b) leveraging it to obtain funds without formal collaterals are the two most important activities of the SHGs. Since large commercial Banks, due to their complex operational structure and other management constraints, are usually not able to meet the needs of this sector, a large number of private micro-finance institutions have been set up in recent years in various parts of the country to fill this void. Certain important issues relating to the activities of the MFIs in the country have been examined in the succeeding paragraphs.4.6.9.2 Micro-credit is defined as provision of thrift, credit, and other financial services (such as deposits, loans, payment services, money transfer, insurance and related products) of very small amounts to the poor in rural, semi-urban and urban areas for enabling them to raise their income levels and improve living standards. Micro-finance institutions are those which provide such micro-credit facilities. Leaving aside the commercial Banks, the needs of this sector are currently being handled by the following four major players:(i)Rural Banks(ii) Cooperatives(iii) Institutions which have been registered as Societies, Public Trusts, and Section 25 Companies or as NBFCs to take up the work of micro-finance on operational/financial sustainability(iv) Individual money-lenders.4.6.9.3 Micro-credit is an instrument of both social as well as economic policy. It opens up integral development processes such as use of financial and technical resources, basic102Thrd ASector AOrg ni ati ns Aat the AL c l ALevel elp A– Groups Self-Hpril 2008)services it, Amoney se vicesAan Atraining Aopp rt nit esAtoAthe Aunp ivileg d. AccessAt Asaving ,Acred al life AA transfer Apa ment,Aand ins ranc Acan help Ap orAp opleAta e A ontro i AofAthei Afnan Ac ildrenA ItAals Aemp we sAth mAtoAmak Acritic lAcho cesAabout in estingAin busines ,Asendin lig tionsA o Aschool, improv ngAh al hAc reAofAt eAfamily Aco erin At eAc st AofA ey AsocialAo gene atesA and A nforeseen As tua ion . ABu Athe Amost im orta tA fAall, an access to Afinance nAancie tA s lfAes eem Aa on Ath m. AInA he AIndia Aco text, At e A oncept Aof Ami ro- re it AhasA endersAatA origin, pr val nt Ai At eAform of cre it At At eAp orAby At eAt adersAandAmon y- oAillegal xorbitan Ainter st A ates. AThi Ar sulted Ai Ah rds ip AtoAthe borro ersAoft nA eadingA prac icesAl keAbond dAlabour AH wever, in Amod rn Atimes,Am crocred tAimpli sA end ngAt At eApoorAatA eas nableAbut As stainabl AinterstArate .Aoutline AaA .6.9.4AThARagh ram ARajan Commi tee whi hA as setAup in AA gu t A2007 A oasAdeepl A com rehens ve A gen aAforAthe ev lut on AofAth Afinanc al sec or AinAt e Ac untryA st onsAis an lysed theAissue A“ rodening of AccessAto Fi ance .AInAthi Aco te t,A neAofAitsAs gg to A alterAth Aemphasi Asom wha Afrom theA arge BankAl d, Apub ic AsectorA ominate ,Amand teA efficiency,A idden Aand Abranch-expansi n-focuse Ast ategy (to AMic o A anks . AThe poor Aneed hoA ave A A nno ation and value for Am ney whic Acan comeAfrom motivated fina cier Apacity ofA lowAcost str ctu eAa d Aw oAc n Ase At e ApoorAas A rofiable AThey als AhaveAth Acmaking decisio sAq ickl Aand Awi h Amin mumApperAwor .A-governedA .6.9.5AThe CommitteeArec mmen ed20A“(a Aall wingA or AentryA oAprivateAwel yA ocusedA depo it-ta ingAsm llAfin nceAbanks offset ingAth irAh gher riskA rom AbeingAgeog aphical sac ions, by requir ngAhigh rAcapita Aadequ c Anorms AaAstrictAp oh bitionA nArel tedApartyAtra deAtoAo eA andAlower allowableAcon entra ionAno ms ( oansA s A AshareA fAca ita At atAc nA eAm eAgreaterA p rty ,AandA b)AmakingA ignific nt efforts toA reateAthe As pervisor Ac pacityA oAd liverAt orrect veA onito ingAt eseA anks willAneed A nit all ,AandA( )A uttin A nApla e AaAto gh ApromptAact onAr gimeAth tAen uresA hatAt es Aba ksAdoA otAbec meApubliccharges ”A4.6.9.6 AMic o-Finance AIn ti uti ns AinA heAForm a lASecto handli gAA 4.6.9.6.1 A u rentl , Aa Am jo Ash re Aof Athe Amicr -financia Aser ic s Asuch Aahrift Aand provid ng cre itAto AtheAec nomica lyAactiveA ow-incom As gmentsAo Asociety,A specia ly Aw men, ApoorA ous holds and At eirAmicro Ae te prise Ais AbeingAco ectivel AA andled by Apub icAsector Ain titu ionsAli e ANAB RD,ASmall A ndustriesAD velo me tABan AofAIndi A(SIDBI), Rashtr ya AMa ilaAK sh,Arura Ab anchesAofA ommer ial Banks Aan ARegi nalAR ralABan2 Rep rtAofAth ARagh ramARajan Co mitteeAon Financ alASect rARefo msA(A103Soci l C pitalA AAAShar4.6.9.7 Private/NGO Initiative in Micro-finance4.6.9.7.1 Apart from the formal sector organisations, private/NGO initiative too has played an important role in expanding micro-finance in the country. This expansion has happened in two ways. Some of the NGOs which actively promoted Self-Help Groups in the early years of the SHG movement themselves diversified into micro-credit lending (such as SEWA in Gujarat, Nav Bharat Jagirity Kendra (NBJK) in Jharkhand and Shramik Bharati in Uttar Pradesh). The second set of institutions consists of those which came on the scene later (when the presence of SHGs had already reached a significant level) by registering as pure MFIs such as Bandhan, BASIX and SKS. In 2006, there were 800 NGOs in the country engaged in delivery of micro-credit with an outreach of 7.3 million households.214.6.9.7.2 Their form varies; some of these MFIs have been registered as Societies, some as Trusts and some as NBFCs. There are some which got registered under Section 25 of the Companies Act. Some Cooperative and Mutually aided societies too, are engaged in this business.4.6.9.7.3 Over the years, these institutions have shown tremendous growth in terms of number as well as the spread of their activities. As per the Forbes List-2007 prepared on indices of gross loan portfolio, efficiency of operations, quality of advances and return on equity and assets, there are 7 Indian Micro-Finance Institutions in the list of world’s top 50. Bandhan (at No.2), Micro-credit Foundation of India (at No.13) and Sadhna Microfin Society (at No.15) find place above Bangladesh’s Grameen Bank which ranks at 17. Other important MFIs which are providing micro-credit to people in different parts of the country are the Aga Khan Agency for Microfinance; Association for Sarva Seva Farms (ASSEFA); MYRADA; SADHAN - The Association of Community Development Finance Institutions; SEWA; SKS Micro-finance (AP); BASIX; SAMPADA; Streedhan; and Working Women’s Forum, Madras, Spandana (AP), Friends of Women’s World Banking (FWWB); Sanghamitra Rural Finance Services (SRFS) and Nav Bharat Jagriti Kendra (NBJK). Then, there are organisations like APMAS, Mitrabharati and The Indian Microfinance Information Hub which provide support to these MFIs in human resource development, quality assessment / enhancement and research and advocacy. While a large proportion of the micro-credit institutions in India work as non-profit organisations, many bigger players (SKS, BASIX, Share Microfin, Spandana) function on a model of financial sustainability. Many of these MFIs derive their working capital from private equity whereas some thrive on the support of new generation private Banks and venture21Working Paper on Micro-Financial Sector (Development and Regulation) Bill, 2007 prepared by IRMA104Thir AS cto AOrga isativel – Aat Self-Hlp Athe ALncalGroupsALecapital funds. esAwhich Acon ront AitsA ca italAfu ds. AThe Aseies Athe follotor broadly Ai entiing Anine issAonAhan ling A hrif A/ functi ning: A(i operational/ Afin ncia Asustainabil ty A(ii) Are tricti n dAits Aret nt on,A(iv)A savi gsA(iii) A ack A f Awel Adevelop dAMIS, Ah man res urce Acapac tyAaGOsAandAforma Asec orAm rketingAo Abo rowers’ Aprod cts, (v) Ar lati nsh pAwith otherABanks A(v ii)A apitalA insti utions, A vi) At ckling Adefau t, A( ii) Arelati nship A ith Aco mercial n zedAtha Ainstallin A inflo Aand (ix Ainteractio Aw th theAgo ernment.AI AisA idelyAreco ngAfurther A ro thAandA a Aunifor Areg la o y Ame han sm will Ago AaAlo gAway Ai Afacil tat evelopment of priv teAinit ativeAi Athi Ase tor.A4.6.9.8AM IsAa n dAMoney le ders’ AAct rtant A ssu Awhich A as.6.9. .1 AAn impens Adeb te Aconcern A become A he Asubj ct Aof Ain recov ry Apractic s AofA th Arate Aof interest A nd Aare A22 State Ain A heA FIs AC rrentl , A herMoney- ender ’ AAc Aincountry Awhi h Ah veKarn taka Aha e Ag ne Aa place. ATa il AN du Aa d stepAfu t erA ndAalsoAena tedAaA ewAlegislat on fAChargi gAEx rb tantA called AP ohibitionA es, theyAhaveA pp iedA In erest A ct.A nAse eralAca wo Act Aon A cti itiesA t eAp ovis on AofAtheseA edAthem At AstopAthe rA fAth AM IsAa dAfor theAKeral AGov rnm ntA b siness ARecently, ey lenders AA t Awould announcedAt atA heAMo ring ntAp ovision AtoA beAamende AtoAinclud AsfArules.A h sAbeen d alA ithAprivateA ankshisA ndAinsti ut onsAwhich fu ctionA n Av ola ionA AKe alaAM ne -lendersA supp rtedA yAaAKera aAHi h ACourt AJu gm nt A hatApr visionsAofAthTheAJ dgme tAa soAlaidA A tA oul AbeAapplica leAtoAthinaAnon-banking AcialAins itut ons.Ath Amaxi um Ali it ofA do nAthatAthe Aicaovern ent noti ionAfixin At eAr teAof Ai teres Aa ied Ab Ath Acomme cial 2% Awo ld apply to A ll Aty es A f Aloans A or Aw ich Ath Ai ter st Arate Alen Aset Aup to prob AtheBa ks Awas around A1 %. In AAndh a APradesh, an A nq ir Acomm ssithe Arate of int rest, exce s s Aof AM Is also Amade Aa Aser es Ao Arecom en ati ns Aw th regard Ato duration ofAtheAlo n,A ecoveryApr ce ure Aa dAmonitori gA f AthereA ctivitiesA yAD strictAMagistr te andASup rinte dant of APolice. Ca esAwereAre istered at Vij yawad Aagains AanA FI A nd rAS cti nA3 4, A 20 AofAthe IP Aand Afo Aviolation of var ousApr visions of AtheAAndhraA rade h A one -lenders’A ct AIt was challenge AbyAthe Mve yAIAc ncer edAt ro ghAaABox 4.6 ARateAofInterestA nd RecoPra tic sAof AMFIsAclosedA ow Aab utA50 In 2006,A heAa thori ie bran he Aof Atwo majorAMF sA nAK ishna AD stri tAon theA rounds At at AtheyA ereAchar ingAus riousAint restAra es,Ademandi gAi legalAco late alsAan A oerciveAlo n A ecover A doptingA ighA andedA/Ald Abe sor ed Ao tAonly prac ic s. AThe A att rAco ptAa vo untaryA utualA af erAth A FIsAagree AtoAad sAlikeAi terestAr te,A co e AofAc nduc Acoverin Aissu Asan tion procedur s. savin s,A ecovery A racticesAan Asche ule of inte estA MFIsAalsoA eleasedA n A ndicativ hou dAbeAchar ed fro A r tes A(2 At A24%)Aw ichAA ingAc stAstructureAotheAborro ers A n AtheApre aitheseA rgan zat ons.A Surce: VoW, MayA105c a ACapit lA–AAASwrit petition in the Andhra Pradesh High Court. The Court held the view that the State was within its rights to investigate the matter and file a chargesheet under the provisions of the IPC and the Money-lenders’ Act.4.6.9.8.2 The Commission is of the view that the scope and activities of MFIs need to be clarified vis-à-vis the Money-lenders’ and Prohibition of Charging Exorbitant Interest Acts as prevalent in various States. In 2006, the RBI set up a working group under Shri S.C. Gupta to review State money-lending legislations. The group submitted its Report in July 2007. It suggested major changes in the State Money-lenders’ Acts and drafted a model legislation which could be enacted by the States in place of their existing law. It recommended that lending transactions by NBFCs, registered Charitable Societies and Public Trusts should be exempted from the provisions of the State money lending legislations. The Commission feels that there is need to further look into the issues of MFI – State Money-lending legislations interface and take all categories of MFIs; Societies, Public Trusts, Cooperative Societies, Section 25 Companies and NBFCs out of the purview of these laws. The Commission also feels that the issue of interest rate charged by the MFIs should be left to the Regulatory Authority which is being proposed under the Micro-Financial Sector (Development and Regulation) Bill 2007. (Para 4.6.9.9)4.6.9.9 Micro-Financial Sector (Development and Regulation) Bill, 20074.6.9.9.1 At present, except for those registered as NBFCs, the lending activities of MFIs are not being covered by any regulation. In order to regulate this sector, the Union Government introduced ‘the Micro Financial Sector (Development and Regulation) Bill, 2007’ in Lok Sabha on 20th March, 2007. The proposed legislation seeks “to provide for promotion, development and orderly growth of the micro finance sector in rural and urban areas for providing an enabling environment for ensuring universal access to integrated financial services, especially to women and certain disadvantaged sections of the people, and thereby securing prosperity of such areas and regulation of the micro finance organisations not being regulated by any law for the time being in force and for matters connected therewith or incidental thereto.” The salient features of the Bill are as follows:(a) It identifies the National Bank for Agriculture and Rural Development (NABARD) as the agency responsible for development and regulation of this sector.106ThirdASectorA rg nis tions atAth A ocalf-HlpALeve A–GroupsASelIt seeks (b AItAseeksA o const tuteAaA icroAFinanc ADevelo me tACoun ilAtoA dv seANABARDAo Af rmulation ofApoli ies Asche es AandAo herAmeas re Are uiredAin th Aintere tAofAo der yAgrowth Aan Ad vel pment iofAthe microAfnan eA ector.eAsuchAas co- c)AItAd finesAvar ousAent ti sAe gagedAin th Aacti i ityAof micr Af anc sAreg stere A operati eAsoci ties, A utualAben fit societie AorAm tuallyAai edAsocieti ste edAunderA underASta e A nactmentsAo Amulti-State Co-operat ve ASocieti sAreg ste edAunderA th AMulti-State Co-operat veAS cieti s AAct,A20 2, ASocieti sAReg he ASocieties Regi trat on Act, A 860Ao AotherASta eAenactme tsAg verningAs chA o ietie AandAa A rust A rea edAund rAtheA ndia ATru ts A t,A188 AorAa PublicATru tAreg ste edAun erAany ASta eAen ctme t, that Awil Ab Ago erned AbyAt eAregulat ryAframe or Ap opo edAtoA As tAup.ili y ( upsA AAIt AdAGr )finesAvario sA ategori sAof cl ents s chAas SHGsA/AJo ntALiawhit i Afrom Am Awil AbenecroAfnancialer ices. Aof Afinancie) AItAselAks Ato extend Am croAfinan ia Aservice Ato Aeli ib eAc ie tsAbyAwaassis an eAsubjec At Aceilings A sA rescri bedAAN BARD.s A the Atha (f) A AIt provides Af r A cceptan e Aof A hrift, A .e , Asaving Aof Aeli ible A lien micro AfinanceA i Athe Afo m Aof Acu re t Aacco nt Aor Ad mand Ade os t Aacc unt Aby rganisatio sA egi tered Aby the AN tional A an , Asu jectA oAs chAterms Aa dA ond ti nsAasAmayAbeAp sc ibed.(g) AIt provides fo A reation ofAa res rve AfundAan Am intenanc AofaccountsAa dAperio ic l A eturnsAto be submittedAby micro-financeAorga sa ions.AE ui y (h) AFundA AIt providesAfor co stitu ionAofA icroAFinanc ADe elopme tAan Apromotiona A t Abe uti ised AforAth Ad vel pment of Athe micro Ainanc Asector A(foactiv ties, Aequity A ar ici ationAor forAgr anti Al ans).ntAo Aone (i) A rA AIt empowers theA at onalA a kAtoAf ame aAschemeAfo Aa poi tm eenAeli ibl A moreA icroAFina ce A mbudsman Af r A ettlemen AofAdis utesAbet clientsAand micro-financeAo107So i l Capita A–Atiny(j)It provides for offences and penalties for non-compliance with the regulatoryrequirements of the Bill.(k) It empowers the Union Government to prescribe Rules for carrying out the purposes of the Bill.(l) It empowers the National Bank to make regulations with the previous approval of the Union Government for carrying out the purposes of the Bill.4.6.9.9.2 The proposed Bill has generated fierce debate among stakeholders and civil society organisations. Resistance to the Bill is based on the following arguments:a)The Constitutional propriety of the Bill may be questionable in as much as theobjective and scope of an entity created by a State Act (Societies, Trusts and Cooperatives) cannot be extended/overridden by a Central legislation.b)Societies, Trusts and Companies formed under Section 25 of the CompaniesAct etc. are part of civil society, whereas companies, cooperatives, partnership firms, nidhis etc. are part of market and therefore, it may not be appropriate to put these two sets of institutions in the same basket for the purpose of providing micro-financial services.c)Nominating NABARD as the primary regulator appears to go against thebasic principles of natural justice, equity and autonomy as NABARD is itself a major player in this sector.(d) There is some ambiguity with regard to the definition of Micro Finance Services, service providers, service receivers etc. in the proposed Bill. This needs to be removed.(e) The Bill defeats the intended purpose of providing affordable credit to the disadvantaged sections of the society by not addressing the issues of interest rates and fees to be charged by the MFIs.(f) The Bill does not cover Non-Banking Financial Companies (NBFCs) and Section 25 Companies which too operate in this sector. They are handling a major share of the micro-finance market.108ThirdASector Or ani ation AatAt e Locallf-HelpALev lA–GroupsASe6.9.9.3 the pro osed 4.6.9.9.3 The ARangarAja ACommittee on A‘Financ al A nclusion Ato Aexamine Bil Aand Amade theAfollowi ngAs ggestions56Aneed to Abe(i) ACo panie Aformed un er Sec ionA25 Aof theA ompa ies A ct A1 bro ghtAund r A he Ap rviewof A his ABill.(ii ACoope at vesAs oul Ab Ata enAoutA f A heA urview Ao Athe pr posedBi lAinA rderAto av id Adual tyAofAc ntr l Abet eenA heA tat AActs andAtheAUnio ALegislat on.A ASHGs /AotherA .6. .9.4AWith th Aem rgenc Ao Anew Af rms AofA ocial Acapita Ains itut o s Aviz omyAfo Amicro- J intALiabili y Forma ions, a Al rgeA paceAha Ab en A reate Ain Athe rur lAecon comprehensi eA finance in titutions. The ACo miss on Afe ls that th reAi A eed Ato AhaveAa ceA ectorAAi l A gislationA orApromotio ,Ad velopme tAandA rd rly growthi AofAth Amicro na suchAas micro- t eAcou try. A t would cover a A holeAran eAofAp od cts need d Aby th ApoorA re Athe Avi wsA cr dit,Asavi gs, insur nceAandAm ne Atransfer. TheA ommi sion AhasAa soA onsid AtheAconc rn A of Avariou As ake olders Ao Athe A ropos dABill.A hile agre in Awi hAsomeAo BARDAhas Abe nA exp essedAi Ath s Aregard, A he Co mis ionA sAof theAv ewAtha Asi ceAN AhasAacq iredA su erv sing ARRBsAa d ACoo era ive Bank Afor At e Ap stAtw nty five years Aan fAs pervisingA adeq at AexpertiseA n A evelopmentAof mi ro- re it,Ai Aca Abe A iv n AtheAtaskA mendedAbyA heA nd Ar gu ating AMF s A sAp opose Ain the Bill AThis hasAalsoAbe nA eco tAthatAN BARD Rangara an Committee. TheA ommi sionA as Aa so tak nAno eAof theAfaA sAprimarily provides only Arefian e Afacil ty AtoAp ima yAle der Aand does AnotA en Ad rectly. AI nfi tAbetweenA aAf cil t torAand notAaAser iceA rovider AThre ap ears A o A eAno l Asc pe AofAct eAs pervisoryA ndAregula or Afunct insAof ANAB RD Aon yAtransfer 4. .9 9.5 AsAfarAa At eAquesti n Aof al owingA FIsAto h ndle At rif A/ Asa ingAandA Awil Ainvol eA isA oncerned, A he ACo miss on would l keAt Aa optAa Apa h AofA au ion. SinceAi iewAth t A FIsA hardA ar ed A avings A f A he A oorestAo Ath Asociety, A he Co mis ionA sAof theA hed led Ba ksA sho ld beAall wedAtoA ccep As vingsAon yAasAbusinessA or espondent AofAS sA ithAregardA an AnotAinAth irAindiv du l capacityAasAinance lender.AOtAmicro-erAp ovisio oAmonito ing Aauditi gAand Ap na tyAclause Aa Asu gest dAi AtheABillAmay rem in.He ce, Athe AM croAFi ancialASecto A(D velopment Aa d AReg lati n) ABi l, 20 7Aneeds AtoAb Ar con ideredAon theAfo109S c alACap talA–AA(i)The scope of micro-finance services should be substantially widened to cover credit / savings, insurance, pension services, money transfer, issue / discount of warehouse receipts and future / option contracts for agricultural commodities and forest produce.(ii) NBFCs are already regulated by the RBI. However, Nidhis registered under Section 620A of the Companies Act, and Producer Companies should also be brought under the new legislation.(iii) The activities of Section 25 Companies to the extent they concern micro-financial services as described under the proposed Bill also need to be brought under purview of this legislation. However, for their management and other functions, they will continue to be governed by the provisions of the Companies Act.(iv) Savings, in general, is a low cost source for onward lending. But there is need to protect the savings of the poor people. Steps should be taken to ensure that if MFIs are allowed to handle thrift / savings and money transfer services, they would do so only as business correspondents of Commercial Banks.4.6.10 Recommendations:a) The role of the Government in the growth and development of the SHG movement should be that of a facilitator and promoter. The objective should be to create a supportive environment for this movement.b) Since a large number of rural households in the North-Eastern States and Central-Eastern parts of the country (Bihar, Jharkhand, Uttar Pradesh, Uttarakhand, Orissa, Madhya Pradesh, Chhattisgarh and Rajasthan) do not have adequate access to formal sources of credit, a major thrust on the expansion of the SHG movement in these areas should be facilitated. The presence of NABARD should be much more pronounced in these places.c) The SHG movement needs to be extended to urban and peri-urban areas. State Governments, NABARD and commercial Banks should join together to prepare a directory of activities and financial products relevant to such areas.110Thi dASectorAOrga is tio sAatA heALo a ALevelA– A elf-Help Groupsd)AC rre tly, AtheAc mmerci l A ank , Aon A he b sisAofAaA roject’sifnancialA iab lityAcan disburseAmi ro redit inA rban AandAs mi-ur an areasonA hei AnceAfro own A butAsuchAmic o-creditAdisb rse ent AareAnot en i itledAto refn su tably N BARD. AIfAn ces ary,At eANA ARD A ct, 19 1AmayAb Aamended to Abr n AurbanA/ As mi-ur an Aar asA nder Aits refinancema da e.AesAtoAbeA ) TheAS GA ABan ALink geAm d lAwith a Ame to ASH IAinAtow de er rou houtA e co rag d AasAtheA refe red modeAfor financialAinter ediationAt theuntry.he AStateA f) AC mmerc al A anks Aa d A ABARD Ain Acoll bora ion with A financial G vern en Aneed Ato Acon inuously inn vate Aa d Ad sign Anew pro ucts A orAtheseA roups g) AThe e A h uldAbe A Aplann dA ffortAtoA sta lishARRB ne wori AtheAA87A is ric sAofAth Acoun ryAwhichA ur ent yAdo not haveARRBre ence.Ah ASpec alAste sA hould beA akenAfor t ainingA/ capacity bu ldingAofAg vernmentAfunc io arie AsoA hatAthe A evelopAa positive att tudeA ndA reat the poorAandAmar in lizedA sAv able AandAre ponsibleA ust me s Aand Aas possibleAentrereeurs.i)ARur lA redit isAoft nA i wedAasAaA ote tialANonAP rformi hg AAs et ATer Ai AneedAt AeducateAg vernmentA mpl yees andABankA er onne AinAthi Aregard.AT chn lo yAmayAbeA ev ragedA oAr duce th Acost Aof rea hi gAo tAtoAth Ap ore t AofAhepoor Aj ATher Ai AneedA oAr viewA he sca e Aof Athe Apr motio alAgr nt given to SHPIsA yANABARDA( urrently A s.1 00/ Aper AS GAf rmedAandAa cti at d).osh,Ai k) sA In order to sca eAupAtheAo er tio sAofAtheA ashtri aAMah laA hA houldA corp s A houldAbe enhancedAsubst ntial y.ARMK’sAgeo raphi alArea effectiveA be ex ande Ato Ah lpAquick Ap oc ssin Aof AloanAapp ica ionsAand mayAopenA m ni ori gAofAtheAs nctioned pr jec sA f nAfarA f A reas AThe Kosh andAgiv A a equate yAstaffed regio al officesAat select d A lac sAinAth Aco ntrygreater A tt nti nAtoAt eAcredit deficien111cial ACa i a A–Arid Deytiny1)The )ATeA icroAFina cialAS ctorA(Develo men AandARegula ion)A ill,2007Aee sA oAbeAam nd dAtoAin lud AtheAfoll wingAsuggestins Aen dA AAThe Aico e AofAMicro-fianceASer icesAs ou dAbeAsubstant allyAwifer,A toA overAc e itA/Asav ngs,Ainsur nce, Ape sionAserv ces,A oneyAtran s ueA/Adis outAofAware ouseArec ipt AandAf t reA/Ao tionAcont act AforAagricul uralAcommod tie AandAf restAprouce ii.AA‘Ni his’Aregis eredA nderASe tion 62 AAo AtheAComp nies Act AandAPro ucer AComp niesAs ou d AbeAbr ught A nde Ath AnewAlegislation iicernAAATheAactiv ti s AofASe ti n A25 AComp ni sAt AtheAe tent theyAcoould micro-fina cialAser ic sAasAdesc ibedA nde AtheApro osed BillAs al oAbeAbr ughtA nde AtheApu vi wAof this Alegisla ion.AHow ver AforA heirAmanag men AandA therAfunct ons, they willAcon in eA oAbeAgov rn dAb AtheAprovi io sAo Athe AComp niesAc ivAtheA AATheA ss eAofAint rest rateAch rg dAb Athe MFIsAs ou dAbe le tAt osedA Regul toryAAuth rityA hi h AisA eingAcr atedA nde AtheApro Bil iv AAItAs ou dAbeAen ured th tAif MFI AareAal ow dAtoAh ndleAt r ftA/Asa ing AandA oney Atra sferAserv ces, theyA ou d A o Aso on yAasAbus nessAcorrespon en sAof Acomme cialAB nks.A therAcon er sAasAs at dAin Para A4.6. .9.2 also ne d A oAbeAconsid re .AdAbem) AMicro-fianceAinstitu ionsAco eredA nde Athe Apro ose AlawAs ou kep Ao tAo AtheApu vi wAo AtheA tate la sAonAmoney-lending.112SELF-REGULATORY AUTHORITIES55.1 Introduction5.1.1 The Self-Regulatory Authority of a profession means a select Body of its members which is responsible for growth and development of the profession in the background of its responsibility towards society and State. The functions of such a Self-Regulatory Body may include: (i) issues of professional education: development of curriculum, setting up of teaching standards, institutional infrastructure, recognition of degrees etc. and (ii) matters connected with licensing, and ethical conduct of the practitioners.5.1.2 Currently, there are six major professional Bodies operating in India each having been formed under a specific law.Bar Council of India (BCI) – formed under the Advocates Act, 1961Medical Council of India (MCI) – formed under the Indian Medical Council Act, 1956Institute of Chartered Accountants of India (ICAI) – formed under the Chartered Accountants Act, 1949Institute of Cost and Works Accountants of India (ICWAI) – formed under the Cost and Works Accountants Act, 1959Institute of Company Secretaries of India (ICSI) – formed under the Company Secretaries Act, 1980Council of Architecture (COA) – formed under the Architects Act, 19725.1.3 Then, there are organisations like the Institution of Engineers which have been formed purely by voluntary action by respective members of the profession. They do not have any statutory background.5.1.4 All the above professions are vital for society and the economy of a country. In fact, the number of medical practitioners, lawyers, chartered accountants, engineers and other113o i lSharedACapi al A– Destiny AA Aprofessionals in a society per one lakh population is one of the indices on which the status of a nation’s advancement is measured. As per an estimate, the number of registered lawyers in the country in 2006 was 8.47 lakhs, while the corresponding figures for doctors, engineers, chartered accounts, company secretaries, cost accountants and architects were 6.59 lakhs, 4.0 lakhs, 1.30 lakhs, 0.17 lakh, 0.13 lakh and 0.02 lakh22 respectively.5.1.5 In the Indian context, besides regulating the domain of professional education and setting standards for the conduct and behaviour of the members, these Self-Regulatory Bodies have often played a significant role as technical advisers to the government in conceptualizing, formulating and implementing policies and standards for providing important public services to the citizens (e.g. on health care and justice delivery).5.1.6 Trust between Professionals and Citizens5.1.6.1 In general, there is a relationship of deep trust between a professional and his client. A professional practitioner is in a position to have access to the most personal details of a person and hence he is obliged to act in consonance with the principles of beneficence and justice to justify this trust. The professionals need to maintain high standards of practice and show respect for professional ethical values. The trust also implies that they update their knowledge, skill and ability at periodic intervals in order to deliver their services competently.5.1.6.2 Formed with enthusiasm and vision, the Regulatory Authorities worked with zeal and interest in the initial years of their existence. Though, commitment to self-interest may have been there in some form or the other on their agenda, the level of professional competence and conduct was adequately high in the early years of Independence and by and large, the medical profession, engineers, lawyers and others conducted themselves with great responsibility and professionalism. But in recent years, the drift in almost all professions towards self-interest has become markedly pronounced. The general perception is that instead of being self-regulatory, Regulatory Bodies have become “self-promoting lobbies running to the rescue of delinquents, starting agitations against any action that is taken, organising strikes and hardly taking steps to uphold standards or action against professional misconduct”.“Lawyers are the only persons in whom ignorance of the law is not punished”.– Jeremy Bentham5.2 Separating Professional Education from Self-Regulatory Authorities5.2.1 Currently, one of the major tasks of Self-Regulatory Authorities is to manage and regulate professional education. The National Knowledge Commission (NKC) which22Source: Compiled from Annual Reports of MCI, BCI etc. and other sources.114Self-Regulatory Authoritieswas ingAthe wasAcon ti uted in A2 0 AwithAa ma date Ato p epare Aa Ab uep intAforAtran for ountr AA coun r Ainto AaAk owledge soc etyA as Ag ne Aint Ai sues Ao Ahigher Ae uc tio AinAthe ssionalA (e.g.Aman geme t,A aw,AandAme ici e) AOn Aof Ai sAmajorArecomme da ions isAthatAprof ies AThee ucatio As ouldA eAta enAa ayA romAth Ad mai AofAtheA xistingARe ulatory Bo NKCAhasA bserved A hat,cts.ATheA “The presentAre ulator As stem Ai Ahigher Ae uc tionA lawed inAmanyArs Asp dAt ereA ar iersA o Ae try areAt o A igh.AThAs stem AofAaut orizi gA ntry AisAcum ers me.AAed Af om are Ae tensi eArul sAafte Ae try,Aa Aalmo tAever Aa pe tAofAan Ains it tion AisAr gula on, Aa eA feesAto Acur ic heAotherAreglum. Alat rs Asa Ain Ath Ashere AofAprof ssionalAed catameworkA oftenAinco si tent A nAtheir Aa he ence Ato Apri ci les.ATheA xistingAre ulatoryAf ion AinA co str insAth Aspply ofAgood Ainsti utions, Aexc ssivelyAr gulatesA xistingAinst tu ca ion.A te Awrong pla es Aan Ais Anot Ac nd cive AtoAin ov tion AorAcr at vity Ai AhigherAed TheAc al engeAis At er foreAt A esignAaAre ulator Asys em AthatAi cre sesAth ofAgoodAgul to A inst tut onsAand fostersAaccoun ab lityA n Athose Ainsti ut ons.AAn Aind pendentArtedAandA h sAt AbeAtheAcor ertone o Asuch Aa sy tem.AThAs s em Aas aA hole isAoverAr gulv erne ”.under-go is me tA .2.2 InAthisAs que ce,AtheA ationalAK owledgeACo mis ionAhasArec mmendedAestabHE mu tA of AanAInd pendentARe ulatory AA tho ityAfo AHigherAE ucation A IRheAIRHE). A clu ingA eAatA n Aarm’ Alen th A romAtheAgo ern entAandAind pe den AofAall Astak holdersAi e the nm Ac nt. ncernedAMi is rie AofAtheAgovhouldbe ? eIRA Ewo ld ha etobeest bl sh db ~a ~ActofPar iam nt,a dn en ry. res ons bleAfor set ing Athe A rit riaAandA ec dingAoranti ? g t oul ~be heonl ~age cyth t ouldbeau ho izedt ~accorddegree- owerAt AhigherAe ucationAinstit ti ns.?d te ouldobeires ons bleiforimo itoringds and rdstandg ettlingsd i pu es.?d tpwou dxapply exa tlye hersa eo ormsit apu licvand privatetinsti ut on,oasd to ould Ato A ome ticAandAinter ationalAinstit ti ns.g enc i s.? t oul ~bethea tho ityforl censingaccre itation ade ned, .2. AInAtheA rop sedAnewAenvi onm nt,A he rol Aof theAU CAwo ld ne dAto i AbeAre ApublicA so that Ai Aremain co fine Ato A(a) Adisb rs ment Aof gra ts, and A(b) Amai te ance Ao d Ato AbeA insti ut ons AThe AA l AIndia Cou cil Afor AT chnical AE ucation (AIC E) Aw ll ne Co ncilA a olish d Aw ile Athe Af nc ion Aof Athe Medical Co ncil A f AInd a A( CI) and the ABar f AInd aA(B I) will Abe li itedA oAth ir roleAas AProf ssionalAAssoc ations.A eparateAAspply115AS cilSharedAC pitalDestinyA–Committees will be constituted within the structure of the IRAHE to take care of the above functions in different streams.5.2.4 The subject of legal education was discussed in detail by the Law Commission of India in its 184th Report on “The legal education and professional training and proposals for amendments to the Advocates Act, 1961 and the University Grants Commission Act, 1956, December 2002”. The Law Commission had discussed the suggestion to form an All India Legal Education Council on the model of All India Council for Technical Education (AICTE). In the new dispensation, the BCI would be responsible only for regulating entry into the profession and maintenance of standards.5.2.5 Section 7(1)(h) of the Advocates Act, 1961 enables the Bar Council to lay down standards of legal education in the country in consultation with the Universities. The Law Commission was of the view that generally in the matter of standards of legal education, the UGC or the Universities may have primacy but in the matter of standards of legal education for those who will practice in courts, the primacy of the Bar and the Judiciary remained undisputed. The Commission also quoted a similar view expressed by Shri M.C. Setalved in the 14th Report of the Law Commission (1958). If legal education is kept totally out of the purview of the BCI, it may not be able to prescribe a definite course of legal education which can meet the needs of the Bar.“We have already seen how in England, professional legal education and the admission to the profession are controlled by a body consisting exclusively of professional men. There is no reason why a similar control and regulation should not be vested in the profession in India. Co-ordination between the bodies regulating professional training and the Universities with a view to ensuring minimal standards can be achieved in the manner indicated above. In our view, the Legal Education Committee of the All India Bar Council may be empowered to keep itself in touch with the standards of legal education imparted at the various Universities by visits and inspection as in the case of the medical and dental professions or as is done by the American Bar Association in the case of the American Law Schools. If the Council or its Committee is of the view that the standards prescribed by a particular University in legal education are not adequate or that institutions established by it or affiliated to it for imparting legal education are not well-equipped or properly run, it may decide to refuse admission of the graduates of that University, to the professional examination till the University has taken steps to reach the minimum standards.”– The 14th Report of the Law Commission (1958) presided over by Shri M.C. Setalvad116Self-Regulatory Authorities5.2.6 he m 5. .6ATe Ama n Aargu ent behind AtheAreco me dat onsAof At eANationa AKnowledge Anot ca erA Co miss on is A hat Ain A he Ac rre t Aera, Athe cu r culum Aof Aa partic lar A tre m Adoe compet nce nly Ato Athe A raditi na Ase tor Aof Athe A rof ssio , Abut als Ameet At e Anee s Aof Aother car ers in areas. AF r Ae amp e, Aour Al w colleges A/ in tit tes Ado A ot Aprepa e Ast den s Aonly A or Aimportan A th ABa AorAin Athe ju iciary.AThe curr culum A lso A rai s Athe AforAot erAequallAac ivists f nctions inAs ci tyAsu hA sAthos AofApol cyAmaker ,Abusines Aadvisers,Aac demicians nv ronmen A andApubl c A fficials. AThAe pansi nAo AtradeAa dAc mme ce AandAth AresultingAialAi suesA ofAglobal A nteg ationAh veAb oug t AintoA h Apictur Aa variety of Acomplex commer wh ch Arequ reA bility Aan Ak owl dgeAof A heAhighetAcal br .AsearchAa5.2.7 The Aov ra l At nor ofAlaw Aa dApr ctice now AcallsA orAserio sAacadem cArd Aenq iry.AwledgeA a A 5. .8AMedica Aed ca i n Ato Ai Aa Afie dAi AwhichAt e A tandardA fAr search Aan Akn search ha A rea hedAa A igh Alevel ADesigning A urricul m,Asettin Ast ndards Aa dAmanagi gAr xc llence. bec me anAa eaAofAhig Ascient ficApu sui Aw ichAcan beAm na edAonl Ab Apeople AofA sAinto AtheA TheAcur en Asystem Ao Aelections A isc urage At eAen ryAof Ah ghAcalibreA ndiv dua arateABod P A ofessio alAB dies. The eA eemsAt AbeAs ro gAm ritAinAt eAar u entAthat aAse el Ash ul A domina ed largely by Ap rsons Awith A pecialize Ak owled eAin Atheir i resp ctiveAbeApu Ai Acharge ofAmedicald ucat on AA5. .9 InA iewAof the above,Athe Commis ionA gre sAwit At eAs andAofAt eANationa AKnowledge th Ado ainA Comm ssi n AthatA he subjectAofAp ofessiona Aeduca io AshouldAb Asep rat dAfrom ithAatAt eA of At eAexisting A egulator . A ow ver, itAi AfeltAth t crea ingAaAh gh Apower dA ono ti n,Awill nati nalAle el AIRAHE, in Aover ll com and ofAallA he streams AofAp ofessional educ overnance A go A gain t AtheAver Ap incipleAof Adecen r li ationA– Aa Aessent al elem ntAofAgoodA HE Ato lookA Se ond y,A heANKC Ah sA ropose Ato Acrea e Asepara eAStanding Co mitte sA nAIR ntantancy A aft rAdiffere tAs ream ,Ao eAea hAforAlaw Amedicine,A anagement AcharteredAacco n gAd ne Ab A pharma y,An rsihey AwigAet . AlAb Adoi gAth As me workAasAi Acurr ntly beAnormsAandBCI, MCI AAICTE and Aothers (planning, A orm lationAandA ai tenan eAo mon toringA standar s, Aqualit Aassura ceAthroughAacc editati n, fundingA nAprio ityAareas,inatedAand and A valuation,A aintai in AparityAof Ac r ificati nA/ awards Aa dAensuringA oor iev sAthatA integrated A eve opment Aand ma age entAof At e A tream). AThe Commissi nAbe monol thicA th Ai terest AofAhighe Aedu at on Awil AbeAbet er served, if insteadA f Ac eating Aone (med cine,A bod , Aseparate Ai sti utions A re A reat d A or A ach Aof AtheAp ofes io alAfie dAofAstudy law,A anagement, techn ol og yAe c.)educati n A 5.2. 0AThe Aapex regulato y age cie A– Ao e A or A ach Aof Athe Ap ofessionastrea s A Ashould be crea edA yAlaw AThyAcoul Abe called At e ANationa ASt117So i l Capitaared A–AADestinyAShQuality Council for Law, National Standards and Quality Council for Medicine, National Standards and Quality Council for Management and so on. It needs to be ensured that there is uniformity in their composition and structure. In order to ensure transparency and objectivity in the functions of these Councils, the law should provide a clear description of their functions, powers and procedures to be adopted. The Commission is also of the view that these Councils need not act as Regulators in the classical sense as they will have no licensing functions. They should be entrusted only with the task of laying down norms, standards and parameters for (a) setting up new institutions, (b) designing / updating curriculum, (c) faculty improvement, (d) carrying out research / innovation, and (e) other key issues concerning the stream. While constituting these Councils, the law should take into consideration the following guiding principles:(1) Such Councils should have full autonomy.(2) The highest policy and decision making Body of these Councils should have a majority of independent members, and preferably no more than 2 or 3 drawn from government, who could be there in ex-officio capacity.(3) These Councils should have a strong and effective grievance redressal mechanism.(4) The Councils should be accountable to Parliament and their Reports, should be placed before the House annually. In addition, there should be strong norms for suo-motu disclosures under the RTI Act.(5) One important function of these Councils will concern accreditation / certification of institutions falling under their jurisdiction. Hence, each of these National Councils should have a body of experts to advise it on these matters.(6) Some of the members of such Councils can be elected from among office bearers of speciality Associations (e.g. Indian Medical Association), as these members are elected by the practicing professionals in their individual specialty.Subject to the laid down norms, standards and parameters, the Universities/ Autonomous Institutions would be free to take decision in all the above matters.With enactment of a new law as proposed above and creation of separate National Standards and Quality Councils for technology and management, the AICTE will need to be abolished.118Self-Regulatory Authorities5.2.11 0Aabo e,A 5. .1 AWith Aan enha ced rol AforAthe AUniv rs ties, Aas pr posedAin A aragra hA5.2. icul rlyA t er Awil Ab Aneed AtoA ntroduceAsu stantia Ar for sAinAt e Ahigher A ducati n AsectorApar esearch, wi hA e ardAto –An mber an Asi eAofAthe AUniv rsities,Acu riculum, Aas essment,A mmi sion faculty, finances,Ainfra tru tureAandAgo er ance.AThe NationalA nowledgeAC dAbyAtheA has AmadeA mportantArecomm nd tion AinAth sAreg rd Awhi h A hould Abe ex min icularlyA g ver mentAand Aim le entedAonA io ity.AAThe AC mmiss on Aw ul Alike AtoApar AofAViceA igh ight Aan Aen orse Athe Arecom en ati n Ao AtheANKCA egardingAap oi tmenrf ren eA Cha ce lors. AThAp ocessAofAap ointme tA houl Abe A reeAfr m A irectAor indirectAintAye rs.AA of Athe Ago ernm nt. AOnceAa poin ed,AViceACh ncel or Anee A oAhave a A enu eAofAsThy Ash uldAhave adequateA uth rityAandAflxi ilityA oAg vernAthe AUni ersi ieswith At eAa vice Aan Ac nse tAofAtheA xecutiveACounc l.ctorAan A 5. .12 There ha AbeenAanA me genceA f Astron AprivateAi it ati e AinAthe A ducati nAs ion.AThisA severalAins it tionsAof lear ing A ave be nAs t AupAfor A rovi ingAhig AqualityAe uca it tio sA un ers ores the needAfor Aesta li hment Aof stro gerAtie Abetween Aed cationalAins hangeAof inAth Apr vate Aa d Apubli Asector Athrough Aap ropriate A echanismA ncluding ex fachisAwould mutuallyAlty.Aein orce AtheAco parative st ength ofA heseAtwosecto s.5.2.13ARecommend tions:existingA a)APro essionalA ducati nAhould beAt kenA way fromAt eA oma nAofAthe Aone fo A R gulato yAB diesAa dAha de AoverAtoA peciall Acreated a enc es A di sAmayA ea hAofAth As reamsAof Ahigher/pro essionalAe ucat on.AThe eAB eAcalled NationalA tan ardsAan AQualit ACo ncil AforA edicine, NationalArca ion, tan ardsAan AQualit ACo ncilAforAM nage ntAet .AAA terAthisAbif oAissuesA th Awo kAofAthe existing AR gulator ABodi s’Awou dAremai Ac nfinedA essionalA c ncerningAregi trati n,AskillAup rad tionAandAm na ementAofApro tan ardsAan Ae hics.AOn cr ation ofAthese separate A oun ils,A heAA CTEAw llAstandAabo ishe .eAto b) layA ASuch Counci sA houldAb Ac eat dAb AlawA ndAt eirAro eA ho ldA gAg owthA do nAnorms,A tan ardsAand Ap ra eters A nAissuesAc ncerni ons,A(b)A andAde el pment ofAthe rAst eam viz.A(a As tti gAupAnewAinst tut yingAout d signing/ updatingAcu ric lum,A(c AfacultyAimp ove ent,A(d) car r searchA/ Ain ova ion AandA e)A therAk yAissues Ac nce ningAth s re m.AAguidingA c) AThe pro osedAl wAsh uldA akeAintoAcons der tionAtheA ollowin p incip esAwhileAcon titut ng Athese A119Socia A a italA–d ADestinyASharei.Such Councils should have full autonomy.ii. The highest policy and decision making Body of these Councils should have a majority of independent members, and preferably no more than 2 or 3 drawn from government, who could be there in an ex-officio capacity.iii. These Councils should have a strong and effective grievance redressal mechanism.iv. The Councils should be accountable to Parliament and their Report should be placed before the House annually. In addition, there should be strong norms for suo-motu disclosures under the RTI Act.v.Each of these Councils should have a body of experts to advise it on accreditation / certification of institutions falling under their jurisdiction.vi. Some of the members of such Councils can be elected from office bearers of specialty Associations (e.g. Indian Medical Association), as these members are elected by the practicing professionals in their individual speciality.d) Within such norms, standards and parameters, the Universities/ Autonomous Institutions should be given full autonomy for setting up and running institutions under their jurisdiction.e) The recommendations of the National Knowledge Commission regarding reforms in the structure, governance and functioning of Universities should be examined and implemented on priority. The process of appointment of Vice Chancellors should be free from direct or indirect interference of the government. Vice Chancellors should be given a fixed tenure and they should have adequate authority and flexibility to govern the Universities with the advice and consent of the Executive Council.f)There should be stronger ties between educational institutions in the public and private sectors through mechanisms such as exchange of faculty.120Self-Regulatory Authorities5.3 Professin a lAU da ion5.3.1 AI Ath Apre entAeraAwh nAt chnolo yAa dAskills are Achan ing Ar pi ly, A herAis Aneed AforA n i c al sk lls. ro ession ls Ato update Ath ir A nowledgeA ndAtechqualifc ti nA 5 3. AInAord r AtoAprovid Aspecialis d Akn wledg , AICA Aoffe s AshortAterm i Apostent. AItAhasA courses A nAmanagement accountan y, AcorfairsAand Ataora eAama ageAmanagement,A al oAintro uc d Acourses Ai Ainfor ationA ystemAaud t, A nsur nceAandAris ntern tion lAt ade A ws andAWTO. AItAcond cts Aperiod c A rogramme AonAc mputerAa dedAauditintechn ques AA5.3.3 ICA Athrough Ai s AContinuing Professio al AEducatio ADirect rat AassumesAtheAr sp nsibilit Aof updatin Ai s Amembers Aon profes ionalAi sue Aa isi gAout AofAnewA egislations,A Ago ernme tAA echnolo ica Achang s Aand Ala est policies Aand Ap on unc ments Aof At PE)A asAbeenA and Ao h r Aagencies A/ Ao ganisation . AContinuing Professio al AEd cat onA( Ato Aea nA PEA m de A anda ory Afor ICAI A ember Asin e A2003. Now, memb rs will hav EApro rammes creditA yAun ergoingAsu h Ahe AMrai ing . AIAtoo Ais Anow Af cil titatingAC ingAfinanci lA be ng Ah st dAb Asome Ao Athe Are uted Amedical A ns it tions.AIt isAprovi ssista n c eA o Ath m.mesAtoAt eir 5. .4ABut, Aman Ap ofe sion AdoA otAoffer suchAqualit Aenhanceme tA rogra members. For exam le,Ath Aonly Aopt on a ailableAto a Aprac ic ng lawy r isAt Ajoi AaAtwo-A Profession lA ear AMa te ’ Acourse Ain A AUhe Aiversity. A om iss on Ai Aof A he A iew Athat Athe nd AStan ard A Regu at ry ABodies Ai Acon unc ion Awith At e Arespec ive ANat ona AQuality A 4 A o A6 AweeksA Co ncil Aand the Aacademic instit tion Ashou d Aoffer As ort Adur ti n co r es Aof o ApracticingA rof ssionals for updation Aan Ae hanceme t Aof skills. SuchA oursesAw uldA iveAfie dAan A cqua nt A hemAwi hAtheA ate tAtrendsAand developme ts occur ing AinAthe r Are pec echnolo ica A u date Athe Aon clinical Aand profes ionalAi sue Aa isi g Aout AofAnew legislation,Achanges Aa d Agovern e t ApoliciesA/Apronoun ements.5.3.5AReco menda ion:eArespec iveA a) AEvery Profession l ARe ul toryABodyAin coor ina ionAwithAt tionsAs ouldA Nat ona AQualityA ndAStan ard ACouncil andAAcademic Instit odically for condu tAContinuing Professio alAEducati n Aprogrammes per updat onAandAskil Ae han ementAof121Soci l C pital~d A~Destiny5.4 Ethical Education and Training5.4.1 Decline of ethics among professionals can be attributed to two primary factors: (i) the tenor of the overall educational system; and (ii) impact of the environment. While behavioral changes can be brought about through carefully designed training programmes, trying to change entrenched mindsets is more difficult. It needs sustained efforts from all concerned. Ethics finds a very small space in our current academic content. There is need to give it a prominent place in the curricula being followed by professional institutions throughout the country.5.4.2 Once the education part of a profession is hived off to a different machinery, the currently existing regulatory structure would be free to devote time and energy to issues of entry and maintenance of professional ethics and standards. In this context, holding workshops, seminars and interactive sessions periodically would be of great value.5.4.3 Recommendation:a) After separation of professional education, the agenda of the Professional Regulatory Authorities should be to focus on (i) procedure for registration of new members / renewal of registration; and (ii) matters concerning professional ethics, standards and behavior. The Regulatory Authorities should also pay greater attention to conducting workshops, seminars and training programmes on such issues.5.5 Enrolment in the Profession5.5.1 As per the current practice, once a person successfully obtains a professional degree, getting registered as a member of the profession is almost a matter of routine. The candidate is asked to fill up certain forms, deposit a prescribed fee and thereafter he is enrolled as a practitioner. Such a perfunctory procedure is not in the interest of the profession. There is need to put in place a stricter procedure for enrolment / registration of new members.5.5.2 The Law Commission, in its 184th Report submitted to the Government in 2002, had recommended that an apprenticeship of six months followed by a test should be made mandatory for registration at the Bar. In this connection, it had quoted the report of the “Ahmedi Commission on Legal Education” submitted in 1999. The National Knowledge Commission recommended that entry into a profession should be based on an examination conducted by the respective Professional Regulatory Body at the national level.5.5.3 Currently, two kinds of law syllabi are being followed in the country; one is the three year degree course for graduates, and the second is the five-year integrated course122Self-Regulatory Authoritiesfor senior schfor seniorAsc oolA assou s.ABoth theseAc urse Apro id AsomeAkin AofAprac ic lAtraini gAtoAst dentsAthroug Ao gani ationAo AmootAcourt ,Aintera tive sessio sAw thAJudg sAa dAlaw ersAandAsh rtAa tachmentAwit A nstitutions / Ai d stries.sAanAinte ra For A AaAm dicalAcour e, in ernshipA For ACharter dA co ponent Aof the syllabus. retar es too,A A countan s Aand ACompa yASe AonApract calA there Ai Aconside ab e Aemphasi ionA sAof the le rni g. AHence, A he Co mis AofAprac i alA viewAth tAanyAfurth r A equiremen tAofAentranc A trainin A/ i ternship orA As parateAs fo Aen olmentA ex min ti ns Amay not beAneeded rAto Aen ureAaA o AnewAmem er . AHow ve , AinAo d heArespectiv A ea thy growthAof At eAp ofession,A ityAshoul Ab A Professio alARegula oryAAu ho uidelines fo A empowere Ato Ap escribe Aba icAen olmentAonew A embers.A5.5.4 ARec mmenda ion a)AWithinA he parmete sAo AtheAAct,A heArespect veARegula oryAAu ho ityAshoul Ab Aempowere Ato Aprescr beA uidelines fo Aen olmentAone Amembers.A5.6ARenewa /R validationAofAReg st ati nacticeAi Ao rA 5. .1AAsAper A heApreva li gAp eAaAperson is c untry, Ain Aal Apro e sions, on re isteredA sA nAentran , heAacqui esAaAlifeti Am mbershi . A No Aproc ss ofA renewalAor Ar -r gistra ion AisAneed dAt erea ter.AT e A nlyAg o ndAon AwhichA Aprof ssio alA ouldAlose A isAme be s ipAw ul AbeAaAc seAofAe tremeAdevin t Abe av our.Athe A iewAthatA 5.6.2 The Co mis ionA sAof wh n Atechnol gy Astand rds ofAinAAfc tioi Ain AUS C rti idAdocto sAtoA InAthe A nite AStates,A anyAho pitalsA orAc rtific tionA pr ctice wi h utApr of Aof aAvalidAboar rialAA vo a in yA Ath irAspeci lty.A at onalA oardAofAAof At orne sA (NBTA) A s AaAnon-profiAo ganizatiolityAofA ria s A tAu Aw thAtheAai Aof betteri gA heAqu Astan ar s AbyA advocacy Aan Aestablis ingAobjec iv tiseAof A rial wh chAtoAmeas re A xperience an Aexpe Ath AAmericanA law ers. NBTAAhasAb en acc editedAb heAsp ci lityA B rA ssociat onAtoAc rt fyA awyersAinA s.ACert ficateA a eas AofAc vil Acrimi alAan AfamilyAla ningAofAthei A h l ers Aunde goAaAthor ug Ascre nce,AaAform lA credentials, do umentationA f experi eAcheckingAo A e a inationAandAa comprehe si m.A osse singA discip inaryA atters A aised againstAtht orneyA oldsA theAN TAAce tific teA eans Atha AtheA Ah gherAlevel Ao sonal Apr fessionaAc nduct. AandAperww.nbtanet.o gSource:Awsi nAinAtheAUK R validat onAinAMedi al Pro esoAp ocesse :AA ThArevali ationApr ces AinvolvesA“goodAmed calA (i ADoctorA ho sApr ctic Ain Al neAwith frmsAth tAth A p act ce”A GMP Aan A(ii) i At eAGM Aco llAcontin e.A licenceA ndepend ntAorA Apprai alAand ACli icA overnanceAa dA tesAto Aobtain utside ACli icA ove nanceA re twoAro gh AApp aisal/A rev lidation.AFo Arevali ationAthros should have: Clin cAG vernanc ,AtheA octor cWorkedl nderrclini alrgov rna cevduringith prevali ationAperiod n ala pra sal ~P rticip tedinan~docume tat on ?Kept~ hesupportingsideAClini alA WhereasAfo Arevali ation At roughAou r Amu t Ash w:- Gov rna ce Arout , Ath Adoctoi ~harteivoanl ?Tey hav ~follo ed MPduringthpe io ?aEvidenceiof pa ticipat onsineqalityiassu edaappra sal?oAna ysed outcomesnfrom questionna redtool “GoodAMed calAPrac ice AinvolvesAt eAfo lowing:? Good?linicalncar ?oMa ntainin pgoodime d calcprac ice tTeachin g andatraining? Rela ionships?ithkpat ents cWorkingewi hrcollea ues?tProbi ty? He lth ubjectAtoAth Asatisfac oryAevidence Arvalidat on isA ionalsA y AtheA rantedAtoA heAregi teredAmedical pr feseryAfiv A ears. G neralAMe icalA oun il,AevSource A:Akill Aand theABox.A5.1 AProfessiona ARali ati nAUSAAandA K123Social Capital – A Shared Destinyfunctional environment are changing rapidly, obtaining just a degree at some point of time is not enough to sustain professional competence for a lifetime. There needs to be a statutory provision that a registration / license will require revalidation / recertification at specified intervals.5.6.3 Recommendation:a) There should be a provision in the relevant laws that a professional registration/license will need revalidation after a prescribed number of years. It could be done after successful completion of a course prescribed by the respective Professional Regulatory Authority.5.7 Disciplinary Mechanism5.7.1 A Professional Regulatory Authority sets and enforces standards in a profession so that its practitioners can earn the trust of their clients. The autonomy given to a Regulatory Authority in matters of discipline obliges it to preserve professional purity. For instance, in the legal profession, it is society’s expectation from the legal fraternity that it shall objectively and diligently provide inexpensive legal aid and advice to all who are obliged to take recourse to legal remedies. It must remain vigilant and keep strict disciplinary control over breaches of ethics by its members. This is so with the other professions as well.5.7.2 Though, the Regulatory Acts prescribe a mechanism for disciplining professional practitioners, in actual practice, the enforcement of ethical conduct among them remains weak. It is primarily because of two reasons: (a) there is reluctance on the part of the public to report cases of deviant behaviour because of (i) ignorance, (ii) respect for the profession or (iii) for fear of reprisal; and (b) many of these Bodies have not been able to develop a proactive attitude which could suo motu take cognizance of unprofessional / unethical behaviour of practitioners. The statutes need to be strengthened on these aspects.5.7.3 ICAI has an innovative mechanism to punish errant members and prevent unethical practices. It has a pro-active disciplinary cell which speedily investigates complaints against its members. ICAI entertains complaints not only from stakeholders or user-groups but also takes suo-motu action on the basis of its in-house information. The provisions contained in the code of conduct of ICAI are very stringent and the agency is equally effective in taking action against its defaulting members. Peer review is undertaken to ensure compliance with technical standards and adherence to quality control policies and procedures. Often, ICAI on its own, looks into public accounts of different organisations including Banks and financial institutions. Disciplinary actions is taken if there is any deficiency in reporting. Quality control among Chartered Accountants is ensured by peer pressure and financial reporting review.124Table 5.1: Disciplinary Committee Meetings held, Cases Disposed of, and the Nature of Orders from 1st April, 2006 to 31st March, 2007 (Bar Council of India)1. 29/30.5.2006 Delhi2281412—1—12. 6/7.5.06Ernakulam338115———63. 13/14.5.2006 Delhi21953—1——14. 20/21.5.2006 Mumbai34612812—1—5. 27/28.5.2006Chandigarh 235138——1——226. 3/4.6.06Jaipur23613621—227. 19/20.6.2006 Delhi223632—1——8. 8/9.7.06Hyderabad3523418221299. 15/16/7.2006 Delhi12463—11—110. 24/25.6.2006Delhi11221————111. 12/13.8.2006Delhi12042——1—112. 18.8.06Kolkata21865———1—13. 26/27.8.2006Banglaore3241033—31—14. 23/24.9.2006Delhi12011————115. 7/8/10. 2006Delhi12222—————————16. 14/15.10.2006Ernakulam45531132242817. 4/5/11.2006Delhi11931—11——18. 11/12.11.2006Hyderabad456208——. ——1219. 24/25.11.2006Delhi21432—1———20. 2/3.12.2006Bhopal4643091—551021. 9/10.12.2006Delhi122———————22. 23/24.12.2006Chennai3592816————12Source: Annual Report, 2006-07 Bar CoSl. Date ofPlace ofNo. ofNo. ofDisposedDismissed Nature of OrdersNo. MeetingMeeting CommitteesCasesofRepri-Suspen-AppealRepri-JudgementmandeddedAllowedmandedreservedSelf-Regulatory Authorities125ocialAC p t lA–Aed Destiny5.7.4 For advocates, the State Bar Council gets a period of one year to decide on a disciplinary proceeding, but there is no time limit for disposal of the case when it comes in appeal to the Apex Body (the Bar Council of India). For medical professionals, the respective State Medical Council has been given a period of six months to decide on a disciplinary matter but again there is no time limit for deciding an appeal filed before the Apex Body (the MCI). Further it will be evident from the Table 5.1 that only a small percentage of the complaints result into penalty.5.7.5 The Commission feels that the existing in-house mechanisms of the Professional Bodies have not acted in the best interest of the people or the profession. The Commission is of the view that the participation of the stakeholders is needed to bring objectivity in the system. Hence, every Disciplinary Panel should have a membership consisting of senior professionals as well as outsiders (lay persons) in the ratio 60:40. Whenever a complaint is received, it should be disposed of within a given time limit (say 90 days). An appeal against a decision of the State Panel would lie before the Apex Body which again would be required to dispose of the matter within the same time limit.5.7.6 Recommendations:a) There should be provision in the relevant laws that in order to bring objectivity in their working, the Disciplinary Committees of the Regulatory Authorities at both the State as well as the national level should consist of professional and non-professional members. They could be inducted in the Committee in the ratio of 60:40 respectively.b) The law should provide that such Bodies should be required to complete the entire disciplinary proceeding within a prescribed time span (say 90 days).c) The law should also have a provision that anybody aggrieved with the findings of the State Panel could go in appeal to the National (Apex) Body which too will have to dispose of the matter within the prescribed time limit (say 90 days).126Self-Regulatory Authorities5.8ACom os tio AofAtheASelf-Re ulatoryAAuth o r i t es5.8.1AI terface bet eenAtheAGo ern ent andAtheARe ulatoryABodie Ai ten A 5.8.1.1ARe ulatory AAut orit es Ah veAbe nAgiven Acons derableA ut nomy by law.ATh str intA of th Al wAis AtoA eas ure Ath Apub icAth t Athes ABod esAwill A unction wit outAanyAco Ae tentA and provide quality se vice A o At em AButAi AactualAp actic ,At ereAare Ava ia ion AinAth nomyAasA ofA utono y Awh ch Asuc ABodie Aen oy.AFor A xam le, the ABC Aenj ysAmoreA ut acti e.A om are AtoAt e A ICTEA n A ermsAof set ing Ath Aag ndaAfor Aed cation,A rai ingAandAphereA a AtotalAre A nly Atwo Ago ernment Areprese tativ s A(both A x-officio A emb rs A ut Aof tr ng h A fA2 Ain theABCI General CouncilA( ttorney Gen ral AandAS licitorAG neral,A hil AinAth AA CTE A1 Ao tAo A21AareAgo ernmentAreprese na t i ve .A5.8.2 AG verningASt r u ctu r 5. .2.1AInA ene al,AtheARe ulatoryAAut orit esAh veAbeenA od lle AonAtheAParli ment ry AhavingA form AofAgo ernm nt withAan elected Gene al A o y AandAa smallerAE ecuti e Aoutfi eA( C),A n minated A embers.ASt uctu es A ikeAthe General A oun il, AtheAE ecutiveAC mmit t theAs xA the AEduc tional,AExam nation, Eth cal Aand FinanceACo mit eesAar Ac mmo Ato all ber. TheA SRAs.A oweve , A here Ais Acons derable Av ri tion A n Athe rAsize, Acom osi ion Aand nu CAI hasAthe larges An mberAof A tandingACo mitte A( 7) AAIt Ais A ol owed byAI C IA(20 ,AICW I A( 8), AM IA( 6), and AB IA 10) AAs perA he siz AofAthe Gener lAB dy, theA CIA opsA SI withAheAl st A ith A119 members A ol owe Aby COAA 1, A CAI 40, BCIA2 ,AI WAI A ndAI itt es. 20 membe sAeac .AAls ,A here Ais Av ri tio AinAtheA tr ngt Aof AtheAE ecutiveACom MC AhasA10 A embers, A ol owe Ab ABCIA , A CWA A7 ACOA 7 AIC I A6 A ndAICSI 5.Ta leA5.2:AS ruc ureAandACom os tio AofAtheARe ulatoryAAuthori ie NamAofA he SizAofA he SizAof th ANo. AofASubjectOrgaisation GenealABodyAEecutiveAandingAACmmitteeACommie eC21A9 A1MCA119A116A40AA6ICI20 AA18S20AA2O41 AA7A 5 ourceA:Aompi ed A romAtheA eb itesA fAtheseAa127Ao ialSharedACa italDestinyA–A5.8.3 Membership of the Governing Bodies5.8.3.1 Generally, there are four routes through which a professional can become a member of the Governing Council of a Professional Body (at both the State as well as the apex level) i.e. by election, by nomination, by co-option or by ex-officio membership. Some seats are reserved for teaching faculties of Universities / Colleges. The challenge is to find a model that will promote inclusiveness and transparency, and which will enjoy the confidence of the profession as of well as of the citizens.5.8.4 Tenure of Office and Collective Leadership5.8.4.1 Free and fair periodic elections together with a short tenure for office bearers can promote collective and honest leadership. The control of an institution by a few individuals for a long period is not a healthy practice and invariably leads to growth of vested interests. For instance, one individual remained as President of the Council of Architects of India for 21 years (1973-1997) with just a two-year break. The tenure of the President in the MCI is five years and there is no bar on seeking re-election. An incumbent thus remained in office for ten long years till he was advised to step down by the Delhi High Court on corruption charges. Such long tenures also deny entry to younger professionals who could bring new ideas to such Bodies. The tenure of the President in the ICAI and the ICWAI is just one year.5.8.4.2 It is felt that the existing governing structures of the Professional Regulatory Bodies do not have an inclusive character. There is no client representation (unlike in the UK and the USA). Secondly, the ratio of elected and nominated members too is highly skewed. In the BCI, 19 out of 21 members are elected and the remaining two are there in ex-officio capacity. On the other hand, in the AICTE, 19 out of a membership of 21 are government nominees or ex-officio members. While in the ICAI, only 6 out of 40 members are ex-officio/ government nominees. Thirdly, there is no provision for sectoral representation (i.e. from various sub-specialisations; dentistry, pharmacy, neurology and bio-sciences in the MCI or corporate, human rights or businesses law in the BCI) in important functional committees. Often, the Committees appear to be biased towards a particular region, class, group / community. An organisation like the BCI with just 21 members is too small to be genuinely inclusive.128Self-Regulatory Authorities5.8. AAny A ttemptAto Ar formA heseAAu horitiesA ou dAr quireAadhrenc AtoA heAfollowingAfour AcoreA r nci les: statutoryA un tions AasA ffec ive essA– AtheA eedA or the ARegul tor ABodyAtoA ischargeA ts dAsp edi y Awith Ainput Affect vely Aa Aposs ble.AThe e ABodies Ac uld operateA ffect velyAaAifAtheAor ani at onalA fr mAke Asta eholder Aand A it AmuchAclearerAl ne Aof accountability struct resAa e Aof Aa pro riat Asize,AsipleAand AtaskA r ent d.AnAof Akey Astake o der .A I cl sive ess –AtheAnee Ato haveAthe Aconfien eAa dAparticipat itableAtoAsta e old rs.A Ac ou ta ilityA–Athe ne d AtoAbeAaccou ra sp renc A– Ath Ane dAto Abe Ao en A bout Ath Adec sionsand Aa ti ns Athey At ke.Are ard At Aconstitut onA 5.8 6 ATheAf ll wing A acto sAshouldAbe At kenA ntoAco si erationAwith Ael cted Apr fess ona sA of At eseARe ulato y ABodi s. Fi st, Athe eAshould be anAover llAmajorityAo dly,Athere shouldAbe A A (inAkee in AwithAthe Aprincipl AofAprofessi nally-led regul tors). Se o 0:4 ),AinAkeeicant ApringA ithA s gnipo tion of Al y A emb rsAin th m A(say A n A he Arati AofAnApartn rship Aw thAtheA the Aprinciple A hatAprofes ion lly-ledA eg lato s A reArequired to Aw rkAAshoul Aa so AbeA nAtheAeneralApub ic.AThirdly Anominate /Agover mentAa poin ed me bersio AshouldAbeAre ewedA Board. AThAB dy’ Aaccou tab li yAt AtheApubli AandAt At eAprofet a b il ty to AParliam annt Astre gthene . A as ly, Ather AshouldAbe AanA xp icitAaccounuldAconheACoistAof A Ala g A 5. .7 Amiss on A sAofAthe Av ew Atha AtheAR gulator AB d esAshAwellA efin dAstatutoryA Gene alACounci AandAaAsm ll AEx cuti eACo mitt eA(EC) AeachAwitthA50- 0 membe s Awould power Aan Aresponsi ili ies. AFo Ainstan e, At e AGen ral ACou cilAw tho eAof Ainclusiven ssA strike A Ari ht AbalanceAb tw en AtheArequi eme ts Aof effctiveness Aandsine s AIts size AwouldA a d acco ntabi ity. SuchAaABod Ac uld AmeetA requently toA isch rgeAband,Aa A ma ler AG neralAffe AaAwide persp ctiveAo Am tte s Aund r Adeb t . AOnAth AotherAtive.A Acr ationAo AaA C uncil ofA 0-2heAmem er Acoul ArunAtheAriskAofAbe ng non-repr se t uldApermitAst ke olderA arger Bo y A nables Ath Am delA oA eAinclusi e A sAwel AasAeffctive.AItAw articipation in A olicy Af rmulation,A nd A rovide op ortunit AfrApeo leAtoAinvo ve inA ACouncil would Ai cl deAtherA ct vitiesAof theABody. The sta utoryAf nctions of Ath AGenera lectingA embersAof A he AExcut v ACommittee Ae ectin A/Anomina in to Ao herAstatu oryAor Anon-Astatu oryApolic ACo mittees, requiring the Excut veACommitt eA ndAoth rACommi tee AtoAsubmit AR p rtsAand As rutin singA/ Aana129So i l Capitaared A–AADestinyASh5.8.8 A small Executive Committee consisting of 10-15 members would be suitable for preparing policy papers, for implementing and monitoring policies, and taking urgent executive action. This Body would be required to work within the boundaries of transparent standing orders issued by the General Council. The overall responsibility for discharging the main statutory functions such as registration, setting standards of practice, and acting on complaints against professionals should lie with the Executive Committee.5.8.9 As regards the tenure of the Members and the office bearers, the Commission feels that no office bearer should be allowed to continue beyond one term. However, in case of members of the Council, there should be a limit of a maximum of two terms.5.8.10 Recommendations:a) The structure and composition of the General Council and the Executive Committee of Professional Regulatory Authorities should be rationalised. As far as practicable, it should be uniform for all of them.b) Every Authority should have a fairly large and representative General Council (the ideal number could be around 50; such a Body encourages a wider perspective and diversity of opinions).c) The Executive Committee should be a small Body consisting of 10 to 15 members (a compact forum supports administrative efficiency and accountability).d) There should be an explicit provision that a person cannot be elected to the post of President / Vice-President or General Secretary for more than one term. However, a person could be elected as a member of a Body for a maximum of two terms.5.8.11 Committees and Working Groups5.8.11.1 Though, the Executive Council / Committee is generally responsible for the overall day-to-day functioning of the Regulatory Body, it needs to be supported by specialist Committees / Working Groups. These specialist Committees and Working Groups should remain accountable to the Executive Council for the discharge of their functions. People from outside the Council could also be co-opted to such Bodies wherever found appropriate.130Self-Regulatory Authorities8 12 ACl e ts /AU ersA–Aa AL yAMembersA nARegulatoryAAuthor tiesementAof Akey 5.8.12.1 Profession lAregu ationAca not Afuncti nAeffect vely Awithou Ai vol holdersA lay stak holders fro AoutsideAth ApATh ofession. Ai volv mentAofAsuch stak memb r )AhasAbeenA Afundam nt lAfeature Aof Profes io alAB dies AinAmnyAdevelop dA community Ai A ountri s.AT Aen ureAtha AtheAba anc AbetweenAt eAp ofe sionA nd AtheAwi er embers. (La m A inta ned, inAmanyAsuchA rgan sa ion AhalfAof theAs reng hAc mesAfrom layA eA egister dA membersA re AcurinedAas Athosen ly AdeAin ivi ual AwhoAare no Ae igibleAtoA sAm mbers Aof A he Aconcern dARegulator A uthor ty).AA Alarg AstakeholderArprese tat onAgivesA he authority Aa Ao portuni yAto Aembra eAdiver it , A hether Ait is expre se AinAter sAofAg nd r, Aregion AorAs cio-econo mi cAgroup ng .in AUK AinAth A 5.8.1 .2ATheAm th dAa optedAb Athe AGe eralAMe ical A ou ci A( MC) iv ACo ncil,A a poi tment Ao AlayAmem ersA rovidesA om Agui ance Ain Ath s A irect on.ATheAP Al yAm mber on AtheAr co men at onAofA heAUKAHealt ADepartme t, Acurre tly appoint s Ain Athe GM .eh ldersAand 5.8.12.3AheA om iss onAi AofA he viewA ha AinAor erAtoAsecur Ai volvementAof sta Ae e yAforumA toAencour ge diversity ofAop nions, th reAshouldAbeAr pr sen ationAo Al yAper onsAipoin men AofA of aARegulato y AAu hority AThre shouldAbe anAimpart al mech nism AtoAmak Aarnm ntAmakesA suc Al y AmembersAonAp e-determi ed A rit ri .AThisAc n A eAe suredAifAt eAgov the ap ointmentsAin cons lta ionAwithAt eARegulat ryAAuthorityAconce ned.5.8.12.4ARecom en ations:veACom it eeA a)AThAc mpo itionAo AtheAGe er lACo nc lAa AwellAasA heAExecuts ould be A uc Ath tA40%Aof theAstre gt Aco sistsAof l yAm mbers.b)AT eA omi ationAo AlayAm mb rsAs ou dAb AdoneAby teAMinistry /ADepartm nt concernedAin cons lta ion AwithAth AappropriaeARegulatoryA uthority.a r yAO ersight 5.9AA cou tabilityAandA arliamentATho gh,AtheyA 5.9.1ASe f-Regulator AAuth ritiesAenjoy considerab eAfunctio al Aaut nomycom lete AThe re cre ture Aof At eAlaw,Atheir Aa co ntability is Acurren lyA mbiguous Aan Ai leAforAtheir lawAdoe Ano Ap ovideAfo AanAexpli itAme han smAw ichA anAholdAthe Are ponsi igh A o AknowA pe formanc .ATheAPublic AParliamen ,AG ver mentAand At e Apr f ssion ha eAaA howAaASe f-Regulat ry AAuthori y Ad schargesA tsA un tion Aand toAholdAthem131Social C p talA–A ASharedDestiny5.9.2 It would be pertinent to quote here from the report of the Committee of Inquiry into the Regulation of the Medical Profession (the Merrison Report) published in UK. The Report says that the professional regulation is:A‘ contract between the public and the profession...the legislature – that is, Parliament– acts in this context for the public and it is for Parliament to decide the nature of this contract and the way it is to be executed’.5.9.3 The Commission is of the view that a Self-Regulatory Authority’s primary accountability as a statutory Body must be to Parliament, which, on behalf of the public, defines its powers and responsibilities.5.9.4 Recommendation:a) The laws governing the Self-Regulatory Authories should have a provision under which the Regulatory Authority should be required to present an Annual Report to the Parliament for scrutiny.1326COOPERATI VES .1AIntroduct io n6. .1 “A Acooperat ve is anAautonom us Aassociat on of Apers nsAuni ed Avoluntar ly toAm etAth ir Acom onAeconom c, Asoc alA ndAcultu alAne dsA nd Aaspirati ns Athro g Aa Ajoin lyAow edA meA ndAdemocratica ly Acontrol ed Aenterpris ”. ACooperati es asAbusin ssAenterpr se Aposs ssAs heA ba icAintere tsAs ch asAowners ipA nd Acont olA ut Ath seAintere tsA re Adirec ly Aves ed inA edA ha ds of A he Aus r. ATherefo e, At ey Afol owAcert inAbr adAval esAot er At anAth seAassocia rsA pur ly Aw thApr fitAmaki g. AN ed A orAprofitabil ty isAbalan ed byA he Ane ds of A heAmemb es ndA he Awi erAinter st ofA he Acommuni y. TheAval esAuniversa ly Arecogni ed asAcornersto ryA of Acooperat ve Abehavi urA re Aself-he p,Ademocra y,Aequali y,Aequ tyA nd Asolidari y.AVolunt nd Ao en Amembersh p, Ademocra ic Acontr l,Aecono icAparticipati n,Aautono y,Atrain ngA ndAinformat onA nd Aconc rn A or Acommun tyA re A heAoverarch ng Afeatu es by Awh chA heAcooperati esA ut Ath irAval es Ai toApractie.A .2AHist ry of ACooperati es inAIndiaasA 6. .1 TheAInd an Acooperat ve Asec or Acomple ed A 03 Aye rs ofA tsAexiste ce in A20 7. ItA toA b rnAdur ng A heAla erAp rt of A he Acolon alAe a’Apredominan ly a AaAGovernm ntAinitiat ve i A addr ss A heAt in Aiss es ofAfarme s’Aindebtedn ssA ndApover y.AhisAinitiat veA as Aformali ed n A a Alegislat onAenac ed in A1 04Aentit edA he A“Cooperat veACre it ASociet esAA t, A190 ”.ADur khA aAcent ry ofA tsAexisten e, At is Asec orA asAbu l Aa Anetw rk Aconsist ng of Am re At an A5 45Al heA individ al Acooperat veAorganisati nsA ndAo er A 36 Amill on Amembe s. It isAnumerica lyA 55A larg stAmovem nt ofA ts Ak nd inA he Awor d. AW t Aa Awork ngAcapi alAb se of A s.A34, 0 0 , llA millio s,Aprese ce inApractica lyA llAwa ks ofAru al Al feA n AaAcover ge Aspann ngAalm stA stA villa es ofA he Acount y, A he Acooperati esAh ve Ac me to be Arecogni ed asA ne ofA heAm nt import ntAecono icA nd Asoc alAorganisati ns in A heAnatio ’s Ali e. ACooperati esA reAme veA to beAenterpri es of A he Acitiz nsA nd it isAenvisa ed At a Aa Avibr ntA nd Arob stAcooperat alA movem ntA an Asignifican ly Acontrib te inAharness ng A he Aposit ve Apotent al of Asoc alAcapi orA heAgrea er Ag od ofAsocie ty.ngA 6. .2 The ACooperat veACre it ASociet esA ct of A1 04A as Afollo ed b AaAnum er ofAsupport legislati nsAinclud ng A he ACooperat ve ASociet esAA t, A1 12Awh chAprovi ed A or A he Aformat133Soci l C pitalA AeStinyof non-credit societies and federal cooperative organisations. Provinces like Bombay, Madras, Bihar, Orissa and Bengal enacted their own cooperative laws on the lines of the 1912 Act. In 1928, the Royal Commission on Agriculture submitted a report emphasizing the importance of cooperative sector and observed that “if cooperation fails, there will fail the best hope of Rural India”. In 1942, the government enacted the Multi Unit Cooperative Societies Act which was an enabling instrument for incorporation and winding up of cooperative societies. The Reserve Bank of India formed in 1934, had agriculture credit as a part of its basic mandate. By extending refinance facilities to the cooperative credit system it played an important role in spreading the cooperative movement to far corners of the country.6.2.3 Post-Independence, cooperatives were considered to be the part of the strategy of planned economic development. Pandit Nehru visualized an India in which each village would have a panchayat, a co-operative and a school23. Rapid and equitable economic development became the focus of the State policy. In the early 1960s, cooperative legislation all over the country underwent a major change on the basis of the findings of the All India Rural Credit Survey Committee (1951-54) formed under the Chairmanship of Shri A.D. Gorwala. The crux of the Committee’s recommendations was that the State should play an active role in the spread of the cooperative movement. Based on these recommendations, States enacted new laws / amended the existing ones under Entry No. 32 of List II, Schedule 7 of the Constitution. The new legislations gave them a major role in the functioning of the cooperative institutions. Cooperative Societies having jurisdiction over more than one State had to encounter different laws and therefore a need was felt to introduce a separate consolidated legislation for them. Parliament accordingly enacted a Multi-State Cooperative Societies Act in 1984 under Entry No. 44, of the List I of the Schedule 7 of the Constitution.6.2.4 Over the years, there has been a growing realisation that undue interference from the State, lack of autonomy and widespread politicisation has severely impaired the functioning of these institutions and there is need to introduce urgent reforms in the sector. During the last two decades, a number of Committees were appointed to go into various issues of cooperatives. Choudhary Brahm Prakash Committee (which proposed a model law) (1990), Mirdha Ccommittee (1996), Jagdish Kapoor Committee (2000), Vikhe Patil Committee (2001) and V. S. Vyas Committee (2001 and 2004) went for a complete dissection of the sector and made a number of valuable suggestions to turn cooperatives into self-reliant, autonomous and democratised institutions. These Committees strongly advocated the need to replace the existing government dominated cooperative laws by a new people centric legislation.e3Speech o2 Spe ch AofAt eAHon bleAPrim AM nister ofAIn ia, AwhileA nnounci gA et ingA pAofA as AForc AonAruralAcoo erativsmber ANov2004.e134Cooperatives6.2 5 A6 2 5AAs AaAcons qu nce Ao AtheseArecommen ati ns and AonA up o t AofAaA izableA ec ion ofAtheAcoop rative Acom uni y,Atw Amajor even s Atoo Ap ace on AtheAcoop rativ As eneof AtheAcunt y.rativeA (a)ATheAGov rnentAof AndhraA radesh pas ed At eAA.P.AM tuall AAidedACoop AotherA So iet es AAc A19his AwasAf5.All wedAbyA imilar Aena tm ntsAi Aeigh tates; Bihar,AJha khand, Madhya AP adesh,AChhatt sgarh AJa muAandAKshmir,AKar ataka, Ori saAandAUttarkha d.L w AbyA (b) AThAUnion AGov rnment Ar pla ed Athe Ae isting AMult -State ACo-op rat veAfreshA t tut A–Athe AMult -StateACoop rativeASo ieties (MSC ) AActA2002 AA2 02.A 6.2.6 AGov rn entAo AIndia Aan o nced Aa AN tional Po icy Aon ACo-ope at ves Ai onAandA TheAu timateAob ec ive ofAthe AN tional Po ic AisAtoA rovideA upp rtAforApr mot at onsA deve op ent AofAcoope at vesAas Aauto omous,Ainde end nt AandAdem craticAorgani ry.AThe oAth tAt eyAc nApla Ath ir Ad e A ole in Athe Asocio-e onomic Adeve op ent of AtheAc un rativeA Policy A urth rA imsAatAre uc ionAofAr gionalAimb lan esAandAstreng he ing AofAcoop rativeA edu ation, At ain ngAan AhumanAr source Adeve opm ntAfor Aprofessional sa ion AofAcoop Atheir mana em nt.AItArec gni es AtheAd stinct Ai en ity AofAcoope ati es Aan As eks AtoA uppor val esAand Apri ci lesAbyAcat lysing St tesAtoA rovi eA hem Aan Aappr priateAadminis rat veAand Alegi lativeAenvirnment Aecade A 6.2.7ACo-ope at vesAi AInd aAh v AhadAa Ach queredAh story. Dur ngAt eAfistAfewAifcantA afterAIndepe denc , Athis sector p ayed AaA ivot l A ole inAtheA co omyAby making iAsig gAfoodA contr bu ion toAourA rimary sectorAprod ct on. It had AanAim orta t A ole AinAb ingi ofAnewA suficiencyA hro ghAth AgreenArevo ut on, Ain Ab il i gAupAaA etw rk Afor Adistr bu ion pat onA va ie ies Aof seeds, Afert liz rsAa dAcash cre it andAin Ac ea ingAan Aenvi on entAofApartic tr des a dAhop Aam ng Athe A eople.ABe inni gAwi h A mul AinAG ja at, A tAtook Aextrao dinaryA andA2 A inAth Adairy sect rAtoo.ACur ent y,A170 AD strictACoop rati eAMilkAP oducer Uni ns ducing Stat ADairyAFede ationsA eserve cre itA orA(a)A urnin AInd aAi toAthe A arge t AmilkApr na ion of Athe wor d, A ndA(b)Ab ingingAsubs antia Ar ise inAthe family in omeAofAm ll onsA f AmilkApr ducers acr ss AtheAc untr .ABu ,Aev n Athis sec orA as Ano AbegunA howi gAsom As gnsAofAf ti ue.A nAmany areas,Apro uct on AhasA e chedAaA lat au A ndAt e A ate AofA apitalAfo ma ionAisAinadqua e.A6.3AE istingAWeakne s s sAt dayA 6 3.1AThAaboveAachie ementsAnotwithst ndi g, AtheAcoop rativeA ec or Aas Ait exist n A ost ofAthe A ta es,A sAw akAandAin c ive. AAAm jo ity of AtheAcoope ativ sAlookA135Socia A a italA–d ADestinyASharegovernment patronage both for business as well as for their capital requirement. In this regard, two areas of concern stand out prominently:(i) Bureaucratisation and Government control – When the colonial rulers officially brought the cooperatives to India, they created the post of the “omnipotent” Registrar of Cooperative Societies, a position specially designed by the government with a view to operating the final levers of control over these institutions and not allowing the cooperative sector to blossom as a people’s movement. The government of Independent India, while championing the cause of cooperatives, not only retained this key position but also further added a complex hierarchy of bureaucratic power centres to the existing structure. Existence of such a government controlled cooperative infrastructure has gone against the very logic of the cooperative movement.(ii) Politicisation of cooperative leadership – The Boards of a majority of cooperative Bodies are dominated by politicians. They are cooperators by default. Many of them are in cooperatives because they want to use this position as a stepping stone for their political ambitions. And there are some who join this sector because their current political standing has gone down. Movement of the first kind may be a normal phenomenon, but politicians joining cooperatives introduces decay in the system.6.3.2 Further, the Indian cooperative sector has failed to inculcate two of the very essential cooperative values. The first is that of self-help. Self-help has been envisaged as a basic tenet of cooperatives. In its very genesis the movement is opposed to both Market as well as State. It is widely perceived that these two institutions have failed to protect the interest of the common man. Both are, in a sense, forces which the cooperators inherently need to resist. Drawing support from such sources is essentially a result of the modern day political complexities. It needs to be understood that governments both in centrally planned economies and free market regimes have generally, been too eager to provide financial and other support to cooperatives and the sector has very often fallen prey to this temptation. The government thus, succeeds in establishing its dominance over them. This trend needs to be reversed. A cooperative endeavour should necessarily depend on its own resources, however small they may be. Its growth and expansion should be evolutionary.6.3.3 The other important missing value is the member-centrality. Cooperatives by their very nature are inward looking organisations. They are meant to serve the member community unlike outward looking organisations such as the corporates which operate for profits. The focus of the activities of a cooperative organisation needs to be on its members. Its business136Cooperativesis to be Ato theirAviewsA is toAbeA evelo edAaro nd Atheir nee s, po iciesAar AtoAbeAde ig ed Aac ordin t,Ain Apracti e, an Aa mi is ration A s At AbeAcar iedAou Athrough Amembe Apar ic pation.AB ofAthe emergingA coope ativ s Ai AIndiaA av Ano Aadhe ed Ato A he abo eAnorms AI Ath Acontextun ry willAhave glo al in egrat on,A tAis bei gAfeltAth tA heApressuresA fA lob lisatio AinA heAc ve initi ti es.A to b Aaddr ssed At Aa Alarg Aextent At ro gh Aupscal n Aof Aself-he p A/Acooperat Thepe ativeAgroup Aa Ainstrum ntsAof eco omicAgrow hAa e Athe eforeA owAbeingAwde l yA iscu se .sA fAw thdra alA 6.3.4 AThreAis Aa Adefiite Acr di ili yAcrisisAin theAcoo er tiveAse to .ATheAproceour eAope ed A pA o AtheASt te Afrom certa n Aserv ceAa ea Ash uldAhave in Athe ordina yA otAhappene . ATheA the Adoors Afor Ac operati is tionAinstead A f Apr vati ati n Ab t,AthisAh s A Ane therAvalue A preva li gApe cep ionAisAthat theAco pe ati eAsecto AinAi sAp esentAf rm,Aha Aval esA fAself n rAcomp tenc AtoAaccept this Achal enge. The efor ,A hereAisAn edAtoA nc lcate helpAand Am mb r Ac ntralityAin ourAcooperati e A rgan sati ns A o Ath tAtheyAn tA nly AfunctionA s A‘ nter ri es’ Ab t A lsoAas units AofAlar erA‘cooperat ieAcom unities’.A6 3.5 Recognisin At eAimportance A fAc opera ives,AtheA nio AGove nmentAh sAtakenAsev ra Ain tiativ s Ain the Arece tApast (forming AE pe t ACom itt es Ao Asho tAandA ongAtermAcr ditAstruc u es,Ap epari gAaA raftAmod lAla ,Aente ingAintoA efor Aag eemen AwithAtheAS ate l Arem ins Ato AbeA Government Aand Aan ouncing Are ival Apac a es) AHow ver, A Alot Amo e A ti ay be Ape tin ntA don , A articu arly, in ASt te Awhere Athe e A s Are uctanc At Amo e A head. AIt A Ain A2004, A hil A to Aqu te the concern Aof At e AHon’bl APrim AM nister Awh ch he Aex resse In Asp te Aof Ath A announci g A he A orma ion Ao At e ATask A or e Aon A evival Aof Arur l Ac opera iv s. A ace this A ecto A l rge coverage Aof A he Aco-ope ative mov ment Athere Aare many chal enge Athat A y Ai Athe A pr adA and th se will Ah ve At Abe fac d. AThere A s Afor A xample Aa great Adeg ee of A iabili ome ASta es AoneA and Ad pt Aof coverage Aof the Acoope at ve Am vement AIn so e Apl ces Aand in A y Ahave Ano Aev nA no ice Aan Ain ense Aand ac ive Apresence of Acoop ra ives Awh reas in Ao her , Ath rative Aonl A nA scrat he Athe A urface Aof A heir potenti l. AMany Aplaces Aunf rtunately, Ah ve Ac op Ath ir Afinanc alA paper, with Aa A om let Aabsence Aof the Acoo erat ve Asp rit. Even Aw ere At ey Aexist ooperat ves notA and Ab siness strength Avarie Asuhis Aleadstant all . AAon At Awonder- Awhy do Ath Aperformance suc ee Aan Ablosso Ain the clim te and A he soi Aof Asom Aof ou ASt tes? AWhy Ais ?A nAthe answerA of cooperat vesAso variableAac ossAac ivities, acr ss Asec ors, Aand ac oss region ea t iv Aa ti n.”A to the eAq estio s Al eAtheA eedsAfor Af tur Aproduct veAandA c At at A ave AriseA .3.6 AItAi Aa so Aimport nt At Are ognize AthatAt eAc rcumstanc sAan Asit atio Alarg Aparts ofA to theAcoop rativ Amoveme tAabo tAh ndr d Ayea s A goAareAst ll inAex stenc Ai s,Ama ginal AandA ruralAIn ia. Eigh y- our perAcen Aof A ur far ersAfall in theAcateg ryAofAla dle produce AandA he sm ll Al nd old rs,A heyAdo no AhaveAacc ssAto Ao gan sed Am rketsAf rAt eiravailabilit Aof Aag ic ltu eAc editAisAfar tooAinadequate. Non-agricu tu eAact vitieissueAo As ci l Acap tal asAan Ainput for developme t and Aself-he pA/Aco137Social C p talA–A ASharedDestinyare equally credit starved. In this background, the most appropriate institutional structure which has the capacity to tackle these problems is cooperatives. They can provide credit to the rural people at affordable rates. They can also play a major role in other primary sector activities such as livestock development, dairy production, fisheries and agro-forestry. Cooperatives can establish linkages between credit and market and thus develop into multipurpose rural institutions. The role of cooperatives could be very important in other related operations as well such as sale of consumer goods, sugar production and housing. There is need to comprehensively revive and strengthen this sector by adopting a multi-dimensional reform agenda covering all aspects of legal, institutional and policy changes.6.4 Constitutional Context6.4.1 Cooperatives find mention in the Indian Constitution explicitly at two places: (i) in Part IV, Article 43 as a Directive Principle which enjoins the State Government to promote cottage industry on an individual or cooperative basis in rural areas, and (ii) in Schedule 7 as Entries 43 and 44 in the Union list and Entry 32 in the State list.6.4.2 In addition, the Right to form cooperatives can also be construed as a Fundamental Right emanating out of Article 14 – (Right to Equality) and Article 19(1)(c) as ‘Right to form Associations or Unions’. Theoretically, when a cooperative is formed by a set of people to serve some common needs of the members, it inherently falls under Article 19(1)(C). To that extent, even if the State is providing financial and other support to such an institution, Constitutionally it is not permitted to exercise any control over it. Any law made by the State to regulate or control cooperatives is prima facie an infringement of the Constitution and the Fundamental Right. However, in practice the growth of the cooperative sector has taken a different route and government has always taken it for granted that it can make laws for regulation of the cooperative sector just as it does with the other subjects in the State list.6.4.3 In this background and on the basis of the recommendations of the Task Force on Revival of Cooperative Credit Institutions, the Union Government has introduced The Constitutional (One Hundred and Sixth Amendment) Bill, 2006 in the Parliament on 22nd May, 2006. The Statement of Objects and Reasons for the introduction of the proposed Bill states that:“The Central Government is committed to ensure that the co-operative societies in the country are functioning in a democratic, professional, autonomous and economically sound manner. With a view to bring the necessary reforms, it is proposed to incorporate a new Part in the Constitution so as to provide for certain provisions covering the138Cooperativesvital aspects tonomousAand it lAaspec sA fAworkingAof co-operat veAs cieties Alik Ademocrati ,Aa Ainte Aa ia,A professional fu ctioning AThe prop se Ane APartAin AtheA onsti ution oci tiesA ndA see sAt AempowerAt e A arliame tA n Arespect Ao Amulti-State co-operat veA ropria eAla A theAState Le isla ur sAinA aseAofAother co-operat ve soci tiesAtoAmak Aapla ingAdownA he Afollo ingAmatters, namely:--veAso ie ) Apies( ovisionsAfor Ai corporatio ,Ar gulatio Aa dA inding AupAof co-operat basedAonAt eA rinciples A f AdemocraticAme ber-control,Ame ber-economicA art cipation Aa dAautonomousfu ctioning;( )As ecifyin AtheAm xi umAnumber of d rectorsAofAa co-oper tive societyA( otAexceedi gAtwenty-one embers);( )AA r vidi gAfo Aafixe Aterm Afiof eAy arsA ro AtheAdat Ao Aelecti nnAr spectAo Athe Ael ct dAm mbers of A heA oardif and Aitsofc Abearers;hAaAboard of d) A r viding A or Aa maxim mA ime limitA fAsixA onths d ringA hi d rectorsAof Aa co-oper tiveA oc ety A ould A eAkeptAunderAs spension; e) A rovidingAfo Aindependent professio alAaudit; f) A rovid ng forAright Ao Ainfor at on A ccess At At eAm mbers Aof Atheco-operativeA ocieties;( )Ae power ngAtheAStat AG vernme tsAtoAob ainAper od cAreportsA fAativities an AaccountsAof co-operativeA ocieties; sA nAre pectAh) A rovidin Afor Aoffe ce ArelatingAto co-operat ve A ocietiesA nd penaltif ofAsu hA fences.dAdemocrati I A AisA xpect dAthatAthe eApr vis onsA illAno Aon yAensureAt eAa tonomousAa ementAt Ath f A nctioningAofAc -op rati es,Abu Aal oAensureAtheAa co ntabilityA fA ana vio ationAofA memb rsAand Aother sta ehol er AandAal o At Aprovide Af r Ad terrence A or t eA rov sionsAof At e A aw”.eholdersAanhe ACA6.4.4 Ammission has exami edAthe Avi ws express d AbyAvarious stanstitutio alA cooperativeAlead rs act vistsA nAt eAmerits an Ade eritsAof theAproposedACctiv Ao At eAAm nd ent Bill AItAhasA eenAst on ly Aa gu dAby some of the AthatAifA he objerative,A Bill heA A sAtoApromo eAvoluntary Ademocratic,A rofessional,Amemb r-controlled coo am nd en AseeksA oAd Aexactly the oppo ite AandA illA e-fac o AmakeAthese A r139cial ACa i a A–AAAS aredADepart of the government machinery by making them more dependent on the government, thus defeating the whole purpose of their existence. The National Advisory Council also felt that “cooperatives, associations, unions and business enterprises are not part of the State. A detailed provision in the constitutions in respect of their functioning is inelegant, unwarranted and counter productive as it leads to restrictions on citizens liberties” .246.4.5 The Commission appreciates the stated objective of the proposed Constitutional Amendment Bill which seeks to promote and build cooperative societies on the principles of voluntary and open membership, democratic and member-centric participation and autonomous functioning. However, the moot question is whether the proposed amendment is the most suitable mechanism to achieve this goal. It needs to be understood that cooperative societies are meant to be autonomous Associations of persons united voluntarily to meet their common economic, social and cultural needs and aspirations. They must not be treated as a part of the government machinery - like the institutions of local governance which have been established as the third tier of the government following the 73rd Constitutional amendment. The Constitution is meant to define the role of the State, provide for mechanisms for proper functioning of the different organs of the State and protect citizens from undue encroachments on their liberty. As such, the Constitution needs to contain detailed provisions only to this extent. In fact, the Directive Principles of State Policy lay down the fundamental principles for the governance of the country and it is the duty of the State to apply these principles in making laws.6.4.6 The Parliamentary Standing Committee on Agriculture in its Thirty Second Report on the proposed Amendment Bill has also opined that a comprehensive amendment to the Constitution on cooperatives is not necessary. The Committee further recommended that “the Bill should be converted into a comprehensive central model law for voluntary formation, autonomous functioning, democratic control and professional management of the cooperatives with certain incentives and disincentives to the States that implement or not implement the model law”. As regards the amendment in the Constitution, the Committee recommended that a new Article 43B on empowerment of cooperatives may be added in Part IV of the Constitution that contains the Directive Principles of State Policy and which may read as under:-“43B Empowerment of Co-operatives: The State shall endeavour to promote voluntary formation, autonomous functions, democratic control and professional management of the co-operatives.”stiny24Communic tion fro AtheANat onalAAdv sory ACo nc lAt AtheA nionAGover me t AonA19-4-2005.140Cooperativest is learIt isAl arn Athat theAUni nAC binetAh sAalr ady givenAit Aa pro alAto th AaboveAb suitabl Aam nding Ath Aprop sedA106thACons itutional AmendmentA il .Com it ee 6.4.7 AThe A ommiss on Aa ree Awith theAaboveArecom en ati nsAofAth AStanding hieved byA and is Ao Athe vie AthatAthe ob ect veAof Ath Aproposed ame dm ntAcan beAbette Aa spo sibleA sim ly addingA nA r icle AasAa Directive Princ ple where theAS at Acou dAbe AmadeAr fessionalA orAm kingA awsA hichAw llAensureAa tonomous,Ad mocrat c,Amem erA riven AandApr men edAbyA c operative Ains itu ions. Thi Ac uld be Ai At e for AofAaAn w AA ti le A43B AasAr co fAa mo elA th AStanding A om ittee. AThe A omm ssio Ahas AalsoAr commended en c mentA aphA6 5. . lawAonAco perativesAsu se uentlyAat pa r agricAor Ano - 6. .8AA Athe A ame time, th Arig tAt Afo mAand ArunAcoo era ives, Afo Ae onom ta ArightA economic pur oses Aand freeA romAStat Acon ro ,AmustAbe A ec g izedAas AaAf ndame inAu equivo al A erms. Thi Acou d A eAd ne AinAthe fol owingtwoAway:O tion-AAByAinc r orati gAaAmi or cha geAinAt e AArticl A1 (1) c) AofAtheACo st tuti nA oAmak AitA lea Athat th Arig tAto AformAas oc ations orAunion Ain ludes th Arig tAto AformAco oer tives.A t Apresen A19(1) C) Ar ads,A“Al Aciti ensA hal Ahave the righ A“to AformAas ocationsAorAuni ns” the righ A After the Aabov Aproposed A me dmen ,AitA illA ead,A“Al Aciti ensA hal Ahave “to AformAass ciatio s, unionsAorAcoo perativesOption-B.”tAto AformA Alte nati ely, A his A ou dAal oA eAdone b AaddingA Asepa ate ent y Afor A he ‘rigste AthatA coo er tives’A s AArticle 19 1)(h).AThANationa AAdviso y AC uncil Ahas suggthe following amend en Acou dA e Amade AbyAinc rporatin A19(1 (h) Aafter 19(1 (g .A“( ) At Afo mAand Arun Aco perat ve AbasedAonA ri ciplesAof vol ntarAand AopenAm mbership, A emocra ic Amembe Acontr l,Amembe AeconomicApart cip tion,AandA utonomous Af ncti ning freeA rom AstateAcontrol.”Corres ondingl , AArt cleA1 (4 An edsAto Ab Aa ende , Aso Atha Aena lin Al wsAc nA eAm de Aby AtheAleg slature . A Art cl A19(4)A tApre en AreadsAa141Soci l C pitaledA AADestinyAShar“(4) Nothing in sub-clause (c) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevents the State from making any law imposing, in the interests of [the sovereignty and integrity of India or] public order or morality, reasonable restrictions on the exercise of the right conferred by the said sub-clause.The amended Article 19(4) would read:“(4) Nothing in sub-clauses (c) and (h) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of [the sovereignty and integrity of India or] public order or morality, reasonable restrictions on the exercise of the right conferred by the said sub-clause”.6.4.9 The Commission endorses the amendment suggested by the National Advisory Council. A new Article 19(1)(h) may be inserted to make the right to form and run cooperatives as a Fundament Right. Article 19(4) may be correspondingly amended so that enabling laws on cooperatives can be enacted by the legislatures. Also, an Article in the form of 43B should be added to Part IV of the Constitution making the State responsible for making such laws that will ensure autonomous, democratic, member driven and professional cooperative institutions. The Commission feels that with these changes, a large scale Constitutional amendment on the pattern of the 73rd and 74th Amendments may not be necessary.6.4.10 Recommendations:a) An Article should be added to Part-IV of the Constitution in the form of 43B where the State should be made responsible for making such laws that will ensure autonomous, democratic, member driven and professional cooperative institutions. In that case, a large scale Constitutional amendment on the pattern of Parts-IX and IX-A which was introduced by the 73rd and 74th Amendments, will not be necessary. The proposed Article 43B may read as follows:Article 43B: Empowerment of Co-operatives: “The State shall endeavour to secure by suitable legislation or economic organisation or any other way autonomous, democratic, member driven and professional cooperative institutions in different areas of economic activity particularly those relating to agriculture.”142Cooperativeshe Cob)ATe ACo missionA ndo sesAtheAam ndmentsAs gg ste AbyAtheA ationalA dvisory Cou cil Aa dAfe ls At at Athis coup ed A ith AtheAa endmentAs gg ste AinAtheAD rectiveAPr ncipl s A o ldAb Aa ste AinAt eArightAd re tion to A akeAtheAcoo erativeAinst tutionsAvo untary,Adem cratic,Aprofe sional,Amembe -dr venAand Amember centricAente prises.AAcco din ly,AtheAf llowingAam ndm nt Amay be mad AinAtheAConstit ion:i AAUnder Art cl e A1 9,A 9(1 (h AmayA eA ddedAasAo(lo s: “(h) toA orm andArunAcoop rativ sA asedAonApr nc plesAofAv lun aryA nd AopenAmem ership, Ade ocrati AmemberA ontrol AmemberAconomicApartic pat on,Aand Aauonomous AfuntionngAf eeAfr mAStateA contl.”ii.AACorrespo dingly, Artic eA19(4 As ould Abe am ndedAasollo s:lAaAhing Ain Asub cla ses (c) an A(h AofA heAsai Aclau eAshafectA “(4) No rev ntsA theAo er tio AofAanyA xis in Al w Ai As Af rAasAitA mp ses,AorA of A[theA t e ASt teAfro Ama ing any AlawAi po ing AinAtheAi te ests rality,A sov rei ntyAandAi te rityA f AI dia Aor Apubl c A rderAorAm AbyA heA re sonableArest ic ion AonAtheA xe cis AofAt eArightAc nf rresaidAsub-cla se”.6.5ALeg slativeAFra m e w rken ionsA .5.1 ATheAleg slativeAenv ron entAand Af am wor Ai Aon Aof A he AmostAi portantAdiAinAthe ofAcoo erative A ef rm . AIt AisA tron ly Af lt A hat AtheAcoo erativeAlegi lations Ap ev len ov mentA coun ry Ah veA een one At eAmajor factor Abe ind th AnotAso Asu cessfulAcoo erativeAability i AInd a. Mos AofA heAlaws Ag verningAcoop rativfer Afrom consAsurolAandAaccoun andAtheA relatedAp ob ems.AAs Ad scussedA arl er,Athe Ae ac men Aof A heAM CS AA t,A 002ved the utually AAided/Self-Reliant/Self- ufficient AS ciet es Acts byAnin ASta esAha eAp way AforAreeng nee ingAandAre oul ing AtheAcoo erative As cie ie Ab tAa Aof now Ath Ai pactA all AtheA f Athese Alegi lat ons Ahas A emained A ubdu d. AThese Alegi lati ns Ahave Ainco por ted engthenA coo erativ Ava ues Aand Apr nci les Aand contain A dequate Apr vi ions Ato A res rve Aand Ast 2002 A o coo erative Ai en ity. AThe Apr vi ion Aof Athe AC mpa ies A ct Aw re Aalso am nded in allow AaAcoo erativeAen er rise AtoA egist rAu derAthe AC mpa ie A ctAasAa A roducerA ompany.A owe er, At e A ssueAof du lityAof contr lAstillAem a in .A.5.2 TheAM CS AA t, A2002 ap lies AtoAcoo erative As cieti s Awhose obj cts are Anotico fnedtoA nlyAo eAState (hav ng Abee Af rmedA oAs rveAthe A nt rest Aof me bers in Am re143S c alACap talA–AyState). The other essential condition for registration of a society under this Act is that its bye-laws should provide for social and economic betterment of its members through self-help and mutual aid in accordance with the cooperative principles. The MSCS Act seeks to reform the governance of the cooperative society by removing the restrictive provisions which conferred excessive power on Registrar and the Government (such as powers of issuing directions, making rules, appointing nominees, conducting elections, directing special audit etc.). The Act also contains provisions relating to cooperation among cooperatives, strategic alliance with companies, private and public sector entities and equity participation in other cooperatives. In a nutshell, the important changes brought out by this Act can be listed as follows:251)The objective of the Act is enlarged (preamble of the Act).2)Simplification of procedure for registration i.e. provision for deemed registration.3)Bye-laws: The matters to be covered under bye-laws have been elaborately codified.4)Provision for promotion of subsidiary organisations.5)Separate chapter for federal cooperatives duly making provision for registration and codification of their enlarged duties and functions.6)Conferment of affirmative duty upon cooperatives for organizing cooperative education programmes for its members, directors and employees.7)Prescribing express grounds for disqualification of members.8)Provision for redemption of shares on their face value.9)Prohibition to hold office of Chairman or President, etc. by members after becoming Ministers, Members of Parliament and Members of Legislative Assembly.10) Elections: The responsibility to conduct timely elections is cast upon the society. If the society fails to do so, the Registrar can conduct elections at the cost of the society.11) The nomination of the Union or State Government on the board of cooperative society is restricted to a minimum of one where the share capital of government is less than 26 per cent and to a maximum of three where the same is 51 per cent or more.144"Third Critical 5Tird Cr tical AStudyA nACo-operat ve A egisla ionAandA olicyAReforms AInternation lACo-oper tiveAAll affice ARe iona A fce forific,New DelhiCooperatives12) iveAhaveAbe nA 12) The Apowers an Afu ction Aof the AB ard AandAC iefA xecu a te yAcodified. elabor Abe nAallowed. 3) Inves me t of AfundsAby a A ooper tive AinAothe Aco pera ivesAhas l yA rohibited. 14 AC ntrib ti nAo Afun sA fAa y Akind Ato anyAp li icalApa tyAisAtotal Abe n A mposed. 15 AR stric ion AonAloansA ndAb rrow ngs Ahaveensure 16A im lyA ATheA ocie iesAha eAbe n Avest dA ithApow rsAtoAap oin Aaudit rsAand ADepartme talA co du tAofAaud t AbyAqu lifiedACharte AAccount n s, ACertifiedA to sAp eparedA Audit rs. Provisi nAforAdr wing aud torsA ro Athe Apan l AofAaud yAt eAsociet Aa dAa provedAby the Regi trarAh as beenAmade.cialAau itAin 7) Confe ment of A ower A ponAtheAUn on Govern ent AtoA irect spr i uti nAup oA sp cific Acase AofAso ieties Ahav ng Ago ernment shareAcapita Acon Ace t A r Am re. 1Aper utA nspe tionA 1 ) ATheA uo mot ApowerAof th ARegist arAto con uctAa dit and AcarryAndu tAinq iry has be nAdeleted AThe Regi trarAh sAbe nAvest dA ithApow rsAtoAc dAmajori yAofA and Acarry Ao t Ai sp ction, A ut AonAs ec fiArequest Ao AaApresc ibmembe s,Acr ed tors,Aetc 19) Pro isionAforA he settleme tA fAdisputesAbyAa bitrators. AdulyAelec 0)AedA over mentAh sAbe nAv sted A it Athe Apowe Ato supe sedeAth heAgo er men A manage en Acom ittee of AonlyAthos Acoop rat vesAwhereA re son AcouldA hol s A 0 Ape Ac nt A r Amor AofAt e Atotal A ha eAcapit l. AThe rforma ceAofAA beA(a Apersi tently Am kin Ade ault, Aand A b) negligenceA nA ut es A mposedA rAt eAsociety has com itted an Aact AwhichA sA rej dicialAt At eAi terestA f A heA ocietyA r A tsAmem er Aor Afai ed or Aomi tedA oAc mply AwithA heAdir ctionsAis ued Aetcocieti sA cts 6.5.3 ASimi ar Ap ovi ionsA ls Afin Aplace Ai Athe AMutually AAide /Self-Rel antA pass d AbyAt eAnine States namely AA dhraAP adesh, ABih r,AJha khand,AM dhyaAPradesh, erASt tesAareA Chhatti garh,AOrissa AUttarakh nd, Karna aka and AJamm AandA ashmir AOt eAi ArevivingA still cont mpla ing Ao erA hi Ais ueAand A nAt eAproc ssAare Al sing pr ciousAti Abee AfeltAsoA t e Acoope ativ As ctor. Even inAthes Ani eAState , AtheA esi ed A mpac Ahas no Athe old Act f A r,Aprim rily Ab cau eAmostAof theAs cietiesA ti lA ontinueA oA eAg ver edAblaAofAthe A ewATher Ahas not Ab en much Aeffor AtoA nc urag Athem toA ome Aunde At eAu bre ;Ath yAdo AnotA na tme t.AOneA fAth Ar aso s Alies Ai AtheAfina ci lAc pacityAof A heAs ci tie ueA s Awhethe A av Aresou ces At Aset leA heir du sAa dAm veAto At e A ewAsyst m. AThe re atedAistwo Aparall lAco per tive Alaws ar Ane essar Ao A an Athe eAbe AaAs ngle Acombin dA145Soc a A apitalred –AADestinyAShagovern both sets of institutions. Functionally, there are two distinct kinds of cooperative institutions which operate in our country. One consists of those which have come into existence as a result of conscious government policies and interventions as channels for distribution of scarce sources. These enterprises are neither competitive nor fully business oriented. Because of considerable financial involvement of the government, the ownership, management and controls of these bodies do not rest fully with their members. The other kind of cooperatives are those which essentially cater to the needs of their members. Such cooperatives are formed as autonomous Associations of persons united voluntarily to meet their common need through a jointly owned and democratically controlled enterprise. The Commission is of the view that the first kind of cooperative organisations too perform important public functions and therefore they should not be closed down unless they become totally unviable. Since they primarily deal with scarce public resources, they cannot be given total freedom as well. At the same time, the mutually aided / self reliant and member-driven societies will have to be made fully autonomous to enable them to achieve the desired results. Thus, there has to be two different sets of legislations whcih enable the above two to function in their respective jurisdictions. Incorporating features of both public service cooperatives and member-driven cooperatives in a single law would be legally clumsy. However, the cooperative structure has to be reformed in such a way that the government control on this sector gradually fades away.6.5.4 The Task Force on the Revival of Cooperative Credit Institutions in its Report (December, 2004) examined the enabling legislations for cooperatives in detail and suggested a Model Mutually Aided Cooperative Societies Act to be adopted by all the States. The salient features of the draft model law suggested by the Task Force are as under:(i)The law is based on internationally accepted principles of cooperation andensures that cooperatives function in a democratic manner.(ii) The model law is member-centric. It ensures that members are in control of their organisation, and that they can hold accountable those they elect. It places responsibilities on members, and it gives them the right to manage their own affairs, based on the responsibilities that they choose to fix for themselves.(iii) It places responsibilities on elected Directors in such a manner, that elected positions are positions of responsibility and not only of power and authority. Accountability of the Directors to the General Body is in-built, and any lapse is treated seriously. A Director’s behaviour is expected to be reported to the General Body for its scrutiny.146Cooperativeshe Model iv) TeAMo el Law Am kesA tAclearAtha Acooperat veA oci tie AareAnotAhe cre turesAof A heA tate norAare At eyAstatuto yAcreature . A ember hipAinAth sesocieties isArad AUnions,A oluntaryA nd th ref reAa Ai Athe Acase A f ACompanie ,ASoc eties,A fairAof AeachA andAu incorporated A ssociatio s, Aele ti ns should Ab Aan f Ai te nalAorg nis tion..AThe Ge eral(v AFor Asim la Areas ns,Aa AA dit BoardAis A otAen isag dAun er thisAla Body AofAeac Acooper tive society wi lAappoin Aan aud tor, Aand AtheAreson ibi itiesAo Athe audi orAh veAbeen Am deAexplicit. Pr sentat on of A opiesAo AtheAaudit dA tatement Aof acc untsAfor theAp eviou Ayea ,Aalo g AwithAaudi Aoject ons,At Aea h Ame berA as AbeenAmadeAco pulsory.iveAso (vi iety.A AR crui f ment of sta AwillAbeAtheAr sp nsib lityAofAeac Acoopera omm nAcadresAan Arecru tme tAb ards Aare An tAen is ged. A ustAa Ao herAformsAofAcitizens’- rganisation A(Companie ,ASoc eties,A radeAUnions,Auinco rporatedA ssoc ations) Atake Ar spo sibil ty Afor Astaf Are ruitmentAndApersonne Amanagement Acooperat ve A ocieti s Ato Ash uldAh ve theA igh AtoAfakeAall stafrelat dAdeci ions ALa our Alaws ar AexpectedAt Aappl .Coo eratives(vii) APr fitA surp us) AandA oss (d fic t)Aare toAbe sharedAa ong Amembers. eAphrase, asA ar Ae pected Ato AbeAp ofessio al yAm naged A n Athe tr est sense Ao At mendAs rplus/ D re tors have A o AfaceA heir Gene al AB dyA achAyearA ndArecomgAto Am mb rs.d fic tAshari ntualA idAandA viii)ATheA awAenvis ge AcreationAo Acooperat veAso ie iesAba edA nAm ed Ato A cceptA rust Aamo gst Am mbers. AWhil Acooperat ve A ocieties A re permit they Aare A ot m mbe Asavings A nd A eposits, Aa d Abo rowings from oth rs, permit edAtoAa cept savingsAfrom no -mem e s. AIn AcaseA Acoope at veAwis esAto A cceptApubli A(non-v ting Amemb r) depo its, it wi lAneed At Ab Ali ens dAb AtheAR I Aan Afoll wAsuchAoth r Areg la ory Anorms A sA res rib edAby th ARBI.builtAin th A ( x) The Amanne Ao Arec very of Adues fr mAmember Ai Ar quired At Ab Ain Articles AofAAsso ia ion.eATaskAForceA 6.5.5 Ahe A om iss on Ai AofA he A iewAt atA heAModel A aw sug este AbyAt Awill enableA co prehensiv lyA ddr ssesAa lAtheAis ue ArelevantAt Acooperat veA ocie iesAan dAdemocr ticA these in titution At AfunctionAa Aautonomou , Avoluntary, A elf reliant,Aa busines Aente pri esAwh ch A anAserve the Ae ono ic Aneeds Aan Aa pirat onsAofAt147Soci l C pital~d A~DestinyIncidentally, the Union Government has already accepted the report of the Task Force and efforts are being made for its implementation. The Action Plan to implement the National Policy on Cooperatives also aims to achieve this goal.6.5.6 Recommendations:a) All States (other than Andhra Pradesh, Bihar, Jharkhand, Madhya Pradesh, Chhatisgarh, Orissa, Uttarakhand, Karnataka and Jammu and Kashmir) should immediately take steps to enact their own Mutually Aided / Self-Reliant Cooperative Societies Act on the pattern of the Model Law suggested by the Task Force on Revival of Cooperative Credit Institutions. The States where such Acts are already in existence should also examine the Model Law suggested by the Task Force and amendments in the existing legislations may be made, if so required.b) For the next few years, there is need to have parallel laws to deal separately with (i) the Mutually Aided / Self-Reliant cooperative societies formed under the recent enactments (post 1995), and (ii) societies formed under the old laws in which the government still has financial stakes. The societies referred at (ii) above should gradually be encouraged to clear off their liabilities and convert into Mutually Aided Societies.6.6 Producer Companies6.6.1 Economic liberalisation has opened up co-operatives to global competition. When most of the Indian industries have been deregulated and de-licensed, it undoubtedly makes sense to put co-operatives on the same level playing field. One of the reasons why cooperatives have not been able to meet the needs of their members is because, by and large, they continue to be governed by restrictive cooperative laws. These laws allow little or no freedom to them to operate as autonomous business entities. The members of co-operatives in India, who are largely rural, are at a potential disadvantage given their generally limited assets, resources, education and access to advanced technology. In the present competitive scenario, if cooperative enterprises are to serve rural producers, they require an alternative to the present institutional form.6.6.2 Keeping this in view, Government of India constituted a Committee consisting of experts led by Dr. Y.K. Alagh, an eminent economist and former Union Minister, to examine and make recommendations with regard to (a) framing a legislation which would enable incorporation of cooperatives as companies and (b) ensuring that the proposed legislation accommodates the unique elements of cooperative business within a regulatory framework148Cooperativessimi ar ts mila At AthatAofAc mp nie .AOnA he basisAofArecomm nd tio sAofAtheAC m itt e,Aa new endm nt)A Par AIXA Awas in ert d Ain AtheA ompa ies A ct,A195 Ath ough A“TheA ompaniesA(A Ac , A 002”. ATheAle isla ionA ameAi toAf rce fromA6thA ebru ary ,A2 03sio s AofA 6.6 3 AThe Ala Aclearly As ipul tes Athat Ap ov sion Aof Part A XA Ashall overr de Aother Ap ov ProducerA the A omp nie AAct A nd Ao her Alaws (Sectio A5 1ZQ). AThe A omp nies A ct Akeeps ompan esA nderAthe ca egoryAo Aprivate A omp nies but does An tAi poseAanyAre tr cti nAon At e A umber Aof me bers.AItAs ipul t sAthatAa Produce AComp ny As allAn t,A nderAanyAcirc mstanc , A ec me AorA eA eemedA o become aApubli Alimited com any.A tsAsha eA annotA eA sophicalA rad d AinA heAStockAE ch nges. ATheAle islation com inesAtheAinst tut onalAandAphil tr ngths AofAcoo eratives A( wnershi Al mited A oAusers Alimited in erest Ao Ashares Aa senceA onomyAo fAequity trading,AAatr nag AandAno Acapit lAba ed) with Athe Aflxib lity Aand aucoman yAl w.A6.6.4A mportant Fe turesAof Produce ACompanyALegi slat i n6.6.4.1A oll wing ar Aso e Aof AtheA mportant fe tur sAofAthe Produce ACompanyALe islationA ontai edAu der Pa tAI A Aof AtheA ompa iesAAc ,A1 56: oA yote iorimoreaind vidu ls teac bofnt e pbeingea pr duc rwo oa yotw pordmore producerA producerAinst tu i ns,AorAaAco bi ati n A f Ate AorAmoreAin ivi ualsAand sp cifi dA inst tutions, de irousAo A ormingAa Produce ACompa yAh ving Ait Ao jects Aas AComp nyA in AtheAle isl tion ma AformAanAinc rporate AC m any AasAa Produce Aalso A eA u der Pa tAI A Aof Athe A ompa ies AA t A1956.AA Produce ACo pany ca ormedAbyAc nv rsion AofAco-o erati esA hichAareAin er StateAi Anat re, Awit AobjectsA xt ndin AtoA ore thanAon AS atestablis ?Thelaw~prov des thatthe Ar iclesofAs oc ati nofth ~Co panymaychA ho eA minim m A evels Aof Apart cip tio AandAma Aprovide Ac nditi ns Aun erAwh el gibl A w oAdo not Am etAthos Al vel ,Aor A ho cease Ato Apar ici at ,Ama Abe AmadeAi toAh ld office At Av te Aor Ato conti ue AtheirAmem er hip. oI a asedofea Produce fCompa yy ormedibyai dividua om mb r corbbyaaico bi ationiofAin ivi ualsAandAinst tuti ns,Aea hAmem erAs all have oneAvoteAirr sp cti eAofA is Ashare ho ding AI A ase AofAa Produce ACompa yAformedAex lu ivelyAby producerAinst tut ons,At eAvot ngA ig tAmayAbe co put dAonA he basis AofApart ci ati nAinAtheAb siness.?nC nsis entewithiintern tionally acceptedico perativeepr nci les,uthe Produce LCompanyALe isl tion AhasAinc r ora ed a AsetAof Ap incipl sA ermedAa149Social C p talA–A DestinyAssistance Principles. Accordingly, the law stipulates that the Articles of Association of the Company shall contain the following Mutual Assistance Principles:a)The membership shall be voluntary and available to all eligible persons who can avail of the services of the company and are willing to accept the duties of membership.b)There shall be a limited return on share capital.c)Surplus arising out of the operations of the Producer Company shall be distributed in an equitable manner by providing for- the development of the business of the Producer Company; common facilities; and distributing amongst the Members, as may be admissible in proportion to their respective participation in the business.d)Provision shall be made for education of members, employees and others on the principles of mutuality and techniques of mutual assistance.e)The Producer Company shall actively cooperate with other Producer Companies (and other organisations following similar principles) at local, national or international levels so as to best serve the interests of their members.?The law enables the Articles of association of a Producer Company to provide for division, amalgamation, and merger, creation of subsidiaries, entering into joint ventures etc.?The shares or any other rights of the Producer Company cannot be traded on the stock exchange thus ensuring that they are not taken over by multinationals or other companies.?The law provides for co-option of expert Directors up to one-fifth of the total number of Directors on the Board keeping in view the expert/professional assistance needed for the Board.?The Board of Directors shall appoint the Chief Executive of the Producer Company. Other employees of the Producer Company will be appointed by the Chief Executive as per the powers delegated to him by the Board.?The Board of Directors of the Producer Company shall be responsible and accountable to conduct; timely audit, election and General Body meetings.?Dispute settlement shall be by a simple process of Arbitration and Reconciliation.150Cooperatives6.6.5 Exam les Af om AotherC oun t r i sArole AasA 6 6.5. AInAm st par sAofA he Awo ld AwhereAcoo erat v sApla AaAmajor econ mi eworkAasA su cessful,Aprodu er-owned Abu ines es, Athe Aopera eAw thin theAs meAlegalA ra zerlan ,A corp rat on .AThi Ai AtrueAinA ount ies like AtheANet erland , AUnite AStates,ASwi oduct veA Italy, Denmark ANor ay Aet .AIn ANew Zeal nd, wi hAo eAofAth Awor d’s AmostAp urn,AareA dairyAin ustr es Amo tAofAthe da rying Ai Aca ri dAout AbyAcoop rative ,A hich, inA tives toA r giste ed A nder AtheACo- perative A ompa ies AA t, 199 .ATheAA tAallowsAcoo erserveA roduc rs AwhileA ompetingAsuc es ful y Ain AtheAinte nationalAmar et.6.6.6AImp ic tio s Aof A he AIrani A ommitteeARecommen dati o seva pingA 6 6.6. AThe AJ J. AIrani A ommittee Aco st tut d Aby Athe AG ve nment of A ndia Afor A ProducerA the A ompa ies A ct, 1956 Ahas Are omme ded At at A ince Athe Am na ement Aof om ani s A sAnot AinAc nson nce with At e A ene sAof theAfr eAmarketAd termine AcompanyAs ruc ure, th A artAIXAA (dea ingAwith ProducerAC mpanie )A houldAbe deli ked fromAtheommittee proposedA omp nie A ctA ndA AnewAl wA houldAb Ae actedAto regul te them.ATheA obser ed A hat,Aune withA “TheAadmin str tionAandAm na ementAof A ProducerAC mp nie ’ A sAno AinA ra tees.A th AgeneralA ram work AforA ompa ies AwithAli bilitie Al mitedA y shares A/Agu ability A TheAsha eh l ingAof Aa A Producer Company AimposedAres ri tio sAonAitsAtransfe aAmarketA thereby Ap eve tingAtheAsha ehol ers AfromAe ercis ngAt eirAexi Aoption A hrough bl eAtoAaA d terminedAs ru tur . AIt was alsoAnot fe sibl AtoA akeAthisA tructure am nco petiti eAm rket AforA orporateAc nt ol ram workA If Ai Ais A elt Athat ProducerA omp nies Aa eA nableAto functi nAw thin AtheA eAregimeA andA iabilityA tr ctureAo AlimitedA iabilityAc mp nies. ATheA orporateAg vernan mentAmay a pl cable AtoA ompan es A ou d Anot Abe properl Ai pose AonAt is Aform.AG ver considerAint od c ion Aof Aa sep ra eAAc AtoA eal with Athe Ar gu atio AofAsuchA ProducerACo pani s’ A ar AIX A Ain Ath ApresentA ompa ies AA t,A hichAh s Aha dlyAbeen re ort dA o Aan AisAmo eA ikelyA oAcreate diputesAofAinter ret tion and Amay,At er fore,Abe excl dedfrom AtheA ompa nie sAA t.”6.6. AChanges Pr pos dAinAthe Producer A ompaniesALegislat i nine withA 6.6.7.1 Ove all,AtheAint od c ion ofAa Ane ACh pt rAIXAAon ProducerAC mp nies AinA ependen A th Acur ent Afree business Aen ironmentA erv dingAour eco omy, A as given AanAin pla in Afie dAto AtheAco perati e AsectorAinst tution .AE ceptAfo Acertain Aconditi nalit151c a ACapit lA–AAAShave been included in the Act in the interest of members, government intervention in their activities is now minimal.6.6.7.2 The Commission has been given to understand that based on the recommendations of the Irani Committee, the Union Government is in the process of drafting a new Company Law.6.6.7.3 The Commission is of the view that there is need to review the existing provisions in Part IX A of the Companies Act and to bring about changes that are felt necessary for improved governance and management of Producer Companies. For this purpose, enactment of a separate law on Producer Companies is desirable, as recommended by the Irani Committee. On the basis of the feedback received by the Commission from various stakeholders, it is of the opinion that the following changes need to incorporated in the proposed new legislation:?Currently, the objects of the Producer Companies relate to only eleven items dealing with production, processing, manufacture of primary products and other related activities. In the interest of their growth and development, the Producer Companies need to be given a liberal charter of functions; they should be allowed to take up any primary activity as per their technical and financial capability.?Depending on their functional requirement and financial strength, a Producer Company should have full flexibility in creating / abolishing executive and managerial posts.?The compliance requirements with regard to the company’s audit and accounts should also be in tune with the size of its operations.?The law should provide for flexibility in investment of funds, surpluses / reserves.?The law should also have provision for proxy voting in order to facilitate smooth conduct of elections and general meetings.6.6.8 Recommendations:a) A new law regarding Producer Companies should be enacted on the basis of the following broad principles:i.Producer Companies should be given a liberal charter of functionsto take up any primary activity as per their technical and financial capability;152CoopequallyAii. The Afunds,A ii. The Ala Ashould pro ideAforAfle ib lity Ain Ain es mentAoserv s;As r lusesA/Arngth, iii. AaA AD pe dingA nAtheir Afu ctionalAreq ire entAandA inancialAs r lishingA roducer Compan Asho ldAh veAfullAfle ib lityAinA r atingA/AablAp st ; e ecu iveAandAma ageriasAa ditA iv.ATheAco plianceArequ reme tsAwit Ar gar AtoAtheAC mpanyon; A nd andA ccount As ou dAbe inAt neA ithA he siz AofAitsAope atiilitat v A AThe Ala Asho ldAhaveAp ovi ionAf rAprox Av tingA nA rderAtoAfaee ings.smooth co ductAof Ae ect ons Aand generalAmroducerA b)ACo-op rative As ouldAbeAen ou aged Ato Ainc rporateAth ms lvesAasAe sAA t,A C mpani sAu derAtheA xistingApr vi ions of A arAIX AofAtheAC mpan 956AandAsubs quent yAu der theA ew law AasA ndAwhenA na ted,as Ath sAxistingA o ld Ab AaAmor Aviabl Ao tio AinAthe present Aenvi on ent.ATheA gettingA int r-StateAcoo erativeAs cie ies A ayAalso exp ore AtheApos ib lityAof th mselvesAc nver edAintoA roducerACopan es.A6.7ACoo erativ ACr ditAand BankingAInstitut i nslingAofA 6.7.1ACoo erativ AcreditAinst tuti nsAc meAinto Ae is e ce AasAa Am cha ism Afor po AButAi A r so rcesA nArur lAa eas andAforAp ovid ngAeas Acredi Aa ces AtoAt e Arural pro le nsA reAA c urse of Ati e AtheirAinancia Ahe lthAhas A eclined Aconsi er bly.AThe primary rea ge ent.A ( ) Aund e AState Ainte fer nceAand Apolitic sat on, and A b)Apoor qu lityAofAman eAbase,A AtA resen , AtheseAinst tut onsAar A acin Aa host AofA robl ms s ch Aa A- ApoorA esour l,AhugeA de en ence AonA xternal A unding,Ae cessi e AState Ain rusion, Amult pl cityAofA ontr AAro nd acc mulated los es,AlowAr cove y, lack Aof A usinessAini iat vesAandA egional Adi parity eAtie ,A hal Aof Athe Primary AAgr cultur ACredit AS cieties ( ACS),A Af urt AofAtheAinte media eASta e- v z., AtheA istrict CentralACoo erati e ABanks A DCC s),Aa d under a A ixt AofAth ing.ATheA le el AapexAinsti ution ,Av z.,At e AStateACoo erati e ABank A(S Bs) AareAloss ma AAsset A acc mulate Al sse Aof Ath AsystemAa greg te A ver AR .A9,10 Acrore.ANon-Pe formin AendA fA ( P ),AasAaApe ce tage A f AloansAout ta din AatAt e A evel of A CBs Aan AD CBs Aat th refore, Ma ch A2 06Awer Aar und 16% and A20%Arespe tive y. ATheseAinst tu ions doAnot,Ath ersAandA inspireAc nfiden eAamongA xis ingAand Ap tential A embers,Adep sitors,Ab rro anathanA le ders.26A urt er, A he ATa k A orceAon Re ivalA f ARura ACreditAInst tutionsA(Vaid ra ing.A Co mittee) A bserv dAth t, A“the Ainancial A os tio Aof Ath As stem is A eakAandAdeteri ompl te TheAacc mula ed loss of PACs AisAe timated ro ghl AonAt eA asis Aof Aa ailableAin dataAat Rs.45 5A ro e Aas on A31s AMarc , A 003. AThe A os tionA fA CCBs isAalso1536R por Aof th ADr.AC.ARa garajanAC mm tteeAon AF nancial AIn lusion,ry Janu2008.ao ialACa italA–unsatisfactory; with accumulated losses aggregating Rs.4401 crore and erosion in deposits being Rs. 3100 crore. In the early 1990s, they accounted for over 60 per cent of the total institutional credit to agriculture, while currently their share has fallen to about one-third”. In order to regain their health these institutions need (a) massive financial support and (b) wide ranging legal and institutional reforms.6.7.2 The cooperative credit institutions in spite of their weaknesses still remain one of the major instruments of credit and banking requirements in rural India [along with Commercial Banks (CBs) and Regional Rural Banks (RRBs)]. As per a recent NABARD statistics, during the year 2006-07, the total credit flow to the agriculture sector stood at Rs.2,03,297 crore (provisional figure), out of which the share of cooperative credit institutions was Rs.42,480 crore. How to expand this credit flow further has been one of the major concerns of the government in recent years. Though, there have been vigorous and determined efforts in this direction, the outcome has remained disappointing. The crisis is not confined to the agriculture sector alone. The largely unorganized non-farm enterprises which play a major role in providing employment also face severe financial exclusion. As per 59th round NSSO survey, about 59.98% of all rural households, about 51.4% of the farm households and 78.2% of rural non-farm households do not have access to banking services.27 The target fixed in the National Credit Policy, 2004 is being met since then but it must also be ensured that such lending does not get converted in non-performing assets.6.7.3 The structure of the cooperative credit institutions includes both Short-Term Rural Cooperative Credit Structure (STCCS) and the Long-Term Cooperative Credit Structure (LTCCS). The STCCS providing short-and medium-term credit is highly relevant for financial inclusion of the rural people. At present, there are approximately one lakh village level Primary Agriculture Credit Societies (PACSs), 368 District Central Cooperative Banks (DCCBs) with 12,858 branches and 30 State Cooperative Banks (SCBs) with 953 branches providing primarily short- and medium-term agriculture credit to people in the rural areas. The long-term cooperative structure consists of 19 State Cooperative Agriculture and Rural Cooperative Banks (SCARDBs), with 2609 operational units as on 31st March, 2005 comprising 788 branches and 772 Primary Cooperative Agriculture and Rural Cooperative Banks (PCARDBs) with 1049 branches.28 As such, there is one PACS for every six villages and the total membership of more than 12 crore rural people makes it one of the largest rural financial system in the world. Though, the network of commercial banks and RRBs too, has spread rapidly and they now154AAShared Cestin 27“RuralAC editA tructur sANeedsAGenuine A evitalis tio ”,AEconom cAandAP lit cal Weekly,AMayA1 ,A2007 27Annual ReportA200 -0 ,ADepartmen Aof Agriculture AditAinstituthave near y 50,000 aveAnearl A50,0 0Abra ch s, A heirAreachA n Ath Ac untry id Abo h AinAt rm Aof Athe num erAof Aclients an Aac essib lit AtoAtheA mallAan Ama ginal farmer AandAoth rA oor rAse ment AisA ar less AthanAtha Ao Acoop ra ives. A n A erms AofAnumb rAofAa riculturaAcr dit Aa cou ts, RBsAputA og ther.AtheA TCCS Ahas 50%A ore accountsAt anAth Aco merc alA anks AandAotalA op lat on.29 Direc ly orAind rectly AitA ov rsAnear yAhal Aof AIndia’sAtofAtheir reac Ai A .7 4AO AtheA asisAofAthe aboveAindic tors,Acooper ti eAinsti ut onsAo Aacco nt Amar inalAf rme sA vill ge Abo hAinAt rm AofAthe num erAofAclients an Aac essib lit AtoAtheA mallAan ces.AHoweve ,AtheA ill rema nAoneAofA heAmostAimpo tan Ainstit ti nsAfo i Arevival ofArural fna othA an gerialAa A oop rativeA reditAand banki gAst uctureAt day AfaceAc it calA mpairmentA nA Aref rmAthemA nto wellAa Afina ci lA ronts. There is anAurg ntAne dAtoAtackl Ath irAwea ness sAan wellAgo ernedAandAv br ntAin trumen sAo AruralA reditAandAbanki gAinf as ructure A6.7.5 As alreadyAs ated Ai AParagr ph A6.2.4, A ever l Aco mitteesAhav Ab enA onst tu edAin At eApast to Asugge tAr formA easuresAforA hese in tit tions A uchAasAth AC poorA omm ttee in A2000,A he Vyas A ommit eeAin 2001, AVik e A atil A ommi teeAinA20 1,AVy sA ommit eeAagainAinA ilar AComm ttee Ao A 004, AVaid an than ACommi tee Aon sh rt-t rm A r dit Ain A 004 Aand Aa si of AShort- erm AandA l ng-te m A redit Ai A2 06. The AR ports of the Task AFo ce on Athe ARev val ee Ahas Asuggeste A Lon -term A ooperativ ACredi AStructure A( rof. AVaidy nat an ACommitnce Ato AStates Afo A an Aim leme table actio Aplan Awhich offers Asu stantial Afian ial Aas istce Aof a Af w AvitalA r capit lisation Aof their Acoopera iv Ai stituti ns AIt Ais Asub ec A o Aa cepta e ATa k AForce A av A legal and Ains it tiona Aref rmhe AAat Atheir Aend. A eco mend tions of Atto i plement Ath mA be n Aacc pted Aby Ath AUn on AGov rnm nt Aan Aeffo ts are Abeing madecom nda ions in Aa are: time-b und manner Aa ro s Ath Acountry. AThe Ama n Areor A he Ashortinancial astermA I. AA one Atime Aistant Apa kage Ao ARs 14, 39 Acrores Adi AInstit ti ns A a d AR .4, 37 Acrores for At e Along-term Rural A ooperative ACrn Aa d A he AStat s.AThApacka e Ais Ato be A hared bet een the AUnihe Arevsis ance At Ab in II. A Ava Apa kage Aseek Ato A( ) Ai troduce AAfiegal Aand an ial Aaand Ains itutional the Asyste Ato Aa Aa ceptabl Ale el Aof Ahea th; A( ) Ai troduce Alegal ien Afu ctio ing;A ref rms necessaryAf rAitsAdemocr tic if Aself-r liantAandAefAtheAcooperatand (c AtakeAm asures Ato A mproveA an gem nt AqualityAveAA ns itution .AtsAof A he StatesAA III.AThe A ank ngA egu ationAActAa d AtheACoo erat ve Soc etiesA houldAb As itablyA men ed A oA mpo erAt eARBI Ato Ala Ado nAregulati ns A n Aguidelines forA ACoop rativeA ank AwhicAac eptsAde osit.AIV.AF rtherAwide spre dAam ndmentsAh ve bee AsuggestedA nAtheACoo erat ve Soc eties AA tsAof At eAStates, A anki gAR gulati nAA t, and ANAB RD A ctAtoAimpr ve the managementA fAthe A ooperativeAcr2 Re ortAofAthe Dr.AC.ARa ga ajanAComm tteeAonion,AFi ancilJanuaryA nclu2008.s155Soci l C pitalA AehtinyV. A model Cooperative Law is to be enacted by the States. If a State decides not to pass the Model Act, a separate chapter for Agricultural and Rural Credit Societies containing the salient provision of the model law may be incorporated in the existing Cooperative legislations of the State.VI. The revival package will be conditional and released only on implementation of the accompanying legal and institutional reforms. The States have been given a time period of two years for it.6.7.6 It is further stipulated that as carrying out amendments to laws is time consuming, the State Governments may hasten up the process of reforms by :30i)Ensuring full voting membership rights on all users of financial services including depositors in cooperatives other than Cooperative Banks.ii)Removing State intervention in all financial and internal administrative matters of cooperatives.iii) Providing a cap of 25% on State Government equity in cooperatives and limiting participation in the Boards of Cooperative Banks to one nominee. Any State Government or a cooperative wishing to reduce the State Government’s equity further would be free to do so and the cooperative will not be prevented from doing so.iv) Allowing cooperatives registered under the State Cooperative Societies Act to migrate to the Parallel Act (wherever enacted).v)Withdrawing restrictive orders on financial matters.vi) Permitting cooperatives in all the three tiers freedom to take loans from any regulated financial institution and not necessarily from only the upper tier and similarly, placing their deposits with any regulated financial institution of their choice (beyond a threshold). The threshold limit may be determined by the State Government/Registrar of Cooperative Societies concerned for each entity or class of entities.vii) Permitting cooperatives registered under the Parallel Act (wherever enacted) to become members of upper tiers under the old Cooperative Societies Act and vice-versa.viii) Limiting the powers of the State Government to supersede the Board.~0h~~p:~~w30 c) Ensuix)A nsurin Atimely A lectio Abe ore Ath Ae pir AofA he ter Aof AtheA xistinard.Ax)AFaci ita ing th ARBI to AhaveAre ulator Apow rs AoverACoo erativBa ks.Axi)APr denti lAnormsAi cluding Ca italAtoARisk- eighte AAsse sARatio(CR R),forAallAinancialAcoop ratives Ai cludi gA ACS Aas perAthe Adi ec ionsAof AR I.AareAasA .7.7 ATheAi portant Aam ndmentsAs gg ste Ain Athe BankingARe ulat on AA t,A 94 fol ows (i)AAllACoo erati eABan s A ou d Ab AatA ar A ithAtheACo merci lA ank Aa AfarAasAre ulato yAn rmsAareAcocern d.A erativ ii)A A BIAwillAp es rib AfitAan AproperA rit riaAforA le tionAt AB ardsAofACoo tureAofA Ban s.ASuch A riter a Awould how ve An tAbe AatA aria ce A ithAth An Aof At eA me be ship Aof primaryAcoop rativ sAwhichAco sti uteAthe Ame be shi D CBsAadASCB .AAat (iii) At eA A ow ver,AasAinancialAinsti utio s, At eyAw ll An ed As me kind Aof su por oAb AonA Boar Alevel AHe ce, the A BIAwill Ap escribe A rit ria Afor Aprofe si na sA ssionalA th AB ards AofACoo erativ AB nks. A nAcase, memb rsAw thAsuchAprof roce icas,A quali ions Aor Aex er enc Ado not Aget el cte AinAth AnormalAe ectoralA ardA ndA henAt eABo rd willAbe A eq ired At Aco- ptAsuch Aprofe si nal AtoAt eABrigh s.th y Awo ldAh ve Aful AvotingheAChiefAEpo nte (iv) A Aecutiv AOfficer A( EOs) AofACoo erati eABan s A ould AbeAaow ver,A by AtheAre pecti eABanksAth mse ves an Ano AbyAt e AStateAGov rnment.A ca ion sAt eseAare bankingAinsti uti ns,A BIAwillAp esc ibeAthe minimum i Aquali of th AC OAto AbeAa poi ted andA heAname A ro ose Aby AtheACoo erat veA ank for Athe A os tio AofAC OAwo ld ha eAtoAbeA pp ovedbyA BI.A(v)ACoop rativ sAot erAthanACoo erati eA anksAasA pp ove Aby theAR IAs allAno AacceptAno -votin AmemberAd posi s. ASuchAcoop rativ sAwo ld A lso notAu eAwo ds Alike “Bank”,A“B nking”,A Ba ker AorAa yAotherAde iv tiv AofA heAwor A“ ank” A nAtheirAre isterdAnam .A6.7 8AAfterAe tensive Adis ussi ns A ithAt e AStateAGov rnm ntsAa d Aother Astak ho der Aon Ath Ar por Aof A he ATa k A orce Ao AST CS, At e AUnionAGo ern entAhasAfo m lated AaAc nsensus ion AofA revival pac ageA nd se tAi AtoAth ASt tes AforAimpleme ta ion. ATheArecomme da he ATa k A orc AonA he AL ng ATermACoo erativ ACreditAS ructure (LT CS) A reAal oAbeingAd sc sse AonA heAsame pat e nAandAa revival pac ageA or Al ng Aterm lendingAinst tu ions isAalsoAu157Soc alACapi a A Ahsred iestiny6.7.9 The above package for STCCS focuses on introducing legal and institutional reforms, which will enable the cooperatives to function as autonomous, member-centric and member-governed institutions. These reforms will enable wider access to financial resources and investment opportunities, remove geographical restrictions in operations as well as mandated affiliations to federal structures, and provide administrative autonomy to cooperatives at all levels. In addition to providing resources for covering the accumulated losses in the STCCS as on 31st March 2004, the package also provides for taking cooperatives to a minimum level of CRAR of 7%, and for meeting the costs of computerisation of the accounting and monitoring system and specific human resource development initiatives at all levels of the STCCS. The sharing of the accumulated losses among Government of India, State Governments and the Cooperative Credit Societies is based on the concept of origin of losses rather than any arbitrary proportions.6.7.10 NABARD has been designated as the Implementing Agency responsible for implementing the revival package in all the States. A special department called the Department for Cooperative Revival and Reforms (DCRR) has been created in NABARD for this purpose. NABARD is also providing dedicated manpower at the National, State and District levels for working out the details. A National Implementing and Monitoring Committee (NIMC) not only monitors the implementation of the Package regularly, but also takes necessary decisions on policy and operational matters.6.7.11 The process of implementing the Revival Package in any State begins with the signing of the Memorandum of Understanding (MOU) among the Government of India, the participating State Government and NABARD. The draft of this MoU has been prepared by the NIMC. Any new suggestion on policy or operational issues could be incorporated in the memorandum at the time of its execution. Such suggestions could also be given effect while making amendments to the various Acts, Rules, Bye-Laws etc. State specific issues which are not common to other States and are not against the spirit of the MoU or the revival package may be included in the memorandum at the option of the State Government. Implementation of the package has begun in fifteen States viz., Andhra Pradesh, Arunachal Pradesh, Bihar, Chhattisgarh, Gujarat, Haryana, Madhya Pradesh, Maharashtra, Nagaland, Orissa, Rajasthan, Tamil Nadu, Uttarakhand, Uttar Pradesh and West Bengal which have signed the tripartite memorandum.316.7.12 There is also a strong view that conceptually ‘Cooperative’ and ‘Banking’ do not blend together. A cooperative has to be member-centered, member-oriented, and member-controlled. It is designed to exclusively serve its members who are all its patrons and user of services, meaning thereby that every user has to be a member and every member has31w31158to be a user. o A eAa user.AOnA h Acontra y,AaABankin AIn t tuti nAhas aAmuchAwi erA li nt leAand AisAan blicAd main. organis ti nAf llingAi AtheAg neralAp 6.7.13AWhile app eciat ng AtheAab ve A oncerns, At eACom issi nAfeelsAthatAi pl men ationAo Athe Apac ag Ade ignedAonAthe Are om end tionsAofAthe Vaidyanat anACom it eeARe ortA nstitu ions. nA T CS Aw llA o A AlongAwa Ain reviving AandA trengthenin Acoope ative AcreditA hout fu therA Stat s Aw ich have An tAy t As gnedAt e A OU Ashould be pe su dedAtoA oAsoAwi owAup of AtheA osheACoAofAtime. Amissi nAal oAfee s Atha At er A eeds At Abe AaA tr ng folabove Are om end tion Ao Athe par Aof Ab thA heA nionA ndAthe AState Govern e ts.A6.7 14AAAsim lar Aex rc se Ashould beAcomplete Ai mediate y A nAr spectA f A he epor AofAt eA askAF oceAon A TCCS.A6.7.15ARecom en ations:ture A(LTCCS)heAprocessAof AirASho t-TermA )Apl men ationAo AtheAre iva ApackageAfthe basisAofA Rura ACoope ativeACre it AStru ture A(STCC ) A orm lated on im ediately A the Vaidyanat anACom itteeA ep rt Ashould beAcompleted I Aco sistsAofA heAfo lowin AmaorAste sA:i. Stat sA hic Aha eAsoAf rAn tAs gne Athe MOUAfor thisAprp seAsh ul Ab Aa kedAtoA oAsoAwi hout fu therAoss of time.AACooperat veA i .ATheABanki gARe ulatio AAc ,AN BAR AActA ndAtheAStat AimproveAtheA S ciet es Ac s AneedAt AbeAsui ab y Aame de Ain Aord rAt manageme t/ overnanceAo Acoope ativeAcreditAnsti u ions.iii.AAAmode ACo perat ve La AneedsA oA eAe actedAb AtheAS ates. St tes whic Ad Anot wis AtoAp ssAt eAMode AAct, Asho l Aintrodu eAaAsep ra eAchapterAon Agr cultu alAand RuralACre itASocieti sAc ntainin AtheAsalie tA rov sions ofA he Model LawAinAt eirAexistin ACooperativel gislati n.b)A imilar st psAsh ul A eAtakenAin aAtime bo ndAmann rA nAr spectAofAtheAre om end tion Aof AtheAs me Committee on ALong-Ter ACoope ativeACre itAStruc1597.1 The people of India were fortunate to be guided in shaping their future by the principles enshrined in the Constitution of India by our founding fathers most of whom had been in the forefront of our freedom struggle. Their vision was articulated by Pandit Nehru’s historic words to the people of India on August 15, 1947 that “long years ago, we made a tryst with destiny and now the time has come when we shall redeem our pledge”. This was a message to the people of the country to dedicate themselves to the service of India and to the larger cause of humanity. It was a clarion call to all citizens “to endevour, to bring freedom and opportunity to the common man, to the peasants and workers of India; to fight and end poverty and ignorance and disease; to build up a prosperous, democratic and progressive nation, and to create social, economic and political institutions which will ensure justice and fullness of life to every man and woman.” Specifically, the economic and social order envisaged for this country is incorporated in the Directive Principles of State Policy which is a unique feature of our Constitution. In fact, it has been described as a forerunner of the U.N. Convention on the right to development as an inalienable human right.7.2 The following are some of the relevant and important Articles of the Directive Principles of State Policy impacting on the promotion of a just and fair socio-economic order :Article 38 –State to secure a social order for the promotion of welfare of the people.The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform the institutions of the national life.The State shall, in particular, strive to minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations.TOWARDS AN INTEGRATED SOCIAL POLICY7160Towards an Integrated Social PolicyA ticleA3 A–ACertain pr nciple Ao Ap licyAtoA eA oll wedAby A heASt teTheAS at Ashall,AinA articu ar, direct itsApol cyAtowardsAecur ng; )Athat Ath Aci ize s, Ame AandAwom n Aeq all ,Ahav At eA ightAtoA nAadeua eAmeansAofAlielih od; )Athat Ath Aow ership A nd con rolAof At eAmateria Ar sou cesAof Ath Acomu ityAareAso A is ribu ed asAbestA oAs bserve theAcomonAg od; )AthatAth Ao era ionAofAt eAecon micA yst mAdoes no Are ultAinAtheAcoce tratio Aof wealt Aa d AmeansAof pr duc ionAto theAcommon Ad trim nt.d) th tAthe e Ai Aeq alApa Afor equ l Awo kAf rAb th AmenAadAwo en; )Athat the healthAa dA trengthA fAw rke s,Amen and wom n,AandA heA enersAageA fAc ild en Aare not abus dAandAth tAc tiz ns Aare no Aforced A yAeconomi An cessi yAtoAenter avocatio sA nsuit dAt At eirAageAo Astregth; andf) Ath tAc ildre Aare AgivenAop ort nities Aand fa ilities to d velopAiAaAhea thy ma nerAand Ain co ditions ofA reedomA ndA igni yAandAtha Ach ldhoo Aan AyouthAar Aprotec edAagainst Ae plo tation A nd Aag ins AmoralAa dAmaterialAabandonm n t. rticl A4 –ARig tA o Awork, At Aed ca ionAan Ato Apublic as istanceta nAinAcercas s.ent, Amak AA The AS ate Ash ll, within th Ali its Aof Ai s Aeconom c Ac pacity Aand Ad veloss stanc AAeffectiv Apr vision Af r As curin At e Arig t A o Awork, At Aed ca ion Aan Ato Apublic nAcasesAof Aun mpl ymen , Aold Aag ,As ckness Aand Ad sab em nt, Aa d AinA thrAcases AofA ndersrvedAwa t. A ticle A45 A APr visi nAf rAfreeAand compulsor Aed cationAfor A hildr n.mm ncem ntA TheA tate Ashal Ae deavour A oAprov d , Awith n A Ape iodAo Aten yea sAfrom AtheAc yAc mpl te ofAthis ACo sti utio ,Af rAfree Aand compulsor Aed cat on AforAa lAchi dren untilAth theAageA fAfourt e e Ayear .7 3ABas d Aon Athese A rinci les, AIn i Aadop ed a Amodel A fAeconomicA eveopmentAand o-eco om cA form lated Five A ea sAPlan AThAvi ionAof At eAp an ersAwa A o AsecureAaAsocord rAi Awhic At eAg ins AofA he Aec nomyA oul Area hAt eAp orAandAthe Auleged in apr v161So ial ACap t l –Aared Desr~e~~~~~substantive way. The ultimate objective was to create an economy and a society which could offer adequate livelihood to all, where social practices like dowry, domestic violence and abuse of children were absent, and where people lived in social harmony. Over the years, we have made significant progress in many spheres, we have been able to build up an impressive infrastructure for industrial development, the tertiary sector has shown remarkable growth and many of the social and health sector indices have registered considerable improvement. But, there are still some areas which are cause of deep concern. Approximately 25% of our population continues to live in penury, below the poverty line, a large part of our work force is either unemployed or under-employed, and our social security measures contnue to remain inadequate and cover only a fraction of the total population. Cases of child rights abuse come to notice almost regularly, domestic violence rocks and destroys many families and incidents of atrocities against the weaker sections are still reported aplenty. The primary reason behind this situation lies in the fact that our development process has tried to tackle issues in isolation; in bits and pieces. The government and the planners have not tried to craft a composite social policy which could take up all the above issues in a coordinated and complementary manner. The Commission is of the view that instead of adopting a fragmented development approach, there is need to lay stress on an integrated social policy which would work on these issues in a comprehensive manner. It will provide an appropriate focus for both our planners and development practitioners. A significant portion of the plan allocation should be earmarked for implementation of such a composite social policy.7.4 This Social Policy should interalia include the following elements:?Political elements like affirmative action for the socially excluded, special institutional arrangements to give ladders to the ‘weaker sections’?Economic elements, like1.right to work or an employment guarantee, or a protection of livelihoods.2.also a clear priority focus on the poorest of the poor, to be the first step fora development design.3.adequate allocation of resources for social amenities including a nationalsocial insurance policy which protects the unemployed.?Social elements like1.stronger laws for child rights, anti-dowry, domestic violence, atrocitiesagainst the oppressed etc162Towards an Integrated Social Policy.Asocia Awelfare Apr visions, A men tiesA orAc ildAcaresrvic sAsuch 3 AasA AtakeAanA ve -vi wAofA llAotherA olicies Ar latedA oAsocia Asec or tion an e ucation Ahealth, Apo ulatio ,Asocial welfar ,Awater,Adecentr lis makeAanAi tegrated Ac mm tment AtoAtrans orm tion Af r Asocia Aju ticeAand ieconomicAfufl l en .AyA epend 7.6AThAoveral As cces A fAsuch AaA omposi e Asoci l A o icy Ain aApol tyAwouldA rimari Aand A(c) onAthre Afac ors viz A(a)Athe Ag vernanc Asy tem,A(b Aq ality ofAHuman Cap talcr ationA st engthAofAc llecti eAa tion AandAco perativeA ehavi ur Aamong citi ensAt at leadsAto of effect ve Acivi A ociety /Asocia AcapitalAinstitu ions.7.7 ARecommend tions:a)AG vernme tAsho ld craftAanAi tegrat dAsoci lApol cyAw ichAwilAensure prior tyASta e A cti nAo Athe Ak yAissues re atingA o Asocia AjuticeAandAempwe ment.Ab)AG vernme t Ashoul A rovide AaAs gnifican Ap rti nAof itsAplanAa loctionAforAimple en atio AofAthisAi tegrat d Asocia163CONCLUSIONPeople’s participation in governance is recognized the world over as a prerequisite of good governance. The growth and development of society is critically dependent on its internal institutions, particularly those created by people’s initiative and vigour. Some of these institutions are for non-profit, some for mutual benefit of a group and some for raising income levels of their members. Collectively they play a major role in contributing to good governance and to economic and social development.In the sociological context, these institutions produce cohesiveness and mutual trust. In the economic sphere, these qualities together constitute the fourth essential factor of production; land, finance and entrepreneurship being the other three. And, in the field of public governance, such institutions represent people’s participation and initiative which add strength to instruments of State. Realizing their growing importance in economic and social management and public administration, sociologists and development theorists now define them as ‘Social Capital Institutions’.A State with strong democratic norms and traditions allows greater opportunity to social capital institutions to organise and activate people around many key areas of public activity such as welfare and delivery of services. It leads to formation of a polyarchic society.The Report has tried to comprehensively cover all categories of such institutions which are currently in existence in various parts of the country (Societies, Public Trusts, Cooperatives, Self-Help Groups, Producer Companies and Professional Self-Regulatory Bodies). The composition, functions and legislative environment of each of these have been analysed in detail and specific suggestions have been made to enhance their efficacy so that they play a greater role in development of India’s polity and economy. The Report emphasizes the need to bring about ‘attitudinal changes’. The Report also suggests direct involvement of people to increase openness and public sensitivity in functioning of these institutions. The Commission firmly believes that if the recommendations put forth in this Report are implemented, it will bring about far reaching changes in the working of the entire third sector. It will (a) bring charity organisations closer to public good, (b) improve conduct of professional practitioners, (c) lead to better governance of technical, management and other164Conclusionprofessional n Arural Acr dit profess onal Aeducatio Ain titutions, (d) Arejuvenat Aco peratives, (e) As rength nd enab e Athe A str cture, A nd A(f) Aprovid Ao portu ities Aof Ask ll enh ncem nt A o Athe A oor Aand Ar sponsivet Aearn Am re. AThe over ll imp ct Awill Ab At e emergenc Aof Aa Ah alt y, Avibrantfollow AM hatmaA civ l Asoc ety. Thi Awould Ah l Ain Acr ating Aa carin Asoci ty Awhi h Awould an hi’s Avis on as A mbodied Ai AtheAfol owingAl ne :“IAven ure A o A ug est thatAitAis A he A unamental lawAof A ature,Awit outA xcepti n,AthatA everyb dy A ookA ature A rod ces enoug Afor our wa ts Af om A ay to Ad y, Aand Aif onlyin Ath s Awor d, eno gh A or Ahims lf Aan Anoth ng Amo e, th re Awould A e A o Apa perism as Aw AhaveAgotA th re A ouldA eA oAmanAdyin Ao Asta vation in A hi Awor d. Bu AsoA ong t is ineq al ty, so AlongAweare thie ing.”Aiona Af eed m.A Fo Amany decades,Athe e Ain titution Ahav AoperatedAwi hAconsider bleAfunc theirAo i inalA Many AofAt e AProf ssio alABod es AhaveAbec meA olit cizedAan Ahav Adevi tedAfrom e bur oug sAo A i te t. AA Anumb rAo ASocie ies andATrust Aa eApe ceived to Ahave AbecomeA oc heAcou tr AtooA aAf wAw oAuse the AforAthe r A wn Abenefits. The ACoo erativ Ase torAacr ssAel Aen renched sta dsAinAcom le e Adisarray ATheACommis ionA ecogni esA hat peop e AwhoAareA inAthe curr nt A ystem Aw llAno Ar adilyAag ee Ato sheddi gAt eirApowers A ndAp ivlege .A ha AweAneed Ai Aan Aunwave in Acommi me tAt Aref rm onAthe Apart ofA ov rnments andAan equallyAstr ng wil ingn ss onAth Apart Ao Ac vilA oci ytheseAto workchanges.Afor165SUMMARY OF RECOMMENDATIONS1. (Para 3.1.2.6) New Legal Framework for Charities in Indiaa) The Union Government should draft a comprehensive model legislation covering both Trusts and Societies in lieu of the existing laws on Societies, Trusts, Endowments and Charitable Institutions etc.b) In place of the present charity administration consisting of a Charity Commissioner / Inspector General of Registrations as existing in the States, the proposed law should provide for a new governance structure in the form of a three member Charities Commission in each State with necessary support staff for incorporation, regulation and development of Charitable Organisations. The Chairman of the Commission should be a law officer drawn from the cadre of District Judges. Out of the other two members, one should be drawn from the voluntary sector and the other would be an officer of the State Government. In addition, the State should also have a Charities Tribunal which would exercise appellate powers over the orders of the Charities Commission.c)The proposed model legislation should indicate a cut off limit with regardto the annual revenue of a Charity. Organisations having an annual income below this threshold will have lighter compliance requirements with respect to submission of returns / reports / permission etc. However, if irregularities are detected in their functioning, the organisations will be liable for legal and penal action. To start with, the cut off limit could be set at Rs.10 lakhs which could be reviewed for upward revision once in five years.d) The government should set up an Inclusive Committee which will comprehensively examine the issue of defining ‘Charity’ and ‘Charitable Purpose’ and suggest measures to “soften” charities-government relationship, particularly in tax matters.166Summary of RecommendationsThe model )ATheAmodel legisl tion shou dAtakeAinto Ac nsi erati nAt eAviewsAand sugg stion Amad Aabove wi hAr gardAto At eAfoll wi gAissueAofAcharityAadmintration:i AAIn erf ceAwi hAtheAStateAG ernmentii. AA ter tion AinAth eAme randumii . A Approv lAonAc han Areportiv. AA ienationA fAimmovablpropertyv. AA on ributi nAbyAP bl cAT ustsA oAtheAStateA overn ent2.A(Par A3.2.6.2. ) ACorp rate ASocialAResp nsib l tytity,A he eA a)AWhen aAcomm nity Abe efiAproj ct is t kenAupAby aAcorpo ateAedAtheAloca A sh uldAbe someAmutualA onsulta ion between the com anyAa herAsimilar g vern entAs At at thereAis Ano unneces aryA verla AwithAo developmen Ap ogr mmesA nA heAarea.Ab AGover men As o ldAactAasAa fac litato Aa dAcreateAan envir nmentAwhic Aencoura es A usinessA nd indu tr AtoAtake upA rojectsAan Aacti iti sAwhic Aa e Ali el Ato Aha e A nAi pactAon th Aqua it Aof lifeA fAtheAloca lA ommun ty.3.A(Par A3.2.7.2.8)AA cr ditationA f AVoluntaryAOrg nisa ionsfAvoluntaryA a) The e should be aAsystemAofAa c editationA/ A er ificationA o ganis tion AwhichA eekA undingAfro AgovernmeAa encies.AAinde e dentA b AGover ment shouldAtak Ai itiat v Ato en ctA Al wA o Aset AupAan ork.AIn Ath A Bod A–ANationalAA credita i nA ounc lA Ato A akeAu At isA us ofAf ndsA beginning AGo ernm nt mayAnee A o Ap ovid AaAone ti eAcor ga is tion. to AthisAotitheAabovtionAofA c)AAlawAsh uldApro ideA etails wi hAr gardAtoAtheA onesAfromAthe heA ouncil, Ait Afu ctions Ai sApo ers Ato Alevy appr pria eAf app icant ,AandedAo hermatters.Arela167168o i lShared al A– Destiny A~ ~4. (Para 3.3.7) Charitable Organisations and Tax Lawsa) Under Section 12AA and Section 80G, the registration or approval should be granted or an order rejecting the application should be passed within a period of ninety days from the date of filing of the application instead of the present one hundred and eighty days.b) In view of the fact that infrastructure projects are a critical component of charitable institutions, the period for accumulation of surplus which is currently five years needs to be further enhanced.c) The present National Committee may be replaced by four Regional Committees to recommend “deduction on expenditure” to the Union Government under Section 35AC of the Income Tax Act.5. (Para 3.4.4) Regulation of Foreign Contributiona) The Foreign Contribution (Regulation) Bill, 2006 needs to be amended to include inter-alia the following suggestions:i.There should be a fine balance between the purpose of the legislationon one side and smooth functioning of the voluntary sector on the other. The objectives of such a regulatory legislation should be properly enunciated to avoid subjective interpretation of law and its possible misuse.ii. There should be a time limit for procedures falling under Section 11 (seeking registration or prior permission for receiving foreign contribution).iii. Transparent rules/guideliens should be prescribed for inter-agency consultation particularly in respect of (a) the minimum amount of donation which would require inter-agency consultation, (b) the level of the Authority which would authorise it, and (c) setting up time limits for such procedures.iv. To facilitate (a) speedy disposal of registration / prior permission petitions received from organisations, (b) effective monitoring of their activities, and (c) proper scrutiny of returns filed by them, some of the functions under the Foreign Contribution Regulation Act should be decentralised and delegated to State Governments/ District Administration.S mmaryAofARecommOther v. AOther co cernsA s A tatedAinA aragraph A .4.1 5.3A ls AnedAtoAbeAcons dered.AtoA essA b)AOrga isationsA ec ivingA nAannua AforeignAcon ributionAe ui alen toAtim )A than Rs.1 .0 A akhA nAaA earA( he fig reAtoAbe revi wedA ro Atimemen sAof houldAbe exem tedAfromAreg str tionA ndAotherA eportingAreq ir AforeignA the law.AThyA houldA eAasked, in tea ,A oAfileA nAannu lA etu nAofAthcon ribution re eive Aby the AandAitsAut li ati nAa At e Ae dAofA hhe yealawAma Apro ideA hat th yAmayA eA ia leAtoAbeAinve ti ated, if t ereAisAaAr asonableA us icionAofAsu p essionA/Amisrepre en ation A fAf cts,A ndApenalAp ov sio sAo Athe la Awil AbeAuse Aaga ns Athe AinAcase A io ationAisAestab ished 6.A(Par A4.6.1 )A ssues AofA elf-H lpAGroupM ve entAtheASHGa AThAro eAofAtheAG ve nme tAinAt eAg owthAandAde el pme t Ao eA ho ldA moveme tA houl Ab A hatAofAaAfa ili atorAandA ro oter.ATheA bjectibeA o createAaAs pportiveAen iro ment forAthisAcountr .ov ment.ates bAandA ASinc AaAlar eA umber of AruralAh us hol sAinAtheANort -Easte nAS Pradesh,A Centra -East rn par sAofAth Acountr A(Bihar, AJ arkha d,AUttar tha )Ado Utt rakhand AOriss ,AMadhya Pradesh,AChh tti garhAandAR ja tAonAtheA notAhave adequa eA ccessA o Aforma As urcesAo A redit AaAmaj rA hru ated.AThe xp nsi n Ao AtheASHG mo ement inAth seAare sA houldAbeAfac li pr senceA fANABA D A houl AbeA uchAmoreAp on unced inAthesp ac s.AnAare s.A )ATheASHG movem nt ne dsAtoAbe ex ended to A rbanAandAp ri-urb to etherA StateAGov rnment ,AN BARDAandAc mmerc al ABan s Ash uldAjoin vant toAA t A repareAaA ir ctoryAof Aa tiv ties Aand financial products re suhA reas.AfinancialA d) AC rre tly, Athe Ac mmerci l A ank , Aon A he b sis Aof Aa A roject’s onA hei A iab lityAcan disburseAmi ro redit inA rban AandAs mi-ur an areas nceAfro own A butAsuchAmic o-creditAdisb rse ent AareAnot en i itledAto refn su tably N BARD. AIfAn ces ary,At eANA ARD A ct, 19 1AmayAb Aamended to Abr n AurbanA/ As mi-ur an Aar asA nder Aits refinance ma da e.A.ATesAtoAbeA ) TheAS GA ABan ALink geAm d lAwith a Ame to ASH IAinAtow de er rou houtA e co rag d AasAtheA refe red modeAfor financialAinter ediationAt the169CapiSrl — A Srared Destinyf) Commercial Banks and NABARD in collaboration with the State Government need to continuously innovate and design new financial products for these groups.g) There should be a planned effort to establish RRB networks in the 87 districts of the country which currently do not have RRB presence.h) Special steps should be taken for training / capacity building of government functionaries so that they develop a positive attitude and treat the poor and marginalized as viable and responsible customers and as possible entrepreneurs.i)Rural credit is often viewed as a potential Non Performing Asset. There isneed to educate government employees and Bank personnel in this regard. Technology may be leveraged to reduce the cost of reaching out to the poorest of the poor.j)There is need to review the scale of the promotional grant given to SHPIsby NABARD (currently Rs.1500/- per SHG formed and activated).k) In order to scale up the operations of the Rashtriya Mahila Kosh, its corpus should be enhanced substantially. RMK’s geographical reach should be expanded to help quick processing of loan applications and effective monitoring of the sanctioned projects in far off areas. The Kosh may open adequately staffed regional offices at selected places in the country and give greater attention to the credit deficient States.l)The Micro Financial Sector (Development and Regulation) Bill, 2007 needsto be amended to include the following suggestions:-i.The scope of Micro-finance Services should be substantially widenedto cover credit / savings, insurance, pension services, money transfer, issue / discount of warehouse receipts and future / option contracts for agricultural commodities and forest produce.ii. ‘Nidhis’ registered under Section 620A of the Companies Act, and Producer Companies should be brought under the new legislation.170cummerd~ti ~~sheAtheyAconcernA iii.AA ctiviti s A f ASection 25 Com aniesA oAth Aextent ABil As ouldA m cro-finan ia Aservices asAde cri edAunder theA ropose Howev r,AforA al oAbeA rou htAunde At eApu viewAofAthis legislat on. ntinueAt Ab A the rAm nagem ntAandAoth rAfu ctio s, AtheyA il Ac go erned Aby At eA rov sionsAofA heAC omp ie AAct.Aleft Ato At v. eA AThe Aissu Aof A nterest ra e Ac arge Aby Ath AM Is As ou d Abthe ApRegulat ry AAu ho ity Aw ich Ais A eing A rea ed Aunderrose ABill. ftA Asavi .A It gsA Ashou dAbe en ured tha AifAMFI Aa eAallo edAto A a dleAthr AasAbusinessA andAm neyAtrans er As rvice ,A he Awou dA o Aso Aonl asAs ated AinA c rr spondentsA fAcomm rcial Banks.AO he Aconce ns P raA4 6.9. .2 al oAneedAtoAbc nsidered.AtheAst ea .Aoul Ab Ake tA m) Micro-finance institu ionsA ove edAunder the propos dA awAs out Ao At eAp rview ofAt e A tateAlawsAonAmo n y-len i n g .7. A Para A5.2.1 ) ASeparating Professio al AE ucation AfromASe-Regu latoryuthoritiestheAexisti a) gA Professio alAedu atonAsh uldA eAta enA wayAfr mA heA omainAof esA– on Afo A Regu ato yABodi sAan Ah ndedAover toAspec allyAcre t dAa enc eA odiesA ayA eachAo At eAstreamsAofAhigher profession l h Aed cation ATe ne,ANatio alA be Aca ledANatio al A tandard Aand AQu lit ACouncilA orAMedic bif rcat on A tandard Aand AQu lit ACouncil Af r AMa gemen Aetc AAAfter Athis ed Ato Aissu sA th Awork Aof the Aexisti g ARegul tory A odies’ would i Ar ma n Aconf professio alA concerning A egist ation, Askil Aup radation Aa d A anagement Aof tandard Aa dAethics AO Acrea ion AofAt eseAsepar teA ounci s,At eAAIC EAwillAstand abol shed.b)A uchACo nc lsAshou dA eAc eat dAbyA awAa dAthei Ar le sho ldAb AtoAla AdownAnor s, A tandards Aa d A aramet rs AonAissu sAconc rni gAgrowthAan Ad velop entAof thei Ast eamAviz A( )As ttingAupAnewA nst tutions,A( )Adesign ng/Aupdatin Acu riculum A(c)Afaculty imp ovement, (d) carrying o tAresearchA Ain ova ion,A ndA e) Aoth rAkeyAissu sAc ncernin171cial ACa i a A–Ared Destinyc) The proposed law should take into consideration the following guiding principles while constituting these Councils:i.Such Councils should have full autonomy.ii. The highest policy and decision making Body of these Councils should have a majority of independent members, and preferably no more than 2 or 3 drawn from government, who could be there in an ex-officio capacity.iii. These Councils should have a strong and effective grievance redressal mechanism.iv. The Councils should be accountable to Parliament and their Report should be placed before the House annually. In addition, there should be strong norms for suo-motu disclosures under the RTI Act.v.Each of these Councils should have a body of experts to advise it on accreditation / certification of institutions falling under their jurisdiction.vi. Some of the members of such Councils can be elected from office bearers of specialty Associations (e.g. Indian Medical Association), as these members are elected by the practicing professionals in their individual speciality.d) Within such norms, standards and parameters, the Universities/ Autonomous Institutions should be given full autonomy for setting up and running institutions under their jurisdiction.e) The recommendations of the National Knowledge Commission regarding reforms in the structure, governance and functioning of Universities should be examined and implemented on priority. The process of appointment of Vice Chancellors should be free from direct or indirect interference of the government. Vice Chancellors should be given a fixed tenure and they should have adequate authority and flexibility to govern the Universities with the advice and consent of the Executive Council.172f)There should be stronger ties between educational institutions in the publicand private sectors through mechanisms such as exchange of faculty.Sueeada~i~ ~s8 A(Para A5.3 5)AContinuin AProfession lAEdu ationa)AEver AProfessio alAR gu atoryABody Ai Acoo din tion AwithA heArespe tiveANa ion lAQuality andASta dar sACounci AandAAcademi AInsti utionsA houldAcond ctAContinuin AProfessi nalAEducat onAprogramme Ape iodicall Afo Aupda ion AandAski lA nha cementAofA tsAme bers.9 A(ParaA .4.3)AEth cal EducationA ndATr ininga)AAf er separationAo Aprofessio alA ducati n, the agendaAofAth AProfessio alARegulato yAAuth ri ie Ashou d A eAt AfocusAon (i) procedureAfo Ar gis rationA rsAconcernin A f new Amem er A/ArenewalAof reg stra ion;Aan A(ii)Amatt yAAuth riti sA profes ionalAeth cs, standards an Abehavior. TheARegulato Aseminar AandA s ouldAal oApayAgre te Aattention to Aconduct ngAworks opstrain ng prog ammesAonAs chAis ues.10 A(ParaA5. .4 AEn olment Ain(sayA90 da s).th AProfe sio a)AWithinA he par mete sAo Athe AAct,A heArespect veARegulaoryAAu ho ityAshoul Ab Aempowere Ato Aprescr be A uidelines fo AenolmentAone Amemb rs.A11 A(ParaA . .3)ARenewal A AR validationAofA egis rationheAprofessionalA ) A e Ashould A e A Apr visionAi Athe rele a t Alaws AthatA bedAnu be AofA regist atio /lic nseAwillAnee Areva i ationAafte AaApre cr se pre cribedA y ar .AIt could beAdoneAaf er Asuccess ul c mpleti n Aof AaAcou byA heArespectiv AProfessio alARegulatory Autho ity.12 A(ParaA5.7.6 ADisciplina y AMe hanismhereAshoulrderAtoAbri gA ) AAb Apr visionAi Athe rele an Alaws th t AinA bject vityAinA hei Aworking,Ath ADisciplin ry Com itteesAofAheARegulato yA ldAconsist Ao A utho iti sAatA ot Athe St teA s Awell Aa AtheA ationa AlevelA ho eAi ductedAin pr fessionalAandAno -profess ona Amemb rs ATheyAcou dA th ACo mitte Ai AtheA atio AofA60:40 re pe tiv ly.AdAt Acompl teA b) TheAlawA houl Apro ideAth tAsuch Bo iesAshou dA eArequir edAt me spanAA the Aentir Adisciplin ry Apro e ding Awithi AaAp escr173cial ACa i a A–Ared Destinyc) The law should also have a provision that anybody aggrieved with the findings of the State Panel could go in appeal to the National (Apex) Body which too will have to dispose of the matter within the prescribed time limit (say 90 days).13. (Para 5.8.10) Constitution and Composition of the Self-Regulatory Authoritiesa) The structure and composition of the General Council and the Executive Committee of Professional Regulatory Authorities should be rationalised. As far as practicable, it should be uniform for all of them.b) Every Authority should have a fairly large and representative General Council (the ideal number could be around 50; such a Body encourages a wider perspective and diversity of opinions).c) The Executive Committee should be a small Body consisting of 10 to 15 members (a compact forum supports administrative efficiency and accountability).d) There should be an explicit provision that a person cannot be elected to the post of President / Vice-President or General Secretary for more than one term. However, a person could be elected as a member of a Body for a maximum of two terms.14. (Para 5.8.12.4) Clients / Users – as Lay Members in Regulatory Authoritiesa) The composition of the General Council as well as the Executive Committee should be such that 40% of the strength consists of lay members.b) The nomination of lay members should be done by the Ministry / Department concerned in consultation with the appropriate Regulatory Authority.15. (Para 5.9.4) Accountability and Parliamentary Oversighta) The laws governing the Self-Regulatory Authories should have a provision under which the Regulatory Authority should be required to present an Annual Report to the Parliament for scrutiny.174S mmaryAofARecomm6.A(Par A6.4.10)ACoop ratives;AConst tutionalA on exta)AA AArtic eA hould be addedAt AP rt- VAofAtheACon ti uti nAin th Afo mAofA 3BA hereA heASta e A houl AbeAmadeAre pon ibleAf r Ama ingA uchA awsA hat Awi lAensure Aau onomous,Ade ocrati ,Amemb rAd ivenAandApro essionalAco perative Ainst tu ions AIn At a Acase AaAla ge AscaleAConst tutionalA tr duc dA me dme t AonAth Ap ttern Aof Par s-IX andAI -AA hichAwasAi propose A by the 73rd andA74thAAm ndme ts, wi lAnot AbeAn ce sary. ATheAr icl A43B ma AreadAasfollows nd avourA ArtA cle A43B: AEm ow rment AofACo-op rat ves:A TheASt teAshallA ther AwayAo A ecure Aby suitable Ale is ation Aor economic Aorg ni ati n Aor A ny A perativeA au onomous, Ade ocrati , Amemb r Ad iven Aand Apro essional Aco re atingA ins it tions Ain differ nt areas Aof economic activity Apar icula ly Athoseto Aagr iul ur .”A-clause .National b) AThe AC mmission end rses Athe Aa endments A ug est d Aby Athe Advisor ACo ncil A nd Af els A hatAthi Acou led with AtheA mendmentA ug est d AinAtheA irectiveAP incip es w uldA eA Ast pAinA heArightA ir ctio Ato make AtheAco perativeAins itutionsAv luntary,Ade ocratic,Aprof ssional,Amemb r-d ivenAandAmembe -centricAent rprises.AAcc rdi gly,AtheA ollowingAa end en sAma Ab Ama e AinAtheAConsti tion: .AAUnde AAr ic le A 19, 19( )( )Amay be addedAasfohlws olu ta ry “(hA Ato for Aand ArunAcoo erati es basedAonAp in iplesAofA ,Amember and Aopen Ame bership,Ad mocrat c Amember contro omAStateA economicAparti ipa ion, Aand Aa tonomousAfuctio ing A reeAf con ol.”ii. AACorresp ndingly AArti leA19( ) A houldAb Aa endedAasfoll ws:ll A ffectA “(4A AN thing Ain Asu -cl use A(c Aa d A( ) Aof the Asa d Acla se Ash pre entsA the A pe ati n Aof Aany exi ti g A aw A n A o A ar Aas Ait im oses, Aor Aof A[theA he AS ateAfr m Am kin AanyAlaw A mp sin ,AinAtheA nt rest orality,A so ere gntyAandA nt grity ofA ndiaAo ] Apub ic orderAorA dAby theA r asonableAres ri tio sAonAthe ex rci eAof A he ArightA on errsaidAsub175So CaA Atap t A SAared Desr~e~~~~~17. (Para 6.5.6) Legislative Frameworka) All States (other than Andhra Pradesh, Bihar, Jharkhand, Madhya Pradesh, Chhatisgarh, Orissa, Uttarakhand, Karnataka and Jammu and Kashmir) should immediately take steps to enact their own Mutually Aided / Self-Reliant Cooperative Societies Act on the pattern of the Model Law suggested by the Task Force on Revival of Cooperative Credit Institutions. The States where such Acts are already in existence should also examine the Model Law suggested by the Task Force and amendments in the existing legislations may be made, if so required.b) For the next few years, there is need to have parallel laws to deal separately with (i) the Mutually Aided / Self-Reliant cooperative societies formed under the recent enactments (post 1995), and (ii) societies formed under the old laws in which the government still has financial stakes. The societies referred at (ii) above should gradually be encouraged to clear off their liabilities and convert into Mutually Aided Societies.18. (Para 6.6.8) Producer Companiesa) A new law regarding Producer Companies should be enacted on the basis of the following broad principles:i.Producer Companies should be given a liberal charter of functionsto take up any primary activity as per their technical and financial capability;ii. The law should provide for flexibility in investment of funds, surpluses / reserves;iii. Depending on their functional requirement and financial strength, a Producer Company should have full flexibility in creating / abolishing executive and managerial posts;iv. The compliance requirements with regard to the Company’s audit and accounts should be in tune with the size of its operations; andv.The law should have provision for proxy voting in order to facilitatesmooth conduct of elections and general meetings.b) Co-operatives should be encouraged to incorporate themselves as Producer Companies under the existing provisions of Part IXA of the Companies176Su mary AofARecommepolicyAct, ted, asA A t, A 956AandAsubs quent yAu der theA ew law AasA ndAwhenA na xistingA th s A o ld Ab AaAmor Aviabl Ao tio AinAthe presentAenvi on ent.ATheA gettingA int r-StateAcoo erativeAs cie ies A ayAalso exp ore AtheApos ib lityAof th mselvesAc nver edAintoA roducerACop an es.A1 .A(Para 6.7.15)ACoo erativ ACr ditAand BankingAInstit ti nsrt-Te mA a)AThe pr cessAofAimplem nt tio AofAthe revival pac age AforASh asi AofA RuralACoo erativ ACreditAS ructure (STCCS)Afo mu ate Aon At eA ia ely.A theAVaid anathanAC mmitte ARepor As ould AbeAc mpletedAimmeAseps It A: A on ist AofAthe Af llowi gAmaj rAs ouldA i AStat sAwh ch hav Aso farAno Asi ned the MOUA orAthis purpos eA sk d A oAdoAso without furt er lossAfAt me AerativeA ii.AThe BankingARe ulat onAAct ANA ARD Act andAt eAStateACoo oveAtheA S ciet esAA ts ne d AtoAbeA uitably am ndedA nA rderAto imp management/go er ance AofAcoo erativ AcreditAinstiutio s AAStat iii. sA AAmodelACoo era iveAL wA ee sAtoAbe en cte AbyAthe States eparate hic AdoA ot wish toA assAt eAMo elAAct AshouldAi t oduceAaA ingAthe ch pterAonAAgri ult ralAa dARura ACreditAS cietiesAco tai erativeA salientApr vi ion AofAt eAM de ALawA nAtheirA xistingACoo legisl tion.b) Simil rAstep As ouldA eA a enAinAaAti e-boun Am nnerAin re pec AofAtheArecomme da ion Aof A he AsameAC mm tteeAon AL ng-TermACoo erativ ACreditAS ructureA(LT CS).2 .A(P raA7.7)AIn egrate ASocialA olicya)AGo ernmen Ashou dA raftAanAin egrate Asocia Apoli yAwh chAwil AensureA riori yAStat Aa tio Aon the Ake Aissues A el ting At Asocial jus iceAandAempoer ent.AionAforA b)AGo ernmen Ashould p ovideAaAsi nificant po tio AofA tsAplanAal oca implem nt tion ofAthisAin egrate Asocial177AS cilSharedAC pitalDestinyA–Annexure-I(1)Speech of Shri M Veerappa Moily,Chairman, Second Administrative Reforms Commissionat theNational Colloquium on Social Capital, Trust andParticipative public service delivery19th December, 2006I am happy to be here with you all during discussions on ‘Social Capital, Trust and Participative public service delivery.’ I have been fascinated by the term ‘Social Capital’ ever since James Coleman adopted Glen Loury’s 1972 definition and popularized the concept in 1987 and Robert Putnam in his 2000 book, “Bowling Alone” raised public awareness about this concept. I think, the conception of social capital as it is understood today has been a very stimulating intellectual discovery in social sciences and development thinking in the last few decades. Even though its roots date back to the 19th century philosophers who emphasized the relation between pluralistic associations and democracy. An abundance of social capital is seen as a necessary condition for a modern liberal democracy whereas low levels of social capital imply rigid, unresponsive and often corrupt political systems.As I understand it, by conceptualising in terms of social capital, we are adding a fourth one to the standard three categories of capital in economic analysis-physical, natural and human. It is interesting how this came about. Economists have traditionally been engaged in the study of the markets. The political scientists, in the study of the State. The anthropologists and sociologists, in the study of interpersonal networks. In the recent years, each of these groups started looking at the work of others to see if they can better understand the links connecting their particular objects of interest. One of these exercises led to the publication of the classic 1987 article by James Coleman on the development of social capital as an organising concept in the social sciences.It is difficult to think of an academic notion that has entered the common vocabulary of social discourse more quickly than the idea of social capital. Not only do the academic journals devote special issues to discuss the concept, journalists make frequent references to it and politicians use the term regularly.But there is a great deal of diversity in how people think of it. Some identify social capital with such features of social organizations as trust. There are others who think of it as an178re-I(1) Contd.aggregagg eg te AofAbehav oural A orms ASom Av ew it AasA ocial Ane wor sAand the eAare thoeAwho erentA th nk of i AasAa Acombi at on Ao Athe Aa l. So Ait woul Asee AthatA ocialAc pital means f Adi eg Aon hi gs AtoAdi ferentAp ople ATho eAw o AareAenthus astic abo tAthe Ac nce t A se i Aas aA o, itA whic Athe Aha gAall thoseAin ormalAengag ment Athey like Aca eAf rAandAa pro e Ao .A ibe yA is quite A om on At Ahe rAth Avie At a AifAaApart cular As ciety Aha bours Arent-se king,Ab lyA nA andAcorru ti n, it AisAb causeAcommu it es Ai Athat As ciet Aha e Anot Ain ested fi Asufc en theAaccumu at on AofA ocialAcap tal. book,A Aw llAg AwithA obertAP tna , AtheAH rvard APro ess rAwho wrot Atha AveryAinflu ntial edAatA ‘ akingADem cracy Work: Civic ATrad ti ns AinA odernA ta y” Ain 1993.A utnamA oo AbeenA diferent Ar gi nsAof It lyAtoAa aly eAho Athe Ahave A ar d. AThe Ano thern pa tsAof Ital Ahav nn ngA iche Ath n Athe Aso the n AforAs veralAcent ries, Ad spiteA avin Ab e Aon aA ar A t AtheAbegntAof fAthe Amille nium ATher Awere greatAdiffe ences Ab twe nAt eAtwo Ar gi nsA nAtheA xt sion A civicAcomm nity,Ac tizenAinvol eme tAandAgovern ental Aeffic ency.APu nam’sAconcl lsAofA wer Ath tAthe Ano thern AI alian Ar gion Awer Aa le Ato Aest bli h AandAma ntain A igherA ev ut ut AbyA ir ueAofAg eaterAendo me ts AofA ocialAcapital. As chA obertA utnamAide tifiesA ocialAc pita Awith A thoseAfe tu es AofA ocialAorganiz tionatingA asA rust, nor s Aand Ane work Ath t AcanAi pro e Athe Aeffiie cy Aof As ci tyAbyAfaciliocialA coord nated Aact on .” A oAh mAth Ater AalsoA ef rsAt A“the Acoll ctive va ue A f AallAher”. ne wor sAa d Athe Ainclin tion Athat aris Afro Asuch Ane wo ks to AdoA hin s Afo AeachAo AhaveA While At lking aboutA ocialAca ital AmostAan lyst Ahave Af cu edAon A rust ASomeA therreditA s udied Acomp ne ts AofA ocialAorganiz tion Alike AS vin sAandA reditAOrganisa ions,A talAaA Cooper tiv s Aand CivicAAssocia ion ,Aand AProfes ional A odies whic AmakeA ocialAc pilAof prod ctive A sset. AIncreas ngly, ASelf-Regu atory AProfes ional A odie AlikeAM dicalAC un AhaveA India A MCI , ABarACounci s, tc Aa Aw llAas AIndep ndentAregu atoryAautho ities A TRAI Aetcoader eco e Akey Ael me tsA n Aour Asocio-ec nomicAfram work.A ther Ahave Acons d red AaAb se se A fAthe A ot on AbyAinc udingAex endedAk nship Aorganisa ions,Alo byingAorganis tio sAandAad ocacy Ag oups ACase As udie Ahav Abee Am de A f AtheAmana ement As st ms AoflocalAta enA ommonApr pertyAres ur es Ain whichAmu ually Aben ficial Ac ur esAof A ctio Ahav Abeen Ar lyA byAre ou se Ato Aself-mana ement Asy te s. A nAall theseAacc unt , AtheAengag ment Atha yAareA onA ocialAc pital occurAsom whereAb twe n AtheAindiv dua sAa dAtheAgover ment Athorks,A con ucted A ithinAin ormal Ainstitu io s.AIn other A or s, Ain Ar sp ct AofAhori ontalAnet nc ptA ocialAc pi alAisAide tifie Awi hAthe Aw rk ng A fAthe civil Aso iety.AP esentAin er stA nAtheAcsAtheA ofA ocialAc pi alAis A rive Aa soA yAth Ar se Aof Akno ledge basedAorganiz ti ns Aa Aw llA tegicA eme ge ce A fAthe Anet orked Ae ono y Aand As ciety which Are uir sAtheA ro thAofAstr alli nces, jointAve tur sAa d AnewAorgani ation A179Socia A a italA–d ADestinyAShareAnnexure-I(1) Contd.Of central importance in all this is the notion of trust. But how is trust to be defined? Is trust a public good? If created, how is trust to be maintained? Is trust a moral good in that it grows with use and decays with disuse? Is trust, at the interpersonal level, a substitute for the courts and the rule of law, or is it a complement? What are the links between Legislature, Judiciary and the Executive on the one hand, and the personal networks, which embody social capital? Do those institutions reinforce one another or does each type displace the other?These questions need to be answered, but we have some indication of what social capital would mean in a country like India, and particularly with reference to the poor and marginalized. In India, caste-class segmentation as an important contextual variable in determining development of trust and social capital between different groups also needs to be recognized. Social capital, in our context, would mean the norms and networks that make possible collective action which will allow the poor and marginalised people to increase their access to resources and opportunities and participate in the process of governance. In this connection, one has to distinguish between different dimensions of social capital within and between communities. The strong ties connecting family members, neighbours and close friends are called “Bonding Social Capital”: these are the ties that connect people who share similar demographic characteristics. The weak ties connecting individuals from different ethnic and occupational backgrounds are referred to as “Bridging Social Capital”: this implies horizontal connections to people with broadly comparable economic status and political power. A third dimension - Linking Social Capital - consists of the vertical ties between poor people and people in formal organisations such as government departments and financial institutions. Linking Social Capital captures an important feature of the functioning of poor and marginalised communities in which the members are usually excluded from decision-making process affecting their lives.As is our experience, poor people are good at bonding social capital. They do this by establishing close ties with others who share the same characteristics as themselves. Such bonding helps them to cope with their disempowerment. Sometimes, the groups to which poor people belong, bridge social capital by establishing ties with groups unlike themselves, but these ties are often unequal, tending to result in patron-client relationships. When poor people link with organisations of the State, civil society or the private sector, they are in a position to mobilize additional resources, and are able to participate in the societal processes. Social capital has been assessed as being associated with cooperative social problem solving, effective government and rapid economic development.180Annexure-I(1) Contd.Awha , Ab tATheAmost perplexi gAqu stion that AfacesAde elopmentalApr ctit on rs lik AmeAi AnotAp ojectsA h w. AHow can Asoc al capital Ab Ai creased to Aimprove Aefec iveness AofA evelopme nd Aservi e Adelivery A ech nism ? AH wAdoes one creat AtheAright Ain titutional mechani m Awhereb AaA ocietyA anApro ideA tse f Awit AtheAbas c A e vicesAin aAs cially AandA oliticallyAstedAwasAa ust inableAandAco t-effect veAm nner A nceAu onA Atime, theAanswe Asu g signific nt governmentA ureaucra yAco b ned Awit AaAmassiv Ae tension inAsuppl . AHowever, nmen AwithA fail re Ao At isAmodeAo Aprov dingAbas c As rvi es hasAledAto widespreadAdisi lusi rimentsAi A such Ain titutio al A ptions Af rAr achin Athe poor. A omeArecent successfulA xp AcommunityA p ovisio AofApubl cA erv ces A o Athe po r Apo ntAto someAb sicA he es Asuch Aa AAll Ath se d velopment,Apa tic pat on AandAthe im ortan e AofAlocal Aorg nisationa Aca acity iveApub icA the es, in one AwayA r Aanother Aem hasi e A he Arol Aof Asoc al capitalA nf Acreati gAefec with At eirA a tio . AEven A he successAofAm cro-cred t Aoriente ASelf- el AGroup AofA omen, am enABankA strongA ooperativ Abe aviour Aa dAmutuallyA einforcing sanc ion , AwithA heAG Apromoting of Ba gla eshA sAtheAm stAstel arAexampleA llu trate At eAvalu AofAsoc al capitalAi emp oyment Aa dAeconomicAd eve op ent One A f AtheAmos Aimportant Aa pl cation Aof Asoc al cap tal Ais At e A elivery AofA ustai ableAbas cA nAtheAl stA erv ces At Ath Apoor AandAlocalAinf ast uctureA ndAnatur l Aresource A an gem nt.A velo ment,A sev ra Ayea s, Aw A ave AseenAa re urgence A f A nterestAin Acommu ity-drivenAd -help AandA wit Acommu it Agroup Ain cha ge Aan Athe Afoc sA hifti g AtoAlocal A nitiative, sel Acases,At A local Aorg nisationa Acapacity ACommu ityA roup Ahave Abeen A uc essfu ,AinAt es monAgo ls.A initiat ,Ao gani eAand A ak Aaction to Afur herAcommo Ai terests or Aach eveAcoSoc alA apit lAh sAb en Athe Ake Ac mpone t AofAt hfeseAeforts.esAth oughA Pa ticipatory man gementAhasAch rac erise AallAth seAefforts.APa ticipator Aprocesen thenin Awhic Acommu ity groups A re enab edAtoAma eAinforme Adec sio sA aveAledAtoAstbeyo dAth A of Asoc al capit l AorAlocal Aorg nisation lAc pacityA ndAfurt er Aprob emAsol ing l feAtimeAof particul rAp ojectsAandArogra mes.ALocal Aorg nisation l A apa ity AisA he abilit Ao Apeo le AtoAwor Atoge her Atrust A neA notherAa dA ndAn tworkA rgani e Ato Asolv Aproblem ,Am bilise and Amanage resourc s, Aresol eAc nflictsAeAprobl ms w th Ao hers. A hen Apeopl Aco pera eAandAwor Atog the ,Athey Ac nAoverco lAtoAlocalA relat d Ato Arisk, Ai for ation, A nd As ill .AThreAareAtw Aelem nts AwhichAa eA riticecond, theA o ganisatio Abuild ng. AFi st,A ro psAhave toAde elo ArulesAforAself- overnan e.A ro ps need AtoA e A mbe dedAin At e Aexis ingAsocial Aor anisa ion ASin eAtheA oorA arelyA aveAstrongAor an sati nsAto makeAt eirAvo cesAhear ,Apr jec sA hatAa mAt Area h Ath Apoor A us AinvestAinAst eng hening At e A apaci yAofAl ca Agro psAto At ke action. A n A ncreas181Social Capital – A Shared DestinyAnnexure-I(1) Contd.capital in development projects is reflected in improvements in indicators like cooperation and womens’ participation.The debate on what social capital is and what it is not, will continue for many years. But, what is clear is that the application of social capital facilitating collective action by community groups will remain a critical component in poverty alleviation strategies. The challenge for us is to formulate policies and the framework of rules that will allow and facilitate collective action that is instrumental in generating and managing local resources, and create conditions to support participatory decision-making and organisational capacity, especially among the poor.182Annexure-I(2)Natio alAColloqu um onASoc alACapit l,ATr stndAParticipat veApub icAserv ceAdelivery1 th A ndA2 thADecemb r,A2006L ST OFAPARTICIPAN T1.AS ri A oeAMadia h,AExecut ve ADirect r,AG am AVik s,AOriss2.A r.ARaj shATand n,APreside t,AParticipat ryAResea ch inAA iaA(PRI,AA ewADel h3.AS riAA ay S.AMeh a,AExecut veADirect r,ANatio alAFoundat onA orAIn iaA(NF),A ewADelh4.AS ri AB N.AMakhi a,AChairpers n,ACredibil ty AAllian e,AMumb a5.AS riASac inAO a,ACh efAExecuti e,ADevelopm ntASupp rtACen reA(DS),AAhmedaba 6. A s. ARe maANanava i,AS lfAEmplo ed AWome ’s AAssociati n,AAhmedaba7.AS riACris in ALo o,AWaters edAOrganisat onATr stA(WOT ),AMaharasht r8.A r. D.ADu gaAPras d,AOrganisat on ADes gnA nd AResearch r,AMumb a9.APr f.ABid utAChakrabar y,AHe d,ADepartm nt ofAPoliti alAScien e,AUniversty ofADel h i 0.A r.AKuld epAMath r,AProfess r,ASt dy ofA awA ndAGovernan e,AJawahar alANe ru AUniversi y,A ewADel h i 1.A r.ASa ya P.AGaut m,AProfess r,ACen reA orAPhiloso hyASch ol ofASoc alAScienc s,AJawahar al ANe ruAUniversi y,A ewADel hi 2.A r.AJ M.ATrive i,AHe d,ADepartm nt ofASociolo y,ASar arAPa elAUniversi y,AVall bhAVidyanaa r A 3.A r. AP S.AChoondaw t,AProfes o A&AHe d,ADepartm nt of ASociolo y,AMahar jaASayaji ao AUniversi y,ABaroda 4.A r.AMa oj ASo i, AVice-Chancell r,AMahar jaASayaji ao AUniversi y,ABarod a 5.AS ri AVi ay ASh h,AArchitect-Plann r,AEMA A,AAhmedab ad 6.AS ri AD S.AMeshr m,AInstit te ofAT wnAPlann rs of AInd a,A ewADe l hi 7.AS riAMa ojAPand y,ACh efAExecuti e, AShah ad AM lkAUni n,ABih a r 8.AS riAR S.ASod i,ACh efAGene alAManag r,AGuja atACooperat veAM lkAMarket ngAFederati n,AAn183Soci lACapit l – AAShar dADestinyAnnexure-I(2) Contd.19. Shri Y.Y. Patil, Managing Director, National Cooperative Dairy Federation of India, Anand20. Shri J.P. Dange, Principal Secretary, Co-operation & Marketing, Mumbai21. Shri Vinod Jutshi, Secretary (Co-operation), Government of Rajasthan, Jaipur22. Shri Anil Kumar, Commissioner & Secretary, Department of Dairy, Fisheries & Animal Husbandry, Government of Bihar23. Shri B.M. Vyas, Managing Director, Gujarat Cooperative Milk Marketing Federation, Anand24. Fr. E. Abraham S.J., Director, Xavier Institute of Management, Bhubaneswar25. Dr. Satyanarayana Sangita, Professor & Head, Institute for Social and Economic Change, Bangalore26. Ms. Mohini Kak, Society for Participatory Research in Asia (PRIA)27. Shri S. Sen, Coordinator (Special Projects), Confederation of Indian Industry28. Ms. Kajri Misra, City & Regional Planning, School of Arts, Architecture & Planning, Cornell University29. Shri Binoy Acharya, Executive Director, UNNATI, Ahmedabad30. Shri A. Ramanathan, Chief General Manager, National Bank for Agriculture and Rural Development31. Shri Rana Alok Singh, Development Support Centre32. Shri Rajiv Kumar Gupta, BASIX, Jaipur33. Shri R.R. Vorsani, Collector, Kheda, Nadiad34. Ms. Sreeparna G Chaudhary, Hunger Project, New Delhi35. Dr. N.V. Belavadi, Sr. General Manager (CS-I), National Dairy Development Board, Anand36. Shri Ravi Shankar, Sr. General Manager (CS-II), National Dairy Development Board, AnandInstitute of Rural Management, Anand37. Prof. Debiprasad Mishra, Colloquium Coordinator, Institute of Rural Management, Anand38. Prof. Ajit Choudhury, Institute of Rural Management, Anand39. Prof. Arvind Gupta, Institute of Rural Management, Anand40. Prof. H.S. Shylendra, Institute of Rural Management, Anand184Annexure-I(2) Contd.41. Prof. Maitreyi Kollegal, Institute of Rural Management, Anand42. Prof. Prabal K. Sen, Institute of Rural Management, Anand43. Prof. Arun S. Nathan, Institute of Rural Management, Anand44. Ms. Neelima Khetan, Acting Director, Institute of Rural Management, AnandAdministrative Reforms Commission45. Shri M. Veerappa Moily, Chairman46. Shri V. Ramachandran, Member47. Dr. A.P. Mukherjee, Member48. Dr. A.H. Kalro, Member49. Smt. Vineeta Rai, Member-SecretaryOfficers of the Administrative Reforms Commission50. Shri A.B. Prasad, Joint Secretary51. Shri P.S. Kharola, Joint Secretary52. Shri Sanjeev Kumar, Director185Capital – A Shared DestnySocialAnnexure-I(3)National Colloquium on Social Capital, Trust andParticipative public service delivery19th and 20th December, 2006Recommendations Made by Working GroupsParticipants at the Colloquium were divided into five groups to discuss various issues pertaining to Social Capital, Trust and Participative public service delivery. The issue-wise recommendations of the respective groups are as follows:I. WAYS OF INVESTING AND PROMOTING SOCIAL CAPITAL AT ALL LEVELS OF GOVERNMENT?Promoting social capital at different levels of government can be understood in terms of design of organisations, the authority allocated in organisations and education and the use of education and training for developing social capital.?The objective of the discussion was understood in terms of arriving at broad indicators of future direction; but social capital being a productive asset which cannot be transferred, has to be understood as context and location specific.(a) Institutional Issues in Social Capital in Government?The key issue is change in attitudes. Merely creating new laws may not be sufficient for effective implementation because laws can provide only a direction. The focus lies in ‘de-bureaucratization’ which implies a reduction in the rigidities occurring due to a blind adherence to bureaucratic procedures in the Indian government system.?One way of getting over the bureaucratic rigidities is adopting Citizens’ Charters for each department. However Citizens’ Charter in most departments remains a dead-letter document because people are not aware of it, and it is also introduced in top down manner. Hence the manner in which the Citizens’ Charter should be brought about is also very important. There is also a need to increase awareness about the existence of the Citizens’ Charter itself.?In the context of implementation of government programmes, social capital can play a key role in monitoring and evaluation. For instance, use of joint citizen186Annexure-I(3) Contd.forums for ern lisingA forums Afor mon toringAand ev luationA t Adiffe ent leve s A anAhelpAinAin nA reat onA the evaluat onA rocessAa dAi creaseAtheAefec ive ess AofAthe A ro rammes.A ationsA ndA of A uc Afo um Ait Ama Ab Aus ful Ato Am pAexi tingAci ilAsocietyAor ani nt-cit zen forums, stre gth nAthem andA reate them where theyAd n’ Aexist.ATheAjo foru sAcanAalso co tributeAto Aorg nizati nal Adesig Aproces esAthroug Ap ovisionA fArelevan Afeedbac .AHoweve , A reationAofAjo nt-cit zen A orums AneedA ppropriateAi st tuti ns to AtakeAt fo ward.izens, he? norde ~t ~createan nv ronme toftr st etween he ffici lsandth ~ci pub ished A Reports onAac io sAt ken AbyAtheA epar me ts need AtoAbe pub icised Aandtaken AThisA This couldAa soAinclude Ae pla ati nsAforA heAa tion At atA as, orAwas not epa tmentsA co ldA rovide the Asoc al A apitalAf r Afruitful Ai teracti ns A etweenAtheA eAv llages an Aci izens.AFo Ain tance, th AsystemAof ni ht-hal AbyAsen or offic alsAinAt t eAs st m. hadAhelp dAi crease Ath Ac nfid nce AofAth Av lla ers AinAion~isthe ? One~of the~issues pe taining oeffectiv ~programme~imp em nta in sharingA inadequate A nformation Aa ai ability atAvar ous Al ve s AowingA o A roblemsesolvedAby of A nforma ionAac oss levels and AacrossAd par ments AThsAcould A eA rtmen s A nA structu ed A ystems Afor A nformat on Ashar ng Abetwe n Adifferent A epThe AcurrentA or er Ato Ama e Arelevant A nf rmat on Aat Aeach Adeci ion-ma in Alevel. icatio Aof ndepende t Aplannin Ap ocessesA nAdifferentA epart entsAcauseA upeng heningAeffortsAandA ve lappin Ao Apla s. AInAt is Aco te t ther Ais a AcaseAforAsttAPlanning the integ ated Aloc l Aplanning mech ni ms A uch Aas At eADistriom ittee.honfdent al ? Tecurren ~apprai alsyste s ollowedin governme t genc es isithatoffA istr st reports A y Asuper or A fficers AThis AcouldA otenti ll AcreateAanA nv ronmentA Ase vices.A as AwellAa Adi regar Afor A ower Aleve Aem loy es AandAth Ac nsu ersAofAthyste sAandA Thi Asitu ti n AcouldAb Apartial yA esolv d Aby usingAope Aapprai alA anAhe pAtoA als Aincludin Aa prais l AbyAotherAst keho ders.AOpe Aappra sal syst mA uild Atr s Athrough aAcomb ne Asystem Aof Aself ass ssmentAa dAseniors’ assessmen A nvolvingAa A egotiati n Aprocess AIncl dingAother As ak hol ers Ain Ath Aapprai alApr cess co ldAh lp A o AmakeAficials Amorhe AoAs nsi ive to Athee dAusers A? Systems totpro ideobetterlacc untabilit mincluding mech ni msasuchlasr takeholder duced AThis eva uationAandAjo nt-cit ze AforumsAa Adescr bedAa ov ,A eedsAtoAbeA ntr wo ldAhelp toApro ideAproper inc nti es AforA he offic alsAtoA ctAtoward187ocial Capital – A Shared DestinySAnnexure-I(3) Contd.the organisational goals. The current system of evaluation and incentives tries to promote individual performance and competition. This could adversely affect the overall performance of the organisation by reducing the effectiveness of the teams. There is therefore a need to change the incentive systems from individual to group-based to promote efficiency at organisation / department / team level. As organisations and teams working at different working environments and different levels have varying evaluation needs, it could be better to introduce a system of evaluation in which the criteria are developed internally by the departments themselves.?In the changing environment of increased responsibilities assigned to community groups, it may be useful to provide better role clarity of the officials along with a full job description of each individual, also providing the details of the task that he or she has to handle.?In the current government organizations, there is a huge gap between the different levels and cadres. This can be partly bridged by creating informal forums like intra-institutional and inter-institutional sports and cultural programmes that can help promote social capital.?The current government systems, by design, encourage distrust of subordinates as all the key decisions are centralised. The systems should be modified to allow for delegation of authority/decentralization of authority/responsibility to people at appropriate level. To build trust and capabilities at the decentralised level, it is necessary to provide positive experiences. It is only such positive experiences that would encourage social capital to develop at the grass roots level.?When officials take decisions on a day-to-day basis, it may not be possible to have rules providing directions for taking each action. A certain amount of discretion is required to handle real life situations. A respect for discretion of all employees and in their abilities to take the appropriate decisions is essential to have an effective programme implementation mechanism.188?There needs to be built a general environment of democratisation such that continued pressure is exerted on the officials to perform, and the community and local organisations are able to perform complementary functions in the process. For this to happen, a conscious effort is required to strengthen Local Self Government, Panchayats, Municipalities and bottom-up planning.Annexure-I(3) Contd.In the Indian io ~inea hdepartm nt ? I ~theIn iang ve n entsys em,there s ~gen raldominaly A ue Ato Ae pertise Ain by Aoffice s Abelon ing to cer ain Acadres. This is not Aneces arn Aorder A o A mprov AtheA the AspecifiAa tiv ties Aunderta en by Ath Ad partmen s. Adilute Ath Am nopoly A fA efficiency A f A hes Ao ganisatio s, it Amay be A ecessary to nallyAt ai edAm nage osisA io sAbyAcadr s. ItAm y AbeAnecessary toAhave professint AasAt eAs nior AlevelA working A n Afied term Acontr cts.AThis is esp cially relevApr fess on lAmanage sA ffic a sAgetAtr nsfer edA nAa Af equent Abasis and Athes AmayAa so Ab Aus fulAto can Ahelp to maint in Acontinuit Ai Ath seAd pa tments AI Adepartments Aand At eirA ensu e AthatAIASAoffice s A aveAspe ial sations AinA ect rs Aan AThis wou d Aalso ensureA tr nsfe s/pos ings As ould A akeAplac Awi hinAt ese A ectors hatAth Asoci l Acapit l A ithinAth se secto sAis A nh ncedAasAt ereAwould Ab Asustai edA nteractfion Abet e n AtheAoc al Awi hin A Asector.A ctoris enera ly ~ ellIt as a sopercei ed hatina district, th ~District CollfAd velop en A rojectsA in or edAaboutAt eAs atu AofAactiv ti sAandAthe Ad rectionA fcers in the di trict. butAt ere isAa com unic tionA ap fi withAt eA ext levelAofA eenAtheAoffic alsAacr ss He ceAit Ama Abe usefulAto Ain reaseAt eAi teracti nsAbet departm nts Awor in A nArelatedasp ctsAinAa dis rict.A(b ATrainin Aan ACapacit AB ilding forACre a ionAofA ocialACa ita ?e o usedut aini goc nrbetanu e ulitoo bforecr atings obidgeobetween levelsro tAuthori ie .s owever,Atr iningAasA s unde ta enAcu rentl A–AsuchA s cad eAb se Atrain ngA AmayA d Aorgani ation-spec ficA ot be A se ul Afor th s. AI Amay Abe Abett r At Ahave Agoal-specific Aa ing to Ad fferent Alevel A t aini g Ap ogrammes such Athat Ath Adifferent A ar icipants (belon ves Aa out their Ac mmo A an Aeve Ad part ents) A re Aable Ato Ah ve Ash red Ap rspectal A rob em Aof Abhis Awidg ngA goal Aand is u s. Auld A ls Ain a Away At ke Acare of the Acrucin Aeach A epartmen Aand the Ag p Abetw en the Adiffere t Alevel Ao Agov rnment Aoffic als d A o Ad vise mec anismsA projec . AHoweve , Athis Aco mon trai in Aprogr mme Amay Ane erred Aeve At Atraini to gA Age Aover Ath Ahier rchical mind set Awhich Au uall Ag ts Atransmay Aneed A o Abe trainedA ses ion .AThe Avar ing Ask ll Aand capa ity acro s A ev ls AthatndA eth ds AYe ,AthereA o ether, Aal o A resen sA Achallen eAinA erm AofAtrai ingA oolsAtherAinA nAintra-cmay no Abe AanyA lterna iveAt Adiffere tAlevels be ng broughtAtogd eArainingA xercise.hentso ~th ~knowledg , ?Te ra ni gprovi ed oug ttoberela ed to herequireskills an AattitudferesArequiredAby di tAfunction hriesAinA189So i l Capitaared A–AADestinyAShAnnexure-I(3) Contd.the training needs to be demand based which will facilitate the easy learning of skills, rules, and roles. Specific attention in training needs to be given to team and leadership building, and for changing attitudes and behaviours of government officials from the risk averse, to a proactive result oriented one.II. IMPROVING AND STRENGTHENING THE CAPABILITY OF THE ADMINISTRATION TO PROACTIVELY PARTNER WITH LOCAL COMMUNITY, PARTICULARLY IN REMOTE AREAS(a) Partnerships?Partnerships are created with awareness, values of trust, mutual dignity, shared commitment, transparency, ownership and sharing of goals between administration and local communities.?Partnership can be seen at three levels i.e. interaction, transaction and transcendental where the administration has to play a proactive role to involve the local communities. Its success lies in careful alignment of objectives of the parties involved with an aim at reaching the expected outcome. It is possible in such developmental initiatives where administrators and local communities complement each other and work in synergy.(b) Understanding the Need for Partnerships?Administration / administrator must be aware of the communities for whom they exist. At the same time, local communities need to be made aware of their Constitutional rights and responsibilities and of development programmes for effective partnerships to take root. Clarity on the aspect of why the partnership is needed and what purpose it serves, helps in establishing effective partnerships.?Administration / administrator needs to respect the perceptions and identities of individuals involved at various levels from within and from local communities.?While it is evident that this will never be a partnership of equals, efforts have to be made to make it more workable.190Con d.Annexur -I(3) Ani (c) ies ASugge ti nsAt AHelp BuildASucc ssfulAPartne ship Awith LocalACommu i.AAdminista ionA?m ys emcoftince tiv siandndis-ince tives ne ds tovbeodev lopednk ep ngni tmi duthe Aou comesAex ec edA fAtheAdevel pmentAinitiai es.Aedin ?Mech nisms ho ld e utin pl cetoperiod cally xposeper onnelin olnAth A administ at on At Akee AthemAa re stA fAthe A round Areal tie .AThs A an beAlyAinA f rm Aof Ar gularAv sits, Adi log e AandAint rfac Awith localAcommu itiesAespe ia emoteAr as A?cToifaci itatear gulargdi log enandainter ctio lwith localncommun ities ofifelds fcer tn ed toAbe free AfromAr utineAadminist ation Aresponsibi itiesAt roughAisimplif at onAofAproceu es.AnaAinA ? Transforma ional Atr in ng A tAtheAindi idual A evel: Camp As ch AasAVip ssatorsA Mahar sht aAandAKar ayogiAA hi anAinAG jara Ahave A elpedAadminist tAtheA ecom AmoreAreflcti e AandAindivi ually Arespon ib e.ATheAtr inin Amu tA imAiningA devel pm ntAofAindi idua Atha Amere As st ms Ain wh chAheAfunc io s.ATheAtr houl Ah lp AinAinternali at on A fAthe Af elin Ath t Athe As rviceAde iver Am st Ab Ad neAinApartn rshi Awith localAcommuni ies.local~ ? Asy me ryininform tion/relati nshipb tweenadminis rat randris sA commu it e Ais Aa Acr tical Ab rr erAto Asucc ssfulApartner hi s.ATheAasy metryA sAandA utA fAth Ag ps Ain Akno led eAandAinfor ation Ab tween localAcommu iti sAandA administr tors. AAdminist ator At nd AtoAc ntrolAc nd ctAofAprog amm sAtheA utili at on AofAres urces Aw thoutAbr nging localAcommu it es Aon A oa d. f AItA fec localA at itudeAt wards grass roots levelApl nn ngAi AturnAre uci g Athe As pp rt Aof commu iti sAforAgove nment Ainitia ives AThese Acr tica Agap An ed toAbeAbr d ed.Atheir~ ?In ernaldispos ti nsofadminist ator ~n ed tobe take ~c retoi proveova eA contrib tio .AThs A an Ab Ad ne AbyAencou agingAindivi ual’sAcapa it es AtoAinandAcr ating Aappro riate Aince tiv sAforAinnova191192cial ACa i a A–AAAS aredADestinynnexure I(3)AC?Creating an enabling environment to inculcate norms and values among the government servants.?Civil society organizations can be engaged by the administration more effectively in building bridges with local communities.?Evaluation of outputs on a more objective basis. ii. Local Communities?Training and capacity building at the grass roots especially to overcome information asymmetries is important.?Strengthen Panchayati Raj by allotting more funds allotted for training. Special emphasis is needed in identifying the training needs of the women keeping in mind their position in society.?Recognising the importance of indigenous knowledge helps build positive mindset among local communities towards the government initiatives is important.?Decentralisation and allotment of funds for programme planning and implementation at appropriate levels of the Panchayat to make them functional and effective.?Civil society organisations/ local communities should be encouraged to come up with alternative solutions for development.?Involve other stakeholders such as media, formal, informal groups for identification of development issues and effective implementation of development initiatives.III. BETTER SYNERGY BETWEEN THE GOVERNMENT AND THE CIVIL SOCIETY INSTITUTIONS AND INCREASING THE PEOPLE– CENTRICNESS OF THE ADMINISTRATIVE APPROACHES.(a) Trusts / Societiesi.General Conditions to Enable Trusts, Societies to Function in anIndependent and Self-Reliant Manner?Trusts and Societies are forms of organization which generally involve in philanthropic activities. These voluntary sectors are numerous in number and participate in a wide range of activities, which includesnnexure I(3)ACliseA he lth,Aeduc tio AandAmicro-fin nce AForA heseAactiv ties theyAmob self- unds from Ava iousAfu dingAagen ies Abut n edAaAgr aterAd gr e AofAable rel an eAto A ulfiAits A asic Aobjec ive AO eAo Athe A ajorAi su sA sAtoAeions condi ionsA hich ne d A oAbe Adeve op dAto make A heseAorganiza a t.A more Aindepe den AandAself-relnto ?Government- wned N Os-“G NGO” ou db ~oneo tieAofA r duce Adepen en eAon Aext rnalAfun in .AI Ath Aflip A id ,Ain ca enc A “GO GO” Athe An ti nAofAvolu tar Aan AtheAd gr e AofAindepen nom A and Aaut nomy Abe o esAa Apro lem.AFur he ,AtoAmai tainAaut AtheA andAself-reli nce,A he e is Aa ne dAto kee Athe NGO Afar fro orms govern ent Aa d A t Ais Aimpo ta t AtoAed cate NGOsA bou AtheA they A ug tAtoAfol ow ?nInaI dia,nvolu taryos ct raislm inlyiconsi er daas pa teofgreli iousvacti ity Ab t AbyAprom tingAch r ty A/Aphilant ropy Ath oughAind str AandAindivid als AtheA ss eAof fund Amobilis tio Ac nAbeAminim zed.AReform ti nAi Atax la s Ais Aimpo ta tAto makeAcu rentAoper tion moreAtransp rentAm in yAtoAr duceAcorru ti nAi Athe Are enueAmachieryAt ii. es ARegul toryAFram wor AforAT ust AandASociohse, ?Teexi ting lawsregul tingvolu tarys cto ~ar ~too agu ~andl when Acom ar dAt Athe Aco plex Acooper tive A aws. La k AofApoperAscre ningAmech ni mAa AtheAin tialA tageAre ul sAi AtheAdevelo me tAofAp e doA/A aperAorganisat ons,A hi hAin turn Aco pet AforA onorAfn s.A~the?The e isa nee ~forp blic udi ~forscre nin ~andaccredit ti no GOs, A as dAon A heirAactivi ies.AMand toryAaccredit ti n AofNGOsA ou d be Aa A ean Afo AtaxAexemp ion.ACoun ries like APak sta AandAPhilip ines haveAal eady Aad pted thisApra ti e AtoAs ree AtheAN Os. aForeaccredit ti nGof, GOs,c“Panch heeloAppr ach” wit ftheofoll wingocompo ent Ac nAbeAadoted A(i)AIde t tyA– Wh tAi AtheAide ti yAo AtheAorganizat ons AFor whatApu pose the Aare Aexi ti gAi Athe Asoc ety?ADocu entsAs ou dA eAin Ap oper Ao193Socia A a italA–d ADestinyAShareAnne ure-I((ii) Objectives – What is the mission and vision of the organization?(iii) Internal System of Governance – Robust operational policy, human resource management, regular meetings, strategies and direction.(iv) Operations – Should be in line with objectives. Should not follow survival strategy all the time (going behind fund and changing the activities very often).(v) Transparency – Accounts should be audited and Annual Report should be published latest within eight months of the close of the financial year and must be communicated to all stakeholders and made available to anybody for a price.?Though few NGOs are already subjecting themselves to rating procedures in line with the above approach (micro-finance), there is a need for adopting higher norms and best practices.?There are flip sides of accreditation also, which could be identified as follows:- Absence / lack of resources available with the voluntaryorganisations / NGOs for accreditation- Lack of knowledge about the need for adopting accreditation iii. Suggestions?Government should educate and provide resources to the organisation for accreditation. On this line, NABARD is providing support to organisations involved in micro-finance.?The importance of clearly distinguishing the government norms and government transaction between NGOs vs ‘Contractors’ was emphasized. ‘Hassle-free administration benefits’ should be provided for better performance of the organisation involved.?There is a need for an independent National Regulator / Ombudsman to regulate the accrediting agencies at the State level.194()) Contd.he huge ?iTerhuge diver ity amongtthe volunt ryqsecto a equiresdr‘layerednre ulati n’ Aba ed Aon theAsiz , Aregion, Ao erat onal forAetc. AFo Aexampl ,Alayered A egulationclu e,A- A eer audit form llANGO Al rgeANGOs -APu lic audit forAnca ~b ~ Financial?sou dnessand unctiona ~s ren thoftheor ani atks shouldA used as A Abase AforAaccr ditat on.AOth r AsimilarA enchma eA eci edAby Ath ANational Re ulatorAinAco sult tionAwi hAvariousAacc editationag ncies.f r Othe iv.A s egu ationAetie ~ ? and~ ABill providing~ egulatory fra eworkf rTrusts, Socid rat onA NG s A ork ng Ain AtheAmi ro-fian eAare AisAunderAconegulatory of Athe AP rlia en . There is A Aneed AforA evelopi gAsimilarA eAhealth, fra ework AforAorg nisatio s A orkin Ain Ao her A reas alsoAli educ tionAetc AHo ever,Athe Regu at rAmustA eAo tsideAtheA overnmetA ector.A .AConflictR solu ion mWays an rmeanse ohr solve-the intra-andei terl-leve ic nfi tslintthe volunt ryA ectorAwasAi cussed A-AInte :Ab twe nANGOAandAartner( ) aAPradeshA Example A- A ov rnmentA fAG jarat andASE A,AAndhA onflict Ami ro-financ- AIntr : Ab twe nAo eAN O AandtheAoth r Example A- AC mpetiti n Abe wee ANGOsAfor fu ding ?eInrth shreg rd a here isr an eddfornanni dependenty egulatory,echan sm, ppedAwithA whichAcan rec gnize AthlictsAwiAconhAc arity Aan Aequin ep ndenceA oAr solve At eAconfli tAw thout195cial ACa i a A–AAAS aredADestinyAnnexure-I(3) Contd.(b) Self-Help Groups (SHGs)?Self-Help Groups are informal organization of 10-20 homogenous members, who come together for the purpose of savings and availing credit from formal institutions.i. Enabling Conditions for Greater Self-Reliance of SHGs in Mobilising Financial Resource?SHGs are savings driven and their major strength lies in their autonomy, which needs to be retained. Though ‘Joint-liability’ is promoted as the basic principle of SHG, administration of the principle, is legally not possible. But in the recent years, partnership model based on the joint-liability of the members are adopted by organisations, which needs to be carefully examined to maintain / uphold the self-reliance of the SHG.?Realising the relevance of the SHG in the current scenario, government is utilizing the SHG as an instrument in implementing various programmes, like Public Distribution System, Mid-Day Meals etc. But, before using the SHG as a tool, government should understand the lack / presence of available resources (capacity, capability) of the SHG.?To make them viable agents, substantial investment in terms of capacity building, technical support and training of SHGs is important. Till now the major investment for capacity building of SHGs has come from private agencies and other donor organizations, as compared to government institutions. Also the need for proactive participation and investment of the Banks is important along with government institutions.ii. Cooperatives?First of all, it is necessary to understand that cooperatives are ‘member’ enterprises rather than being ‘citizen’ enterprises. In the current scenario, the cooperative are neither ‘user owned’ nor ‘user controlled’.?There is a critical need for creating awareness and advocacy on the following issues:196Annexure-I(3) Contd.-AWh tAcooperativ sAare?-AWh t Ashou dAcooperati eAb ht ? epropos dConstitution lamendme t ~ (106 hConstitution lAmendmedA Bil ) A nAcooperativ sAa dAadvoca yAf r Abett r ASta eAcooperati eAl wAcousA provi e a Amo e Aenabli gAleg l Aenvironme tAf rAfunctioni g A fAcooperativ nAIndi .hx ? eimportan e fadopti ginnovati esolutio s otack et ecompleA cooperati e Al wAa d Ai sArestricti nAw sAdiscuss dA yAt e AGro pAa dAt followi g Asuggestio sAwe eAmad:-AAdopti g /Aexercisi gAt eAchoi eA fAbei gAregulat dAund rAmo eAliber lAcooperati eAlaw .A(Multi-Sta e ACooperati eALa sA oAavo dASta eAintervention -A yAzealous yAguardi gAthe rAautono y – A fAth yAalrea yAha eA i -A yArepatriati gAgovernme tAequi y -Aatta nAoperation l /Aorganization lAautono yA oAmana eAthe rAo nfAafair.?rTraini gs sn nmimporta tocompone tf focooperati eogovernan ena dninvestme t A nAcooperativ sAtraini gAa d Aeducati nAwi lAcontin eA o A e aAmaj rAdriv rAf r Abett r Aperforman e A fAt eAcooperativ e s.I .ABETT RASYNER YABETWE NAT EAGOVERNME TAA D ACIV LASOCIE YAINSTITUTION : AINDUST YAASSOCIATIO SAA DAPROFES SION LABODIE ? fIndust yAssociatio sa dProfession lBodi sreprese tt ofdifere ttyp sdA member-bas dAciv l Asocie y Ainstitution he Aiss. Ae A sA sA o Ah w Asoci lAcapit lAanA tru tAwith nAthe e Ainstitutio sAa d A nAthe r Apartnersh pAwi hAt eAgovernme tAc he p A n Aimprovi gAt eAdelive y A f Apubl c Aservic sA oAt eAcitize n.?oSoci lacapit liwith n arProfession loBo yocou de en nmimporta temechani mof redeali gAwi hAun-profession lAcondu t A rAderelicti n A fAdu yA y a Aprofessiona197Ao ialSharedACa italDestinyA–AAnnexure-I(3) Contd.?Members of Professional Bodies are drawing associational benefits / collective benefits from these Bodies but they do not adhere to disciplinary norms. The reason partly being that the ability of these Bodies to enforce punishments is weak – as of now no professional has ever lost its license / practice even in face of ethical issues.?In order to build social capital with regard to the Professional Bodies, following steps would be useful:- The charter of a particular associational Body can be modified so that the end goal is articulated more in terms of the larger interest of the society rather than that of its members.- Design incentives / mandatory requirements for the professionals to work for the common good.- Educate both the professionals and the citizens - lack of information both to the citizens and professionals about possible institutional / legal frameworks that can enforce better compliance and service delivery from professionals (e.g. Architect Law).- Build the capacity / secondary cadre of professionals to serve those who are not being serviced today.?The government could pursue a combination of coercive and persuasive strategies for fostering social capital such as:- To consider Professional Bodies as normative arms (not an agent) of the State- To negotiate with Associations to change the nature of relationship between government and Professional Bodies from adversarial to collaborative relationship- To provide more teeth to the Professional Bodies so that they have the incentive to take action against erring professionals- To enact and provide for legal frameworks / deterrents (Consumer Act, RTI)198Annexure-I(3) Contd.he P?oTesProfes ionals odiesd ho lddb mmad amorenaccou tab ehf retheibeh vi ureof theirAme bers ASome Apo sible Asugge tions co ld beAt Am keAitAman ato yAfor these A od esAto Ap blish theirAr co ds asAi Ac seAofAa dits,Astre gthenAprov sio sAforAsanc ion , Aa d AputAmec an smAof A ublicAsc utin Ae.g.A irectArep rtingAreg la lyAtoAgove nm ntAinAla . AV AA OWATOA NSUREAG EATERAINVOL EM NTAOFAPE PLE’SAREPRESENT TIV S AAND ACOM UN TY AAT LA GEA NATHEACONCEPTUALI ATI NAANDAEXE UT ONAOFAPROGA MESonA sA ~?Ba ri rs AtoAparticip ti n: AThAmostAimp rtant Ab rr er Ato Ape ple’sApartici atze s.A theAco onialA syche whichAc eate Al ck AofAr sp ctAin StateAemp oye s Af rAitsAcit s.ATheA TheAci izen Aals Afe r Athe StateAemp oyee Aw o,Ain turn,A eh veAasAma te rage A es lt Ais that,Aci ize sAsh Aawa Afrom A aking Aresponsibi ities whichAdisco s.ATheA th mAand theirArepresent ti esAt AtakeA ctiveApartici at onAinAprogr mm onialA administ ativeA efor AmustAconsc ousl Amake Aprov sio s AforAbr aki gAtheAco syc e Aand Ap omote Ainstit tions whi h AareApeople-fr end yAandAge erateAr spe tAf rAtheAcit zens.ASec ndly, A eopl Aalso A ho ldAbeAin ormed about thei Aro eAa dAtheA xt ntAof Apartici at onA nAtheA eformAprc ss.Aop lyA ?En bling leg lAandAinstitu ionalA orms: APre ently th re isAan A xc ssAof StateAmo nuineA nAthe Adevel pment Apr ce s.ATheA xt nt Aof Amo op lyAi Asuc Atha AevenAgour eA pe ple’s Ainiti tiv s Aare Ahi de edAbyAadminist at on A n AtheAp etex Ath tAtheAre nAth A are AState own d Aan Aon y Athe Sta eAc nAac Aup n Ait AThe eAar AalsoAambig it esA zens’A laws which lea e AtheAinterpre at onA o AtheAburea cra s Awho Aen ren hAtheAcit nAtheA depe de ce A n Athe A tat .AThisAc early sho sAth Ahigh le elAofAinse ur tyA ple’sA administ ativeAs st m.ATheA eformA houl AmakeAprov sio s AforAencou agingApe initi tiv sAand thereA houl Aa soAbe Ac ar tyA nAt eAl wAa dAthe legalApr c ss .AlocalA ? F rthe Aw ysAof Adecentrali ati n Aand ste s Afor Apro ctiveAinvol em nt AofiaAisA govern en s: ATheA ecent st psAto Ap omoteAPanc aya i ARaj AInstit ti nsAin In othe A encour ging;Ah weve Ath sAha Acome alon A ithAa se se AofArestr ct on AatAaini gA end AThe e Aha A eenAa Adeli erate effrt Ato lim tAth Ar leAof civil As ci tyAtoAtrro e.A andAcom unityAorgani ation whi eAthe APanc ayatsAund rta eAtheAexe utive TheA at e AisAaAnec ssaryAcon iti nAforAdecentr lisedAgove nan eAb tfiAnotAsuf ient AThereA ho ld Ab Amore spa eAfor Aau on my Aof local Ainiti tiv s AandAstrengt199– A ocial Shared Capital DestinyContd.civil society involvement. There should be equal acceptance of non-Panchayat institutions promoted by civil societies which has its own role.?Specific sectors for greater local participation: The sectors needing immediate attention in this regard are: education, health care, transport, hygiene and sanitation, communication, and environment. Among the sectors (which may differ from place to place), some require mere consultation and others require strategic collaboration with institutions for long term benefits.?It has been observed that the conceptualisation of civil society initiatives has not been adequate. More interfaces between academia, administrative system and civil society for design and execution of development programmes are required. However, reforms should not aim at developing an alternative to State but rather it should supplement and complement the State.?Social capital as a component of entrepreneurship: It is inappropriate to say that social capital do not exist in our country. It exists and there are exemplary works; the need is to identify and appreciate such initiatives. However, it is true that there is a lack of professional skills and infrastructure – the reform should look for building this. Initiatives like supporting philanthropic infrastructure through Matching Grants and Block Grants can be useful. So far, it has been recognised that the rich should contribute to the poor, but there are also initiatives by people from middle-class who spend lifetimes for promoting social capital in society. Such initiatives should also be encouraged.?The main reason behind low social capital in our society is lack of trust and morality in our day to day life. There is no deliberate attempt to educate people and impart values which were practised by Gandhiji, Jai Prakash Narayan and many others in the context of our society. Not only there is a need of moral education, principles of accountability and transparency should also be entrenched in every spare of social life particularly in the administrative process.200AnnexuSTIOQUESTI NN IREAON SOCIALAC PITAL ATRSTAANDAPARTIC PATIVE PUBLICA ERVICEADE IVER I A AYSAOF AIN EST NGAANDAPR MOTING SOCIALA AP TAL ATAALL LE ELSAOFAGOV RN EN AAS AANAINS RU ENTAOFAEN ANCINGAGOVER MENTALAEFFECTVENESSA sationA udgingAeffect ve ess ofAany Aorgan sa ion Ais Ad fficul , A ore A oAw en AtheAorgan s sAonA co ce ned isAtheAgov rn e t Aor a A art ofAtheAgover mental A ys em. ATheAd fficulty ar sAevenA a nu berAof A ounts. First Ath reAare Am ltiple Astake olde sAwith Adiferent,Aso etim cAla ;A div rgent,Aexpect tions.A econd,Agover mental ac ionAi Ab und byAthe ca ons Aof publomisedA l wsAan Arules frame Aund r Athe Aof en A reAnot AsuffiientlyAve sa ileAto enableAcusksAandA responsi eness AThird,Adem cratic Agov rnanc AworksA hroughAmul it des Aof che gnAandA ba ance , thus AaAdem craticAgover ment’sA bi it AtoAbeAefec ive Ais A im ted byAthe desope at onsA f AsuchAprocesses.ar hip H we er AitAis widelyAa cept dAth tA‘oneArec gnisesAeffect vene s Aw en Ao eAse s Ait’.AScho endAt A in At ield Aof public Amane Agem nt Ahas Aesta lish d Ath t AmostAefective Aorgani atio sAshare commonAcharacter stic . A ome Ao Ath se areAasAfo lows: ? An one inath cpl celc not lle ougthesorganis tion’sn iss onland.v lu s. n ~ne . ~Itis always~ ooki gintoso ethis hig . ?Itscus omers’satis actio ~l veli~ ea s. ?Itsem loyeesfre uent y orkine bh rs. ?Te le d risa ar ner toft estafmi nc . ?A‘f il re’iscon i eredal arningexpe?Itvc negivenr levantainfo ma ion onoitsmpr grammesres lts.ph sisA In short,Aeffect venes Aste sAfrom A erta n A aysAof Afunc ioning Aw erein At ere AisAe aAt olA on Ate mwork,Ahi ra chy A s Aus dA o eAasAa Acoord natingAme han sm A nd n tAas amAandA for Aexe cising Ac ntrol,Alea ership Apo ition Aca ryAth Abasic bu denAofAe abli gAt simplyA ind vidualA fficacy, Ae ternal Astake old rs AareAcon id redAas A‘cus ome s’ A nd Anot ofAtheA ‘rec pi nts Ao Ago dsAandAs rvi esA(or Alarg sse ’,A ndAthe entire Aorgan sa ionAi Aa are AtoAre fund mental re son ofAits Aexi tence,A emain A‘goal Afo uss d’ AandAcont nuall As eks inv nt Aan ArenewA201SocialA a i alA–AA SharedADestinyAnnexure-I(4) Contd.All the above collapse into the notion of ‘organisational culture’ wherein the organisational members function in an interdependent and cooperative manner, exhibiting reciprocity and trust among themselves, and are continually seeking to serve the overall and specific goals of the organisation. This notion of culture fits in with some of the definitions of ‘social capital’; thus such organisations/agencies are said to possess high degrees of social capital.If social capital was to be invested and promoted at all levels of government the following questions become relevant:1.What would enable the government as a whole, and every part of it as separateentities, to function such that the foundational and operating goals inform its internal processes, decisions and actions?2.What is required to be done such that the government, especially those partsthat directly interface with the citizens, function in a manner as if they are dealing with the ‘customers’. There is a realisation that customer satisfaction is the key to the governmental entity’s survival.3.What would enable the government functionaries to function as if they are apart of a ‘professional bureaucracy’ wherein primacy is attached to situation-specific knowledge and competence and not to positions in the hierarchy?4.What would enable governmental organisations to rely more on trust andreciprocity for internal coordination than on positional authority?5.What forms of education and / or training would enable individual functionariesto acquire ‘professional-like’ characteristics?6.What would be the appropriate institutional infrastructure within which suchtraining / education should occur?II IMPROVE AND STRENGTHEN THE CAPABILITY OF THE ADMINISTRATION TO PROACTIVELY PARTNER WITH LOCAL COMMUNITY, PARTICULARLY IN REMOTE AREASAn individual seeks out partnership when he/she recognises that tasks at hand are such that working alone it would either be impossible or, at the least, difficult to accomplish them. With the assumption that the individual in question has the motivation to accomplish such202Annexure-I(4) Contd.tasks, stas s, Asuch Arec gniti n Al a s Ah rA AhimAt Ase rchAfor Am tua ity AandAcomplemen aritesAwithithAthe othe s.AUpon Aident fic tion of AsuchA others AeffrtsA re madeA o AforgeApartn rshi s.A furtherAas umpt on Atha Aso ghtAoutA othe s’Aa so A aveAthe Ar quisiteAmo iva ionAadAneed,Apart ers ipsAget fo ged. ATheAf re oing isAa so A rueAforAorganisat onshAlocalAThus Afor Ai pro ing AtheAca ab lit Aof Athe Aadmini tr tionAtoApro ctively part erAwipar AofA co mun ty, A he Afirst Areq ireme t A oul AbeAthe Arec gn tion o Asuc Aa nee AonA he ted,A tA the Aadminis ra ion.AIfAco dit ons setAout earli rAu der AirstAhe AOR wer Ato AgetA reprim ryA woul AbecomeA ppa ent for Athe Aadmini tr tion AtoAr cogn seAsuc Ane ds. ThenAthe ta kA oul Ab AhowAto enh nce AtheAca ab lit Aof Athe Aadmini tr tionA o AforgeApartnr sips. 1.AWhat Aad ition lAn rms Aan Ava uesAareAn ces ary forAtheA‘adminis raion’AtoAr cog ise A he A eedAfor forgingApar ners ip Awi hAlocal Acomm nit es?AH wAcou dA heseAbeAinculated?2.A ssum ng Asu hAn rmsAareAinter alis d,Awhat Acapa ilit esAmu tA xist AtAenableA‘adminis ra ion’ Ato su ceedAin forging Asyn rgistic Arelat onsh psAwi hAlocalAcomm nit es?AH wAcou dAtheseAcapa il tiesAbeAc rated?3.A uitableAre-ori nt tio AinAtheA ra ningAofAadmini trativeAp rs nneAatAtheAi ducti nAsta e A oul Abe Aone Am ch nism Ato ach eveAth Aabo e.AWh tAotherAorie tation/ A raini g A ouldAbe th ugh AofAforAmi -ca eer Aan AseniorAadmini trativeAperso nel?II ABETTER SYNERGY BET EENATHEAGO ERN ENTAA D ACIVIL SOCIETYAINSTTUT ONSA(a)A el tingAto Trusts/ AS cie iesAandAS lf-HelAGroups Trusts, AS cie ies A ndA HGsAa e Aforms Aor anising throu h which a group A Apeopl Ac eateAan Aorga isa ion A(orAasso iat on)AforAfu theri g AtheirA urpo e.AY t,A chA aveA heyAareAexc ssively Ad pend ntAuponA xternal so rcesAof fundi gAwh at theyA the Ap te tial A oAcause reducedA uto omyAf r A he .AIt isAfelt Ad sira leAt hereAis be enab ed As ch At at Athe Areta nAtheir Aau onomous Afun tio ingAa dA syne gy A ithAtheAgo er mentAinAfu the ingAt e A ause Ao AsocialAdev lop entAa d Acivil societyAb203SocialA a i alA–AA Shared AAnnexure-I(4) Contd.1.What would be the general conditions that would enable Trusts, Societiesand SHGs to function in an independent and self-reliant manner?2.What would be an appropriate regulatory framework for Trusts, Societiesand SHGs, such that their autonomy is maintained while also meeting minimal requirements of external accountability?3.What enabling conditions could lead to greater self reliance of Trusts,Societies and SHGs insofar as financial resources are concerned?4.Are there provisions in the tax laws that, if suitably amended, could leadto greater financial security? What are they?5.What changes / modifications in the approach and / or manner offunctioning of government / administration are likely to enhance the synergy between government / administration and Trusts, Societies and SHGs?(b) Relating to CooperativesCooperatives are meant to be the ‘enterprises of the citizens’. Yet, the role of government in the formation and functioning of cooperatives is so pervasive that a large majority of them fail to further the enterprising energies of members. A vast majority of SHGs and other community based organisations that have come up in recent decades should ideally be formed under the cooperative framework. Yet, due to the apprehensions of ‘governmental control/ interference’ they have taken recourse to other legal forms which are not most conducive to furthering their members’ interests.1.What is the current scenario with respect to independent functioningof cooperatives as ‘citizens’ enterprises’?2.What are the factors that constrain autonomous functioning ofcoopertives? Are these different for cooperatives registered under the three different legislations pertaining to the cooperatives, i.e., State Cooperative Acts, Multi-State Cooperative Act, and the Mutually Aided Cooperative Acts (of different states)? If so, what are they?204Annexure-I(4) Contd. Wha3 AWhatAc an es A nAtheAg neralAfra ew rkAof Aregist at on AofAcoopera ive ,Aand Aregu a ion A/ Aadminist at on A f Athe A ector wouldAe han eAtheAau on my AofAcooperaties?4 AWhat wo ldA eAtheAcond tion Athat woul Ame tAtheAex ernalAaccountailityArequir me ts Aof Acooper tives while Aen bling theirAauto omousAfunctioni g?(c)ARe at ng AtoAIn ustryAAssocitionssAandA InA ustry AAssoci tio sAareAve iclesAt rough which A ommonAco cer mbe sA int re ts Aof Am mbe sAare Afurt ere .AThey Arep ese tAthe ca seA fAtheAm blingA andAm diat Awi hAtheAgove nme t Aand other A od es Ain Aobt iningAen Atha A cond tio sAf rAthe Afurth ra ceAof Aind st y.A t Aha Abeen A rg ed Ab Asom Ath tA suchAassoci tion Aha eAand couldArigh full A layAa Aself-regu ator Arol AsuctheAm mbersA me geAa Atrue A‘cor orateAcit ie n ’.Ay,AofA 1 AW at A sAthe Ac rrent im ge Ain te ms A fAth Arol Athe Apl yfi AandAe catins? In ustryAAssociament/A 2 AW at A s AtheA at re AofArelati ns ip AofAAssoci tion Awi hAtheAgovero ter? regu atory Ainstit ti nsA n Aon Aha dAa d Athe Am mb rs A n AtheA rcingA . AHowAeffic cio s Aha Abe nAth Ar le Aof AIn ustryAAssoci ti ns AinAenftio sA c rtain A gree AuponAsta da dsAofAfuncti ning AWhatAen blingAcond ciou A c nAtheAgove nmentA rea eAfo AsuchAAssoci ti nsAt A layA fi AmoreAefc theirA r le AinAen uri g AtheAeme ge ce Ao Agood A‘cor orateAciti enry’ amongmembe s?(d)ARe at ngAtoAProfes ionalAodiesAProfe sio s Aar As idAt Ah ve Aat leas Afo rAkey Aeleme ts; 2A a)Aan Aac epte AB dyAofAknow edg , (b) Aa A ys em AofAcert fyin AthatAindiv dual AhaveAma tere Atha AB dy Aof Akno ledgeA efor Ath yAareAa lo edAtoApra tic , (c) AaAcomm tm ntA oAthe A ublic goo ,Aa dA d) AanAenfor eabl Ac deAofAe hics. AProfes ionalA odi sAno Aonl Apl yAth Ar leAof Afurt eri gAtheAkno led e AandApr ct ceA f AtheAprofe sion Athe Aals Aha eAtheAenor ouslyAva uabl Ar leAofA‘regul tin ’ Athe Aprofessi20532 akeshAK uranaA(H rvardAUniver ity),A uo edAinA a renAGAB nnis, JamesAO’ ool ,AHowABu inessAS hool ALost thei AWay,AH rvardABu inessAR vie ,AMay 200 , AV lA83,ue I5.sSocia A a italA–d ADestinyAShareAnne ure-I(This regulation of the professional practice and hence professionals is essential because the users of such professions / practices usually do not possess the knowledge or wherewithal to determine the quality / quantity of service they are receiving.1.What is the current image in terms of the role they play and efficacy, ofProfessional Bodies, such as the Medical Council of India, Institution of Engineers, Institute of Chartered Accountants, Institute of Cost and Works Accountants, Council of Architecture, Institute of Town Planners of India, Bar Council/Bar Associations (etc.)?2.What is the nature of relationship of Professional Bodies with thegovernment on one hand and the individual professionals on the other?3.How efficacious has been the role of Professional Bodies in furtheringthe knowledge and practice of profession?4.How efficacious has been the role of Professional Bodies in enforcingthe code of ethics among professionals?5.What conditions would enable the Professional Bodies to move into a self-regulatory platform such that (i) the cause of furthering the knowledge and practice of the profession is served, and (ii) the role of the Body in ensuring ethical conduct of individual professionals is made more efficacious?6.What could the government do, to enable such a role-playing or changein the role of Professional Bodies?(ii) Professional Bodies as Self-Regulatory Authorities (SRAs) A. Legitimacy (Confidence and Trust)Citizen’s confidence and trust in the Professional Body and professionals depend upon the service provision in terms of access, quality, reliability and cost.?Does the citizen have a trust in the professionals in terms of competence and commitment? Do the professionals trust their own Professional Bodies?2064) ContC.?hW ichfofstheapr fes iona srarewmorey rustworth ta cor inglto? t erp blic??eAreaSelf Regulatorys uthori iese SRAs)wmorey ru tworthysin copar sonetomthe gov rnment AandA ndependent RegulatoryAA t ori ies?A?oHowy rus wforthyva dre ecti en redSR shin Indiarwh no omparedtossimilarni st tutio sAin Aotherc un rie ?A?fIfstheapr fes iona saan sSRAs fa lhs ortiofnth ecitizen’snex ecta ion ,hw atcareA he AfactorsAres onsible? .AAutonomy (Interf ceAbetween Gov rnmenAa d ASR s)dAto A njoyA TheASRAs Aexercise A ndepen en Apo ers Ain theApubl cAi te estAaakAandA ctA their co fidence AThe A ub ic Amust be Aa sur d Ath tAth ASRAs wil AspndardsAforA wi hout Abeing A on tra nedAby Aan Asection l A nterest inAsettin Ast nAm thods)A p ofessiona Aeducatio A college A Acourses /At achingAand evaluati deAquali yA a dApractic A(g anting Aand A it holdingAof Are is ration) toAprov ervicesAof Ain ernational st nda ds. A tAthe sam Atime,Athe gov rnmentAhasAres on ibility toAp ovide A as Aacce s AofAthe eA erv cesAto Aa l A ections ofAsoci tyAwithout Ae plo tatio Aand Ah man Arightsio atio .develo ing ? Do SRAsenj ysufficie ta tonomyand~i de endencein skillsAand A nculca ing Av lue Aamong Athe Apr fe siona sAt AserveAheAsocietyA omp tentlyAanon stl ?A?s oath aSRAsaha eoadeq at rpowerse onr gulateia dtmaintai is andardsoi (education A per ission Af r As artingAnew Ains itutions ,AtrainingA curricul ,Am thods,Aan Afa ulty), A ndAtesting A( va uation) toAdevelopAp o fessi on l A kil s??sDont eoexisting governmentaLaws/Regulations/Acts/Policies/I stitutions facilitate A ndependentA un tionig ofASRAs A?y hethers nye ha ge baregto be broug toincthe enp lici so ndhlaws/todenh nce d effi ie t?A reduceAthe governm nt cont olAt AmakeASRA Ain lusiveAarsonsfr m ? DoweneedSuper Regulatory~ utho itiesw themin ntpdifferent A rof ssions Aa dAinte es AgroupsAin reg latin207Social C p talA–A ASharedDestinyAnnex re-I(4C. Governing Structures (Constitution, Composition, Powers, Functions and Efficiency)The present governance structures were originally created in an era in which self-regulation really meant regulation by professionals like doctors alone, when patients were passive recipients of doctor’s services and technological developments were very low. Now doctors and patients are partners with an agreed framework of expectations and standards to protect the interests of the patients, professional and public in the context of the global era and technological revolution. In order to strengthen the voice of the clients, representation has been given to the laymen in UK Medical Council. Forty per cent out of 104 members in UK Medical Council are non-professionals and it is chaired by the layperson. Similarly, the number of government nominees in the Indian Medical Council has been increased in recent years to represent public voice.?Are the existing governance structures (number, composition and size of the General, Executive and other Bodies/Committees) of SRAs relevant in the present era of globalisation (competition, privatisation, quality) and technological revolution (information and communication technology)??Whether these governing structures (General Body/Executive Council/ Chapters/Federation) of SRAs are inclusive and efficient in terms of representation (professionals, clients, stakeholders, interest groups)??How effective and competent are the Committees for ensuring high ethical standards to perform functions like setting and enforcing of standards for education, practice, conduct and performance??Do you think that the SRAs have been able to influence government policies related to professional matters? What are your suggestions in this regard?D. Inclusiveness and Internal Democracy1Whether competent people are selected to various Governing Bodies?How fair and transparent are the selection processes in these Bodies?Whether the elections in the SRAs are free and fair?208eIIC4) Contd.What 2 AWhat sh uld beAtheAc it riaAto selectAco petent Aprofes io alsoAheadAim ortantAcom itte sAlikeAed cat on AandAdisciline 3AW at A re Athe Amec ani msAforAstreng hening Ai ternalAde ocacyA nA RAsAto Afac lit te Ath Av ice of AtheAco petent Aprofes ion lsAandAclients/c iiz ns?AE. ATrans are cyAandAAccountbi i yhatAi A AsAaAstAtutor ABod , ASR sAh ve Athe Arespons bi ityAto A cco nt Af rAoAk owA d es. AThe A ublic,AParl ament,Agove nme t,Athe Apro essi nAhav Ar ghtA rimaryA h wAS As AareAdisc argin Atheir Afun tions. ANo mal y,At eAS AsAareA pow rsA acco nt ble toAtheAPar iament wh ch, Aon be alf ofAthe A ublic, defines derin A andAresponsib lit esA(by making Rules,Anom natingA emb rs AandAcons onAandA their Ade is onsAin re ardAtoAst nd rdsAtoAr gulate Aprofe sionalAed catp act ceA or At e A ood of AtheAsoiet )?eH wno enaandatran par ntAa en RAsminaform lat ngfandien orcingrsta dar s?aHowAtran par ntA reAtheApro edu esAforA ettingAst nda dsAforAs artingAco leges,Ainstit tio s, AnewAcorse ?dur sf? ?Howe ect ve rethee istingre ressalgr eva ceandco plaintproc HowA oAma e Ath mAmore Atran par ntAand Aaccou tabl ?AD esAthesyst mAhav AsoundAmec ani ms AforAcons der ng AtheAcom lain sAf omAtheA lientsA gai stAthe Aprofe sio alAfo Awr ngA ct AandAcoduc ?io als f ?Howe ect ve rethemec an smsto ens retheaccount bi ityofprofesonAforA inAr la ionAtoAg ant ngAand Awith ol ingAofAlicenceis/certifcate/regis rat ysicalA profe sional Ap ac iceAi At rmsAofAcompetence/performance/conduct/p onalsitneAs? AHowAefect veA re AtheAmec an sms Ato Adis ipl neAtheAprofesswhoseAperf rmanceArep atedl Afall Ab lowAanAacc ptableAsta dar ?uni y? ?How~ omakeprofes ionalsres ons veandacco nt ble tothecomthical HowAefect ve A reAtheA thica Aco esAfor Ae suringAin egr ty Aa d AhighA va uesAi ASR s? How Ato ens reAtheAaccount bi ityA fA RAS toAtheAc ients,A ublic, Aprofes ion ls A ndAtheAgove209Social C p talA–A ASharedDestinyAnnex re-I(4F.SRAs, Citizen/Client and Social ResponsibilitiesIt is generally believed that the professionals exploit the clients, since they have monopoly over the knowledge and its application. Clients have very little say in deciding the cost and quality of service provided by the professionals. The illiterate and poor have no voice to obtain compensation for the deficiency in performance and conduct of professionals. In order to rectify these defects, advanced countries have taken initiatives such as representation by nonprofessional in Governing Bodies and laws protecting the rights of clients.?Whether the professionals act as reliable agents for the well-being of their clients? How effectively the rights of the citizen are protected? (Rights of compensation for administrative wrongs and lower standards) How effective are the mechanisms to prevent exploitation of the more vulnerable consumers from the professionals??How effective are the social regulations in SRAs to protect the consumers? How effective are the consumer laws in ensuring the accountability of SRAs??How effective are they in fulfilling the social obligations like protection of environment and disadvantaged groups (children, old, women, SC/ST, poor)?(e) Relating to Creation of Autonomous Domains and SynergyMovements in two directions would be necessary if the associations and organisations in the civil society were to move onto a mode of self-regulation. First, such associations/organisations must re-invent their respective roles, and second, the government must enable such role-taking by them by way of appropriate legislative support and re-orientation of its own role vis-à-vis these domains of society.1.What action could government initiate to help Professional Bodies andIndustry/Trade Associations play a self-regulatory role?2.What action could government initiate to help Societies, Trusts andCooperatives play their respective roles of acting as associations of citizens in a democratic society?3.What could be the initiatives that would assist government and itsfunctionaries at various levels re-orient themselves and be able to strike210-((o) Contd.synergissyn rgistic Arelat onsh ps Awith AAsso ia ions Aof A iti ens Aand groups/Aorganiatons A4. AA yAother generalAsu gestion Ar garding Ae han ingAtheAgovenment’s ab lit AtoA ap Ainto ‘social A apit l’ As ch A hat A he task Aof societyA uil ingAand Adev lo ment AisAna led?AIVA NSURING GREATERAINV LV MENTAOFA EOPLE’SAREPRESE TAT VESAANDAC MM NITYA TA ARG AIN ATHEACONCEPTUA ISA IONAANDAE EC TIONAOFAPOGRA MEer enceA MosA ApublicA ervi esAth tAt uchAt e Adai yA ive AofAtheA iti ens AandA nfluen eAtheirAex se uen A of qu lity ofA ifeAare cr ate AbyAtheAgov rnme tsA(andAa en ies AatAt eAloca Alevel.ACo veAbee A toA heA 3rdA nd A74thAConsti utionalAame dment , ALocalAGov rnme tsAh fe’.ATheA ves edAwithAConsti utional sta us. ThisAhas enab ed themAto a quireA A‘ ightAt Al Aw men; insti utionalAf ameworkA andatesArepres nttionAo AweakerA ec ionsAof soc etyAan bhaA ndA itAalsoAst pulatesAc nv ningAofA ee ing AofAtheA Gener lAB dy A(as inAGr mAS rti l sA War AS bha)AinAoperatio ali ingAt eAbasicAf nc ion AofAt eALocalAGove nments.A entAan A 2 3AG a dA243 WAe dowAtheArespon ib lityAofA lan ingAforA conomicAdev lop nt tio A social just ceA ithAt eALocalAGove nmen s.AThus,Aparti ipatoryAp anning,Arepres areAnowA inAt e ALocalAGov rnm nt,AandAo ersight through Gene alABody Ap oce sesr sents Constitu ionallyAm nd ted.AThAs atusAo AactualAimplem nt tio AofAtheApr visionsA utiona A aAmixed A ictuhereAe.AreAsome success stor esA et,AtheArea is tio AofAtheAConstir oect. s heme inAthi Ar gardA sA tillAanA volvingA niti s, 1. A hat areAtheA ar iers AtoAge erating Ai terest/ Aen husia mAamongAcomm bothA nAr ral Aa dAurba Aar as, Afor Aparti ip tin AinAt e ALocalAGoernmentApr cess s?AWh tAste s Aco ldAhelpA verc meAsuchAbariers buteAtoA 2. AWh t A orms A fAl gal Aand Ainsti utional Aen bleme t AwouldAco trAfru s? tran for ingAt e ALocalAGo ernmen ABod esAi to AtrueAdeli erativeeople’sA 3. In Awhat furt er Awa sAcould Adecentra is tion be Ad ne As ch AthatA ate and represe tat vesAandAc mm nityA tAlar e AcouldAmean ngfullyApar ici own AtheAp ogrammeA lan ing AandAimplem ntationAprocsses oactiveA 4. AWhat speciicAste sAwould Ag lva ise Athe Acom unit es Ai toAmoreApinv lv men AinAthfairAa AofAt e ALocalAGove211Social Capital – A Shared DestinyAnnexure III(1)-loosely refers to democratic framework.-purpose compliance mechanism andfinancial discipline scheme ineffective.Laws for Societies, Trusts, Wakfs and other Endowments(Source: )1.LimitationsStrengthLeast intervention by the State.-facilitative role of law recognized.-purpose should be lawful.-alteration ofpurpose ordissolution only by General Body byspecial vote.Measures forPurposeComplianceCoverageOrganisationsCoveredPurpose ofthe Act-requirements for registrations.-annual returns about Governing Body.-legal personality of Society.Societies registered for the promotion of literature, science, fine arts, diffusion of knowledge,education, charity, political education, libraries.-Non-profit BodiesLegislationRegulation,incorporation, improving the legal condition of SocietiesSocietiesRegistration Act, 1860Modelled on the English Literary and ScientificInstitutions Act, 1854Basic aim was (i)to maintain a register of such Associations functioning in the State and (ii) to make them a legal entity; (iii)element of any control / regulation was absent in the original Act. After Independence the subject came under the State list of Schedule 7. Under Indian Adaptations Order this legislation became virtually a Model Act which could be amended only by the State Government. In subsequent212-excessivegovernmental intervention amounting to regimentation.-freedom to disassociate isdifficult to exercise.LimitationsStrength-systematic democraticorganisation.-well conceivedfinancial discipline.-effective scheme for purpose compliance.-laws role both facilitative and regulativeMeasures forPurposeCompliance-General Bodies control and Committees accountability.-annual audit and other reports to be placed before General Body.-Registrar’spower of enquiry,investigation,surcharge andactions likesupersedingappointment ofadministrator.-Court’s orRegistrar’s power of dissolution and cancellation of registration.Coverage-requirement for registration.-democratic framework of Managing Committee.-Authority vested with General Body.-control over transfer of property or use of funds.-extensive power of Registrar-financial anisationsCoveredSocieties established for promotion of charity, education, science, literature, fine arts, sports, foundation or maintenance of libraries, reading room, collection of natural history.-Non-profit BodiesPurpose ofthe ActRegulation, incorporation, improving the legal condition of Societies within the State.LegislationAndhra PradeshSocieties Registration (SR)Act,1959Karnataka SR Act, 1960-M.P. SR Act,1973-Meghalaya SR Act,1983-Rajasthan SR Act,1958-Tamil Nadu SR Act, 1975-Travancore-Cochin Literary, Scientific & Charitable Societies Act, 1955-U.P. SR Act,1976 -W.B.SR Act,1963years, many of the governments went on adding different degrees of teeth to this Act in form of (a) placing annual audit and other reports before the General Body as well as to the government;(b) Registrar’s power of enquiry and investigation;(c) power of supersation; (d) take over of management.213Social Capital – A Shared Destiny-Extensiveinstitutional or administrativecontrol is absent.-preventivemechanism is not adequate.3.LimitationsStrength-life tenure ofCommittee Member.-autonomy to Endowment.-concept of elected Body of the Committee.-control over Trustee.-Transparency isensured by disclosure of particulars.-Courts regulative role.-Court’s interference for properadministration.-Remedies undercivil procedure code for breach of trust.Measures forPurposeComplianceCoverage-Trustees to give accounts.-committee to supervise.Since it was acontract between the Will maker and the Trustees, the only intervention possible was through filing of a civil suit in a court of law.-suits for breach of trust.Rights of Trustees;appointmentof RegionalCommittees;members of RegionalCommittees; Dutiesof the anisationsCoveredPurpose ofthe Act-Trustee under an obligation to disclose object, income and value of Trust.-court to pass orders relating to proper management.Charitable andReligious Trusts.Endowments of Mosques, Temples and other religious establishments.Management was solely in the hands of the Trustees.Effective control over charitable and religious Trusts.Charitable and Religious Trusts Act,1920Concept of Public Trust came to be established firmly. Trustees were made accountable for disclosure of the income and the value of the Trust. Civil courts given sue-motto powers to pass orders relating to proper management of Trust. But directLegislationReligiousEndowments Act,1863Basically a Private Endowment Act which placed the property under the management of Trustee/Trustees under a Will for religious andcharitable purposes. It was some sort of a contract between the Will maker and the Trustee.2.214LegislationPurpose ofOrganisationsCoverageMeasures forStrengthLimitationsthe ActCoveredPurposeComplianceintervention of the government was not at all intended. After Independence, the situationchanged drastically. Many of the State Government enacted their own Religious and Charitable Endowments Act in the areas of temple management. State Government officials (State Government- appointed Trustees and functionaries) given widespread administrative and supervisory powers.-lack of democratic framework for devotees participation.-systematization in templeadministration.-wide-rangingpowers of StateAuthorities to ensure purpose compliance.-supervising powers of authorities.-religiousqualifications andduties of Trustee and servants.-financialaccountability for proper use.Formation, rights and duties ofTrustees, powers ofAuthorities such as-Commissioner, DeputyCommissioner, AssistantCommissioner, AccountsCommittee etc.Hindu publicreligious institutions and endowments including Matths.Administration and governance of all Hindu public religious institutions and endowments in the concerned State.a) Madras Hindu Religious and CharitableEndowments Act,1951b) Travancore-Cochin Hindu Religious Institutions Act, 1950215Social Capital – A Shared Destiny-exclusion of Matths and religiousdenominations.-lack of democratic participation of devotees.-lack of democratic framework for devotees’ participationWakf Act,1995Special kind of Charitable and Religious Endowments Act. To manage Muslim Trust properties (Wakf). This againLegislationPurpose ofOrganisationsCoverageMeasures forStrengthLimitationsthe ActCoveredPurposeCompliance4.Beneficiaries are not given any opportunity in decision making.Semi-democraticcomposition of Wakf Board.-protectionagainst misuse of mechanism for purpose compliance is effective.-restraints on powers of muttawalli.-restriction onmisuse of property -Executive Officer’s role.-Wakf Tribunal’s interference-formation of Wakf Board.-distribution of power between Wakf Board and Wakf Commissioner.-appointment of Executive Officer.-Chairman of the Board of Trustee is elected by the Board of Trustees.-elaborate measures about Tirupati Temple.-requirement of giving accounts, audit, budget.-regulation oninvestment of funds and use of surplus funds.Extensive measures for financial discipline.-requirement of giving accounts, audit, budget.-regulation oninvestment of funds and use of surplus funds.-power to suspend improperly Working Committee.-properadministration ofcommon pool fund.Wakfs or permanent dedication by aMuslim, of anyproperty for anypurpose recognized by the Muslim law as pious, religious or charitable.Betteradministrationof Wakfs,superintendence andcontrol of Wakfs.-registration.-vesting of property in the institution.-appointmentof Board ofTrustees, rights,powers, duties,disqualifications ofTrustees.-Powers of Authorities.Hindu publicreligious institutions and endowments including Matths.-formation of Committee of Management for each notified institution.-AdvisoryCommittee at State level.-Powers of Authorities.Hindu religiousinstitutionsand CharitableEndowments otherthan Matths anddenominationinstitutions.Administration and governance of all Hindu Public Religious Institution and Endowments in the State.c) Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act,1966Administrationand governanceof Hindu publicreligious institutionsand endowmentsin Karnatakaother than Matthsand Institutionsof religiousdenominations.d) Karnataka Hindu Religious Institutions and Charitable Endowments Act,1997216Creation of Trust, duties, liabilities, rights and powers of Trustees.Rights and liabilities of beneficiaries.Private Trusts-either for charitable or other lawful purposes.Indian Trusts Act, 1882beginning ofcharity laws in the country. Basically for management of6.Lack of remedies outside the courts.-lack of Statesupervision.facilitates creation of Trusts.-codifies rights and duties of Trusts and beneficiariesBeneficiaries cancompel Trustee through legal proceeding to execute the trust and avoid breach of trust.Registration/incorporation.Rights and duties of Trustees and beneficiaries.-strengthening finance of Wakf Board.-restrictions onpowers of Muttawalli -Wakf Tribunal.-prevention ofmisuse of impropertransfer of propertyguided by a Will.Little regulatorypowers of thegovernment. In caseof any dispute, itcould be settled onlyby a Civil Court.LegislationPurpose ofOrganisationsCoverageMeasures forStrengthLimitationsthe ActCoveredPurposeCompliance Skeleton likelegislation withoutelaborationfor peoples’participation.State’s involvement in ensuring proper use of Trust property.Treasurer has the responsibility of using Trust’s property for the purpose mentioned in the Trust Deed.-defines charitable purpose.-constitutes treasurer for charitable purpose.-vesting andadministration of property.Public Trusts forcharitable purpose.Vestingadministration of property held in Trust for charitable purposeCharitableEndowments Act,1890The governmentintroducedsome elementsof regulation byinstituting a postof treasurer in eachState to overseethe functioningof such charitableendowments. It wasthe first step towardsState intervention inthe field of charity.5.217Social Capital – A Shared DestinyLegislationPurpose ofOrganisationsCoverageMeasures forStrengthLimitationsthe ActCoveredPurposeCompliancea Private Trust created by a person through a Will, in the form of a contract between the Will-maker and the Trustees. The intended benefit was only for the family members as mentioned in the Will. The intervention could only be through Civil Court.7.-does not involve extensive State control-Registrar’s power to cancel registration-suspension or dismissal of Trustee by Charity Commissioner for injurious acts.-prevention of waste, damage or improper transfer of Trustproperty.-special audit ofaccounts and inquiry about laws.-arrangements andrequirements about-superintendence of Public Trusts by CharityCommissioner.-quasi-judicial adjudication by Charity Commissioner.Trade UnionsPublic TrustsRegistration, rights and liabilities of Trade Unions.Detailed measures for governance of Public Trusts in the State of Maharashtra.Trade Unions Act, 1926a) Bombay PublicTrusts Act, 1950:The first Act forPublic Endowments;Firmly establishedstrong regulatorypresence of theState Government(CharityCommissioner).Provision forsuspension anddismissal of Trustees,special audit ofaccounts.-no check against outside /political interferences-scope for election of office bearers.-not much insistence on democratic governance.-over work on CharityCommissioner.-over dependence on CharityCommissioner.-transparency.-in-built checks by CharityCommissioner.-purpose compliance is effective.-economically more effective.218-purpose clause usually vagueLegislationPurpose ofOrganisationsCoverageMeasures forStrengthLimitationsthe ActCoveredPurposeCompliance and democratic framework.-competence toinvolve in collective bargaining.-annual returns.-access to Registrar.registration of Trade Unions.-immunity fromcivil suits and from criminal liability.-funds,amalgamation dissolution.-enables a corporate personality.-General Bodymeetings controls, policies andleadership.Acts done in violation ofMemorandum ofAssociations areinvalid, Directors are answerable-arrangement and requirement about registration.-corporate entity -privileges of aLimited Company.Not-for profit CompaniesRegistration of Nonprofit Companies/ InstitutionsIndian Companies Act, 1956, Section 258.219Social Capital – A Shared DestinyAnnexure-III(2)dAprohibitAiparative omparati e AAnaly isAbetwnAvar ousAAState AL gi lationsAonA ocietie 1. A urposeAfo AF rmationAofAS cietiestyAforAan (a A ASocietiesAR gist atio AAct,A18 0Ap ovidesAfo Af r ationAo AaA oci Adesc ibedA literary, sc entific,Aor charitab e A urp se, orAf r Aany As ch pu poseAas Ai ASo ie iesA un er Se tio A20 A f A he AAc . A n Aterms of A ect on A20,Ath Afollowin mayAbe regis ered underAthisAAct: Charitable Soc eties,At e Amili aryAo ph n Afunds Ao ASocietiesA st bli hedAatA heAseveral Ap es dencie AofAIndia ASocieties A sta lis edAforAthAp omotionA ifusio AofA f Ascience, A it rat re, orAt eAfie AartsAfor Ai str ction, f At eAfo ndationA useful know edge, A[t e A iffusionAo Apolitical A duc tion],Athe Aus AamongA orA ai tenanceAo Al brariesAor Are din -roomsA or A enera he memb rs orA pen Ato A he public Aor Apub ic A useumsAan Ag lleriesAo Apa nting AandA th rAwo ks Aof Aart, A ol ections ofAnatur lAhistory, mec anical Aand Aph losophical A nventions,Ai st uments,AorAd signs ”(b)AState Amen mentsA fAar ,AfineA (i)AAnd r A radeshA AAA oc etyAcan Abe reg steredAfo Ap omot onA Apolitical ar ,Achari y,Acrafts Areligi n,Asports,A iteratur ,Acultur ,Ascience any Apubl education, ph losophy A r A iffu ion Aof Aany kn wle ge, AoricAp rpose.(ii A arnataka A ASo ie iesAcan Abe A sta lishedAfo Ap omotionAfAcharity, Aknowled eA educatio ,Ascience, A ite ature Afie Aarts, orAsport , A iffusionAo knowledg ,A elatingA o A ommerceA r A nd str Aor Ao AanyAo herAusefullibrari s,A iffusionAo Apolitical education, fo ndationAorA ai tenance Aof omotionAofA rea ing Aro ms, Apub ic A useums Aand gal eries,Ath Ap structural c nse vation and pr perAuse of Anatura Are ources andAscarceAinfr ofAnatur lA faci i iesAl keA– Al nd,Apo er,Awat r,Af res ,Ae c. AandAthe co lection r Ad si ns.A history, mec anicalAandAph losophical A nventions,A ns rumentsAdAto A pplyAThis is sub ectAto Ath Apro isio Athat Asuc ASoci ties Aw ul Aintet ei Aprofis Aor Ao he Aincome Ai Aprom ting Ath irA bjectsAa220Annexure-III(2) Contd.the payment of any dividend or distribution of any income or profits among their members.(iii) Madhya Pradesh – Societies may be formed for promotion of science, education, literature or fine arts, diffusion of useful knowledge or political education, foundation or maintenance of libraries, galleries of paintings and arts, public museums, collection of natural history, mechanical and philosophical inventions, instruments or designs, promotion or social welfare, promotion or religious or charitable purpose including establishment of funds for welfare of military orphans, political sufferers and welfare of the like, promotion of gymnastics, promotion and implementation of the different schemes sponsored by the State Government or the Union Government and promotion of commerce, industries and khadi.(iv) Rajasthan – For any literary, scientific or charitable purpose, military orphan funds, promotion of literary, science or fine arts, diffusion of knowledge or political education, foundation or maintenance, libraries, reading rooms, museums, galleries, collections of natural history and for mechanical and philosophical inventions, instruments or designs.(v) Tamil Nadu – The objects for formation of a Society are interests of consumers in the supply and distribution of essential articles, interests of passengers using buses, taxies and similar public conveyance, welfare of the physical handicap, working women and the unemployed, interests of residents in the matter of provision of civic amenities, interest of pilgrims and tourists, welfare of animals, beards and similar living beings, welfare of displaced persons and downtrodden economically and socially backward classes.(vi) West Bengal – Promotion of literature, arts, science or religion; any charitable purpose, including the care or relief or orphans, or of aged, sick, helpless or indigent persons; the alleviation of the sufferings of the animals; the diffusion of knowledge; the dissemination of social, political or economic education; establishment and maintenance of libraries or reading-rooms for the members or for the public; the221Soci l C pitaledA AADestinyASharAnnexure-III(2) Contd.collection and preservation of manuscripts, paintings, sculptures, works of art, antiquities, natural history specimens, mechanical and scientific instruments and designs; any other object as may be notified by the State Government as being beneficial to the public or to a section of the public.(vii) Uttar Pradesh – In addition to the objectives listed in the Societies Registration Act, Societies can also be formed for Khadi and Village Industry and Rural Development.1.Registration(a) In terms of the Societies Registration Act, 1860, the Registrar will register a Society after the Memorandum of Association and certified copy of Rules and Regulations are filed with him.(b) State Amendments:(i) Andhra Pradesh – A Society can be registered after the Memorandum of Association and Bye-laws are filed with the Registrar. If an application for registration complying with all the provisions of the Act is not disposed of within 60 days, the Society is deemed to have been registered and the Registrar shall issue a certificate to that effect. In case of refusal of registration, an appeal shall lie to the Registrar General.(ii) Karnataka – Registration to be given on the basis of MOU and the Rules and Regulations filed with the Registrar. In case of refusal, an appeal shall lie to the Karnataka Appellate Tribunal.(iii) Madhya Pradesh – Registration certificate to be issued on the basis of a copy of MOU and the Rules and Regulations.(iv) Rajasthan – Registration is done on the basis of the certified copy of MOU.(v) Tamil Nadu – Registration certificate to be issued on the basis of a copy of MOU and the Rules and Regulations.222()) Contd.erAmeeting.AWest s A f Aa (vi) cop W A st ABengal A– A egistratio Ac rt ficate A o A e Ai sued A n A h Abas o Athe AStat A of MOU Aa d At e ARules Aand Re ulatio . AAn A ppe l A hal Alie A certify AtheA Govern en Aagai st an A rder Aof At e ARegist ar refusin Ato egi tra ionAand A he deci ion Aon such A pp ialAshllAbe fnal.forceA or (vii) aA AU tr A radesh AThA– Ac rtificateAofA egist ationA hallAre ain eAbe Arenewed p riodA fAtw Aye rsAf om the Ad te A fAis ueAa dA il AhaveAt th rea ter. AIf A nyAque tionAaris s Aregarding en itl ment Aof the SocietyAforAr gis ration AtheA at er Ashall be ref rredA o AtheAStat AGo ern entAandA he dec sionA f AtheAStat AGove nm intAshll beAfnal A2 ACh ngesAin Ath AM morandumAof Ass ciationAand Bye-lawmaj rity ofA ( ) A uja atA AThAMOU Aca Ab Aaltere AbyAspecia Aresol ti n passedAb AaAa terationA n t Ales At an A /5thA fAthe Atota Am mbe shipAof the Soci tyAandAsuci As nct oned AbyAthReg strar.(ii)AAn h aA r deshA– AB Aa A“Special A e olution ,Aa Socie yAm y Aalter AthAp ovi ionsAofAth Amem randumA it Aesp ctAtoA A( ) AChangeAo Ao jec ives AofAthe So iety;(b)AT Aamalg mate its lfAwi h Aany Aot erASo ie y;Aor( ) ATo Ad vide its lf into twoAorAmreASocie y.A“Special resol t on”AmeansA Aresol ti n passedAb Aa maj rityAfAtheAt ta Ame bers Aof the Soc ety A nd An t Ales At an A /5th Aof theAmemers presen Aa d votingAiAa meeting.by An t Ale sA The A ye laws Aca Ab Aa tered Aby an Aordinar Aresol ti n Ap ssedand A oting.han half Aof the Amem ers presentyAthe vo (ii esA ) Ka natAThkaA AMOUAca Ab A lteredAb AaApro os lA gre dAtoAeAtime At eA cas eA nAf vourAofA heA ropo alAan Asu hAv tesA reAn tAles Athan thrluti nA il A n mberAo At eAvo es, Ai Aany,Ac ste againstAthe re olution. AThAresialAgen ralA needAto be c nfirmed byAa Asim le major ty o Avotes at AaAse ondAspe meet ngAco ve edAafter an interv lAof thirt Ada sAafte AtheAfor223Soc alACapi a A AAASha edADestinyAnnexure-III(2) Contd.(iv) Madhya Pradesh – Any amendment to the MOU or Regulations of a registered Society will have to be registered with the Registrar. Alternately, if the Registrar considers that any such amendment is necessary, he will direct the Society to make the amendments within such time as may be specified in such order. If a Society fails to make such amendment within the specified time, the Registrar will himself register such amendment and these amendments shall be binding on the Society and its members.(v) Tamil Nadu – The MOU and Bye-laws can be amended by a special resolution by the Society and such amendments will have to be registered by the Registrar.(vi) West Bengal – A Society shall not alter its Memorandum except with the previous permission of the Registrar in writing and the votes of 3/4th of its members. The regulation of a Society can be altered by the votes of 3/4th of the members subject to the provisions of the Act and its Memorandum.3. Filing of Annual Return(a) In terms of the Societies Registration Act, 1860, an annual list is supposed to be filed with the Registrar containing the names, addresses and occupations of the Governors, Councils, Directors, Committee or other Governing Body entrusted with the management affairs of the Society.(b) State Amendments:(i)Karnataka – Along with the list indicated above, a society has to file acopy of the Balance Sheet and Income & Expenditure Account audited by a person authorized under Section 226 of the Companies Act to act as an auditor of companies registered in Karnataka.(ii) Madhya Pradesh – In addition to the annual list of the Governing Body, every society shall send to the Registrar a statement of Income and Expenditure with full particulars duly audited by its auditor, audit report and balance sheet of the previous year along with details of all financial activities. Accounts of such Society having annual transaction exceeding Rs.1 lakh shall be submitted to the Registrar duly audited by Chartered Accountant. The Registrar is empowered to undertake a special224Annexure-III(2) Contd.aud tAof Ath Aa c untAofA ASocie y Aeithe Ah ms l AorAby aApersonAaho izedbyAh m.AASoci ( tyA ii)AWe t Be galA–AIn ad iti nAto th Ali tAofAtheA overn ngABo y,Aever rki gAofA ha lAfileA nAannu lA epo t AbyAtheA over in ABo yAonAth Aw hee AandA th ASo iet AforAthe prev ous y ar Aa d A Aco y AofAth Abala ceA c AmeansA the audito sAreport ce t fiedA yAaAduly qualifie Aaudi orAwh AinAthi a A harteredAA co n antAor aAperson ap rov dAby AtheA eg strasAbe al .(iv)A nAa mos AallAt eAS ates AtheA egi trar has Abeen A mp were Ato cal AforAanyAin orma ion fromAthe So ie y, ifAheAsode ires.A4. Pr per y AofAtheAS ci ty(a) In terms Ao A ec ion 5 Aof Athe A ocietiesAReg stra ion AA t,A 860, Athe propertyA el n ingAtoAa So iet ,AifAn tA estedAin A ruste s, shallA eA ee edAtoA eA est dAin AtheA over in ABod AofAsuchSo iety. b)AStateAAmend ents: i)AUtta A ra eshA– It A ha lAnotA eAl wfu Afor AtheA over in A odyAofA AS cie yA r Aa yAof Ait Am mbers Ato transfe Awi houtAthe previous ap rov lAofAt eAC urt,Aany Ai moveable property A el ngin AtoAsuchSoci ty.A(i ) AMadhy A ra esh A–ANo Ai moveable prope ty shall Abe ac uiredAorAtr ns err dAbyAth ASociet Awi houtA heApriorAp rm ssi nAofAtheA egi trar eA bje tA and Asuch prop rty wi lAno Abe use Afor Aa y Aobj ct Ao her thanAt Ai Acase of Ath ASociet Awith ut Aprior Ap rmis ion from AtheA egi tr rAan ofAgift Awritte Ac nse tAofAteA onor.A5.AAma gam tion AandADi so utionAofAS ciety shallAb a) AA nder Athe A ocietiesAReg stra ion Act, AtheAdi so u ionAofA ASoci ty tt eme tA d cid dAby notA ess At an 3/5 h Aof Ath Ame ber Aand Athe As bsequentAs plicable of Athe prope ty woul AbeAdoneA cc rdi gAtoA he rul s Aof Ath ASocietyAa th reto AI Acas AnoAs chA ul sAareAinAe is enc , A tAma Ab Ado eAa Aper Athe de isi nAofAtheA overn ng Body AI Aca eAof Aan Adisput Abe ween AtheA over ing Bod Aand Athe mem ers,At e Amat er shallAbe re err d AtoA he ACiv l ACourt. AS225Socia A a italA–d ADestinyAShareAnnexure-III(2) Contd.assent will be required by vote of 3/5th of the members present in the general meeting convened for this purpose. Also, if the Government is a member or a contributer or otherwise interested in other Society, such Society shall not be dissolved without the consent of the government.Upon dissolution, any property left after discharging debts and liabilities of the Society, the same shall not be paid or distributed among the members of the Society but shall be given to some other Society to be determined by the votes of not less than 3/5th of the members. However, this shall not apply to any Society which has been founded or established by the contribution of share holders in the nature of a Joint-Stock Company.(b) State Amendments:(i)Uttar Pradesh – Apart from proposing the dissolution of a Society by itsGoverning Body, the Registrar or not less than 1/10th of the members may also move the Court seeking an order for dissolution on the grounds of contravention of the provisions of the Act, number of the members is reduced below seven, the Society has ceased to function for more than three years, the Society is unable to pay its debts or liability and the registration of the Society has been cancelled on the grounds that the activities of the Society constitute a public nuisance or are otherwise opposed to public policy.(ii) Karnataka – The proposal for amalgamation of Societies needs to be approved by votes of the members which are not less than three times the number of votes cast against the resolution. The proposal needs to be reconfirmed at a second special general meeting convened by Governing Body after an interval of thirty days. The dissolution requires approval of 3/4th of the members of a Society. However, if the State Government is a member or a contributor or otherwise interested in any Society, such Society shall not be dissolved without the consent of the State Government. The property which remains with the Society after the satisfaction of its debts and liabilities, shall be given to some other Society to be determined by the votes of not less than 3/5th of the members. The majority of the members may also decide to give such property to the State Government to be utilized for the purpose of formation of other Society.226Annexure-III(2) Contd. mbe(iii) sA A adhyaAP a es A–AThe Adisso ut on toAbeAd ci ed Aby 3/ thA fAtheAm neralA nd to AbeAco fir ed AbyA ot ngAof equal A um er Aof Am mb r AatAaAg per yA m eting Aco ven dAf r Athe Apu po e.AThe Aprov sionsAreg rdingApr ,AtheA a e Ath As me Aas Aappl ca leAinAKarn taka,Adis ussed A bove.AHo eve beingA Reg str rAha Aals Abeen givenA ow rsAtoA anc lAthe Aregist at on Aon gAtheA sa isfie At at AnoA seful Ap rp se AisA ik ly to Abe A er ed AbyAcont nui lv d.A S cie yAand Aconseq ent y AtheAS ciet AbeenA ee edAt Ahav AbeenAdiss shal A I AsuchAsitu tio ,AtheAmo eab eAandAimmo eableA ss tsA f Athe As ciety tAtheA v st A n Athe StateAGover me tsA oAthe A xt nt Aof Aassistance gran Ath rA nyA S cie y Ama AhaveAre eive Afr mAthe Un onAor StateAGove nm ntA f AtheAsta utoryAB di s. AIt sh ll A eAth Ad ty A f Athe ACol ec o Aof AaADi trict whe e Athe Apr pe tyAisAsi ua edAt AtakeA ha ge A f Ath As meAonAinti at onAofAcancel at on A yAtheARegistra .fAtheA (iv) Tami A ad A– ATheAamalgam tion, Adi isi nAand Adisso ut onA rAtheA regi tered ASoc eti s A an Ab Ad ne Aby As ecial Adisso uti nA nd A sAp alA fA Bye laws.AHo eve ,AforAamalga ati nAand Adiv sion, priorAap ro uir d. the Areg st ar AisAreqci edA AWestA(ve gal – A wo Ao Amore ASoc eti s A anAbeAamalg ma ed if AsoAd y AtheAGov rnin AB dyAo Aeac Asuch ASo ie y, A f Athe Apr po al AisAapro edA ern dA yAthe vo es Aof 3/ thA f AtheAM mb rsAo Ae ch A f Athe ASoc etiesAcon ever, andAco fir ed Ab Alike vo e Aat Aa Asubs quentAg neral Ame ting.AHo rAforA priorAap ro al A fAthe AReg strar wo ldAbe Are uir dAw oAca Aalso ord AsuchA modific ti ns toAbe Ac rri dA ut A n Athe Apro os l. AAnA ppealAa ains rd rs A fAthe AReg stra Alie Awi h Athe StateAGover m nt.r AatA A ASA cie y A ay Abe Adis ol ed A yAthe vo es A f Athe 3/ thA f AtheAm mb eAany aAg neralAm eting Aco ven dAfo Athis Apu po e.ANo A em er AtoAr ceire f,A profiAupon Adisso uti n Aand 3/ th A f Athe Am mb rs or AinAd faultAth yAthe ARegi trar Awi hAtheAap ro al A f Athe StateAGove nme tAcanAecideA nAma A ivi g AtheAs rplus Apr pe ty At Asome otherASo ie y. ATheAdisso uti Ales A a soAbeAo de ed A yAthe co rt Aon Aappli at on A fAthe AReg st ar or A y Ano fAtheA thanA /1 thA f Athe Am mb rsAi Aca e Athe AS cietyAcontr ven s A nyA fAtheA prov si ns A fAth AA t, A fAthe A um er Aof Am mb rs Ai Ales Athan A ev n,As cie yAhas A ea edAtoAfu cti n Afo Amor Athan three A ea s, A f Athe AS227– A ocialSharedA apialDestinyAAnnexure-III(2) Contd.is unable to pay its debt or meet its liabilities and if it is proper that the Society should be dissolved.Also, where in the opinion of the Registrar, there are reasonable grounds to believe that a Society is not managing its affairs properly or is not functioning the Registrar may move the court for making an order for the dissolution of the Society.6. Other Powers of the State Government and the Registrar(i) Karnataka – (a) The Registrar may on his own motion and shall on the application of the majority of the members of the Governing Body or of not less than 1/3rd of the members of the Society, hold an inquiry or direct some persons authorized by him to hold an inquiry into the constitution, working and financial condition of a registered Society. While doing so, he will have all the powers regarding inspection of the documents, issuing summons to any person, calling general meeting, etc. During the course of such enquiry if any person related to Society has been found guilty of misfeasance or breach of trust, the Registrar can make an order requiring him to repay or property along with the interest or to contribute such sum to the assets of the Society by way of compensation. This will be in addition to the criminal liability incurred under the Act.(b) The Registrar can also order for cancellation of registration and dissolution of certain societies if he satisfied that such society has been carrying on any unlawful activity or has allowed any unlawful activities within their premises.(c) The State Government is empowered to appoint an Administrator for such period not exceeding six months at a time (the aggregate period shall not extend beyond four years) in case a Society is unable to hold the General Meeting, the Governing Body has not been constituted and whether it is in the public interest to do so. The Administrator shall perform all duties and functions of the Society. He shall take necessary action to hold elections for the constitution of the Governing Body and convene the General Body meeting but for the reason beyond his control if is not able to do so, the State Government may order dissolution on his recommendations.228Annexure-III(2) Contd.ecords,A (ii AMadhya P ade h A A(a) ATheAR gis rar A asAbe nAg venAth Ap wersA oAseizeA yAto AbeA d cu ent AofAthe So iety in ca e Ahe Ais Aied AthatistAt eseAar Al ke ampe ed withAorAdetro edaj rit A (b) ATheARAgis rar may hisAow Am ti nAorAanAapp icat on m deAbyAaAnA /3r A of Athe me ber AofAthe AG vern ng Bod AofAthe so iet Aor A ot Al ssAth ApersonA ofAt eAtota Anumber me ber AofAthe A ociety Ae ther Aby hi se f or Aby A nancialA au ho ize AbyA im holdAan enqu ryA ntoAtheAconst tution, wo i kingAanAc nd t on Aof AaAoci tyng Bodhe AState AGoA (c)AAern entA ayAma eAo der Afor Asupe se sion AofAG vernsAw ichA ofAa yASta e Aaided so ie y A fAi AisAnot Afun tioningA ro erlyAor comm tsAac sonsAt A areApre ud cia AtoAtheA nt restAof Soc etyAand a pointA Ap rsonAor pe oA ear A ma ageAthfairAa AofAthe Soc e y AforAaA pecifie Ape iodAnot Ae cee ingAtto tim A in A heAfirstAi st nce. AThAperiod how ve Acan Abe A xten ed Af om timeat AtheAdi cr tio AofAt eAStatleve .Ase (ii sionA )ATa i ANa heAStateAGou A A(a)Aern ent hasAt eA ower A o AorderAsupefcerAt A ofAc mm tte AofAany Soc etyAand a pointA Ap rso AasAthe if speci lA e A ear. ma ageAthfairAaAofAthe Soc e y Afor Aa A pecifie Ape iodAnotAe cee ingAoeAStateAThe Atim Ap riod AisAex enda le Aup oAthr eA ear Aat AtheAdi cr tio AofAtGovnme t.A( )AA Ais A he Ac se A ith At e Aother Sta es,AtheAR gis rar hasAt eA owerAtoenqu reAocie y.A ntoAtheAconst tution, wor ingAandAinancial Aco di i ns Aof Aa Are isteredAAby AtheA Such enq iry A an also Abe or ere Aon At eA asisAanAapp icati nA ove Aon At eA istrictACo le tor. ATheAR gis rarAhas Aa th rityAt Aca celAtheAregi tr tio asisAof ou come ofAsuchAqui y.ietyAisA (c) ATheARAgis rar A anAal oAorderAcanc ll tion AofAregi tr tio AifAany so ar yin AonAanyA nlawfulA ct vityA rAallowA nlawfulA ctivit Awi hinAitsApemise .AAfter Acanc ll tion AofAregis rat on,Athe soci ty will AbeAd ss lvedAby specialAre olu io Aand in caseAof fa lu eAt Ado so,AtheAR gis rarAcan a pointAaAli ui ator to win AupAtheA229Social Capital – A Shared DestinyAnnexure-III(2) Contd.(d) The Registrar also has the power to remove the names of the defunct Societies from the register.7.Offences and PenaltiesUnlike the Societies Registration Act, almost all the State Acts contain provisions regarding offences and penalty on the office bearers and members of the society for contravention of the provisions of these Acts.8. AppealFew State Acts such as Tamil Nadu and Madhya Pradesh contain the provisions regarding appeal against the order of the Registrar. In Madhya Pradesh, the appeal against the order of the Registrar lies with the State Government and appeal against the order of the subordinate officers lies with the Registrar. In case of Tamil Nadu, the appeal against the order of the Inspector General of Registration can be filed before the State Government. In case of the orders of any other person, the appeal would lie with the Inspector General of Registration and any person aggrieved by any order made by liquidator may appeal to the Court.230List of List Aof ReportsAS bm ttebyAth ASecondAAdmini trative Reforms ACo miss onAupt AAugu s A2008 .AFirstRepor :A ight Ato AInfo mation AMa te AKey to AGoodAGove nance2 ASeconda Report: AA AUclocki gAHuman A apital:AEnti lem ntsAandAGos e StudAA AAACaAt AHope 3.AThirdReport ACrisis AMan geme t:AFrom De pairv e nance 4 AFourthReport AE hics AinAGo Afr AAll .AFifthReport APubl c OrderA– Jus ice fr A lA.A. . AP ace eAuture .ASixthRepor :ALocal AGo e na ceA– AAnAI spiring Jour ey A ntoAthoA usion 7. SeventhReport:A apacityA uil ingAfor ConflictARe o utionA– A ri tionAt8 AEighthReport:ACo battingAT r orismA–APr te ting Aby ARighteousness231Second Administrative Reforms CommissionGovernment of India2nd Floor, Vigyan Bhawan Annexe, Maulana Azad Road, New Delhi 110 011 e-mail : arcommission@nic.in website : REPORT: REFURBISHING OF PERSONNEL ADMINISTRATION - Scaling New HeightsNOVEMBER 2008________________ -GOVERNMENT OF INDIASECOND ADMINISTRATIVE REFORMS COMMISSIONTENTH REPORTREFURBISHING OF PERSONNEL ADMINISTATION Scaling New HeightsNOVEMBER 2008________________ -s c c in c tiin c a a a a b ww o th tr p m w o e v in c________________ -PREFACEThe roots of the civil service go back a long way in human history. The key to the survival of the ancient Egyptian civilisation that flourished as early as 3,000 BC, was the civil service – the historical model of all later bureaucracies. The waterways for the whole country needed central management, which required a body of scribes and officials. Once in place, the scribes and officials found their second realm of business in the extensive construction activities which were organised along military lines. It was only a matter of time before they took over the administration of the entire state.In China where the civil service has lasted from at least 200 BC, it played a crucial role in the preservation of the Chinese Empire from the time of Shi Hwangti. In China, the civil servants were recruited on the basis of merit and enjoyed a well-defined career path and security of tenure. Serving the state was considered a great privilege bestowed only on a chosen few with demonstrated talents. In Japan, the civil service provided continuity of administration since the Taika reforms of 645 AD, and that too, in spite of change of systems and transfer of power from one regime to another. The numerous Negro empires existed only briefly because they lacked an apparatus of officials. The unity of the Carolingian empire was under serious strain once its organisation of officials disintegrated.The nuclei of intensive modern states in the Middle Ages developed concomitantly with bureaucratic structures. Developing a civil service was an essential step in the process of nation-building in Europe. The modern bureaucratic state evolved in Europe, where the concept was considered such a breakthrough in administrative technology that it was transported to other countries. So the concept journeyed eastward in Europe to the German principalities and Russia. In Prussia, the bureaucracy introduced extensive regulations to modernise the economy and the educational system on the pattern of the French; the system worked well only because the civil society was sufficiently developed to moderate the process of bureaucratisation. When the concept travelled further east to Russia, the state became excessively bureaucratic in the absence of a developed civil society to restrain it. In spite of valiant efforts by Peter the great, and Mikhail Gorbachev in recent times, the civil society in Russia has not been able to develop itself on the Western European model and act as a check on the bureaucratic state.i________________ -In India, the legends of the Aryans speak of the evolution of the administrative apparatus. The gods, at war with the demons, were on the verge of defeat. In desperation, they got together and elected a king to lead them. The origins of the early Aryan administrative system may perhaps be traced to these legends.Kautilya’s Arthasastra stipulates seven basic elements of the administrative apparatus. These elements are embodied in the doctrine of the Prakrits. They are: Swamin (the ruler), Amatya (the bureaucracy), Janapada (territory), Durga (the fortified capital), Kosa (the treasury), Danda (the army), and Mitra (the ally). According to Arthasastra, the higher bureaucracy consisted of the mantrins and the amatyas. While the mantrins were the highest advisors to the King, the amatyas were the civil servants. There were three kinds of amatyas: the highest, the intermediate and the lowest, based on the qualifications possessed by the civil servants. The key civil servant was the samahartr, who prepared the annual budget, kept accounts and fixed the revenue to be collected. The other key civil servant was the samnidhatr who kept records of the body of taxes realised and was in charge of the stores.A new stage in the evolution of the administrative order came at the time of Delhi Sultanate. The Sultanate was initially a classical conquest state and it was necessary for the rulers to establish and consolidate their authority and control over the newly conquered territories. This was done by assigning land on a temporary basis to the followers, who became the civil servants, while, at the same time, by transferring the holders of these assignments as frequently as possible to establish control over them. Such a system – the system of simultaneously appropriating a sizeable part of the social surplus and distributing it to the members of the ruling elite – so successfully introduced by the Delhi Sultanate – was adopted by contemporary states outside the Sultanate such as in Orissa and Vijayanagara.This system was responsible for bringing about a new conception of civil service which, through radically different from the Mauryan practice defined, in general, the structure and role of public bureaucracies in later years. The Mughal bureaucracy, for example, was based on the mansabdari system. Every mansabdar was invested with a mansab (a rank or a command) which determined his position in the Mughal bureaucracy. The mansabdari system was essentially a pool of civil servants available for civil or military deployment. The mansabdari system, as it finally evolved, became a combination of the higher civil service, the peerage and the army, all rolled into an omnibus civil service organisation.The civil service system in India during the British times was based essentially on the Mughal system, albeit with certain refinements. But the big changes came with the implementation of Macaulay’s Report. The Macaulay Report recommended that only the best and brightest would do for the Indian Civil Service. The Report said, ‘It is undoubtedly desirable that the civil servants of the Company should have received the best, the mostiili th oth c s c ‘I m v th loa is c M B o o th th aa th in w I ‘e a w a it c to________________ -liberal, .the most finished education that the native country affords’. The Report insisted tthat the civil servants of the Company should have taken their first degree in arts at Oxford eor Cambridge.The Macaulay Committee cannot be faulted for its enthusiasm to get the best and .the brightest for the ICS. After all, the interests of the Empire itself demanded that the ,civil service of colonial India attract the best talents of the British universities. The Report esuggested that the educational background of the colonial administrator should be even more rcomprehensive than that of the civil servant in England. In the words of the Committee, t‘Indeed, in the case of the civil servant of the Company, a good general education is even :more desirable than in the case of the English professional man; for the duties even of a every young servant of the Company are more important than those which ordinarily fall to ,the lot of a professional man in England’. The advocacy for the best talents of England to elook after the imperial interests in India could not have been done with greater sophistry. .In 1835, Lord Macaulay did admit before the British Parliament: “I have travelled iacross the length and breadth of India and I have not seen one person who is a beggar, who eis a thief. Such wealth I have seen in this country, such high moral values, people of such dcalibre, the very backbone of this nation, which is her spiritual and cultural heritage”. But oMacaulay’s Report was a product of the times. At the time that the Committee reported, eBritish political supremacy in India had matured into a paramount sovereign power capable eof imposing its will through its bureaucratic agency. From Wellesley through the Marques tof Hastings to Dalhousie, the political authority of the British in India kept growing; and sthe scope of operations of the Empire had increased substantially. Clearly, the services of .the best and brightest were called for to sustain the Empire, maintain its territorial integrity,and impose order.eThe ICS men were trusted agents of the British Government even though there were salso many patriots among them. The ICS was the instrument of the imperial power, and rthe leaders of the Indian National Congress had made it clear during their struggle for iindependence that they wanted to abolish the ICS and all it stood for. Jawaharlal Nehru ewas ‘quite sure’ in 1934 that ‘no new order can be built in India so long as the spirit of the ,Indian Civil Service pervades our administration and our public services’, it being therefore ‘essential that the ICS and similar services must disappear completely’. Yet in the yearsn e e y tafterwards the ICS tradition not only survived, it prospered. In the spring of 1964, Nehru was asked at a private meeting by some friends what he considered to be his greatest failure as India’s first Prime Minister. He reportedly replied, ‘I could not change the administration, it is still a colonial administration’. Nehru then went on to elaborate his belief that the continuation of that colonial administration ‘was one of the main causes of India’s inability to solve the problem of poverty’.iii________________ -Prime Minister Indira Gandhi was even more critical. Replying to the debate on the President’s address in the Parliament in March 1966, she said, “what India needed today, was a ‘revolution in the administrative system’ without which no enduring change could be brought about in any field”. In an interview she gave to a news agency on completing 100 days in office, she observed:“The problem of administration has added to the difficulties of the country. All along the line, administration has deteriorated – at the Centre, in the States, and even in the lower rungs of the governmental set up. Toning up would have to be done, new procedures might have to be evolved, and even fresh recruitment at all levels would have to be considered”.In her convocation address to the University of Roorkee in November 1967, she noted that, “Administrators sometimes lag behind the situations they are supposed to administer. If a large proportion of the investment we have made under the plans remains unutilised, the cause is to be found in administrative shortcomings”.It is ironical that there has been no sincere attempt to restructure the civil service although more than six hundred committees and commissions have looked into different aspects of public administration in the country. Rather, the Indian reform effort has been unfailingly conservative, with limited impact. While there has been some improvement in civil service recruitment and training procedures, other incremental reform measures such as O&M, vigilance committees and commissions, citizens’ grievance organisations, Whitleyism, manpower planning, and the institutions of Lok Ayukta have achieved very little. Civil service reform in India has neither enhanced the efficiency nor the accountability of the civil service in any meaningful manner. As S.R.Maheshwari commented, India’s efforts at reform have amounted to ‘correction slips to the inherited administrative system’. Maheshwari was being charitable. The Indian civil service reform efforts were not even correction slips – they were more in the nature of endorsement slips.Rapid and fundamental changes are taking place in the political, economic and technological fields. These call for major changes in the civil service. Far-reaching changes in the global economy have made it necessary to build a competent, well-functioning civil service. As a result of recent changes induced by globalisation, countries are competing internationally not only in the market place but also on the quality of their governance structures. The changed policy of deregulation, liberalisation and competition has suggested a new role for the civil service, emphasising the strategic management of the economy in less prescriptive and more market-driven approaches. The changes in the economic structure raise new demands related to control and accountability of the civil service as well as new definitions of professional obligations. In addition, the role and importance of civil society organisation and of the private sector in the Indian economy and the society in general have increased substantially over the years. As a result, it is important for the civil servants tos ae p a u o D e c a s rc th in in a th efa fr fo a b o M th th m ab aiv________________ -e , d gg r t .d . ,e t n n s , il ils yd s il g e d n ey e osee the private sector and civil society organisations as partners in the process of economic and social development of the country.As instruments of public service, civil servants have to be ready for change. The common experience, however, is that they resist changes as they are wedded to their privileges and prospects and thereby, have become ends in themselves. In the political field, the 73rd and 74th Amendments to the Constitution have brought about major changes. Rural and urban local governments have been enabled to become institutions of self government. In order to make it meaningful, the existing system of administration of departments and the District Collectorate has to undergo fundamental changes. This has not happened to the extent envisioned. One of the principal reasons is the marked reluctance on the part of the civil service to accept the changes in control and accountability as well as the altered roles and responsibilities. This is because of the fact that most of the civil servants have been socialised to act in a manner that accentuates command and control methods rather than respond to people’s needs and aspirations.Despite these momentous changes, the attitude of civil servants does not seem to have changed at all. This is because the civil servants still believe in the Hegelian prescription that they represent the universal interest of the society. Hegel argued that the most important institution in the state was the bureaucracy which represented “the absolutely universal interests of the state proper”. To Hegel, the bureaucracy was a transcendent entity, a mind above individual minds. He regarded the bureaucracy as the universal class, synthesizing the particularism of the civil society with the general interests of the state. For Hegel, the exercise of power by the bureaucracy was a mission sanctioned by God.It will not be an exaggeration to say that the civil service in India has continued to be faithful to the Hegelian dictum. It believes that its authority and legitimacy is derived not from the mandate of the people but from an immutable corpus of rules that it has prescribed for itself, without any correspondence to the needs and aspirations of the people it serves and the democratic ethos. That is why the functioning of the civil service is characterised by a great deal of negativity, lack of responsiveness to what the people want and the dictates of democracy. It is sad but true that the civil service in India evokes the metaphors of what Michel Crozier calls ‘bureaucratic behaviour’; the normal association that people have with the “vulgar and frequent use of the word ‘bureaucracy’” which as Crozier explains, “evokes the slowness, the ponderousness, the routine, the complication of procedures, and the maladapted responses of ‘bureaucratic’ organisations to the needs which they should satisfy, and the frustrations which their members, clients, or subjects consequently endure”.That is why the civil service has to change. But not in the incrementalist manner that barely touches the basic structure. It has to be a total change, a thorough transformation, a metamorphosis. It has to be like Avtaras in the Hindu Pantheon, in which a new Avtarav________________ -takes its form afresh without any correspondence to the persona of its predecessor. For such a transformation to take place, the old structure has to fall away and the new one created; as Pablo Picasso said, ‘unless you destroy, you cannot create’. It is like Rajiv Gandhi destroying the old shibboleths before ushering in modernity or like Manmohan Singh burying the old system before ringing in the new economic order. There was no continuity, not even the faint hint of a compromise. The change in the civil service has to be equally transformative: uncompromising and a clean rupture with the past.I am encouraged by the fact that transformative structural changes are taking place in civil service systems across the world. Particularly transformative are the changes brought about in Commonwealth countries such as the United Kingdom, Australia and New Zealand, with whom we have shared a common ancestry of civil service traditions, mores and structures. The changes in these countries have been brought about in response to the demand that the civil service should be fully accountable to the community they serve, reflect the hopes and aspirations of the citizens who pay for its upkeep and be responsive to democratic ethos.I am also encouraged by the latest developments in the area of public administration such as the New Public Management and the reinventing-the-state which emphasize the importance of measuring results, and highlight the outputs and outcomes rather than inputs and processes. They focus on the benefits that people derive from the use of government funds and seek to establish a framework in which it can be ascertained what quantifiable outcomes have been achieved in enhancing the quality of life of the citizens. We need to realise that civil service is the instrument created for achieving the ends of public service. It is sad but true that, wedded to their permanent privileges and prospects, this instrument in India has become an end in itself. As a result, change and reform essential for efficient public service, which is citizen-oriented, is resisted and to that extent, the concept of sovereignty of the people is jeopardised.With this in view, this Commission has advocated a total change, a radical transformation. It has proposed a wide-ranging agenda of reforms, that includes reforms relating to recruitment, training, tenure, domain competency, creation of a leadership cadre incorporating some elements of a position based Senior Executive Service, performance management, exit mechanisms, creation of executive agencies, accountability for results, a code of ethics and enactment of a civil service legislation. I am confident that with the implementation of the slew of reform initiatives proposed in this Report, India will have a civil service? that is valued by ministers, and is a superb source of expert, objective policy advice;N Nvi________________ -h s g d e :n ts e , en e s t e o t n c yl s e e , e ey? that delivers world-class, customer-focussed services, day-in and day-out, frequently in partnership;? that attracts the best talents from every area of the society;? in which the civil servants are honest, objective, impartial, and act with integrity;? in which the civil servants are accountable, result-oriented and transparent in their dealings;? in which the civil servants are proud of, and passionate about their work, committed to doing what they have to do with the pace that India needs and expects in the twenty-first century, and with the right professional skills; and? every part of which commands the confidence and respect of the public it serves.New Delhi (M. Veerappa Moily) November 05, 2008 ChairmanviiELEVENTH REPORT: PROMOTING e-governance, the SMART Way ForwardDECEMBER 2008________________ -GOVERNMENT OF INDIASECOND ADMINISTRATIVE REFORMS COMMISSIONELEVENTH REPORTPROMOTING e-GOVERNANcE The SMART Way ForwardDEcEMbER 2008________________ -t a c o a l c m S o lT R S f t t f c p oa d c t p________________ -PREFAcEIn his Grundlegung Zur Metaphysik de Sitton, Immanual Kant says, “So act as to treat humanity, whether in their own person or in that of any other, in every case as an end withal, never as means only”. Kant’s observation is even more valid today. The citizens are ends in themselves, rather than as means to other ends. The colonial view of the Government used to be as a ‘controller’ and ‘ruler’. It is now that of a coordinator and provider. Government is responsible for providing certain services to the citizens, just like an organisation is responsible for managing a value chain that leads to output. business corporations have discovered over the last few decades that information technology can make the value chain more efficient and lead to quality improvements and cost savings. Similarly, Governments have discovered that information technology can make the provision of services to the citizen more efficient and transparent, can save costs and lead to a higher level of efficiency.e-Governance is in essence, the application of Information and communications Technology to government functioning in order to create ‘Simple, Moral, Accountable, Responsive and Transparent’1 (SMART) governance. In this report on e-Governance, the Second Administrative Reforms commission (ARc) has tried to analyse the successes and failures of e-Governance initiatives in India and at the global level, in order to extrapolate the best practices, key reform principles and recommendations that can help the government to implement a new paradigm of governance in the country. This new paradigm would focus on the use of information technology to bring public services to the doorsteps of our citizens and businesses on the basis of revolutionary changes in our institutional structures, procedures and practices that would transform the relationships between our three levels of government, our businesses and our citizens.The revolution in Information and communications Technology (IcT) has brought a whole new agenda for governance into the realm of possibility. e-Governance comprises decisional processes and the use of IcT for wider participation of citizens in public affairs. citizens are participants in e-Governance. The purpose of implementing e-Governance is to improve governance processes and outcomes with a view to improving the delivery of public services to citizens. Some authors have defined e-Governance as the e-business of thei1Paragraph 83, Report of the Working Group on convergence and E-Governance for The Tenth Five Year Plan (2002-2007), Planning commission, November, 2001________________ -State. This seems appropriate as both e-Governance and e-business use similar technologies, infrastructure and hardware. However the market models are widely different thus justifying e-Governance as a separate area of research (Gisler, 2001). Although there are many definitions of e-Governance, the objectives of governments are indisputable: maintaining collective security, administering justice, providing the institutional infrastructure of the economy and ensuring that vital social capital is enhanced through improvements in health and education and through strong families and communities (Dawes et al. 1999). A more comprehensive definition of e-Governance proposes changes of government in two related aspects: 1) transformation of business of governance i.e. reducing costs, improving service delivery and renewing processes; 2) re-examination of the functions and processes of democracy itself (Aicholzer and Schmutzer 2000). The resulting impacts are reduced costs, lesser corruption, increased transparency, revenue growth and convenience for the citizenry.India, being the largest democracy in the world, has much to gain from e-Governance, especially when citizen participation in governance is one of the features of the fully evolved stage of e-government. Many e-readiness assessments have been carried out at the global level that show the current state of India’s e-readiness. Some of the more recent study findings are as follows: The July 2002 EIU ranking found that 55 of the countries navigating the information super highway account for 98 per cent of all IT in 150 countries. It ranked India at 54 among the group of elite 55.The May 2001 Mc-connell ranking of e-readiness assessment indicated that substantial improvements were needed in the area of connectivity. Improvements are also required in the areas of E-Leadership, E-business, Information Security and Human capital. The Global Information Technology Report, 2002-03, ranked India 37 above china which is ranked 43rd, whereas the 2001-02 Report ranked India 54 (adapted from INDIA: E-Readiness Assessment Report 2003, Department of Information Technology, Government of India).Singapore has ‘SINGAPORE ONE’, an e-Governance suite that offers very comprehensive services to its citizens. Once a child is born, the data base keeps track of this child during its primary and secondary school days, graduation degree, employment, marriage, housing loans, passport, business etc. South Korea is another country that has developed a number of e-Governance projects. This country boasts of the best connectivity in the world. The UK also has an excellent e-Governance system and a lot can be learnt from how the government has transformed itself in the new era. While the India processes are based on the UK processes, they have remained antiquated. They need to be updated and changed as per current circumstances.e-Governance refers to the use by government agencies of Information Technologies (such as Wide Area Networks, the Internet and mobile computing) that have the ability toiit b i m ce m e to f a c e in s rp b o a________________ -transform ,relations with citizens, businesses, and various arms of government resulting in better delivery of government services to citizens, improved interactions with business and industry, citizen empowerment through access to information, or more efficient government management. The resultant benefits are less corruption, increased transparency, greater fconvenience, revenue growth, and cost reductions.*Analogous to e-commerce, which allows business to transact with each other more efficiently (b2b) and brings customers closer to businesses (b2c), e-government aims to make the interaction between government and citizens (G2c), government and business senterprises (G2b), and inter-agency relationships (G2G) more friendly, convenient, transparent, and inexpensive. eThe goals of e-Governance are:,a. better service delivery to citizensb. Ushering in transparency and accountability l s ec. Empowering people through informationd. Improved efficiency within Governmentse. Improve interface with business and industry. s .e-Governance needs to transform all levels of Government but the focus should be on local governments since local governments are the closest to citizens, and constitute for many, the main interface with government. The relationship of citizens and local aauthorities tends to be one based on proximity as the interests at stake for both parties are closely entwined concerning issues such as public services, local development, education etc. e-Governance based administrative reforms in local governments can have maximum impact on citizens.f , sThe benefits of information technology have not been evenly distributed. It has been noticed that most of the time the benefits of e-Governance are also reaped by the affluent sections of society. Therefore a concerted effort has to be made to direct e-Governance reforms towards the common man. t sThe advances in information and communications technologies and the internet provide opportunities to transform the relationship between governments and citizens and business in new ways that contribute to the attainment of good governance. They provide opportunities for people and business to involve themselves in the process of governance at sall levels. They facilitate better service delivery to clients, in terms of timelines and quality,iii*The World bank________________ -thus making governance more efficient and effective. In addition, the use of IcT may lower transaction costs both for citizens and government operations and public services can be made more affordable to the people at large.e-Governance has to be comprehensive; mere introduction of the IT component is not an end in itself. comprehensive e-Governance reforms cover (1) the process, (2) preparedness and the technology (3) and the people. Introduction of e-Governance needs process engineering as the first step. Unless the processes and procedures and even structures of government are re-engineered so as to be e-Governance compatible, e-Governance projects cannot succeed. The technology and the hardware and software come second, only after the processes have been re-engineered. And ultimately, in order to make the reforms sustainable the people in the concerned departments/agencies have to internalize the changes. This is also one of the reasons why e-Governance projects succeed at the pilot level but ‘when up- scaled’ they become unsustainable.Different States in India are at different levels of e-readiness: while implementing e-Governance reforms in different parts of the country, this aspect has to be kept in mind. This makes implementation of national e-Governance projects in a uniform way difficult. Therefore, it is necessary to bring all States at the same or comparable levels of IT readiness. Today, there are a number of successful projects of e-Governance running in the country. but there are very few which are on a nation-wide basis. The challenge is to replicate and upscale the successful models.A large number of e-Governance projects can be implemented in the public-private partnership mode. It is a challenge to integrate the professional approach of the private sector with the social concerns of the Government. It is necessary to evolve some norms for such partnerships. It is also very important to provide all services to citizen at one common counter/platform, preferably close to where the citizen lives. This is possible through e-Governance. but this requires all the individual services to be brought to the same levels of computerization which poses a serious challenge. The next step thereafter is to use mobile technology and India’s increasing mobile telephony penetration rates to allow citizens to transact many services on the move without even needing to come to a common counter let alone queue up for the services.The types of services possible through e-Governance can be broadly classified into three categories (1) providing information (2) improving processing efficiency and (3) facilitating transactions. Amongst these, providing information is the simplest and the degree of complexities increase as we move from information to transactions. but it is the second and the third category of services that provide maximum convenience to the citizens. The challenge is to cover such services.w t t b pv db eiv________________ -r et s s f s es -. . . .e e rsr) eee-Government is not about ‘e’ but about ‘government’; it is not about computers and websites, but about services to citizens and businesses. e-Government is also not about translating processes; it is about transforming them. e-Government is concerned with the transformation of government, modernisation of government processes and functions and better public service delivery mechanisms through technology so that government can be put on an auto-pilot mode.The four pillars of e-Government are:#? People? Process? Technology? ResourcesThe challenges in e-Governance have been described as centred around for key areas viz people, process, technology and resources. The key considerations in e-Governance are described below:e-Governance imperativesProcess Simplicity Efficiency citizen- Sustainability cost-centricity effectivenessPeople Vision Leadership commitment competency changeTechnology Architecture Open Reliability Scalability SecurityStandardsResources Holistic Efficient Service- Sustained AdequateorientedTo compete successfully in a network based global economy, governments need to be both leaders and facilitators. The leadership and facilitation roles comprise the following elements:? Developing a national e-strategy, making ICT adoption and network readiness a national priority;? Undertaking innovative projects that make a difference, to lead by example, adopting best practices;? Reforming government processes covering areas such as revenues, expenditures, procurement, service delivery, customer grievances etc;v# This and subsequent paragraphs are adapted from a paper prepared/presentation made by Dr. P.K. Mohanty________________ -? Tracking, storing and managing information, promoting production of national content online and through electronic media; and documenting “successes” and “failures”;? According high priority to protection of individual rights, intellectual property, privacy, security, consumer protection etc. and mobilising the civil society; and? Developing a supportive framework for early adoption of ICT and creating a regulatory framework for IcT-related activities.creating the macro-economic environment for growth and innovation in IcT, including fiscal policies (cost, innovation, investment, and venture capital), legal and regulatory environment (competition, independent regulator, rule of law, intellectual property protection) and channelizing and mobilization of resources for IcT is an important corollary to e-Governance as is implementing an education policy for the right quantum and quality of manpower resources for a network-ready economy-curricula, IcT training facilities and wiring/networking of educational institutions. Addressing the ‘digital divide’ domestically and internationally, giving signals to markets - articulating a national vision of IcT, according national priority to IcT, undertaking large projects, promoting innovation and risk taking through fiscal concessions and availability of venture capital; creating an investment climate for domestic and foreign investment in IcT sector; championing national interests in international forums etc. are equally important.Despite important policy initiatives and significant achievements in the economic and social sectors in our country, we still have a long way to go before achieving our full potential for development. This is because there is still a wide gulf between our policy initiatives and intents and the actual achievements. Among the major reasons for this gap include outmoded systems of governance, cumbersome processes and procedures, prevalence of corruption and lack of accountability in our functioning. A pertinent question, therefore, is how can these deficiencies be best redressed. An obvious answer is through adopting e-Governance as an inextricable part of government functioning, be they in routine matters or major projects. In this context I would like to share some of the successful initiatives in e-Governance which were undertaken when I served as Education and Finance Minister and later as chief Minister in Karnataka. These include use of e-Governance both in routine matters as well as in major initiatives. Some of these are:? Introduction of computerised counseling in the Common Entrance Test (CET) for admission to Professional colleges in Karnataka.This involved creation of a computerized system to manage the processing of the results of cET, to prepare merit lists and thereafter on the basis of the merit list to enable seat selections by the candidates in a transparent manner.o e t c i e c T b pg wN Dvi________________ -l,at’ flle. e f l)e t? Disposal of files in the Chief Minister’s office.Every grievance or appeal which was addressed to the chief Minister, was given a computer number and date and watched on computer for its disposal. Needless to mention the impact of such objective watch had an impact on the efficiency of the cM’s secretariat in the matter of prompt disposal of files, redressal and are elaborated in this rmation Technology presents many avenues for improving governance. It has opened up new opportunities for governments to manage things differently and in a more efficient manner by utilizing information effectively and re-engineering processes. IcT tools are emerging as important instruments towards the goal of “good governance”. Many countries have launched specific initiatives for open government. Freedom of information is being redefined and supported by IcT. India’s Right to Information Act, 2005 is a prime example in this regard. IcT has facilitated a conscious attempt to bring the citizen to the centre-stage. citizens are being perceived as customers and clients rather than beneficiaries. The internet revolution coupled with rapid advances in communication have proved to be a powerful tool for citizen-centric governance. An important dimension of the Internet potential is the possibility of providing public services anytime, anywhere.My hope is that the ARc’s Eleventh Report on e-Governance, can help transform governance in India to a transparent, responsive, citizen friendly and efficient regime that we can all be proud of.New Delhi (M. Veerappa Moily) December 20, 2008 chairmanviiTWELFTH REPORT: CITIZEN CENTRIC ADMINISTRATIONThe Heart of GovernanceFEBRUARY 2009PREFACEThe American theologian Reinhold Niebuhr wrote, “Man’s capacity for justice makes democracy possible, but man’s inclination to injustice makes democracy necessary”. It has also been said that “democracy is the worst form of government except all those other forms that have been tried from time to time” (Sir Winston Churchill). But even those cynical about conventional representative democracy with its periodic elections and cycles of widespread popular disillusionment, often described as anti-incumbency; will acknowledge that the average citizen is concerned less with the convolutions of governance and politics, or the myriad structures and levels of government departments; than with obtaining rapid and equitable access to government services, whether regulatory or developmental or welfare oriented, preferably at his doorstep. That is why, stability, transparency, efficency and continuity in the governance systems that the citizens are most immediately concerned with, is so necessary. That is why, our priority in India must be to place the citizen at the centre of a modern public administration. This is my idea of Inclusive Government.India has an elaborate legal framework and institutional structures underpinned by the Constitution which articulate the vision of a welfare state and by implication, provide for creation of a citizen centric governance structure. But popular perception as well as the reality belies that vision. In that background, the ARC has tried to address the need for inclusive, transparent and citizen centric administration in all of its Reports submitted so far but especially so in the current Report, which looks specifically at its terms of reference relating to promotion of citizen centric administration. The Commission has in this Report examined in detail the processes, mechanisms, strategies and best practices that can help us attain this objective.The concepts of good governance and citizen centric administration are intimately connected. Citizen centricity with the aim of ensuring citizens’ welfare and citizens’ satisfaction, is critical for any government, local, state or national; which aims to provide good governance. As has been pointed out in the Report, the following are the pre-requisites of citizen centric governance:ia)Sound legal framework.b)Robust institutional mechanism for proper implementation of laws and their effective functioning.c)Competent personnel staffing these institutions; and sound personnel management policies.d)Right policies for decentralization, delegation and accountability.Going beyond these necessary conditions, the Commission has outlined the following core principles for making governance citizen centric:?Rule of Law - Zero tolerance strategy.?Making institutions vibrant, responsive and accountable.?Decentralization.?Transparency.?Civil Services Reforms.?Ethics in Governance.?Process Reforms.?Periodic and independent evaluation of the quality of Governance.Finally, taking matters further beyond principles and pre-conditions, the Commission has tried to examine the finer details of how governance can be made more citizen centric, with reference to the strategies and processes, the tools and mechanisms, which can be usefully employed to make the administration citizen centric. These are:a)Re-engineering processes to make governance ‘citizen centric’.b) Adoption of Appropriate Modern Technology.c)Right to Information.d)Citizens’ Charters.e)Independent evaluation of services.iif)Grievance redressal mechanisms.g)Active citizens’ participation – Public-private partnerships.Some of the mechanisms mentioned above have already been examined by the Commission in detail in its earlier Reports. Thus, the Commission in its first Report on ‘Right to Information’ has made detailed recommendations on further changes required to ensure greater transparency in governance and better implementation of the Right to Information Act. Similarly, the Commission’s Report on e-Governance has made detailed recommendations on how adoption of modern technology preceded by re-engineering of processes can make governance more responsive, transparent and efficient.In that context, the Commission has, in the present Report, examined the concept of citizen centric administration in a more specific manner, in relation to various functions of the government, the role of special institutional mechanisms such as the national and state commissions set up to safeguard the rights of vulnerable sections of the society, other mechanisms such as citizen charters as a means of improving performance and accountability of government departments, how simplification of procedures and decentralization and delegation can improve efficiency and bring Government services to the doorstep of citizens and finally how citizens’ participation in administration can make government departments more responsive, accountable and transparent. As governance is primarily a series of service operations with the ultimate objective of maximizing citizens’ welfare, use of management principles such as the Six Sigma concepts (data, focus on clients/citizens, quality) combined with Lean thinking (process flow, minimizing the costs of unnecessary complexity) can help to transform government service organizations into more efficient and citizen friendly agencies.It is ultimately my hope that governance in India can be simplified so as to bring to its citizen a multi-channel single window delivery structure for channelising all types of government services at the local level in the most efficient manner possible using modern IT technology so that the citizen can access these services easily and conveniently at his doorstep and even on the run through the use of mobile telephony. It is hoped that this Report will give certain pointers towards making that vision a reality.New Delhi(M. Veerappa Moily)February 17, 2009ChairmaniiiGovernment of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reforms and Public GrievancesResolutionNew Delhi, the 31st August, 2005No. K-11022/9/2004-RC. — The President is pleased to set up a Commission of Inquiry to be called the Second Administrative Reforms Commission (ARC) to prepare a detailed blueprint for revamping the public administration system.2.The Commission will consist of the following :(i)Shri Veerappa Moily - Chairperson(ii)Shri V. Ramachandran - Member(iii)Dr. A.P. Mukherjee - Member(iv)Dr. A.H. Kalro - Member(v)Dr. Jayaprakash Narayan - Member*(vi)Smt. Vineeta Rai - Member-Secretary3.The Commission will suggest measures to achieve a proactive, responsive,accountable, sustainable and efficient administration for the country at all levels of the government.The Commission will, inter alia, consider the following :(i)Organisational structure of the Government of India(ii)Ethics in governance(iii)Refurbishing of Personnel Administration(iv)Strengthening of Financial Management Systems(v)Steps to ensure effective administration at the State level(vi)Steps to ensure effective District Administration(vii) Local Self-Government/Panchayati Raj Institutions(viii) Social Capital, Trust and Participative public service delivery(ix)Citizen-centric administration(x)Promoting e-governance(xi)Issues of Federal Polity(xii) Crisis Management(xiii) Public OrderivSovS me of he iss es to be exami ed un er e ch h ad re gi en in he Te ms of Refere ce attac ed a a Sched le to t is Resolution on 4 h e Commisson ay excl de f om ts purv ew he detai ed examinat on of administrat as of Defen e, Railwa s, Exter al Aff ai s, Secur ty nd Intelligen e, as a so subje ts s ch er Centre-St te relatio s, judic al refo ms e c. wh ch re alre dy be ng exami ed by ot to bodi h e Commissson wi l, howev r, be f ee to t ke he probl ms of th se sect rs iny acco nt in recommend ng re-organisat on of he machin ry of he Governm nt or of of ts serv ce agencie s te 5 h e Commisson w ll g ve ue considerat on to he n ed or consultat on w th he StGovernments he 6 h e Commisson w ll dev se ts wn procedu es (includ ng or consultati ns w th nt St te Governm nt as ay be conside ed appropri te by he Commissio ), nd ay appo he committe s, consultants/advis rs to ass st t h e Commisson ay t ke i to acco ntme exist ng mater al nd repo ts availa le on he subj ct nd consi er build ng u on he s rat er t an attempt ng to addr ss ll he iss es ab initio on 7 h e Ministres nd Departme ts of he Governm nt of In ia w ll furn sh s ch informat e nd docume ts nd prov de ot er assista ce as ay be requi ed by he Commissi n h nd Governm nt of In ia tru ts t at he St te Governme ts nd ll oth rs concer ed w ll ext th ir full st cooperat on nd assista ce to he Commission e 8 h e Commisson w ll furn sh ts report s) to he Minis ry of Personn l, Pub ic Grievan & Pensio s, Governm nt of Ind a, wit in ne y ar of ts constituti on.- (/- (P I. Suvrath an)Additio al Secret ry to Governm nt of In dia* r. Jayaprak sh Nara a – Memb r, resig ed w th eff ct f om st Septemb r, 2007(Resolut on o. K.11022/26/207- R, da ed 1 th Augu t, 2007).Government of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reforms and Public GrievancesRESOLUTIONNew Delhi, the 24th July, 2006No. K-11022/9/2004-RC (Vol.II) – The President is pleased to extend the term of the second Administrative Reforms Commission by one year upto 31.8.2007 for submission of its Reports to the Government.Sd/(Rahul Sarin)Additional Secretary to the Government of IndiaGovernment of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reforms and Public GrievancesRESOLUTIONNew Delhi, the 17th July, 2007No.K-11022/26/2007-AR – The President is pleased to extend the term of the second Administrative Reforms Commission (ARC) by seven months upto 31.3.2008 for submission of its Reports to the Government.Sd/(Shashi Kant Sharma)Additional Secretary to the Government of IndiaviiiGovernme t f IndiaMinist y f Personne , Publ c Grievanc s & PensionsDepartme t f Administrati e Refor s a d Publ c GrievancesRESOLUTIONN w Delh , t e 14 h Februar , 2008d No.K-11022/26/2007- R – hT e Preside t s pleas d o exte d t e te m f t e secon Administrati e Refor s Commissi n (AR ) y s x mont s up o 30.9.20 8 f r submissi f i s Repor s o t e Government./(D(Dhr v Vij i Singh)Addition l Secreta y o t e Governme t f IndiaGovernme t f IndiaMinist y f Personne , Publ c Grievanc s & PensionsDepartme t f Administrati e Refor s a d Publ c GrievancesRESOLUTIONN w Delh , t e 5 h Septembe , 2008d No.K-11022/26/2007- R – hT e Preside t s pleas d o exte d t e te m f t e secon Administrati e Refor s Commissi n (AR ) y s x mont s up o 31.3.20 9 f r submissi f i s Repor s o t e Government./(P.P. . Jha)Joi t Secreta y o t e Governme t f IndiavviiiORGANISATIONSecond Administrative Reforms Commission1.Dr. M. Veerappa Moily, Chairman2.Shri V. Ramachandran, Member3.Dr. A.P. Mukherjee, Member4.Dr. A.H. Kalro, Member5.Smt. Vineeta Rai, Member-SecretaryOfficers of the Commission1.Shri A.B. Prasad, Additional Secretary2.Shri P.S. Kharola, Joint Secretary3.Shri R.K. Singh, PS to Chairman4.Shri Sanjeev Kumar, Director5.Shri Shahi Sanjay Kumar, Deputy SecretaryixCONTENTSChapter 1 Introduction1Chapter 2 ~e Concept of Citizen Centric Administration8Chapter 3 Functions of Government25Chapter 4 Citizens’ Charters33Chapter 5 Citizens’ Participation in Administration58Chapter 6 Decentralisation and Delegation73Chapter 7 Grievance Redressal Mechanism79Chapter 8 Consumer Protection93Chapter 9 Special Institutional Mechanisms103Chapter 10 Process Simplification121Conclusion140Summary of Recommendations142LIST OF TABLESTable No.TitleTable 2.1Global Competitiveness Index (2008-09): Rank of India13Table 4.1Overall Assessment of Citizens’ Charters40Table 4.2Sevottam Model: Assessment Criteria49Table 4.3Sevottam Model: From Process to Quality of Services51Table 8.1Disposal of Cases by the Consumer Courts94Table 8.2Consumer Disputes Settled by Lok Adalats98(updated on 31.12.2008)xTable 10.1Total Number of Registered Motor Vehicles in India - 1951-2004 128LIST OF FIGURESFigure No.TitleFig 2.1Good Governance8Fig 9.1Number of Cases Registered under the Scheduled Castes and116Scheduled Tribes (Prevention of Atrocities) Act, 1989Fig 9.2Disposal of Cases by NHRC-2005-06, 04-05, 03-04117Fig 10.1Procedure for Issuing Motor Vehicle Driving License130Fig 10.2Administrative Structure of the Civil Registration System in A.P. 133LIST OF BOXESBox No.TitleBox 1.1Jawaharlal Nehru on Citizen Centric Administration1Box 2.1~e 2006 Transparency International Corruption10Perceptions IndexBox 2.2Common Bottlenecks in Implementation of Projects11Box 2.3What’s Ailing Public Services ?12Box 2.4Mexican Woman Wins 22,000 Dollars for Useless Red Tape14Box 2.5~e Fundamental Duties16Box 3.1Single Window Multi Channel Government (SWMCG) -30GermanyBox 4.1Awareness about Citizens’ Charters and RTI: Jharkhand37Box 4.2Trains in Europe Provide Compensation for Late Running42xiBox 4.3The Parliamentary Committee’s Views on Citizens’ Charters46Box 4.4Some Stipulations in IS 15700:200550Box 5.1Citizen Report Cards (CRC) - Bengaluru62Box 5.2Communitisation of Services in Nagaland63Box 5.3Bhagidari: Citizens’ Participation in Governance – Delhi64Box 5.4Window of Hope71Box 7.1Public Grievances Commission - Delhi82Box 7.2Guidelines Issued by DAR&PG (Illustrative)83Box 7.3Complaint Redressal Mechanism in the Telecom Sector84Box 8.1Justice Delayed95Box 8.2Consumer Courts Need Not be ‘Technical’96Box 10.1Re-engineering of the Regulatory Processes124Box 10.2Jaankari – RTI Facilitation on Phone126LIST OF ANNEXURESAnnexure IV(1)Citizens’ Charter of the Income Tax Department151Annexure IV(2)Citizens’ Charter of the Delhi Transport Corporation154Annexure IX(1)Comparison of Composition, Powers and Functions of159Different Constitutional and Statutory InstitutionsxiiLIS O ABBREVIATIONSAbbreviatio Ful FormARAdministrativ Reform CommissionBATBangalor Agend Tas ForceBDBangalor Developmen AuthorityBMBangalor Mahanagar PalikBWSSBangalor Wate Suppl an Sewerag BoardBSNBhara Sancha Niga LimitedCVCentra Vigilanc CommissionCPGRAMCentralize Publi Grievance Redres an Monitorin SysteCRCitize Repor CardDAR&PDepartmen o Administrativ ReformPubli GrievanceDPDirectorat o Publi GrievanceDCDRDistric Consume Dispute Redressa ForumDISNIDistric Informatio Syste o th Nationa Informatic CentrHMWSSHyderaba Metropolita Wate Suppl an Sewerag BoarICInformatio an Communication TechnologMCMetr Custome CarNCSNationa Commissio fo Schedule CastesNCSNationa Commissio fo Schedule TribesNCNationa Commissio fo WomenNCDRNationa Consume Dispute Redressa CommissionNCNationa Commissio fo MinoritiesNCBNationa Commissio fo Backwar ClassesNHRNationa Huma Right CommissionNINationa Informatic CentrNGNon-Governmenta OrganisationNREGNationa Rura Employmen Guarante AcxiiPACPublic Affairs CentrePSUPublic Sector UndertakingRTORegional Transport OfficeRBIReserve Bank of IndiaRTIRight to InformationSWCSingle Window CellSCWState Commission for WomenSCDRFState Consumer Disputes Redressal ForumSHRCState Human Rights CommissionVECVillage Education CommitteeVEMBVillage Electricity Management BoardVHCVillage Health CommitteexivINTRODUCTION1“A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it.”- Mahatma Gandhi1.1 The Second Administrative Reforms Commission (ARC) was set up with a wide mandate to prepare a blue print for revamping the public administration system and to suggest measures to achieve a proactive, responsive, accountable, sustainable and efficient administration for the country at all levels of government.1.2 One of the terms of reference of the Commission relates to Citizen Centric Administration. Specifically, the ARC has been asked to examine the following aspects of this issue:?Accountable and Transparent GovernmentoIssues of delegation, accountability and transparency.oMove from Processes Accountability to Productivity Accountability and from Transactional to Transformative Governance.oReduce delays and ensure promptness in delivery of services.?Progressive interventions to make administration more result-oriented. These interventions, inter alia, include:oProcess Simplification.Box 1.1: Jawaharlal Nehru onCitizen Centric Administration“....Administration is meant to achieve something, and not to exist in some kind of an ivory tower, following certain rules of procedure and, Narcissus-like, looking on itself with complete satisfaction. The test after all is the human beings and their welfare.” (March 29, 1954)Source: From the Address delivered at the Inaugural Meeting of the Institute on 29th March, 1954, extracted from Public Administration Vision and Reality by U.C. Agarwal, IIPA.1xP omotingAe-Go e nhn eA–AT e AS ARTForwardAWayoTarget Group Consultations.oFlexibility to implementing agencies customized to local needs.?Strengthening Citizen Centric decision making:oTo further empower the citizen through Citizens’ Charter etc.oTo facilitate accessibility of user groups to decision making processes. The operational details, inter alia, may include:?Setting up of Information Facilitation and Solution Centres.?Augmenting facilities for submission and redress of grievances and providing replies thereto.?Setting up consultative mechanism for receiving suggestions.?Freedom of Information:oTo review the confidentiality classification of government documents specially with reference to the Officials Secrets Act.oTo encourage transparency and access to non-classified data.oDisclosure of information and transparency as a supplement to the Right to Information of the citizens.Besides, one more term of reference pertains to citizen centric administration:?Social Capital, Trust and Participative public service delivery.. . .oIncrease the people-centric ness of the administrative approaches.oEnsuring greater involvement of people’s representatives and community at large in the conceptualisation and execution of programmes.1.3 Governance in order to be citizen centric should be participative and transparent. It should be effective, efficient and responsive to the citizens. Furthermore, an ethos of serving the citizens should permeate all government organizations. Last but not the least, government organisations should be accountable to the people. As one of the primary functions of the State is to promote the welfare of its citizens, an evaluation of the functioning of the institutions of governance will ultimately have to be based on the satisfaction they provide to the common man. In this regard, prominence would need to be attached to the voice of the citizens themselves.1.4 Past InitiativesThere have been a large number of reform measures - some at the macro level and others at the micro level - which have sought to bring administration closer to the people. These2Introductns.incincl de A i)Aenact ngAl wsAgiv ng Acert in Arig ts to Apeop e, A( i) Asett ng up ofA ewAinstitutio alAmechani ms to Aredr ss Acitize s’Agrievanc s, A(i i) Aimprov ngAaccessibil ty to Acitiz ns byAsett ng upAun ts Aclo er to Apeop e,A( v) Asimplify ngAprocedu es to Ared ceAbureaucra icAdela s,A v) Aus ng Atechnol gy to Aimpr veAinter al ffiAAcien y,A( i)Areward ngAgovernm ntAemploy esA ho Aperf rm Awe l,A(v i) Aimprov ng Adiscipl ne Awit in A he Aorganizati n,A(vi i)Areduc ngAregulat ry Acont olA( x) Ahold ngApub ic Acont ctAprogram esAe c. AS me of A he Agene icAref rmAinitiati esA reAdescri ed in A he Afollow ngAparagraph s.1. .1ASantha am ACommit ee ARep r A hAe ACentAal AVigila ceACommissio n,A On A heAba is of Arecommendati nsAm de by A he ACommit ee onAPrevent on ofACorrupti onA popula ly Akn wn as A heASantha am ACommitt e, A he ACent al AVigila ceACommiss s,A (C C)A as A et up by A heAGovernm nt of AIn ia in A19 4. 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ItAexerci esAsuperintende ceAo erA he Awork ng of A heACent alABur au ofAInvestigat o A-A heAprinci alAinvestigat ngAage cy of A he AUn onAGovernm nt inAanti-corrupt onAmatt r A-A nd Aa soAo er A he Avigila ceAadministrat on ofAvari usAMinistr esA ndAot erAorganizati ns ofA heAUn onAGovernmen t.1. .2 AFi stA R A- A okA alA ndALokayuhAk a okA AfiA stAAdministrat ve ARefo ms ACommiss onA ad Arecommen ed A he Asett ng up ofA heA usA P l hAe AAokA alAB llA asAb enAintrodu edAseve al Ati es inAParliame t,A utA ue toAvarierA reas ns itA as A otAb enAenac edAi t AaAl w hAe AAokA al isAsuppo ed to b AaAwatch ogAo orA heAintegr ty ofAMinist rsA ndA he AMemb rs ofAParliame t hAe AAokA al AB llAprovi esAonA constitut on ofA he A okA al as anAindepend nt Ab dy toAenqu reAi toAca es ofAcorrupt ngA agai stApub icAfunctionari s, Aw t Aa Amechan sm A oAfiAl ng Acomplai tsA ndAconduct inquir esAec.AesA Af er A he Arecommendati ns of A hAfiA stAAdministrat veARefo ms ACommissi n,Am nyASta heA h ve Aconstitu edA‘Lokayukt s’ toAinvestig teAallegati ns orAgrievan esAaris ngA ut ofA teA cond ct ofApub ic Aserva tsAinclud ng Apoliti alAexecutiv s, Alegislato s, ffiAAc rs of A heASt t A Governme t, Alo al Abodi s,Apub icAenterpri esA ndAot erAinstrumentalit es ofAGovernme icA A Amem er of A heApub icA aAfi le Aspe i Ac Aallegati ns Aw th A he ALokayu taAagai stA nyApub ofA serv nt A orAenqui y hAe ALokayuAtaA an Aa soAiniti teAsuo-m tu Ainqu ryAi to A he Acond ctonA pub ic Aservan s hAe ACommissAonA as Ade lt Aw th At isAsubj ctAextensiv ly inA ts ARep rt‘Eth cs inAGovernan e’A ndA asAm deAsubstant veArecommendatio3Promoting e-Governance – The SMART Way Forward1.4.3 Review of Administrative LawsOne of the principal causes for the inordinate delay in providing services to citizens was the existence of a complex system of rules, regulations and procedures which had outlived their utility. Government therefore set up a Commission on the Review of Administrative Laws in May, 1998. This Commission submitted its report on 30 September, 1998. Some of its important recommendations include (i) compilation of up-to-date information about rules, regulations etc. by all Ministries/Departments under different Central Laws administered by them; (ii) expeditious amendments to various Acts, (iii) unification and harmonization of Statutes, Laws etc.; and (iv) repeal of 1382 Central Laws of different categories out of about 2500 Laws in force on the ground that these Laws have become irrelevant.11.4.4 Citizens’ ChartersThe Citizens’ Charter is based on the premise that the Citizen is “King” and government organizations exist not to rule but to serve the citizens. Citizens’ Charters are merely reflections of this principle. In order to ensure that both the service provider as well as citizens realize that public agencies are meant to provide service, each organization should spell out the services it has to perform and then specify the standards/norms for these services. Once this is done then the organisation can be held to account if the service standards are not met. Government of India commenced the exercise to formulate Citizens’ Charters in 1996. The Scheme of Citizens’ Charters has been reviewed several times and these have lead to the finalization of Quality Management System Standard – IS 15700: 2005 and also the new assessment-improvement model ‘Sevottam’.1.4.5 e-GovernanceThe revolution in Information and Communications Technology (ICT) has the potential of elevating the governance process to new levels. The reason why countries around the world are increasingly opting for ‘e-Governance’ is that governance per se has become more complex and varied in the last few decades and more importantly citizens’ expectations from government have increased manifold. ICT facilitates efficient storing and retrieval of data, instantaneous transmission of information, processing information and data faster than the earlier manual systems, speeding up governmental processes, taking decisions expeditiously and judiciously, increasing transparency and enforcing accountability. It also helps in increasing the reach of government – both geographically and demographically.Recognising the increasing importance of electronics, Government of India established the Department of Electronics in 1970. The subsequent establishment of the National1Source: Adapted from the website of the Department of Administrative Reforms and Public Grievances4IntroductionInformatics Centre (NIC) in 1977 was the first step towards e-Governance in India as it brought ‘information’ and its communication in focus. The advent of personal computers brought the storage, retrieval and processing capacities of computers to Government offices. By the late 1980s, a large number of Government officers had computers but they were mostly used for ‘word processing’. Gradually, with the introduction of better software, computers were put to other uses like managing databases and processing information. Advances in communication technology further improved the versatility and reach of computers, and many Government departments started using ICT for a number of applications like tracking movement of papers and files, monitoring of development programmes, processing of employees’ pay rolls, generation of reports etc. However, the main thrust for e-Governance was provided by the launching of NICNET in 1987 – the national satellite based computer network. This was followed by the launch of the District Information System of the National Informatics Centre (DISNIC) programme to computerize all district offices in the country for which free hardware and software were offered to the State Governments. NICNET was extended via the State capitals to all district headquarters by 1990. Several important initiatives were undertaken by the Union and the State Governments in the nineties. All these culminated in the launch of the National e-Governance Programme in 2006. (The Commision has examined various aspects of e-Governance in its Eleventh Report).1.4.6 Computerised Grievances Redressal MechanismsA Computerized Public Grievances Redressal and Monitoring System (CPGRAMS) developed by the Department of AR&PG in collaboration with the National Informatics Centre (NIC) was installed in the Department on 5 September, 2001. All the grievances received are entered in this system and processed. The internet version of this software was launched on 31.05.2002 which facilitates the citizen to lodge and monitor the progress of his/her grievance on internet. A comprehensive website of Citizens’ Charters in the Government of India was also launched the same day. The CPGRAMS has been further improved by adding several other services.1.4.7 Right to InformationRight to information has been seen as the key to strengthening participatory democracy and ushering in people centred governance as access to information can empower the citizens to demand and get information about public policies and actions, thereby leading to their welfare. Transparency in government organisations makes them function more objectively, predictably and also enables citizens to participate in the governance process effectively. In a fundamental sense, right to information is a basic necessity of good governance. In recognition of the need for transparency in public affairs, the Indian Parliament enacted5Citizen Centric Administration – The Heart of Governancethe Right to Information Act, 2005. It is a path-breaking legislation empowering people and promoting transparency. hT e Commission has examined this subject and made comprehensive recommendations in its First Report.1.5 Citizens FeedbackDuring its visit to the States, the Commission held public hearings to get first-hand knowledge of the ground situation in various parts of the country regarding reform in the governance system. Some of the grievances voiced at these hearings, which have a direct bearing on citizen centric administration, especially at the cutting-edge level, are as follows:i.Officials do not adhere to prescribed time schedules in coming and leaving their offices.ii.Offices do not have any designated day or time-schedule for meeting people.iii. There is great deal of inconvenience and delay in getting different certificates (e.g. - income and castes certificates) because of cumbersome procedures and indifference of the office.iv.Files in government offices do not “move” without payment of a bribe.v.There are no nodal officers in departments implementing various developmental programmes for informing people on how to avail of the benefits.vi. Letters written to higher authorities like Governors and Chief Ministers for redressal of grievances are marked to different departments who do not take any action on them.vii. Acknowledgements are not given for the complaints filed.viii. The Patwari is generally absent from the Gram Panchayats – some hours per day should be fixed for his presence.ix.There is rampant corruption in police stations and tehsil offices.x.Senior citizens are not treated with due regard by officials and are often harassed.xi. 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AThAe AComm ssion woul Aals Al ke Ato th kAoffi Ac rsA Al keA Mi is ry AofA ocialAJ sti eAandAEmpow rme tAfor theirAi p t .AThAe AComm ssion ould,Afor to thankAr tir d AandAs rving civilAser ants Ab th A fAthe Uni n Aand StateAGovern ent theirA seful Asugge tionsA uring theirAinter ctio Awi h AtheACommi7TTHE CONTHE A ON EPT AOFA ITIZEN ENTRICAADMINIS RAT ON2 tr a t i n 2 1AGoodAGov rna ceAandA itizenA entricAAdminishastraA . .1 AThAe A on ept A fAgood Agov rn nce isAn tAnew.AK ut lya inAhisAt eatiseAArtha bjec sA ela ora edAthe tr its of At e A i gAof aAwellAg verne AStat Ath s: A inAthe Aha pi ess of AhisAs derAa A l esAhis Ahap in ss,Ai AtheirA elf reAhisAw lfare,Aw ateverA leases Ah ms lf,A e Ad es AnotAc ns oun edA go d,AbutAwateverA lea es AhisAs bj ctsAheAco si ersAas good”.A ahatma Gan hiAhadApro in Ait the A on eptAofA‘S -raj .AGoodAgov rna ce A as AtheAfo lowin Aeight Aatt ibute Awhi hA to AitsAci izen 2 A(FigA2 1).F gA2. :AGoodAGov2.1.2 pe tiveA 2. .2AGoodAgo erna ce aimsAat Ap ov ding AanAenv ro mentA nAw ichAallA itizensAirre erna ceA o Aclas ,Ac steAan Age derAcan de elopA oAth ir Afull Apo en ial. AIn Aa diti n,AgoodAgo i e s AA a so aimsAat Ap ovidin Apublic A ericesAeffAe ti ly, AeffiA cie tlyAand Ae ui abl AtoAtheAc ThAeA4 pi larsA nAw ich Ahe ed fiAce ofAgoodAgo ernanc Ar sts, Ainnce are:esseUNESCAP A ebsite:Aune8hA AConcep Ao ACitize ACentri AAdministratio?Ethos (of service to the citizen),?Ethics (honesty, integrity and transparency),?Equity (treating all citizens alike with empathy for the weaker sections), and?Efficiency (speedy and effective delivery of service without harassment and using ICT increasingly).Citizens are thus at the core of good governance. Therefore, good governance and citizen centric administration are inextricably linked.2.1.3 The Constitution articulates the vision of its Founding Fathers for the people of this country and also spells out the role and functions of the three organs of the State - Legislature, Executive and Judiciary. It enshrines the Fundamental Rights which are critical for democracy and the Directive Principles of State Policy which embody the concept of a Welfare State3 and are a unique feature of our Constitution. The endeavour of Government at all levels has, therefore, been to provide for a citizen centric administration. To this end, a robust legal framework has been created. Institutions such as the National Human Rights Commission, National Women’s Commission, National Consumer Disputes Redressal Commission, and Lokayuktas etc. have been set up. Several other measures including affirmative actions have been initiated for the socio-economic empowerment of the weaker sections of society.2.1.4 The Tenth Plan drew attention to the implementation of good governance in the following terms:‘Governance relates to the management of all such processes that, in any society, define the environment which permits and enables individuals to raise their capability levels on the one hand, and provide opportunities to realize their potential and enlarge the set of available choices, on the other. These processes, covering the political, social and economic aspects of life impact every level of human enterprise, be it the individual, the household, the village, the region or the nation. It covers the State, civil society and the market, each of which is critical for sustaining human development. The State is responsible for creating a conducive political, legal and economic environment for building individual capabilities and encouraging private initiative.’2.1.5 The Eleventh Plan has emphasized that good governance should cover the following distinct dimensions:93Keshavnan ABhart ACase AAI A197 AS A146Ci izenACe tric AAdministr t oA Aehact cf GovernanceAs a democratic country, a central feature of good governance is the constitutionally protected right to elect government at various levels in a fair manner, with effective participation by all sections of the population. hTis is a basic requirement for the legitimacy of the government and its responsibility to the electorate.?The government at all levels must be accountable and transparent. Closely related to accountability is the need to eliminate corruption, which is widely seen as a major deficiency in governance. Transparency is also critical, both to ensure accountability, and also to enable genuine participation.?The government must be effective and effi cient in delivering social and economic public services, which are its primary responsibilities. hTis requires constant monitoring and attention to the design of our programmes. In our situation, where the responsibility for delivery of key services such as primary education and health is at the local level, this calls for special attention to ensuring the effectiveness and efficiency of local governments.Box Bo A ionalA . :AThA A2006ATransp rencyAInternaAIndexCorr ptionAPerce tionsbasedA Acc rd ng A oAtheA nnualA ur eyA y AtheABerlin lan ,A organi ationATransp rencyAInternat onal,AFi land,AIc rruptA a dANewAZ ala d AareAper ei ed toA eAthe Aw rld’s leastAc.AThAe coun rie , Aand Ha tiAisAper ei ed to A eAth AmostAco r p ivat A indx Ad fiAnesAcorr pt on A sAthe abseAof A ub cA ffiAA e AforApei edA ga nAandAme sur sAtheA eg eeAto whichAcorr pt onAisAper s. I A to exist a ongAaAcou try’s A ub cAoffiA cia s AandApoliti ia A romA isAa Acom ositeA ndex,Ad aw ng onA12 pol s AandAs rvey nsAofA 9 Aindep ndent Ainstitu ions, whichAga her dAtheAop ni r ld sA bu iness A eop eAandAc untryAana ysts AOn y A 63A fAtheAw ceAofA 193Acou tri sAare Ain lu edA n AtheAs rve ,A ue to AanAa se rang A re iabl Adat Afr mAtheArem iningAcoun r e .AThAeA coresr eA fA fr mAtenA(s ueakyA le n)At AzeroA( ighlyAcor u t). AA sc sAtheA .0A s AtheA umberATransp rencyAInterna ionalAcon ide oAno A bord r ineA Agure Adistingu shingAcou trie At at A oA ndAblem. aveAa As riousAcorr ptionApr Ave yA IndiaAfe tu es A t A o. A7 A ithAaA at ng Ao h A .3 AT i AisAAthatA lowAr nk ng A nAtheAinterna ionalAsc nar oAand show corr pt o AisAa As riousAp ob em AinA10?Governments at lower levels can only function efficiently if they are empowered to do so. This is particularly relevant for the PRIs, which currently suffer from inadequate devolution of funds as well as functionaries to carry out the functions constitutionally assigned to them.?An overarching requirement is that the rule of law must be firmly established. This is relevant not only for relations between the government and individuals enabling individuals to demand their rights but also for relations between individuals or businesses. A modern economic society depends upon increasingly complex interactions among private entities and these interactions can be effi ciently performed only if legal rights are clear and legal remedies for enforcing these rights are swift.?Finally, the entire system must function in a manner which is seen to be fair and inclusive. This is a perceptional issue but it is real nonetheless. DisadvantagedThAeAC nc ptAofAC tizenAC ntricAAdministSTs,A gr ups,Aespec all Athe SCs, feel minor tie AandAot ers, must AandA they ha eAanA qualA takuate s ouldAper ei e AanAade AtheA fl w Aof Aben fi s Ato Ae sur legit ma yAo AtheAStat .2.2APercep ionsA boutAGover aneAinABoxA2 2:ACommonAB tt enecksAinAImpl metationAoPro ect Amon AtheAmos Acomm nlyAnotedAb tt enecksAinAimpl me tationAo Aproje tsAare:i.AMu ti lici yAofAlaws gove ni g AsameA rAs miarAsetAofA ssues.ii.AR qu r mentA f AaAla ge numberAofAapprovals/pe rmis ions.iii ASeparateAclearances approval Areq ireAfrom diffAerentAa th riti s A n AsameA rAsimilarA ssu s.iv ATooAm ny pointsA fAconta t Abetwee AinestorAandAauth riti s. .ALack AofAtr ns are cyAin AtheAadmi is rationAofA lea ancesAandAapp ovals vi. ALa ge numberA fAr turns A nd amountAofAi fo ma ionAtoAb Ap ovid dAtoAmanyAdepartments/age cies.v i. ALittleAcom uni ationAandAinformati n-sha ingAamo gArelatedAdepartmen s.Sour e: ReportAon Reforming A nvestmen A pprovalA&AImpl mentationA r ceduresmberA 2002.ANoveIndia blicA .2 1 AAs As ated Aear ier,Ap allyA administr ti n Ain A nd a AisAgenetiv A perc iv d A oAbeAunrespon ive,Ainsens AitsA andAcor u t AThAeACommi sionAd rin io sA v si sAt AtheAS ate Ahad Ase eralAocca Aand to mee Aand hear fro AtheAp bli dAb A mo tAo AtheAobserva io sAby Acit zens wereA bou Athe poor Aqu li y AofAser icesApro id eAofA the AGovern ent Athe AndiffA rent Aatt tu eAof Agover mentAserv nts,Acorru tio AandA bu pis A auth rit Aand la kAof Aaccountabi i y. AAAc mmon Acomp aintApert in dAto Aexce siveAred-t on’sA an Athe long time A ak nAt Aget evenAro tine work A o e AThAeA ixthACe tra APayACommisscom en sAin this Aconne tio AareA orthAnofAting wor A “Fo Athe Ac mmon man,Abureau racy Ade otesAro tin AandArepet tiveAproced res,A aper tat A andAde hAis, Adea s.Apit Athe fact tha AtheAGover men AandAbureau racyA xi t AtoAfaciloverA theAcit ze sAi AtheArig tfulApu su tAof A heirA egal Aactivi ies.ARigid ti sAo AtheAs stem w thA centraliz ti n AofApo ers,Ah ghlyAhierarc ica Aan Atop downAm th d AofAfuncti ning eAofA aA argeAn mb rAofAinterme iaryAl velsAdel y ngAfiAnaliz ti nAo AanyAdeci ion,Adi or toAaA auth rity from Aaccountab lit Aan AtheAten ency Ato ardsAmicromanage ent, hav Al d ove A stru tu eAinA hich fo m Ais more Aimpo tant thanAsubs anc AandAproce ure Aare Av lued viceA end Are ult AandAoutc mes.ANon-perfor an eAo AtheAadministr tiveAstruct res, poorAse haveA qu lit Aand la k Aof Aresponsive ess Aan AtheAsubje tiv Aand Aneg tiveA bue AofAauth ritye odedA ru tAinAgover anceAsy temsA hichA ee sA oAbeAres oredAurge ntly.” sionA . . AThAe A ifthACe tra APayACommi sio Aha AtheAfoll wi g At As yAo Athe Ap blicAimpre boutA ivilAservants:intsA “How ve , Ai AoneAs ea sAt AanyAenligh ened Am mb r Ao AtheAp bl cAh Ahas Ase eralAcompl ity,A ag ins AtheAp blicAserv c hAese Ars.Ala eAto A heirA ize,Aproducti ity,Aaccountabitranspa enc AandAinteg11Citizen Centric Administration – The Heart of GovernanceThere is a general impression that the absolute size of the bureaucracy is overgrown beyond what is fundamentally necessary. It is often referred to as being “bloated”. It is also felt that the numbers are increasing at a rapid pace, with scant regard for the work-load. People also speak of the bureaucracy being top-heavy.Not only are public servants perceived to be too many in number it is also believed that they do not contribute to the gross domestic product. Public servants are alleged to invariably come late to office, spend a large part of the day in sipping tea, smoking and indulging in gossip, and leave office early. Consequently, productivity is said to be abysmally low, estimates of their actual working hours ranging from one to two-and-a-half hours in a day.Box 2.3: What’s Ailing Public Services?A recent Centre for Media Studies (CMS) study shows that a majority of citizens are not satisfied with the delivery of public services. In seven out of the 11 departments covered the study, less than one-third of the citizens are satisfied with the services delivered. In fact, in most need-based services such as the police, judiciary and municipalities, (which enjoy a greater discretion and power), not even 20 per cent of the households are satisfied with their services. Even in essential services such as the PDS, hospitals, and electricity and water supplies, a mere 30-40 per cent of the households are happy with the services....The study brings out that there are hardly any effective complaint redressal systems in place in most departments. In most cases, citizens are not even aware that such systems exist and departments make no effort to educate them. Even those who are aware have little confidence in them. Not surprisingly, the result is a sense of helplessness.The behaviour of cutting-edge level employees is another area of concern. Most employees of the public services are not turned into the changing expectations of the citizens.There are a number of possible initiatives at the department level, such as strategic outsourcing of services, use of technology (like e-seva in Andhra Pradesh), better commercial practices, performance-linked incentive to staff, periodic tracking of user satisfaction and involving resident welfare associations. These initiatives can go a long way in improving the quality of public services.Also, the public service provider needs to be made more accountable to the citizens through user committees. This experiment has been demonstrated to hold potential in the case of Rogi Kalyan Samitis in Madhya Pradesh.Also, it is high time that we directly linked outlays to outcomes. We can draw valuable lessons from the British experiment of having public service agreements (PSAs) - with local governments under which objective and measurable targets for various services are fixed together with an evaluation mechanism. The funds are allocated to local governments on the basis of their achievement on PSAs.Source: Business Standard – 25/26 March, 2006 (Shri Manu Vatsal Sharma and Naveen Surapaneni of Centre for Media Studies)It is felt that bureaucrats are a law into themselves. They hide behind mountains of paper, maintain uncalled - for secrecy in their dealings with public issues, take surreptitious decisions for considerations that are not always spelt out on paper, and are accountable to no one. hTey have life-time contracts of service which cannot be cut short on any ground, defended as they are by the safeguards under Article 311 of the Constitution. Their misdeeds are never found out. If exposed, they take refuge behind the protective wall of collective decision making in committees, which cannot be brought to book.12oAeACo ce tAofACi izenACe tric AAdministrThAus ThAe mostAse iousAc argeAlev lledAag inst th mAis that they lackAinte rit AandAhon s y. 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AeAe Arec ntly Arel ased AG obal ACompetitiv nessA ndex AR port A(2008 09)4Ahighl ght Athe Afoll wingAstre gt sAas we lAasA re sAofAco ce nAinAIdia:A abl A2.1 AG obalACompetitiv nessA ndex A(2008 09): Ra kAofns 84AnAana ys s Aof Apeo le’sAperce tionA boutAgover an e Ain A ndiaAre eals thatA her AareAse eralAbar ie sAto good Agover anc Aand A hes AareAl st dAi AtheAfoll wingAprragraphs.4So rce:Apdf/GCR08/GCR08 p f134)eSTRENGTHSAInnov t onA-Aavailab li yAof Ascien ist AandAengisrsA3r t i o o i o r a sf ioADom sticAm rkett izeA4AFina cing Ath oughA ocal Ae uityAmetA8AInte si yAofA ocalAcompetnA11AQu li yAofAmanag mentAscsA12AQu li yAof mat AandAsc enceAeduc17ANat onalAsa ingseA1 AFD AandAtechn logyAtrarA20AQu li y AofAScin ifiAcARes archAInstitusA27ACap cit AforAinnovAREAS OF CONCERNsA61AWastefu ne sAof Agover mentAspesA55ATranspa en yAofAgover ment Ap licyAmnA35ADive si n AofAp blicgA55AFavour ti m AinAdeci io sAof Agover meAoffiAsA58AEt icalAbeha io r ofgA62AP blicA ru t AofApolitidiu nk ii aiarndiaAParaeter AG obal ankAA(ma imum13Citizen Centric Administration – The Heart of Governance2.3 Barriers to Good GovernanceThe reasons for Governments not being citizen centric can be attributed to the attitude and work of some government servants, the deficiencies in existing institutional structures and also to some citizens. While the laws made by the Legislature may be sound and relevant, very often they are not properly implemented by government functionaries. e institutional structure provided at times may be also weak and ill-conceived and thus has neither the capacity nor the resources to implement the laws in letter and spirit. The Prime Minister, in this context, had stated:5Effective and efficient institutions form the backbone of a successful development and governance process. The founding fathers had the foresight to create the necessary institutional framework which has brought us thus far. We need to think whether this framework is adequate in the years to come; whether past modes of functioning will address the demands of the future in fast changing world; whether skills and capabilities that were relevant in the past have outlived their utility? It is only by asking and answering these questions will we be able to identify institutional reforms which will meet the needs of our times.The system often suffers from problems of excessive centralization and policies and action plans are far removed from the needs of the citizens. This results in a mismatch between what is required and what is being provided. Inadequate capacity building of personnel who are to implement the laws also results in policies and laws not being implemented properly. Further, lack of awareness about rights and duties and callous approach to compliance to laws on the part of some of the citizens also create barriers to good governance.2.3.1 Attitudinal Problems of the Civil ServantsThere is a growing concern that the Civil Services and administration in general, have become wooden, inflexible, self-perpetuating and inward looking. Consequently,5Ci ilAServ ceAD y,A2ox A2 4 A: rsA AMexi an AWo an AW ns A22, 00 ADollapeor AUsel ss A ed ATenA Mex co AC ty A(A P A AA AMexi an Awo an A ho Ane ds to Acoll ct Ase AaA signatu es Aev ry A wo Awe ks to Aobt in Amedic ne A or A er As ck A on A o re. governm nt Acompetit on A or A he Am st Ausel ss Abureaucra ic AproceduomA Ceci ia AVelazq ez Arecei e Aa Ach ck A or A300, 00 A(22, 00 Adolla s) Af fyA Presid nt AFel pe ACalde on Aaf er Awinn ng A he Acompetit on to Aident ry. he Awo st A ed At pe in A he Anotoriou ly Abureaucra ic AcountalA Velazque ’s A on A a Aa Agene ic Acondit on A nd A he Ane ds to Avi it Asoc ssA secur ty Aservi es Aev ry A wo Awe ks to Acoll ct A is Amedici . A“ Ae Aproc toA ta es at Ale st Af ur Ad ys Ae ch Ati e, Af om Adeliver ng A he Aprescript on i . administer ng A he Amedicin ,” AVelazq ez AsaedA Ae Acompetiti n, Aovers en by A he Apub ic Aservi es Aminist y, Agathe ns. 20, 00 Aentr es Af om Afrustra ed Acitizeat “Sh ’ Aa Awork ng Amot er A ho A a Aa As ck A on A n AI Akn w, a Aa Afath r, At onA we Aw ll Ag ve Aanyth ng A or A he Ahea th A nd Al fe of A ur Achildre ,” ACalde ze. s id as he Apresen ed A he Apri93d Sour e: Ahttp://w ww.breitba article.php? id=C NG.65f7f87763fc 3a726ec0167adc8c8.121&show_articl00714Concep Ao ACitize ACentri AAdministratioththe rAattitu eA s Ao e A f AindffAeren eAa d Ainsensitivi yA oAt eAnee s A fAcitizen .iAi ,Acoupl dAwi hAt e Aenormo sAasymmet y A nAt eAwieldi g A f Apow rA tAa l Alevel , Ah sAfurth rAaggravat dAt e Asituatio . e e Ae dAresu t A sAth t AAAce s Apercei eAthemselv sA sAdispensi gAfavou sA oAcitize sArath rAth n Aservi gAth mAa dAgiv nAt eAabje t Apovert , Ailliterac ,Aet . aAcultu eA fAexaggerat dAdeferen eA oAauthori yAh s Abeco eAt eAnor.A2.3 2ALa k A fAAccountabilit AAcomm nAreas nAusual yAcit dAf r Ain AAcien y A nAgovernan e A sAt e Ainabili yAwith nAt eAsyst mA oAho dAt e ACiv l AServic sAaccountab eAf rAthe rAaction . ASeld mAa eAdisciplina yAproceedin s Ainitiat dAagain tAdelinque tAgovernme t Aservan sAa d Aimpositi n A fApenalti sA sAev n Amo eArar . iA s A s Aprimari y Abecau eA t Amo t Aleve sAauthori y A sAdivorc dAfr mAaccountabili y Aleadi gA o aAsyst m A fArealist cAa d Aplausib eAalibi .ACumberso eAdisciplina yAprocedur s Aha eAadd dA oAt eAgener lAapat yAtowar sAdiscipli e A n AGovernmen .AMoreov rAt e Asafeguar s Aprovid dA oAciv l Aservant , -Awhi hAwe eAwe l Aintention d – Aha e Aoft nAbe nAmisuse .AAnoth rAreas nAf rAla k A fAaccountabili y A sAth t Aperforman eAevaluati nAsyste sAwith nAgovernme t Aha e An t Abe n AffAective y Astructure . e eAcomplacen yAth tAt eAsyst mAbree s Ah sAresult d A n Aemploye sAadopti gA nAapathet c A r Alackadaisic lAattitu eAtowar sAcitize sAa dAthe rAgrievance.A2.3 3AR dATapismBureaucraci sAt eAwor dAov rAa eAexpect dA oAadhe eA oArul sAa d Aprocedur sAwhi hAar ,A fAcours , Aimporta tAf rAgo dAgovernanc . AHoweve ,A tAtime ,Athe eArul sAa d Aprocedur sAa eAab-init o Ai lAconceiv dAa dAcumberso eAan ,Atherefor ,A o An t Aser eAthe r Apurpos .AAls ,Agovernme t Aservan s Asometim s Abeco eAover y Apre-occupi dAwi hArul sAa dAprocedur sAa dAvi wAthe eA sA n Ae d A nAthemselve . e eAPri e AMinist r AD . AManmoh n ASin hAwhi eAemphasizi g Aprocedur lAreform ,Astated:Ve yAofte ,At e Amo tAdAAcu t Aar aAfArefo mA nAgovernme tA s Aproce sAad Aprocedur lArefor .A dA o Aamou tA f Ainvestme tA nAcapabiliti sAa dAtechnologi sAc n Aimpro e Aperforman eAa dA servi eAdelive yAbeyo d a Apoi t A fA eAcontin eA oA e Aprisone sA f Aarcha c Aprocedur sAakA processe .AOfte , Apoli yArefo m Ameasur sA o An tAdeliv rAt eAdesir d Aoutcom sAbecau eA f AlaeA f Aforwa d Amoveme tA nArefo mAfAgovernme t Aprocesse . ThA sA sAaft rAal ,Awh tAgiv sAri hA oAt eAso-call dAInspect rARa . ThA sA sAwh t Amak sAt eAinterfa eA f aAcomm nAcitiz nAwinA governme t aAcumberso eAa dAdaunti gA ffAai . ThA sA sAoft nAt eAro tAcau eA f Acorrupti sAwel .AWh n I Ame tAindividua s A rAindustrialist ,A tA sAth sAaspe tAfAgovernme tAwhi hA sAcryi g AotAf rAchange156PM sAAddre sA tAt eASeco dACiv lAServi e ADa ;A Centric Administration – The Heart of Governance2.3.4 Low levels of Awareness of the Rights and Duties of CitizensInadequate awareness about their rights prevents citizens from holding erring government servants to account. Similarly, low levels of compliance of Rules by the citizens also acts as an impediment to good governance; when citizens do not adhere to their duties they infringe on the freedom and rights of other citizens. Thus, awareness of rights and adherence to duties are two sides of the same coin. A vigilant citizenry, fully aware of its rights as well its duties, is perhaps the best way to ensure that officials as well as other citizens, discharge their duties effectively and honestly.2.3.5 Ineffective Implementation of Laws and RulesThere is a large body of laws in the country, each legislated with different objectives – maintaining public order and safety, maintaining sanitation and hygiene, protecting rights of citizens, giving special protection to the vulnerable sections etc. Effective implementation of these laws creates an environment which would improve the welfare of all citizens and at the same time, encourage each citizen to contribute his best towards the development of society. On the other hand, weak implementation can cause a great deal of hardship to citizens and even erode the faith of the citizenry in the government machinery.2.4 Need for Reforms2.4.1 An integrated index to measure the quality of governance has not been evolved so far. In the absence of any such index, only indirect conclusions can be drawn about the standards of governance. Rapid economic growth, increasing literacy, improved health indices etc. point towards improving governance standards. At the same time, the poor image of government inBox 2.5: The Fundamental Duties?To abide by the Constitution and respect its ideals, the national flag and the national anthem.?To cherish and follow the noble ideas, which inspired the national struggle for independence.?To uphold and protect the sovereignty, unity and integrity of India.?To defend the country and render national services when called upon to do so.?To promote the harmony and the spirit of common brotherhood among all the people of India transcending religious, linguistic and regional or sectional diversities, to renounce practices derogatory to the dignity of women.?To value and preserve the rich heritage of our composite culture.?To protect and improve national environment including forests, lakes, rivers and wildlife and have compassion for living creatures.?To develop scientific temper, humanism and the spirit of inquiry and reform.?To safeguard public property and to abjure violence.?To strive towards excellence in all spheres of individual and collective activity, so that the nation constantly rises to higher levels of endeavour and achievement.16Concep Ao ACitize ACentri AAdministratiothe minds of large sections of society points towards inefficient and ineffective administration. All these highlight the need for substantially reforming our governance systems. The Prime Minister in his Civil Services Day speech (2007) observed:It is in this context that ‘reform of government’ becomes relevant. ‘Administrative Reforms’ is a phrase that has been used widely to mean many things. It is used by some to mean change of any kind to deal with government problems of any description. Some regard ‘administrative reform” merely as a means of “making the government work” better. Others in fact see ‘reform’ as “less government”. I view the reform of government as a means of making citizens central to all government activities and concerns and reorganising government to effectively address the concerns of the common people.2.5 Necessary Pre-conditions for Good Governance2.5.1 An analysis of the barriers to good governance reveals that there are several preconditions which must be fulfilled in order to make governance citizen centric. Some of the pre-conditions are:a.Sound legal framework.b.Robust institutional mechanism for proper implementation of the laws and their effective functioning.petent personnel staffing these institutions; and sound personnel management policies.d.Right policies for decentralization, delegation and accountability.Besides, a number of tools can also be employed to make administration citizen centric. These are:a.Re-engineering processes to make governance ‘citizen centric’.b.Adoption of appropriate modern technology.c.Right to information.d.Citizens’ charters.e.Independent evaluation of services.f.Grievance redressal mechanisms.g.Active citizens’ participation – public-private partnerships.17Ci izenACe tric AAdministr t oA Aehact cf Governance2.5.2 Sound Legal FrameworkA sound legal framework is the basic pre-requisite for any orderly society. The Constitution is the cornerstone of our legal framework. Parliament has enacted a large number of laws to further the objectives enshrined in the Constitution. A dynamic society requires constant updating of existing laws as also enactment of new laws to meet emergent needs and challenges so that the welfare, protection and development needs of citizens is fully met. In fact, the Law Commission has inter alia been given the responsibility to examine existing laws to ensure their relevance to present-day needs and requirements. The Commission in this context has also examined and analysed a number of laws relevant to the wide mandate of promoting a transparent, accountable and citizen centric system of governance. Thus, the Right to Information Act, 2005 was analyzed in the First Report. The National Rural Employment Act, 2005 was examined by the Commission in its Second Report. The Third Report of the Commission dealt with the laws relating to crisis/disaster management. The Fourth Report of the Commission inter alia dealt with the legal framework required to curb corruption in governance. The Fifth Report - Public Order - included a detailed study of the laws governing the Police system in the country. In its Sixth Report -Local Governance – the Commission made recommendations for empowering the urban and rural local bodies. The Commission examined the legal and institutional framework for conflict resolution in its Seventh Report – “Capacity Building for Conflict Resolution”. The Eighth Report of the Commission contained an elaborate evaluation of the laws to combat terrorism. The Ninth Report – “Social Capital” – dealt with the legal provisions for various mechanisms to promote social capital. The Tenth Report – “Refurbishing of Personnel Administration” – analyzed the legal framework for the Civil Services. In its Eleventh Report, the Commission recommended a legal framework for facilitating the implementation of e-Governance projects. As stated earlier, the citizen must be the focus of all laws and there cannot be only a single law to promote citizen centricity. The Commission in this Report has therefore examined some legal provisions which have a direct bearing on promotion of a citizen centric administration in the country and which have not been covered in its earlier Reports.2.5.3 Robust Institutional Mechanism for Establishing Rule of LawThe country has, over the years, created and sustained strong and effective institutional mechanisms to ensure that the rule of law is maintained and the rights of our citizens are well protected and human dignity upheld. Some of these institutions have been established in our Constitution and others through statutes and executive orders. The Commission in its present Report has examined the structure, powers and functioning of some of these institutions like the National Commissions for the Scheduled Castes and for the Scheduled18Concep Ao ACitize ACentri AAdministrationTribes, the National Human Rights Commission, the Consumer Grievances Redressal mechanisms, the National Commission for the Child, etc.2.5.4 Competent and Dedicated WorkforceA sound legal system and a robust institutional mechanism need to be buttressed by ensuring that competent and motivated personnel run the system in order to provide a vibrant citizen centric administration. The Commission in its Tenth Report, “Refurbishing of Personnel Administration” has examined in great detail various aspects of personnel management in government and made far reaching recommendations. The Commission would not therefore be dealing with issues relating to personnel management in this Report.2.5.5 Decentralization, Delegation and AccountabilityWhile examining the subject of Local Governance, in its Sixth Report, the Commission has stated as follows:`2.2.1 The central idea of subsidiarity is that citizens as sovereigns and stakeholders in a democracy are the final decision-makers. Citizens are also the consumers of all services provided by the State. The citizen-sovereign-consumer must exercise as much authority as practicable, and delegate upward the rest of the functions which require economies of scale, technological and managerial capacity or collective amenities.2.2.2. The Oxford dictionary defines subsidiarity as `a principle that a central authority should have a subsidiary function, performing only those tasks which cannot be performed at a more local level.”2.2.3. The principle of subsidiarity stipulates: functions shall be carried out closest to citizens at the smallest unit of governance possible and delegated upwards only when the local unit cannot perform the task. hTe citizen delegates those functions he cannot perform, to the community, functions that the community cannot discharge are passed on to local governments in the smallest tiers, and so on, from smaller tiers to larger tiers, from local government to the State Governments, and from the States to the Union. In this scheme, the citizen and the community are the centre of governance. In place of traditional hierarchies, there will be ever-enlarging concentric circles of government and delegation is outward depending on necessity.”The Commission has examined issues relating to delegation and accountability in this Report.19Citizen Centric Administration – The Heart of Governance2.5.6 Adoption of Modern Technology – e-GovernanceThe Commission has examined various aspects of e-Governance initiatives in India in its Eleventh Report. The Commission has emphasized that even in e-Governance projects, the focus has to be on governance reforms keeping the citizens at the centre stage and using the technological tools made available by the IT revolution to transform the interaction between the citizens and government. The Commission has already made wide ranging recommendations on the subject in the light of both national and international experience.2.5.7 Transparency and Right to InformationTransparency and Right to Information are an essential pre-condition for good governance. Access to information empowers the citizens to demand and get information about public policies and programmes, thus making the government more accountable and helps to strengthen participatory democracy and citizen centric governance. It enables citizens to keep themselves informed about the policies of the government, the rights that they have and what they should expect as service from the government. These aspects have already been examined in detail by the Commission in its First Report on “Right to Information”. In that Report, the Commission has made detailed recommendations on various aspects of the Right to Information Act and suggested various measures including changes in the Manual of Office Procedure, measures to strengthen the institution of Information Commissioners, the need for capacity building and awareness generation, etc, to facilitate the implementation of the Right to Information Act.2.5.8 AccountabilityIn its Tenth Report on “Refurbishing of Personnel Administration”, the Commission had observed as under:“13.3.1 Accountability also means answerability i.e. questions asked of public officials have to be answered by them. hTere are two types of questions that can be asked. One type as under the RTI Act merely seeks information/data and involves one way transmission of information. It promotes transparency and to a much lesser degree accountability in Government. The second type of question enquires not just as to what was done but why; and therefore involves a consultative two-way flow of information with the citizens usually providing a feedback in respect of the working of government departments and service delivery of public agencies. Such mechanisms include citizens’ charters, service delivery surveys, social audits, citizens’ report card and outcome surveys. Each of these mechanisms20e AConc pt ofACiti en ACent icAAdministrationwowou d A eAexamin dA nAdeta lA nAt eACommission sAsubseque tARepo t A nA‘Citiz nACentr cAAdministration.AAccordingl ,At e ACommissi nAh sAexamin dAtoo s Asu hA sAcitizen ’Acharter , Aet . A n aAsepara eAchapt r A nAth sARepor.A2.5 9AFoc s A n AOutcom s –AEvaluati nAa dAMonitoringMonitori gAa dAevaluati nAa e Aimporta tAmanageri lAfunctio s A nAa y Aorganizatio .A nAgovernme t Aorganizatio sAthe eAfunctio sAassu e Aspeci l AsignfiAcan e Abecau e A fAthe rAlar eAsi eA nAter s A fAt eAworkfor eAcoupl dAwi hAthe rAwi eAreac . e e Asucce s A fAt eAlaw ,Apolici sAa dAguidelin s -Awhi hAa e Aimplement dA y aAlar eAnumb r A f fiAe d Aorganizatio s -Adepe dA nAthe r AffAecti eAadministratio . A s Anecessitat sAconsta t Amonitori gAa dAevaluatio.A2.5. 0AGrievan eARedress lAMechanisms n aAwelfa e ASta eAli e AIndi ,Acitize sAha e aAvarie y A f Ainteractio sAwi hAt eAGovernme tA n Ai sAmyri dAfor s –A s a Aservi e Aprovide , aAregulato ,A s a Aprovid r A f Asoci lAa dAphysic lAinfrastructu e Aet . AMeeti gAt eAexpectatio s A fAt eAcitize s A s aAchallengi gAta kAf rAa yAGovernmen . ASometime ,At eAta k A sAcompound dAd eA o Aintern l AinAAcienci sAwhi eA t Aoth rAtime ,Adespi eAt e Abe t AffAor s A fAt e Apubl cAagenc ,Aextern lAconstrain sApreve tAth mAfr m Ameeti gAt eAexpectatio s A fAt eAcitizen .AAddressi gAt eAgrievanc s A fAtho eAcitize sAwho eAexpectatio sAa eAn tAfufiAll d A s Aprimari yAt eAta k A fAt e AGovernme tAagen yAconcern dAev nAthou hAextern lAaccountabili y Amechanism , Aoft n Ahavi gAlimit dAscop ,A oAexis . A nAth sARepor ,At e ACommissi nAh s Aprimari yAfocuss d A nAt e Aintern lAgrievan eAredress lAmechanis sAth t Apubl cAagenci sAa d AGovernme t Ashou dAdevel p A oAth tAcitize sA oAn t Aha eA oAreso tA oAcost yAalternativ s Asu hA s Ajudici l Aintervention ,A o Ase kAredress lA fAthe rAgrievances.2.5. 1AActi e ACitizen ’AParticipati n – AInformati n ADisseminatio ,AMechanism ,ATarg tAGro pAConsultation2.5.11 1APromoti gAcitiz nAcentr cAadministrati nAal o Aimpli sAgivi g aAvoi eA oAcitize sA nAt eAgovernan e Aproces .A s Anot dA yAt e ACommissi n A nAi s ASix hARepo t A nA“Loc lAGovernance ,A tAt eAloc lAcommuni yAleve ,Acitize sA s Astakeholde sAc nAdirect yAparticipa eA nAdecisi nAmakin . A tAw s Apoint d Ao tAth t Abesid s Ainstitutio s Asu hA sAt eAGr mASabh ,Acitize s Aparticipati nAc n A e Apromot dA y Aidentifyin ,Af rAexampl , AidentfiAab eAstakeholde sA nAt eAdelive y A f Aspecfi c Apubl c Aservice . e e ACommissi nAal o Astat dAth tAempowerme tA f Astakehold rAgrou sAa d Aloc lAgovernme tA sA o A e Ase nA s aAcontinui gAa dAn t aAcau eA fAco flAi t Abetwe nAt eAtw . AInstea , AffAecti eAempowerme t A f Astakeholde sAaccompani21Ci izenACe tric AAdministr t oA Aehact cf Governanceby mechanisms for coordination with local governments, is the key principle to be followed.2.5.11.2 In the present Report, the Commission has examined how meaningful participation by citizens in governance can be promoted through various mechanisms. These would include proactive sharing of information with citizens as required under the RTI Act, setting up of consultative mechanisms for stakeholders, involving citizens groups in certain aspects of governance etc.2.5.12 Process SimplificationAs the Commission has noted in its Report on ‘Ethics in Governance’, simplifying transactions focusing on adoption of Single Window Approach, minimising hierarchial tiers, up-dating and simplification of existing department manuals and codes etc. needs to be brought to the centre-stage of administrative reforms. hT e Commission has further examined this issue in its Eleventh Report on “e-Governance” where it has made detailed recommendations regarding process re-engineering in all Government organizations focusing on rationality and simplicity ultimately leading to re-designing of governmental forms, processes and structures to make them adaptable to e-Governance backed by procedural, institutional and legal changes. In the present Report, the Commission has made a detailed study of how process simplification could be achieved in a few different areas of citizen-government interface.2.6 Core Principles for Making Governance Citizen Centric 2.6.1 Rule of Law -Zero Tolerance StrategyThe Commission in its Fifth Report on ‘Public Order’ has stated that in our country there is a tendency for some enforcement agencies not to rigorously enforce the provisions of law. This is particularly evident in case of traffic related violations, civic offences, infringement of pollution control laws etc. For their part, sometimes, the citizens are equally to blame for flouting rules with impunity and without regard to public health, safety and consideration for others. A crackdown on these types of offences in some cities like Delhi, whether enforced by Courts or otherwise, have tended to operate as campaigns and may therefore be unable to create and sustain a long term impact because they are driven by personalities or by court verdicts rather than by the institutions themselves. The Commission has recommended that:22ThAeAC nc ptAofAC tizenAC ntricAAdminstration“ .6.4 ARecommendatios:aAAllAp blic Aage cies As ould A d ptAa zeroAtole anceAstr tegy Ato ards Ac im , AinA rdrAtoAc e teAa Acl ma eAof Acompl ance with lawsAle di gAto Amainte ane AofAp blicAordrtingA b. ThAisAstr tegy As ou dAbeAinstitutiona iz dAi AtheAva iousAp blic Aage ci sAbyAcre AtheA approp iateAstatis ical Adatab ses,Ab ck dA p Aby Am dernAtechno og , AtoAmo ito ive A eve AandAt en sAofAva iousA yp sA f AoffA nce Aand linkA he e toAaAs st m AofAincen withA and Apena tie Afo At AoffiAA ialsAwo ki gAinA hese Aagen ie .AIt As ou dAbeAcom inedres.”initia iv sAto Ain olv Athe Acomm ni yAin A rimeApreve tionAmeas u ta le .6.2 AM kingAInstitu ionsAVib ant, ARespo siv AandAAccounAareA AsAdisc ss dAi AtheApre iousAparagr phs,A Ru eAof Law’Areq iresAinstitu i ns A-A hic AandA adequ telyAempow red, Apro erlyAstruc ure Aand hav Athe A ightAqu li y Aof Apers nne eingA reso rc sAat A heir Adis o al A Afr AeffAe tiveAimplementa ion. A te s AtoAe sure thi AareA AtheA disc ssedAsepar te yAi Athe ARe or sAo AtheACommi si n AonA‘Organizat onalAStru tu eAo des A Gover me t AofAI dia AandA‘ te sAtoAe sueAeffAe tive Aadministr ti nAa AtheA tate Ale el’.ABes sAofA the ALegisl tur AhasAestabl shed Ase eralAspecia isedAinstitut on ,Ato look A fterAs e ifiAcA eepo rt. soc e y AThAeAwo ki g Aof so eAof A heseAinstitu ions A ou dAbeAdisc ss dAin thisARe a i n .6.3AA tive ACiti ens’AParticip t on A– ADecentraliz tio AandADelegc l AThAe AConstit ti n Aof A ndiaApro ide AforA hreeA ie s Aof AGover m ntA– AU ion,A tat AandALion A ThAe AR po tAo AtheACommi si n AonA‘ ocal Self AGover m ntA/APanch yat ARajAInstitu aterA had Arecommenda io s AonAimpr vingAdel very Amech ni mAby Adecentraliz tion withAgr sAonA cit zen AandAstakeh lder Ainvolvem n s. ThAat AR por Ahas also madeArecommenda io ec sA encour gingAparticip tive Agover an e AbyAempow ringA ocalAself-governm nts. SomeAas dAtoA of Aciti ens’Aparticip tion have beenAexa in dAin this ARe ort. ABes des, someAi suesAre atpo rt. deleg ti nAofAauth rity have also beenAdisc ss dA nAanAexcl sive Ach pt rAin thisARe .6.4ATransparencyTranspa en y Ai Ao eAo Athe coreAprinc pl sAof goodAgovern nce.ATranspa en yAinAdec sionAma ing,Adiscl su e AofAstan ar sAofAdel ver AandAope ne sAi AtheA ver AdayAfuncti ni gAo AtheAadministr tio Aar AtheAhall ar s of Aa Aci izenAce tricAappr ac .AAs th s isAa Areaso abl AnewAcon ept,A hic AhasAg inedAaccep ance A fte AtheAenac me tAo Athe A ig t Ato AInform tion A t,AaAc an eAinAapp oa hAisAreq ir dAa Aall Al ve sAo Athe Agovern ent. ARecommenda io sAin thisAr gard were ma eAby thisACommi si n Ai Aits AR po t AonA‘ ig t Ato AInformat on’. SomeAas ec sAof Aciti ens’Aparticip ti nAin Agover ance have beenAdisc ss dAin Ach p er 5Aof this ARe23Citizen Centric Administration – ~e Heart of Governance2.6.5 Civil Service ReformsCivil servants man various institutions of Government. Their attitude, competence, efficiency and approach to governance determines the experience that a citizen has with government. The Commission has made detailed recommendations on civil services reforms in its Report on ‘Refurbishing of Personnel Administration’. One of the core principles for reforming the civil services has been ‘providing citizen centric administration’ so that the governance apparatus becomes an instrument of service to the people.2.6.6 Ethics in GovernanceEthics is a set of standards that society places on itself and which helps guide behaviors, choices and actions. Corruption and the abuse of office is an important manifestation of the failure of ethics. Ethics in governance, however, has a much wider import than what happens in the different arms of the government. An across-the-board effort is needed to fight deviations from ethical norms. Such an effort needs to include corporate ethics and ethics in business; there is need for ethics in every profession, voluntary organization and civil society structures as these entities are now vitally involved in the process of governance. Finally, there should be ethics in citizen behaviour because such behaviour impinges directly on ethics in government and administration. Recommendations on this have been made in the Report of the Commission on ‘Ethics in Governance’.2.6.7 Process ReformsAfter appropriate laws have been enacted, policies laid down and the institutional structure determined, it is important that the appropriate processes are put in place to ensure that they serve the citizens effectively and efficiently. These include well designed citizens’ charters with in-built penalties for non-adherence to commitments made, independent, empowered and effective anti-corruption agencies and innovative tools to involve citizens in government’s functioning. All these, combined with legislations like the Right to Information Act, will undoubtedly play a major role in promoting a citizen centric administration. In fact, it is this core element which is the focus of this Report.2.6.8 Periodic & Independent Evaluation of the Quality of GovernanceIt has been aptly said that what is not monitored, never gets done. This underscores the need to periodically evaluate the quality of governance at all levels. This evaluation can be done internally as well as by external independent agencies. The Planning Commission in the Eleventh Plan Document has emphasized the need to strengthen our monitoring and evaluation capacity and though this may be in the context of programmes and projects, the principle holds good for governance as well. The process reforms required in this connection are dealt with in later chapters of this Report.24FUNCTIONS OF GOVERNMENT33.1 Functions of Government3.1.1 All governments perform a wide range of functions. These functions could be classified as follows:7a.Self preservation – The authority of the State needs to be preserved both from external aggression and internal disturbances. Government discharges this function by raising and maintaining a national army, a police force and other enforcement agencies and empowering these agencies through legislations.b.Supervision and resolution of conflicts – Strengthening of democratic practices and processes, ensuring equity to all citizens, setting up of conflict resolution mechanisms and fair governance are some ways for minimization of conflicts.c.Socio-economic development – Enactment and effective enforcement of laws, assuring welfare of the weaker sections, bringing about desirable social change are some measures which governments adopt to bring about socio-economic development.d.Regulation of the economy – This has emerged as one of the most important functions of government. Adopting sound fiscal and monetary policies is one of the major duties of a government.e.Provision of goods and services – Wwith increasing emphasis on socio-economic development, governments today are major providers of different types of goods and services such as education, health, public distribution of foodgrains etc.3.1.2 The functions of government are laid down in the Constitution of a country. The Constitution of India lays down the roles and functions of the three levels of government – Union, State and Local. These are spelt out in Part III on Fundamental Rights, Part IV on the Directive Principles of State Policy, Parts IX and IX A on local bodies, etc. For the sake of present analysis, the functions of a government could be broadly categorized as follows:257Adapted from Britannica online - . retrieved on 6-8-08Citiz nACentr cAAdministrati n –hT eAHea tA fAGovernana.Regulatory functionsb.Service providing functionsc.Developmental functions.3.2 Regulatory Functions3.2.1 Thomas Jefferson said government is created to secure the inalienable rights of all citizens - i.e., the right to life, liberty and the pursuit of happiness. If everyone were to be allowed to pursue complete freedom for doing whatever he wants to do and to pursue his happiness, then it could lead to a situation where rights and freedom of other persons may be affected. This necessitates the regulatory role of government. The State enacts laws which impose restrictions on the activities of citizens, in the larger interest of society. In order to enforce these laws, the State creates a large number of organizations which are charged with the implementation of these laws. However, attaining ‘optimum regulation’ is a challenging task, as a balance has to be achieved between an individual’s freedom and society’s interest.3.2.2 In India, as stated earlier, the regulatory role of government stems from the provisions of the Constitution which empower the Union and State Legislatures to make laws on various subjects. Besides, Article 19 of the Constitution empowers the State to impose reasonable restrictions on the exercise of various Rights - conferred by Article 19 - in the interest of public order, sovereignty and integrity of India, protecting the interest of the general public, or in the interest of decency, morality etc. Consequently, there is a plethora of laws and rules which seek to regulate the activities of individuals and groups of individuals. These are in the form of municipal laws and bye-laws, laws governing vehicular traffic, laws governing possession of weapons, laws to prevent public nuisance, taxation laws which impose taxes and stipulate different requirements to be met by the assessees, laws relating to immigration etc. As mentioned in an earlier paragraph, effective regulation is a delicate balancing exercise and both excessive regulation as well as loose regulation can cause the citizens a great deal of hardship. There are instances where government agencies regulate for the sake of regulation without keeping in mind the ultimate objective of public welfare. Sometimes systemic rigidities, needless complexity and over-centralization lead to a situation where agencies of government function sub-optimally, and efforts of the government machinery do not yield the desired results. There are also large number of cases where public interest is sacrificed because of weak regulations - poor enforcement of municipal building bye-laws led to large scale demolitions in Delhi recently.26Function Ao AGovernment3.2.3 The Commission in its Report on “Local Governance”, examined the issue of regulatory functions carried out by the local bodies and observed that all regulatory functions should adhere to five principles – simplification, transparency, objectivity, convergence and speedy disposal. The Commission recommended:5.4.2.10 (a). A time-bound programme for updating and simplification of all regulatory provisions relating to the ULBs should be made mandatory. Each State Government should create a task force to examine and suggest simplification of procedures in local governments. This task force could also suggest steps to be taken to reduce discretion and bring objectivity in the field offices of local governments. The city municipal corporations could undertake such an exercise on their own.3.2.4 The Commission would like to reiterate that the principles enunciated in the context of local governments would also be applicable to all regulatory activities. Besides, the Commission would emphasise the following aspects of regulation:a.Regulation only where necessary: It has been argued that India is an over-regulatedcountry, but many of the regulations are not implemented in right earnest. The reasons include – (i) the sheer number of such regulations; (ii) outdated regulations that continue to remain on statute books; (iii) the tendency to over-legislate - as a result, the legislation becomes an end itself; and (iv) the complex procedural formalities stipulated in these regulations. It is, therefore, necessary to have a detailed scrutiny of all laws and regulations – Union, State and Local – followed by the repeal of unnecessary regulations, updation of outdated ones and simplification of procedures so that compliance becomes easy.b.Regulation to be effective: One of the consequences of a large number ofregulations has been their poor enforcement. Social legislations are classic examples of this. Slack enforcement leads to corrupt and unethical practices and the objectives of the legislations are also not met. Another reason for the poor enforcement of regulations is the lack of attention to building capacity in the agencies entrusted with their enforcement. For example, the capacity and expertise of the Motor Vehicles Department has not kept pace with the explosive growth of vehicles on the road. The Commission is of the view that in order to ensure that the regulatory measures do not degenerate into corrupt practices, it is necessary to have an effective supervision of the agencies which27Citize ACentri AAdministratio A AA AHear Ao AGovernanccarry out these regulatory functions. hT is supervision should primarily be done internally by the supervisory officers and should be supplemented by a periodic assessment by an independent agency.c.Self regulation is the best form of regulation: In the field of taxation, there hasbeen a shift from departmental assessment to greater reliance on self assessment. This holds good for Union taxes such as Income Tax, State taxes like the VAT and local taxes like the Property Tax. This principle of voluntary compliance can be extended to other fields like building bye-laws, public health regulations etc. To start with, this principle can straightaway be applied to cases where permission/licence is required to be renewed periodically.d.Regulatory procedures to be simple, transparent and citizen friendly: TheCommission in its Report on ‘Ethics in Governance’ has dealt with a series of systemic reforms to minimize the scope for corruption. These include, simplifying transactions, using IT, promoting transparency, reducing discretion, effective supervision etc.e.Involving citizens’ groups, professional organizations in the regulation activities:The burden of the enforcement machinery can be shared by associating citizens’ groups as well as professional organizations to certify compliance and report violations of the regulations to the concerned authorities. Recently, in Delhi the procedure for grant of building permissions has been simplified and registered architects have been authorized to certify the building plans for houses. This has reduced the work of the civic agencies as also delays and corruption. This principle could also be extended to other spheres of activities.3.3 Service Providing Functions3.3.1 Government provides a variety of services to citizens ranging from social services like education and health to infrastructural services like power, road, transport and water etc. The Commission in its Report on “Local Governance” has examined the issue of service delivery, particularly health and education and has recommended as follows:a.~ere is need for a shift in emphasis in the crucial service delivery sectors of educationand health from centralized control to decentralized action, from accountability to the State department to accountability to the local communities and from employment guarantee to service guarantee.28F nc ions AofAGovernmentIt is .AItAisAn cess ryA hatAall sch olsA reAmadeAfunc ionallyAlf-suffi Ac en ,Ain as muchAsAbasicAfa ili iesAand Ac assroomArequ rem nts AareA ro ide AinAa lAurban school Awi hinA heA extAtwoAe r .Os, AtheA c. A~Ae Amunicip lities, Aes eci llyAth Alarg rAones Asho ld A eek A he helpA fAN In eed, c rporat Ase torAandAin ividualAvo unt ersAfor Aas is ance Ain runningA chools. ctorAto tA ould Ab Au efulAtoA n tiate Aa Av luntary service el men AinAou Asocia As improve serviceAdelv r .nAas d. AanA A eA rendA nAurb nA reas A oAshift towards privateAhe lthca eA ee sAto be se ctAfromA opp rt nit AbyA heAcityAaut or tiesAtoAcon en rateAo Apubli Ah althAasA isti linicalAs rvi es AandAonApr ven ive andA ot AonlyA urative as ectsAo Ahealthcare.dAthi e. dA AIns itutio A pecifiAcAs andard As ouldAbeApr scr bedAfor sch ols AandAh spi alsAa orman eA partyAass ssments car ie AoutAto monitorAper or anceAin service Ad livery.APer ingsAtoA based Ain entive As ouldAbe Apr sc ibe AatAal Al velsAby brakin AsalaryA eig arantee serviceA utc mesAand linkingApe ma enceAin se viceAtoAperfor ance.f.ARec uit entAforAh spi als Aand school As ould be ma eAtoAanAinstitution/ociety Amov ngAa ay A romAnonAacc untab eASta eAlevelArecruiment. ili . iesA ALoca Abodie Ashoul AensureAcon ergen eAamon AhealthA ystems,Asa itationAfanAurb nA andA rinki g AwaterAfac lities. Prima y Aleve Apubli Ahealth Ainst tu ionsA area As ouldAbe ma age AbyAt eAurb n Alocalbdie .Aset AofA h. ForAallA ervicesA ro idedA yAlocal Agov rnmen sA here is needAto d vel pA del nesA per ormanceAind c t rs. A~Ae Ac ncernedA inistr Ash uldA ayAdo nAbroadAgu orAthisA or AthisA u pose. A~A ref re, At eAState AGov rnmen sAc uldA ay Ado n An rmsApupos .out AtheA i. AThe Ac ncernedA inistr Ashould A a ntain Aa ASt te-wise A ataba eAa AhaveAaA per or anceAof various service A eliveryA ystems.ASi ila ly,At eAStat Asho l ata aseA orAsuchA ervicesA ove ing Aall Am nicipalbodi sA AfarA 3 3.2AThAe ACo missi n Awo ld likeAtoAr ite ateAits Arecomme da ions on Athi Ai sue asAinfras ructure A erv ces Aare Aco cerned, AGo ernment A genc esAhave Atradi iona29Cit zenACen ricAAdministra i n – ThAeAH ar AofAGovernnadaresponsible for these services since these were considered natural monopolies. However, there is now an increasing trend towards privatization of many of these services in order to ensure greater efficiency, competition as well as accountability. Privatization of power distribution in several Indian cities including Delhi reflects this trend. Whether these services are provided by Government or private agencies, there is need to ensure greater efficiency and accountability to the citizens. Ensuring full cost recovery, effective implementation of Citizens’ Charters, feedback mechanisms from citizens’ groups and public-private partnership are some of the mechanisms to meet these objectives. The subject of Citizens’ Charter and involvement of citizens’ groups is dealt with in detail in Chapter 4 of this Report.3.3.3 Single Window System for Delivery of Services3.3.3.1 One of the ways in which governments across the world have approached efficient and effective service delivery to citizens (and businesses) is by adopting a ‘single window system’. The driving force behind this approach is the belief that citizens need not run around different government offices for getting various services. This is achieved through a number of ways. One approach allows a service providing organization to re-engineer its processes in such a way that all the services provided by it get delivered to citizens through a single outlet/unit. Another approach is to establish an organization which would create an infrastructure through which different government organizations are able to provide services to citizens at a single point of delivery. Some governments have adopted an approach where no separate organization is created – all the organizations work in tandem to establish a common service delivery infrastructure.8.pptBox Box A .1:ASi gle entA AWi dowAM ltiACha nelAGovernmany(SW C )A–AGerAinA S MCG had itsAori in Ain theAmid 80 Aat the Amunic palAl ve ly, Ger anyA i hAaA ie AtoAcr ateA‘one- topAshopp ng’Aagenc es.APresen web- theA‘multi-chan el’ Aappr achAintegr tes theAphys calAac ess andA ugh b sedAac ess Asys ems anAoff ers Asi gleAwi dowAser iceAdeli eryAthr theAfollo ingAchann e l :1. AMunic palAInte netAPo t l A–Aprov desAcomprehen veAAinformaton,Adownl ads andAservic s2.A all ACen r s A–Apro ideAinformat on,Asi pleAserv ces andAappointme n s3.ACit zenASer ice ACen res A(C C ) A–Apro ide Asi gle Awi dowAfaci ity forAdelive ingAserv cesApertai in AtoAregistrati ns AIDAca ds,Apasspo ts,Adri ingAlice ces and Ac imeAregi terAattestati n .AA Atyp cal CSCAca er Ato Aa out A100 000Apopulatio .InAGerm ny,A SCs are Anon-exis en Aat theAs ate andAfed ralAle el AasA ostAserv ces areAdeliv re Aby Amunic palAbo ies and Aconstituti nal lawAprev ntsAfed ral andAs ateAor ans A romAinterfe in Ain Amunic palAactivit es.AHowe er Ain A as AofAserv cesA ikeAinforma ion Aa outApolic es,Ataxat on,Acust ms,Aeduca ionA tc,Afed ral andAs ate webApor als areAavaila ble. are hasA eenAt ken no AtoAover oad theA S s A–A nly theAserv cesAli kedA notA ith theA oreAn ed Aof theApeo le, A assAservi es,Aserv ces Aw ic Ado areA req ire theAspecial zedAtechn calAknowl dg Aof theAc vilAserv nts ire b ingAprovi ed.AServ ces Aw ich areAindu tryAspc fiA Aor Aw ichAreq theAspe ialAsk ll A fAaAgovern entAser an AorAw ichAreq ireAcollec io AofAadditi nalAinforma ionA ave notA eenAlo de Aon theACSCs.ENT/ Sou ce: A ces.worldb EXTEDEVELOPM Resources/0 70918_Axel.ppt?resourceurln ame=0 70918_Axel30AofA 8Ada tedA romA‘Impro ingASer i eAThAr ughASi g eA- AWi owAADelive y’;AR lphAHeintz an,AAssis antASecret ry,ASer ice andAInnovat n,AAGovern en CaFunc io s Aof AGovernment3.33.3. .2AInformat onA nd ACommunicati ns ATechnol gy A(I T)A asAenab edAgovernme tsA nd Ath ir AiffAer ntAun ts toAprov deAinformat onA nd Adeli er Aservi es toAcitiz ns i AaAfast r,Am re ffiAAci ntA ndAtranspar ntAmann r. InAfa t, AiffAer ntAgovernme tsA reA owAprovid n Aa Aweb-enab ed Asin le Awin owAinterf ce A orA llAgovernmen alAorganizatio s. AnAexam le ofAt is is A heA SAAGovernmen ’s ffiAAc alA eb Apor al A orA llAgovernm ntAtransactio s,Aservic s,A ndAinformat o A-A“usa.go ”. ASimilar y, A he Awebs teA ukAprovi e AaAsin leAwin ow Aweb-enab edAacc ss toA he Ainformat onA ndApub ic Aservi es Adelive ed by A he UKAgovernme t. InAIn iaAa soA heANatio al APor al A(. n)Aprovi es an Ainterf ce t AaAla geAnum er ofAgovernm ntAorganizati ns at A heAUn onA ndASt teAlev es.AorA Similar y,ASt teAGovernme tsAh ve Aconstitu ed ASin le AWin owAAgenci s, Aespecia lyA heA gr nt ofAindustr al Aclearanc s AThA se ASin leAWin owAAgenc esAh ve Anomin es of A llA inA departme ts Aconcern d. ItA asAb en Aobser edAt atAth seAagenci s,Am n Aa Ati e,Ag veAo lyA y A princi le Aapprov l’A ndA he Aapplic ntA as At en toAs ek Afor al Aapprov lsAf omAe chAagenem ThA s, Ath re is An ed toA ffiAAcien lyAempo erAth se A‘sin le Awind w’Aagenc es to Aena leAt toAprov deArelev nt Aservic s.AHowev r, itAne ds to beArecogni edAt at Atho gh A heA‘sinleAwind w’ Aappro ch i Aa Asim le Aconce t,A tsAimplementat on Arequi es Athoro ghAbusin ssAproc ssAre-engineer ng inAgovernm ntAorganizatio s, Aai ed by A he A se ofAIT.A3.3 4.ARecommendationsa.AGovernm ntAorganisati nsAsho ldAadh re toA heAprincip esAhighligh edinAparagr ph A3. .4Awh leAperform ngAregulat ryAfunctions ldA b.AGovernm ntAagenci s, Awhet erAregulat ry orAdevelopment l,Asho ns introd ceA he ASin leAWin owAAge cy Aconc ptAwit in Ath irAorganisati toAminim zeAdel ys A ndAmaxim ze Aconvenie ce toAcitize s.AGovernm nta AaAwh leAsho ldAd a Aa Aroad apAw thAtimeli esA orAexpediti usAcreat on o AaAsin leAwin ow atA he Alo alAle el A orAprovis on ofA llAdevelopmen alA ndAregulat ryAservi es toAcitizens. .4ADevelopmen alAFuncti ns ofAGovernme nt3. .1AGovernm ntAimpleme t AaAla geAnum er ofAwelf reA ndAdevelopm ntAprogram esA orA orApromot ngA he Asocio-econo ic Aupliftm nt ofA ts Acitize s AThA seAincl deAprogram esA e,A pove tyAalleviati n,Aemploym nt Agenerat onAschem s,Asche es toAstrengt enAinfrastructuthA measu es A or A he Awelf re of Awea er Asecti ns of Asocie y,Aprogram es toAimpr ve A heAhea heA ndAnutritio alAsta us of Acitiz nsAe c AThA seAprogram esA reAimplemen edAlarg ly byASt teAGovernme ts Athro gh Ath irAmachin ry A nd Athro gh ALo alAGovernmen s.AE31Cit zenACentricAAd i ihAe Governancet ation –f A AHeart Aoone of these programmes has its specific features and guidelines. hT e Commission in its Second Report examined in detail the issues regarding implementation of the National Rural Employment Guarantee Act (NREGA) and made comprehensive recommendation for effective implementation of this law. Without going into specific details of the other important programmes of Government, the Commission would like to suggest that the principle of subsidarity should be adopted in implementing various programmes. While doing so, citizens should be involved in all stages of these programmes and social audit should be made mandatory for all developmental programmes.3.4.2 Recommendations:a. ~e principle of subsidiarity should be followed while deciding on the implementation machinery for any programme.b.Citizens should be actively involved in all stages of these programmes i.e.planning, implementation and monitoring.c.Mandatory social audit should be carried out for all progrmames.d. Impact assessment should be carried out for all programmes at periodic intervals.324CITIZENS ACHARTERS4. AIntroductionA 4.1. A hA ACitizens ACharte Ai Aa Ainstrumen Awhic Aseek At Amak Aa Aorganizatio A transparent Aaccountabl Aan Acitize Afriendly A ACitizens ACharte Ai Abasicall A Ase AoA commitment Amad Ab Aa Aorganizatio Aregardin Ath Astandard Ao Aservic Awhic Ai AdeliversA Ever Acitizens Acharte Aha Asevera Aessentia Acomponent At Amak Ai Ameaningful Ath AArs Abein A th AVisio Aan AMissio AStatemen Ao Ath Aorganization A hAi Agive Ath Aoutcome Adesire AanA th Abroa Astrateg At Aachiev Athes Agoal Aan Aoutcomes A hAi Aals Amake Ath Auser AawarA o Ath Ainten Ao Athei Aservic Aprovide Aan Ahelp Ai Aholdin Ath Aorganizatio Aaccountable A Secondly Ai Ait ACitizens ACharter Ath Aorganizatio Amus Astat Aclearl Awha Asubject Ai AdealA wit Aan Ath Aservic Aarea Ai Abroadl Acovers A hAi Ahelp Ath Auser At Aunderstan Ath Atyp Ao A service Athe Aca Aexpec Afro A Aparticula Aservic Aprovider A hAes Acommitments/promise A constitut Ath Ahear Ao A Acitizens Acharter AEve Athoug Athes Apromise Aar Ano Aenforceabl A i A Acour Ao Alaw Aeac Aorganizatio Ashoul Aensur Atha Ath Apromise Amad Aar Akep Aand Ai A cas Ao Adefault A Asuitabl Acompensatory/remedia Amechanis Ashoul Ab Aprovided hA Airdly A th ACitizens ACharte Ashoul Aals Astipulat Ath Aresponsibilitie Ao Ath Acitizen Ai Ath Acontexo Ath Acharter4. AEvolutio Ao Ath ACitizens ACharterA 4.2. hA A ACitizens ACharter Awhe Aintroduce Ai Ath Aearl A1 A90’s Arepresente A Alandmar A shif Ai Ath Adeliver Ao Apubli Aservices A hA Aemphasi Ao Ath ACitizens ACharte Ai Ao AcitizenA a Acustomer Ao Apubli Aservices A hA ACitizens ACharte Aschem Ai Ait Apresen Afor Awa AArs A launche Ai A199 Ai Ath AUK A hA Aai Awa At Aensur Atha Apubli Aservice Aar Amad Aresponsiv A t Ath Acitizen Athe Aserve AI Ath A“Introductio At Ath AFirs ARepor Ao ACitizens ACharter Athawa Arelease Ab APrim AMiniste AJoh AMajo Ai A1992 Ai Awa Aclearl AdeAne Aa Afollows:A “ hA ACitizens ACharte Asee Apubli Aservice Athroug Ath Aeye Ao Athos Awh Aus Athem AFo A to Alon Ath Aprovide Aha Adominate Aan Ano Ai Ai Ath Atur Ao Ath Auser.. A hA ACitizensACharte Awil Arais Aquality Aincreas Achoice Asecur Abette Avalu Aan Aexten Aaccountabilit (Cabine AOAce AU.K. A1992)”33Citize ACentricAAdmin s rhAe HeartAofAGt onA–A4.2.2 A Citizens’ Charter is a public statement that defines the entitlements of citizens to a specific service, the standards of the service, the conditions to be met by users, and the remedies available to the latter in case of non-compliance of standards. The Charter concept empowers the citizens in demanding committed standards of service. Thus, the basic thrust of Citizens’ Charter is to make public services citizen centric by ensuring that these services are demand driven rather than supply driven. In this context, the six principles of the Citizens’ Charter movement as originally framed were:9i.Quality - improving the quality of services;ii.Choice - for the users wherever possible;iii. Standards - specifying what to expect within a time frame;iv.Value - for the taxpayers’ money;v.Accountability - of the service provider (individual as well as Organization); andvi.Transparency - in rules, procedures, schemes and grievance redressal.These were revised in 1998 as nine principles of service delivery in the following manner:10i.Set standards of service;ii.Be open and provide full information;iii.Consult and involve;iv.Encourage access and promote choice;v.Treat all fairly;vi. Put things right when they go wrong;vii. Use resources effectively;viii. Innovate and improve; andix.Work with other providers.'Source: 9Source:A charters.nic.in/cciniti tive.htm 1 SourceA:A s’AChaters4 3 e eAChart rAMarkeA 4.3 1 hT eAChart rAMa kASche eAw sAintroduc dA nA19 1A nAt eAUnit dAKingd mA oAimpro ,A t e A AAca y A fAt eAcitizen ’Acharter . A tAw s aAto lAdesign dA o Ahe p Aorganisatio sAfoc sAo eA a d Aimprov ,Athe rAcustom r Aservi eAa dAdelive yA oAuser . A As t A f As xAcriter aAma eA pAt Chart r AMa kAstandar d :1 ?ACriteri n A : AS t Astandar sAa d Aperfo mAwel ?ACriteri nA :AActive y Aenga eAwi hAyo rAcustomer , Apartne sAa dAst A ?ACriteri n A : A eAfa rAa dAaccessib eA oAeveryo eAa d Apromo eAchoi ee ?ACriteri n A : AContinuous yAdevel pAa dAimpro ?ACriteri nA :AU eAyo rAresourc s AffAective yAa dAimaginative y?eA ACriteri n A :AContribu eA oAimprovi gAopportuniti sAa dAquali yA fAli eA nAt communiti sAy uAserve.4.3 AAPubl c Aservi e Aorganizatio sAwe e Aeligib eA oAapp yAf rAt e AChart r AMa kAa d Aon yAtho eAwhi hAcou dAsco e Asatisfactori y A nAt eAcriter aAmention dAabo eAwe eAgiv nAt e AChart rAMa kA s aArecognitio .hT eAproce sA fAevaluati nAw sAcarri dAo tA yAindepende tAagencie s.sA 4.3 3AEvaluati n A fAt e ACitizen ’ AChart r Asche e A nAt eA KAh s Abe nAconduct dA yAexper eA fr mAoutsi eAagenci sA sAwe lA sAGovernme tAcommittee . hT eAPubl cAServi eACommitt aA conclud dA nAi sA‘Repo tA n hT eACitizen ’AChart rA(1997 ’Ath tAt eAinitiati eAh dAma eA nA valuab eAcontributi nA oAimprovi gApubl cAservices . hT eACommitt eAca eA oAt eAconclusi sA th t ACitizen ’AChart rAh dAl dA o Aimprovemen s A nAt eAdeliver ,Acultu eAa dAresponsivene fAma yAservice s. 2AlA 4.3 4 A nAt e Aoth r Ahan ,Athe e Ah sAal o Abe n Aso eAcritici mAabo t ACitizen ’ ACharte .ASever . assessmen sAreveal dAth tAt e Apromis sAcontain d A nAt eAChart rAwe eAvag eAa dAmeaningles eA hT e ASele tACommitt e A nAPubl cAAdministrati nA(U ) A n Ai s A11 hARepo t A n AChoic ,AVoi sA a dAPubl c AServi e Anot dAth tAt e ACitizen ’ AChart rAh sAlo t Apubl cArespe t Abecau e A tAwse nA s Abei gAt oAconfus d A n Ai sAobjective s.3AeA 4.3 5 hT eAChart rAMa kASche eAw sAtak nA pAf r aAcomprehensi eArevi wA nA20 6A– Th gA Custom rAVoi eA nATransformi gAPubl cAService ’A(t eABerna dAHerd nAReport) Th eAfollowi observati nAw s Amad"11 xAretriev dA nA9 -1-0912Sele tACommitt eA nAPubl cAAdministrati n A12 hARepo tA(U K)13ib35Citizen Centric Administration – The Heart of GovernanceThe Charter Mark scheme is something of an unsung success story. Charter Mark holders are generally very positive about the scheme. hTey feel it is a valuable management tool in driving up standards and that it helps motivate members of staff. hTere is much anecdotal, but little hard evidence of the Charter Mark’s effectiveness. hTe Charter Mark Scheme continues to prosper, but percentage penetration of the whole public sector – and therefore overall impact – remains quite low. hTere is now a very low level of public awareness of the Charter Mark, and a general scepticism about quality schemes and awards was displayed by members of the public that we met in focus groups. However, on balance, people do believe that the holding of some form of quality scheme or award might influence choice where this applies. It is to be noted that most public services do have performance standards and report to Parliament and the Public on how well they have met these. Most public service providers do also measure levels of customer satisfaction however this is often not particularly rigorous. Comparisons even within sectors are difficult to make, with a few notable exceptions. We have also recognised that there has been research in a number of countries on the fundamental drivers of customer satisfaction. Such research has been undertaken in the UK and generated consistent conclusions. In summary, the key drivers of customer satisfaction within public services are considered to be:?Delivery of promised outcomes and handling problems effectively;?Timeliness of service provision;?Accurate and comprehensive information, and progress reports provided;?Professionalism and competence of staff and treating customers fairly; and?Staff attitudes – friendly, polite and sympathetic to customers’ needs.4.3.6 Pursuant to the recommendations made in the Bernard Herdan Report, the Charter Mark Scheme was modified and the ‘Customer Service Excellence’ scheme was launched in 2008. Like the Charter Mark Scheme, under the new scheme also, public service organizations are encouraged to seek ‘Customer Service Excellence’ through a formal independent assessment process based on the following five criteria:i.Customer Insight.ii.Culture of the Organisation.iii. Information and Access.36Cit zens’AChartersiv.Div.ADelivey.v. ATimel nes AandAQu li y AofAServic .. AnAeAI dianAExper en eAofACiti ens’ACharte r . . AoAe AGover me t Aof A nd a Ain 1996Acomm n edAa ANat onalAD bat AforARespo siveAAdministra i n.AA A ajorAsugge tionA hichAem rge AwasAbri gin Aout ACiti ens’ACha ter Afo AallAp blicAse viceAorganisat os AdAe ideaArec ived As rong Asu po tAa Athe A hiefAMinis ers’AConfe en e Ai AMay A 997 Ao eAo Ath Akey Adeci io sAo AtheAConfe enc Aw sAtoAform lat AandAoperation lise ACiti ens’ACha te sAa Athe A nio AandA tate AGover ment Al ve s AinAse torsA hich haveA arge Ap blic Ainte face su hAasARail ays, ATel com, P stA&AP blicADistrib tionASys ems, AHospi als Aan AtheARe e ueA&AElectr cityADepartm ns AoAe Amom ntu Afor thi AwasApro id dAb AtheADepar me tAof AAdministr tive ARe o msA& AP blicAGriev ncesA(DA &P )Ain Aconsult tion wit AtheADepar men Afor ACon umrAAffA is AeAeADepar me tA f AR & APGAsimultane usly Aformu atedAguide ine AforAstruct r ng AaA odelAch rt rAas we l as Aa li tAof do’ AandAd n’ s Ato Ae able Ava iousAgover mentAdepart en s AtoA rin AoutAfo use AadAeffAe tiveAchar ers.A inc AMay A 997, whe AtheAprog amm AwasAlau ch d Ain AI diaAdiffA rentAMinist ies,ADepartm nts, ADirecto ate Aand A therAorganiza io sAa Athe A nion A evel haveAformu ate A115ACiti ens’AChar es.A Aere wer A650 suchACha ters Adeve op dAby Ava iousADepart ent AandAage ci sAo AtheA tate AGovern ent Aand A nionATerrit rie A( sAonAFeb uaryA2 007).1 4 . . AAAe A ARP Ase A ut Aa As ri sAofAguide in s Ato Ae abl AtheAse viceAdel veryAorganisa io sAto Aform lateApr cis Aand Ameani gfulACha te s At Ase AtheAse viceAdel veryAparame e s.AAese we eAas Afollos: . A oAbeAus ful AtheACh rter mu t AbeAsimp eb AhAeACh rter mu tAbeAf ame Anot on y Aby As nior Aexp rts Ab tAbyAintera tion wit AtheAcu ting edge taff Awho wllAfiA allyAimplme tAi Aand wit AtheA sersA(indiv dualAorganizat ion);c.AM relyAannou cin AtheAChrter wil Anot Ac ang Ath Aw yAweAfunc io . A t Ais Aimpo ta tAtoAc eateAcondi ions Ath oughAinteratio Aand Atra nin AforAgener t ngAaArespo siveAcliBox 4.1: AandAAwar nessA boutACiti ens’ACha terk andRTI:AJharound A ATranspa encyAInternat onalA ndiaA tudy teamA de sA thatAe cep AforAb nks, no eAo AtheAse viceAprov ity,A in ca eAofAP blicADistrib tionASy tem,Aelectri dsA&A hosp tal,A aterAsu ply, Ahou ing, landAre o aye A registra ion,Ap lic AandAtar etedAsc emesAdisp ters. anyACiti ens’ACharna eA How ver Ath ARTIAdi playAb ardsAdispl yin Athe AtheA o Athe AP blic AInform ti AOffi AcerA PIO Aan AtheA comp aintA oxes wereAavai ab eAin ca e Aof so eAo servAR& Gices.So rce:A ndiaACorru tionA t dyA–A 008;ATranspa encyAInternat onalA37mate;14Extr cted fro Athe AWe si eAofADCitiz nACentr cAAdministrati n – hT eAHea tA fAGovernanspd.Begin with a statement of the service(s) being offered;e.A mention is made against each service about the entitlement of the user, service standards and remedies available to the user in case of non-adherence to standards;f.Procedures/costs/charges should be made available on line/display boards/ booklets/inquiry counters etc at places specified in the Charter;g.Indicate clearly, that while these are not justiciable, the commitments enshrined in the Charter are in the nature of a promise to be fulfilled with oneself and with the user;h.Frame a structure for obtaining feedback and performance audit and fix a schedule for reviewing the Charter at least every six months; andi.Separate Charters can be framed for distinct services and for organizations/ agencies/attached or subordinate to a Ministry/Department.4.4.3 DAR & PG, in collaboration with the Consumer Coordination Council, New Delhi, undertook an evaluation of the Citizens’ Charter programme in 1998. The initiative at that time was at a nascent stage, but the findings were encouraging. Subsequently, a professional agency was engaged from 2002 to 2003 to develop a standardized model for internal and external evaluations of Charters. Some of the findings of the agency were:15i.In a majority of cases, the Charters were not formulated through a consultative process;ii.By and large, service providers were not familiar with the philosophy, goals and main features of the Charter;iii. Adequate publicity to the Charters had not been given in any of the Departments evaluated. In most Departments, the Charters are only in the initial or middle stage of implementation; andiv.No funds have been specifically earmarked for awareness generation of Citizens’ Charter or for orientation of the staff on various components of the Charter.4.4.4 Some of the recommendations of this agency were:16a.Need for citizens and staff to be consulted at every stage of formulation of theCharter,381515 pA(retriev d A nA1 4 -1-0 9)16 e.aCitizen ’AChartersbAOrientatio Ao Asta Aabou Ath Asalien Afeature Aan Agoals Aobjective Ao AthACharter Avisio Aan Amissio Astatemen Ao Ath Adepartment Aan Askill Asuc Aa Atea Abuilding Aproble Asolving Ahandlin Ao Agrievance Aan Acommunicatio Askills,cANee Afo Acreatio Ao Adatabas Ao Aconsume Agrievance Aan Aredress,dANee Afo Awide Apublicit Ao Ath ACharte Athroug Aprin Amedia Aposters AbannersAleaAets Ahandbills Abrochures Aloca Anewspaper Aetc Aan Aals Athroug Aelectroni Amedia,eAEarmarkin Ao AspeciA Abudget Afo Aawarenes Ageneratio Aan Aorientatio AoAstaA AandfAReplicatio Ao Abes Apractice Ai Athi AAeld.4.4. AA Aindependen Arevie Ao Ath ACitizens ACharte Ai AIndi Awa Acarrie Aou Ab Ath APubli AAAair ACentre ABangalor A(2007 Aan Ath Aresult Ahav Abee Apublishe Ai A Arepor Aentitle A‘India’ ACitizens ACharte A A Adecad Ao Aexperience’ AA Aoveral Aassessmen Ao Ath ACitizens ACharte Ai Apresente Ai ATabl A4 . 1.4.4. AhA ARepor Ao APA Aha Aals Abrough Aou Ath Afollowin Agenera AdeAciencies:aA APoo Adesig Aan Acontent AMos Aorganization Ad Ano Ahav Aadequat Acapabilit AtA draf Ameaningfu Aan Asuccinc ACitizens ACharter AMos ACitizens ACharter Adrafte Ab A governmen Aagencie Aar Ano Adesigne Awell ACritica Ainformatio Atha Aend-user Anee A AholtAagencie Aaccountabl Aar Asimpl Amissin Afro A Alarg Anumbe Ao AchartersA hAus Ath ACitizens ACharteAprogramm Aha Ano Asucceede Ai Aappreciabl AempowerinAend-user At Ademan Agreate Apubli AaccountabilitybA ALac Ao Apubli Aawareness AWhil A Alarg Anumbe Ao Apubli Aservic Aprovider AhavA implemente ACitizens ACharter Aonl A Asmal Apercentag Ao Aend-user Aar Aawar Ao A th Acommitment Amad Ai Ath ACitizens ACharter AE Aectiv Ae Aort Ao Acommunicatin A an Aeducatin Ath Apubli Aabou Ath Astandard Ao Adeliver Apromis Ahav Ano Abeeundertaken.cAInadequat Agroundwork AGovernmen Aagencie Aofte Aformulat ACitizens ACharterAwithou Aundertakin Aadequat Agroundwor Ai Aterm AoAassessin Aan Areformin Ait Aprocesse At Adelive Ath Apromise Amad Ai Ath ACharter3940GeneralAdmin.SocialDev.Ci izenACe tric AAdministr t oA Aehact cf Governancenent.Table 4.1: Overall Assessment of Citizens’ Charters% of Total Score ObtainedCharter ComponentNote: Percentages indicate the average fraction of the total possible number of points (100) a Citizens’ Charter could receive for a given charter compo73%Overall43.9%44%35%41%63%21%57%50%85%38%23%25%44.1%44%41%67%51%26%44%59%88%64%34%22%44.2%44%Industry23%34%59%12%59%58%81%85%38%24%54.5%55%Environment63%50%61%31%59%85%91%83%59%22%45.2%45%Infrastructure54%26%67%24%69%40%91%76%39%21%42.7%43%28%14%61%17%61%54%84%69%39%24%41.2%41%41%37%62%20%50%41%81%68%36%Vision & Mission StatementAvg. Score (Points)Overall (% of Total Points)Related LegislationCitizens’ DutiesCitizen Friendly MeasuresRights and CompensationQuality StandardsInformation About Dept.Business TransactedGrievance RedressList of ServicesAgriculture &Rural Dev.Citizens AChartersd.Charters are rarely updated: Charters reviewed for this report rarely showed signs of being updated even though some documents date back from the inception of the Citizens’ Charter programme nearly a decade ago. Only 6% of Charters reviewed even make the assurance that the document will be updated some time after release. In addition, few Charters indicate the date of release. Needless to say, the presence of a publication date assures end-users of the validity of a Charter’s contents.e.End-users and NGOs are not consulted when Charters are drafted: Civil society organizations and end-users are generally not consulted when Charters are being formulated. Since a Citizens’ Charter’s primary purpose is to make public service delivery more citizen-centric, agencies must investigate the needs of end-users when formulating Charters by consulting with ordinary citizens and civil society organizations.f.hT e needs of senior citizens and the disabled are not considered when drafting Charters: Just one Charter reviewed for this report assured equitable access to disabled users or senior citizens. Many agencies actually do cater to the needs of the disadvantaged or elderly, but do not mention these services in their charter.g.Resistance to change: The new practices demand significant changes in the behaviour and attitude of the agency and its staff towards citizens. At times, vested interests work for stalling the Citizens’ Charter altogether or in making it toothless.4.4.7 A study sponsored by the Department of Administrative Reforms and Public Grievances on evaluation of the Citizens’ Charters was carried out by the Indian Institute of Public Administration (2008). Some of the observations/ findings of this study are;a.Citizens’ Charters have still not been adopted by all Ministries/Departments.b.There was lack of precision on standards and commitments in several cases.c.There is often little interest shown by the organizations in adhering to their Charter.d.On the communications front, the Charter programme has been throttled on account of poor planning and resource commitment for publicity.e.In some cases, the Charters have become a one-time exercise, frozen in time.f.There was general lack of accountability and review mechanisms.41Citiz nACentr cAAdministrati n –hT eAHea tA fAGovernang.The Charters were devoid of participative mechanisms for effectiveperformance.4.5 Analysis of Two Citizens’ Charters4.5.1 The Commission has studied the Citizens’ Charters of the following two Organisations:a.Income Tax Department. [Annexure IV(1)}b.Delhi Transport Corporation. {Annexure IV(2)}4.5.2 Citizens’ Charter of the Income Tax Department (Government of India):174.5.2.1 The Citizens’ Charter (March, 2007) aims at promoting compliance with Direct Tax Laws through quality taxpayer services encouraging voluntary compliance and firm administration. The objectives laid down by the Department for itself include 18 action points. These are aimed at improving service delivery on matters ranging from dissemination of information and generating awareness to issue of refunds, giving effect to orders, disposal of rectification and other applications and redressal of grievances. Out of these 18 action points, 16 mention specific time frames for providing respective services. To mention a few:i.Refund should be issued along with interest, if any, within 9 months from the end of the month in which the return, complete in all respects, is received.ii.Effect to appellate/revision order should be given within 45 days from the date of receipt of the appellate/revision order by the A.O.iii. Rectification application should be disposed of within 2 months from the end of the month in which the application is received.ys17 xA4. :ATrai sA nAEuro eAProvi eACompensatinAf rALa eARunninaAal s AInternation lA AAtra n A nAEurop )Aprovi eAcompensati nAf rAdela s A fAmo eAth n A 0Aminute ,Aexce tA nAcas s A fAfor eAmajeur .A oA e Amo eAprecis ,A f aAal sAreach sAi sAdestinati n Amo eAth n A3 ,A 0A r A1 0 Aminut sAlat , aAal s AffAe sAy u A2 , A 0A r A10 % A fAt e Apri e A fAt e Ajourn yA nAquesti nA(on yAf r aAal sAticke s A nA n Ainternation l Ajourney .iA sAcompensati nAconsis s A fAtrav lAvouche sA o A eAus dA nAanoth r aAal sAjourney.Eurost rA(Tra nAbetwe nAFran eAa dAt eAU )Aundertak sA o Aprovi eAt eAfollowi gAcompensation:Dela s A f A 1A o A1 0Aminut sA(inclusiv e):O eAfr e Asing eAtick t A r A5 %Areducti n A nAt eAco tA fAa yAEurost r Ajourn y A nAt e ABrussels-Lond nA rAParis-Lond nAlin es.Dela s A f A1 1 Aminut sAa dAmore:Reimburseme t A fAt e Asing e Ajourn yAth tAw sAdelayed.Sourc :A w.b-rai l.be/int/E/service s/compensation/index.php#thal42Citizens ACharters4.5.2.2. In fact, the two action points which do not indicate any specific time frame pertain to general matters relating to creating awareness and acknowledgement of communications. The Charter also stresses on certain expectations on the part of the taxpayers. These include obtaining and quoting correct PAN/TAN in all returns, challans and communications, filing correct returns on time, quoting correct bank details etc.4.5.2.3 It is evident from the Charter that it applies uniformly to all field formations in the Department. However, field units across the country differ on account of workload (i.e. number of cases, complexity involved), human resources etc. Thus, there is need for having Citizens’ Charters at the level of field units which should be formulated by taking into account the ground situation while adhering to the overarching principles adopted by the organization as a whole. Further, there is also need for specifying certain standards for providing basic facilities to the citizens visiting Income Tax offices. It would be advisable for the Income Tax Department to assess and evaluate in due course the extent to which the time lines indicated in the Charter are being adhered to and take suitable remedial measures accordingly.4.5.3 Citizens’ Charter of the Delhi Transport Corporation:184.5.3.1 This Charter is aimed at setting out the commitment ‘to provide a convenient, comfortable, regular, punctual, effi cient, safe, reliable and eco-friendly bus transit system at reasonable prices benefiting the National Capital.’ It is aimed at establishing ‘an effective 6- active interface with the commuters to evaluate our performance against their expectations and take appropriate remedial measures to provide them the best possible service’. However, the Charter is more in the nature of an information brochure than a Charter. Many of its action-points are of a general nature and highlight the ‘aims’ of the organization. It also contains future plans of the Corporation. Some of them are highlighted below:i.Reliability and punctuality standards: ‘We aim to make our services reliable byway of ensuring their punctuality’.ii.Technology upgradation: ‘We are always keen to imbibe the latest technologicaladvancements indigenously 6- globally available in Bus Body Designs, Engine Equipment, Technology, Systems etc. so as to be able to provide the commuters a comfortable 6- efficient Bus Service’.iii. Controlling pollution: ‘...The Corporation also operates Inter State Services with diesel buses. These buses too are made to undergo Stringent Pollution Checks after regular intervals.’4318Source: ACentricAAdmin s rt onA–A Ae muter care: ‘With a view to be able to take better care of its commuters, theCorporation plans:a.To optimize its fleet strengthb.To diversifyc.To equip all its buses with GPS based Automatic Vehicle Tracking System, etc.v.The Charter also gives information about ‘the requirements to be fulfilled fordifferent categories of bus-passes’.4.5.3.2 Thus, this Charter does not provide the citizens with time-frames for any citizen-centric activity on the part of the organization. hT e Charter should also have incorporated standards such as:i.Standards of Cleanliness: Specifying benchmarks such as ‘Buses shall be cleaned once a day’.ii.Standards of Punctuality: Specifying benchmarks to point out the maximum acceptable late running time.iii. Standards of Overloading: Specifying benchmarks for maximum allowable number of passengers in a bus.iv. Equipment Quality Standards: Specifying limits for number of running kilometers allowable for a bus, specifying quality of seating equipment etc.v.Safety Standards: Specifying adherence to benchmarks such as maximum speed limit of 40 KMPH or so for buses.vi. Bus Personnel Standards: Specifying bench marks for uniforms, behaviour with commuters etc.vii. Standards for Response to Grievances/Complaints: Specifying time frames response to various types of grievances/complaints, non-adherence to standards specified in the Charter etc.4.5.4 The analysis of different Charters brings out the following:?Measurable standards of delivery are rarely spelt out in the Charters.?As the standards of delivery are seldom defined, it becomes difficult to assess whether the desired level of service has been achieved or not.44Citiz ns’ACharE?AA ven Aw ere theAstand rd AofAser ice are As eltA ut, At er Ai AnoAmecha is AtoAen ureA is A hat At eseAstand rds areAactu llyAadh red h t .AT er Ai AnoAcit zen Afrie dlyAmecha ad A toAcompen ate theAciti en Aif theAorganiza ion Af il AtoAho our the Apro iseA in theAChart rh theA ?AT er Ai AnoAperi dicArevi io AofAChar er AinAo de AtoAup ate A hemA ith nc A expectat on Aof theAciti en Aon the oneA and and theAorganizati nalAexperi on theAoth rh entA ?AT er A sAaAtend nc AtoA a eAa Auni ormACha ter for al offiA cesAu der theApau s. organizat o hAis Aoverl. AoksAl calAiss?A ostAChar ers areAver ose and refl ect the Aaspirat on Aof theAorganizat on.4.6AMa ingACitiz ns’AChar erAEffAec i eA AAnAAg nda forARefrm*ArthA 4. . . ThAeACommis ion hasAb i flAyAd altA ith the Ai su AofACitiz ns’AChar er Ain itsAFo eseA Re or AonA‘Et ic AinAGovernan e . ThAeACommis ion Aobse vedA ha AinAo de AtoA akeAt rlyA Char erAeffAec ive At ols forAhol ing Apu licAserv ntsAaccounta le, theAChar ers Ash uldAcle rdsA s ell out theAremedy/penalty/compensa io Ain A aseAt er A sAaAdef ul AinAmee ing theAstand ca A s elt ou Ain theAChar er AIt Aemphas zedA ha Ai AisAbe te AtoA a eAa few Aprom ses Aw ichbeA eptA h nAaA ong A is AofAl fty but Aimpract calAaspiration.i. fulA AInte nalArestructu ingAsh uldApre edeACha terAformulat on A sAaAmeanin Ain Cha ter As ek Ato Aimp ove theAqua it AofAserv ce,A ereAstipula io AtoA haAeff ec ingA theACha terA ill not uffiA h c .AT ere ha At A eAaAcomp eteAanal si Aof theAexis At A sys ems and Aproce sesAwi hin theAorganiza ion A nd Aif A eed be, At ese Ash ul aceA beAre ast and new Ainitiat ves Aadop ed.ACitiz ns’AChar ersA hat are pu AinAp ne A a terAt eseAinte nalAref rmsA il AbeA ore Acred ble and Aus fulA han At oseAdesiasA ere A esk Aexerc sesAwit out any Asy temAre-engineeringii.theA OneA izeA oes n t fiAt A l hAisA: AugeAchall ngeAbec mes A venA oreAcom le AasentA capabili ies andAresou cesA hatAgovernm nts and Adepartm ntsA ee AtoAimple are Citiz ns’AChar ersA aryAsinifiAca tlyAac oss theAcoun ry.AA de Ato At ese ersA diffAe ingAl calAconditi n . ThAeAhi hlyAun ven Adistribu io AofACitiz ns’AChar ies ac ossASt te AisAc earAevid nc AofA hisAgr undAreal ty. ForAexam le,A omeAagen may A eedA oreA im Ato Aspe ify andAa ree A ponAreali ticAstand rd AofAserv ce AIn Aoth rs,Aadditi naAeff ortA il AbeArequ re AtoAmoti ate andAe uip theA aff AtoApartici at Ain A hisAre orm Aexerc se.A uchAorganizat onsAc ul AbeAg ven A ime45ters*Ada tedA rom the Are ortAfurni he AbyPAC.AC tizenAC ntricAAdminist a in –AaAe He rtAofAGoverna ceresources to experiment with standards, grievances redressal mechanisms or training. They may also need more time for internal restructuring of the service delivery chain or introducing new systems. Therefore, the Commission is of the view that formulation of Citizens’ Charters should be a decentralized activity with the head office providing broad guidelines.tee’s ABo . :AThAeAParliam ntaryACommi Vi wsAonACit zens’ACha t rsrtersA ThAeACom it ee is A f th AfiArmAo inio AthatACit zens’ACh ubl cA s ecifyAsta da dsAof Ase vic sAan AtimeA imit Ath t AtheA ain AA can Areas nablyA xpec Afr m AtheAorganiz ti n.AI AalsoAcoowA tA theAd ta lsAofAgrie ancesAred essalAmec ani mAa dA ndentA anAbe Aacc sse .AIt,Ather fore,Apr vid sA or AanAindepsumerA mec anis Awi hAtheAinvol em ntAofAci ize sAandAco nmentA g o p .AThAe ACom ittee note At at Ai Am st A f AtheAGove geAofA organiza ion ,AtheACh rte sA reA n Athe Ai it al AorA iddle st dit dA formu ati n AandAimplement t on. ThAes An ed toAbeAexp zens’A a d A ut Ain pl ceAonApri rity. AFu th r, Ai Amost A ases,ACit c s .A Ch rte sAa eAnotAform lated At r ugh AaAconsul ativeApr dAforA ThAe AComm ttee,Ather fore,Areco mend Athat th r AisA Aneat onA ci ize s Aan st ff A to AbeAcon ul edAat every st ge AofAformu abo tA fAtheAC art rAand th r AisA Ane d Afor Aorien at onAo staffA r e the .A As lientAfe tur sAand go lsA fAtheAChrsAsoA ThAeACom itte Aalso Areco mend Ath tAtheACh rt StateA form la edAb Ae ch A f AtheAMinistries/Department roughA Governmen s/UTs A ho ldAbeA idelyApubl cizedAt esA nA print/elec ronic med aAandAdis la ed Aat Aconsp cuousA la m n .A the Aorgani at on AorAestabliseci eA ThAe ACom it ee isA fAth Avie AthatAC arterA ho ldAbeAp ndA sA ar Aas Apo sible A imp eAandA poken Ala guageA holdAbeAused. it eeA S urce: ADepa tment AR lated AParliam ntary ASt nding ACom NinthA on APers nnel, A ublic AGriev nce , AL w Aand AJu tice; A wenty ep rt AonA ublicAGrie ancesARed essal AMech nismiii.Wide consultation process:Citizens’ Charters should be formulated after extensive consultations within the organization followed by a meaningful dialogue with civil society. Inputs from experts should also be considered at this stage.iv. Firm commitments to be made: Citizens’ Charters must be precise and make firm commitments of service delivery standards to the citizens/consumers in quantifiable terms wherever possible. With the passage of time, an effort should be made for more stringent standards of service delivery.v.Redressal mechanism in case of default: Citizens’ Charter should clearly lay downthe relief which the organization is bound to provide if it has defaulted on the promised standards of delivery. In addition, wherever there is a default in the service delivery by the organization, citizens must also have recourse to a grievances redressal mechanism. This will be discussed further in the next chapter on grievances redressal mechanisms.46itizens’ Chartersv . tA APeriod c Aevaluati nA fACitizen ’ACharter :AEve y Aorganizati n Amu tAcondu lA period cAevaluati n A f Ai s ACitizen ’ AChart r Apreferab yAthrou hA nAextern dA agenc . ThA sAagen yAwhi eAevaluati gAt e AChart r A fAt e Aorganisati nAshou gA al oAma eA n Aobjecti eAanalys s AfAwheth rAt e Apromis sAma eAthere nAa eAbei tA deliver dAwith nAt eAdfiAn dAparameter . hT eAresu tA fAsu hAevaluatio sAmu ’A eAus dA o Aimpro eAup nAt eACharte . ThA s A sAnecessa y Abecau e aACitizen sA Chart r A s aAdynam cAdocume tAwhi hAmu tAke p Apa eAwi hAt eAchangi gAnee fAt eAcitize sA sAwe lA sAt eAchang s A nAunderlyi g Aprocess sAa dAtechnolog A A Aperiod cArevi w A fACitizen ’ AChart rAth s Abecom sA nAimperativ.Avi . fA ABenchma kAusi gAend-us r Afeedba k : ASystemat cAmonitori gAa dArevi wA eA Citizen ’ ACharte s A sAnecessa yAev nAaft rAth yAa eAapprov dAa d Aplac d A nAt eA publ cAdomai .APerforman eAa dAaccountabili yAte dA o AsffA rAwh n A AAcia sAa .A n tAhe dAresponsib eAf rAt eAquali y A f a ACharter sAdesi nAa dAimplementatio sA nAth sAcontex , Aend-us rAfeedba kAc n A e aAtime yAa dA oAasse sAt eAprogre s a d Aoutcom s A fA nAagen yAth t Ah s Aimplement d a ACitizen ’ ACharte . ThA sA a Astanda d Apracti eAf r ACharte s Aimplement d A nAt eAUK.vii . eA AHo dA AAce sAaccountab e Af rAresult :AA l A fAt eAabo e Apoi tA oAt eAne dA oAma rA t e Ahea s A fAagenci s A r Aoth rAdesignat d Aseni r A AAcia sAaccountab eAf rAthe cA respecti eACitizen ’ACharter . hT eAmonitori gAmechani mAshou d fi xAspecfi ’A responsibili y A nAa lAcas sAwhe eAthe e A s aAdefau t A nAadheri gA oAt eACitizenCharter.i . dA AInclu eACiv lASocie yA nAt e Aproces : AOrganizatio s Ane dA oArecogni eAa rA suppo tAt eAffAor s A fAciv l Asocie yAgrou s A n Apreparati n A fAt e ACharter ,Athe aA disseminati nAa dAal oAfacilitati g Ainformati nAdisclosure AThAe e Aha e Abe n sA numb r A f AStat sAwhe e Ainvolveme t A fAciv l Asocie yA nAth s Aenti e Aproce sAh sA result d A nAva t Aimproveme t A nAt eAconten s A fAt e ACharte ,Ai sAadheren eAwe lA s Aeducati gAt eAcitize sAabo tAt e Aimportan e A fAth sAvit lAmechanis.A4.6 2ARecommendation:A.ACitizen ’ACharte sAshou dA eAma eAffAecti eA yAadopti gAt eAfollowigAprinciples:.AO eAsi eAdo sAnt fi tAall.i . rA ACitizen ’AChart rAshou dA e Aprepar d Af rAea hAindepende tAun tAund t e Aovera lAumbrel aA f At e Aorganisation ’Acharte47Citizen Centric Administration – ~e Heart of Governanceiii. Wide consultation which include Civil Society in the process.iv. Firm commitments to be made.v. Internal processes and structure should be reformed to meet the commitments given in the Charter.vi. Redressal mechanism in case of default.vii. Periodic evaluation of Citizens’ Charters.viii. Benchmark using end-user feedback.ix. Hold officers accountable for results.4.7 ~e Sevottam Model4.7.1 Sevottam19 is a Service Delivery Excellence Model which provides an assessment-improvement framework to bring about excellence in public service delivery. hT e need for a tool like Sevottam arose from the fact that Citizens’ Charters by themselves could not achieve the desired results in improving quality of public services. Besides, the absence of a credible grievances redressal mechanism within organizations was also becoming a major impediment in improving service delivery standards. Thus, it was felt that unless there is a mechanism to assess the outcomes of various measures, the reform initiatives would not yield the desired results. The Sevottam model works as an evaluation mechanism to assess the quality of internal processes and their impact on the quality of service delivery.4.7.2 The Sevottam model has three modules.20 The first component of the model requires effective Charter implementation thereby opening up a channel for receiving citizens’ inputs into the way in which organizations determine service delivery requirements. Citizens’ Charters publicly declare the information on citizens’ entitlements thereby making citizens better informed and hence empowering them to demand better services. The second component of the model, ‘Public Grievance Redress’ requires a good grievance redressal system operating in a manner that leaves the citizen more satisfied with how the organization responds to complaints/grievances, irrespective of the final decision. The third component ‘Excellence in Service Delivery’, postulates that an organization can have an excellent performance in service delivery only if it is efficiently managing well the key ingredients for good service delivery and building its own capacity to continuously improve service delivery.4819The term Sevottam is formed by joining two Hindi words seva and uttam meaning service and excellence respectively.20Extracted from a booklet on Sevottam, published by the Department of Administrative Reforms and Public Grievances, Government of India.C tizens’ACharters4.7.3 Each module is assessed on the basis of these three criteria (Table 4.2). Each criteria, in turn, has several specific elements/questions (Table 4.2). Several Departments have initiated steps to use the Sevottam model in order to improve their quality of services.Table 4.2: Sevottam Model : Assessment CriteriaIMPLEMENTATIONMes33 Questions1.1.1 How do you determine and/or distinguish the citizen groups as also your stakeholders and whatservices do you offer to them?1.1.2 How do you meet the service expectations of your citizens’ groups?1.1.3 How do you ensure that services and their standards as described in the charter are in accordance with expectations of citizens’ groups identified above?CITIZENS’ CHARTERS od1.1.4 How do you ensure that preparation and/or review of the charter is participatory and inclusive of al your citizens’ groups?1.1.5 How do you ensure that frontline staff and citizens’ groups are aware of the charter and can understand its contents easily for compliance?MONITORING1.2.1 How do you measure and track service delivery performance of different outsets against charter contents?1.2.2 How do you communicate the gaps in service delivery to officer/team responsible for charter monitoring and to the outlets concerned?1.2.3 How do you fill the observed and/or reported gapsREVIEW1.3.1 How do you find out whether your charter is serving its purpose and take measures to enhance its effectiveness?1.3.2 How do you incorporate legislative changes (e.g. introduction of Right to Information Act, etc.) and other relevant provisions/developments in your charter revision process?1.3 3 How do you ensure that frontline staff and the citizens are aware of the basis for making changes as above?PUBLIC GRIEVANCE REDRESSRECEIPT2.1.1 How do you prepare and implement guidelines for spreading awareness on public grievances process and ensure that citizens get the information the need?2.1.2 How do you prepare and implement guidelines for recording and classifying grievances?2.1.3 How do you prepare and implement guidelines for multiple channels of grievance redress such as toll-free telephone lines, web site, etc?REDRESS2.2.1 How do you determine time norms for acknowledgement, and redress of grievances/complaints received?2.2.2 How do you ensure that the time norms as above are adhered to?2.2.3 How do you continuously improve the system and use forums like Jan Sunwai, Lok Adalats and other single window disposal systems to expedite grievance redress?PR2.3.1 How do you use grievance analysis while preparing annual action plans and strategy of the organization?2.3.2 How do you find out grievance prone areas and communicate them to the officer/team responsible for service delivery improvement and to the Public Grievance Redress Officer?2.3.3 How do you link grievance analysis to charter review and to other guidelines so that complaint prone areas are improved upon?2.3.4 How do you measure and track the progress on improvements required to reduce complaint prone areas?2.3.5 How do you ensure that frontline staff and the citizens are aware of improvements made in grievance redress mechanism?49Ci izenACe tric AAdministr t oA AThAeA ea tAofAGovernanceteriaMoSERVICE DELIVERY CAPABILITYu esA9ACriCUSTOMERSINFRASTRUEMPOYEESer aA33AQues3.2.2 How do you prepare and implement guidelines to encourage the willingness of the frontline staff to accept responsibilities for service delivery as per citizen expectations?3.2.3 How do you encourage healthy competition among your outlets for improved service delivery?3.3.1 How do you determine and implement minimum standards of service for convenience of citizens such as putting signage, placing waiting benches, drinking water and other needs?3.3.2 How do you determine the resources that are required taking into account service delivery needs, current budgets, current channels of service delivery to ensure resource availability/utilization as per plans/requirements and standards fixed for service delivery?3.3.3 How do you prepare and implement guidelines that encourage outlets to continuously improve service delivery?3.1.1 How do you determine citizen satisfaction levels and implement steps required for improving the same?3.1.2 How do you measure citizen satisfaction across the organization and for particular service deliver outlets?3.1.3 How do you link citizen satisfaction results to charter review and to other processes affecting service delivery?3.1.4 How do you prepare and implement guidelines that encourage your outlet for creating a citizen focused organization?3.1.5 How do you find out and distinguish among outlets on the basis of service delivery, and implement steps required to improve the same?3.2.1 How do you encourage and ensure courteous, punctual, and prompt service delivery by your frontline staff?tio sCTUREable 4.2:ASev ttamAo elA:AAsses mentACribard4.7.4 The Sixth Central Pay Commission observed as follows:hTe citizen centric governance commitment of Government of India has led to development of a model for public service delivery (Sevottam). The model has been developed through extensive consultations with multiple stake holders and it has led to development of Indian Standard IS: 15700: 2005. By doing that, India has become the first country to have a published standard for Public Service Delivery. We are of the view: 0 5Box 4.4: SomeAStipula io sA n AISA15700a i :A ThAeACiti ens’ACh rterA hallAconio .A 1. AV sio Aand Ami sionAstat me tAo AtheAorganisaAa dA 2. Li tAo AkeyAservi e(s) A eigAoff er dAb AtheAorganisa iondiesA 3. AMeasu ableAse viceAstan ard Afo AtheAservi e(s)Apro ide AandArem a d . avai ab eAt AtheAcus ome Afor Anon-compl an eAt AtheAstanda l :A ThAeACit zensACh rterAsAitsA 1.ARepr s ntAaAsyste atc Ae Ao tAo AtheAorganis ti nAtoA oc sAoer .Acommi mentAto ard AitsAcusto .ABeAs mpl AandAe silyAunderstan abl Aand alsoApr nt dAinA ocalAlanguge ,AasArequre .A . ABeAnon-discriminaor .A4.ADes ri eAorA ef rAtoAcomp aintAhan lingAproes .A5.AIn lud AtheA ame,Aadd ess,Atele honeAn mbe AandA therAco tactAde ai sAo Athe Ap blicAgrie anAoffiAce .A . ABe Aperiodi allyArev ewe AforAup- ate AandAcont nualAimproveen .A7.AHigh ightAexpecta io sAo AtheAorganis tion fro AitsAcust mersA hereArequr e .A8.APr vide Ainform ti nAo Athe da e AofA ss eAo AtheACit zensACh rte AandApe son Awho were Acons lted Ad rin Aits Aprepara50TORINGCit zens’AChartersthath t, A orARI Apurpo e, A heASevot am Amo elA an be Aintegra ed Ai to A heAmo elA ndAt usAemploy es ghA ofAministries/departme ts Af lfiAll ngAcert inAle el ofApub icAaccountabil ty beArewar edAthro amA P I.ASi ceAcollect ve effA rt ofA llAemploy es isArequi ed A orAh ghAqual tyAserv ceAdelive y,ASevot orA sc re Asho ld b AaAgr upAmeasu e hAe AuAit ofAanaly isA an beA he Alar erAorganizat onAandes ba icAperforma ce Aun tsAdetermi ed byAserv ceAdeliv ryArequiremen s. AsA RI Asys emAprogres in Amaturi y,Amini um Aperforma ceAun erASevot amA ay beAk pt a AaAquaifi er A orAP I.AHe e,Aemploy es of Aent reAorganizat on A or Apa t)Aachiev ngAot erAresul s, A utAfail ng inASevot amA ayA otArece veAP I. We Awo ldAl ke toAemphas zeAt at by noAme ns weAim ly Anon-achievem nt ofAoterAperforma ce Agoa s, Awh leAachiev ng ASevott m. In A ur Aopini n, byAmeasur ngA ndAreward ngAh ghAqual ty Apub ic Aserv ceAdelive y, itA an beAm d AaAnatu alAprior ty A orAtea m s.”ep 4. . hAe ACommissAonA asAstud ed A heASevot am Amo elA nd is of A heAv ew At at it i AaAs inA he Ari ht Adirecti n.AHowev r, it Awo ld Arequ reAfurt erAstrengthen ngA ndAefiAnemet. erA As ofAn w, it i Aa Avolunt ry Ainitiati e.AAl o, A he Afo us isAlarg ly onAproc ssAstanda dsArat esA t an Aserv ceAstandar s hAe ACommissAon is ofA he Av ew At at Awh le Ag od Ainter alAprocesre re Anecess ry A or Abet er Aservic s, Ath se by Athemsel esA ay A ot beA ffiAAcie t AThAerefo e,Ath ngA is An ed to Afo us on Abet erAqual ty of Aservi e hAT is Aco ld beAachie ed Awit inA heAexist isA Sevot amAframew rk by Ashift ngA heAempha isAf omAproces es toAqual ty of Aserv ce as illustra ed inATa le A4rvicesMCITIZENS’ CHARTERSte iaA33AQuetionsASug estedAqueon the toAevAAAluarvic AAA s q al tyAofAseio edA Do sAthe Al st ngAof Ase vicesAmentAtheAyAyou matc Awit At atAo AwheAth A ci izensA xp ctAo Ayou AWh tAa dress ga sAan Awh ?A owA oAyouAa Agap ? thesenAthe W atA sAte AdiffA renceAb twe sAtheA norm Ath tAyo Aha eAset vis aAv ti ns? cu tomerAexpect aati nA oAyouAi volveAci iz nsAinAprepa rter A and Ape iodicA ev ewAo AyourAch rou s? D esAit cov rAallAcit zens’Agzens’A A eAtheAci izens aw reAo AyourACit art r? Chzens’A A eAtheAcommi ment Am deA nAtheACit xten ? C arter beingAa her dA o?AT AwhatAe AsomeA Do sAtheACit zens’ AC arterAp ovi eAfo ffiA ceA aut maticA el efAtoAci iz nsAi Aca eAeA dAforA sAno Aa leAt Ame tAthe normsApres ribIMPLEMENTATIONtizenA 1.1 1A owA oAyouAdet rmineA nd/or Adisti gui hAtheAcoAouro psAa Aals AyourAstakeh lde sAan Awhat Ase vi esAoffAerq al tyAofAseAthemAyourA 1.1 2A owA oAyo Ame tAtheAs rviceAexpect ti nsAor o u p s cit zens’AgdsAasA 1.1 3A owA oAyouA nsur AthatAse vic sAand theirAsta dati nsA des ri edA nAthe AC art rA reAinAacco danc AwithAexpecta b o ve ofAcit zens’A roupsAi en ifiAedAev ewA 1.1 4A owA oAyouA nsur AthatAprepa ationA nd/orAAyourAfAtheAc ar erAis Apartici ato y AandAinc us veA fAalr o u p s cit zens’Agzens’A 1.1 5A owA o AyouA nsur AthatAfro tlin sta AAandAcitdAitsA rou sAare aw reA fAtheAC art rAa dAcanAunde stai an c e co tentsA asi yAforAcompliveryA 1.2 1 A ow A o Ayou Am asu eAand track As rviceAdet en ts perfo ma ceAfAdiff erentAo tsetsAa ainstAc arterAcon iv ry 1.2 2A owA oAyouAcommu ica eAth Ag psAinAs rviceAdendA oA oAoffiAAce /team Arespo sib eAforAc arterAmoni ori gAe rn ed theAo tletsAconc1.2 3A owA o yo AfiA l AtheAob ervedA nd/orAre ortedMONITab e 4.3A:ASe ottam M delA AFromAP oc ssAtoAQ al tyAofASegaps51Citizen Centric Administration – The Heart of GovernanceCITIZENS’ CHARTERSModules9 Criteria33 QuestionsSuggested questions to evaluate the quality of servicesWhat are the findings of an independent evaluation report regarding adherence to the standards and norm specified in the Charter?E1.3.1 How do you find out whether your Charter is serving its purpose and take measures to enhance its effectiveness?1.3.2 How do you incorporate legislative changes (e.g. introduction of Right to Information Act, etc.) and other relevant provisions/developments in your Charter revision process?How frequently do you upgrade your Charter?1.3 3 How do you ensure that frontline staff and the citizens are aware of the basis for making changes as above?Arethestaff atthecutting-edgelevel and the citizens aware of these upgradess?PUBLIC GRIEVANCE REDRESS2.1.1 How do you prepare and implement guidelines for spreading awareness on public grievances process and ensure that citizens get information they need?Are the citizens aware of the grievance redressal mechanism? To what extent?RECEIPTHow do you ensure that all the grievances received by the organization are registered and classified according to their nature? How do you check cases of non-registration of grievances?2.1.2 How do you prepare and implement guidelines for recording and classifying grievances?2.1.3 How do you prepare and implement guidelines for multiple channels of grievance redress such as toll-free telephone lines, web site, etc?2.2.1 How do you determine time norms for acknowledgement, and redress of grievances/complaints received?While registering grievances, do you acknowledge the time norms for their redressal? Do you have checks in place to ensure the adherence to such timenorms?I n how many cases were the grievances redressed to the satisfaction of the citizen?REDRESS2.2.2 How do you ensure that the time norms as above are adhered to?2.2.3 How do you continuously improve the system and use forums like Jan Sunwai, Lok Adalats and other single window disposal systems to expedite grievance redress?2.3.1 How do you use grievance analysis while preparing annual action plans and strategy of the organization?PREVENTIONWhat are the improvements in internal processes for reducing the grievances? Has it led to reduction in the number of grievances?2.3.2 How do you find out grievance prone areas and communicate them to the officer/team responsible for service delivery improvement and to the Public Grievance Redress Officer?2.3.3 How do you link grievance analysis to Charter review and to other guidelines so that complaint prone areas are improved upon?2.3.4 How do you measure and track the progress on improvements required to reduce complaint prone areas?2.3.5 How do you ensure that frontline staff and the citizens are aware of improvements made in grievance redress mechanism?Table 4.3 : Sevottam Model : From Process to Quality of ServicesContd.52Citizens AChartersTabl A4. A ASevotta AMode A AFro AProces At AQualit Ao AServiceouttd.ssA3 AQuestionASuggeste Aquestion At Aevaluat Ath Aqualit Ao AserviceA ACriteriTO33.1. AHo Ad Ayo Adetermin Acitize Asatisfactio Alevel Aan Aimplemen Astep Arequire Afo Aimprovin Ath Asame?I Ather Aimprovemen Ai Aleve Ao Acitize AsatisfactionC?3.1. AHo Ad Ayo Ameasur Acitize Asatisfactio Aacros Ath Aorganizatio Aan Afo Aparticula Aservic Adelive Aoutlets?3.1. AHo Ad Ayo Alin Acitize Asatisfactio Aresult At ACharte Arevie Aan At Aothe Aprocesse AaAectin Aservic Adelivery?Ha Ath Aimprovemen Ai Aleve Ao Acitizens Asatisfactio Ao Aotherwis Ale At ACharte Arevie Ao Aproces Areview?3.1. AHo Ad Ayo Aprepar Aan Aimplemen Aguideline Atha Aencourag Ayou Aoutle Afo Acreatin A Acitize Afocuse Aorganization?Wha Astep Ahav Ayo Atake At Acreat Aawarenes Aamon Aclients/customers /citizens?3.1. AHo Ad Ayo AAn Aou Aan Adistinguis Aamon Aoutlet Ao Ath Abasi Ao Aservic Adelivery Aan Aimplemen Astep Arequire At Aimprov Ath AsameEMPLOYEES?3.2. AHo Ad Ayo Aencourag Aan Aensur Acourteous?HaAthAinternaAculturAo AthApunctual Aan Apromp Aservic Adeliver Ab Ayou Afrontlin AstaAAorganizatio Aimproved?3.2. AHo Ad Ayo Aprepar Aan Aimplemen Aguideline At Aencourag Ath Awillingnes Ao Ath Afrontlin Astaf At Aaccep Aresponsibilitie Afo Aservic Adeliver Aa Ape Acitize Aexpectations?3.2. AHo Ad Ayo Aencourag Ahealth Acompetitio Aamon Ayou Aoutlet Afo Aimprove Aservic AdeliveryAD Ayo Ahav A Asyste Ao Aincentives/reward Awithi Ath Aorganizatio Afo Aimprove Aservic AdeliveryINFRASTRUCTUR?3.3. AHo Ad Ayo Adetermin Aan Aimplemen Aminimu Astandard Ao Aservic Afo Ath Aconvenienc Ao Acitizen Asuc Aa Aputtin Asignage Aplacin Awaitin Abenches Adrinkin Awate Aan Aothe Aneeds?D Ayo Areceiv Afeedbac Afro Aclients /citizen Aabou Aimprovement Arequire Ai Ayou Ainfrastructura Afacilities AHo Aregularl Ad Ayo Aac Aupo Ait?3.3. AHo Ad Ayo Adetermin Ath Aresource Atha Aar Arequire Atakin Aint Aaccoun Aservic Adeliver Aneeds Acurren Abudgets Acurren Achannel Ao Aservic Adeliver At Aensur Aresourc Aavailability/utilizatio Aa Ape Aplans/requirement Aan Astandard AAxe Afo Aservic Adeliver?D Ayo Aregularl Apla Afo Aan Awor Aou Arequirement Ao Aresource Aneede Afo Aimprovin Aservic Adeliveryy3.3. AHo Ad Ayo Aprepar Aan Aimplemen Aguideline Atha Aencourag Aoutlet At Acontinuousl Aimprov Aservic AdeliveryModuleSERVICE DELIVERY CAPABILITYE4. A ANe AApproac Afo AMakin AOrganization ACitize ACentric4.8. AA ACommissio Arecognize Atha A ACitizens ACharte Acanno Ab Aa Aen Ai Aitself Ai Ai Arathe A Amean At Aa Aen A A Atoo At Aensur Atha Ath Acitize Ai Aalway Aa Ath Ahear Ao Aan Aservic Adeliver Amechanism AA AI A15700:200 Ao Ath ABurea Ao AIndia AStandard Ai Aa AIndia AStandar Afo AQualit AManagemen ASystems AA AStandar Aitsel Astipulate Atha A AQualit AManagemen ASyste Ahelp Aa Aorganizatio At Abuil Asystem Awhic Aenabl Ai At Aprovid Aqualit Aservic Aconsistentl Aan Ai Ano A Asubstitut Afo A‘servic Astandards’ AI Afact53Citizen Centric Administration – The Heart of Governancethey are complementary to each other. The Sevottam model seeks to assess an organization on (i) implementation of the Citizens’ Charter, (ii) implementation of grievances redressal system and (iii) service delivery capability.4.8.2 The Sevottam model is in the take off stage. The Commission is of the view that a model to make administration citizen centric should be easy to understand both by the citizens and the organizations. Therefore, prescribing a rigid model and implementing it, following a top-down approach is not always the best option. Since the maximum interaction of citizens takes place with field formations, it is necessary that reforms for enshrining a citizens’ centric administration take place at that level rather than following a trickle down approach by concentrating on reforms at the apex level. The Commission during its visit to various States and organisations met citizens who observed that the large number of reforms carried out at Headquarters do not trickle down to the cutting edge level and therefore the real benefits do not flow down to large number of citizens. Examples most often cited, pertain to lack of citizen centric reforms at the village level because of which Patwaris and other officials, continue to be indifferent and corrupt.4.8.3 The same approach is also necessary for Citizens’ Charter. Today, most of the field formations either do not have a Citizens’ Charter or they adopt a generic one provided by the Headquarters.4.9 ~e ARC Seven Step Model for Citizen CentricityThis model draws from the principles of the IS 15700:2005, the Sevottam model and the Customer Service Excellence Model of the UK. Each organization should follow a step by step approach which would help it in becoming increasingly more citizen centric. This approach should be followed not only by the top management but also by each unit of the organization that has a public interface. The top management has the dual responsibility of setting standards for itself as well as guiding the subordinate offices in setting their own standards. Besides, all supervisory levels should ensure that the standards set by the subordinate offices are realistic and are in synergy with the broad organizational goals. Thus, though each office would have the autonomy to set standards, these would have to be in consonance with the organizational policies.a.Define all services which you provide and identify your clients.b.Set standards and norms for each service.c.Develop capability to meet the set standards.54Citizens ACharterss dAPerfor At Aachiev Ath Astandard. eAMonito Aperformanc Aagains Ath Ase Astandards. fAEvaluat Ath Aimpac Athroug Aa Aindependen Amechanism.gAContinuou Aimprovemen Abase Ao Amonitorin Aan Aevaluatio Aresults4.9. ASte A1 ADeAn AServicesAl Aorganizationa Aunit Ashoul Aclearl Aidentif Ath Aservice Athe Aprovide AHer Ath Ater Aservic Ashoul Ahav A Abroa Aconnotation AEnforcemen Adepartment Ama Athin Atha Aenforcemen Ai Ano A Aservice ABu Athi Avie Ai Ano Acorrect AEve Ath Atas Ao Aenforcemen Ao Aregulation Aha Aman Aelement Ao Aservic Adeliver Alik Aissu Ao Alicenses Acourteou Abehaviou Aetc ANormally Aan Alegitimat Aexpectatio Ab A Acitize Ashoul Ab Ainclude Ai Ath Ater A‘service’ ADe Anin Ath Aservice Awoul Ahel Ath Asta Ai Aa Aorganizatio Ai Aunderstandin Ath Alink Abetwee Awha Athe Ad Aan Ath Amissio Ao Ath Aorganization AI Aaddition Ath Auni Ashoul Aals Aidentif Ait Aclient Aan Ai Ath Anumbe Ao Aclient Ai Ato Alarg Ai Ashoul Acategoriz Athe Aint Agroups AAi Awoul Ab Ath AArs Aste Ai Adevelopin Aa Ainsigh Aint Acitizens Aneeds.4.9. ASte A2 ASe AStandardsI Aha Abee Awel Asai Atha A‘wha Acanno Ab Ameasure Aneve Aget Adone’ AOnc Ath Avariou Aservice Ahav Abee AidentiAe Aan AdeAned Ath Anex Alogica Aan Aperhap Ath Amos Aimportan Aste Ai At Ase Astandard Afo Aeac Aon Ao Athes Aservices A Agoo Astartin Apoin Awoul Ab Agettin Aa Ainpu Afro Ath Aclient Aa At Awha Athei Aexpectation Aar Aabou Aeac Aon Ao Ath AidentiAe Aservices AAereafter Abase Ao Athei Acapability Ath Aorganization’ Aoveral Agoal Aan Ao Acours Ath Acitizens Aexpectations Ath Auni Ashoul Ase Astandard At Awhic Athe Acoul Acommit AI Ai Aver Aimportan Atha Athes Astandard Aar Arealisti Aan Aachievable AComplaint Aredressa Amechanis Ashoul Afor Aa Aintegra Apar Ao Athi Aexercise AAes Astandard Ashoul Athe Afor Aa Aintegra Apar Ao Ath ACitizens ACharter.4.9. ASte A3 ADevelo ACapacityMerel AdeAnin Ath Aservice Aan Asettin Astandard Afo Athe Awoul Ano Asu Ac Aunles Aeac Auni Aha Ath Acapabilit Afo Aachievin Athem AMoreove Asinc Ath Astandard Aar At Ab Aupgrade Aperiodically Ai Ai Anecessar Atha Acapacit Abuildin Aals Abecome A Acontinuou Aproces s ACapacit Abuildin Awoul Ainclud Aconventiona Atrainin Abu Aals Aimbibin Ath Arigh Avalues Adevelopin A Acustome Acentri Acultur Awithi Ath Aorganizatio Aan Araisin Ath Amotivatio Aan Amoral Ao Ath AstaA55Citizen Centric Administration – The Heart of Governance4.9.4 Step 4: PerformHaving defined the standards as well as developed the organizational capacity, internal mechanisms have to be evolved to ensure that each individual and unit in the organization performs to achieve the standards. Having a sound performance management system would enable the organizations to guide individuals’ performance towards organizational goals.4.9.5 Step 5: MonitorWell articulated standards of performance would be meaningful only if they are adhered to. Each organization should develop a monitoring mechanism to ensure that the commitments made regarding the quality of service are kept. Since all commitments have to form a part of the Citizens’ Charter, it would be desirable that an automatic mechanism is provided which signals any breach of committed standard. This would involve taking corrective measures continuously till the system stabilizes. Compliance to standards would be better if it is backed up by a system of rewards and punishments.4.9.6 Step 6: EvaluateIt is necessary that there is an evaluation of the extent of customer satisfaction by an external agency. This evaluation could be through random surveys, citizens’ report cards, obtaining feedback from citizens during periodic interactions or even an assessment by a professional body. Such an evaluation would bring out the degree to which the unit is citizen centric or otherwise. It would also highlight the areas wherein there have been improvements and those which require further improvement. This would become an input in the continuous review of the system.4.9.7 Step 7: Continuous ImprovementImprovement in the quality of services is a continuous process. With rising aspirations of the citizens, new services would have to be introduced, based on the monitoring and evaluation, standards would have to be revised and even the internal capability and systems would require continuous upgradation.4.9.8 The Commission is of the view that the approach outlined in the model described is quite simple and there should be no difficulty for any organization or any of its units to adopt this approach and make it citizen centric. The Commission would like to recommend that the Union Government as well as State Governments should make this model mandatory for all public service organizations.56Citizens ACharters.4.9. ARecommendation:a AA AUnio Aan AStat AGovernment Ashoul Amak Ath Aseven-ste Amode Aoutline Ai Aparagrap A4.9 Amandator Afo Aal Aorganization Ahavin Apubli Ainterface575CITIZENS’ PARTICIPATION IN ADMINISTRATION5.1 Peoples’ Participation in Governance5.1.1 Governance comprises the mechanisms, processes and institutions through which collective decisions are made and implemented, citizens’ groups and communities pursue their vision, articulate their interests, exercise their legal rights, meet their obligations and mediate their differences. (UNDP 1997).5.1.2 Citizens’ participation in governance embodies a shift in the development paradigm from citizens as the recipients of development to one that views them as active participants in the development process. Equally, it involves a shift from a “top-down” to a “bottom-up” approach to development involving increasing decentralization of power away from the Union Government and closer to grassroots levels, i.e. “Subsidiarity” which the Commission has gone into in detail in its Sixth Report on “Local Governance”. The concept of citizens’ participation in governance is essentially based on the premise that citizens have a legitimate role in influencing decision making processes that affect their lives, their businesses and their communities. In other words, citizens’ participation refers to the mechanism and modalities by which citizens can influence and take control over resources and decision making that directly impacts their lives. At the ideological level, direct citizens’ participation in governance is seen as contributing to a healthy democracy because it enhances and improves upon the traditional form of representative democracy to transform it into more responsive and thus a participative grassroots democracy.5.1.3 It is now widely accepted that active citizens’ participation can contribute to good governance in the following ways:i)It enables citizens to demand accountability and helps to make governmentmore responsive, efficient and effective.ii)It helps to make government programmes and services more effective andsustainable.58Citizens AParticipatio Ai AAdministration.iii AI Aenable Ath Apoo Aan Amarginalize At AinAuenc Apubli Apolic Aan Aservic Adeliver At Aimprov Athei Alives.iv AI Ahelp At Apromot Ahealthy Agrassroot Ademocracy.5.1. AUnde Athi Ane Aparadigm Acitizen Aar An Alonge Aconsidere Amer AbeneAciarie Ao Ath Afruit Ao Atechnica Aexpertis Aan Aknowho Afro Aexternall Aguide Adevelopmen Aprogrammes AInstead Athe Aar Asee Aa Aequa Astak Aholder Ai Ath Adevelopmen Aprocess AI Afact Apopula Aparticipatio Aa A Ademocrati Arigh Atha Ashoul Ab Apromote Ai Aal Adevelopmen Aprojects Aha Aincreasingl Acom At Ab Aaccepte Aa Aa Aobjectiv Aan Ano Ajus Aa A Amean At Adevelopment .A 5.1. ACitizens Aparticipatio Ai Agovernanc Ai A Abilatera Aengagemen Awherei Ai Ai Aessentia A bot Afo Agovernmen Aagencie Aa Awel Aa Ath Acitizen At Ab Afull Ainvolve Ai Aorde Afo Asuc A participatio At Alea At Aimprove Aoutcome Asuc Aa Abette Aservic Adelivery Achang Ai Apubli A policy Aredressa Ao Agrievance Aetc hAA Apatter Ao Asuc Aparticipatio Aha Abee Adescribe Aa Aladde Awit AdiAeren Atype Ao Aengagement Atha Arepresen AdiAeren Adegree Ao Aintensit Ao Aparticipation AT Aillustrate Athes Acoul Astar Awit Aconsultatio Ai Aorde At Aliste At Ath Acitizens Aneed Aan Ademand Aan Awoul Aevolv Aint Aconsultativ Ameetings Acustome Afeedback Asurveys Ahom Avisit Aetc A Amor Aintensiv Afor Ao Aparticipatio Awoul Alea At Acreatio Ao Ainstitutionalize Amechanism Afo Aengagemen Asuc Aa Acitizens Aactiv Ainvolvemen Ai Aplanning Abudgetin Aan Amonitorin Ao Aprogramme Athroug Amembershi Ai AAudi Aan ABudge ACommittee Aetc5.1. AhA ACommissio Ai Ao Ath Avie Atha Amechanism Afo Acitizens Aparticipatio Ai governanc Acoul Ab Aconceptualize Ai Ath Afollowin Amai Aforms:iACitizen Aseekin Ainformation;iiACitizen Agivin Asuggestions;iii ACitizen Ademandin Abette Aservices;iv ACitizen Aholdin Aservic Aprovider Aan Aothe Agovernmen Aagencies AaccountableAandvAActiv Acitizens Aparticipatio Ai Aadministration/decisio Amaking.5.1.7 AEac Aon Ao Athes Ai Aelaborate Ai Ath Afollowin Aparagraphs59Citizen Centric Administration – The Heart of Governance5.2 Citizens Seeking Information5.2.1 Access to information is a fundamental pre-requisite for ensuring citizens’ participation in governance. Making information available (on procedures, prices, application forms, officers to be contacted for grievance redressal etc) is the first step in any strategy to empower citizens for their interaction with government. The Right to Information Act in India has in essence already laid down the ground-work for ensuring this pre-requisite for citizens’ participation in governance but it is only by greater citizens’ awareness of their rights under this Act that its vision of transparency can be realized. The Commission in its First Report on the ‘Right to Information Act’ has already given detailed recommendations on the improvements needed in the implementation of the Right to Information Act to fully achieve its objectives. Those recommendations are reiterated here as being critical to encouraging citizens’ participation in governance.5.3 Citizens Giving Suggestions5.3.1 Listening to the voice of citizens not just during periodic elections but on an ongoing basis is the starting point of participation of citizens in governance. Such listening could be done through public hearings, surveys, referenda etc. where citizens can give their suggestions with regard to their problems as well as the possible solutions. Citizens are in the best position to articulate their needs and suggest the appropriate solutions which is why there is often need to complement local knowledge and skills with governmental expertise. Such participation can lead to proactive engagement with the policy making process thus creating entry points for further participation and mobilization of citizens to enter the arena of governance.5.3.2 To illustrate, the Bangalore Agenda Task Force (BATF) was set up in 1999 with the goal of transforming Bangalore into a world class city with the participation of its leading citizens including the heads of its major IT companies, as well as prominent members of the Bangalore civic community. BATF was asked to explore how to improve city services and infrastructure, expand the city resource base and enhance the administrative capacity of the city corporation. The BATF held public summits in the presence of the media and the Chief Minister every six months to follow up these objectives. This engagement not only gave citizens’ groups the opportunity to make suggestions on what needed to be done but also enforced accountability in the city service providers by creating a forum where their promises, once made, had to be fulfilled in a time bound manner.215.3.3 The Commission is of the view that suggestions of citizens can be of great help both at the level of policy making and implementation since citizens are in the best position to1Reinvent ngAPub icAServ ceAdeliv ry inAInd a; A V.AVik amACha d;ASa e;Ap ge60Citizens AParticipatio Ai AAdministratioindicat Athei Aprioritie Aan Ath Apossibl Asolutions AWhil An Aunifor Amode Afo Areceivin A th Asuggestion Ao Acitizen Ao Aholdin Aconsultation Aca Ab Asuggested Ath ACommissio feel Atha Ai Ashoul Ab Amandator Afo Aal Agovernmen Aorganization At Adevelo A Asuitabl Amechanis Afo Athi Apurpos Awhic Acoul Arang Afro Ath Asimpl A‘Suggestio ABox At regula Aconsultation Awit Acitizens Agroups AA AHead Ao Ath Aconcerne Aorganization shoul Aensur Arigorou Afollo Au Aactio Ao Ath Asuggestion Areceive As Atha Athes Abecom A Ameaningfu Aexercise AA ACommissio Aals Afeel Atha A Asyste Ao Aincentive Aan Areward shoul Ab Aintroduce As Atha Asuggestion Atha Alea At AsigniAcan Aimprovemen Ao Asaving Aca Ab AacknowledgedAs 5. ACitizen ADemandin ABette AServiceA 5.4. A A Aobjectiv Ao Acitizens Aparticipatio Ai At Aensur Atha Agovernmen Aorganization A wor Afo Ath Aconstituencie Awhic Athe Aar Amean At Aserve AFo Athi At Ahappen Agovernmen A servant Ashoul Ab Aaccountabl Ano Aonl At Athei Asuperior Abu Aals At Acitizens AI Ai Aonl A whe Athi Ai Arealise Ab Agovernmen Aagencie Atha Acitizen Aca Avoic Athei Agrievance Awit A assuranc Atha Adu Aattentio Ai Agive At Athem AFo Aexample Ath AHyderaba AMetropolita A Wate ASuppl Aan ASewerag ABoar A(HMWSSB Acreate A Acampaig Acalle Ath ACust omers A meet Acampaig Awhic A“compelle Asenio Amanager At Aleav Ath Acomfor Aan Asecurit Ao Athei A oAce At Ainterac Adirectl Awit Acitizen Ai Aneighbourhood Athroughou Ath Acity hAA Acampaig A no Aonl Aprovide Avaluabl Acustome Afeedbac At Ath AMetr AWate AManagement Abu Aals A sparke Apressur Afro Acitizen Afo Afurthe Arefor Ab Araisin Aexpectations A hA Acampaig A wa Acovere Aextensivel Ai Ath Amedia Athereb Amagnifyin Ait Aimpact AI Awa Afollowe Ab Ath A establishmen Ao A AMetr ACustome ACar A(MCC Acentr Alocate Aa Ath Ahea AoAce A hA AMC A wa Aope A2 Ahour A Ada Awit Ath Asol Amandat At Areceiv Aan Acoordinat Ath Aresponse At A complaint A Ale Ab Acitizen Athroug A Adesignate Atelephon Anumber A Asoftwar Apackage A calle Ath ACustome ARedressa AEAcienc ASystem Aprovide Asenio Amanager Awit A Aregula A strea Ao Aperformance-relate Adat Atha Acoul Ab Ause At Ahol Afrontlin Aan Amiddle-leve A manager Aaccountabl Afo Aservic Aqualit Aan Acomplianc Awit Ath Anorm Ai AMetr AWate r’ A ne Acitizens Acharter Awhic Aha Abee Alaunche Ai AJanuar A200 Ab Ath AChie AMinister A Finally A ASingl AWindo ACel A(SWC Awa Aestablishe Aa Ath Ahea AoAc At Areceiv Aproces an Acoordinat Aal Ane Awate Aan Asewerag Aconnectio Aapplications A.225.4. AA ACommissio Afeel Atha Ath Ae Acienc Ao A Agovernmen Aorganizatio Ai Abes Ajudge Ab Ait Aresponsivenes At Acomplaints/demand Afro Ait Aclients AA ACommissio Ai Ao Ath Avie Atha Aever Agovernmen Aorganizatio Amus Aensur Ath Afollowing A(i A Afool Aproo Asyste Afo Aregistratio Ao Aal Acomplaints A(ii A Aprescribe Atim Aschedul Afo Arespons Aan6122Reformin APubli AService Ai AIndia AWorl ABank ASage.C tizenAC ntricAAdminist a in –AThAe He rtAofAGoveresolution, and (iii) a monitoring and evaluation mechanism to ensure that the norms prescribed are complied with. Use of information technology tools can help to make such a system more accessible for citizens. The Commission feels that the heads of all government organizations should be made responsible for ensuring the development of such a system for responding to the complaints of citizens, on a time bound basis.5.5 Citizens Holding Service Providers and Government Agencies Accountableu u B x: A. A:ACiti enARep rtACa dsA(C C A–ABengalhAeAPub eeAic AffAa rsACent e,ABengal ruApresen edAthAeA Citi enARep rtACa ds A(19 4, A1 99 A nd A200 ) hA ryA objecti es ofA heAsurv ysAw re t Afi ndAo t: 1)A owAsatisfact 2)A w reA he Apub icAservi esAf om A he Ause s’Aperspecti e; atA w atAaspe ts ofA heAservi esAw reAsatisfact ry A ndAw tsA w re An t;A nd 3)Aw atAw reA he Adir ct A nd Aindir ctAco asA incur ed by A he Aus rs A orAth seAservic s.ASatisfact onA ldA measu ed o AaArat ngAsc le (1 to 7) A ndAaggrega ed toAyi s A avera es A orA ts AiffAer ntAdimensioceA A Acompari on of A heAperforma ce ofAiffAer ntAserv od provid ngAagenc esAo er A heAl stA enAye rs A(i e.A heAper of At meAbetw enA heAth eeArepor s)Arevea e AaAsig ifiAcntAimprovem nt in A heAsatisfact on of Aus rs ofAservic s. OfA he An neAagenc es on Awh ch Acitiz ns ofABangal reAprovi edAfeedba k,A llArecei edAsatisfact onArati gs Aab ve A 0%inAinA he Ath rd Asur ey A(20 3) in Acontr st toAl ssAt anA 0% 4.A 1 99 A ndAm chAlo erArati gs inA19es/ Sour e:A documents/Case%20Studi Bangalore%20Citi zen%20report%20card.5.5.1 Making public agencies work and ensuring that their service delivery would meet the criteria of efficiency, equity and customer satisfaction, requires citizens to voice their grievance and their dissatisfaction in an organized manner. The mechanisms used could include citizens feedback and surveys, citizens’ report card and social audit. To illustrate, “three citizens’ report cards (CRC) on city services in Bangalore conducted by the Public Affairs Centre (PAC) – in 1994, 1999 and 2003 – showed a significant improvement in the quality of services provided by city agencies (Balakrishnan, 2005). ... The three utilities – the Bangalore Electric Supply Company, the telecom company (BSNL) and the Bangalore Water Supply and Sewerage Board (BWSSB) – showed major improvements across all three report cards; the Bangalore Mahanagara Palike (BMP; city corporation), public hospitals, and the Bangalore Development Authority (BDA) improved fastest between 1994 and 1999, with satisfaction ratings remaining steady or falling marginally in the 1999-2003 period. Bangalore’s five regional transport offices (RTOs) recorded major improvements between 1999 and 2003, reflecting reforms, including the use of e-governance)”.235.5.2 hT e Commission is of the view that citizens should be given the opportunity to rate the services provided by government organizations, on a periodic basis. Regular citizens’ feedback and survey and citizens report cards should therefore be evolved by all departments for this purpose. hT is would not only give a voice to the citizens but also enable the agencies concerned to judge satisfaction ratings and the need for improvement.pdf23Reform ngAPub icAServi es inAInd a;AS geAp ge62C tizens’AParti ip tion Ain AAdmnistration5.6AA tiveACiti ens’AParticip ti nAinAAdministr t onA/ADecision-m a k i n g ce sA .6.1 AG ving Acit zens Aon- oingAayondA t Athe Adecision-m kingApro ess,Ab tur A per odic Aconsulta io s is Aa moreAm ti nA andAinte sive fo mAofAciti ens’Aparticip themA in Agover ance A hic Acan help tterA nego iate with Agover men AforAb.AAt po icy,Ab tterAp ans,Ab tter Apro ects et thisAs age Athe Acit ze s AnoAl ngerAmrelyA oiceA heirAgriev nces withAgovern ent Ab tAit Ainv lves Agover mentAact allyAwo king on’sA with Aciti en .AAs A ot dAi AtheACommiss mostA r po t AonA“ ocal AGoverna ce , “ThAe is AaA impo tant fo mAofAcitiens’Aparticip ti n de sA comm ni y Aof Acl arly Aid ntifi ableAstakeho AForA i Athe Adel ve y of AaAs e ifiAcAp blicAser ice to Aa inst nce,Apa entsAse ding A heirAchi dr ntion p blic Asc ool, Afa mersArece vingAirrig f om Aa Ac mmonAso rce,Aprod cersAselingA of AaA heirApr du e in AaAm rke AandAme be s ableA cooper tiv AareAg ou sAof Acl arly Aid ntifii y A stakeho der Awho also need Aempowe me tAinAconso ance wit Athe Aprin ip eAofAsubsidiaAThAeAThAe ACommi sio AhasA aken no eAo Athe Ad ba eAon A ocalAgovern entsAv rsusAciti ens’Agr u sents Commi si nA sAo AtheAconsi ered view that Aempowe me t AofAstakeho der AandA ocalAgovern ers’A mu tAbe se n asAaAcont nuu Aand thatA hereAs ou dA eAnoA aus Afor con AictAbe weenAstakeholni dA g oup AandArepresent tiveAocalAgovernm nt . AEffAe tive Aempowe metAofAstakeho dersAaccompoAbeA byAmecha ism AforAcoordin tion withA ocalAgovern ent Ais,Athere o e,A Akey Aprin ip eA ing,A follo ed”.AExa pl s Aof suchAparticip tionA ouldAin ludeAparticip tory Amuni ipalAbudge sAinA all wing Acit ze sAto vote Adir ctly Ath o gh Aa Arefer nd m AonAse ifiAc Aprop sal AforAch ng ec sA p blic Apoli ies, Apro ect Aand A aws;Amand toryAp blicAhea ings Ab foreAapp ov l AofApro ocalA or Adeci ions su hAasAch ng s Ain lan Ause Ap ans, tht Aa Aec Athe Aenviro ment Aa d/o AtheA tal A commu ity, Ag ving Aciti ens’Arepresent ti nAonAmanag ment Acommi tee AforA ocalAhosp ti nA and Asch ols,As cial Aa dit,Aempow rin Athe GramA ab aAto Ad ci e AonAi su sAofAimplementin Agover mentAwe fare Asc emesBox agaland B xA5.2:ACommunit sa ionAofAS rv cesAinANenAtheA Communit za i n AisAaApart ershipA etw bi ityA Gov rnm ntA nd Athe Aco mun tyAfor A haringArespons ices.AA inAman ge entAof publicAinsti uti nsAandAse sedAo A Ini ial y,Athe sc eme Aof Acommunit zationA oc AGra sA thr e AveryAim ortan Aareas AEle entaryAedu ation t.AThAeA root healthAs rvi es AandAElec ricityAmana e e nsAandA N galandACommunit sa ionAof PublicAInsti uti ngA orA S rvi es ActA n A2002 Ap ovi edAtheAst tutoryA ack ct wasA theAiniti t v .ThA AfiArstAim ortantA ea ure ofA heA it eesA toA rov deA or AtheAconst tu ionAof Bo rds AorAcom icularA to Are res nt Athe Aco munit Awhi hAu esAtheAparation, f cil ty se Aup byAtheAgov rn ent inAt eA reaAofAedu secondA hea thAandAsani ation Awater sup ly and s A n.AThAeAstateA del gationAco prised pow rsAand Afu ct ons ofAth publicA gov rn entA oAsuchAauth ri iesAto mana e Asuch board,A uti ities,At an ferAofAgov rnment as etsA o Asuch ryAan A c ea ion A fAf nd Af rAsuchAauth ri ies At Awhich saledAforA other gran sAf omAtheAgov rnmen Aw uldAbeAc edi unn ngAandAdeve op ent Ao AthoseAut lit esAandAimpsi ionAofArespons bi ity onAthe Agov rn entAtoA ro ideA oAsuchAauth ritiesAc iticalAsupe vis ryAandAsup ortiveAassi tance ARule Aun erA heAA t Awere Aprom lga edAf r AeachA sector. ource: AGov rnentAof AN63Citize ACentri AAdministratio A AhA AHear Ao AGovernanc5.6.2 Social AuditSocial audit generally refers to engagement of the stakeholders in measuring the achievement of objectives under any or all of the activities of a government organization, especially those pertaining to developmental goals. The basic aim here is to have an understanding of an activity from the perspective of the vast majority of people in society for whom the institutional/administrative system is designed and to improve upon it. Various participation techniques are used to involve all stakeholders in measuring, understanding, reporting and improving the social performance of an organization or activity. e whole process is intended as a means for social engagement, transparency and communication of information, leading to greater accountability of decision-makers, representatives, managers and officials. It can be a continuous process covering all the stages of the target activity/programme.245.6.3 In its earlier Reports (the Second, Third and Sixth Reports), the Commission has emphasized the need for institutionalizing a system of social audit for improving local service delivery and to this end, the Commission in its Sixth Report, on “Local Governance” has made the following recommendation: “For establishing robust social audit norms, every State Government must take immediate steps to implement the action points suggested in para 5.9.5 of the Report of the Expert Group on ‘Planning at the Grassroots Level’.5.6.3.1 Gram Sabha: As noted in the Commission’s Report on “Local Governance”- hTe Gram Sabha occupies a central place in the entire scheme of local governance because it is this body which provides an opportunity to the individual villager to participate in the local decision making processes. hTe Commission went on to add : The Commission is of the view that in order to have effective popular participation at the micro level, the large Gram Panchayats should be split into a number of wards/areas. Representing a unit of smaller habitation or cluster, the124Source ASocia AAudit A AToolkit ACGG AHyderabadBo A5.3 ABhagidari ACitizens AParticipatio AiAGovernanc A ADelhi“Bhagidari” Ath ACitizens APartnershi Ai AGovernanc A – Ai A Amean Afo Afacilitatin Acitywid Achange Ai ADelhiA Autilise Aprocesse Aan Aprinciple Ao Amulti-stakeholder A(citize Agroups ANGOs Ath AGovernment AcollaborationA Aapplie Ath Ametho Ao ALarg AGrou AInteractiv AEventA Aaim At Adevelo A‘join Aownership Ab Ath Acitizen Aan Agovernmen Ao Ath Achang Aproces sA Afacilitate Apeople’ Aparticipatio Ai AgovernancAA Ainitiativ Alaunche Ai AJanuar A200 Aha AArme Au Aan Abecom A Amovemen Ai Aeigh Ayears AMor Atha A200 Acitizens Agroup Ahav Abecom A‘Bhagidars Ai Agovernanc Aafte Ahavin Aparticipate Ai Avariou ABhagidar Aworkshops AA A“Bhagidars Ahav Ano Aonl Abee Asuccessfu Ai Asolvin Athei Aday-to-da Aproblems Abu Ahav Aals Abee Aprovidin Ahel At Apubli Autilit Adepartment Ai Amaintenanc Aan Aup-gradatio Ao Aservices ASom Aexample Aare :-1 ASuccessfu Aimplementatio Ao A‘Clea AYamuna” A‘Sa An At Aplasti Abags Aan A‘N Acracker Ao ADiwali Acampaigns.2 ASwitchin Aon/o Ao Astreetlight Ab ARWAs.3 AMete Areadin Ab ARWA Ai Athei Aresidentia Acolony.Source A .nic .in/bhagi .asp#64Citiz ns’AParticipa io AinAAdministraW W rd ASa haAw llAprov d AaAplatf rm Awh reApeo leA anAdirec lyAdisc ss Ath irAne dsA ndAprep re heA anAa ea Aspe i Ac Alo alApl n hAe AWArd ASa haA anAexerc seAcert in Apow rsA nd Afuncti ns ofAed G am ASa haA ndAa so As me Apow rsA ndAfuncti ns of A heAG amAPanchay tsA ay beAentrus to Ath m.AAccording y, A he ACommiss onArecommen ed asAund r:AWhere er Ath reA re Ala geAGamAPanchaya s,ASta es Asho ldAt keAst ps to Aconstit te AW rd ASab as Awh chAw llAexerc se inAs chAPanchaya s,Acert in Apow rsA nd Afuncti ns of A heAG am ASa haA nd of A heAG amAPancha at asA ay be Aentrus ed toAthe m .5. .A Ae ACommiss on Areitera esAth se Arecommendati ns Asi ce it is ofA he Aconside edAv ewAt atAcitize s’Aparticipat on inAgoverna ceA as to Abe in at A heAgrassro ts toAbu l AaAheal hyA nd Arespons veAdemocracy. .7AEncourag ngACitize s’AParticipati on5. .1 As Aalre dyAstat d,Acreat ng an Ainstitutio alAenvironm nt Aconduc ve toAcitize s’Aparticipat on inAgoverna ceAinvol e AaAbilate alAproc ss At at Arequi e Aa Avigila t,Aproact veA nd Aresponsi leAcitize ry on A he A neAh ndA n AaAtranspare t, Arespons ve A ndArecept veAgovernm ntAage cy on A heAoth r A Ae ACommiss onAfe lsAt at Ath re i AaAc se A orAinduc ngAgovernm nt Adepartme tsA ndAagenc es to be Am reAproact ve in At is Arega d. Of A hAfi veAfo ms of Acitize s’Aparticipat on Amentio ed in A he Aforego neeAessentia ly Arequ reAcreat on of Aappropri te Af ra A orAinterf ce Abetw en A heAagenc esA ndA heAcitiz ns A or A heApurp se of Aconsultati n,Aexcha ge ofAinformati n, Arece pt ofAcomplai tsA onA ndAsuggestio s,Ae c.ASt psAs ch as Asett ng up of Aw llAequip edAinformation-cum-facilitat ep centr s,Apub ic Aheari gs byAgovernm nt ffiAAci ls on Aspeifi edAd ysAprefera ly at A heAdoors wnA of A he Acitiz nsAinclud ngAgrea er A se of A he Ato ls ofAinformat on Atechnol gy toA utAd isA que esA nd Aincre se Aconvenie ce A or Acitiz ns Awo ld Ase ve to Am etA he Arequireme ts A orAt ofA t pe ofAengagem nt Abetw en A heAgovernm ntA nd A he Acitize s.A ut A heAl stA woAty esed citize s’Aparticipat on Awo ld Arequ reAcreat on ofAinstitutio al Amechani ms Aperh psAbac e.A byA aw orAgovernm nt Aresoluti ns A orAencourag ng Acitize s’Aparticipat on inAgovernanalA Examp es ofAs chAmechani msArang ngAf om A heAG amASa ha to A he Arepresentat on ofAlo tcA residents/stakehold rs in A heAmanagem nt Acommitt es of Alo alAscho lsA nd Ahospit lsA ngA h ve Ab en Amentio edAearli r.ANagalan ’sA“communitizati n”Ainitiat ve A orAempowerls lo al Acommunit es toAman ge Aservi es Al keAeducati n,Aelectric tyA ndAwa erAsup lyA(deta inA heAaccompany ngAb x) i AaAsigifiAc ntAh meAgr wnAexperim ntAt at effAectiv lyAinvol esAcitiz ns inAgovernanc e.5. .A Ae ACommiss on Afe ls At at Awh le no Asin le Amodal ty orAmechan smA an beAprescri edA or Aencourag ng Acitize s’Aparticipat on inAgovernan e; in Agener l,Ath re is An ed toAcre teAinstitutionali ed Amechani ms A orAencourag ng Ath irAparticipat on inAgoverna ceAacr ssApub icAagenc es atA llAlev ls Aa d, A or At is toAhapp n, A he Afollow ngAst psA re AnecessagAparagrap s, A hAfiA stAth65Citizen Centric Administration – The Heart of Governancea)A comprehensive review of policy and practice in each department/public agency:An assessment should first be made of existing mechanisms for citizens’ participation in governance within each agency/department in order to develop sustainable and effective mechanisms for the same. A focused review for a department cutting across central, regional, and state agencies will ensure the development of core values, principles, and successful best practices.b) Modifying administrative procedures where necessary:It would have to be ensured that the procedures, budgets, and schedules for policy and programme development create adequate “windows” for citizens’ involvement along with a transparent and accountable decision-making process.c)Entrustment of the function of institutionalizing citizens’ participation in governance to a senior level officer:A senior officer reporting to the head of the agency would need to be tasked with this function with adequate resources and authority so that the issue gets the required priority on a sustainable basis.d)Performance management reviews to incorporate effectiveness in ensuring citizens’ participation in governance:hT e performance management reviews of senior officers may incorporate their role in encouraging citizens’ participation in governance.5.7.3 Innovative experiments are being made by government and reputed voluntary organizations in the field of citizens’ participation, as for example, the one on ‘City Connect’ in Chennai and Bengaluru, by Janaagraha for providing a platform to various stakeholders to interact with and support the government for improvement of urban infrastructure and the one on ‘Bhagidari’ by Government of NCT of Delhi for facilitating citizens’ participation in maintenance and up-gradation of services. Active and cooperative involvement of government agencies in such efforts would also promote citizens’ participation.5.7.4 Recommendations:a. It should be mandatory for all government organizations to develop a suitable mechanism for receipt of suggestions from citizens, which could66Citizen ’AParticipati n A nAAdministrationrrang Afro Ath Asimpl A‘Suggestio ABox At Aperiodi Aconsultation Awit Acitizens Agroups AHead Ao Ath Aconcerne Aorganization Ashoul Aensur Arigorou Afollo Au Aactio Ao Ath Asuggestion Areceive As Atha Athes Abecom A Ameaningfu Aexercise A Asyste Ao Aincentive Aan Areward Ashoul Ab Aintroduce As Atha Asuggestion Atha Alea At AsigniAcan Aimprovemen Ao Asaving Aca Ab Aacknowledged.b AEver Agovernmen Aorganizatio Amus Aensur Ath Afollowing A(i Afool-proo Asyste Afo Aregistratio Ao Aal Acomplaints A(ii A Aprescribe Atim Aschedul Afo Arespons Aan Aresolution Aan A(iii A Amonitorin Aan Aevaluatio Amechanis At Aensur Atha Ath Anorms Aprescribe Aar Acomplie Awith AUs Ao Atool Ao Ainformatio Atechnolog Aca Ahel At Amak Asuc A Asyste Amor Aaccessibl Afo Acitizens AHead Ao Aal Agovernmen Aorganization Ashoul Ab Amad Aresponsibl Afo Aensurin Ath Adevelopmen Ao Asuc A Asyste Afo Arespondin At A Atim Aboun Aresolutio Ao Ath Acomplaint Ao AcitizensAcARegula Acitizens Afeedbac Aan Asurve Aan Acitizens Arepor Acard Ashoul AbAevolve Ab Aal Agovernmen Aorganisation Afo Agaugin Acitizens Aresponse At Athei Aservices AAes Ashoul Ab Ause Aa Ainput Afo Aimprovin Aorganizationa AeAciency.d A AWhil An Asingl Amodalit Ao Amechanis Aca Ab Aprescribe Afo Aencouragin A citizens Aparticipatio Ai Agovernance Ai Ageneral Ather Ai Anee At Acreat A institutionalize Amechanism Afo Aencouragin Athei Aparticipatio Ai A governanc Aacros Apubli Aagencie Aa Aal Alevel Aand Afo Athi At Ahappen Ath : followin Astep Aar AnecessaryiA Acomprehensiv Arevie Ao Apolic Aan Apractic Ai Aeac Adepartment/publi Aagency.ii AModifyin Aadministrativ Aprocedure Awher Anecessary.iii AEntrustmen Ao Ath Afunctio Ao Ainstitutionalizin AcitizensAparticipatio Ai Agovernanc At A Asenio Aleve AoAcer.iv APerformanc Amanagemen Areview At Aincorporat AeAectivenes Ai Aensurin Acitizens Aparticipatio Ai Agovernance.eAA Aobjectiv Acoul Aals Ab Aserve Ab Aactiv Aan Acooperativ AparticipatioAb Agovernmen Aagencie Ai Acivi Asociet Ainitiative Ai Ath Aare Ao Acitizens Aparticipatio Ai Agrievanc Aredressal67Citize ACentricAAdmin s rhAe HeartAofAGt onA–A5.8 Enabling Women’s ParticipationBecause of socio-cultural mores and seclusion norms, women in many parts of our country find it more difficult to approach and access government offices/services. This gender perspective must be kept in mind by all government authorities and agencies while ensuring participation of citizens in governance as discussed in earlier paragraphs. This will imply that special measures and mechanisms including in its Citizens’ Charters will be required to obtain inputs, suggestions and participation of women in government’s policies and programmes. This is particularly important since women are the focus of many of our socio-economic programmes and are also the prime users of resources like water, etc., particularly in rural areas. Encouraging full participation of women as a part of citizen centric administration and obtaining their feedback will ensure that their suggestions and perspectives based on ground realities are adequately reflected in various policies and programmes including in grievance redressal and other mechanisms.5.9 The Physically Challenged5.9.1 As per the 2001 Census, there are 2.19 crore persons with disabilities in India (2.13% of the total population) which include persons with visual, hearing, speech, locomotor and able mental disabilities. A citizen centric administration should cater to the special needs of this section of its population and fully involve them in the process of governance. India is a signatory to the Proclamation on the Full Participation and Equality of People with Disabilities in the Asian and the Pacific Region (April, 1993). This Proclamation stated:25“3. Throughout the region, the opportunities for full participation and equality for people with disabilities, especially in the fields of rehabilitation, education and employment, continue to be far less than those for their non-disabled peers. hTis is largely because negative social attitudes exclude persons with disabilities from an equal share in their entitlements as citizens. Such attitudes also curtail the opportunities of people with disabilities for social contact and close personal relationships with others. hTe social stigma associated all too often with disabilities must be eradicated.4. The built environment throughout much of Asia and the Pacific has been designed without consideration for the special needs of persons with disabilities. Physical obstacles and social barriers prevent citizens with disabilities from participating in community and national life. The various impediments to participation and equality are especially formidable for girls and women with disabilities. With improved attitudes, increased awareness and much care, we can build social and physical environments that are accessible for all, i.e., we must work towards a society for all. ...”5Source:A’APar ic pation AinAAdmi5.9.2 In onsAwithA 5.9.2AInA ur uan eAofAtheA foresaidAProc amation, AP rliamen Ae a tedA‘ThA APer , 1 95’ A Dis biliti sA(EqualAOppor unities,AP ot ctionA fAR ghts andAFullAParti ipat on)AAc ionsAforA ThAeAlaw pro idesAforAp eve tionA nd Aearly A et ction Aof Adisa ilities AspecialAp ovi in iplesA e ucation, Ae plo me AandAaffi Armativ Aaction. Be ides Ait A lsoA aidAdow AcertainAp Ath Alaw ofAnon-discr minatio Aagains Aper onsAwith physical Adisa ilities. AFur her ore hasAalso pro idedAtheAs ructural A ech nism Af rApolicyAfor ulation,Aimple ent tionAandAm ni ori gAofAal Amatters re ating At Aper ons AwithAdisai l i ti s Ang dAan A .9. AThAe ALawA roh bits an AtypeAof Adiscr minatio Aag inst AtheAp ysicallyAc all to th sAendAit proviesAfor:aANon-discr mi ation AinArasportAb.ANon-discr mi ati nAonAthAroadsc.ANon-discr mi ation inAbuiltAenvi nmentd. AANon-discr mi ationAin AG vernmentAem p l oy entAbar ierA 5.9.4 How ver,Ate specifiAc measuresAre om end d Ai Ath Alaw Afor A r moting A As bje tA free Aen iro ment Af rApe ple Awith Adis bil tie Aare AnotAen orceabl Abec use they Aar ldAad ptA toAth Apro iso thatAthe A oncernedAorganizations/governme ts/loc l Abodi sAsho Aresult,A these measur sAw thinAth A“ imits ofAtheir economic cap city AandAdeve op e t”. AAsA mmissionA c mpli nce Aw thAtheseArecomm nda ions hasAbeenA xtremel A n ven.AThAeAC en ation r cog iesAtheA Ana cial A nd AotherAco stra nts that Ama AinhibitA mmediateAimple ions notA of Athese A easu es. None theA ess Ath sAs ould An tA ecome A nAe cuseAforAorga iza oriesAofA ev nAt kng A heAfiA st step AinAthi A e ard.AThAe AC mmiss on Af el AthatAi AseveralAc te ransport se vice Aa Aw ll A s Ain A heAbuilt Aenv ron ent, the time has come Af rAm kingAthe Aro dmapA ad ptio Ao Asome of Athese measures A andator Awithou Afurt er A elay Aand c eating A vernmentA for Aunivers li ation of Athese A e s res. AThAe AC mmiss on Awoul Asug est Athat AG AspecialA c ns itute A n Aexpert A om ittee Ato ide tify A he are s Ain Athe A foresaid servi es Awher could Abe p ovi ion Afor Athe Ap ysically Ac alleng d A houl Abe Amade Am n ato y. AThA se Aar asrev ewedAand expan eAe eryAfiAv eAye r .rmentAi A .9.5 AThAe AC mmiss on An tes that Athe Mi istryA fASocia AJu ticeAandAEm ow bili iesA s ekingAt Aam lifAtheAd fiA itionA fApublicA uildi gs u derA‘ThA APer onsAwithADis rAp bli A A t, 1995’ At Acla ify Ath t ApublicA uildi gsAwoul AincludeA uildi gsA hic AareAf us Aand notAonly Ag vernmentAb69itizen A entric AAdminis r to A–AThA AH artAofAGov5.9.6 Government of India has issued ‘The Persons with Disabilities’ (Equal Opportunities, Protection of Rights and Full Participation) Rules, 1996. These Rules have enunciated guidelines for evaluation and assessment of various disabilities and issue of disability certificate. Rule (1) provides:a.A Disability Certificate shall be issued by a Medical Board duly constituted by theCentral and the State Government.b.The State Government may constitute a Medical Board consisting of at least threemembers out of which at least one shall be a specialist in the particular field for assessing locomotor/visual including low vision/hearing and speech disability, mental retardation and leprosy cured, as the case may be.c.The Medical Board shall, after due examination, give a permanent DisabilityCertificate in cases of such permanent disabilities where there are no chances of variation in the degree of disability.d.The Medical Board shall indicate the period of validity in the certificate in caseswhere there is any chance of variation in the degree of disability.e.No refusal of Disability Certificates shall be made unless an opportunity is givento the applicant of being heard.f.On representation by the applicant, the Medical Board may review its decisionhaving regard to all the facts and circumstances of the case and pass such order in the matter as it thinks fit.hTe certificate issued by the Medical Board under Rule 5 shall make a person eligible to apply for facilities, concessions and benefits admissible under schemes of the Governments or Non-Governmental Organization, subject to such conditions as the Central or the State Government may impose.5.9.7 The Ministry of Social Justice and Empowerment has issued detailed guidelines describing the procedure for the aforesaid certification. Even though the National Policy for Persons for Disabilities states that government will ensure that persons with disabilities obtain the required certificate without any difficulty in the shortest possible time by adoption of simple, transparent and client friendly procedure, this has not been achieved in reality. hT e Commission is happy to note that the Ministry of Social Justice and Empowerment is in the process of incorporating a new rule under ‘The Persons with Disabilities Act, 1995’70Citizens’APar ic pation AinAAdmito providt Apro ideA hat Asuch Ad sabiliyAcer ifiAcat sA Aweek Ao A hould A e Aissu d Aw thin on mmiss onA r ceipt Aof Aapp i a ion. AThAe AC whereverA woul Afurther A ecom end Athat toAi sueA osible AeffA rt Amus Ab Amade ni ation suhAcer ifi cat sAonA heAspot.AOrg ,Aas wa A of cam s AatAtheAPH /villa eA eve ris aAatA don AinAso eAforestA is ricts A fA r,Awoul A theAi it a ive Aof Aa DistrictAC llectgre tl AhelpAin ensu ingAt isA( Bx :A5. ) AhatA100%AAe AC mm ss on A sAof theA iewerAali ,A reg st ati n Aof Aal Ap rsons AofAdis bili iesAmu t becomeA Arealit Abec useAth s Awou d,Ain ha dsh pA ens reAearly A et ctio Aa Awell AasAap ropriate remedia Aa tions AtoAa eli rateAthe lab eAt A of Athe Ap ysicallyAc all ngedAa dAen ure At atAtheirAent tle ents AareA enerallyA vaoachAforA all who An e h At em.AT is Awoul Arequire Ag ve nment t AadoptAaA roactive app y Ag vingA ete tion Aand Areg st ati n Aof Athe Ap ysically Ac allenged h p rs ns. AT is coul Ab Adone Ain AtheirA the Arespo si ili y Ato Ath APrima y AHealt ACentr s A PHCs) Ato ide tify all As ch cases mand tedA jur sdi ti n Aa d At Aget Athe Ae al ati n Aof Athe Adis bilit es done. A t Ash ul Aalso Abe cases AofA that A nganvadi Wor ers, Aand A uxili ry ANurse Midwiv s A(ANM ) Ashou d Arep rt ili yAofA uspectedAd sa ili yAtoAthe A once n d APHC. AThA re fter,A t A hou dAbe AtheArespo sipeten e,A th AM ica AO AAc r Ao At eAPHCAt Aex mine the ca eA nd if Ait A s Awithi Ahis/herAco ssueAthe Ad sabiliyAcer ifi cate. In case, Aa Ao i ion AofAa As ec alist Ais requir dAhe/seAshoul Aco sultAthe Distric AMica AOffi AcerAan Aar ang AforAh eAsa e AAtheAPH h A 5 9.9AT isAwould however Arequir Aplacing adequateA es urc sAatAthe di pos lAo ules forA M ical OffiAAcer, Ad le ation AofAcom ensurateA uth rityAan Ac ang sAinAthe relev ntA biliti sA this purpose.ASimult neous y, Aste sA hould be takenA o createAa dat bas Afo AallAtheADis Ce tifiAcat Ahol ersAwithAin eg ationAatA istri t,A tate Aand NationanAtha AaA h 5. .8 T ereAisA AgeneralAp rcep i all nge A largeAp op rti n Aof AtheAp ysicallyAc en s.AItA are notAe en aware ofAtheirAenti le %AofA heA is A stim tedA hat Ao ly A bo tA2 ss ssi nA total Ap pu ation ofA he e Aare AinAp i A ate.A of Athe Ap escribed Adis biliti sAcer Thnis rati BoxA5w :A WindThAM AyurbTAeA ayurbhan ADistrictAAdmi istratio A(Orissa Area ized tha Afrom th Apoi t A f AvewAofADiffAerenti lly-abldAPerso A(DAPs) AAservic Ad livery Ais extremel Acompl x,Aostl AandAtie t king.AveAcall dAThA ADistrictAAdmi istratio Al unchedAanA nitiat Windo AofA ope AwithAthe followingAinn v tions: AAASin leAWin owAS stemAwithAdecent al zationA fAservic Ad liv ryAat theAbl ckAlevel?ARe-e gi eeringA fAcomplex A overnment pr cess sAt Asuit th Ane dsAof the DAPs?AAllA acilitie Apro id dAfr eA f costAa AaA‘ am ’AsiteA oAa tractAt e A oor st Aoft e Apoor.A?AMo il satio AofAfun sAthroughAc nvegenceA ndAPubli A–Private APa tn rships to Ae sureA100% follow-up Aacti n.Source:APr sent ti nAm deAbyAth ADistrictAAdmiistrat onA a A(April,it efo eAtheA RCA uring Avi itAto th AState ofAOris2007)71Citizen Centric Administration – The Heart of Governance5.10 Recommendations:a.Ensuring the full participation of women should be a specific aim of citizen centric administration and this should be reflected in various policies and programmes, including citizens’ charters and grievances redressal mechanisms.b. Government may constitute an expert committee to identify the areas where special provisions for the physically challenged should be made mandatory. ~ese areas could be reviewed and expanded every five years.c. Government should adopt a more proactive approach for detection and registration of the physically challenged persons.d. To achieve this, responsibility should be cast on the Primary Health Centres (PHCs) to identify all such cases in their jurisdiction and to get the evaluation of the disabilities done. To enable the PHCs to discharge these responsibilities, adequate resources should be placed at the disposal of the Medical Officer, PHC along with delegation of commensurate authority and changes in the relevant rules.anization of camps at PHC level, attended by the concerned medical personnel, would greatly help in issuing certificates of disability on the spot.f.Further, steps should be taken to create a database for all the Disabilities Certificate holders with integration at District, State and National levels.726DECENTRALISATIO AAN ADELEGATION6. AA APrincipl Ao ASubsidiaritAA 6.1. A hA AOxfor AEnglis ADictionar Ade Ane A‘subsidiarity Aa Ath Aprincipl Atha A Acentra Aauthorit A shoul Ahav A Asubsidiar Afunction Aperformin Aonl Athos Atask Awhic Acanno Ab Aperforme e Aectivel Aa A Amor Aimmediat Ao Aloca Alevel.6.1. AAi Aprincipl Ai Aenshrine Ai Asevera Anationa AConstitutions AFo Aexample Ath ATent AAmendmen At Ath AUnite AState AConstitutio Astipulates:A “ hA Apower Ano Adelegate At Ath AUnite AState Ab Ath AConstitution Ano Aprohibite Ab Ai t Ath AStates Aar Areserve At Ath AState Arespectively Ao At Ath Apeopl e”6.1. AA Asubsidiarit Aprincipl Ai AdeAne Ai AArticl A1-1 Ao Ath AConstitutio Ao Ath AEuropea AUnion AI Astipulate Atha Ai Aarea Awhic Ad Ano Afal Awithi Ath Aexclusiv Acompetenc Ao Ath AUnio A(i.e Ai Aal Aarea Ao Ashare Ao Asupplementar AUnio Acompetence A Ase A‘competences Alink) Ai Awil Aac Aonly A“iAan Ainsofa Aa Ath Aobjective AoAth Apropose Aactio Acanno Ab AsuAcientl Aachieve Ab Ath AMember-States Aeithe Aa Acentra Aleve Ao Aa Aregiona Aan Aloca Alevels Abu Aca Arather Ab Areaso Ao Ath Ascal Ao AeAect Ao Ath Apropose Aaction Ab Abette Aachieve Aa AUnio Alevel .”6.1. AA ACommissio Ai Ait ASixt ARepor Ao ALoca AGovernanc Aha Astated:A “Applicatio Ao Ath Asubsidiarit Aprincipl Aha Athre Agrea Aadvantage Ai Apractica Aterms A First Aloca Adecision-makin Aimprove Ae Aciency Apromote Aself-relianc Aa Ath Aloca Alevel A encourage Acompetitio Aan Anurture Ainnovation hAA Ademonstratio Ae Aect Ao Asuccessfu A bes Apractice Awil Aensur Arapi Asprea Ao Agoo Ainnovation Aan Ather Awil Aals Ab Agreate A ownershi Ao Aprogramme Aan Apractice Ab Ath Aloca Acommunities ASecond Ademocrac Ai A base Ao Athre Afundamenta Aassumptions Aal Acitizen Aar Aequa Airrespectiv AoAstatio Aan A birth Ath Acitize Ai Ath Aultimat Asovereign Aan Ath Acitize Aha Ath Acapacit At Adecid Awha A i Ai Ahi Abes Ainterest AOnl Awhe Athes Aprinciple Aar Apu Ai Apractic Aca A Ademocrati A syste Aderiv Ait Aful Alegitimacy ASubsidiarit Ai Ath Aconcret Aexpressio Ao Athes Afoundation A o A Ademocrati Asociety A hAird Aonc Adecision-makin Aan Ait Aconsequence Aar Aintegrall linke Aa Ath Aloca Alevel Apeopl Aca Abette Aappreciat Atha Ahar Achoice Anee At Ab Amade73Ci izenACe tric AAdministr t o A A~AeA ea tAofAGovernancekingAn.ht SuchAawar ness Apro otesAgr ater Aresponsibi ity,Aenligh enedAcitize shi AandAmat rigAofAdemo cracy .6.2AHi to y AofADecentralis ti nAinInd i a ardsA . . AThAe ABr tish Ru e Ain A ndi Awas Ah ghly Acentral z hAe Ad A Arst A ajor step Ato cialA decentraliz tio Awas when some Ap wer Aand Afunc ions were Adev lv d Ao Athe AProvi Act,A Gover me t Ab Athe AGover me t Aof A ndia Act, A 9 9 AThAe AGover me t Aof A ndia rongA 935,Aca ried thisApr cessAfur h r AThAe AConstit ti n AofA ndia lai AtheAfound ti n AofAs tiveA ni nAas we l AasA tate AGovernm n s AThAeASe enth ASch duleAdemar ate AtheAlegisl therA p we sAo Athe AParli men Aan AtheA tate ALegislat res.AAr ic e A40 A ave Ath Awa AforAfu them decentraliz ti nA sAitAman atedAgover me t AtoAorg nize Avi lageApanch yat AandA ndow sAof with suchAp wer AandAauth ri y Aa Am y Abe Anece sa y Ato Ae able th mAtoAfun ti nAasA ni AtheA self Agovern e t AThAe 73r Aand 74th AConstitut onal AAmend ents were Awater he sAihi to yAof Adecentraliz ti n AinAIdia A6.ADefiAn ti n AofADecentralisat i o n .3.1ADecentralis ti nAiAde AnedAas “theAtra sfrAofAdec sionAmkingA owe AandAassig metAof Aa cc ountab lit AandAresponsiblit AforAres lt .A tAis Aaccomp ni dAbyAdeleg ti nAof Acommens rateAauth ri yAtoAindivi uasAorA ni sAa AallAl vesA f AanAorganization evenA hos Afar Areoved fromAheadqua te s AorAtherAce tes AofApower”2 “theAs red AofA ower away fro AtheAc nt rAtoA ocal Abra ch sAorAgovernments ”2 7 iz dA .3. AAnyAorganiz t on -A eAitAgover me t AorApr v teA-Ac nn tAbeAt rm dAasAto allyAcentra whenA or Adecentral z hAerd.AAare someAfunc io sAorAactiv tiesA hic Aare bestAperf rmedizedA centra izedA hileAce tainAfunc ions A ieldAb tterAre ults whenAperf rm d inAaAdecentra set ig AThAeA ss eAofAcentraliz tion Av rsus Adecentraliz ti nAis A ac dAb AallAorganization s . AtheA .3.3 ADecentraliz ti nAi AtheApr ce sAofAtransfe ring Adec sion Am king A ower Ac os rAttiveA pe pl . AIt Ainc udes Apoli ical Adecentraliza in,Afi scal Adecentraliz tio AandAadministr someA decentraliza i n AThAe “new Ap blicAmanage ent”A hichAem rg dAi Athe A 99 s Ainheir deve oped Acoun ries g veA Anew Aperspe ti eAt Athe Asu je tAof Adecentraliza io .AInA book A‘Reinve ting AGovern ent’ A avid AOs orn Aan ATed AGa ble AputA o th Aa viewthatAgovern entsAs ou dAbeAcrea ive,Am rket Aorie ted, Adecentral zed AandAfo us d AnAoffA ringA teerA heir A“custo ers AtheAhi hestAqu lityAserv c s. ThAey Aadvo ated that Agovern entsAs ouldA“ r ther than row Aand Afacil tat AandAe sureAse viceAprov sion Ar ther than Ai selfAundert.html2 6 /defiAnition/decentralization 27 and Delegationservice delivery. This could be achieved by deregulating and privatizing those activities that could be carried out by the private sector or even by citizens’ groups.6.3.4 hT e Commission in its Sixth Report on ‘Local Governance’ has examined the issues of political decentralization to the local governments and their financial empowerment and made wide ranging recommendations. In this Report, the Commission would focus on administrative decentralization. Administrative decentralization is often referred to as delegation. More precisely, the Commission would examine issues pertaining to delegation within a government organization in order to increase their efficiency and effectiveness.6.4 Meaning of DelegationDelegation is primarily about entrusting one’s authority to others. This means that persons to whom authority has been delegated can take decisions and act independently. They also assume responsibility for their actions. At the same time, the person delegating authority continues to be accountable for the actions of those to whom authority has been delegated. Chester Barnard first enunciated the principle of delegation in the context of effective administration; however, delegation has not been widely accepted and used in public administration. This may be because delegation of authority is immensely challenging for all supervisors because it involves effective communication, motivation, goal setting and behaviour modification.6.5 Benefits of DelegationIf used effectively, delegation provides real benefits to every one involved. It enables decision making at the most appropriate level, changes the work culture, improves job satisfaction, motivation and morale of employees. Further, it satisfies the employee’s need for recognition, responsibility and autonomy. Delegation is the Administrator’s key for efficiency, and benefits all. Hence, delegation has a number of benefits:?Saves time - it leads to quicker decision making.?Develops people.?Grooms and motivates a successor.?Provides more time to superiors for constructive review, or deliberation in the interests of progress.?Saves hours of unnecessary work.75Citizen Centric Administration – The Heart of Governance?Increases productivity.?Provides invaluable training to associates and employees.?Provides an enriched level of satisfaction as well as greater sense of worth. 6.6 Barriers to Effective DelegationIn spite of the several advantages associated with delegation of authority, there are often barriers which inhibit the practice of delegation within an organization. It is necessary to identify these impediments so that measures could be taken to overcome them. Some of the barriers to delegation are:A. Reluctance by the superior to delegate:?Because he believes that he can do the task better.?Lacks trust in others.?Feels that subordinates will get credit which he deserves.?Finds it difficult to monitor and supervise.B. Reluctance by the subordinates to accept delegation:?Because they find it easier to ask, than to take their own initiative.?Want to avoid possible criticism from supervisors.?Fear of making mistakes.?Lack of self-confidence to take responsibility for their work. 6.7 Facilitators of Delegation Delegation is facilitated when there is:1.Transparency - subordinates are provided with the required information.2. Open communication.3.Subordinates are made to feel important.76Decentralisatio Aan ADelegatio44AAuthorit Ai Aequate Awit Aresponsibility.5AAcceptanc Ao Aresponsibilit Aan Agoo Aperformanc Ai Arewarded.6A Acultur Ao Atrus Aan Arisk-takin Ai Adeveloped.7AConstructiv Afeedbac Ai Agiven.8AStandard At Ameasur Aan Aevaluat Aperformanc Aar Aprescribe Ai Aadvance.6. AHo At ADelegateA Afollowin Aar Ath Aprinciple At Adelegat AsuccessfullyAaAClearl Aarticulat Ath Adesire Aoutcomes ABegi Awit Ath Aen Ai Amin Aan AspecifAth Adesire AresultsbAClearl Aidentif Aconstraint Aan Aexten Ao Aauthority Aresponsibility AanAaccountabilityAcA AWher Apossible Ainclud Apeopl Ai Ath Adelegatio Aprocess AEmpowe Athe At AdecidAwha Atask Aar At Ab Adelegate At Athe Aan Awhen. dAMatc Ath Aresponsibilit Awit Acommunicat Aauthority.eADelegat At Ath Alowes Aleve Ai Ath Aorganizatio Acapabl Ao Aperformin Ath AtaskfAProvid Aadequat Asuppor Aan Aensur Asucces Athroug Aongoin Acommunicatio Aanmonitorin Aa Awel Aa Aprovisio Ao Aresource Aan AcreditgA AFocu Ao Aresults AAllo Ath Aperso At Acontro Ahi Ao Ahe Aow Amethod Aan AprocesseshAi Afacilitate Asucces Aan Atrust.hAAvoi A“upwar Adelegation. AI Ather Ai A Aproblem Ad Ano Aallo Ath Aperso At AshifAresponsibilit Afo Ath Atas At Ahighe AlevelsAiABuil Amotivatio Aan Acommitment ADiscus Aho Asucces Awil Aimpac AAnanciaArewards Afutur Aopportunities Ainforma Arecognition Aan Aothe Adesirabl Aconsequences AProvid Arecognitio Awher AdeservedjAEstablis Aan Amaintai Acontrol77Citizen Centric Administration – The Heart of Governance?Set timelines and deadlines.?Agree on a schedule of checkpoints.?Make adjustments as necessary.?Take time to review all submitted work.6.9 The Commission is of the view that there is a general perception that many government organizations have a tendency to hold back authority at higher levels and instances of top policy makers indulging in micro-management of routine matters are common in government organisations. This could lead to inefficient and time consuming decision making processes and can in fact render the entire administration non-citizen centric. It is therefore necessary that an exercise should be carried out within each organization to assess whether adequate delegation of authority has been done. If required, external expertise can be sought. The principle of subsidiarity should be followed while deciding on the extent of delegation. It should be clearly enunciated that the top echelons in any organization should essentially deal with policy making functions and the field organizations should deal with operational aspects.6.10 The Commission is also of the view that the extent to which delegated powers is used or is allowed to be used, should be two of the elements while appraising an officer’s overall performance.6.11 Recommendationsa.Based on the principle of subsidiarity, each government organization should carry out an exercise to assess whether adequate delegation of authority has been done. In doing so, it should be clearly enunciated that the top levels of the organization should essentially focus on policy making functions and the field level functionaries should focus on operational aspects.b. ~e extent to which delegated powers is used or is allowed to be used, should be two of the elements while appraising an officer’s overall performance.787GRIEVANC AREDRESSA AMECHANISM7. ADeAnin A AGrievance7.1. A‘Grievance Aha Abee AdeAne Aa Aindignatio Ao Aresentmen Aarisin Aou Ao A Afeelin Ao Abein Awronged AI A15700 A200 AdeAne A‘grievance Aa Aa Aexpressio Ao Adissatisfactio Amad At Aa Aorganizatio Arelate At Ait Aproducts Aservice Aand/o Aprocess(es) Awher A Arespons Ao Aresolutio Ai Aexplicitl Ao Aimplicitl Aexpected A Agrievanc Ai Athu Aan Asor Ao Adissatisfaction Awhic Aneed At Ab Aredressed AI Aca Ab Area Ao Aimaginary Alegitimat Ao Aridiculous Arate Ao Aunvoiced Awritte Ao Aoral Ai Amus Ahowever AAn Aexpressio Ai Asom Afor Ao Ath Aother.27. AGrievanc ARedressa AMechanism Ai AIndia7.2. AGovernmen Ao AIndia AStat AGovernment Aa Awel Aa Avariou Aorganization Aunde Athe Ahav Ase Au Agrievanc Aredressa Amechanism At Aloo Aint Ath Acomplaint Ao Acitizens ABesides Ather Aar Aothe Ainstitutiona Amechanism Alik Ath ACVC Aan Ath ALokayukta Awhic Ahav Ath Amandat At Aloo Aint Ath Acomplaint Ao Acorruptio Aan Aabus Ao AoAc Ab Apubli Aservants AMan Aorganizations Afo Aexample Ath AReserv ABan Ao AIndia Ahav Ase Au AOmbudsma At Aloo Aint Agrievances AInstitution Asuc Ath ANationa Aan AStat AHuma ARight ACommissions ANationa Aan AStat AWomen’ ACommissions Ath ANationa ACommissio Afo ASchedule ACastes Aan Ath ANationa ACommissio Afo ASchedule ATribe Aals Aloo Aint Ath Acomplaint Afro Ath Apubli Ai Athei Aprescribe Aareas AAus Ath Agrievanc Aredressa Amechanis Ai Aa Aintegra Apar Ao Aan Agovernanc Asystem AToday Awit Aincrease Aawarenes Alevels Ath Aaspiration Ao Acitizen Ahav Agon Au Aa Aals Ath Ademan Afo Apromp Aan AeAectiv Aresolutio Ao Athei Agrievances.7.2. AA Abasi Aprincipl Ao A Agrievanc Aredressa Asyste Ai Atha Ai Ath Apromise Aleve Ao Aservic Adeliver Ai Ano Aachieve Ao Ai A Arigh Ao A Acitize Ai Ano Ahonoure Athe Ath Acitize Ashoul Ab Aabl At Atak Arecours At A Amechanis At Ahav Ath Agrievanc Aredressed AAi Amechanis Ashoul Ab Awel Apublicized Aeas At Ause Apromp Aand Aabov Aall Acitizen Amus Ahav Afait Atha Athe Awil Age Ajustic Afro Athe Ait.7.2. AA ADepartmen ARelate AParliamentar AStandin ACommitte Ao APersonnel APubli AGrievances ALa Aan AJustice Ai Athei ATwent ANint ARepor Aobserved79:28Source A tizenAC ntricAAdminist a i n –AThAe He rtAof AGovrnancess.aspNowadays, the empowered and enlightened citizenry is far more demanding services in convenient and comfortable channels. And the government, therefore, has to develop, evolve and enable itself to meet the evolving demands of the society. A citizen-friendly Government should give high priority to redressal of public grievances since the Government being a service provider, it is bound to meet people’s needs and aspirations. Effective and timely redressal of public grievances is a hallmark of responsive and responsible governance. hTis has become more important after enactment of Right to Information law. The society today is impatient with the old system of governance that is not coming up to its expectations. To them, a Government employee is perceived as insensitive, aloof, corrupt and overall the administrative system as autocratic, opaque and with no work culture. This requires a paradigm shift in governance to a system where the citizen is in the centre and he is consulted at various stages of formulation and implementation of public policy. To achieve this objective, our country needs a public service, which is capable, innovative and forward looking. hTe traditional role of civil service which was of administrator, service provider and controller of development activities has to make way for the new roles of facilitator and regulator so as to create best environment and conditions in the country for building a nation of excellence.7.3 Structure of Grievance Redressal Machinery at the National Level7.3.1 Grievances from the public are received at various points in different Ministries/ Departments in the Government of India. However, there are primarily two designated nodal agencies in the Union Government handling these grievances. These agencies are:a.Department of Administrative Reforms and Public Grievances, Ministry ofPersonnel, Public Grievances & Pensions.b.Directorate of Public Grievances, Cabinet Secretariat.7.4 Department of Administrative Reforms and Public Grievances7.4.1 The Department of Administrative Reforms and Public Grievances (DAR & PG) is the nodal agency in respect of policy initiatives on public grievance redressal mechanisms and citizen-centric initiatives. The role of the Department of Administrative Reforms and Public Grievances is primarily to undertake citizen-centric initiatives in the fields of administrative reforms and public grievances to enable the Government machinery to deliver quality public service to citizens in a hassle-free manner and eliminate the causes of grievance.2929 evanceARe ressalAMec h a n i mto AtheA . .2AThAeAgri vancesAr ce ved by AtheADep rt ent Ao AAR PG AareAfo wa ded antiveA co cernedAMinistries/Department /StateAGovernmen s/U s, Aw oAde lAw thAtheAsubs t.AThAeA fu ctions link dAw thAtheAgr eva ceAfor Ar dress AunderAint ma ion to AtheAcompl i a us ess Dep rtment ‘ta esAup Aabo tA1000Agri vance Aeve yAy arAandAde endi gAu on AtheAseri entAtoA ofAtheAgr evanceA ol owsAupAre ular y At lAit AfiAnal Adi p sa . AThAis A nab es AtheADep rt rnmentA e alu te theAeffAect ve ess ofAtheAgr evanceAre ressalAma hi ery ofAtheAco cernedAgov agenc .pt andA 7.4.3AGui elin sAha eAbeen is ued toAallAMinistries/Depa tm nts to s tAupAa pro bod esA eff ectiveAgr evanceAre ressal A ys em. AsApe AtheseAguid lin s,AallAMini tries, Aaut nomous torAof and PublicA ectorsAUnder akings (PS s)AareAr qu red AtoAde ig at an A ffiA cerAasAD re PublicAGri vancesAin lu ingAin Aaut nomous bod esAand Public SectorAUndert ki gs. ItAh sAal o AbeenAsti ulat dAt atAtheAgr evance Are ressal system shou d form a A art ofAtheACi izens’ACh rters.AMin stri sAha e Aal oAbeen A dv sd t AfiAx aAtim Afr me Afor Ad sp sal of AtheApe itionsAre eiv d, As o Amotu Ai entifyAgri vanc sAfromAne spaperA olu ns AandAre ularlyA oni orAtheAd sp sal of AtheApetiti ns.7.5ACent alized PublicAGri vances A edr ss Aand AMon toring SystemA(CPG R A M )edAtheA. .1 AThAeADep rt entAof AAdminis rative A efo msAand PublicAGri vancesAl unc PG AMS A nA2 07 AforArec iving, Ared ess ng Aand Amon to ing AofAgri vanc sAf omAtheA ublic.A PGRAMSAp ovi esAtheAf ci ityAt A odgeAaAgr evanceA‘ nlin ’Af om AanyAgeogr phicalAlo at on.AIt A nab es Athe A it zenAt Atrack onlineA is/herAgr evanc AbeingAf ll wedA pAwithAdepa tmentsAco cer edAa d Aalso A nab esAthe DA &PGAto A oni orAtheAgri vance. A PG A SAi AaAwebA h ou hA nabledAappl cat onA nd canAbe Aa ce sedAbyAMinistries/Departments/Organi ationsA ssAthe a AP Au ingAan Ai ternetAcon ect on andAanAi ternet Ab o s r.AThAeA iti enAcan acc system onlineA hro gh Athe port alApgportal. ic in. AsAthe system Ade elo edAh sAbeenAr centlyAla nch d, tsAe AAc cy AandAr sp nseAb AotherAMinistries/Depa tm nts is ye Ato AbeA ested. AH wev r,Athe sy te AisAan Aex ell nt useAof modernAtechol o gy AASt teA . .2 AThAe ACom is io Ais of At e Avi w that Aa A imilar system sh uld Abe Ain ta led at Ath ti ens and Ad strict levels A e ause Aa Adecent alized syste Awoul A e efiAt Aa larger nu ber Aof Ac on Athe on A he Ao e Ah nd Aan Awou d Aal o A elp Ain Aim rov ng the AeffAect ve e s Ao Afi ld A ffiA ces other.A imilar Ac ncep sAhaveA lrea yAbee At iedAinA everal A tat s,AforAe amp e, AtheA ok aniAi AUttar AP81Citizen Centric Administration – The Heart of Governance7.6 Directorate of Public Grievances (DPG)7.6.1 The Directorate of Public Grievances was set up in the Cabinet Secretariat with effect from 01.04.88, initially to look into individual complaints pertaining to four Central Government Departments which were more prone to public complaints. Subsequently, more Departments having larger public interface were added to its purview.7.6.2 The Directorate was envisaged as an appellate body investigating grievances selectively and particularly those where the complainant had failed to get redressal from the internal redressal machinery and the hierarchical authorities. Unlike the Department of AR&PG, the Directorate of Public Grievances has been empowered to call officers and files to see if the grievance handling has been done in a fair, objective and just manner. Wherever the Directorate is satisfied that the grievance has not been dealt with in such a manner, it makes suitable recommendations for consideration and adoption by the concerned Ministry/ Department which are required to be implemented within a period of one month.307.7 Grievance Redressal Machinery in the States7.7.1 State Governments have also evolved mechanisms for redressing public grievances. The Chief Ministers’ office generally have a public grievance cell which receives complaints from citizens, forwards these to the concerned departments and follows them up. Some Chief Ministers hold regular public hearings and also use the electronic media for hearing and responding to public grievances. In some States, Ministers and senior officers visit districts and even villages accompanied by officers and hear and resolve grievances of citizens.7.7.2 At the district level, the District Magistrate is normally designated as the District Public Grievance Officer. He/she monitors the disposal of various complaints received by the public. In some States, the Zila Panchayats have also constituted their own public grievance mechanisms.30 7.1: Public Grievances Commission – DelhiThe Public Grievances Commission is an additional forum where the public can lodge their grievances. Already, the Directorate of Grievances in the Office of the Chief Minister, the Grievances and Anti-corruption Cell headed by the Secretary (AR) and the Directorate of Vigilance of the government receive complaints of inaction or corruption by the departmental officials. A separate grievance redressal mechanism also exists under each department as well as in the local bodies like Municipal Corporation of Delhi, NDMC, Delhi Jal Board, Delhi Transco etc. The Public Grievances Commission is a body which cross-cuts sectors, departments and agencies and provides a simple, virtually paperless mechanism where the public can personally speak their mind pointing out the difficulties they have faced.Source: ARedressa AMechanis7. AAnalysi Ao Ath AExistin APubli AGrievanc ASyste Ai AGovernmen Ao AIndia7.8. AA ADepartmen Ao AAdministrativ AReform Aan APubli AGrievance Ago A Astud Aconducte At Aanalys Ath Apubli Agrievanc Aredressa Aan Amonitorin Asyste Ai Ath AUnio AMinistrie Aan ADepartment A(IIPA A2008) ASom Ao Ath AAnding Aar Aa Afollows:aATher Ai AconsiderablAvariatio Aacros Aorganization Ai Arespec Ao Ath Anumbe Ao Agrievance Areceived Adispose Ao Aan Apendin Ai Avari ou Aorganization Aa Aals Ath Aexten Ao Ainstitutionalizatio Ao Ath Aredres AprocessbAI Aorde At Afacilitat AinterfacAwit Ath Apublic AMinistrie Aan ADepartment Ahav Abee Aadvise At Aobserv Aon Ada Ai Ath Awee Aa A Ameetingles Aday AI Awa Areveale Atha Amos Aorganization Aar Ano Aeve Aawar Ao Athi Ainstruction.cAMinistrie Aan ADepartmentAhav Abee Aadvise At As e Au Asocia Aaudi Apanel Afo Aexaminin Aarea Ao Apu bli Ainterface AA Astud Abring Aou Atha Asuc Apanel Ahav Ano Abee Aconstituted.dAPubli AGrievanc ACell AofteAsuAe Afro Ashortag Ao Asta Aan Aresources AMoreover Athes Acell Ahav Ano Abee Aadequatel AempoweredBBo A7.2 AGuideline AIssue Ab ADAR&P A(Illustrative) AObserv Aever AWednesda Aa A Ameetingles Ada Ai Ath ACentra ASecretaria AO AcesAADesignat A Asenio Ao Ace Aa ADirecto Ao AGrievances /Grievanc AoAce Ai Aever AoAceA ADea Awit Aever Agrievanc Ai A Afair Aobjectiv Aan Ajus AmannerA AAnalys Apubli Agrievance Areceive At Ahel AidentiAcatio Ao Ath Aproble Aarea Ai Awhic AmodiAcation Ao Apolicie Aan Aprocedure Acoul Ab AundertakenA APic Au Agrievance Aappearin Ai Anewspape Acolumn Aan Atak Aremedia Aactio Ao Athe Ai A Atim Aboun AmannerA ASe Au ASta AGrievanc AMachiner Aan Adesignat A ASta AGrievanc AO AcerA AInclud Ath Apubli Agrievance Awor Aan Areceipt/disposa Astatistic Arelatin At Aredres Ao Apubli Agrievance Ai Ath AAnnua AActio APla Aan AAnnua AAdministrativ ARepor Ao AMinistries/DepartmentsA AFi Atim Alimi Afo Adisposa Ao Awor Arelatin At Apubli Agrievance Aan ASta AGrievance Aan Astrictl Aadher At Asuc Atim AlimitsA AAcknowledg Aeac Agrievanc Apetitio Awithi Atw Aweek Ao Areceipt Aindicatin Ath Aname Adesignatio Aan Atelephon Anumbe Ao Ath AoAcia Awh Ai Aprocessin Ath Acase AA Atim Afram Ai Awhic A Arepl Awil Ab Asen Ashoul Aals Ab AindicatedA AConstitut ALo AAdalats/Sta AAdalats Ai Ano Aalread Aconstituted Aan Ahol Athe Aever Aquarte Afo Aquicke Adisposa Ao Apubli Aa Awel Aa Asta Agrievance Aan Apensioners AgrievancesA AConstitut A ASocia AAudi Apane Afo Aexaminin Aarea Ao Apubli Ainterfac Awit A Avie At Arecommendin Aessentia Achange Ai Aprocedure At Amak Ath Aorganisatio Amor Apeople-friendlyA AEstablis A ASingl AWindo ASyste Aa Apoint Ao Apubli Acontact Awhereve Apossibl At Afacilitat Adisposa Ao AapplicationsA APromptnes Aan Acourtes A Aa Aobligatio Ao Ath Apubli AserviceA AMonitorin Ao AGrievance Ai AOrganisation Aunde AMinistries ADepartment Ao A Amonthl Abasis.83Citizen CentricAAdmini t ahi nA–AT eA eartAofAGoe.Several Ministries/Departments do not detect or note public grievancesappearing in newspapers for suo motu redressal actions despite clear instructions on the subject.f.No efforts are made to hold satisfaction surveys to ascertain the outcome ofmeasures taken by the organization to redress grievances.7.8.2 The Department Related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice, in their Twenty Fifth Report observed:The Committee is of the view that generally, people are not aware that a system of redressal exists in many of the Government departments and its subordinate offices where they are required to visit. The Committee, therefore, recommends that wide publicity through national, regional and local media as well as through electronic media to create awareness regarding the redressal mechanism among people is the need of the day particularly for the weaker sections of the society, women and those challenged with handicaps and also the people living in remote areas....hTe Committee also recommends that grievance-handling system should be accessible, simple, quick, fair, responsive and effective. It is not uncommon to hear from people complaining against harassment, waste of time and money, repeated visits to offices etc. The Committee, therefore, recommends that every Ministry/Department in the Union/State Government/ UTs should have a dynamic public grievance redressal mechanism in place with special focus on the information delivery system. The Committee further feels that the language and the content of various application/complaint forms should be user-friendly, and should be widely available in various outlets, like post offices, on websites for downloading etc....oxA7.3:AC mplaintAR dressalAM ch nisAinAthe Telecom SectordressalA ?AC stom rsAhave Athr e-stage Ag ievanceAr izACall m chan smAwi h Atheir serviceApr vid rs,A Centr ,Adal OffiA cer AandAA pellateAAu hority.AServiceAP ov ders Ato appoi t AdalA ffiA cerAinAd ffAerent servi eA reas to Ad al AwithAcom pl int ).?AAll serviceArequests/co plai ts mad Ato AtheA usto erAcareA elpli e A hallAbeA s ignedA Auniqu Adocke Anu berAand Acom un ca eAi Ato AtheAcu tomer.? ACo plaintsApe ta ningAto serviceAdisrupti n/ au tAtoAbeA aysAand ttende A ithin Aa maximu Ap riodA fAth eeA neAweek billing Aco plaint Awi hinAoed fromA Sourc : A asedAonAgu deline Ai sued A yATRAI.AE trac ffAai ,A anAadver isemen Ai sue AbyAthe A in stryAofAon umer A F od AAan APublcADstribution.84Gri vance ARed essalAMecnAofA ThAeAComm tt eA sAo Athe view that timeAl mitsAs ou d beA Axe AforAapp ov lAorAreje ti ssalA applica io sAo AtheA as s Aof Awell-publi ize Aand Aunif rmlyAap liedAcrit ria.A lso,Aredr ssalA s ou dAbe doneAw t inAaAreaso able timeAp ri d AasApresc ibe Afor eachA ta eAofAredr ore,A wi hout Aindu gi gAinAle gthy Atechnical ti sAo AtheAproce u e AThAe ACommi tee,Athere .A tA recom ends tha AdueAatte tion As ou dAbeA iv nAtoAt melyAredr sslAofAgriev ncesAlo ge abl is A al o Ao AtheAconsi ered view thAoffiA cers Arespon ibl AforA elay As ou dAbe madeAaccounandAsui ableAa tionA akenAag instAh mt...nismA ThAe ACommi tee, Afu ther Arecom ends tha Athe AP blic AGrie ance ARedr ssal AMech 2005A s ou d Abe Aenvi ag d in Aa Astat tory fo m Ao Athe li e Ao Athe A ig t Ato AInform tion Act, hichA ould ma eAitAmand to yAo AallA tateAGovernm nts/ UTs/AMinist ies/ADepartm nts/AOrganisa io s AtoAp rsu Athe Agrie ance till A hirA AnalAdisp s lo...rnalA ThAe AComm tteeA eels that each ADepart ent/ PSU/ BankA rust et .AisAh ving A heirAint th tA s ste AforAredr sslAofAgriev nc s Ao AitsApers nne Ab tA t Ai AnotAwo kingAsatisfact ril Aand sAonA i AtheAr ason thatAnon-settl metAofAgriev ncesAr su t inAfi ligAofApeti io sAi AtheAc ur ettyAis uesAOurAJud cialAs stemA hi hAisAal eadyAoverbur en d Aby o erA3A roreAasesApe di gAinAva iousAc ur sAo Athe Aco ntryAcon a ns AaA arge Ase metAofA as sAonA malAandA ettyAi suesA b enA hichA ould have beenAse tl dAb AtheAp rent ADepartment/organiza ion Ahad A heir ore,A a goo Aand Am tureAint rnalAgrie anceAredr ssalAs stemAt e e AThAe ACommi tee,Athere ries/ recom ends thatAint rnalAgrie anceAredr ssalAme hodsAavai ab eAinAva iousAMinist like Depart ent Aan AtheAorganisa ions As ou dAbeAstrengt en dAorArestruc ur d inA Away for A bot AtheArepresent ti e Ao AtheAorganis tio Aan AtheAaggr evedA arty mu t AbeApr sent AbtheAdesig atedAauth rit Aan AtheAgrie an eAisAse tled the AandAte eh...an eA ThAe AComm tt eA s Ao AtheAconsi ered view thatA he e isAa ne d AtoA ring A b ut AaA otalAc ardsA i AtheAattitude/beha io r AofAp blicAser an sA r Ain A therAw rds Athe min AsetAto instA redr ss l AofAp blicAgriev nc sAa AallAl vel Aa d Ato Apin oint Aresponsib lit AforAa tionAag gAinA griev nc sAo Athe Ape p e AThAe AComm ttee alsoA eels tha Aone step Ato ardsAbri gi oughA attitu inalAc ange li sAinAimpr vin Athe Amotivat onalAl ve s AofAp blicAser antsAth rateA rewa ding good wor AandAawa di g AeffAe tiveAsugges ion AandApuni hin AtheAdelibneglig ne AThAe AComm tteeAr fe sAt AtheAHim chalAPr deshASe ifiAcACo ruptAPrac ice85Ci izenACe tric AAdministr t oA AThAeA ea tAofAGoverwhich equates omissions on the part of officers to discharge their statutory and bona fide duties with a corrupt practice....The Committee also feels that monitoring is one of the most important aspects of PGR system and there must be a separate unit in each and every Ministry / department which caters to the needs of the citizens or a computerized system like PGRAMS should be used in each and every Ministry/department so that a grievance can also be lodged online and a number is given to the aggrieved so that he can see the status of its grievance online....In support of its foregoing recommendations/observations, The Committee, strongly recommends that the Public Grievance Redressal Mechanism should be envisaged in a statutory form on the line of the Right to Information Act, 2005 which would make it mandatory on all State Governments/UTs/Ministries/Departments/Organisations to pursue the grievance till their final disposal. hTe Committee also reiterates that like Right to Information Act in the PGRM system, there should be a time limit of 30 days and provision of fine on delay should be there.7.9 Evolving an Effective Public Grievance Redressal System7.9.1 The Case for Statutory Backing for the Public Grievance Mechanism7.9.1.1 As stated in Paragraph 7.6.2, the Department Related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice, in their Twenty Fifth Report have recommended that the public grievance mechanism should be envisaged in a statutory form on the lines of the Right to Information Act, 2005. The main reason for recommending a statutory backing, perhaps, emanates from the low priority it has received from various organizations, as has also been brought out in paragraph 7.8.2.There are several Constitutional and statutory institutions which look into complaints filed by citizens :a.The Central Vigilance Commission.b.State Lokayuktas.86G ievance AR dressal AMechanismNatic.AN tiona AHuman RightsAComm ssion:ARe ardingAvi la io AofAorAa et entAofAvi la ionAo Ahuman ri htsAorAneg ig nce in AtheA onuctAof public As rv ntsA nAsuchAvio lation.{ ec ion A 2 ( ).AThAeAPro ecionAo AHuman Righ s AAct,193}.ec ionA AStatdAHuman RightsAComm ssion: A im l rA o A( Ac) above.A{ ect o A 9.AThAeAProo AHuman Righ s AAct,193}.e.AN tionalACom iss on Afor Women:ARe ardingAdepr va ion AofAomens’A ight,Anon-Aimpleme ta ionA f AlawsApr vidingApro ec ion At Awom nAetc.A{ ection 1h ().ATAeAN tionalACom iss on Afo AWom n AAct,A190}.f.AN tionalACom iss onAfor ASc eduledA astes:ARe ardingAcom lain sAwithA esectAtoAdepr va ionAof rig tsAandAsaf gu rds ofAthe ASc eduledA astes.A rti leA338A(5(b).g.AN tionalACom iss onAfor ASc eduledA ribes:ARe ardingAcom lain sAwithA esectAtoAdepr va ionAof rig tsAandAsaf gurds ofAtheASc eduledA ribes.A rti l A338AAA(5(b).h AStateAComm ssi ns Afor Women:ARe ardingAcom laintsAr la ing AtoAdepr vaionAofAomens’A ights,Anon-impleme taionAf AlawsAprvidingApro ec ion At Awom nAet .A{ForAe ample, A ectionA1 (1 (f) ofAtheAMaha ashtr AStateACom issi n AAct,1 93}.onAandA i.AN tionalACom iss onAforAPro ec ionAo AChildA ights:ARe ardingAdepr vat ec ionA vi la ionAofA hild’s rig ts AandAnon-impleme ta ionA f AlawsApr vidingApro sAAct, toAch ldren.A{ ection 1 ( ). AThAeAComm ssi nsAforAPro ec ionAo AChild Righ205}.onAandA j AStateAComm ssi nsAforAPro ec ionAo AChildA ights:ARe ardingAdepr vat ec ionA vi la ionAofA hild’s rig ts AandAnon-impleme ta ionA f AlawsApr vidingApro sAAct, toAch ldren. A ect on 2 .A{ThAeAComm ssi nsAforAPro ec ionAo AChild Righ205}.k.AN tional AC nsumerAD sputesARe ressalAComm ssion AState AC nsumerADsputesARe ressal Forum, AD strict AC nsumerAD sputesARe ressal Forum:ARe ardingAcom la ntsAinAr la ion to Aan Ag odsAorA ervi e A old AorApovi e AforAaAconside ation.A{ ect on A12, AC nsumerAPro ecti n AAct,A1986}. .9.1. AApa tAfrom the e, Athe ACom is ion inAits Re ortAonA Public Ord r’AhasAreco men edAtheA et in Au AofAan Ainde endent PoliceACom laintsAAut ority.AB sid s, Athe ACom87Cit zenACen ricAAdministra i n – ThAeAH ar AofAGovernin its Sixth Report has recommended the constitution of a Local Body Ombudsman for a group of districts to look into complaints of corruption and mal-administration against functionaries of public bodies.7.9.1.3 The Reserve Bank of India first introduced the Banking Ombudsman Scheme in 1995 (this scheme was modified in 2002 and 2006). The Banking Ombudsman receives and considers complaints relating to the deficiencies in banking or other services filed on specific grounds and facilitates their satisfaction or settlement by agreement or through conciliation and mediation between the bank concerned and the aggrieved parties or by passing an Award in accordance with the Scheme. The institution of Insurance Ombudsman was created by a Government of India Notification dated 11th November, 1998 with the purpose of quick disposal of the grievances of insured customers and to mitigate their problems.31 hT e Insurance Ombudsman performance two types of functions (1) conciliation, (2) award making. The Insurance Ombudsman is empowered to receive and consider complaints in respect of personal lines of insurance from any person who has any grievance against an insurer. The complaint may relate to any grievance against the insurer i.e. (a) any partial or total repudiation of claims by the insurance companies, (b) dispute with regard to premium paid or payable in terms of the policy, (c) dispute on the legal construction of the policy wordings in case such dispute relates to claims, (d) delay in settlement of claims, and (e) non-issuance of any insurance document to customers after receipt of premium.7.9.1.4 The Electricity Act, 2003 also provides for the constitution of an Ombudsman. The Act stipulates that:(6) Any consumer, who is aggrieved by non-redressal of his grievances under sub-section (5), may make a representation for the redressal of his grievance to an authority to be known as Ombudsman to be appointed or designated by the State Commission.(7) The Ombudsman shall settle the grievance of the consumer within such time and in such manner as may be specified by the State Commission.7.9.2 International Experience7.9.2.1 The institution of Ombudsman is common in European countries. The Swedish Constitution of 1809 established the Parliamentary Ombudsman of Sweden, Justitieombudsmannen, as an independent institution of Parliament, to investigate complaints made by citizens. Today, there are several Ombudsman in Sweden: e.g. the31 RedressalConsumer Aagain tA ConsumerAO bud man,A he AEqualAOppo tunitiesAO bud man,AtheA mbudsma Aet .AI A Ethnic ADiscri ina ion, AtheAC ildren’sAO bud man,Athe AD sabilityA mbud mar,Ato be th AUK,AtheAParl amentary ACom issi ner A ct,A1967 pro i ed Afor AaAComm ss on mpla nt A kno nAas Athe AParl amentary ACom iss oner AforAAdmini tr tion, At Aenq ire AintoAcalfAofAaA madeAby A i i ens. AThAe ACom iss onerAmayAin est gate Aa yAact on ta en by Aor A nA e tak nAinA g vernment Ad pa tment orAotherA ut ority toAw ich thisAAct appli s,Abei gAact on ai tA asA the ex rciseAofAadmin strativeA un tion Aof Athat Ad pa tment AorA utho ityA(theA omplAsectr to A eAroute A hrough a A emb r Aof A he House Aof A ommons). ASubs quently Asever ServicesA specifiAcA mbud man A ave Abee Acre ted like At e AHealt AServiceAO budsm n, ALegal,APublicO budsm n,ALocal AG vernmentAO budsman APr sons Aand A robationAO budsma ServicesA mbu sman A orAW le Aet .AInAS iAL nka, Athe AParl amentaryACom issonerAforAAdmin strationA(O bu s an)Ais AaAconst tutional Aap oin me tAandAi Acha ged with th Aduty AofAinve tig ting AandA epor ingAuponAc mp aintsAor Aal eg tio s AofAtheAinf in ementAofAfu dament lAr ghts A ndAotherAi ju tices A y Ablic A ffiAAce s,AlocalAau hor tiesAndAothe AsimilarAinsttu t io s AMec ha n i m 7.9.3 A AStrong InternalA rievanceA edressalAsti utedA 7.9 3.1 From AtheA xi t nceAo AaAlar e A umberAof extern lAbod esAw ich A aveAbeenAco ech nis A forA ed essalAofAgr ev nc s,AitAi Aevi ent thatAthe intern lApublicA rievanceA edressalA dAbyAtheA has Anot Af ncionedAeffA c ivel . AThAoughA laborate Ag idel nes A ave Abe nA ssu adequateA D pa tmentAofAAdmin strativ ARe orms Aa d APublicAGr evanc s,A here hasAbeenAi that At eA co pl ance AI Aview of A his,Athe Standing A om ittee Aof AP rliamentAre omme ded ormat onA publicAg ievances A echani m A hould A eA a ked by Aa Ala As mil rAto A he RightAtoAInhatAthey ( TI) A ct, A2 05 Awh chAwou dAen ure Ath tApublicAg iev nces A re A iven Athe A tten ionA ci izensA dhAe Abasic fes rve. Atur s Ao Ath ARTI A ct A er : A(a) Ai Acl arl Ade Aned A he right Aof o AobtainAin orma ion from At eApublicAaut ori ies,A(b) Aest blis ing wel AdefiAn dAointsAo Aco tactAfo AseekingAin o mati nA– PIO,A(c) mand ted Athat Ade artmen s Ashould suo-mot Adeclae A pecifiAedAinf rma ion, A(d)Ast p lati gAaAt meAfra eAwit in A hich AtheAin orm ti nA ism AandA asAto Abe A ur ish dAtoAtheAa pli ant A( )A etAupAan internalA ppellantAm charec ions (f)Aco st tutedAanAin ependentA ppellantA echa ism withAt eA owers toAissueAd and Aev n impo seAfiAne .es,AsomeA . .3.2AThAe AC mm ss on A sAof theA iew A ha Awhen it comes A oApublicAgr evan rAaAw de p in ipl sAo AtheARTIAi iti ti eAmayAbe adopted. Howeve ,ApublicAg ievan e Acov range A fAi sues Aand problem Aran ing Afr mAsimple Ac mplaints A egardingAre -tapism,Ac rru tionAa dA elays to Amajo Ade andsAfor A ro ision Aof phy ical Aa d AsocialAinfras89Citiz nACentr cAAdministrati n –hT eAHea tA fAGovernanGrievances could thus be categorized into three broad groups – (i) grievances arising out of abuse of office and corruption on the part of public functionaries, (ii) grievances arising out of systemic deficiencies within an organization, and (iii) grievances arising from nonfulfillment of needs/demands. While the first category is amenable to statutory intervention similar to those embodied in the RTI Act, the second and the third categories may require internal reforms, organizational capacity building and even substantial budgetary allocations. Statutory mechanisms already exist to deal with the first category of grievances. Moreover, the Commission has recommended the creation of a Local Body Ombudsman in its Sixth Report. The Commission is of the view that since budgetary allocations are a legislative process, setting up an external mechanism as under the RTI Act, with powers to issue directions on such issues would interfere with the resource allocations process which is approved by the legislature. Moreover, setting up of an external appellate authority with powers to issue directions, by means of a law, may lead to proliferation of litigation, convert the grievance redressal process into a legalistic exercise and may even create a turf war with the existing judicial and statutory mechanisms. Public grievances which emanate out of systemic deficiencies, or those which are in the nature of requests or demands are best handled through providing a strong internal grievance redressal mechanism, transparency in use of resources and reforming internal processes. Therefore, there is no doubt that the internal public grievance mechanism needs to be much more effective and efficient both in terms of its reach and functions. The Commission feels that this can best be achieved in the following manner:(i)The Union and the State Governments should issue directions asking all publicauthorities to designate public grievance officers on the lines of the Public Information Officers specified under the RTI Act. These officers should be of adequate seniority and be delegated commensurate authority.(ii) All grievance petitions should be satisfactorily disposed of by these officers within thirty days. Non-adherence to the time limit should invite financial penalties.(iii) Each organization should also designate an appellate authority and devolve adequate powers upon them including the power to impose fines on the defaulting officers.90Gri vance ARed essalAMechanism7. .3.3 ARecommendatios:a.A he e Ais nee A orAa As ron Aand Aeffe tive Aint rnalAgrie anceAredrssalAmech ni mAin eachAorganizati nb AnAe A nio AandA tate AGovern entsAs ouldA ssue Adirec ions Aa kin AallAp blicAauthor ti sAtoAdesi nateAp blicAgrie anAoffiA ce sAo AtheA in sAo Athe AP blic AInform tion AOff cers A nde Ath ARTI Act. A heseAoffcersAs ou dA eAofAade uate Aseni rit AandAs ou dAbeAdele atedAcommens rateAauthoriy.c AAllAgrie anceApeti ionsArec ivedAs ou dAbeAsatisfact rilyAdis os dA fAbyAheAoffiA cersAw thinAt irty A ays. ANon-adhe en eAt Athe timeA imitAs ouldAi vteAfiAna cialApenalti s.d. EachAorganiz tionAs ouldAdesi na eAanAappe late Aauth rit AandAdeolveAade uateAp wers upon themAincl din AtheA ow rAto Ai pseA An sAo AtheAdefau tiAoffiAAer s .7.10AAna ysi AandAIdntifiAc ti nAofAGrie ance A roneAAr e a s7 10.1A veryA ear, Agover mentAorganiza io sAa Athe A nio AandA tate Al vels Are e veAaA argeAn mb r Aof Apeti ion AforAredr ss lAofAgriev nces fro Athe Apu lic.A hileAevo v ng AaAr bustAint rnalAmech ni mAto deal with A heseAgriev nce Aand Asimpli yingAproc sse AforAb tterAse viceAdel very A ould for AtheAbac bo eA f AAeffiAA ientAgrie anceAredr ssalAs st mAinAgover mentAorganizat ons Athe mainA oc s Aof s chAaAs stemAs ou dA eAtoAe sure that Aconsequ ntl AtheAn mb rAofAgriev ncesAact all AgetAredce d .AmentA 7 10 2 AIn A rd r Ato Aelim nat Athe Aunder ying Ac uses that le d Ato Ap blic Agrieva ces, Agover ciseA organiza ions A ould ha e A o Abe Aproact vely Aen ag d in Aa Arig rou Aand Aper odic Aexe ha eA to ards Aanal zin Athe An tu e Aof Agriev nces Arec iv d Aby A h hAus, Agrievm. Ances A ouldni gA o AbeAidnti Aed,Acorre ate AandAl nked witAdiffA rentAproc sses Ainv lv dAi AtheAfuncti learA of bot AtheAorganiz tio Aan Aits Ava iousAunits/functiona i s. ThAisA ouldApr v deAaA AtheA ma pi g AofAp blicAgriev nces A as d Aon bothAfunc ion AandAfunctiona ie .AIn Ama pin an eA n tur AandAo ig nAofAgrieva ces, Aint rnal Areso rce Am yAbe Aaugm nt dAby At kingAassis yAtoA of Ap blicAop nio Aand Aext rnal Aad ice. Onc Athe Ama pi gAis A on ,Ait A ou d Abe eaide tif AtheAgrie anceA roneAa eas,Aproce ses,Afunc ion AandAunits/function ries Aw91Citizen Centric Administration – The Heart of Governancethe organization. This should lead to devising and taking corrective measures in order to eliminate the reason for generation of grievances – both in numbers and magnitude. The Commission is of the view that this exercise should be carried out at regular intervals so as to keep a constant vigil on the source areas of generation of grievances and accordingly take steps to rectify these.7.10.3. ernment organizations should analyse the complaints received andidentify the areas wherein interventions would be required so as to eliminate the underlying causes that lead to public grievances. This exercise should be carried out at regular intervals.928CONSU ERAPROTECTION .A Ae AConsu erAProtect onAA c tusA 8. . hAe AwelfAre Ar le of A heASt te is of Aconsidera le Aimporta ce A nd Atheref reAvarireA measu es to Aens re A he Awelf r A- Asafe y, Asecur ty A nd Aw ll Abe n A- ofA ts Acitiz nsA A–A essenti l.AHowev r, Acitiz ns Ar ly on A he Ao enAmar et A or Am st of Ath irApurcha e heA particular y, Ago ds A nd Aa so Aincreasing y, of Aservi es A nd A he Aasymme ry Abetw enA ms consum rs of Ago ds A nd Aservi es A nd A he Aproduc rs of Ath se Ago ds A nd Aservi es inAte ed of Aknowled e,Abargain ngApo erAe c. Anecessita esASt te Ainterventi n hAT isA asAresul asA in Asett ng up of Aconsu er Aprotect on Amechanis s hAe AConsuAer AProtect on A ct Ais pas ed in A1 86 to Aprot ct A he Aintere ts of A he Aconsume hAe Aobjects Ave of At is A awirA to Aprov d Aa Asimp e,Af st A nd Ainexpens ve Amechan sm to A he Acitiz ns to Aredr ssAth ry grievan es in Aspe ifi edAcas s hAe AActAenvisa e Aa Athree-t er Aquasi-judic alAmachin alA at A heANation l, ASt te A nd ADistr ctAleve s; A i)ANatio al AConsu er ADispu esARedresesA Commiss o A- Akn wn as A“Natio al ACommissio ”, A( i) ASt te AConsu erADispu erA Redres al ACommiss on Akn wn as A“St te ACommissi n” A nd A(i i) ADistr ctAConsu orA Dispu es ARedres al AFo u A- Akn wn as A“Distr ct AForu ” hAe AAct Aa so Aprovi esAs,A establishm nt of AConsu erAProtect on ACounc ls at A he AUni n,ASt te A nd ADistr ctAlevewh seAm inAobjecti es A re to Aprom te A nd Aprot ct A he Arig ts ofAconsum e rs. .2 AWork ng ofA he AConsu erACout sA8. . AAAgla ce at A heAstatist cs of Adispo al of Acomplai ts inA he Aconsu er Af raAreve lsAth t, byA ndAlar e, A he Asp ed ofAdispo alA as Ab enAm ch Abet er At an inA heAot erACou tsA(Ta le A8).93Citizen Centric Administration – ~e Heart of GovernanceTable 8.1 : Disposal of Cases by the Consumer CourtsSl.Name of AgencyCases filed since inceptionCases disposed of since inceptionCase Pending% of disposalNo.Up to September 20031National Commission31275235107765752State Commissions316374209314107060663District Fora1817861157264124522087Total21655101805465360045Up to December 20081National Commission559614574210219822State Commissions459918349000110918763District Fora2605337236836623697191Total3121216276310835810889Source: Annual Report of the Department of Food Consumer Affairs and Public Distribution, and Website of National Consumer Disputes Redressal Commission8.2.2 However, there was public expectation that the disposal in these fora would be even quicker, as they are supposed to provide speedy, simple and inexpensive redressal of citizens’ grievances. In order to expedite the proceedings, the law was amended in 2002 and a new Section {13(3A)} was inserted which stipulated as follows:“(3A) Every complaint shall be heard as expeditiously as possible and endeavour shall be made to decide the complaint within a period of three months from the date of receipt of notice by opposite party where the complaint does not require analysis or testing of commodities and within five months, if it requires analysis or testing of commodities:Provided that no adjournment shall be ordinarily granted by the District Forum unless sufficient cause is shown and the reasons for grant of adjournment have been recorded in writing by the Forum.94Consumer Protection8.2.3 However in spite of this amendment, the delay in disposal of cases persisted. In the Thirteenth Report of the Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution, it has been stated as follows:“The Planning Commission during the meeting with the Department of Consumer Affairs on 21.06.2005 had pointed out that although 5 % to 8 % of cases could be resolved within a stipulated period of 90 days, average period of disposal of cases was 150 days, which had underlined requirement of strengthening of the institutional mechanism. In this regard, the Committee enquired the reasons for such low percentage of cases disposed by the Consumer Fora and the steps taken by the Government for strengthening the institutional mechanism.”8.2.4 Shri Sharad Pawar, Union Minister for Consumer Affairs, Food and Public Distribution, while addressing the Conference of the Presidents of State Commissions and the Secretaries incharge of Consumer Affairs in the State Governments/UTs (August, 2007) expressed his satisfaction with the overall performance of the Consumer Fora. He stated that over 28 lakh cases were filed and 88 per cent cases were disposed of. He however, cautioned that the need of the hour is to change the common man’s perception that the Consumer Fora have become like civil courts, making litigation long drawn out and taking several years to dispose of even cases involving small compensation. Furthermore, even where orders have been passed, these are not getting executed on time. An equally common criticism is that while the orders of the Fora are not swift enough, they are also not adequately punitive to act as deterrent and therefore, offenders may not take the Fora seriously. This situation has to change so that the Consumer Fora become a role model in redressing grievances swiftly and more effectively and sending a strong message that exploitation will be penalised.32Box 8.1: Justice DelayedFacts, in brief are that the Complainant, Mr. Bhausaheb Devram Patil has filed complaint, No. S. R. 92 of 1993, against Kishore D. Patil, alleging deficiency in service on his part in supplying the defective colour television. The District Forum vide its order dated 30.9.1994 directed the Opposite Party to repair the T.V. set or refund its price. As the order was not complied, the Complainant filed an Execution Petition, M.P. No. 28 of 1996. before the District Forum. In that Execution Petition the District Forum by order dated 20.8.1998 sentenced the Opposite Party to undergo simple imprisonment for three months and to pay penalty of Rs. 5,ooo/-.Against that order which was passed in the Execution Petition, the Opposite Party filed Revision Petition, i.e. Revision Petition No. 44 of 1998, before the State Commission. The State Commission reversed the original judgment passed by the District Forum in S. R. No. 92/93 and arrived at the conclusion that there exists no relationship of consumer and service provider between the Petitioner and the Respondent.On 30-5-2006, the National Consumer Disputes Redressal Commission passed the following order (RP-580-1999):“In the result, this Revision Petition is allowed. ~e impugned order dated 10.9.1998 passed by the State Commission in R. P. No. 44 of 1998 is set aside. ~ere shall be no order as to costs. However, considering the fact that the Revision Petition was filed in the year 1999, we direct the District Forum to give a chance to the Opposite Party (Respondent) to comply with the order passed by the District Forum in S.R. No. 92 of 1993 by serving necessary notice on him.”Extracted from the Order RP-580-19999532Extracted from Centric Administration – The Heart of Governance8.2.5 ere have been instances where the final settlement of disputes has taken several years. (Box 8.1). Some of the reasons which have been brought to the notice of the Commission are (i) lack of infrastructure and delay in appointments of Chairpersons and Members,(ii) rigid adoption of procedures laid down in the CPC, by some District Fora and(iii) liberal grant of adjournments.8.2.6 The Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution, in its Twenty Fourth Report (2008) observed as follows:“The Committee are highly perturbed to note that the number of non-functional District Fora which were 22 in 2006 has increased to 52 in 2007. The Committee view this development as a serious hurdle in imparting justice to the aggrieved consumer in many parts of the country.”...“The Committee observe that although 74.30% cases were disposed of by the National Commission and State Commissions during 2007-08 yet the position of disposal of cases in respect of the States namely, Assam, Haryana, Maharashtra, Orissa and Uttar Pradesh was dismally poor as only 53.04%, 57%, 58.12%, 60.87% and 35.78% cases respectively were disposed of during the same year.”Government is seized of the issue of providing better infrastructural facilities for the consumer courts as well as prompt constitution of these bodies wherever they are not functional. As regards disposing of cases quickly, the National and the State Commissions have also expressed their concern as follows:oxA8.2:A onsume ACou tsA ee ANotAbeA‘Technical’iewA asA Unfort na ely AinAthe prese tA ase,AanAover-t chni alA orumAinA be nA ake AbyAt eAState ACo mis ion and AtheA istri tA rAofAanA di mis ingAthe Ac mp aintAby hold ngAthatAfathe /m th to AfiAleA a grieve Ap rso AorAh s A ower AofA tt rne AisAnotA nt ted inafter c mplai tAu derAtheA onsumerAPr tect on AA t, A1986A(here Ac ). ef rr dAt AasAt eAis Ais Aer on ou .A t A sAtoAbeAre tera edAth tAu derAheAAct,Atechni ali ies ar An tAto AbeAen ouraged bec useA heAonlyApr cedur ,A plesAof hich Ais Apr scrib dAu der th AA tAisAt Afo low AtheApr nc othAtheA natural jus ic AandAt Ade ideAth Amatt rAafter hear ngAparties.Re ea edl AitA as AbeenA bser ed Athat Ac mplaint A lleging de ectsA nA ood AorAde Ac encyAin ser ic AcanAbeAent rt inedAon re e ptAofA Aletter stangAsu AAcie tAf cts andAt eA auseAof ac ion.AIfAr qu red Ai AcanAbeAent rtain dAafterAr cordingAs at men AofAtheACom lai an AandAif gro ndsA re Am de Aout An ticeAisA eq ir d AtoAb AisuedAtoA pposite Pa ty Ato AtheA ~AisAisAf rgo te AandA eAstill Aerr neo sl AtryAt Aa her sewhere. p ocedure Apr scrib dAu der Ath AC P.C.AorAel DisputeA evision A et tion No 2721 A fA2007,A ationalA onsumer R dressalACom96Consume AProtectiontoA RESO VEDA hat all theACons merA ora Ash uld Adis os Aof theAc sesAwit outAg ingAbleAlen thy Aproced re, As nce theA ainAob ec AofAt eseACons merA or Ai Ato Adisp nseAequit no A jus iceA ithAsp ed,Asimpli ity an Ai AanAinexpen ive Aman e . ThAeACons merA oraAs all ideA be Ab un Aby theAst ictAr le AofAplead ngs an AitAs al AbeAincum ent A ponA he AtoApro e .A comp eteAjus ic Ato theApar ie Aon theAb si Aof theAmate ial andAdocum nts Abe oreAt andAhAi Ai AinAconfor ityA ith the Aproce ureAfoll we Aby the ACommer ial ACo rt AinAEng low RoyAG ode ACommer ial LawA(Se ondAEditio ) . ThAeA nlyArequire en Ai AtoAfo ralA theAprinci le AofAnat ralAjust c . ThAeACons merA ora are not Ab un Aby theAproced technicali iesAu der theAsubstan iveAl wla A ThAeACons merAF ru Ais Aexpe te AtoAfo lowAsi ple Aproced re,Aw ich may notAre ul AinAd low in Adisp sa AofAc sesAwi hin theAstipul ted At m . ThAeACons merAF ru Ais notAb un AtoAfo AofA the CP Aor theAEvid nceA ct. But theACons merAF rum Ash uldAobs rve theAprinc plum.A nat ralAjus iceAw ileAdeci ing theAma ter andA ha AisAb ing A on Aby theACons merAFo .J.A Furt er, the Aproce ureA aidA ow Aby the AHon ble ASup eme AC ur Ain theA as Aof Dr. AAby Merc a tA&AOt ers Vs.AShri athAChatur ediA(2 0 ) A6 SCC 635 Ash ul AbeAfoll we theACons merAF ora.33...ictA REITER TED A hat theAS ate ACommis ion Ash uld Amon tor theAwor in Aof theADist hat ora Afunctio in AinAt eirASta e . ThAeAPresi en Aof theAS ate ACommis ion Ash uldA lso seeA g . the APresid n s A& AMem er Aof the ADist ict A ora are Apunc ua Ain Aatten ing the A ora Asittiect ThAe Adisp sal Ash ul Abe A ore A han t e AfiA in Aof Ac ses and the Astatem nts Ash uld A lso refl merA the Anu be AofAc ses Adisp se AofAwi hin the A ime Af ameAprescr bedAu der theACons de A Protec ionA ct AIt wasA lsoAreiter ted A hatA‘Perform nce AB nchAma k’ AasArecomme on A in theA astAmeeti gs AbeAmainta ned and Aimplemen ed AtoAeval ate theA orkAb ingA theA by theAindivi ual AMem er Aof theADist ictA ora andAS ate ACommiss ons forAasses ingse ondA ermAappointme nt.theA 8 2 7 ~Ae ACommis io Ai Aof theA iewA hat Aw ilAeffA rt AtoA ake the Aproceed ng Ain AbeA cons merAco rts Asi ple and Aq ick Ash uldAconti u ,AaAl rgeAnu be Aof Ac sesAc ulAit disp se Ao AbyAmedia ionAbet een theApart e . A Ai AisAalr ady Ab ing At ied A ut AIn A2 05 wasAdec de A n AaAConfer nc Aof APresid nt AofASt tesACommiss ons andASecreta iesAin-chrg AofACons meAAffA ir AinAStates UTsAorgan se Aby theANati nalACommis io AonA17-08 - 2 05,A hat allACons merA ora may A lsoAorga ize LokAAda at Aon the A astAwor ing da AofA achAw e. PAeAParliamen aryAStan ing ACommi te Aon the ADepart en Aof AF od, APu licADistribu ion and ACons meAAffA irs has A lso Asuppo tedA u h AaAm97Re33Resolut onsAado te Ain theAConfer nc AofAPresid nt AofAS ateACommiss o s A&ASecreta iesAin-cha ge,ACons meAAffA ir AinAStat /UTAGovernm nts el AonA 6th andA 7thAAug st, A 00 AatA all No A5,AVi yanABha an, NewADe hi;A Centric Administration – The Heart of Governance8.2.8 The Parliamentary Standing Committee on Food, Consumers Affairs and Public Distribution, in its Thirteenth Report observed as follows:“The Committee are happy to note that holding of “Lok Adalats” by Consumer Fora has given consumers another Forum to seek redressal of their grievances. hTe Consumer Protection Act does not mandate the Consumer Fora to organize “Lok Adalats”. However, to reduce pendency in Consumer Courts, an out of Court settlement through Lok Adalats, is a powerful medium to resolve Consumers grievances. The Committee, however, regret to note that despite the instructions issued by the President of National Commission to adjudicate the consumer grievances through Lok Adalat, only five States namely, Punjab, Haryana, Chandigarh, Karnataka and Maharashtra have started the Lok Adalats. In the opinion of the Committee, the concept of Lok Adalat is a very convenient option for the consumers to seek redressal of their grievances, which is evident from the number of cases settled by the State Commission and District Fora through Lok Adalats during 2005-06.”8.2.9 The Lok Adalat experiment has had mixed success. As is evident from Table 8.2, very few cases have so far been settled by the Lok Adalats and the performance of States also varies.Sl. missionForaAs on1Andhra PradeshN.A.N.A.02A & N IslandsN.A.N.A.03Arunachal PradeshNilNil30.06.20084 AssamN.A.N.A.05Bihar3028031.07.20086 ChandigarhNil127630.11.20087 Chhattisgarh80N.A.30.09.20088D & N Haveli/Daman & DiuN.A.N.A.09DelhiNilN.A.31.12.200710 GoaNil3730.11.2008Table 8.2: Consumer Disputes Settled by Lok Adalats (Updated on 31.12.2008)98Contd.Consume AProtectiod11 AGujatA17595A3 0.09.0 0 A12AHarnAA5 A071A3 1.10.0 0 A13 AHima halAPrash Ail A113A3 0.11.0 0 A14AJ m uA& AKasirAAA.AAA.A 015AJharkndAAAAA6A31.12.0 0 A16AKarnakA4 A6A3 0.11.0 0 A17AKelaAAA.AAA.A 018ALakshadep Ail AilAA3 0.09.0 0 A19AMa hyaAPrashAAA.AAA.A 020 AMaharasra A126701A3 1.10.0 0 A21AManurAAA.AAA.A 022AMeghayaAAA.AAA.A 023AMizaAA1 AA.AA3 1.03.00 A24ANagandAAA.AAA.A 025 AOrsa A106431A3 1.10.00 A26APuduchryAAA.AAA.A 027APuabA29 A376A3 0.11.00 A28 ARajasan A120 A243A3 0.11.00 A29ASiim Ail AilAA3 1.03.00 A30ATamilduA11ilAA3 0.09.0 0 A31 ATrira Ail AilAA30.06.00 A32AU tarAPrash A311 A506A3 0.11.00 A33AUttaraknd Ail A152A3 0.11.00 A34 A estABealAAA.AAA0AALALA840A1SourSou ce:A Centric Administration – The Heart of Governance8.2.10 Lok Adalats could be an effective mechanism for settlement of consumer disputes. However in order to make them more effective, it should be mandated by law that cases up to a particular value, say Rupees two lakhs, should first be referred to Lok Adalats and only if these cannot be settled there should they be taken up for adjudication in the Consumer Courts.8.3 Other Laws which Seek to Protect Consumers’ Interests8.3.1 Apart from the Consumer Protection Act, 1986, there are a large number of laws - both Union and State - as well as regulations whose objective is to protect the interests of the citizens’ - safety, security, health, hygiene etc. Some of these laws are:a.Prevention of Food Adulteration Act, 1954.b.Essential Commodities Act and Rules thereunder.c.The Standards of Weights and Measures Act, 1976 and The Standards of Weights and Measures (Enforcement) Act, 1985.d.Rules and Regulations and Bye Laws under the Municipal Acts of the States.e.The Drugs and Cosmetics Act, 1940 , The Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954, hTe Narcotic Drugs and Psychotropic Substances Act, 1985, The Medicinal and Toilet Preparations (Excise Duties) Act, 1956, The Drugs (Prices Control) Order, 1995 (under the Essential Commodities Act).f.Mandatory Certification Scheme of Bureau of Indian Standards under various laws.g.hTe Cinematograph Act, 1952.8.3.2 ~e modalities prescribed under each one of these laws is different but the general underlying principle is that a licensing/registration procedure has been prescribed in each one of these laws which seeks to ensure that a licensee fulfills certain pre-conditions before undertaking the prescribed activities. In order to ensure that the licensing conditions are adhered to over a period of time, the laws provide for random inspections and, if conditions of license are violated, penalties have been prescribed. Without going into the specifics of each one of these laws, the Commission is of the view that the effectiveness of these laws can be enhanced by bringing in more transparency and expediency in their enforcement. Some steps that the Commission would like to suggest are as follows:100Consume AProtectionaAAer Ashoul Ab Aa Auppe Atim Alimi Afo Agran Ao Aan Alicense/permission/registration AA Ala Ashoul Aprovid Afo Apenaltie Ai Aa Aapplicatio Ai Ano Adispose Ao Awithi Ath Astipulate Aperiod.bAApplication Awoul Ab Aprocesse Aonl Ao A A‘Firs Ai AFirs Aou ABasis’ AAlAapplication Areceive Aan Apendin Ashoul Ab Apu Ao Ath Alicensin Aauthority’ Awebsite.cAPickin Au Aunit Afo Asurpris Ainspectio Ashoul Ano Ab Alef At Ath AdiscretioAo Ath Ainspectin Ao Acers AEac Ao Ac Ashoul Adevis Aa Aobjectiv Aprocedur At Arandoml Aselec Aunit Afo Ainspection AException Aca Ab Amad Ai Acas Ao Areceip Ao Agenuin Acomplaint Aagains Aan Aunit.dAA Aoutcom Ao Aal Ainspection Amus Ab Aimmediatel Apu Ai Ath ApubliAdomain.eAAer Ashoul Ab Aa Aannua Aaudi Ao Ath Alicensin Aan Ainspectio Asyste AeacAyea Ab Aa Aindependen Aagency.fAAl Alicensin Aauthoritie Ashoul Aevolv Aa Aaccessibl Asyste Afo Areceip Ao AcitizenAcomplaints.8.3. ARecommendations :a ALo AAdalat Awoul Ab AeAectiv Ai Asettlin Aman Aconsume Adisputes AI Ashoul Ab Astipulate Ab Ala Atha Acase Au At A Aparticula Avalue Asa ARupee Atw Alakhs Ashoul AArs Ab Areferre At ALo AAdalatsb AAl AMinistries/Department Anee At Aexamin Ath Aprocedure Aregulatin Agran Ao Alicenses Apermission Ao Aregistratio Aincludin Ath Aunderlyin AActs ARules ANotiAcations Aetc AAes Ashoul Ab Arecas Awit Ath Afollowin Aunderlyin Aprinciples:iATher Ashoul Ab Aa Auppe Atim Alimi Afo Agran Ao Aan Alicense/permission/registration AA Ala Ashoul Aprovid Afo Apenaltie Ai Aa Aapplicatio Ai Ano Adispose Ao Awithi Ath Astipulate Aperiod.ii AApplication Ashoul Ab Aprocesse Aonl Ao A A‘Firs Ai AFirs Aou ABasis’ AAl Aapplication Areceive Aan Apendin Ashoul Ab Apu Ao Ath Alicensin Aauthority’ Awebsite101Citizen Centric Administration – The Heart of Governanceiii. Selecting units for surprise inspection should not be left to the discretion of the inspecting officers. Each office should devise an objective procedure to randomly select units for inspection. Exceptions can be made in case of receipt of genuine complaints against any unit.iv. The outcome of all inspections must be immediately put in the public domain.v.There should be an annual audit of the licensing and inspection system each year by an independent agency.vi. All licensing authorities should evolve an accessible system for receipt of citizens’ complaints.1029SPECIA AINSTITUTIONA AMECHANISMS9. AIntroduction9.1. AA Abasi Apremis Abehin Amakin Aadministratio Acitizen-centri Ai At Aensur Atha Ath AbeneAt Ao Agoo Agovernanc Aar Aavailabl At Aal Asection Ao Asociety AA Amentione Ai Aa Aearlie AChapter Aon Ao Ath Apillar Ao A Acitizen-centri Aadministrativ Astructur Ai A Arobus Agrievanc Aredressa Amechanism ASinc Asom Acategorie Ao Acitizen Aar Amor Avulnerabl Atha Aothers Ather Ai Anee Afo Ainstitution Awhic Aredres Agrievance AspeciA At Athem AI Afact Ath AConstitutio Aitsel Aprovide Afo Avariou Asocio-economi Aan Apolitica Asafeguard At Acertai Adisadvantage Asection Ao Asociety AAes Aar Aguarantee Athroug Aenshrinin Ao Acertai AspeciA Aright At Asuc Acitizen Aan Ab Alayin Adow A Anumbe Ao A‘Directiv APrinciple Ao AStat APolicy Afo Ath AStat At Aac Aupon AFurther Ai Acas Ao Atw Aspeci A Agroup Ai.e Ath ASchedule ACaste Aan ASchedule ATribes Ath AIndia AConstitutio Aals Aprovide Afo Aconstitutin ACommission At Asafeguar Athei Ainterests AApar Afro Athis Ath AIndia AStat Aha Aals Aconstitute Asevera Aothe ACommission Athroug Astatute At Asafeguar Ath Aright Ao AdiAeren Asection Ao Asociety ASom Ao Athes ACommission Aar Aa Afollows:iANationa AHuma ARight ACommissionii ANationa ACommissio Afo AWomeniii ANationa ACommissio Afo AProtectio Ao AChil ARight siv ANationa ABackwar AClasse ACommissionvANationa AMinoritie ACommissionvi ANationa AConsume ADispute ARedressa ACommission9.1. AAes Aar Aal Ainstitution Aconstitute Afo Aprovidin Aspecia Afocu Ao Aredressin Ath Agrievance Ao Aspeci A Asection Ao Asociety AI A Away Athes Aar Aspecia Atype Ao Acitizen-centri Ameasures AA Acomposition Aterm Afunction Aan Apower Ao Athes ACommission Aar Adiscusse AbrieA Ai Ath Afollowin Aparagraphs.103Citizen Centric Administration – The Heart of Governance9.2 ~e National Commission for Scheduled Castes9.2.1 Part XVI of the Constitution contains ‘Special Provisions Relating to Certain Classes’. Article 330 provides for reservation of seats for Scheduled Castes (and Scheduled Tribes) in the House of the People, Article 332 provides for reservation of seats for Scheduled Castes in the Legislative Assemblies of the States and Article 335 provides that the claims of members of the Scheduled Castes and Scheduled Tribes shall be taken into consideration (in consistence with the maintenance of efficiency of administration) while making appointments to services and posts in connection with the affairs of the Union or of a State. The latter provision is to be read with Article 46, which contains a Directive Principle, that the State shall promote the educational and economic interests of the weaker sections of the society, particularly of the Scheduled Castes and Scheduled Tribes and shall protect them from social injustice and all forms of exploitation.34 Further, Article 338 provides for the constitution of a National Commission for Scheduled Castes to investigate and monitor all matters relating to constitutional and legal safeguards provide for the Scheduled Castes.9.2.2 Originally, Article 338 of the Constitution provided for a Special Office for Scheduled Castes and Scheduled Tribes. This Office was designated as Office of Commissioner for Scheduled Castes and Scheduled Tribes. Consequent to the 46th Amendment, a multimember Commission for Scheduled Castes and Scheduled Tribes was constituted in 1978. This Commission was renamed as the National Commission for Scheduled Castes and Scheduled Tribes in 1987. However, the First Statutory National Commission for Scheduled Castes and Scheduled Tribes was constituted only in 1992 following the 65th Amendment (1990). The Constitution (Eighty-ninth Amendment) Act, 2003 provided for the constitution of separate Commissions for the Scheduled Castes and for the Scheduled Tribes. Accordingly, the first National Commission for Scheduled Castes (NCSC) was constituted in 2004.359.2.3 The functions of the Commission, inter alia, are:(a) to investigate and monitor all matters relating to the safeguards provided for the Scheduled Castes under this Constitution or under any other law for the time being in force or under any order of the Government and to evaluate the working of such safeguards; and10434Comptroller v. Jagannathan, AIR 1987 SC 537: (1986) 2 SCC 679: (1986) 1 ATC 1: (1986) 1 SLR 712, paragraphs 21 and 22. 35Source: Institutional Mechanisms(b) to inquire into specific complaints with respect to the deprivation of rights and safeguards of the Scheduled Castes.9.2.4 Some of the constitutional and legal safeguards provided to the Scheduled Castes which the NCSC is required to investigate and monitor are as follows:i.Safeguards provided under Article 17: This Article prohibits the practice ofuntouchability. The NCSC also investigates and monitors the implementation of Protection of Civil Rights Act, 1955 and Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989.ii.Safeguards provided under Articles 23, 24 and 25 (2) (b) : Article 23 prohibitstraffic in human beings and begar and other similar forms of forced labour and provides that any contravention of this provision shall be an offence punishable in accordance with law. In pursuance of this, Parliament has enacted a Bonded Labour System (Abolition) Act, 1976. Article 24 provides for the prohibition of employment of children below the age of 14 years in any factory, mine or other modes of hazardous employment. In pursuance of this Article, Central and State laws have been enacted. Article 25 (2) (b) provides, inter-alia, that Hindu religious institutions of public character shall be thrown open to all classes and sections of Hindus. The NCSC investigates and monitors these general safeguards as they have a special relevance for the Scheduled Castes.iii. Safeguards provided under Article 15(4): Article 15(4) empowers the State to make any special provision for the advancement of any socially and educationally backward classes of citizens or for SCs and STs.iv. Safeguards provided under Articles 16(4), 16(4A), 16(4B), 320(4) and 335: These Articles provide for reservation in posts, promotions, filling up of vacancies etc. for SCs and STs.v.Safeguards provided under Article 164(1): The proviso to this Article mentionsthat in the States of Chhattisgarh, Jharkhand, Madhya Pradesh and Orissa, there shall be a Minister in charge of tribal welfare who may in addition be in charge of the welfare of the Scheduled Castes and Backward Classes or any other work.105Citizen Centric Administration – The Heart of Governancevi. Safeguards provided in statutes other than those mentioned above, such as The Child Labour (Prohibition and Regulation) Act, 1986; The Minimum Wages Act, 1948; Acts and regulations in force in different States to prevent alienation of land belonging to SCs etc.9.2.5 While investigating into matters related to constitutional safeguards and individual complaints, the NCSC has the powers of a civil court trying a suit. Such powers include:(a) Summoning and enforcing the attendance of any person from any part of India and examining him on oath;(b) Requiring the discovery and production of any documents;(c) Receiving evidence on affidavits;(d) Requisitioning any public record or copy thereof from any court or office; and(e) Issuing commissions for the examination of witnesses and documents.9.2.6 The Commission has offices in 12 States/UTs, which enables it to have a wide regional perspective. The Commission is organized around four wings which look after administration and coordination, service safeguards, atrocities and protection of civil rights and economic and social development respectively.9.2.7 The mandate of the Commission is to present Annual and other Reports to the President. These Reports contain recommendations on measures to be taken by the Union and State Governments for effective implementation of the safeguards and other welfare measures. These Reports are to be laid before both Houses of Parliament along with a Memorandum explaining the action taken or contemplated by the respective Ministries/ departments and reasons for non-acceptance, if any. In case the recommendations pertain to State Governments, these are to be laid out before the respective State Legislatures along with a similar Memorandum.9.3 ~e National Commission for Scheduled Tribes9.3.1 The National Commission for Scheduled Tribes had an origin similar to the NCSC. It was constituted as a separate Commission in 2004 following the amendment of Article106Specia AInstitutiona AMechanism433 Aan Ainsertio Ao AArticl A338 Ab Ath AConstitutio A(Eighty-nint AAmendment AAct A2003 ABefor Athat Aa Amentione Aabove Amonitorin Ao Aconstitutiona Asafeguard Aprovide t ASchedule ACaste Aan ASchedule ATribe Awa Adon Ab A Acommo AbodyA9.3. AA Acomposition Aterm Afunctions Apower Aan Aprocedur Afo Apresentatio Ao AReport i Acas Ao Ath ANationa ACommissio Afo ASchedule ATribe A(NCST Aar Asimila At Atha Aoth ANCSC AA Aconstitutiona Aan Alega Asafeguard Aprovide At ASchedule ATribe Aar Aals simila At Athos Aprovide Afo ASCsA9.3. AA ANCS Afunction Athroug Asi Aunit Awhic Aloo Aafte Aadministration Acoordination socio-economi Aan Aeducationa Adevelopment Aservic Asafeguard Aan Aatrocitie Arelate Amatters AA ANCS Aha Asi Aregiona AoAce Awhic Aprovid Ai Awit A Aregiona Aperspective 9. AA ANationa AHuma ARight ACommission9.4. AA ANationa AHuma ARight ACommissio A(NHRC Awa Aconstitute Ai A199 Afollowin Ath Aenactmen Ao Ath AProtectio Ao AHuma ARight AAct A1993 AA AStatemen Ao AObject Aan AReason Ao Ath ABil Anote Atha AIndi Awa A Apart At Ath AInternationa AConventio Ao ACivi Aan APolitica ARight Aan Ath AInternationa ACovenan Ao AEconomic ASocia Aan ACultura ARights Abot Ao Awhic Awer Aadopte Ab Ath AUnite ANation AGenera AAssembl Ao A1 ADecember A196 Aan Atha Ath Aright Aembodie Ai Athos ACovenant Astoo Asubstantiall Aprotecte Ab Ath AConstitutio Ao AIndia AI Aobserve Atha Ather Aha Abee A“growin Aconcer Ai Ath Acountr Aan Aabroa Aabou Aissue Arelatin At Ahuma Arights” AHavin Aregar At Athis Aan At Ath Achangin Asocia Arealitie Aan Aemergin Atrend Ai Ath Anatur Ao Acrim Aan Aviolence Ai Aha Abee Aconsidere Aessentia At Arevie Ath Aexistin Alaw Aan Aprocedure Aan Ath Asyste Ao Aadministratio Awit A Avie At Abringin Aabou Agreate AeAcienc Aan Atransparency AA ABil Areceive APresidentia Aassen Ao A AJanuary A1994.3A9.4. ASectio A1 Ao Ath AAc Amandate Ath ANHR At Aperfor A“al Ao Aany Ao Ath Afollowin AfunctionsA(a Ainquire Asu Amot Ao Ao Ath Abasi Ao A Apetitio Ao Ao A Adirection/orde Ao A Acourt Aint A Acomplain Ao A-iAviolatio AoAhuma Aright Ao Aabatemen Athereo AoriiAnegligenc Ai Ath Apreventio AoAsuc Aviolation Ab A Apubli Aservant107;36 izenACe tric AAdministr t oA AThAeA ea tAofAGoverb)intervene in any proceeding involving any allegation of violation of human rights pending before a court with the approval of such court;c)visit, any jail or any other institution under the control of the State Government, where persons are detained or lodged for purposes of treatment, reformation or protection for the study of the living conditions of the inmates and make recommendations thereon;d)review the constitutional and legal safeguards provided for the protection of human rights and recommend measures for their effective implementation;e)review the factors, including acts of terrorism that inhibit the enjoyment of human rights and recommend appropriate remedial measures;f)study treaties and other international instruments on human rights and make recommendations for their effective implementation;g)undertake and promote research in the field of human rights;h) spread human rights literacy among various sections of society and promote awareness of the safeguards available for the protection of these rights through publications, the media, seminars, and other available means;i)encourage the efforts of non-governmental organisations and institutions working in the field of human rights; andj)such other functions as it may consider necessary for the promotion of human rights.9.4.3 The Act defines ‘human rights’ to mean “rights relating to life, liberty, equality and dignity of the individual guaranteed by the Constitution or embodied in the International Covenants and enforceable by courts in India”. This definition cuts a wide swathe across the spectrum of rights available to individuals in India. Because of this wide definition and the range of functions mandated to the Commission, the NHRC has been assigned specific powers to facilitate the discharge of its functions. With regard to inquiries into complaints, it has similar powers of a civil court trying a suit as available with NCSC/NCST. However, it also has some additional powers such as:108Spec alAInstitutio alAMechanismsnA . hT eACommissi nAh sAt eApow rA oArequi eAa yApers nA oAfurni hAinformati nArelati nA oAa y Ainqui yA(subje tA oAprivilge s).i. sA AProceedin sAbefo eAt eACommissi nAa eAdeem dA oA eAjudici lAproceedinn A with nAt eAmeani g A f ASectio s A1 3Aa d A2 8Aa dAf rAt e Apurpos s A fASecti eA 1 6A fAt eAIP . hT eACommissi nA sAal oAdeem dA oA e aACiv lACou tAf rAt purpos s A f ASecti n A1 5Aa d AChapt rAXX I A fAt eACr.P.Aii yA . hT eACommissi nA rAa yAGazett dA AAc rAauthoriz dA yA tAm yAent rAa buildi gAe cA o Aseize/ta eAcopi s A fAa yAdocument .9.4 4AFurthe ,Af rAt eApurpo eA fAconducti gAinvestigation ,At eACommissi n A sAempower dA oAutili eAt e Aservic s A fAa y AAAc r A r Ainvestigati nAagen y A fAt eAUni n A r ASta eAGovernment ,Awi hAthe rAconcurrenc. A9.4 5 ADuri g A rAup nAconclusi n A fA n Ainqui y Ain oAcomplain s Aetc ,At e ANHR , A fA tAdee sfiA ,Am yArecomme dA oAt eAconcern d AGovernme t A rAAuthori yA( )A o Ap yAcompensati nA rAdamag sA oAt eAcomplainan ,A(i )A o Ainitia e Aproceedin sAf r Aprosecuti n Aet .Aa dA oAta eAa yAfurth rAacti nA s A tAm yAthi k fiA .A tAm yAal oAapproa hAt e ASupre e ACou tA rAt eAconcern dAHi h ACou tAf rAdirectio s / Aorde s /Awrit . A tAm yAal oArecomme dA oAt eArespecti e AGovernmen sAduri gAt e Apendan y A f Ainqui yA oAgra tAimmedia e Ainter mAreli fA oAt eAvictim/fami yAmember . A nAcompleti n A fAt e Ainquir ,At e ACommissi n A sAmandat dA )A o Ase dAt eAinqui yArepo tAa d Ai sArecommendatio sA oAt e Aconcern dAGovernment( eA whi hA sArequir dA oAforwa dAi sAcomme tAa dAActi nATak nARepo tA oAt eANHR . hT eA Commissi n Asubmi s Ai sAAnnu lARepo tA oAt eAUni n AGovernme tAa dAt eAconcern dASta sA Governmen sAwhi hAa eA o A eAla d Abefo e Aea hAHou e A fAParliame tAa d ASta eALegislaturalo gAwi h a Amemorand m A fAacti nAtak n A r Apropos dA o A eAtake n .eA 9.4 6 hT eAA tAal oAprovid sAf rAconstituti nA fASta eAHum nARigh sACommissio sA tAteASta e Alev lAwi h Asimil rAfunction , Apowe sAa dAmandat , Aea hArestrict dA oArespecti eASta jurisdiction .A9 5 e eANation l ACommissi nAf rAWomn A9.5 1 AT e ACommitt e A n At e AStat s A fAWom n A n AInd a Ah d A n Ai s Arepo tA(197 )Arecommend dAt e Asetti gA p A f aANation l ACommissi nAf rAWom nA(NC )A oAfufi109Citi enACent icAAdministrat o A hAeAHeArt ofAGovernathe surveillance functions to facilitate redressal of grievances and to accelerate the socioeconomic development of women. In consequence to the enactment of the National Commission for Women Act, 1990, the National Commission for Women was set up as a statutory body in January 1992 with the mandate to review the constitutional and legal safeguards for women, recommend remedial legislative measures, facilitate redressal of grievances and advise the Government on all policy matters affecting women.9.5.2 hT e NCW is inter alia mandated to carry out the following functions:i.Investigate and examine all matters relating to the safeguards provided forwomen under the Constitution and other laws;ii.take up cases of violation of the provisions of the Constitution and of otherlaws relating to women with the appropriate authorities;iii. look into complaints and take suo moto notice of matters relating to:a.deprivation of women’s rights;b.non-implementation of laws enacted to provide protection to women and also to achieve the objective of equality and development;c.non-compliance of policy decisions, guidelines or instructions aimed at mitigating hardships and ensuring welfare and providing relief to women, and take up the issues arising out of such matters with appropriate authorities; andiv.inspect or cause to inspect a jail, remand home, women’s institution or otherplace of custody where women are kept as prisoners or otherwise and take up with the concerned authorities for remedial action, if found necessary.9.5.3 To carry out these functions, the Commission has all the powers of a Civil Court trying a suit, as exists in the case of the NCSC/NCST. hT e Union Government causes the reports made by the Commission concerning the working of the safeguards provided to women to be laid before each House of Parliament along with an Action Taken Report on the recommendations and the reasons for non-acceptance, if any. In case of matters pertaining to any State Government, the report is placed before the State Legislature along with its Action Taken Report.110Spec alAInstitutio alAMechani9 6 e eANation lACommissi nAf rAProtecti nA fAChi dARight s7A 9.6 1 hT eANation lACommissi nAf rAProtecti nA fAChi dARigh sAw sAs tA pA nAMar hA20 s a Astatuto y Abo y A n Apursuan e A fAt e Aenactme t A fAt eACommissio sAf rAProtecti nAfAChi dARigh sAAc , A20 5A o Aprotec , Apromo eAa dAdefe dAchi dArigh s A nAt eAcountr. AsmsnA 9.6 2 hT eAA tAdfiAn sA‘chi dAright ’A nASecti nA2( )A oAinclu eA‘t eAchildren sArigh sAadopt dAdA t eAUnit dANatio sAConventi n A nAt eARigh sA fAt eAChi d A nAt eA20 hANovembe , A19 9AanA rat fiA dA yAt eAGovernme tA f AInd a A nAt e A11 hADecembe , A1992 . AArtic e 1A f Ath sAConventigA mentio sAtha :A“F rAt e Apurpos sA fAt e Aprese tAConventio , aAchi d Amea sAeve y Ahum nAbeidA bel wAt eAa eA f Aeighte nAyea s Aunle s Aund rAt eAl wAapplicab eA oAt eAchil , Amajori yA sAattainearlier ”.3 79.6 3hT eAma nAfunctio s A fAt e ACommissi nAa eto.Aexami eAa dArevi wAt e Asafeguar s Aprovid dA y A rAund rAa yAl wAf rAt eAtieAbei g A nAfor eAf rAt e Aprotecti n A fAchi dArigh sAa dArecomme d Ameasur sAfrAthe rAffAecti eAimplementation.i.Ainqui e Ain oAviolati n A fAchi dArigh sAa dArecomme d Ainitiati n A fAproceedinsA n Asu hAcases.ii .Ainspe t A rAcau eA o A eAinspect dAa y Ajuveni eAcustodi l Ahom , A rAa y Aoth rApla eA fAresiden e A rAinstituti n Amea tAf rAchildre ,Aund rAt eAcontr l A fAt eACentr lAGovernme t A rAa y ASta e AGovernme t A rAa y Aoth rAauthorit , Aincludi gAa yAinstituti nAr nA y a Asoci l Aorganizatio ;Awhe eAchildr nAa eAdetain d A rAlodg dAf rAt e Apurpo e A fAtreatmen ,Areformati n A r Aprotecti nAa dAta eA pAwi hAthe eAauthoriti sAf rAremedi lAactio , A fAfou dAnecessary.i.Ainqui e Ain oAcomplain sAa dAta e As oAmo uAnoti e A fAmatte sArelati goA. ADeprivati nAa dAviolati n A fAchi dArights;.ANon-implementati n A f Ala s Aprovidi gAf r Aprotecti nAa dAdevelopmetA fAchildre ;Aa11137 ACentri AAdministratio A AhA AHear Ao AGovernancc.Non-compliance of policy decisions, guidelines or instructions aimedat mitigating hardships to and ensuring welfare of the children and to provide relief to such children, or take up the issues arising out of such matters with appropriate authorities.9.6.4 The powers and manner of presenting reports in case of this Commission are similar to those of the NCW. The Act also provides for constitution of State Commissions for Protection of Child Rights which have similar functions and powers within State jurisdictions.9.7 The National Backward Classes Commission9.7.1 Article 340 of the Constitution provides for appointing a Commission to investigate the conditions of socially and educationally backward classes. Following the enactment of the National Commission for Backward Classes Act, 1993, the eponymous Commission was constituted in 1993. The National Backward Classes Commission (NBCC) has been given the mandate of examining requests for inclusion of any class of citizens as a backward class and hear complaints of over-inclusion or under-inclusion in such lists and tender such advice to the Union Government as it deems appropriate. As this Commission has a different mandate it is not discussed further in this Chapter.9.8 The National Commission for Minorities9.8.1 The National Commission for Minorities was constituted as a statutory body in 1993 following the enactment of the National Commission for Minorities Act, 1992. As per Section 2 (c) of this Act, the term ‘Minority’ for the purposes of the Act, means a community notified as such by the Union Government. Vide a Gazette notification issued on 23rd October 1993 by Ministry of Welfare, Government of India, five religious communities viz; the Muslims, Christians, Sikhs, Buddhists and Zoroastrians (Parsis) were notified as minority communities. As per the 2001 Census, these five religious minority communities constitute 18.42% of the country’s population.389.8.2 The main functions of the Commission are as follows:(a) monitoring the working of safeguards for minorities provided in the Constitution and in laws enacted by Parliament and the State Legislatures;38 AInstitu ionalAMechn(b)Am kingArecommenda ion Afo AteAeffAe tiveAimplement ti nAofAsafeg ardfo AtheAprote ti nAo Athe Ainte es s Aof Aminor ti sAb Athe A nionAGover me tAo AtheA tateAGovernm nts;Aa d(c)Alo king intoAse ifiAc Acompl intsArega dingAdepriv ti nAofAr ght AandAsafeg ar sAof Aminor tie Aand At ki g Aup suchAma ters wit AtheAapprop iateAauthor it ie s. eralA . . AThAe AConstit tion doe AnoAd fiAn Athe termA‘minor ty’.AHow ver,A part fro AtheAge ca eA safegu rds Athe Afoll wing Asafeg ard Aare Acons ru d A o AbeAsecifiA allyApro id dAi Athe of Aminorities39i.A ig tAof ‘anyAse ti nAo Athe Aciti en ’AtoA‘cons rve Aits A‘dis inctAlang age,Asri tAorAcult re’;A{Ar ic leA 29(1}ii.Arestri ti nAonAd ni lAofAadmi si nAt AanyAcit ze ,At AanyAeducat onalAinstittionAmaint in dAor A id dAb AtheAS ate A‘onAgr unds on yAof Areli ion, A ace,Ac ste,Alan ua eAo Aa yAofAt em’;A{Ar icleA29(2) iii.A ig tAo Aall Aminori ies,Awh ther A as dAon Arel gi nAorAlang ag ,AtoAesta lisAandAadmin sterAeducat onalAinstitu io sAof A heir Ach ice;A{Ar icleA30(1}iv.Afr edom fromAdiscrimin ti nAo AtheAg ound tha AanyAeducat onalAinstit tinAisA nde AtheAmanag me t of Aa Amino it ,Ai AtheAm tt rAof Arece vin Aaid fro AtheAS ate;A{Arti cle30()}v.Asp cialAprov sionArel ti gAt AtheAlan uageAs ok n by AaAse ti nAo AtheApopulti nAo AanyAS ate;A{Ar icle34}vi.Aprov sio AforAfacil tie AforAinstru ti nAi Athe Amother-t ng e AatApr maryAsage;A{Ar icl A350AA vii.Aprov sio A orAaASp ciAOffi Ace AforALingu sticAMinor tie Aan AhisAdu ies;A{Ar icl A3 0AB}Aand iii.Aprov sio Afor Aincl din AtheAwe rin AandAcar yi gAof Ak rp nAi AtheAprofe si nAo Athe Sikh Arel gion A{Explan ti nA1, AAr icl A2 } Aas pa tAof A ig tAtoAfr ed mAofAconsc enc Aand freeAprofes ion,Apra tic Aand Apropag ti nAof Areli39 Centric Administration – The Heart of Governance9.8.4 hT e Commission has powers similar to the NCSC to carry out its functions i.e. those of a civil court trying a suit.9.9 ~e National Consumer Disputes Redressal Commission9.9.1 This statutory Commission was created under the Consumer Protection Act, 1986 which was enacted to provide for a consumer disputes redressal mechanism at the national, state and district levels. As these bodies have been given judicial functions with powers to issue orders and decrees, these have been considered in a separate chapter in this Report.9.10 IssuesA table showing the comparison of objectives, composition, functions, powers etc. of the different Commissions is presented in Annexure IX (1) to this Report.9.10.1 Co-ordination and Avoidance of Overlap in the Functioning of the Commission.9.10.1.1 Suggestions have been made, from time to time, to merge all Commissions into a comprehensive Human Rights Commission with separate Divisions for Scheduled Castes, Scheduled Tribes, Women and Children. The Commission has considered this suggestion. While it recognises that there are major issues of overlap and potential conflict which would need to be addressed, the suggestion for merging of the Commissions, particularly in larger States, is impracticable and would fail to adequately address the special problems of different disadvantaged groups. However, this may be possible in case of some of the much smaller States where the various Commissions to redress the grievances of different sections of society could be constituted into a single ‘multi-role’ Commission to carry out the specific functions of the existing constitutional and statutory Commissions of that State.9.10.1.2 The existence of a large number of Commissions’ should enable each one of them to look into specific categories of complaints thereby ensuring speedy action on the complaint. However, this multiplicity of Commissions could lead to problems of overlapping jurisdictions and even duplication of efforts in dealing with complaints. Some of the laws had envisaged these problems and made legal provisions for the same. For example, in order to prevent duplication of efforts among the National and State Human Rights Commissions’, Section 36 of hT e Protection of Human Rights Act, 1993 (PHRA) mandates that the NHRC shall not inquire into any matter which is pending before a State Commission or any other Commission duly constituted under any law for the time being in force. Furthermore,114ecial AInstitu ionalAMechanismsS ctio A3 3) A f Ath APHRA Apr vide Ath tAtheAChairp rs ns A fAthe ANa ionalAComm ssi nAforAMinor tie ,Athe ANa ional AComm ssi n AforASch duled AC ste ,Athe ANa ionalAComm ssi nAforASch duledA rib sAa dAthe ANa ional AComm ssi nAfor Women sh ll Abe A eemedAM mb rsA f Ath ANH CAf rAthe Adis ha geAof Av riousAfun tionsAas ig ed A o Ait.AHo ever Athi Ado sAnot coverAfun tionsApres ribed under AS ction 12 a) A f Athe PHRA, which deal AwithAin uir ,Asu Am tuAorAothe wise A ntoAa Acom la nt AofAvio at on AorAab tm nt AofAvio at onAof humanAig ts Aor Anegl ge c Aby Aa A ublicAs rv nt A n Athe Aprev nt onAo AsuchAviola t i o n .9. 0.1.3AMor ov r, itAis Ae iden A romAaAcomp ri on A fAtheAfun tio s AandA ower Ae c.AfAdiff erentASta utory ACommi sionsA{An exure A X(1) Athat there exist Ana io al Aa Aw llAas staterAtheA level ACommi si ns AtoAr dress As milarAgriev n e . AThAeAC ntr l Alaw A tself Apr vid sAf sAand consti ut onAof ANa ion l Aand State level ACommi sio s AforAsafegu rding humanA igh childAr ghts. AFu the, Adiff erent StateAgover ment AhaveAconst tutedAsta utoryACommi sio sAforAsafegu rdi g AtheAint re ts Ao ASCs ASTs, Wom n Aand AMinor ties. Amo gAall theseACommis ion ,Athe HumanA ights ACommi sion Aha eAthe A idestAm nda eA ue A o Athe bro dAdefiA it onA fAth AtermA humanAr ghts’Apr vi edA n Athe PHRA,1993.A9. 0.1.4ASimi arly,Awh rev r Athe A tate Ahave Aestab ishedAsta utory State levelACommis ions’ (s chAas tho eAfor A ome ,AS s Aan ASTs,AMinor ties,ACh ldre Aetc) whoseAjurisdi tio sAmay Ao erla Awi hAthe ANa ional level ACommis io s, it Ais Anec ss ryAtoA v lveAaAmec an smAtoAp eventAdupli at on ofAefforts.AHumanA 9. 0hAo1.5 A gh A t Aha Abeen Ama da ed Ain AS ct on A 6 A 1 A f AThAe AProt ct on Aof ight AAct A1993A PHRA AthatAcomp aints Ap ndingA efo e Aany otherAsta utoryAComm ssio Awi l A otAbe Aen uire Ai to A yAthe ANa io alAor State level ACommis io s,AinApra ticalA erm ,AthAconfiAr at onAo Asuch Anon-pe de cy AisA olely Adep nd nt A nAtheAdecla atio Am deA yAtheAcompl in nt A nAthe Acomplaint- ormat (bothApaper bas d AandA nlineAfor at ).AIn fa t,AStateA nAtheAa se ce Aof Anetw rki gAandAr gularAinter ction Ab twe nAthe ANa ion l Aand .AThAeA Commis io s, itA Adiffi Ac ltAtoAp eventAdupli at on ofA ffA rtA tAtheApreli inaryA t g nnualA ep rt A f Ath ANH C Afor A2 05-06 Ame tion At atA tAhas A tak n Athe Ainit at veAt AhaveA nnualAintera tion Awi hAa l Athe State HumanA ights ACommis ions, whereA utualAdiscu sion Atake Ap ace’.A uri gAitsA is ts Ao Adiff erent AS ate , A ne A f Athe Asugge tion AmadeA efo eAt eA RCA stateA yAthe State level ACommi sionsAr la edAtoAim rovedAcoordi at on A tAthe Ana ion l Aand lAandA l v l . AThAe AComm ss on isA fAth Avie Athat th re Ai An edAto Ap o ideA AmoreAmean ngfcont nuou Am deAofAinter ctionAb twe nAthe ANa ion l Aand HRCs.State115Citizen Centric Administration – The Heart of Governance9.10.1.6 At the basic level, in case of complaints, coordination between different Commissions at the national and state levels could easily be facilitated through creation of electronic data bases and networking. For having a seamless exchange of data, a common complaint format needs to be devised for all such Commissions constituted to monitor and investigate the constitutional and legal safeguards. This common format would have specifically designed data fields to capture the details of the victim(s) and complainants. In case of complaints filed without utilizing the specifically designed format, the necessary details could be ascertained at the time of registration of the case itself. The Commission has already recommended in paragraph 6.3.9 of its Eleventh Report entitled ‘Promoting e-Governance: The SMART Way Forward’ that such databases could be generated in a prospective manner without waiting for feeding and updating of the historical data. When the UID project is fully implemented, the unique identification number allotted to each citizen would further facilitate this process. Within each Commission, a concerted effort needs to be made to identify the dominant grievance in each of the complaints received at the preliminary stage itself so that the complaint could be assigned to the Commission which is best suited to redress the grievance of the complainants. As mentioned earlier, Section 3(3) of the Prevention of Human Rights Act (PHRA) provides that the Chairperson of the NCW, NCSC, NCST, and NCM are deemed to be members of the NHRC. This expanded Commission may lay down the norms to deal with complaints by the most appropriate Commission. Nodal Officers in each Commission may be appointed to coordinate such complaints.9.10.1.7 The creation of a database and networking would assist these Commissions in not only streamlining their workload but also in deciding which body would be the best agency to carry out investigations. Further, it would also help in identifying those areas and groups where the rights of such groups of citizens are more prone to abuse. This would assist the respective governments in devising specific measures to address the situation.116pecialAInstit tionalAMec. 0.2A AMore AFo ussedAApr o a c hA9. 0 2.1AA large A um er Aof Acomp ain sAareAre ei ed Aby these ACommi sions whi hAareAreg larly Adi po ed Ab At emAby Apro idin Asome A el efA oAthe Avi t ms. A AgoodAc tizenAc ntricAgove nanceA ystemA houldA nsur Athat Aocc sio s Afo AsuchAcomp ai ts A oAnot A rie.AE Aort Ah ve toAb Am deA yAthe Uni n Aand StateAGover me tsAtoA nsur Ath tAthe ca es AofAvio at onA fAtheA ig ts AofAci izensAespe ial yAthe Avuln rable Ase tio s Aare AignifiA antlyAr du edA fAnotAelim natedAaltog ther. APrev ntiveAme sures woul Aals Ah ve toAbe ta enAto Aeli inate ca esAof As rious humanA ightsAviol tion As chAas Acus odial Ad aths,At rtureAetc.9.1 .2 2.AInAad it on A oAthe Acr minal Aj stice As ste ,Athe ANa ion l Aand State HumanA ightsACommi si ns Aa Aw ll A s Athe other ACommi sions coul Ap ayAanAimp rtan Ar leAinAprev ntin AsuchAviol ti ns AofAcit zens’ rig tAan Aa so AinAmiti ati g Athe Ahar sh ps A fAtheAv i ti s.AAnAan ly is A fAthe cases Adi po ed of Ab ANHR Aov rAth Alast three yearsAr veal A hatA AwideAv ri ty Aof Acomp ai tsAof humanA ightsAviol tio sAareAre eiv d AandAproc sse .AButAd spi eAheAe Ao ts A f Athe ANHRC/ HRC ,Athe A um erAo Asuch cas sAh s Ano Abeen AignifiA antlyAreTherefoTAe efo e,Ath AUn on A ndAth AState AGove nments shou d AtakeApr activ As eps AtoAelminate Aenc sA ca sesA f AsuchAoccur e ce .AThAi Ac uld AbeAa hi ved Aby Aprior tiz ng At e AmoreA erousAo rep reA likeAcu todial Adeath /rap s Aetc. AG id nce of At eA HRCAa ASH Cs mayAb At ken AtoA and Aim le entAan acti nAp an Af r Athi Apurpose.117Citizen Centric Administration – The Heart of Governance9.10.3 Parliamentary Oversight9.10.3.1 In its Seventh Report entitled ‘Capacity Building for Conflict Resolution’, the Commission had examined the effectiveness of the institutional framework provided by such Commissions. In paragraph 6.4.3.1, this Report states that the “National Human Rights Commission has analysed the effectiveness of the ... watch-dog institutions and has concluded that these institutions are handicapped because of the very large number of complaints received, their limited capacity to deal with these complaints and also due to the absence of adequate field staff”. Apart from these capacity related handicaps, the ARC also felt that as these Commissions are mandated only to make recommendations in their Reports which are to be laid before Parliament or the State Legislatures or both, their effectiveness depends on the fate of such recommendations i.e on their final implementation. Thus, in paragraph 6.4.3.2 of its Seventh Report, the Commission cited the following from a report prepared by the NHRC on the Prevention of Atrocities against Scheduled Castes:“The prescribed drill on the reports of the statutory Commissions is that the nodal Ministry of the Commission circulates the recommendations of the Report to the concerned agencies of the Government whom they concern. The comments furnished by them are included in the Action Taken Report, which is placed before the Parliament indicating whether the recommendation is accepted or not accepted and, if accepted, what action is being taken. If no final decision has been taken on a particular recommendation, the comment inserted is that it is under consideration. With these comments on action taken, the report is placed before the Parliament. hTis explains why there is time lag between submission of the reports by the Commissions and their placement before the Parliament since quite sometime is taken in collecting comments of concerned government agencies. hTe time lag in case of National Commission for SCs and STs is as long as three years.”9.10.3.2 The issue of non-acceptance of several recommendations of these Commissions was further discussed in this report and it was observed:“Usually, in respect of recommendations which are radically divergent from the existing processes/practices/approaches or decisions on the subject, the bureaucratic tendency is to deflect or reject it and some grounds are mentioned for doing so. Commissions, however, expect that during the discussion on the report, some MPs may raise the question of non-acceptance of important recommendations which the Minister concerned may have to answer and, if there is widespread support for the issue, non-acceptance may cause embarrassment. The matter may even be picked up by the Media or NGOs/public spirited118Specia AInstitutiona AMechanism. AB tA citizens/pr ssure A roups whi h Ama Aalso bu ld Aup A ublic Ao ini n Af r Aits Aaccep anc ionalA the Ar al ty Ai Athat Ar po ts A o Ano Ac me A p Afor Adisc ss on A t A ll A s Athe Aexpe ie ce Aof ANa amentA Comm ssi n Af r AS s Aa d A Ts Ain Ar sp ct Ao Ala t Afew Ar ports A laced A efo e Athe AParl dat dA indi h AT is Ais Aa esartly Ab ca se A y Ath Atime Ar por s Aare Asub itte Awith ATRs Ath y Aare nd Aat time Alose theirAcont xtualArele ance.ARef re ce Ato theseAr port Aals Ado sAno AcmeAupA Ati eA uringAdiscu si nsA nAtheAbud etaryA ra ts A f Athe nodalAMi is ryA sA ue AtoAsh rt ge Ao tr esA a d AlowApri rit , AtheA ud etAisA assed afterAguillot n n .AThAeAdisc ss onA nAtheAMini etherA sAnot tak nAu .ANCW woul Aa so AbeA acingAs milarApr bl m. It A sAnot knownAwsAnotA Na ional HumanA ightsAComm ssi n Ahas fared A et er Ai AthisAre pect.AInfor at onA eAno A ava lable about A p cifiAc Arecommend tion Am de A y Adiff erentACommis ions, whic Aha WhileA been Aac ep ed A yAtheAGove nme tAa dAthe Ar asonsAas ign dAfo AsuchAnon-accep ance.ewAof Gove nme tAma AhaveAg nui AdiffiA cu tyAin Aacc ptin Asome Arecommend ti nsAi Av ti n A their wider ramifiAc tio s Aand other valid Are sons, Anon-acce ta ce Aof ArecommendAort A on Aa large sc le Ais Adishear eni g Aan Aeven Afrust at ng A o Athe AComm ssion Ab cau e A ts Ae seem Aw as t e d . ”Amake 9. 0 3 3 A~Ae AComm ssi nAhas Aex mine Athis iss e A nd is A fAth Avie At atAin or erAt these ACommi sion AmreAeffAe tive, th re Ai Ane d AforAcr a ing AaAse arateAParliamntaryASt ndingACom itt eAforAdelibe at ng A nAtheA nnualAR po ts Aof these Ap cifiAcACommis ins AaA s Away Aparliam ntary Aove sight woul Ah lpAto Ae hanceAaccounta il tyA n At e Aon Aha dAndAeffA ctive Aimplemen at on A fAthe ACommis ions’Arecommend ti ns A n AtheAth e r.A .10.4ARecommendati n :a. AA A ommonA orm t Afor A aking Acomp aintsA efore Av riousAsta utoryACommi sionsA ho ldAbe Ad vi ed AinAconsul atio Awit AeachA t er AoAisA A uch ormatA houldAc ptu eAtheAd ta lsA fAtheAv cti sAandAcompla na tsAi io s.A a Awa At atAitAfacil tates Ama ch ngAo AdataA cro sAdiff erentACommis ,AtheA I Ac se AofAcomp ants fiAled Aw tho tAt eA seA fAthe A ommonAf rmats lfA nec saryA Ael s A aAbeA Al ed up A tAth At meAofAregist at onAof casesA y Athe AComm ssionArec ivi gAtheAcompla nt b.AAs Arecom en edAinApar graph 6. .9A fAtheACommis ion’sAEl venthA eportAen itled A‘Pro otingAe-Gover anc : Athe SMA TAWayAFor ard’AeachAsta utoryAComm ssionA houldA re teAanAelec ronicAda abase Aprospecively119Citizen Centric Administration – The Heart of Governanceand each database should be networked with each other to facilitate comparison of data.c. The Human Rights Commission {as defined in Section 3(3), PHRA} should lay down norms to deal with complaints by the most appropriate Commission. The basic principle could be that the dominant grievance in a complaint should lead to its handling by the appropriate Commission. Nodal officers may be appointed in each Commission to identify and coordinate action over such cases. Internal mechanisms should be evolved within each statutory Commission to facilitate the handling of such cases in a coordinated manner.d. The Union and State Governments should take proactive steps in dealing with serious offences like custodial deaths/rapes etc on priority so that their occurrence diminishes over the years. Help of NHRC may be taken to prepare an action plan for this purpose.e.In the smaller States, a single ‘multi-role’ Commission may be constituted which would carry out the specific functions of all the constitutional and statutory Commissions at the State level.f.A separate Standing Committee of Parliament may be constituted to look into Annual Reports submitted by these statutory Commissions.1200PROCES ASIMPLIFICATIO1N10. ASimplifyin AInterna AProcedures10.1. AA Aworkin Ao Amos Agovernmen Aorganization Ai Abase Ao Ath AWeberia Aprincipl Ao Adecisio Amakin Agoverne Ab Arule Aan Aregulation At Aensur Aobjectivit Aan Auniformity AA A Aresult Ath Aprocesse Aan Astructure Ai Aan Agovernmen Aorganizatio Agenerall Aow Athei Aexistenc At Aan Aar Aregulate Ab Astatutes Arule Aan Aregulation Aetc AAes Arule Aan Aregulation Ao Aprocedura Amanual Ahav Abee Aformulate Aove A Alon Aperio A Awit Aman Aprocesse Astil Acontinuin Afro Ath Acolonia AperiodA10.1. AA Aexpans Ao Agovernance Ath Acomplexitie Aan Aabov Aal Ath Aaspiration Ao Acitizen Ahav Achange Asubtantiall Ai Ath Alas Afe Adecades AAoug Ather Ahav Abee Asporadi Aattempt Aa Amodifyin Ath Aol Arule Aan Aprocedures Ather Aha Ano Abee Aa Aexhaustiv Aan Athoroug Aexaminatio Ao Athes Aespeciall Akeepin Acitizen Aa Ath Acentr Astage AA Ath AParliamentar AStandin ACommitte Ao AInformatio ATechnolog Ai Ait A22n ARepor Aobserved:A “ hA ACommitte Aobserv Atha Ath Aage-ol Astatute Aan Aregulation Agovernin Ath Amanua A proces Awil Ano Ab Asuitabl Afo Agovernin Ath Aelectroni Aprocesse Awhic Arequir Aaltogethe A Adi Aeren Ase Ao Alega Aframewor Aan Aguideline At Amak Ath Ae-governanc AsuccessfulA hAe Aar Ao Ath Astron Aopinio Atha Ath Alega Aan Aregulator Achange Ai Ath Aproces Awoul A b Aabl At Adelive Ath Aservice Amor Ae Acientl Aan Ae Aectivel Aan Aremov A Alo Ao Aothe A hurdle Ao Amanua Aregulator Amechanism hAA ACommittee Atherefore Arecommen Atha A A comprehensiv Arevie Ao Aal Arelevan Astatute Aan Aregulation Ashoul Aurgentl Ab Adon At A brin Aabou Asuitabl Achange Atherei As Aa At Amak Athe Acompatibl Awit Ath Acybe Aag A technolog Aenablin Ath Acitizen At Aobtai Amaximu Aadvantag Ao Ae-Governanc Aprojects A hAe Afurthe Arecommen Atha Apossibilit Ao Abringin A Ane Alegislativ Amechanis Ama A als Ab Aexplored Ai Anee Abe At Aensur Atha Ath Aimplementatio Ao Ae-Governanc Aprojectdeliver Ath Acitizen-centri Aservice Ai Aa AeAectiv Aan Asuccessfu Amanner”.10 .1. AA ACommissio Ai Ait AElevent ARepor Ao Ae-Governance Awhil Aemphasizin Ath Anee Afo ABusines AProces ARe-engineering Aobserved;121Citizen Centric Administration – The Heart of Governance“To sum up, the Commission feels that the entire gamut of activities under Business Process Re-engineering could be classified into the following four heads:a.Clear assessment of citizen needs.b.Analysis of the existing processes and identification of the weaknesses and redundancies.c.Redesigning of processes and the required changes to be made in the statutes and regulations.d.Bringing about changes – in forms, processes, structures and statutes. 10.1.4 The Commission recommended as follows: (Paragraph 6.4.16, Eleventh Report)a.For every function a government organization performs and every service or information it is required to provide, there should be a step-by-step analysis of each process to ensure its rationality and simplicity.b.Such analysis should incorporate the viewpoints of all stakeholders, while maintaining the citizen-centricity of the exercise.c.After identifying steps which are redundant or which require simplification, and which are adaptable to e-Governance, the provisions of the law, rules, regulations, instructions, codes, manuals etc. which form their basis should also be identified.d.Following this exercise, governmental forms, processes and structures should be re-designed to make them adaptable to e-Governance, backed by procedural, institutional and legal changes.10.1.5 Earlier, in its Sixth Report, while dealing with Local Governance, the Commission suggested implementation of a time-bound programme for updating and simplification of all regulatory provisions relating to Urban Local Bodies (ULBs). The Commission recommended as follows; (Paragraph 5.4.2.10, Sixth Report)“ a. A time-bound programme for updating and simplification of all regulatory provisions relating to the ULBs should be made mandatory. Each State Government should create a task force to examine and suggest simplification of procedures in local governments. hTis task force could also suggest steps to be taken to reduce discretion and bring objectivity in the field offices of local governments. The city municipal corporations could undertake such an exercise on their own.”122Proces ASimpli Acatio10. 10. .A Ae ACommiss on Awh leAdeal ng Aw thAEth cs inAGovernan e, inA ts AFou thARep rtA adAsuggestedveA AThAa re isAn ed toAbr ngAsimp ifiAcat on ofAmeth ds toA heAcenter-st ge ofAadministrat chA refor s.ALeav ngAas de Aspe i AcAsecto alArequiremen s, A heAbr adAprincip es ofAs alA refo msAm stA e:Aadopt on ofA‘sin leAwind w’Aapproa h,Aminimiz ngAhierarchtctie s,Astipulat ng At meAlim ts A orAdispo alAe edA AhAeAexistbngADepartmen alAManu lsA ndACo es Asho ld be Athoroug lyArevie lyA nd Asimp ifi ed Aw t Aa Aresponsibil ty on A he AH ad of A he ADepartm nt to AperiodicaorA upd te As ch Adocume ts A nd Am ke Aavaila le Asoft-cop es Aon-l ne A nd Ah rd Acop es A toA sa e AThA se Amanu ls Am st be Awrit en in Av ry Aprec se Ater s, A nd Aphra es Al ke A‘l ft beA heAdiscret on A f, A as A ar asApossibl ’,A‘suita leAdecis onA ay beAtak n’A tcAsho ld ofA avoid d hAT is Asho ld be Afollo ed A orA ll Aru esA ndAregulati ns Agovern ngAis uepermissio s,Alicen esAetcc AAAsys em ofArewa dsA ndAincentiesA orAsimpifiAcat onA ndAstreamlin ng ofAproceduesA ay be Aintrodu ed in Ae ch Agovernm ntAorganization leA AhAeAprincidle fo A‘posit veAsilen e’Asho ldAgenera ly beAus d,Atho gh At isAprincireA can ot beAu ed inA llAcas s. AWhere er Apermissions/licen esA tcA re to beAissu d,Ath otA sho ld b Aa At meAli it A orAprocess ng of A he As me Aaf erAwh chApermissi n, ifA ldA alre dy Agiv n,Asho ld beAdee ed to Ah veAb enAgrant d. AHowev r,A he Aru esAsho edA prov deAt at A orAe chAs chAc seA he ffiAAc alAresponsi le A orA heAde ayAm st beAproceeagains t .t. 10. . A Ae ACommiss on Awo ld Al ke toAreiter teA tsAearl er Arecommendati ns on At isAsubje It Awo ldAl ke toAsugg st At at A ll AMinistries/Departme ts Asho ldAundert ke A heAexerc se of AsimpifiAcat on ofA ts Ath irAinter alAprocedur s As is Asho ld be Acomple ed i AaAti me-bo ndAman er Awit in A ne Aye r. ASimilar y, A heAMinistries/Departme tsAsho ld Ainstr ctA llAorganizati ns Aun er Ath irAsupervis on toAca ryA ut At isAta k.ASt teAGovernme tsAsho ldAa so beAadvi edAaccording y As isAelabor teAexerc se Awo ldAinvo ve A he Afollow ngAst psA orA nyAorganizationa.AConstitut on of anAin-ho seAc reAt am ofApers nsAw llAver edAw thAinteralAproceduresb.AEngag ngAexter alAexpe t A- ifAnecessaryc. AGett ng Afeedb ckAf om Acitizens.123Citizen Centric Administration – The Heart of GovernanceBox 10.1: Re-engineering of the Regulatory Processesi. Simplification of the extant procedures for approvals/clearances would also require basic changes in the regulatory process prescribed under relevant legislations. Detailed examination of each approval requirement under different Acts, Rules and Regulations would need to be carried out for re-engineering of the regulatory process in the following order:a. Self-regulation, i.e. automatic approval upon filling of necessary documents (‘blinking traffic lights’ model).b. Professional outsourcing with sufficient documents of certification to enable determination of professional malpractices (‘stop-go traffic lights’ model).c. Prior case-by-case regulation by public agency (‘policeman regulating traffic’ model).....ii. Re-engineering of the regulatory processes is too elaborate an exercise to be undertaken by the Committee at this stage since extensive consultations with the concerned Ministries would also be required. It is, therefore, recommended that re-engineering groups may be formed, to begin with, in the Ministries of Labour, Environment & Forests, Power, Agriculture, Petroleum & Natural Gas and Department of Industrial Policy & Promotion.Source: Report on Reforming Investment Approval & Implementation Procedures – November 2002d.Analyzing all processesfrom the point of necessity, simplicity, rationality and citizen centricity.e.Redesigning processesand forms.f.Doing a pilot study andgetting it evaluatedg.Once the pilot stabilizes,analyzing the changes required in the rules/ statutes.h.Implementing thechange.i.Creating an incentivemechanism for sustaining the change.The Commission is of the view it is a myth that ‘complex processes reduce discretion’. The remedy lies in taking quick deterrent action in cases of individual aberrations rather than abandoning simplification for complexity.10.1.8 Closely associated with the task of simplifying governmental procedures is the reduction in the number of layers in the decision-making process. One of the maladies of most organizations is the existence of a multiplicity of layers in the organizational hierarchy. This delays decision making on the one hand and diffuses accountability on the other. Therefore, structural change should be an integral part of any process simplification exercise.10.1.9 Recommendations:a. All Ministries/Departments should prepare a roadmap for carrying out a process simplification exercise. This should involve changes in Rules, Regulations and Laws wherever necessary. The entire exercise should be completed within two years. Similarly, the Ministries/Departments should124Proces ASimpli Acatioinstruc Aal Aorganization Aunde Athei Asupervisio At Acarr Aou Athi Atask AStat AGovernment Ashoul Aals Ab Aadvise Aaccordingly AAi Aelaborat Aexercis Awoul Ainvolv Ath Afollowin Astep Afo Aan Aorganizations:iAConstitutio Ao Aa Ain-hous Acor Atea Ao Aperson Awel Averse AwitAinterna Aprocedures.ii AEngagin Aexterna Aexpert A Ai Anecessary.iii AGettin Afeedbac Afro Acitizens.iv AAnalyzin Aal Aprocesse Afro Ath Apoin Ao Anecessity Asimplicity Arationalit Aan Acitize Acentricity.vARedesignin Aprocesse Aan Aforms.vi ADoin A Apilo Astud Aan Agettin Ai Aevaluated.vii AOnc Ath Apilo Astabilizes Aanalyzin Ath Achange Arequire Ai Ath Arules /statutes.viii AImplementin Ath Achange.ix ACreatin Aa Aincentiv Amechanis Afo Asustainin Ath Achange.b AStructura Achang Ashoul Ab Aa Aintegra Apar Ao Aan Aproces Asimpli Acatio Aexercise.10. AUsin AModer ATechnologyA ACommissio Aha Adeal Awit Athi Asubjec Aa Agrea Alengt Ai Ait AElevent ARepor Ao Ae-Governance.10. ASupervision10.3. ASupervisio Ai A Aver Aimportan Amanageria Afunctio Ai Aan Aorganization AI Aan Ahierarchica Astructure Aon Ao Ath Aimportan Atask Ao Aeac Afunctionar Ai At Asupervis Ath Awor Ao Ath Aothe Afunctionarie Areportin At Ahim/her ASupervisio Aimplie Aoversigh Aan Asuperintendenc Aove Ath Aperformanc Ao Aother Ai Aa Aorganization AI Ai Acarrie Aou Athroug Adirection Aan Aguidance Asettin Atargets Ahelpin Ai Aproble Asolving Amonitorin Ao Aperformanc Athroug Aconduc Ao Ainspections Acheck Aan AveriAcations Areceip Ao Areport Aetc125Citizen Centric Administration – The Heart of Governance10.3.2 Lack of proper supervision in several government offices is evident from the low levels of performance, inadequate discipline, delays in internal processes and consequently citizens’ dissatisfaction. This lack of supervision is often due to incompetency at the supervisory levels. Another more important reason is the reluctance on the part of officers to supervise the work of their subordinates in the real sense of the term. As stated earlier there are several elements of supervision. The easier ones like issuing directions, target setting etc are normally carried out but the difficult ones like ensuring compliance to these directions, inspections, meaningful reviews, changing entrenched mindsets are more often than not relegated to background as they may involve a time consuming process of supervision, the unpleasant task of finding fault with subordinates, and, if required, penalizing them. The Commission therefore feels that the supervisory role of all officers needs to be re-emphasised. Also, in the Annual Performance Report of the officer, while rating his/her own performance, the performance of his/her subordinates should be an input.10.4 Monitoring and Evaluation10.4.1 Monitoring is the process of collecting information about the performance of an organizational unit with a view to ensure that the activities are carried out as mandated. Evaluation, on the other hand, assesses the impact of the activities of an organizational unit. Broadly speaking, while monitoring focuses on internal performance, evaluation focuses on the external impact created by the activities of the organization. In other words, while monitoring deals with outputs, evaluation is concerned with outcomes. It has been observed by the Commission that most of the monitoring tools like periodic reporting by subordinates, formats for inspections etc are mainly based on process parameters. The extent to which citizens are satisfied is seldom captured by these tools. The Commission would therefore like to suggest that the feedback of citizens must become a necessary input in all monitoring tools used in government offices.10.4.2 As mentioned earlier, while monitoring within organizations does take place, impact evaluations are generally rare. The essence of citizen centric administration is thatBox 10.2: Jaankari – RTI Facilitation on PhoneBihar’s unique attempt to accept Right to Information (RTI) applications through phone calls (‘Jaankari’ project) has been selected for the first prize for ‘outstanding performance in citizen centric service delivery’ at the National Awards for e-Governance (2008-09).Under this facility, anyone can make a phone call at the specified number (a call centre) and the call centre person will record all the details. The charges for making the RTI application are included in the phone call charges.Source: The Times of India, February 7, 2009126Proces ASimpli Acatioal Apubli Aorganization Aexis At Aserv Ath Apeopl Aa Alarge AT Aasses Ath Aexten At Awhic Aa organizatio Ai Aservin Ath Apubli Ainterest Ai Ai Atherefor Anecessar At Aevaluat Ath Aoutcom o Ath Aactivitie Ao Aa AorganizationAA10.4. AEvaluatio Aexercise Acoul Ab Acarrie Aou Ab Ath Aorganizatio Aitsel Ao Athroug Aexterna A agencie Aa Ai Ainvolve Ainteractio Awit A Alarg Abod Ao Acitizens AEvaluatio Athroug Aexterna agencie Ai Amor AeAectiv Aa Acitizen Aar Amor Alikel At Agiv Afran Aview At Aindependen Aassessors AA ACommissio Awoul Atherefor Alik At Asugges Atha Aeac Agovernmen AoAc Awhic Aha Apubli Adealing Ashoul Ahav Aa Aexterna Aevaluatio Aconducte Aever Ayea Ai Aadditio At thos Aconducte Ab Ath Aorganizatio Aitself.10.4. ARecommendations :a AA Afeedbac Afro Acitizen Ashoul Ab Ause At Amonito Ath Aperformanc Ao Agovernmen AoAces.b AEac Agovernmen AoAc Awhic Aha Apubli Ainterfac Ashoul Ahav Aa Aexterna Aevaluatio Aconducte Aannuall Ai Aadditio At Athos Aconducte Ab Ath Aorganizatio Aitself.10. ARationalisin AProceduresA ACommissio Aundertoo A Adetaile Aexaminatio Ao Athre AdiAeren Aprocesse Aan Aha Asuggeste A Aframewor Afo Amakin Athe Amor Acitizen AfriendlyA10.5. AIssu Ao ADrivin ALicense10.5.1. A ADrivin ALicens Ai A“th Alicens Aissue Ab A Acompeten Aauthority Aunde Ath AMoto AVehicle AAct A1988 Aauthorizin Ath Aperso AspeciAe Atherei At Adriv A Amoto Avehicl Ao Aan AspeciAe Aclas Ao Adescription” AA Ape Ath AMoto AVehicle AAct Athi Ai A Amandator Adocumen Arequire Afo Adrivin Avehicle Ao Apubli Aroads ASevera Agovernmenta Aagencie Aals Aus Athi Adocumen Aa A Aproo Ao Aidentit Ao A Aperson AA Ala Aplace Aal Avehicle Aint Atw Abroa Acategorie A Atranspor Avehicle Aan Avehicle Aothe Atha Atranspor Avehicles AAl Apubli Aservic Avehicle Alik Ataxis Abuses Agood Acarrier Aet Ainclude Ai Ath Aforme Acategor Awherea Avehicle Ause Ab Aindividual Afo Athei Aow Aus Aar Ainclude Ai Ath Alatte Acategory ANeedles At Asay Ath Aprovision Afo Ausag Ao A‘transpor Avehicles Aar Amor Astringen Atha Afo Ath Aothers127Citizen Centric Administration – The Heart of GovernanceTable 10.1 : Total Number of Registered Motor Vehicles in India - 1951-2004(Figures are in thousands)Year (As on 31st March)All VehiclesTwo WheelersCars, Jeeps and TaxisBusesGoods VehiclesOthers*1234567195130627159348241956426412034711916196166588310571684219661099226456732598519711865576682943431701976270010577791153513981981539126181160162554897198610577624517802278631462199121374142002954331135625331996337862325242044492031385019973733225729467248423434104199841368286425138538@25364514199944875313285556540@25544897200048857341186143562@27155319200154991385567058634@29485795200258924415817613635@297461212003(R)67007475198599721@349266762004(P)72718519229451768@37496828* : Others include tractors, trailors, three wheelers (passenger vehicles) and other miscellaneous vehicles whichare not separately classified.Ca : Includes omni buses.(P) : Provisional(R) : Revised(Source: Website of the Ministry of Road Transport and Highways)128Proces ASimpli Acation10.5.1. AIssuin Adrivin Alicense Ai Aon Ao Ath Amajo Afunction Ao Ath AStat AMoto AVehicle ADepartment AA Aexponentia Aincreas Ai Ath Anumbe Ao Avehicle Ao Aroad A Aeviden Afro ATabl A10. A Aha Aresulte Ai A Acommensurat Aincreas Ai Ath Ademan Afo Adrivin Alicenses A Acitize Acentri Asyste Ao Aissuin Adrivin Alicense An Adoubt Ashoul Aenabl Acitizen At Age Ath Alicens Aeasily Abu Aa Ath Asam Atime Ai Ashoul Aensur Atha Aapplicant Awh Ad Ano Aposses Ath Arequisit Adrivin Askill Aar Adenie Ath Alicense Asinc Aa Auntraine Adrive Ai A Aris At Ath Alive Ao Aothe Aroa Ausers AAer Ahav Abee Aman Areform Ai Ath Alicens Aissuin Aprocedur Aove Ath Alas Asevera Ayears Aimportan Aamon Athe Abein Ath Alaunc Ao A‘Vahan Aan A‘Sarathi’ A Acompute Aapplicatio At Aproces Avariou Aissue Aconnecte Awit Ath Aissuanc Ao Adrivin Alicenses A‘Vahan Ai Afo Aprocessin Aal Atransaction Arelate At AVehicle Aan ASarath Ai Afo Aprocessin ADrivin ALicence Aan Arelate Aactivities AVaha Aca Ab Ause At Aissu ARegistratio ACertiAcate Aan APermits ASarath Aca Ab Ause At Aissu A ALearner’ ALicence APermanen ADrivin ALicence AConducto ALicenc Aan Aals ADrivin ASchoo ALicenc At Ath Aapplicants AMos AState Ahav Aadopte Athi AsystemA10.5.1. AI Aspit Ao Athes Areforms Ath Agenera Aperceptio Ai Atha Ath Alicens Aissuin Asyste Ai Astil Ano Aobjectiv Aan Atransparen Aan Ai Athu Apron At Acorruption ATh Aprocedur Afo Aissuin A Alicens Ai Alai Adow Ai Ath AMoto AVehicle AAct A199 Aan Ath AMoto AVehicle ARules A1999 ATh AAct Awhil Amandatin A Alicens Afo Adrivin Aal Amotorize Avehicles Alay Adow A Atwo-ste Aproces Afo Aissuin Ath Alicense AI Ath Afirs Astage Aafte Aundergoin Acompulsor Atrainin Aa A Alicense Adrivin Aschool Aa Aapplican Aha At Aappl Afo A Adriver’ Alicense ASectio A Ao Ath AAc Aprovide Atha An Alearner’ Alicens Ashoul Ab Aissue At Aan Aapplican Aunles Ahe/sh Apasse At Ath Asatisfactio Ao Ath Alicensin Aauthorit Asuc Ates Aa Ama Ab Aprescribe Ab Ath AUnio AGovernment ATh ACentra AMoto AVehicle ARules A1989 Afurthe Aprescrib Atha Ath Alicens in Aauthorit Ashal Aadministe A Ates Ahavin Amultipl Achoic Aobjectiv Atyp Aquestion s AIntroductio Ao Athi Aprovisio Areduce Ath Aelemen Ao Asubjectivit Awit Ath Alicensin Aauthority ASubsequently Asom AState Adevelope Aquestio Abank Aan Ath Aquestion At Ab Aadministere At Aa Aapplican Awer Apicke Au Arandomly AThi Aproces Aha Amad Ath Apreliminar Ates Atotall Aobjectiv Aan Aensure Atha Aonl Athos Acandidate Awh Ahav Ath Arequisit Aknowledg Aar Aabl At Aobtai A A‘learner’ Alicense ’.10.5.1. ASectio A Ao Ath AAc Astipulate Atha Ath Alicensin Aauthorit Ama Agran A Adrivin Alicens At Aa Aapplican Ai Ahe/sh AqualiAe Ai A Aprescribe Atest AHowever Ath Alicensin Aauthorit Ama Aexemp A Acandidat Afro Asuc A Ates Ai Acas Ao Arenewa Ao A Alicens Ao Ai Ath Aapplican Apossesse A Adrivin AcertiAcat Aissue Ab Aan Ainstitutio Arecognise Ab Ath AStat AGovernment129Citizen Centric Administration – The Heart of Governance10.5.1.5 The entire procedure as prescribed by the Motor Vehicles Act 1988, and the Motor Vehicles Rules, 1989 is explained by the flow chart in Figure 10.1.Figure 10.1 : Procedure for Issuing Motor Vehicle Driving LicenseSTAGE - ISTAGE - II130Proces ASimpli Acatio10.5.1. AWit Ath Aintroductio Ao A‘Vahan Aan A‘Sarathi’ Ath Ao Ac Aprocedur Aan Arecor keepin Ahav Abee Astreamline At A Alarg Aextent Aye Ath Amanne Ai Awhic Ath A‘tes Ao competence Ai Aconducte Astil Aremain Asubjectiv Aan Aopaque AA ACommissio Ai AthereforoAth Avie Atha Ather Ai Aa Aurgen Anee At Arefor Ath Aprocedur Afo Aconductin Ath A‘tesoAcompetence ’A10.5.1. ARul A15 Awhic Aprescribe Ath Acriteri Ao Awhic A Acandidat Aha At Ab Ateste Afo Agran Ao A Adrivin Alicense Astipulate Atha A Acandidate Awhil Atakin Ath Ates Ashoul Ab Aabl t A(illustrative):aATak Asuitabl Aprecaution Abefor Astartin Ath Aengine.bAMov Aawa Asafel Aan Asmoothl Astraigh Aahea Aa Aa Aangl Awhil Aa Ath AsamAtim Aengagin Aal Agear Aunti Ath Ato Agea Ai Areached.cAT Achang At Alowe Agear Afro Ato Agear.dASto Aan Arestar Avehicl Ao A Astee Aupwar Ainclin Awithou Arollin Aback.eADrivin A Avehicl Abackward Aint A Alimite Aopening....10.5.1. AI Ath Apresen Asystem Aa Ao Acia Ao Ath AMoto AVehicle ADepartmen Aask Ath Acandidat At Aperfor AdiAeren Atype Ao Amanoeuvre Ai Ahis/he Aow Avehicl Aan Ath Acandidat Ai Adeclare A‘successful Abase Ao Ath Asubjectiv Aassessmen Ao Ath Ao Acia Aadministerin Ath Atest AO Aa Aanalysi Ao Ath Atestin Acriteria Ath ACommissio Afeel Atha Ai Ashoul Ab Apossibl At Areplac Athi Asubjectiv Aassessment Ab Aa Aobjectiv Apractica Ates Afo Amos Ao Ath Acriteri Aliste Ai ARul A15 AFo Aexampl A Aon Ao Ath Acriteri Astipulate Atha Ath Acandidat Ashoul Ab Ateste Afo Ahis/he Aabilit At Adriv Ath Avehicl Abackward Aint A Alimite Aopening AAi Acoul Ab Ateste Aeasil Ai A Acandidat Ai Aaske At Adriv Abackwar Aint A Apre-deAne Aopenin Acreate Ab Aerectin Aplasti Ao Awoode Apoles AA Anumbe Ao Apole Atopple Ab Ath Acandidat Ai Ath Atestin Aproces Acoul Ab A Agoo Aobjectiv Aindicato Ao Ahis/he Adrivin Askills ASimila Aobjectiv Atest Acoul Ab Adevise Afo Atestin Ath Aothe Arequire Askill Ao Ath Acandidate AAn At Abrin Ai Agreate Atransparency Ath Aentir Aproces Ashoul Ab Avideo-recorde Aan Akep Aope At Apubli Ascrutiny AA ACommissio Awoul Ano Alik Ag Aint Afurthe Atechnica Adetail Ao Athes Atests Abu Awoul Asugges Ath Aconstitutio Ao Aa Aexper Agrou At Adevis A Apractica Ates Afo Ath Apurpos Ao Adrivin Alicenses ASuc Apractica Atest Ahav Abee Ause At Aconduc Arecruitmen Ao Adriver Ai Asevera Apubli Atranspor Aorganizations.4131040India AJourna Ao ATranspor AManagement AEvolvin A ATransparen AProcedur Afo ARecruitmen Ao ADriver A AJul A200Citizen Centric Administration – The Heart of Governance10.5.1.9 The Commission is also of the view that in order to reduce the workload of the transport department, the testing processes could be outsourced. Section 9(3) already provides that:“the test of competence to drive referred to in sub-section (3) of Section 9 shall be conducted by the licensing authority or such other person as may be authorized in this behalf by the State Government.....”10.5.1.10 The Motor Vehicles Department should however monitor these tests randomly to ensure that these are being properly conducted without undue harassment but at the same time ensuring that those not fit are denied a driving license.10.5.1.11 Recommendations:a. Ministry of Road Transport and Highways should constitute an expert group to devise practical and objective tests of competence for issue of driving licenses.b. The conduct of these practical tests as well as the one prescribed for learner’s license could be outsourced. Close monitoring over their processes, would however be required.10.5.2 Registration of Births and Deaths10.5.2.1 The Civil Registration System forms the basis of various important databases which a government maintains. It involves the compulsory recording of important events like births, marriages, deaths etc. The registration of births and deaths in India started on a formal basis after the enactment of the Registration of Births and Deaths Act, 1969. Prior to that, registration of births and deaths was a voluntary exercise with no uniformity, in different States. This law provides the legal and administrative framework for the registration of births and deaths in the country. Though registration of births and deaths has been made compulsory under the Act, there is large scale under registration in several States and Union Territories. It is estimated that only 64% of all births and 56% of all deaths are currently registered in India. Several reasons are assigned for this low rate of registration - lack of awareness among people, low priority accorded to this work, somewhat difficult procedures, perception of low utility about the registration certificates, lack of proactive stance of the registering authorities, non-prosecution for not complying with the legal provisions etc. Instances of registering authorities demanding bribes for registration are not uncommon. Several States have attempted to modernize the registration process using computers.132Proces ASimpli Acatio110.5.2. AA ANationa APopulatio APolic Aha Ase A Atarge Afo Aachievin A100 Abirth Aan Adeath Aregistratio Ab A2010 AA Ath Apresen Apace Ai Ai Aunlikel Atha Athi Atarge Awoul Ab Aachieve Aunles Astron Ameasure Aar Aundertaken AA ACommissio Ai Ao Ath Avie Atha A Aperfec Aregistratio Asyste Acoul Apav Ath Awa Afo A ANationa APopulatio ARegister A AUniqu Identit Afo Ath Acitizens Afoolproo Avoter Alis Aetc AI Avie Ao Ath Aimportanc Ao Ath ACivi ARegistratio ASystem Ath ACommissio Adecide At Aexamin Ath Alega Aprovision Afo Aregistratio i Aorde At Amak Athe Acitize Afriendl Aan Aals Aensur Acreatio Ao A Aver Aimportan Adatabas Ao Abirth Aan Adeaths10.5.2. AA ARegistratio Ao ABirth Aan ADeath AAct A1969 Aprescribe Ath Acreatio AoAvariou authoritie Aa Ath AUnion AState ADistrict AMunicipa Aan APanchaya Alevels A(Figur A10.2)133Citizen Centric Administration – The Heart of Governance10.5.2.4 Section 8 of the Act provides the mandate for registration of births and deaths:“Section 8: Persons required to register births and deaths – (1) It shall be the duty of the persons specified below to give or cause to be given, either orally or in writing, according to the best of their knowledge and belief, within such time as may be prescribed, information to the Registrar of the several particulars required to be entered in the forms prescribed by the State Government under sub-section (1) of section 16, –(a) In respect of births and deaths in a house, whether residential or nonresidential, nor being any place referred to in clauses (b) to (e), the head of the house or, in case more than one household live in the house, the head of the household, the head being the person, who is so recognized by the house or the household, and if he is not present in the house at any time during the period within which the birth or death has to be reported, the nearest relative of the head present in the house, and in the absence of any such person, the oldest adult male person present therein during the said period;(b) In respect of births and deaths in a hospital, health centre, maternity or nursing home or other like institution, the medical officer in charge or any person authorized by him in this behalf;(c) In respect of births and deaths in a jail, the jailor in charge;(d) In respect of births and deaths in a choultry, chattram, hostel, dharmasala, boarding-house, lodging-house, tavern, barrack, toddy shop or place of public resort, the person in charge thereof;(e) In respect of any new-born child or dead body found deserted in a public place, the headman or other corresponding officer of the village in the case of a village and the officer in charge of the local police station elsewhere:Provided that any person who finds such child or dead body, or in whose charge such child or dead body may be placed, shall notify such fact to the headman or officer aforesaid:(f) In any other place, such person as may be prescribed.(2) Notwithstanding anything contained in sub-section (1), the State Government, having regard to the conditions obtaining in a registration division, may by order require that for such period as may be specified in the order, any person specified134Proces ASimpli AcatioA b Ath AStat AGovernmen Ab Adesignatio Ai Athi Abehalf Ashal Agiv Ao Acaus At Ab A give Ainformatio Aregardin Abirth Aan Adeath Ai A Ahous Areferre At Ai Aclaus A(a oAsub-sectio A(i Ainstea Ao Ath Aperson AspeciAe Ai Atha Aclause.10.5.2. ABasically Athi ASectio Astipulate Atha Ai Ashal Ab Ath Aresponsibilit Ao Ath Ahea Ao Ath Afamily/hea Ao Ath Amedica Ainstitutio Awher Ath Aeven Atake Aplace At Asubmi Ath Arequisit Ainformation AI Ai Aals Aprovide Atha Ath Ainformatio At Ab Asubmitte At Ath ARegistra Ashal Ab Ai A Aprescribe AformA10.5.2. AFurthermore ASectio A1 Aenjoin Aupo Acertai Apersons Alik Amidwives Aperson i Acharg Ao Adisposa Ao Adea Abodie Aet At Anotif Aever Abirt Ao Adeat At Awhic Athe Awer Awitness ASectio A1 Aprovide Afo Adelaye Aregistrations:“Sectio A13 ADelaye Aregistratio Ao Abirth Aan Adeath A A(1 AAn Abirt Ao Adeat Ao Awhic Ainformatio Ai Agive At Ath ARegistra Aafte Ath Aexpir Ao Ath Aperio AspeciAe Atherefore Abu Awithi Athirt Aday AoAit Aoccurrence Ashal Ab Aregistere Ao Apaymen AoAsuc Alat Afe Aa Ama Ab Aprescribed.(2 AAn Abirt Ao Adeat Ao Awhic Adelaye Ainformatio Ai Agive At Ath ARegistra Aafte Athirt Aday Abu Awithi Aon Ayea Ao Ait Aoccurrenc Ashal Ab Aregistere Aonl Awit Ath Awritte Apermissio AoAth Aprescribe Aauthorit Aan Ao Apaymen AoAth AprescribeAfe Aan Ath Aproductio AoAa AaAdavi Amad Abefor A Anotar Apubli Ao Aan Aothe AoAce Aauthorize Ai Athi Abehal Ab Ath AStat AGovernment.(3 AAn Abirt Ao Adeat Awhic Aha Ano Abee Aregistere Awithi Aon Ayea AoAit Aoccurrenc Ashal Ab Aregistere Aonl Ao Aa Aorde Amad Ab A Amagistrat Ao Ath AArs Aclas Ao A APresidenc AMagistrat Aafte Averifyin Ath Acorrectnes Ao Ath Abirt Ao Adeat Aan Ao Apaymen Ao Ath AprescribeAfee.(4 A A hA Aprovision Ao Athi Asectio Ashal Ab Awithou Aprejudic At Aan Aactio Atha Ama Ab A take Aagains A Aperso Afo Afailur Ao Ahi Apar At Aregiste Aan Abirt Ao Adeat Awithi A th Atim Aspeci Ae Atherefor Aan Aan Asuc Abirt Ao Adeat Ama Ab Aregistere Adurin th Apendenc AoAan Asuc Aaction.10.5.2. A Aquic Aanalysi Ao Ath Aabov Aprovision Aindicate Atha Ath Aemphasi Aa Apresen Ai Ao Afollowin Ath Adetaile Aprocedur Afo Aregisterin Abirth Aan Adeath Ab Aseekin Ainformatio Ai A Aprescribe Aproforma AAxin Atim Aframe Afo Ainformatio Aan Aprescribin A Acumbersom Aprocedur Aan Apaymen Ao Afee Afo Alat Ainformatio Arathe Atha Ao Afacilitatin Aachievemen Ao A100 Aregistratio Ao Abirth Aan Adeaths AA ACommissio Ai Ao Ath Avie Atha A Agoo Ala Ao Asuc Aa Aimportan Aissu Ashoul Aemphasis Ao Ath Anee At Aensur A100 Acredibl135Citizen Centric Administration – The Heart of Governanceregistration of births and deaths and procedural formalities should be the means to achieve this, rather than becoming an end in themselves. Further, the role of the Registrar in this entire process should be much more proactive and the law should provide that it should be the duty of the Registrar to register each case of birth and death within his jurisdiction irrespective of whether a formal application has been received by him or not. At present, the law is silent on this aspect and the entire onus to inform the Registrar of the events of births and deaths has been placed on public and private functionaries. In case the Registrar has a very large jurisdiction and it may thus not be feasible for him to keep suo motu track of every birth and death, the problem can be overcome by designating a larger number of public functionaries as Registrars with each of them being assigned a manageable jurisdiction. Furthermore, each Registrar would have to be empowered under the law to seek and obtain information from any person. For this purpose the Law should provide that the Registrar should have the power to issue notice seeking information from any person, regarding births and deaths and the person shall be bound to provide such information. The Commission understands that compliance to the provisions of the law has been weak. Therefore, a provision to impose fines should be incorporated in the law for non-complains and in order to make the process of imposition of fines quick and deterrent, the power to levy fines should be given to the District Registrar.10.5.2.8 The Commission is of the view that the provision of late fees for delayed registration is an impediment in achieving 100% registration and needs to be done away with. The Commission also feels that the procedure and the scrutiny of delayed registration cases needs to be modified, and a duty needs to be cast on the Competent Authority to enquire into the veracity of the claimed event. If the Competent Authority comes to the conclusion that the event did actually take place, he/she shall order for the registration of the same. There may be a provision for imposition of late fines, but payment of fines should not be a pre-condition for the registration.10.5.2.9 Recommendations:a. ~e emphasis under the Registration of Births and Deaths Act should shift from compliance to prescribed procedures to achieving 100% registration.b. Registrars would need to adopt a more proactive approach, and it would be necessary to cast a duty upon them to register each case of birth and death within their jurisdiction irrespective of the fact whether a formal application has been received by them. ~e Registration could be done based on information from any source or even suo-motu by the Registrar.136Proces ASimpli AcatiocASuAcien Anumbe Ao Apubli Afunctionarie Ashoul Ab Adesignate Aa ARegistrarAs Atha Aeac Aon Ai Aassigne A Amanageabl Ajurisdiction.d AEac ARegistra Awoul Anee At Ab Aempowere Aunde Ath Ala At Asee Aan Aobtai Ainformatio Afro Aan Aperson AFo Athi Apurpose Ath Ala Ashoul Aprovid Atha Ath ARegistra Ashal Ahav Ath Apowe At Aissu Anotic Aseekin Ainformatio Afro Aan Aperson Aregardin Abirth Aan Adeath Aan Atha Aperso Ashal Ab Aboun At Aprovid Asuc AinformationeAI Aorde At Amak Ath Aproces Ao Aimpositio Ao AAne Aquic Aan AdeterrentAth Apower At Alev AAne Ashoul Ab Agive At Ath ADistric ARegistrar.fAAer Ashoul Ab An Afee Afo Adelaye Aregistration AI Ashoul Ab AprovideAtha Ai Acas Ao Adelaye Aregistration A Amor Aelaborat Aenquir Awoul Ab Arequired AA Aonu Afo Aconductin Ath Aenquir Ashoul Ab Ao Ath ACompeten AAuthority.10.5. ABuildin ALicense Aan ACompletio ACerti Acates10.5.3. ALoca Asel Agovernin Abodie Abot Ai Aurba Aan Arura Aarea Aregulat Abuildin Aactivitie Ai Athei Ajurisdictio Ai Aorde At Aensur Aplanne Adevelopmen Ai Alin Awit Ath Alan Aus Aregulation Aan Aprovisionin Ao Ainfrastructure ASanctio Ao Abuildin Apermit Aa Ath Apre -constructio Astag Aan Acompletio Acerti Acate Aa Ath Apost-constructio Astag Aar Ath Atw Amechanism Athroug Awhic Asuc Aactivitie Aar Aregulated AAi Aactivit Ai Agenerall Aperceive At Ab Acumbersome Anon-transparen Aan Apron At Acorruption AWhil Ather Aar Awid Avariation Abetwee AState Aan Aacros Acitie Ai Ath Aprocedure Aprescribe Afo Athi Apurpose Agenerall Ai Ainvolve Ath Afollowin Asteps:iASubmissio Ao Apropose Abuildin Apla Aapplicatio Asupporte Ab AvariouAdocuments.iiAPaymen Ao Ath Aprescribe AfeesAiii AScrutin Ao Ath Adocument Ab Ath AoAcial Ao Ath Aloca Abod At Aensur Acomplianc Awit Ath Aregulations.ivASit Ainspectio Ab Ath AoAcials.vASubmissio At Ath Acompeten Aauthorit Afo Aapproval.viAGran Ao Ath Abuildin Apermit.137Citizen Centric Administration – The Heart of Governance10.5.3.2 Several cities have taken steps to simplify this procedure in order to make it less cumbersome. This is basically sought to be done by shifting the onus for compliance with the building bye-laws and local plans to the owner and the concerned Architect on the same principles as has been done for self assessment of property tax. For example, Delhi, Bengaluru, Mysore, Hyderabad etc. have already adopted simplified procedures for grant of building permits on the basis of certification by the owner/registered architect on a time-bound basis. Generally, the steps involved are the following:i.The building permit notice is given by the owner through his/her architect inthe concerned office of the local body along with required documentation – affidavits/undertaking/indemnity bond certifying adherence to the building regulation - along with required fee.ii.After scrutiny, sanction is issued within a fixed time limit and generally astamp is affixed on the sanction letter to the effect that sanction has been accorded on the basis of affidavit/undertakings submitted by owner/registered architect.iii. If the documents are not in order, the application is rejected straight away and reasons informed.iv.In case of discrepancies, mis-representation etc., the defaulting architect is tobe black listed and the matter is to be reported to the Council of Architecture for appropriate action against the concerned architect.v.In order to ensure that the information submitted is correct, random sampleof sanction cases is verified.10.5.3.3 There are also minor variations in these simplified procedures. For example, the Municipal Corporation of Delhi (MCD) allows all architects registered with the Council of Architecture to certify plans for immediate sanction, while in Bangalore, Architects as well as Engineers / Supervisors who are registered with the Municipal Corporation are authorized to certify the building plans. In addition, they have the responsibility to report deviations in the sanctioned plans and they also file undertakings accepting full responsibility for violations.10.5.3.4 Government of India has also tried to encourage local bodies to adopt such simplified procedures through the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The guidelines of JNNURM provide for a set of mandatory reforms as well as optional reforms. Revision of bye-laws to streamline the approval process for construction of buildings, development of sites etc. is included in the set of optional reforms.138Proces ASimpli Acatio.10.5.3. AA ACommissio Afeel Atha Ai Avie Ao Ath Aimmediat AbeneA At Ath Acitizen Aan Abecaus Ath Aadministrativ AsimpliAcatio Arequire Adoe Ano Aentai Ahug Aresource Aan Aca Ab Adon Arelativel Aquickly Athes Aprocedura Asimpli Acation Ashoul Ab Amad Amandator Afo th AStat AGovernment Aan Aloca Abodie Ab Asuitabl Amodifyin Ath Aguideline Aprescribe Aunde AJNNURM AApar Afro Athis Ath AStat AGovernment Ashoul Ab Aencourage At Aadop th Asam Aprinciple Afo Aothe Asmal Aan Amediu Asize Atown Aan Acitie Aalso10.5.3. AI Aaddition Ath ACommissio Ai Ao Ath Avie Atha Athi AsimpliAe Aprocedur Ashoul b Aadopte Afo Agran Ao Acompletio Acerti Acate Ab Aloca Abodies AAi Awould Ahowever Arequir considerabl Acapacit Abuildin Ai Ath Aenforcemen Awing Ao Ath Aloca Abodie Aconcerne At ensur Atha Ath Aundertaking Agive Ab Ath Aowners/architect Aar Acomplie Awith AI Acas Ao complete Abuildings A Ahundre Ape Acen AveriAcatio Aafte Ath Aissu Ao Acompletio AcertiAcate o Ath Abasi Ao Asel Acerti Acatio Awoul Ab Anecessar Awithi A AspeciAe Aperio Ao A9 Adays AA ARule Ashoul Aprovid Aheav Apenalties Aincludin Ademolition Afo Aviolatio Ao Acondition Aa Awel Aa Afo Anegligenc Ao Acollusion Ai Aany Ao Ath Apar Ao Ath Aprescribe Averifyin Aauthority AA Ahel Ao Aloca Aresidents Aassociation Ama Ab Aobtaine Afo Athi Apurpose10.5.3. ARecommendations :aASimpli Ae Aprocedure Afo Agran Ao Abuildin Apermit Ao Ath Abasi Ao Aself-certi Acatio Ab Aowner A Aregistere Aarchitect Ashoul Ab Aadopte Ab Aal AStat AGovernment Aan Aloca Abodiesb AA AJNNUR Aguideline Ashoul Ab Aamende At Amak Aadoptio Ao Asuc Aprocedure Aa A Apar Ao Ath Amandator AreformsAcASimila AsimpliAcatio Ao Aprocedure Ashoul Ab Adon Ai Ath Aissuanc AoAcompletio Acerti Acate Ab Aloca Abodies AI Acas Ao Acomplete Abuildings A Ahundre Ape Acen AveriAcatio Aafte Ath Aissu Ao Acompletio Acerti Acate Ao Ath Abasi Ao Aself-certiAcatio Awoul Ab Anecessar Awithi A AspeciAe Aperio Ao A9 Adays AA ARule Ashoul Aprovid Aheav Apenalties Aincludin Ademolition Afo Aviolatio Ao Acondition Aa Awel Aa Afo Anegligenc Ao Acollusion Ai Aany Ao Ath Apar Ao Ath Aprescribe Averifyin Aauthority.d AA Acapacit Abuildin Ao Ath Aenforcemen Awing Ao Ath Aloca Abodie Ashoul Aals Ab Adon Aalongsid Athes Ainitiative At Aensur Acomplianc Awit Aloca Abye-laws AA Ahel Ao Aloca Aresidents Aassociation Ama Ab Aenliste Afo Athi Apurpose.139CONCLUSIONCitizen centricity is the essence of any vibrant democracy and is inextricably linked to good governance. Good governance basically means creating an environment in which all classes of citizens can develop to their fullest potential. It also means provision of public services in an efficient and equitable manner to citizens.In India, the Constitution lays the foundation for promotion of citizen centric governance. It provides for fundamental rights that are the hallmark of our democracy and mandates the welfare of all citizens through a set of Directive Principles. Based on the principles enshrined in the Constitution, India has developed an elaborate legal and institutional framework for ensuring good governance to its citizens.The Commission’s primary mandate is to suggest measures for achieving a proactive, responsive, accountable, sustainable and efficient administration for the country at all levels of government. The objective of promoting citizen centric administration has, therefore, been a central focus of all the Reports submitted so far by the Administrative Reforms Commission (ARC).In this Report, the Commission has emphasized on governance processes that can make administration more citizen oriented. The strategies highlighted in the Report can be conceptualized as demand side strategies and supply side strategies. While the demand side strategies are geared to giving citizens’ groups a greater role in governance, the supply side strategies aim to reorient government organizations to make them more efficient, effective and participative.The Commission has therefore looked at various mechanisms for making administration more responsive to citizens. Thus the concept of citizens’ charter as a tool for promotion of greater efficiency and accountability has been examined in detail. Further, processes and mechanisms for promotion of citizens’ participation in administration have been suggested. The Commission has also emphasized simplification of processes along with de-centralization and delegation to make administration more accessible to citizens. The Commission has, in140Conclusionaddition, suggested various measures for revamping the grievances redressal mechanisms in government departments. The role of special institutional mechanisms such as the various national and state commissions for protection of vulnerable groups has also been examined and measures suggested for improving their functioning.In conclusion, the Commission would like to reiterate that the aforesaid measures will need to be implemented in conjunction with the various recommendations made in the Commission’s other Reports.141SUMMARY OF RECOMMENDATIONS1. Functions of Government (Para 3.3.4)ernment organisations should adhere to the principles highlighted in paragraph 3.2.4 while performing regulatory functions.b. Government agencies, whether regulatory or developmental, should introduce the Single Window Agency concept within their organisations to minimize delays and maximize convenience to citizens. Government as a whole should draw a roadmap with timelines for expeditious creation of a single window at the local level for provision of all developmental and regulatory services to citizens.(Para 3.4.2)a.The principle of subsidiarity should be followed while deciding on the implementation machinery for any programme.b.Citizens should be actively involved in all stages of these programmes i.e. planning, implementation and monitoring.c.Mandatory social audit should be carried out for all progrmames.d. Impact assessment should be carried out for all programmes at periodic intervals.2. (Para 4.6.10) Making Citizens’ Charters Effective – An Agenda for ReformCitizens’ Charters should be made effective by adopting the following principles:i.One size does not fit all.142Summary of Recommendationsii. Citizens’ Charter should be prepared for each independent unit under the overall umbrella of the organisations’ charter.iii. Wide consultation which include Civil Society in the process.iv. Firm commitments to be made.v. Internal processes and structure should be reformed to meet the commitments given in the Charter.vi. Redressal mechanism in case of default.vii. Periodic evaluation of Citizens’ Charters.viii. Benchmark using end-user feedback.ix. Hold officers accountable for results.3. (Para 4.9.9) The ARC Seven-Step Model for Citizen Centricitya. The Union and State Governments should make the seven-step model outlined in paragraph 4.9, mandatory for all organizations having public interface.4. (Para 5.7.4) Citizen’s Participation in Administrationa. It should be mandatory for all government organizations to develop a suitable mechanism for receipt of suggestions from citizens, which could range from the simple ‘Suggestion Box’ to periodic consultations with citizens’ groups. Heads of the concerned organizations should ensure rigorous follow up action on the suggestions received so that these become a meaningful exercise. A system of incentives and rewards should be introduced so that suggestions that lead to significant improvement or savings can be acknowledged.b. Every government organization must ensure the following: (i) fool-proof system for registration of all complaints, (ii) a prescribed time schedule for response and resolution, and (iii) a monitoring and evaluation mechanism to ensure that the norms, prescribed are complied with. Use of tools of information technology can help to make such a system more accessible for citizens. Heads of all government organizations should be made responsible143Citizen Centric Administration – The Heart of Governancefor ensuring the development of such a system for responding to a time bound resolution of the complaints of citizens.c.Regular citizens’ feedback and survey and citizens’ report cards should beevolved by all government organisations for gauging citizens’ responses to their services. These should be used as inputs for improving organizational efficiency.d. While no single modality or mechanism can be prescribed for encouraging citizens’ participation in governance; in general, there is need to create institutionalized mechanisms for encouraging their participation in governance across public agencies at all levels and, for this to happen, the following steps are necessary:i.A comprehensive review of policy and practice in each department/public agency.ii. Modifying administrative procedures where necessary.iii. Entrustment of the function of institutionalizing citizens’ participation in governance to a senior level officer.iv. Performance management reviews to incorporate effectiveness in ensuring citizens’ participation in governance.e.The objective could also be served by active and cooperative participationby government agencies in civil society initiatives in the area of citizens’ participation in grievance redressal.5. (Para 5.10) Participation of Women and the Physically Challengeda.Ensuring the full participation of women should be a specific aim of citizencentric administration and this should be reflected in various policies and programmes, including citizens’ charters and grievances redressal mechanisms.b. Government may constitute an expert committee to identify the areas where special provisions for the physically challenged should be made mandatory. These areas could be reviewed and expanded every five years.144Summary of Recommendationsc. Government should adopt a more proactive approach for detection and registration of the physically challenged persons.d. To achieve this, responsibility should be cast on the Primary Health Centres (PHCs) to identify all such cases in their jurisdiction and to get the evaluation of the disabilities done. To enable the PHCs to discharge these responsibilities, adequate resources should be placed at the disposal of the Medical Officer, PHC along with delegation of commensurate authority and changes in the relevant rules.anization of camps at PHC level, attended by the concerned medicalpersonnel, would greatly help in issuing certificates of disability on the spot.f.Further, steps should be taken to create a database for all the DisabilitiesCertificate holders with integration at District, State and National levels.6. (Para 6.8) Delegationa.Based on the principle of subsidiarity, each government organization shouldcarry out an exercise to assess whether adequate delegation of authority has been done. In doing so, it should be clearly enunciated that the top levels of the organization should essentially focus on policy making functions and the field level functionaries should focus on operational aspects.b. The extent to which delegated powers is used or is allowed to be used, should be two of the elements while appraising an officer’s overall performance.7. (Para 7.9.3.3) Evolving an Effective Public Grievances Redressal Systema.There is need for a strong and effective internal grievance redressalmechanism in each organization.b. The Union and State Governments should issue directions asking all public authorities to designate public grievance officers on the lines of the Public Information Officers under the RTI Act. These officers should be of adequate seniority and should be delegated commensurate authority.145Citizen Centric Administration – The Heart of Governancec.All grievance petitions received should be satisfactorily disposed of by theseofficers within thirty days. Non-adherence to the time limit should invite financial penalties.d. Each organization should designate an appellate authority and devolve adequate powers upon them including the power to impose fines on the defaulting officers.8. (Para 7.10.3) Analysis and Identification of Grievance Prone ernment organizations should analyse the complaints received andidentify the areas wherein interventions would be required so as to eliminate the underlying causes that lead to public grievances. This exercise should be carried out at regular intervals.9. (Para 8.3.3) Consumer Protectiona.Lok Adalats would be effective in settling many consumer disputes. Itshould be stipulated by law that cases up to a particular value, say Rupees two lakhs, should first be referred to Lok Adalats.b. All Ministries/Departments need to examine the procedures regulating grant of licenses, permissions or registration including the underlying Acts, Rules, Notifications, etc. These should be recast with the following underlying principles:i.There should be an upper time limit for grant of any license/permission/registration. The law should provide for penalties if an application is not disposed of within the stipulated period.ii. Applications should be processed only on a ‘First in First out Basis’. All applications received and pending should be put on the licensing authority’s website.iii. Selecting units for surprise inspection should not be left to the discretion of the inspecting officers. Each office should devise an objective procedure to randomly select units for inspection. Exceptions can be made in case of receipt of genuine complaints against any unit.146Summary of Recommendationsiv. The outcome of all inspections must be immediately put in the public domain.v.There should be an annual audit of the licensing and inspectionsystem each year by an independent agency.vi. All licensing authorities should evolve an accessible system for receipt of citizens’ complaints.10. (Para 9.10.4) Special Institution Mechanismsa. A common format for making complaints before various statutory Commissions should be devised in consultation with each other. This format should capture the details of the victims and complainants in such a way that it facilitates matching of data across different Commissions. In case of complaints filed without the use of the common format, the necessary fields may be filled up at the time of registration of cases itself by the Commission receiving the complaint.b. As recommended in paragraph 6.3.9 of the Commission’s Eleventh Report entitled ‘Promoting e-Governance: the SMART Way Forward’, each statutory Commission should create an electronic database prospectively and each database should be networked with each other to facilitate comparison of data.c. The Human Rights Commission {as defined in Section 3(3), PHRA} should lay down norms to deal with complaints by the most appropriate Commission. The basic principle could be that the dominant grievance in a complaint should lead to its handling by the appropriate Commission. Nodal officers may be appointed in each Commission to identify and coordinate action over such cases. Internal mechanisms should be evolved within each statutory Commission to facilitate the handling of such cases in a coordinated manner.d. The Union and State Governments should take proactive steps in dealing with serious offences like custodial deaths/rapes etc on priority so that147Citizen Centric Administration – The Heart of Governancetheir occurrence diminishes over the years. Help of NHRC may be taken to prepare an action plan for this purpose.e.In the smaller States, a single ‘multi-role’ Commission may be constituted which would carry out the specific functions of all the constitutional and statutory Commissions at the State level.f.A separate Standing Committee of Parliament may be constituted to look into Annual Reports submitted by these statutory Commissions.11. (Para 10.1.9) Simplifying Internal Proceduresa. All Ministries/Departments should prepare a roadmap for carrying out a process simplification exercise. This should involve changes in Rules, Regulations and Laws wherever necessary. The entire exercise should be completed within two years. Similarly, the Ministries/Departments should instruct all organizations under their supervision to carry out this task. State Governments should also be advised accordingly. This elaborate exercise would involve the following steps for any organizations:i.Constitution of an in-house core team of persons well versed with internal procedures.ii. Engaging external experts - if necessary.iii. Getting feedback from citizens.iv. Analyzing all processes from the point of necessity, simplicity, rationality and citizen centricity.v.Redesigning processes and forms.vi. Doing a pilot study and getting it evaluated.vii. Once the pilot stabilizes, analyzing the changes required in the rules/ statutes.viii. Implementing the change.ix. Creating an incentive mechanism for sustaining the change.148Summary of Recommendationsb. Structural change should be an integral part of any process simplification exercise.12. (Para 10.4.4) Monitoring and Evaluationa. The feedback from citizens should be used to monitor the performance of government offices.b. Each government office which has public interface should have an external evaluation conducted annually in addition to those conducted by the organization itself.13. (Para 10.5.1.11) Rationalising Proceduresa. Ministry of Road Transport and Highways should constitute an expert group to devise practical and objective tests of competence for issue of driving licenses.b. The conduct of these practical tests as well as the one prescribed for learner’s license could be outsourced. Close monitoring over their processes, would however be required.14. (Para 10.5.2.9) Registration of Births and Deathsa. The emphasis under the Registration of Births and Deaths Act should shift from compliance to prescribed procedures to achieving 100% registration.b. Registrars would need to adopt a more proactive approach, and it would be necessary to cast a duty upon them to register each case of birth and death within their jurisdiction irrespective of the fact whether a formal application has been received by them. The Registration could be done based on information from any source or even suo-motu by the Registrar.c.Sufficient number of public functionaries should be designated as Registrarsso that each one is assigned a manageable jurisdiction.d. Each Registrar would need to be empowered under the law to seek and obtain information from any person. For this purpose, the law should149Citizen Centric Administration – ~e Heart of Governanceprovide that the Registrar shall have the power to issue notice seeking information from any person, regarding births and deaths and that person shall be bound to provide such information.e.In order to make the process of imposition of fines quick and deterrent,the powers to levy fines should be given to the District Registrar.f.There should be no fees for delayed registration. It should be providedthat in case of delayed registration, a more elaborate enquiry would be required. The onus for conducting the enquiry should be on the Competent Authority.15. (Para 10.5.3.7) Building Licenses and Completion Certificatesa.Simplified procedures for grant of building permits on the basis of self-certification by owners / registered architects should be adopted by all State Governments and local bodies.b. The JNNURM guidelines should be amended to make adoption of such procedures as a part of the mandatory reforms.c.Similar simplification of procedures should be done in the issuance ofcompletion certificates by local bodies. In case of completed buildings, a hundred per cent verification after the issue of completion certificates on the basis of self-certification would be necessary within a specified period of 90 days. The Rules should provide heavy penalties, including demolition, for violation of conditions as well as for negligence or collusion, if any, on the part of the prescribed verifying authority.d. The capacity building of the enforcement wings of the local bodies should also be done alongside these initiatives to ensure compliance with local bye-laws. The help of local residents’ associations may be enlisted for this purpose.150Citizens’ CharterAnnexure-IV(1)Citizens’ CharterINCOME TAX DEPARTMENTGovernment of IndiaMarch , 2007A Declaration of Our Commitment to Excellence in Service to TaxpayersOur Mission:?To promote compliance with Direct Tax Laws through quality taxpayer service encouraging voluntary compliance and firm administration.We believe:?in transparency and fairness?in voluntary compliance?in encouraging and assisting taxpayers We aim :?to provide information, leaflets, forms etc. at the information and facilitation counters as well as on website .in and to organize awareness programme.?to issue refund along with interest, if any within 9 months from the end of the month in which the return complete in all respects is received.?to give effect to appellate/revision order within 45 days from the date of receipt of the appellate/ revision order by the A.O.?to dispose of rectification application within 2 months from the end of the month in which the application is received.?to issue refund including interest, if any, arising from proceedings other than Section 143(1), within 30 days of its determination.?to acknowledge communications from taxpayers.?to allot PAN within 15 days of receipt of PAN application.?to dispose of application seeking extension of time for payment of tax or for grant of instalments within one month from the end of the month in which the application is received.?to issue tax clearance certificate under Section 230 of the I.T. Act immediately on the date of receipt of application or latest by the following working day.?to dispose of application for recognition/approval to provident fund/superannuation fund/gratuity fund within 3 months from the end of the month of its receipt.151Citizen CentricAAdmini t a h i nA–A~ ~~ ~~v~~~a~c~~~~~V~~~VV(I) Contd.?to dispose of application for grant of exemption or continuance thereof to institutions (University, School, Hospital etc.) under Section 10(23C) of the I.T. Act within one year.?to dispose of application for approval to a fund under Section 10(23AAA) of the I.T. Act within 3 months from the end of the month of its receipt.?to dispose of application for registration of charitable or religious trust or institution within 4 months from the end of the month of its receipt.?to dispose of application for approval to Hospitals in respect of medical treatment of prescribed diseases within 90 days of its receipt.?to dispose of application for grant of approval to institution or fund under Section 80G(5)(vi) of the I.T. Act within six months from the date on which application was made.?to dispose of application for no deduction of tax or deduction of tax at lower rate as early as possible but not later than 30 days of its receipt.?to redress/dispose of a complaint/grievance within 2 months from the end of the month of its receipt.?to dispose of application for transfer of case within 60 days of the receipt of application. For better services, we expect our taxpayers:?to obtain PAN/TAN and quote the same correctly in all returns, challans and correspondence.?to file all statutory returns, completely and correctly well within due dates in proper jurisdiction.?to pay due taxes well in time.?to quote Bank Account Number, MICR Code and other Bank details in returns of income to facilitate issue of refunds.?to be fair and prompt in complying with all proceedings under Direct Taxes Statute.?to intimate change of address to the Assessing Officer.?to quote PAN of all deductees in TDS Returns Complaints and GrievancesCitizens can lodge their complaints/grievances at all Facilitation Counters/Tax Payer Service Centres functioning in all Income Tax Office buildings.For telephone numbers and e-mail ids of Facilitation Counters/Tax Payer Service Centres, please log on to .in152Citizens ACharterAnnexure IV(2)Delhi Transport CorporationCitizens’ CharterTHE CHARTERhT is Charter sets out our commitment to provide a convenient, comfortable, regular, punctual, efficient, safe, reliable and eco-friendly bus transit system at reasonable prices benefiting the National Capital.hT e aim is to establish an effective & active interface with the commuters to evaluate our performance against their expectations and take appropriate remedial measures to provide them the best possible service.The Commuters are at the focal point of this Charter and their maximum satisfaction is the main strategic thrust.Reliability and Punctuality StandardsWe aim to make our services reliable by way of ensuring their punctuality. We also aim at minimizing the waiting time of the commuters at the bus stands by way of optimizing frequency on different routes as against the actual demand.Technological UpgradationWe are always keen to imbibe the latest technological advancements indigenously & globally available in Bus Body Designs, Engine Equipment, Technology, Systems etc. so as to be able to provide the commuters a comfortable & efficient Bus Service.Controlling PollutionDTC is the First Transport in the country to have inducted the CNG Buses in its City Fleet. Not only that, having replaced its entire City Fleet with the CNG buses, the Corporation is the World’s Largest Eco-friendly CNG Fleet Operator and, thus, has the pride of its active contribution towards cleaning up the environment of the City. Our city fleet has over 3110 CNG buses.The Corporation also operates Inter State Services with diesel buses. These buses too are made to undergo Stringent Pollution Checks after regular intervals.The Corporation has a full-fledged Pollution Control Cell which is entirely dedicated to ensure that its buses plying on the roads do not emit pollution. The buses found emitting smoke are immediately withdrawn from the road & put back only after necessary rectification/s. The telephone number of its Pollution Cell has been displayed in all DTC Buses and any complaint/report about DTC buses found emitting smoke may be telephonically lodged with the Pollution Control Cell at 26811379.Induction of low floor buses to facilitate disabled and senior citizens. Customer Care?Special Hire Service: - Apart from the normal services, the Corporation also provides buses to the Citizens of Delhi on Special Hire for marriage parties, picnics, etc. Apart from the normal services, the Corporation also provides buses to the Citizens of Delhi on Special Hire for marriage parties, picnics, etc.153Citizen Centric AAdmini t ai nA– At eA eartAofAGoAnnexu e-IV(2)Contd.?School Bus Service: - The school bus service of the Corporation is preferred the most by the parents of school going children as the safest mode of transport for the school going children. The Corporation provides the buses to schools within the territory of Delhi on Special Hire.?Free/Concessional Passes: - DTC also offers Free Passes to disabled persons, war-widows & their dependents, eminent sports personalities, Freedom Fighters etc. and Concessional Passes to various categories of commuters viz. Students, Senior Citizens, Residents of Resettlement Colonies, Journalists, etc.?Commuter-Care: - With a view to be able to take better care of its commuters, the Corporation plans - To optimize its fleet strength in order to be able to meet the transportation requirements of the people. The City Fleet is targetted to be raised to 3142 CNG buses.- To diversify & introduce a variety of services to cater to specific needs of different segments of society.- To equip all its buses with GPS based Automatic Vehicle Tracking System in order to optimize bus availability through realistic/differential scheduling, facilitate quick replacement of buses in case of break-down en route and provide immediate help to the crew/commuters in case of an accident. Automatic Vehicle Tracking System has already been fitted on a number of buses on experimental basis. AVTS, through Satellite Aided Monitoring, will help in ensuring that the buses strictly adhere to their schedule & are stopped properly on bus-stands by the crew.- To equip all DTC buses with Speed Governors to make travelling safer for commuters & other road users.- To give the city a better look, the Corporation has constructed Bus Queue Shelters of New Design all over the City. DTC Terminals, Time-Keeper Booths & other DTC establishments too are in the process of renovation.Customer InformationIn order to ensure easy accessibility of the information of the commuters’ use, the following facilities are available: - Route Guide/Maps are available at all pass sections for sale to the commuters. - Route/Time-tables: Displayed at Important Points/Terminals.- “Time Keeping-cum-Enquiry Booths”: Manned with knowledgeable staff at Terminals to redress the problems of commuters.- Complaint/Suggestion Book: The commuters may ask the conductor for the same to record their complaints/suggestions.- Central Control Room: Functions round-the-clock. Commuters may dial 24351763 or 24352745 to have any information about DTC services.- DTC Call Centre : Commuters can have any information about DTC’s Operation from DTC’s Call Centre by dialling 23317600.154Citiz ns’AChaAnnexure-I (2) AComentionA - DTCAWebs t : ThAe AWeb it Aof theACorpora ionA .inAcont ins allAv talAinforma a out itsAactivite .Ano.A - ACen ralACompl intAC l : ThAeAcommu ers mayAl dge At eirAcomplaints/grieva ce Aon Ap one 2 4 35187.A assASectionsed, i hAaA ie At AdoA wayA ith the iffiAAcul iesAf ce Aby theAcommu er AinAget ing At eir Apa sesAmade/rene theA theACorpora ion hasAcomputer zed its A assAsecti n . ThAeAcommu ers ar AnoA oreArequ re AtoAs an Ain Ai A ti ingA ong Aqu uesAout ide theA assAsect ons for theApurp s . ThAeAnetwor in Aof all DTC A assASect ons to a s in Aprogr ss AToAfacili ate theAreg larAcommu er AofAsatellite-To ns, DT AisAprovi ingAconcessi nal busAp ThAeACorpora ion hasAcomputer zed A assAsect on Aat theAfollo ingApla ese AACen ralASecretaatAASaro iniAN gar ADotAA auzA hasATermnalA andANariAAShah araATermalAAD lhiteAAN hruAPurAAKash ereteA RedrtAA zad:A-A Sci dia AHhiAA ajaAGaenAAW zir Pur ADot AAS adi PurADaceA T marPurAP eraAGpotAarAAU tamAN garATel.AAMehrliAANajaf arhATermLa patANnalA ariAN gar ADpusAJ mia AM lia AIslJNUAAlotAotAAMa goliaAAN rthACaIIAABa ana ADpur AS emaA uriAD riAAH san Pur ADusAAK rolA aghATerm t AAAS uthACaalAARo iniADepootAA astAV nodANarg A ProceAure forA assAMaave ThAeACorpora ionAis uesAmon hlyApa se Ato theAcommu ers for itsA ityABu es.ACommu ersAwil in AtoAThAeA DTC Apa ses areArequ re AoA Al A p AaA ORMAw ic AisAavail ble for Re. 1/ Aat all Apass-sect on Aof A T .requirem nt At AbeAulfiA led for diffAe entAcatego ie AofApa ses ar AasAun e:A-ACateryAAMon hlyAChasAAARequiremntsAStudts ted AADestina i nA&All Rs.A/ A ThAeA ormA uyAfiA l d &Aa Ap o o A-A othAatteAR uteA assA(Ordiny) Aby theAInstitu ionAAuthorit es,Av li AIDAardAis ue Aby the AInstitu ion and the Av lid FeeARecipt AllAR uteAOrdiryA ARs.1-AA AllAR uteA assAAAA Rs.A55/-Resid ntAofADestina ion Aass Rs.A/-AARa ionA a dA& APosses ionA li Aof theAaccom-Re-settle ent (U At A10 Ak.) AAmodat on. A( o aA AdeAresid nt AofAresettle155Citize ACentri AAdministratio A AhA AHear Ao AGovernancAnnexure-IV(2 AContdColoniesDestination P.Rs. 100/-colonies that came into existence between(Above 10 kms.)25.06.75 & 24.01.1977 only are entitled.)General Public All Route Pass (GL)Rs. 450/-No document required. Valid in all CityInter-State (NCR) PassesService.Delhi - GGNRs. 700/Delhi - BahadurgarhRs. 575/Delhi - FaridabadRs. 825/Delhi - GhaziabadRs. 860/-PoliceAll RouteRs. 400/- Police ID Card. Only Delhi Police personnelPersonnelare entitled.Media Persons All RouteRs. 100/- Accredition Card issued by Press InformationBureau (PIB) or Directorate of Information & Publicity (DIP). Besides, all City Service Buses, also valid in the DTC buses bound for Ghaziabad, Gurgaon, Faridabad, Bahadurgarh and Greater Noida.SeniorAll Route including GL Rs. 50/-Residence proof (such as Ration Card,Citizens (60Election ID Card). For Age proof-Passport,Years & above)School Certificate, Driving License, PensionBook, Radiological Report, Birth Certificate. Income Certificate for annual family income less then Rs. 75000/- issued by MP/MLA & Gazetted officer.)DisabledAll Route (Ordinary)FREEValid proof of Residence in Delhi , ID CardPersonsissued by the SDM, Disability Certificateissued by a Govt. Hospital . {Deaf & Dumb (60 decibel), Blinds (1/60 to 6/60 – both eyes) and Physically Handicapped (40% or above) only are entitled. One escort is allowed with the blinds on half ticket}.FreedomAll Route (OrdinaryFREEPension Payment Order, for recepients ofFightersCity & Inter-State)pension under “Swatantra Sainik Samman”Scheme, Bank Certificate and Valid Proof of Residence in Delhi.War-widowsAll Route (Ordinary)FREECertificate issued by Ministry of Defence and& Dependentsvalid proof of residence in Delhi . (War-widows/dependents of the martyrs of 1962, 1965 & 1971 War only are entitled).156Citizens ACharterAnnexure-IV(2) Contd.NationalAll RouteFREECertificate of Award, valid proof of residenceAwardin Delhi. (Valid for Bharat Ratan, PadamWinnersBhushan, Padam Vibhushan & Padam Shreeonly are entitled).International All RouteFREECertificate issued by Sports Authority of IndiaSports Personsand host country for representing India in anyevent in Asian & Olympic games. Valid proof of residence in Delhi.The pass seekers of all above categories are required to pay a sum of Rs. 15/- for ID Card.157158NationalCommissionMinoritiesStateRightsof ChildCommissionfor ProtectionNationalRightsof ChildCommissionfor ProtectionNationalCommissionfor ScheduledTribesNationalCastesCommissionfor ScheduledNationalCommissionfor WomenStateRightsHumanCommissionNationalCommissionRightsHumanCitizen Centric Administration – The Heart of GovernanceAnnexure IX(1)Comparison of Composition, Powers and Functions of Different Constitutional and Statutory InstitutionsNational Commission for Women Act, 1990Constituted forinvestigationandexaminationof all mattersrelating tothe safeguardsprovidedfor womenunder theConstitutionand other laws.LegalFrameworkObjectivesNationalCommission for Minorities Act, 1992.Protection of Child Rights Act, 2005To monitor the working of the constitutional and legalsafeguardsprovided to the minorities and evaluate the progress of the development etc.Protection of Child Rights and matters connected therewith or incidental thereto at the state level.Protection of Child Rights Act, 2005Article338A of the Constitution; TheConstitution (Eighty-Ninth Amendment) Act, 2003Protection of Child Rights and matters connected therewith or incidental thereto at the national level.To investigate and monitor mattersrelating to constitutional safeguards provided to the Scheduled Tribes.Article338 of theConstitution; TheConstitution (Eighty-Ninth Amendment) Act, 2003ConsumerProtection Act, 1 9 86To investigate and monitor mattersrelating to constitutional safeguards provided to the Scheduled Castes.To provide for a consumer disputesredressalmechanism at the national, state anddistrict levels.The Protection of Human Rights Act, 1993The Protection of Human Rights Act, 1993Constitutedfor betterprotectionof HumanRights at theState level andfor mattersconnectedtherewith orincidentalthereto.Constituted for better protection of Human Rights at theNational level and for matters connected therewith orincidental thereto.NationalCommission,RedressalConsumerDisputesStateCommission and District ForumCitizens ACharterAnnexure IX(1) Contd.NationalMinoritiesCommissionStateCommissionfor Protectionof ChildRightsTheCommission shall consist of a Chairperson, [a ViceChairperson and five]Members to be nominated by the Central Government from amongst persons of eminence, ability and integrity;Provided that five members including the Chairperson shall be from amongst the Minoritycommunities.The StateCommission consists of a Chairperson and sixmembers out of which at least two are women. The qualifications are same as thoseprescribed for the National parison of Composition, Powers and Functions of Different Constitutional and Statutory InstitutionsNationalCommissionfor Protectionof ChildRightsNationalCommissionfor ScheduledTribesTheCommissionconsists of aChairpersonand sixmembers outof which atleast two arewomen. TheChairpersonshould bea person ofeminencewho has doneoutstandingwork forpromotingthe welfare ofchildren. Thesix membersare appointedfrom amongstpersons ofeminence-ability-integritystanding inexperience inthe followingsix fields. (i)TheCommissionconsists of aChairperson,Vice-Chairpersonand three othermembers. TheChairpersonis appointedfrom amongsteminentsocio-politicalworkersbelonging tothe ScheduledTribes,who inspireconfidenceamongst theScheduledTribes bytheir verypersonalityand recordof selflessservice. Outof the Vice-ChairpersonNationalCommissionfor ScheduledCastesTheCommissionconsists of aChairperson,Vice-Chairpersonand three othermembers. TheChairpersonis appointedfrom amongsteminentsocio-politicalworkersbelonging tothe ScheduledCastes,who inspireconfidenceamongst theScheduledCastes bytheir verypersonalityand recordof selflessservice. Outof the Vice-ChairpersonThe National Commission consists of a President (serving or retired Judge of the Supreme Court) and a minimum of four members, one of whom is the women, who are not less than thirty five years of age, possess a Bachelor’s Degree etc. Not more than 50 per cent of the members should be from amongst the persons having a judicialbackground. The StateCommission consists ofNationalCommission,RedressalConsumerDisputesStateCommission and District ForumNationalCommissionfor WomenTheCommissionconsists of aChairpersonand fivemembers.TheChairpersonshould bea personcommitted tothe cause ofwomen. Thefive Membersshould befrom amongstpersonsof ability,integrity andstanding whohave hadexperiencein law orlegislation,tradeunionism,managementof an industryor organizatione ThCommissionconsists of aChairpersonand twomembers.(1) TheChairpersonshould be aretired ChiefJustice of aHigh Court,one Membershould be aserving orretired Judgeof a HighCourt, theother Membershould be aperson havingknowledge of,or practicalexperience in,matters relatingto humanrights.StateHumanRightsCommissionNationalHumanRightsCommissionTheCommissionconsists of aChairpersonand fourmembers.(1) TheChairpersonshould be aretired ChiefJustice ofthe SupremeCourt, oneMembershould be aserving orretired Justiceof the SupremeCourt, oneMembershould be theserving orretired ChiefJustice of aHigh Court;remainingtwo Membersshould bepersons havingComposition159Citizen CentricAAdmini t a h i nA–At G~ G~v~~~a~c~160Annexure IX(1) Contd.NationalMinoritiesCommissionComparison of Composition, Powers and Functions of Different Constitutional and Statutory InstitutionsStateCommissionfor Protectionof ChildRightsNationalCommissionfor Protectionof ChildRightsNationalCommissionfor ScheduledTribesNationalCommissionfor ScheduledCastesNationalCommission,RedressalConsumerDisputesStateCommission and District ForumNationalCommissionfor WomenStateHumanRightsCommissionNationalHumanRightsCommissionand other Members, at least two are appointed from amongst personsbelonging to the Scheduled Castes, and at least one member is appointed from amongst women.knowledge of, or practical experience in, matters relating to human rights. (2) TheChairperson of the National Commission for Minorities, the National Commission for theScheduled Castes, the NationalCommission for theScheduled Tribes and the National Commission for Women act as deemed Members of the NHRC.education,(ii) childhealth, care,welfareor childdevelopment,(iii) juvenile justice or care of neglected or marginalized children or children with disabilities;(iv) elimination of child labour or child in distress;(v) child psychology or sociology; and (vi) laws relating to children.and otherMembers, at least two are appointed from amongst personsbelonging to the Scheduled Tribes, and at least one member is appointed from amongst women.a President (retired orserving Judge of a HighCourt) and a minimum of two members, one of whom should be a women having qualifications as mentioned above. Not more than 50 per cent of the members should be from amongst the persons having a judicialbackground. The District Forum consists of a President (servingor retired or havingqualifications of a Districtcommitted toincreasing theemploymentpotentialof women,women’svoluntaryorganizations(includingwomenactivists),administration,economicdevelopment,health,education orsocial welfare.At least onemember eachshall be fromamongstpersonsbelonging tothe ScheduledCastes andScheduledTribesrespectively.Citizens ACharterAnnexure IX(1) Contd.NationalMinoritiesCommissionTheChairperson and every Member shall hold office for a term of three years.Similar to the NationalCommission.StateCommissionfor Protectionof ChildRightsComparison of Composition, Powers and Functions of Different Constitutional and Statutory InstitutionsNationalCommissionfor Protectionof ChildRightsTheChairperson and Members hold office for a term of three years. They are not eligible for appointment for more than two terms. The upper age limit for holding office in case of the Chairperson is sixty five years and in case ofEvery Member holds officer for a term of three years. Members are not eligible for appointment for more than two terms.NationalCommissionfor ScheduledTribesEvery Member holds officer for a term of three years. Members are not eligible for appointment for more than two terms.NationalCommissionfor ScheduledCastesJudge) and two other members, one of whom should be a women having qualifications as mentioned above.NationalCommission,RedressalConsumerDisputesStateCommission and District ForumEvery Member of the National Commission holds office for a term of five years or up to the age of seventy years whichever is earlier. ThePresident and Members are eligible for reappointment for another term of fiveyears subject to the age limit of seventy years.TheChairperson and Members hold office for a period not exceeding three years.NationalCommissionfor WomenStateHumanRightsCommissionSame as that of the National Commission.The Chairman and Members hold office for a term of five years or until they attain the age of seventy years whichever is earlier. The Members are eligible for reappointment for another term of five years.NationalHumanRightsCommissionTerm161NationalCommissionMinoritiesStateRightsof ChildCommissionfor ProtectionNationalRightsof ChildCommissionfor ProtectionNationalCommissionfor ScheduledTribesNationalCastesCommissionfor ScheduledNationalCommissionfor WomenStateCommissionRightsHumanNationalCommissionRightsHumanCitizen Centric Administration – The Heart of GovernanceAnnexure IX(1) parison of Composition, Powers and Functions of Different Constitutional and Statutory Institutionsthe Members is sixty years.In case of the StateCommission, the President or Members hold office for a term of five years or up to the age of sixty seven years whichever is earlier.They are also eligible for reappointment for another term subject to age limit. In case of the District Forum, the President or Members hold office for a term of five years or up to sixty five years which ever is earlier. They are also eligible for reappointment.162NationalCommission,RedressalConsumerDisputesStateCommission and District ForumCitizens ACharterAnnexure IX(1) Contd.NationalMinoritiesCommissionStateCommissionfor Protectionof ChildRights(a) Evaluate the progress of the development of Minorities under theUnion and States(b) Monitor the working of the safeguards provided in the Constitution and in laws enacted by Parliament and the State Legislatures.(c) Makerecommendations for the effective implementation of safeguards for the protection of the interests of Minorities by the Central Government or the StateSimilarfunctions as to the National Commission within parison of Composition, Powers and Functions of Different Constitutional and Statutory InstitutionsNationalCommissionfor Protectionof ChildRightsNationalCommissionfor ScheduledTribes(1) Inquire into complaints and take suo-moto notice ofmatters relating to deprivation and violation of childrights; non-implementation of lawsproviding for protection and development of children; and non-compliance of policy decisions etc. aimed at mitigatinghardships to and ensuring welfare ofchildren.(2) Examine, review and report about the legalsafeguardsSimilar to the National Commission on Scheduled Castes.NationalCommissionfor ScheduledCastes(!) Toinvestigateand monitormattersrelating toconstitutionaland legalsafeguardsprovided tothe scheduledcastes andevaluate theworking ofsuch safeguards.(2) To inquire into a specific complaints whererights andsafeguards of the scheduled castes have been deprived.(3) To advise on the planning process ofsocio-economic development of the scheduled(1) ~eNationalCommissionhas jurisdictionto entertaincomplaintswhere the valueof goods orservices andcompensationif any, claimedexceeds Rs.1crore(2) To entertain appeals against the orders of any State Commission(3) Jurisdictionto call forthe recordsand passappropriateorders in case ofany consumerdisputepending ordecided byany StateNationalCommission,RedressalConsumerDisputesStateCommission and District ForumNationalCommissionfor Women(1) Inquire intocomplaintsand take suo-motu notice ofmatters relatingto deprivationof women’srights; non-implementationof lawsproviding forprotection towomen andachieving theobjective ofequality anddevelopmentand non-compliance ofpolicy decisionsetc. aimed atmitigatinghardships andensuring welfareof women.(2) Examine, review and report aboutSimilar to the NationalCommission.StateHumanRightsCommissionNationalHumanRightsCommission(1) To enquire, suo-moto or an petition or an a direction/order of any court, complaints of violation/ abetment of human rights or negligence in the prevention of suchviolation by a public servant.(2) Intervene in any proceeding involvingallegation of violation of human rights pending before a Court with its approval(3) Visit any Jail or other State GovernmentInstitutionswhere personsFunctions163Citizen Centric Administration – The Heart of GovernanceAnnexure IX(1) parison of Composition, Powers and Functions of Different Constitutional and Statutory InstitutionsGovernments.(d) look into specific complaints regarding deprivation of rights and safeguards of the Minorities and take up such matters with theappropriate authorities(e) Cause studies to be undertaken into problems arisingout of anydiscrimination againstMinorities and recommend measures for their removal.(f) Conduct studies, research andprovided for the protection of child rights etc.(3) ~eCommission is prohibited from inquiry into anymatter which is pending before a State Commission or any other Commission dulyconstitutedunder any law.castes andevaluate theprogressof theirdevelopmentunder theUnion and anyState.(4) To resent tothe President,annual andotherwise,reports uponworking ofthe safeguardsand makerecommen-mission where itappears to it that any State Commission has notexercised its Jurisdiction properly.'Ihe StateCommissionhas similarjurisdictionwithinthe State.However, it canentertain claimsexceedingRs.20 lakhs butless than Rs.1crore. Further,it exercisesappellate andreview overDistrict Forawithin theState.the legal and constitutional safeguardsprovided for women.are detained or lodged for purpose of treatment etc. for making a study of the livingconditions and to make recommendations to the Government (4) Review constitutional or legalsafeguards for protection of human rights.NationalMinoritiesCommissionStateCommissionfor Protectionof ChildRightsNationalCommissionfor Protectionof ChildRightsNationalCommissionfor ScheduledTribesNationalCommissionfor ScheduledCastesConsumerCommission,RedressalNationalStateCommission and District ForumDisputesNationalCommissionfor WomenStateHumanRightsCommissionNationalHumanRightsCommission164Citizens ACharterAnnexure IX(1) Contd.analysis on the issues relating to socio-economic and educationaldevelopment of minorities(g) Suggest appropriate measures in respect of any Minority to be undertaken by the Central Government or the State Governments(h) Makeperiodical or special reports to the Central Government on any matter pertaining to Minorities and in particular the difficulties confronted by them.NationalMinoritiesCommissionStateCommissionfor Protectionof ChildRightsComparison of Composition, Powers and Functions of Different Constitutional and Statutory InstitutionsNationalCommissionfor Protectionof ChildRightsNationalCommissionfor ScheduledTribesNationalCommissionfor ScheduledCastesNationalCommission,RedressalConsumerDisputesStateCommission and District ForumThe DistrictForum hasjurisdictionto entertaincomplaints etcwhere valuedoes not exceedRs.20 lakhs.NationalCommissionfor WomenStateHumanRightsCommissionNationalHumanRightsCommission165Citizen Centric Administration – The Heart of GovernanceAnnexure IX(1) parison of Composition, Powers and Functions of Different Constitutional and Statutory Institutions(a) Summoning and enforcing the attendance of any person from any part of India and examining him on oath(b) Requiring the discovery and production of anydocument(c) Receiving evidence of affidavits(d) Requisitioning anypublic record or copy thereof from any court or office(e) Issuingcommissions for theexamination of witnesses andSame as thoseof the NationalCommission.(1) TheCommission has all the powers of aCivil Courttrying a suit under CPCespecially in respect of the following:(a) Summoning and enforcing the attendance of any person and examining them on oath;(b) Discovery and production of anydocument;(c) Receiving evidence on affidavits;(d) Requisitioning any public record or copy thereofSimilar to the National Commission for Scheduled Castes.Whileenquiring into anycomplaint the Commission has all the powers of the Civil Court trying a Suit, particularly the following:(a) Summoning and enforcing the attendance of witnesses and examining them on oath;(b) Discovery and production of anydocument;(c) Receiving evidence on affidavits;NationalCommission:(a) Summoning and enforcing the attendance of witnesses and examining them on oath;(b) Discovery and production of anydocument;(c) Receiving evidence on affidavits;(d) Therequisitioning of the report of the concerned analysis or test from the appropriatelaboratory or from any other relevant source(e) Issuing commissions for(1) TheCommission has all the powers of a Civil Court trying a suit under CPC especially in respect of the following:(a) Summoning and enforcing the attendance of any person from any part of India and examining him on oath;(b) Discovery and production of anydocument;(c) Receiving evidence on affidavits;Same as those of the National Commission within itsjurisdiction.(1) TheCommission has all the powers of a Civil Court trying a suit under CPC especially in respect of the following:(a) Summoning and enforcing the attendance of witnesses and examining them on oath;(b) Discovery and production of anydocument;(c) Receiving evidence on affidavits;(d) Requisitioning anypublic record or copy thereof from any court or office;PowersNationalMinoritiesCommissionStateCommissionfor Protectionof ChildRightsNationalCommissionfor Protectionof ChildRightsNationalCommissionfor ScheduledTribesNationalCommissionfor ScheduledCastesConsumerCommission,RedressalNationalStateCommission and District ForumDisputesNationalCommissionfor WomenStateHumanRightsCommissionNationalHumanRightsCommission166Citizens ACharterAnnexure IX(1) Contd.documents; and (f) Any other matter which may be prescribed.NationalMinoritiesCommissionStateCommissionfor Protectionof ChildRightsComparison of Composition, Powers and Functions of Different Constitutional and Statutory Institutionsfrom anycourt or office;(e) Issuingcommissionsfor theexaminationof witnesses ordocuments.(2) TheCommissionshall havethe powerto forwardany case toa Magistratehavingjurisdictionto try thesame and theMagistrateto whom anysuch case isforwarded shallproceed to hearthe complaintagainst theaccused as ifNationalCommissionfor Protectionof ChildRightsNationalCommissionfor ScheduledTribesNationalCommissionfor ScheduledCastes(d) Requisitioning anypublic record or copy thereof from any court or office;(e) Issuing commissions for theexamination of witnesses or documents.the examination of witnesses or documents.(2) Proceedingsbefore theCommissionare deemed tobe a judicialproceedingwithin themeaning ofSections 193and 228 and forthe purposes ofSection 196 ofthe IPC. TheCommissionis also deemedto be a CivilCourt for thepurposes ofSection 195and ChapterXXVI of theCr.PC.(3) TheCommission has powers to pass interimNationalCommission,RedressalConsumerDisputesStateCommission and District ForumNationalCommissionfor Women(d) Requisitioning anypublic record or copy thereof from any court or office;(e) Issuing commissions for theexamination of witnesses or documents.StateHumanRightsCommissionNationalHumanRightsCommission(e) Issuingcommissions for theexamination of witnesses or documents.(2) TheCommission has the power to require any person to furnish information in relation to any inquiry(3) Proceedings before the Commission are deemed to be a judicial proceeding within the meaning of Sections 193 and 228 and for the purposes of Section 196 of167Citizen Centric Administration – The Heart of GovernanceAnnexure IX(1) Contd.NationalMinoritiesCommissionComparison of Composition, Powers and Functions of Different Constitutional and Statutory InstitutionsStateCommissionfor Protectionof ChildRightsNationalCommissionfor Protectionof ChildRightsNationalCommissionfor ScheduledTribesNationalCommissionfor ScheduledCastesNationalCommission,RedressalConsumerDisputesStateCommission and District ForumNationalCommissionfor WomenStateHumanRightsCommissionNationalHumanRightsCommissionthe case has been forwarded to him under Section 346 of the Cr.PC, 1973.orders alsoduring thependencyof theproceedings.(4) At theconclusionof theproceedings,theCommissionmay throughan orderrequire theopposite partyto removethe defects/deficienciesin goods/services, replacethem, paycompensation,discontinueunfair tradepracticeswithdrawhazardousgoods, seizemanufactureof hazardousthe IPC. The Commission is also deemed to be a Civil Court for the purposes of Section 195 and Chapter XXVI of the Cr.PC.(4) TheCommission may utilize the services of any officer or investigation agency of the Central or StateGovernments with their concurrence for conducting anyinvestigation.168Citizens ACharterAnnexure IX(1) parison of Composition, Powers and Functions of Different Constitutional and Statutory Institutionsgoods etc. (5) Appeal againstorders of the Commission lie with the Supreme Court.StateCommission and District Forum:These bodies have similar powers to the National Commission.Appeal against the orders of the State Commission lies with the National Commission.In case of theDistrict Forum, appeal lies with the State Commission.169StateRightsof ChildCommissionfor ProtectionNationalRightsof ChildCommissionfor ProtectionNationalCommissionfor ScheduledTribesNationalCommissionfor WomenStateRightsHumanCommissionNationalCommissionRightsHumanNationalCommissionMinoritiesNationalCastesCommissionfor ScheduledNationalCommission,RedressalConsumerDisputesStateCommission and District ForumCitizen Centric Administration – The Heart of GovernanceAnnexure IX(1) parison of Composition, Powers and Functions of Different Constitutional and Statutory InstitutionsNationalMinoritiesCommissionStateCommissionfor Protectionof ChildRightsNationalCommissionfor Protectionof ChildRightsNationalCommissionfor ScheduledTribesNationalCommissionfor ScheduledCastesNationalCommission,RedressalConsumerDisputesStateCommission and District ForumNationalCommissionfor WomenStateHumanRightsCommissionNationalHumanRightsCommission(1) If theCommission deems fit, it mayrecommend to the concerned Government or Authority :(i) To paycompensation or damages to thecomplainant(ii) To initiate proceedings for prosecution etc.(2) It may approach the Supreme Court or the concerned High Court for directions / orders / Writs(3) Senda copy ofInquiry Report together withThe Central Government shall cause the Annual Report together with a memorandum of action taken are laid before both Houses of Parliament.Similar to the NationalCommission.(1) TheNationalCommission mayrecommend to the concerned Government or Authority the initiation of proceedings for prosecution etc.(2) It may approach the SupremeCourt or theHigh Court concerned for Directions/ Orders/Writ(3) It mayrecommend to the concerned Government or Authority for grant of interim reliefSame as the NationalCommission for Scheduled Castes. The Annual and Special Reports are laid before Houses of Parliament.The Annualand SpecialReports arelaid beforeboth Houses ofParliament.The orders of the National Commission, the StateCommission and the District Forum are final if no appeal has been preferred against such orders.The Central Government causes the reportsmade by the Commission on theworking of the safeguards to be laid before each House of Parliament along with an Action Taken Report on the recommendations and the reasons for non-acceptance if any. In case of matters pertaining to any State Government, the StateGovernment causes theSame as the NationalCommission. The Annual and Special Reports are laid before the State Legislature.Out- come of theproceedings170Citizens’ CharterAnnexure IX(1) Contd.NationalMinoritiesCommissionStateCommissionfor Protectionof ChildRightsComparison of Composition, Powers and Functions of Different Constitutional and Statutory Institutions(4) ~e Centraland the StateGovernmentsare requiredto placethe Annualand SpecialReports to belaid beforeeach Houseof Parliamentor the StateLegislatureconcernedalong withAction TakenReport withinone year fromthe date ofreceipt of thereport.NationalCommissionfor Protectionof ChildRightsNationalCommissionfor ScheduledTribesNationalCommissionfor ScheduledCastesNationalCommission,RedressalConsumerDisputesStateCommission and District ForumNationalCommissionfor Womenreport before the StateLegislature along with its Action Taken Report.StateHumanRightsCommissionNationalHumanRightsCommissionthe recommendations to the concerned Government or Authority and publish reports along with action taken report(4) 'Ihe Annual or specialreports of the Commission are laid before both Houses of Parliament underrespective State Legislature.Citizen Centric Administration – The Heart of GovernanceList of Reports Submitted by theSecond Administrative Reforms Commission up to February 20091. First Report: Second Report:Right to Information: Master Key to Good Governance2. Unlocking Human Capital: Entitlements and Governance – A Case Study3. Third Report:Crisis Management: From Despair to Hope4. Fourth Report:Ethics in Governance5. Fifth Report:Public Order – Justice for All . . . Peace for All6. Sixth Report:Local Governance – An Inspiring Journey into the Future7. Seventh Report:Capacity Building for Conflict Resolution – Friction to Fusion8. Eighth Report:Combatting Terrorism – Protecting by Righteousness9. Ninth Report:Social Capital – A Shared Destiny10. Tenth Report:Refurbishing of Personnel Administration – Scaling New Heights11. Eleventh Report:Promoting e-Governance – hTe SMART Way Forward172THIRTEENTH REPORT: ORGANISATIONAL STRUCTURE OF GOVERNMENT OF INDIAAPRIL 2009Government of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reforms and Public GrievancesResolutionNew Delhi, the 31st August, 2005No. K-11022/9/2004-RC. — The President is pleased to set up a Commission of Inquiry to be called the Second Administrative Reforms Commission (ARC) to prepare a detailed blueprint for revamping the public administration system.2.The Commission will consist of the following :(i)Shri Veerappa Moily - Chairperson(ii)Shri V. Ramachandran - Member(iii)Dr. A.P. Mukherjee - Member(iv)Dr. A.H. Kalro - Member(v)Dr. Jayaprakash Narayan - Member*(vi)Smt. Vineeta Rai - Member-Secretary3.The Commission will suggest measures to achieve a proactive, responsive,accountable, sustainable and efficient administration for the country at all levels of the government.The Commission will, inter alia, consider the following :(i)Organisational structure of the Government of India(ii)Ethics in governance(iii)Refurbishing of Personnel Administration(iv)Strengthening of Financial Management Systems(v)Steps to ensure effective administration at the State level(vi)Steps to ensure effective District Administration(vii)Local Self-Government/Panchayati Raj Institutions(viii) Social Capital, Trust and Participative public service delivery(ix)Citizen-centric administration(x)Promoting e-governance(xi)Issues of Federal Polity(xii) Crisis Management(xiii) Public OrderiSome of the issues to be examined under each head are given in the Terms of Reference attached as a Schedule to this Resolution.4. The Commission may exclude from its purview the detailed examination of administration of Defence, Railways, External Affairs, Security and Intelligence, as also subjects such as Centre-State relations, judicial reforms etc. which are already being examined by other bodies. The Commission will, however, be free to take the problems of these sectors into account in recommending re-organisation of the machinery of the Government or of any of its service agencies.5. The Commission will give due consideration to the need for consultation with the State Governments.6. The Commission will devise its own procedures (including for consultations with the State Government as may be considered appropriate by the Commission), and may appoint committees, consultants/advisers to assist it. The Commission may take into account the existing material and reports available on the subject and consider building upon the same rather than attempting to address all the issues ab initio.7. The Ministries and Departments of the Government of India will furnish such information and documents and provide other assistance as may be required by the Commission. The Government of India trusts that the State Governments and all others concerned will extend their fullest cooperation and assistance to the Commission.8. The Commission will furnish its report(s) to the Ministry of Personnel, Public Grievances & Pensions, Government of India, within one year of its constitution.Sd/(P.I. Suvrathan)Additional Secretary to Government of India*Dr. Jayaprakash Narayan – Member, resigned with effect from 1st September, 2007 (Resolution No. K.11022/26/207-AR, dated 17th August, 2007).ORGANISATIONSecond Administrative Reforms Commission1.Dr. M.Veerappa Moily, Chairman*2.Shri V. Ramachandran, Member**3.Dr. A.P. Mukherjee, Member4.Dr. A.H. Kalro, Member5.Dr. Jayaprakash Narayan, Member***6.Smt. Vineeta Rai, Member-SecretaryOfficers of the Commission1.Shri A.B. Prasad, Additional Secretary2.Shri P.S. Kharola, Joint Secretary#3.Shri R.K. Singh, PS to Chairman#4.Shri Sanjeev Kumar, Director5.Shri Shahi Sanjay Kumar, Deputy Secretary*Dr. M. Veerappa Moily – Chairman, resigned with effect from 1st April, 2009 (Resolution No.K-11022/26/2007-AR, dated 1st April, 2009)**Shri V. Ramachandran, was appointed Acting Chairman vide Resolution No. K-11022/26/2007-AR, dated 27th April, 2009***Dr. Jayaprakash Narayan – Member, resigned with effect from 1st September, 2007 (Resolution No.K11022/26/2007-AR, dated 17th August, 2007)# Till 31.03.2009iiiiiCONTENTSChapter5.The Structure of Government of India at the Apex74Chapter1.Introduction15.1Rationalising the Functions of Government74Chapter2.Reorganising Government - International Experiences45.2 Rationalising the Size of Government782.1Background45.3 Reorganising the Ministries and Departments792.2Models of Structural Reforms in Government65.4Recasting the Allocation of Business Rules972.3Origins of NPM85.5 Ministries and Departments to Primarily Focus on103Policy Analysis2.4Reforms in Public Administation in UK155.6Creation of Effective Executive Agencies1092.5Reforms in Australia185.7Internal Reorganisation of Ministries1192.6Reforms in Thailand205.8Simplification of Governmental Processes1252.7 Link between Governance and Growth235.9 Recasting the Manual of Office Procedure1302.8 World Bank’s Recommendations for Improving32Governance Capacity5.10 Coordination Mechanisms1342.9Lessons from Some Commonwealth Countries355.11 Reducing Paperwork in Government Offices1382.10 Global Lessons38Chapter6.Creating an Effective Regulatory Framework141Chapter3.Existing Structure of Government of India466.1Introduction1413.1Historical Background466.2Regulatory Functions1413.2The Constitutional Provisions476.3 The Statutoty Independent Regulatory Agencies1443.3 The Structure of a Department496.4Issues1493.4 Reforms since Independance52Conclusion1593.5Strengths and Weaknesses of the Existing Structure68Summary of Recommendations160Chapter4.Core Principles of Reforming the Structure of Government71ivvLIST OF TABLESTable No.TitleTable No. 5.1List of Ministerial Responsibilities in the United Kingdom79Table No. 5.2List of Departments in the US and Their Responsibilities86Table No. 5.3List of Existing Ministries / Departments89Table No.5.4Departmentally Related Standing Committees of Parliament94Table No. 6.1Comparison of Functions and Powers of Different145Regulatory BodiesLIST OF FIGURESFigure No.TitleFig 5.1Government and Executive AgenciesLIST OF BOXESBox No.TitleBox No. 2.1India^s Ranking on Key Parameters4Box No. 2.2Delivering High Quality Public Service: The Singapore Way35Box No. 5.1Policy Making to Policy Planning105Box No. 5.2Inland Revenues, Britain110Box No. 6.1What Does a Management Statement Set Out?152LIST OF ABBREVIATIONSAbbreviationFull FormAPOsAutonomous Public BodiesARCAdministrative Reforms CommissionASEANAssociation of South-East Asian NationsCEOChief Executive OfficerCERCCentral Electricity Regulatory CommissionCOSCommittee of SecretariesDGETDirectorate General of Employment and TrainingDODDepartment of Defence (US)DOEDepartment of Energy (US)DOHDepartment of Health (US)DOIDepartment of Interior (US)DOJDepartment of Justice (US)DOP&TDepartment of Personnel and TrainingDOTDepartment of TelecommunicationsDSOsDepartmental Strategic ObjectivesERCsElectricity Regulatory CommissionsEUEuropean UnionGDPGross Domestic ProductGOMsGroup of MinistersIAIsIndependent Administration InstitutesIIPAIndian Institute of Public AdministrationIMDInternational Institute for Management Development, SwitzerlandINTANInstitute Tadbiran Awam Negara (Malaysia)IPCIndian Penal CodeIRDAInsurance Regulatory and Development AuthorityLDCLower Division ClerkMOUMemorandum of UnderstandingMRTPSMonopolies and Restrictive Trade Practices CommissionNATONorth Atlantic Treaty OrganizationNPMNew Public ManagementNPRNational Performance ReviewO&MOrganisation and ManagementPMSPerformance Management SystemviviiPSAPublic Service AgreementPSUsPublic Sector UndertakingsPUCPaper under ConsiderationSEBISecurities and Exchange Board of IndiaSESSenior Executive ServiceTQMTotal Quality ManagementTRAITelecom Regulatory Authority of IndiaUAEUnited Arab EmiratesUDCUpper Division ClerkUKUnited KingdomUNUnited NationsUPSCUnion Public Service CommissionUSUnited States1INTRODUCTION1.1 One of the terms of reference of the Administrative Reforms Commission pertains to the structure of the Government of India. The Commission has been asked to look into the following aspects:anizational Structure of the Government of India1.1 Reorganization of Ministries and Departments1.1.1 Revisiting and redefining the role of the Ministries and Departments in the context of evolving role of governance and need for greater collaboration.1.2 Manpower planning and Process re-engineering.1.3 Suggest ways to position the administrative services in the modern context of global integration, emergence of markets and liberalisation.1.4 To examine if the present system of governance is optimally suited to the environment of the times1.4.1 To suggest a framework for possible areas where there is need for governmental regulation (regulators) and those where it should be reduced.1.4.2 To strengthen the framework for efficient, economical, sensitive, clean, objective and agile administrative machinery.1.2 The Commission in its various Reports has already examined and made recommendations on different aspects of governance – transparency in government, public order and antiterrorism, ethics in governance, decentralization and empowerment of local bodies, refurbishing of personnel administration, creating citizen centric administration, etc. In the present Report, the Commission will be analyzing and making recommendations for reforming the structure of the Government of India since the sustainability of theviii1xOrganisational Structure of Government of Indiaother reforms is closely interlinked with the creation of a pro-active, efficient and flexible organizational framework.1.3 Most of the structures existing in the government are based on the Weberian model of division of work - a well defined hierarchy, adherence to rules and, by and large, impersonal functioning. These organizational structures have stood the test of time to a considerable extent but are more suited to command and control functions and less so when it comes to developmental, promotional and facilitative functions of the State. India’s position on various key human development and economic parameters remains well below desired levels. In a way this is a reflection of the structure and functioning of governmental organizations.1.4 The Commission is of the view that these structures now need to be redesigned in order to make our governance apparatus an instrument of service to the people as well as a tool to achieve national objectives in the fields of social and economic development.1.5 The Commission obtained the views of different Ministries/Departments on various aspects of their mandate and role as well as their organizational structure and internal processes. In addition, the questionnaire on civil services reforms sought to elicit responses on aspects like minimizing hierarchical tiers in government, shifting towards a decision maker oriented system instead of a hierarchical system and creation of executive agencies. The Commission had also enlisted the help of the Indian Institute of Public Administration (IIPA), New Delhi to prepare a background paper on the existing structure. The Commission also sought the assistance of management experts in getting an overview of the modern concepts in organizational structure. The Commission organized a series of consultations with Secretaries to the Government of India, members of Central and All India Services as well as eminent retired civil servants. During its visits to the States, the Commission held detailed discussions with State Governments, retired civil servants and eminent public personalities. The Commission visited Singapore, Australia, Thailand, France and the United Kingdom and had extensive discussions with the authorities there to understand the structure and functioning of government in those countries as well as the reform measures undertaken by them. As the terms of reference of the Commission included Regulatory Reform, the Commission held deliberations with prominent government regulators, both past and present.1.6 Though the Report was finalized in April and printed in May, 2009, the Commission would like to record its appreciation for the contributions made by Dr. M Veerappa Moily in arriving at the conclusions. Before resigning from the position of Chairman ARC, on 31st March, 2009, Dr. Moily had played an important role in guiding the deliberations of the Commission in finalizing this Report.Introduction1.7 The Commission would like to place on record its gratitude to Prof. Pradip Khandwalla for preparing an analytical report titled ‘Revamping Government of India’s Administration for Governance Excellence’. The Commission would like to thank Shri S K Das, Consultant, ARC for providing very useful inputs in drafting this Report. The Commission is grateful to Dr. P.L. Sanjeev Reddy, the then Director, Indian Institute of Public Administration (IIPA) and Prof. Sujata Singh, IIPA for preparing a background paper on the existing structure of Government of India. The Commission would also like to thank Shri Nripendra Mishra, Chairman, Telecom Regulatory Authority of India; Shri Pradip Baijal, Former Chairman, Telecom Regulatory Authority of India; Prof. N.R. Madhava Menon, Member, Commission on Centre State Relations; Shri L. Mansingh, Chairman, Petroleum and Natural Gas Regulatory Board; Shri Vinod Dhall, Former Chairman, Competition Commission of India; Shri M. Damodaran, former Chairman, SEBI; Shri Prabodh Chander, Executive Director, Insurance Regulatory and Development Authority; Shri C.A. Colaco, Adviser (Legal/ Regulatory/Policy), Tata Power; Ms. Vandana Aggarwal, Director, Planning Commission, Shri Mani, National Highways Authority of India and Shri K M Abraham, Shri Sahoo and their team from SEBI for sharing their views on reforms in the Regulatory sector. The Commission is grateful to Dr. K.P. Krishnan, Joint Secretary, Ministry of Finance, for making a presentation to the Commission on a comparative analysis of Regulators in different sectors in the country. The Commission acknowledges with gratitude the very useful suggestions made by eminent persons including former civil servants and senior officers of Government of India and State Governments. The Commission is particularly grateful to the dignitaries and officers of the countries visited for sharing readily the experience with reforms in their respective countries.23Reorganising Government - International Experiences2 REORGANISING GOVERNMENT - INTERNATIONAL EXPERIENCES12.1 Background2.1.1 Public administration in India faces immense challenges. These include the need to maintain peace and harmony, to alleviate deep poverty, to sustain a healthy and inclusive economic growth, to ensure social justice and to achieve an ethical, efficient, transparent and participative governance. The magnitude of these challenges is evident from India’s ranking on various parameters (Box 2.1).2.1.2 The sort of public administration needed to escalate the growth rate may not necessarily be the one that tackles deep poverty, seeks to remove inequality, tackles corruption, fights criminalization of politics, or ensures speedy justice. It is unlikely that a single design of the administrative machinery will fill all bills. One needs to be bold and innovative in designing special purpose instrumentalities, some of which may apparently be inconsistent with one another. For instance, further de-regulation may be required to foster economic growth, and the State may need to withdraw from some of the commercial activities that it is currently engaged in. At the same time, the State may need to devise measures to more effectively regulate certain sectors while pumping more money to improve the infrastructure, alleviate poverty and remove inequalities. Some de-regulation can reduce corruption, but other regulations may have to be put into place to fight corruption.Box 2.1 : India’s Ranking on Key ParametersUN Human Development Report, 2008From 127 in 2004, India has slipped to 132 in the Human Development index, scoring below Equatorial Guinea and the Solomon Islands.IFC/WB Doing Business Report, 2009India is the most difficult country to enforce contracts in a court or otherwise. At 122, it trails Nepal and Bangladesh.WEF Global Competitiveness Report, 2008With its inadequate infrastructure, inefficient bureaucracy and tight labour laws, India at 50th position, is no match for China.Global Corruption Perception Index, 2008India’s rank has fallen from 72 in 2004 to 85 even as China, with which it was on par till last year, maintained its position at 72.UNIDO Report, 2009India, at 54 (down from 51 in 2000), trails China by 28 positions on the Competitive Industrial Performance Index.Index of Economic Freedom, 2009With a shackled judicial system, excessive regulation and a “mostly unfree” reputation, India, at 123, trails Gabon.Source: India Today, April 6, 20092.1.3 India has taken several significant initiatives to improve the quality of governance as detailed in our earlier Reports. These include the 73rd and the 74th Constitutional Amendments which aimed to empower the local bodies, the 97th Constitutional Amendment which limited the size of the Council of Ministers, the new Value Added Tax regime and the Right to Information Act etc. These indicate that our political system is responding to the growing challenges of governance.2.1.4 The reasonably swift and efficient response of our administration to a series of major natural calamities e.g. the Tsunami in December 2004, and the earthquake in Jammu & Kashmir - demonstrates that in times of crisis we are able to marshal our resources effectively. All these and competent election management show that we have an impressive administrative infrastructure and it responds well when objectives are clearly defined, resources are made available and accountability is strictly enforced.2.1.5 However, a lot more remains to be done. There is increasing lawlessness in several pockets of the country, and armed groups are resorting to violence with impunity for sectarian or ideological reasons. The State apparatus is generally perceived to be largely inefficient, with many functionaries playing a passive (and safe) role. The bureaucracy is generally seen to be tardy, inefficient, and unresponsive. Corruption is all-pervasive, eating into the vitals of our system, undermining economic growth, distorting competition, and disproportionately hurting the poor and marginalized citizens. Criminalization of politics continues unchecked, with money and muscle power playing a large role in elections. In general, there is high degree of volatility in society on account of poor implementation of laws and programmes and poor delivery of public services leading to unfulfilled expectations.2.1.6 Fulfilment of the human potential and rapid growth are the two fundamental objectives of public administration. The ‘non-negotiable’ role of the State lies in four broad areas:1.Public order, justice and rule of law.2.Human development through access to good quality education and healthcare to every citizen.3.Infrastructure and sustained natural resource development.4.Social security, especially for the unorganized sector workers.2.1.7 Propensity to centralize has been the dominant feature of our administration. We need to truly redesign government on the basis of the principle of subsidiarity. A task which can be performed by a small, lower unit should never be entrusted to a large, higher unit.451Adapted from REVAMPING GOVERNMENT OF INDIA’S PUBLIC ADMINISTRATION FOR GOVERNANCE EXCELLENCE by Pradip N. Khandwalla (Commissioned by the Administrative Reforms Commission)Organisational Structure of Government of IndiaReorganising Government - International Experiences2.1.8 India is not unique in the challenges and the problems it is facing. A large number of other countries have struggled for long to forge effective democratic governance. Some of them have managed to provide welfare facilities, design justice delivery systems and contain corruption, pollution and other negative externalities much more successfully than India. There is much to learn from them. Similarly, many ‘developmental’ States have struggled for decades to raise the growth rate, improve infrastructure, and rapidly increase social capital and alleviate poverty. One can learn a lot from their experiences, too. And, of course, there is much to learn from our own experiences.2.2 Models of Structural Reforms in Government22.2.1 Several attempts have been made to bring about structural reforms in government. An extensive body of literature exists on these attempts. A comparative analysis of these reform measures has been carried out by several researchers and academicians. Three models of public administration reforms have been distinguished by Romeo B. Ocampo3.i.Reinventing Government was written to map out “a radically new way of doingbusiness in the public sector” (Osborne and Gaebler, 1993: xviii). According to the authors, reinvention is a “(r)evolutionary change process” that had happened before in the Progressive and New Deal eras in the U.S. and has been occurring again in local governments and elsewhere. Instead of originating the model, they pieced the ideas embodied in it from the actual practices of those who have dealt with government problems in innovative ways. The model represents a basic, “paradigm shift” from the New Deal paradigm of 1930s to 1960s toward the “entrepreneurial government” model that they now advocate. In their own summary:Most entrepreneurial governments promote competition between service providers. They empower citizens by pushing control out of the bureaucracy, into the community. They measure the performance of their agencies, focusing not on inputs but on outcomes. They are driven by their goals-their missions-not by their rules and regulations. They redefine their clients as customers and offer them choices... They prevent problems before they emerge, rather than simply offering services afterward. They put their energies into earning money, not simply spending it. They decentralize authority, embracing participatory management. They prefer market mechanisms to bureaucratic mechanisms. And they focus not simply on providing public services, but on catalyzing all sectors-public, private, and voluntary-into action to solve their community problems (Osborne and Gaebler, 1993: 19-20).ii. Re-engineering or BPR “is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed” (Hammer and Champy, 1993: 32). It represents an effort to turn back the Industrial Revolution and reassemble the tasks and functions taken apart by the 19th century principles of the division of labor (Hammer, as cited by Fowler, 1997: 36-37). According to Fowler, its many features include the following results of the desired changes:(1) Separate, simple tasks are combined into skilled, multi-functional jobs.(2) The stages in a process are performed in their natural order.(3) Work is performed where it is best done-some parts of the process may thus be outsourced.(4) The volume of checking and control of separate tasks is reduced.(5) There is total compatibility between processes, the nature of jobs and structure, management methods, and the organization’s values and beliefs.(6) IT is recognized and exploited as offering many opportunities for the redesign of the work systems and the provision of information to enhance devolved decision-making.(7) Processes may have multiple versions to cope with varying circumstances.Re-engineering is thus more inward-looking and gives greater attention to the role of information technology (IT). BPR has been extensively applied in private business, but only to a limited extent in the public sector. However, it shares certain areas of concern with reinvention, as indicated by the following aims:(1) Managerial hierarchies and organizational structures are flattened.(2) Rewards are given for the achievement of results, not simply for activity.(3) Work units (i.e., sections or departments) change from functional units to become process (often “case”) teams.(4) Customers have a single point of contact with the organization.672Extracted and adopted from – Models of Public Administration Reform: “New Public Management (NPM)” by Romeo B. Ocampo. 3College of Public Administration, University of the anisational Structure of Government of IndiaReorganising Government - International Experiencesiii. New Public Management (NPM) is “shorthand for a group of administrative doctrines” in the reform agenda of several OECD countries starting in the 1970s. According to the OECD (Kickert, 1997: 733), “a new paradigm for public management” had emerged, with eight characteristic “trends” (listed below in modified order, to range from internal to external concerns):(1) strengthening steering functions at the center;(2) devolving authority, providing flexibility;(3) ensuring performance, control, accountability;(4) improving the management of human resources;(5) optimizing information technology;(6) developing competition and choice;(7) improving the quality of regulation; and(8) providing responsive service.2.2.2 The Commission has already examined the business process re-engineering concept in detail in the Indian context in its Reports on e-Governance and Citizen Centric Administration. As NPM is in many ways a derivative of the reinvention model, the Commission has examined its features in various countries such as the UK, USA, Thailand, Australia etc.2.3 Origins of NPM2.3.1 New Public Management (NPM) – has also been called market-based public administration, managerialism, reinventing government, and post-bureaucratic model. It evolved in Britain and the US, and later spread to most of the affluent liberal Western Countries and also to several developing countries like Ghana, Malaysia, Thailand, and Bangladesh. Its initial growth can be traced to the relatively minimalist, non-interventionist state ideology of the late 1970s and early 1980s, but the basic approach of NPM was later adopted by a number of countries that did not necessarily share this ideology. NPM sought to bring management professionalism to the public sector without necessarily discarding the active role and welfare goals of the State. NPM also offered the possibility of a more cost-effective and citizen-friendly State, and the possibility of substantially enhancing the governance capacity of the State for tackling the highly complex challenges of our times.2.3.2 Ambit of NPM2.3.2.1 Sarker has enumerated the salient features of NPM (Sarker, 2006, p. 182; op. cit., Khandwalla) as follows:^A shift from focus on inputs and procedures alone to include outputs and outcomes.^Shift towards greater measurement in terms of standards, performance indicators etc.^Preference for ‘lean’, flat’ specialised and autonomous organizational forms such as executive agencies.^Widespread substitution of hierarchical relations by contractual relations both inside government organizations and between government bodies and outside entities.^Much greater use of market or market-like mechanisms for delivering public services, such as through partial or full privatization, outsourcing, and the development of internal markets.^Much greater public sector-private sector/civil society partnerships and the use of hybrid organizations.^Much stronger emphasis on efficiency and individual initiative.^Greater ability to discharge government functions effectively (in terms of public policies) and equitably.2.3.2.2 Siddiquee has added the following additional features (Siddiquee, 2006, pp. 340-1; op. cit., Khandwalla):^“...decentralization of authority with a wide variety of alternative service delivery mechanisms including contracting out and quasi-privatization;^downsizing..., deregulation, and employee empowerment in the public sector;^private sector-style management and flexibility;89Organisational Structure of Government of IndiaReorganising Government - International Experiences^cost recovery, entrepreneurship by allowing employees/teams to pursue program delivery outside established mechanisms, competition between public and private agencies for the contract to deliver services;^improving quality of regulation and the management of human resources; and^a management culture that emphasizes the centrality of citizens/customers and accountability for results.”2.3.3 Evolution of NPM2.3.3.1 States opting for NPM have not necessarily incorporated all these elements of NPM. Most countries have been selective in incorporating those elements of NPM that they felt were best suited to their individual administrative milieu, economic and social condition, and governance culture. NPM has also been an evolving concept with States experimenting with approaches and mechanisms noted earlier. These include policy guidance to the government through stakeholders’ councils (the ‘deliberations councils’ of Japan) for the management of sectors, industries, issues etc., departmental boards as in Britain, policy analysis and evaluation cells as in Japan and other countries, the minister’s ability to reach beyond the senior bureaucrats to ‘buy’ policy advice, and corporatization of government functions, as in New Zealand, e-governance, as in Britain, Malaysia, China, and several Indian States, and a whole host of management tools and techniques like Total Quality Management (TQM), operations research, HRD, market research, etc.2.3.3.2 A welfare State is expensive. The average percentage of state expenditure to GDP in the West is around 40%. To prevent negative externalities like pollution by industries or drug abuse or such abuses as child labour, the liberal state has had to set up many surveillance departments; similarly, to provide welfare measures to the citizens, such as medical care and unemployment and old age benefits, the State has had to enlarge its bureaucracy.2.3.3.3 In the 1970s and 1980s, this enlargement of the State led to cries of inefficiency, red tape, excessive regulation, high tax burden and high national debt in the U.S. and Britain, and in turn incited their politicians to seek votes by claiming to be able to ‘roll back the State’. Some of these politicians indeed attained power, most notably in the US (President Reagan) and the UK (Prime Minister Thatcher). Britain and the US initiated major attempts to reform the government and enhance its governance capacity in response to the public perception that their bloated bureaucracies were not cost effective in terms of the services rendered to citizens. These changes were adopted by many countries, and fructified into a new paradigm of public administration called New Public Management (NPM).In the following sections, the public administration changes in the US and Britain in the 1980s and some that began much earlier, are briefly analysed.2.3.4 Reforms in Public Administration in the USA2.3.4.1 In the 1960s, Robert McNamara, formerly President of Ford Motor Company, introduced ‘managerialism’ in the US Department of Defense when he became Defense Secretary under President Kennedy (Smalter and Ruggles, 1966). When he joined the government, he found that the three Services – Army, Navy, and Air Force – pursued their own agendas with little coordination and much rivalry. Budgetary requests were not backed by clarity about what would be delivered in terms of the different defense missions that the armed forces could be called upon to perform. He brought in the concept of integrated missions that cut across jurisdictional boundaries and required an effective integration of resources and skills. He introduced the notion of running five-year budgets (rolling plans) for each strategic programme. He also introduced the culture of questioning all assumptions and assertions, of quantifying costs and benefits, of using techniques like project evaluation and review (PERT) and critical path method (CPM) to cut costs and delivery times of projects, the use of mathematical techniques for optimizing resource allocation (operations research), network planning, value engineering, and a detailed planning, programming, and budgeting system. This managerial culture gradually spread to several other departments of the federal government.2.3.4.2 The vast increases in spending by the federal government in the 1960s and 1970s on account of new welfare schemes (medical care, social security etc.) led to a backlash from the voters. There was general public perception of inefficiencies and waste in government. In the 1980s, President Reagan rode to power on the slogan of cutting down the “big, bad, wasteful state”. The President’s Council on Integrity and Efficiency was appointed in 1981, with the mandate of recommending measures for greater economy and delivery effectiveness of the government’s various projects and ongoing programmes; protection from fraud, especially in government contracting and purchasing; more effective financial management; better information processing; and greater use of professional expertise and management tools in decision making. Its recommendations led to recovery proceedings against vendors etc. for $5 billion though only a seventh was actually recovered, and it was claimed that an estimated $57 billion worth of assets was more effectively used than in the past.2.3.4.3 The Grace Commission, set up in 1982, was a major initiative of President Reagan for securing government reform as desired by the private sector. It interviewed some 2000 businessmen to find out how wasteful and mismanaged they perceived the federal1011Organisational Structure of Government of IndiaReorganising Government - International Experiencesgovernment to be. Some 2500 specific recommendations were provided by the Grace Commission for getting rid of wasteful programmes, removal of red tape, and divestiture of assets of the federal government, etc. which, it claimed, would save the government $424 billion in three years. These recommendations were controversial. However, the White House claimed later that 80% of the prospective savings could be achieved.2.3.4.4 President Reagan also ordered all government departments and agencies to establish productivity and quality priorities, and install an incentive system to reward high achievement. He also encouraged the practice of total quality management of administration. A deregulation drive was launched under which regulations were reduced by 5% per year from 1982 to 1992, an initiative that is increasingly criticized now that the the recent financial sector meltdown is linked by many to the indiscriminate deregulation of the sector going back to the Reagan administration. He also devolved many more responsibilities on the States for executing programmes funded by the federal government. The Office of Privatization was established in 1988, and the Organizational Excellence Project was initiated to document and disseminate cases of excellence in the federal government.2.3.4.5 Subsequently, an influential book on better governance by David Osborne and Ted Gaebler, titled Reinventing Government (Osborne and Gaebler, 1992), drawing many of its ideas from the reforms in Britain in the 1980s, became an inspiration for the Clinton presidency. Its chief tenets were:1.The government should concentrate on catalyzing various social and economicactivities. It should steer, that is, give broad support and direction, rather than get involved in rowing, that is, in actual operations. It should steer rather than row.2.The government should empower communities to serve themselves ratherthan the government itself getting involved in community service activities. The services in which community control can be especially beneficial could be health, schooling, and welfare related services.3.The government should set out to create competition in public service deliveryso that citizens, as customers, get the best value for money. For example, monolithic public sector organizations could be broken up into numerous units to foster competition; public services could be contracted out to the best bidder, and bidders could include public as well as private sector agencies; and an option could be given to government agencies to buy from inside the public sector or outside it. Privatization of a government activity or service could bedone in such a way as to promote competition, for example, by handing it over to several parties rather than a single party.4.The government should be transformed from being rules-driven to beingmission-driven, that is, driven by a vision of excellence and a sense of mission.5.The government should be results-oriented, and fund outcomes rather thaninputs. The tendency in democratic governments is to worry about whether the budgeted expenditure is incurred or not, and whether government rules have been followed or not in incurring it. Instead, the stress should be on getting results, even if it means liberalizing the budgeting rules and regulations, such as by permitting agencies to reallocate money from one head to another freely, or to carry forward the unspent balance next year without prior government approval.6.The government should be customer-driven, meeting the needs of the citizen-customer rather than mainly the needs and requirements of the bureaucracy. This could be done through customer surveys and follow-up assessments of changes introduced as a result of such surveys, compulsory minimum contact of each staff member with the customers of the government agency or department, setting up of customer councils for feedback, of focus groups for dialogue on a new service or service modification, creating electronic facilities for customers to communicate directly with an agency, customer service training for agency staff, test marketing of new services, giving of quality guarantees to customers, use of undercover inspectors to monitor public services, the setting up of efficient complaint registering and complaint tracking systems, etc.7.The government should become more business-like, and try and earn what itspends on its various activities. Thus, its agencies should price their services rather than give them gratis, and price them to generate a surplus. Having to support activities on their own would make these agencies value efficiency much more.8.The government should concentrate on prevention rather than cure, and learnto anticipate problems. Governments generally tend to be reactive and that too slowly. Also, often governments undertake activities without thinking through their wider implications for pollution, environmental degradation and effects1213Organisational Structure of Government of IndiaReorganising Government - International Experienceson disadvantaged groups. Anticipation of these consequences could lead to more effective plans.9.The government should decentralize its operations and learn to get its work donethrough participative management and teamwork rather than hierarchically through the orders of bosses. For example, the bulk of authority over schools could be transferred from the local government to teams of principals, teachers, and parents; a field laboratory to test creative policing ideas could be participatively set up; staff meetings could be held to brainstorm on how to rehabilitate a moribund sanitation department, etc.10. The government should harness incentives and markets rather than controls and regulations to bring about desired changes, such as by offering guarantees for educational loans by banks to students rather than give loans itself, by creating a secondary market for housing loans, by taxing pollution at punitive rates rather than banning it, and by providing tax credits or vouchers to low income families to get child care from the market.2.3.4.6 In 1993, President Clinton launched his own reinventing initiative called National Performance Review (NPR). The mission of NPR was to shift the federal government’s focus from red tape to results by reinventing and redesigning government systems, agencies and programmes to make them more responsive to their ‘customers’, and to streamline the administration to make its operations cost-effective and its managers more accountable and empowered. The NPR team heard more than 30,000 citizens and representatives of hundreds of organizations. It also sought the experiences of State and local governments that had restructured themselves. The NPR team led by Vice President Al Gore made some 1250 recommendations, which were supported by 2500 pages of annexures. The NPR effort was continued beyond this first phase with a much smaller staff. It summarized the work of federal agencies and produced status reports to document progress. In the second phase, Gore was asked to focus more on what the government did. A preliminary assessment of NPR indicated that as of end 1995, nearly a third of its recommendations had been enacted, resulting in estimated savings of nearly $60 billion. Some 2000 field offices were closed and 160,000 positions were eliminated. The US Congress passed 36 NPR-related legislations. Scores of agencies began to measure their performance, and over 200 developed and posted more than 3000 customer service standards. The federal government workforce was cut by over 17% (Kamarck, 2002; op. cit., Khandwalla).2.3.4.7 How good was the US government during the period of the reform? Its scores on governance quality for 1997-98 were 1.37 for government effectiveness (broadly, the abilityof the government to pursue its priorities such as encouraging business, delivering quality public goods and services, and the control of waste in government); 1.10 for political stability (broadly, the absence of social unrest, radicalism, and coercive governance); and 1.52 for voice and accountability (broadly, democratic functioning and the rule of law) (Kaufmann 0.02 and Kraay, 2002). The scores of India and China for that year were far lower -0.26 and .02 for governance effectiveness; -0.04 and 0.48 for political stability; and 0.36 and –1.29 for voice and accountability respectively. For each dimension of governance quality, 0 represented the average score for 150-plus countries. While the US scored well, it was far behind several other States like Singapore, UK, Canada, New Zealand, Australia, and Germany. Among these States, on political stability, New Zealand, Singapore, Germany, and Australia had higher scores. On voice and accountability, however, only Australia had a higher score. Thus, while the US outscored India and China hands down, its governance quality appeared to be mediocre among its peer group. The US economy grew at around 3% per annum during the 1980s and the 1990s – about the average for Western liberal States, but far below the growth rates of Singapore and Hong Kong among the affluent states and far below the growth rates of India, China, and several other developmental states. Thus the NPM initiatives in the US, while significant in reducing government waste and inefficiency cannot be considered an unqualified success particularly in the light of recent events that have highlighted the perils of indiscriminate deregulation.2.4 Reforms in Public Administration in the UK2.4.1 The UK has had a long history of public administration reform many of which have influenced reforms in India. The charter of civil and political liberties that King John signed in 1215, called the Magna Carta, paved the way for parliamentary democracy, and earned the British parliament the sobriquet of Mother of Parliaments. In the mid-1850s, Britain was one of the first nations to turn a frequently nepotistic civil service into a meritocratic civil service that significantly increased its governance capacity, and made it possible for Britain to rule a sixth of the globe. The commissioning of the Northcote-Trevelyan Report was a landmark. A change was made from a sinecures-oriented system to a merit-based system. Borrowing from the experience of East India Company in innovating open competitive examinations in 1853, the N-T Report enunciated the following principles that have remained the backbone of the UK Civil Service (and of Indian bureaucracy):1.Merit-based selection2.Honest, impartial, and non-political service3.High standards of probity and propriety1415Organisational Structure of Government of IndiaReorganising Government - International Experiences4.Careerist service5.Recruitment of gifted generalists6.Monopoly on professional advice to ministers7.Self-regulation by the civil service2.4.2 The Labour Government commissioned the Fulton Committee in 1968, which called for a more professional service, with more modern managerial skills, and greater openness to talent from lower ranks and from outside. It also called for greater managerial accountability via executive agencies.2.4.3 Britain also pioneered the welfare State, which then spread all over the West. Britain’s post-1945 welfare State, however, created a vast, expensive and often slow-moving bureaucracy that irked citizens, and in 1979, Margaret Thatcher was voted to power on promises to get the State off the back of the people. She privatized 100 billion pounds (about Rs. 850000 lakh crores at the current exchange rate) of the assets of public sector enterprises and other entities. This enabled ministers and senior bureaucrats to pay greater attention to the effective management of the rest of the State. The number of civil servants decreased from 751000 to 460000. From 15 general grades, a new Civil Service recognized only the top five grades. All other pay and grading was decentralized to departments and executive agencies. Several services, including IT, were privatized. She increased the governance capacity by a number of steps. She brought in a performance management system that held departments accountable for quantified targets; carved out well over 100 semi-autonomous but accountable executive agencies out of lumbering departments with professionals as heads on contract appointments and performance incentives; tried to instill a culture of cost consciousness by having government bodies perform market tests for the services they provided; devolved more authority to officials and local government bodies; got rid off many irksome regulations; promoted public-private partnerships and so forth.2.4.4 Margaret Thatcher’s successors have retained the basic character of the changes but have tried to make the government much more customer-friendly through such devices as citizens’ charters and national standards of service. John Major, who succeeded Mrs. Thatcher as Prime Minister, emphasized quality and responsiveness to the citizen-customers. National standards of quality in the rendering of public services were developed and enforced. Citizens’ charters were publicly announced by each department and executive agency. These listed the standards of service that ‘customers’ were entitled to and the grievance redress mechanisms including compensation to an aggrieved customer. Quality auditing was stepped up.2.4.5 Tony Blair, the Labour PM, also built on these reforms by strengthening ‘customer’ orientation and sharpening the focus on users and their needs, arranging delivery of services in user-friendly ways, and enabling citizens to avail services from multiple suppliers to induce competition and enable the customer to get best value for money. Three-year ‘Public Service Agreements’ were introduced under which departments publicly stated the outcomes citizens can expect from the department’s spending, and disclose explicit productivity and performance targets. Greater ‘joining up’ of government was attempted to improve the strategic capability to respond to contingencies at the heart of the government, and the capacity to respond holistically to issues and problems that could not be tackled satisfactorily by any single department or agency. More specialist skills were brought into the Civil Service. The Civil Service has been opened up to include people from the private sector and civil society, with encouragement to civil servants to have stints in these sectors. Fast tracking for high potential civil servants was tried. Policy-making was made more innovative and strategic. Getting feedback and participation of users of public services was institutionalized by setting up ‘Service First’ and ‘People’s Panels’. The e-governance programme was stepped up to ensure that all public services related information was available online by 2005 through initiatives like ‘Office of the E-Envoy’ and ‘UK Online’.2.4.6 Following the recommendations in the mid-1990s of the Nolan Committee on standards in public life, a civil service code of conduct was drawn up and has been incorporated into law in 2004. The Centre for Management and Policy Studies has been created for HRD in the government. The attempt has been to shift through training from a mindset of an organization-centred service to a citizens-centred service; from preserving the status quo to change and innovation; from procedural orientation to results orientation; and from monopolistic provision of services to competitive provision of government services. 360-degree appraisals have been introduced for evaluating civil servants in a more objective manner. To protect civil servants from undue pressures from bosses, politicians, and businessmen, a reporting and redress system was set up. The complaint must first be addressed to the department head, and if this does not elicit the desired response, the complainant could approach independent Civil Service Commissioners. A Delivery and Reform team with seven sub-teams was set up under the Cabinet Secretary to drive the agenda forward.2.4.7 The upshot of these changes appears to be a relatively high quality public administration. In a study on effective governance of 150-odd countries, Kaufmann and Kraay (2002) scored UK 1.97 on ‘government effectiveness’, 0.92 on ‘political stability’, and 1.51 on ‘voice and accountability’ for the year 1997-8 (score of 0 being more or less the average for many countries), far higher than India. Another upshot may have been superior economic1617Organisational Structure of Government of IndiaReorganising Government - International Experiencesperformance by Britain. Britain was considered the sick man of Europe in the 1960s and 1970s. Its annual GDP, growth rate was 2.3% per year, versus 4.0% of its main European rivals, namely France, Germany, and Italy. During the 1980s, however, when Britain went full tilt at public administration reforms and its rivals did not, Britain’s growth rate was about 40% higher than that of these countries during the period.2.5 Reforms in Australia2.5.1 Unlike the UK, Australia is a vast country with a relatively small population of 20 million. It is a federal polity while the UK is a unitary state. Australia, like Britain, is a parliamentary democracy. A number of changes were made in the federal government beginning in the early 1980s to align its polity with market economy, design a state that could enhance Australia’s economic competitiveness, and incorporate some of the better features of effective corporate management (Dawkins, 1995; Dixon, Kouzmin, and Korac-Kakabadse, 1996; Khandwalla, 1999; Prasser and Northcote, 1992). The Australian government relied a lot on consultation and consensus in getting the bureaucracy to cooperate with it. In the Westminster model of parliamentary democracy adopted by Australia, the Cabinet meets weekly to take collective policy decisions. It is assisted by a few Cabinet standing committees that deal with the economy, structural reform and social policies. The Cabinet and its standing committees are assisted by a bureaucratic apparatus that makes a variety of perspectives and considerations available to the political masters. In 1987, many departments of the government that were closely inter-dependent, such as, foreign affairs and trade, were amalgamated. The number of departments was reduced from 26 to 16. Thereafter, each department was represented in the Cabinet by a minister. This reportedly improved coordination as well as decision-making at the Cabinet level, and also cut down substantially the volume of business discussed in Cabinet meetings.2.5.2 To get better value for the taxpayer, and to ensure that the public sector was responsive to the priorities of the political leadership and accountable to it, a number of changes were initiated in the public sector.2.5.3 Public service officials were turned into managers. A meritocratic Senior Executive Service (SES) was created as a cadre whose members could be assigned responsibilities for managing programmes and for giving policy advice. Financial Management Improvement Programme and Programme Management and Budget increased the responsibility of public officials for results. Public sector managers were given the authority to create and abolish positions, appoint, transfer, and promote staff, etc., in their areas of jurisdiction. Only overall personnel policies and standards were set by the once all-powerful central agencies. The central personnel function of the Public Service Board was abolished and a Public ServiceCommission replaced it with limited functions. SES and Merit Protection and Review Agency was entrusted with the task of fostering merit in public sector appointments. Over 100 separate office-based grades and classifications were merged into one administrative service structure. All departments and their staff units were asked to make plans. Performance-based pay was introduced at senior levels and performance appraisal was improved.2.5.4 The Management Information System was improved. Each department began making three years’ advance estimates of its expenditures, and its annual budget was based on them. In this way, departments had a better idea of what resources would be available to them for three years at a time. Various heads of expenditure were consolidated to simplify budgeting.2.5.5 Public managers could carry over financial surpluses from one year to the next, and were allowed to borrow against the budget for the next year. This gave them much greater financial flexibility. An annual automatic percentage reduction in every agency’s running costs was mandated to force them to be efficient. This ‘efficiency dividend’ amounted to about A$80m. a year. More than the quantum of saving, this automatic percentage reduction institutionalized a mindset of looking for efficiency, productivity, and cost saving. An Efficiency Scrutiny Unit was set up. Each government programme was required to be evaluated at three-to-five year intervals by the agency in charge of it, and the results of the evaluation were provided to the Department of Finance. This institutionalized periodic reflection and learning from such reflection, often in short supply in systems overloaded with routines, standardization, and meeting deadlines. The Cabinet got directly involved in the appointment of senior public servants, strengthened ministerial offices with personal advisers and extensively used private consultants.2.5.6 To improve fiscal discipline the government not only published estimates of future spending under new policies, but also estimates of savings from modifying or discontinuing existing policies. The projected figures became the basis for actual budgets. Ministries proposing policy changes involving additional spending had to propose ways of offsetting the additional spending, so that total government spending remained within the limits decided by the Cabinet. As a consequence, Australia’s fiscal deficit, which was 4 per cent of GDP in 1983, turned into a surplus by 1990.2.5.7 The user-pay principle was introduced and encouraged under which agencies had to pay for availing the services of other government agencies. For example, earlier the Attorney General’s department provided free legal advice to, and legal representation for, other government departments. Now, except for advice on constitutionality, these services had to be paid for, and the departments had the choice of getting legal services from other1819Organisational Structure of Government of IndiaReorganising Government - International Experiences20sources. Thus, such ‘staff’ departments now had to compete for survival, and had, therefore, to become more ‘customer’ friendly.2.5.8 The government followed a policy of retaining the ownership of Australian public enterprises but by instituting an arm’s length relationship with them and ensuring that they were autonomous and professionally managed (Callender and Johnston, 1997; Dawkins, 1995; op. cit., Khandwalla). The government also followed a policy of encouraging competition in industries, enhancing benefits to customers of these enterprises, benchmarking with the world’s best operating practices, and also pursuing social goals in accordance with government policy. The performance of Australian public enterprises significantly improved under this policy regime (Dawkins, 1995).2.5.9 A programme of commercialization of the Australian public service was launched in the late 1980s (Dixon, Kouzmin, and Korac-Kakabadse, 1996; op. cit., Khandwalla). This meant creating markets for the delivery of these services and re-designing the service organizations to operate in a competitive environment. Over the first four years the inception of this initiative (1988-89 to 1992-93) the commercial and quasi-commercial revenues of the agencies involved in this initiative nearly doubled, and these covered nearly 30% of the total running costs of these bodies in 1992-93 as compared to about 15% in 1988-89. Commercialization was pushed the hardest in administrative, health, housing, and community services, and it continued its gentler penetration in a host of other areas like local government services, industry, regional development, etc. The degree of commercialization was negligible in employment, education, training, tourism, social security, trade, foreign affairs, etc.2.5.10 Summing up, the Australian NPM reforms seemed to have improved the information available to the managers of the public services for discharging their accountability, and appeared to have enhanced their concern with outcomes and effectiveness of programmes (Dixon, Kouzmin, and Korac-Kakabadse, 1996). Australian public enterprises appear to have improved their performance significantly under a regime of autonomy and professional management (Dawkins, 1995). Australian governance scores in 1997-98 were 1.63 for voice and accountability, 1.18 for political stability, 1.46 for government effectiveness (Kaufmann and Kraay, 2002; op. cit., Khandwalla). These increased marginally in 2000-01. By the standards of Western States, the economy was growing well. After 1980, the annual growth rate has been about 3%, reasonably high for the high per capita income group of countries that have collectively been growing at about 2.5% per annum.2.6 Reforms in Thailand2.6.1 After democratic rule was restored in Thailand in1991, a small group of technocratic reformers in government sought to modernize the functioning of the governmentthroughout the 1990s. By the 1980s, the State’s staff had got bloated (42% of the budget went in meeting staff salaries). At the same time the compensation the staff received was inadequate. Major reforms were undertaken during 1991-97 (Bowornwathana, 2006; Painter, undated; UN, 1997; op. cit., Khandwalla).2.6.2 The 1991 reforms were aimed at improving efficiency, quality, and ethical orientation in the civil services.The government evolved a strategy of changing the role of the government from micro-management to policy-making, facilitating private enterprise, and monitoring the economy. Reforms in subsequent years aimed at performance improvement, compensation reform (better parity in compensation was attempted both within government and also vis-à-vis the private sector), downsizing, people’s participation, and decentralization to make administration more citizen-friendly. Government agencies providing public services and engaged in international trade were re-engineered. Management by results was sought through planning and monitoring. Agencies were given greater autonomy in personnel decisions. The State was downsized through attrition and right-sized through redeployment.2.6.3 Political reforms to increase the stability of governments were introduced. And after 1997, in the wake of the East Asian financial crisis, the technocrat reformers in government sought the help of the World Bank and other donors. A reform plan was formulated in 1999 which was a mixture of structural adjustment and NPM measures. The five main components were: revision of roles, functions and management practices of departments; reform of budgeting, procurement, and financial management; personnel management reform; legal reform; and reforms related to corruption and ethics. The reforms were put under the charge of a Public Sector Development Commission. The reform plan focused on streamlining and rationalization; budgetary and financial reform; HRM and compensation reform; ‘work culture and values’; modernization through e-governance; and encouragement of public participation.2.6.4 An outputs-based performance budgeting system was adopted with the help of World Bank consultants and agencies had to adopt new/modified systems in budget planning, output costing, procurement management, budget and funds control through block grants and accrual accounting, financial and performance reporting, asset management and internal audit before they could get funds. The Budget Commission signed a public service agreement with each minister on fiscal and service delivery targets, and in turn service delivery agreements were signed with department heads, and ministers and department heads were evaluated against their promises and deliveries. Open recruitment, performance-linked pay, contractual arrangements for top executives were favoured.21Organisational Structure of Government of IndiaReorganising Government - International Experiences2.6.5 Governors of the provinces were turned into the CEOs of their provinces, and they were made accountable for planning and coordinating development. They were given a two-week induction course by international experts and by the Prime Minister. Performance agreements were drawn up for the governors. These governors were mostly appointed from within the Ministries. Ministries (14) and Departments (126) were restructured. A number of people were brought in at senior positions from outside. Ministries could form clusters of related departments, and common services could be pooled in one of the departments. High fliers were identified to fill new positions. Service delivery units were planned in each department, each with devolved administrative powers, performance targets, and service agreements and run by an appointed board.2.6.6 Corruption was a major issue in Thailand and a survey had revealed that 40% of senior officials had reported that they had to ‘buy’ their positions. So, lists of qualified personnel were drawn up who had undergone extensive training, and selections had to be made from this list by screening committees and they had to justify their recommendations. An elite Senior Executive Service (SES) was created. A ‘fast track’ system of senior appointments was approved in 2003 for encouraging external applicants. Inter-ministerial job rotations were encouraged to fill vacancies. As a policy, all vacant senior positions were openly announced. Merit pay and performance review was partially implemented for the SES. Performance rewards were allotted to high-performing departments and agencies for distribution to the staff. Performance indicators and performance ratings were implemented. A challenge system was introduced under which government agencies wishing to avail of performance awards would be rewarded if they met at least ten performance targets. Voluntary retirement programs were implemented to downsize the government. In addition, on the basis of job reviews, the bottom 5% were offered training to improve performance, and if improvement did not materialize, they were asked to leave with 8 months’ severance pay.2.6.7 Thailand also began trying out agencification, though the pattern is somewhat different from the British one. Three new types of Autonomous Public Bodies (APOs) have emerged in Thailand: agency-type APOs (Bowornwathana, 2006); APOs mandated by the 1997 Constitution; and local government APOs. For the first type, the Thai government decided to borrow in 1999 the agencification experiences of Western countries, namely the United Kingdom’s executive agencies and New Zealand’s crown entities. Agency creation was empowered through an Act of Parliament. From 1999 to 2004, 17 agency-type APOs were established. These operated in the areas of education, commerce, tourism and sports, health, social development, culture, science and technology, energy, information technology, agriculture and cooperatives, etc. Their sizes were small. Each was run by a strong Boardappointed by the relevant minister. The Board appointed the CEO. The Agency Boards were typically chaired by ministers, permanent secretaries, and other senior bureaucrats and advisors.2.6.8 The second type were APOs mandated by the 1997 Constitution to promote governance, transparency, and openness in government, and these were outside the government’s chain of command. They included the National Human Rights Commission, the Ombudsman, the Constitutional Court, the National Counter-corruption Commission, the Election Commission, the Audit Commission, the National Telecommunication Commission, and the National Broadcast Commission. The Thai senate has the power to choose and appoint qualified candidates as members of these APOs.2.6.9 Under the 1997 Constitution, by 2006 the central government was expected to transfer 35% of its annual budget to local governments by transferring appropriate taxing power. Under a new law, the local bodies (74 provincial, 289 municipal, and 2496 subdistrict organizations) have been more empowered and largely taken out of the rule of the Ministry of Interior. These are the third type of APOs.2.6.10 During the last two years, there has been considerable political uncertainty and agitation in Thailand, but the main features of the administrative restructuring seem to have been retained.2.6.11 To conclude, NPM in some form or other, is gaining currency in countries, including developing countries with the objective of improving public administration. A 1999 survey indicated that in the last two decades, some 40% of the world’s largest 123 countries had at least one major reform movement that was influenced by NPM, and 25%, including many South American governments, had two or more such movements (Kamarck, 2002; op. cit., Khandwalla). The case studies in this chapter indicate that NPM is not an alien system grafted on unwilling cultures nor is NPM a rigid formula. Rather, it is an approach towards tackling almost intractable problems of governance in a citizen-friendly and efficient manner, an approach that is flexible enough to yield effective local solutions.2.7 Link between Governance and Growth2.7.1 Table 3.1 shows the average annual growth rates of the two fastest growing and the two slowest growing countries in each of the decades of the 1960s, 1970s, and 1980s for each of four per capita income classes: those that the World Bank considered ‘low income’, ‘lower-middle income’, ‘upper middle income’, and ‘high income’. The Table also shows the growth rate for each decade of China and India, the two largest nations in the world. As2223Organisational Structure of Government of IndiaReorganising Government - International Experiencesthe table shows, there are huge differences in the growth rates of countries in each income class for each decade.Table 3.1 : Two Fastest and Slowest Growth Rates of Countries for Each Income ClassAnnual GDP Growth Rate1960s1970s1980sSlowestFastestSlowestFastestSlowestFastestLow Income CountriesTogoHaitiMalawiUgandaChinaNicaragua(8.5)(0.2)(5.6)(-1.6)(10.2)(-2.0)PakistanChadChinaGhanaChadNiger(6.7)(0.5)(5.5)(-1.2)(6.3)(-1.1)ZairePakistan(-0.2)(6.3)Lower Middle Income CountriesThailandPR if Cibgi (2.3)SyriaJamaicaBotswanaJordan(8.4)(10.0)(-1.2)(10.3)(-1.5)Ivory Coast (8.0)SenegalParaguayZambiaThailandPeru(2.5)(8.8)(0.4)(7.6)(-0.2)Upper Middle Income CountriesIranUruguayHong Kong (9.9)LebanonOmanTrinidad & Tobago (-2.5)(11.3)(1.2)(-5.4)(8.3)Hong Kong (10.0)Trinidad & Tobago (4.0)South Korea ArgentinaMauritius (6.2)Saudi Arabia (-1.2)(9.1)(1.9)High Income CountriesJapanUKNorwaySwitzerland (0.7)South Korea (9.4)UAE(10.4)(2.9)(4.5)(-2.0)SpainNew ZealandJapanUKHong KongKuwait(7.1)(3.6)(4.5)(1.7)(6.9)(0.9)Ireland(4.0) Table 3.1 : Two Fastest and Slowest Growth Rates of Countries for Each Income Class (Contd.)Annual GDP Growth Rate1960s1970s1980sFastestSlowestFastestSlowestFastestSlowestIndia(3.4)(3.6)(5.8)China(5.2)(5.5)(10.2)Figures in brackets are annual growth ratesSource: World Bank’s World Development Reports2.7.2 Some of these growth rates could be attributable in part to extraneous circumstances like a very low base economy such as of Togo or Chad, or highly favourable commodity price movements during a decade (e.g. Iran), or adverse commodity price movements. But in several cases, governance changes could have been a significant factor in influencing the growth rate. Japan was not a low economic base country in the 1960s. Its high growth rate could be attributed, at least in part, to a series of governance changes, such as an exports-led growth strategy, an industrial strategy that gave priority to heavy and basic industries, the extensive use of ‘deliberation councils’ with representatives of industry, labour, and the academia to help the government to reach consensus decisions, etc. that made it a highly effective developmental state (Campos and Root, 1996; Patrick and Rosovsky, 1976; Shahid Alam, 1989). Governance changes also made Hong Kong a favoured destination for trade and investment (Huque and Yep, 2003). China virtually doubled its growth rate in the 1980s from what it was in the 1970s thanks to the extensive decentralization of powers to the provinces, counties, and even villages that led to a huge upsurge in agricultural and industrial production; government recognition of the private sector as an engine of growth; dismantling of many controls; downsizing of the government; large investment in infrastructure; and invitation and incentives to foreign investors to invest in China (Chai, 2004; Straussman and Zhang, 2001). India’s growth rate picked up in the 1980s mainly on account of the gradual dismantling of the permit-license raj.2.7.3 IMD (International Institute for Management Development) (2006), Switzerland, has developed a system for ranking nations on ‘competitiveness’. Competitiveness has four components: economic performance, government efficiency, business efficiency, and infrastructure. On the standard of competitiveness, in 2006 (as well as in 2005), the US was ranked first. The next four were Hong Kong, Singapore, Iceland, and Denmark. The2425Organisational Structure of Government of IndiaReorganising Government - International Experienceslowest ranked among the 60-odd countries for which rankings were done were Venezuela, Indonesia, Croatia, Poland, and Romania. These data suggest that governance capacity, at least in terms of the components of ‘competitiveness’, tends to differ widely among the world’s nations.2.7.4 A little more direct evidence on differences in governance capacities is provided by Garelli (2006, p. 51; op. cit., Khandwalla), using IMD’s data on competitiveness. He has tried to measure the largest negative and positive differences between the government’s and the economy’s contribution to overall competitiveness for each country. Four of the worst countries on this measure were Venezuela, Argentina, Italy, and Brazil. These were the countries in which growth may have been most impeded by the governance system. Four of the countries that scored best on this measure were Denmark, Jordan, Slovak Republic, and Russia. Governance capacity in these countries seems to have spurred the growth rate of the economy.2.7.5 These and other studies suggest that governance quality differs greatly between countries. Thus, while innate problems of governance of the State affect all countries, either they do not affect them equally or nations respond to them with differences in effectiveness.2.7.6 Two studies statistically tried to show the effect of governance quality on various dimensions of the quality of life of citizens of countries.The first study was by Keefer and Knack (1993) which indicated that a strong, efficient, growth-oriented bureaucracy could contribute substantially to a country’s growth rate. In a study of a sample of developing and developed countries during the thirty-year period 1960 to 1989, the researchers measured such aspects of bureaucracy as the quality and strength of bureaucracy, absence of bureaucratic delay, corruption, risk of expropriation, and the risk of contract repudiation by the government, and their effect on the per capita growth rates of these countries. The researchers found that each of these bureaucratic dimensions was significantly correlated with the growth rate of per capita income. In other words, improvement in bureaucratic quality, non-expropriation, and contract enforcement, and decrease in bureaucratic delay and in corruption raised the growth rate. The researchers estimated that greater effectiveness of bureaucracy could increase the per capita growth rate by as much as 70 per cent!2.7.7 The second study was conducted by Daniel Kaufmann and his colleagues at the World Bank (Kaufmann, Kraay, and Zoido-Lobaton, 1999; Kaufmann and Kraay, 2002; Kaufmann, Kraay, and Mastruzzi, 2005). They have made an elaborate study of how six measures of perceived quality of governance affect per capita GDP (in purchasing power parity terms) of 150 plus countries. The six perceived governance quality measures, eachan aggregate of a number of sub-measures, are:?voice and accountability;?absence of political instability and violence;?government effectiveness;?reasonableness of regulatory burden;?rule of law; and?absence of graft.2.7.8 To estimate national scores, they have relied on a wide range of judgmental sources.2.7.9 ‘Voice and accountability’ measures such features as whether the change of government is orderly or not; whether or not there is a transparent and fair legal system; whether or not citizens enjoy civil rights and political freedoms; whether the press and the media are free; whether governance is free from the military’s influence or not; whether the business sector can express its concerns, etc. It broadly measures how democratic the governance is.2.7.10 ‘Absence of political instability and violence’ measures the perceived absence of social unrest, coups, terrorism, civil war, armed conflict, ethnic or tribal tensions, coercive government, radicalism etc. It broadly measures political stability.2.7.11 ‘Government effectiveness’ measures whether government policy is pro-enteprise or not; whether there are red tape and bureaucratic delays; the quality and turnover of government personnel; the government’s ability to continue its programs; political non-interference in public administration; the quality of public goods like roads, public health, mail services; government’s efficiency in delivering public services; lack of waste in government expenditure; the honouring of commitments by an incoming new government; the effective implementation of government decisions, etc.2.7.12 ‘Reasonableness of regulatory burden’ measures the burden of regulations on business; government intervention in the economy; wage/price controls; tariff barriers; regulations on capital flows; banking regulations; foreign trade regulations; restrictions on non-residents vis-à-vis ownership of business, shares, etc.; barriers to entry in banking and other sectors; freedom to compete in the market place; whether anti-monopoly legislation is effective or not; dominance of state-owned enterprises; state interference in private business; tax system that hinders competitiveness etc. The lower the score, the more reasonable the regulatory burden.2627Organisational Structure of Government of IndiaReorganising Government - International Experiences2.7.13 ‘Rule of law’ measures whether crime is properly punished or not; enforceability of contracts; extent of black market; enforceable rights to property; extent of tax evasion; prevalence of rule of law; police effectiveness; protection of intellectual property; judiciary’s independence; ability of businesses and people to challenge government action in courts etc.2.7.14 ‘Absence of graft’ measures relative absence of corruption among government political and bureaucratic officials; of bribes related to securing of permits and licenses; of corruption in the judiciary; of corruption that scares off foreign investors, etc.2.7.15 Underlying the choice of these six measures of governance is a model of an ideal State: one that is democratic, transparent, relatively free from corruption, business friendly, committed to the rule of law and law and order, competition, deregulation of the economy, protection of private property (including intellectual property), and the provision of public services. This is the state one associates with Western democracies, except that some significant features of Western democracies such as welfare coverage, affirmative action to reduce inequalities, and conservationist action are absent. Absent also is a significant feature of the growth story of many Third World economies and developmental efforts.2.7.16 The information for these six measures was secured from a number of sources, mostly Western. The sources included World Bank’s World Development Report, World Economic Forum’s Global Competitiveness Survey, Freedom House’s Freedom in the World Poll of Businessmen, Heritage Foundation’s Economic Freedom Index, Wall Street Journal, IMD’s World Competitiveness Yearbook, Gallup International’s 50th Anniversary Survey, Standard and Poore’s Country Risk Review, Business Environment Risk Intelligence’s Business Risk Service, etc.2.7.17 Kaufmann and his colleagues sought to measure the effect of the six governance variables on the level of a country’s per capita GDP in purchasing power parity terms, the country’s infant mortality per 1000 live births, and adult literacy rate. They studied the effects for each for a number of years beginning in 1997-98. The sample consisted of over 150 countries. They concluded: “Our empirical results show a strong positive causal relationship from improved governance to better development outcomes...These results clearly indicate that there is large payoff in terms of per capita income to improvements in governance. In other words, governance does matter.” (Kaufmann, Kraay, and Lobaton, 1999, pp. 15-16). Further, “Improved governance has a strong negative impact on infant mortality...Improved governance also leads to significant increase in adult literacy...” (Kaufmann, Kraay, and Lobaton, 1999, p.17).2.7.18 It can however be argued that ‘good governance’ as measured by Kaufmann and his colleagues is a function of economic development rather than vice versa. As countries become affluent, their citizens begin to demand and get better governance, especially when they are democracies, as most affluent countries are, so that better governance becomes a consequence rather than a cause of affluence. Also, affluent countries can afford the expensive bureaucracy, technocrats, tools and techniques (especially IT), and professional managers that can provide good governance. However, Kaufmann and his colleagues have tried to show (Kaufmann, Kraay, and Mastruzzi, 2005) that the effect of per capita income on governance is much weaker than the effect of governance on per capita income for a sample of the poor countries of sub-Sahara Africa, and therefore the influence of affluence on governance is negligible.2.7.19 The researches of Keefer, Knack, Kaufmann and their colleagues do indicate that governance matters, as far as levels of material comforts are concerned. But there are some important caveats that need to be kept in mind in interpreting the findings of Kaufmann and his colleagues. High per capita income, as in Western countries, is the end-result of centuries of development, and except for the past few decades, the states with high per capita incomes did not necessarily score high on the governance measures of Kaufmann and his colleagues. Britain, France, Germany, Japan, and the US were quite interventionist during several decades of the 19th and 20th centuries. Secondly, for emerging economies, the point of concern is not high per capita income that the West enjoys (it will take decades before Third World countries approach the levels of Western affluence) but high growth rate of GDP that generates the surpluses for further investment and increased spending on poverty alleviation, rural development, urban renewal, etc. Do the six measures of governance of Kaufmann and his colleagues impact the rate of growth the same way as they do per capita income?2.7.20 Probing this issue is important because in a number of countries the phase of their fastest growth was not when they became true blood market economies but when their governments spurred economic growth through a variety of measures not assessed by Kaufmann and his colleagues, namely large planned developmental expenditure by the state, the setting up of a number of strategic public enterprises, protection and nurturance to infant industries, forced savings, large investments in poverty alleviation, rural development, social capital building etc. For instance, Brazil’s era of rapid growth was not in the 1980s and 1990s when it availed of structural adjustment loans from international financial institutions and tilted towards a private sector friendly market economy and away from2829Organisational Structure of Government of IndiaReorganising Government - International Experiencesstate-led development, but in the 1960s and 1970s when there was strong-arm rule and a huge state-led developmental effort (along with a robust private sector). This was also true of the Soviet Block in the 1950s and 1960s, and to some extent also of Japan from the 1950s to 1970s, South Korea from the 1960s to the 1980s, several ASEAN countries in the same period, and so on. Indeed, several emerging market economies faced sharply reduced growth rates when they heeded international financial institutions and liberalized and globalized their economies and sharply reduced the government’s investment expenditures – Russia’s GDP declined by about 50% in the 1990s following the beginning of its market economy-oriented liberalization in 1991, an experience several East European countries also shared in the 1980s and 1990s.2.7.21 Indeed, China and India may be the major exceptions to the trend of liberalization eating into the growth rate of statist economies, at least for an initial decade or so. In both these countries, the growth rate has perked up after liberalization began in earnest. But in both these countries, the state has remained developmental, with a large and dynamic public sector working along with a growing and dynamic private sector to deliver unprecedented growth rates.2.7.22 The disconnect between growth rate and good governance as measured by Kaufmann and his colleagues is demonstrated in Table 3.2. It shows the governance scores of nine large emerging market economies (almost all are federal states with populations in excess of 100 million, and per capita purchasing power parity GDP of below US $10000) for three of the governance measures of Kaufmann and his colleagues (governance effectiveness, political stability, and voice and accountability) for the year 2000-01, and the average growth rate of these countries during 2000-04 (see World Bank’s World Development Report, 2006, Table 1, p. 292). These countries represent half of the world’s population. Each country is also ranked vis-à-vis each governance variable, with a rank of 1 for the best score among the nine countries and 9 for the worst score. As a summary score of governance quality, these ranks are summed up for each country (the larger the sum of ranks, the worse the measured quality of governance). The table also provides information for seven benchmark countries for governance quality, namely Australia, Canada, Germany, New Zealand, Singapore, UK, and US. They are not only widely considered to be effectively administered, but have amongst the highest scores on perceived quality of governance in the Kaufmann et al studies.Singapore2.161.440.112. 8US1.581.181.242. 8Sources: Kaufmann and Kraay (2002) and World Bank’s World Development Report 2006 Note: Quality of governance score of 0 = average for the sample of 150-odd countries. The higher the sum of ranks, the poorer would be the governance, as evaluated.Develop-Governance Rank PoliticalRank Voice andRankSum ofGrowth Rate RankmentalEffectivenessStabilityAccountabilityRanksof GDPStates2004-05Table No. 3.2 : Governance Quality Scores of Nine Large Developmental States for 2000-01 and their Growth RatesPakistan-0.485-0.395-1.439194.17Brazil-0.2740.4710.53272.08India-0.173-0.0540.66186.22Indonesia-0.506-1.569-0.406214.66Canada1.711.241.332. 5New Zealand1.271.211.593. 9UK1.771.101.462.2Benchmark StatesNigeria-1.009-1.368-0.447244.95Australia1.581.261.703. 3Mexico0.2810.0630.12371.59Russia-0.578-0.416-0.355196.13Bangladesh-0.547-0.577-0.204185.14China0.1420.392-1.118128.713031Organisational Structure of Government of IndiaReorganising Government - International Experiences2.7.23 As Table 3.2 shows, among the nine large emerging market economies, the ones with the worst governance scores (Nigeria, Indonesia, Pakistan, and Russia) average a growth rate that is no different from the average of the growth rates of the best governed of these states (Mexico, Brazil, India, and China). Also, while all but two of these nine States have recorded a growth rate exceeding 4%, none of the seven ‘benchmark’ States, with governance scores far higher than those of the nine emerging market economies, has managed to grow at even 4%.2.7.24 Obviously, high growth rate is not the be all and end all of good governance. Growth must be accompanied by improvements in the quality of life through fairer availability of public goods and services, better control of negative externalities like pollution and drug adulteration, fewer hassles for the average citizen to get needed permits and licenses, positive discrimination in favour of the disadvantaged, strong poverty alleviation initiatives, etc. In Third World countries, forms of governance are needed that facilitate high growth rate as well as improved quality of life and equity. The policy structure for high growth rate, equity, and rising quality of life for the people of emerging market economies, especially those that are disadvantaged, would include liberalization and democratization, a vibrant private sector, a strong but well-managed developmental and poverty alleviation thrust by the State plus good governance as conceptualized by Keefer, Knack, Kaufmann and their colleagues.2.8 World Bank’s Recommendations for Improving Governance Capacity2.8.1 Concerned about the failures of public administration in many States, especially poor developmental States, the World Bank came out with a number of prescriptions for increasing governance capacity (World Bank, 1997):1.There should be a two-part strategy for increasing the effectiveness of the State.Part one requires narrowing the gap between the demands on a State and its capabilities to meet these demands, through greater selectivity in the State’s priorities. The State should concentrate on the priorities and offload the rest to the civil society and the private sector. Part two requires increase in the capability of the State to manage collective actions efficiently by recharging public institutions.2.Matching the State’s role to its capability implies the following:a.Redefining of priorities for State action: Five main tasks lie at the core ofevery government’s mission. Without these, sustainable, shared, poverty-reducing development may be impossible. These fundamentals are:(i) establishment of a foundation of law and prevention of lawlessness;(ii) macro-economic stability (low inflation, containment of adverse balance of payments, etc.) and a ‘non-distortionary’ policy environment;(iii) investment in basic social services like health and education and infrastructure (energy, transportation, communications, postal services, etc.); (iv) protection of the vulnerable segments of society such as women and ethnic minorities; and (v) protection of the environment through harnessing public opinion, flexible regulation, strengthening of self-regulation mechanisms and creating financial incentives for environment friendly activities.b.Creation of alternative providers of infrastructure, social services,etc. For instance, instead of the State assuming the entire burden of providing health insurance or unemployment benefits, business, labour, and community groups can be co-opted in sharing the burden. Outsourcing can be devised to increase competition and innovation. Unnecessary regulations can be eliminated to release creative market forces. Privatization offers important possibilities for reducing the burden on the state. However, the way privatization is managed is as important as its content, and this means ‘transparency’ in the privatization process, winning the acquiescence of the staff, broad-basing ownership in the privatized entity, and instituting an appropriate regulatory structure for the privatized activity.c.In countries with weak institutions that are unable to check arbitraryactions of the State or its masters, self-restricting rules that precisely specify the ambit of a policy, and make it irreversible or costly to reverse, can be harnessed. Another way of checking arbitrary State action is for the State to work with the corporate sector and other organized forces for pursuing, say, an industrial policy, so that the latter is a product of consensus rather than administrative fiat.3233Organisational Structure of Government of IndiaReorganising Government - International Experiences3.The second part of the strategy of reform is the strengthening of the State’sinstitutional capability:a.Provide incentives to public officials to perform better; separate thepowers of the legislature, the executive, and the judiciary, and create a system of mutual checks and balances; create an independent judiciary, so that laws are enforced and unconstitutional laws are struck down; reduce opportunities for corruption by reducing the discretionary authority of officials, regulations, and artificial barriers to entry in industry; pay competitive remuneration to public officials; have meritocracy in the recruitment and promotion of officials; institute stringent punishment for wrongdoing, and an independent agency for detect.b.Deliver needed services by subjecting the state’s services to increasedcompetition from agencies both within and outside the state. For example, public goods and services such as electricity and telecommunications services can be competitively provided rather than exclusively by monopoly agencies of the state. Focused, performance-based public agencies with autonomy and greater managerial accountability can be set up.c.Give people voice in the affairs and activities of the state, by the ballotbox route as well as by co-opting them on various advisory councils; involve the beneficiaries of government programmes in the planning and implementation of these programmes.d.Devolve authority from the central government to regional and localgovernments, but institute mechanisms to monitor devolution, prevent the capture of these governments by vested interests, and to check profligacy by these governments.e.Ensure broad-based public discussion of key policies and priorities. Givemuch greater access of the public to information with the state and create various consultative forums.34352.9 Lessons from Some Commonwealth Countries2.9.1 The developments in Commonwealth countries are of special relevance to India because of a shared administrative legacy. The key lessons that emerge from Commonwealth Secretariat studies (Commonwealth Secretariat, 1992, 1995d, 2002; Kaul and Collins, 1995; Khandwalla, 1999) seem to be the following:1.P o l i t i c a lcommitment for change is critical. The vast changes in Britain, Australia, and New Zealand were driven by politicians, and in Canada, though the change was masterminded by the bureaucracy itself, it had the necessary support of the political leadership. It would be useful in a democracy, therefore, to forge a consensus on how governance must change.Box 2.2 : Delivering High Quality Public Service: The Singapore WayIn the 1990s, Singapore had nearly 60,000 civil servants. Its civil service, until the 1960s as corrupt and as bureaucratic as any in Asia, had become something of a model. Several long-term policies and actions, closely resembling NPM, seem to have contributed to this eminence (Commonwealth Secretariat, 1992; Quah, 1995):Autonomy for Agencies Singapore has over 60 statutory boards each enjoying a great deal of autonomy. Each could decide whom to hire, promote, and fire. Each formulated and implemented operating policies within its parliamentary mandate.Containment of Corruption An earlier anti-corruption ordinance was modified in 1980 under which the Corrupt Practices Investigation Bureau, formed in 1952, was given additional powers. This bureau used its powers to investigate even ministers; at least one reportedly committed suicide when threatened with an petitive PayBy world standards, Singapore paid its public servants well indeed. There was a long-standing policy since 1972 of reducing the gap between public and private sector remuneration.Recruitment of Highfliers Relatively high pay scales enabled Singapore to attract and retain highfliers in its civil service. The Singapore Public Service Commission tried to reinforce this by some attractive puterization Computerization in the government began in 1962. Singapore’s civil service was fully computerized by 1990. In terms of public service, this effort meant shorter waiting times for customers and faster responses.Service Improvement Unit (SIU) This unit was set up in 1991 to monitor the standard of public services and catalyze their improvement by soliciting feedback from the users of these services. SIU encouraged ministries and statutory boards to assess the quality of their services through service audits and exit interviews, and to set quality targets for achievement.Quality Circles In the 1980s, the Government of Singapore adopted the idea of quality circles to launch nearly 8000 quality circles called WITs (work improvement teams).Organisational Structure of Government of IndiaReorganising Government - International Experiences2.Reform has to be paced appropriately to the administrative culture. Reform can bedramatic, as in New Zealand, or incremental, as in Canada. Where reform has been held up for a long time because of the defensiveness or rigidity of the system and a political consensus for reform has finally emerged, administrative reform can be swift and radical. This process has been called punctuated equilibrium, meaning interludes of major change within long periods of stability (Romanelli and Tushman, 1994). Where a culture of change has been institutionalized, reforms and innovations can be spaced out, based on continuous trial and error learning, so that changes are gradual and time tested, but over a period of time, amount nearly to a revolution, as in the case of Canada. Obviously, it is preferable to evolve a government culture in which reform is brisk on a fairly continuous basis.3.A central monitoring unit for monitoring progress, and for spurring it, is useful.The INTAN played this role in Malaysia and the Cabinet Office in UK. It should preferably be a permanent and powerful unit, such as a special ministry of public administration reform, or an administrative reform commission with a constitutional mandate, or a powerful unit in the office of the head of the government. It should be the full-time (but not exclusive) responsibility of this unit to monitor reform, report progress to the nation, evolve remedial steps participatively, and monitor, possibly push, implementation of these steps.4.Ownership of change across the entire public service is important. ‘The managementof change requires that public servants at all levels feel a sense of involvement in the process, and that they share the vision and want the change. Involving staff in change from the beginning makes it more probable that those who have to live with the changes feel some commitment to the new order’ (Commonwealth Secretariat, 1995d, p. 17). In Canada, the top rungs of the bureaucracy set up a number of task forces of senior bureaucrats to evolve options for change. In Britain’s scrutiny exercises, the Efficiency Unit worked closely with the head and staff of the department that volunteered for a scrutiny, and participatively evolved the needed changes.5.External pressures for change have to be harnessed along with the bureaucracy’sinternal drive for change in changing departmental processes. For instance, the federal government of Australia required year-on-year efficiency savings from departments, and the so-called efficiency dividend was sought in Singapore.In Europe also, several countries have introduced required minimum efficiency savings in departmental budgeting (Schick, 1990). Citizens’ charters of UK departments similarly institutionalized the pressure within the government to respond to the customer. At the same time, various ways of monitoring customer satisfaction through panels, customer surveys, the use of enquiry commissions, consultants, etc. by the government are ways of catalyzing change from outside the government.6.The measurement of the performance of government departments and agencies mustbe institutionalized, with systems for feeding back assessed performance, and reward systems for reinforcing good performance. This means the development of concrete criteria for measuring performance and the development of a monitoring system that gathers performance-related information and reports this performance to decision-makers and supervisors of government departments and agencies. A system that recognizes and rewards good performance and one that recognizes and penalizes poor performance needs to be institutionalized. Performance management systems as under the UK’s Financial Management Initiative and the Next Steps Initiative are examples. Some 1800 different performance indicators were developed for various agencies (Schick, 1990). A problem, however, that needs to be kept in mind is that in penalizing poor performance of an agency or department, the public is not penalized. For example, if school funding is tied to the school’s performance or the school’s popularity, as in the UK, the students of poorly managed schools would be the prime sufferers. Rather than penalizing the stakeholders of the poorly performing government entity, it may make sense to replace an ineffective management by an effective management. Contract appointments of CEOs and other top-level executives facilitate this sort of flexibility. Emphasis on quantitative indicators of efficiency can lead, in government-funded health care systems to the neglect of needed but expensive treatments. A balance, therefore, between the purpose of a funded activity and its efficiency must be maintained in institutionalizing the monitoring and reward systems.8.Civil society needs to be co-opted to buttress the reform. “An effective publicservice is not an isolated, autonomous body. It relies on an interconnected network of civil society and private sector organizations and interest groups,3637Organisational Structure of Government of IndiaReorganising Government - International Experienceswhose specific concerns are harnessed to support public service performance. Many managerial options proposed for inclusion within public service reform programmes rest on the capacity of external civic, professional and political institutions. Without such supporting institutional capacity, these managerial options are more illusory than real”, notes the Commonwealth Secretariat (Commonwealth Secretariat, 1995d, p.19). This implies strengthening, not weakening, of responsible professional bodies, industry and trade associations, trade unions, consumer and environmental protection groups, academic institutions, voluntary organizations, the media, etc. Although these are pressure groups that often perceived has “pain in the neck” by bureaucrats, they are also the source of various skills, ideas, competencies, and commitments required for sustaining public service reform.9.There must be recognition that reform is a continuing, long-term process. ‘Publicservice reform programmes must contain specific targets if they are to have focus. The targets must be specified and achievable. Equally, however, reform programmes must note that reforms will be continuous. There is no final point...’ (Commonwealth Secretariat, 1995d, p. 19). This implies a focused commitment to the immediate programme, but longer-term flexibility and openness to innovations and changes in the reform agenda.10. Several practical mechanisms are useful in policy making and implementation (Commonwealth Secretariat, 1995d, pp.20-65). These include mechanisms for policy development/evaluation, such as policy units segregated from implementing agencies, and development of criteria for assessing the quality of policy advice, as in New Zealand, or strengthening of the office of the head of the government and of offices of ministers with expert staff, recourse to external consultants, as in the US and Malaysia, greater use of expert commissions or task forces to evolve policy options, and creation of standing committees of the cabinet as in Australia and India. A high level mechanism for policy coordination, such as Malaysia’s National Development Council, can be useful.2.10 Global Lessons2.10.1 The concern for much more effective governance that can give best value for money to taxpayers, meets the needs of citizens, especially the disadvantaged, and is accountable to the stakeholders of the governance system has led to the development of a number ofmechanisms and techniques. While there is no uniform formula or template for successful reform, the following are some of the lessons that could be drawn from the experience in other countries.1.Political CommitmentIn most of these countries, the reforms agenda was pushed and sustained by the country’s political leadership at the apex level.The vision of the political leadership and a consensus across party lines for governance reforms to promote a more efficient and effective functioning of government agencies is a pre-requisite for triggering such reforms. Stable governments and a demand from the citizenry for change also tend to be features of effective governance reforms. It is therefore essential that political commitment and consensus for such reforms be developed for such initiatives to succeed.2.Focusing on the Core Functions of Government: Right-sizing, OutsourcingModern developmental States tend to be very large, with an excess of clerks and menial staff but are often short of the right kind of managerial, vocational, and technical talent, such as teachers and health professionals to serve the indigent, engineers and other professionals to set up and operate infrastructure projects, and competent professional managers to run state-owned enterprises, agencies, boards, councils, development programmes, poverty alleviation programmes, and the like (Commonwealth Secretariat, 2002). So they need to shed excess manpower in certain categories or re-deploy it for more useful ends, and also employ more people of the right sort. Many Western governments have turned to ‘downsizing’. Britain, for example, reduced its civil service staff by about 20% during the 1980s and 1990s, primarily by privatization and transferring of staff to executive agencies. But they also have attempted ‘right-sizing’. The Clinton administration in the US let go of nearly 17% of the federal staff (about a million jobs), but added about 100000 to the police force to make America safer. Outsourcing of government activities to business/civil society bodies/citizens is a more reliable tool than privatization for improving the efficiency of governance and/or reducing the costs of services provided by the State. This is because it is more selective – only those activities of a government body are outsourced that can be done more economically and/or better than3839Organisational Structure of Government of IndiaReorganising Government - International Experienceswithin the government body. Outsourcing also provides better control over outcomes because it is done through contracts that are enforceable as law. There are many ways of outsourcing. The most common is contracting with private vendors of services; others are franchising; subsidizing private bodies to carry out government activities; providing eligible citizens (mostly the needy) vouchers to buy, say medicine, from a list of approved outlets, etc. These include such services as meter readings of public utilities, the maintenance of public utilities, utility billing, waste collection and disposal, road repair and cleaning, building of roads and highways, fire prevention and control, crime prevention through patrolling, traffic signal maintenance, ambulance services, operation and maintenance of government hospitals, public housing, various welfare programmes, maintenance of public parks and cultural centers, government payroll and accounts, maintenance of computerized records, local tax assessment, billing and bill collection, slum development, recording of legal documents, accreditation of academic institutions so that they become eligible to receive state funds, binding conflict resolution (through lok adalats, for instance), improvement of accounting standards (such as through recognizing the Institute of Chartered Accountants of India for this purpose) etc. The more developed the civil society and the private sector, the greater the possibility of outsourcing activities for improving quality, volume, and coverage, and reducing costs.petition in Delivery of Public Services - Dismantling MonopoliesMany public services are delivered by a single agency that is more or less a monopoly, at least for local users of the services. Thus, a single board or government department may provide such services to the indigent as social security/pension/provident fund payments, schooling for poor children, etc. Monopoly power tends to curb customer orientation and innovation, and can cause distress to those who avail of public services. Competition in the provision of public services can yield better service at lower cost, and overall may be quite useful to society. Competition can be created in several ways: license private sector/civil society bodies to provide public services (Canada licensed retailers to dispense postal services); break up a large public sector service dispensing unit into a number of smaller public bodies that provide a choice to people as to from whom to get the service; get public service bodies do a ‘market test’, that is invite bids for providing one or more of the servicesthey are currently providing, and outsource if the bid exceeds the current cost, quality etc. parameters of the public service (such as a government employment agency inviting bids for finding employment for the unemployed in a particular city).Corporatizing even a not-for-profit government service offers some advantages. Firstly, it sends a clear message to its management that the service is to operate on economic lines (even when making money is not the prime consideration). That is, it is expected to be cost-conscious, efficient, productive, innovative, and ‘customer’-friendly. Secondly, since it is a corporation, it has a different legal structure than a government department – in India, it would have to be registered, for instance, under the Companies Act, and have an accountable board, with a CEO who is, in turn, accountable to the board. It would have flexibility in terms of raising financial resources from bodies other than the government and developing its own personnel and operating policies. If government controls are kept to the minimum regarding overall policies and objectives, it is a device that can minimize political and bureaucratic interference and enhance performance.Privatization comes in many different forms, ranging from outright sale of a government asset and relinquishment of control over its use to the buyer, to the sale but retention of at least some control through, for instance, the golden share device, to the award of a management contract to a private party without relinquishing government ownership. It is partly a response to the ideology of the minimalist state, and partly it is a pragmatic response to the need to reshuffle the state’s portfolio of activities and release funds for higher priority activities. Research on privatized enterprises has yielded a mixed picture. Privatization is not a panacea for improved governance performance.4. AgencificationThe basic idea was that agencies should be carved out of government departments to carry out specific executive functions within a mandate and a framework of policy and resources provided by the relevant ministry. The attempt was to separate policy making from implementation and to bring in professional management for implementation. Each agency was headed by a chief executive with considerable operating freedom, subject, however, to4041Organisational Structure of Government of IndiaReorganising Government - International Experiencesthe mandate, and the policy and resources framework. The Commission has already made detailed recommendation on this issue in its Tenth Report on Refurbishing of Personnel Administration. In addition, this issue is dealt with in detail at paragraph 5.6 of this Report.5.Decentralization, Delegation and DevolutionDecentralization is the process of dispersing decision-making governance closer to the people or citizen. Devolution is the outsourcing of functions, funds, and requisite authority by the central government to the local governments (states, local self-government bodies etc.). The Commission has already made detailed recommendation on these two issues in its Sixth Report on Local Governance. Delegation is the assignment of authority to subordinates or subsidiary units to enhance effectiveness and efficiency. The Commission has already made detailed recommendation on this issue in its Twelfth Report on Citizen Centric Administration.6.Public-Private PartnershipsPublic-Private Partnerships refer to joint ventures in developmental or social capital or even commercial projects. between governments, the private sector and the academia that are coordinated through power sharing and joint decision making mechanisms like a board with representation of all the partners and other key stakeholders. The tool has the merits of pooling human and financial resources, professionalism, and participation of civil society in governance so that democracy is strengthened.7.Process Simplification - DeregulationA regulatory framework is created by government to ensure that policy is effectively implemented. Often, however, policies and regulations are hastily designed, or their relevance is overtaken by a change in circumstances. Unless harmful or useless regulations are periodically removed or modified, administration can get mired in red tape, and large costs can get borne by business and civil society. Many countries had launched efforts at reducing the number and complexity of regulations to make them more citizen and business friendly. The liberalization effort of India has resulted in the elimination or modification of many irksome permits, licenses, quotas, and procedures.Recent events in the financial sector have shown however that indiscriminate deregulation may be as costly in its own way as over regulation. As regards process simplification in general, the Commission has already made detailed recommendation on this issue in its Reports on e-Governance and Citizen Centric Administration.8.Strengthening Accountability MechanismsEnsuring accountability and promoting an ethical approach in governance institutions is vital to improved governance. The Commission has already made detailed recommendations on this issue in its Fourth Report on Ethics in Governance.9. e-Governancee-Governance is better delivery of government services to citizens, improved interactions of government with business, citizen empowerment, and more efficient governance through information technology. The Commission has already made detailed recommendations on this issue in its Eleventh Report on e-Governance.10. Performance Management System (PMS)For each public service, the major components of PMS are the service’s aims and mission, strategic objectives set by the organization offering it, breaking down of the objectives for the components of the organization, the identification of agreed upon targets of individual manager and his/her key result areas, periodic reporting of performance against targets and standards, review by superior authority, and remedial action. At every level, the specific needs of the ‘customers’ of the service, as well as critical success factors and the closing of any capability or other gaps have to be kept in mind. The Commission has already made detailed recommendations on this issue in its Tenth Report on Refurbishing of Personnel Administration.11. Empowering the Citizen-customerA number of mechanisms are available for enabling the voice of the people to be heard. Citizens’ charters, publicizing the standards of services on offer to the people, effective grievance redress mechanisms, Right to Information etc4243Organisational Structure of Government of IndiaReorganising Government - International Experiencesare some of these that have evolved in different countries. The Commission has already made detailed recommendations on these issues in its Reports on Right to Information and Citizen Centric Administration.12. Promotion and Diffusion of Good Governance PracticesMany innovations occur in the recesses of the government but remain unknown to the rest of the government. Thus, the impact of the innovation remains limited. Thanks to high IT connectivity; it is possible to bring innovations anywhere in the government, and indeed in any government, to the notice of all administrators for potential application. This is equally true of good practices. All it takes to diffuse innovations and good practices in governance is a national governance website for innovations and good practices, some encouragement and reward for logging these on to the website, with a software for sorting these out by function, and a cell in each ministry to bring significant relevant innovations and good practices to the notice of the ministry head.13. Policy Evaluation and Regulatory Impact AssessmentOften, policies are hastily conceived and rammed through legislation without adequate consideration of consequences or long-term costs and benefits. Better appraisal of policies, through inter-disciplinary teams, wide public debate, and the involvement of stakeholders and domain experts can surely reduce the dysfunctional consequences of public policies and increase the benefits.Regulatory impact assessment usually consists of a checklist of questions relating to assessing whether a regulation is worth having or not. The OECD checklist includes the following: Is the problem for which the regulation has been designed correctly defined? Is government action in designing a regulation justified? Is the regulation the best option? Does the regulation have a sound legal base? What level of government should be involved in operating the regulation? Do the benefits of regulation justify its costs? Is the knowledge about how the regulation is going to impact/is impacting various parts of society available to the public? Is the regulation clear, consistent, comprehensible and accessible to the actual regulators? Have all the stakeholders had an opportunity to be heard? How will compliance to the regulation be achieved? To this must be added the important question whether there has been excessive deregulation, if so, in which sector.14. Benchmarking for Continuous ImprovementBenchmarking is a process of identifying highly effective processes, structures, and systems in use within a system or outside it with a view to making such changes as are necessary to close the gap. It requires a careful comparison of quantitative and qualitative performance measures of different units or organizations (preferably comparable ones), the establishment of what could be considered high standards of performance and processes to assess one’s unit against doing the relevant comparisons to identify significant gaps, and the development of a strategy of closing the identified gaps. Since comparisons can be painful, and may require painful decisions, it is essential to get the top management to support benchmarking. Benchmarking is likely to be seen as especially useful when it helps implement the organization’s mission, goals, and strategy more effectively. Participative benchmarking is more likely to succeed than authoritarian benchmarking, and cross-functional benchmarking teams are more likely to come up with useful benchmarks than teams consisting of the same genre of specialists.15. Governance IndicesGovernance indices indicate what is happening to different social groups in terms of the quality of their life, especially to those that are disadvantaged or vulnerable and could assist the State and civil society to take appropriate and expeditious remedial action. Hong Kong developed a social development index (SDI) in 1999 (Mok and Law, 2002; op. cit., Khandwalla). It consists of some 362 different indicators classified under 26 sectors of development activity. The index is computed for each of several groups of citizens (e.g. families, women, children, the elderly, people with disabilities, new arrivals, etc.). The development activity sectors include the rule of law, political participation, strength of civil society, health, education, housing, income security, transportation, population trends, employment, occupational safety, crime mitigation, public sector investment in social sectors, science and technology, social justice, social service, arts and culture, sports, entertainment, and recreation, environmental quality, economic growth and other economic indicators, subjective life satisfaction, and cost of living.44453EXISTING STRUCTURE OF GOVERNMENT OF INDIA3.1 Historical Background3.1.1 The British Government took over the administration of India from the East India Company by the Government of India Act, 1858. Thereafter, the British Parliament enacted several laws for governance of India. Some of the important legislative instruments in the pre-independence period were the Indian Councils Act, 1909; Government of India Act, 1919; and Government of India Act, 1935. With India attaining Independence, the Constitution of India laid the foundation of the structure of Government of India.3.1.2 With the Government of India Act, 1858, the erstwhile territories of the East India Company vested in the British Crown who would appoint the Governor General of India as well as the Governors of the Presidencies. The powers of the Crown were to be exercised by the Secretary of State for India, assisted by the Council of India. The Indian Civil Service was created consequent to this enactment. There was no popular participation in the governance system. The Indian Councils Act of 1909, also known as the Morley-Minto Reforms, introduced the elections of Indians to the legislative councils. The Government of India Act, 1919, also known as the Montague Chelmsford Reforms, introduced a dual form of government (“diarchy”) for some provinces - the reserved list and the transferred list.3.1.3 The Government of India Act, 1935 brought several changes in the system of governance in the country. It provided for the establishment of an All-Indian Federation and a new system of government wherein the provinces were given more autonomy. The Central Legislature was to comprise two Houses - the Upper House or the Council of States and the Lower House or the Central Legislative Assembly. The ‘Diarachy’ which was earlier established in the Provinces was abolished but was introduced in the Centre. The executive authority of the Centre was vested in the Governor General (on behalf of the Crown) who had absolute power over defence, external affairs (Reserved Subjects). On other matters the Governor General was to act on the advice of a ‘Council of Ministers’.3.1.4 The Act stipulated that no Finance Bill could be placed in the Central Legislature without the consent of the Governor General. The Act further provided for three Lists -Existing Structure of Government of IndiaFederal, Provincial and Concurrent - for division of legislative functions between the Centre and the Provinces.3.2 The Constitutional Provisions3.2.1 The Constitution has provided an elaborate framework for the governance system in India. Part V, Chapter 1 deals with the Union Executive, Chapter II deals with the Parliament and Chapter IV deals with the Union Judiciary. The Executive Power of the Union vests in the President and is exercised by him either directly or through officers subordinate to him in accordance with the Constitution (Article 53). Article 74 provides that there shall be a Council of Ministers with the Prime Minister as the Head to aid and advise the President who shall, in the exercise of these functions, act in accordance with such advice. Article 75 provides that the Prime Minister shall be appointed by the President and the other Ministers shall be appointed by the President on the advice of the Prime Minister. Article 77 provides for the Conduct of Government Business:“77. (1) All executive actions of the Government of India shall be expressed to be taken in the name of the President.(2) Orders and other instruments made and executed in the name of the President shall be authenticated insuch manner as may be specified in rules to be made by the President, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the President.(3) The President shall make rules for the more convenient transaction of the business of the Government of India, and for allocation among Ministers of the said business.”3.2.2 Article 73 lays down the executive powers of the Union.“73. (1) Subject to the provisions of this Constitution, the executive power of the Union shall extend –(a) to the matters with respect to which Parliament has power to make laws; and4647Organisational Structure of Government of IndiaExisting Structure of Government of India(b) to the exercise of such rights, authority and jurisdiction as are exercisable by the Government of India by virtue of any treaty or agreement:Provided that the executive power referred to in sub-clause(a) shall not, save as expressly provided in this Constitution or in any law made by Parliament, extend in any State to matters with respect to which the Legislature of the State has also power to make laws.(2) Until otherwise provided by Parliament, a State and any officer or authority of a State may, notwithstanding anything in this article, continue to exercise in matters with respect to which Parliament has power to make laws for that State such executive power or functions as the State or officer or authority thereof could exercise immediately before the commencement of this Constitution.3.2.3 Exercising powers vested by virtue of Article 77, the President has made the “The Government of India (Allocation of Business) Rules”. The Rules stipulate that the business of the Government of India shall be transacted in the Ministries, Departments, Secretariats and Offices specified in the First Schedule to these rules (all of which are hereinafter referred to as “departments”). The distribution of subjects among the departments shall be as specified in the Second Schedule to these Rules. The manner in which the officers are required to help the Minister in discharge of his/her executive functions is governed by the Government of India (Transaction of Business) Rules. The Rules provide that all business allotted to a Department shall be disposed of by, or under general or special directions of, the Minister-in-charge, subject to certain limitations where consultation is required with other departments or where cases have to be submitted to the Prime Minister, the Cabinet and its Committees or the President. These Rules also provide for the constitution of the following Standing Committees of the Cabinet and each Standing Committee shall consist of such Ministers as the Prime Minister may, from time to time, specify. As of now, these Committees are:1. Appointments Committee of the Cabinet2. Cabinet Committee on Accommodation3.Cabinet Committee on Economic Affairs4. Cabinet Committee on Management of Natural Calamities5.Cabinet Committee on Parliamentary Affairs Cabinet Committee on Political Affairs6.Cabinet Committee on Prices7.Cabinet Committee on Security8.Cabinet Committee on World Trade Organisation Matters3.2.4 The Rules also provide for appointment of ad hoc Committees of Ministers for investigating and reporting to the Cabinet, and, if so authorized, for taking decisions on such matters. The Rules also stipulate that it shall be the responsibility of the Departmental Secretary, who shall be the administrative head thereof, to ensure observance of these Rules in the Department.3.3 The Structure of a Department3.3.1 The work of Government of India is distributed into different Ministries/ Departments.A Department has also been defined in the General Financial Rules as follows: “5. Department -(1) A department is responsible for formulation of policies of the government in relation to business allocated to it and also for the execution and review of those policies.(2) For the efficient disposal of business allotted to it, a department is divided into wings, divisions, branches and sections.(3) A department is normally headed by a secretary to the Government of India who acts as the administrative head of the department and principal adviser of the Minister on all matters of policy and administration within the department.(4) The work in a department is normally divided into wings with a Special Secretary/Additional Secretary/Joint Secretary in charge of each wing. Such a functionary is normally vested with the maximum measure of independent functioning and responsibility in respect of the business falling within his wing subject, to the overall responsibility of the Secretary for the administration of the department as a whole.4849Organisational Structure of Government of IndiaExisting Structure of Government of India(5) A wing normally comprises a number of divisions each functioning under the charge of an officer of the level of Director/Joint Director/Deputy Secretary. A division may have several branches each under the charge of an Under Secretary or equivalent officer.(6) A section is generally the lowest organisational unit in a department with a well-defined area of work. It normally consists of assistants and clerks supervised by a Section Officer. Initial handling of cases (including noting and drafting) is generally done by, assistants and clerks who are also known as the dealing hands.(7) While the above represents the commonly adopted pattern of organisation of a department, there are certain variations, the most notable among them being the desk officer system. In this system the work of a department at the lowest level is organised into distinct functional desks each manned by two desk functionaries of appropriate ranks e.g. Under Secretary or Section Officer. Each desk functionary handles the cases himself and is provided adequate stenographic and clerical assistance.” 43.3.2 The Secretary is the administrative head of a Department and in a Department, the structure may comprise Special Secretaries, Additional Secretaries, Joint Secretaries, Directors, Deputy Secretaries, Under Secretaries and Section Officers. The functions of each of these are spelt out in the Central Secretariat Manual of Office Procedure as follows:“(9) Functions of various levels of functionaries :(a) Secretary – A Secretary to the Government of India is the administrative head of the Ministry or Department. He is the principal adviser of the Minister on all matters of policy and administration within his Ministry/ Department, and his responsibility is complete and undivided.(b) Special Secretary/Additional Secretary/Joint Secretary – When the volume of work in a Ministry exceeds the manageable charge of a Secretary, one or more wings may be established with Special Secretary/Additional Secretary/Joint Secretary, incharge of each wing. Such a functionary is entrusted with the maximum measure of independent functioning and responsibility in respect of all business falling within his wing subject, to the general responsibility of the Secretary for the administration of the wing as a whole.(c) Director/Deputy Secretary – Director /Deputy Secretary is an officer who acts on behalf of the Secretary. He holds charge of a Secretariat Division and is responsible for the disposal of Government business dealt within the Division under his charge. He should, ordinarily be able to dispose of the majority of cases coming up to him on his own. He should use his discretion in taking orders of the Joint Secretary/Secretary on more important cases, either orally or by submission of papers.(d) Under Secretary – An Under Secretary is in charge of the Branch in a Ministry consisting of two or more Sections and in respect thereto exercises control both in regard to the despatch of business and maintenance of discipline. Work comes to him from the sections under his charge. As Branch Officer he disposes of as many cases as possible at his own level but he takes the orders of Deputy Secretary or higher officers on important cases.”3.3.3 Each Department may have one or more attached or subordinate offices. The role of these offices are:'“6.2 Attached and Subordinate offices -(1) Where the execution of the policies of the government requires decentralisation of executive action and/or direction, a department may have under it executive agencies called `Attached’ and `Subordinate’ offices.(2) Attached offices are generally responsible for providing executive direction required in the implementation of the policies laid down by the department to which they are attached. They also serve as repository of technical information and advise the department on technical aspects of question dealt with by them.(3) Subordinate offices generally function as field establishments or as agencies responsible for the detailed execution of the policies of government. They function under the direction of an attached office, or where the volume of executive direction involved is not considerable, directly under a department. In the latter case, they assist the departments concerned in handling technical matters in their respective fields of specialisation.”50514Central Secretariat Manual of Office Procedures. Retrieved from on 20-2-09'Central Secretariat Manual of Office Procedures. Retrieved from on 20-2-09Organisational Structure of Government of IndiaExisting Structure of Government of India3.3.4 Besides, the attached and subordinate offices there are a large number of organizations which carry out different functions assigned to them. These may be categorized as follows:6“1. Constitutional Bodies : Such bodies which are constituted under the provisions of the Constitution of India.2.Statutory Bodies : Such bodies which are established under the statute or an Act ofParliament.3.Autonomous Bodies : Such bodies which are established by the Government todischarge the activities which are related to governmental functions. Although such bodies are given autonomy to discharge their functions in accordance with the Memorandum of Associations etc., but the Government’s control exists since these are funded by the Government of India.4.Public Sector Undertakings: Public Sector Undertaking is that part of the industrywhich is controlled fully or partly by the Government. These undertakings have been set up in the form of companies or corporations in which the shares are held by the President or his nominees and which are managed by Board of Directors which includes officials and non-officials.”3.4 Reforms since Independence3.4.1 Efforts to reform the structure of Government of India can be traced back to the early Fifties. In 1952, a Special Reorganisation Unit was constituted to economise on staff. Later on this unit was entrusted the task of using ‘work study’ techniques to scientifically evolve norms for work. In 1954, a Central Organisation and Management (O&M) Division was set up in the Cabinet Secretariat. This was followed by creation of O&M units in several Ministries. The main purpose of establishing these divisions was to streamline procedures and improve efficiency. The Planning Commission also set up a committee to evolve organizational norms for execution of plan projects. In order to provide a more focussed approach for reforms, the Government created the Department of Administrative Reforms within the Ministry of Home Affairs, in 1964.3.4.2 During 1966, the First Administrative Reforms Commission undertook a comprehensive task of examining the machinery of Government of India and its procedures of work. Its major recommendations were:7Chapters I and II1.(1) (a) The number of Ministers in the Union Cabinet should be 16,including the Prime Minister.(b) Each Department/subject should be represented in the Cabinet by one or the other Cabinet Minister. The sixteen Cabinet portfolios may be as indicated in para 15.(c) The strength of the Council of Ministers should normally be 40. It may be increased in special circumstances but should in no case exceed 45.(2) The three-tier system in the ministerial set-up, comprising Cabinet Ministers, Ministers of State and Deputy Ministers, may continue. The office of Parliamentary Secretary, which has now fallen into disuse, need not be revived.(3) The functions and responsibilities of Ministers of State and Deputy Ministers and the powers which they may exercise within a Department or a Ministry should be clearly specified in the appropriate rules and orders.(4) The Prime Minister should consult the Cabinet Minister concerned before assigning a particular Minister of State or Deputy Minister to his Ministry.(5) No more than two Ministers should be involved in the decision making process in any Ministry.2.(1) The Prime Minister should be given institutional support, in the form ofDeputy Prime Minister, for ensuring efficient and effective functioning of the governmental machinery. The Deputy Prime Minister should have the charge, in addition to his own portfolio, of such subjects and ad hoc assignments as the Prime Minister considers appropriate. The office of the Deputy Prime Minister should be recognized in the Transaction of Business Rules.(2) The Prime Minister should continue to be associated with key-appointments. He should periodically, say, once a month, meet, individually or in groups the Secretaries of important departments.52536Extracted from the Central Secretariat Manual of Office Procedure 7Subject to note of dissentOrganisational Structure of Government of IndiaExisting Structure of Government of India(3) A Minister should take a holiday of at least two weeks in a year which he should devote to reading, reflection and relaxation.7.The initial and annual statements of their financial assets and liabilities to befurnished by the Ministers under the Code of Conduct should be made available to the Lokpal. If any Minister fails to furnish such a statement the fact should be mentioned by the Lokpal in his annual report to Parliament. Suitable provision to this effect may be made in the Lokpal Bill which is now before Parliament.8.(1) All major decisions, with reasons therefore, should be briefly reduced towriting, particularly where the policy of Government is not clear or where some important departure from the policy is involved or where the Minister differs from the Secretary on an important issue.(2) Ministers should try to develop a climate of fearlessness and fairplay among the senior offices and encourage them to give frank and impartial advice. They should give the Secretaries the necessary guidance in carrying out their policies and orders.(3) The Prime Minister should, with the assistance of the Cabinet Secretary and the central personnel agency, take special interest to arrest the growth of unhealthy personal affiliations to individual Ministers among civil servants.(4) Ministers should not intervene in the day-to-day administration except in cases of grave injustice, serious default or maladministration on the part of civil servants. Where a citizen’s request or complaint calls for revision of a rule, procedure or policy, it should be met by effecting such revision, and not by relaxing the rules to accommodate an individual case.(5) Secretaries and other civil servants need to show greater sensitivity to and a better appreciation of the Minister’s difficulties, and to discriminate between minor adjustments on the one hand, and acts of political and other forms of accommodation compromising basic principles or likely to have substantial or lasting repercussions on efficiency and morale of the services, on the other.(6) The official relationship of the Secretary to the Minister should be one of loyalty and that the Minister to the Secretary one of confidence.9.(1) A Minister should be held accountable – (a) when he fails to formulatepolicy in respect of a major problem or when the policy formulated is found erroneous or suffers from major weaknesses; (b) when he neglects to pay(3) The Prime Minister should not ordinarily be in charge of a Ministry. His time should mostly be available for guidance, coordination and supervision.3.(1) The existing Standing Cabinet Committees should be reconstituted asproposed in para 29-30. The Committees should between them cover all important activities of Government. The membership of each Committee should not normally exceed six and should include all Ministers in charge of subjects covered by the Committee.(2) Every Standing Committee of Cabinet should be supported by a Committee of Secretaries which will consider in advance all matters to be taken up in the Cabinet Committee.(3) Ad hoc Committee of Ministers may be set up for investigating (but not deciding) particular issues and reporting to the Cabinet or the appropriate Cabinet Committees, as the case may be.4.(1) The role of the Cabinet Secretary should not be limited to that of acoordinator. He should also act as the principal staff adviser of the Prime Minister, the Cabinet and the Cabinet Committees on important policy matters.(2) The Cabinet Secretary should ordinarily have a tenure of three to four years.Chapter III – Relations between Ministers, Civil Servants and Parliament5.The Prime Minister should meet all Ministers individually or in group every monthto discuss progress in implementation of policies and programmes and measures for improving the administrative efficiency. This should help promote a more active interest on the part of individual Ministers in improving the implementation process and the management of their Ministries.6.(1) In selecting his colleagues, the Prime Minister should give special attentionto considerations of political stature, personal integrity, intellectual ability and capacity for taking decisions and sustained application to work.(2) In assigning a portfolio, due regard should be paid to the aptitude and capabilities of an incumbent.5455Organisational Structure of Government of IndiaExisting Structure of Government of Indiapersonal attention on important issues other than that of policy where such attention is expected of him or wrongly handles such issues; (c) when there is a general or major mismanagement or maladministration in his Department/ Ministry; and (d) when he commits some act of impropriety.(2) A Minister should not be held accountable for an act of a civil servant which is (a) in express violation of a directive or order issued by him; or (b) by implication prohibited by policies already approved by him; or (c) is mala fide.(3) For reinforcing the principle of collective responsibility, it is essential that (a) the Cabinet should; (b) a Minister does not announce a new policy or a major departure from current policy or a major departure from current policy with the approval of the Cabinet; and (c) a Minister should not ordinarily speak or make announcements on matters not within his portfolio. However, if the circumstances so require of him, he must bet himself properly briefed by the Minister concerned.(4) Standing Committees of Parliament may be set up for reviewing the work of Departments grouped in five sectors, namely, Social Services, Economic Administration, Defence and Foreign Affairs, Food and Rural Development and Transport. These Committees should function on the lines of the Committee on Public Undertakings and without taking over the functions of the Public Accounts Committee. To begin with, only two of the Committees need be set up. As the Estimates Committee is now doing for each Department the type of review which is proposed for the sectoral committee, it will be necessary to remove from the purview of the Estimates Committee the Departments which fall within the jurisdiction of the sectoral committee. Where a Parliamentary Committee for a Department exists, it should not be necessary to have an Informal Consultative Committee.Chapter IV – Ministries and Departments10. The role of Central Ministries and Departments in subjects falling within the State List should be confined to matters listed in para 85. An analysis should be made in the light of these criteria of the items of work now handled by the Central agencies; and such items as do not fulfil the criteria should be transferred to the States.11. (1) Non-secretariat organizations engaged primarily in planning, implementation, coordination and review of a single development programme or several allied programmes, covering a substantial area of the activities of the Ministry and having a direct bearing on policy-making should be integratedwith the Secretariat of the concerned Ministry. Such amalgamation, subject to criteria laid down in para 96, is especially significant in the case of activities of scientific and technical character and activities which call for a high degree of functional specialization.(2) The heads of non-secretariat organizations which are integrated with the Secretariat should function on the principal advisers to the Government in the respective areas and should enjoy a status appropriate to the nature of their duties and responsibilities. They may retain their present designations. It is not necessary to confer on them a formal ex-officio Secretariat status.(3) In all other cases, the present distinction between policy-making and executive organizations may be continued. Such distinction is vital for protecting the operational autonomy of the regulatory executive agencies and such developmental executive organizations as are mostly engaged in promotional activities, provision of a service or production and supply of a commodity.(4) Executive functions at present performed by an administrative Ministry or Department which do not have a close bearing on policy-making (in terms of the criteria enunciated in para 96) should be transferred to an appropriate, existing non-secretariat agency or to a new executive organization specially created for the purpose, provided that the volume of the work justifies its creation.(5) Policy position in Departments and Ministries dealing with scientific and technical matters or with functions of highly specialized character should include persons having relevant specialized experienced or expertise.12. (1) In non-staff Ministries other than those with board-type of top management, there should be a set up of three “staff” offices, namely, (i) an office of planning and policy; (ii) a chief personnel office; and (iii) a chief finance office. An administrative Department with a heavy charge or with functions which have no close affinity with the work of other department(s) may have a separate planning and policy office.(2) The office of planning and policy should include the planning cell recommended in the ARC Report on Machinery for Planning. This office should continuously be engaged in forwarding long-term policies, carrying out policy studies and evolving a series of well-articulated policy statements. It should also deal with the parliamentary work of the Department/Ministry.(3) The chief personnel office in a Ministry should serve as a focal point for the formulation ‘and coordination of overall personnel policies, initiating5657Organisational Structure of Government of IndiaExisting Structure of Government of India58measures for promoting personnel development and matters concerning discipline, appears, memorials and service rules of cadres administered by the Ministry. It may also look after office management, O&M and general administration.(4) Each of the three “staff” offices should be manned by staff having specialized knowledge and experience. The head of each “staff” office should generally be of the rank of a Joint Secretary though, in some cases, he may even be a Deputy Secretary or an Additional Secretary depending on the quantum of work.(5) In addition to the three “staff” offices, each Ministry should have a public relations office or unit.(6) The heads of the “substantive work” wings may deal directly with the chiefs of the three “staff” offices, as also with the Secretary and Minister on matters of technical or operational policy. Proposals having a bearing on long-term policy should, however, be processed through planning and policy office.13. (1) Distribution of work between the wings of a Ministry/Administrative Department and within the divisions of a Secretariat wing should be based on considerations of rationality, manageability of change and unity of command.(2) Each secretariat wing should have its separate identity and its budget should appear as a distinct unit in the budget of the Ministry. Its head should enjoy adequate administrative and financial powers.(3) The head of the wing should have the primary responsibility for good administration within the wing, effective supervision and control of staff and maintenance of high standards of discipline and conduct.(4) The head of the wing should have considerable say in formulation of the wing budget, creation of posts subject to budget provision, spending of budgeted funds and appointment of personnel to the wing and their transfer therefrom. He should also have the necessary powers for effective day-to-day personnel management in the wing, e.g., powers to sponsor staff for training, to grant honorarium, to impose minor penalties and to fill short-term vacancies.14. (1) (a) There should be only two levels of consideration below the Minister, namely, (i) Under Secretary/Deputy Secretary, and (ii) Joint Secretary/ Additional Secretary/Secretary. Work should be assigned to each ofthese two levels on the lines of “desk officer” system. Each level should be required and empowered to dispose of a substantial amount of work on its own and will be given the necessary staff assistance.(b) The staffing pattern within a wing may be flexible to facilitate the employment of officers of various grades.(c) The duties and requirements of various jobs in the Secretariat at each of the two levels should be defined clearly and in detail on the basis of scientific analysis of work content.(2) For smooth and effective working of the proposed “desk officer” system, the following measures will be necessary:?introduction of a functionalfile index;?maintenance of guard files or card indices which will contain all important precedents;?adequate provision for “leave” reserve; and?adequate stenographic and clerical aids.(3) (a) There should be set up in each Ministry or major administrative Department a Policy Advisory Committee to consider all important issues of long-term policy and to inject thinking inputs from different areas of specialization into problem solving. The Committee should be headed by the Secretary of the Ministry and should include the heads of the three “staff” offices (of planning and policy, finance and personnel) and heads of important substantive work wings (including those of the non-secretariat organizations integrated with the Ministry/Administrative Department). As and when necessary, the heads of the governing bodies of important research and training institutions and boards and corporations outside the Government may be co-opted as members of the Policy Advisory Committee for such items of work as are of interest to them.(b) Self-contained papers or memoranda, setting out problems, their various alternative solutions, merits and demerits of each alternative, etc. should be prepared for consideration by the Committee, and the decision arrived at should be duly recorded in minutes.59Organisational Structure of Government of IndiaExisting Structure of Government of IndiaChapter V – Administrative Reforms – Formulation and Implementation15. (1) The Department of Administrative Reforms should confine itself mainly to: (a) studies on administrative reforms ofa foundational character, (b) building up O & M expertise in Ministries/Departments and training the personnel of their O & M; units in modern techniques of management, and (c) advice and guidance to these O & M units in effecting administrative improvements and reforms.(2) The existing O & M units in different Ministries/Departments should be reactivised.(3) A special cell on ‘perspective reforms’ should be set up in the central reforms agency.(4) In its methods of work, staffing pattern and organizational structure of the central reforms agency should be ‘research-oriented’.(5) The Department of Administrative Reforms should be placed directly under the Deputy Prime Minister.(6) It is necessary to develop strong, autonomous professional institutions which will promote original thinking on administrative reforms and innovations. Studies on administrative reforms and improvements of the types mentioned in para 149 can be entrusted, with advantage, to autonomous professional institutions like the Indian Institute of Public Administration, Institute of Applied Manpower Research, Administrative Staff College of India (Hyderabad), and Indian Institutes of Management at Calcutta and Ahmedabad and selected Universities.(7) There should be a set up of a council on administrative reforms to advise the central reforms agency on the planning of its programme of work, to review progress, to help induct fresh thinking into its working, and to coordinate the activities of the different professional organizations engaged in research on problems of public management. The Council should consist of eight members, drawn from Members of Parliament, experienced administrators and eminent scholars interested in public administration. It may be presided over by the Deputy Prime Minister.16. (1) The responsibility for overseeing the implementation of the recommendations of the Administrative Reforms Commission should rest with the Deputy Prime Minister.(2) Before the Cabinet takes up a report of the Commission, it should be considered by the Cabinet Committee on Administration.(3) A Special Cell should be set up in the Cabinet Secretariat under the overall charge of the Deputy Prime Minister and the general supervision of the Cabinet Secretary, to process the Commission’s Reports. It should also assist the Deputy Prime Minister in overseeing the implementation of the accepted recommendations.(a) After the Ministry/Ministries have communicated their views, the Special Cell in the Cabinet Secretariat should, under the direction of the Deputy Prime Minister, prepare the necessary papers for the Cabinet Committee on Administration.(b) Within a Ministry/Department, the Commission’s recommendations should be dealt with at a high level.(4) Within three months of the receipt of a Report of the Commission, Government should place it before Parliament a White Paper indicating their decisions on the basic recommendations contained in that Report.(5) There should be a set up of an all-party Parliamentary Committee of both Houses whose function will be to see that the recommendations accepted by the Government are implemented expeditiously.Chapter VI – A Central Personnel Agency17. (1) A separate Department of Personnel should be set up, with a full Secretary in charge who should work under the general guidance of the Cabinet Secretary.(2) This Department should have the following functions and responsibilities:(a) formulation of personnel policies on all matters common to the Central and All-India Services, and inspection and review of their implementation;(b) talent hunting, development of personnel for “senior management” and processing of appointment to senior posts;(c) manpower planning, training and career development;(d) foreign assistance programme in personnel administration;6061Organisational Structure of Government of IndiaExisting Structure of Government of India(e) research in personnel administration;(f) discipline and welfare of staff and machinery for redress of their grievances;(g) liaison with the Union Public Service Commission, State Governments, Professional Institutions, etc.; and(h) staffing of the middle-level positions in the Central Secretariat (of Under Secretaries and Deputy Secretaries) with the assistance of and on the advice of the Establishment Board.(3) (a) The Department of Personnel should not itself administer any service cadre. The administrative control of different service cadres should vest with individual Ministries and Departments concerned.(b) The administration of the IAS, IPS and the centralized aspects of the Central Secretariat Service should be the responsibility of the Ministry of Home Affairs.(c) The management of the Indian Economic Service and of the Indian Statistical Service should be transferred to the Department of Economic Affairs.(4) The Cabinet Secretary should, by convention, be regarded as Secretary-General of the new Department of Personnel, without being formally so designated. He should be activily involved in the development of and selection for “senior management” but not in appointments below that level.(5) The new Department of Personnel should be placed directly under the Prime Minister.(6) An Advisory Council on Personnel Administration may be set up to act as a feederline of new ideas and thinking on personnel administration. It should be composed of official and non-official experts in different aspects of personnel management, drawn from all over the country.(7) The Establishment Board should be located in the new Department of Personnel and the Secretary of this Department should be its Chairman. The Board should deal with appointments only up to and including Deputy Secretaries.Chapter VII – Grouping of Subjects18. (1) (A) Ministries and Departments in the Government of India as presently constituted should be reorganized into Ministries and Departments as indicated in para 192.(B) In particular –(i) As recommended earlier –(a) A new Department of Personnel should be created under the Prime Minister’s charge with functions as indicated in para 182 of Chapter VI of this Report.(b) The Department of Administrative Reforms should be under the charge of the Deputy Prime Minister (vide para 147, Chapter V).(ii) The Research and Development Organization of the Ministry of Defence should be located in the main Ministry and not in one of its Departments.(iii) The Department of Revenue and Insurance should be reorganized as the Department of Revenue and Expenditure.(iv) (a) “Insurance” should be transferred to the Department of Economic Affairs.(b) The present functions of the Department of Statistics in the Cabinet Secretariat should be transferred to the Department of Economic Affairs in the Ministry of Finance.(c) The Department of Economic Affairs should be responsible for coordination of all activities of Government in the economic field. The Commission for Prices, Cost and Tariff (the establishment of which has been recommended earlier in the Report on Economic Administration) should be administratively related to the Department of Economic Affairs.(v) The Department of Company Affairs should be shifted from the Ministry of Industrial Development and Company Affairs to the Ministry of Finance.6263Organisational Structure of Government of IndiaExisting Structure of Government of India(vi) External Publicity should be transferred to the Department of Information and Broadcasting (now a Ministry).(a) The combined Ministry of Commerce and Industry should have two Departments: (a) Department of Commerce and (b) Department of Industrial Development.(b) The Council of Scientific and Industrial Research should be placed in the combined Ministry of Commerce and Industry.(vii) The Advisory Committee to the Cabinet on Science and Technology should serve as the central point for advising the Cabinet on science policy, setting priorities and planning and review of scientific and technological research. It should have a permanent secretariat to service it.(viii) The Ministry of Transport and Shipping and the Ministry of Tourism and Civil Aviation should be combined into a single Ministry of Transport and Tourism.(ix) “Communications” should be transferred to the Ministry of Information and Broadcasting to form the Ministry of Communication, Information and Broadcasting.(x) The charge of the Department of Parliamentary Affairs should be held by a Cabinet Minister who is the Leader of the House (Lok Sabha).(xi) A Directorate of Construction should be set up in the Department of Works and Housing, charged with functions indicated in para 224.(xii) The Ministry of Steel, Mines and Metals and the Ministry of Petroleum and Chemicals should be integrated into a single Ministry of Metals, Chemicals and Oil.(xiii) The Department of Community Development and the Department of Cooperation should be merged together to form the Department of Community Development and Cooperation.(xiv) The Department of Food, the Department of Agriculture and the combined, new Department of Community Development and Cooperation should constitute together the Ministry of Food and Rural Development.(xv) (a) The Department of Rehabilitation should be merged into the Department of Social Welfare.(b) The Ministry of Health, Family Planning and Urban Development, Department of Social Welfare and Ministry of Education should be amalgamated to form a new Ministry of Education, Health and Social Welfare.(xvi) A Bureau of Youth Services should be set up in the Ministry of Education, Health and Social Welfare.(xvii) The present functions of the Ministry of Home Affairs in judicial administration should be transferred to the Department of Legal Affairs in the Ministry of Law and this Ministry should be redesignated as Ministry of Law and Justice.(2) Responsibility for overall coordination within a Ministry which has more than one department/Secretary, should be specifically assigned to one of the Departments/ Secretaries most appropriate for this purpose.3.4.3 The Fifth Central Pay Commission laid emphasis on downsizing of the government. It stated:Optimization of the Government machinery, rightsizing of Government, work-force size control - these are various facets of the same problems. It must have been noticed that reduction in the overall size of the bureaucracy is the underlying idea behind all the civil services reforms... that we have advocated in the preceding chapters. Here we would like to gather all the threads and describe the overall strategy in clear-cut terms. We would like to divide the overall strategy into four main sections as under:Reduction in quantum of worka)Suggestions that will lead to reduction in the quantum of work left with theCentral Government. We have to:i)Ascertain tasks that need not be done by Governmentii) Pass on tasks to State Governmentsiii) Transfer certain tasks to corporate entities in public sectoriv) Contract out tasks to the private sectorv)Transfer some entities to the cooperative sectionvi) Convert some institutions into autonomous bodies6465Organisational Structure of Government of IndiaExisting Structure of Government of IndiaReduction due to organizational restructuringb) Suggestions that will lead to reduction in number of organizational employees required, because of organisational restructuring. These include:i)Reduction in number of Ministries and Departmentsii) Introduction of officer-oriented system in Governmentiii) Dellayering and level-jumpingiv) MultiskillingReduction due to induction of technologyc)Suggestions that will reduce the necessity for so many employees due toinduction of technological change in Government. These include:i) Computerizationii) Office automationiii) Creation of a paperless officeiv) Changes in office systems and file management Rightsizing strategiesd) Rightsizing strategies that will enable Government to shed some fat. These include:i)Abolition of vacant postsii) Freeze on recruitmentiii) Across the board cutiv) Statutory control on creation of new postsv)Voluntary retirementvi) Compulsory retirement 3.4.4 The Expenditure Reforms Commission (ERC, 2000) examined the structure of various Ministries/Departments. The ERC was of the view that the entire gamut of the Union Government functioning on the civilian side had to be examined de novo and redetermined in the light of four key criteria- (i) Does this need to be done; (ii) Does this need to be done by government; (iii) Does this need to be done by the Union Government; (iv) If it is to be done by the Union Government, which ministry/ department/ organisation is best suited for doing it. It expressed concern at the rapidly increasing financial burden caused by the increasing staff strength and was of the view that a drastic downsizing of the government staff strength becomes necessary not only for securing modern and professional governance as visualised by the Fifth Central Pay Commission, but also to ensure that the burgeoning salary bill does not pre-empt scarce resources, that could otherwise be applied to priority areas like infrastructure development, human resource development and poverty alleviation. The ERC made the following recommendations:(1) A cut of 10% of the staff as on 1.1.2000 to be carried out by the year 2004-05.(2) A screening committee consisting of secretary of the concerned ministry, a representative of DOP&T and a representative of Department of Expenditure should prepare annual direct recruitment plan for all cadres, with the approval in respect of Group A posts, being accorded by a committee consisting of the Cabinet Secretary, concerned secretary, Secretary (DOP&T) and Secretary (Expenditure).(3) There should be a total ban on creation of new posts for two years.(4) Staff declared surplus should be transferred to the Surplus Cell to be redesignated as the Division of Retraining and Deployment, who will pay their salary, retirement benefits etc. In these centres, where the number of surplus staff is quite small, the present practice of the parent organizations making these payments may be continued.(5) Surplus staff should be made eligible for a liberal Voluntary Retirement Scheme recommended by the Fifth Central Pay Commission with the exception that commutation entitlements will be as at present and the ex-gratia amount will be paid in monthly installments covering a five-year period.(6) Those who do not opt for Voluntary Retirement Scheme and are not redeployed within one year will be discharged from service.(7) Redeployment of Group D will be handled by DOP&T and not DGET.6667Organisational Structure of Government of India(8) Group A officials opting for Voluntary Retirement Scheme will not be required to seek approval for commercial employment after retirement.3.4.5 The Sixth Central Pay Commission (2008) also suggested a number of measures for improving the performance of government servants. It introduced the concept of running pay bands. The Sixth CPC itself cited the following as one of the benefits of having a running pay band system:“the model will make the Government organization less hierarchical. While, initially grade pay will be payable as per the hierarchy, however, Government will have the flexibility to remove layers by removing specific grade pay. In the long run the model can be suitably adjusted to remove even the element of grade pay thereby ensuring total delayering of the Government structure facilitating quick decisions and increased output.”3.5 Strengths and Weaknesses of the Existing Structure3.5.1 The existing structure of the Government of India has evolved over a long period. It has certain inherent strengths which have helped it stand the test of time. However, there are weaknesses also which render the system slow, cumbersome and unresponsive.Strengthsa.Time Tested System – adherence to rules and established norms: TheGovernment of India has evolved an elaborate structure, rules and procedures for carrying out its functions which have contributed to nation building and the creation of an inclusive state. These have ensured stability both during crises as well as normal times. At the same time, where considered essential, innovative structures have been created in form of empowered commissions, statutory boards, autonomous societies and institutions especially in the fields related to research, science and technology.b.Stability: The structure of Government staffed by the permanent civilservants has provided continuity and stability during the transfer of power from one elected government to the other. This has contributed to the maturing of our democracy.Existing Structure of Government of mitment to the Constitution – political neutrality: The well laid down rulesand procedures of government have upheld the neutrality of the civil services and prevented politicisation of government programmes and services. This has helped in the evolution of institutions based on the principles enshrined in the Constitution.d. Link between policy making and its implementation: The framework of the Government of India has facilitated a staffing pattern which promotes a link between policy making and implementation. This has also helped the structure of both the Government of India and the States and promoted the concept of cooperative federalism.e.A national outlook amongst the public functionaries: Public servants workingin Government of India as well as its attached and subordinate offices have developed a national outlook transcending parochial boundaries. This has contributed to strengthening national integration.Weaknessesa.Undue emphasis on routine functions: The Ministries of Government of India areoften unable to focus on their policy analysis and policy making functions due to the large volume of routine work that they are saddled with. This leads to national priorities not receiving due attention. Often, functions which are best carried out by the State or Local Governments or could easily be outsourced continue to be retained with the Union Government.b.Proliferation of Ministries/Departments - weak integration and coordination: Thecreation of a large number of Ministries and Departments sometimes due to the compulsion of coalition politics has led to illogical division of work and lack of an integrated approach even on closely related subjects. It has been observed that the Ministries/Departments often carve out exclusive turfs and tend to work in isolated silos. This, at times, detracts from examination of issues from a wide national perspective and in an integrated manner.c.An extended hierarchy with too many levels: Government of India has an extendedvertical structure which leads to examination of issues at many levels frequently causing delays in decision making on the one hand and lack of accountability on the other. Another noteworthy feature of the structure is that several levels are redundant as they do not contribute to the decision making process.6869d.Risk avoidance: A fall-out of a multi-layered structure has been the tendencytowards reverse delegation and avoidance of risk in decision making. Another aspect of the existing structure is an increasing emphasis on consultations through movement of files as a substitute for taking decisions. This leads to multiplication of work, delays and inefficiency.e.Absence of team work: The present rigid hierarchal structure effectively rulesout team work so necessary in the present context where an inter-disciplinary approach often is the need of the hour to respond effectively to emerging challenges.f.Fragmentation of functions: At the operational level also, there has been a generaltrend to divide and subdivide functions making delivery of services inefficient and time-consuming. Several decades ago, this was captured in a telling manner in a Shankar Cartoon, of an official being appointed as “Deputy Assistant Director General, Envelopes (Glue)”!g.Except in the case of a few committees and boards, there has been considerableweakening of the autonomy conceived at the time of their anisational Structure of Government of IndiaCORE PRINCIPLES OF REFORMING THE STRUCTURE OF GOVERNMENT44.1 Core Principles of Reforming the Structure of Government4.1.1 The extensive discussions and consultations that the Commission has had, the studies it has made (as detailed in its earlier Reports) and the experience of its own working lead to the conclusion that, over the years, the weaknesses listed in the previous Chapter have become stronger and the strengths have been diluted. As part of comprehensive administrative reforms, there is urgent need to reform the structure in order to reverse this trend. A major and basic restructuring is essential to combat the evils of fragmentation, narrow departmentalism, concentration of powers and micro-management at the higher levels which leads to inordinate delays and lack of accountability. The Commission feels that the following core principles should govern the restructuring of the Government of India:a.The Union Government should primarily focus on the following core areas:i.Defence, International Relations, National Security, Justice and rule of lawii.Human development through access to good quality education and healthcare to every citizeniii. Infrastructure and sustainable natural resource developmentiv.Social security and social justicev.Macro-economic management and national economic planningvi.National policies in respect of other sectorsb.The principle of subsidiarity should be followed to decentralise functions toState and Local Governments.c.Subjects which are closely inter-related should be dealt with together: In anyorganization, functional division is inevitable but it should not be at the cost7071Organisational Structure of Government of Indiaof an integrated approach towards organizational goals. It is therefore necessary that while structuring Government into Ministries and Departments, a golden mean between the need for functional specialization and the adoption of an integrated approach is adopted. This would involve an in-depth analysis of all the government functions followed by their grouping into certain key categories to be linked to a Ministry.d.Separation of policy making functions from execution: In any large organization,the imperative of efficient management requires that higher echelons concentrate more on strategic decisions and policy making whereas the lower echelons focus on operational decisions and implementation of policies. In the context of Government, this would require the Ministries to give greater emphasis to the policy making functions while delegating the implementation functions to the operational units or independent organizations/agencies. This is all the more necessary because policy making today is a specialized function which requires a broader perspective, conceptual understanding of the domain and proper appreciation of the external environment. Implementation of the policies on the other hand require in-depth knowledge of the subject and managerial skills.e.Coordinated implementation: Coordination is essential in implementationas in policy making. The proliferation of vertical departments makes this an impossible task except in cases where empowered commissions, statutory bodies, autonomous societies have been created. There is considerable scope for more of such inter-disciplinary bodies in important sectors. This should be pursued urgently. In cases where these already exist, the tendency to reduce their autonomy should be reversed.f.Flatter structures - reducing the number of levels and encouraging team work:The structure of an organization including those in government should be tailor-made to suit the specific objectives it is supposed to achieve. The conventional approach in the Government of India has been to adopt uniform vertical hierarchies (as prescribed in the Manual for Office Procedure). There is a need to shift to flatter organizations with greater emphasis on team work.g.Well defined accountability: The present multi-layered organizational structurewith fragmented decision making leads to a culture of alibis for non- performance. The tendency to have large number of on file consultations, often unnecessary, lead to diffused accountability. A clearer demarcationCore Principles of Reforming the Structure of Governmentof organizational responsibilities would also have helped in developing a performance management system for individual functionaries.h.Appropriate delegation: A typical characteristic of a government organizationis the tendency to centralize power and avoid delegation of authority to subordinate functionaries or units. However, this leads to delays, inefficiency and demoralization of the subordinate staff. The principle of subsidiarity should be followed to locate authority closer to the citizens.i.Criticality of operational units: Government organizations have tended to becometop-heavy coupled with fragmentation and lack of authority, manpower and resources at the operational levels that have a direct bearing on citizens’ lives. Rationalization of Government staff pattern is necessary, commensurate with the requirements of the citizens.4.2 Recommendationa. The core principles mentioned in paragraph 4.1 should govern the restructuring of Government of India.7273The Structure of Government of India at the Apex5 THE STRUCTURE OF GOVERNMENT OF INDIA AT THE APEX 5.1 Rationalising the Functions of Government5.1.1 Kautilya in his treatise, Arthasastra, while describing the virtues of a king, had stated “In the happiness of his subjects lies his happiness, in their welfare his welfare, whatever pleases himself he shall not consider as good but whatever pleases his subjects, he shall consider as good”.5.1.2 Government in the pre-Independence period was primarily concerned with enforcement of law, collection of taxes, defence and administration of justice. It also took up some welfare measures for society. After Independence, the Constitution provided the framework for a democratic welfare state with the Directive Principles providing the essence of good governance. In order to achieve the objectives set by the founding fathers of the Constitution, the structure of the government was recast. New departments and organizations were established to discharge various responsibilities. In general, there was a wide expansion in the role, function and structure of government. This expansion was necessitated because of the following reasons:i.to fulfil the mandate given by the Directive Principles and to meet the developmental aspirations of the people.ii.to attend to special problems of a region or a particular section of the society.iii. to expand the reach of government. iv.to provide a fillip to the economy.v.to meet the emerging challenges.5.1.3 It has been argued that often government assumes roles and carries out functions which could be carried out more efficiently and effectively by agencies outside government. There is also a school of thought which feels that some of the functions of the Union Government should be entrusted to State Governments and similarly a large number offunctions currently carried out by the State Governments should be assigned to the local governments.5.1.4 With the ushering in of economic liberalization, the span of the regulatory role of the government gets reduced while that of facilitating role is enhanced – government need not row the ship but merely steer it. Added to this is the use of modern technology-especially computers and communications – which have rendered old structures obsolete.5.1.5 The issue regarding the types of functions that the government should perform has been examined by several Commissions/Committees in the past. The First Administrative Reforms Commission while examining the role of the Union Government in respect of matters falling within the ambit of State Governments stated that:“... we are of the view that the role of the Centre in areas which are covered by the State List of subject in the Constitution should be largely that of a pioneer, guide, disseminator of information, overall planning and evaluator. The Centre, of course, cannot give up its general responsibility of overseeing that the broad national objectives embodied in the Constitution are achieved by the States. But that does not mean that the Central Government should take upon itself tasks and responsibilities which properly belong to the States or duplicated their functions. Except in the most essential areas and that too for a limited duration, the Centre should not take upon itself functions and responsibilities which are legitimately those of the States.”5.1.6 The First ARC recommended:“The role of Central Ministries and Departments in subjects falling within the State List should be confined to matters listed in para 85. An analysis should be made in the light of these criteria of the items of work now handled by the Central agencies; and such items as do not fulfil the criteria should be transferred to the States.”5.1.7 The Fifth Central Pay Commission identified the following areas as the legitimate province of the Union Government:?National security?International relations?Law and order?Management of economy at macro-level7475Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex?Setting up of infrastructure?Social services?Programmes for disadvantaged sections5.1.8 The Fifth Central Pay Commission further examined the structure of Government of India and recommended a new charter for the Union Government:?The Central Government would confine its activities only to the core functions mentioned in the Union List. Even here, an attempt could be made to prune the list.?Some items could be shifted from the Concurrent List to the State List. Education is one such major subject.?Matters which are itemized in the State List could be generally left to the States, with the Centre only dealing with certain minimal aspects of international relations, overall legislation and coordination.?The list of Centrally Sponsored Schemes could be brought down sharply to almost ten National Programmes, with the rest being transferred to the States.5.1.9 The Fifth Central pay Commission was of the view:“At the same time, it is recognised that there are functions currently performed by Government which ought to be given up. Direct participation in manufacturing, mining and economic services and direct control of economic activity in the private sector are two such major areas. Many countries have divested themselves of public sector enterprises which could be better run in the private sector in the areas of coal, steel, fertilizers, air, rail and road transport, tourism, hoteliering, banking, insurance, and so on. Some countries have turned to the private sector even in the traditionally super-sensitive areas of atomic energy, space and defence production. Where some activities have been retained in Government, they have been hived off into separate autonomous agencies with independence of functioning.All this has wide-ranging implications for the way the Central Government needs to be structured. The decisions that may require to be taken will be of the following broad types:(i) Some Ministries and Departments may have to be abolished altogether or amalgamated with other Ministries and Departments.(ii) The size of a Ministry or Department may have to be reduced drastically in order to fit it for the revised role that it has to perform....5.1.10 The Commission is, by and large, in agreement with the suggestions made by the Fifth Central Pay Commission and the Expenditure Reforms Commission. The Commission would like to reiterate that the Union Government should primarily focus on the core functions mentioned below:i.Defence, International Relations, Public Order, justice and rule of lawii.Human development through access to good quality education and healthcare to every citizeniii. Infrastructure and sustained natural resource developmentiv.Social security and social justicev.Macro-economic management and economic policyvi.National policies in other sectorsAlso, the principle of subsidiarity should be the guiding principle while deciding the level at which a particular function should be carried out.5.1.11 Recommendationsa. The Government of India should primarily focus on the core functions stated in paragraph 5.1.10.b. Government at all levels should be guided by the principle of subsidiarity.c.There is need to carry out a detailed analysis of the functions/activities in each Ministry/Department in the light of (a) and (b) above. This should be followed by restructuring which may include decentralization/delegation or hiving off activities.7677Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex5.2 Rationalising the Size of Government5.2.1 A closely linked aspect of the expansion of the functions of government is the increase in the size of the governmental workforce. It is often argued that government is overstaffed. The number of civilian posts of Government of India employees has increased from 17.37 lakh in 1957 to 29.82 lakh in 1971 and 37.87 lakh in 19848. According to the census of Central Government employees, the total employment under the Central Government was 41.60 lakh in 1991 and increased further to 43.51 lakh in 1995.5.2.2 The issue of overstaffing in government was examined by the Fifth Central Pay Commission. They observed:From the statistics it is difficult to any definite conclusion whether the bureaucracy as a whole is ‘bloated’ or not. It would be correct to conclude that the 71.7% increase in the number of sanctioned posts between 1957 and 1971 was probably not justified. But the fact that this percentage growth rate came down sharply to 27% between 1971 and 1984 and then to a remarkably low figure of 10.3% between 1984 and 1994 shows that Government has acted to contain its fat. If the extra pounds have not been shed, at least the rate of growth has been markedly arrested. Even the very modest increase of 1% per annum is more due to the jump in the size of the uniformed forces. The armed forces grew at a compound annual growth rate of 1.4% between 1981 and 1991 and the Central Police Forces by more than 5% annually between 1986 and 1994. The Ministries of Communications and Railways sanctioned 70,000 and 41,000 additional posts during 1984-94 and contributed to the increase.5.2.3 However, the Fifth Central Pay Commission felt that control of the size of the workforce was still essential because of various measures like rationalizing of functions, organizational restructuring and induction of modern technology. Accordingly, it recommended a freeze on recruitment after abolition of 3.5 lakh vacant posts, across the board 30% cut over 10 years and statutory controls over creation of new posts etc.5.2.4 Subsequently, the Expenditure Reforms Commission recommended a further cut of 10% in the staff strength as on 1-1-2000, to be carried out by 2005, a system of approval of recruitment plans by a Screening Committee, a total ban on creation of new posts for a period of two years, creation of surplus cell for redeployment/training etc.5.2.5 The Commission is of the view that an optimum size of government workforce is essential for its effective functioning. While an oversized government may prove to be a burden on the exchequer apart from breeding inefficiency, an understaffed governmentmay fail to deliver. Across the board, cuts and recruitment freezes have played a role in trimming the bloated workforce in government, especially when there is resistance to implement any rationalization of the staff strength. Such procrustean measures however have unintended consequences leading to shortages in departments that require officials for service delivery. The Commission has come across examples of skewed staffing patterns with inadequate field staff in many service delivery agencies, whereas positions at supervisory and headquarters levels were often overstaffed. It has also led to the undesirable system of short-term contract appointments of untrained persons. The Commission would like to emphasise that rationalizing the staff strength in government should be underpinned by the principle of criticality of the functions to be performed with respect to the objective of the organization rather than be driven by numbers.5.3 Reorganising the Ministries and Departments5.3.1 As in any other large organization, the structure of Government at the apex level reflects the complex tasks the process of governance involves. Given the varied nature of Government’s responsibility, it is inevitable that the structure of Government reflects a functional classification based on the nature of tasks performed by it. Governments in all countries are therefore organized into different Ministries and Departments that are entrusted with separate domains of responsibility such as defence, finance, health, education etc.5.3.2 The Commission examined the structure of Government in other democratic countries such as United Kingdom and the United States of America. In the UK the number of Cabinet Ministers is less than 25 as listed in Table 5.1.Table No. 5.1 : List of Ministerial Responsibilities in the United Kingdom9Sl.NoMinisterResponsibilities1Prime Minister, First Lord of the Treasury and Minister for the Civil ServiceThe Prime Minister is the head of the UK Government and is ultimately responsible for the policy and decisions of Government.As head of the UK Government the Prime Minister also oversees the operation of the civil service and Government agencies, appoints members of the Government, and is the principal Government figure in the House of Commons.2Secretary of State forThe Secretary of State holds overall responsibility for the business of the Department and its policies.Business, EnterpriseandRegulatoryReform78798Fifth Central Pay Commission9Extracted from Structure of Government of IndiaThe Structure of Government of India at the ApexTable No. 5.1 : List of Ministerial Responsibilities in the United Kingdom (Contd.)Sl.NoMinisterResponsibilities3Secretary of State for Children, Schools and FamiliesThe purpose of the Department for Children, Schools and Families is to make England the best place in the world for children and young people to grow up.The Secretary of State holds overall responsibility for the business of the Department and its policies.4Secretary of State for Communities and Local GovernmentThe Department of Communities and Local Government sets policy on local government, housing, urban regeneration, planning and fire and rescue.The Secretary of State leads on:?Overall responsibility for the Department and its policies including: public service agreement (PSA) targets; Departmental strategic objectives (DSOs); and expenditure issues?Empowering communities and citizens?Thames Gateway?Olympic Legacy5Secretary of State for Culture, Media and SportThe Department for Culture, Media and Sport aims to improve the quality of life for all through cultural and sporting activities, support the pursuit of excellence and champion the tourism, creative and leisure industries.The Secretary of State leads on:?Overall responsibility for all Departmental Policy?Comprehensive Spending Review6Secretary of State for DefenceHas overall responsibility for the business of the Department but specifically leads on:?Defence Policy and Planning and Budget Issues?Operations in Iraq and Afghanistan?Nuclear issues including Ballistic Missile Defence?Bilateral Defence Relations with North America, Western Europe and the Middle East?NATO and EU issues?Media and CommunicationsThe Secretary of State has overall responsibility for the business of the Department but specifically leads on:?Defence Policy and Planning and Budget IssuesTable No. 5.1 : List of Ministerial Responsibilities in the United Kingdom (Contd.)Sl.NoMinisterResponsibilities?Operations in Iraq and Afghanistan?Nuclear issues including Ballistic Missile Defence?Bilateral Defence Relations with North America, Western Europe and the Middle East?NATO and EU issues?Media and Communications7Secretary of State for Energy and Climate ChangeThe Department brings together much of the Climate Change Group, previously housed within the Department for Environment, Food and Rural Affairs (Defra), with the Energy Group from the Department for Business, Enterprise and Regulatory Reform (BERR).The Secretary of State has responsibility for the overall strategy of the department and leads the UK in key international and EU negotiations and overseas engagements.8Secretary of State for Environment, Food and Rural AffairsThe Department for Environment, Food and Rural Affairs (DEFRA) central purpose is to help build a low carbon, resource efficient economy, and help people to adapt to changes. DEFRA defends them from environmental risks and makes the most of the opportunity we now have to secure a sustainable society and a healthy environment. DEFRA’s main tasks are to secure a healthy environment for us all and defend against environmental risks; promote an economy that produces less carbon, and uses resources more efficiently; and ensure a thriving farming sector and a sustainable, healthy and secure food supply.The Secretary of State leads on:?Overall responsibility for all Departmental issues?Represents the UK at the EU Agriculture and Fisheries Council at the EU Environmental Council?Leads for the UK in other international negotiations on sustainable development9Secretary of State for Foreign and Commonwealth AffairsThe Foreign and Commonwealth Office works to promote the interests of the United Kingdom and to contribute to a strong world community. The Secretary of State leads on:?Overall responsibility for the work of the Foreign and Commonwealth Office?Policy Planning and Research Analysis8081Organisational Structure of Government of IndiaThe Structure of Government of India at the ApexTable No. 5.1 : List of Ministerial Responsibilities in the United Kingdom (Contd.)S.NoMinisterResponsibility?Communications?Honours10Leader of the House of Commons, Lord Privy Seal and Minister for Women and EqualityThe Government Equalities Office (GEO) is responsible for the Government’s overall strategy and priorities on equality issues. Its work includes: leading the development of a more integrated approach on equality across Government to increase opportunities for all; taking forward the Minister for Women’s priorities; taking forward work on the Equality Bill; sponsoring the Equality and Human Rights Commission and the Women’s National Commission; and supporting the work of the National Equality Panel.The Office of the Leader of the House of Commons is responsible for the arrangement of government business in the House of Commons and for planning and supervising the Government’s legislative programme. The Leader upholds the rights and privileges of the House and acts as a spokesperson for the Government as a whole.The Minister for Women and Equality has overall responsibility for the women and equality Agenda.11Secretary of State for HealthThe aim of the Department of Health (DoH) is to improve the health and well-being of people in England.The Secretary of State leads on:Overall responsibility for the work of the Department including:?NHS and social care delivery and systems reform?Finance and Resources?Strategic Communications12Secretary of State for the Home DepartmentThe Home Office leads a national effort to protect the public from terror, crime and anti-social behaviour. The Secretary of State leads on:?Overall responsibility for the business of the Department and its policies?Security?Counter-terrorism?Civil emergencies?Expenditure issuesTable No. 5.1 : List of Ministerial Responsibilities in the United Kingdom (Contd.)Sl.NoMinisterResponsibilities13Secretary of State for Innovation, Universities and SkillsOverall responsibility for developing, implementing and communicating policies to promote talent, research and innovation.14Secretary of State for International DevelopmentThe Department for International Development (DFID) is the UK Government Department responsible for promoting sustainable development and reducing poverty.15Secretary of State for Justice and Lord ChancellorThe Secretary leads on :?Overall strategy?Resourcing?Judicial appointments?Judicial diversity?Constitutional renewal?Lords reform?Party funding16Secretary of State for Northern IrelandThe role of the Northern Ireland Office (NIO) is to maintain and support the devolution settlement flowing from the Good Friday and St Andrews Agreements and to enable the devolution of justice and policing to occur as soon as the Northern Ireland Assembly requests it.The Secretary of State leads on:The role of the Northern Ireland Office (NIO) is to maintain and support the devolution settlement flowing from the Good Friday and St Andrews Agreements and to enable the devolution of justice and policing to occur as soon as the Northern Ireland Assembly requests it.17Leader of the House of Lords and Lord President of the CouncilThe responsibilities include:?Leading the Government front Bench in the House of Lords?Conduct of Government business in the Lords (jointly responsible with the Lords Chief Whip)?Repeating the Prime Minister’s statements in the Lords and speaking in the House on particular important debates?Giving guidance to the House on matters of order and procedure?Taking part in formal ceremonies in the House, such as the State Opening of Parliament8283Organisational Structure of Government of IndiaThe Structure of Government of India at the ApexTable No. 5.1 : List of Ministerial Responsibilities in the United Kingdom (Contd.)Sl.NoMinisterResponsibilities?Chair, Board of Trustees for Chequers and Dorneywood?As Lord President of the Council, responsible for the work of the Privy Council office. Presides over meetings of The Privy Council, signs draft Orders of Council, exercises on behalf of Her Majesty The Queen the jurisdiction of Visitor in respect of 17 Universities, is ex-officio Trustee for the National Portrait Gallery, and is Government spokesperson in the Lords on Privy Council, equalities and human rights issues.?As Lord President of the Council, one of six State Officer-holders who are ex-officio Commissioners of the Church of England.18Secretary of State for ScotlandThe Scotland Office, headed up by the Secretary of State for Scotland, is part of the Ministry of Justice, based in Whitehall, London. The Office’s key roles are to: represent Scotland’s interests at Westminster; and act as guardian to the Devolution Settlement.19Secretary of State for TransportThe Department for Transport (DfT) has four Departmental strategic objectives which focus on the core areas of its business. These are to:?Sustain economic growth and improved productivity through reliable and efficient transport networks.?Improve the environmental performance of transport.?Strengthen the safety and security of transport.?Enhance access to jobs, services and social networks, including the most disadvantaged. The Secretary of State leads on:?Overview of all policies?Strategy?Corporate issues20Chancellor of the ExchequerHM Treasury is the department responsible for formulating and putting into effect the UK Government’s financial and economic policy. The Treasury’s overall aim is to raise the rate of sustainable growth, and achieve rising prosperity, through creating economic and employment opportunities for all.The Chancellor of the Exchequer has overall esponsibility for the work of the Treasury.Table No. 5.1 : List of Ministerial Responsibilities in the United Kingdom (Contd.)Sl.NoMinisterResponsibilities21The Chief Secretary to the TreasuryLeads on:?Responsibility for public expenditure including Spending Reviews and strategic planning; in-year control; public sector pay and pensions; efficiency and value for money in public services; capital investment; public service delivery and performance?Treasury interest in devolution?Child poverty, welfare reform and oversight of the integration of the tax and benefit system?Assist the Chancellor where necessary on a wide range of economic, international and European issues23Secretary of State for WalesThe role of the Secretary of State for Wales and the Wales Office is to promote the devolution settlement for Wales, to promote the interests of Wales in policy formulation by the Government, to promote government policies in Wales, to steer through Parliament legislation giving specific powers to the National Assembly for Wales, to operate the constitutional settlement under the Government of Wales Act, 2006, to undertake Parliamentary business, and to deal with Royal matters.23Secretary of State for Work and PensionsThe Department for Work and Pensions (DWP) is responsible for delivering support and advice through a modern network of services to people of working age, employers, pensioners, families and children and disabled people. Its key aims are to help its customers become financially independent and to help reduce child poverty.The Secretary of State has overall responsibility for all work and pension matters as well as public expenditure matters.5.3.3 In the US, the Cabinet’s role is to advise the President on any subject he may require relating to the duties of each member’s respective office. The Cabinet includes the Vice President and the heads of 15 executive departments — the Secretaries of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, Interior, Labor, State, Transportation, Treasury, and Veterans Affairs, as well as the Attorney General.10848510 Structure of Government of IndiaThe Structure of Government of India at the ApexTable No. 5.2 : List of Departments in the US and Their ResponsibilitiesSl.NoMinisterResponsibilities1Department of StateThe Department of State plays the lead role in developing and implementing the President’s foreign policy. Major responsibilities include United States representation abroad, foreign assistance, foreign military training programs, countering international crime, and a wide assortment of services to US citizens and foreign nationals seeking entrance to the US.2Department of the TreasuryThe Department of the Treasury is responsible for promoting economic prosperity and ensuring the soundness and security of the US and international financial systems.3Department of DefenseThe mission of the Department of Defense (DOD) is to provide the military forces needed to deter war and to protect the security of our country.4Department of JusticeThe mission of the Department of Justice (DOJ) is to enforce the law and defend the interests of the United States according to the law; to ensure public safety against threats foreign and domestic; to provide federal leadership in preventing and controlling crime; to seek just punishment for those guilty of unlawful behavior; and to ensure fair and impartial administration of justice for all Americans.5Department of the InteriorThe Department of the Interior (DOI) is the nation’s principal conservation agency. Its mission is to protect America’s natural resources, offer recreation opportunities, conduct scientific research, conserve and protect fish and wildlife, and honor our trust responsibilities to American Indians, Alaskan Natives, and our responsibilities to island communities.6Department of AgricultureThe US Department of Agriculture (USDA) develops and executes policy on farming, agriculture, and food. Its aims include meeting the needs of farmers and ranchers, promoting agricultural trade and production, assuring food safety, protecting natural resources, fostering rural communities, and ending hunger in America and abroad.7Department of CommerceThe Department of Commerce is the government agency tasked with improving living standards for all Americans by promoting economic development and technological innovation.The department supports US business and industry through a number of services, including gathering economic and demographicTable No. 5.2 : List of Departments in the US and Their ResponsibilitiesContd.Sl.NoMinisterResponsibilitiesdata, issuing patents and trademarks, improving understanding of the environment and oceanic life, and ensuring the effective use of scientific and technical resources. The agency also formulates telecommunications and technology policy, and promotes U.S. exports by assisting and enforcing international trade agreements.8Department of LaborThe Department of Labor oversees federal programs for ensuring a strong American workforce. These programs address job training, safe working conditions, minimum hourly wage and overtime pay, employment discrimination, and unemployment insurance.9Department of Health and Human ServicesThe mission of the Department of Energy (DOE) is to advance the national, economic, and energy security of the United States.The DOE promotes America’s energy security by encouraging the development of reliable, clean, and affordable energy. It administers federal funding for scientific research to further the goal of discovery and innovation — ensuring American economic competitiveness and improving the quality of life for Americans.10Department of Housing and Urban DevelopmentThe Department of Housing and Urban Development (HUD) is the federal agency responsible for national policies and programs that address America’s housing needs, that improve and develop the nation’s communities, and that enforce fair housing laws. The Department plays a major role in supporting home-ownership for lower- and moderate-income families through its mortgage insurance and rent subsidy programs.11Department of TransportationThe mission of the Department of Transportation (DOT) is to ensure a fast, safe, efficient, accessible and convenient transportation system that meets our vital national interests and enhances the quality of life of the American people.12Department of EnergyThe mission of the Department of Energy (DOE) is to advance the national, economic, and energy security of the United States.The DOE promotes America’s energy security by encouraging the development of reliable, clean, and affordable energy. It administers federal funding for scientific research to further the goal of discovery and innovation – ensuring American economic competitiveness and improving the quality of life for Americans.13Department of EducationThe mission of the Department of Education is to promote student achievement and preparation for competition in a global economy by fostering educational excellence and ensuring equal access to educational opportunity.8687Organisational Structure of Government of IndiaThe Structure of Government of India at the ApexTable No. 5.2 : List of Departments in the US and Their Responsibilities (Contd.)Sl.NoMinisterResponsibilitiesThe Department administers federal financial aid for education, collects data on America’s schools to guide improvements in education quality, and works to complement the efforts of state and local governments, parents, and students.14Department of Veterans AffairsThe Department of Veterans Affairs is responsible for administering benefit programs for veterans, their families, and their survivors. These benefits include pension, education, disability compensation, home loans, life insurance, vocational rehabilitation, survivor support, medical care, and burial benefits. Veterans Affairs became a cabinet-level department in 1989.15Department of Homeland SecurityThe missions of the Department of Homeland Security (DHS) are to prevent and disrupt terrorist attacks; protect the American people, our critical infrastructure, and key resources; and respond to and recover from incidents that do occur. The third largest Cabinet department, DHS was established by the Homeland Security Act of 2002, largely in response to the terrorist attacks on September 11, 2001.5.3.4 Article 74 of the Indian Constitution provides that there shall be a Council of Ministers with the Prime Minister at the head to aid and advise the President who shall, in the exercise of his functions, act in accordance with such advice. Article 75 further provides that the Prime Minister shall be appointed by the President and the other Ministers shall be appointed by the President on the advice of the Prime Minister. It also provides that the total number of Ministers, including the Prime Minister, in the Council of Ministers shall not exceed 15% of the total number of Members of the Lok Sabha.5.3.5 In India, Rules of Business have been laid down providing for the subjects allotted to different Ministries and how the business allotted to the Ministries should be transacted. Thus, the Government of India (Transaction of Business Rules) states that subject to the provisions of these Rules in regard to consultation with other departments and submission of cases to the Prime Minister, the Cabinet and its Committees and the President, all business allotted to a department under the Government of India (Allocation of Business) Rules, 1961, shall be disposed of by, or under the general or special directions of the Minister-in-charge of that Department.5.3.6 The distribution of subjects among the departments shall be as specified in the First Schedule to the Allocation of Business Rules and shall include all attached and subordinate offices or other organizations including Public Sector Undertakings concerned with its subjects. At present, the number of Ministries listed in the First Schedule is 50. The list of Ministries/Departments is at Table No.5.3.Table No. 5.3 : List of Existing Ministries / Departments[Based on Government of India (Allocation of Business) Rules]Sl. No.Existing Ministries Ministry of AgricultureExisting Departments1i.Department of Agriculture and Cooperationii.Department of Agricultural Research and Educationiii.Department of Animal Husbandry, Dairying and Fisheries2Ministry of Chemicals & Fertilizersi.Department of Chemicals and Petro-Chemicalsii.Department of Fertilizersiii.Department of Pharmaceuticals3Ministry of Civil Aviation4Ministry of Coal5Ministry of Commerce and Industryi.Department of Commerceii.Department of Industrial Policy and Promotion6Ministry of Communications and Information Technologyi.Department of Telecommunicationsii.Department of Postsiii.Department of Information Technology7Ministry of Consumer Affairs, Food and Public Distributioni.Department of Consumer Affairsii.Department of Food and Public Distribution8Ministry of Corporate Affairs9Ministry of Culture10Ministry of Defencei.Department of Defenceii.Department of Defence Productioniii.Department of Defence Research and Developmentiv.Department of Ex-Servicemen Welfare11Ministry ofDevelopment of North Eastern Region8889Organisational Structure of Government of IndiaThe Structure of Government of India at the ApexTable No. 5.3 : List of Existing Ministries / Departments(Contd.)[Based on Government of India (Allocation of Business) Rules]Sl. No.Existing MinistriesExisting Departments12Ministry of Earth Sciences13Ministry of Environment and Forests14Ministry of External Affairs15Ministry of Financei.Department of Economic Affairsii.Department of Expenditureiii.Department of Revenueiv.Department of Disinvestmentv.Department of Financial Services16Ministry of Food Processing Industries17Ministry of Health and Family Welfarei.Department of Health and Family Welfareii.Departments of Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homeopathyiii.Department of Health Research18Ministry of Heavy Industries and Public Enterprisesi.Department of Heavy Industriesii.Department of Public Enterprises19Ministry of Home Affairsi.Department of Internal Securityii.Department of Statesiii.Department of Official Languageiv.Department of Homev.Department of Jammu and Kashmirvi.Department of Border Management20Ministry of Humani.Department of School Education and LiteracyResource Developmentii.Department of Higher Education21Ministry of Information and BroadcastingTable No. 5.3 : List of Existing Ministries / Departments(Contd.)[Based on Government of India (Allocation of Business) Rules]Sl. No.Existing MinistriesExisting Departments22Ministry of Labour and Employment23Ministry of Law and Justicei.Department of Legal Affairsii.Legislative Departmentiii.Department of Justice24Ministry of Micro, Small and Medium Enterprises25Ministry of Mines26Ministry of Minority Affairs27Ministry of New and Renewable Energy28Ministry of Overseas Indian Affairs29Ministry of Panchayati Raj30Ministry ofParliamentary Affairs31Ministry of Personnel, Public Grievances and Pensionsi.Department of Personnel and Trainingii.Department of Administrative Reforms and Public Grievancesiii.Department of Pensions and Pensioners Welfare32Ministry of Petroleum and Natural Gas33Ministry of Planning34Ministry of Power35Ministry of Railways36Ministry of Rural Developmenti.Department of Rural Developmentii.Department of Land Resourcesiii.Department of Drinking Water Supply9091Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex92Table No. 5.3 : List of Existing Ministries / Departments(Contd.)[Based on Government of India (Allocation of Business) Rules]Sl. No.Existing MinistriesExisting Departments37Ministry of Science and Technologyi.Department of Science and Technologyii.Department of Scientific and Industrial Researchiii.Department of Bio-Technology38Ministry of Shipping, Road Transport and Highwaysi.Department of Shippingii.Department of Road Transport and Highways39Ministry of Social Justice and Empowerment40Ministry of Statistics and Programme Implementation41Ministry of Steel42Ministry of Textiles43Ministry of Tourism44Ministry of Tribal Affairs45Ministry of Urban Development46Ministry of Housing and Urban Poverty Alleviation47Ministry of Water Resources48Ministry of Women and Child Development49Ministry of Youth Affairs and Sportsi.Department of Youth Affairsii.Department of Sports50Independent Departmentsi.Department of Atomic Energyii.Department of Spaceiii.Cabinet Secretariativ.President’s Secretariatv.Prime Minister’s Officevi.Planning Commission5.3.7 In 1947, the Council of Ministers comprised 16 members including the Prime Minister and Deputy Prime Minister. The size of the Council of Ministers has, over the years, increased significantly with the expansion in the role and apparatus of the State and also due to the political compulsions particularly in an era of coalition governments, to accommodate more Members of Parliament as Ministers. In order to restrict the size of the Council of Ministers to a reasonable limit, the Constitution (Ninety-first Amendment) Act, 2003, provided that the strength of the Council of Ministers shall not exceed 15% of the number of Members of Parliament in the Lok Sabha.5.3.8 As can be seen, there has been significant proliferation of the Ministries and Departments in the Government of India since Independence. Creating new departments to deal with individual subjects has the advantage of focusing greater attention and resources on that field but it also carries with it the disadvantages of lack of coordination and inability to adopt an integrated approach to national priorities and problems. For example, ‘Transport’ is an extremely important subject which requires an integrated approach. Different aspects of this subject are dealt with in different Ministries. The Ministry of Civil Aviation deals, inter-alia, with aircraft and air navigation and other aids relating to air navigation and carriage of passengers and goods by air; while the Ministry of Railways is responsible for all aspects of rail transport; Ministry of Shipping, Road Transport and Highways deals with maritime shipping and navigation, highways and motor vehicles and the Ministry of Urban Development deals with planning and coordination of urban transport systems. Thus, ‘Transport’ as a subject has been fragmented into multiple disciplines and assigned to independent ministries making the necessary integrated national approach to this important sector difficult. Similarly, Energy is now being handled by at least four different departments i.e. the Ministry of Power, Coal, Non-conventional Energy Sources, Petroleum and Atomic Energy. In contrast, in the UK, there is a single Secretary of State (Cabinet Minister) for Transport and a single Secretary of State for Energy. The Commission feels that there is a need to strike a balance between the requirements of functional specialization on the one hand and the need for a holistic approach to key issues on the other. Democracies like the UK and the USA have attempted to achieve this by having between 15 and 25 ministries headed by Cabinet Ministers and assisted by other Ministers.5.3.9 In India, the Departmentally Related Standing Committees of Parliament is a good example of integration of inter-connected subject matters as indicated in Table No.5.493Organisational Structure of Government of IndiaThe Structure of Government of India at the ApexTable No. 5.4 : Departmentally Related Standing Committees of ParliamentSl. No.Name of Departmentally Related Standing CommitteeDemands for Grants Considered by the Committee1.Agriculturei.Department of Agriculture and Cooperationii.Department of Agricultural Research and Educationiii.Department of Animal Husbandry, Dairying and Fisheriesiv.Ministry of Food Processing Industries2.Chemicals & Fertilizersi.Department of Chemicals and Petro-Chemicalsii.Department of Fertilizers3.Coal & Steeli.Ministry of Coalii.Ministry of Minesiii.Ministry of Steel4.Defencei.Ministry of Defence5.Energyi.Ministry of Powerii.Ministry of New and Renewable Energy6.External Affairsi.Ministry of External Affairsii.Ministry of Overseas Indian Affairs7.Financei.Department of Economic Affairsii.Department of Expenditureiii.Department of Revenueiv.Department of Disinvestmentv.Department of Financial Servicesvi.Ministry of Planningvii.Ministry of Statistics and Programme Implementationviii. Ministry of Corporate Affairs8.Food, Consumer Affairs & Public Distributioni.Department of Consumer Affairsii.Department of Food and Public rmation Technologyi.Ministry of Information and Broadcastingii.Department of Telecommunicationsiii.Department of Postsiv.Department of Information Technology10.Labouri.Ministry of Labour and Employmentii.Ministry of Textiles11.Petroleum & Natural Gasi.Ministry of Petroleum and Natural Gas12.Railwaysi.Ministry of Railways13.Rural Developmenti.Department of Rural Developmentii.Department of Land Resourcesiii.Department of Drinking Water Supplyiv.Ministry of Panchayati Raj5.3.10 Suggested Ministries/Departments5.3.10.1 As mentioned earlier, currently the Ministries and Departments are organized on the basis of the Allocation of Business Rules. Schedule I of the Business Rules lists out 80+ Ministries and Departments. As stated in paragraph 5.3.8, the Commission is of the view that in order to evolve an integrated approach to national issues, it would be desirable to categorise the functions of Government into a reasonable number of groups, as has been done in other countries like the UK and the USA. The existing departments would therefore have to be distributed among the 20-25 groups of closely related subjects and functions.5.3.10.2 The Commission is aware of the recent Constitutional amendments which limit the size of the Union Council of Ministers to 15% of the strength of the Lok Sabha. This figure has been arrived at based on the recommendations of the First ARC and after a thorough debate in the Parliament. The Commission recognises that the size of the Council of Ministers reflects the needs of representational democracy for a large and diverse country like India. It would also be unrealistic to expect for curtailment in the size of the Council of Ministers in an era of coalition politics. Instead, a more pragmatic approach would be to retain the existing size of the Council of Ministers but increase the level of coordination among the departments by providing for a senior Cabinet Minister to head each of the 20-25 closely related Departments. He/She may be designated as the “First or Coordinating Minister” (or any other suitable nomenclature) and would coordinate and provide the overall lead for the entire group of departments. Within the broad groups (20-25) mentioned earlier, there could be several departments. Individual departments or any combination of these could be headed as required by the Coordinating/First Minister, other Cabinet Minister(s)/Minister(s) of State. The Commission recognizes that for this arrangement to work, adequate delegation and division of work among the concerned Ministers would have to be worked out.Table No. 5.4 : Departmentally Related Standing Committees of Parliament (Contd.)Demands for Grants Considered by the Committeei. Ministry of Social Justice and Empowermentii. Ministry of Tribal Affairsiii. Ministry of Minority Affairsi. Ministry of Urban Developmentii. Ministry of Housing and Urban Poverty Alleviationi. Ministry of Water ResourcesSl. No.Name of Departmentally Related Standing Committee14. Social Justice & Empowerment15. Urban Development16. Water Resources9495Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex5.3.10.3 This would in effect mean that the concept of a Ministry would need to be redefined. In the new dispensation, a Ministry would mean a group of departments whose functions and subjects are closely related and is assigned to a First Minister or Coordinating Minister for the purpose of providing overall leadership and coordination. The Departments would correspond to the existing list of departments mentioned in the First Schedule of the Allocation of Business Rules. This concept of Ministry and the Coordinating/First Minister may be explicitly laid down in the Allocation of Business Rules. As a consequence of this, a rationalization of posts at the Secretary level, where required, may also be considered.5.3.10.4 This arrangement would in effect lead to enhanced coordination on national issues and at the same time, meet the requirements of providing adequate Ministerial representation in a large and diverse country, without causing a proliferation in the number of Ministries. Even after this restructuring there would still be some issues which would cut across different Ministries. In such cases, suitable inter-ministerial coordination mechanisms would be necessary.5.3.10.5 Without going into the details of how the existing Ministries can be grouped based on how closely their subjects are inter-related, the Commission would like to demonstrate through the following examples how this can be achieved.For example, the Ministry of Local Government could include the following Ministries/ Departments:i.Rural Developmentii.Drinking Water Supplyiii. Housing and Urban Poverty Alleviationiv. Urban Developmentv.Panchayati RajFurther, the following Ministries/Departments could be clubbed under the Ministry of Transport:i.Shippingii.Road Transport and Highwaysiii.Civil Aviation iv. RailwaysSimilarly, the Ministry of Energy would include the following Ministries/Departments:i.New and Renewable Energyii.Petroleum and Natural Gasiii. PowerAs a consequence of this exercise, the Commission expects that the number of Ministries in Government of India could be reduced from about 55 at present to about 20-25.5.4 Recasting the Allocation of Business Rules5.4.1 The Allocation of Business Rules specifies the distribution of subjects among the Ministries and Departments of Government of India. It comprises two schedules; the first lists out the Ministries, Departments, Secretariats and Offices through which the business of Government of India shall be transacted, while the second lists out the subjects in respect of each department including the attached and subordinate offices or other organizations5.3.11 Recommendationsa. The concept of a Ministry would have to be redefined. A Ministry would mean a group of departments whose functions and subjects are closely related and is assigned to a First or Coordinating Minister for the purpose of providing overall leadership and coordination. This concept of a Ministry and the Coordinating (or First) Minister may be explicitly laid down in the Allocation of Business Rules. Adequate delegation among the Ministers would have to be laid down in the Transaction of Business Rules. As a consequence of this, rationalization of Secretary level posts wherever required may also need to be carried out.b. Individual departments or any combination of these could be headed by the Coordinating (or First) Minister, other Cabinet Minister(s)/ Minister(s) of State.c. The structure of the Government of India should be rationalised by grouping together closely related subjects as illustrated in paragraph 5.3.10.5 in order to reduce the number of Ministries to 20-25.9697Organisational Structure of Government of IndiaThe Structure of Government of India at the Apexincluding public sector undertakings concerned with its subjects. The Rules further provide that the President, on the advice of the Prime Minister, allocates the business of the Government of India among Ministers by assigning one or more Department to the charge of a Minister.5.4.2 It is further provided that the President may, on the advice of the Prime Minister, associate in relation to the business allotted to a Minister another Minister or Deputy Minister to perform such functions as may be assigned to him, or entrust the responsibility for specified items of business affecting any one or more than one Department to a Minister who is in charge of any other Department or to a Minister without portfolio who is not in charge of any Department.5.4.3 The Allocation of Business Rules, thus, forms the basis of the structure of Government of India by specifying the Departments among whom the functional division of work of Government of India has been done. The Commission has therefore examined these Rules in detail. The Commission has also examined similar work allocation rules in other countries.5.4.4 The Allocation of Business Rules comprise an exhaustive listing of the subjects and activities of various Departments of Government of India. It also enlists the attached and subordinate offices and other organizations including Public Sector Undertakings. This detailed listing has the advantage of clearly demarcating the turf of individual departments so that there is no ambiguity with regard to their responsibilities. The allocation of Business has been kept up to date by a series of amendments and has stood the test of time.5.4.5 However, the Commission feels that there is need to recast these Rules in order to make them more focussed on the goals and outcomes of each Department. Besides, there is a need to shift the emphasis from a listing of activities/subjects of each Department to a broader perspective. There are some other shortcomings that need to be resolved in order to make these rules more precise and meaningful. These are briefly analyzed below:-5.4.5.1 While the items are listed in detail they relate only to the subject concerned and do not deal with the responsibility relating to that subject.5.4.5.1.1 A perusal of the Allocation of Business Rules indicates that in many cases they tend to focus more on the subjects, activities and organizations under each Department and less on the overall responsibilities and functions of the Department(s) or the Ministry/Ministries in charge. For example, in the allocation of business to the Department of Economic Affairs (Ministry of Finance), there is no mention of the overall responsibility and functions of the Department. Instead there is a listing of individual subjects, functions and organizations. Similarly, for the Department of Health and Family Welfare, these rules list out the organizations, programmes, activities and functions of the Department without any reference to its overall objectives and responsibilities.5.4.5.1.2 In the United Kingdom, on the other hand, the list of ministerial responsibilities of the Department of Health begins with the following:“The aim of the Department of Health (DoH) is to improve the health and well-being of people in England.”5.4.5.1.3 The Commission also notes that the entries in relation to certain Ministries such as the Ministry of Water Resources and the Ministry of Minority Affairs are comparatively well written and closer to the type of entry that the Commission has in mind. Thus, the entry for the Ministry of Water Resources is as under:“1. Development, conservation and management of water as a national resource, overall national perspective of water planning and coordination in relation to diverse uses of water.2.National Water Resources Council3.General policy, technical assistance, research and development training and all matters relating to irrigation, including multi-purpose, major, medium, minor and emergency irrigation works; hydraulic structures for navigation and hydropower; tube-wells and groundwater exploration and exploitation; protection and preservation of ground water resources; conjunctive use of surface and ground water, irrigation for agricultural purposes, water management, command area development; management of reservoirs and reservoir sedimentation; floor (control) management, drainage, drought proofing, water logging and sea erosion problems; dam safety.4.Regulation and development of inter-State rivers and river valleys, Implementation of Awards of Tribunals through Schemes, River Boards5.Water laws, legislation6.Water quality assessment9899Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex7.Cadre control and management of the Central Water Engineering Services (GroupA) ”5.4.5.1.4 The entry for the Ministry of Minority Affairs, spells out the mission of the Ministry in clear terms:“1. Overall policy, planning, coordination, evaluation and review of the regulatory and development programmes of the minority communities.2.All matters relating to minority communities except matters relating to law and order.3.Policy initiatives for protection of minorities and their security in consultation with other Central Government Ministries and State Government.4.Matters relating to linguistic minorities and of the Office of the Commissioner for Linguistic Minorities.5.Matters relating to National Commission for Minorities Act.6.Work relating to the evacuee Wakf properties under the Administration of Evacuee Property Act, 1950 (31 of 1950 (since repealed).5.4.5.1.5 The Commission is of the view that for all departments of Government of India, these rules should first provide a Statement of the mission of the department rather than a mere list of subjects, functions, Acts and organisations.5.4.5.2 The allocation is not uniformly detailed nor does the listing of functions of various departments follow a uniform pattern.5.4.5.2.1 It is observed that for certain departments, subjects, functions and organizations are listed out in great detail whereas in certain other departments the listing is far less comprehensive. Thus for the Ministry of Tourism, only the following three subjects are mentioned viz. (1) Development and Promotion of Tourism, (2) International Cooperation in the field of Tourism, (3) India Tourism Development Corporation and Autonomous Institutes. On the other hand in respect of the Ministry of Textiles, as many as 69 items are listed including various legislations, autonomous organizations, PSUs, advisory/ developmental councils, associations etc. Moreover, the listing of subjects do not follow a uniform pattern. For example, under the Ministry of Social Justice and Empowerment, subjects are listed under 4 parts. Part I refers to subjects falling within List I of the SeventhSchedule to the Constitution of India viz. “Operation of Indo-US, Indo-UK, Indo-German, Indo-Swiss and Indo-Swedish Agreements for duty free receipt of donated relief supplies/goods and matters connected with the distribution of supplies coming thereunder.” Part II refers to subjects that fall within List III of the Seventh Schedule to the Constitution viz. “Social Security and Social Insurance, save to the extent allotted to any other Department.” Part III states that for the Union Territories, the following subject which falls within List II or List III of the Seventh Schedule to the Constitution of India, in so far as they exist in regard to such Territories: “Relief of the disabled and unemployable and measures relating to Social Security and Social Insurance, save to the extent allotted to any other Department.” Thereafter, Part IV lists out 19 different subjects under the Ministry in the same manner as for most of the other Departments/Ministries.5.4.5.2.2 This highlights the need to bring about greater uniformity and clarity in the description of the roles and functions of various Ministries/Departments.5.4.5.3 Listing of laws5.4.5.3.1 While listing of subjects covered by statutes, some are covered while many are left out. Generally, it is observed that the laws including subordinate legislation that is dealt with by some of the Ministries/Departments have been listed as one of the subjects. However, the listing is not uniformly exhaustive for all Departments/Ministries.5.4.5.3.2 The Commission feels that with the large number of laws that have been enacted in India, listing out all such laws and putting them department-wise in the Allocation of Business Rules makes them unwieldy. A better option may be for the Ministries/ Departments concerned to maintain a master list of all laws pertaining to the subjects dealt with in that Ministry/Department instead of mentioning them in the Allocation of Business Rules. The underlying principle should be stated in the Rules that all laws relating to the subjects and functions allocated to a Ministry/Department would fall under its purview.5.4.5.4 Listing of Public Sector Units and autonomous organizations5.4.5.4.1 It is observed that all the Public Sector Undertakings have been listed under the concerned Departments. For example, the entry under the Ministry of Heavy Industry and Public Enterprises lists 35 PSUs. However, for autonomous organizations the treatment varies with the Lists for some Ministries/Departments containing all the autonomous organizations that fall under their jurisdiction while for some other Ministries/Departments100101Organisational Structure of Government of IndiaThe Structure of Government of India at the Apexall the organizations are not mentioned. For example, the entry under the Ministry of Tourism simply states “autonomous institutes” without naming them.5.4.5.4.2 The Commission feels that instead of listing out the individual PSUs and autonomous organizations under each Ministry, the Rules should merely have a generic entry to the effect that all PSUs and Autonomous Organizations whose functioning is directly related to the subject(s) of the concerned Ministry would be under its jurisdiction. However, in cases where the functional area of a PSU pertains to more than one Ministry/ Department, it may be advisable to list out such PSUs under the relevant Ministry/ Department.5.5 Ministries and Departments to Primarily Focus on Policy Analysis* 5.5.1 Policy Analysis in Government5.5.1.1 There are two broad tasks of the government. The first is formulating policy in pursuance of objectives that the political leadership specifies, and the second is implementation of that policy. In a democracy, it is the political leadership. assisted by the civil servants, who set the vision, goals and strategic directions. But sound institutional arrangements play an important role in whether these visions, goals and strategic directions are translated into effective policy priorities.5.5.1.2 Although precise institutional arrangements have varied, effective governments throughout the world are characterized by strong systems for strategic policy formulation. At the heart of these systems are mechanisms for preparing sound policy proposals after due consideration of future implications, estimating the costs of competing several policy options within a disciplined framework of aggregate expenditures, ensuring extensive horizontal coordination where policies are spread across a number of departments and where delivery mechanisms are similarly divided between different parts of the government, and introduction of policy evaluation systems.5.5.1.3 In the UK, the Performance and Evaluation Unit has been set up in the government to tackle areas selected by the Prime Minister where policies spread across a number of departments and where delivery mechanisms are divided between different parts of the government. The function of the Unit is to assemble teams to put together all the facts and options, and to come up with proposals for improvement. The projects taken up by the Unit have included policy towards the rural communities, the ageing population, electronic commerce and delivery of government services in the regions, and developing the concept of accountability and incentives to encourage better working across departments and different parts of the government. The Social Exclusion Unit has been set up in the Cabinet Office to look at the most difficult areas of social policy such as housing estates, rough sleepers, and teenage parenthood and to devise policies which will be effective in bringing about improvements. The Unit’s task is to assemble teams drawn from a wide variety of backgrounds whose responsibility is to come up with better policy prescriptions to deal with these problems.5.5.1.4 In New Zealand, the government has brought out a booklet called “Policy Advice Initiative - Opportunities for Management” for use by policy- makers. New Zealand has even established ministries whose output is policy advice. For instance, it split the Ministry5.4.6 Recommendationsa. There is need to recast the Allocation of Business Rules to make them more focussed on the goals and outcomes of each Ministry/Department in order to shift the emphasis from a detailed listing of activities/subjects of each Ministry/Department to a broader perspective.b. The Allocation of Business Rules should first provide a Statement of the mission of the department followed by a list of subjects and functions.c.There is need to bring greater uniformity in the description of the roles and functions of various Ministries/Departments.d. Ministries/Departments should maintain a master list of all laws pertaining to the subjects dealt with in that Ministry/Department instead of mentioning them in the Allocation of Business Rules. The underlying principle should be stated in the Rules that all laws relating to the subjects and functions allocated to a Ministry/Department would fall under its purview.e. Instead of naming the individual PSUs and autonomous organizations under each Ministry, the Rules should merely have a generic entry to the effect that all PSUs and Autonomous Organizations whose functioning is directly related to subject(s) of the concerned Ministry would be under its jurisdiction. However, in cases where activities of a PSU or an autonomous organization relates to more than one Ministry/Department, then it may be advisable to list out such PSUs under a particular Ministry/ Department.102103*Parts of this module and paragraph 5.6 are adopted from a Report prepared by Prof. Pradip Khandwalla, and also from a Report prepared by Shri S.K. Das, Consultant, anisational Structure of Government of IndiaThe Structure of Government of India at the Apexof Defence in 1989 into the New Zealand Defence Force, in charge of the country’s defence forces, and a small Ministry of Defence, whose primary function was to provide policy advice on strategic and military capabilities.5.5.1.5 Japan has set up a strong mechanism for careful policy evaluation. The idea is to evaluate policy carefully when it is first proposed, and also evaluate periodically the relevance and costs and benefits of policies in force. Although policy review is the responsibility of each ministry, Japan has experimented with inter-disciplinary agencies specializing in policy evaluation to do this on a continuing basis and coach the ministries in sophisticated policy analysis. In Japan, the Ministry of Public Management, Home Affairs, Posts and Telecommunications tries to ensure uniformity, rigour and objectivity in policy analysis throughout the Japanese government, and seeks broader lessons in the light of experience in policy evaluation. Policy evaluation criteria are necessity, efficiency, effectiveness, equity and priority. The use of these criteria is expected to throw up alternatives to the proposed new policy and existing policies and practices. Some critical questions asked are: Are the policy results effective? Is there an alternative, better policy?5.5.1.6 In Malaysia, the Economic Planning Unit of the Prime Minister’s Office undertakes policy analysis: it evaluates the impact of government policies on the quality of life and on the economy. Policy analysis and research units have been established in all the ministries in Tanzania.5.5.1.7 The imperative of providing high quality policy advice requires that the attention of apex levels in government should not get diverted by the demands of managing administrative and operational responsibilities. This would call for a broad separation of policy formulation and implementation responsibilities. What this would imply is that the ministries responsible for policy analysis and formulation including the monitoring and evaluation of policy implementation should be separated from entities responsible for delivery of services, operational matters and enforcement of regulations. Separation of policy-making from implementation would also work as a mechanism to ensure that contestable policy options are generated and that the government does not get captured by provider interests which unduly influence its policy proposals. Such a broad separation of policy and operations would mean a reduction in the excessive degree of central control now being exercised by the Ministries over operational matters. This, in turn, would require the emphasis on system-wide conformity to be replaced with a combination of centrally prescribed standards and much greater autonomy to departments charged with the operational responsibility of implementing policy. In other words, while the ministries would make policy and prescribe standards for implementation, the actual implementationwill be done by entities that will be given the necessary degree of autonomy and authority to discharge their operational responsibilities.5.5.2 Policy-Making in India5.5.2.1 The Union Government at present has about 55 ministries, each headed by a Minister, usually of Cabinet rank. There are Ministers of State in some ministries, some of whom hold independent charge of a Department. Each ministry consists of one or more departments, and many have attached to them one or more special purpose entities (commissions, boards, councils, departmental undertakings, g o v e r n m e n t - owned enterprises, agencies, etc.). A vast bureaucracy, numbering about 4 million, assiststheMinistersof the Union Government. The bulk of the bureaucracy consists of clericalandsupportpersonnel. Members of thecivilservicesoccupy almost all of the key administrative positions.Box No. 5.1 : Policy Making to Policy Planning...Policy planning is an improvement on policy making and came into vogue in the 1960s. Policy planning takes into account the present national and international scenarios as also the likely future contingencies in a given area of interest, and provides a menu of choices enabling the organisation, whether it is the government or any category of enterprise, to prepare itself in advance to meet those situations.Whereas, policy making is working out the response when one is face-to-face with a situation. Policy planning is of help in shaping events along directions conducive to best results while policy making caters to a current requirement in an existing context.The domains of politics and economics eminently lend themselves to policy planning rather than policy making. The reason is that once a political or economic event has come to pass, it becomes a question of catching up with its fallout by trying out suitable remedies, whereas what is of greater importance is either preventing such an event from happening at all, or minimising the harm and maximising the gains.There is all the difference between dealing with a looming crisis by anticipatory action and reacting to a crisis that has already occurred — in short, between fire-proofing and fire-fighting.Holistic viewThe Union Ministry of Home Affairs was the first to start a division for Political and Security Policy Planning of which I became the first Director in 1967; soon thereafter, the Union Ministry of External Affairs also set up a similar division for foreign policy studies with K. R. Narayanan, later President of India, as the Director. Both of us worked in concert taking a holistic view of policy planning in domestic and foreign affairs.The implications of the Centre coming under coalition rule, the measures to be taken against political defections, the prospective geo-political and security scenarios in this part of the world, the need for mechanisms such as the South Asian Association for Regional Cooperation (SAARC) and South Asian Free Trade Association (SAFTA) were all part of the studies emanating from the two divisions. The paper on the agrarian situation in States predicting in 1968 a phenomenon that subsequently came to be known as Naxalism has been widely cited in all academic discourses worldwide for its conclusion that in the absence of vigorous implementation of land reforms, the Green Revolution was bound to turn to red.Ad hocismRegrettably, the waning of enthusiasm on the part of Ministers and the present generation of civil servants for policy planning is the cause of ad hocism witnessed in the handling of issues at the Centre and in the States.Disturbingly, the Government seems to be reacting to national security and terrorism on a tragedy-bytragedy basis, rather than having a comprehensive and long-term strategy. The same tendency to wait on events instead of being abreast of them marks external relations as well.Economic policy planning has not been much in evidence in India, even though it has had a galaxy of economists. Though their contribution to policy making by coming up with solutions on an as-iswhere-is basis for problems surfacing from time to time can be said to be significant, there has not been any notable corpus of original or creative economic thought comparable to the output in industrial countries.It is time policy planning was built into the process of decision making to enable the country to be ahead of developments without being overtaken by ugly surprises.B. S. RAGHAVANSource: Business Line, March 16, 2008104105Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex5.5.2.2 Shriram Maheshwari has elucidated the principles governing the Indian bureaucracy (Maheshwari, 1990, pp. 47-48): “The machinery of government at the Centre (and also in the States) is designed on the basis of two important administrative principles. An overriding belief in the desirability of structural separation of policy-making...and administration has led to the creation of an organization that is concerned exclusively with policy-making and another that is charged with implementing responsibilities. As a result, the machinery of the Government of India is a three-tiered one in which the policy-making organ is the secretariat; and implementation is the responsibility of the attached and subordinate offices.”“But sound policy-making requires first-hand knowledge and experience of the conditions of implementation. This belief underlies the second administrative philosophy: that the policy-making organ of the Government of India must have no permanent cadre of officers but must instead be manned by personnel who are taken on fixed-term deputation from implementation levels so as to project field realities fully into the process of policy-making. The middle - and - senior level positions in the secretariat are filled by public personnel drawn from the all-India and central services, members of which generally work under the State Governments or the field agencies of the Central Government.”5.5.2.3 However, in practice, the existing structure in Government of India combined with the allocation of powers and functions severely constrains the policy making role at the apex level. This is because Ministers as well as Secretaries to government, both at the Government of India and State levels, have multiple and demanding responsibilities pertaining to a wide range of policy, administrative and implementation activities. The time they can devote to each of these functions is seriously limited and they often do not find sufficient time to reflect on important policy and strategic issues. As a result, the policy-making capacity in India is often weak. The need to provide Ministers with high quality policy advice requires that secretaries to government and their supporting staff in the secretariat charged with policy advisory responsibilities do not get diverted by the demands of managing routine administrative and operational responsibilities. Perhaps this may be a reason for a large number of very useful reports lying un-analysed and thus unused.5.5.2.4 As noted by the Commission in its Tenth Report on Refurbishing of Personnel Administration, the policy formulation function needs to be distinguished from those relating to policy implementation particularly in the case of senior civil servants. The Commission noted that “the need to provide the ministers with high quality policy advice requires that secretaries to Government and their supporting staff in the Secretariat with policy advisory responsibilities do not get diverted by the demands of managing routine administrative and operational responsibilities. This should call for a broad separation of policy formulationand implementation responsibilities. What this would imply is that the Ministries responsible for policy advice including the monitoring and evaluation of policy implementation should be separated from the departments and other entities responsible for delivery of services, operational matters and the enforcement of regulations. What is required, however, is not merely a broad separation of policy operation, but also restructuring the design of the ministries to make them less hierarchical, creating flatter structures with team based orientation and reduce the excessive degree of central control now being exercised over operational matters.”5.5.2.5 In any large organization, more so the Government, the apex level should concentrate on providing strategic direction to the organization by taking decisions on major policy issues rather than trying to manage routine administrative and operational matters. It is, therefore, critical that Ministers assisted by senior civil servants focus their energies on providing leadership and vision for the organizations under their charge while delegating routine operational functions to appropriate levels below them. This would enable the apex levels to lay down the broad policy guidelines for their organization while, at the same time, enabling the operational levels with the requisite autonomy and resources to implement these policies efficiently. The Commission recognizes, however, that there can be no water-tight separation of the policy making and implementation functions since Ministers are ultimately accountable to Parliament for the performance of their ministries and departments in all respects. In fact, the Government of India (Transaction of Business Rules) states that all business allocated to a Department in the Government of India, has to be disposed of under the directions of the minister in charge. However, Ministers can discharge their responsibilities in this regard more effectively by supervising the performance of operational agencies from time to time rather than taking routine operational decisions.5.5.2.6 The Commission has considered how a degree of separation between the policy making and implementation functions of the ministries and other government agencies can be best achieved. Under the existing scheme, it is the minister who lays down the extent of delegation of various functions to different levels within the ministry as well as to its attached and subordinate offices. In order to enable the ministries, to effectively fulfil their policy making role and also to ensure uniformity across ministries, the Commission is of the view that some general principles to govern the extent of delegation may be incorporated in the Transaction of Business Rules. These principles may stipulate that the ministries should concentrate on the following:?Policy making and strategic decisions?Budgeting106107Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex?Monitoring of implementation?Appointments of key personnel?Coordination?EvaluationAttached and subordinate offices would serve as the executive agencies of the ministries and concentrate on the implementation of Government policies and programmes.5.5.2.7 Recommendationsa.In order to make them binding, the general principles to govern the extentof delegation from Departments to their attached and subordinate offices (executive agencies) may be incorporated in the Transaction of Business Rules. These principles may stipulate that the Ministries/Departments should concentrate on the following:i.Policy analysis, planning, policy making and strategic decisionsii. Budgeting and Parliamentary workiii. Monitoring of implementation through systems and proceduresiv. Appointments of key personnelv. Coordinationvi. Evaluationb. Attached and subordinate offices should serve as the executive agencies of the ministries and concentrate on the implementation of Government policies and programmes.5.5.3 Policy Evaluation5.5.3.1 While divesting the apex levels in the government with managing administrative and operational responsibilities so that they can concentrate on their policy advisory responsibilities, it is necessary that the quality of strategic policy-making is enhanced. Systematic policy evaluation, either at the time of the formulation of the policy or at periodic intervals to assess the current relevance of an established policy, is rare in India.Policies are often hastily conceived and hurried through the legislature without adequate consideration of long-term costs and benefits. Some of these ill-conceived policies became albatrosses and create problems for years before being abandoned or modified. Better appraisal of policies through inter-disciplinary teams, wide public debate, and involvement of stakeholders and domain experts can reduce the dysfunctional consequences of public policies and increase the benefits. The idea should be to evaluate a policy carefully when it is first proposed, and thereafter evaluate periodically their relevance and costs and benefits. Although policy review is the responsibility of civil servants in each ministry, it will be useful to have an inter-disciplinary policy evaluation on a continuing basis. The policy evaluation system to be introduced, should lay down the criteria for evaluation including?need for the new policy or the necessity of continuing the old policy?efficiency with which it can be implemented/has been implemented (the ratio of its benefits to costs)?the policy effectiveness in terms of its larger social purpose such as social equity or positive externalities?priority in terms of government’s developmental and good governance strategy.5.5.3.2 Such policy evaluation should also highlight alternatives to the current ways of implementing the policy such as participation of the stakeholders in the governance structure for implementing the policy, and ways of assessing implementation on a fairly regular basis through surveys and the use of consultants for impact assessment.5.5.3.3 Recommendationa. Each Department should introduce a system of policy evaluation to be carried out at the end of prescribed periods. All relevant policies should be updated in the light of the findings of such evaluations.5.6 Creation of Effective Executive Agencies5.6.1 Separation of policy and implementation would also call for changes in how the policy implementing agencies are structured. It is necessary that implementation bodies need to be restructured by giving them greater operational autonomy and flexibility while, at the same time, making them responsible and accountable for what they do. It is advisable that, for the purpose, autonomous organizations like executive agencies be set up to carry out operational responsibilities. The executive agency is not a policy-making body; but it is108109Organisational Structure of Government of IndiaThe Structure of Government of India at the Apexby now a time-tested, highly effective executing body in the public sector, analogous to the self-contained, quasi-autonomous division of a corporate body. ‘Agencification’, that is, extensive use of executive agencies in administration has been found useful in conducting an extremely wide range of functions. The process known as ‘agencification’ has been the cornerstone of public service reforms around the world.5.6.2 Executive Agencies in the UK5.6.2.1 The most revolutionary step Britain took for revamping its public administration was the setting up of ‘executive agencies’, because it largely hollowed out Britain’s bureaucracy and professionalized the bodies that substituted the bureaucracy.Box No. 5.2 : Inland Revenues, BritainIn the 1990s, UK’s Department of Inland Revenues was responsible for the efficient administration of duties and direct taxes (Commonwealth Secretariat, 1995a; Khandwalla, 1999). It also provided policy advice to the relevant ministers, and provided valuation and other services. It was a big organization with over 60,000 employees, 40 million taxpaying ‘customers’, and 800 locations; it dealt with 150 million pieces of correspondence and 30 million calls annually, collected around $160 billion in revenues, and had a $30 billion annual budget. It was turned into an executive agency.The department was profoundly transformed by UK’s Financial Management Initiative, Next Steps, Citizens Charter, and Competing for Quality programmes for transforming government and government services. It responded to these by replacing over 100 government grades by five broad bands and new job titles tailor-made to the department; provided humane severance terms for surplus staff; stepped-up staff training and development; enhanced IT use and simultaneously transferred the staff, buildings, and equipment related to IT support to another agency; and empowered lower-level staff with greater responsibility and accountability. Above all, it tried to become more ‘customer’-oriented, and changed from a culture of command, control, and investigation to one of service, support, and audit. It developed and publicized the taxpayer’s charter.Source: Extracted from Report prepared by Prof. Khandwalla.Each agency was headed by a chief executive with considerable operating freedom, subject, however, to the mandate, and the policy and resources framework. By the mid-1990s, about two-thirds of the chief executives of these agencies were recruited on the basis of open competition, and over a half of these were from outside the civil service. Most CEOs were given term contracts.5.6.2.3 A small ‘Next Steps’ team consisting of civil servants was created to identifycandidates for agency status. Before forming an agency, however, some tough questions were addressed: need the function be carried on at all; if yes, could it be privatized or contracted out; if no, would the agency be the best structure for it. Once the decision was taken to form an agency, its mandate, objectives, etc., were crystallized into a ‘framework document’ that spelt out the policy framework, the agency’s mission and objectives, and the resources, pricing, and other operating constraints under which the agency was to operate. This was a very important document, because it constituted the mandate of the agency.5.6.2.4 The annual budget and the annual targets of each agency were approved by the relevant minister. Thereafter the chief executive was personally responsible for the targeted performances. The agency’s annual report provided information on its activities and achievements against targets. The agencies had to make their accounts as per commercial practice on accruals basis. Ministerial responsibility to the parliament was restricted to policy, not operations, and parliamentary questions on operations were answered by the chief executive, not the minister.5.6.2.5 By 2002, 75% of the civil servants were working in 127 executive agencies as the employees of the agencies (Alexander and others, 2002). These agencies undertook functions related to a great variety of services such as customs and excise collection, employment service and benefits, vehicle and driver licensing, issue of passports, child support, prison management, R&D, and weather forecasting. In size, these agencies ranged widely - from around 40 persons to a staff of some 90000. A growing number of these agencies operated as trading funds, and had considerable freedom to manage their own funds. These were not subject to advance parliamentary approval for their income and expenditure, but were expected not to have deficits. As a consequence, agencies were now much more sharply aware of unit costs and were more inclined to find ways of cutting them.5.6.2.6 Earlier, annual pay increases in the government were not linked to performance. The agencies and departments of the government now got increased autonomy to hire and fire. After 1990, departments and agencies were responsible for recruiting over 95 per cent of their staff. As of the mid-1990s, the government required all new pay agreements to have performance-linked pay as their basis. Agencies and departments had the freedom to negotiate with unions the extent of performance-related pay component.5.6.2.7 ‘Agencification’ has been a success in Britain and elsewhere. Running costs of the government as a share of public spending declined in Britain from 9% in 1992 to 8% in 1995, that is, by over 10%, partly because of the efficiencies implemented by executive agencies. A comprehensive review was commissioned by the government in 2002 (Alexander and others, 2002). The Report dealt with 92 executive agencies managed5.6.2.2 Based on a study of the progress of changes in the civil service, the government began setting up these agencies in the late 1980s Commonwealth Secretariat, 1995a). The basic idea was that agencies should be carved out of government departments to carry out specific executive functions within a mandate, and a framework of policy and resources provided by the relevant minister. The attempt was to separate policy making from implementation, and to bring in professional management for implementation.110111Organisational Structure of Government of IndiaThe Structure of Government of India at the Apexby ‘Whitehall’ (UK central government) departments (the rest 35 were dealt with by the governance bodies of Scotland, Northern Ireland, and Wales).5.6.2.8 The Report also concluded that the agency model has led to clarity and focus on specified tasks; a culture of service delivery; empowerment of frontline staff; greater accountability and openness; contextually appropriate structures and systems compared to the earlier standardized, monolithic government system; innovative thinking and action; development of brand for the services offered; better risk management; and greater tendency to expose problems rather than keeping them hidden (pp. 17-18). Some of its major recommendations were that the departments and agencies must work together to bridge the gulf between policy development and implementation, and fill high-level skills gaps in departments and agencies.5.6.3 New Zealand5.6.3.1 Agencification in New Zealand was done through the enactment of two legislations - the State Sector Act, 1988 and the Public Finance Act, 1989. The State Sector Act made major changes in the management, personnel and labour practices of the government. Chief Executives were appointed to be in charge of implementing departments for a fixed term under contract with the State Services Commission. The Chief Executives were given all the rights, duties and powers of an employer in respect of their departments. They were authorized to appoint staff and remove them. The Public Finance Act introduced the output/outcome framework as the basis for accountability relationship between the ministers and the Chief Executives. It also provided for a performance agreement to be signed between the Chief Executive and the concerned minister every year. The Act also devolved financial management and control from the Treasury to the line departments. The Chief Executives were made responsible, under the Act, for financial management, financial performance, accounting requirements, and assets and cash management in their agencies. In other words, the tight regimen of input control that the Treasury had exercised was dismantled and there was devolution of financial management to the line departments.5.6.4 Australia5.6.4.1 All the line departments in Australia operate in the agency mode. The Public Service Act of 1999 includes a range of initiatives that provides for improving public accountability for performance, increasing competitiveness and enhancing leadership in the agencies. These initiatives include?public performance agreements for the Agency Heads?replacement of out-of-date hierarchical controls with more contemporary team-based arrangements?greater devolved responsibility to the agency levels?giving agencies flexibility to decide on their own systems for rewarding high performance?streamlined administrative procedures?a strategic approach to the systematic management of risk.5.6.4.2 The Financial and Accountability Act, 1997 provides the accountability and accounting framework for the agencies. Under this Act, the Agency Heads are given greater flexibility and autonomy in their financial management. The Act requires Agency Heads to-manage resources in an efficient, effective and ethical manner-prepare fraud control plans-establish high-level audit committees.5.6.4.3 In April 1997, an accrual-based output/outcome framework was introduced in the agencies for management of resources. The objective was to put in place a framework that would manage for results by developing robust indicators to assess the performance of the agencies in terms of outcomes for clients. In the past, the systems in the Australian government had been pre-occupied with process, and performance was evaluated in terms of the quantity of resources consumed rather than the quality of outcomes.112113Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex1145.6.5 Japan5.6.5.1 Agencification began in Japan in April 2001. The Japanese agencies are called Independent Administration Institutes (IAIs) and were instituted under an empowering law. The formation of the agencies was subject to the following criteria:?If the central government did not have to perform the activity?If privatized, the private sector could not ensure that public goals would be achieved?The national economy depended on the implementation of that activity.5.6.5.2 For each agency, the agency submits a plan for approval within the ambit of the ministerial directive. The plan consists of the budget and targeted improvements in efficiency and quality of the services provided. The minister normally sets 3-5 year goals for the agency. Each agency gets an operating grant to pay for any expected deficit, and a subsidy for its capital expenditure. There are no restrictions on how to spend the operating grant so long as the expenditure is for meeting objectives. Unspent balances can be carried forward, and the operating surpluses can be retained. The chief executive of the agency is appointed by the minister and is directly accountable to the minister. The chief executive appoints the senior executives of the agency on a contract appointment basis with performance-related pay.5.6.6 Sweden5.6.6.1 There are about 300 agencies in Sweden and actual operations of the government are conducted by these agencies. Approximately 99% of civil servants in Sweden are employed by the agencies while the remaining 1% work with the ministries.11 What distinguishes the agencies in Sweden from the line departments of the government in other countries is the independence that the agencies in the Swedish government enjoy. They are independent to take their own decisions, and they are free from any control and regulation by the central government. There is very clear separation between the ministries on the one hand and the agencies on the other. Such separation of policy and operational functions has been a hallmark of the Swedish government’s functioning for over 200 years.12 The results expected of the agencies are specified in the Letter of Instruction which the ministries issue to each agency. The contents of the Letter of Instruction includes a review of how the agency’s work contributes to the government’s desired outcomes, a specification of objectives and targets at an operational level, and how the agency should report back on the results achieved.11ESV (2001), Accrual Accounting in the Swedish Central Government 12J R Blondal, Budgeting in Sweden (2001), OECD5.6.7 Thailand5.6.7.1 In 1999, Thailand decided to borrow the agencification model from the Western countries, namely the United Kingdom’s executive agencies and New Zealand’s crown entities. Creation of agencies, called Autonomous Public Bodies (APOs), was empowered through a legislation. From 1999 to 2004, 17 APOs were established. These operate in the areas of education, commerce, tourism and sports, health, social development, culture, science and technology, energy, information technology, agriculture and cooperatives. Their sizes are small. Each is run by a strong board appointed by the concerned minister. The board appoints the CEO. The agency boards are typically chaired by ministers, permanent secretaries, other senior bureaucrats and advisors.5.6.8 How have the Executive Agencies worked?5.6.8.1 As mentioned earlier, agencification has been a success in the UK and elsewhere. A comprehensive review that was commissioned by the UK government in 2002 concluded, “the executive agencies brought about revolutionary changes in the culture, processes and accountabilities of those services delivered directly by central government... The agency model has changed the landscape of government. Extremely flexible, it provides the most responsive and accountable framework for delivering executive functions from within central government... The agency model has been a success.”135.6.8.2 In New Zealand, the experiment with agencification has also been a success. The State Services Commission observed in 1994, “The now much smaller core public service is beginning to show clear improvements in operating efficiency and in responsiveness to clients. It costs the government less than it did ten years ago, and is no longer a regulatory impediment to ideas and productive energies in the wider economy and community.”14 In Australia, over the first four years of agencification (1988-89 to 1992-93), the commercial and quasi-commercial revenues of the agencies nearly doubled, and these covered nearly 30% of the total running costs of these bodies in 1992-93 as compared to about 15% in 1988-89.15 The Australian agencies appear to have improved their performance significantly under a regime of autonomy and professional management.16 In Japan, research in 57 agencies in 2003 revealed that operating economy of these bodies had increased, employees had become more quality, cost-reduction and customer-oriented, and effectiveness had improved.1713Alexander and others, Better Government Services: Executive Agencies in the 21st Century (2002), Report commissioned by the British Government. 14New Zealand State Services Commission, (1994), p.1815John Dixon, Alexander Kouzmin and Nada Korac-Kakabadse, “The commercialization of the Australian Public Service and the accountability of government: a question of boundaries”, International Journal of Public Sector Management, vol. 9. 5/6 (1996), pp.23-3616John S. Dawkins, “Achieving improvements in economic transitions: the Australian experience”, Public Administration and Development, vol.15,3 (1995), pp.237-24417Kiyoshi Yamamoto, “Performance of semi-autonomous public bodies: linkage between autonomy and performance in Japanese agencies,” Public Administration and Development, vol.26 (2006), pp 35-46115Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex5.6.8.3 As can be seen, a key initiative that these reforming countries have undertaken in revamping their system of public administration is setting up of executive agencies to carry out the operational responsibilities of the government within a policy and resources framework set by the government. As we have seen, total management and financial responsibility has been given to these executive agencies so that they are able to put in place structures and processes that match their needs and deliver results as agreed upon. On the whole, agencification has led to clarity and focus on specified tasks, a culture of service delivery, greater accountability and openness, contextually appropriate structures and systems compared to the earlier standardized and monolithic systems, innovative thinking and action, development of a brand for the services offered, better risk management, and greater tendency to expose problems rather than keep them hidden.185.6.9 Position in India5.6.9.1 In India, while some agencies or structured as Departments of Government, some have statutory backing and others or registered as a company, cooperative, trust or a society. The line departments of the government are not in a position to optimally deliver government services largely because of the overwhelming nature of centralised controls they are subjected to and the lack of operational autonomy and flexibility. Centralised controls as they exist now reinforce a focus on inputs rather than results and are a great stumbling block to performance.5.6.9.2 At present, micro-management is the culture in the ministries. It is, therefore, necessary that the detailed central controls are replaced by guidelines and minimum standards. While standards need to be maintained, advice provided and best practices promoted, the culture must be one of facilitation, not of undue intervention. Civil servants in the implementing agencies must be given autonomy, greater flexibility and incentives to achieve results.5.6.9.3 From the experience of agencification in other countries as well as in India, the term public sector in a broader sense refers to a continuum starting with the departmental undertakings at one end and stretching towards autonomous agencies and offices to corporatised units on the other. For example, in India, the Railways is organized as a departmental agency undertaking, scientific establishments are structured under autonomous organizations like the CSIR, Space Commission etc while a large number of units working on commercial lines are organized as companies (Public Sector Undertakings). The relationship between the different types of government organizationsand the government is schematically presented in Fig. No. 5.1. The relationship of Government with departmental undertakings is one of direct control and supervision but it shifts towards greater autonomy when accountability is sought to be ensured through performance agreements and contracts.5.6.9.4 The Commission is of the view that each Union Government Ministry should scrutinize the activities and special purpose bodies of the Ministry. The following questions should be asked as a prelude to the formation of the Ministry’s executive agencies:Does the activity/special purpose vehicle need to be carried on at all? Ministries often accumulate activities and bodies that have no use in the present context. Such bodies and activities need to be identified for closure, and their staff should be re-deployed.If the activity/body is seen to be necessary in today’s context, should the activity be administered by the ministry, in the light of the management capacities available in the civil society and corporate public and private sectors and in the light of current governance priorities? If serious equity or security issues or legal issues are not involved, many government activities can be safely outsourced to institutions in the civil society/corporate public or private sector, if this is more cost effective than the ministry carrying on the activity.5.6.9.5 Each agency, whether a new body or an existing departmental undertaking/agency/ board/special purpose body etc. that is to function as an executive agency, must be semiautonomous or autonomous and professionally managed under a mandate. Such executive agencies could be structured as a subordinate office of the department or as a board, commission, company, society etc. (Figure No. 5.1)5.6.9.6 While the precise structuring of the executive agency, as a subordinate office of the department or as a board, commission etc would be determined by the nature of functions entrusted to it, the Commission feels that the company form of structure could be adopted for government organizations whose activities are primarily in the business environment, often in competition with private sector players. In the social sector on the other hand. a society form of organization would be more appropriate because they cannot work as profit centres. Some activities of national importance or of a strategic nature would require the organizations concerned to have statutory backing like the Atomic Energy Commission, the Space Commission etc or will have to be carried out by departments themselves.11611718Alexander and others, Better Government Services: Executive Agencies in the 21st Century (2002), Report commissioned by the British GovernmentOrganisational Structure of Government of IndiaThe Structure of Government of India at the Apex5.6.9.7 Mere creation of executive agencies is not an end in itself. What is equally important is to ensure that the right balance between autonomy and accountability is struck while designing the institutional framework of the agency, which, in turn, would be determined by the nature of activity/functions entrusted to it. This could be achieved through well designed performance agreements, Memorandum of Understanding (MOU), contracts etc. However, preparing and enforcing such performance contracts requires considerable upgradation of capacity in the concerned government departments.5.7 Internal Reorganisation of Ministries5.7.1 Organisational structure refers to the formal and informal patterns of relationship by which an institution organizes and distribute powers. The structure of an organization has also been defined19 as “the architecture both visible and invisible which connects and weaves together all aspects of an organization’s activities so that it functions as a complete dynamic entity”.5.7.2 Bureaucracies everywhere, have generally been structured on principles of hierarchy, top down authority and control. They are usually compartmentalized into layers in a vertical hierarchy and while bureaucracies are generally identified with Governments, they can be the part of any large organization. Based on the experiences in the private sector, management theory today focuses on various attempts to break free from the traditional bureaucratic structure. “The new watchwords are teams (preferably cross-functional), lateral communications, the minimization (if not outright removal) of hierarchy, and the sparse use of rules. Informality and the exploitation of expertise, wherever it may lie in the corporation, are the essential idea. With some variance in emphasis, the same basic tenets can be found underpinning the so-called “high performance work systems” and the “knowledge creating companies”20.5.7.3 While the traditional or classical model of bureaucracy was of a rigid, inflexible, control driven, hierarchical, uniform and centralized organizational structure, the present paradigm focuses on flatter, less hierarchical, and more flexible, multi-disciplinary organisational structures.managed under a mandate. Such executive agencies could be structured as a department, board, commission, company, society etc.d. The right balance between autonomy and accountability needs to be struck while designing the institutional framework of executive agencies. This could be achieved through well designed performance agreements, Memorandum of Understanding (MOU), contracts etc. However, preparing and enforcing such performance contracts requires considerable upgradation of capacity in the concerned government departments.5.6.10 Recommendationsa. Each Union Government Ministry should scrutinize the functions/ activities of the ministry to confirm whether these activities/functions are critical to the mission of the Department and can only be carried out by government agencies. This should be done with reference to core areas mentioned by the Commission in para 4.1.1.a.b.Only those functions/activities that are in line with the principlesenunciated in paragraph 5.5.2.7 (a) should be carried out directly by the Department/Ministries. Other functions/activities should be carried out by the executive agencies of the department.c. Each agency, whether a new body or an existing departmental undertaking/ agency/board/special purpose body etc. that is to function as an executive agency, must be autonomous or semi-autonomous and professionally11811919From paper entitled “Considering Organisation Structure and Design from a Complexity Paradigm Perspective” by Elizabeth McMillan 20Mabey, Salaman & Storey (2001, p-164)Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex5.7.4 The structure in the Ministries and Departments emanates from the Transaction of Business Rules as well as from the Manual of Office Procedure. The Manual defines the following terms:Department -(1) A department is responsible for formulation of policies of the government in relation to business allocated to it and also for the execution and review of those policies.(2) For the efficient disposal of business allotted to it, a department is divided into wings, divisions, branches and sections.(3) A department is normally headed by a secretary to the Government of India who acts as the administrative head of the department and principal adviser of the Minister on all matters of policy and administration within the department.(4) The work in a department is normally divided into wings with a Special Secretary/Additional Secretary/Joint Secretary in charge of each wing. Such a functionary is normally vested with the maximum measure of independent functioning and responsibility in respect of the business falling within his wing subject, to the overall responsibility of the Secretary for the administration of the department as a whole.(5) A wing normally comprises a number of divisions each functioning under the charge of an officer of the level of Director/Joint Director/Deputy Secretary. A division may have several branches each under the charge of an Under Secretary or equivalent officer.(6) A section is generally the lowest organisational unit in a department with a well-defined area of work. It normally consists of assistants and clerks supervised by a Section Officer. Initial handling of cases (including noting and drafting) is generally done by assistants and clerks who are also known as the dealing hands.(7) While the above represents the commonly adopted pattern of organisation of a department, there are certain variations, the most notable among them beingthe desk officer system. In this system the work of a department at the lowest level is organised into distinct functional desks each manned by two desk functionaries of appropriate ranks e.g. Under Secretary or Section Officer. Each desk functionary handles the cases himself and is provided adequate stenographic and clerical assistance.(8) The other notable variation is the Integrated Headquarters of Ministry of Defence where, the Vice Chiefs of Staff, the Principal Staff Officers of the concerned branches and other appropriate authorities, exercise the powers delegated by the Raksha Mantri through the various Branches and the Directorates of the Integrated Headquarters of the Ministry of Defence.(9) Functions of various levels of functionaries :(a) Secretary – A Secretary to the Government of India is the administrative head of the Ministry or Department. He/she is the principal adviser of the Minister on all matters of policy and administration within the Ministry/Department, and his/her responsibility is complete and undivided.(b) Special Secretary/Additional Secretary/Joint Secretary – When the volume of work in a Ministry exceeds the manageable charge of a Secretary, one or more wings may be established with Special Secretary/ Additional Secretary/Joint Secretary, incharge of each wing. Such a functionary is entrusted with the maximum measure of independent functioning and responsibility in respect of all business falling within his/her wing subject to the general responsibility of the Secretary for the administration of the wing as a whole.(c) Director/Deputy Secretary – Director/Deputy Secretary is an officer who acts on behalf of the Secretary. He/she holds charge of a Secretariat Division and is responsible for the disposal of Government business dealt within the Division under his/her charge. He/she should, ordinarily be able to dispose of the majority of cases coming up to him/her on his/her own. He/she should use his discretion in taking orders of the Joint Secretary/Secretary on more important cases, either orally or by submission of papers.120121Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex(iv) to put up the Guard file, if necessary, and supply other relevant facts and figures; and(v) to bring out clearly the question under consideration and suggest a course of action wherever possible.(g) Lower Division Clerk – Lower Division Clerks are ordinarily entrusted with work of a routine nature, for example – registration of Dak, maintenance of Section Diary and File Registers, indexing and recording, typing, despatch, preparation of arrears and other statements, supervision of correction of reference books and submission of routine and simple drafts etc.5.7.5 As is evident from the Manual of Office Procedure, a department in the Government of India has a vertical hierarchical structure with the Secretary as the administrative head and several levels comprising Special Secretary/Additional Secretary, Joint Secretary, Director/Deputy Secretary, Under Secretary and Section Officer/Desk Officer.MinistryMinister/MOSDepartmentSecretaryWingSpecial Secretary/Additional Secretary/Joint SecretaryDivisionDirector/Deputy SecretaryBranchUnder SecretarySectionSection Officer(In several Ministries, in place of Section Officers attached to a section, a Desk Officer System is in place)5.7.6 Thus there are six levels in most Ministries and if one were to include the dealing hand (usually an Assistant/UDC/LDC), the number of levels actually comprises seven. A hierarchical multi-level structure has certain strengths but several weaknesses. While such a system enables a vertical division of labour with extensive supervision and checks and balances at different levels, it also causes delays due to sequential examination, dilutes(d) Under Secretary – An Under Secretary is in charge of the Branch in a Ministry consisting of two or more Sections and in respect thereto exercises control both in regard to the despatch of business and maintenance of discipline. Work comes to him from the sections under his charge. As Branch Officer he disposes of as many cases as possible at his own level but he takes the orders of Deputy Secretary or higher officers on important cases.(e) Section Officer -A.General dutiesB.Responsibilities relating to DakC.Responsibilities relating to issue of draftD. Responsibility of efficient and expeditious disposal of work and checks on delaysE. Independent disposal of casesF.Duties in respect of recording and indexing(f) Assistant/Upper Division Clerk – He works under the orders and supervision of the Section Officer and is responsible for the work entrusted to him. Where the line of action on a case is clear or clear instructions have been given by the Branch Officer or higher officers, he should put up a draft without much noting. In other cases, he will put up a note keeping in view the following points :-(i) to see whether all facts open to check have been correctly stated;(ii) to point out any mistakes or incorrect statement of the facts;(iii) to draw attention, where necessary, to precedents or Rules and Regulations on the subject;122123Organisational Structure of Government of IndiaThe Structure of Government of India at the Apexrather than enhances accountability, prevents an inter-disciplinary approach towards solving problems and kills creativity. For routine regulatory matters such as issue of licenses/permissions etc., such a rigid hierarchical structure with prescribed workflows and adequate delegation may be appropriate, but for functions like policy formulation, managing change, crafting a holistic approach on inter-disciplinary matters, problem solving etc. it does not give optimum results and infact could be counter productive.5.7.7 A new approach to policy making would call for restructuring the design of the ministries to make them less hierarchical, by creating flatter structures with team-based orientation. The ministries, as they function now, are centralized, hierarchical organizations tightly divided into many layers, boxes and silos. Much of the civil service hierarchies in the ministries continue to be structured along traditional lines of authority, carefully regulated to ensure that as few mistakes are made as possible. The staff in the ministries is more concerned with internal processes than with results. The systemic rigidities, needless complexities and over-centralization in the policy-making structures are too complex and too constraining. There are too many decision points in the policy structures, and there are a large number of veto points to be negotiated for a decision to emerge. While such hierarchical exercise of authority provides some control of quality and integrity of decision-making, it often leads to exasperating delays and takes the focus away from delivering results. It is necessary that these hierarchies should be dismantled and team-based structures be introduced.5.7.8 The Commission is of the view that the structure as well as the procedures of Government Departments require significant changes. In particular, greater flexibility is required both in the structure as well as the procedures to deal with the different functions assigned to different Departments. This would require flexible organizational structures which can reorient themselves to tackle evolving situations.5.7.9 The Commission feels that the best way to achieve the objective of reducing delays and creating more responsive, efficient and accountable organizational structures would be by modifying the existing structure of the Government Departments and incorporating elements of team based working for achieving the tasks and objectives assigned to them. As mentioned earlier, the Ministries would basically concentrate on policy making, supervision, monitoring and evaluation and budgetary processes while leaving the implementation to executive agencies (attached / subordinate offices). Functions like supervision and monitoring and evaluation could continue to be performed through the traditional organizational structure. This issue is further elaborated in the following paragraphs.5.8 Simplification of Governmental Processes5.8.1 Government organizations are bureaucratic. The term ‘bureaucratic’ often carries a negative image and denotes red tapism, insensitivity and the rule bound nature of an organization. When Max Weber propounded ‘bureaucracy’ as a form of organization he meant organizations structured along rational lines, where:?offices are placed in a hierarchical order?operations are governed by impersonal rules thereby reducing discretion. There is a set of rules and procedures to cater for every situation?officials are given specific duties and areas of responsibility?appointments are made on the basis ofqualifications and merit5.8.2 Unlike a commercial organization which is driven by the sole profit motive, government organizations have multiple objectives, government organizations function in a more complex environment, the situations which government organizations face are much more varied and challenging and above all government organizations are accountable to several authorities and, above all, to the people. In a commercial organization, the test of profitability determines the decision. This is not possible in government organizations and therefore rules and procedures are developed to minimize discretion, and guide the decision making process within the organization. This is not to say that private commercial organizations never have bureaucratic structures or do not have internal rules but their rules are usually not as elaborate and as rigid as in government organizations. Rules and procedures in government ensure that the organization is able to deal with people in an equitable, predictable and fair manner. However, rigid adherence or over dependence on these tends to curb innovation and reduce organisational responsiveness and sensitivity.5.8.3 The rules and procedures which govern the working of government organizations are laid down in various laws, regulations and executive instructions. There are general rules which apply to all government Ministries/Departments. There may also be rules applicable to only a particular organization. The general rules which lay down the procedures in government are provided in the Secretariat Manual of Office Procedure. The Manual has been amended from time to time in order to adapt the procedures to emerging challenges. The current procedures have several strengths as well as weaknesses.124125Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex5.8.4 Strengths5.8.4.1 Recordkeeping5.8.4.1.1 The present office procedures ensure an elaborate system for maintaining records of “not only what has been done but also of why it was so done”. The present system of files moving across many levels, with each level clearly recording its views/ decisions, leads to creation of an institutional record of how decisions, past and present, were/are arrived at.5.8.4.1.2 While the present system undeniably creates voluminous manual records, the use of this data remains constrained due to lack of proper categorization, referencing and access systems.5.8.4.2 Accountability5.8.4.2.1 An elaborate system of paper based records helps in pin-pointing responsibility for each decision made in a Government Department. In theory, this would also ensure that accountability can be enforced for wrong decisions.5.8.4.2.2 In practice however, the system fosters risk avoidance and inhibits free and fair expression of views by honest officers for fear of reprisal on the one hand while the involvement of multiple individuals in the decision making process can lead to diffusion of accountability.5.8.4.3 Institutional memory5.8.4.3.1 A robust record maintenance system helps in the creation of an institutional memory of past policies and precedents that can guide future decision making.5.8.4.3.2 While reliance on institutional memory may be desirable in cases where uniformity of approach is required but when it comes to new and emerging problems, a blind application of such precedents may prove counter productive. Over-reliance on precedents, discourages independent application of mind and inhibits creative approaches to problems. Another drawback is that even in routine decision making where such institutional memory can be best used, absence of effective data retrievable systems leads to ‘cherry picking’ precedents to suit one’s convenience.5.8.4.4 Inbuilt Redundancy-self Correcting5.8.4.4.1 Examination of an issue on file by multiple levels enables repeated scrutiny which in turn enables correction of errors and omissions at any particular level and thus creates a kind of self correcting mechanism.5.8.4.5 Insulates Individual Functionaries from Extraneous Influences5.8.4.5.1 The present office procedures enable individual functionaries to record their independent views on the files. The system, at least in theory, safeguards the right of expression of individual functionaries and protects them from extraneous influences and victimization, more so with the coming in force of the Right to Information Act.5.8.5 Weaknesses5.8.5.1 Multiple Layers Lead to Inefficiency and Delays5.8.5.1.1 The Manual of Office Procedure lays down at least seven to eight levels –from the dealing hand to the Minister - through which papers usually pass before decisions are taken. It has also been observed that many of the levels do not make any significant contribution in decision making. Multiple scrutiny inevitably leads to delays, and abdication of responsibility in the examination process in the erroneous belief that other levels would ensure adequate analysis.5.8.5.2 Fuzzy Delegation5.8.5.2.1 The multiple levels, as stated above, combined with vague and/or inadequate delegation encourages ‘reverse delegation’ of work to higher levels. This is particularly because the Manual is extremely vague as regards the specifics of delegation especially at the level of Under Secretary/Deputy Secretary/Director/Joint Secretary. For example, it has been provided that:(b) Special Secretary/Additional Secretary/Joint Secretary – When the volume of work in a Ministry exceeds the manageable charge of a Secretary, one or more wings may be established with Special Secretary/Additional Secretary/Joint Secretary, incharge of each wing. Such a functionary is entrusted with the maximum measure of independent functioning and responsibility in respect of all business falling within126127Organisational Structure of Government of IndiaThe Structure of Government of India at the Apexhis wing subject, to the general responsibility of the Secretary for the administration of the wing as a whole.(c) Director/Deputy Secretary – Director/Deputy Secretary is an officer who acts on behalf of the Secretary. He holds charge of a Secretariat Division and is responsible for the disposal of Government business dealt within the Division under his charge. He should, ordinarily be able to dispose of the majority of cases coming up to him on his own. He should use his discretion in taking orders of the Joint Secretary/ Secretary on more important cases, either orally or by submission of papers.(d) Under Secretary – An Under Secretary is in charge of the Branch in a Ministry consisting of two or more Sections and in respect thereto exercises control both in regard to the despatch of business and maintenance of discipline. Work comes to him from the sections under his charge. As Branch Officer he disposes of as many cases as possible at his own level but he takes the orders of Deputy Secretary or higher officers on important cases.5.8.5.2.2 The Manual apparently envisages that all three levels mentioned above can take independent decisions. But this has not been spelt out adequately and is presumably left to individual Departments to specify. In practice, however, it has been observed that many Departments have not done so thus leaving it to the discretion of individual officers whether to dispose of matters at his level or send it to the next level. Due to a pervasive culture of risk avoidance, the inevitable result is the practice of routinely sending all files upwards.5.8.5.3 Focus on File Management at the Expense of outcomes 5.8.5.3.1 The Manual of Office Procedure states that:“The ultimate object of all Government business is to meet the citizens’ needs and to further their welfare without undue delay. At the same time, those who are accountable for the conduct of that business have to ensure that public funds are managed with utmost care and prudence. It is, therefore, necessary, in each case, to keep appropriate record not only of what has been done but also of why it was so done.”5.8.5.3.2 Even though the manual emphasizes the importance of outcomes over processes, the bulk of the stipulations are focussed on file management and recordkeeping. TheManual does not appear to recognize that the goal of process compliance is subservient to the goal of achieving the outcomes targeted by the Department. For example, the ultimate objective appears to be ‘Final Disposal’ of a case which is defined as:‘Final disposal’ in relation to a case under consideration means completion of all actions thereon culminating, where necessary, in the issue of final orders or final reply to the party from which the original communication emanated.5.8.5.4 Reactive Rather than Proactive Approach5.8.5.4.1 The Manual of Office Procedure appears to emphasise the action to be taken on receipt of papers rather than on a proactive approach towards the Departments’ priorities. Even the definition of the work to be done by the Under Secretary seems to reiterate this approach.Under Secretary – An Under Secretary is in charge of the Branch in a Ministry consisting of two or more Sections and in respect thereto exercises control both in regard to the despatch of business and maintenance of discipline. Work comes to him from the sections under his charge. As Branch Officer he disposes of as many cases as possible at his own level but he takes the orders of Deputy Secretary or higher officers on important cases.5.8.5.4.2 Similarly, the Paper Under Consideration (PUC) which sets the process in motion is defined as follows:‘Paper under consideration (PUC)’ means a receipt on a case, the consideration of which is the subject matter of the case.5.8.5.5 Absence of Team-based Working5.8.5.5.1 The multiple levels along with division of task into separate units leads to creation of quasi-independent silos within each department. Complex issues requiring a multi-disciplinary approach thus get embroiled in turf battles rather than generating a holistic approach. The need for inter-disciplinary work teams for dealing with crosscutting issues is not met due to the hierarchical and heavily segmented structure combined with procedures that constrain team efforts.128129Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex5.9 Recasting the Manual of Office Procedure 5.9.1 Well defined delegation at all levels5.9.1.1 As per the Transaction of Business Rules, the work in any Department has to be carried out under the specific or general instructions of the Minister. Since it is not humanly possible for the Minister to take all decisions, the implication is that there should be a detailed scheme of delegation of decision making powers at all levels in the Ministry/ Department. A scheme of delegation does exist in each Ministry/Department and is also mentioned in the Manual of Office Procedure, but their specific contents vary in different Ministries/Departments and is also not well defined in some cases. Even though the Manual of Office Procedure states that officers at the level of Joint Secretary/Additional Secretary/ Special Secretary are “entrusted with maximum measure of independent functioning and responsibility in respect of all business falling within their wings”, in actual fact it is observed more in its breach than in reality. It has been observed that in many Departments it is left to the discretion of the officers concerned to judge for themselves, the level at which a particular matter is to be decided. The experience has been that officers often tend to ‘play safe’ and ‘mark’ files to higher levels even in respect of routine matters.5.9.1.2 The Commission feels that these issues can best be resolved by ensuring that each Ministry/Department lays down a detailed scheme of delegation at all levels so that the decision making takes place at the most appropriate level. The Commission is of the view that it should be laid in the Manual of Office Procedure that every Ministry/Department should prescribe a detailed scheme of delegation for its officers. This delegation should be arrived at on the basis of an analysis of the activities and functions of the Ministry/ Department and the type of decisions that these entail which should be dovetailed with the decision making units identified in that Department. This should be updated periodically and should also be ‘audited’ at regular intervals to ensure adherence to the scheme of delegation. The audit should ensure that the delegated authority is actually exercised by the delegatee. The scheme of delegation should be placed in the public domain. The basic principle underlying the scheme of delegation should be that no item of work should be handled at a level higher than where it ought to have been dealt with.5.9.2 Minimising levels to reduce delays5.9.2.1 As mentioned in paragraph 5.7.6, there are at least 7 levels from the dealing hand to the Minister whose views are recorded on a file (often without or much valueaddition) before a decision is taken. The number of layers and the time taken in the physical movement of files leads to considerable delays and inefficiencies. Though the Manual of Office Procedure provides for ‘level jumping’ and some Ministries have taken the initiative to reduce the number of levels, it is felt that Government of India as a whole should take a major initiative to minimize layers to improve the quality of decision making and significantly reduce delays.5.9.2.2 The Commission feels that the number of levels through which a file should pass for a decision should not exceed three. Only in cases where the Minister’s approval is required, should the file be initiated by the Deputy Secretary/Director concerned and moved through the Joint Secretary (or Additional Secretary/Special Secretary) and the Secretary (or Special Secretary) to the Minister. Cases requiring approval of the Secretary should go through just two levels (e.g. either US and Director, US and JS or Director and JS). Cases requiring approval of the JS/Director/DS should come through just one level. The exact combination of levels should be spelt out in the scheme of delegation for each Ministry/Department whereas the number of levels as suggested above should be prescribed in the Manual of Office Procedure.5.9.3 Shift from process compliance to outcomes5.9.3.1 The Manual of Office Procedure emphasizes the importance of processes, but its stipulations are largely related to file management and recordkeeping. In practice, this has therefore meant dilution of the intended focus on outcomes. The Commission understands the importance of processes but would like to reiterate that instead of blind adherence to processes it is necessary to acknowledge the spirit behind the processes also. The Commission feels that this can be remedied by each Department specifying its key objectives. The tasks assigned to each departmental unit should be linked to these objectives. The Commission in its Tenth Report has suggested the introduction of a performance management system in the Government. The salient features of such a system should be incorporated in the Manual of Office Procedure. This would ensure a built-in evaluation system to assess the quality of decision making5.9.4 Innovative approaches through multi-disciplinary work teams5.9.4.1 At present, the increasing need for inter-disciplinary work teams to deal with the complex issues being handled by each Department is not being met due to the hierarchical130131Organisational Structure of Government of IndiaThe Structure of Government of India at the Apexand segmented structure prescribed in the Manual of Office Procedure. The Commission feels that there should be greater flexibility for the concerned Department to adopt the structure best suited for their work. The Commission would like to emphasise that the conventional hierarchical structure may be well suited for certain routine administrative functions, but for other activities which require a more holistic approach, flatter structures are more relavant and useful. For addressing complex cross cutting issues that cannot be handled in the traditional manner, the Secretary of the concerned Department should have the flexibility to create such team based structures. Such an approach would also help to better utilize the skills and capabilities available among the civil servants. This would also serve to improve the morale and motivation of civil servants who otherwise may be restricted to their limited assignments.5.9.5 Shift from an ad-hoc application of precedents to systematic classification and transparent use of past records5.9.5.1 One of the tenets of bureaucracy is application of rules to decide specific cases to ensure uniformity, transparency and objectivity. Since it is not possible for rules to cover every conceivable situation, precedents are often cited where rules are silent. Although reliance on precedents has its advantages in that it enables one to avoid re-examination of similar cases, it also has the disadvantage that it may promote a culture of blind adherence to past decisions and lack of innovative solutions. Another shortcoming of such an approach is that it may lead to selective application of precedents particularly in the absence of systematic classification and transparent use of past records.5.9.5.2 The Commission is of the view that Departments should build an electronic database of decisions that are likely to be used as precedents. Thereafter such database should be periodically reviewed and where necessary, changes in rules introduced in order to codify them. There may also be precedents that may be the result of wrong or arbitrary decision making which the Department would prefer not to rely on for the future. In such cases, the Department would have to appropriately change its policy/guidelines and if required even the rules to ensure that these precedents are not wrongly used.5.9.6 Shift from a reactive to a proactive approach5.9.6.1 The Manual of Office Procedure, at present, places overwhelming emphasis on action to be taken on receipt of papers/files rather than on taking the initiative to lay down the objectives of the Department and taking decisive actions to achieve them. Thisreactive approach has often led to inertia even in the face of emerging problems, which are therefore not addressed in time. The emphasis should therefore shift to speedy decision making and problem solving.5.9.7 Recommendationsa. Each Department should lay down a detailed scheme of delegation at all levels so that the decision making takes place at the most appropriate level. It should be laid down in the Manual of Office Procedure that every Ministry should prescribe a detailed scheme of delegation for its officers. This delegation should be arrived at on the basis of an analysis of the activities and functions of the Ministry/Department and the type of decisions that these entail which should be dovetailed with the decision making units identified in that Department.b. The scheme of delegation should be updated periodically and should also be ‘audited’ at regular intervals. The audit should ensure that the delegated authority is actually exercised by the delegatee. The scheme of delegation should be placed in the public domain.c.The number of levels through which a file passes for a decision should not exceed three.i.In cases where the Minister’s approval is required, the file should be initiated by the Deputy Secretary/Director concerned and should be moved through the Joint Secretary (or Additional Secretary/Special Secretary) and the Secretary (or Special Secretary) to the Minister.ii. Cases requiring approval of the Secretary should go through just two levels (e.g. either US and Director, US and JS or Director and JS).iii. Cases requiring approval of the JS/Director/DS should come through just one level. The exact combination of levels should be spelt out in the scheme of delegation for each Ministry/Department whereas the number of levels as suggested above should be prescribed in the Manual of Office Procedure.iv. The Department dealing with administrative reforms in the132133Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex5.10 Coordination Mechanisms5.10.1 Cabinet Committee and GoMs5.10.1.1 There is need for ensuring extensive horizontal coordination where policies are spread over a number of departments and where policy delivery mechanisms are distributed in different parts of the government. This issue of coordination among departments in the Government of India was also examined by the First Administrative Reforms Commission (First ARC). It observed as follows:‘One of the major tasks of the Cabinet is to ensure coordination of all important policies, programmes and decisions of Government. There exist at present nine Standing Committees of the Cabinet as follows:Internal Affairs;Foreign Affairs;Defence;Prices, Production and Exports; Family Planning;Food and Agriculture; Tourism and Transport; Parliamentary Affairs; and Appointments.’5.10.1.2 The First ARC went on to add – ‘Some of the Committees have not met regularly. Several important subjects are not covered by these Committees. Further, they can take up a matter only if it is referred to them by the Minister concerned or by the Cabinet. It is necessary to remove these basic deficiencies in their working. They should cover between them all important areas of Government activity. It is also essential that each Cabinet Committee meets regularly so that sustained attention is given to complex problems and the process of implementation of important policies and programmes is kept under constant review.’5.10.1.3 The First ARC recommended the creation of 11 Standing Committees of the Cabinet for the following items:(1) Defence;(2) Foreign Affairs;(3) Economic Affairs;(4) Parlliamentary Affairs and Public Relations;(5) Food and Rural Development;(6) Transport, Tourism and Communications;(7) Social Services (including Social Welfare and Family Planning);(8) Commerce, Industry and Science;(9) Internal Affairs (including Centre-State Relationships);(10) Administration; and(11) Appointments.Union Government should be entrusted with the task of ensuring compliance with this stipulation.d. For addressing cross cutting issues, the Secretary of the concerned Department should have the flexibility to create inter-displinary teams.e.The Manual of Office Procedure should be recast based on the principles stated in paragraph 5.9.f.The Departments should build an electronic database of decisions that are likely to be used as precedents. Thereafter such database should be periodically reviewed and where necessary, changes in rules introduced in order to codify them. There may also be precedents that may be the result of wrong or arbitrary decision making which the Department would prefer not to rely on for the future. In such cases the Department would have to appropriately change its policy/guidelines and if required even the rules to ensure that these precedents are not wrongly used.134135Organisational Structure of Government of IndiaThe Structure of Government of India at the Apex5.10.1.4 The First ARC also observed that each of the Cabinet Committees mentioned above should be supported by a Secretaries’ Committee in order to ensure that time and energy are not wasted in dealing with issues which can be settled at the Secretaries’ level. It further suggested that as the Cabinet Secretary carries a heavy burden which is likely, under our recommendations, to become even heavier in the future he should therefore, be relieved of a part of his responsibility for presiding over and looking after the work of these Committees, by some of his senior colleagues. It also added that apart from the Standing Committees, there may be occasions which call for the setting up of ad hoc Committees of Ministers. These should, as suggested by the Study Team, merely inquire into particular issues and report back to the Cabinet or its appropriate Standing Committee as considered necessary.5.10.1.5 At present, the following Cabinet Committees have been constituted:a.Appointments Committee of the Cabinetb. Cabinet Committee on Accommodationc.Cabinet Committee on Economic Affairsd. Cabinet Committee on Management of Natural Calamitiese.Cabinet Committee on Parliamentary Affairsf.Cabinet Committee on Political Affairsg.Cabinet Committee on Pricesh.Cabinet Committee on Securityi.Cabinet Committee on World Trade Organisation Matters5.10.1.6 In addition, several Groups of Ministers (GOMs) have been constituted to look into different issues/subjects. Some of these GOMs have been empowered to take decisions on behalf of the Cabinet whereas the others make recommendations to the Cabinet. The Commission understands that the constitution of a large number of GoMs has resulted in many GoMs not being able to meet regularly to complete their work thus leading to significant delays on many major issues.5.10.1.7 The Commission feels that more selective use of the institution of Group of Ministers would perhaps lead to more effective coordination particularly if they are empowered to arrive at a decision on behalf of the Cabinet with time limits that are prescribed for completing the work entrusted to them.5.10.2 Coordination Role of the Cabinet Secretariat5.10.2.1 The Cabinet Secretariat plays an important role in coordination of inter-Ministerial matters. Whenever inter-Ministerial coordination is required, the concerned Ministries seek the assistance of the Cabinet Secretariat. The inter-Ministerial problems are dealt with in the meetings of the Committees of Secretaries (COS). These Committees are constituted for discussing specific matters and proposals emanating from various Secretaries to the Government and meetings are held under the chairmanship of the Cabinet Secretary. The Secretary (Coordination) plays an important role in assisting the Cabinet Secretary in inter-Ministerial coordination.5.10.2.2 The discussions of the COS takes place on the basis of a paper formulated by the principal Department concerned and the Department with a different point of view, if any, providing a supplementary note. The decisions or recommendations of the COS are unanimous. The Cabinet Secretariat is seen as a useful mechanism by the Departments for promoting inter-Ministerial coordination since the Cabinet Secretary is also the head of the civil services. The Secretaries therefore consider it necessary to keep the Cabinet Secretary informed of significant developments whenever necessary. The Transaction of Business Rules also require them to keep the Cabinet Secretary informed of developments, from time to time, specially if there are any departures from these rules.215.10.3 Other Coordination Mechanisms5.10.3.1 In addition to the high level coordination mechanisms mentioned above, coordination between Government Departments is also achieved through various other formal and informal mechanisms. The formal mechanisms may include inter-Ministerial committees and working groups that are set up from time to time to deliberate on specific issues or to oversee the implementation of different government schemes and programmes. Coordination is also achieved through inter-Ministerial consultations which could occur through movement of files or through meetings between the representatives of the concerned Ministries.13613721Extracted from the Website of Cabinet anisational Structure of Government of IndiaThe Structure of Government of India at the Apex5.10.3.2 The Commission recognizes the importance of coordination amongst various Ministries/Departments, more so because of new and emerging challenges in many sectors which require a coordinated national response. The Commission has already recommended re-grouping of government functions into inter-related categories to be assigned to a Coordinating Minister to improve such coordination. Besides, while examining the internal structures of the Ministries, the Commission has suggested a flexible, inter-disciplinary team based approach which would inherently serve to improve coordination.5.10.3.3 The need for inter-Ministerial coordination at the apex level would be reduced as a result of these measures. Nonetheless, there will always be issues and problems for which high level inter-Ministerial coordination would be required. In such cases, the extent and quality of coordination would depend on the skill of the coordinator and the spirit with which the members participate. To achieve the necessary coordination, a Secretary should function as a member of a team rather than as a spokesperson of his/her Department’s stated position. Furthermore, effective functioning of the existing mechanisms comprising the Cabinet Secretariat, Committee of Secretaries, Group of Ministers and Cabinet Committees should, therefore, be adequate to meet the requirement of inter-Ministrial coordination.5.10.3.4 An area where the Commission feels the need for having a formal coordination mechanism relates to issues which may arise between the States and the Union Government particularly in relation to sectors like power, transport, water etc. While, at present, such issues are often taken up for resolution by the Government of India through discussions between the concerned Ministry/Ministries and the States, there may be instances where resolution of such issues gets delayed in the absence of an inter-Ministerial mechanism. It should be possible to resolve such stalemates by the States bringing the matter before the Cabinet Secretary for consideration by the Committee of Secretaries based on which the Union Cabinet could take a final view. Secretary (Coordination) could play a key role in facilitating this coordination.5.11 Reducing Paperwork in Government Offices5.11.1 In the Commission’s Report on e-Governance, the Commission has recommended as under:“Business Process Re-engineeringa.For every function a government organization performs and every service orinformation it is required to provide, there should be a step-by-step analysis of each process to ensure its rationality and simplicity.b.Such analysis should incorporate the viewpoints of all stakeholders, whilemaintaining the citizen-centricity of the exercise.c.After identifying steps which are redundant or which require simplification, andwhich are adaptable to e-Governance, the provisions of the law, rules, regulations, instructions, codes, manuals etc. which form their basis should also be identified.d.Following this exercise, governmental forms, processes and structures should bere-designed to make them adaptable to e-Governance, backed by procedural, institutional and legal changes.”5.11.2 In addition, the Commission recommended:“Each government organization should prepare a time-bound plan for providing of transactional information through their websites. To begin with, this could be done by updating the websites at regular internals, while at the same time, re-engineering the back-end processes and putting them on computer networks. Ultimately, all the back-end processes should be computerized.”Moreover, the Commission has recommended that “A clear road map with a set ofmilestones should be outlined by Government of India with the ultimate objective of transforming the citizen-government interaction at all levels to the e-Governance made by 2020. This may be enshrined in a legal framework keeping in consideration the mammoth dimension of the task, the levels of required coordination between the Union and State Governments and the diverse field situations in which it should be implemented.”5.11.3 The recommendations outlined in the Commission’s Report on e-Governance, as briefly summarized above, are reiterated. The Manual of Office Procedure would also have to be updated from time to time during the transition from manual paper based transaction to electronic processes and this task should be entrusted to the Department of Administrative Reforms and Public Grievances.138139CREATING AN EFFECTIVE REGULATORY FRAMEWORK66.1 Introduction6.1.1 One of the terms of reference of the Commission is:“1.4.1 To suggest a framework for possible areas where there is need for governmental regulation (regulators) and those where it should be reduced”While examining issues related to citizen centric administration, the Commission classified the functions of Government as: self preservation, supervision and resolution of conflicts, social and economic development, and regulation and provision of goods and services. The functions of government are laid down in the Constitution of a country. The Constitution of India also lays down the role and functions of the three levels of government – Union, State and Local. These are spelt out in the Part III on Fundamental Rights, Part IV on the Directive Principles of State Policy, Parts IX and IX A on local bodies, etc. For the sake of present analysis the functions of a government could be broadly categorized as follows:a.Regulatory functionsb.Service providing functionsc.Developmental functions 6.2 Regulatory Functions6.2.1 According to Thomas Jefferson, government is created to secure the inalienable rights of all citizens - i.e., the right to life, liberty and the pursuit of happiness. If everyone were to be allowed to pursue complete freedom for doing whatever he wants and to pursue his happiness, then it may lead to a situation where rights and freedom of other persons are affected. This necessitates the regulatory role of the government. The State enacts laws which impose restrictions on the activities of citizens, in the larger interest of society. In order to enforce these laws, the State creates a large number of organizations which are charged with the implementation of these laws. However, attaining ‘optimum regulation’ is a challenging task, as a balance has to be achieved between individual’s freedom and society’s interest.6.2.2 Thus, regulation has always been a key function of the State. The State creates regulatory frameworks which prescribe the limits within which individuals as well as organizations can function. The Constitution and the vast set of laws in any country stipulate the limits ofOrganisational Structure of Government of India5.12 Recommendationsa.There is need to ensure that the existing coordination mechanisms like the Group of Ministers, and Committee of Secretaries function effectively and help in early resolution of issues as stated in para 5.10 Selective, but effective use of GOMs with clear mandate and prescribed time limits, would be helpful.b. Unresolved issues concerning States which require inter-Ministerial coordination in Government of India, should be placed before the Committee of Secretaries (COSs) and then to the Union Cabinet for resolution.140141Organisational Structure of Government of IndiaCreating An Effective Regulatory Framework142as a result the legislation becomes an end itself; and (iv) the complex procedural formalities stipulated in these regulations. It is, therefore, necessary to have a detailed scrutiny of all laws and regulations – Union, State and Local – followed by repeal of unnecessary regulations, updation of outdated ones and simplification of the procedures so that compliance becomes easy.b.Regulation to be effective: One of the consequences of a large number of regulationshas been the poor standards of their enforcement. Social legislations are classic examples of this. Slack enforcement leads to corrupt and unethical practices and the objectives of the legislations are also not met. Another reason for the poor enforcement of some regulations is the lack of attention to building capacity in the agencies entrusted with enforcement of such regulations. For example, the capacity and expertise of the Motor Vehicles Department has not kept pace with the explosive growth of vehicles on the road. The Commission is of the view that in order to ensure that the regulatory measures do not degenerate into corrupt practices it is necessary to have an effective supervision of the agencies which carry out these regulatory functions. This supervision should primarily be carried out internally by the supervisory officers and should be supplemented by a periodic assessment by an independent agency.c.Self regulation is the best form of regulation: In the field of taxation, there has beena shift from departmental assessment to greater reliance on self assessment. This holds good for Union taxes such as Income tax, State taxes like the VAT and local taxes like the property taxes. This principle of voluntary compliance can be extended to other fields like building bye-laws, public health regulations etc. To start with, this principle can straightaway be applied to cases where permission/licence is required to be renewed periodically.d.Regulatory procedures to be simple, transparent and citizen friendly: The Commissionin its Report on ‘Ethics in Governance’ has dealt with a series of systemic reforms so as to minimize the scope for corruption. These include simplifying transactions, using IT, promoting transparency, reducing discretion, effective supervision etc.e.Involving citizens’ groups, professional organizations in the regulation activities. Theburden of the enforcement machinery can be shared by associating citizens’ groups as well as professional organizations to certify compliance and report violations of the regulations to the concerned authorities. Recently, in Delhi the procedure for grant of building permissions has been simplified and registered architects have been authorized to certify the building plans of houses. This has helped in reducing the work of the civic agencies and reduced corruption as well. This principle could be also extended to other spheres of activities.143permissible conduct. However, mere stipulation of such limits is not enough unless these are enforced through an appropriate mechanism.6.2.3 In India, as stated earlier, the regulatory role of government stems from the provisions of the Constitution which empower the Union and State Legislatures to make laws on various subjects. Besides, Article 19 of the Constitution empowers the State to impose reasonable restrictions on the exercise of various Rights-conferred by Article 19-in the interest of public order, sovereignty and integrity of India, protecting the interest of the general public, or in the interest of decency, morality etc. Consequently, there is a plethora of laws and rules which seek to regulate the activities of individuals and groups of individuals. These are in the form of municipal laws and byelaws, laws governing vehicular traffic, laws governing possession of weapons, laws to prevent public nuisance, taxation laws which impose taxes and stipulate different requirements to be met by the assessees, laws relating to immigration etc. The Constitution as well as the laws enacted by Parliament have established the institutions and mechanisms to enforce the laws and rules. Article 53(1) of the Constitution regulates the exercise of the executive powers of the Union. Further, Article 53(3) authorizes Parliament to confer by law such functions to ‘authorities’.6.2.4 International agencies have rated India as a relatively over-regulated State that casts a heavy burden on business and citizens, and thereby diminishes India’s growth rate, increases corruption, and also makes it a less attractive destination for foreign investment. The Global Competitiveness Report 2003-2004 of World Economic Forum (World Economic Forum, 2004, p.263), ranked India 67th out of 102 countries on the burden of regulations, and 50th on business costs of corruption. India scored 2.8 on Transparency International’s 2004 freedom from corruption index (Transparency International, 2004, Table 1) (Finland, New Zealand, Denmark, Iceland, Singapore and Switzerland all scored above 9.0).226.2.5 Some horrific statistics have been reported on how Indian regulations choke initiative. According to the Global Competitiveness Report 2000, the median number of permits needed to start a firm was no more than 3 in Singapore, UK, Canada, Japan, etc., but as high as 10 in India23 (IMD, 2000, Table 8.35). Even in China, only 6 permits were required. Even worse were the figures for the median number of days needed to start a firm: 7 in the UK, 30 in China, and 90 in India (IMD, 2000, Table 8.356).6.2.6 The Commission in its Twelfth Report on ‘Citizen Centric Administration’ emphasized the following aspects of regulation:a.Regulation only where necessary: It has been argued that India is an over-regulatedcountry, but many of the regulations are not implemented in right earnest. The reasons include – (i) the sheer number of such regulations; (ii) outdated regulations that continue to remain on the statute book; (iii) the tendency to over-legislate -22REVAMPING GOVERNMENT OF INDIA’S PUBLIC ADMINISTRATION FOR GOVERNANCE EXCELLENCE by Prof. Pradip N. Khandwalla (Commissioned by the Administrative Reforms Commission)23IbidOrganisational Structure of Government of IndiaCreating an Effective Regulatory Framework6.3 Statutory Independent Regulatory Agencies6.3.1 Regulation by government through its own Departments or Agencies directly under its control has always existed. The last century has seen the emergence of a special category of regulatory systems – the Independent Statutory Regulating Agencies. These agencies differ from the conventional regulating system as they are separated from the executive wing of the government and enjoy a certain degree of autonomy.6.3.2 The concept of independent regulations took birth in the USA. A large number of Federal Agencies were set up by Acts of Congress, the basic premise of the establishment of these agencies being that a market based economy needs to be regulated in order to ensure a level playing field to all and also to safeguard the larger public and national interest. Other factors, which favoured the creation of independent regulations were – increasing complexities and the advancement of technologies required handling of issues by experts; public interest is best served by insulating decision making in certain issues, from political interference. In India, with the initiation of the process of economic liberalization in the early 90s, government withdrew from many activities which, hitherto were monopolized by it. The entry of the corporate sector necessitated certain measures to boost the investor competence and to safeguard public interest. One such measure was setting up of independent regulators. In addition, the traditional departmental structure of government was not best suited to play the dual role of a policy making as well as regulating the sector concerned, more so, because in several sectors there were public sector units competing with corporate bodies. The aforesaid circumstances led to the setting up of several independent statutory regulating agencies in sectors such as Power, Telecom, Financial services, Insurance etc.6.3.3 There is one more category of regulators – Self Regulatory Authorities. These Authorities are created under different laws but they are self regulatory in nature. The functions of Self-Regulatory Bodies may include: (i) issues of professional education: development of curriculum, setting up of teaching standards, institutional infrastructure, recognition of degrees etc. and (ii) matters connected with licensing, and ethical conduct of the practitioners. There are organizations like the Institute of Engineers which was formed purely by voluntary action by the respective members of the profession. They do not have any statutory background. The Commission in its Ninth Report on Social Capital has examined issues concerning the Self Regulatory Authorities and made recommendations.6.3.4 A comparative analysis of the legal framework of independent Self Regulatory Authorities in India is given in Table 6.1.Table No. 6.1 : Comparison of Functions and Powers of Different Regulatory BodiesB y the Central Government. Removal in case of acquisition of financial interest or abuse of power on report after enquiry conducted by the Supreme Court on reference received from the Central Government (Section 7)By the Central Government on the recommendation of a Selection Committee, except in case of Judges o f the Supreme Court or Chief Justice of the High Courts (Sections 3, 4 and 5)Chairperson and three other Members {Section 3(4)}CERCIRDATRAISEBI (SEBI Act,1992)Criteria/OrganisationSl.No.By the CentralGovernment (Section 6)By the CentralGovernment (Section 4)Chairperson; not more than five whol e- tim e members; not more than four part-time members. (Section 4)Chairman; not more than two whole-time and not more than two part-time Members (Section 3)B y the Central Government. Removal in case of acquisition of financial interest or abuse of power on report after enquiry conducted by the Supreme Court on reference received from the Central Government. (Section 7)By the CentralGovernment (Section 3) .Chairman; two Members nominated by Government of India; one Member from RBI; five other Members (at least three whole-time); Section 4(1)By the CentralGovernment {Sections 5 (2) and 6}By the CentralGovernment {Section 4( 1 )}BoardRemoval of Board MembersAppointment of Board Members144145Organisational Structure of Government of IndiaCreating an Effective Regulatory FrameworkCERCRegulation of ratesIRDAChairperson: 5 years or attainment of 65 years of age;Other Members: 5 years or attainment of 62 years of age (Section 6)Regulate the tariff of generating companies owned or controlled by the Central Government; in case of other companies also if they generate and sale in more than one state (Section 13)Levying fees and other charges (Section 14)TRAI3 years or 65 years of age whichever is earlier (Section 5)Chairperson: 5 years or attainment of 65 years of age;Whole-time members: 5 years or attainment of 62 years of age;Part-time members: 5 years (Section 5)Regulate, promote and ensure orderly growth of the insurance business and re-insurance business; adjudication of disputes between insurers and intermediaries or insurance intermediaries(Section 14)Levying fees and other charges (Section 11)SEBI (SEBI Act,1992)Table No. 6.1 : Comparison of Functions and Powers of Different Regulatory BodiesRegulating Stock Exchanges; registering and regulating intermediaries, FIIs, depositories etc.3 years or 65 years of age whichever is earlier (Rules)Recommending terms and conditions of license to service providers etc. (Section 11)Levying fees and other charges (Section 11)FunctionsCriteria/Fees anisationTenure of Board MembersSl.No.CERCCFIPowers of a civil courtHigh Court (Section 16)IRDA----Conducting inquiries and investigations (Section 14)Grants provided by the Central Government after due appropriation made by Parliament by law in this behalf (Section 15); credited to IRDA Fund along with fees and charges; all expenses to be met out of this Fund (Section 22)TRAIGrants provided by the Central Government after due appropriation made by Parliament by law in this behalf (Section 21); credited to TRAI General Fund along with fees and charges; all expenses to be met out of this Fund (Section 22)SEBI (SEBI Act,1992)Conducting inquiries and investigations (Section 12)SAT (Section 15K)Grants provided by the Central Government after due appropriation made by Parliament by law in this behalf (Section 13); credited to SEBI General Fund along with fees and charges; all expenses to be met out of this Fund (Section 14)Conducting inquiries and investigations; suspending activities; attaching bank accounts (Section 11); issuing directions (Section 11B); levying various penalties and powers of adjudication (Section 15)Table No. 6.1 : Comparison of Functions and Powers of Different Regulatory BodiesTeleco m D is putes Settlement and Appellate Tribunal (Section 14)Source o f FinancePowersCriteria/OrganisationAppellate AuthoritySl.No.146147Organisational Structure of Government of IndiaCreating an Effective Regulatory Framework6.4 Issues6.4.1 Defining the term ‘Independent Regulators’6.4.1.1 ‘The creation, design and consequences of independent regulatory agencies represent a classic example of delegation to non-majoritarian institutions. They are created by legislation, hence elected officials are their principals. They are organizationally separate from governments and headed by unelected officials. They are given powers over regulation, but are also subject to controls by elected politicians and judges.’ {Mark Thatcher. West European Politics, Vol.25 1 (January 2002),pp 125-147}. The role of these independent regulators include not only fostering competition in the sector, but also establishing standards and codes so as to maximize benefits for consumers and for the economy as a whole.6.4.1.2 In the post-economic liberalization period, a large number of independent regulatory mechanisms have been set up in India with the primary goal of providing a level playing field for private industry, foster competition and above all to protect the interests of consumers. Recent examples of such mechanisms include the Telecom Regulatory Authority of India (TRAI), followed by the various Electricity Regulatory Commissions (ERCs) and the Insurance Regulatory and Development Authority (IRDA). However, even prior to the setting up of these Regulators, India has had the experience of regulation of certain sectors by bodies which are at an arm’s-length from Government. The most important of these is India’s Central Bank i.e. the Reserve Bank of India. But there were other regulatory authorities such as the Central and State Pollution Control Boards, the Monopolies and Restrictive Trade Practices Commission (MRTPC), to be now replaced by the Competition Commission etc.6.4.1.3 Another way of categorizing the Regulators would be to distinguish between general regulators such as the Competition Commission and the subject specific Regulators which include TRAI, IRDA etc.6.4.2 Proliferation of Regulatory Authorities6.4.2.1 A large number of Regulators have been set up in recent times by the government to whom certain functions previously performed by the government have been transferred. Creation of independent Regulators in respect of certain sectors/industries has helped to promote transparency, a long-term perspective in decision making, insulation from day-to-day political interference, improvement in service standards with substantial benefits to consumers and fostering of competition.Table No. 6.1 : Comparison of Functions and Powers of Different Regulatory Bodies(1) Power to issue Directions: Central Government may give directions in writing on questions of policy involving public interest which the Commission is bound to follow. The decision of the Central Government whether a question is one of policy involving public interest or not is final (Section 38).(2) Commission to furnish an Annual Report to the Central Government, to be laid before each House of Parliament (Section 35).CERCIRDA(1) Power to issue Directions: Central Government may give directions in writing on questions of policy other than those relating to technical and administrative matters which the Authority is bound to follow. The decision of the Central Government whether a question is one of policy or not is final (Section 18).(2) Power to Supersede: On account of inability to discharge functions; failure to comply with directions or in public interest; Central Government may supersede the Authority by way of Notification for six months. However, it has to present a full report on such actions before the Parliament (Section 19).(3) Authority to furnish returns and an Annual Report to the Central Government, to be laid before each House of Parliament (Section 20).TRAI(1) Power to issue Directions: Central Government may give directions in writing in the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality and on questions of policy which the Authority is bound to follow. The decision of the Central Government whether a question is one of policy or not is final. (Section 25).(3) Authority to furnish returns and an Annual Report to the Central Government, to be laid before each House of Parliament (Section 24).(2) Powers to make Rules lie with the Central Government. Only Regulations could be made by the Authority (Sections 35, 36)SEBI (SEBI Act,1992)(1) Power to issue Directions: Central Government may give directions in writing on questions of policy which the Board is bound to follow. The decision of the Central Government whether a question is one of policy or not is final. (Section 16).(2) Power to Supersede: On account of inability to discharge functions; failure to comply with directions or in public interest; Central Government may supersede the Board by way of Notification for six months. However, it has to present a full report on such actions before the Parliament (Section 17).(3) Board to furnish returns and an Annual Report to the Central Government, to be laid before each House of Parliament (Section 18).Criteria/OrganisationInterface with Government of IndiaSl.No.148149Organisational Structure of Government of IndiaCreating an Effective Regulatory Framework6.4.2.2 At the same time, there is also an increasing perception that a number of regulators are being set up on an ad-hoc basis by different Ministries, sometimes with overlapping jurisdictions leading to lack of coordination and issues of turf. The fact that different regulators have been set up with varying terms of appointment, tenure etc. is also a reflection of this. Such proliferation of Regulators is not unique to India and has also been seen in other countries. In the United Kingdom (UK) for example, this issue was examined by the ‘Better Regulation Task Force’ which in its report of October 2003 recommended the following:(i) Before establishing a new independent regulator, a Department should carry out a landscape review of the delivery of the policy objective. This should explore whether another regulator could take on the new function, or whether a number of regulators could be subsumed within the new function.(ii) Department should carry out regular end-to-end reviews of their policy delivery areas to assess which bodies continue to deliver their policy objectives effectively and whether there are some bodies which are no longer necessary.6.4.2.3 The Commission is of the view that a similar exercise should be made mandatory for all Ministries/Departments before they create any new regulator.6.4.3. Appointment and Removal of the Members of the Authority6.4.3.1 The Commission has examined some of the legal provisions relating to appointment, tenure and removal of the Chairmen and Board Members of various regulatory authorities. These provisions are also shown in Table No. 6.1. The number of Board members vary from nine in the case of SEBI, to four in the case of CERC, and include some part-time members. Appointments are made in the case of the Boards of SEBI, TRAI and IRDA, by the Union Government and to the Board of CERC by the Union Government on the recommendation of the Selection Committee (except in the case of Judges of the Supreme Court or Chief Justices of the High Courts).6.4.3.2 The tenure varies from three years or 65 years of age whichever is earlier in the case of SEBI and TRAI; to five years or 65 years of age whichever is earlier for the Chairpersons of IRDA and CERC.6.4.3.3 The power for removal of Board Member(s) is vested with the Union Government in the case of SEBI and IRDA subject to fulfilment of certain conditions. In the case of TRAI and CERC, such removal can only be done in case of acquisition of financial interestsor abuse of power, after enquiry conducted by the Supreme Court on a reference received from the Union Government.6.4.3.4 The Commission feels that there is need for greater uniformity in the terms of appointment, tenure and removal of various Regulatory authorities considering these have been set up with similar objectives and functions they should also enjoy the same degree of autonomy. The Commission further feels that the initial process of appointment of the Chairmen and Board Members should be transparent, credible and fair. The Commission would, therefore, suggest that the appointment of the Chairmen and Board Members for all such regulatory authorities should be done by the Union/State Governments from a panel of names based on recommendations of a Selection Committee. The composition of the Selection Committee should be defined in the respective Acts and may broadly follow the pattern laid down in the Electricity Regulatory Commissions Act, 1998.6.4.3.5 Similarly, the tenure of the Chairmen and Board Members could also be made uniform preferably three years or 65 years of age whichever is earlier.6.4.3.6 As regards removal of the Chairmen and Board Members, legal provisions may be made uniform while at the same time ensuring sufficient safeguards against arbitrary removal. This could be achieved by allowing removal by the Union Government only on fulfilment of certain conditions as laid down in Section 6 of the IRDA Act with the additional safeguard that a removal for abuse of power shall be preceded by an inquiry and consultation with UPSC.6.4.4 Interface with Government6.4.4.1 Since Regulators have been hived off from Government departments for the purpose of carrying out government policies, a close link between the two is essential while respecting the autonomy and independence of the Regulators. Some aspects of this interface are spelt out in the statute creating the regulator while others have evolved out of conventions and practices of government departments. These include:-i.Appointment and approval of membersii.Provisioning of fundsiii.Facilitation of Parliamentary interfaceiv.Capacity building including interaction with regulators from other countries150151Organisational Structure of Government of IndiaCreating an Effective Regulatory Frameworkv.Regulation of public sector undertakingsvi. Miscellaneous administrative mattersvii. Issue of policy directivesviii. Personnel policiesix. Audit and vigilancex.Coordination with other departments and other regulatorsxi. Powers to make rulesxii. Supersessionxiii. Periodical reports to government6.4.4.2 While interface with the government on the various aspects mentioned above is critical to the effective functioning of the regulator, it is also essential to evolve healthy conventions so that the autonomous functioning of regulator is not diluted. The Commission has examined the practices in this regard in other countries. In the UK, the treasury department has prepared a model management statement for the use of regulators and the government departments (Box No.6.1). The Commission is of the view that in addition to the statutory framework which underpins the interface between the government and the regulator, each Ministry/Department should evolve a ‘Management Statement’ outlining the objectives and roles of each regulator and the guidelines governing their interaction with the government. This would guide both the government department and the regulator.6.4.5 Accountability6.4.5.1 A Regulator can retain its legitimacy and credibility only if it is accountable for how it uses the powers that have been delegated to it by the legislature. Often, it has been perceived that there is trade off between independence and accountability whereas the two are mutually reinforcing. Unless there is accountability, independence will not be justified and the greater the level of autonomy, the more critical it is to have credible accountability mechanisms.6.4.5.2 Accountability can best be ensured by adhering to the following broad principles:24?The independent regulator should be backed by a statute.?There should be a clear well-defined mandate for the Regulator.?Relationship with the legislature, executive and the judiciary should be clearly defined.?The procedure for appointment and removal of Regulators should be clearly laid down in law.?Decision making should be transparent.?Mechanisms for superceding such agencies should also be defined in law.6.4.5.3 The Commission has examined the accountability mechanisms for Regulator in other countries. In the UK, the following mechanisms are in place:25?All regulators have an accounting officer;?They have to produce annual accounts – which everyone can read;?They can be audited by the National Audit Office or the Audit Commission;?They can be subject to value for money examinations by the National Audit Office; or?They can be called to appear before the relevant House of Commons or Lords select committee to answer for their actions.6.4.5.4 Another aspect of accountability is accountability of the Regulator to stakeholders and citizens. In the UK, the following ‘good practices’ are in use to promote answerability to the stakeholders:-26?Corporate plans;?Open meetings;?An accessible and affordable appeals mechanism;Box No. 6.1 : What Does a ManagementStatement Set Out??The regulator’s overall aim(s), objectives and targets in support of the sponsor/parent Department’s wider strategic aims and current Public Service Agreement;?The rules and guidelines relevant to the exercise of the regulator’s functions, duties and powers;?The conditions under which any public funds are paid to the regulator; and?How the regulator is to be held to account for its performance?Source: Better Regulation Task Force – Independent Regulators, October 2003.15215324Adopted from – Should Finance Sector Regulators Be Independent?, by Marc Quintyn & Michael W. Taylor (International Monetary Fund, 2004). 25Report of the Better Regulation Task Force – Independent Regulators, October 2003. 26Report of the Better Regulation Task Force – Independent Regulators, October anisational Structure of Government of IndiaCreating an Effective Regulatory Framework?Open consultation exercises and then open feedback;?Publication of Board agendas, papers and minutes (as appropriate);?Regulatory impact assessments;?Statements of proposed action;?Comprehensive – but easy to use – websites; and?Discussion for a on websites6.4.5.5 In India the regulatory bodies in general have the following features that are relevant to their accountability:i)They have been constituted on the basis of statute which also lays down termsof appointment and removal of Board Members.ii)Their decisions can be appealed against before a specified appellant authorityin most cases. Naturally, they are also subject to the writ jurisdictions of High Courts and the Supreme Court.iii) The accounts of regulator are audited by the Comptroller and Auditor General.iv) They are legally bound to prepare an annual report and submit to the Government who in turn lays it before each House of Parliament.v)The respective statutes have mandated that regulators shall ensure transparencywhile exercising their powers and discharging their functions.vi) The Chairmen, Members and officers of regulators are deemed to be public servants within the meaning of Section 21 of the Indian Penal Code (IPC).6.4.5.6 In practice, Parliamentary oversight of the Regulators in India has been through occasional appearance before the Parliamentary Committees and the Departmental Consultative Committees combined with laying of annual reports and other papers before Parliament. The Commission understands that Government is considering a proposal to bring Regulators of various sectors under Parliamentary scrutiny through an exclusive Parliamentary Standing Committee for Regulators. The Commission feels that ensuring accountability of Regulators to Parliament is desirable. However, having an exclusiveParliamentary Committee for Regulators may not be feasible given the widely varying mandate and area of operations of the regulators. Since the Regulators have to work in close conjunction with the concerned Ministries, appearance before the Departmentally Related Standing Committees of the Parliament will facilitate effective legislative oversight. However, it needs to be ensured that Parliamentary Committees do not question the regulators’ day-to-day functioning, and instead focus on their major decisions.6.4.5.7 The Commission is also of the view that there should be independent evaluation of the work of these Regulators, based on pre-specified parameters. Such evaluation should be done by a panel of outside experts in a periodic manner. In fact, the High Level Committee on Financial Sector Reforms set up by the Planning Commission in 2007 has recommended the following with regard to independent evaluation of regulators in the financial sector in its Report: 27Once in five years, a body of reputed outside experts (including possibly regulators elsewhere) would be constituted to propose guidelines for the evaluation of the regulator for the next five years, given the legislative mandate.Based on the report of experts, the government, in consultation with the Parliamentary Committee and the regulator, would finalize the specific principles (the ‘remit’) the regulator would be held accountable for, including any parameters for annual evaluation.The regulator would submit an annual report to parliament (this does happen currently for many regulators). This report would include the progress on pre-agreed evaluation parameters and would be be discussed in the parliamentary Committee.The Parliamentary Committee would be guided by the remit in its discussions with regulator.The annual report, the statement of the regulator to the Committee, and a transcript of the Committee discussions with the regulator should be made widely accessible to the public.The Commission is of the view that a periodical evaluation of all regulators should be carried out on the lines mentioned above.6.4.6 Uniformity in Structure and Powers6.4.6.1 As indicated earlier, there are significant variations in the size and composition of the governing boards, manner of appointment, removal of chairmen/members, tenure,15415527‘A Hundred Small Steps’; Report of the Committee on Financial Sector Reforms; page 133Organisational Structure of Government of IndiaCreating an Effective Regulatory Frameworkprovision of appeals, sources of finance, interface with the government etc. The Commission is of the view that at least in respect of certain provisions like manner of appointment, tenure, interface with the government etc. the statutory provisions should be, by and large, uniform for all regulators.6.4.6.2 A suggestion has been made that given the growing importance of regulation in several critical sectors of economy, governance relating to regulatory institutions has assumed an important role and in order to focus on regulatory reform and governance, a separate Department of Regulatory Affairs may be created. The Commission is of the view that regulation per se is not a new activity for government and various government departments have been carrying out regulations in some form or the other. Regulation in different sectors may require sector specific approach and, above all, a deep insight as well as close cooperation between the regulator and the concerned government ministries. The creation of a separate Department of Regulatory Affairs would not help in ensuring good quality regulation because a generic regulatory department - as proposed - would never be able to acquire indepth sectoral expertise. The creation of a separate Department of Regulatory Affairs may help achieve greater uniformity in the structure of regulators, but this goal can also be achieved through other mechanisms. The existing coordination mechanisms such as the Committee of Secretaries could easily ensure that the institutional framework for all Regulators follow by and large a uniform pattern. This task could specifically be assigned to Secretary (Coordination) in the Cabinet Secretariat.6.4.7 Regulatory Impact Assessment6.4.7.1 A cost-benefit analysis of any proposal for regulation, whether done directly by a government department or by an independent Regulator, is now the norm in most of the developed countries. Generally, if the costs of a proposal are likely to outweigh the potential benefits, then alternative approaches need to be considered. A similar approach is necessary for evaluating the effectiveness of the existing Regulators and regulatory regime. The Commission is of the view that each statute creating a Regulator should include a provision for an impact assessment periodically by an external agency. Once the objective of creating a level playing field is achieved, the intervention of the Regulators could be reduced in a phased manner ultimately leading either to their abolition or to convergence with other regulators.would be better placed to deliver the policy objectives of the department concerned.b. In addition to the statutory framework which underpins the interface between the government and the regulator, each Ministry/Department should evolve a ‘Management Statement’ outlining the objectives and roles of each regulator and the guidelines governing their interaction with the government. This would guide both the government department and the Regulator.c.There is need for greater uniformity in the terms of appointment, tenure and removal of various regulatory authorities considering these have been set up with broadly similar objectives and functions and should enjoy the same degree of autonomy. The initial process of appointment of Chairman and Board Members should be transparent, credible and fair.d. The appointment of the Chairman and Board Members for all such regulatory authorities should be done by the Union/State Governments after an initial screening and recommendation of a panel of names by a Selection Committee. The composition of the Selection Committee should be defined in the respective Acts and may broadly follow the pattern laid down in the Electricity Regulatory Commission Act.e.The tenure of the Chairmen and Board Members could also be made uniform preferably three years or 65 years of age whichever is earlier.f.Legal provisions regarding removal of Board Members should be madeuniform while at the same time ensuring sufficient safeguards against arbitrary removal. This could be achieved by allowing removal by the Union Government only on fulfilment of certain conditions as laid down in Section 6 of the IRDA Act with the additional safeguard that a removal for abuse of power shall be preceded by an enquiry and consultation with UPSC.6.4.8 Recommendationsg. Parliamentary oversight of regulators should be ensured through the respective Departmentally Related Standing Parliamentary Committees.a.Setting up of a Regulator should be preceded by a detailed review to decidewhether the policy regime in the concerned sector is such that a Regulatorh. A body of reputed outside experts should propose guidelines for periodic evaluation of the independent Regulators. Based on these guidelines,156157Organisational Structure of Government of IndiaCONCLUSIONThe Commission in this Report has examined the organizational structure and functioning of the Government of India with a view to making it more pro-active, responsive, accountable and efficient. The Commission, has, therefore, attempted to redefine the role of various Ministries/Departments in order to meet new and emerging challenges of governance which necessitate a much greater degree of collaboration and coordination among them. Besides, the Commission has analysed the procedures as well as the internal structures of different Ministries and Departments with a view to make the Departments function in a more innovative and effective manner.The Commission recognizes that structural reforms are necessary but are not sufficient in themselves to improve governance and, therefore, need to be complemented by a series of other reform measures. The Commission has dealt with such measures in its other Reports. It is essential that all these reform initiatives are implemented in a synchronized way to achieve better governance.Given the complexity and size of the Government of India as an organization, the Commission has refrained from entering into finer details of the restructuring exercise and has confined itself to laying down broad principles. It is expected that individual Ministries/ Departments would be able to apply these principles in order to substantially reorganize themselves. Similarly, in case of several rules that govern the functioning of Government of India, the Commission has suggested certain generic changes. It would be for the Ministries to apply these suggestions in order to recast their rules so as to increase their efficacy. The reorganization needs to be driven by the necessary political will at the highest level and monitored regularly by the Cabinet Secretariat.Some of suggestions made in the Report may look radical but it needs to be recognized that implementing these, even in a phased manner, may be critical to achieving an effective transparent, coherent and efficient governance ernment in consultation with respective Departmentally related Standing Committee of the Parliament should fix the principles on which the Regulators should be evaluated. The annual reports of the regulators should include a report on their performance in the context of these principles. This report should be referred to the respective Parliamentary Committee for discussion.i.Each statute creating a Regulator should include a provision for an impactassessment periodically by an external agency. Once the objective of creating a level playing field is achieved, the intervention of the Regulators could be reduced in a phased manner ultimately leading either to their abolition or to convergence with other Regulators.j.There is need to achieve greater uniformity in the structure of Regulators.The existing coordination mechanisms such as the Committee of Secretaries/ Cabinet Committees, assisted by Secretary (Coordination) could easily ensure that the institutional framework for all Regulators follow, by and large, a uniform pattern.158159Summary of RecommendationsSUMMARY OF RECOMMENDATIONSb. Individual departments or any combination of these could be headed by the Coordinating (or First) Minister, other Cabinet Minister(s)/ Minister(s) of State.c. The structure of the Government of India should be rationalised by grouping together closely related subjects as illustrated in paragraph 5.3.10.5 in order to reduce the number of Ministries to 20-25.1. (Para 4.2) Core Principles of Reforming the Structure of Governmenta. The core principles mentioned in paragraph 4.1 should govern the restructuring of Government of India.2. (Para 5.1.11) Rationalising the Functions of Governmenta. The Government of India should primarily focus on the core functions stated in paragraph 5.1.10.b. Government at all levels should be guided by the principle of subsidiarity.c.There is need to carry out a detailed analysis of the functions/activities ineach Ministry/Department in the light of (a) and (b) above. This should be followed by restructuring which may include decentralization/delegation or hiving off activities.3. (Para 5.3.11) Rationalising and Reorganising the Ministries and Departmentsa. The concept of a Ministry would have to be redefined. A Ministry would mean a group of departments whose functions and subjects are closely related and is assigned to a First or Coordinating Minister for the purpose of providing overall leadership and coordination. This concept of a Ministry and the Coordinating (or First) Minister may be explicitly laid down in the Allocation of Business Rules. Adequate delegation among the Ministers would have to be laid down in the Transaction of Business Rules. As a consequence of this, rationalization of Secretary level posts wherever required may also need to be carried out.4. (Para 5.4.6) Recasting the Allocation of Business Rulesa. There is need to recast the Allocation of Business Rules to make them more focussed on the goals and outcomes of each Ministry/Department in order to shift the emphasis from a detailed listing of activities/subjects of each Ministry/Department to a broader perspective.b. The Allocation of Business Rules should first provide a Statement of the mission of the department followed by a list of subjects and functions.c.There is need to bring greater uniformity in the description of the rolesand functions of various Ministries/Departments.d. Ministries/Departments should maintain a master list of all laws pertaining to the subjects dealt with in that Ministry/Department instead of mentioning them in the Allocation of Business Rules. The underlying principle should be stated in the Rules that all laws relating to the subjects and functions allocated to a Ministry/Department would fall under its purview.e. Instead of naming the individual PSUs and autonomous organizations under each Ministry, the Rules should merely have a generic entry to the effect that all PSUs and Autonomous Organizations whose functioning is directly related to subject(s) of the concerned Ministry would be under its jurisdiction. However, in cases where activities of a PSU or an autonomous organization relates to more than one Ministry/Department, then it may be advisable to list out such PSUs under a particular Ministry/ Department.160161Organisational Structure of Government of IndiaSummary of Recommendations5. (Para 5.5.2.7) Focus on Policy Analysisa.In order to make them binding, the general principles to govern the extentof delegation from Departments to their attached and subordinate offices (executive agencies) may be incorporated in the Transaction of Business Rules. These principles may stipulate that the Ministries/Departments should concentrate on the following:i.Policy analysis, planning, policy making and strategic decisionsii. Budgeting and Parliamentary workiii. Monitoring of implementation through systems and proceduresiv. Appointments of key personnelv. Coordinationvi. Evaluationb. Attached and subordinate offices should serve as the executive agencies of the ministries and concentrate on the implementation of Government policies and programmes.6. (Para 5.5.3.3) Policy Evaluationa. Each Department should introduce a system of policy evaluation to be carried out at the end of prescribed periods. All relevant policies should be updated in the light of the findings of such evaluations.7. (Para 5.6.10) Creation of Effective Executive Agenciesa. Each Union Government Ministry should scrutinize the functions/ activities of the ministry to confirm whether these activities/functions are critical to the mission of the Department and can only be carried out by government agencies. This should be done with reference to core areas mentioned by the Commission in para 4.1.1.a.b.Only those functions/activities that are in line with the principles enunciated in paragraph 5.5.2.7 (a) should be carried out directly by theDepartment/Ministries. Other functions/activities should be carried out by the executive agencies of the department.c. Each agency, whether a new body or an existing departmental undertaking/ agency/board/special purpose body etc. that is to function as an executive agency, must be autonomous or semi-autonomous and professionally managed under a mandate. Such executive agencies could be structured as a department, board, commission, company, society etc.d. The right balance between autonomy and accountability needs to be struck while designing the institutional framework of executive agencies. This could be achieved through well designed performance agreements, Memorandum of Understanding (MOU), contracts etc. However, preparing and enforcing such performance contracts requires considerable upgradation of capacity in the concerned government departments.8. (Para 5.9.7) Reorganisation of Ministriesa. Each Department should lay down a detailed scheme of delegation at all levels so that the decision making takes place at the most appropriate level. It should be laid down in the Manual of Office Procedure that every Ministry should prescribe a detailed scheme of delegation for its officers. This delegation should be arrived at on the basis of an analysis of the activities and functions of the Ministry/Department and the type of decisions that these entail which should be dovetailed with the decision making units identified in that Department.b. The scheme of delegation should be updated periodically and should also be ‘audited’ at regular intervals. The audit should ensure that the delegated authority is actually exercised by the delegatee. The scheme of delegation should be placed in the public domain.c.The number of levels through which a file passes for a decision should notexceed three.i.In cases where the Minister’s approval is required, the file should beinitiated by the Deputy Secretary/Director concerned and should be moved through the Joint Secretary (or Additional Secretary/Special Secretary) and the Secretary (or Special Secretary) to the Minister.162163Organisational Structure of Government of IndiaSummary of Recommendationsii. Cases requiring approval of the Secretary should go through just two levels (e.g. either US and Director, US and JS or Director and JS).iii. Cases requiring approval of the JS/Director/DS should come through just one level. The exact combination of levels should be spelt out in the scheme of delegation for each Ministry/Department whereas the number of levels as suggested above should be prescribed in the Manual of Office Procedure.iv. The Department dealing with administrative reforms in the Union Government should be entrusted with the task of ensuring compliance with this stipulation.d. For addressing cross cutting issues, the Secretary of the concerned Department should have the flexibility to create inter-displinary teams.e.The Manual of Office Procedure should be recast based on the principlesstated in paragraph 5.9.f.The Departments should build an electronic database of decisions thatare likely to be used as precedents. Thereafter such database should be periodically reviewed and where necessary, changes in rules introduced in order to codify them. There may also be precedents that may be the result of wrong or arbitrary decision making which the Department would prefer not to rely on for the future. In such cases the Department would have to appropriately change its policy/guidelines and if required even the rules to ensure that these precedents are not wrongly used.9. (Para 5.12) Coordination Mechanismsa.There is need to ensure that the existing coordination mechanisms likethe Group of Ministers, and Committee of Secretaries function effectively and help in early resolution of issues as stated in para 5.10 Selective, but effective use of GOMs with clear mandate and prescribed time limits, would be helpful.b. Unresolved issues concerning States which require inter-Ministerial coordination in Government of India, should be placed before theCommittee of Secretaries (COSs) and then to the Union Cabinet for resolution.10. (Para 6.4.8) Creating an Effective Regulatory Frameworka.Setting up of a Regulator should be preceded by a detailed review to decidewhether the policy regime in the concerned sector is such that a Regulator would be better placed to deliver the policy objectives of the department concerned.b. In addition to the statutory framework which underpins the interface between the government and the regulator, each Ministry/Department should evolve a ‘Management Statement’ outlining the objectives and roles of each regulator and the guidelines governing their interaction with the government. This would guide both the government department and the Regulator.c.There is need for greater uniformity in the terms of appointment, tenureand removal of various regulatory authorities considering these have been set up with broadly similar objectives and functions and should enjoy the same degree of autonomy. The initial process of appointment of Chairman and Board Members should be transparent, credible and fair.d. The appointment of the Chairman and Board Members for all such regulatory authorities should be done by the Union/State Governments after an initial screening and recommendation of a panel of names by a Selection Committee. The composition of the Selection Committee should be defined in the respective Acts and may broadly follow the pattern laid down in the Electricity Regulatory Commission Act.e.The tenure of the Chairmen and Board Members could also be madeuniform preferably three years or 65 years of age whichever is earlier.f.Legal provisions regarding removal of Board Members should be madeuniform while at the same time ensuring sufficient safeguards against arbitrary removal. This could be achieved by allowing removal by the Union Government only on fulfilment of certain conditions as laid down in Section 6 of the IRDA Act with the additional safeguard that a removal164165List of Reports Submitted by theSecond Administrative Reforms Commission up to February 20091. First Report: Second Report:Right to Information: Master Key to Good Governance2. Unlocking Human Capital: Entitlements and Governance – A Case Study3. Third Report:Crisis Management: From Despair to Hope4. Fourth Report:Ethics in Governance5. Fifth Report:Public Order – Justice for All . . . Peace for All6. Sixth Report:Local Governance – An Inspiring Journey into the Future7. Seventh Report:Capacity Building for Conflict Resolution – Friction to Fusion8. Eighth Report:Combatting Terrorism – Protecting by Righteousness9. Ninth Report:Social Capital – A Shared Destiny10. Tenth Report:Refurbishing of Personnel Administration – Scaling New Heights11. Eleventh Report:Promoting e-Governance – The SMART Way Forward12. Twelfth Report:Citizen Centric Administration – The Heart of GovernanceOrganisational Structure of Government of Indiafor abuse of power shall be preceded by an enquiry and consultation with UPSC.g. Parliamentary oversight of regulators should be ensured through the respective Departmentally Related Standing Parliamentary Committees.h. A body of reputed outside experts should propose guidelines for periodic evaluation of the independent Regulators. Based on these guidelines, government in consultation with respective Departmentally related Standing Committee of the Parliament should fix the principles on which the Regulators should be evaluated. The annual reports of the regulators should include a report on their performance in the context of these principles. This report should be referred to the respective Parliamentary Committee for discussion.i.Each statute creating a regulator should include a provision for an impactassessment periodically by an external agency. Once the objective of creating a level playing field is achieved, the intervention of the Regulators could be reduced in a phased manner ultimately leading either to their abolition or to convergence with other Regulators.j.There is need to achieve greater uniformity in the structure of Regulators.The existing coordination mechanisms such as the Committee of Secretaries/ Cabinet Committees, assisted by Secretary (Coordination) could easily ensure that the institutional framework for all Regulators follow, by and large, a uniform pattern.166167FOURTEENTH REPORT: STRENGTHENING FINANCIAL MANAGEMENT SYSTEMSAPRIL 2009Government of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reforms and Public GrievancesResolutionNew Delhi, the 31st August, 2005No. K-11022/9/2004-RC. — The President is pleased to set up a Commission of Inquiry to be called the Second Administrative Reforms Commission (ARC) to prepare a detailed blueprint for revamping the public administration system.2.The Commission will consist of the following :(i)Shri Veerappa Moily - Chairperson(ii)Shri V. Ramachandran - Member(iii)Dr. A.P. Mukherjee - Member(iv)Dr. A.H. Kalro - Member(v)Dr. Jayaprakash Narayan - Member*(vi)Smt. Vineeta Rai - Member-Secretary3.The Commission will suggest measures to achieve a proactive, responsive,accountable, sustainable and efficient administration for the country at all levels of the government.The Commission will, inter alia, consider the following :(i)Organisational structure of the Government of India(ii)Ethics in governance(iii)Refurbishing of Personnel Administration(iv)Strengthening of Financial Management Systems(v)Steps to ensure effective administration at the State level(vi)Steps to ensure effective District Administration(vii)Local Self-Government/Panchayati Raj Institutions(viii) Social Capital, Trust and Participative public service delivery(ix)Citizen-centric administration(x)Promoting e-governance(xi)Issues of Federal Polity(xii) Crisis Management(xiii) Public OrderiSome of the issues to be examined under each head are given in the Terms of Reference attached as a Schedule to this Resolution.4. The Commission may exclude from its purview the detailed examination of administration of Defence, Railways, External Affairs, Security and Intelligence, as also subjects such as Centre-State relations, judicial reforms etc. which are already being examined by other bodies. The Commission will, however, be free to take the problems of these sectors into account in recommending re-organisation of the machinery of the Government or of any of its service agencies.5. The Commission will give due consideration to the need for consultation with the State Governments.6. The Commission will devise its own procedures (including for consultations with the State Government as may be considered appropriate by the Commission), and may appoint committees, consultants/advisers to assist it. The Commission may take into account the existing material and reports available on the subject and consider building upon the same rather than attempting to address all the issues ab initio.7. The Ministries and Departments of the Government of India will furnish such information and documents and provide other assistance as may be required by the Commission. The Government of India trusts that the State Governments and all others concerned will extend their fullest cooperation and assistance to the Commission.8. The Commission will furnish its report(s) to the Ministry of Personnel, Public Grievances & Pensions, Government of India, within one year of its constitution.Sd/(P.I. Suvrathan)Additional Secretary to Government of India*Dr. Jayaprakash Narayan – Member, resigned with effect from 1st September, 2007 (Resolution No. K.11022/26/207-AR, dated 17th August, 2007).ORGANISATIONSecond Administrative Reforms Commission1.Dr. M.Veerappa Moily, Chairman*2.Shri V. Ramachandran, Member**3.Dr. A.P. Mukherjee, Member4.Dr. A.H. Kalro, Member5.Dr. Jayaprakash Narayan, Member***6.Smt. Vineeta Rai, Member-SecretaryOfficers of the Commission1.Shri A.B. Prasad, Additional Secretary2.Shri P.S. Kharola, Joint Secretary#3.Shri R.K. Singh, PS to Chairman#4.Shri Sanjeev Kumar, Director5.Shri Shahi Sanjay Kumar, Deputy Secretary*Dr. M. Veeerappa Moily – Chairman, resigned with effect from 1st April, 2009 (Resolution No.K-11022/26/2007-AR, dated 1st April, 2009) **Shri V. Ramachandran was appointed Acting Chairman (Resolution No. K-11022/26/2007-AR, dated 27th April, 2009)***Dr. Jayaprakash Narayan – Member, resigned with effect from 1st September, 2007 (Resolution No.K-11022/26/2007-AR, dated 17th August, 2007)# Till 31.03.2009iiiiiCONTENTSChapter 1 Introduction1Chapter2Public Finance Management -3Concepts and Core PrinciplesChapter3An Overview of the Existing Financial22Management System in IndiaChapter4Analysis of Budgetary Process43Chapter5Flow of Funds from Union to the States –91Centrally Sponsored SchemesChapter6 Accrual System of Accounting100Chapter7Internal Control and Audit119Chapter8External Audit and Parliamentary Financial138and Budgetary ControlChapter9Financial Management in State Governments159Conclusion164Summary of Recommendations165LIST OF TABLESTable No.TitleTable 3.1:Types of Fund Release Mechanism (Select Cases)Table 4.1:Due Dates for Rendition of Estimates byUnion Ministries/DepartmentsTable 4.2:Details of Persistent Unspent Provision of Rs.100 Croreor More Under Grant / Appropriations Table 4.3:Unspent Provision was More than theSupplementary Grant / AppropriationTable 4.4:Analysis of Observations by CAG in case of Civil Ministries/DepartmentsTable 4.5:Extent of Cost Overrun in Projects with Respect to Original Cost (Statusas on 30.06.2008)Table 4.6:Extent of Time Overrun in Projects with Respect to Original Schedule(Status as on 30.06.2008)Table 4.7 :Demand for Grants Covered under the Modified CashManagement SystemTable 4.8 :Outcome Budget – Illustrative Cases (2007-08)Table 6.1:Operational Framework of Accrual Basis of Accounting inGovernmentTable 8.1:Does the Legislature Generally Approve the Budget as presented bythe GovernmentTable 8.2:Parliamentary Powers to Amend the BudgetTable 8.3:What Best Describes the Committee Structure for Dealing withthe Budget?LIST OF FIGURESFigure No.TitleFig.3.1:Devolution of Funds from Union to StatesFig.4.1:Month-wise Plan Expenditure (Rs. in Crore) for April2004-February 2009Fig.4.2:Month-wise non-Plan Expenditure (Rs. in Crore) for April 2004February 2009ivvFig.4.3:Actual Expenditure (Plan) for 2007-08 (up to December, 2007) inBIABoard of Internal Aduitcase of Ministries/Departments having a BE of more than Rs. 1000 croreC&AG/CAGComptroller and Auditor General of IndiaCAPARTCouncil of Advancement of People’s Action and Rural TechnologyFig.8.1:Summarised Position of Outstanding Action Taken NotesCASCore Accounting SystemCAsController of AccountsLIST OF BOXESCBSCore Banking SystemsBox No.TitleCCAsChief Controller of AccountsBox 3.1:Allocation between Capital and Revenue Expenditure on a CapitalCDAController of Defence AccountsSchemeCEOChief of Excellence for Internal AuditCFSSConsolidated Fund Standing ServicesBox 4.1:Accounting Deficiencies in case of Centrally Sponsored SchemesCGDAComptroller General of Defence Accounts(CSS)CIAChief Internal AuditorBox 4.2:Decision Units and Decision Packages in Zero-base BudgetingCOAChart of AccountsCOPUCommittee on Public UndertakingsBox 4.3:Shift in Focus from Inputs to OutcomesCSRComprehensive Spending ReviewBox 4.4:Distinction between Plan and Non-planCSSCentrally Sponsored SchemesDDODrawing and Disbursing OfficerBox 4.5:Planning Commission on Plan and Non-Plan ExpenditureDELDepartmental Expenditure LimitedLIST OF ANNEXURESDFPRDelegation of Financial Power RulesDoHDepartment of HealthAnnexure-I(1):Speech of Chairman, ARC at the National Workshop onStrengthening Financial Management Systems, NIPFP,DoITDepartment of Information Technologyon 23rd July, 2008DRDADistrict Rural Development AgencyEUEuropean UnionAnnexure-I(2):List of ParticipantsEYFEnd Year FlexibilityAnnexure-I(3):Recommendations Made by GroupsFA&CAOFinancial Adviser and Chief Accounts Officer?FRAFiscal Responsibility ActLIST OF ABBREVIATIONSFRABFinancial Reporting Advisory BoardAbbreviationFull FormFRBMFiscal Responsibility and Budget ManagementAMEAnnually Managed ExpenditureGARGovernment Accounting RulesATNsAction Taken NotesGASABGovernment Accounting Standards Advisory BoardviviiPWDPublic Works DepartmentQEAQuarterly Expenditure AllocationsRBIReserve Bank of IndiaSIAFIIntegrated System of Federal Government FinancialAdministration (Brazil)TMETotal Managed ExpenditureUSAUnited States of AmericaZBBZero-based BudgetingGDPGross Domestic ProductGFRGeneral Financial RulesGOIGovernment of IndiaGPRAGeneral Performance Results ActIFAsIntegrated Financial AdvisersIFMISIntegrated Financial Management Information SystemIFRSIntegrated Financial Reporting StandardsIGsInspector GeneralsIIAInstitute of Internal AuditorsMCIMedical Council of IndiaMEPMonthly Expenditure PlanMoFMinistry of FinanceMOUMemorandum of UnderstandingMTEFMedium-term expenditure frameworkMTFPMedium Term Fiscal PlanNDPBsNon-departmental public bodiesNeGPNational e-Governance PlanNGOsNon Governmental OrganizationsNIFNational Insurance FundNIPBNational Institute of Public Finance & Policy (Mimeo)NIPFPNational Institute of Public Finance and PlanningNMAMNational Municipal Accounts ManualNPANational Performance AssetsOECDOrganisation for Economic Co-operation and DevelopmentPACPublic Accounts CommitteePAOPrincipal Accounts OfficerPHEDPublic Health Engineering DepartmentPPBSPlanning, Programming and Budgeting SystemPRIPanchayati Raj InstitutionPSUsPublic Sector UndertakingsviiiixINTRODUCTION11.1 One of the terms of reference of the Second Administrative Reforms Commission is ‘Strengthening financial management systems’. It has been specifically asked to look into the following aspects of financial management systems:“4. Strengthening Financial Management Systems4.1 Capacity building in financial management systems at all levels of Governance, to ensure smooth flow of funds for programmes / projects, proper maintenance of accounts and timely furnishing of necessary information / documents for this purpose.4.2 Strengthening of internal audit systems, to ensure proper utilisation of funds for the purposes/outcomes for which they have been provided, and checking that unit cost of delivery/outcome is as per benchmark developed for this purpose.4.3 An institutionalised method of external audit and assessment of the delivery and impact of programmes.”1.2 Collection of sufficient resources from the economy in an appropriate manner along with allocating and use of these resources efficiently and effectively constitute good financial management. Resource generation, resource allocation and expenditure management (resource utilization) are the essential components of a public financial management system. The TORs of the Commission basically focus on expenditure management. Efficient and effective expenditure management calls for expenditure planning, allocation of resources according to policy priorities and good financial operational management and control. Good financial operational management focuses on minimizing cost per unit of output, achieving outcome for which these outputs are intended and enhancing the value for money spent.1.3 The Commission is of the view that reforms in the financial management system are an integral part of the reforms in governance in general. Therefore, these reforms are critical in achieving the national development objectives. The financial management system is quite wide and encompasses resource mobilization, prioritization of governmental efforts, resource allocation, formulation of detailed plans, setting up information systems that assistx1x2Strengthening Financial Management Systemsdecision making, having meticulous accounting systems and creation of robust internal and external accountability mechanisms.1.4 In the present Report, the Commission has focused primarily on expenditure management. The Commission studied various reports and literature on the subject. It also examined some of the best national and international practices and had consultations with experts on the subject. The Commission organized a national workshop, jointly with the National Institute of Public Finance and Planning (NIPFP), to discuss various aspects of the financial management system in the government. The workshop was attended by officers of the Ministry of Finance, Comptroller and Auditor General’s office, State Governments, faculty from the NIPFP and experts on the subject. The NIPFP also prepared a document on the subject which was useful for the Commission in drafting this Report. Another study was commissioned on internal and external audit mechanisms. Besides, the Commission discussed the subject with the State Governments during its visits to the States.1.5 Though this Report was finalized in April 2009 and printed in May 2009, the Commission would like to record its appreciation for the contribution made by Dr. M. Veerappa Moily in arriving at the conclusions. Before resigning from the position of Chairman, ARC on 31st March, 2009, Dr. Moily had played an important role in guiding the deliberations of the Commission on this subject.1.6 The Commission is grateful to Shri Vinod Rai, Comptroller and Auditor General of India, for his valuable suggestions. The Commission would like to thank Dr Govind Rao, Director, NIPFP, for organizing the national workshop and also for preparing a useful document for the Commission. The Commission would like to place on record its thanks to Shri V K Shunglu, former Comptroller and Auditor General of India, who made very well reasoned suggestions for improving the system. The Commission also places on record its thanks to all the State Governments for their help. The Commission would like to take this opportunity to thank Shri I.P Singh, former Dy. CAG, who wrote a paper on the internal and external audit mechanisms. The Commission is grateful to Shri R. Sridharan, Joint Secretary (SP) & Adviser (FR), Planning Commission, for sharing his views on the subject and providing major insights. The Commission is grateful to Shri C.R. Sundaramurti, Controller General of Accounts and his team of officers for making a presentation before the Commission. The Commission is also grateful to Shri Naved Masood, AS&FA, Ministry of Health and Family Welfare, for his useful suggestions.PUBLIC FINANCE MANAGEMENT-CONCEPTS AND CORE PRINCIPLES2.1 Definition of Public Finance Management2.1.1 Public Finance Management (PFM) basically deals with all aspects of resource mobilization and expenditure management in government. Just as managing finances is a critical function of management in any organization, similarly public finance management is an essential part of the governance process. Public finance management includes resource mobilization, prioritization of programmes, the budgetary process, efficient management of resources and exercising controls. Rising aspirations of people are placing more demands on financial resources. At the same time, the emphasis of the citizenry is on value for money, thus making public finance management increasingly vital.2.1.2 For a long time, financial management in developing countries was viewed as a process that enabled central agencies like the Ministry/Department of Finance to keep “spending agencies under control through continuous review and specification of inputs and verification of documents, submitted for payment. As an extension of this approach, financial management was viewed as being restricted to budget implementation, administration of payment systems, accounting and reporting in the states of funds received and spent. This approach with a long lineage continues to be prevalent even now, through a declining scale”.12.1.3 Reforms in financial management have concentrated on taxation reforms, the use of government budget as a vehicle for economic development, through improved budget classification system, accounting system reforms etc. Cost-benefit analysis techniques were also applied. From the 1970s, the need for containment of fiscal deficits through tightened fiscal management, pre-occupied the economists. In the 1980s, the management approach came to be prevalent which included a corporate type of financial management within an overall framework of accountability. The overall assessment is that the system of financial management in developing countries has generally been slow in adapting itself to changing requirements. Basically, there has been a segmented approach to reforms.2.1.4 A review of the literature on public finance management shows that initially the term ‘public finance management’ was defined quite narrowly and was confined to budgeting,231A. Premchand (2005), Controlling Government Spending, the Ethos, Ethics, and Economics of Expenditure Management, Oxford, p.5Strengthening Financial Management Systemsaccounting, monitoring and evaluation. But, it is now widely accepted that it includes taxation and other resource mobilization, debt and cash management, budgetary process, accounting systems, information systems and internal and external audit. Thus, reforming the public finance system would entail several measures:2i.Improving the collection of revenue is critical. No country can be run properlywithout revenue. Moreover, tax can help to establish a government’s authority. Tax policy itself is increasingly limited by external forces: in a globalised world, governments’ choices are less about the tax rate than about the efficiency with which tax is collected and the reach of the tax net. Thus, the revenue services must be properly resourced and motivated to collect tax more efficiently.ii.Debt and cash must be managed efficiently. In particular, sound principles fordeficit funding should be established, efficiencies sought and proper risk management procedures introduced. Proper management of the government’s borrowing program will reduce the cost of funding.iii. Effective planning and allocation of resources is key and government should develop and institutionalise planning processes at all levels of government. The budgeting process must be transparent and inclusive. There should be focus on outputs rather than on mere expenditure and related inputs, with strong accounting and reporting procedures. The office of the accountant-general must be properly resourced and funded to fulfil this function.iv. Effective oversight and monitoring are crucial to sound governance and PFM reform. A well functioning PFM system must have clear rules on transparency and reporting, as well as enforceable sanctions for failure. Oversight should be established by internal mechanisms in the national treasury as well as external oversight by bodies like independent parliamentary committees, a public ombudsman, a free media and civil society, and an independent auditor-general.2.2 Elements of Reforms in the Public Finance Management in Other Countries2.2.1 The last few decades have witnessed large scale reforms in the public finance management systems in most countries of the world. These reforms include taxation, monetary and budgetary reforms. In line with its Terms of Reference, the Commission has focused on budgetary processes and expenditure management in this Report.Public Finance Management - Concepts and Core Principles2.3 Evolution of Budgeting 2.3.1 The Line item Budget2.3.1.1 Budgeting is the process of estimating the availability of resources and then allocating them to various activities of an organization according to a pre-determined priority. In most cases, approval of a budget also means the approval to various spending units to utilize the allocated resources. In the early nineteenth century, government budgeting in most countries was characterized by weak accounting procedures, adhocism, little central control and poor monitoring and evaluation. In the late nineteenth century, line-item budgeting was introduced in some countries. Indeed line item budgeting which is the most common form of budgeting in a large number of countries and suffers from several drawbacks was a major reform initiative then. The line item budget is defined as “the budget in which the individual financial statement items are grouped by cost centers or departments. It shows the comparison between the financial data for the past accounting or budgeting periods and estimated figures for the current or a future period” 32.3.1.2 In a line-item system, expenditures for the budgeted period are listed according to objects of expenditure, or “line-items.” These line items include detailed ceilings on the amount a unit would spend on salaries, travelling allowances, office expenses, etc. The focus is on ensuring that the agencies or units do not exceed the ceilings prescribed. A central authority or the Ministry of Finance keeps a watch on the spending of various units to ensure that the ceilings are not violated.2.3.1.3 The line item budget approach is easy to understand and implement. It also facilitates centralized control and fixing of authority and responsibility of the spending units. Its major disadvantage is that it does not provide enough information to the top levels about the activities and achievements of individual units.2.3.1.4 The weaknesses of the line item budgeting were sought to be remedied by introducing certain reforms. Performance budgeting was the first such reform.2.3.2 Performance Budgeting2.3.2.1 Unlike the traditional line item budget, a performance budget reflects the goal/ objectives of the organization and spells out performance targets. These targets are sought to be achieved through a strategy(s). Unit costs are associated with the strategy and allocations are accordingly made for achievement of the objectives. A Performance Budget gives an indication of how the funds spent are expected to give outputs and ultimately the outcomes. However, performance budgeting has a limitation - it is not easy to arrive at standard unit costs especially in social programmes which require a multi-pronged approach.452Guidelines for public financial management reform - Financial Management SystemsPublic Finance Management - Concepts and Core Principles2.3.3 Zero-based Budgeting (ZBB)2.3.3.1 The concept of zero-based budgeting was introduced in the 1970s. As the name suggests, every budgeting cycle starts from scratch. Unlike the earlier systems where only incremental changes were made in the allocation, under zero-based budgeting every activity is evaluated each time a budget is made and only if it is established that the activity is necessary, are funds allocated to it. The basic purpose of ZBB is phasing out of programmes/ activities which do not have relevance anymore. However, because of the efforts involved in preparing a zero-based budget and institutional resistance related to personnel issues, no government ever implemented a full zero-based budget, but in modified forms the basic principles of ZBB are often used.2.3.4 Programme Budgeting and Performance Budgeting2.3.4.1 Programme budgeting in the shape of planning, programming and budgeting system (PPBS) was introduced in the US Federal Government in the mid-1960s. Its core themes had much in common with earlier strands of performance budgeting.2.3.4.2 Programme budgeting aimed at a system in which expenditure would be planned and controlled by the objective. The basic building block of the system was classification of expenditure into programmes, which meant objective-oriented classification so that programmes with common objectives are considered together.2.3.4.3 PPBS went much beyond the core elements of programme budgeting and was much more than the budgeting system. It aimed at an integrated expenditure management system, in which systematic policy and expenditure planning would be developed and closely integrated with the budget. Thus, it was too ambitious in scope. Neither was adequate preparation time given nor was a stage-by-stage approach adopted. Therefore, this attempt to introduce PPBS in the federal government in USA did not succeed, although the concept of performance budgeting and programme budgeting endured.2.3.4.4 Many governments today use the “programme budgeting” label for their performance budgeting system. As pointed out by Marc Robertson, the contemporary influence of the basic programme budgeting idea is much wider than the continuing use of the label. It is defined in terms of its core elements as mentioned above. Programme budgeting is an element of many contemporary budgeting systems which aim at linking funding and results. “The extent of ongoing influence of programme budgeting is partly obscured by a wide variety of terminology used today to refer to programme such as “outcomes” or output groups (Australia) and ‘Requests for Resource’ (UK)”.42.3.4.5 In 1993, the US Congress enacted the General Performance Results Act (GPRA) to improve the effectiveness, efficiency and accountability of federal programmes, where agencies have to focus on programme results. GPRA requires agencies to plan and measure performance using the “program activities” listed in their budget submissions. So it is again performance through programme/activities. GPRA had a 7-year implementation time-frame, from the initial pilot projects to government-wide performance reports, incorporating feed-back mechanisms. GPRA’s implementation approach also provided for a 2-year pilot project of alternative performance budget approaches in at least five agencies, with regard to their spending decision. GPRA aims for a closer linkage before resource and results. As a report of the General Accounting Report in Performance Budgeting states “In the sense, GPRA can be seen as the most recent event in al almost 50-year cycle of federal government efforts to improve public sector performance and to link resource allocation to performance expectation.”52.3.4.6 The GAO Report states that the GPRA differs from prior initiatives in two important respects. First, past performance budgeting initiatives were typically implemented government-wide within a single annual budget cycle; GPRA, in contrast defines a multiyear and iterative implementation process that incorporates pilot task and formal evaluations of key concepts. In this manner, GPRA increases the potential for integration of planning, budgeting, and performance measure, while guarding against the unreasonably high expectations that plagued earlier initiatives. Second, GPRA will face operating environments unknown to earlier reform processes, that is, persistent efforts have to be made to constrain spending.62.3.4.7 But the GAO Report on performance budgeting also makes two important points when it talks of outcome oriented budget: (i) past initiatives demonstrate that performance budgeting is an evolving concept that cannot be viewed in simple mechanical terms. It states “The process of budgeting is inherently an exercise in political choice – allocating scarce resources among competing needs and priorities – in which performance information can be one, but not the only factor underlying decision,” (ii) GPRA “states a preference for outcome measurements while recognizing the need to develop a range of measures, including output and non-quantitative measures. Focusing on outcome shifts, the definition of accountability from the traditional focus on inputs, processes and projects to a perspective centered on the results of federal programs. However, the difficulties associated with selected appropriate measures and establishing relationships between activities and results will continue to make it difficult in many cases to judge whether changes in funding levels will affect the outcomes of federal programmes”.7674Mark Robinson, (2007) “Performance Budgeting Models and Mechanism”, in Marc Robinson (ed) Performance Budgeting, IMF, p 5.5Report to Congressional Committee, (1997) Performance Budgeting, US General Accounting Office, March6Ibid 7IbidStrengthening Financial Management SystemsPublic Finance Management - Concepts and Core Principles82.3.4.8 The above points need to be kept in view by the reformers who are attempting to introduce `outcome’ budgeting in government budgeting. Since this is a challenging task, the experience of some other countries in this regard would be useful, for example, in South Africa, where attempts have been made to introduce outcome budgeting, in the later half of the 1990s, with the introduction of the medium-term expenditure framework (MTEF). The South African government began restructuring its budget format to show the programmes towards which the departments were allocating funds. The question to be asked is how well have the reforms worked in introducing result-orientation into the budgeting process?. As an informed commentator puts it, the answer is less than sanguine for the following three reasons:8?Firstly, even though performance targets are being developed, they are actually kept separate from the budget not only in South Africa, but also in countries like Malaysia, Singapore, and in most US States, “which undermines their legitimacy,”?Secondly, in the South Africa case, as regards performance information, “outputs are confused with inputs and outcomes remain unconsidered.” Targets appear to have been technocratically identified which therefore lack real world value. Targets are not spelt out in detail making actual measurement unlikely.?Thirdly, and the most important point is that even when effective targets are provided, the budgets in South Africa and many other nations moving toward this kind of system fail to specify who should be accountable for their results, and who should hold them accountable. “Very little thought appears to have been given to the process of institutionalizing political or accountability for the targets identified in their budget”.92.3.4.9 So programme budgeting by itself may not bring the outcome orientation. It is also difficult to make performance targets as part of the budget formulation process unless managers at various levels get involved in the budgeting process, involving prioritization of activities and resource allocation on that basis.2.3.4.10 These experiences make it clear that unless there are institutional reforms, like bringing in the ‘agency’ concept, where the heads of the agencies are made accountable for delivery of services in an efficient and effective manner, the reform in budgeting process would be difficult to implement. Only with these institutional changes would there be an inner compulsion within the organization to bring about changes in the budgetary process. The Commission has examined the concept of executive agencies in its Thirteenth Report.8Mathew Andrews, (2005), “Performance Based Budgeting Reforms.” in Anwar Shah (ed) Fiscal Management, The World Bank, p.32 9Ibid2.4 Weaknesses in the Budgetary Process2.4.1 The World Bank after analyzing the budgetary processes of several countries came to the conclusion that government budgets generally have the following shortcomings:“WEAKNESSES IN RESOURCE ALLOCATION AND USE10 Weaknesses that undermine public sector performance include:i.Poor planning;ii.No links between policy making, planning and budgeting;iii. Poor expenditure control;iv. Inadequate funding of operations and maintenance;v.Little relationship between budget as formulated and budget as executed;vi. Inadequate accounting systems;vii. Unreliability in the flow of budgeted funds to agencies and to lower levels of government;viii. Poor management of external aid;ix. Poor cash management;x.Inadequate reporting of financial performance; andxi. Poorly motivated staff.”Many of the weaknesses in budgeting reflect the failure to address linkages between the various functions of budgeting. The following factors contribute to budget systems and processes that create a disabling environment for performance in the public sector, both by commission and by omission:11?Almost exclusivefocus on inputs, with performancejudged largely in terms ofspending no more, or less, than appropriated in the budget;?Inputfocus takes a short-term approach to budget decision making; failure to adequately take account of longer-term costs (potential and real), and biases in the choice of policy instruments (e.g., between capital and current spending and between spending, doing, and regulation) because of the short-term horizon;?A bottom-up approach to budgeting that means that even if the ultimate stance of fiscal policy was appropriate (and increasingly after 1973 it was not) game playing by10Handbook of public expenditure, 1998 11Handbook of public expenditure, 19989Strengthening Financial Management SystemsPublic Finance Management - Concepts and Core Principles2.4.2 Attempts are continuously being made to overcome as many of the shortcomings as possible. A good example is the trend in OECD countries. The common elements of the budgetary reforms in OECD member countries are:12i.medium-term budget frameworks;ii.prudent economic assumptions;iii. top-down budgeting techniques;iv.relaxing central input controls;v.focus on results;vi. budget transparency; andvii. modern financial management practices.2.4.3 Although they are identified as seven separate features, they do in fact build on each other and must be seen as a package. Each of these features is discussed below in detail:13“Medium-term budget frameworks: Medium-term budget frameworks form the basis for achieving fiscal consolidation. They need to clearly state the government’s medium-term fiscal objectives in terms of high-level targets such as the level of aggregate revenue, expenditure, deficit/surplus, and debt. They then need to operationalise these high-level targets by establishing hard budget constraints for individual ministries and programmes over a number of years. This lends stability and credibility to the government’s fiscal objectives.By their very nature, high-level fiscal targets are set in a medium-term context. They aim to achieve a certain fiscal outcome over a number of years. Budgets are however enacted for a time period of one year, and are notorious for their short-term focus. This short-term time horizon is often criticised for impeding effective expenditure management; decisions on resource allocation are said to be made on an ad hoc or piecemeal basis with the implications of past and present decisions beyond the next year being neglected. This is not a new criticism. Medium-term budget frameworks aim to bridge this gap. Their successful implementation has been nothing short of a “cultural revolution” in governments.Although the level of detail of such frameworks varies from country to country, they generally mirror the format of the budget, i.e. the medium-term frameworks are at the same level of detail as the annual budget. This means that a formal framework (or hard budget constraint) exists for each and every appropriation, most often for three years beyond the current fiscal year. These are rolling frameworks that are presented with the budget eachboth line and central agencies led to high transaction costs to squeeze the bottom-up bids into the appropriate fiscal policy box;?A tendency to budget in real terms, leading either to pressure on aggregate spending where inflation is significant (which was often validated through supplementary appropriations) or arbitrary cuts during budget execution with adverse consequences at the agency level;?Cabinet decision makingfocused on distributing the gains from fiscal drag across new spending proposals;?Cabinet and/or central agencies extensively involved in micro-decision making on all aspects of funding for ongoing policy;?Last minute, across-the-board cuts, including during budget execution;?Weak decision making and last-minute cuts cause unpredictability offunding for existing government policy; this is highlighted to the centre by central budget agencies on the alert to identify and rake back “fortuitous savings;”?Strong incentives to spend everything in the budget early in the year and as quickly as possible, since the current year’s spending is the starting point for the annual budget haggle and the fear of across-the-board cuts during execution;?Existingpolicy itself (as opposed to its funding) subject to very little scrutiny from one year to the next. (This and previous point epitomize the worst dimension of incremental budgeting);?Poor linkages between policy and resources at the centre, between the center and line agencies, and within line agencies because of incremental budgeting;?A lack ofclarity as to purpose and task and thereforepoor information on theperformance of policies, programmes and services, and their cost because of poor linkages;?The linking together (in association with the point above) within government departments of policy advising, regulation, service delivery and funding and an aversion to user charging; and?Overall, few incentives to improve the performance of resources provided.101112Budget Reform in OECD Member Countries: Common Trends. Meeting of Budget Directors from the G-7 Countries. Berlin, Germany, 5-6 September 2002.13Budget Reform in OECD Member Countries: Common Trends. Meeting of Budget Directors from the G-7 Countries. Berlin, Germany, 5-6 September 2002.Strengthening Financial Management SystemsPublic Finance Management - Concepts and Core Principlesyear; year-1 in the previous year’s framework becomes the basis for the budget and a new year-3 is added. This has greatly increased the effectiveness of planning and eased the annual budget process. These frameworks are not, however, enacted into legislation; they are planning documents that reflect the political commitment to fiscal discipline....Prudent economic assumptionsDeviations from the forecast of the key economic assumption underlying the budget are the government’s key fiscal risk. There is no single factor more responsible for “de- railing” fiscal consolidation programmes than the use of incorrect economic assumptions. Great care must be taken in making them and all key economic assumptions should be disclosed explicitly. Sensitivity analysis should be made of what impact changes in the key economic assumptions would have on the budget. Furthermore, a comparison should be made between the economic assumptions used in the budget and what private sector forecasters are applying for the same time period where practicable. The establishment of an independent body to recommend the economic assumptions to be used in the budget may be considered as well. All this serves to place safeguards against the use of unrealistic, or “optimistic,” economic -down budgeting techniquesBudgeting has traditionally operated on a bottom-up principle. This means that all agencies and all ministries send requests for funding to the finance ministry. These requests greatly exceed what they realistically believe they will get. Budgeting then consists of the Finance Ministry negotiating with these ministries and agencies until some common point is found. This bottom-up system has several disadvantages to it. First, it is very time consuming and it is essentially a game; all participants know that the initial requests are not realistic. Second, this process has an inherent bias for increasing expenditures; all new programmes, or expansion of existing programs, are financed by new requests; there was no system for reallocation within spending ministries and there were no pre-set spending limits. Third, it was difficult to reflect political priorities in this system as it was a bottom-up exercise with the budget “emerging” at the end of this process. This manner of budgeting is now being abandoned and replaced with a new top-down approach to budget formulation. This has been of great assistance in achieving fiscal consolidation.The starting point for the new system is for the government to make a binding political decision as to the total level of expenditures and to divide them among individual spending ministries. This decision is made possible by the medium-term expenditure frameworks which contain baseline expenditure information, i.e. what the budget would look like if nonew policy decisions were made. The political decision is whether to increase expenditures for a high-priority area, for example education, and to reduce expenditures, for example defence programs. Only the largest and most significant programmes reach this level of political reallocation. The key point is that each ministry has a pre-set limit on how much it can spend.Once this decision is taken, the Finance Ministry largely withdraws from the details of budgetary allocations for each ministry. The Finance Ministry concerns itself only with the level of aggregate expenditure for each ministry; not the internal allocations. “Each minister is his own Finance Minister,” is the saying in some countries. Each ministry has a total amount and it can freely reallocate that money among its various agencies and programmes. This has several advantages to it. It serves to hamper creeping increases in expenditures as new policies are funded by reallocations from other areas within the ministry. It creates ownership in the respective ministries for the actions that are taken. Decisions are also better informed as spending ministries are in the best position to judge the relative merits of their programmes. The role of the Ministry of Finance is to verify that the offsetting cuts to finance new programmes are real....Relaxing central input controlsRelaxing central input controls is another feature of successful fiscal consolidation strategies in Member-countries. This is based on the simple premise that the heads of individual agencies are in the best position to choose the most efficient mix of inputs to carry out the agency’s activities. The end-result is that an agency can produce the same services at less cost, or more services at the same cost. This greatly facilitates fiscal consolidation strategies by mitigating their effects on services.Relaxing central input controls operates at three levels. First, the consolidation of various budget lines into a single appropriation for all operating costs (salaries, travel, supplies, etc.). Second, the decentralisation of the personnel management function. Third, the decentralisation of other common service provisions, notably accommodations (buildings). The can be seen as the public sector’s version of “deregulation.”The consolidation of budget appropriation lines is rather straightforward and simple. It is now common for agencies to receive one single appropriation for all of their operating expenditures. (It should be clear that this does not apply to transfers or capital appropriations, only to operating expenditures). This single appropriation is, however, not1213Strengthening Financial Management SystemsPublic Finance Management - Concepts and Core Principlesenough to generate managerial flexibility as various central management rules inhibit this flexibility.It is in the area of human resource management where most of the central management rules exist. The cost of staff is generally the largest component of operating expenditures, and it makes little difference to consolidation budget lines if central rules in this area prevent any flexibility. All countries are increasing flexibility in this area, although to significantly varying degrees. The country that has gone the farthest in this area is Sweden.Personnel management in Sweden has historically been decentralised with the outstanding exception of collective bargaining arrangements. Directors-general of agencies are, and have been, responsible for the recruitment, grading and dismissal of their staff. There are no restrictions on whom they may hire. There is no “civil service” encompassing the government as a whole. Vacancies are generally advertised in the press with all qualified applicants being treated equally. Staff are not tenured in Sweden. They can typically be dismissed at two- to twelve-month notice depending on how long they have been employed by the agency. In fact, there are essentially no difference between the labour legislation governing the public sector and the private sector in Sweden....An increased focus on resultsAn increased focus on results is a direct quid pro quo for relaxing input controls as described above. Accountability in the public sector has traditionally been based on compliance with rules and procedures. It didn’t matter what you did as long as you observed the rules. Now, when the public sector is deregulated, a new results-based system is needed to hold managers accountable. This is a fundamental change: holding managers accountable for what they do, not how they do it. Effectively implementing this is, however, very difficult in practice. The difficulties can be divided into several groups of issues.At the most basic level, some government activities simply lend themselves to results measurement much more readily than others. For example, an agency that produces a single or a few homogenous products or services can be rather easily measured. An agency that issues passports is a good example. On the other hand, agencies that produce heterogeneous and individualised services can be very difficult to measure. The majority of government services fall into the latter category. Various social services are the outstanding example.We are also faced with the choice ofdefining results either in terms ofoutputs or outcomes. Outputs are the goods and services that government agencies produce. Outcomes are theimpact on, or the consequences for, the community of the outputs that are produced. An example highlights this. A government may wish to reduce the number of fatalities on highways caused by drunk drivers. This would be the outcome. In order to achieve this, it may launch a series of advertisements in the media highlighting the dangers of drunken driving. It’s easy to measure the output, i.e. that the prescribed number of advertisements were in fact shown in the media. Let’s, however, assume that at the same time the number of fatalities went up, not down. The link between the advertisements and this outcome is very unclear, since many other factors than the advertisements would impact on the outcome. But what lessons do we draw from this. Do we abandon the advertisement campaign? Do we expand it? Do we try other outputs? Do we wait to see if this is a one-off or a sustained trend?From an accountability point of view, the question arises whether you hold managers responsible for outputs or outcomes. Outputs are easier to work with in this context; but outcomes are what matters in the final analysis. Do we want an accountability regime based on outputs even though the outputs may not be contributing to the desired outcome? Or do we have an accountability regime based on outcomes, even though a number of factors outside the control of the director-general of the agency may have contributed to it? Of course, a combination of the two is the optimum choice, but experience in Member- countries shows that one will always dominate.It is a well known phenomenon in management that “what gets measured, gets managed.” As noted above, some activities lend themselves to measurement more readily than others. This also applies within agencies in that certain of their activities are more easily measured than others. If the agency’s measurement systems is biased in favour of those activities that are more easily measured, there’s every likelihood that management will focus its attention disproportionately on those activities since their accountability is based on that. This may lead to all sorts of unforeseen and undesired consequences. This creates a huge onus on those designing the agency’s measurement system to ensure that it captures all aspects of their activities.Budget transparencyIncreased transparency in budgeting made significant advances in the late 1980s and early 1990s. This was a period associated with unfavourable budget conditions in most Member- countries; high annual deficits and increasing levels of outstanding debt. Governments needed to institute large fiscal consolidation programmes. These were often painful and getting the public’s understanding of the problems was necessary. The most effective manner for achieving that was simply to throw open the books and say to the1415Strengthening Financial Management SystemsPublic Finance Management - Concepts and Core Principlespublic: “Look, things are really as bad as we told you, we’re not hiding anything.” This may sound a bit sinister at first, but in actuality it is government at its best: Being honest with citizens, explaining the problem to them in order for an understanding to emerge as to the best course of action to take.This time period also coincided with increased attention being paid to good governance in general. The budget is the principal policy document of government, where the government’s policy objectives are reconciled and implemented in concrete terms. Budget transparency – openness about policy intentions, formulation and implementation – is therefore at the core of good governance agenda.If we take a look at fiscal transparency in concrete terms, we can say that it has three essential elements:?The first is the release of budget data. The systematic and timely release ofall relevant fiscal information is what we typically associate with budget transparency. It is an absolute pre-requisite, but it is not enough.?The second element is an effective rolefor the legislature. It must be able to scrutinise the budget reports and independently review them. It must be able to debate and influence budget policy and be in a position to effectively hold the government to account. This is both in terms of the constitutional role of the legislature and the level of resources that the legislature has at its disposal.?The third element is an effective role for civil society, through the media and nongovernmental organisations. Citizens, directly or through these vehicles, must be in a position to influence budget policy and must be in a position to hold the government to account. In many ways, it is a similar role to that of the legislature albeit only indirectly.These three elements work together. The scrutiny of fiscal information by the legislature and by civil society can only take place if the information is released in the first place. Similarly, released budget information is only of value if it is effectively scrutinised by the legislature and by civil society. The legislature and civil society have a very similar function, one is responsible for shaping budget policy and for holding government directly to account while the other performs this role indirectly....Modern financial management practices The modernisation of financial management within governments made great advances during the past ten years. The sheer scale of government means that such improvements had a material effect on fiscal outcomes. These include the introduction of accruals, capital charges, carry-overs of unused appropriations, and interest-bearing accounts. Each of these is discussed below.AccrualsCash and accruals represent two end points on a spectrum of possible accounting and budgeting bases. The cash end of the spectrum has traditionally been applied by Member-countries for their public sector activities. In recent years, there has been a major trend towards accruals end of the spectrum in Member-countries. About half of Member-countries have now adopted accruals to one degree or another. This is a very rapid migration; it was only in the early 1990s that the world’s first accrual basis financial statements and budget were produced by a government (New Zealand).The objective of moving to accruals is to make the true cost of government more transparent. For example, accruals attributes the pension costs of government employees to the time period when they are employed and accumulating their pension rights rather than having this as an unrelated (and uncontrollable) expenditure once they have retired. Instead of spikes in expenditures when individual capital projects are undertaken, accruals incorporate them into the annual operating expenditures through an allowance for depreciation. Treating loans and guarantee programmes on an accrual basis fosters more attention to the risks of default by those who have been granted them, especially if there is a requirement for such default risks to be pre-funded. In a cash system, outstanding government debts can be designed in such a way that all interest expenditure is paid in a lump-sum at the end of the loan rather than being spread through the years when the loan was outstanding as would be the case under accruals. All of these examples show how a focus on cash only, can distort the true cost of government.A further objective for adopting accruals is to improve decision-making in government by using this enhanced information. This needs to be seen in a wider context. The countries that have adopted accruals have generally been at the forefront of public management reforms in general. These reforms have been highlighted in this paper. A key aim is to hold managers responsible for outcomes and/or outputs while reducing controls on inputs. In this context, it is expected that managers should be responsible for all costs associated with the outcomes and/or outputs produced, not1617Strengthening Financial Management SystemsPublic Finance Management - Concepts and Core Principlesjust the immediate cash outlays. Only accruals allow for the capture of these full costs, thereby supporting effective and efficient decision-making by managers. In short, when managers are given flexibility to manage their own resources (inputs), they need to have the necessary information to do this. The adoption of accruals is therefore an inherent part of these wider reforms...Capital chargesCapital has tended to be viewed as a free good in the public sector. Once an asset was in place, there was no mechanism to track and charge for the cost of capital tied up in the asset. A number of Member-countries have been making headway in this regard.Capital charging regimes generally operate as follows. The government decides to levy a charge on the cost of capital tied up in all assets in an agency. For example, if an agency has $10 million in assets, the government will levy a charge (often equivalent to the long-term government bond rate), of 10%. This means that the agency will have to pay the finance ministry 1 million dollars annually. When the system is first introduced, the appropriations to all agencies will be increased by the amount of their capital charge, so there’s no net impact on agencies or for the government as a whole. However, agencies will in future be allowed to dispose of the assets and thus relieving themselves of the capital charge while retaining the original appropriation to cover it (or part thereof). This creates the incentive. Thus, they could decide to sell excess assets or move from high-priced areas to lower-priced areas and use the amount of the capital charge they save for other purposes. This has had a great impact on asset management in government, a field that was simply neglected previously....Carry-oversAll countries operate on the principle of an annual budget. Previously, this meant that all appropriations lapsed at the end of the fiscal year thus creating a great and irrational rush to spend moneys before the end of the fiscal year. Not only because they would otherwise lose the money this year, but also because future years appropriations would take account of this underspending as well. You were losing what you did not spend in one year, permanently. This has now changed with operating expendituresgenerally being freely transferable (sometimes up to a certainlimit) from one year to the next. Only in cases where an agency continuously, yearon-year, builds up carry-overs does the Ministry of Finance intervene. The advent of medium-term expenditure frameworks also gives a benchmark for agencies to see that their appropriations are in fact being carried-over.Interest-bearing accountsSome countries have also introduced interest-bearing accounts for agencies. This means, for example, that the appropriation of an agency is divided into twelfths (representing each month) and deposited into an agency’s account (either within the finance ministry or with a commercial bank.) If an agency spends at less than this rate, they will receive interest on the difference. If they spend at a faster rate, they will pay interest on the difference. The ability of individual agencies to vary their spending patters, does of course vary significantly but they are now much more aware of cash management practices.All of these practices – accruals, capital charges, carry-overs of unused appropriations and interest-bearing accounts – serve to improve the information available for agency heads and giving them increased freedom to act on that information. Although a very technical area, the impact on the government’s finances is great given the sheer size of government.”2.5 Core Principles of Reforms2.5.1 The Commission broadly endorses the common elements of the budgetary reforms suggested by the OECD member-countries as mentioned in paragraph 2.4.2. The Commission feels that after incorporating suitable additions relevant to the Indian context, these could constitute the core principles for reforming the financial management system in the country. These core principles are described below:i.Reforms in Financial Management System are part of overall governancereforms: Governance reforms to bring about improved transparency, greater accountability, streamlining the structure of the Government, elimination of corruption, and fiscal and environment sustainability have to be backed by reforms in the financial management system in order to deliver the desired results. At the same time, it needs to be understood that reforms in the management system are not an end in itself but a means to achieving good governance.ii.Sound financial management is the responsibility of all government departments/agencies: Maintaining financial prudence, discipline and accountability, while1819Strengthening Financial Management SystemsPublic Finance Management - Concepts and Core Principlesat the same time, ensuring prompt and efficient utilization of resources towards achieving organizational goals is the responsibility of all government agencies/ organizations and not only of the Finance wing/Finance Ministry.iii. Medium-term plan/budget frameworks and aligning plan budgets and accounts: Medium-term plan/budget frameworks attempt to bridge the gap between the short-term time horizon of annual budgets with the medium-term objectives of the schemes and programmes of government. Even when there are medium- term frameworks like five-year development plans, there is need for aligning the annual budgets explicitly with the plans and with the accounting mechanisms so that there is a clear ‘line of sight’ between the medium term developmental plan and the annual budget exercise.iv. Prudent economic assumptions: The economic assumptions that underline the budget have to be prudent and accurate in order to ensure that the budgetary estimates do not go haywire. The tendency to be overly optimistic has to be avoided.-down budgeting techniques: There is need to shift from the traditional bottom up approach to budgeting to a top-down framework where the desired outcomes should point to the resources required which should be allocated thereafter at the macro level sector-wise. This in turn would lead to focus on outputs and outcomes rather than on inputs and processes.vi. Transparency and simplicity: The budget documents should be simple and easy to comprehend and be available in the public domain. Also the procedures involved in operating the budget and release of funds should be simple. Suitable financial management information systems need to be developed in order to ensure that all transactions are captured and ultimately made available for public scrutiny.vii. Relaxing central input controls: Government agencies need to be given greater operational autonomy and flexibility by consolidating budget items and decentralization of administrative and financial powers.viii. Focus on results: Accountability in government needs to shift from compliance with rules and procedures to achievement of results. This is all the more necessary with relaxed central input controls. There should be emphasis on ‘value for money’.ix. Adopting modern financial management practices: Modern financial management tools like accrual accounting, information technology, financial information systems etc. need to be used to improve decision making and accountability. However, care needs to be exercised to ensure that a congenial environment is created and adequate capacity is developed before adopting new practices.x.Budgeting to be realistic: Unless the projections made in the budget are reasonably accurate, the budgetary exercise loses credibility.2021An Overview of the Existing Financial Management System in India3 AN OVERVIEW OF THE EXISTING FINANCIAL MANAGEMENT SYSTEM IN INDIAIntroductionThe basic framework of the financial management system in India is provided in the Constitution. This has been elaborated further through Legislations and Rules. In this Chapter, the legal provisions regarding the financial management system in the country are described. It focuses on the Constitutional provisions on legislative ‘procedure in financial matters’, general Constitutional provisions regarding ‘finance’, framework for preparation of accounts, external and internal audit and flow of funds in case of Centrally Sponsored Schemes (CSS).3.1 Financial Statements and Accounts3.1.1. Constitutional Provisions on Legislative Procedure on Financial Matters3.1.1.1 The Constitution of India provides that in respect of every financial year, a statement of the estimated receipts and expenditure of the Government of India or the Government of any State for that year, is to be laid down before both the Houses of Parliament/ State Legislature. This is referred to as the “annual financial statement” of the concerned Government (Articles 112 & 202). As per Article 112, this statement should show, inter alia, the following:“112. (2) The estimates of expenditure embodied in the annual financial statement shall show separately-(a) the sums required to meet expenditure described by this Constitution as expenditure charged upon the Consolidated Fund of India; and(b) the sums required to meet other expenditure proposed to be made from the Consolidated Fund of India, and shall distinguish expenditure on revenue account from other expenditure....”Article 202 contains similar provisions with regard to annual financial statement of a State Government.3.1.1.2 To meet such expenditure, appropriations have to be made out of the Consolidated Fund of India (or of the respective States). The appropriations are required to be made in the manner provided in the Constitution. The procedure in these matters in relation to the Parliament is provided in Articles 113 to 117 and 119. These pertain to the procedure in Parliament with respect to estimates, Appropriation Bills, supplementary, additional or excess grants, votes on account, votes to credit and exceptional grants, special provisions as to financial Bills and regulation by law of procedure in Parliament in relation to financial business. These provisions are mentioned below:“113. Procedure in Parliament with respect to estimates.- (1) So much of the estimates as relates to expenditure charged upon the Consolidated Fund of India shall not be submitted to the vote of Parliament, but nothing in this clause shall be construed as preventing the discussion in either House of Parliament of any of those estimates.(2) So much of the said estimates as relates to other expenditure shall be submitted in the form of demands for grants to the House of the People, and the House of the People shall have power to assent, or to refuse to assent, to any demand, or to assent to any demand subject to a reduction of the amount specified therein.(3) No demand for a grant shall be made except on the recommendation of the President.114. Appropriation Bills.- (1) As soon as, may be after the grants under Article 113 have been made by the House of the People, there shall be introduced a Bill to provide for the appropriation out of the Consolidated Fund of India of all moneys required to meet-(a) the grants so made by the House of the People; and(b) the expenditure charged on the Consolidated Fund of India but not exceeding in any case the amount shown in the statement previously laid before Parliament.(2) No amendment shall be proposed to any such Bill in either House of Parliament which will have the effect of varying the amount or altering the destination of any grant so made or of varying the amount of any expenditure charged on the Consolidated Fund of India, and the decision of the person presiding as to whether an amendment is inadmissible under this clause shall be final.2223Strengthening Financial Management SystemsAn Overview of the Existing Financial Management System in Indiademand cannot be stated with the details ordinarily given in an annual financial statement;(c) to make an exceptional grant which forms no part of the current service of any financial year; and Parliament shall have power to authorise by law the withdrawal of moneys from the Consolidated Fund of India for the purposes for which the said grants are made; and(2) The provisions of Articles 113 and 114 shall have effect in relation to the making of any grant under clause (1) and to any law to be made under that clause as they have effect in relation to the making of a grant with regard to any expenditure mentioned in the annual financial statement and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of India to meet such expenditure.Similar provisions are contained in Articles 203 to 207 and 209 with regard to the State Legislatures.3.1.1.3 Provisions contained in Chapter I, Part XII of the Constitution of India necessitate the maintenance of government accounts in three parts with regard to receipts – (1) the Consolidated Fund of India / separate Consolidated Funds of the States, (2) the public account of India/public accounts of the States and (3) the Contingency Fund of India/ Consolidated Funds of the States. This is based on the provisions of Articles 266 and 267. Thus, Article 266 provides for the Consolidated Funds and Public Accounts of India and of the States in the following manner:`266. Consolidated Funds and public accounts of India and of the States.- (1) Subject to the provisions of Article 267 and to the provisions of this Chapter with respect to the assignment of the whole or part of the net proceeds of certain taxes and duties to States, all revenues received by the Government of India, all loans raised by that Government by the issue of treasury bills, loans or ways and means advances and all moneys received by that Government in repayment of loans shall form one consolidated fund to be entitled `the Consolidated Fund of India”, and all revenues received by the Government of a State, all loans raised by that Government by the issue of treasury bills, loans or ways and means advances and all moneys received by that Government in repayment of loans shall form one consolidated fund to be entitled `the Consolidated Fund of the State”.(2) All other public moneys received by or on behalf of the Government of India or the Government of a State shall be credited to the public account of India or the public account of the State, as the case may be.(3) Subject to the provisions of Articles 115 and 116, no money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law passed in accordance with the provisions of this article.115. Supplementary, additional or excess grants.-(1) The President shall-(a) if the amount authorised by any law made in accordance with the provisions of Article 114 to be expended for a particular service for the current financial year is found to be insufficient for the purposes of that year or when a need has arisen during the current financial year for supplementary or additional expenditure upon some new service not contemplated in the annual financial statement for that year, or(b) if any money has been spent on any service during a financial year in excess of the amount granted for that service and for that year, cause to be laid before both the Houses of Parliament another statement showing the estimated amount of that expenditure or cause to be presented to the House of the People a demand for such excess, as the case any be.(2) The provisions of Articles 112, 113 and 114 shall have effect in relation to any such statement and expenditure or demand and also to any law to be made authorising the appropriation of moneys out of the Consolidated Fund of India to meet such expenditure or the grant in respect of such demand as they have effect in relation to the annual financial statement and the expenditure mentioned therein or to a demand for a grant and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of India to meet such expenditure or grant.116. Votes on account, votes of credit and exceptional grants.-(1) Notwithstanding anything in the foregoing provisions of this Chapter, the House of the People shall have power-(a) to make any grant in advance in respect of the estimated expenditure for a part of any financial year pending the completion of the procedure prescribed in Article 113 for the voting of such grant and the passing of the law in accordance with the provisions of Article 114 in relation to that expenditure;(b) to make a grant for meeting an unexpected demand upon the resources of India when on account of the magnitude or the indefinite character of the service the2425Strengthening Financial Management SystemsAn Overview of the Existing Financial Management System in India(3) No moneys out of the Consolidated Fund of India or the Consolidated Fund of a State shall be appropriated except in accordance with law and for the purposes and in the manner provided in this Constitution.”3.1.1.4 The provisions regarding the Contingency Funds of India and of the States are contained in Article 267 of the Constitution:“267. Contingency Fund.- (1) Parliament may by law establish a Contingency Fund in the nature of an imprest to be entitled “the Contingency Fund of India” into which shall be paid from time to time such sums as may be determined by such law, and the said Fund shall be placed at the disposal of the President to enable advances to be made by him out of such Fund for the purposes of meeting unforeseen expenditure pending authorisation of such expenditure by Parliament by law under Article 115 or Article 116.(2) The Legislature of a State may by law establish a Contingency Fund in the nature of an imprest to be entitled “the Contingency Fund of the State” into which shall be paid from time to time such sums as may be determined by such law, and the said Fund shall be placed at the disposal of the Governor of the State to enable advances to be made by him out of such Fund for the purposes of meeting unforeseen expenditure pending authorisation of such expenditure by the Legislature of the State by law under Article 205 or Article 206.”3.1.2 The Budgetary Process143.1.2.1 Annual Financial Statement3.1.2.1.1 Based on the Constitutional provisions and provisions contained in the General Financial Rules (GFR), General Accounting Rules (GAR), Budget Manual (in the States) etc, a statement of its estimated annual receipts and expenditure is prepared by each Government and presented to its Legislature. This “Annual Financial Statement” is commonly known as the Budget. In this statement, the sums required to meet the expenditure charged15 upon the Consolidated Fund of India or the Consolidated Fund of the State or the Consolidated Fund of the Union Territory and the sums required to meet other expenditure proposed to be met from the Fund are shown separately. Further, the expenditure on revenue accounts is distinguished from other expenditure (Articles 112 & 202 of the Constitution and Section 27 of the Government of Union Territories Act, 1963). As stated earlier the Annual Financial Statement shows the receipts and expenditure of Government in three separate parts under which Government accounts are maintained viz. (i) Consolidated Fund of India (ii) Contingency Fund of India and the (iii) Public Account.3.1.2.1.2 The part of the estimates pertaining to expenditure charged upon the Consolidated Fund is not submitted to the vote of the Legislature (although it is open to discussion in the Legislature). The part of the estimate which is concerned with other expenditures is submitted to the Legislature concerned in the form of Demands for Grants on the recommendation of the President or the Governor of the State or the Administrator of the Union Territory with legislature, as the case may be.3.1.2.1.3 Normally, a separate demand is presented for each Department or the major services under the control of a Ministry/Department. The number of Demands for Grants and their coverage is decided by the Ministry of Finance. Each demand generally includes the total provisions required for a service, that is, provisions on account of revenue expenditure, capital expenditure, Grants to States and Union Territories and also loans and advances relating to that service. The estimated expenditure included in the Demands for Grants are for gross amounts. The receipts and recoveries taken in reduction of expenditure are shown by way of footnotes.3.1.2.1.4 The Finance Bill containing the annual taxation proposals is considered and passed by the Legislature only after the Demands for Grants have been voted and the total expenditure is known. Then it enters the statute as the Finance Act.3.1.2.1.5 The House of the People (and the Legislative Assemblies) also has the power to authorize by law the withdrawal of moneys from the Consolidated Fund of India for the following purposes (Article 116/206):?Vote on Account – for making any grant in advance in respect of the estimated expenditure for a part of any financial year pending the completion of the parliamentary procedure;?Vote of Credit – for making a grant for meeting an unexpected demand upon the resources of India when on account of the magnitude or the indefinite character of the service the demand cannot be stated with the details ordinarily given in an annual financial statement; and?Exceptional Grant – for making provision for an exceptional grant that does not form part of the current service of any financial year.3.1.2.1.6 As per the requirements of the Fiscal Responsibility and Budget Management Act, 2003 three Statements are to be presented to the Parliament, which form a part of the budget documents: (a) the Macro-economic Framework Statement, (b) the Medium term Fiscal Policy Statement, and (c) the Fiscal Policy Strategy Statement. The Macro-economic262714Mainly based on ‘Introduction to Indian Government Accounts and Audit’15Expenditure charged upon the Consolidated Fund of India is not submitted to the vote of Parliament (Article 113) or State LegislatureStrengthening Financial Management SystemsAn Overview of the Existing Financial Management System in IndiaFramework Statement contains an assessment of the growth prospects of the economy. The Medium term Fiscal Policy Statement indicates the three-year rolling targets for four specific fiscal indicators in relation to GDP at market prices, namely, (i)Revenue Deficit, (ii) Fiscal Deficit, (iii)Tax to GDP Ratio, and (iv) Total Out-Standing Debt at the end of the year, while the Fiscal Policy Strategy Statement seeks to outline the strategic priorities of the Government in the fiscal area for the ensuing year.3.1.2.2 Appropriation Act3.1.2.2.1 After the Demands have been passed by the Legislature, an Appropriation Bill is introduced to provide for the appropriation out of the Consolidated Fund of India or of the State or of the Union Territory with Legislature for all moneys required to meet:a.The Grants made by the Legislature andb.The expenditure charged on the Consolidated Fund, but not exceeding in any case the amount shown in the statement previously laid before the Legislature. (This charged expenditure is referred to as Appropriation).3.1.2.2.2 No money can be withdrawn from the Consolidated Fund until this Bill is passed by the Legislature. Once this Bill is passed, it becomes the Appropriation Act. The sums authorized in the Appropriation Act are intended to cover all the charges including the liability of past years to be paid during a financial year or to be adjusted in the accounts of that year. Any unspent balance lapses and is not available for utilization in the following year.3.1.2.3 Allotments and Re-appropriations3.1.2.3.1 Within the amount of each Grant or Appropriation as shown in the schedule to the Appropriation Act, all allotments and re-appropriations within sub-heads and sub-divisions of sub-heads may be sanctioned by Government or by such subordinate authorities as are duly authorized to do so. This is, however, subject to the limitation that any expenditure not falling within the scope or intention of a Grant may not be authorized from funds provided under that Grant. Any allotment or re-appropriation may be authorized at any time before, but not after the expiry of the financial year to which such Grant or Appropriation relates. Generally, re-appropriations from one Grant or Appropriation to another Grant or Appropriation are not permissible.3.1.3 Form of Accounts3.1.3.1 Article 150 of the Constitution states the following regarding the form of Accounts:“150. Form of the accounts of the Union and of the States. – The accounts of the Union and of the States shall be kept in such form as the President may, on the advice of the Comptroller and Auditor General of India, prescribe.”3.1.3.2 As per Notification No. CD-896/80 dated 27th September, 1980, the function of prescribing the form in which the accounts of the Union and the States are to be maintained has been delegated to the Controller General of Accounts (CGA) by incorporating entry 7A (i) in the Government of India (Allocation of Business) Rules (for Department of Expenditure under the heading Ministry of Finance) –“General principles of accounting relating to the Union or State Governments and form of accounts, and to frame or revise rules and manuals thereto.”3.1.3.3 The general principles of government accounting are presently prescribed by the Government Accounting Rules, 1990 (GAR). Rule 21 of GAR provides for cash system of accounting in the government in the following way:“21. Cash basis of AccountsWith the exception ofsuch book adjustments as may be authorized by these rules or by any general or special orders issued by the Central Government on the advice of the Comptroller and Auditor General of India, the transactions in Government accounts shall represent the actual cash receipts and disbursements during a financial year as distinguished from amounts due to or by the Government during the same period.”This is reiterated by the General Financial Rules, 2005 (GFR) in Rule 68.3.1.3.4 As per GAR (Rule 23), in consequence to the constitutional provisions mentioned earlier, government accounts are kept in three parts:of India (including Union Territory Administration/ Government) or of the State concerned.Part-I Consolidated Fundof India (including Union Territory Administration or of the State or Union Territory Government concerned.Part-II Contingency FundPart-III Public Account2829Strengthening Financial Management SystemsAn Overview of the Existing Financial Management System in India3.1.3.5 In case of Part I of the accounts, there are two main divisions:16(i)Revenue - consisting of sections for ‘Receipt heads (Revenue Account)’ and‘Expenditure heads (Revenue Account)’.(ii) Capital, Public Debt, Loans - consisting of sections for ‘Receipt heads (Capital Account)’, ‘Expenditure heads (Capital Account)’, and ‘Public Debt’, ‘Loans’, and ‘Advances’.3.1.3.6 The first division comprises the section ‘Receipt heads (Revenue Account)’ dealing with the proceeds of taxation and other receipt classified as revenue, and the section ‘Expenditure heads (Revenue Account)’ dealing with expenditure met therefrom.‘Remittances’ and ‘Suspense’ in this Part embrace all ‘merely adjusting heads’ under which appear such transactions as remittances of cash between treasuries and currency chests and transfer between different accounting circles. The initial debits or credits to these heads are cleared eventually by corresponding receipts or payments either within the same circle of account or in another account circle.3.1.3.10 Within each of the divisions and Sections of the Consolidated Fund as referred to above, the transactions are grouped into Sectors such as, “General Services”, “Social Services”, “Economic Services”, under which specific functions or services are placed. These Sectors are further sub-divided into ‘Major Heads of Account’. However, in some specific cases, the Sectors are sub-divided into sub-sectors before their division into Major Heads of Account.3.1.3.7 The second division comprises the following sections:–(a) The section ‘Receipt heads (Capital Account)’ dealing with receipts of a Capital nature which cannot be applied as a set off to Capital Expenditure.(b) The section ‘Expenditure heads (Capital Account)’ dealing with expenditure met usually from borrowed funds with the object of increasing concrete assets of a material and permanent character. It also includes receipts of a Capital nature intended to be applied as set off to Capital expenditure.(c) The section ‘Public Debt’, ‘Loans’ and ‘Advances’, comprises loans raised and their repayments by Government such as, Internal Debt, External Debt of the Union Government and loans and advances made by Governments and their recoveries; transactions relating to ‘Appropriation to Contingency Fund’ and ‘Inter-State Settlement’.3.1.3.8 In Part II of the accounts, the transactions recorded are connected with the Contingency Fund set up by the Government of India or of a State or Union Territory Government under Article 267 of the Constitution/ Section 48 of the Union Territories Act, 1963.3.1.3.9 In Part III (i.e. Public Account) of the accounts, the transactions relating to Debt (Other than those included in Part I), ‘Deposits’, ‘Advances’, ‘Remittances’ and ‘Suspense’ are recorded. The transactions under Debt, Deposits and Advances in this part are such in respect of which Government incurs a liability to repay the moneys received or has a claim to recover the amounts paid, together with the repayments of the former (Debt and Deposits) and the recoveries of the latter (Advances). The transactions relating toBox 3.1: Allocation between Capital and Revenue Expenditure on a Capital SchemeThe allocation between capital and revenue expenditure on a capital scheme for which separate capital and revenue accounts are to be kept are determined in accordance with such general or special orders as may be prescribed by the Government on the advice of the Comptroller and Auditor General. The main principles governing the allocation of expenditure on a Capital Scheme between Capital and Revenue accounts are as follows:a. Capital account should bear all charges for the first construction and equipment of a project as well as charges for intermediate maintenance of the work while not yet opened for service.b. Subject to (c) below, revenue account should bear all subsequent charges for maintenance and all working expenses. These embrace all expenditure on the working and upkeep of the project and also on such renewals and replacements and such additions, improvements or extensions as prescribed by government.c. In the case of works of renewal and replacement which partake both of a capital and revenue nature, the allocation of expenditure should be regulated by the broad principle that revenue should pay or provide a fund for the adequate replacement of all wastage or depreciation of property originally provided out of capital grants and that only the cost of genuine improvements, whether determined by prescribed rules or formulae or under special orders of Government should be debited to Capital account.d. Expenditure on account of reparation of damage caused by extraordinary calamities such as flood, fire, earthquake, enemy action, should be charged to Capital account or to Revenue account or divided between them in such a way as may be determined by Government according to the circumstance of each case.e. Capital receipts in so far as they relate to expenditure previously debited to Capital heads, accruing during the process of construction of a project, should be utilized in reduction of capital expenditure. Thereafter, their treatment in the accounts will depend on circumstances, but except under a special rule or order of Government, they should not be credited to the revenue account of the department or undertaking.(Source: Based on Rule 31, GAR, 1990)3.1.3.12 In the case of the Public Account, the transactions are again grouped into sectors and sub-sectors, which are further sub-divided into Major Heads of Account.3.1.3.13 Major, Minor and Detailed Heads: The main unit of classification in accounts is the major head which is divided into3.1.3.11 In case of the Contingency Fund, there is a single Major Head and all the transactions met out of the Contingency Fund are recorded under it.303116Based on GAR, 1990Strengthening Financial Management SystemsAn Overview of the Existing Financial Management System in Indiaminor heads, each of which has a number of subordinate heads, generally known as subheads. The sub-heads are further divided into detailed heads. Sometimes major heads may be divided into sub-major heads before their further division, into minor heads. Thus, the Sectors, Major heads, Sub-heads and Detailed heads together constitute a five-tier arrangement of the classification structure of Government Accounts.3.1.3.14 The Major Heads of Account falling within the Consolidated Fund generally correspond to ‘Functions’ of Government, such as different services like ‘Crop Husbandry’, ‘Defence’ etc being provided by Government, while minor heads subordinate to them identify the ‘Programmes’ undertaken to achieve the objectives of the function represented by the major head. A programme may consist of a number of schemes or activities and these generally, correspond to sub-heads below the minor head represented by the programme. In certain cases, especially in regard to non-developmental expenditure or expenditure of an administrative nature, the sub-heads may denote the components of a programme, such as ‘Organizations’ or the different ‘Wings of Administration’.3.1.3.15 A ‘detailed head’, is termed as an object classification. On the expenditure side of the accounts particularly in respect of heads of accounts within the Consolidated Fund, detailed heads are primarily meant for itemized control over expenditure and indicate the object or nature of expenditure on a scheme or activity or organization in terms of inputs such as ‘Salaries’, ‘Office Expenses’, ‘Grants-in-Aid’, ‘Loans’, ‘Investments’.3.1.4 Preparation of Accounts3.1.4.1 The annual accounts of the Government comprise the Appropriation Accounts and the Finance Accounts. The Finance Accounts show the details of receipts and expenditure for all the three Funds in the form of various statements including liabilities of the government such as guarantees etc. and loans given to States, Union Territories and public sector undertakings. Through the Appropriation Accounts, Parliament is informed about the expenditure incurred against the appropriations made by the Parliament in the previous financial year.3.1.4.2 These documents are presented before the Parliament after their statutory audit by the Comptroller and Auditor General of India. Preparation and submission of Appropriation Accounts to the Parliament completes the cycle of budgetary process.3.1.4.3 Appropriation Accounts173.1.4.3.1 Appropriation Accounts are accounts of the expenditure, voted and charged of the government for each financial year compared with the amounts of the voted grants andcharged appropriation for different purposes as specified in the schedules appended to the Appropriation Acts passed by the Parliament or Legislature, to exhibit the excess or savings as the case may be, over the final grant or appropriation. These accounts are complementary to the accounts of the annual receipts and disbursements of Government otherwise known as Finance Accounts.183.1.4.3.2 From 1961-62, Appropriation Accounts are complied by group-heads to eliminate unimportant matters and to enhance their usefulness. The Appropriation Accounts include:i.A consolidated statement tilted “Summary of Appropriation Accounts”showing the total amount of funds (original and supplementary) provided by the Parliament/Legislature under each voted grant and charged appropriation, actual expenditure incurred against each and the saving or excess andii.Appropriation accounts of each grant/appropriation indicating original grant/appropriation, additional funds provided during the year by supplementary grant/appropriation as a whole and the amount surrendered during the year.3.1.4.3.3 This is followed by “Notes and Comments” which bring to the notice of the Parliament/Legislature (giving relevant particulars of the group heads) excesses over grants/ appropriations requiring regularization, expenditure booked against the grant/appropriation but not really debitable to it, expenditure incurred on a “New Service” without specific authority of the Parliament/Legislature unjustified or excessive provision of funds leading to large savings and lapses and also cases of defective control over expenditure e.g. excessive, irregular or unjustified re-appropriations or surrenders within the grant/appropriation.3.1.4.3.4 In the summary of Appropriation Accounts, provision is made for:i.Indicating the expenditure met by advances from the contingency Fund whichwere not reimbursed to the fund during the year by authorization of the Legislature;ii.Reconciliation of the total expenditure according to Appropriation Accountswith the total expendire as shown in the Finance Accounts after taking into account recoveries of expenditure; andiii. Drawing attention to cases of excesses over grants/ appropriations requiring regularization.323317Source: Based on ‘Introduction to Indian Government Accounts and Audit’, Fifth Edition, 1987; issued under the Authority of the Comptroller and18 General of IndiaStrengthening Financial Management SystemsAn Overview of the Existing Financial Management System in India343.1.4.3.5 The general rule is that a grant is voted or an appropriation is authorized for the gross expenditure required for each service. The expenditure shown against each grant or appropriation in the Appropriation Accounts thus exclude recoveries of expenditure relating to respective grants or appropriations. The Finance Accounts, on the other hand, show the net expenditure after taking into account the recoveries. A reconciliation statement showing:a.Total expenditure according to Appropriation Accountsb.Total of recoveries total expenditure as shown in the Finance Accounts is therefore included below the summary of Appropriation Accounts. A detailed statement showing recoveries relating to each grant/appropriation is also included as an appendix to the Appropriation Accounts.3.1.4.4 Finance Accounts3.1.4.4.1 As soon as the accounts of a year are closed, the Finance Accounts of each Government of a State or Union Territory with Legislature for the year are prepared by the Accountant General concerned and submitted to the Comptroller and Auditor General for approval and the transmission to the Governor of the State/Administrator of the Union Territory to be laid before the respective Legislature. The Finance Accounts of the Union Government which comprise transactions of Civil as well as Railways, Defence, Posts and Telecommunication are prepared by Controller General of Accounts and submitted to the Comptroller and Auditor General for certification and transmission to the President for being laid on the table of the Parliament.3.1.4.4.2 The Finance Accounts present the accounts of the receipts and outgoings of the Government for the year together with the financial results disclosed by the revenue and Capital accounts, the accounts of the Public Debt and the liability and assets of the Government concerned as worked out from the balances recorded in the accounts.3.1.4.4.3 The statement in Part I is intended to give, in a summarized form, information in regard to:i.Transactions of the year relating to the Consolidated Fund, Contingency Fund and the Public Accounts.ii.(a) Capital outlay outside the Revenue Accounts and progressive Capital expenditure to end of the year.(b) Revenue expenditure temporarily capitalizediii.Financial results of irrigation and electricity schemes.iv.Debt position of Government including expenditure incurred on the service of debt.v.Loans and advances by Government.vi. Guarantee given by Governmentvii. Cash balance and investments of cash balancesviii. Summary of balances under Consolidated Fund, Contingency Fund and Public Account.3.2 Audit193.2.1 The Comptroller & Auditor-General of India3.2.1.1 Article 148 of the Constitution provides that there shall be a Comptroller and Auditor-General of India (CAG) who shall be appointed by ‘the President by warrant under his hand and seal and shall only be removed from office in like manner and on the like grounds as a judge of the Supreme Court ’.3.2.1.2 Article 149 of the Constitution provides that the Comptroller and Auditor-General of India (CAG) shall perform such duties and exercise such powers in relation to the accounts of the Union, the States and of any other authority / body as may be prescribed under law by Parliament. It also provides that until such law is passed, the Auditor-General of India would continue to perform such functions as were exercised by him before the commencement of the Constitution. Accordingly, the Parliament passed The Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971. The functions and duties of the CAG are described in the following paragraphs.3.2.1.3 Accounting Functions3.2.1.3.1 Article 150 of the Constitution mandates that the Accounts of the Union and the States shall be kept in such reforms as prescribed by the President on the advice of the CAG. Before the commencement of The Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, the accounts of Defence, Railways, certain other department of the Union Government, Lok Sabha and Rajya Sabha Secretariats and the3519Based on ‘Introduction to Indian Government Accounts and Audit’, Fifth Edition, 1987; issued under the Authority of the Comptroller and Auditor General of IndiaStrengthening Financial Management SystemsAn Overview of the Existing Financial Management System in IndiaUnion Territories of Goa, Daman and Diu and Puducherry were not being compiled by the C&AG. This arrangement was not revoked by this Act.3.2.1.3.2 Under the Act, the CAG has been made responsible for preparing each year the accounts showing, under the respective heads, the annual receipts and disbursements for the purpose of the Union, the States and each Union Territory having a Legislative Assembly. However, the President and the Governor may, after consultation with the CAG, may relieve him from this responsibility in case of the Union / UTs and States respectively. With respect to the accounts for which the CAG is responsible for compilation / keeping, necessary assistance is to be rendered by him in preparation of respective ‘Annual Financial Statements’.3.2.1.3.3 An exercise towards departmentalization of accounts in the Union with the main objective of integrating accounts with the administrative Ministries and Departments was conducted in a phased manner from 1976 onwards. Under this scheme, accounts and finance form an integral part of overall financial management. Administrative Ministries are entrusted with the responsibility of arranging payments and timely compilation and rendering of accounts. As mentioned earlier, the CAG was relieved of the accounting functions as a consequence of this scheme.3.2.1.3.4 The salient features of the scheme are briefly indicated below:a)The Secretary of the Department/Ministry acts as the chief accountingauthority and discharges this responsibility through and with the assistance of the Integrated Financial Adviser of the Ministry / Department.b)Payment and accounting functions of the Ministry / Department is dischargedthrough departmental Pay and Accounts Offices functioning at the headquarters of the Department / Ministry and regional Pay and Accounts Offices functioning in various regions of the country. The formation of regional Pay and Accounts Offices is determined with reference to the number and spread of field organizations in various regions of the country.c)The payments as well as receipt transactions relating to the Ministry /Department and its attached and subordinate offices are transacted at the branches of the Reserve Bank of India and State Bank of India or its subsidiaries or at specified branches of the public sector banks accredited to the department without intervention of the treasury.d)The regional Pay and Accounts Offices compile the accounts of the regionand render them to the central accounts office at the headquarters, which is responsible for compiling the accounts of transactions directly paid for byhim or received by him, and consolidating the accounts of the Department as a whole on the basis of the compiled accounts received from the regional Pay and Accounts Offices and his own office.3.2.1.3.5 However, as yet, there is no separation of accounts and audit functions at the State Government level.3.2.1.3.6 The accounting function in the Ministries/Departments has now been delegated to the CGA under the General Accounting Rules, 1990.3.2.1.4 Audit Functions3.2.1.4.1 Article 151 of the Constitution provides that the CAG shall submit his/her reports, in case of the Union, to the President who shall cause them to be laid before each House of Parliament. Similar provisions exist in case of the States. Under Sections 13, 16 and 17 of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971, it is the responsibility of the CAG:20a.To audit all receipts which are payable into the Consolidated Fund of Indiaand of each State and each Union Territory having a Legislative Assembly and to satisfy himself that the rules and procedures in that behalf are designed to secure an effective check on the assessment, collection and proper allocation of revenue and are being duly observed and to make for this purpose such examination of the accounts as he thinks fit;b.To audit all expenditure from the Consolidated Fund of India and of each Stateand of each Union Territory having a Legislative Assembly and to ascertain whether the money shown in the accounts as having been disbursed was legally available for and applicable to the service or purpose to which they have been applied or charged and whether the expenditure conforms to the authority which governs it;c.To audit all transactions of the Union and of the States relating to ContingencyFunds and Public Accounts;d.To audit all trading, manufacturing, profit and loss accounts and balance sheetsand other subsidiary accounts kept in any department of the Union or of a State; ande.To audit the accounts of stores and stock kept in any office or department of theUnion or of a State and in each case to report on the expenditure, transactions or accounts so audited by him.363720Based on ‘Introduction to Indian Government Accounts and Audit’, Fifth Edition, 1987; issued under the Authority of the Comptroller and Auditor General of IndiaStrengthening Financial Management SystemsAn Overview of the Existing Financial Management System in India3.2.1.4.2 Apart from the above, the CAG is also authorized by the Act to audit the receipts and expenditure of bodies or authorities substantially financed by grants or loans from Union or State or Union Territory revenue. In fact, the President or the Governor of a State or an Administrator of a Union Territory having a Legislative Assembly may also request the CAG to undertake the audit of accounts of any authority / body which has not been entrusted to him under law.3.2.1.4.3 The Reports submitted by the CAG and laid before each House of Parliament is examined by the Committee on Public Accounts (PAC) under Rule 308 of ‘Rules of Procedure and Conduct of Business in Lok Sabha’. In case of the Public Undertakings, these Reports are examined by Parliamentary Committee on Public Undertakings (COPU). These are further discussed in Chapter 8 of this Report.3.3 Internal Audit3.3.1 Presently, ‘internal audit’ is recognized as an aid to the management for monitoring the financial performance and effectiveness of various programmes, schemes and activities. In Government of India, internal audit is conducted through the Internal Audit Wings in the Principal Accounts Offices of various Ministries/Departments.213.3.2 The scheme of departmentalization of Union Government Accounts provided for setting up an internal audit organization. Accordingly, these were set up in most Union Government Ministries under the Chief Controller of Accounts/Controller of Accounts. The Secretary of the Ministry/Department acts as the Chief Accounting Authority. However, it is the Financial Adviser who, for and on behalf of the Secretary, is responsible for internal audit of payments and accounts from the records maintained by the various secretariat and field formations and Pay and Accounts Offices of the Ministry/Department.223.3.3. The revised charter of the role and responsibilities of the Chief Controller of Accounts (CCA)/Controller of Accounts (CAs) envisages that the internal audit wing working under the control and supervision of the CCAs/CAs would move beyond the existing system of compliance/regulatory audit and would focus on:?The appraisal, monitoring and evaluation of individual schemes;?Assessment of adequacy and effectiveness of internal controls in general, and soundness of financial systems and reliability of financial and accounting reports in particular;?Identification and monitoring of risk factors (including those contained in the Outcome Budget); critical assessment of economy, efficiency and effectiveness of service delivery mechanism to ensure value for money; and?Providing an effective monitoring system to facilitate mid-course corrections.The above revised functions are to be carried out as per the guidelines issued by the CGA from time to time.3.4 New Charter for the Integrated Financial Adviser (IFA)3.4.1 A scheme of Integrated Financial Advisers was put in place in 1975.23 In general, the IFAs were made responsible for:241)Preparation of the budget of the Department/Ministry, distribution of budgetallocations to the various wings, departments/formations;2)Arranging payments directly to the bodies, corporations and authorities ofgrant-in-aid, loans, etc., as may be sanctioned by the Department;3) Arranging payments through Pay and Accounts Offices under him in various regions of the country, all pay and allowances, office contingencies, miscellaneous payments, all admissible loans and advances to government servants including provident funds claims in accordance with prescribed financial and treasury procedures;4)Compilation and consolidation of the accounts of the Department/ Ministryin accordance with the instructions issued by the Union Government and/ or the Comptroller and Auditor General and rendering the appropriation of accounts;5)Introduction of a system of management accounting suited to the functionsand requirements of the Department/Ministry;6)Installation of a sound system of internal inspection within the department toensure both accuracy in accounts and efficiency in operation as a part of the management.3.4.1 This scheme was reviewed in 2006. The new charter of the Integrated Financial Advisers is analysed in Chapter 7. In brief, it redefines the role of the IFAs in financial management within Ministries/Departments ranging from formulation of the Budget Estimates to cash management and internal audit.3.5 Flow of Funds Related to Union Government Programmes3.5.1 Transfer of funds from the Union to the States due to the inadequacy of sources of generation of revenue takes place through various means. The first and foremost is by way383921 F.No.10(29)-E.Coord/73, dated 6.10.7522Introduction to Indian Government Accounts and Audit24Introduction to Indian Government Accounts and AuditStrengthening Financial Management SystemsAn Overview of the Existing Financial Management System in India40of devolution as per the recommendations made by the Finance Commission (in terms of Articles 280 and 281 of the Constitution). The second channel is through the Planning Commission. In this case, the States receive Plan funds from the Planning Commission in the form of ‘Central Assistance’ under the ‘Scheme of Financing of States’ Annual Plan. They also receive Plan Funds through various Union Government Ministries/Departments in respect of certain schemes implemented by State Governments. These schemes are known as ‘Centrally Sponsored Schemes’ (CSS). The mechanisms of transfer of funds in case of the CSS are as contemplated in the design of the respective schemes. A schematic diagram of flow of funds from the Union to the States is presented in Fig 3.1.2525Source: Based on ‘Central Transfers to States & Centrally Sponsored Schemes’, by Naresh C. Saxena; Central%20Transfers.pdf3.5.2 In this Report, the Commission has focused on the transfer of funds from the Union to the States in case of the CSS only. The Centrally Sponsored Schemes do not fall within the subjects allocated to Union Government in List I of the Seventh Schedule of the Constitution. However, they are funded by the Union Government to achieve certain national objectives. The flow of funds from the Union Government to the ultimate implementing agencies for any scheme is through one of these two channels.i)Funds are transferred to the Consolidated Fund of the State Governmentswhich spend the money through the implementing agencies.ii)The Union Government transfers funds directly to implementing agenciesin the States through normal banking channels.3.5.3 The types of fund release mechanism in case of some Schemes is illustrated in Table 3.1.26Table 3.1: Types of Fund Release Mechanism (Select Cases)Sl. No.Type-IType-IIType-IIIType-IVTo State Governments through credit to the state government account at the RBI by the Finance MinistryTo State Governments through credit to the state government account at the RBI by concerned Administrative Ministry/ Department or a subordinate office of that DepartmentTo separate agencies at State or district level directly by the concerned Administrative Ministry / Department or a subordinate office of that DepartmentTo State Government departments bymeans of a bank draft by the concerned Administrative Ministry / Department or a subordinate office of that Department1. Hill Area Development ProgrammeIntegrated Dairy Development ProjectEmployment Assurance SchemeNorth Eastern Council2. Slum Development SchemeSpecial Central Assistance Tribal Sub PlanBalika Samridhi Yojna3Prime Minister’s Gramodaya YojnaNational Pulses Development ProgrammeIndira Awas Yojna4Prime Minister’s Gram Sadak Yojna*National Oilseed Production ProgrammeNational Programme on Biogas DevelopmentOperation BlackboardNational AIDS Control ProgrammeNational TB Control ProgrammeSwarna Jayanti Shahari Rozgar Yojna*** In 2000-2001, the release was made in this fashion and from 2001-2002 it moved to a type III mechanism.** In practice, most states have not established a registered state level agency and the concerned state government office is receiving the funds but instead of depositing these in the state government account and securing budgetary allocation for further disbursing to implementing agencies, they have been routing these through bank accounts. In effect, they have been functioning in much the same fashion as a registered state level agency would be expected to.26 Actual expenditure under the CSS is incurred only when payment is made either to a beneficiary of the scheme or to the supplier of goods and services. However, due to lack of a proper information system, the tracking of fund flow and correlation between the amount released and expenditure made could not be determined without a degree of uncertainty. Further, when funds are transferred directly to the implementing agencies in the States, it has to be done in advance which results in a substantial accumulation of funds in the pipe line.3.6 Earlier Initiatives in Budgetary Reforms3.6.1 Initiatives relating to Performance Budget (1969), Zero-based Budget (1986-87) and Outcome Budget (2005-06) have been briefly outlined in Chapter 2. They are further discussed in the following Chapter while considering issues related to budgetary reforms.Strengthening Financial Management SystemsANALYSIS OF THE BUDGETARY PROCESS44.1 The Budgetary System4.1.1 In an input-based budget system the linkages of budget outlays with productivity of public expenditure and delivery of public services generally remain nebulous. In the conventional line-item budgeting, the major focus is on ensuring that agencies do not exceed the specified allocation.27 Financial compliance is sought to be achieved in this system through a detailed budgetary specification of inputs and to achieve this, detailed procedures are designed for expenditure control. The budgeting system in India, both at the Union and State levels, continues to be conventional and inputs based though the recently introduced outcome budgeting is a major reform towards achieving results.4.2 Parliamentary Procedures4.2.1 As per Rule 204(1) of the Rules of Procedure and Conduct of Business in the Lok Sabha, the Budget is presented to the Parliament on such date as is fixed by the President. The present convention is to present the Budget at 11.00 am on the last working day of February i.e. about a month before the commencement of the financial year except in the year when General Elections to the Lok Sabha are held. In an election year, the Budget may be presented twice, first to secure a Vote on Account for a few months and later in full.4.2.2 The General Discussion on the Budget is held on a day appointed by the Speaker, subsequent to the day of presentation of the Budget and for such period of time as the Speaker may decide. During the general discussions, the House is at liberty to discuss the budget as a whole or any question of principle involved therein, but no motion can be moved nor can the budget be submitted to the vote of the House. The Finance Minister has a right to reply at the end of the discussions. The scope of discussions at this stage is confined to general examination of budget, policy of taxation as expressed in the Budget speech of the Finance Minister and general schemes and structures etc. Specific points or grievances can be discussed on the floor of the House when it takes up relevant Demands for Grants or the Finance Bill.4.2.3 After the conclusion of the General Discussion, the Demands for Grants of individual Ministries/Departments are taken up in the Lok Sabha for discussion as per the time table424327For example, General Financial Rules (GFR) 52(3) stipulates that no disbursements be made which might have the effect of exceeding the total grant or appropriation authorised by Parliament for a financial year except after obtaining a supplementary grant or an advance from the Contingency Fund.44Strengthening Financial Management Systemsdecided by the Business Advisory Committee of the House and is subjected to vote. In order to facilitate proper examination of different Demands for Grants, different Departmentally related Standing Committees of the Parliament are constituted every year to consider the concerned Demands for Grants and make a report on them to the House. However, these Committees are not empowered to suggest anything in the nature of ‘cut motions’ and they have only persuasive value.4.2.4 When a Demand is taken up for discussion, any Member may seek reduction in the amount of the Demand by moving any of the following types of Cut Motions:?Disapproval of Policy Cut (by moving “that the amount of the Demand be reduced to Re. 1”, thereby representing a disapproval of the policy underlying the demand);?Economy Cut (by moving “that the amount of the demand be reduced by a specified amount”, thereby representing the economy that can be effected); and?Token Cut (by moving “that the amount of the demand be reduced by Rs. 100”, in order to ventilate a specific grievance).4.2.5 At the end of the period allotted for discussion on the Demands for Grants, the Speaker puts all the outstanding Demands for Grants to the vote of the House. This process is known as ‘Guillotine’ which acts as a device for bringing the debate on financial proposals to an end within a specified time with the result that several Demands have to be voted by the House without discussions. At the same time, Cut Motions which have been moved are also put to vote and disposed of. The Appropriation Bill for withdrawal from the Consolidated Fund of India is introduced in the Lok Sabha with the prior approval of the President. For its introduction, consideration and passing on the same day, special permission has to be sought from the Speaker. The scope of debate on an Appropriation Bill relating to Demands for Grants for the financial year after the remaining demands have been guillotined is restricted to matters of public importance or administrative policy implied in the grants covered by the Bill which have not already been raised while relevant Demands for Grants were under consideration.4.3 Preparation of the Budget4.3.1 Preparation of the Annual Budget in the Government of India follows both the top-down and bottom-up approaches. While guidelines and instructions are issued by the Ministry of Finance and Planning Commission, the spending Ministries/Departments make requests for budgetary allocations based on their own estimates. The provisions which govern the preparatory process are contained in the General Financial Rules. The MinistryAnalysis of the Budgetary Processof Finance issues a Budget Circular annually which contains the guidelines applicable to the particular year along with instructions and guidelines issued by different authorities in the form of annexures.4.3.2 The process of preparation of the Budget begins with the issue of the Budget Circular by the Budget Division of the Ministry of Finance in the month of September. This Circular is issued for the guidance of Ministries/Departments in framing the Revised Estimates for the current year and the Budget Estimates for the ensuing year. It gives detailed instructions about the preparation of estimates of receipts and expenditure, the required format and the various statements that are to be appended to the estimates. It also specifies the processes to be followed and their scheduled dates. The procedure for preparing the estimates for expenditure is briefly outlined in the following paragraphs.4.3.3 The first step to be taken by the Ministries/Departments is to review the existing Expenditure Budget so as to prioritise the activities and schemes, both on the Plan and Non-Plan side and identify those activities and schemes, which can be eliminated or reduced in size or merged with any other scheme. Thus, all ongoing schemes/programmes need to be evaluated to determine their continued relevance.28 Schemes that are not to continue beyond the current year, need to be excluded from the BE of the ensuing year. From the Eleventh Five Year Plan onwards, Planning Commission’s guidelines regarding inclusion of new Schemes in the Plan, enhancement of Five Year Plan/Annual Plan outlays and major changes in the scope and investment approval of the Plan Schemes is to be adhered before firming up the estimates.294.3.4 Instructions are issued regularly giving due consideration to past performance, the stages of formulation/implementation of the various schemes, the institutional capacity of the implementing agencies to implement the scheme as scheduled, the constraints on spending by the spending agencies, and most importantly the quantum of Government assistance lying with the recipients unutilised/ unaccounted for etc. while making estimates. These are all aimed at minimising the scope for available surrenders at a later stage.30 The Ministry of Finance has issued instructions on the need for the individual Ministry/Department to put in place effective mechanism for realistically assessing their requirement of funds in a way that would ward off the occurrence of unwarranted surrender of savings at a later date. Under the standing instructions of the Ministry of Finance, no provision should normally be made in the Budget without completion of a pre-Budget scrutiny of a project/scheme. However, the Budget Circular also provides that where, such a provision has been made without the necessary scrutiny, such scrutiny should be completed and appropriate approvals obtained therefor before the commencement of the financial year or latest by the time the Budget is passed by the Parliament.3128Secretary (Expenditure)’s O.M. F. No. 7(5)/E-Coord/2004 dated 24.09.2004 29Planning Commission U.O. No. N- 11016/4/2006-PC dated 29.8.2006 30O.M. F. No. 7(6)-B(R)/2001 dated 20th July, 2001; F.No.7(1)/B(D)/2006 dated 31st July, 2006 31Para 3.2.6; Budget Circular, 2009-1045Strengthening Financial Management Systems4.3.5 The departmental estimates are examined and analysed by the Financial Adviser and then forwarded to the Budget Division in the Finance Ministry. This is followed by pre-budget meetings with the Secretary (Expenditure). Once this stage is over, the expenditure ceilings are communicated (which include ceilings on both revenue and capital expenditure). The Departments then prepare the Statement of Budget Estimates (Final). In case of the 2009-10 Budget, the due dates for rendition of estimates by Ministries/Departments to the Budget Division are given in in Table 4.1 : 32Table 4.1: Due Dates for Rendition of Estimates by Union Ministries/DepartmentsOctober 24, 2008(followed by pre-budget discussions)Immediately after ceilings are communicatedSBE with BE 2009-10 (Plan) and statement showing provision for externally aided projects in Central PlanNotes on Demands for Grants for Expenditure Budget Vol. 2Material for Statements to be appended to Demands for Grants/Expenditure Budget4.3.6 In the following paragraphs, different issues related to strengthening of the financial management system, so far as the budgetary processes are concerned, and the agenda for reforms in the budgetary process are discussed.4.4 Weaknesses in the Budgetary System and Implementation4.4.1 The Commission has analysed the recent Annual Budgets and their implementation and has found that they have the following weaknesses:i.Unrealistic budget estimates: The amounts budgeted are often not realistic.Weakness in preparing proper estimates leads to frequent revisions and supplementaries. On the other hand, there are major unspent provisions at the end of the year.Analysis of the Budgetary Processii.Delay in implementation of projects: Resources are being spread thinly with onlytoken provisions in some cases, often leading to inordinate delays in execution of projects.iii. Skewed expenditure pattern: The expenditure pattern is skewed, with a major portion getting spent in the last quarter of the financial year, especially in the last month.iv. Inadequate adherence to the multi-year perspective and missing ‘line of sight’ between plan and budget: Though the Five Year Plan provides the basis for multi-year perspective, often ad hoc deviations from it distort the long-term plan objectives. The Plan schemes get dispersed into line-items in the budget estimates and there is no consolidation afterwards – both in the estimates and the final accounts. There is need for alignment between the plan, budgets and accounts.v.No correlation between expenditure and actual implementation: The expenditurefigures do not reflect actual expenditure made towards receipt of goods and services.vi. Mis-stating of financial position: Parking of funds by implementing agencies, outside the government accounts portrays an incorrect picture of the financial position of government. This also means that the Government’s financial position is not known with reasonable accuracy at any given point of time.vii. Ad hoc project announcements: Indiscriminate announcement of projects/ schemes not included in the plan/budget is regularly made, often without proper consideration and detailing.viii. Emphasis on compliance with procedures rather than on outcomes.ix.Irrational plan / non-plan distinction leads to inefficiency in resourceutilization.4.5 Unrealistic Budget Estimates4.5.1 The Report of the CAG on Union Government Accounts 2007-08 mentions in paragraph 8.4 that “Unspent provisions in a grant or appropriation indicate either poor budgeting or shortfall in performance or both. Unspent provisions of more than Rs. 100 crore, which need a detailed explanatory note to the Public Accounts Committee (PAC), occurred in 60 cases of 47 grants (including Civil, Posts and Defence) during theStatement of Budget Estimates (proposed):Statement of Budget Estimates (Final):Within 3 days of receipt of Plan allocation from Planning CommissionWithin 3 days of rendition of SBE (Final) for Plan Expenditure 2009-10-Do-464732Budget Circular 2009-10Strengthening Financial Management SystemsAnalysis of the Budgetary Process48year 2007-08. The unspent provisions were attributed by the Ministries/Departments to some of the schemes failing to take off.” In fact, this Report also points out that there were 24 sections of 20 grants/appropriations including six capital sections which had persistent savings of Rs. 100 crore and above during the last three years (2005-08). These are presented in Table 4.2.Table 4.2: Details of Persistent Unspent Provision of Rs.100 Crore or More under Grant /Appropriations(Rupees in crore)Grant No.YearSavings duringthe yearRevenue (Voted) Table 4.2: Details of Persistent Unspent Provision of Rs.100 Crore or More under Grant / Co7rd6 – Nuclear Power Schemes2005-06104.732006-07205.832007-08709.4618 – Department of Food and Public Distribution2005-063299.012006-07205.132007-08495.8733 – Payments to Financial Institutions2005-061523.182006-071687.992007-081224.4735 – Transfers to State and Union Territory Governments2005-061106.342006-07722.372007-081481.3046- Department of Health and Family Welfare2005-061406.502006-072274.912007-081467.4648 – Department of Heavy Industry2005-061183.72006-07138.522007-08477.7752 – Police2005-06117.822006-07600.932007-08285.07Appropriations(Rupees in crore)Grant No.YearSavings during the yearRevenue (Voted)56 – Department of School Education and Literacy2005-06505.922006-07373.192007-082668.2961 – Department of Law and Justice2005-06217.742006-07199.722007-08309.7865 – Ministry of New and Renewable Energy2005-06276.182006-07207.852007-08139.6781 – Department of Science and Technology2005-06205.092006-07490.042007-08271.0685 – Department of Road Transport and Highways2005-06448.172006-07515.542007-08335.6288 – Department of Space2005-06435.952006-07505.092007-08374.8189 – Ministry of Statistics and Programme Implementation2005-06154.412006-07145.502007-08138.7691 – Ministry of Textiles2005-06118.282006-07763.182007-08147.3599 – Department of Urban Development2005-06718.292006-07197.192007-08118.1149Strengthening Financial Management SystemsAnalysis of the Budgetary Process50Contd.Table 4.2: Details of Persistent Unspent Provision of Rs.100 Crore or More under Grant/Appropriations(Rupees in crore)Grant No.YearSavings duringthe yearRevenue (Voted)102 – Ministry of Water Resources2005-06112.532006-07195.082007-08102.75Revenue (Charged)35- Transfer to State and Union Territory Governments2005-06740.512006-071161.692007-083748.34Capital (Voted)5 – Department of Atomic Energy2005-06298.172006-07164.032007-08458.656 – Nuclear Power Schemes2005-061013.462006-07713.492007-081240.5352 - Police2005-06152.812006-07192.722007-081788.6772 – Ministry of Power2005-061417.132006-07737.702007-08775.28Capital (Charged)35 – Transfer to State and Union Territory Governments2005-06350.532006-071000.002007-081000.1527 – Capital Outlay on Defence Services2005-062033.972006-073653.052007-084417.704.5.2 Further, in paragraph 8.14, the Report states that in 25 cases relating to 25 grants/ appropriations, while supplementary provisions aggregating to Rs. 65887.93 crore were obtained during 2007-08 in anticipation of higher expenditure, the final expenditure was less than even the original grants/appropriations resulting in unspent provisions of Rs. 70108.62 crore. This is presented in Table 4.3.Table 4.3: Unspent Provision Were More than the Supplementary Grant / Appropriation(Rupees in crore)Sl.Grant/OriginalSupplementaryActualUnspentNo.appropriationprovisiongrant obtaineddisbursementsprovisionCivilRevenue - Voted1.14 – Department of Tecommunications5445.00377.014788.221033.792.19 – Ministry of Culture882.61115.00850.52147.093.20 – Ministry of Defence6865.08229.796842.77252.104.43 – Indirect Taxes1689.8059.701636.08113.425.46 – Department of Health & Family Welfare16270.63280.5415083.711467.466.50 – Ministry of Home Affairs765.7728.27763.4230.627.56 – Department of33535.2249.1530916.082668.29School Education & Literacy8.58 – Ministry of Information & Broadcasting1391.764.941363.7132.999.69 – Ministry of Personnel, Public Grievances & Pensions320.886.47306.4620.8910.72 – Ministry of Power4883.912.274309.97576.2111.83 – Department of Biotechnology694.708.30636.6266.3812.85 – Department of12003.90161.8811830.16335.62Road Transport & Highways13.86 – Ministry of Micro, Small & Medium Enterprises585.414.08486.35103.1414.90 – Ministry of Steel85.504.2781.048.7351Strengthening Financial Management SystemsAnalysis of the Budgetary Process52Sl.Grant/OriginalSupplementaryActualUnspentNo.appropriationprovisiongrant obtaineddisbursementsprovisionRevenue - Charged15.52 – Police2.940.652.780.8116.62 – Appropriation – Supreme Court of India53.263.4852.933.8117.93 – Ministry of Tribal Affairs1489.2918.421357.18150.53Capital- Voted18.28 – Ministry of Development of North Eastern Region154.371.76147.788.3519.46 – Department of Health & Family Welfare725.5951.25261.66515.1820.48 – Department of Heavy Industry628.58165.79615.81178.5621.51 – Cabinet33.360.2617.0216.6022.52 – Police4529.8181.102822.241788.6723.81 – Department of Science and Technology73.901.9572.593.2624.94 – Andaman & Nicobar Islands816.901.00813.933.9825.37 – Appropriations Repayment of Debt1611645.9264230.601604110.4770108.62Total65887.934.5.3 The Commission has analysed the Reports of the CAG pertaining to the Civil Ministries in the Union Government from year 2000 onwards with regard to unspent provisions, injudicious re-appropriations, supplementary grants without requirement, rush of expenditure in the month of March etc. The findings are presented in Table 4.4.Contd.Table 4.3: Unspent Provision Were More than the Supplementary Grant / Appropriation(Rupees in crore)requirementgrants withoutSupplementaryIn five cases,actual expenditure was less than the original provision (Rs. 17 crore)In 14 cases relating to 13 grants,actual expenditure was less than the original provision (Rs. 295.89 crore)In 16 cases relating to 15 grants,actual expenditure was less than the original provision (Rs. 317.33 crore)reappropriationsInjudiciousRs.9481 crore in32 cases of 16 grants/ appropriationswhere even theoriginal provisioncould not be utilisedRs.17.64 crore in17 cases of12 grants/appropriationswhere even theoriginal provisioncould not be utilisedRs.324.97 crorein 28 casesof 17 grants/appropriationswhere even theoriginal provisioncould not be utilised77Chargedexpenditureas % of total75Expenditure72ExcessDisbursementsover Grants /AppropriationsRs.0.57 crore in 2 segments of two grants / appropriationsRs.11824.46 crore in56 segments of 42 grants / appropriationsRs.0.44 crore in one segment of one grant / appropriationsor moreUnspentRs. 100 crore32 cases34 cases of24 grants and twoappropriations.25 cases of 20 grants and one appropriationprovision ofTable 4.4: Analysis of Observations by CAG in case of Civil Ministries/Departmentsprovision(Rs. crore)UnspentFY35021.40(5.44%of totalauthorization)2000(1998 99)Report /68017.08(10.15%of totalauthorization)2001(19992000)138164.89(19.61% of totalauthorization)2002(2000 01)CAGYear of53Strengthening Financial Management SystemsAnalysis of the Budgetary ProcessContd.In 17 cases relating to 16 grants,actual expenditure was less than the original provision (Rs. 1202.01 crore)In 20 cases relating to 20 grants,actual expenditure was less than the original provision (Rs. 916.34 crore)In 17 cases relating to 12 grants,actual expenditure was less than the original provision (Rs.2044.46 crore)grants withoutSupplementaryrequirementreappropriationsInjudiciousRs.499.62 crorein 21 casesof 17 grants/appropriationswhere even theoriginal provisioncould not be utilized70Chargedexpenditureas % of totalRs.52.27 crore in29 cases of18 grants/appropriationswhere even theoriginal provisioncould not be utilized70ExpenditureRs.40.88 crore in 7 cases of 6 grants/ appropriationswhere even theoriginal provisioncould not be utilized72ExcessRs. 878.67 crores in five segments of five grants / appropriationsDisbursementsRs. 42190.20 crores in seven segments of seven grants / appropriationsRs. 1864.47 crore in nine segments in eight grants / appropriationsover Grants /Appropriationsor moreUnspentRs. 100 croreprovision ofTable 4.4: Analysis of Observations by CAG in case of Civil Ministries/Departments46 cases of 38 grants and one appropriation57 cases of 48 grants and one appropriation37 cases of29 grantsand twoappropriationsprovision(Rs. crore)UnspentFY24290.85(3.47%of totalauthorization)2003(20012) Report/2004(20023) 59849.32(7.69%of totalauthorization)(ExcessExpenditure of 12386)2005(20034) CAGYear ofContd.In 29 cases relating to 22 grants,actual expenditure was less than the original provision (Rs.2259.81 crore)grants without25 cases relating to 25 grants,actual expenditure was less than the original provision (Rs.65887.93 crore)In 36 cases relating to 33 grants,actual expenditure was less than the original provision (Rs. 3432 crore)In 24 cases relating to 20 grants,actual expenditure was less than the original provision (Rs.443.80 crore)SupplementaryrequirementreappropriationsInjudiciousRs.33.09 crore in 7 cases of 7 grants/ appropriationswhere even theoriginal provisioncould not be utilizedRs.194.65 crorein 20 casesof 13 grants/appropriationswhere even theoriginal provisioncould not be utilizedRs.426.23 crorein 17 casesof 11 grants/appropriationswhere even theoriginal provisioncould not be utilizedRs.430.76 crore in 22 cases of 13 grants/ appropriations where even the original provision could not be utilized81Chargedexpenditureas % of total80Expenditure7874ExcessDisbursementsover Grants /Appropriations171.32 crores in4 segments of 4 grants /appropriationsRs. 33784.53 crores in three segments of three grants / appropriationsRs. 36637.20 crores in 4 segments of 4 grants /appropriationsRs. 97062.69 crores in 8 segments of 8 grants /appropriationsor moreUnspentRs. 100 croreprovision ofTable 4.4: Analysis of Observations by CAG in case of Civil Ministries/Departments60 cases of 47 grants and one appropriation (includingposts anddefence)48 cases of38 grants and oneappropriation60 cases of47 grants (includingDefence etc.)53 cases of 44 grants(Rs. crore)(ExcessExpenditure of Rs. 66896 crore)5194 (0.52% of totalauthorization)Unspent(Excessexpenditure of Rs. 1034 crore)10772 (4.40% of totalauthorisation)provisionFY2006(200405)2008(200607)2007(200506)2009(200708)Report/CAGYear of5455Strengthening Financial Management SystemsAnalysis of the Budgetary Process4.5.4 Table 4.4 shows that despite having such an elaborate and time consuming system of making budgetary estimates, large amounts of unspent money have been surrendered every year at the lapse of the financial year. Large-scale unspent provisions are indicative of lack of efficiency in programme management at the departmental level in an annual budget cycle and undermine efficient use of public money which is one of the major objectives of any budgeting system. Excessive provision under various sub-heads during the budget preparation stage due to lack of a realistic assessment of departmental requirements is the major reason for this. It also shows that proper forecasting methods are not used to estimate expenditure on account of various items.4.5.5 In fact, the serious nature of this state of affairs has also been taken note of by the Public Accounts Committee in its reports. Thus, the observations of the PAC (13th Lok Sabha) in para 13.1 of their 16th Report were communicated by the Ministry of Finance (MoF) to all Ministries/Departments in the following manner: “the Public Accounts Committee while taking adverse note of the whopping saving of Rs. 44231.22 crore in the grants pertaining to civil Ministries/Departments for the year 1996-97 has noted that out of the above savings, Rs. 29466.03 crore was on account of less withdrawal of 31 days Treasury Bills. Excluding these Treasury Bills savings, the effective saving of Rs. 14765.13 crore constituted more than two times the supplementary grants of Rs. 7326.86 crore and 3.5 per cent of the total provision of Rs. 420902.71 crore. The Committee has further observed that there was aggregate savings (both Revenue and Capital Sections) amounting to Rs. 11266.16 crore in the Voted portion and Rs. 32965.06 crore in the Charged portion.”33 It was further mentioned that the PAC has observed that “this indicates the lack of earnestness on the part of Ministries/ Departments concerned reflecting on the injudicious formulation of budget estimates/utilisation of funds, where such savings could have been significantly reduced, if not avoided altogether, by making realistic budgetary projections by the concerned Ministries/Departments.” To avoid this ‘recurring malady’, the Ministry of Finance advised the Ministries/Departments to gear up the ‘existing mechanism of review, monitoring and control’ as to make a careful formulation of plan/schemes having regard to ‘ground realities and achievable targets’ and also to make ‘realistic assessment of funds’.344.5.6 However, apparently, the ‘existing mechanism of review, monitoring and control’ could not be geared up to take into account the ground realities and make realistic assessment of funds in the ensuing period as another OM was issued in 2006 which cited the 17th Reportof the PAC (14th Lok Sabha) in observing that “large sacle unspent provisions under Grants/ Appropriations by the civil Ministries/Departments have become an almost recurring feature and the position is still to improve. The Committee is inclined to conclude that the concerned Ministries/Departments have not made any serious attempts to apply effective corrective measures in accordance with the Committee’s recommendations.”35 This time, reliance was placed on the role of the Financial Adviser under the new Charter, wherein he was required to provide analytical inputs into the budget formulation process in such a way that large savings/ unspent provisions were reduced if not altogether avoided. Thus, the Financial Advisers were enjoined to take the following steps in this regard:?Budget Estimates and Revised Estimates should be prepared with reference to the measurable/monitorable commitments made in the Outcome Budget. Fiscal discipline should be enforced in implementation of programmes/projects to ensure ‘value for money’.?Ministries/Departments may review the expenditure profile of each major scheme/ programme at regular intervals and apply the result of such analysis at the time of initial budget formulation so that a more realistic estimation of expenditure is made.?Ministries/Departments may, after carrying out such review, intimate the MoF at the time of finalisation of Revised Estimates of the current year about the possible savings so that they could be re-deployed.4.5.7 However, there has been little improvement in the situation. This shows that in spite of repeated observations by the PAC, CAG and MoF, Ministries/Departments are actually not in a position to make a true assessment of fund requirement or gauge the ground realities regarding implementation of schemes/programmes. The Commission is of the view that the root cause of the problem lies in the prevalent method of formulation of the annual budget by getting details from different organizations/units/agencies and fitting them into a pre-determined aggregate amount leading to unrealistic budget estimates. This method should be given up along with the method of budgeting on the basis of ‘analysis of trends’. As mentioned in Chapter 2, many countries have now adopted top-down budgeting techniques where a medium-term expenditure framework provides baseline expenditure565733OM No.F.7(6)-B(R)/2001, dated 20th July, 200135Para 14; cited in F.No.7(1)/B(D)/2006 dated 31st July, 200634ibidStrengthening Financial Management SystemsAnalysis of the Budgetary Processinformation leading to fixing of the total level of expenditure (the medium-term perspective and expenditure limits are discussed in paragraph 4.8 of this Report). This is then allocated among different Ministries/Departments. These Ministries/Departments are thus free to reallocate moneys among its various agencies or programmes in accordance with their priorities. In case a new policy decision is made, it is funded by reallocations from other areas within the Ministry/Department. The Finance Ministry, however, generally examines the appropriateness of these reallocations. The Commission is of the view that such a ‘top-down’ method may be adopted in India also. Further, it also needs to be ensured that assumptions made while arriving at estimates are realistic.4.6 Delay in Implementation of Projects4.6.1 Another aspect of financial management concerns the delays in implementation of projects. In fact, time and cost overruns have been a major problem affecting the central sector projects. The analysis made by the Ministry of Statistics and Programme Implementation shows that 308 projects have accounted for a cost over run of Rs. 57,193 crore (i.e. 49.48%) with respect to their original sanctioned cost during the April-June, 2008 quarter. This is shown in Table 4.5.58%increaseAnticipated(Rs. Cr)CostOriginal(Rs. Cr)CostNo. ofProjectsCost%Over runAntici-(Rs. Cr)pated CostOriginalCost (Rs. Cr)No. ofProjectsAtomicEnergyShipping& PortsWaterResourcesUrbanDevelopmentCivilAviationSl.No.109.800.0044.84118.6415.686.9529.1249.4815.56522.5841.550.0022.070.0034.72113.9633.0932618.55172782.5730701.021187.00807.976512.348714.14442.170.0014698.207404.08443.1541.960.001472.0667739.9331660.29115591.0110383.57542.90557.835629.728147.92342.4626567.4271.186065.600.0020.001092.6524509.470.00189308Total Projects11211928160112415190-8.3113.470.003.50118.641.113.694.6827.082.92522.584.410.0082.278.9033.8435.00421158.3423342.481187.006544.8561443.3915852.972231.82111467.044091.5120234.77443.1579497.9610658.3860680.9086.8664.90371156.82108303.40542.906323.7915289.5360771.272132.1115922.884091.5122357.3471.1855719.6735.0043615.7711624.3140901Total Projects13020220324571111611226452I&BTotalSteelMinesPowerHealth & FWCoalTelecommunicationRailwaysInformation TechnologyPetroleum16.1.15.12.14.11.2.Table 4.5: Extent of Cost Overrun in Projects with Respect to Original Cost (Status as on 30.06.2008)9.8.6.3.5.10.4.13.7.590.000.000-3.8323360.2624291.265SectorRoad Transport &Highways4.5.8 Recommendationsa. The assumptions made while formulating estimates must be realistic. At the end of each year the reasons for the gap between the ‘estimates’ and ‘actuals’ must be ascertained and efforts made to minimize them. These assumptions should also be subject to audit.b. The method of formulation of the annual budget by getting details from different organizations/units/agencies and fitting them into a predetermined aggregate amount leads to unrealistic budget estimates. This method should be given up along with the method of budgeting on the basis of ‘analysis of trends’. This should be replaced by a ‘top-down’ method by indicating aggregate limits to expenditure to each organization/agency.c.Internal capacity for making realistic estimates needs to be developed.60Strengthening Financial Management SystemsAnalysis of the Budgetary Process4.6.2 The details of time over-runs are given in Table 4.6.4.6.3 As stated in an earlier paragraph, the Report of the CAG on Union GovernmentAccounts 2007-08 mentions that in a large number of cases, many Ministries/Departments have reported that there were unspent provisions due to various schemes not taking off. In many cases, such delays and unspent provisions are due to token provisions made on account of ill-conceived or hastily conceived projects which fail to take off leading to wastages on the one hand and tying scarce resources on the other, thereby resulting in delayed implementation of other schemes/programmes which are starved of funds.4.6.4 Thus, the Commission feels that there is need for stricter adherence to project formulation norms so that budgetary provisions are made only when administrative and technical sanctions have been obtained and a detailed feasibility report and cost-benefit analysis have been made. In the same vein, clear and unambiguous provisions should be made for jettisoning of projects where justifiable reasons are on record. Further, a more strict regime needs to be put in place to prevent cost and time over-runs which would contain measures to deal with various factors causing delays in projects. However, there is also a need for taking holistic approach as there is a whole host of factors, apart from financial constraints, which leads to delays in implementation of projects.4.6.5 Recommendationa.Projects and schemes should be included in the budget only after detailedconsideration. The norms for formulating the budget should be strictly adhered to in order to avoid making token provisions and spreading resources thinly over a large number of projects/schemes.4.7 Skewed Expenditure Pattern - Rush of Expenditure towards the End of the Financial Year4.7.1 There is a tendency to incur a significant part of the annual expenditure in the last quarter of the financial year, especially during the month of March. The details of month-wise Plan expenditure in case of Union Ministries/Departments for the period April 2004 to February 2009 are shown in Fig.4.1. This Figure clearly indicates that every year, there is a rush for expenditure in the month of March, which is represented by the peaks observed in the figure. The figures for monthly non-plan expenditure during the same period show similar trends. This is shown in Fig 4.2.61Range of(Months)delayAnticipated(Rs. Cr)CostOriginal(Rs. Cr)CostNo. ofProjectsCost%Over runWaterResourcesUrbanDevelopmentShipping& PortsCivilAviationSl.No.--13-25601-804-963-562-413-159--1-491-68--1-127---4-204– 1080.00210153.360.001187.0035567.439067.93916.951766.6355236.228278.5528402.090.0036759.4815151.961232.860.000.00180013.1752726.59542.908502.2134875.671625.61861.940.0014473.320.008851.7428869.5811017.480.001079.870372301144111717021306701701433.8413.470.00118.643.691.113.504.682.928.900.00-8.3182.27522.5827.084.41Projects with time overrunTotal Projects15.1.11. 14.12. 2.421158.34371156.82901TotalTable 4.6: Extent of Time Overrun in Projects With Respect to Original Schedule (Status as on 30.06.2008)86.8664.902Information Technology16.Antici-(Rs. Cr)pated CostOriginalCost (Rs. Cr)No. ofProjectsAtomicEnergy23360.2624291.265Sector1187.00542.90161443.3960771.2722015852.9715289.53206544.856323.79302231.822132.11324091.514091.511Mines5.111467.04108303.4071Power8.35.0035.001I&B4.79497.9643615.77264Railways10.10658.3811624.3152Telecommunication13.60680.9055719.6740Petroleum7.23342.4822357.34116Coal3.443.1571.181Health & FW9.20234.7715922.8845Steel6.16586.2616586.263-3.83Road Transport &HighwaysStrengthening Financial Management SystemsAnalysis of the Budgetary Process4.7.2 A modified exchequer control-based expenditure management system was put in place in December 2006 to curb this rush of expenditure in the last quarter of the financial year. The Modified Cash Management System36 seeks to achieve, inter alia, the following objectives: –i.Obtaining greater evenness in the budgeted expenditure within the financial year, especially in respect of items entailing large sums of advance releases and transfers to corpus funds.ii.Reducing rush of expenditure during the last quarter, especially in the last month of the financial year.iii. Reducing tendency of parking of funds.iv.Effectively monitoring the expenditure pattern.v.Better planning of Indicative Market Borrowing Calendar of the Central Government.4.7.3 The implementation of this modified system has been entrusted to the Financial Advisors. In accordance with the modified system, a Monthly Expenditure Plan (MEP) has to be worked out for each Demand for Grant. There has to be a separate MEP for Plan and Non-plan expenditure which would be annexed to the Detailed Demand for Grant. The MEP would form the basis of a Quarterly Expenditure Allocations (QEA) and theMinistry/Department concerned would have to limit issuing of cheques accordingly are arrange prior consent of Ministry of Finance. The MEP now needs to be finalized taking into account the following:a)MEP for the month of March may not exceed 15 per cent of the budgetedprovision [Budget Estimate];b) MEP for the months of January-March may be so fixed that the QEA for the last quarter may not exceed 33 per cent of the budgeted provision; andc)The extant guidelines of the Ministry of Finance, Department of Expenditure,including D.O.No.7(3)/2006/E.Coord, dated December 21, 2006.4.7.4 Under the new system, savings would not be available for automatic carry forward to the next quarter. The Ministry/Department concerned has to approach the Ministry of Finance for revalidation of such savings. Further, even in case of Demand for Grants not covered by the modified exchequer management system, the expenditure in the last quarter of the financial year may not exceed 33 per cent of the budget allocation. The 23 Demands for Grants covered under the modified system are given in Table 4.7 below:Table 4.7: Demands for Grants Covered under the Modified Cash Management SystemSl.No.Demand NoName of the Ministry / Department1.1Department of Agriculture and Cooperation2.2Department of Agricultural Research and Education3.8Department of Fertilizers4.11Department of Commerce5.14Department of Telecommunications6.18Department of Food and Public Distribution7.31Ministry of External Affairs8.32Department of Economic Affairs9.41Indian Audit and Accounts Department626336F.No.21(1)-PD/2005 Dated 27th November, 2006, Ministry of Finance, Department of Economic Affairs.Strengthening Financial Management SystemsAnalysis of the Budgetary Process64Table 4.7: Demands for Grants covered under the Modified Cash Management SystemSl.No.Demand NoName of the Ministry / Department10.42Department of Revenue11.43Direct Taxes12.44Indirect Taxes13.47Department of Health & Family Welfare14.57Department of School Education and Literacy15.58Department of Higher Education16.68Ministry of Panchayati Raj17.71Ministry of Petroleum and Natural Gas18.73Ministry of Power4.7.5 The modified exchequer-based expenditure management is basically a Cash Management System which emphasises the time value of money. The Ministries/Departments covered under the Cash Management System are required to annex a Monthly Expenditure Plan (MEP) along with their Detailed Demand for Grants. By identifying specific Demands for Grants, it aims at ensuring greater evenness in the budgeted expenditure within the year especially in respect of items entailing large sums of advance releases. Thus, it enables the Ministry of Finance and the Reserve Bank of India to plan their market borrowing calendar-based on more predictable patterns of cash flows.4.7.6 However, in spite of this cash management system, these targets have not been achieved in many cases. For example, the actual expenditure (Plan) up to December 2007 in case of Ministries/Departments having a BE of more than Rs. 1000 crore (Fig 4.3) shows that in the FY 2007-08, a number of Ministries/Departments were not able to spend 67% of the BE (Plan expenditure) in the first three quarters of the year.374.7.7 Thus, it is seen that the rush of expenditure in the last quarter of the financial year and especially in the month of March continues. While the Modified Cash Management System introduced in some Demands for Grants has shown improvement in this area, the Commission feels that there is scope for further improvement in this regards. It is also of the view that apart from stricter adherence to the system, there is need for its extension to all Demands for Grants as soon as possible.4.7.8 Recommendationa. The Modified Cash Management System should be strictly adhered. This System should be extended to all Demands for Grants as soon as possible.6519.79Department of Rural Development20.86Department of Road Transport and Highways21.92Ministry of Textiles22.100Department of Urban Development23.104Ministry of Women & Child Development37Source: CGA websiteStrengthening Financial Management SystemsAnalysis of the Budgetary Process664.8 Inadequate Adherence to the Multi-year Perspective and Missing Line of Sight between Plan and Budget4.8.1 Multi-year budgeting addresses the basic problem faced in budgeting, - how to integrate planning and budgeting. Multi-year budgeting essentially refers to budgeting in the medium-term, i.e., a perspective covering 3 to 5 years including the current year budget. A medium term perspective for budgeting becomes necessary because a single year budget is not sufficient to meet the expenditure priorities. Given the rigidity of committed expenditures and their large share in the budget, success of any new programme and associated adjustments in expenditure priorities require several years beyond the annual budget. The preparation of rolling multi-year expenditure planning leads to improvement in budget preparation by providing advance expenditure ceilings to the departments, increasing predictability of resource availability, and by improving efficiency of public spending. Today, a realistic multi-year budget framework (medium-term) is considered as the cornerstone of performance oriented budgeting, linking resources to policy objectives that defines performance.4.8.2 A step towards such a medium-term framework was attempted in the 1980s also. Thus, the then Finance Minister, in the Budget Speech for 1985-86 mentioned that:“71. The formulation of the Budget is an annual exercise but, to be meaningful, it has to be set in a longer time frame. Our fiscal system has served us well. However, over the years, objective conditions have changed calling for new responses. I am quite aware that it is not possible to usher in all the changes at one stroke, yet we have to initiate a process ofreform which can be completed in a phased manner in a time-boundframe. We will be moving towards the formulation of a long-term fiscal policy co-terminous with the Plan.I hope to initiate a debate on this after the budget session is over.” 384.8.3 A medium-term fiscal policy was indeed drawn up in 1985. This, however, was concerned only with taxation. Further, it was not followed up in later years.39 The basic issue here is to arrive at a reasonably true picture of the resource situation in a medium-term of 3-5 years and formulate truer estimates of different developmental schemes/programmes/ projects within the limits suggested by the availability of resources and follow it up with well formulated annual budgetary estimates for executing the schemes. In the end, the accounts for the actual expenditure, the budgetary estimates and the plan document (the medium-term framework in the Indian context) should be integrated in such a way that a holistic picture emerges and the outcomes could be evaluated. Such a system has been put to practice in the UK where the process of reforms is still continuing. As its governance structures, at least at the Central level, are very similar to that of India, these reforms and developments need consideration. These are described below.38Budget Speech of the Finance Minister (1985-86); 39Source: An improvised framework for the planning and control of public expenditure has been in operation in the UK since the 1998 Comprehensive Spending Review (CSR).40 This framework is based on the following key principles:?consistency with a long-term, prudent and transparent regime for managing the public finances as a whole;?the judgement of success by policy outcomes rather than resource inputs;?strong incentives for departments and their partners in service delivery to plan over several years and plan together where appropriate so as to deliver better public services with greater cost effectiveness; and?the proper costing and management of capital assets to provide the right incentives for public investment.The framework has two components:i.Departmental Expenditure Limit (DEL) spending, which is planned andcontrolled on a three-year basis in Spending Reviews; andii. Annually Managed Expenditure (AME), which is expenditure which cannot reasonably be subject to firm, multi-year limits in the same way as DEL. AME includes social security benefits, local authority self-financed expenditure, debt interest, and payments to EU institutions.4.8.5 In Spending Reviews, firm DEL plans are set for Departments for three years. To ensure consistency with the Government’s fiscal rules, departments are set separate resource (current) and capital budgets. To encourage Departments to plan over the medium term, Departments are allowed to carry forward unspent DEL provision from one year into the next and, subject to the ‘normal tests for tautness and realism of plans’, these may be drawn down in future years also. This facility is called ‘End Year Flexibility’ (EYF). This EYF also removes any incentive for Departments to use up their provision as the year-end approaches with less regard to value for money. To reap the full benefits of this facility, it is expected that EYF and three-year budgets should be cascaded from Departments to executive agencies and other budget holders, ultimately resulting in improved public service delivery. This ensures that the benefits of this facility is also passed on to lower levels.4.8.6 The basic principle at work behind three-year budgets and EYF is that the implementing agencies and administrative departments need the stability to plan their operations on a40Source: Financial Management SystemsAnalysis of the Budgetary Processsensible time scale. Further, the implementation of this system also means that departments cannot seek to bid up funds each year (before 1997, three-year plans were set and reviewed in annual Public Expenditure Surveys).4.8.7 Departments now have certainty about their budgetary allocation over the medium-term and these multi-year DEL plans are strictly enforced. Departments are expected to prioritise competing pressures and fund these within their overall annual limits, as set in Spending Reviews. So the DEL system provides a strong incentive to control costs and maximise value for money.4.8.8 Apart from the above, there is also a small centrally held DEL Reserve. Support from the Reserve is available only for genuinely unforeseeable contingencies which Departments cannot be expected to manage within their DEL.4.8.9 As mentioned above, the second component of the public expenditure framework is the AME. This typically consists of programmes which are large, volatile and demand-led, and which therefore cannot reasonably be subject to firm multi-year limits. In the UK, the biggest single element in this category is social security spending. Other items include tax credits, Local Authority Self Financed Expenditure, Scottish Executive spending financed by non-domestic rates, and spending financed from the proceeds of the National Lottery. AME is reviewed twice a year as part of the Budget and Pre-Budget Report process. Although AME is not subject to the same three-year expenditure limits as DEL, it is still part of the overall envelope for public expenditure. Given an overall envelope for public spending, forecasts of AME affect the level of resources available for DEL spending. Cautious estimates and the AME margin are built in to these AME forecasts and reduce the risk of overspending on AME.4.8.10 The Departmental Expenditure Limit (DEL) and Annually Managed Expenditure together amount to ‘Total Managed Expenditure’ (TME). TME is a measure drawn from national accounts and represents the current and capital spending of the public sector. The public sector is made up of central government, local government and public corporations.4.8.11 It needs to be mentioned here that the Budget and Spending Reviews in the UK are roughly equivalent to Five Year Plans in the Indian context and should not be mixed up with the Annual Budget as presented to the Parliament in India. In the UK, annual Parliamentary authority for the expenditure of individual departments is sought through ‘Supply Estimates’ following the plans announced in Spending Reviews.4.8.12 Thus, these initiatives not only integrated the planning process to the budgetary process and provided a medium-term perspective to annual expenditure estimates but it also put a stop to the phenomenon of the ‘March rush’ by providing for the EYF facility.4.8.13 It was also felt that the financial information presented before the House of Commons needed ‘alignment’ in order to:i.make the Government’s financial decisions transparent, including the relationship between its stated priorities and its funding decisions;ii.have the opportunity to influence the Government’s financial decisions;iii. hold the Government, individual Departments and other public bodies to account for their financial decisions and financial management;and thereby contribute to an improvement in the quality of Departments’ financial decisions and management and improved value for money in public services.41 It was felt that under current arrangements, there were a number of different systems for presenting Government expenditure. The Government uses budgets to plan what it will spend; it then presents Estimates to Parliament for approval; and finally, after the year-end, it publishes resource accounts. However, there were two main issues with these arrangements:42i.there is significant misalignment between the different bases on which financial information is presented to Parliament; and ernment financial documents are published in different formats, and on a number of different occasions during the year, making it difficult to understand the links and inter-relationships between the bases on which financial information is presented.4.8.14 Thus, the UK Government came out with a “Vision” for the Alignment Project in order to simplify its financial reporting to Parliament:“to create a single, coherent financial regime, that is effective, efficient and transparent, enhances accountability to Parliament and the public, and underpins the Government’s fiscal framework, incentivises good value for money and supports delivery of excellent public services by allowing managers to manage”.4.8.15 The frameworks in case of the National Accounts, budgets, Supply Estimates and the ‘Resource Accounts’ had developed in different ways over the years as they served different686941Alignment (“Clear Line Of Sight”) Project; Memorandum submitted by HM Treasury 42ibidStrengthening Financial Management SystemsAnalysis of the Budgetary Process70purposes. However, it was found that this has resulted in significant misalignment between the different frameworks, with only about two-thirds of government expenditure fully aligned across budgets, estimates and resource accounts.43 The following misalignments were noticed:44i.Differences in the various boundaries – i.e. the entities and spending includedin budgets, estimates and accounts – covering both:?different types of income and expenditure within the budgets, estimates and accounts boundaries – for example, payments from the National Insurance Fund (NIF) and Consolidated Fund Standing Services (CFSS), which are covered by separate legislation and are included in budgets and resource accounts, but not in estimates; and?different treatment of entities within the respective boundaries – for example, non-departmental public bodies (NDPBs). NDPBs’ spending scores in budgets, but it is the grant-in-aid paid to these bodies which scores in estimates and resource accounts.ii.Differences in the policies – specific transactions are often treated differentlybetween the three frameworks. Examples include capital grants, provisions and other non-cash items within budgets.4.8.16 In order to effect the ‘alignment’, the following key principles have been pronounced:i.Alignment should not be pursued if the results are likely to be manipulated,or if doing so risks causing serious damage, bearing in mind that the different purposes of various frameworks may lead to the conclusion that different treatments may, in certain cases, be legitimate.ii. Alignment will not change the National Accounts, nor the way in which they measure economic or fiscal performance. There will be no increased residual risk to fiscal control – although the places where risk is managed, and the nature of the mitigations, may change.iii. Flexibility may be needed in certain areas to achieve alignment:?For budgets, while the overriding need is to maintain firm control over public spending while incentivising value for money, it may be possible to achieve this in different ways in order to achieve better alignment.?For estimates, the aim should be to align with whatever is needed in budgets to control public spending, consistent with the requirements of Parliament.?For resource accounts, if it is not desirable in the context of alignment to implement IFRS strictly in specific areas, it may be possible to achieve alignment in other ways through seeking adaptations to IFRS – in limited cases and subject to the agreement of the Financial Reporting Advisory Board (FRAB) – while still satisfying its overall intentions.iv.It is unlikely to be possible to achieve full alignment in all areas, given thedifferent purposes for which the different frameworks have been developed, for good reasons, over the years. In the absence of full alignment, the aim should be to ensure that any necessary reconciliation is kept as simple as possible.4.8.17 In accordance with these general principles, the UK Government has proposed the following in order to effect the desired alignment:45i.All non-voted expenditure and income within budgets should be broughtwithin the coverage of estimates.ii.Parliamentary controls in estimates should be on a net (rather than both grossand net) basis, to line up with budgetary controls, with details of income shown in the estimates and appropriate safeguards in place so that firm control is maintained over the use of incomes by Departments.iii. The estimates and accounting boundaries should be extended to accommodate NDPBs and other bodies classified to the central government sector.iv. The budgeting concepts of near-cash and non-cash should be removed from budgets, so that there is a single Resource DEL budget.v.Parliamentary controls over government spending should be aligned withthe Treasury’s budgeting controls, consistent with the Treasury Committee’s recommendation.vi. Resource accounts should, as far as practicable, be based on IFRS, as adapted in the public sector context. The Government’s proposals in this Memorandum have, where appropriate, been agreed in principle by the independent Financial Reporting Advisory Board (FRAB).7143‘Alignment (Clear Line of Sight) Project’; March 2009; HM Treasury Cm 7567 44ibid45ibidStrengthening Financial Management SystemsAnalysis of the Budgetary Processvii. The number of departmental and HM Treasury expenditure documents should be reduced to just three “publication events” each year.4.8.18 The UK Government expects that if implemented, the Government’s proposals would mean that budgets and estimates would be fully aligned for the generality of departments. It is also of the view that the whole “package” of changes outlined above need to be implemented in full, otherwise it would lead to a situation where budgets and Estimates were not fully aligned for the generality of Departments and there were further continuing misalignments between estimates and accounts, all resulting in a very complex situation. In such circumstances, the benefits for Parliament and the public would be significantly reduced, since more reconciliations would be needed between budgets and estimates, and between estimates and resource accounts. Accordingly, it is proposing these changes as a single package.4.8.19 One of the reasons why the UK Government is pushing for the whole package of reforms under the alignment project relates to ‘Non Departmental Public Bodies’ (NDPBs), which has great significance in the Indian context. The UK Government feels that “In fact, the implications for alignment would be particularly severe if misalignments remained which affected the majority of Departments. If, for example, NDPBs were not consolidated in Departments’ estimates and resource accounts, this would result in a continuing misalignment, for all Departments with NDPBs, between budgets and estimates/ accounts; or if it did not prove possible to secure agreement to moving to net control in estimates, this would result in a continuing misalignment, for all departments, between budgets/accounts and estimates.464.8.20 The changes regarding the NDPBs would be effected through a legislation which would contain an explicit provision that consolidation of NDPBs and other bodies into Departmental accounts and estimates will not change the status of the consolidated bodies or their relationship with the Department sponsoring them. The purpose of this is to ensure that the independence of NDPBs is not compromised, and that they are not subject to any additional control as a result of consolidation.4.8.21 The significance of this and the need for having such alignment in case of NDPBs would become apparent in Chapter 5 of this Report while discussing flow of funds from the Union to implementing bodies in the States in relation to the Centrally Sponsored Schemes.4.8.22 In India, the Five Year Plans provide the basis for a medium-term multi-year perspective for resource allocation. On the basis of this, each year the Planning Commission, in consultation with the Ministry of Finance, allocates annual limits for plan expenditures to each Ministry/Department. It has been noticed, however, that often, major projects and schemes are launched by government which are not provided for in the plan. This results in change in allocation for other projects and schemes thereby diluting plan objectives.4.8.23 Another weakness of the current budget exercise is the absence of a clear link between the plan and the budget. While preparing the budget estimates, the allocations indicated by the Planning Commission get dispersed over various heads and sub-heads of expenditure. Further, while the plans are formulated scheme-wise and sector-wise, the budgets are formulated under different heads and sub-heads which is also the case with accounts. Thus, in the Indian context also, this ‘clear line of sight’ is not present. Consequently, even the final accounts reflect the expenditure only under various heads. This makes it difficult to link the expenditure under various heads to the objectives sought to be achieved by the different developmental schemes/projects. Thereby the accounting process loses its potential as a measuring tool for achievement of government objectives.4.8.24 Accounting is an integral part of the budgetary process. A good accounting system should be able to reflect the objectives of any amount being spent by government, where and how is the amount spent and finally what have been the results of any such expenditure. For the accounting exercise to be meaningful it should be able to measure the extent to which the results envisaged from expenditure have been achieved.4.8.25 The Commission is of the view that the developments in the UK need examination in the Indian context, especially the need and ways for having similar medium-term expenditure limits for Ministries/Departments through the Five Year Plans and linking them to annual budgets with carry forward facility in relation to funds for plan schemes. Further, to bring about clarity, transparency and consolidation, a similar ‘alignment’ project with regard to the plan, budgets and accounts may be required to be implemented in India too. The Commission is of the view that a High Powered Committee should be constituted to examine and recommend on these issues.727346ibidStrengthening Financial Management SystemsAnalysis of the Budgetary Process4.10.2 This underlines the need for a modified fund flow system backed up by a comprehensive financial information system that captures the entire range of transaction in government accounts. This has been discussed in the Chapter on flow of funds from the Union to the States.4.11 Adhoc Project Announcements4.9 No Correlation between Expenditure and Actual Implementation4.9.1 At present, the release of funds from any head of account is deemed as an expenditure. In a large number of cases, especially in Centrally Sponsored Schemes, such releases cannot be construed as expenditure because funds lie in the pipeline with various project authorities and there is considerable lag before they are actually utilized. Thus the accounts do not reflect the correct position as regards the implementation of government schemes and programmes.4.9.2 This issue is examined in the chapter on flow of funds from the Union to the States.4.10 Mis-stating of Financial position4.10.1 The present system of release of funds to project authorities outside the government often leads to parking of funds which is often resorted to in order to prevent lapsing of funds. This leads to idle funds being maintained outside government accounts and thus portrays an incorrect picture of government funds besides causing loss of interest to government.4.11.1 Even though detailed exercises are made over a length of time to prepare and get the Five Year Plans approved by the National Development Council and the Union and State Cabinets, projects and schemes are announced on an ad-hoc basis in almost every budget of the Union and the States. They are also announced on important National Days (e.g. Independence Day, Republic Day, Birthday of Mahatma Gandhi etc.) and during visits of dignitaries to States, in the form of ‘packages’. Such announcements of large sums seriously distort the plan allocations and disturb the faithful implementation of schemes already approved and under implementation. This often leads to announcements not being followed by formal approvals thereby resulting in discontent and disaffection. The proper method would be to include projects that may be considered absolutely essential at the time of preparing the annual plans or during the mid-term appraisal.4.12 Emphasis on Meeting Budgetary Financial Targets rather than on Outputs and Outcomes4.12.1 At present, government departments often measure their performance in relation to the expenditure targets laid down in the budget without adequate regard to outputs and even less to outcomes. Furthermore, little emphasis is placed on efficient utilization of resources.4.12.2 Various reforms measures have been attempted in the past to move away from the compliance aspects of the annual budget towards measurement of actual outcomes of the expenditure made. The first significant step in this regard was suggested by the First Administrative Reforms Commission (ARC) in the form of ‘Performance Budget’. This is described below.4.8.26 Recommendationsa. A High Powered Committee may be constituted to examine and recommend on the need and ways for having medium-term expenditure limits for Ministries/Departments through the Five Year Plans and linking them to annual budgets with carry forward facility.b. In order to bring about clarity, transparency and consolidation, the ways and means for implementing an ‘alignment’ project, similar to that in the UK, may also be examined by the High Powered Committee so constituted.Box 4.1: Accounting Deficiencies in case ofCentrally Sponsored Schemes (CSS)An increasing proportion of fund transfers to the States in the recent years take place under CSS. These funds are routed to States and district level bodies directly from the Central Government. This practice is motivated by the desire to avoid delays and to prevent diversion of CSS funds by the States to support their ways and means position. Of late, the emerging concern is ensuring accountability on the usage of these funds.The existing system of accounting for plan schemes, both for States and the Centre, does not adequately support informed planning, budgeting, effective monitoring, and decision making. The current accounting system does not capture transaction-oriented information. It also does not distinguish between transfer to States, final expenditure, and advance payments against which accounts have to be rendered. The extantaccounting framework is not structured to generate State-wise and scheme-wise releases of funds by the Central Government to States, and other recipients, and also the actual utilization for the intended performance.Economic Survey 2007-084.11.2 Recommendationa. The practice of announcing projects and schemes on an ad-hoc basis in budgets and on important National Days, and during visits of dignitaries functionaries to States needs to be stopped. Projects/schemes which are considered absolutely essential may be considered in the annual plans or at the time of mid-term appraisal.7475Strengthening Financial Management SystemsAnalysis of the Budgetary Process4.12.3 Performance Budget4.12.3.1 The Report of the Study Team on Financial Administration (Volume I & Volume II, May 1967) presented the concept of Performance Budgeting, as essentially ‘a technique of presenting Government operations in terms of functions, programmes, activities and projects’. Thus, governmental activities were sought to be identified in the budget in financial and physical terms so that a proper nexus between inputs and outputs could be established and performance assessed in relation to costs. Under performance budgeting, the emphasis would get shifted, as the ARC hoped, from the means of accomplishment to the accomplishments themselves. The important thing under this technique was the precise definition of the work to be done or services to be rendered and a correct estimate of what that work or service would cost. A performance budget is prepared in terms of functional categories and their sub-division into programmes, activities and projects and not merely in terms of organizational units and the objects of expenditure. A performance budget thus developed in terms of costs and results facilitates management control by bringing out the programmes and accomplishments in financial and physical terms closely interwoven into one comprehensive document.4.12.3.2 In the view of the First ARC, three basic steps were required in the introduction of the system of performance budgeting. These were:a)establishing a meaningful functional, programme and activity classification ofgovernmental operations;b)bringing the system of accounting and financial management into accord withthis classification: andc)evolving suitable norms, yardsticks, work units of performance and unit costs,wherever possible under each programme and activity for their reporting and evaluation.4.12.3.3 The First ARC was of the view that in the context of planned economic development, accountability is not merely confined to ensuring that the amounts have been spent for the various purposes and within the limits laid down in the budget. It also extended to ensuring that the expected results are achieved. Thus, it was necessary to ensure that the budget reflects the pattern of the Plan both in content and classification. The performance budget was a step towards achieving this.4.12.3.4 Performance budgets were initially presented for a few Departments on a supplementary basis in 196947 and later its scope was enlarged to cover all the Ministries. Some State governments also made efforts on their own to prepare performance budgets. But the efforts came to be substantially diluted as the scope of the document was limited to plan programmes. The Departments continued the practice of preparing performance budgets annually in addition to their regular budget. The preparation of performance budget has become a routine affair without any discernible influence on expenditure management.48 It, however, needs to be pointed out that the Working Group constituted by the First ARC had clearly warned against this approach. In their own words, “The Working Group has given careful consideration to these aspects and is of the opinion that it would not be sufficient to have the performance budget document as a supplementary one to the existing set of documents, as in that case it will not have any impact whatsoever on the existing system. For one, the performance budget is being evolved to overcome the deficiencies in the existing budgetary process and framework and not to supplement it. The idea of a supplementary document in such a context would inevitably mean the continuation of the existing procedures, financial practices, accounting classification, etc., with their inadequacies. Indeed, if performance budgeting is not made an integral part of the budgetary process, but only an additional exercise, unconnected with the main process, the advantages that are expected of it would not materialize. Secondly, performance budget is not merely a matter of form; it represents a change in concepts that has significant effects on the approach to the budget and the decision-making process. The performance budget as a supplementary document would be somewhat in the nature of a fifth wheel to the coach.”4.12.4 Zero-Base Budgeting4.12.4.1 A system of Zero-Base Budgeting (ZBB) was first introduced in the United States Department of Agriculture in its 1964 fiscal year budget. It was based on the concept that all programmes of the Department were to be reviewed afresh from the base zero and not merely in terms of incremental changes proposed for the budget year.494.12.4.2 In India, the first application of Zero-Base Budgeting was in the Department of Science and Technology, which through its Memorandum50 of December 1983 conveyed Government’s acceptance in principle that the budgets of all S&T Departments / Agencies/ Institutions should be formulated each year on the principles of Zero-Base Budgeting. The Seventh Five Year Plan also emphasized the need for introducing Zero-Base Budgeting. The Plan document stated that :7647F.No.2(1)Pers/E-Coord/OB/2005, dated 30th December, 200548A Premchand (2007), Trapped in the Comfort Zone of denial: 50 Years of expenditure management in India, National Institute of Public Finance and Policy, (Mimeo), p 1649Based on ‘Zero-Base Budgeting’ by Prof K.L. Handa; Purchase%20Training%20Material/D-%20Availability%20of%20Funds/Advanced/Zero-based%20Budgeting.htm50Government of India, Department of Science and Technology, Office Memorandum No. DST / JSF / 17(3) (1) / 83 dated 28th December, 1983.77Strengthening Financial Management SystemsAnalysis of the Budgetary Process“ The principle of Zero-Based Budgeting which requires the expenditure on even on-going activities to be justified needs to be introduced. It is to be applied not only to items of non-development expenditure, but also to those of development expenditure.” 514.12.4.3 Subsequently, the Economic Survey, 1985-86, also stated that :“The Government has recognised, in principle, the need for Central Government Departments to adopt Zero-Base Budgeting. This would require identification and sharpening of objectives, examination of various alternatives of performing identified tasks, cost-benefit analysis, prioritisation of objectives and activities, identification and elimination of redundant activities and designing and ranking of decision-packages.”4.12.4.4 The Ministry of Finance formally introduced Zero-Base Budgeting through their letter of 10th July, 1986, addressed to all Ministries and Departments of the Government, asking them to adopt Zero-Base Budgeting approach with effect from the budget for 1987-88. The letter also emphasized the need for applying Zero-Base budgeting approach in Public Sector Enterprises, Departmental Undertakings and Autonomous Bodies under the administrative control of Ministries / Departments, adopting such methodology in each case as would suit the culture and requirements of each organisation.4.12.4.5 The methodology employed in applying Zero-Base Budgeting involves(i)Identification of Decision Units,(ii) Formulation and Development of Decision Packages,(iii) Evaluating and ranking Decision Packages in order of priority, and(iv) Preparation of budget by allocating resources to activities or decision packages by utilising hierarchical funding cut-off levels.4.12.4.6 However, due to lack of capability building, this concept did not prove to be effective in the Indian context. Another important issue involved in the application of ZBB is the distinction being followed in India between Plan and Non-Plan expenditure. Ideally, prioritisation should be done among all items of expenditure whether on-going or new, Non-Plan or Plan. But the system in which Plan and Non-Plan expenditure are treated differently and assigned varying priorities, ZBB would have to be applied separately to Plan and Non-Plan expenditures.4.12.5 Outcome Budget4.12.5.1 Due to the realisation that ‘certain weaknesses ... have crept in the performance budget documents such as lack of clear one-to-one relationship between the Financial Budget and the Performance Budget and inadequate target-setting in physical terms for ensuing years’...52 it was felt that there was need for tracking ‘outcomes’ and not the readily measurable ‘outputs’. This found mention in the Budget speech of the Finance Minister (Budget 2005-06) which was re-emphasised by the Prime Minister in his letter to all Union Ministers in March 2005. The first outcome budget was passed in the Parliament on August 25, 2005. The guidelines for the 2006-07 outcome budget provided that each Ministry/Department will separately prepare the outcome budget documents in respect of ‘all Demands/ Appropriations controlled by them’. These contained:i.Details about the mandate, goals and objectives as well as the policy frameworkand vision statement of the Ministry/Departmentii.Details in indicated tabular format comprising financial outlays, projectedphysical outputs and projected/budgeted outcomes.4.12.5.2 The key words used here are ‘Outlays’, ‘Outputs’ and ‘Outcomes’. It has been recognised in the guidelines that converting ‘outlays’ into ‘outcomes’ is a complex process addressing “value for money” concerns; being more a management process than merely a financial process and admitting possibilities of different approaches and modalities, which may differ from Ministry to Ministry and programme to programme. It has also been stated that preparation of the Outcome Budget is an evolving and dynamic process, which will require detailed scrutiny and examination on yearly basis, with value addition based on the preceding year’s experience. The guidelines have prescribed the following steps in this conversion process:Box 4.2: Decision Units and Decision Packages inZero-Base BudgetingA Decision Unit is a distinct segment of an organization for which budget is prepared. It can also be a programme, scheme, project, or an operation. A decision package is a budget request which should contain the following :-A description of the function or activity of the decision unit-The goals and objectives of the various functions / activities of the unit-Benefits to be derived from financing the activity / programme-Relevance of the activity / programme to the overall objectives of the Organisation / Department in the present context.-The consequences of its non-funding-The projected / estimated cost of the package-The yearly phasing of the proposed expenditure / project cost-Alternative ways of performing the same activity or achieving the same objectives.Source: ‘Zero-Base Budgeting’ by Prof K.L. Handa787951Government of India, Planning Commission, Seventh Five Year Plan, Vol.1, new Delhi, 1985, P.7052F.No.2(1)Pers/E-Coord/OB/2005, dated 30th December, 2005Strengthening Financial Management SystemsAnalysis of the Budgetary ProcessaDefining intermediate and final outcomes specifically in measurable andmonitorable terms;bStandardizing unit cost of delivery;cBenchmarking the standards/quality of outcomes and services;dCapacity building for requisite efficiency at all levels, in terms of equipment,technology, knowledge and skills;eEnsuring adequate flow of funds at the appropriate time to the appropriatelevel, avoiding both delay and ‘parking’ of funds;f)Setting up effective monitoring and evaluation systems, to indicate the directions for further calibration and honing the processes, to deliver the intended outcomes; andg)Involving the community/target groups/recipients of the service, with easy access and feedback systems.4.12.5.3 The guidelines have defined the three terms used in the performance budget. Thus, ‘outlays’ imply total financial resources deployed for achieving certain outcomes. Part of this money may come directly from the Government budget and part may be contributed by other stakeholders such as the State Governments, Public Sector Undertakings or even private parties in the growing area of Public Private Partnerships. It has been mentioned that the outlays should be segregated scheme-wise, covering both Plan / Non-Plan budget (as shown in the Expenditure Budget Vol II) for the financial year in monetary terms. In case of projects (whether Government or parastatal) spanning multi-year time frames, total sanctioned cost of the project and the planned annual expenditure both should be brought out as both are relevant ‘outlays’ for effecting linkage with outcomes.4.12.5.4 ‘Outputs’ have been defined as the ‘measure of the physical quantity of the goods or services produced through an activity under a scheme or programme’. They are identified as an intermediate stage between ‘outlays’ and ‘outcomes’. For example, in case of a social sector programme/scheme, the intermediate results before identifying, measuring andarriving at the ‘final outcome’ as per the objectives of the said programme/scheme, may be treated as ‘output’. The purpose is to capture intermediate ‘outputs’ before identifying and measuring the ‘final outcome’.4.12.5.5 ‘Outcomes’ are the end product/results of various Government initiatives and interventions, including those involving partnership with the State Governments, Public Sector Undertakings, Autonomous Bodies, private sector and the community. They involve much more than mere ‘outputs’, since they cover the quality and effectiveness of the goods or services produced as a consequence of an activity under a scheme or programme. The ‘outcomes’ are required to be measured keeping in mind the objectives of the programme/ scheme by following appropriate methodology.4.12.5.6 For the year 2007-08, the Outcome Budget and Performance Budget were merged and placed in one combined document, the latter providing information relating to the preceding year. This has been done in order to compare the performance of the past year vis-à-vis the performance indicators used for the budget year. The Ministries/ Departments are required to prepare their respective outcome budgets by late March each year on the basis of the Annual Financial Statements presented in the parliament in February. The performance budget, now part of the outcome budget, would indicate the ‘outcome’ of the outcome budget of the previous fiscal year. Thus, while the Annual Financial Statement and outcome budget would be for the ensuing financial year, the performance budget would present the picture of actual achievement/performance for the financial year gone by.4.12.5.7 However, the outcome budget for 2007-08 shows that in many cases the measurement of outputs and outcomes seems to have been mixed up. While the outputs could be measured in quantifiable terms, measuring outcomes is a difficult proposition given the fact that proposed outcomes of a specified programme could be influenced by many other extraneous factors. It is also seen that in some cases Departments have merely reproduced the outputs targets as outcomes and, in many other places, general intents of the programmes are described as outcomes. Some illustrative cases are presented in Table 4.8:8081Strengthening Financial Management SystemsAnalysis of the Budgetary ProcessProjected OutcomesConstruction /renovation of 15 .00 lakh tonnes storage capacity.1. Development of 300 new Agricultural Marketing Infrastructure Projects.2. Strengthening / Modernisation of infrastructure in 90 Wholesale Markets.3. Strengthening / Modernisation of infrastructure in 200 Rural Primary Markets / ApniQuantifiable Deliverables/Physical OutputsConstruction / renovation of 15.00 lakh tonnes storage capacity.1. Development of 300 newAgricultural MarketingInfrastructure Projects.2. Strengthening /Modernisation ofinfrastructure in90 Wholesale Markets.3. Strengthening /Modernisation ofinfrastructure in 200 RuralPrimary Markets / ApniMandies etc.4.Remaining work onModernisation and requiredsupplies in CAL, Nagpurand 6 RALs.OutcomesTo provide additional agricultural marketing infrastructure to cope up with the large expected marketable surpluses of agricultural and allied commodities including dairy, poultry, fishery, livestock and minor forest produce, to promote competitive alternative agricultural marketing infrastructure by inducement of private and cooperative sector investments; to promote direct marketing through reduction in intermediaries and handling channels thus enhancing farmers’ income; and to provide infrastructure facilities for grading.Name of theTable 4.8 : Outcome Budget – Illustrative Cases (2008-09)Objectives /SchemeConstruction of Rural Godown (Plan)The main objectives of the scheme include creation of scientific storage capacity with allied facilities in rural areas to meet the requirements of farmers for storing farm produce, to prevent distress sale of produce, promote pledge financing and marketing credit and to introduce a national system of warehouse receipts for agricultural commodities stored in such godowns.Development of Agricultural MarketingInfrastructure Grading &Standardisation (Plan)DepartmentMinistry /Department of Agriculture and Co-operationDepartment of Agriculture and Co-operation1. 2. No.Sl.82Contd.Production:Wheat – 1m.tonnes Rice – 2m.tonnesPulses – 0.5 m.tonnesMandies etc.4. Remaining work on Modernisation and required supplies in CAL, Nagpur and 6 RALs.Quantifiable Deliverables/Projected OutcomesPhysical OutputsRiceDemonstrations (No) - 10,000SRR – (qtl)-3,00,000Micro nutrients (ha) - 20,000 Liming of acidic soils (ha) – 20,000Conoweeders & other implements (no) 33300IPM (ha)1,00,000Training FFS (no) 1000WheatDemonstration (no) – 1,20,000SRR (Qtl)3,00,000Seed minikits (no) – 28,000 Micronutrients (ha) 10,00,000 Gypsum (ha) – 6,00,000OutcomesTo enhance the production of rice, wheat and pulses by 10, 8 and 2 million tons respectively by 2011.Name of theTable 4.8 : Outcome Budget – Illustrative Cases (2008-09)Objectives /SchemeNationalFood Security MissionDepartmentMinistry /No.Department of Agriculture and Co-operation3.Sl.83Strengthening Financial Management SystemsAnalysis of the Budgetary ProcessContd.Not mentionedProjected OutcomesNot mentionedPhysical OutputsQuantifiable Deliverables/Zero till seed Drill machines(no) – 6,000Rotavators (no) – 3000Purchase of Pump sets (no) –15000Training of farmersFFS (no) - 3000PulsesProduction of breederSeed by ICATR (qtl)14,330Production and distributionof seed(qtl) 1,21,000Strengthening of State Seedcertification agencies (no) 20INM (ha) 9,62,000IPM (ha) 9,62,000Irrigation by Sprinkler sets (ha)44338OutcomesName of theTable 4.8 : Outcome Budget – Illustrative Cases (2008-09)Objectives /SchemeThe Ministry is responsible for policy formulation, planning and trade regulations of the Textile IndustrySecretariat– Economic ServicesDepartmentMinistry /Ministry of TextilesNo.4.Sl.Contd.Not mentionedProjected OutcomesContinuousreplacement of filmic contents of the website and transfer of films on DVDs.3,10,000 weaversPhysical OutputsQuantifiable Deliverables/To webcast the films of Films Division for global access to audio-visual encyclopaedia of post-independence India and to transfer the films of Films Division in digital format for preservation thereof.Quantifiable Deliverables Continuous replacement of filmic contents of the website and transfer of films on DVDs. Spill over financial liability of the last financial year hasOutcomesThe objective being the exposure of Documentary, Short & Animation Films of Films Division to the world through the medium of Internet. For this purpose, films are digitally transferred to DVD’s through the medium of High Definition Technology. The outcome being the availability of FD Films in its official website Name of theTable 4.8 : Outcome Budget – Illustrative Cases (2008-09)Objectives /SchemeIntegrated Handloom Development SchemeComponentsi. Focus on formation of weavers group as a visible entity.ii. To develop the Handloom Weavers Groups to become self-sustainable.iii. Inclusive approach to cover weavers both within and outside the co-operating fold.iv. Skill upgradation of Handloom weavers / workers to produce diversified products with improved quality to meet the marker requirementsWebcasting and Digitalisation of FilmsDivision filmsDepartmentMinistry /No.Ministry of Textiles5.Ministry of Information andBroadcasting (FilmsDivision)6.Sl.8485Strengthening Financial Management SystemsAnalysis of the Budgetary ProcessContd.Projected OutcomesNot mentioned.Quantifiable Deliverables/Physical Outputsbeen cleared by passing the outstanding bills. During the current financial year, 1058 titles of Films Division’s Archieve have been verified and 507 films digitized.Groundwater Managementstudies – 1.50 lakh squaremetreAnalysis of Water Samples –20000Groundwater Exploration -800WellsGeophysical survey: VES-2200Line KM-10Well logging – need-basedGroundwater Monitoring –15,600Short-term water supplyinvestigations – need-based(-300)Preparation of district report-40Groundwater Year Book – 23Mass Awareness – 57Outcomesi) Integrated Groundwater Management Studies to prepare ground water management planii) Groundwater exploration utilizing scientific tools viz. Remote sensing and GIS, Geophysical surveys aided by drilling to locate ground water worthy areas.iii) Monitoring of groundwater levels from groundwater monitoring stationsiv) Short term water supply investigations for source finding to Central/State Government departmentsName of theTable 4.8 : Outcome Budget – Illustrative Cases (2008-09)Objectives /SchemeGround Water Management and RegulationDepartmentMinistry /No.Ministryof WaterResources7.Sl.Contd.Quantifiable Deliverables/Projected OutcomesPhysical OutputsWater Management Training Programme – 57Regulation of Ground Water development in motified area Demonstrative studies of Artificial Recharge-15Outcomesv) Preparation of Report, Maps for use by planners and administrators.vi) Demonstrative projects for Artificial regarge to GW for replicating the same by State Government and other agencies.Name of theTable 4.8 : Outcome Budget – Illustrative Cases (2008-09)Objectives /SchemeDepartmentMinistry /No.Sl.8687Strengthening Financial Management SystemsAnalysis of the Budgetary ProcessBox 4.3: Shift in Focus from Inputs to Outcomes“10.35. Traditionally, government schemes are evaluated in terms of expenditure incurred and adherence to process requirement. It is necessary to shift the focus from vertical input controls to horizontal coordination and monitoring of outcomes. The need for horizontal coordination is evident from the fact that interventions in one are, say, rural drinking water nad sanitation, affect outcomes in health, which affect outcomes in education. These examples can be multiplied. Given the manner in which government structures are organized at the Centre and States, horizontal coordination is very necessary to achieve the desired outcomes. Mechanisms for this coordination, convergence and synergy at all levels have atrophied or are non-existent. Reinstating dynamic coordination, to break through excessive hierarchy and securing teamwork and mechanisms for vertical coherence and horizontal coordination to achieve outcomes is a major challenge at all levels of government. Emphasis will be laid on effective monitoring on outcome at all levels. The district level and other functionaries will need to be strengthened with authority and powers so that they are made fully accountable for the outcomes.”Source: Eleventh Five Year Plan4.12.5.8 This is in spite of the fact that the guidelines clearly spell out that wherever ‘physical outputs’ are in a sense the ‘final outcomes’, assessment of ‘quality of output’ through ‘appropriate indicators of quality’ should be brought out. However, the moot question is whether there is need for preparing an ‘outcome budget’ for each and every item prescribed in the Expenditure Budget Vol.II (the guidelines clearly point out that the description of items should exactly match with the description shown for the different items in the Statement of Budget Estimate as included in Expenditure Budget Vol.II).4.12.5.9 The Commission is of the view that the Outcome Budget cannot be prepared for all Ministries/Departments simply by way of declaration. It’s a complex process and a number of steps are involved before it can be attempted with any degree of usefulness. In many cases, the ‘outcomes’ would influence and be influenced by developments in other sectors. For example, rural electrification would influence the outcome of schemes related to education, health, irrigation and agriculture, to name a few. The view of the Commission is that a beginning may be made with proper preparation and training in case of the Flagship Schemes and certain national priorities.4.13 Irrational ‘Plan – Non-Plan’ Distinction Leads to Inefficiency in Resource Utilization4.13.1 Since the country follows a Plan- based model of economy, the expenditure of Government is divided into Plan and Non-Plan. As the name suggests, Plan expenditure is directly related to expenditure on schemes and programmes envisaged in the Five Year Plans. Non-Plan expenditure is the expenditure incurred on establishment and maintenance activities.53 Thus, ‘Plan’ in this context includes what is provided by the Planning Commission and is included in the Five-Year Plan. Non-Plan expenditure covers expenditure on security, interest payments and subsidies etc. The Plan and Non-Plan divide runs too deep to give a comprehensive idea about resource availability to the departments at an early stage of budget development. The dichotomy between plan and non-plan in expenditures has been commented upon as an unnecessary development that has adverse effects on the quality of public services.54 Moreover, in order to find funds for the plans, over the years, a tendency has developed to view non-plan expenditure as far less important and subject it to cuts and economy measures, although many of them are vital in nature.4.13.2 This distinction, however, undermines the budget formulation process of the departments by bringing in complexity. The Five Year Plans prepared by the Planning Commission are indicative in nature and are operationalised through Annual plans. The4.12.6 Recommendationa. Outcome budgeting is a complex process and a number of steps are involved before it can be attempted with any degree of usefulness. A beginning may be made with proper preparation and training in case of the Flagship Schemes and certain national priorities.Box 4.4: Distinction between Plan and Non-PlanIt is argued that the distinction between plan and non-plan expenditure is illogical and even dysfunctional. The distinction has led to ever increasing tendency to start new schemes/projects to the utter neglect of maintenance of existing capacity and service levels. The distinction also often leads to the misperception that non-plan expenditure is inherently wasteful and should be avoided. This dichotomy has resulted in fragmented view of resource allocation to various sectors. The problem is assuming greater significance with higher priority to social sectors where salary constitutes an important element of the programme. The embargo imposed on recruitment for non-plan posts have caused serious problems of service delivery in health and education sectors. A need has been felt to draw protocols that will specify the agency for specific function and provide arrangements for coordinated activity.Source: Economic Survey -2007-08Box 4.5: Planning Commission on Plan and Non-Plan Expenditure“3.58. Other perceptions that have developed around this distinction, namely, that Non-Plan expenditure is inherently wasteful and has to be minimized, that Non-Plan expenditure is different in kind from Plan expenditure, etc., are patently incorrect assessments that have nevertheless taken deep root in the process of government expenditure planning. This dichotomy also results in a fragmented view of resource allocations to various sectors. The problem has become particularly acute as government’s emphasis has shifted to the social sectors where salary costs are high. Routine bans on recruitment for Non-Plan posts, ostensibly imposed to conserve expenditure, cause serious problem for service delivery in health, education, extension systems, etc. The case against the use of these categories, both on grounds of illogicality and dysfunctionality, is therefore indisputable.3.59. At the same time, it is necessary to understand that this classification of expenditures has been used essentially as a convenient shortcut for the performance of functions that are inherent in public expenditure management. It is perhaps in the manner in which the Plan and Non-Plan distinction has been denuded of its substance over the years, rather than in any inherent conceptual inadequacy, that the causes of the present state of affairs need to be found.”Source: Eleventh Five Year Plan888953 of India (2000), Report of the Eleventh Finance Commission, p.33schemes/projects to be undertaken in the Plan are indicated in the Plan documents and resources are made available in the annual budgets. However, if any new scheme/project is proposed by any Department, it requires ‘in principle’ approval from the Planning Commission and then financial resources are tied up in consultation with the Planning Commission. This requires detailed analysis of resource requirements and availability of funds for the existing schemes and if fund requirement exceeds the availability reprioritization exercise needs to be undertaken. The procedures are elaborate and time consuming thus leaving the individual Department with less flexibility in proposing new schemes. From the budgeting point of view the relevant distinctions are in terms of revenue and capital expenditures with sufficient disclosures relating to new expenditure proposals.4.13.3 The plan versus non-plan distinction in expenditures needs to be abolished keeping in view its impact on budget development and public service delivery. The Departments should have the flexibility in formulating their budgets with prior indication of resource availability. Though this has been considered by many Committees over the last forty years and repeated recommendations have been made to do away this division, this has not been done so far. Just as Public Undertakings, Autonomous Bodies, Societies etc. are required to consider their resources as a whole and plan accordingly, the Departments should also be allowed to work out the committed resources and plan within overall allocations.4.13.4 Recommendation:a. The Plan versus non-Plan distinction needs to be done away with.FLOW OF FUNDS FROM THE UNION TO THE STATES - CENTRALLY SPONSORED SCHEMES55.1 Flow of Funds related to Centrally Sponsored Schemes5.1.1 The Centrally Sponsored Schemes (CSS) do not fall within the subjects allocated to the Union Government in List I of the Seventh Schedule of the Constitution. However, they are funded by the Union Government to achieve certain national objectives. The CSS have formed an important part of successive Five Year Plans. As mentioned in Chapter 3, the flow of funds from the Union Government to the ultimate implementing agencies for any scheme is through one of these two channels:55i.Funds are transferred to the Consolidated Fund of the State Governments which spend the money through the implementing agencies. In such cases, the agency banks at the field level, honour the payment claims made by authorized officers of the State Government and, in return, place the claim on the State Government through the RBI office at the State Headquarters.ii.The Union Government transfers funds directly to implementing agencies in the States through normal banking channels. These agencies distribute funds progressively to lower level field formations through banking channels. The banks honour cheques up to the amount lying as credit in their respective bank accounts.5.1.2 Actual expenditure under the CSS is incurred only when payment is made either to a beneficiary of the scheme or to the supplier of goods and services. However, due to the lack of a proper information system, the tracking of fund flow and correlation between the amount released and expenditure made could not be determined without a degree of uncertainty. Further, when funds are transferred directly to the implementing agencies in the States, it has to be done in advance which results in a substantial accumulation of funds in the pipeline. The Report of the CAG on ‘Union Government Accounts 2007-08’ has the following to say in the matter:“2.2 Unascertainable unspent balances in the accounts of Implementing AgenciesIn recent years, there has been a paradigm shift in the Central Government strategy for implementation of flagship programmes and other centrally sponsored schemes (CSS) forStrengthening Financial Management Systems909155Source: Note received from the Office of CGAStrengthening Financial Management SystemsFlow of Funds from the Union to the States - Centrally Sponsored Schemespoverty alleviation, health care, education, employment, sanitation etc,. Most of these schemes were earlier implemented on cost sharing basis with transfer of central share to State Government. The Union Government has now started transferring central plan assistance directly to state/district level autonomous bodies, societies and non-Governmental organisations for implementation of CSS without devolving funds through the State Government accounts. The State and District level implementing bodies keep these scheme funds in their accounts in banks outside Government Accounts.For the year 2007-08, Union Government made a provision for transfer of central plan assistance of Rs. 51259.85 crore (as per revised estimates) directly to State/District level autonomous bodies and authorities, societies, non-governmental organisations, etc., for implementation of centrally sponsored schemes. Since the funds are not being spent fully by the implementing agencies in the same financial year, there remain substantial amounts of unspent funds in their accounts. The aggregate amount of the unspent balances in the accounts of the implementing agencies kept outside Government accounts is not readily ascertainable. The Government expenditure as reflected in the Accounts to that extent is, therefore, overstated.”5.1.3 The basic issues here are:i.whether the simple release of funds by Union Government Ministries/Departments to State Governments/other implementing agencies, NGOs, societies etc in the States for implementing various centrally sponsored schemes could be termed as expenditure in their accounts,ii.whether real time information about the use of funds so transferred isavailable,iii. whether such use of funds gets adequately reflected in government accounts, andiv.how to minimize the costs of raising the financial resources which are lyingunutilized.5.1.4 The Planning Commission, realizing the import of such issues, had formed an Expert Group to Develop Concrete Proposals for Restructuring the Centrally Sponsored Schemes. This Expert Group submitted its Report in September 2006 which contained, inter alia, a note from the Deputy Comptroller and Auditor General of India on the financial aspects of these Schemes. This note pointed out the following:“In the existing system, the amounts under Centrally Sponsored Schemes are released by the Central Government through a variety of channels. The amounts released to all or most of them are booked as final expenditure in the books of the Union Government, even when the whole or part of it may not have been utilized for the purpose for which the funds were appropriated during the year.”5.1.5 While mentioning that some of the channels of release of the funds as:?To State Governments, when the amounts are further released / spent;?Directly to the state autonomous bodies (viz., DRDA etc);?To Central autonomous bodies for specific tasks / jobs (viz., research etc.); it observed that:“The existing procedure does no facilities capture, at any given point of time, of (i) amounts actually utilized for the end-use, (ii) amounts in transit viz., advances to local bodies / PRI or to the executive departments (viz. PWD, PHED, etc.) and (iii) unspent amounts with the state governments / agencies.”5.1.6 Thus, it was pointed out that in case of expenditure incurred on Centrally Sponsored Schemes through the State Budget, the Accountants General (Accounts & Entitlements) in the States would not be able to link such expenditure unless the expenditure incurred on a scheme can be ascertained across all functional Major Heads of Accounts involved. Further, even the accounts compiled by Accountants General (A&E) would not capture the data distinctly under each Centrally Sponsored Schemes in the absence of uniform plan-budget link and a distinct sub-head for the each of the Centrally Sponsored Schemes. Moreover, the expenditure booked in the State Accounts consists of expenditure for the end-use as well as advances to implementing agencies without any distinction between them. There is no coding or accounting rules prescribing coding of the expenditure by their type (end- use, advance etc.)5.1.7 Further, in many cases, transfers are recorded in registers and not made through account books. This further aggravates the position and the link to end use gets lost in transition. In case of transfers to societies, NGOs etc., their accounts do not get reflected in the governmental accounts. The problem of absence of coding by the type of expenditure exists here also, in the same manner as with the State Government.9293Strengthening Financial Management SystemsFlow of Funds from the Union to the States - Centrally Sponsored Schemes5.1.8 It was, therefore, suggested that the following aspects, inter alia, would need to be taken care of:i.As in the case of funds from the State Budget, a provision / system should bemandatory for autonomous bodies and NGOs to capture their expenditure that can be identified to the particular Centrally Sponsored Schemes and the type of expenditure.ii.A system may be put in place to track the amount in transit to the end-usethrough accounts / subsidiary accounts rather than through registers.5.1.9 As mentioned in Chapter 4 earlier, a similar problem has been encountered in case of Non Departmental Public Bodies (NDPBs) in the UK as far as their accounts are concerned. It is not that the problem has not been identified in India. In fact, in his budget speech (2008-09), the Finance Minister had already announced the following:56“Robust economic growth has necessitated a need to put in place effective monitoring, evaluation and Accounting systems for the large sums of money that are disbursed by the Central Government to State Governments, district level agencies and other implementing agencies.I think we do not pay enough attention to outcomes as we do to outlays; or to physical targets as we do to financial targets; or to quality as we do to ernment therefore proposes to put in place a Central Plan Schemes Monitoring System (CPSMS) that will be implemented as a Plan scheme of the Planning Commission and also a comprehensive Decision Support System and Management Information System. The intended outcome is to generate and monitor scheme-wise and State-wise releases for about 1,000 Central Plan and centrally sponsored schemes in 2008-09”.5.1.10 As stated earlier, the CAG in its Report has mentioned that more than Rs. 50,000 crore is being released by the Union Government to State and District level bodies directly and a significant portion of this amount remains unutilized at different levels. The practice to transfer funds directly to state and district level bodies, nongovernmental organizations, societies etc. is motivated by the desire to avoid delays on the one hand and prevention of diversion of these funds by the State Governments in order to support their ‘ways and means’ position. There is no doubt that when funds are transferred to the Consolidated Fund of the States, it leads to legislative approval and appropriations at two stages. Thus, in case of the Centrally Sponsored Schemes, first the appropriations are approved by the Parliament in case of the Union Government Ministries / Departments and second when they are transferred to the consolidated fund of the States, the appropriations are again required to be approved by the State Legislature before these funds could be transmitted to implementing agencies. However, this has led to a positionwhere transparency and accountability are not being ensured leading to a failure in getting a complete picture of expenditure related to these schemes.5.1.11 In fact, the existing system of accounting for plan schemes in case of both the Union and State Governments does not adequately support informed planning, budgeting, effective monitoring and decision making. The present accounting system does not capture transaction-oriented information. The main contours of this problem are presented in the following paragraphs.5.2 Absence of a System for Managing the Flow of Financial Information5.2.1 There exists a hierarchical chain of implementing agencies through which GOI funds flow to the grass roots level. A bulk of the actual expenditure is carried out at the block/ panchayat level in most schemes. The current system does not facilitate tracking of fund flow from the point of release in GOI to final expenditure at the spending unit level. The current system lacks a reliable reporting system for utilization of plan scheme funds. Moreover, it does not generate (i) agency-wise (ii) geographical location-wise and (iii) scheme-wise information on flow of funds. Huge funds are lying unutilized in the banking system parked in different accounts of different implementing agencies across several schemes.575.2.2 The present Chart of Accounts allows ‘releases’ to be treated as ‘expenditure’. Further, the Chart of Accounts followed by the Civil Ministries, State Governments, NGOs and other agencies is not uniform and each agency adopts its own Chart of Accounts for maintaining accounts pertaining to plan schemes. There is thus a need for a common Chart of Accounts (COA) so as to ensure a seamless flow on information from all stakeholders.5.2.3 The existing system of expenditure classification is one-dimensional as it flows only in the direction namely from the fund to the sector/sub-sector. It does not permit an integration and consolidation with regard to functions, programmes and economic categories in a single hierarchy. Presently, budget classification focuses on compliance rather than on government policies and priorities and the two main dimensions (functions/programmes and objects) are clubbed together with a 15-digit accounting code, which has limited flexibility and scope for segregating and correlating various budget dimensions. Thus, it does not allow capture of information regarding:-Schemes as defined by Planning Commission (Schemes defined in Chart of Accounts are often not the same as defined by Planning Commission)-Recipient agency identification-Geographical location identification949556Source : : Adapted from ‘Development of a Management Information & Decision Support System for Plan Schemes’ by Archana Nigam and DipankarSenguptaStrengthening Financial Management SystemsFlow of Funds from the Union to the States - Centrally Sponsored Schemes5.2.4 Moreover, the classification system between the Union and State Governments is uniform only till the programme level - at the scheme level there is no uniformity of classification.5.2.5 In consultation with the Controller General of Accounts (CGA), it has now been planned that the Government should shift over to a system of transfer of debits in respect of the CSS. The Core Banking Systems (CBS) which most banks have now rolled out is sought to be linked with a Core Accounting System (CAS), which is to be set by the CGA. Under the proposed CAS, only the sanctions will move down the line to the final implementing authority. These sanctions, through the proposed linkage between the CAS and the CBS, would also move in parallel down the CBS to the bank branch that will make the payment upon the authorisation of the field level implementing agency.5.2.6 In order to implement this, the CGA have proposed the use of an IT-based platform which would address the following concerns:?Identifying the entities involved in fund devolution,?Identifying schemes under which funds are devolved to the agencies/spending units,?Identifying geographical location of the entities receiving funds, and?Using the extensive banking network for reducing float in the system.5.2.7 The objective here is to build a comprehensive centralized database from the source for enhanced financial reporting for monitoring plan schemes implementation by including sanction ID with the current system of classification of accounts. This will facilitate complete information base for Plan Schemes about:?Funds released under a scheme of Planning Commission?Funds received by an agency?Funds received geographical location-wise5.2.8 Thus, sanctions pending release of funds under Plan schemes can be monitored more effectively and recipient agencies/States can also use the sanction ID for referencing purposes. A sanction in such cases would include both actual expenditure and transfer. This will create a system in which only “authorization to spend” and not “funds to spend” flows throughthe system. This will use the existing banking networks to transfer these “authorizations” instead of real funds. A system of authorizations also implies that all these entities become a part of the preparation process of national accounts.5.2.9 It is expected that the proposed CAS will solve two major problems being faced at present. First, it will provide a platform for consolidating accounting data relating to all plan schemes on a uniform basis, irrespective of the agency that is actually charged with the receipt of funds and with programme implementation. Secondly, the CAS will have the advantage of ensuring that expenditure is booked in the accounts of the Union Government only at the time when the actual payment at the field level takes place.5.2.10 The Commission has already recommended in Chapter 4, the examination of the ‘line of sight’ project (‘alignment’ project) of the UK Government in the Indian context by a High Powered Committee. It is of the view that first, a reform in the structure of the Chart of Accounts and its codification has to be carried out in order to arrive at an alignment between the Plan, budget and the accounts. Further, it needs to be ensured that the IT-based systems being thought of for implementing the CAS are in tune with the National e-Governance Plan (NeGP), and take advantage of the connectivity offered by SWAN and the CSCs.5.2.11 As already observed in Chapter 3, Article 150 of the Constitution provides that the accounts of the Union and of the States are to kept in such form as the President may, on the advice of the C&AG, prescribed. By incorporating Entry 7A (i) in the Government of India (Allocation of Business) Rules in case of the Department of Expenditure, the Controller General of Accounts has been delegated to carry out the business of prescribing ‘General principles of accounting’ relating to the Union or State Governments and ‘form of accounts’. The Commission is of the view that the Controller General of Accounts, in consultation with the C&AG, should lay down the principles for implementing the new system of transfer of funds mentioned in the fore-going paragraphs taking into account the available technology, the modifications required in the Chart of Accounts and should implement the system within a prescribed time frame.5.2.12 Recommendationa. The Controller General of Accounts, in consultation with the C&AG, should lay down the principles for implementing the system of flow of sanctions/ approvals from the Union Ministries/Departments to implementing agencies in the States to facilitate release of fund at the time of payment. After taking into account the available technology and infrastructure for electronic flow of information and funds, especially under the NeGP,9697Strengthening Financial Management SystemsFlow of Funds from the Union to the States - Centrally Sponsored Schemesand putting in place a new Chart of Accounts, the scheme should be implemented in a time bound manner.5.3 Development of Financial Information System5.3.1 A robust financial information system is necessary as it helps in:?Providing timely and reliable information to the decision makers?Providing inputs to control systems?Monitoring financial and physical progress?Ensuring proper utilization of resources5.3.2 Brazil is one of the countries which has made substantial progress in implementing a modern IT-based financial information system. Until 1986, each Federal Government Unit in Brazil had its own accounting system and there was lack of integration among the units. From 1987 onwards, the Federal Government implemented an integrated System for Financial Management (SIAFI) which has been continuously improved. The main objectives of this system were to :?Provide Public Administration Agencies with proper mechanisms for budget daily control as well as financial execution;?Provide means to speed up financial programming, optimizing the usage of the National Treasury’s resources, via unification of Federal Government’s funds;?Ensure safety and timely information recording by Public Accounting;?Standardize budgetary and financial management and execution procedures throughout the Federal Government; and?Allow the follow up and evaluation of public expenses.5.3.3 Presently, all Federal Government Units (Executive, Legislation and Judiciary) including all State/owned company units are required to use SIAFI.58 The outcome has been that accounting system has become integrated with standardized procedures, on-line automatic book keeping, data compatibility, availability of reliable and timely management information and transparency.5.3.4 In fact, as far as transparency in financial matters is concerned, in Brazil, the creationof such a robust financial information system has also resulted in the public having direct access to data on government spending at the federal, state and municipal levels59 through the transparency portal (.br). Information about even the smallest payment is now accessible to the public, thus providing suo motu information at a very advanced level.5.3.5 The Commission is of the view that a robust financial information system needs to be created in the government. This system should also make accessible to the public real time data on government expenditure at all levels and should be available in the public domain. This would also be honouring the spirit of the Right to Information which mandates that government organizations should attempt to provide maximum information through voluntary disclosures.5.4 Capacity Building5.4.1 The changes in the accounting and financial management system discussed above would necessitate capability building in not only the accounts and finance personnel but also non-finance personnel. Better skills would allow better preparation of estimates and better management of expenditure. A lot would require to be done for improving the estimating and forecasting capabilities within Ministries/Departments and implementing agencies. Specially designed and periodic training modules for personnel at different levels need to be designed to meet these needs.5.4.2 The Commission is of the view that major reforms in financial management can only be undertaken if capacity of both - individuals and institutions – is improved. For this to happen, a proper programme of training needs to be devised and implemented in a time bound manner.5.3.6 Recommendationa. A robust financial information system, on the lines of SIAFI of Brazil, needs to be created in the government in a time bound manner. This system should also make accessible to the public, real time data on government expenditure at all levels.5.4.3 Recommendationa.The capacity of individuals and institutions in government needs to beimproved in order to implement reforms in financial management. To facilitate this, a proper programme of training needs to be devised and implemented in a time bound manner.999858 System of Accounting6ACCRUAL SYSTEM OF ACCOUNTING6.1 As mentioned in Chapter 3, both the General Accounting Rules, 1990 and General Financial Rules, 2005 prescribe cash based accounting in the Government. The basic reasons for maintaining accounts of the Government on cash basis and its ‘fundamental’ difference with commercial accounting has been succinctly analysed in the ‘Introduction to Indian Government Accounts and Audit’ issued by the Comptroller and Auditor General of India.60 This is reproduced below:“The principles of Commercial and Government Accounting differ in certain essential points. The difference is due to the fact that, while the main function of a commercial concern is to take part in the production, manufacture or inter-change of goods or commodities between different groups or individuals and thereby to make profit, Government is to govern a country and, in connection therewith, to administer the several departments of its activities in the best way possible.Principles and Methods of Commercial Accounting6.1 A non-Government commercial concern deals primarily with the utilization of Capital for the purpose of making a profit; and it is interested to see at intervals how it stands in relation to its debtors and creditors, whether it is gaining or losing, what are the sources of its gain or loss, and whether it is solvent or insolvent.6.2 In order to obtain ready answers to these questions the concern has to keep a system of detailed accounts. In respect of each person dealt with each cases of assets held, each article dealt in and each department of its activities, it maintains a separate account so that the result of the transactions in each case may be ascertained. It then becomes necessary for it to collect the result of all these accounts in one place in order to record the assets and liabilities under different heads and finally to prepare the Manufacturing, Trading and Profit and Loss Accounts and a Balance Sheet, which shall show what is the gain or loss of the concern as a whole and whether it is solvent or insolvent.6.3 It is the generally accepted practice in the commercial world to maintain account books on the Double Entry System, which is based on the fact that in every transaction or financial change two parties or accounts are involved, one giving and other receiving. Under that system, every transaction, therefore, requires two entries in the books, one against the party or account giving and the other against the party or account receiving. Further, if the concern is a manufacturing one, it has also to maintain set of books for (a) costing and (b) stores accounting in order to ascertain as regards (a) the cost of production of each article so as to control costs or increase price suitably provided of course the market permits, and as regards (b) that there is an efficient system of stores control.6.4 The main concepts applicable to commercial accounts are:-(1) Financial conditions – This is represented by the assets, liabilities and shareholder equity and refers to the impressions or conclusions one might draw from a balanced array of the Company’s assets and claim against those assets i.e. a balance sheet and other associated accounts indicating long range and current positions and solvency and liquidity.(2) Results of operations – The economic results of operations aimed to show what the enterprise has accomplished and at what cost, are generally reflected by the Profit and Loss Accounts. In arriving at the net income, financial conservation dictates that all foreseeable losses should be provided for, no credit should be taken for unearned profits.(2) True and fair view – As accounting statements contain subjective evaluation, the results presented to the shareholders should be a fair view of the affairs of the company. Such fairness is assured by:- Generally accepted accounting principles which include a number of conventions and practices which have over a period of time been found to be most useful.- Consistency in treatment accorded to various items which are material to the statements to make comparisons with the earlier years possible and meaningful.- Full disclosure to enable informed readers to come to appropriate conclusions.10010160Fifth Edition, 1987Strengthening Financial Management SystemsAccrual System of AccountingPrinciples of Government Accounting6.5 The activities of good Government in any country are determined by the needs of the country. The main branches of its activities being known, it is a matter for decision what expenditure will be necessary during any year in carrying out these activities. After a decision has been reached on this point, it becomes necessary to determine how to raise sufficient money to meet that expenditure.6.6 With a Five-tier classification of Government Expenditure under Sectors, major heads, minor heads, sub-heads and detailed heads of account, the accounting is more elaborate than that followed in commercial accounts. But the immediate objective of Government accounting is not to ascertain the gain or loss on the transactions of the Government as a whole in carrying out its activities. The method of budgeting and accounting under the service heads is not designed to bring out the relation in which Government stands to its material assets in use, or its liabilities due to be discharged at more or less distant dates. The accounting methods adopted for commercial concerns, and the preparation of Manufacturing, Trading and Profit and Loss Accounts and a Balance Sheet, in the commercial sense, are, therefore, unsuitable and unnecessary. In its Budget for a year, Government is interested to forecast with the greatest possible accuracy what is expected to be received or paid during the year, and whether the former together with the balance of the past year is sufficient to cover the latter. Similarly, in the compiled accounts for that year, it is concerned to see to what extent the forecast has been justified by the facts and whether it has a surplus or deficit balance as a result of the year’s transactions. On the basis of the budget and the accounts, Government determines (a) whether it will be justified in curtailing or expanding its activities (b) whether it can and should increase or decrease taxation accordingly.6.7 In the field of government accounting, the end products are the monthly accounts and the annual accounts. The monthly accounts serve the needs of the day-to-day administration, while the annual accounts present a fair and correct view of the financial stewardship of the government during the year.Purpose of Government and of Commercial Accounts6.8 Government Accounts are designed to enable Government to determine how little money it need take out of the pockets of the tax-payers in order to maintain its necessary activities at the proper standard of efficiency. Non Government Commercial accounts on the other hand are meant to show how much money the concern can put into the pockets of the proprietors consistently with the maintenance of a profit-earning standard in the mercial Undertakings of Governments6.9 The operations of some departments of Government, however, sometimes include undertakings of a commercial or a quasi-commercial character, e.g. an industrial factory or a store. Even though these may be maintained almost entirely for the benefit of the department, it is still necessary that the financial results of the undertakings should be expressed in the normal commercial form so that the cost of the service or undertaking may be accurately known. This implies the maintenance of suitable capital, Manufacturing, Trading and Profit and Loss Accounts, and as the Government system of accounts, being on a purely cash basis, is unsuitable for such commercial accounts, these are usually kept on a proforma basis outside the general accounts of Government. The actual transactions entering these proforma accounts except those adjusted on a liability basis find a place primarily in the regular accounts and the commercial accounts are additional as well as separate.Methods of Government Accounting6.10 The mass of the Government accounts being on cash basis is kept on Single Entry. There is, however, a portion of the accounts which is kept on the Double Entry System, the main purpose of which is to bring out by a more scientific method the balance of accounts in regard to which Government acts as banker or remitter, or borrower or lender. Such balances are, of course, worked out in the subsidiary accounts of single entry compilations as well but their accuracy can be guaranteed only by a periodical verification with the balance brought out in the double entry accounts”.6.2 Accounting in Commercial Undertakings of the Government6.2.1 As stated above, only in case of certain commercial undertakings of the Government, are the accounts maintained in a manner so as to reflect the true outcome of the commercial enterprise. However, these accounts are kept separate from the normal Government accounts. A classic example of such accounts is presented by the Railway Accounts. As the Indian Railways function as a ‘Departmental Commercial Enterprise’, there is need for securing the essential requirements of commercial accounting apart from conforming to the norms of Government accounting. This is achieved in the Railway Accounts by keeping the accounts of the railways on a commercial basis outside the regular Government account and by maintaining a link between the two for necessary correlations. Thus, the accounts which facilitate a review of the finances of the railways as a commercial undertaking are known as ‘Capital and Revenue Accounts’ which are compiled annually and included in the Annual Report of the Railways. On the other hand, the accounts maintained in accordance102103Strengthening Financial Management SystemsAccrual System of Accountingprovide information on the assets held by the government, much less the cost of holding and operating these assets and the impact of current consumption on the stock of assets. Another major limitation is its inability to record the full cost of providing services by the government’s departments or the commitments made by the government regarding payment in future years. The cash-based accounting provides room for fiscal opportunism, as tax revenues can be collected in excess during a period followed by high incidence of refunds, payments can easily be deferred and passed on to future periods, revenues due in the future could be compromised by providing for one-time payments, etc. To quote some other examples, it takes no note of transformation of indebted government agencies into autonomous legal entities outside government through suitable state guarantees, and on the expenditure side, omit existing net liabilities of public enterprises and agencies outside the government, though the latter cannot escape such liabilities.14.15 Compared to the cash-based system, the system of accrual accounting recognizes financial flows at the time economic value is created, transformed, exchanged, transferred or extinguished, whether or not cash is exchanged at that time. It is different from cash-based system in that it records flow of resources. Expenses are recorded when the resources (labour, goods and services and capital) are consumed, and income when it is earned, i.e. when the goods are sold or the services rendered. The associated cash flows generally follow the event after some time and may or may not take place during the same accounting period. Thus, in addition to cash flow, unpaid consumptions (payables) and unrealized income (receivables) are also recorded. Resources acquired but not fully consumed during an accounting period are treated as assets (inventory and fixed assets). Payments made for acquisition of inventory are included in the operating cost for the period in which it is consumed. Payments made for acquisition of physical assets, that have future service potential, are amortized over the entire useful life of the asset by charging depreciation.14.16 The system of accrual accounting, thus, inter alia, allows better cost – price calculations, records capital use properly, distinguishes between current and capital expenditures, presents a complete picture of debt and other liabilities and focuses policy attention on financial position, as shown in the whole balance sheet not just cash flows or debts. It gives a complete measure of cost of various services, takes care of disinvestment receipts and provides adequate information of both fiscal balance and net worth and their changes over time. Information, as would be available under accrual accounts, constitutes an essential input for bodies like finance commissions, not only in assessing the revenue requirements of the centre and states vis-à-vis the available resources, but also in appraising their fiscal performance with a view to assigning due credit to the governments, which have performed well and providing disincentives to those, which fail to measure up-to expectations. ...”with the requirements of the government accounts are collectively termed as the ‘Finance Accounts’.616.2.3 Unlike Government accounts which record expenditure only when actually disbursed or receipts only when actually realized, the commercial accounts of the railways record the expenditure incurred or earnings accrued in a month irrespective of whether they have actually been paid or realized. On the expenditure side, the revenue liabilities of the Railways for a particular month, which are not payable within the same month, are brought to account as working expenses for the month by taking contra credit to a suspense head called ‘Demands Payable’. When the liabilities are actually discharged by payments, the suspense head is debited with that amount. Thus, the balance at the end of a particular month in the suspense head represents liability incurred but not actually discharged during that month. In case of earnings, similar suspense account is maintained under the head ‘Traffic Accounts’. In case of wages and allowances for a month for labour, another suspense account is maintained under the head ‘Labour’. These three accounts thus linked the commercial accounts with the Government accounts.6.2.4 Thus, basically the Railway Accounts follow a modified accrual system in their accounts so that the performance of their commercial activities could be captured in a proper way. However, this is maintained separately from the normal government accounts.6.2.5 In the 1990s, international financial institutions began stressing on adoption of the accrual system of accounts while disbursing financial aid. Thus, in a loan given to Kumbakonam Municipality (Tamil Nadu), the World Bank included the introduction of accrual accounting as a part of its conditions. Similarly, while extending financial assistance to the Ahmedabad Municipal Corporation, the USAID insisted on introduction of accrual accounting so that the Corporation could borrow from the public market.626.2.6 The Twelfth Finance Commission (2005-10) in its Report has summed up the benefits arising out of adoption of the accrual system of accounting as follows:“14.14 The cash-based system of accounting lays emphasis on transactions vis-à-vis the budget. It does not record and report complete financial information required for management of resources. It does not provide a full picture of the government’s financial position at any given point and the changes that take place over time as a result of government policy. The system fails to reflect government’s liabilities such as accrued liabilities arising due to unfunded pensions and superannuation benefits and current liabilities arising from a disconnect between commitments and payments. Similarly, the present system is unable to track current assets as well as non-financial assets. It does not10410561Source : Indian Railways Code for the Accounts Department, Part-I: Code/AccCode1/Chapters/Chapter2.pdf 62Source: Trapped in the Comfort Zone of Denial: 50 years of Expenditure Management in India; A. Premchand; NIPFP; pp 30-31Strengthening Financial Management SystemsAccrual System of Accounting6.2.7 It needs to be mentioned here that in order to implement the recommendations of the Twelfth Finance Commission, the Government Accounting Standards Advisory Board (GASAB) in the Office of the C&AG has been entrusted with the task of recommending a detailed road map and an operational framework. The Roadmap prepared by GASAB for transition to accrual accounting envisages a 10-12 year transition period. The main activities proposed under this Roadmap are:63i.Setting up a Task Force or Cell or designating a nodal agency preferably atMinistry for Finance for coordination and overseeing the implementation. Besides representative from the Ministry of Finance, the said Task Force may comprise :representative of the office of the CAG,representative from the office of the CGA,representative from Railways,representative from the office of the CGDA,representative from Posts, andrepresentative from State Governments (select State Governments).This Task Force would work as a nodal agency for implementation and coordination of transition to accrual accounting. It would further consider and suggest ways and means of setting up separate task forces in the concerned Ministry / Department and State Governments for supervision and monitoring of such transition. It would focus on facilitating an integrated approach across Governments aimed at maintaining broad uniformity in the form of accounts. Further, it would also provide a forum for evolving accounting policies and accounting standards and facilitate resolution of issues faced by different stakeholders. Finally, it would bring about a detailed plan of action for scheduling of different activities involved in the transition.ii.Identification and collection of data required for preparation of accrual-basedFinancial Statements.iii. Pilot Studies covering a few Ministries/Departments/State Governments with a view to assess the gaps and problems in the existing system. This would also be crucial for process mapping.iv.Detailed process study of various activities and accounting practices to assess the extent of departure from the existing system in terms of accounting principles, recognition and measurement of elements, classification and disclosure of information.v.Preparation of a detailed accounting framework in line with the broad contours of the operational framework prescribed by GASAB.vi. Laying down accounting policiesvii. Preparation of a Chart of Accountsviii. Devising subsidiary ledgers/records to be maintained in accounting officesix. Streamlining accounting dataflow and defining role and responsibilities amongst officials dealing with accounting datax.Putting in place a new IT systemxi. Pilot implementation of the new system in few Ministries/Departmentsxii. Full implementation6.2.8 The operational framework for this transition would have to encompass accounting and treatment of assets, liabilities, revenue and expenses and the final accounts of the Governments consistent with the provisions of the Constitution. Accordingly, the operational framework suggested by GASAB takes into consideration various issues related to this transition. It recognizes that different departments / organizations should have the flexibility to decide the appropriate degree and extent of accrual base that is useful and sustainable for them. Thus, accounting policies would need to be framed independently by them which would be consistent with generally accepted accounting principles. Due to these considerations, the operational framework designed by GASAB indicates broad deviations from the conventional approval basis of accounting as followed by commercial / industrial and business enterprises. This is necessitated on account of the specific requirements of accounting and reporting owing to the nature of governmental transactions, types of assets held, liabilities carried and revenue collected.6.2.9 The proposed broad framework for transition to accrual accounting is presented in Table 6.1.6410610763Operational Framework of Accrual Basis of Accounting in Governments in India; GASAB; February, 200764Source: Operational Framework of Accrual Basis of Accounting in Governments in India; GASAB; February, 2007Strengthening Financial Management SystemsAccrual System of AccountingGuaranteesContingent LiabilitiesGuaranteesGuaranteesAll explicit contingent liabilitiesLiabilitiesStock of Public debt and Borrowing on Public Account + Payables + All other Liabilities [except superannuation benefits,compensated leaves, provisions andsocial security]All liabilities (except superannuationbenefits,compensated leaves, provisions andsecurity)AssetsFinancial assetsStock of Public debt and Borrowings on Public AccountFinancial assetsStock of Public debt and Borrowing on Public Account + PayablesFinancial assets+ Receivables +Military assetsAll Assets (excluding infrastructure, land, heritage, intangible assets)DoRevenuesReceiptsReceiptsExpensesTable 6.1: Operational Framework of Accrual Basis of Accounting in GovernmentExp – Current & CapitalCurrent Expense on accrual basis and Capital Expenditure on cash basisNon Tax Revenues on accrual basis + Tax Revenues on cash basisAll Expenses on accrual basis + DepreciationCurrent Expenseon accrual basisand CapitalExpenditure on cashbasis [excludingExpenditure onMilitary Assets]Stage IIIStage IIStage ICurrent StageStages108Contd.Table 6.1: Operational Framework of Accrual Basis of Accounting in GovernmentLiabilitiesContingent LiabilitiesAssetsStagesRevenuesExpensesAll assets including infrastructure and land [excluding heritage andintangible]All expenses on accrual basis + Depreciation + ProvisionsStage IVDoDoDoAll explicit contingent liabilitiesAll liabilitiesAll AssetsAll Revenues on accrual basisAll ExpensesStage V109Strengthening Financial Management SystemsAccrual System of Accounting6.2.10 GASAB has suggested that Stage 1 depicted in the above Table should be the starting point for introduction of the accrual basis of accounting and accounting reforms should incrementally graduate to Stage V which represents full accrual accounting. It also noted that certain entities within the government like the Railways may straightaway adopt full approval on account of their preparedness and nature of activities. A description of these stages is given below:Stage I: Accrual-based recognition is introduced in case of current expenses leading to recognition of payables which would be shown as a liability.Stage II: Accrual-based recognition is introduced in case of non-tax revenues which would lead to recognition of receivables, to be included in assets. This will also include military assets.Stage III: At this stage, all expenses are recognized on accrual basis and recognition of depreciation is introduced. Further, all financial and physical assets (except for infrastructure, land, heritage and intangibles) and inventories are recognized on accrual basis. Further, disclosure of all explicit contingent liability begins to be made.Stage IV: At this stage, inclusion of provisions as expense and extension of physical assets to cover infrastructure and land would be on accrual basis.Stage V: At this stage, all the aspects of Government accounts are based on accrual system of accounting.6.2.11 GASAB has proposed that successful completion of every stage should be considered for consolidated reporting for the entire government at different levels. The time frame for Stage I should be 3-5 years. This framework would require preparation of a Chart of Accounts for capturing accrual based information in account books. This Chart of Accounts should have two tiers, the first tier would capture information for use at the macro-level (uniform for all Departments as in the case of existing Major and Minor Heads) and the second tier would capture information for budget management in the Ministries/ Departments. Ministries / Departments / organizations should have the flexibility to design their own Chart of Accounts in case of the second tier.6.2.12 GASAB has indicated that adoption of the accrual principle would necessitate certain changes in the financial statements. The new structure of financial reporting would comprise three inter-related statements.Statement of operating performance (Income & Expenditure Account), Statement of financial position (Balance Sheet), and Statement of sources and uses of cash.6.2.13 The accrual based financial statements will provide two important measures of financial performance – Fiscal Balance and Net Assets / Equity (Net Worth). Fiscal balance will measure the operating performance and provide an indicator of the saving-investment gap of the government; Net Assets/Equity will provide a measure of government’s financial position in terms of its ability to relinquish its liabilities. Changes in the net worth over time provide a measure of the sustainability of government’s fiscal policies. However, all information previously recorded according to the cash basis of accounting will be retained and presented in a reorganized format in the statement of sources and uses of cash. Other statements will serve to provide an integrated presentation of the economic operations and positions of government.6.2.14 The Appropriations from Parliament would continue to be obtained on cash basis and this will necessitate preparation of Appropriation Accounts showing compliance with parliamentary supply. Similarly, Finance Accounts would also continue to be prepared on cash basis till the new framework stabilizes. The statement of receipts and disbursements (Statement No.1 of Finance Accounts) would serve as the link between the accrualsbased Statement of Operating Performance and cash-based budgets.6.2.15 As far as the Urban Local Bodies (ULBs) are concerned, the Commission in its Sixth Report entitled “Local Governance” had recommended that the accounting system for them as provided in the National Municipal Accounts Manual (NMAM) should be adopted by the State Governments (Paragraph 3.9.22.a). The NMAM prescribes that these accounts should be prepared on accrual basis. In case of the PRIs, the formats for accounts developed by the C&AG are basically in the form of a simple receipt and payment account on cash basis accompanied by key statements that take care of the items of accrued income and expenditure. The Commission has recommended in its Sixth Report that it should be ensured that the accounting standards and formats for Panchayats are prepared in a way which is simple and comprehensible to the elected representatives of the PRIs (paragraph 3.9.22.d).6.2.16 However, in case of adoption of the accrual-based system, first in government accounts, and then in budgeting, some pertinent aspects would need to be addressed:110111Strengthening Financial Management SystemsAccrual System of Accountingi)There is a high cost of transition from cash-based to accrual-based accountingsystem as it requires higher level of trained and skilled personnel, and higher costs are involved in identification and evaluation of assets and setting up the technological infrastructure.ii)The transition period takes a fairly long time to settle, sometimes even morethan a decade.A number of activities associated with the accrual-based accounting system involve high level of subjectivity for example valuations and risk assessment. The nature disclosures and reporting could change substantially based on such valuations and assessments. Robust accounting framework for implementing such a system is also required.6.2.17 In fact, discussions on adoption of the accrual system of accounting in the government has been on-going for quite some time. Even the Committee on Fiscal Responsibility Legislation, July 2000 was in favour of introduction of accrual accounting system and was inclined to make it a part of the Fiscal Responsibility and Budget Management Act, as it felt it would be an instrument of fiscal control. Its Report stated that:“The Union Budget should progressively move towards greater disclosure on accrual basis of all contractual liabilities, explicit contingent liabilities, revenue demands raised but not realized, committed responsibility in respect of major works and supply contracts in progress, hidden subsides by way of below cost supply of goods and services etc” .656.2.18 They expressed the view that the cash accounting system should be progressively supplemented by accrual accounting and wherever necessary, general accounting norms should be aligned with internationally accepted best practices. However, the offices of both the C&AG and the CGA expressed their reservations on incorporating the accrual-based system as part of the FRBM Act, which was accepted by the Committee: “After careful deliberation on various issued raised by the CGA and the representative of the C&AG, the committee felt that introduction of accrual accounting as a part of proposed fiscal responsibility legislation would not be desirable. However, the need to gradually introduce an accrual system of accounting may be separately examined. Meanwhile, greater disclosure of accrual-based information in the budget document should be set as a target in the proposed FRA”. In fact, it was pointed out that a committee headed by Shri A.C. Tiwari, former Dy. C&AG, had examined the issue of introducing accrual accounting earlier, and was of the view that “The requirement of accrual accounting, in government, has not yet been established, as theneeds of government accounting are quite different from those of commercial enterprises. Accrual accounting is untested, difficult to implement and not really useful. There are practical problems, huge costs and timeframes involved and it would not be cost effective”.666.2.19 A word of caution has also been put in the OECD document ‘Managing Public Expenditure – A Reference Book for Transition Countries’67 in case of countries considering the implementation of a government-wide full accrual accounting system. In their view, “Full accrual accounting requires a comprehensive registration of assets and a sound cost measurement system. Implementing such systems government-wide needs time and its cost-effectiveness needs to be carefully examined. Full accrual accounting would not contribute to the development of a performance-oriented approach to budgeting at the agency level if depreciation is roughly estimated. If accounting standards are not clearly specified and reported, accrual accounting leaves room for “creative accounting”, through manipulating estimates of depreciation, provisions, recognition of losses, etc.”6.2.20 A gradual approach was thus advocated in the OECD document: “It might start with those areas of of government activity that require information on the value of physical assets, their uses and full costs (e.g. agencies that charge users for services provided). Taking into account the need to strengthen fiscal management, transition countries should focus first on implementing methods to better recognize financial liabilities in their accounts..... Making accrual accounting effective requires a true and fair recognition of expenses. Applying only formal accounting rules does not increase transparency. Accrual accounting therefore requires the availability of many highly skilled accountants both inside and outside the government. Accrual accounting can improve transparency but only if decision-makers and the public are well informed about the nature of the information provided and its financial implications. This is not always the case, even in many OECD countries...”6.2.21 They further point out that although including accrual accounting information in budgetary documents is desirable in principle, relatively few OECD countries (e.g. Australia, Iceland, the Netherlands, New Zealand, Sweden and the UK) have moved in this direction. The US has decided to retain its obligations-based system of budgeting in which information on cash transactions is supplemented by accruals information for certain categories of transactions.68The implementation in OECD countries is presented in Table 6.2.11211365Report on the “Committee on Fiscal Responsibility Legislation July 2000”, para 46, Fiscal Responsibility and Budget Management Act 2003 and its implementation, Seminar Volume, October 2004, National Institute of Financial Management. (cited in the Report furnished to ARC by NIPFP)66Seminar in Fiscal Responsibility and Budget Management Act 2003 and its Implementation, NIFM, October 12, 2004, para 72. (cited in the Report furnished to ARC by NIPFP)67Ed. Richard Allen, Daniel Tommasi; OECD, 2001; page 30668Ibid; page307Strengthening Financial Management SystemsAccrual System of AccountingTable 6.2: OECD Member Countries : Government AccountingOECD MemberAccrual Accounting forConsolidatedAccrual BudgetingIndividual Agencies /Accrual ReportingDepartmentsG7 EconomiesCanadaSince FY 2002Since FY 2002YesFranceBeing introducedSome, full accrual being introducedESA 95.Intends to move tomodified accrual basisFranceBeing introducedSome, full accrual being introducedESA 95.Intends to move tomodified accrual basisGermanyCash statements supplemented with accrual informationNoESA 95. In preparationItalyYesYesESA 95. YesJapanYesIntroducingNoUnited KingdomSince FY 2000From FY 2006ESA 95. Since FY 2002Other MembersAustraliaSince 1995Since 1997Since FY 2000AustriaNo*NoNo, but will be introducing modified accrual budgeting in accordance with ESA 95DenmarkSomeSomeESA 95.Is introducing fullaccrual budgetingFinlandSince 1998Since 1998ESA 95. YesGreeceSomeYesESA 95. Modified accrualHungaryCash statements supplemented with accrual informationNoNo, but will be introducing modified accrual budgeting in accordance with ESA 95IcelandSince 1992Since 1992ESA 95. Since 1998IrelandCash statements supplemented with accrual informationNoESA 95. Modified accrual.Korea, Republic ofIs introducing full accrual accountingNoIs introducing full accrual budgetingTable 6.2: OECD Member Countries : Government AccountingOECD MemberAccrual Accounting for Individual Agencies / DepartmentsConsolidated Accrual ReportingAccrual BudgetingLuxemburgNo*NoESA 95MexicoNo*NoNoThe NetherlandsSince 1994IntroducingESA 95.For agencies since1997. Is introducing full accrual budgetingNew ZealandSince FY 1992Since FY 1992Since FY 1995NorwayNo*NoNoPolandSomeSomeNo, but will be introducing modified accrual budgeting in accordance with ESA 95PortugalYesNoESA 95. Is introducing additional accrual informationSlovak RepublicNo*NoNo, but will be introducing modified accrual budgeting in accordance with ESA 95SpainModified accrualModified accrualESA 95. Modified cashSwedenSince 1994Since 1994ESA 95. Is introducing full accrual budgetingSwitzerlandYesNoIs introducing full accrual budgetingTurkeyNo*NoNo* Most countries actually use modified cash accounting. ESA 95: European System of Accounts 1995Source : Accrual Budgeting and Accounting in Government and its Relevance for Developing Member Countries; by A.C. Athukorala & Barry Reid; default.asp114115Strengthening Financial Management SystemsAccrual System of Accounting6.2.22 However, it needs to be pointed out that International experience also indicates various complexities and risks involved. For example:691.Many countries have attempted to move towards accrual accounting but successhas not been widespread. For example, even among the OECD countries, Germany and Italy are yet to decide on the transition. The Netherlands has retracted its steps because of the costs involved. Japan has decided not to go for it, at least for the present. South Africa has reverted back after actively pursuing it.2.Even in countries where the system has been implemented, the cost ofimplementation has been high and the system has stabilized in about a decade. However, it has not conclusively been shown that the information provided by accrual accounting system is being used in decision making.3.Different countries have followed different approaches to adopting accrualaccounting. In Australia, accrual accounting was first implemented at the provincial level and later at the national level. In the U.K, although departments prepare accrual based accounts, there is no consolidation of these accounts at the national level.6.2.23 The enormity of the last mentioned task was also realized by the Twelfth Finance Commission. Thus, it stated that “The change over to the accrual based system of accounting will place considerable demands on the accounting personnel in various government organizations, particularly at the lower and middle levels of accounting hierarchy, consisting of accounts clerks, accountants, assistants, treasury officials and others.” As mentioned earlier, to be able to derive meaningful inferences from the new system of accounts and to see through window dressing exercises, all the stake holders involved in the decision making process in the government including Parliament and public at large would have to be aware of the intricacies involved. Realising this, the Twelfth Finance Commission also observed that “however, the transition would occur in stages, as this is a time consuming process. While we are in favour of a change over to the accrual based system of accounting in the medium term, we suggest that in the interim, some additional information as mentioned below in the form of statements should be appended to the present system of cash accounting to enable more informed decision making. An illustrative list of statements, which could be included are:a statement of subsidies given, both explicit and implicit;a statement containing expenditure on salaries by various departments / units;detailed information on pensioners and expenditure on government pensions;data on committed liabilities in the future;statement containing information on debt and other liabilities as well as repayment schedule;accretion to or erosion in financial assets held by the government including those arising out of changes in the manner of spending by the government;implications of major policy decisions taken by the government during the year or new schemes proposed in the budget for future cash flows; andstatement on maintenance expenditure with segregation of salary and non-salary portions.”6.2.24 While discussing reforms in the budgetary system, the initiatives taken in the UK, especially its ‘Alignment Project’ has been described in detail. The Commission is of the view that a similar alignment in India would bring about the transparency as desired by the Twelfth Finance Commission.6.2.25 So far as accrual system is concerned, it is observed that while its implementation has been costly and time consuming in countries where it has been adopted, empirical evidence of its benefits has not been conclusively demonstrated. Its implementation also places a high premium on capacity building, both in case of institutions and personnel. Views have also been expressed about limitations in its usefulness if the system of accounting does not cover the budgeting system also. The Commission has considered the views from both sides of the debate. It is of the view that while adopting the accrual system of accounting may be the ultimate objective in case of government accounts, in the present scenario the following steps would first need to be taken:i.Setting up of a Task Force to examine the costs and benefits of this system. ThisTask Force should also examine its applicability in case of the Appropriation Accounts and Finance Accounts.ii.A few departments/organizations may be identified where tangible benefitscould be shown to be derived by implementing the new system within 2-3 years, especially departmental ‘commercial undertakings’.iii. The result may be studied by a committee of experts which would recommend or otherwise its further implementation in all departments/organisations at the Union/State level along with exclusions, if any. This may proceed in a phased manner.11611769Source: Information provided by the Office of the CGA, Ministry of Financeiv. Training and capacity building needs of the accounting personnel and all stake holders in the decision making process would have to be addressed and a schedule worked out in line with the road map.v.Before the new system is adopted, alignment of the plan, budget and accountsneeds to be achieved and a viable financial information system needs to be put in place.6.3 Recommendationsa. A Task Force should be set up to examine the costs and benefits of introducing the accrual system of accounting. This Task Force should also examine its applicability in case of the Appropriation Accounts and Finance Accounts.b. Initially, a few departments/organizations may be identified where tangible benefits could be shown to be derived within 2-3 years by implementing the accrual system of accounting, especially departmental ‘commercial undertakings’.c.The result of this initial implementation may be studied by a committee of experts which would recommend on its further implementation in all departments/organisations at the Union/State level along with exclusions, if any. This may proceed in a phased manner.d. Prior to its implementation, training and capacity building needs of the accounting personnel and all stake holders in the decision making process would have to be addressed and a meticulous schedule worked out in line with the road map of implementation.e. Before the new system is adopted, alignment of the plan, budget and accounts, as recommended in this Report elsewhere, needs to be achieved and a viable financial information system needs to be put in place.Strengthening Financial Management SystemsINTERNAL CONTROL AND AUDIT77.1 Introduction7.1.1 Internal control systems are basically management control systems with a view to ensuring compliance with rules and regulations, reliability of financial data and reports, and to facilitate efficiency of government operations. A sound internal control framework, of which internal audit is an important element, is required to assure that government operations attain some basic fiduciary standards in guarding against misuse and inefficient use of resources; for safeguarding government assets; countering fraud and error; checking maintenance of satisfactory accounting records; and whether budgetary objectives set out in the government policies are being achieved. Thus, “Internal controls can be regarded as one of the foundations of good governance and the first line of defense against improprieties. They also provide the public with ‘reasonable assurances’ that if improprieties do occur, they will be made transparent and made appropriately addressed.” 707.1.2 Though internal audit is also a part of internal control system, it has a distinct role in that it is one of the tools for evaluating and improving the internal control system. Internal audit in government also involves audit on the basis of standards of financial propriety (as does the external audit) and, therefore, is required to observe upon cases of improprieties in financial operations.7.1.3 The function of audit has been entrusted to the Comptroller and Auditor-General of India by the Constitution. Internal audit, as the name suggests, has to be a part of the government organization. Presently, in Government of India, this function is discharged by the Office of the Controller General of Accounts in the Ministry of Finance through Chief Controllers/Controllers of Accounts in different Ministries/departments. The present scope of internal audit is as follows:12.2.1 The Internal Audit Unit will work directly under the As/CCAs/CAs, with overall responsibility remaining with the concerned Financial Adviser and the Secretary of the Ministry/Department. The Principal Accounts Office, the Pay and Accounts Offices as well as the offices of the D.D.Os in Ministries/Departments, Indian Missions and other Govt. of India offices abroad, shall be within the jurisdiction of internal audit. In addition11811970Jack Diamond (2006), “Budget System Reform in Emerging Economies”, , IMF, p.44Strengthening Financial Management SystemsInternal Control and Auditto these offices, internal audit shall be required to audit the implementing agencies for various schemes and programmes of the Ministry/Department.Internal Audit shall also check the initial accounts maintained in the executive offices to ascertain the extent of following of the rules and regulations, system and procedures in accounting and financial matters. The scrutiny would cover checking of all accounting records including those relating to fund accounts, loans and advances, disposal of confiscated stores (in CBEC), review of the installation and operating efficiency of expensive equipments and machinery and examination of records relating to physical verification of stores, equipments, tools and plant. The accounts of all grantee Institutions or Organizations shall be open to inspection by the sanctioning authority and audit, both by the Comptroller and Auditor General of India under the provision of CAG (DPC) Act 1971 and internal audit by the Principal Accounts Office of the Ministry or Department, whenever the Institution or Organization is called upon to do so and a provision to this effect should invariably be incorporated in all orders sanctioning grant in aid.” 717.1.4 Thus, the overall responsibility of internal audit lies with the concerned Financial Adviser and ultimately with the Secretary of the Ministry/department. The general duties of the internal audit organization in the Ministries/departments include the following:(i) Study of accounting procedures prescribed for the department with a view to ensuring that they are correct, adequate and free from any defects or lacunae;(ii) Watch over the implementation of the prescribed procedures and the orders issued from time to time;(iii) Scrutiny and check of payments and accounting work of the accounting units;(iv) Investigation of important arrears in accounting and other connected records;(v) Coordination with other Ministries and C.G.A. regarding internal audit procedures;(vi) Periodical review of all accounts records;(vii) Pursuance/settlement of objections taken in test audit notes issued by statutory audit offices and other matters relating to statutory audit;(viii) To examine and report on points or irregularities brought to its notice by the Principal Accounts Office/P.A.Os; and(ix) Preparation and submission of ‘Annual Review’ on performance of internal audit wing to the Controller General of Accounts.” 727.1.5 However, the revised charter for the Chief Controllers of Accounts includes some additional responsibilities:As per the new charter of duties and responsibilities of Chief Controllers of Accounts issued by the Secretary, Department of Expenditure, Ministry of Finance, the following functions will be carried out as per the guidelines issued by the Controller General of Accounts from time to time.(i) The appraisal, monitoring and evaluation of individual schemes;(ii) Assessment of adequacy and effectiveness of internal controls in general, and soundness of financial systems and reliability of financial and accounting reports in particular;(iii) Identification and monitoring of risk factors including those contained in the Outcome Budget;(iv) Critical assessment of economy, efficiency and effectiveness of service delivery mechanism to ensure value for money; and(v) Providing an effective monitoring system to facilitate mid course corrections.”737.1.6 Thus, whereas the original mandate of internal audit was to ascertain whether the rules and regulations have been followed and procedures in accounting and financial matters have been complied with, the revised charter includes appraisal and evaluation of individual schemes, assessment of adequacy of internal controls, monitoring of risk factors, efficiency etc.7.1.7 In order to move towards risk assurance based internal audit, the CGA has decided to establish a Centre of Excellence for Internal Audit (COE) in the Office of Controller General of Accounts. Its objectives would be:?to ultimately develop into a repository of technical resource and guidance centre for advising internal audit wings of line Ministries on effective, independent and objective internal audit functions, procedures, and “best practices”. The approach12012171Civil Accounts Manual; Second Revised Edition -200772Civil Accounts Manual; para 12.3.173Ibid; para 12.3.2Strengthening Financial Management SystemsInternal Control and Auditof COE will be to cover important aspects of risk management strategy and the management control framework and practices;?to enhance the quality of internal audit so that the results of internal audit become an input into the processes of planning, project formulation and implementation; and?to provide an assurance to the management that the “controls” in place provide adequate protection against likely “risks”.7.1.8 However, this initiative also realizes that ‘risk based internal audit’ would develop ‘gradually, evolving over time, as the capacity to meet the objectives gets enhanced and standards and practices to carry out modern risk based internal audit are firmed-up’.74 In order to formulate the future course of the Centre of Excellence, a Working Group has also been constituted to:751.Evolve guidelines and scope for the functioning of the Centre of Excellence.2.Examine the current and future needs and charter the future course of the Centre of Excellence.3.Suggest improvements which could be brought about in the scheme of Internal Audit being conducted by the Ministries / Departments.4.Periodically evaluate the performance of audit and suggest changes for constant improvement in relation to the changing scenario.5.Harness technological developments to aid the objectives of audit.7.1.9 It is thus evident that internal audit as per the revised mandate, is in its infancy in India. It would be instructive here to look at some of the international best practices in this regard.7.1.10 In the private sector of the developed economies, the scope of internal audit in the revolves around three functions: (i) risk management, (ii) control and (iii) governance of the organization concerned. The Institute of Internal Auditors (IIA), the leading institution in the field of professional internal auditing, has defined the nature of work with regard to internal audit as follows: “the internal audit activity should evaluate and contribute to the improvement of risk management, control, and governance processes using a systematic and disciplined approach” (Internal Standards for the Professional Practice of Internal Auditing, Para 2100). ‘Risk’ has been defined by IIA to mean “ The possibility of an event occurringthat will have an impact on the achievement of objectives. Risk is measured in terms of impact and likelihood”. ‘Risk Management’ is defined as “A process to identify, assess, manage and control potential events or situations, to provide reasonable assurance regarding the achievement of the organizations objectives”. ‘Governance’ has been defined as “the combination of processes and structures implemented by the Board in order to inform, direct, manage and monitor the activities of the organization toward the achievement of its objectives”. Many countries of the developed world have tried to introduce these modern concepts into government institutions. Thus, the ‘Government Internal Audit Standards’ published by HM Treasury Audit policy and Advice, UK (October, 2001) defines Internal Audit in the following manner:Internal audit is an independent and objective appraisal service within an organization:?Internal audit primarily provides an independent and objective opinion to the Accounting Officer on risk management, control and governance, by measuring and evaluating their effectiveness in achieving the organisation’s agreed objectives. In addition, internal audit’s findings and recommendations are beneficial to line management in the audited areas. Risk management, control and governance comprise the policies, procedures and operations established to ensure the achievement of objectives, the appropriate assessment of risk, the reliability of internal and external reporting and accountability processes, compliance with applicable laws and regulations, and compliance with the behavioural and ethical standards set for the organization.?Internal audit also provides an independent and objective consultancy service specifically to help line management improve the organisation’s risk management, control and governance. The service applies the professional skills of internal audit through a systematic and disciplined evaluation of the policies, procedures and operations that management put in place to ensure the achievement of the organisation’s objectives, and through recommendations for improvement. Such consultancy work contributes to the opinion which internal audit provides on risk management, control and governance”.7.1.11 Internal audit in the UK provides objective opinion directly to the Accounting Officer. To facilitate this, specific internal audit standards have been prescribed which define the way in which the internal audit should be established and undertake its functions. They apply equally to internal audit services which are provided by in-house audit units, in-house audit units and service level agreements and by external contractors who provide either partial services in support of an in-house team or the whole internal audit service. The standards are organized in two groupings. The organizational standards deal with:12212374OM No.G.25014/48/07/MF.CGA/Insp./390 dated August 22, 2007; No.G.25014/80/07-08/MF.CGA/COE/Insp./1275 to 1284 dated March 19, 2008; Financial Management SystemsInternal Control and Auditi.scope of internal audit,ii. independence,iii.audit committees,iv.relationship with management etc. andv.staffing, training and development. The operational standards deal with:i.audit strategy,ii.management of audit assignments,iii.due professional care,iv.reporting andv.quality assurance.7.1.12 These definitions and standards are in general agreement with those provided by the IIA. Thus, internal audit in the government in the UK is designed to provide independent and objective advice to the Accounting Officer (generally the Permanent Secretary in Central Government Departments is designated as the Accounts Officer)76 and is guided by the standards prescribed, covering the whole gamut of activities covered by such audit.7.1.13 In the United States, responsibilities of internal audit carry a strong element of investigation following the enactment of the Inspector General Act of 1978. This Act established an office of Inspector General within each of the selected government establishments in order to create independent and objective units to:771.conduct and supervise audits and investigations relating to the programs and operations of the selected establishments;2.provide leadership and coordination and recommend policies for activities designeda.to promote economy, efficiency, and effectiveness in the administrationof, and b.to prevent and detect fraud and abuse in, such programs and operations;and3.provide a means for keeping the head of the establishment and the Congressfully and currently informed about problems and deficiencies relating to the administration of such programs and operations and the necessity for and progress of corrective action.7.1.14 Thus, investigation into government programmes and prevention and detection of frauds therein are important objectives of these offices. In fact, this Act effectively combines internal audit and investigations into programmes and activities under the authority of the Inspector General of an establishment. The main functions and duties of the Inspector General include:781.providing policy direction for and to conduct, supervise, and coordinate auditsand investigations relating to the programs and operations of the estsablishment within which he/she is functioning;2.reviewing existing and proposed legislation and regulations relating to programsand operations of his/her establishment and to make recommendations regarding their impact on the economy and efficiency in the administration of programs and operations administered or financed by his/her establishment or the prevention and detection of fraud and abuse in such programs and operations;3.recommending policies for, and to conduct, supervise, or coordinate otheractivities carried out or financed by his/her establishment for the purpose of promoting economy and efficiency in the administration of, or preventing and detecting fraud and abuse in, its programs and operations;4.keeping the head of his/her establishment and the Congress fully and currentlyinformed, by means of the reports, concerning fraud and other serious problems, abuses, and deficiencies relating to the administration of programs and operations administered or financed by the parent establishment, to recommend corrective action concerning such problems, abuses, and deficiencies, and to report on the progress made in implementing such corrective action.7.1.15 However, so far as conduct of audit and investigation is concerned, the Inspectors General have to comply with the standards established by the Comptroller General of the United States for audits of Federal establishments, organizations, programs, activities,12412576; Section 477Section 1, Inspector General Act, 1978Strengthening Financial Management SystemsInternal Control and Auditand functions. Further, the Inspectors General also have to pay regard to the activities of the Comptroller General of the United States so that there is no duplication and effective coordination and cooperation is achieved. With the objective of increasing the number of agencies with statutory IGs, the IG Act has been amended and there are now 67 statutory IGs.797.1.16 Thus, international best practices suggest that internal audit units, although being part of their respective organizations, are designed to provide independent assessment of government financial operations and programmes and prevent and identify frauds. The overall objective is to assist the management in improving performance and increasing efficiency and reducing risk. It is evident that the present situation in India is not in harmony with international best practices.7.1.17 In order to benchmark the status of internal audit in the Union Government and determination of roadmap for its improvement, the Comptroller and Auditor General of India constituted a Task Force on 17 July, 2006 at the request of the Ministry of Finance, Department of Expenditure.80 Its recommendations are discussed in paragraph 7.3.7.2 Weaknesses of the Present System of Internal Audit7.2.1 The existing internal audit set-up in Government of India has been described briefly in Chapter 3. The CAG, in their Reports, also discuss the status and functioning of internal controls (including internal audit). Thus, in their Report (No. 12 of 2006) on Union Government, they have commented on internal audit in some of the Union Ministries in the following manner.i.Deptt. of Health (Ministry of Health and Family Welfare): The internalaudit of the Department of Health (DoH) was conducted by the internal audit wing of the Ministry of Health and Family Welfare under the administrative control of the Chief Controller of Accounts. A test check of the internal audit wing of DoH revealed the following deficiencies:a.Training of Internal Audit Staff: Specific training programme for upgradingthe skills of the staff was not conducted to enable efficient checking of various aspects of functioning of the Department.b. Internal Audit of Schemes and PSUs: A large number of central and centrally sponsored health programme financed mainly by the Ministry and involving outlays which constituted 70% of plan allocation of DoH were kept out of the purview of internal audit. Audit of PSUs and granteeinstitutions/ autonomous bodies receiving grants loan and advances were kept out of jurisdiction of internal audit, which defeated the purpose of internal audit wing in the Ministry.c.Non-preparation of Audit Plan: No information regarding units plannedto be audited and actually audited during previous years was documented nor any monthly, quarterly or annual audit plans were prepared.d.Lack of response by Auditee Units: The Ministry did not take timelyand effective measures to rectify the deficiencies or to comply with the observations of the internal audit and statutory audit which lead to raising of repeated persistent paras in Inspection Reports (IRs) ultimately rendering a large number of outstanding audit observations. Thus lack of action by the Ministry in attending to internal audit objections made the efforts of internal audit wing ineffective.ii. Department of Information Technology (DoIT), Ministry of Communication and IT: The Civil Accounts Manual provided for setting up of an efficient internal audit wing to ensure accuracy in accounts and efficiency in operation of accounts establishment. Each Ministry/ Department was, therefore, required to draw up a manual of internal audit specifying duties and functions of the wing. Audit examination revealed that DoIT neither prepared an internal audit manual nor established an internal audit wing. The internal audit plans were being prepared in an adhoc manner on case-to-case basis. Out of 37 units, internal audit of six, seven and 29 units was conducted during 2002-03, 2003 04 and 2004-05 respectively. Internal audit of 3 units had not been taken up even once during this period. The internal audit wing could not be established due to shortage of staff and ban on recruitment and the functions of internal audit were being managed by the existing staff.iii. Ministry of Urban Development and Ministry of Urban Employment and Poverty Alleviation : The following observations were made:a.Training of Internal Audit Staff: For an efficient check of various aspectsof functioning of the Department including its budget and accounts with reference to rules and orders, it was essential for the internal audit staff to undergo periodical in-service trainings. No specific training programme for upgrading the skills of the staff was conducted.12612779 on this Task Force is based on a paper furnished to the ARC by NIPFPStrengthening Financial Management SystemsInternal Control and Auditb.Audit Planning: Internal audit had identified 447 units under its auditjurisdiction, which were to be audited annually as provided in the Civil Accounts Manual. However, due to inadequate sanctioned staff strength only 104, 132 and 126 units were audited during 2002-03, 203-04 and 2004-05 respectively. It was also observed that the audit plan was not documented, based on risk perception and the only criteria of selection was the date on which the unit was last audited.c.Internal Audit of Schemes and PSUs: A large number of central sectorand centrally sponsored schemes implemented were financed by the two Ministries and the outlays thereof constituted about 70% of plan allocation. However, these programmes were kept out of the purview of internal audit. The audit of PSUs and grantee institutions/ autonomous bodies was also kept out of the jurisdiction of internal audit. Out of 10 PSUs/ autonomous bodies, only 2 were audited by internal audit during 2004-05.7.2.2 It was also pointed out that the Ministries/Departments neither took any effective action for rectifying the deficiencies nor complied with the observations of internal audit. Therefore, irregularities pointed out by the Internal Audit Wing persisted.7.2.3 The above observation of the C&AG on the functioning of Internal Audit indicates that there are serious deficiencies in the existing internal audit system making it inadequate and ineffective. The internal audit guidelines are outdated and there are no manuals in many cases. There are also no prescribed internal auditing standards. Because of the acknowledged problem of under-resourcing of the internal audit service and shortage of manpower, including that of qualified professional staff, internal audit is not being conducted in many departments. The limited staff of the internal audit is also sometimes diverted for accounting and budgeting purposes. In cases where internal audits have been conducted, there is often lack of response to their reports by auditee units. As a result action is not taken to rectify the deficiencies and irregularities and the deficiencies pointed out persist. A large number of Central and State scheme and programmes as well as Public Sector Undertakings and Autonomous Bodies have also been kept out of the purview of internal audit. At the supervisory level, there is no segregation of duties relating to internal audit and other accounting functions. The reports of internal audit are of a routine nature. It is largely a faultfinding exercise with no positive recommendations. Extremely low priority is accorded to internal audit and to resource allocation for internal audit both in terms of manpower and finances.7.3 The Task Force on Internal Audit7.3.1 The Comptroller and Auditor General of India had constituted a task force at the request of the Ministry of Finance in July 2006 for benchmarking the status of internal audit in the Union Government. The task force had issued a questionnaire to 15 Ministries covering various aspects of internal audit.81 Some Ministries considered that the purpose, authority and responsibility of internal audit had not been formally defined in a charter and that it needed to be done to enable internal audit to play a constructive role as an aid to management and function as a tool for decision-making. The other issues that emerged from the responses were as follows:i.Direct supervision is not being done regularly as a part of quality assurancetechniques. Practices such as independent working paper review, audit client feedback and peer review are not prevalent. Assurance memos’ are not adopted as an institutional mechanism and standards are lax.ii.The practice of communicating all the reports of internal audit to the topmanagement i.e. the Secretary is generally not followed.iii. In some cases, the internal auditors are expected to function as internal advisers on financial matters and even on operational matters. Internal audit is also involved in pre-payment checking and other non-audit executive functions such as budget preparation, pre-audit and revenue collection. This dilutes the independence of internal audit.iv.Risk areas such as unauthorized access to information systems, threats of lawsuit,adverse environmental impact, third party risks, fiduciary risks, etc. are not factored in by internal audit.v.The practice of developing a risk assessment model and taking managementinputs into account during planning are not prevalent.vi.Field audit techniques such as statistical sampling, process reviews, analyticalcomparisons and physical inspections are not used regularly. Even transaction testing is not as widely prevalent as it should be.vii. The scope of financial audit appears to be limited. Even in areas like adequacy of controls, accuracy, reliability and completeness of reports, usefulness of reports, and impact of changes in policies, etc. most of the respondents have not indicated whether these are covered by internal audit. Similarly, in the12812981Source: Paper furnished to the Commission by Shri I.P.SinghStrengthening Financial Management SystemsInternal Control and Auditcase of operational activities, most respondents have not given any indication whether important areas such as management system of controls, purchase agreements, safeguarding of assets, procurements, etc. are covered by internal audit.viii. Despite large-scale computerization, very few respondents have indicated whether IT applications are audited by internal audit.ix. Collaboration with external auditors in terms of sharing of audit plans and reports is completely absent. Joint annual planning/ risk assessment sessions are not held.x.Though there is a mechanism for the disposal of internal reports, there is no enforcement mechanism in case of non-compliance. There is no time-bound mechanism for enforcing accountability. There is no practice of conducting follow-up tests for examining and implementing corrective action.xi.In most cases, the final internal audit report does not incorporate a certificate indicating the status as determined by the results of internal audit.xii. Data extraction and analysis is mostly manual. The use of desktop software such as spread sheets/ database or packages such as ACL, IDEA, etc. is rare.xiii. The respondents expressed a need for capacity building in terms of trained personnel and constitution of multi-disciplinary teams.xiv. A need for broadening of scope and greater commitment from top management was felt necessary.xv. There was a need to develop Internal Auditing Standards consistent with international standards.7.3.2 After making a detailed study of the present internal audit system, the Task Force observed the following:i.Restricted mandate has resulted in non-evaluation of risk associated with various activities of the Ministries/Departments. PSUs and autonomous bodies have been kept outside the purview of internal audit thus further diluting its usefulness and effectiveness.ii.No standards have been evolved for internal audit. There was no segregation of duties especially at supervisory levels between those who are responsible for internal audit and those responsible for pre-audit, disbursement and accounting functions. The internal audit set-up also did not report directly to the chief executive in any of the organizations. For example, in the Department of Telecommunications, internal audit functions and accounting functions were not segregated at supervisory levels. In the Ministry of Defence, while there was segregation of duties in respect of personnel engaged in internal audit up to the supervisory level, they reported to Controllers of Defence Accounts, who are responsible for other functions also. The inspection wing of the Railways, both on the revenue as well as expenditure side, functioned under the concerned FA&CAO, who was also responsible for accounting and pre-audit functions.iii.Independence is hampered in two ways. First, in the Civil Ministries, theoversight of internal audit vested with the Chief Controllers of Accounts, who were also responsible for accounting and payment functions. In Defence, it is the Chief Controller/Controller of Defence Accounts, who are responsible for both payment functions and internal audit. This means that internal audit did not have the required independence for its effective functioning. An independent internal audit should be able to look into payments made after approval of the Controller of Accounts, at least from the propriety angle. Second, as per the revised mandate, the Financial Advisers are enjoined to `review the progress of internal audit’. This has resulted in the (Chief) Controller of Accounts who is in-charge of internal audit being put under the administrative control of the FA. This has resulted in compromising the intended independence of internal auditing functions.7.3.3 Based on these observations and after examination of international best practices, the Task Force felt that the Inspector General model of the U.S.A. (already described above), with appropriate modifications is the most suitable for effective internal audit. The main advantage of the IG model is that it can be used to revamp the structure of internal audit into a single authority responsible for both internal audit and investigation, so that audit can be focused on high risk areas. As opposed to external audit, internal audit can be done on a continuous basis as soon as the transactions take place. It is also in a much better position to do the risk analysis because of its familiarity with the systems and procedures in a particular department and as soon audit indicates likely fraud or serious irregularity, investigation could follow immediately.130131Strengthening Financial Management SystemsInternal Control and Audit7.3.4 In other words, the Accounts Departments should confine themselves to maintenance of accounts, disbursement of payments and providing local financial advice to field level officers. Further, internal audit functions should not be combined with financial advice. Accordingly, the Integrated Financial Adviser should not be involved in management and control of internal audit.7.3.5 However, the Task Force felt that it would be difficult to implement the IG model immediately. Consequently, in the interim period, it recommended setting up of an Apex Board to prescribe internal audit standards and processes across jurisdictions. This ‘Board of Internal Audit’ (BIA) should comprise of Controller General of Accounts, Controller General of Defence Accounts, Financial Commissioner, Railways and Member (Finance) Telecommunications. Eventually under a proper mandate through a specific statute or cabinet resolution, internal audit in each ministry/department should be established as an entity directly reporting to the Secretary of the department/ministry, and becoming exclusively responsible for internal audit activities.7.3.6 The Commission has examined this issue. It is of the view that if internal audit has to function independently of both Finance and Accounts, the concept of a Board of Internal Audit (BIA) consisting of ‘Controller General of Accounts, Controller General of Defence Accounts, Financial Commissioner (Railways), Member Finance Telecommunication for “oversight of internal audit in Government of India” and for prescribing standards, even for an interim period, is not the right solution. In fact, the standards for internal audit should be prescribed by the C & AG of India, as is the case in the US (the Inspector General Act of 1978). As has been mentioned earlier, even the IG Act did not establish the Office of Inspector General in each and every government organization at one go. The Commission is of the view that an Office of Chief Internal Auditor should be established in select government Minstries/Departments dealing with major governmental programmes such as those under the ‘Bharat Nirman’ initiative. Its duties and functions and independence should be provided under a statute. These Chief Internal Auditors should be directly responsible to the Secretary of the concerned Ministry/department. As provided in the IG Act in the US, the statute should also contain provisions regarding ensuring that there is no duplication of work and maintenance of proper coordination with the C&AG. The functioning and effectiveness of this new system may be examined and a cost benefit analysis done after allowing a suitable period of operation. Based on the outcomes of this examination, such offices may be instituted in other Ministries/departments/organisations. The personnel for these offices may be inducted from existing accounts officers and given proper training. However, given the magnitude of the task of internal audit, the norms for using outside auditors may also be provided. The Commission is also of the view thatinternal audit should not concern itself with investigation of cases where irregularities are unearthed during audit. These may be dealt with by appropriate agencies created for this purpose. In fact, the Commission has already recommended the formation of a specialised agency to deal with serious frauds in its Fourth Report entitled ‘Ethics in Governance’.7.4 Audit Committees in Departments7.4.1 Presently, Audit Committees have been set up in various Ministries/Departments to review the action taken on inspection reports and their speedy settlement. They are normally chaired by the Secretary or the Head of Department and include senior officers of the concerned Department and Finance. However, the performance of these Committees has not been satisfactory and they have been generally ineffective.7.4.2 The Commission is of the view that to effectively coordinate Audit plans in the department with the internal audit structure on the one hand and external audit on the other, there should be an Audit Committee in each Ministry/Department. However, in order to make it independent and effective, its structure needs to be reorganised. Thus, its Chairperson should be a person of eminence in public life and should be appointed by the Minister in charge of the Ministry/department. It should have two more members with expertise in matters of audit and should not be from the government. The Audit Committee should have an independent status and deal with matters related to both internal and external audit. All Departments should be duty bound to furnish information as and when required by this Committee.7.5 Recommendationsa.An Office of the Chief Internal Auditor (CIA) should be established in select Ministries/departments to carry out the functions related to internal audit. Its independence, duties, functions, mechanism of coordination with the CAG etc. should be provided by a statute.b. CIAs should be directly responsible to the Secretary of the Department.c.In the initial stages, personnel may be inducted from existing accounts cadres. Norms for recruitment and utilizing private sector expertise in select tasks may also be devised. Capacity building needs for proper functioning of this Office should be identified in advance.132133Strengthening Financial Management SystemsInternal Control and Audit7.6 Integrated Financial Adviser7.6.1 The Ministries in the Government of India had an internal financial adviser prior to 1975, who was incharge of their Budget and Accounts. The Internal Financial Adviser was required to be consulted in all cases of exercise of delegated financial powers. There was also an ‘Associate’ Financial Adviser based in the Department of Expenditure who was required to be consulted in matters following outside the delegated field. In 1975, the question whether the functions of the ‘Associate’ financial adviser and the Internal Financial Adviser could, with advantage be integrated in a single official forming part of the administrative Ministry was considered. It was felt that combining the two functions in a single official would enable him/her to play a more effective and constructive role in the developmental activities in the Ministry and provide better financial expertise in assisting the Secretary of the administrative Ministry and other senior officers in the planning, programming, budgeting, monitoring and evaluation functions of the Ministry. Therefore, a scheme of Integrated Financial Adviser was drawn up and implemented in 1975 (vide O.M. F.No.10(29)-E.Coord/73 dated 6.10.1075). The Integrated Financial Adviser was responsible both to the administrative Ministry and to the Ministry of Finance.7.6.2 The entire scheme of the Integrated Financial Adviser was reviewed in 2006 in the background of India emerging as one of the fastest growing economies of the world and the last two decades witnessing major reforms in the monetary and fiscal management of the country. The overarching concept in re-defining the charter for Financial Advisers was that they are meant to assist in the achievement of objectives/goals of the respective administrative Ministry with due financial prudence and to ensure that monies allocated are spent on time to achieve the intended outcomes. It was thought that the more complex responsibilities envisaged for FAs must be accompanied by corresponding authority and capacity. Section 2 of the OM of Ministry of Finance dated 1.6.2006 states – “The role of Financial Adviser is now conceived to be akin to the role of Chief Finance Officer in a corporate structure with specific responsibilities for ensuring fiscal prudence and sound financial management.” The duties and responsibilities of the FAs have been enumerated in the DFPR. Rule 64 of the General Financial Rules designate the Secretary of the Ministry/ Department as the Chief Accounting Authority. The role of the Chief Accounting Authority as indicated in the GFR is as follows:?be responsible and accountable for financial management of his Ministry or department;?be responsible for the effective, efficient, economical and transparent use of resources of the Ministry or Department in achieving stated project objectives of that Ministry or Department, while complying with performance standards;?be responsible for preparation of expenditures and other statements relating to his Ministry of Department as required by regulations, guidelines or directives issued by Ministry of Finance;?shall ensure that his Ministry of Department maintains full and proper records of financial transactions and adopts systems and procedures that will at all times afford internal controls;?shall ensure his Ministry or Department follows the Government procurement procedure for execution of works, as well as procurement of services and supplies, and implements it in a fair, equitable, transparent, competitive and cost effective manners;d. The modalities for ensuring non-duplication of work vis-à-vis the C&AG should be formalized. This should be aimed at assisting the C&AG in concentrating on carrying out specialized audit/tasks.e.Standards for internal audit should be prescribed by the Office of theC&AG.f.The Accounting functions should be completely separated from InternalAudit.g. The functioning and effectiveness of this new system may be examined after allowing a suitable period of operation. Based on the results of this examination, such offices may also be instituted in other Ministries/ departments/organisations.h. An Audit Committee should be constituted in each Ministry/Department. It should consist of a Chairperson and two members to be appointed by the Minister in charge of that Ministry/Department. The Chairperson should be a person of eminence in public life. The two members should be from outside the government. The Audit Committee should look after matters related to both internal and external audit including implementation of their recommendations and report annually to the respective Departmentally related Standing Committee of Parliament.134135Strengthening Financial Management SystemsInternal Control and Audit?shall take effective and appropriate steps to ensure his Ministry or Department:a.collects all moneys due to the Governments andb.avoids unauthorized, irregular and wasteful expenditure. 7.6.3 The duties and responsibilities of the IFAs have been enumerated in the DFPR. Someof the tasks for which IFAs would be responsible for are as follows:i.Budget formulation:ii.Outcome Budgetiii. Performance Budgetiv. FRBM related tasksv.Expenditure and cash managementvi. Project/programme formulation, appraisal, monitoring and evaluationvii. Screening of proposalsviii. Leveraging of non-budgetary resources for sectoral developmentix.Non-tax receiptsx.Tax Expenditurexi.Monitoring of assets and liabilitiesxii. Accounts and Auditxiii. Procurement and contractsxiv. Financial Management Systemsxv. Nominee Director on Boards of Public Sector Undertakingxvi. Use of technology7.6.4 As a consequence of the OM dated 1.6.2006 and GFR 64, the Commission is ofthe view that there can be no room for doubt that the responsibility of FA as the ChiefFinancial Officer of the Ministry or Department should be to the Secretary of the Ministry/ Department and the role of the FA would be to support the Secretary of the Ministry in discharging the responsibility for economical, efficient and effective use of resources, effective internal controls and avoidance of irregular and wasteful expenditure. The Commission believes that it is important for the Secretaries of the concerned departments as well as the Finance Ministry to recognize this and to discharge their responsibilities accordingly so that the concept of dual accountability of the FA to the administrative Ministry as well as to the Ministry of Finance is dispensed. At the same time it is essential that only officers with sufficient experience, knowledge and exposure to modern financial management systems are posted as Financial Advisers so that they are able to effectively discharge the responsibilities of a Chief Financial Officer.7.6.5 Recommendation:a.The role of the Financial Adviser as the Chief Finance Officer of the Ministry who is responsible and accountable to the Secretary of the Ministry/ Department should be recognized and the trend of dual accountability should be done away with.b. Officers with sufficient training and experience in modern financial management systems should be posted as Financial Advisers in the Ministries/Departments.1361378 EXTERNAL AUDIT AND PARLIAMENTARY CONTROL82Internal Control and Audit8.2 The Comptroller and Auditor General of India8.2.1 As stated in the earlier chapters, the Comptroller and Auditor General of India (CAG) derives his position and authority in relation to the external audit of expenditure and receipts of both the Union Government and the State Governments from the Constitution of India. The duties and powers of the CAG are enshrined in Articles 148 to 151 of the Constitution and elaborated under CAG’s (Duties, Powers and Conditions of Service) Act, 1971. The duties entrusted to the CAG fall broadly under two categories viz. (i) compilation and keeping of accounts and entitlement work in selected States under the Articles 149 and 150 of the Constitution and CAG’s DPC Act, 1971, (ii) audit of public entities under Article 151 of the Constitution of India and CAG’s DPC Act, 1971. The CAG also audits Government Companies and Corporations in accordance with the provisions of the Company’s Act read with Section 19 of the CAG’s (DPC) Act, 1971. The Constitution prescribes exhaustive safeguards for the independent functioning of CAG like fixed non-renewable term, full access to information, right to table the reports in the Parliament/ Legislature; power to determine the nature and extent of audit checks and to decide what should be included in the Audit Reports.8.2.2 As per the Auditing Standards of the CAG, the purpose of Public Audit is to safeguard the financial interests of the Union/ States and to promote accountability and sound financial management practices. As per performance report of IA&AD (2005-06) the vision is:“To promote excellence in public sector audit and accounting services towards improving the quality of governance”.The mission is:“To enhance accountability of the executive to the Parliament and State Legislatures by carrying out audits in the public sector and providing accounting services in the States in accordance with the Constitution of India and laws as well as best international practices. Where entrusted, to provide technical guidance and support to local bodies including Panchayati Raj Institutions to enhance their accountability.”8.3 Types of Audit8.3.1 The role of audit in India has been constantly evolving. Initially, in the pre-Independence period, audit was an integral organ of the Government keeping track of its8.1 Importance of External Audit8.1.1 External audit has a very important role to play in financial management, because it :(a) provides assurance to Parliament/Legislature that public money has been spent for the purpose for which it was sanctioned by the Parliament/Legislature and that it has not only been properly spent but has achieved the purpose/ outcome for which it was sanctioned.(b) is a crucial element of public accountability as it is an independent external scrutiny. External audit is, therefore, deemed to be a key element in ensuring proper accountability of the executive both to the Parliament/Legislature who provide/ sanction resources and to the community including tax payers, consumers and beneficiaries.(c) is a deterrent against careless decision-making and irresponsible attitude towards public expenditure and project management.(d) is expected to establish public confidence that public money is being properly spent.(e) is expected to help in achieving full value for money. External audit includes examination of the economy, efficiency and effectiveness in the use of public resources including the evaluation of service quality and measurement of performance.(f) adds value not merely by analysing and reporting what has happened after the event but also by looking ahead and identifying lessons to be learnt and by disseminating good practices.13813982Parts of this chapter are extracted from a paper prepared by Mr. I.P. SinghStrengthening Financial Management SystemsExternal Audit and Parliamentary Controlexpenditure and receipts, checking and exercising control over expenditure incurred by various Departments in accordance with rules, norms and instructions. In Independent India, planning and development changed the audit perspective. It was realized that Regularity (Compliance) Audit and Financial Audit were not enough to evaluate the results of expenditure out of public funds. Performance Audit, slowly developed as an attempt to measure the economy, efficiency and effectiveness of the Government expenditure. The following types of audit are undertaken by the CAG:^Performance Audit^Regularity (Financial) Audit^Regularity (Compliance) Audit^IT Audit8.4 Strengths of External Audit in India8.4.1 The external audit by the CAG of India has many inherent strengths.(i) The CAG has a high status enshrined in the Constitution, upheld by long traditions of public audit in India. The institution of audit under the CAG is often regarded as the fourth pillar in the democratic setup and an essential instrument of financial control and accountability.(ii) The Constitution of India ensures independence and autonomy of the public audit.(iii) The expression ‘Audit’ or scope of the audit has not been defined either in the Constitution or the CAG’s DPC Act, 1971. The scope of external audit is, therefore, wide. Audit can respond to changes, reforms, new initiatives, changing patterns of Government activities, international developments in the profession and rising expectations of the stakeholders regarding public accountability.(iv) The CAG has the power to determine the nature and extent of audit and related access to records and to relevant information.(v) The CAG has the inherent right to determine what should be included in the Audit Reports.(vi) There is a requirement that Audit Reports should be tabled in the Parliament/ Legislature and thereafter these become public documents.(vii) There are well documented Audit Manuals and audit guidelines for the Auditors to follow.(viii) Auditing Standards framed on lines of INTOSAI (International Organization of Supreme Audit Institutions) guidelines are available.(xii) There are discussions in the Public Accounts Committee of the Parliament/ Legislature on the important observations contained in the Audit Reports.8.5 Challenges before the External Audit8.5.1 There is no doubt that external audit by the CAG has contributed a great deal in improving the financial management in the country keeping in view the large number of Inspection Reports issued, Audit Reports presented to the Parliament/Legislature and the recoveries made at the instance of audit. In its Reports, Audit raises many important issues relating inter-alia to weak budgetary controls, deficiencies in revenue collection, wastage of public resources, inappropriate accounting, poor returns on investments, diversion of funds, system deficiencies and numerous instances of poor management of public resources, etc.8.5.2 There is, however, a feeling that the impact/effectiveness of external audit could be further enhanced. Some of the factors and perceptions, which are impeding the effectiveness of external audit are given below.(i)Detailed examination of paras included in the Audit Reports by PublicAccounts Committee is barely about 15-20 against the total number of 1000 to 1500 paras included in the CAG’s reports submitted to the Parliament every year. The Ministries/Departments take only those audit paras seriously which come up for discussions in the PAC.(ii) The Ministeries/Departments are supposed to submit Action Taken Notes on the paras not discussed. Such Action taken Notes are largely formal rather than substantive.(iii) In the State Legislatures, there is a huge pendency of Audit Paras to be examined by State PACs. Some of the pending paras are 10 to 20 years old. Delay in examination of matters brought out in the Reports reduces their relevance.140141Strengthening Financial Management SystemsExternal Audit and Parliamentary Control(iv) Thousands of inspection reports containing a huge number of observations are lying unattended in the State and Union Government Departments. Many of these paras have revenue implications. There is hardly any accountability for not taking timely action on audit observations.(v) There is a feeling that the CAG’s reports are sometimes not timely because there is substantial time gap between occurrence of an irregularity and its reporting by Audit. It reviews programmes after these have run for a few years. CAG’s audit itself is post facto and by the time, the process of auditing and reporting is completed, its findings and recommendations may be too late for corrective action. Many transaction audit comments relate to earlier years and not to the year of the Audit Report.(vi) Audit findings are based exclusively on documents and files. Many a times, the situation on the ground is quite different from what is reflected in the papers. There is practically no physical verification to supplement or validate the audit findings.(vii) There is a feeling that external audit reports tend to be unduly negative and their focus is on irregularities and faultfinding. Audit does not always recognize the practical constraints under which the Government/Government Agencies function.^Audit often does not discriminate between errors arising out of bonafide intentions/malafide intentions.^Government Agencies are handicapped by unknown/ unforeseen problems, delays beyond their control and unexpected hurdles. The auditors on the other hand have the benefit of hindsight. Audit as such could act as a dampner against new initiatives and risk taking.(viii) Audit Reports are not always presented in a sufficiently constructive manner, as they often do not delve into the causes of the problems and how to address them.^Findings are at times not focused and are in the nature of scattered observations. A macro level view of the functioning of a department is seldom available.^Audit does not give due credit for good performance.(ix) The relationship between the auditor and auditee is not always harmonious. Generally interaction is confined mainly to the lower levels.^Audit is viewed as a system for policing Government Organisations. The view that audit is a valuable aid to management is normally missing.^There is poor/inadequate response to external audit bordering sometimes on indifference on the part of Government officials, which seriously reduces the effectiveness of audit.(x) Though Audit Committees comprising representatives of audit and government agencies have been set up to review the departmental action taken on inspection reports/recommendation, their functioning is not satisfactory.(xi) There is lack of informed media coverage of CAG’s reports on Union/ State Governments.^The extent of public interface between the auditors and civil society is poor. Inspection reports are not in the public domain.(xii) There is inadequate synergy/coordination between external audit and internal audit.(xiii) External audit does not provide audit assurance on the fair presentation of financial statements of the Government in accordance with stated accounting principles and policies.(xiv) There is rarely any audit of grants and loans to NGOs.The Commission has examined some of these issues in the succeeding paragraphs.^Reporting each year a large number of problems which are already known and which are not being addressed does not add value. Audit must therefore identify systemic problems.142143Strengthening Financial Management SystemsExternal Audit and Parliamentary Control8.6 Accountability to Parliament8.6.1 Accountability of the Executive to the Parliament is ensured through various institutional mechanisms and procedures. The system of Parliamentary financial control works on the basis of inter-dependent functions discharged by different institutions like Ministry of Finance, Comptroller and Auditor General of India (CAG), and the Parliamentary Financial Committees – Committees on Estimates, Public Accounts and Public Undertakings.8.6.2 Committee on Public Accounts (PAC)8.6.2.1 The provisions regarding the constitution and functions of these three Parliamentary Committees are contained in the ‘Rules of Procedure and Conduct of Business in Lok Sabha’. Thus, Rule 308 provides that the Committee on Public Accounts shall examine the ‘accounts showing the appropriation of sums granted by the House for the expenditure of the Government of India, the annual finance accounts of the Government of India and such other accounts laid before the House as the Committee may think fit’. In scrutinizing the Appropriation Accounts of the Government of India and the Report of the C&AG thereon, the Committee is enjoined to satisfy itself on the following:a.that the moneys shown in the accounts as having been disbursed were legally available for, and applicable to, the service or purpose to which they have been applied or charged;b.that the expenditure conforms to the authority which governs it; andc.that every re-appropriation has been made in accordance with the provisions made in this behalf under rules framed by competent authority.8.6.2.2 Apart from the above, the Committee is also empowereda.to examine the statement of accounts showing the income and expenditureof State corporations, trading and manufacturing schemes, concerns and projects together with the balance sheets and statements of profit and loss accounts which the President may have required to be prepared or are prepared under provisions of the statutory rules regulating the financing of a particular corporation, trading or manufacturing scheme or concern or project and the report of the Comptroller and Auditor-General thereon;b.to examine the statement of accounts showing the income and expenditure of autonomous and semi-autonomous bodies, the audit of which may be conducted by the Comptroller and Auditor-General of India either under the directions of the President or by a statute of Parliament; andc.to consider the report of the Comptroller and Auditor-General in cases where the President may have required him to conduct an audit of any receipts or to examine the accounts of stores and stocks.8.6.2.3 Apart from the above, the PAC is also authorized to examine the circumstances leading to expenditure in excess of moneys granted by the House for any service. However, the PAC is excluded from examining any subject which has been allotted to the Committee on Public Undertakings (COPU). The membership of the PAC is limited to 22, with 15 members from the Lok Sabha and 7 from the Rajya Sabha. The PAC has an annual term.8.6.3 Committee on Estimates8.6.3.1 Rule 310 provides that a Committee on Estimates is to be constituted for the ‘examination of such of the estimates as may seem fit to the Committee or are specifically referred to it by the House or the Speaker’. The Committee has the following functions:a.to report what economies, improvements in organisation, efficiency or administrative reform, consistent with the policy underlying the estimates, may be effected;b.to suggest alternative policies in order to bring about efficiency and economy in administration;c.to examine whether the money is well laid out within the limits of the policy implied in the estimates; andd.to suggest the form in which the estimates shall be presented to Parliament.Thus, the mandate of this Committee is very wide; it is empowered to examine not only the form and contents of the estimates, but also their relation to overall efficiency. Further, it is also mandated to suggest alternative policies. However, although the Committee may continue the examination of the Estimates from time to time throughout the financial year and report to the House as its examination proceeds, it has not been made incumbent on the Committee to examine the entire estimates of any one year. Notwithstanding these substantial powers, it has been provided that the Demands for Grants may be finally voted, even when the Committee has made no Report (Rule 312).144145Strengthening Financial Management SystemsExternal Audit and Parliamentary Control8.6.3.2 As in the case of the PAC, this Committee has also been excluded from examining the subjects allotted to the Committee on Public Undertakings. The membership of the Committee is limited to 30, all from the Lok Sabha and it has an annual term.8.6.4 Committee on Public Undertakings (COPU)8.6.4.1 Rule 312A provides for the constitution of a Committee on Public Undertakings for the ‘examination of the working of the public undertakings’ specified in the Fourth Schedule to these Rules. This Fourth Schedule contains a list of all Public Undertakings established by Central Acts. The Committee is empowered to examine the reports and accounts of the public undertakings specified in the Fourth Schedule; examine the reports, if any, of the Comptroller and Auditor-General on the public undertakings; examine, in the context of the autonomy and efficiency of the public undertakings, whether the affairs of the public undertakings are being managed in accordance with sound business principles and prudent commercial practices; and exercise such other functions as allotted to it by the Speaker. However, the Committee is excluded from examining the following:i.matters of major Government policy as distinct from business or commercial functions of the public undertakings;ii.matters of day-to-day administration; andiii. matters for the consideration of which machinery is established by any special statute under which a particular public undertaking is established.The membership of the Committee is limited to 22, with 15 members from the Lok Sabha and 7 from the Rajya Sabha. The Committee has an annual term.8.6.5 Departmentally related Standing Committees838.6.5.1 To facilitate proper examination of different Demands for Grants leading to more meaningful discussions in Parliament, the Rules were amended in 1993 to provide for the constitution and functions of Departmentally related Standing Committees (Rules 331C to 331N). Each of such Committees consist of not more than 31 members, 21 from Lok Sabha and 10 from Rajya Sabha. The term of office of these Committees is one year. These Standing Committees have the following functions:a.to consider the Demands for Grants of the concerned Ministries/Departmentsand make a report on the same to the Houses. (However, it has specificallybeen mentioned that the “report shall not suggest anything of the nature of cut motions”);b.to examine such Bills pertaining to the concerned Ministries/Departments as are referred to the Committee by the Chairman, Rajya Sabha or the Speaker, as the case may be, and make report thereon;c.to consider annual reports of Ministries/Departments and make reports thereon;d.to consider national basic long term policy documents presented to the Houses, if referred to the Committee by the Chairman, Rajya Sabha or the Speaker, as the case may be, and make reports thereon.8.6.5.2 However, the Rules also lay down that these Standing Committees shall not consider the matters of day to day administration of the concerned Ministries/Departments. The general procedure relating to Demands for Grants to be followed by these Standing Committees is as follows:a.after the general discussion on the Budget in the two Houses is over, the Houses shall be adjourned for a fixed period;b.the Committees shall consider the Demands for Grants of the concerned Ministries during the aforesaid period;c.the Committees shall make their report within the period and shall not ask for more time;d.the Demands for Grants shall be considered by the House in the light of the reports of the Committees; ande.there shall be a separate report on the Demands for Grants of each Ministry.8.6.5.3 The Reports of the Committees are generally to be based on broad consensus. However, a Member of a Standing Committee is allowed to give a note of dissent on the report of the Committee which has to be presented to the House along with the report. The Committees are empowered to avail of the expert opinion or the public opinion to make the report. In the end, the report of a Standing Committee on any matter has only persuasive value and is to be treated as ‘considered advice’ given by the Committee (Rule 331N).14614783Sub by L.S. Bn. (II) dated 29-3-1993, para 1921.Strengthening Financial Management SystemsExternal Audit and Parliamentary Control8.7 Parliamentary Control over Budgetary Policies-lessons from different countries8.7.1 The issues involved in enhancing Parliamentary control over budgetary policies and finances need careful consideration. Legislatures in different countries differ substantially with regard to their control over budgetary processes. These may be categorized in the following manner:84Table 8.1: Does the Legislature Generally Approve theBudget as Presented by the Government?(OECD)With no changesWith minor changes onlyWith significant changesAustraliaxAustriaxCanadaxCzech RepublicxDenmarkxFinlandxFrancexGermanyxGreecexHungaryxIcelandxIrelandxItalyxJapanxKoreaxMexicoxThe NetherlandsxNew ZealandxNorwayxPolandxPortugalxSpainxSwedenxSwitzerlandxTurkeyxUnited KingdomxUnited StatesxTotal6174Percent of Total22%63%15%Source : OECD (2002b); Source : Back from the Sidelines? Redefining the Contribution of Legislatures to the Budget Cycle by Joachim Wehner; WBI/37230 Wenherweb.pdffew other legislatures make such significant changes to budget proposals prepared by the executive. The position in different legislatures is presented in Table. 8.1.8.7.3 From the Table, it is evident that most of the legislatures fall in the middle category of budget influencing legislatures (approving the budget proposed by the Government with only minor changes). Legislatures which do not exercise any significant influence on budget policy are basically the Westminster type Parliaments where any successful amendment to the budget is considered a vote of no confidence that would prompt the resignation of the Government.858.7.4 However, even in the Westminster model changes have been incorporated leading to substantial presentation of information on the physical framework ahead of the tabling of the budget thereby generating more parliamentary debate. In fact, it has also been argued that in spite of limitations on amendment activity, parliamentary control over the budget can be enhanced substantially. This can be done through establishing systems which lead to parliamentary consultation on medium term budget policy, thereby diminishing the need for making amendments to the budget. Secondly, as expenditure related to plans/ programmes take place on a continuous basis, parliament has sufficient opportunities to indulge in analysis of implementation of these plans/programmes and influencing subsequent budgetary allocations.8.7.5 Thus, there are two ways of increasing parliamentary control over the budgetary process; if the legislature has to involve itself in decisions involving allocations, it will have to indulge in ex ante scrutiny during the accrual stage of the budgetary process; on the other hand, if it has to influence the operational efficiency it will have to vigorously conduct ex post scrutiny on the basis of audit findings after budget implementation. As mentioned earlier, the US Congress follows an ex ante process while the Westminster Parliaments follow the ex post process. However, there are countries where both the functions are blended in a single committee. Thus, in the German Bundestag, the Budget Committee both approves the annual budget and later considers audit results.86 Different parliamentary powers to amend the budget are mentioned in Table 8.2.Table 8.2:87 Parliamentary Powers to Amend the BudgetRightsNumber of countriesUnlimited powers to amend the budget32Reductions of existing items only17May reduce expenditure, but increase only with4permission of government4Increases must be balanced with commensurate cuts elsewhere13i.‘Budget making legislatures’have the capacity to amend or reject the budget proposal of the executive, and the capacity to formulate and substitute a budget of their own.ii. ‘Budgetinfluencinglegislatures’ have the capacity to amend or reject the budget proposal of the executive, but lack the capacity to formulate and substitute a budget of their own.iii. ‘Legislatures with little or no budgetary effect’ lack the capacity to amend or reject the budget proposal of the executive, and to formulate and substitute a budget of their own. They confine themselves to assenting to the budget as it is placed before them.8.7.2 For example, the United States Congress sometimes functions as a budget making legislature. In certain years the presidential budget suggestion is pronounced as ‘dead on arrival’ and Congress proceeds to independently define its own budget policy. However, only a14814984Source: ‘Back from the Sidelines? Redefining the Contribution of Legislatures to the Budget Cycle’ by Joachim Wehner; (adapted from Norton (1993:85ibidTable 4.1); Wenherweb.pdf86ibid87ibidStrengthening Financial Management SystemsExternal Audit and Parliamentary Control8.7.6 Even where committees deliberate over the budget, there are wide variations. Different committee systems prevalent in the OECD countries are described in Table 8.3: 888.7.7 As mentioned earlier, in case of the Indian Parliament, the Departmentally related Standing Committees are prevented from making any suggestions which could be construed as a ‘cut motion’. Even in the Australian Senate, while the committees deliberate on the budget, the Report to the House only mentions issues of concern. Further, in the House of Representatives, there is no committee stage for the budget.898.7.8 The Commission has considered these diverse scenarios and is of the view that the present system need not be tinkered with. The reforms suggested with regard to budgetary processes and programme based outcome budget would provide succour to ex-ante strengthening of the budgetary process. As far as the ex-post processes are concerned, these are discussed below.8.8 Public Accounts Committee and CAG8.8.1 The Audit Reports of the CAG upon their presentation to the Parliament/ Legislature stand referred suo-moto to the Public Accounts Committee (PAC) for all matters except the Reports on the commercial undertakings, which stand referred to the Committee on Public Undertakings (COPU) of the Parliament/ Legislature.8.8.2 The Reports of the CAG on the Union Government referred to the PAC contain about 1000-1500 paragraphs and performance audit reports every year. Out of these, the PAC has been selecting for detailed examination about 25-30 paragraphs, but has been able to discuss, with the concened Ministries/Departments, only between 10 and 15 paragraphs out of those selected for detailed examination. This is despite the fact that successive PACs have tried their best to discuss as many paragraphs as possible.8.8.3 Hon’ble Speaker, Lok Sabha at a seminar organized by CAG’s office on 22nd July 2005, made some suggestions in this regard.“Many PACs including the PAC of the Parliament have setup working groups and sub-committees to deal with audit paras that cannot be considered in detail by the full committee. Ways must be found to strengthen the working of these sub-committees or working groups. The sub-committees should be empowered to deal with subjects referred to them by the main committee in a conclusive manner after approval of the Chairman of PAC and allowed to record evidence of the executive. Their recommendations should be approved by Chairman and endorsed by other members by circulation.”8.8.4 He also suggested for consideration whether sub-committees particularly those of the PAC could be constituted department-wise for major departments like Defence, Railways at the Centre or the PWD in the States. He further suggested for consideration the need for a separate committee for Direct Taxes, Indirect Taxes and Non-tax Revenues as the Receipt Audit Reports of the CAG have direct revenue implications for the Government. It may also be debated whether formation of working groups or sub-committees on these lines to examine the paragraphs finally is possible within the existing strength of PAC and COPU.Rights not specified15Total81Source: Adapted from PIU (1986 : Table 38A)Table 8.2: Parliamentary Powers to Amend the BudgetRightsNumber of mittee structureNumber ofPercentagecountriesof totalBudget committee decides1947.5%Budget committee decides; non-binding615%input from sectoral committeesBudget committee decides totals; sectoral717.5%committees decides departmental budgetsNo budget committees; sectoral committees25%deal with departmental spendingOther615%Total40100%Source: OECD (2003), httpL//ocde.Table 8.3: What Best Describes the Committee Structure for Dealing with the Budget?15015188Source: Good Governance, Parliamentary Oversight & Financial Accountability; Rick Stapenhurst, World Bank Institute; 89Source: The Role of Parliament in the Budget Process; Warren Krafchik and Joachim WehnerStrengthening Financial Management SystemsExternal Audit and Parliamentary Control8.8.5 In order to strengthen parliamentary control over the executive it is necessary to devise a system which envisages that PAC examines all the reports submitted by the CAG and submits its recommendations to the Legislature within a stipulated time limit. It has already been observed that this is possible only if the volume of CAG’s Audit reports is reduced and their quality and content improved.8.8.6 The Commission is of the view that in order to further strengthen the Parliamentary oversight mechanism, as many audit paras as possible may be examined by Parliamentary Committees. The PAC and COPU may like to decide in the beginning of the year itself, which paras would be examined by them and which by their sub-committees (to be constituted for the purpose). They may consider assigning other paras for examination to the respective Departmentally related Standing Committees. The objective would be to complete the examination of all paras within one year. In exceptional cases, Chairman, PAC or COPU may authorize keeping a para alive for more than one year. Thus, the PAC and COPU and their sub-committees and the Departmentally related Standing Committees (and their sub-committees) would be able to complete the examination of all paras within a year. If still there are pendencies, it is for the consideration of the PAC and COPU to refer such paras to the Departmental Audit Committees (recommended vide paragraph 7.5 of this Report).8.9 Relationship between Audit and the Government/Government Agencies8.9.1 Due to the very nature of its role as watchdog, independent audit is sometimes perceived by government agencies and auditees as a mere fault finding exercise. This perception has, on occasions, led to lack of adequate cooperation by the auditees which results in tardy repsonse to audit observations. In such cases, external audit does not have the desired impact.8.9.2 There is need for better understanding and synergy between government agencies and audit so that there is proper accountability and timely oversight and consequently better audit impact. The information provided by the external audit is useful only if the executive acts upon it. How to encourage a more collaborative approach to public audit is the real challenge. This calls for a more positive approach by both auditors and auditees.8.9.3 Another area of concern is that audit is often perceived by the auditees as discouragement to innovate, change and reform. This is because departments associate risk taking or innovations with the increased possibility of something going wrong leading to financial loss and consequently their censure by the audit. Because of this apprehension officers prefer to play it safe and continue with the traditional time tested methods of functioning even when need for innovations or reforms is obvious because unlike audit, they do not have the benefit of hindsight. Therefore, before indicting an officer for an innovation or reform which may have caused a financial loss, the audit should carefully examine whether the department had taken adequate steps to identify the risks and planned suitably before carrying out the reforms/innovations. If this had been done and no malafide is indicated then audit should not be hasty to draw adverse conclusions.8.9.4 There is a need for deepening and enhancing the level of interaction between audit and the executive at senior levels. They should discuss important issues, recommendations and what needs to be done arising out of audit. Audit should not remain isolated; While independence of audit is crucial to objectivity, it should not mean isolation. There should be increasing coordination with the executive. There should be a quarterly communication from the Accountant General to each Administrative Secretary informing the latter of significant points and systems deficiencies noticed during audit inspections. Additionally there should be quarterly meetings relating to pending inspection reports, audit observations8.8.7 Recommendationa.In order to further strengthen the Parliamentary oversight mechanism,as many audit paras as possible need to be examined by Parliamentary Committees. To facilitate this, the PAC and COPU may decide in the beginning of the year itself, which paras would be examined by them and which by their sub-committees (to be constituted for the purpose). They may consider assigning other paras to the respective Departmentally related Standing Committees. The objective would be to complete the examination of all paras within one year. In exceptional cases, Chairman, PAC/COPU may authorize keeping a para alive for more than one year. If still some paras are pending, it is for the consideration of the PAC and COPU to refer these to the Departmental Audit Committees (recommended vide paragraph 7.5 of this Report).152153Strengthening Financial Management SystemsExternal Audit and Parliamentary Controlc.There is need for increasing interaction as well as coordination betweenthe executive and the audit, including at senior levels. These should include regular and meaningful meetings where important issues could be discussed and conclusions reached on what needs to be done arising out of the recommendations made by the audit. There should also be quarterly communication from the Accountant General to Administrative Secretaries informing them about significant points and areas of improvement noted by Audit during their inspections.8.9.7 Recommendationsa. There is need for better understanding and synergy between the audit and auditees for enhanced public accountability and consequently better audit impact.b. There should be balanced reporting by the audit. Audit reports should not focus on criticism alone but contain a fair assessment or evaluation, which would mean that good performance is also acknowledged.154and clearance during the quarter and various issues of common interest including audit recommendations for improvements. Audit should consider their views with an open mind and appreciate their constraints. A concern has been that the public audit reporting is unduly negative. While it is true that audit has a major role in ensuring accountability, this does not mean a negative or only faultfinding approach.8.9.5 The Commission is of the view that there is paramount need to sensitize the executive towards the role and findings of audit so that the two sides realize that they are not working at cross purposes but for the same objective of delivery of the programmes in a manner which leads to achievement of objectives, outcomes and also promotes accountability. Further, the Auditing Standards require Auditors to be careful to avoid offering implied criticism in cases where although the original anticipations have not been realized, there are no strong indications, significant or substantive of inefficiency or waste on the part of the administrative authorities.8.9.6 Audit organizations in all the developed countries have been moving towards positivism while still maintaining their key role. Everybody is sensitive to criticism but amenable to reason and logic and ready to take corrective action. Rather than focus exclusively on irregularities, external audit should conduct studies and evaluation of systems e.g. accounting, financial management, internal control, risk management, contracting, procurement, etc. and offer constructive suggestions for strengthening Government operations and reforms oriented towards best practices. Audit should look at itself as an agency for change and improvement rather than primarily detection of irregularities.8.10 Timeliness of Audit8.10.1 External Audit often reviews programmes after these have run for a few years. CAG’s audit itself is post facto and by the time, the process of auditing and reporting is completed, its findings and recommendations may be late for corrective action.8.10.2 Concurrent Audit8.10.2.1 While performance audit is mainly a posteriori exercise, there is no bar to conduct performance audit of programmes concurrently, or at the initial stages of the implementation of the programmes, in cases where the risk and materiality are perceived as being significant. Concurrent performance audit of long-term on-going schemes should be undertaken at appropriate intervals. Accountants General are expected to be aware of issues where concurrent performance audit or audit at the initial stages of the programme may be desirable. The strategic plan should contain a list of recently introduced programmes and selection of subjects for audit in their initial stage should be made in the light of expected value addition.8.10.3 Major Policy Shift Issues8.10.3.1 Accountants General and the Supreme Audit Institution (SAI) should be alive to major shifts in the policies and programmes of the entity and the consequential new public sector programmes and select critical cutting-edge subjects for performance audit in the context of policy changes. Performance audit of such sunrise issues are likely to contribute value to the implementation of the policy shifts. The performance audit of155Strengthening Financial Management SystemsExternal Audit and Parliamentary Controlsuch subjects could be undertaken singly or in generic form when they are at the early stage of their implementation. Some examples of such subjects are sale of assets, private finance initiative, public-private sector partnership, introduction of structural changes, major changes in industrial or export-import policy, etc.8.10.3.2 With e-governance and Internet, apart from adjusting to the momentous speed of communications, Government is gearing up to generate responses to various issues and communications at a pace much faster than before. This will require audit to also review its procedures to reduce/ compress the time lag between the occurrence of an event and its reporting.8.10.3.3 External audit has to spend considerable time on the audit of transactions because internal audit arrangements in the State Government and in many Union Government Departments are either weak or non-existent. Transaction audit is basically the job of internal auditors. External audit is supposed to do only sample checking. If internal audit is strengthened, CAG’s audit will save considerable time spent on extensive audit of transactions (The Commission has suggested strengthening of internal audit in Chapter 7.8.10.4 Recommendations:a. External audit needs to be more timely in inspecting and reporting so that their reports can be used for timely corrective action. All audits for the year under review should be completed by 30th of September of the following year. To start with, all Audit Reports may be finalized by 31st December and this date may be gradually advanced.b. IT should be used increasingly and effectively for data collection and analysis.c. Government agencies also need to be more prompt in responding to audit observations and ensure that the remedial and corrective action not only settles the irregularities reported but also addresses the systemic deficiencies.8.11 Inadequate Response to Audit8.11.1 One of the reasons for Audit not having the desired impact is the inadequate response of government agencies. It has been observed that often they do not send replies to draft paras intended for inclusion in Audit Reports or furnish Explanatory Notes on paragraphs finally included in CAG’s Reports. A primary reason for this inadequate response to audit is that there are no significant consequences for non-compliance with financial rules, regulations and procedures laid down by the Government.8.11.2 In respect of the audit reports of CAG, on the recommendation of the PAC the Government of India has prescribed that Ministries/Departments must furnish replies to the draft paragraphs which are forwarded to the Secretaries of the Ministries/Departments demi-officially within 6 weeks. Yet it has been observed that Ministries/Departments often do not furnish their responses to the draft paragraphs within the prescribed time frame. Similar delays have been observed in case of Action Taken Notes on paragraphs included in the reports of CAG. A review of outstanding ATNs on paragraphs included in the Reports of the Comptroller and Auditor General of India, Union Government (Civil, Other Autonomous Bodies and Scientific Departments) as of October 2007 has disclosed that the Ministries/Departments had not submitted remedial ATNs on 169 paragraphs. This is shown in Fig. 8.19015615790Report No. CA 1 of 2008Fig. 8.1 : Summarised Position of Outstanding Action Taken Notes(ATNs, Source: Report No. CA1 of 2008, CAG)8.11.4 The Commission feels that the pending paras could be monitored by having a database in each Ministry/ Department of the pending audit paras. The number of audit paras pending in respect of an officer with reasons and adequacy of response to audit should be an input while appraising an officer. This will ensure better response and responsibility for taking appropriate action. Also for persistent default in submitting replies to the audit paras a procedure should be laid down for action against concerned officers.8.11.5 Recommendationa. The pending audit paras should be monitored by having a database on them in each Ministry/Department. In case of persistent default in submitting replies to the audit paras a procedure should be laid down for action against the concerned officer.FINANCIAL MANAGEMENT IN STATE GOVERNMENTS9The Commission has not examined the States’ budgets in detail, but it feels that the weaknesses highlighted earlier and the core principles stated would apply to the financial management systems in the States. Some of the issues which need to be addressed by the State Governments are briefly analysed below.9.1 Integrated Financial Advisers9.1.1 The extent of delegation of financial powers to Departments varies from State to State. It has generally been observed that since this delegation is quite limited, most of the financial proposals get referred to the Finance Department. Some States have created the mechanism of Financial Advisers in some major Departments, but their powers are also rather inadequate. The same compulsion that made the Union Government implement the scheme of Integrated Financial Adviser for assisting administrative ministries in planning, programming and budgeting should now be the reason for State Governments to introduce the system of FA in various departments where FAs would be the representatives of the Finance Department.91 This should be coupled with greater delegation of financial powers to the Departments. But all these need to be preceded by capacity building of the Departments in financial administration.9.2 Multi-year Budgeting9.2.1 Along with the introduction of the FA system, multi-year budgeting would help in bringing about better fiscal discipline and financial management. The present system of budgeting in the States for a year at a time suffers from a number of weaknesses. The most important is that full financial implications of projects, which are to be implemented over a number of years, are not brought out fully. A government decision may entail only a nominal expenditure in year one, but may call for sizable expenditure in the following years. With one year budgeting system, the full implications of incomplete work are not realized. It is, therefore, necessary that State Governments shift to multi-year budgeting and give the estimates of revenue and expenditure for a period of four years in addition to the year which the budget pertains. This should be done on a roll-on basis. This will enable better estimation of the fund requirements of on-going schemes, programmes and projects. It will also ensure realistic budgeting.91Madhav Godbole (2003), Public Accountability and Transparency, Orient Longman, p.231Strengthening Financial Management Systems158159Strengthening Financial Management SystemsFinancial Management in State Government9.2.2 States like Karnataka have implemented the Medium Term Fiscal Plan (MTFP) since 2001-02, a rolling document prepared annually. The MTFP is a medium-term statement of the governments, medium-term fiscal objectives and also provides projection of key fiscal variables for the current year and three subsequent years. Each MTFP also reports performance against targets. The MTFP serves two purposes. First, it helps to put annual budget formulation within the medium-term context. Second, it serves as a communication channel to the people, of government’s fiscal intentions and strategy. Many other states have followed this practice. This needs to be followed by all States. Karnataka was the first state in India to enact a Fiscal Responsibility Act 2003 (FRA), which became the most influential factor in budget making. FRA indicates the fiscal management principles that will guide the state government. These are steps in the right direction.9.3 Realistic Estimates and Proper Assumptions while Preparing Budget9.3.1 There is need to have economic assumptions which are prudent and realistic in order to formulate budget estimates which are accurate and not overly optimistic. At the end of every financial year, the gap between the estimates and the actuals should be analysed so that the underlying economic assumptions could be suitably calibrated for the future.9.4 Avoiding Ad hoc Announcements Token Provisions9.4.1 As stated earlier in the case of Government of India, in States also, in spite of detailed instructions and guidelines in budget manuals, projects and schemes are announced on an ad-hoc basis during visits of high-level functionaries. Such announcements of large sums seriously distort plan allocations and disturb the faithful implementation of schemes already approved under the budget. This could also lead to announcements not being followed by formal approvals thereby resulting in discontent among people and financial indiscipline. The proper method would be to include projects that may be considered absolutely essential at the time of preparing the annual plans and budgets. The practice of announcing projects and schemes on an ad-hoc basis needs to be abandoned.9.4.2 A related practice is to make token provisions in the budget. This is resorted to facilitate announcement of a large number of projects. This can result in spreading limited resources thinly over a large number of projects and starvation of projects already under execution. Cost and time over-runs are consequences of this practice. It is therefore necessary that norms for sanction of projects should be rigidly adhered to.9.5 Skewed Expenditure Pattern9.5.1 As in the case of Union government, the expenditure pattern of the State Governments is also highly skewed with the bulk of expenditure taking place in the last quarter and particularly in the month of March. Government of India has tried to overcome this problem by introducing the Monthly Expenditure Plan (MEP). A similar system should be adopted by the States.9.6 Internal Control9.6.1 The weaknesses of the internal audit system have been brought out by the CAG through various Reports:Andhra Pradesh – Health, Medical and Family Welfare Department – [CAG’s Report (Civil) for the year ending 31st March 2005 on Government of Andhra Pradesh]1.The internal audit in the department was inadequate. The Departmentdid not have any manual on internal audit nor did they prescribe the duties and responsibilities of the internal auditors2.No training was imparted to the staff in internal audit methodology andtechniques as of August 2005.3.Only two AAOs were in position against the sanctioned strength ofthree (without any supporting staff) to cover the entire State with more than 100 subordinate offices and 1703 DDOs and other grant receiving institutions. No supervision was made by the Accounts Officer. This indicated that little importance was given to internal audit.Goa – Police Department – (CAG’s Audit Report on Government of Goa for the year ended 31st March 2005)Internal Audit ArrangementsThe Finance Department specified (August 1996) that in Departments where the post of Accounts Officer/ Senior Accounts Officer exists, the duty of carrying out the internal inspection of the establishment/ Drawing and Disbursement Officers would devolve on the Accounts Officer. It was, however, observed that neither was the internal audit of any unit conducted (2000-2005) nor was a separate internal audit wing within the Department set up.160161Strengthening Financial Management SystemsFinancial Management in State GovernmentJharkhand – Rural Development Department – [CAG’s Audit Report (Civil and Commercial) on the Government of Jharkhand for the year ended 31st March 2005]The Department did not have an internal audit wing. The internal audit wing of the Finance Department was responsible for internal audit of Rural Development Department. It was noticed that Finance Department also had not conducted internal audit of any of the test-checked units.9.6.2 The above observations of the C&AG on the functioning of internal audit in some of the Departments of the Union and State Governments, PSUs and PRIs indicate that there are serious deficiencies in the existing internal audit system. The current internal audit arrangements are inadequate and ineffective. It is not even being conducted in some departments. Internal audit guidelines are outdated and there are no internal audit manuals in many cases, particularly in States. There is an acknowledged problem of under-resourcing of the internal audit service. There is shortage of manpower and often lack of qualified and professional staff, the capacity of staff is inadequate, and supervision is weak. There is lack of response to internal audit reports by auditee units. A large number of internal audit reports and observations remain pending. No effective action is taken to rectify the deficiencies. Because of lack of action on internal audit observations, the irregularities and deficiencies pointed out persist.9.6.3 It is therefore necessary to develop a strategic view of internal audit to move beyond the financial regularity and compliance audit to exert a wider role. In the light of this strategic view, the scope and role of internal audit needs to be redefined. The organization structure of the internal audit should be recast with the internal audit directly reporting to the head of the organization followed up by proper staffing and capacity building of internal audit units. The Commission has suggested constitution of audit committees in respect of Government of India. The same could be considered by the State Governments.9.7 External Audit9.7.1 The Public Accounts Committees in some States have a practice of examining all paragraphs and performance audit reports included in the CAG’s Audit Reports, while others have adopted a more selective approach. In the former case, due to the volume of work involved, the Reports of the CAG are sometimes not discussed for years together, often upto 10-15 years and the arrears keep mounting. The approach of discussing all the paragraphs in the order of the year of their presentation often results in examination of matters as old as 10-20 years many of which may have lost their relevance due to the lapse of time. Inother State Legislatures, where selective approach is adopted, the status on effectiveness is similar to the one in the case of the Central PAC/ COPU discussed above.9.7.2 The CAG had constituted a High Powered Committee under the Chairmanship of Shri S.L. Shakdher, former Chief Election Commissioner in August 1992 to review the status of Audit Reports pending examination by the State Legislatures. The Committee submitted its report in March 1993. Some of the recommendations were:^A selective approach may be adopted by the PACs/ COPUs in all States in regard to taking oral evidence and having detailed discussions with witnesses as at Centre.^The PACs and COPUs in all States may accord priority to the consideration of the latest Audit Report, selecting matters for detailed discussions in such a manner that they can complete scrutiny of that Report within one year.^As regards the clearance of arrears, the PACs/ COPUs may simultaneously take up the outstanding past Audit Reports for selective scrutiny in a phased programme, so that the arrears would be cleared within a period of say two to three years.9.7.3 The implementation of the aforesaid recommendations did result in some improvements but a large number of paras are still pending. As per the status paper of the CAG on the detailed examination of Audit Reports by the State PACs/COPUs, 14,715 paras/reviews were pending for discussion as on 31st March 2006 and some of the paras date back to 1983-84. This would indicate that the examination of CAG paras included in the Reports is still in heavy arrears in almost all States.9.7.4 To overcome the situation, the Legislative Committees may like to adopt a time frame within which they would complete examination of audit reports also and submit their reports to the Legislature. The State Governments may also specify a time frame for the Departments for necessary follow up action on the recommendations of Audit and forwarding of the ATNs for vetting to the Accountant General before their final submission to the State PAC/ COPU. It is also necessary to ensure that all Departments adhere to the prescribed time limits.162163CONCLUSIONSUMMARY OF RECOMMENDATIONSIn this Report on Financial Management, the Commission has examined the issue of reforms in the public financial management system as a part of the overall governance reform. Efforts aimed at improving the efficiency, responsiveness and accountability of Government organizations have to be complemented by reforms in financial management system in order to deliver the desired outcome. In accordance with its terms of reference, the Commission has largely emphasized the expenditure size of public finance in India with particular attention to proper maintenance of accounts, smooth flow of funds and strengthening of internal and external audit mechanisms.Maintaining financial discipline and prudence while simultaneously ensuring prompt and efficient utilization of resources to achieve the goals of different government agencies has to be the underlying theme for all government agencies. Towards this end, accountability needs to shift from compliance with procedures to a much greater focus on results and outcomes. Tools of modern of financial management like information technology and financial information system need to be used to improve accountability combined with accurate budgeting and realistic economic assumptions.In order to reform the financial management system in India, the Commission has suggested adoption of medium term plan/budget framework and alignment of plan, budget and accounts, in order to bring greater synergies between the annual budgets and the five year development plan. A paradigm shift from the traditional bottom up approach to budgeting to a top down technique focusing on broader resource allocations as well as on outcomes rather than processes has also been recommended. This has to be combined with greater operational autonomy to government agencies and decentralization of administrative and financial powers to them in order to improve their efficiency.Any financial management system, howsoever sound, will not be able to deliver the desired outcomes unless there are strong internal and external oversight mechanisms. The Commission has therefore recommended measures for strengthening of both internal and external audit mechanisms.1. (Para 4.5.8) Unrealistic Budget Estimatesa. The assumptions made while formulating estimates must be realistic. At the end of each year the reasons for the gap between the ‘estimates’ and ‘actuals’ must be ascertained and efforts made to minimize them. These assumptions should also be subject to audit.b. The method of formulation of the annual budget by getting details from different organizations/units/agencies and fitting them into a predetermined aggregate amount leads to unrealistic budget estimates. This method should be given up along with the method of budgeting on the basis of ‘analysis of trends’. This should be replaced by a ‘top-down’ method by indicating aggregate limits to expenditure to each organization/agency.c.Internal capacity for making realistic estimates needs to be developed.2. (Para 4.6.5) Delay in Implementation of Projectsa.Projects and schemes should be included in the budget only after detailedconsideration. The norms for formulating the budget should be strictly adhered to in order to avoid making token provisions and spreading resources thinly over a large number of projects/schemes.164165Strengthening Financial Management SystemsSummary of Recommendations3. (Para 4.7.8) Skewed Expenditure Pattern – Rush of Expenditure towards the end of the Financial Yeara. The Modified Cash Management System should be strictly adhered. This System should be extended to all Demands for Grants as soon as possible.4. (Para 4.8.26) Inadequate Adherance to the Multi-year Perspective and Missing Line of Sight between Plan and Budgeta. A High Powered Committee may be constituted to examine and recommend on the need and ways for having medium-term expenditure limits for Ministries/Departments through the Five Year Plans and linking them to annual budgets with carry forward facility.b. In order to bring about clarity, transparency and consolidation, the ways and means for implementing an ‘alignment’ project, similar to that in the UK, may also be examined by the High Powered Committee so constituted.5. (Para 4.11.2) Adhoc Project Announcementsa. The practice of announcing projects and schemes on an ad-hoc basis in budgets and on important National Days, and during visits of dignitaries functionaries to States needs to be stopped. Projects/schemes which are considered absolutely essential may be considered in the annual plans or at the time of mid-term appraisal.6. (Para 4.12.6) Emphasis on Meeting Budgetary Financial Targets rather than on Outputs and Outcomesa. Outcome budgeting is a complex process and a number of steps are involved before it can be attempted with any degree of usefulness. A beginning may be made with proper preparation and training in case of the Flagship Schemes and certain national priorities.7. (Para 4.13.4) Irrational ‘Plan – Non Plan’ Distinction leads to Inefficiency in resource Utilizationa. The Plan versus non-Plan distinction needs to be done away with.8. (Para 5.2.12) Flow of Funds relating to Centrally Sponsored Schemesa. The Controller General of Accounts, in consultation with the C&AG, should lay down the principles for implementing the system of flow of sanctions/ approvals from the Union Ministries/Departments to implementing agencies in the States to facilitate release of fund at the time of payment. After taking into account the available technology and infrastructure for electronic flow of information and funds, especially under the NeGP, and putting in place a new Chart of Accounts, the scheme should be implemented in a time bound manner.9. (Para 5.3.6) Development of Financial Information System,a.A robust financial information system, on the lines of SIAFI of Brazil,needs to be created in the government in a time bound manner. This system should also make accessible to the public, real time data on government expenditure at all levels.10. (Para 5.4.3) Capacity Buildinga.The capacity of individuals and institutions in government needs to beimproved in order to implement reforms in financial management. To facilitate this, a proper programme of training needs to be devised and implemented in a time bound manner.166167Strengthening Financial Management SystemsSummary of Recommendations11. (Para 6.3) Accrual System of Accountingb. CIAs should be directly responsible to the Secretary of the Department.a. A Task Force should be set up to examine the costs and benefits of introducing the accrual system of accounting. This Task Force should also examine its applicability in case of the Appropriation Accounts and Finance Accounts.b. Initially, a few departments/organizations may be identified where tangible benefits could be shown to be derived within 2-3 years by implementing the accrual system of accounting, especially departmental ‘commercial undertakings’.c.The result of this initial implementation may be studied by a committee of experts which would recommend on its further implementation in all departments/organisations at the Union/State level along with exclusions, if any. This may proceed in a phased manner.c.In the initial stages, personnel may be inducted from existing accounts cadres. Norms for recruitment and utilizing private sector expertise in select tasks may also be devised. Capacity building needs for proper functioning of this Office should be identified in advance.d. The modalities for ensuring non-duplication of work vis-à-vis the C&AG should be formalized. This should be aimed at assisting the C&AG in concentrating on carrying out specialized audit/tasks.e.Standards for internal audit should be prescribed by the Office of the C&AG.f.The Accounting functions should be completely separated from Internal Audit.d. Prior to its implementation, training and capacity building needs of the accounting personnel and all stake holders in the decision making process would have to be addressed and a meticulous schedule worked out in line with the road map of implementation.e. Before the new system is adopted, alignment of the plan, budget and accounts, as recommended in this Report elsewhere, needs to be achieved and a viable financial information system needs to be put in place.12. (Para 7.5) Internal Audita.An Office of the Chief Internal Auditor (CIA) should be established in selectMinistries/departments to carry out the functions related to internal audit. Its independence, duties, functions, mechanism of coordination with the CAG etc. should be provided by a statute.g. The functioning and effectiveness of this new system may be examined after allowing a suitable period of operation. Based on the results of this examination, such offices may also be instituted in other Ministries/ departments/organisations.h. An Audit Committee should be constituted in each Ministry/Department. It should consist of a Chairperson and two members to be appointed by the Minister in charge of that Ministry/Department. The Chairperson should be a person of eminence in public life. The two members should be from outside the government. The Audit Committee should look after matters related to both internal and external audit including implementation of their recommendations and report annually to the respective Departmentally related Standing Committee of Parliament.168169Strengthening Financial Management SystemsSummary of Recommendations13. (Para 7.6.5) Integrated Financial Advisera.The role of the Financial Adviser as the Chief Finance Officer of the Ministrywho is responsible and accountable to the Secretary of the Ministry/ Department should be recognized and the trend of dual accountability should be done away with.b.Officers with sufficient training and experience in modern financialmanagement systems should be posted as Financial Advisers in the Ministries/Departments.14. (Para 8.8.7) Accountability to Parliamenta.In order to further strengthen the Parliamentary oversight mechanism,as many audit paras as possible need to be examined by Parliamentary Committees. To facilitate this, the PAC and COPU may decide in the beginning of the year itself, which paras would be examined by them and which by their sub-committees (to be constituted for the purpose). They may consider assigning other paras to the respective Departmentally related Standing Committees. The objective would be to complete the examination of all paras within one year. In exceptional cases, Chairman, PAC/COPU may authorize keeping a para alive for more than one year. If still some paras are pending, it is for the consideration of the PAC and COPU to refer these to the Departmental Audit Committees (recommended vide paragraph 7.5 of this Report).15. (Para 8.9.7) Relationship between Audit and the Government/Government Agenciesa. There is need for better understanding and synergy between the audit and auditees for enhanced public accountability and consequently better audit impact.b. There should be balanced reporting by the audit. Audit reports should not focus on criticism alone but contain a fair assessment or evaluation, which would mean that good performance is also acknowledged.c.There is need for increasing interaction as well as coordination betweenthe executive and the audit, including at senior levels. These should include regular and meaningful meetings where important issues could be discussed and conclusions reached on what needs to be done arising out of the recommendations made by the audit. There should also be quarterly communication from the Accountant General to Administrative Secretaries informing them about significant points and areas of improvement noted by Audit during their inspections.16. (Para 8.10.4) Timeliness of Audita.External audit needs to be more timely in inspecting and reporting sothat their reports can be used for timely corrective action. All audits for the year under review should be completed by 30th of September of the following year. To start with, all Audit Reports may be finalized by 31st December and this date may be gradually advanced.b. IT should be used increasingly and effectively for data collection and analysis.c. Government agencies also need to be more prompt in responding to audit observations and ensure that the remedial and corrective action not only settles the irregularities reported but also addresses the systemic deficiencies.17. (Para 8.11.5) Inadequate Response to Audita. The pending audit paras should be monitored by having a database on them in each Ministry/Department. In case of persistent default in submitting replies to the audit paras a procedure should be laid down for action against the concerned officer.170171Strengthening Financial Management SystemsAnnexure-I(1)Speech of the Chairman, ARCNational Workshop onStrengthening Financial Management Systemsat National Institute of Public Finance and Policy, New Delhi23rd July, 2008The mandate of the Commission is vast. So far the Commission has submitted 8 reports on a range of vital issues. But now the Commission has to address itself to the key issue of how to administer and run the government structure. It has to suggest measures to achieve an efficient and accountable administration for the country. The difficulties inherent in the political economy of reforms cannot, of course, be underestimated. The country has tackled this path well. But a harder climb lies ahead. Given the same political will which has brought about the beginning of the effort and the widening support, the task shall be achievable.Let me start by introducing you to the larger picture that the Administrative Reforms Commission is seeking to bring about through its various reports. In fact the most important trilogy of three reports that Commission shall now be bringing out shall be on:1. Civil services reforms: personnel refurbishment2. Structure of the Government3. Financial management systemsThe Commission would like to introduce a system of greater autonomy coupled with more accountability. For the purpose, it is proposing to recommend a system of executive agencies to be the implementation arm of the Government in its Report on Civil Service Reforms and separation of policy making and implementation of the policies. To bring this about we are suggesting the following steps.Firstly-There should be broad separation of policy making from implementation responsibilities. The ministries should do only policy making. Implementation bodies need to be restructured as Executive Agencies (as done in the UK, Australia, New Zealand, Japan, Sweden, Singapore) by giving them greater operational autonomy and flexibility whileSpeech of Chairman, ARCAnnexure-I(1) (Contd.)making them accountable for what they do. For accountability purposes, the Executive Agencies have to sign annual performance agreements with the departmental ministers, describing the performance targets to be achieved. The Executive Agencies would become directly accountable to the departmental Minister through performance targets that are defined in advance and used as a benchmark for measuring end-of–the–period performance. In return for such ex ante specification of accountability, the Executive Agencies should be given necessary financial autonomy. The heads of the Executive Agencies should be from the Senior Executive Service.We are also proposing to recommend that government servants would be assigned to a domain early in their career, and with the years of experience in the domain shall acquire domain specialization. As suggested by the Surinder Nath Committee there shall be a specific domain dealing with “Public Finance and Financial Management”. Officers shall therefore, once assigned to this domain have specialized knowledge in dealing with financial issues. There shall therefore be no dearth of officers having specialization in the fields of finance to assist the heads of the executive agencies in performing their functions. Once this responsibility has been given to the Heads of the executive agencies it shall be imperative that the requisite amount of financial freedom should be given to him to allow him to achieve the goals that have been set. To enable him to achieve this, a new scheme of financial management and accountability shall have to be spelt out to provide him an enabling environment which is not centralized and is more responsive to his immediate requirements. The present system of line based budgeting, cumbersome processes of reappropriation & demand for supplementaries, all done in a centralized system have to be, to my mind, done away with. In the modern system being envisaged for the future, the authority must have the financial autonomy; and this authority is to be exercised with consistency and efficiency to achieve a system where the goals are achieved and results are visible to all. The authority shall itself be vigilant about the processes and outcomes. An effective system of internal audit shall ensure that the financial propriety is being followed. I have some reservations about the role external audit plays in assisting in the financial management of the organization. External audits are not conducted in the contemporaneous time frame and at times there is a lag of many a years in finalizing the audit objections. This does not aid the organizational head in keeping the financial processes under control. The role of internal audit has to be well developed in maintaining the financial discipline in organisations that shall be given more autonomy. The system that we hope to put in place has worked well in the case of Deptt of Space and Department of Atomic Energy where financial delegation has been done and an effective internal system of checks and balances has been introduced.172173Strengthening Financial Management SystemsSpeech of Chairman, ARCAnnexure-I(1) (Contd.)Annexure-I(1) (Contd.)The next serious concern that the Commission seeks to address itself is the need to introduce accrual accounting. When we are managing our personal accounts we are adopting the system of dual accounting, maintaining a balance sheet of asset & liabilities; then why do we differ in approach when dealing with public money and public property. It has come to my notice that when there are time and cost over-runs there are at times difficulties in gathering from the records the total amount of funds that have been paid to the government agencies who are implementing the projects. Reconciliation of accounts and payments is not done for many a years when dealing with repairs and refurbishment of capital assets by government agencies. As the assets created do not find a mention in the books of the govt, many are languishing on account of poor maintenance. All these problems are compounded and the net result is that we do not have a fair idea of the cost of service that we are providing, we are not in a position to intelligently determine when and at what cost future capital investments are to be made. The opportunity cost of the funds deployed in a project are not known, so the returns on the investments can also not be determined. These are just some of the examples that come to my mind. I am sure this gathering has a better idea of the problems and drawbacks we face when restricted by cash accounting. Cash accounting has worked well in controlling expenditure. However now the Commission seeks to move the administration to a level where it shall be accountable for its performance. When we are to introduce greater autonomy with greater accountability then we need to have intelligent financial decisions and multiyear budgeting. Lapsing budgets at the year end have created problems in delivering the goals that have been set out. The quarter-wise and at times month-wise restriction on spending have brought about spending discipline but has affected the achievement of the targets. We must grow out of the system of the Finance Ministry monitoring our spending pattern and move to a system where the spending decisions are based on conscious decisions. Such decisions have a bearing on the transgenerational equity. The accrual accounting system is complex and this gathering shall have to help the Commission determine the road map for implementation of the accrual accounting system.The Indian reform process should be seen to be part of a larger global process. Our policies and practices have to be adapted to the realities of the international economy. On the philosophical plane, our reforms should be in keeping with the paradigm shift which we are witnessing round the world. On studying the international experiences we realized that if Government were to survive in this competitive environment, they need to make a transition to a more disciplined and rigorous system of financial management. Other countries felt the pressure of globalization earlier than India did and they responded by adopting financialreforms. India has to now sooner rather than later embark upon strengthening its financial management system.In this millennium the international economy has become more integrated and more complex and difficult. No country can afford to be island unto itself. There is, no need to fear the impact of globalization if we structure our policies right, for globalization does indeed accentuate the benefits of good policies even as it raises the cost of bad ones. We have to have confidence in ourselves – confidence born out of an appreciation of our potential, and a will to fashion our policies to realize that potential, we shall do so without loss of time.It must be appreciated that the funds available with the govt. have an opportunity cost of not being available to the corporate and global economy. When dealing with the policies of expending such funds one now must be clearer about the outcomes sought and work towards delivering them efficiently within the government framework.To bring about the changes, and also to provide a financial accountability and accounting framework, we need a legislation. In Australia, for example, the Financial and Accountability Act of 1997 provides such a framework. Under the Australian Act, the chief executives of the Agencies are given greater flexibility and autonomy in their financial management; they are also required to promote efficient, effective and ethical use of public resources. We do need such a legislation. In addition, this legislation could include some of the requirements for the budget process as recommended in the Report under discussion today.Some of the other issues that have been raised at many an economic fora in the past are the need to do away with the artificial distinction between the Plan and Non-Plan expenditure, a more realistic differentiation of the Revenue and Capital expenditure, and the need for doing away differentiation of charged and voted expenditure in the Budget. I would like to call upon this gathering to debate whether resolving such issues will result in better budgeting.Some of the other issues that come to mind are the need to ensure effective utilisation of funds that are transferred from the Centre to the States; the problems that are encountered in the implementation and in the release of funds of the Centrally sponsored schemes, and the Non plan Schemes and the steps that can be taken to remove such impediments.Also it is high time we flag the issues that result in the failure or the poor quality of implementation of our policies; these can be in the nature of subsidies not reaching the174175Strengthening Financial Management SystemsSpeech of Chairman, ARCAnnexure-I(1) (Contd.)poor, projects having a time and cost over-run. etc. All these result in outcome targets not being met. I feel that at the time of conceptualising and planning the programmes and projects, a strong financial management system should give a correct assessment of the risks that are associated. This entails recognising factors that may result in the programme failing or not meeting the objective for which it is being set out.I have noticed that at times there is mindless splintering of Plan Schemes. We lament the low impact of such schemes on the outcome desired. Do such steps detract from the achievement of the main objective. Should not the Financial Management system have a role to play in consolidating the programmes and working to make them more viable to achieve the goal for which they were set out.Our financial system has served us reasonably well so far. It is capable of doing better. The Concise Oxford Dictionary defines ‘reforms’ as making or becoming “better by removal or abandonment of imperfections, faults or errors”. This is what the Report of NIPFP has proposed – correcting the imperfections, faults and efforts of the past in the hope that our financial management system will enhance the progress of the economy and that credit would be, in Schumpeter’s memorable phrase, “phenomenon of development”.The way the economy is now linked to international economic pressures, it is also necessary that the country takes steps to insulate itself and contain inflationary pressures. The old fashioned virtues of fiscal prudence and monetary restraint have thus not lost their contemporary relevance. It must be appreciated that there is indeed no substitute for sound and internally consistent macro management, covering aspects such as fiscal, monetary and exchange rate policies and an adequate institutional and legal framework which help in the efficient intermediation and control.The system is always capable of improvement in productivity, efficiency and in the ultimate analysis of profitability, which again helps to increase the inherent strength of institutions and delivery systems. The process of reform in the social sector that we are now engaged in cannot succeed unless the financial system itself is strong and efficient so that it can help to support higher investment levels and accentuate growth and help to create a productive and competitive economy. Structural and financial reforms are thus mutually reinforcing and sustain each other.No reform can indeed be painless. We have to appreciate that the quest for competitive efficiency will take its toll of the weak and the inefficient. These pains, however, are aAnnexure-I(1) (Contd.)necessary foundation for the emergence of a strong and viable financial system which will conform to best international practices and make its distinctive contribution to the furtherance of our national objectives of growth, equity and justice.I am sure that a sound financial management system with the correct practices of planning, budgeting and accounting shall provide the desired framework for a result oriented delivery system in the government. In a democratic and federal polity like ours, it is necessary for reforms to have broad consensus. Such a consensus shall emerge. The states which were initially somewhat hesitant about the reform programme are now embracing it with enthusiasm. There has also been a broadening across the political spectrum for support of the reform effort. This augurs well for the future.Our motto shall be the same as the oath taken by the Council Members in the ancient city of Athens:“ We will strive increasingly to quicken the public sense ofpublic duty; that thus....we will transmit this city not only not less, but greater, better, and more beautiful than it was transmitted to us.”176177Strengthening Financial Management SystemsParticipantsAnnexure-I(2)Workshop onStrengthening Financial Management System in India23 July, 2008National Institute of Public Finance and Policy, New DelhiLIST OF PARTICIPANTSSl.No. NameDesignation1. Shri Vinod RaiComptroller and Auditor-General of India2. Dr. Renuka ViswanathanSecretary (C&PG), Cabinet Secretariat3. Shri V.N. KailaController General of Accounts4. Shri Rakesh JainDG (AEC), Office of CAG of India5. Shri R.S. NegiAAO, Finance (Budget), Deptt., Delhi Government6. Shri I.P. SinghFormer Dy.CAG of India7. Shri Ashok DasPrincipal Secretary (Finance), Govt. of M.P.8. Shri Subhash GargPrincipal Secretary (Finance), Govt. of Rajasthan9. Ms. Ananya RayJoint Secretary & FA, Ministry of Water Resources, New Delhi10. Shri B.B. PanditD.G.(Audit), Office of CAG11. Shri Sandeep SaxenaDy.CGA, Office of CGA12. Shri V. BhaskarJoint Secretary, 13th Finance Commission13. Shri R. SridharanJoint Secretary (SP) & Adviser (FR), PlanningCommission14. Shri Ajay SethSecretary (B&R), Govt. of Karnataka15. Shri K.P. KrishnanJoint Secretary, Department of Economic Affairs, Govt. of IndiaAnnexure-I(2) (Contd.)16. Shri S.C. JainED(CF) IOC17. Shri Ajay GargJoint Secretary (Fin/Plg)18. Ms. Benita SharmaGender Specialist19. Dr. P. UmanathDeputy Secretary (Budget), Finance Deptt. Govt. ofTamil Nadu20. Shri B.C. MohapatraJoint Secretary, Finance Deptt., Govt. of Orissa21. Shri Sunil SoniPrincipal Secretary, Govt. of Maharashtra22. Shri Deepak SenguptaJt. Director-Plg., Govt. of Delhi23. Shri L.N. MeenaJt. Director – Planning, Govt. of NCT, Delhi24. Shri Santosh KumarDirector (Fin.), Min. of Health & Family Welfare25. Shri Ravindra DhongdeDirector of Accounts & Treasuries, Mumbai26. Shri B.L. PathakJoint Director (Plg. Deptt), Govt. of NCT of Delhi27. Shri D.K. MalhotraUnder Secy., Finance, Govt. of NCT of Delhi28. Shri B.S. RawatDy. Director, Planning Deptt., Govt. of NCT ofDelhi29. Ms. Parneet SuriSpl. Secy., Finance, Govt. of Punjab30. Shri S.N. ShuklaCOA, Govt. of NCT of Delhi31. Shri S.P. SinghDy. Director Finance32. Dr. B.K. SharmaDirector (Planning) Govt. of Delhi, DelhiSecretariat33. Dr. Ram MohanAdvisor (Finance), Railway Board34. Dr. I.Y.R. Krishna RaoPr. Secretary (Finance), Govt. of Andhra Pradesh178179Strengthening Financial Management SystemsRecommendations made by Group180Annexure-I(3)Recommendations made by Groups Group 1: Reforms in Budgetary System – Central?Budget process: It is essential that accounts and other information required should be made available in time and should be reliable.?Plan and Non-plan divide: The plan and non-plan distinction should be removed?Capital and Revenue Expenditure: To begin with disclosure relating to revenue grants that are aimed at creating capital assets be made without changing the existing revenue and capital accounting system?Multi-year Budgeting – Advance Expenditure Ceilings:?Three year perspective budgeting with first year approval, next two year are indicative – rolling framework?carry over provision?Annual ceilings of the ministries fixed within the three year perspective budget with scheme wise flexibility?Performance Orientation in budgeting:?Programme based budgeting with performance indicators?Institutional support: Departmental financial Management Committee to be convened by the FA and chaired by the SecretaryGroup-II: Institutional Reforms for Strengthening Financial Reforms I. Role of Integrated Financial Advisor in Financial Management?Role of IFA laid out in the Charter issued by Ministry of Finance should be reconciled with the provisions of GFR 64 and reflected in a legislation defining the role of CAO and CFO and the relationship between the two.?The detailed framework within which FAs should function should be laid down in terms of his professional competence, skills and support systems.Annexure-I(3) (Contd.)?The role of the FA as bridge between the spending department and the Ministry of Finance should be defined in the proposed statute.?Accountability for programme implementation should be incorporated in the canons of financial propriety as well as in the proposed statute.?In the Ministry of Finance there should be a separate wing called Financial Management Wing which should be headed by a Controller General of Financial Management drawn from a pool of specialists in the field of financial management and accounting.?Supporting staff and all officers in the Financial Management wing should be recruited from among professionals having the requisite qualifications.II. Internal Audit and Internal Control?To strengthen the oversight function within the Ministries/Departments, there should be an independent and professionally competent internal audit and investigation set-up. It should be directly responsible to the Chief Accounting Authority of the department.?For this purpose, the Inspector General Model of US should be adopted. This model should be given a statutory backing.?In each department there should be an Audit Committee headed by the Chief Accounting Authority including some independent members to lay down the scope of internal audit, to consider its Reports and to monitor its effectiveness and competence.?Internal Audit should be equipped with the requisite power and competence to investigate cases of frauds etc. (forensic audit). Such powers should be provided in the proposed statute.?Chief Accounting Authority should lay down along with the budget, a positive statement containing assurance on existence and functioning of internal controls in his department.181Strengthening Financial Management SystemsRecommendations made by GroupAnnexure-I(3) (Contd.)Annexure-I(3) (Contd.)III. Accrual Accounting for Better Accountability?GASAB should be the nodal agency for preparing the standards and formats for accrual accounting.?Accrual accounting should be taken up in project mode and implemented in a specific timeframe. Further, incentives for introduction of accrual accounting should be given by the Ministry of Finance to the State Governments in the form of grants.?A steering committee should be set up under the chairmanship of the Finance Minister for implementation of the accrual accounting project.IV. Parliamentary Financial Control?PAC should be coterminous with the term of the Parliament. On-fifth of the PAC members may retire every year to involve more members.?Financial limits for savings and excess expenditure should be periodically reviewed.?The Standing Committee attached to each department while discussing the demands for grant may also discuss the internal control framework of each Ministry as well as outstanding audit paras.?CAG DPC Act needs an amendment, particularly in relation to powers of CAG to secure documents, information and clarifications as well as access of audit in regard to audit of grants.?FRBM may be amended suitably to incorporate provisions relating to control over savings/ excess expenditure and avoidable supplementary grants and costing and concept of programme budgeting.Group 3: Strengthening financial management at State level Flow of centrally sponsored schemes?One size fits all approach will not work State should be involved in the Scheme formulation?There should be enough flexibility for State specific variation?There can be a MOU to regulate flow of funds.?If there is delay on part of state Government to release the funds, additional contribution by way of interest may have to be made.?An alternative can be to release the funds directly to executing agencies, but make a non cash credit in favour of State Government.?State Government in turn releases it share in cash and also makes a non cash release corresponding to the central share.?All releases from GOI should be posted on a common website. IFMIS?The standard software for all states will not work.?Instead GOI should help in putting together a common framework incorporating best practices from different states.?The protocol for inter-state communication and standards for financial transactions having all India implications should be prescribed by GOI.?States should be encouraged to develop to their own IFMIS based on the common framework.?This can be an area for funding by GOI/Finance Commission. Expenditure tracking at local bodies?Expenditure tracking should include all funds of the local bodies including their own resources.?The major lacuna found in proper expenditure tracking/auditing is non-maintenance of Accounts and non closing of Accounts on time by local bodies.182183Strengthening Financial Management SystemsAnnexure-I(3) (Contd.)?This can be out sourced to Chartered Accountants and Accounts maintained and closed on time to facilitate proper auditing.?Outcome/performance auditing should also be taken to see how well the funds are spent.Programme based expenditure classification?Distinction between revenue and capital should remain?Grants to another level of Government for asset creation should be accounted as Capital expenditure at the level where the assets are created.?Distinction between Plan and Non-Plan should be removed. It should be development expenditure and expenditure on statutory and sovereign functions.?Further classification may be for– Programme activities– Administrative Cost– Overheads– Financing cost?Performance parameters should be a part of the Budget Multi Year Budgeting?There can be multi year planning of resources and expenditure?This exercise should feed into the Annual Budget?Multi year budgeting and carry over of funds from one year to another may not be practical.List of Reports Submitted by theSecond Administrative Reforms Commission up to April 20091. First Report: Second Report:Right to Information: Master Key to Good Governance2. Unlocking Human Capital: Entitlements and Governance – A Case Study3. Third Report:Crisis Management: From Despair to Hope4. Fourth Report:Ethics in Governance5. Fifth Report:Public Order – Justice for All . . . Peace for All6. Sixth Report:Local Governance – An Inspiring Journey into the Future7. Seventh Report:Capacity Building for Conflict Resolution – Friction to Fusion8. Eighth Report:Combatting Terrorism – Protecting by Righteousness9. Ninth Report:Social Capital – A Shared Destiny10. Tenth Report:Refurbishing of Personnel Administration – Scaling New Heights11. Eleventh Report:Promoting e-Governance – The SMART Way Forward12. Twelfth Report:Citizen Centric Administration – The Heart of Governance13. Thirteenth Report:Organisational Structure of Government of India184185FIFTEENTH REPORT: STATE AND DISTRICT ADMINISTRATIONAPRIL 2009Government of IndiaMinistry of Personnel, Public Grievances & PensionsDepartment of Administrative Reforms and Public GrievancesResolutionNew Delhi, the 31st August, 2005No. K-11022/9/2004-RC. — The President is pleased to set up a Commission of Inquiry to be called the Second Administrative Reforms Commission (ARC) to prepare a detailed blueprint for revamping the public administration system.2.The Commission will consist of the following :(i)Shri Veerappa Moily - Chairperson(ii)Shri V. Ramachandran - Member(iii)Dr. A.P. Mukherjee - Member(iv)Dr. A.H. Kalro - Member(v)Dr. Jayaprakash Narayan - Member(vi)Smt. Vineeta Rai - Member-Secretary3.The Commission will suggest measures to achieve a proactive, responsive,accountable, sustainable and efficient administration for the country at all levels of the government.The Commission will, inter alia, consider the following :(i)Organisational structure of the Government of India(ii)Ethics in governance(iii)Refurbishing of Personnel Administration(iv)Strengthening of Financial Management Systems(v)Steps to ensure effective administration at the State level(vi)Steps to ensure effective District Administration(vii)Local Self-Government/Panchayati Raj Institutions(viii) Social Capital, Trust and Participative public service delivery(ix)Citizen-centric administration(x)Promoting e-governance(xi)Issues of Federal Polity(xii) Crisis Management(xiii) Public OrderiSome of the issues to be examined under each head are given in the Terms of Reference attached as a Schedule to this Resolution.4. The Commission may exclude from its purview the detailed examination of administration of Defence, Railways, External Affairs, Security and Intelligence, as also subjects such as Centre-State relations, judicial reforms etc. which are already being examined by other bodies. The Commission will, however, be free to take the problems of these sectors into account in recommending re-organisation of the machinery of the Government or of any of its service agencies.5. The Commission will give due consideration to the need for consultation with the State ANISATIONSecond Administrative Reforms Commission1.Dr. M.Veerappa Moily, Chairman*2.Shri V. Ramachandran, Member**3.Dr. A.P. Mukherjee, Member4.Dr. A.H. Kalro, Member5.Dr. Jayaprakash Narayan, Member***6.Smt. Vineeta Rai, Member-Secretary6. The Commission will devise its own procedures (including for consultations with the State Government as may be considered appropriate by the Commission), and may appoint committees, consultants/advisers to assist it. The Commission may take into account the existing material and reports available on the subject and consider building upon the same rather than attempting to address all the issues ab initio.7. The Ministries and Departments of the Government of India will furnish such information and documents and provide other assistance as may be required by the Commission. The Government of India trusts that the State Governments and all others concerned will extend their fullest cooperation and assistance to the Commission.8. The Commission will furnish its report(s) to the Ministry of Personnel, Public Grievances & Pensions, Government of India, within one year of its constitution.Sd/(P.I. Suvrathan)Additional Secretary to Government of IndiaOfficers of the Commission1.Shri Anil Bhushan Prasad, Additional Secretary2.Shri P.S. Kharola, Joint Secretary#3.Shri R.K. Singh, PS to Chairman#4.Shri Sanjeev Kumar, Director5.Shri Shahi Sanjay Kumar, Deputy Secretary*Dr. M. Veerappa Moily – Chairman, resigned with effect from 1st April, 2009 (Resolution No.K-11022/26/2007-AR, dated 1st April, 2009)**Shri V. Ramachandran, was appointed Acting Chairman vide Resolution No. K-11022/26/2007-AR, dated 27th April, 2009***Dr. Jayaprakash Narayan – Member, resigned with effect from 1st September, 2007 (Resolution No.K11022/26/2007-AR, dated 17th August, 2007)# Till 31.03.2009iiiiiCONTENTSChapter 1Introduction1Chapter 2State Administration52.1Introduction52.2Relevant Recommendations of the Commission in itsEarlier Reports62.3Restructuring State Governments212.4Refurbishing State Civil Services352.5State Public Service Commission52Chapter 3District Administration593.1Introduction593.2The Institution of District Collector / Deputy Commissioner603.3Functional and Structural Reforms86Chapter 4Administration of the Union Territories934.1Evolution of States and Union Territories934.2The National Capital Territory of Delhi984.3Chandigarh1404.4Puducherry1454.5Andaman and Nicobar Islands1514.6Lakshadweep1604.7Daman and Diu and Dadra & Nagar Haveli164Chapter 5Governance Issues in the North-Eastern States1715.1Introduction1715.2Natural Resources and Constraints1775.3Ethnic Conflicts in Places, Manifesting as Territorial180Conflict and Violance (Problem of Insurgency and Law and Order)5.4Provisions of the Sixth Schedule of the Constitution with respect to Assam, Meghalaya, Tripura and Mizoram184ivv5.5Adhoc Transfer of Subjects/Activities188Chapter 6Managing State Finances272to the Autonomous Councils5.6Predominance of non-elected Customary Heads/Bodies190Conclusion283at the Village Level; Issue of Village Self Governance in the Sixth Schedule AreasSummary of Recommendations2845.7Absence of linkage between the Sixth Schedule and192LIST OF TABLESthe 73rd Amendment5.8Special powers of the Governors of Assam, Meghalaya,193Table No.TitleTripura and Mizoram with Respect to2.1Strength of the Legislative Assembly of various States23Schedule Sixth Areas2.2Composition of the Public Service Commissions565.9Special provisions in the Constitution under207Articles 371A, 371B, 371C, 371F, 371G & 371H3.1Functions of the District Collector/Deputy Commissioner65applicable to North-Eastern States3.2Function of the Revenue Department in Andhra Pradesh735.10 Special Autonomous Councils created by State Enactments (in Assam and Manipur)2094.1State set-up at the Commencement of the Constitution934.2Statistical Details regarding the Union Territories965.11 Issues of Tribal Areas lying outside the Sixth Schedule2095.12 Personnel Management and Capacity Building of2114.3Statistical Details regarding the Union Territories96Administration4.4Recommendations of Various Committees on Governing Issues1075.13 Issues of Recruitment in the Sixth Schedule Areas215of the NCT of Delhi5.14 Regional Institutes2164.5Terms and Mode of Election of Mayors in Various States1125.15State Specific Issues2184.6Suggestion of the Balakrishnan Committee1155.15.1Assam2194.7Suggestion of the Virendra Prakash Committee1165.15.2Arunachal Pradesh2324.8Proposal of Delhi Government Regarding1175.15.3Manipur235Splitting up of the MCD5.15.4Meghalaya2444.9Demand No. 55 – Demand for Grants-Budget 2008-091345.15.5Mizoram2524.10NCR Limits1365.15.6Nagaland2584.11Composition of the NCR Planning Board1365.15.7Sikkim2644.12Proposed Financial Delegation in respect of Chandigarh1435.15.8Tripura2664.13Proposed Financial Delegation in respect of149Puducherry Administrationvivii4.14Proposed Financial Delegation in Respect of Andaman and1585.18Cadre strength of the All India Services in Sikkim265Nicobar Administration5.19Structure of TTADC2684.15Proposed Financial Delegation in Respect of1636.1Share of States in Combined Revenue Receipts and Expenditures272Lakshadweep Administration4.16Proposed Financial Delegation in Respect of Daman & Diu and Dadra & Nagar Haveli Administration168LIST OF FIGURESFigure No.Title5.1NER States: Various Development Indicators1755.2Special Powers of Governors in Respect of Sixth Schedule Areas1935.1Map of North-Eastern States1725.3Additional Powers to the Governors of Assam, Tripura and Mizoram196LIST OF BOXES5.4Applicability of Union and State Laws to Tribal Areas of Assam,200Box No.TitleMeghalaya and Mizoram3.1Role of District Collector in Health Sector685.5Representation of ST Candidates from North-Eastern Region in All India Services2143.2SCORE – eRegistration in Bihar (A case study of Muzaffarpur Registry office)845.6Percentage Share of ST Candidates from the North-Eastern Region in Overall appointment from ST Category2143.3Improved Health and Sanitation Practices, District Surguja, Chhattisgarh854.1Present composition of the DDA1265.7Basic facts relating to Sixth Schedule Councils in Assam2204.2Raising of Dhanikhari Dam : Case Study of a Drinking Water1585.8Brief accounts of KAAC and NHAC221Supply Scheme5.9Powers and functions of KAAC and NHAC2215.1Socio-economic and Cultural Features of the1765.10Summary Information of Tribe Specific Autonomous Councils229North-Eastern Regionin Assam5.2Purpose of Vision Statement – 2020 for the NER1795.11Hill District Councils of Manipur2375.3An Illustrative list of Regional Institutions in2175.12Statistics related to the Autonomous Councils of Meghalaya245the North-Eastern Region5.13Brief account of the Autonomous Councils of Meghalaya2465.4Naga and Kuki traditional system in Manipur2395.14Powers and Functions of the Autonomous Councils of Meghalaya 2475.5Communitization of Primary Education; importance of2635.15Brief account of the Autonomous Councils of Mizoram253Social Audit5.16Activities entrusted to the Autonomous Councils of Mizoram2546.1Contingent Liability in Maharashtra2785.17Village Development Boards in Nagaland262viiiixLIST OF ABBREVIATIONS Abbreviation Full FormDHS DICDistrict Health Society District Industries CentreADCAutonomous District CouncilDMC ActDelhi Municipal Corporation Act 1957AECArea Executive CommitteeDMRCDelhi Metro Rail CorporationANSETAnantapur Society for Employment and TrainingDPCDistrict Planning CommitteeAPWALTA ActAP Water, Land & Tree ActDRDADistrict Rural Development AgencyARCAdministrative Reforms CommissionDWSCDistrict Water and Sanitation CommitteeASHAAccredited Social Health ActivistEINEmployee Identification NumberATIAdministrative Training InstituteGHADCGaro Hills Autonomous District CouncilBTCBodoland Territorial CouncilGNCTGovernment of National Capital TerritoryCADCChakma Autonomous District CouncilGPGaon PanchayatCDCConstituency Development CommitteeGSDPGross State Domestic ProductCEExecutive CommitteeGSsGram SabhasCEMChief Executive MemberHADCsHills Autonomous District CouncilsCJChief JusticeHODHead of the DepartmentCMAsCounter Magnet AreasHRDHuman Resource DevelopmentCPISComputerisation of a Personnel Information SystemsIASIndian Administrative ServiceCr.riminal Procedure CodeIAYIndira Awas YojnaDANICSDelhi, Andaman Nicobar Islands Civil ServiceICARIndian Council of Agricultural ResearchDCDeputy CommissionerICDSIntegrated Child Development SchemeDDADelhi Development AuthrityIDAIslands Development AuthorityDDMCDistrict Disaster Management CommitteeIDBIrrigation Development BoardDFRDelegation of Financial Powers RulesIFADInternational Fund for Agriculture DevelopmentxxiIFASIndian Frontier Administrative ServiceNABARDNational Bank for Agriculture and Rural DevelopmentIFSIndian Foreign ServiceNaRMGNatural Resource Management GroupsIIMIndian Institute of ManagementNCHACNorth Cachar Hills Autonomous CouncilIITIndian Institute of TechnologyNCRNational Capital RegionIPCIndian Penal CodeNCTNational Capital TerritoryIPSIndian Police ServiceNDCNational Development CouncilISBTInter State Bus TerminusNDMCNew Delhi Municipal CouncilJHADCJaintia Hills Autonomous District CouncilNECNorth Eastern CouncilKAACKarbi Anglong Autonomous CouncilNEEPCONorth Eastern Electric Power CorporationKHADCKhasi Hills Autonomous District CouncilNEFANorth Eastern Frontier AgencyLADCLai Autonomous District CouncilNEIGRIMSNorth Eastern Indira Gandhi Regional Institue of Medical SciencesLDCsLower Division ClerksNEHUNorth Eastern Hill UniversityLGLt GovernorNEPANorth East Police AcademyMADCMara Autonomous District CouncilNERNorth Eastern RegionMCDMunicipal Corporation of DelhiNERCORMPNorth Eastern Region Community Resource Management Project forUpland AreasMEAMinistry of External AffairsNGOsNon Government OrganisationsMHVAAManipur Hill Village Authority ActNHAINational Highway Authority of IndiaMLAMember of Legislative AssemblyNICNational Informatics CentreMNFMizo National FrontNIRDNational Institute of Rural DevelopmentMOUMemorandum of UnderstandingNREGANational Rural Employment Guarantee ActMPMember of ParliamentNRHMNational Rural Health MissionMPCMetropolitan Planning CommitteeNSCNNational Socialist Council of NagalandMPSPLManipur Public Servant LiabilityNWFPNorth West Frontier ProvincexiixiiiOSDOfficer-on Special DutyPDSPublic Distribution SystemPESAThe Panchayats (Extension to the Scheduled Areas) Act, 1996PRIsPanchayati Raj InstitutionsPWDPublic Works DepartmentRDRural DevelopmentRoRsRecords of RightsRTIRight to InformationSGRYSampoorna Grameen Rozgar YojnaSIPARDState Institute of Public Administrative & Rural DevelopmentSTScheduled TribeTTADCTripura Tribal Areas Autonomous District CouncilUDUrban DevelopmentULBsUrban Local BodiesUPSCUnion Public Service CommissionUTsUnion TerritoriesVCsVillage CouncilsVDBVillage Development BoardVECVillage Education CommitteeZPsZila Parishad / Zila Panchayats1INTRODUCTION1.1 The Administration at the State level is the cutting edge of the public administration system in the country. Be it the issue of ration or electoral identity cards, procurement of foodgrains, implementation of employment guarantee schemes, supply of drinking water, mutation of land records, functioning of primary schools and healthcare centres or control of epidemics in the countryside, it is the instrumentalities of the State and District administration with which citizens have to interact.1.2 The institutions of the State and District administration exist primarily to provide these services to the citizens. There are laid down rules and procedures for every aspect of the government’s functioning and its interaction with the common man but, due to weaknesses of the bureaucracy, growing complexities of administration and absence of commitment and responsiveness, a wide gap has emerged between “Government” and “Governance”.1.3 In this background, the terms of reference of the Second Administrative Reforms Commission identify the following issues on which the Commission has been asked to make specific recommendations.5.Steps to ensure effective administration at the State level5.1 To encourage and promote appropriate changes in State Administration in the governance of the States to achieve envisaged outcomes.5.1.1 Changes required in the State Administration to achieve the objectives.6.Steps to ensure effective District Administration6.1 Progressive modernization and transformation of district administration in form and content keeping in mind the centrality thereof in regulating,facilitating and delivering services at the grass-root levels.6.2 Bringing about systemic changes to infuse and sustain vibrancy and responsiveness.xiv1State and District AdministationIntroduction6.3 Streamlining and fine-tuning a comprehensive and accessible public grievance handling and redress mechanism.6.4 Greater devolution and delegation of functions and resources to the local levels.6.5 Examine the coordinating and leadership role of the District Officer in developmental activities and enlisting peoples’ participation therein.1.4 The Commission has so far submitted fourteen Reports to the government on its different terms of reference. Many of the recommendations made in these Reports particularly those on Public Order, Local Government, NREGA, Crisis Management, Conflict Resolution and Financial Management have a direct bearing on the administration at the State and District levels. Besides, the principles enunciated in Reports dealing with “Right to Information”, “Citizen Centric Administration”, “e-Governance” and “Social Capital” too are of considerable relevance to State Governments as they provide the basic foundation for public services. In this Report, the Commission would be dealing with those issues of State and District administration, which have not been covered in the earlier Reports.1.5 The Commission has structured the current Report in the following manner:-1. Introduction2.Reorganisation of the State Secretariat and Departments.a.Role and functions of the Secretariat, Departments and Agencies (Societies, Cooperatives, Statutory Bodies and Government Corporations).b.Some issues of personnel administration including those relating to State Public Service Commission, enactment of Civil Services Law and appointment and tenure of senior functionaries in the State Government.c.The future of the office of the Divisional Commissioner and Regional Offices of line departments.d.Vigilance set up in the States.3.District Administration, the role and composition of line departments andparastatals in the districts after empowerment of local governments. Special aspects of the administration of Union Territories (Delhi, Chandigarh, Island UTs and others).5.Issues pertaining to the administration of the North-Eastern States6.Managing State Finances1.6 The Report deals with issues of modernization, increased devolution of functions and powers, effective grievance handling system, people’s participation, enhancing responsiveness, process simplification and delegation of power. The Report has also taken note of certain innovative measures initiated by government on issues of human resource development and social service which have resulted in better implementational practices and consequently in a marked improvement in the tenor of administration. The communitisation experiment in Nagaland and the digitised registration of documents in Bihar are two such examples. The Commission believes that with appropriate modification it is possible to replicate such practices in other parts of the country as well.1.7 The Union Territories and the North-Eastern States have special features, which call for careful study. Generally, except perhaps for Delhi, the administration of the Union Territories has not been studied in detail, as it has been considered as part of the Union Government. In the case of the North-Eastern States, the Commission found that knowledge of their special features was rather limited in the Ministries; the approach until recently, has been to deal with the administrative challenges in more or less the same way as in the rest of the country, without taking into account the special features of each of them, as for example, extensive powers given to the Autonomous Councils in the Sixth Schedule areas. The Commission, therefore, thought it fit to deal with the Union Territories and North-Eastern States at some length in this Report. The suggestions given here are in addition to the recommendations made in earlier Reports like the one on “Conflict Resolution”.1.8 In order to have a composite view of the issues and challenges being faced by the State and District administration across the country, the Commission visited 20 States viz. Andhra Pradesh, Tamil Nadu, Maharashtra, Karnataka, Gujarat, Rajasthan, Punjab, Haryana, Jammu & Kashmir, Assam, Meghalaya, Nagaland, Manipur, Tripura, Uttar Pradesh, Bihar, West Bengal, Orissa and Chhattisgarh. It also visited 5 Union Territories viz. Andaman & Nicobar Islands, Lakshadweep, Puducherry, Chandigarh and Delhi. During these visits, the Commission had detailed discussions with the Governors, Chief Ministers, Lt. Governors/ Administrators and senior officials of the States/UTs concerned on their programmes, schemes and innovative practices. In order to elicit suggestions and perceptions of people on administration, the Commission organised public hearings in the States’ capital and23State and District Administationalso interacted with scholars, litterateurs, retired officials and the media on common issues of governance and administration. The Commission expresses its deep gratitude to all of them for their help, cooperation, and valuable suggestions.1.9 Though the Report was finalised in April and printed in May 2009, the Commission would like to record its appreciation for the contributions made by Dr. M. Veerappa Moily in arriving at the conclusions. Before resigning from the position of Chairman, ARC, on 31st March, 2009, Dr. Moily had played an important role in guiding the deliberations of the Commission in finalising this Report.1.10 In the preparation of this Report, the Commission took support of the Indian Institute of Public Administration, Delhi, the Administrative Staff College of India, Hyderabad, HCM Rajasthan State Institute of Public Administration, Jaipur, Yashwantrao Chavan Academy of Development Administration, Pune, the Centre for Good Governance, Hyderabad, Himachal Pradesh Institute of Public Administration, Shimla, State Training Institute, West Bengal, Assam Administrative Staff College, Guwahati and Asian Development Research Institute, Patna. The inputs provided by them were extremely valuable. The Commission thanks them for this assistance. The Commission would also like to acknowledge the contribution of Shri Lalit Sharma, Consultant, ARC and Shri P.P. Srivastav, Member, North-East Council who provided significant and valuable inputs to the the Commission on the administration of the Union Territories and the North-Eastern States.1.11 The Commission feels that the implementation of the recommendations made in this Report in conjunction with the measures suggested in the earlier ones, will bring considerable improvement in the functioning at all levels of the State Government.STATE ADMINISTRATION22.1 Introduction2.1.1 Constitutional guarantees and provisions, Union and State laws as well as policies and programmes for economic and social development are relevant to the daily lives of the people only to the extent they are implemented honestly and efficiently. The Constitution of India gives a special role and responsibility to the State Governments for preserving public order and ensuring the welfare of citizens. The Seventh Schedule which clearly demarcates the legislative and functional domain of the Union and the States, highlights the critical role envisaged for State Governments in fulfilling the aspirations set out in the Directive Principles of State Policy.2.1.2 So far the Commission has submitted fourteen Reports, each of them containing recommendations to be acted upon by the Union, State, District and Local Governments – by one or all of them - as well as by institutions of civil society. The Reports dealt with:-(i)Right to Information;(ii) Implementation of NREGA;(iii) Crisis Management;(iv) Ethics in Governance;(v) Public Order;(vi) Local Governance;(vii) Capacity Building for Conflict Resolution;(viii) Combatting Terrorism;(ix) Social Capital;45State and District AdministationState Administration(x) Refurbishing of Personnel Administration;(xi) Promoting e-Governance;(xii) Citizen Centric Administration(xiii) Organisational Structure of Government of India(xiv) Strengthening of Financial Management Systems2.2 Relevant Recommendations of the Commission in its Earlier Reports2.2.1 While contemplating reforms in the State and District Administration, all the above Reports of the Commission need to be considered together. For ease of reference, the relevant recommendations of the earlier Reports have been recapitulated below. There are some areas in which action needs to be taken primarily by the Union Government; in such cases, the States’ role would be to provide support and cooperation to the latter in the measures taken to implement the recommendations. Whereas, the measures suggested in the Reports on “Public Order”, “Local Governance”, “NREGA”, “Crisis Management” and “Conflict Resolution” have a direct bearing on the State and District administration; hence appropriate reform actions have to be initiated by the State governments themselves. In addition, the principles enunciated in other Reports such as those dealing with “Right to Information”, “Citizen Centric Administration”, “e-Governance” and “Social Capital” have overarching relevance to the State and District administration.2.2.2 Local Governance – Empowerment and Strengthening of Local Governments2.2.2.1 In its Report on “Local Governance”, the Commission notes that in India, the most important institutional reform brought about in governance, since the reorganization of States, has been the inclusion of local governments – Panchayats and Municipalities – as Constitutional entities, through the Constitutional 73rd and 74th amendments in 1992. But, there has been a marked reluctance on the part of most States to adequately transfer powers and functions, finances and functionaries to put local governments on the path envisaged by these Constitutional amendments. As of now, most local governments are over-structured and weakly empowered. The Commission believes that India needs a fundamental transformation in governance and that empowered citizen-centric and accountable local governments are the core around which this transformation will take place. There will be no real ‘loss of power’ to the State Governments as feared. With the abolition of permitsand licensing needed for setting-up new projects in many sectors, the States have now got greater freedom to take major investment decisions and many of them have utilised these powers to accelerate the pace of their development. The Union Government too, has found new roles in social sectors and social security after halting major investments in public undertakings.2.2.2.2 The major recommendations in the Sixth Report that are of particular relevance to State and District administration are:2.2.2.3 Structural Reforms?Adopting the principle of subsidiarity in devolution of functions to local bodies.?Creation of a District Council having representation from both rural and urban bodies, as the true third tier of government;?Immediate transfer of functions/functionaries to the PRIs as per provisions of law;?Autonomy of Panchayats with regard to their personnel;?Establishing a local body Ombudsman for a group of Districts;?Merging DRDA with the Zila Parishad;?States not to have final powers over Panchayats/ Municipal bodies;?Creation of a separate Ombudsman for a Metropolitan Corporation;?Urban Local Bodies – Basic Structureo There should be three tiers of administration in urban local governments, except in the case of Town Panchayats, where the middle level would not be required. The tiers should be:^Municipal Council/Corporation (by whatever name it is called)^Ward Committees; and^Area Committees or Sabhas.67State and District AdministationState Administration?The Mayor of a Municipal Corporation should be its Chief Executive and should be elected directly;?Special powers and authorities in Metropolitan Corporations (with a population above five million).2.2.2.4 Decentralised Planninga.Constitution of a District Council to be empowered to exercise the powers andfunctions in accordance with Articles 243G and 243W of the Constitution.b.For urban districts where town planning functions are being done byDevelopment Authorities, these authorities should become the technical/ planning arms of the District Planning Committees (DPCs) and ultimately of the District Council.d.Guidelines issued by the Planning Commission pertaining to the preparationof the Plan and the recommendations of the Expert Group regarding the planning process at the district level should be strictly implemented.i.The function of planning for urban areas to be clearly demarcated among thelocal bodies and planning committees. The local bodies should be responsible for plans at the layout level. The District Planning Committees/District Councils – when constituted – and Metropolitan Planning Committees (MPCs) should be responsible for preparation of regional and zonal plans. The level of public consultation should be enhanced at each level.j.For metropolitan areas, the total area likely to be urbanised (the extendedmetropolitan region) should be assessed by the State Government and a Metropolitan Planning Committee constituted for the same which may be deemed to be a District Planning Committee for such areas. As such an area will usually cover more than one district. District Planning Committees for those districts should not be constituted (or their jurisdictions may be limited to the rural portion of the revenue district concerned). The Metropolitan Planning Committees should be asked to draw up a Master Plan/Composite Development Plan for the entire metropolitan area including the peri-urban areas.2.2.2.5 Accountability and Transparencya.Audit committees may be constituted by the State Governments at the districtlevel to exercise oversight regarding the integrity of financial informationb.There should be a separate Standing Committee of the State Legislature for thelocal Bodies. This Committee may function in the manner of a Public Accounts Committee.c.A local body Ombudsman needs to be constitutedd. A suitable mechanism to evolve a system of benchmarking on the basis of identified performance indicators may be adopted by each State. Assistance of independent professional evaluators may be availed in this regard.e.Evaluation tools for assessing the performance of local bodies should be devisedwherein citizens should have a say in the evaluation. Tools such as ‘Citizens’ Report Cards’ may be introduced to incorporate a feedback mechanism regarding performance of the local bodies.2.2.2.6 Personnel Management in PRIsa.Panchayats should have the power to recruit personnel and to regulate their service conditions subject to such laws and standards as laid down by the State Government.b.In all States, a detailed review of the staffing pattern and systems, with a zero-based approach to PRI staffing, may be undertaken over the next one year in order to implement the policy of PRI ownership of staff.2.7.2.5 PRIs and the State Governmenta.The provisions in some State Acts regarding approval of the budget of a Panchayat by the higher tier or any other State authority should be abolished.b.State Governments should not have the power to suspend or rescind any resolution passed by the PRIs or take action against the elected representatives on the ground of abuse of office, corruption etc. or to supersede/ dissolve the Panchayats. In all such cases, the powers to investigate and recommend action should lie with the local Ombudsman who will send his report through the Lokayukta to the Governor.89State and District AdministationState Administrationc.For election infringements and other election related complaints, the authority to investigate should be the State Election Commission who will send its recommendations to the Governor.d.If, on any occasion, the State Government feels that there is need to take immediate action against the Panchayats or their elected, it should place the records before the Ombudsman for urgent investigation. In all such cases, the Ombudsman will send his report through Lokayukta to the Governor in a specified period.e.In all cases of disagreements with the recommendations made by the local Ombudsman/Lokayukta, the reasons will need to be placed in the public domain.2.2.2.8 Position of Parastatalsa.Parastatals should not be allowed to undermine the authority of the PRIs.b.There is no need for continuation of the District Rural Development Agency(DRDA). Following the lead taken by Kerala, Karnataka and West Bengal, the DRDAs in other States also should be merged with the respective District Panchayats (Zila Parishad). Similar action should be taken for the District Water and Sanitation Committee (DWSC).c.The District Health Society (DHS) and Fish Farmers Development Agency(FFDA) should be restructured to have an organic relationship with the PRIs.d.The Union and State Governments should normally not set up specialcommittees outside the PRIs. However, if such specialised committees are required to be set-up because of professional or technical requirements, and if their activities coincide with those listed in the Eleventh Schedule, they should, either function under the overall supervision and guidance of the Panchayats or their relationship with the PRIs should be worked out in consultation with the concerned level of Panchayat.munity level bodies should not be created by decisions taken at higherlevels. If considered necessary the initiative for their creation should come from below and they should be accountable to PRIs.2.2.2.9 Local Government in the Fifth Schedule Areasa.The Union and State legislations that impinge on provisions of PESA shouldbe immediately modified so as to bring them in conformity with the Act.b.If any State exhibits reluctance in implementing the provisions of PESA,Government of India may consider issuing specific directions to it in accordance with the powers given to it under Proviso 3 of Part A of the Fifth Schedule.c.Each State should constitute a group to look into strengthening of theadministrative machinery in Fifth Schedule areas. This group will need to go into the issues of (i) special administrative arrangements, (ii) provision of hardship pay, (iii) other incentives, and (iv) preferential treatment in accommodation and education. All expenditure in this regard should be treated as charged expenditure under Article 275 of the Constitution.2.2.3 Ethics in Governance2.2.3.1 The Fourth Report of the Commission deals comprehensively with the important subject of ‘Ethics in Governance’ and has made a number of suggestions in this regard. If implemented, these will increase efficiency, transparency, responsiveness and accountability in government work. A corruption-free regime would also lead to a much higher rate of growth and bring overall improvement in the economy. All this, in turn, will make the administration citizen friendly and lead to greater empowerment of the people – the core objective of a vibrant democracy – and their trust in the system.2.2.3.2 The fourth Report has recommended a large number of measures which could enhance probity among public servants. They are – amendment of the Prevention of Corruption Act, delegating powers to grant sanction of prosecution to an empowered committee, fixing time limit for trial of anti-corruption cases, enhancing powers of the Central Vigilance Commission, repealing Article 311, creating a multi-member Lokayukta, simplifying disciplinary procedures, creating mechanism which can empower citizens to seek legal relief against fraudulent claims against the government, confiscation of property acquired by corrupt means, ensuring accessibility and responsiveness of government functionaries and adopting measures to protect honest civil servants.2.2.3.3 Many of these recommendations will apply equally to both the Union and State Governments. But, there are some which specifically relate to the State administration. A1011State and District AdministationState Administrationproactive stance by the State Governments would go a long way in enhancing ethics among government functionaries.2.2.3.4 The main recommendations applicable to States and District administration are narrated:-2.2.3.5 Institutional Frameworki.The Constitution should be amended to incorporate a provision making itobligatory for State Governments to establish the institution of Lokayukta and stipulate the general principles about its structure, power and functions.ii.The Lokayukta should be a multi-member body consisting of a judicial Memberin the Chair, an eminent jurist or eminent administrator with impeccable credentials as Member and the head of the State Vigilance Commission as ex-officio Member. The Chairperson of the Lokayukta should be selected from a panel of retired Supreme Court Judges or retired Chief Justices of the High Courts, by a Committee consisting of the Chief Minister, Chief Justice of the High Court and the Leader of the Opposition in the Legislative Assembly. The same Committee should select the second Member from among eminent jurists/administrators. There is no need to have an Upa-Lokayukta.iii. The jurisdiction of the Lokayukta would extend to only cases involving corruption against Ministers and MLAs. They should not look into general public grievances.iv.Each State should constitute a State Vigilance Commission to look into casesof corruption against State Government officials. The Commission should have three Members and have functions similar to that of the Central Vigilance Commission.v.The Anti Corruption Bureaus should be brought under the control of the StateVigilance Commission.vi. The Chairperson and Members of the Lokayukta should be appointed strictly for one term only and they should not hold any public office under government thereafter.vii. The Lokayukta should have its own machinery for investigation. Initially, it may take officers on deputation from the State Government, but over a period of five years, it should take steps to recruit its own cadre, and train them properly.viii. All cases of corruption should be referred to Rashtriya Lokayukta or Lokayukta and these should not be referred to any Commission of Inquiry.2.2.3.6 Ombudsman at the Local Leveli.A local bodies Ombudsman should be constituted for a group of districtsto investigate cases against the functionaries of the local bodies. The State Panchayat Raj Acts and the Urban Local Bodies Acts should be amended to include this provision.ii.The local bodies Ombudsman should be empowered to investigate casesof corruption or maladministration by the functionaries of the local self-governments, and submit reports to the competent authorities for taking action.2.2.3.7 Strengthening Investigation and Prosecutioni.The State Vigilance Commissions/Lokayuktas may be empowered to superviseprosecution of corruption related cases.ii.The investigative agencies should acquire multi-disciplinary skills and shouldbe thoroughly conversant with the working of various offices/departments. They should draw officials from different wings of government.iii. The prosecution of corruption cases should be conducted by a panel of lawyers prepared by the Attorney General or the Advocate General in consultation with Rashtriya Lokayukta or Lokayukta as the case may be.iv.The anti-corruption agencies should conduct systematic surveys of departmentswith particular reference to highly corruption prone ones in order to gather intelligence and to target officers of questionable integrity.v.The economic offences unit of States need to be strengthened to effectivelyinvestigate cases and there should be better coordination amongst existing agencies.2.2.3.7 Besides, the principles mentioned in the Report on key issues such as enhancing citizen centricity, reducing discretion, promoting transparency, and enforcing accountability would be equally applicable to all levels of government.1213State and District AdministationState Administration2.2.4 Public Order2.2.4.1 In its Report on Public Order, the Commission dealt with the much delayed, but essential reform of police organisation and the criminal justice system; the need for reform of prisons, the future of some special laws, and the role of political parties, civil society and the media. Since Public Order and Police are State subjects under Schedule 7 of the Constitution, the recommendations made in that Report are, to a large extent, to be acted upon by the State Governments and their law-enforcment agencies.2.2.4.2 Some of the important recommendations of the Report relate to separation of crime investigation and police functions, insulating the police force from political interference, creation of a separate machinery for prosecution under a district attorney, setting up of police establishment committees to ensure fixed tenures for senior police functionaries, strengthening of the intelligence mechanism, setting up of a transparent complaint system by appointing independent complaint authorities both at the State as well as at the district level. In addition, the Commission has also recommended substantial reforms in the criminal justice system such as setting up local courts, citizen-friendly registration of FIRs, prescribing rules for inquest, amendment to sections 161, 162 of Cr.P.C., making confessions before the police admissible as evidence, amendments to section 311 Cr.P.C., and modernization and reforms of the prison system. One of the important suggestions is to include offences having inter-State or National ramifications into a new law. The Report also makes recommendations with regard to local policing, traffic management and metropolitan policing. It also suggests measures to enhance capacity of the local magistracy (which is actively involved with the police in maintenance of public order). All the above issues are of immediate concern to governments at the State level.2.2.4.3 The recommendations relevant to the State and District administration in the Report, in brief, are:-2.2.4.3.1 Streamlining the police functionsa.Crime investigation should be separated from other police functions. A CrimeInvestigation Agency should be constituted in each State. A State Police Performance and Accountability Commission should be constituted to provide the required autonomy to the police. A similar Board of Investigation should be constituted to oversee investigation and prosecution.b.The tenure of the Chief of the Law and Order Police as well as the Chief ofthe Crime Investigation Agency should be at least three years.c.Police Establishment Committees should be constituted to deal with all mattersof postings and transfers.d.A system of District Attorneys should be constituted wherein the DistrictAttorney would supervise prosecution as well as the investigation of crimes in a district.e.Metropolitan Police Authorities should be constituted in large cities. Theseauthorities should have powers to plan and oversee community policing and other functions.f.Non core police functions may be outsourced to other departments/agencies.g.The existing system of constabulary should be substituted with recruitmentof graduates at the level of Assistant Sub Inspectors of Police (ASI), except for the Armed Police.h.Independent City and District level Police Complaints Authorities should beconstituted to look into all cases of misconduct by the police.i.An independent Inspectorate of Police should be established to carry outperformance audit of police stations and other police offices.j.Representation of women and under represented sections of society in the policeshould be increased through affirmative actions. Women should constitute 33% of the police force.2.2.5 Capacity Building for Conflict Resolution2.2.5.1 The Report of the Commission on “Capacity Building for Conflict Resolution” covers part of its TOR No.13 i.e. Public Order. In this Report, the Commission has sought to outline measures that can be taken to improve the institutional capacity of the country to resolve and manage conflicts of all types. Creating an institutional context wherein conflict management is done in a democratic manner keeping the interests of all sections of society in mind rather than resorting to short term fire fighting, is the focus of the Report. The1415State and District AdministationState AdministrationReport deals with a large number of issues which cause tension in our Society such as – left extremism, land related issues, water disputes, matters related to scheduled castes/tribes and other backward classes, religious and political disturbances. The Report stresses on the need to enhance the capacity of the security forces, to speed up formation of special task forces in the effective areas, to ensure effective implementation of Forest Dwellers (Recognition of Rights) Act, 2006, to give flexibility to local agencies with regard to development schemes, to speed up implementation of land reform measures, to take steps for consolidation of land holdings, and to expand the banking system in the rural areas. The Commission has also recommended avoiding use of prime agricultural land for SEZs, diversifying risk coverage measures such as - weather insurance and price support schemes, setting up River Basin Organisations for inter-State rivers, adopting proactive measures to settle inter-State river disputes, implementing measures to end the discrimination against scheduled castes, faster disposal of such cases, sensitisation of civil and police machinery towards the special problems of SCs and STs, and involvement of local governance institutions in various programmes concerned with enforcement of various social legislations. The Report further recommends that in the Fifth Schedule Areas, various State laws and policies should be made compliant with the PESA and there should be convergence of regulatory and development programmes. With regard to religious conflicts, the suggestion is to take prompt action against spreading of hatred, to make effective use of peace committees/integration councils, provide for enhanced punishment for communal offences and set up special courts. The Report has also taken up issues arising out of regional disparities and conflicts in the North-East. The State administration has a major responsibility in preventing conflicts from escalating into violent protests and activities.2.2.6 Crisis Management2.2.6.1 In its Third Report, the Commission examined all aspects of Crisis Management and attempted to delineate a road map involving stakeholders/ agencies and organisations at every level during different phases of a crisis – from prevention to management. ‘Disaster Management’ as a subject is not mentioned in any of the three lists under Schedule 7 of the Constitution, but, by practice and convention the primary responsibility for managing disaster rests with the State Governments. The Union Government has enacted the Disaster Management Act, 2005 under entry 23 namely ‘Social security and social insurance, employment and unemployment’ in the Concurrent list. At the same time, some States too have enacted laws governing disaster management.2.2.6.2 The following recommendations of the Report are relevant for the State Governments:-i.Disaster/Crisis management should continue to be the primary responsibilityof the State Governments and the Union Government should play a supportive role.ii.The law should create a uniform structure at the apex level to handle all crises.Such a structure may be headed by the Prime Minister at the National level and the Chief Minister at the State level. At the administrative level, the structure is appropriately headed by the Cabinet Secretary and the Chief Secretary respectively.iii. The role of the local governments should be brought to the forefront for crisis/ disaster management.iv. The National Executive Committee as stipulated under the Disaster Management Act need not be constituted, and the National Crisis Management Committee (NCMC) should continue to be the apex coordination body. At the State level, the existing coordination mechanism under the Chief Secretary should continue.v.In larger cities (say, with population exceeding 2.5 million), the Mayor,assisted by the Commissioner of the Municipal Corporation and the Police Commissioner should be directly responsible for Crisis Management.vi. Empowering the Relief Commissioners/Disaster Management Departments to effectively discharge disaster related responsibilities.vii. The district emergency response plan should be prepared in consultation with all concerned. The plan should be known and accepted by all the role plays. (This should be a part of the District Disaster Management Plan).viii. Effective coordination is essential at the district and sub-district levels for rescue/ relief operations and to ensure proper receipt and provision of relief. During rescue and relief operations, unity of command should be ensured with the Collector in total command.1617State and District AdministationState Administration2.2.7Organizational Structure of Government of India2.2.7.1 In its Thirteenth Report the Commission has examined in detail the Organisational Structure of Government of India. In order to make the administration more efficient, responsive and accountable, the Commission suggests that the focus of the government should be on the following core activities.a.i.Defence, International relations, National Security, justice and ruleof law.ii.Human development through access to good quality education and healthcare to every citizen.iii. Infrastructure and sustainable natural resource development.iv.Social security and Social justicev.Macro economic management and retorted economic Planningvi.National policies in respect of other sectorsb.The principle of subsidiarity should be followed to decentralise functions toState and Local Governments.c.Subjects which are closely inter-related should be dealt with together.d.Separation of Policy Making Functions from Execution: The Ministry/Department should concentrate on strategic decisions, policy making, monitoring/evaluation and budgetary processes, whereas the implementation of policies should be handed over to Executive Agencies.e.Coordinated Implementation: Coordination is essential in implementationas in policy making. The proliferation of vertical departments makes this an impossible task except in cases where empowered commissions, statutory bodies, autonomous societies have been created.f.Flatter Structures-reducing the number of levels and encouraging team work:The structure of an organization including those in government should be tailor-made to suit the specific objectives it is supposed to achieve. There is aneed to shift to flatter organizations with emphasis on team work. Well defined Accountability: The present multi-layered organizational structurewith fragmented decision making leads to a culture of plausible alibis for non performance. The tendency to have large number of on - file consultations, often unnecessary, leads to diffused accountability. A clearer demarcation of organizational responsibilities would help in developing a performance management system for individual functionaries.g.Appropriate Delegation: A typical characteristic of a government organizationis the tendency to centralize power and avoid delegation of authority to subordinate functionaries or units. However, this leads to delays, inefficiency and demoralization of the subordinate staff. The principle of subsidiarity should be followed to locate authority closer to the citizens.h.Criticality of Operational Units: Government organizations have tended tobecome top-heavy with a lack of authority, manpower and resources at the operational levels that have a direct bearing on citizens lives. Rationalization of Government staff pattern is necessary and commensurate with the requirements of the citizens.2.2.7.2 Based on the above core principles, the Report has made a large number of recommendations with regard to formation and functioning of a Ministry and a Department as mentioned earlier and reframing of the Allocation of Business Rules. It has also suggested that the Ministries/Departments should concentrate on policy planning and strategic decision making and implementation work should be given over to adequately empowered Executive Agencies. Thereafter, the Report deals with issues of delegation, reduction of hierarchy, maintenance of electronic database and strengthening the coordination mechanism in the government. Finally, the Commission also dwells on issues connected with setting-up of regulatory authorities; viz. need for a Regulator, autonomy in functioning, uniformity in appointment of Chairman and Members etc.2.2.7.3 Most of the above recommendations with minor changes are applicable to the State governments. They have been referred to at appropriate places in the subsequent Chapters of this Report.2.2.8 Financial Management System2.2.8.1 Financial Management is one of the most critical elements of Public Administration. The Commission has carried out an elaborate study of this subject in its fourteenth Report.1819State and District AdministationState Administration2.2.8.2 The Commission is broadly of the view that the core principles for reforming the financial management system of the government in the country should consist of the following:-i.Reforms in Financial Management System is part of overall governancereforms: Governance reforms to bring about improved transparency, greater accountability, streamlining the structure of the Government, elimination of corruption, and fiscal and environment sustainability have to be backed up by reforms in the financial management system in order to deliver the desired results. At the same time it needs to be understood that reforms in management system are not an end in itself but a means to achieving good governance.ii.Sound financial management is the responsibility of all government departments/agencies: Maintaining financial prudence, discipline and accountability, while at the same time, ensuring prompt and efficient utilization of resources towards achieving organizational goals is the responsibility of all government agencies/ organizations and not of the finance wing/Finance Ministry only.iii. Medium-term plan/budget frameworks and aligning plan budgets and accounts: Medium-term plan/budget frameworks attempt to bring the gap between the short-term time horizon of annual budgets with the medium term objectives of the schemes and programmes of government. Even when there are medium term frameworks like five year development plans, there is need to aligning the annual budgets explicitly with the plans and with the accounting mechanisms so that there is a clear ‘line of sight’ between the medium term developmental plan and the annual budget exercise.iv. Prudent economic assumptions: Economic assumptions that underline the budget have to be prudent and accurate in order to ensure that the budgetary estimates do not go haywire. The tendency to be overly optimistic has to be avoided.-down budgeting techniques: There is a need to shift from the traditionalbottom up approach to budgeting to a top-down framework where the desired outcomes should point to the resources required which should be allocated thereafter at the macro level sector-wise. This in turn would lead to focus on outputs and outcomes rather than on inputs and processes.vi. Transparency and simplicity: Budget documents should be simple and easy to comprehend and be available in the public domain. Also the procedures involved in operating the budget and release of funds should be simple. Suitablefinancial management information systems need to be developed in order to ensure that all transactions are captured and ultimately made available for public scrutiny.vii. Relaxing central input controls: Government agencies need to be given greater operational autonomy and flexibility by consolidating budget items and decentralization of administrative and financial powers.viii. Focus on results: Accountability in government needs to shift from compliance with rules and procedures to achievement of results. This is all the more necessary with relaxed central input controls. There should be emphasis on ‘value for money’.ix. Adopting modern financial management practices: Modern financial management tools like accrual accounting, information technology, financial information system etc. need to be used to improve decision making and accountability. However, care needs to be exercised to ensure that congenial environment is created and adequate capacity is developed before adopting new practices.x.Budgeting to be realistic: Unless the projections made in the budget are reasonably accurate, the budgetary exercise lose credibility.2.2.8.3 The above core principles which have been discussed extensively in the context of financial management in the Union Government in the 14th Report of the Administrative Reforms Commission, will apply as well to the State Governments. There are, however, some specific issues in this important area pertaining primarily to the State Governments. The Commission has analysed these in greater detail in Chapter 6 of this Report.2.3 Restructuring State Governments2.3.1 In addition to the issues on which the Commission has already made recommendations earlier, the Commission has analysed the following major aspects of State Administration in this Report:(i)Size of the Council of Ministers(ii) Rationalizing the number of Secretariat Departments(iii) Executive Agencies(iv) Internal restructuring of the State Government Departments.2021State and District AdministationState Administration(v) State Civil Services Law(vi) Appointment and security of tenure at senior levels in the State Government(vii) State Public Service Commission 2.3.2 Size of the Council of Ministers2.3.2.1 The State executive consists of the Governor, who is the Constitutional head of the State, and the Council of Ministers with the Chief Minister as the head. Each Minister of the Council of Ministers is in charge of one or more departments and the business of the Government is carried out through Secretaries functioning at the State level.2.3.2.2 Over a period of time, partly due to administrative needs and partly due to compulsions of coalition politics, there has been a significant proliferation of Ministers and Departments in almost all the States. This proliferation has led to administrative fragmentation. The present size of the Council of Ministers in the States, more so in the larger ones, appears to be disproportionate, particularly in view of the establishment of the third tier of Government, to whom substantive powers and functions have to be devolved as mandated by the Constitutional 73rd and 74th Amendments. An attempt was made to address this issue by way of the Ninety-first Constitutional amendment introduced with effect from 01.01.2004 by restricting the size of the Council of Ministers to a maximum of 15% of the strength of the respective State Legislative Assembly but the problem still persists. In bigger States (like U.P. where the Assembly has a strength of 404 legislators), even this restriction has not prevented formation of jumbo sized Ministries.2.3.2.3 Article 164 of the Constitution deals with the appointment of the Chief Minister and the other Ministers. As per Article 164(1A), the total number of Ministers including the Chief Minister, in the Council of Ministers in a State shall not exceed 15% of the total number of members of the Legislative Assembly of that State provided that the number of Ministers, including the Chief Minister in a State shall not be less than twelve. In case of smaller States like Sikkim, Mizoram and Goa where the strength of the Assembly is 32, 40 and 40 respectively, a minimum strength of 7 for the Council of Ministers has been provided.2.3.2.4 Before the 91st Constitutional amendment, there was no limit on the size of the Council of Ministers in a State. At one point, there were 76 Ministers in the Bihar Government, 69 in Maharashtra and 93 in Uttar Pradesh. The size and composition of the Council of Ministers is of basic importance to effective public administration. The Ministry and the Cabinet come into existence for the specific purpose of running theadministration efficiently and impartially and not for operating a spoils system. Hence, it needs to be compact and homogenous, its size being determined by administrative needs. It would depend on factors such as the area of the State, its population, the stage of economic development and its peculiar problems.2.3.2.5 It may be pertinent to recall that the National Commission to Review the Working of the Constitution had suggested that the size of the Council of Ministers should not be more than 10 per cent of the total strength of the lower House, the Lok Sabha at the Centre and the Legislative Assembly in the States. This recommendation was in line with the views of the First Administrative Reforms Commission which had suggested that the size of the Council be limited to 10 per cent of the strength of the Assembly in a unicameral State and 11 percent in a bicameral State.2.3.2.6 There is a growing realisation that there is need to further reduce the size of the Council of Ministers in the States. The number of Ministers (of all ranks taken together) should be in direct proportion to the needs of an efficient government. There should be a correlation between the number of Ministers and that of the Departments existing in the government. However, different yardsticks would be needed for different States and a distinction will have to be made on the basis of population, strength of the Assembly and specific functional needs of individual States. The following Table indicates the current status in various States.Table1 No.2.1 : Strength of the Legislative Assembly of various StatesSl. No.StatesPopulation (in lakh)Strength of the Lagislative AssemblySize of theNumber of DepartmentsCouncil ofMinisters1.Uttar Pradesh1660.5240456772.Bihar828.7824335353.West Bengal802.2129542544.Madhya Pradesh603.8523123505.Rajasthan564.7320024336.Gujarat505.9718220267.Maharashtra967.5228943298.Andhra Pradesh757.2829540309.Karnataka527.34224322810.Tamil Nadu621.11235293311.Jammu and Kashmir100.70891022231Source: Based on the data available on State Government’s Websites.State and District AdministationState Administration2.3.2.7 The Commission feels that a compact and small sized Council of Ministers is one of the essential requirements of good governance and as indicated earlier the current ceiling of 15% which has been imposed by Article 164(1A), appears to be somewhat excessive for many of the States.2.3.2.8 In order to arrive at some rational criteria for reducing the size of the Council of Ministers, the Commission feels that all the 28 States of the country could be conveniently placed in three groups on the basis of the strength of their Legislative Assemblies. Bigger States where the strength of the Assemblies lies between 200 and 400 could be placed in one group such as Uttar Pradesh, Bihar, West Bengal, Madhya Pradesh, Rajasthan, Gujarat,Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu. States where the strength of the Legislative Assemblies is between 80 and 200 such as Jammu & Kashmir, Punjab, Haryana, Assam, Jharkhand, Orissa, Chhattisgarh, and Kerala could be grouped together. The third Group may consist of States where the strength of their Assembly is below 80 such as Himachal Pradesh, Uttarakhand, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, and Goa. (For The Union Territory of Delhi, Article 239AA(4) of the Constitution itself limits the size of the Council of Ministers to 7 whereas in the case of Puducherry it is limited to 6).2.3.2.9 While suggesting reduction in the size of the Council of Ministers, the Commission is conscious of the fact that medium and smaller States should not be in a disadvantageous situation and they must have adequate number of Ministers to meet the requirements of governance. Therefore, it is of the view that a graded system could be adopted where the maximum percentage limit could be in the range of 10-15 % of the strength of the respective State Legislative Assembly. To be more specific, the larger States where membership of the Assembly is more than 200, the strength of the Council of Ministers should not exceed 10% of such strength. This maximum percentage could be 12% in case of medium States (where the strength of the Assembly is between 80 and 200) and 15% in case of smaller States (where the strength of the Assembly is below 80). This stipulation should, however, be subject to an appropriate proviso to remove the resultant anomalies. It may be ensured that the maximum number of Ministers permissible for the medium sized States should not exceed the number prescribed for a large State having 200 legislators and similarly the maximum number of Ministers permissible for the smaller States may not exceed the number prescribed for a medium sized State having 80 Legislators. At the same time there may be no prescribed minimum.2.3.2.10 In this context, the Commission would also like to take note of the developments which have taken place in the Indian polity during the last few decades. They are (a) emergence of a large number of regional political parties based on local identities and aspiration, (these parties are now able to secure a significant number of seats in the State Legislature), (b) formation of coalition governments both at the Centre as well as in the States and (c) the third and a natural corollary has been the swearing in of large Councils of Ministers in the States.2. 3.2.11 The issue seems to be complex and there is a need to arrive at a national consensus through deliberations/discussions with the States. The Commission is of the view that the appropriate forum for these deliberations/discussions would be the Inter-State Council.Sl.StatesPopulationStrength ofSize of theNumber ofNo.(in lakh)theCouncil of DepartmentsLagislativeMinistersAssembly12.Punjab242.89117363313. Haryana210.8390104314. Assam266.38126193115. Jharkhand269.0981123616.Orissa367.07147213617.Chhattisgarh207.9690124318.Kerala318.39141194019.Himachal Pradesh60.7763104420. Uttarakhand84.8070124321.Sikkim5.4032123522.Arunachal Pradesh10.9160294323. Nagaland19.8960133124. Manipur23.8960125225. Mizoram8.9140123426.Tripura31.9160122627. Meghalaya23.0660124528. Goa13.44401234Source: Based on the data available on State Governments’ Websites.Table No. 2.1 : Strength of the Legislative Assembly of various StatesContd.2425State and District AdministationState Administration2.3.3 Rationalising the Number of Secretariat Departments2.3.3.1 The Secretariat is the top most echelon of the State administration and its main function is to assist the political executive – the Chief Minister and other Ministers - in maintaining peace and law and order and designing policies for the socio-economic development of the State as well as in carrying out legislative responsibilities of the government. The political executive is elected for a fixed tenure, but the Secretariat consists of civil servants and others who are permanent employees of the government. Hence the Secretariat works as a memory bank providing continuity to government policies and programmes. The primary functions of the Secretariat are:(a) Assisting the Ministers in making policies for the socio economic development of the State;(b) Carrying out regulatory work;(c)Drafting legislations, rules and regulations; Coordinating various policies and programmes, monitoring progress of work and analyzing results;(d) Preparing budget and maintaining control over expenditure;(e) Maintaining liaison with various departments of the Union Government;(f) Monitoring the administrative system and taking steps to enhance its efficacy, competence and responsiveness.2.3.3.2 Over the years, due to continued expansion of governmental activities in all sectors and also to some extent due to the self serving tendencies of the system and considerations of expediency, there has been a marked increase in the size of the State secretariat. There has also been accumulation of multifarious and unnecessary tasks and expansion of executive work. Though, from time to time many States have constituted their own Reforms Commissions and Committees to suggest improvements in the functioning of the secretariat, the system has remained by and large immune to change. The overall impression of the Secretariat is of an unwieldy, slow-moving organization with an in-built propensity for delays.2.3.3.3 Creation of the departments in the State Government has not always followed administrative logic. Functions which are closely related both in terms of the scope of activities as well as staff skills have often been truncated to form separate departments. Often, an activity which is insignificant in terms of both functions as well as budgetary allocation is converted into a full-fledged department.2.3.3.4 For example, in some States, a separate Department dealing with Administrative Reforms and Public Grievances has been carved out of the existing Department of Personnel/ General Administration Department. In West Bengal, there is a separate Department for Municipal Affairs, though there is also a Department for Urban Development and Town and Country Planning. In Uttar Pradesh, Civil Aviation is a separate Department, though it has a very small functional activity - relating to operation and maintenance of just a few small aircrafts. Similarly, Dairy Development which should have been a part of the larger Animal Resources Development Department, exists as a separate entity in this State. In Madhya Pradesh, there is a separate Department of Jails, though it could have been a part of the State Home Department.2.3.3.5 As already mentioned at para 2.3.3.10, the emergence of a large number of regional parties during the last four decades has led to a situation in which coalition governments and2.3.2.12 Recommendations:a) The size of the Council of Ministers in the States needs to be reduced further considering the needs of an efficient government. For this purpose the maximum size of the Council of Ministers may be fixed in a range between 10% to 15 % of the strength of their Legislative Assemblies. In the larger States (where membership of the Assembly is more than 200) such maximum percentage should be 10% where as in the medium (where the strength of the Assembly is between 80 and 200) and the smaller States (where the strength of the Assembly is below 80) it may be 12% and 15% respectively. This stipulation should however be subject to appropriate proviso to remove anomalies. It may be ensured that the maximum number of Ministers permissible for the medium sized States should not exceed the number prescribed for a large sized State having 200 legislators and similarly, the maximum number of Ministers permissible for the smaller States should not exceed the number prescribed for a medium sized State having 80 Legislators. There may not be any prescribed minimum.b) There is need to arrive at a national consensus on this issue through deliberations/discussions with the States at the Inter-State Council.2627State and District AdministationState Administrationhence large sized Council of Ministers in States have become regular features of the Indian polity. The large number of Ministers has in turn led to creation of new departments or splitting up of the existing ones. A State Government consisting of too many departments suffers from the following inherent disadvantages.a)There is diffusion of responsibility and accountability among the large number of functionaries working under different vertical structures.b)Coordination becomes a major issue and decision making becomes difficult and time consuming.c)It leads to needless expansion of the bureaucracy. Its own management takes a major part of the government’s attention. The structure often, becomes more important than considerations of efficiency, responsiveness and service to people.2.3.3.6 The Commission believes that there is need to emphasis that the allocation of work to different departments should be made on the basis of an empirical analysis of the functions and tasks to be performed by the government. There has to be a rational grouping of subjects among departments keeping in mind considerations of efficiency, effectiveness, homogeneity and economy.2.3.3.7 Ideally, each of the Secretariat departments should deal with a particular segment of administrative activities which are inter-related and are more or less homogenous. It should also provide an in-built mechanism for coordination of policies and programmes. The basis for this rationalization could be as follows:-a)Inter-related subjects, activities and functions to be placed under one department.b)Need for synergy between the activities of various Departments.c)Devolution of a large number of functions to the PRIs/ULBs.d)The role of Secretaries to be redefined; to be divested of non-essential responsibilities and executive work and larger delegation of power to the executive departments/ agencies.e)Need for streamlining the decision making process.2.3.3.8 Based on the above principles, the State Governments need to rationalize the number of departments presently existing in the Secretariat. To give an example from theGovernment of Bihar, the presently separate departments of Panchayati Raj and Rural Development could be merged into one Department. Similarly, the Departments of Agriculture, Animal Resources and Dairy Development could be combined into a single entity.2.3.3.9 The Commission is of the view that a small and compact Secretariat in which all related activities and functions are kept together in one department with more responsibilities devolved on local governments and executive work (not related to policy making and broader monitoring), hived off to executive agencies, is a sine qua-non for good governance at any level of public administration. Hence, there is need to rationalize the number of Secretariat Departments in the State Governments.2.3.3.10 The Commission would recommend that all States attempt such a rationalization exercise as illustrated above keeping in view their specific requirements.2.3.3.11 Recommendation:a) The number of Secretariat Departments in the States should be further rationalized on the following basis:i)The existing departments covering inter-related subjects, activities and functions should be merged;ii) Need for synergy between the activities of various departments;iii) Devolution of a large number of functions to the PRIs/ULBs;iv) The role of Secretaries to be redefined; to be divested of non-essential responsibilities and executive work and larger delegation of power to the executive departments/agencies; andv) Need for streamlining the decision making process.2.3.4 Separate Focus on Policy Making and Implementation2.3.4.1 There are two broad tasks of the government. The first is formulating policy in pursuance of objectives that the political leadership specifies, and the second, implementation of that policy. In a democracy, it is the political leadership-assisted by the2829State and District AdministationState Administrationcivil servants – which sets the vision, goals and strategic directions. But sound institutional arrangements play an important role in translating the vision, goals and strategic directions into effective action.2.3.4.2 Although precise institutional arrangements have varied, effective governments throughout the world are characterized by strong systems for strategic policy formulation. At the heart of these systems are mechanisms for preparing policy proposals after due consideration of future implications, estimating the costs of competing policy options within a disciplined framework of aggregate expenditures, ensuring horizontal coordination where policies are spread across a number of departments where delivery mechanisms are similarly divided between different parts of the government, and introduction of policy evaluation systems.2.3.4.3 A key structural reform in various countries towards achieving good governance has been the separation of policy and operational responsibilities. There is a two-fold logic behind it: (a) the separation of policy advice from operational functions allows those responsible for operational activities to focus on their prime objective i.e. running their operations as efficiently as possible within the policy parameters of the government, and (b) it ensures that contestable policy options are generated and government does not get captured by provider interests.2.3.4.4 The Commission in its Tenth Report, on Refurbishing of Personnel Administration, has recommended that policy formulation functions need to be distinguished from those relating to policy implementation, particularly in the case of senior civil servants. The Commission noted that “the need to provide the Ministers with high quality policy advice requires that Secretaries to Government and their supporting staff in the Secretariat with policy advisory responsibilities do not get diverted by the demands of managing routine administrative and operational responsibilities. This would call for a broad separation of policy formulation and implementation responsibilities. What this would imply is that the Ministries responsible for policy advice including the monitoring and evaluation of policy implementation should be separated from the departments and other entities responsible for delivery of services, operational matters and the enforcement of regulations. What is required, therefore, is not merely a broad separation of policy operation, but also restructuring the design of the Ministries to make them less hierarchical, creating flatter structures with team based orientation and reducing the excessive degree of central control now being exercised over operational matters.2.3.4.5 The Commission recognizes, however, that there can be no water-tight separation of the policy making and implementation functions since Ministers are ultimately accountableto Parliament for the performance of their Ministries and departments in all respects. In fact, the Government of India (Transaction of Business) Rules states that all business allocated to a Department in the Government of India, has to be disposed of under the directions of the Minister in-charge. However, Ministers can discharge their responsibilities in this regard more effectively by supervising the performance of operational agencies from time to time rather than by taking direct control of routine functions.2.3.4.6 The Commission has considered how a degree of separation between the policy making and implementation functions of the Ministries and other government agencies can be best achieved. Under the existing scheme, it is the Minister who lays down the extent of delegation of various functions to different levels within the Ministry as well as to its attached and subordinate offices. In order to enable the Ministries to effectively fulfill their policy making role and also to ensure uniformity across Ministries, the Commission is of the view that some general principles to govern the extent of delegation may be incorporated in the Transaction of Business Rules. These principles may stipulate that the Ministries should concentrate on the following:?Policy making and strategic decisions.?Budgeting?Monitoring of implementation?Appointments of key personnel?Coordination?EvaluationAttached and subordinate offices would serve as the executive agencies of the Ministries and concentrate on the implementation of government policies and programmes.2.3.5 Executive Agencies:2.3.5.1 Separation of policy and implementation would also call for changes in how the policy implementing agencies are structured. Implementational bodies need to be restructured by giving them greater operational autonomy and flexibility, at the same time, making them responsible and accountable for what they do. The Executive Agency is an organization in the public sector, analogous to the self-contained, quasi-autonomous division of a corporate body. ‘Agencification’, that is, extensive use of executive agencies in administration has been found useful in conducting an extremely wide range of functions and has been the cornerstone of public service reforms around the world.3031State and District AdministationState Administration2.3.5.5 Recommendationsa) The State Governments should scrutinize the functions/activities of each department to confirm whether these activities/ functions are critical to the mission of the department and can only be carried out by government agencies.b) Only those functions/ activities that have to be carried out by the government based on the principle enunciated in paragraph 2.3.4.6 should322.3.5.2 In the States too, a major part of implementation work is done by executive agencies of different kinds. They are structured as departments, statutory boards, commissions, departmental undertakings, societies and other parastatals. In effect, however, because of centralized controls and inadequate delegation of authority, these bodies do not function as real autonomous agencies. While the importance of delegating increased powers to the executive agencies is now getting recognized and some States have delegated more powers to the agencies, the overall approach has been one of caution and hesitancy. Delegations are also often made in a piecemeal manner and with reservations, more as a favour than as a method of organizational management. The Commission would, therefore, like to emphasise that mere creation of Executive Agencies is not an end in itself. It is necessary to ensure that they have a right balance between autonomy and accountability in their functioning. This could be achieved through well designed performance agreements, Memorandum of Understanding (MoU), contracts, etc. However, preparing and enforcing such performance contracts requires considerable upgradation of capacity in the concerned government departments.2.3.5.3 The Commission has comprehensively examined this issue in the context of the Union Government in its Report on the “Organizational Structure of India”. The recommendations made therein would also be applicable to the State Governments.2.3.5.4 There may be some Executive Agencies in the States whose major functions/activities have devolved on local governments. Their role will change. Instead of spending time on personnel matters and micro-management, their role has to change to one of monitoring and supervision, ensuring of standards and quality, providing guidance to local governments on technical matters, training of personnel and giving feed back to the government on implementation and performance and advising on changes that are needed in plans and programmes. It follows that, in course of time, their number and size, as well as the skills of those manning them will have to be different.2.3.6 Internal Restructuring of the State Secretariat2.3.6.1 Apart from the above, there are some important procedural issues related to the functioning of the Secretariat in the States which too need to be reformed. They are internal reorganization, process re-engineering, simplication of government processes and recasting the Manual of Office Procedures. The Commission has examined these issues in detail in its Report on “Organisational Structure of Government of India” with reference to functioning of the Central Secretariat and has suggested a large number of measures to make the system efficient, responsive and citizen-friendly (Paras 5.7, 5.8 & 5.9) such asa.Each Department should lay down a detailed scheme of delegation at all levels sothat the decision making takes place at the most appropriate level. It should be laid down in the Manual of Office Procedure that every Ministry should prescribe abe carried out directly by the departments. Other functions/ activitiesshould be carried out by Executive Agencies of the department.c) Each Executive Agency, whether a new body or an existing departmental undertaking/ agency/ board/ special purpose body, etc. that is converted into an Executive Agency, must be semi-autonomous and professionally managed under a mandate. Such executive agencies could be structured as a department, board, commission, company, society, etc.d) There is need for a right balance between autonomy and accountability while designing the institutional framework of executive agencies. This could be achieved through well designed performance agreements, Memorandum of Understanding (MoU), contracts, etc. However, preparing and enforcing such performance contracts requires considerable upgradation of capacity in the concerned governmental departments.e) Agencies dealing with subjects where major functions and activities have devolved on local governments would need to concentrate on monitoring and supervision, ensuring of standards and quality, providing guidance to local governments on technical matters, training of personnel, giving feedback to the government on implementation and performance and advising on changes that are needed in plans and programmes – as stated in paragraph 2.3.5.4.33State and District AdministationState Administrationdetailed scheme of delegation for its officers. This delegation should be arrived at on the basis of an analysis of the activities and functions of the Ministry/Department and the type of decisions that these entail which should be dovetailed with the decision making units identified it that Department.b.The scheme of delegation should be updated periodically and should also be ‘audited’at regular intervals. The audit should ensure that the delegated authority is actually authorized by the delegate. The scheme of delegation should be placed in the public domain.c.The number of levels through which a file should pass for a decision should notexceed three. Only in cases where the Minister’s approval is required, would the file be initiated by the Deputy Secretary/Director concerned and be moved through the Joint Secretary (or Additional Secretary/Special Secretary) and the Secretary (or Special Secretary) to the Minister. Cases requiring approval of Secretary should go through just two levels (e.g. US and Director, US and JS or Director and JS). Cases requiring approval of JS/Director/DS should come through just one level. The exact combination of levels should be spelt out in the scheme of delegation for each Ministry/Department whereas the number of levels as suggested above should be prescribed in the Manual of Office Procedure. The department dealing with administrative reforms in the Union Government should be entrusted with the task of ensuring compliance with this stipulation.d.For addressing cross cutting issues, the Secretary of the concerned Department shouldhave the flexibility to create inter-displinary team.e.Departments should build an electronic database of decisions that are likely to beused as precedents. Thereafter such database should be periodically reviewed and where necessary, changes in rules introduced in order to codify them. There may also be precedents that may be the result of wrong or arbitrary decision making which the Department would prefer not to rely on for the future. In such cases the Department would have to appropriately change its policy/guidelines and if required even the rules to ensure that these precedents are not wrongly used.The above recommendations will also need to be appropriately replicated in the State Secretariats.2.4 Refurbishing State Civil Services 2.4.1 Civil Services Law2.4.1.1 In its Report on “Refurbishing Personnel Administration” (Tenth Report), the Commission has recommended a series of measures for reforming the civil services of the Union Government. The recommendations concern:a)Determining a set of values for civil servantsb)Redefining the relationship between the government and the civil servantsc)Reforming procedures of recruitment to the civil servicesd)Reforming the procedure for placement of officers and ensuring security of their tenure – setting up an institutional mechanisme)Drafting fresh terms and conditions for new appointeesf)Improving accountability mechanisms and simplifying disciplinary proceedingsg)Creating new organisational structures in the government.2.4.1.2 In order to provide legislative backing to these measures, the Commission has recommended enactment of a Civil Services Law which will cover all personnel holding civil posts under the Union. As recommended at paragraph 17.5 of this Report, the proposed law has the following salient features:I.Civil Service Values: The Civil Services and the Civil Servants shall be guidedby the following values in addition to a commitment to uphold the Constitution in discharge of their functions:i.Absolute integrity at all timesii.Impartiality and non-partisanshipiii. Objectivity3435State and District AdministationState Administrationiv.Dedication to public servicev.Empathy towards weaker sectionsThe Heads of Departments shall be responsible for promoting these values in their organizations. The Central Civil Services Authority may from time to time review the adoption, adherence to and implementation of the Civil Service Values in the departments or organizations under the Union.II. Code of Ethics: The following should be included in the Code of Ethics for civil servants:i.Integrity: Civil servants should be guided solely by public interest in their official decision making and not by any financial or other consideration either in respect of themselves, their families or their friends.ii.Impartiality: Civil servants in carrying out their official work, including functions like procurement, recruitment, delivery of services etc, should take decisions based on merit and free from any partisan consideration.iii. Commitment to public service: Civil servants should deliver services in a fair, effective, impartial and courteous manner.iv.Open accountability: Civil servants are accountable for their decisions and actions and should be willing to subject themselves to appropriate scrutiny for this purpose.v.Devotion to duty: Civil servants should maintain absolute and unstinting devotion towards their duties and responsibilities at all times.vi. Exemplary behaviour: Civil servants should treat all members of the public with respect and courtesy and at all times should behave in a manner that upholds the rich traditions of the civil services.III. Recruitment and Conditions of Service: Recruitment and conditions of service of persons appointed to the ‘Public Services’ shall be governed by Rules made under this Act. The following principles of recruitment should be included for all appointments not routed through the UPSC or SSC:i.Well-defined merit based procedure for recruitment. Wide publicity and open competition for recruitment to all posts.vii. Minimisation, if not elimination, of discretion in the recruitment process.viii.Selection primarily on the basis of written examination or on the basis of performance in existing public/board/university examination with minimum weightage to interview.An independent agency should audit the recruitments made outside the UPSC and SSC systems and advise the government suitably. This audit should be conducted under the supervision of the UPSC.IV. New Conditions of Appointment: (1) A civil servant, other than those recruited or inducted for a short-term appointment, shall hold office for twenty years from the date of initial appointment. (2) The relationship between the civil servant and the Government of India during the time he/ she holds office shall also be governed by the rules made in this regard. All public servants shall be subjected to two intensive reviews on completion of 14 years and 20 years of service respectively. Their further continuance beyond 20 years will depend on the outcome of these reviews. It should be expressly provided that all new recruitments shall be for a period of 20 years and their continuance beyond 20 years would depend on the outcome of the intensive reviews.V.Fixation of Tenures: All senior posts should have a specified tenure. The task of fixing tenures for various posts may also be assigned to this independent agency - Central Civil Services Authority.VI. Dismissal, Removal etc. of Civil Servants: After the repeal of Articles 310 and 311 (as recommended in the Report on ‘Ethics in Governance’), safeguards against arbitrary action against government servants should be provided in the new law. These safeguards should include:i.No penalty of removal and dismissal should be imposed, except by an authority, which is at least three levels above the post which the government servant is holding.ii.Other penalties – apart from dismissal and removal - may be imposed by an authority which is at least two levels above the current post of the government servant.3637State and District AdministationState Administration38iii. No penalty may be imposed, unless an enquiry is conducted and the accused government servant has been given an opportunity of being heard.iv. The Head of an organization should have powers to lay down the details of the enquiry procedure, subject to the general guidelines which may be issued by the Government from time to time.VII. A performance management system should be mandatory for every organization in the government.VIII. Constitution of the Central Civil Services Authority:i.The Central Government shall, by notification in the Official Gazette, constitutea body to be known as the Central Civil Services Authority to exercise the powers conferred on, and to perform the functions assigned to it, under this Act.ii.The Central Civil Services Authority shall be a five-member body consistingof the Chairperson and four members (including the member-secretary). The Authority should have a full time Member- Secretary of the rank of Secretary to Government of India. The Chairperson and members of the Authority should be persons of eminence in public life and professionals with acknowledged contributions to society. The Chairperson and members of the Authority shall be appointed by the President on the recommendations of a Committee consisting of the Prime Minister and the Leader of the Opposition in the Lok Sabha. (Explanation:- Where the Leader of the Opposition in the Lok Sabha has not been recognized as such, the Leader of the single largest group in the opposition in the Lok Sabha shall be deemed to be the Leader of the Opposition).IX. Functions of the Central Civil Services Authority: The Central Authority shall discharge the following functions:i.Review the adoption, adherence to and implementation of the CivilService Values in the departments or organizations under the Central Government and send reports to the Central Government.ii.Assign domains to all officers of the All India Services and the CentralCivil Services on completion of 13 years of service.iii. Formulate norms and guidelines for appointments at ‘Senior Management Level’ in Government of India.iv. Evaluate and recommend names of officers for posting at the ‘Senior Management Level’ in Government of India.v.Identify the posts at ‘Senior Management Level’ in Government of India which could be thrown open for recruitment from all sources.vi. Fix the tenure for posts at the ‘Senior Management Level’ in Government of India.vii. Submit an annual report to Parliament.X. Creation of Executive Agencies in Government: Government should be authorized to create or reorganize some or all of the existing Departments into ‘Executive Agencies’. The role of the Ministries should primarily concern policy formulation while implementation should be left to the Executive Agencies.2.4.1.3 Each one of the above mentioned features of the proposed law has been separately discussed by the Commission in its Tenth Report and suitable recommendations have been made. These recommendations are equally relevant to the State administrative structure. In fact, the Commission specifically recommended creation of State Civil Services Authority on the lines of the Central Civil Services Authority at paragraph 8.7 (d) of its Report. The Commission reiterates that each State Government needs to enact a similar Civil Services Law in order to provide appropriate legislative backing to the reform measures in respect of all personnel holding civil posts in the State. However, the Commission is also of the view that it is advisable to achieve a national consensus on this issue and have some kind of uniformity among different States on enactment of this Law. This issue may be taken up for deliberations / discussions among States at an appropriate forum such as the Inter-State Council, before the law is enacted by each State.2.4.1.4 Recommendations:a) The Commission reiterates that the recommendations in its Tenth Report pertaining to the Civil Services Law and Civil Services Authority should be implemented by the State Governments both in letter and spirit.b) In order to provide appropriate legislative backing to these reforms, each State Government should enact a Civil Services Law for all the personnel39State and District AdministationState Administrationholding civil posts in the State (on the lines of the proposed Union Law). However, in order to evolve a national consensus and ensure a measure of uniformity among States, the matter may be taken up for deliberations at the Inter-State Council.2.4.2 Appointment and Security of Tenure at the Senior Levels in the State Government2.4.2.1 In the present system of State administration, top level assignments such as Heads of Departments and Regional/Zonal Heads are manned by officers of the All India Services. The supporting positions are held by senior officers of various State services. The Chief Secretary is the senior most officer of the State administration and assists the Chief Minister/ Council of Ministers in all matters of governance. Then there are Principal Secretaries who are in-charge of various departments such as Home, Industries, Finance, Forests, Agriculture, Health, Public Works Department (PWD), Water Resources etc. who work in conjunction with the respective Ministers.2.4.2.2 The Director General of Police, Engineer-in-Chief, PWD, Principal Chief Conservator of Forests, Engineer-in-Chief, Irrigation, Director General of Health Services, Director, Agriculture and Director Industries are some other important functionaries who work as Agency Heads. The issues concerning appointments to these highest levels of administration and the security of their tenure have been points of debate since Independence. Often, the process of such appointments is found to be lacking in transparency and objectivity. Transfers are frequent and often coincide with the change in the political regime; the duration of tenure is thus uncertain. All this leads to instability of the administration and lack of faith in the system among the common people. There is need to introduce methods which would impart greater credibility to the appointments process; it should be impartial and merit based. It should also appear as to be so in the eyes of the stakeholders and the public. Selection of officers having unimpeachable conduct, integrity and professional competence is an essential requirement of good governance.2.4.2.3 The Commission has examined the issue of security of tenure and a transparent and objective appointments process in its Reports on “Public Order” and “Personnel Management”. For the appointment of Director General of Police, the Commission has recommended that the State Police Performance and Accountability Commission comprising inter alia the Home Minister as the Chairman and Leader of the Opposition in the State Assembly, Chief Secretary and others as its Members would recommend a panel of names to the State Government for appointment. The tenure for the Director General of Police and the Chief of the Crime Investigation Agency would be for at least three years and in case of their removal the State Government would need to seek the clearance of the State40Police Performance and Accountability Commission or the State Investigation Board, as the case may be.2.4.2.4 For appointments to the posts of the Chief Secretary and the Principal Conservator of Forest, the Commission communicated the following interim suggestions to the Government in December 2007:-i)There should be a collegium to recommend a panel of names to the ChiefMinister/ Cabinet for these two posts. For the post of Chief Secretary, this collegiums may consist of (a) a Minister nominated by the Chief Minister,(b) the Leader of the Opposition in the State Legislative Assembly and (c) the incumbent Chief Secretary. For the selection to the post of Principal Chief Conservator of Forests the collegiums may consist of (a) The Minister In-charge of Forests, (b) the leader of Opposition in the State Legislative Assembly and(c) the Chief Secretary.ii)There should be a fixed tenure of two years for both these posts.iii) The selection for the post of Chief Secretary and Principal Chief Conservator of Forests should be widened to include all officers above a specified seniority (e.g. 30 years). All officers with seniority higher than a prescribed limit should be eligible to be a part of the panel.2.4.2.5 Subsequently, in its Report on “Refurbishing of Personnel Administration” (the Tenth Report), the Commission suggested a detailed procedure for placement of officers at the middle and top management levels in the Union Government. It calls for the constitution of a Central Civil Service Authority by law, which will be an independent five member body consisting of persons of eminence in public life and professionals with acknowledged contributions to Society. This Authority will be empowered to deal with a large number of issues concerning civil services such as assignment of domain to officers, preparing panels for posting at the levels of Joint Secretary and above, fixing tenures for senior assignments and such other matters that may be referred to it by the Union Government. The Commission is of the view that there should be a similar Civil Services law and a State Civil Services Authority for each State. The mandate and functions of the State Body would largely coincide with those prescribed under the proposed Union Civil Services Law. This Authority should deal with issues of appointment and tenure of higher officials of all ranks in the State Governments including the Chief Secretary, Principal Secretaries, Engineer-in-Chiefs and the Principal Chief Conservator of Forests. However, till the time the proposed law is enacted and the State Civil Service Authority is constituted, recommendations made at para 2.14.2.5 above may be immediately adopted by all the State Governments.41State and District AdministationState Administration2.4.2.6 Recommendations:a) After enactment of the State Civil Services Law on the lines of the proposed Union enactment, the proposed State Civil Service Authority should deal with matters concerning appointment and tenure of senior officers of all ranks in the State Governments (including the Chief Secretary, Principal Secretaries, Engineer-in-Chiefs, other Agency Heads and Principal Chief Conservator of Forests).b) Till the time that such an Authority is constituted, the following mechanism may be adopted for appointment of the Chief Secretary and Principal Conservator of Forests in the States:-?There should be a collegium to recommend a panel of names to the Chief Minister/Cabinet for these two posts. For the post of Chief Secretary, this collegium may consist of (a) a Minister nominated by the Chief Minister, (b) the Leader of the Opposition in the State Legislative Assembly and (c) the incumbent Chief Secretary. For the selection to the post of Principal Chief Conservator of Forests the collegiums may consist of (a) The Minister In-charge of Forests, (b) the leader of Opposition in the State Legislative Assembly and (c) the Chief Secretary.?There should be a fixed tenure of atleast two years for both these posts.?The selection for the post of Chief Secretary and Principal Chief Conservator of Forests should be widened to include all officers above a specified seniority (e.g. 30 years). All officers with a seniority higher than a prescribed limit should be eligible to be a part of the panel.c) As regards the appointment and tenure of the Director General of Police, the recommendations made by the Commission in its Report on “Public Order” at para 5.2.3.7 should be implemented.2.4.3 Regional Level Administration2.4.3.1 The East India Company treated the District as the focal point of its revenue administration within British India. In 1786 the districts were reorganised into regular fiscalunits each under a Collector. In 1787, leaving aside a few districts, the Collectors were vested with magisterial powers; they could try criminal cases within certain limits. The Cornwallis Code of 1793 divested the Collector of his major judicial functions, but he still remained the most powerful functionary of the Company on Indian soil. He was responsible for collecting various types of taxes and revenue; he was the government treasurer in-charge of local funds and he was the Magistrate, responsible for the maintenance of law and order, superintendence of the police and the management of jails and in-charge of relief in times of epidemics and disasters for the territories under his charge.2.4.3.2 Towards the beginning of the 19th century, it was felt by the Company that keeping an eye on districts spread over far flung areas was becoming difficult and there was need to create an intermediate level of functionaries who could effectively supervise and control functioning of 4-5 districts. The Company did not want this intermediate functionary to have direct powers / responsibilities for the departments which were assigned to the Collectors, yet, he was expected to be powerful enough to have supervisory control over them. Thus, the institution of the Divisional Commissioner was born in 1829. Initially, Divisions were created in the permanent settlement areas of the British Empire consisting of modern day Bengal, Orissa, Assam, and Bihar. Later, the scheme was extended to NWFP and Avadh.2.4.3.3 Gradually, the Division became an important hub of the British Administration around which almost all major departments of the government positioned their senior level officers, intermediate in rank between the official at the district level and the Agency Head located at the State headquarters. The range DIG of Police, Conservator of Forests and the Superintending Engineer of the PWD were among the first positions which were sanctioned at the divisional level immediately after placement of the Commissioner in the division. With the expansion in the number of government departments, the establishment grew in size. Posts of the Regional Directors of Health Services, Education, Agriculture and Animal Husbandry and Deputy/Assistant Commissioners of Transport, Excise and Commercial Taxes are the other important positions which got created at the Divisional Headquarters in course of time in the post-Independence era.2.4.3.4 Theoretically, these positions serve two purposes:-(a) A regional officer supervises the functioning of departmental officers posted in the districts (usually 4-5 in a division) and then he sends a consolidated report for this entire area to the State Government.4243State and District AdministationState Administration(b) Existence of these senior positions opens up promotional avenues for the departmental officers and hence serves an important purpose in cadre management.2.4.3.5 In actual practice, the efficacy of the system varies widely across the States. In some of the States, the Division has been recognized as an established unit of field administration. The regional officers have been given substantial powers to exercise effective supervision and control over the district formations; the Headquarters too give considerable value and weight to their reports. But, there are States where regional units work more like post offices – doing only nominal work.2.4.3.6 In the post 73rd/74th Constitutional Amendment scenario, the situation is different. The district has now been recognized by the Constitution as the third tier of government with local institutions, both rural and urban, vested with substantial functions and powers with respect to the matters listed in the 11th and 12th Schedule. In the transferred domain, the machinery of the State Government including the District Collector and his offices, have a limited role. The Commission has dealt with these facets of district administration in its report on “Local Governance” (sixth Report). As recommended therein, all the development functions pertaining to the subjects listed under the Eleventh/Twelfth Schedule of the Constitution have to be dealt by a District Council consisting of representatives from both urban and rural areas. The District Collector would now be the ex officio Chief Officer of this body and would have a dual responsibility. He will be accountable to the District Council in respect of transferred matters, but will report to the State Government on regulatory/other matters which do not stand delegated to the District Council. Also the offices of the line departments of the State Governments working at the District and Sub-District levels pertaining to these subjects would be merged with the District Council and the appropriate Local Government Institutions.2.4.3.7 In the last few decades, most of the State Governments have carried out large scale reorganization of the districts; geographically the districts have become compact and smaller. There have been rapid advances in technology leading to tremendous improvement in connectivity and accessibility (both physical as well as electronic). Hence, the Commission feels that there is no need to have any intermediate level of administration in the form of regional/divisional offices between the two units of Government – District and the State. Having such a layer in between the two tiers adds only to red-tapism and delays.2.4.3.8 With regard to issues of promotions and cadre management, (which may get disturbed if the regional offices are wound up), the Commission feels that this problemcan be taken care of by identifying suitable departmental posts in the major Districts and at the State Headquarters to be manned by the senior officers who are presently eligible to head the regional offices.2.4.4 Lokayukta and the Vigilance Set-up2.4.4.1 Vigilance is an important facet of public administration. It is of critical significance in keeping a check on the integrity of the employees and for controlling government expenditure. The subject of vigilance can be discussed in two different perspectives.(a)Existing Legislation, statutes and regulations(b) Institutional set-up2.4.4.2 Before 1947, it was the Indian Penal Code (IPC) which provided the legal base for initiating action against corrupt government employees. The chapter relating to offences by public servants contained in Sections 161 to 165 provided the legal interpretation on which cases of corruption were lodged against public servants.2.4.4.3 The Prevention of Corruption Act 1947 was the first specific Act in this direction. Subsequently, the Criminal Law Amendment Act of 1952 and 1964 brought some changes in the above law (with regard to enhancement of punishment, expanding the definition of “public servant” and “criminal misconduct” and “enhancing the powers of investigating officers”). Finally in 1988, a vastly modified enactment – Prevention of Corruption Act 1988 was put on the statute.2.4.3.9 Recommendations:a)In view of the emergence of District as the key unit of field administration - as the third tier of government - and with rapid advancement in physical and electronic connectivity between the State Headquarters and the Districts, there is no need to have an intermediate level of administration between the two units of government.b) In order to take care of cadre management issues arising out of this step, suitable posts should be identified by respective departments, in the major districts and at the Headquarters to be manned by senior officers who are presently eligible to head the regional offices.4445State and District AdministationState Administration2.4.4.4 Currently, in most of the States, the vigilance setup consists of the following:(i) The Vigilance Commission and the Investigation Bureau(ii) Lokayukta2.4.4.5 In a majority of the States, the institution of Lokayukta is only a recommendatory body whereas the actual power of instituting corruption cases against public functionaries rests with the State Government (Vigilance Department). In Karnataka, the Vigilance Commission has been placed under the overall control of the Lokayukta.2.4.5 Vigilance Commission/Vigilance Commissioner in the State:2.4.5.1 Currently, all the States have an Office of the Vigilance Commissioner which is usually headed by a senior IAS / IPS officer. There is also a Vigilance Bureau which is the investigating arm of the vigilance setup. The State Government consists of a large number of departments whose work is highly specialized and of technical nature. In order to obtain a composite view on various vigilance issues, it is desirable for the Government to have requisite technical expertise in the office of the Vigilance Commissioner. As such, the Commission is of the view that the organization of the Vigilance Commissioner in the State should be structured on the pattern of the Union CVC; particularly in the larger States. The State Vigilance Commission should be a three Member Body with Members who have been experts in their respective fields. In smaller States, however, the requirement of a multi Member Body may not be there.As regards the Lokayukta, the Commission’s views have been summarized in Para 2.8.4.1 of the Commission’s Report on Ethics in Governance.2.4.5.2 Recommendations:a) The recommendations made by the Commission in its Fourth Report (on Ethics in Governance) and its Sixth Report (on Local Governance) for action by State Governments should be implemented expeditiously.b) The organization of the Vigilance Commission/ Commissioner in the State should be structured on the patterns of the Central Vigilance Commission. In larger States, the State Vigilance Commission should be a three Member Body with Members who have been experts in their respective fields. In smaller States, it may continue to be a single Member Body.c) The laws regarding the Lokayukta would need to be amended to incorporatethe changes suggested in the Report on ‘Ethics in Governance’.2.4.6 Human Resource Development, Capacity Building and Training2.4.6.1 Capacity Building in public administration needs to be characterized by several key considerations:?Developing strategic human resources policies?Investing in professional and executive development; proactive bridging of insufficiencies of knowledge and skills, preventing obsolescence both individual and organizational.?Establishing flexible human resource systems to meet socio-technological and environmental changes in the public service, particularly in view of changing conceptions of the role of the State?Transforming cultural attributes of the personnel, relating to their personality, character and behaviour.?Establishing performance management systems that provide motivation and rewards for improved functioning?Improving decision-making systems so as to provide full scope for the skills and capacities of civil servants2.4.6.2 Training is universally recognized as a critical component of human resource development. It has become even more important in recent years due to rapid quantitative and qualitative changes taking place in all dimensions of public administration across the world. Citizen-centricity of programmes, use of ICT, primacy of Right to Information and emphasis on programmes of social sector development and on issues of environmental protection and conservation are rapidly making the classical bureaucratic skills obsolete. Economic policies which rely heavily on globalization and corporatisation have given a new direction to the paradigm of governance. The representatives of the Government now have to interact with a new class of awakened stakeholders; civil society, academics and technologists, which is quite different from the passive recipients of services of the earlier era. The new regime of public service management calls for an advanced set of knowledge, skills and attitudes from civil servants. But, the prevailing perception is that the Government functionaries lack the required professionalism and sensitivity to meet the higher expectations that the people have from the public services.4647State and District AdministationState Administration2.4.6.3 The Commission believes that in order to raise the overall quality and effectiveness of government functioning, capacity enhancement of government personnel is an issue of critical importance. The Commission has examined it in detail in its Report on “Refurbishing of Personnel Administration” (Tenth Report) particularly with respect to All India and Group ‘A’ Central Services. Some of the important recommendations of this Report are:-a. Every government servant should undergo a mandatory training at the induction stage and also periodically during his/her career. Successful completion of these trainings should be a minimum necessary condition for confirmation in service and subsequent promotions. Mandatory induction trainings should be prescribed for Group D staff also before they are assigned postings.b. A monitoring mechanism should be set up for overseeing the implementation of the National Training Policy (1996).c. All civil servants should undergo mandatory training before each promotion and each officer/official should be evaluated after each training programme. Successful completion of the training programmes should be made mandatory for promotions.d. The objective of mid-career training should be to develop domain knowledge and competence required for the changing job profile of the officer. To this end, mid career learning opportunities relevant to specific domains or specializations should be made available for officers.e. Public servants should be encouraged to obtain higher academic qualifications and to write papers for reputed and authoritative journals.f. A strong network of training institutions at the Union and State levels needs to be built up to cater to the training requirements of civil servants. However, instead of spreading resources over a large number of institutions, a few institutions should be identified for capacity building and up gradation.g.The composition of governing bodies of the national training institutionssuch as the Lal Bahadur Shastri National Academy of Administration, Sardar Vallabhbhai Patel National Police Academy, Indira Gandhi National Forest Academy and also the State Administrative Training Institutes should be broadened by inducting eminent experts. The governing bodies should be adequately empowered to enable them to discharge their functions efficiently.2.4.6.4 While generally reiterating and re-emphasizing the above recommendations, the Commission would like to analyse a few issues which are of specific relevance to the State and District administration.2.4.6.5 At the State level, there are more than three dozen provincial service cadres dealing with subjects such as – General Administration, Police, Finance, Agriculture, Excise, Transport etc. which have continuous training needs.2.4.6.6 In many of the States, the practice of putting new recruits on mandatory induction training is in vogue only in case of a few of the organised services, such as the Civil, Police, Forest and Finance Services. But even this training leaves much to be desired in terms of the duration of the course, its content and practical exposure. Probationers belonging to many of the other services are straightaway given field assignments. The concept of mid-career training and skill upgradation of senior State service officers has not found roots in the personnel policy of the State Governments.2.4.6.7 Similarly, the importance and need of imparting training to Group ‘C’ and ‘D’ government officials too, has not been adequately recognized by many State Governments. In fact, it is this large body of officials which interacts frequently with citizens and thus the “image” of the government depends significantly on how these functionaries conduct themselves both professionally and personally. Because of widespread poverty, illiteracy and excessive centralization of power, there prevails a culture of deference to public authorities. Over a period of time, the public servants develop a sense of superiority. This underscores the importance of making available training opportunities to them. Such trainings will upgrade their professional knowledge and skills and also bring about change in their mindset and attitude so that they become an effective instrument of service to the people. In States like Gujarat where such trainings have been conducted periodically, independent evaluations have revealed that they have brought change in the attitude and professional output of Government officials. Therefore, regular and well-designed trainings of Government officials at these levels should be a major thrust area in the training policy of State Governments.2.4.6.8 Almost all the States have an Apex Training Institute/Academy (commonly known as the State Administrative Training Institute) whose primary responsibility is to cater to the training needs of the State administration. However, it has not been able to do so effectively. Firstly, the capacity of many Institutes is far too inadequate vis-à-vis the annual intake into the various Services. Secondly, the training effort in most of the States is disjointed, ad-hoc and not demand driven. There is disconnect between the training programme chalked out by the Institute and the skills/attributes requirement and the overall career development plan of the personnel of various departments. This is due to the fact that such training modules4849State and District AdministationState Administrationare often not part of the larger human resource development plan of the State. Therefore, there is need to reorganize the entire training system with a clear focus and strategy. Steps are needed to identify and assess the training needs of Government personnel at all levels. The content of the training programmes should be derived from such assessed needs. Thirdly, there is very little attention given to mid-career training needs of officials; which could enable them to respond appropriately to the rapid changes taking place in different sectors of public management. This needs to be addressed.2.4.6.9 Adequate capacity building of the training institutions is one of the key factors responsible for the quality of training. As recommended by the Commission in its Tenth Report, the composition of governing bodies of the State Administrative Training Institutes should be broadened by inducting eminent experts. The governing bodies should be adequately empowered to enable them to discharge their functions efficiently.2.4.6.10 Equally important is the process of selection of faculty which needs to be rigorous and transparent, in terms of attracting the most suitable professionals to join as trainers. Whereas a fair proportion of professionals may come from the open market and the academia, departmental officers who are deputed to such institutes should be selected on the basis of their competence and motivation for such assignments. Very often, “unwanted” officers are pushed into training institutes. A scheme of incentives to attract talented and dedicated officers to this field would be necessary.2.4.6.11 In addition, training activities have usually been subjected to insufficient budgeting because of the low priority accorded to it. For a meaningful HRD programme this sector needs to be given a higher priority in budget allocation. This could be done easily if a certain percentage of all scheme funds is earmarked for training and related activities. It is also not necessary for all trainings to be formally institutionalised. A large part of trainings can also be provided “in situ” under the supervision of the head of the organization with appropriate support from a team of experts.2.4.6.12 The Commission is of the view that every State should formulate a comprehensive human resource development policy with training as its main constituent. While doing so the broad parameters of the National Training Policy, 1996 may be kept in mind. Such a policy should address the issues raised in the preceding paragraphs. Simultaneously, a suitable monitoring mechanism to supervise the implementation of such policy may also be set up.2.4.6.13 The Commission feels that there is need to somewhat disperse the existing unitary institutional arrangement and set-up adequately equipped training centres at the regionaland the district levels (their number will depend on the specific requirement of the State). The Apex Institute should concentrate on all aspects of training of Class I and Class II officers, (both pre-induction as well as mid-career programmes). The Regional Institutes could look after the shorter training needs of the Class II officers and also run foundation courses for Class III recruits. It would also be desirable to have district level training organizations which could take care of the mid-career training needs of Class III employees. The district centre should also have proper facilities for skill / behavioral training of Class IV employees.2.4.6.14 The Commission is further of the view that the State level apex training institute (the ATI) should be truly professional and autonomous and have an overall integrative and coordinating role for the entire training/orientation activity running in the State. It should act as the primary resource centre for level II and level III Training Institutes. It would also provide training to those who will work as trainers at the Regional and District Institutes. In course of time, it can undertake projects of distance learning and become a virtual academy of training for the entire State.2.4.6.15 The State Administrative Training Institutes should have embedded in them Centers dealing with Good Governance and documentation and institutionalization of good practices – so that these are institutionalized and disseminated across States.2.4.6.16 Recommendations:a) The Commission reiterates its recommendations pertaining to capacity building and training made in the Report on “Refurbishing of Personnel Administration” (Tenth Report).b) Every State should formulate a comprehensive Human Resource Development Policy with training as an important component on the lines of the National Training Policy, 1996. Simultaneously, a suitable monitoring mechanism to supervise the implementation of such policy may also be setup.c)In addition to the apex level training body called the Administrative Training Institute (ATI), adequate numbers of Regional Training Institutes should also be established at different places across the State. The Apex Institute should take care of the training needs of the Class I/Class II officers of the State services, whereas the Regional Training Institutes should deal with the mid-career training needs of Class II officers and induction training of Class III employees. Steps should also be taken to set-up district level5051State and District AdministationState Administration2.5 State Public Service Commission2.5.1 Articles 315 to 323 of the Constitution deal with Public Service Commissions both at the Union and the State level.2.5.2 Article 320 of the Constitution of India lays down the functions of the State Public Service Commission. The functions of the State Public Service Commission are:(i)It is the duty of the State Public Service Commission to conduct examinationsfor appointment to the services of the State.(ii) The State Public Service Commission will be consulted by the State Government on the following issues:-(a) on all matters relating to methods of recruitment to civil services and civil posts;(b) on the principles to be followed while making appointments, promotions and transfers to civil services and posts;(c) on all disciplinary matters of a person serving the government of a State in a civil capacity, including memorials or petitions relating to such matters;(d) on any claim by a person, who is serving or has served the government in a civil capacity that any cost, incurred by him in defending legal proceedings instituted against him in respect of acts done or purporting to have been done in the execution of his duty, shall be paid out of the consolidated fund of the state;(e) on any claim for the award of a pension in respect of injuries sustained by a person while serving under the government in a civil capacity and any question as to the amount of any such award.(iii) The State Public Service Commission functions as an advisory body. It is the duty of the State Public Service Commission to advise on any matter, referred to it by the government.2.5.3 In the early years of Independence, State Public Service Commissions throughout the country functioned well primarily on account of the fact that:(a) There was objectivity in selection of competent and experienced people as Chairman and Members of the Commission. The government treated the Public Service Commission as a sacrosanct institution and the Chairman and Members were either very senior government servants (drawn usually from the ICS) or academicians of high standing in their field.(b) The Commissions enjoyed excellent reputation for objectivity, transparency and fairplay.2.5.4 But in recent years, this Constitutional body has suffered extensive loss of reputation in many States, mainly on account of (a) charges of corruption, favoritism and nepotism in matters of recruitment and (b) use of archaic processes and procedures in its functioning which leads to inordinate delays. For example, the civil services examinations conducted by a State Public Service Commission take a minimum time period of one and half year to complete. In some cases, it may take even longer.2.5.5 The following issues need to be examined in this context:i.Appointment of Chairman and Members – issue of qualificationsii.Role and functions of the Public Service Commissioniii.Its composition / strengthtraining organizations which could take care of the mid-career training needs of Class III employees. The district centre should also have properfacilities for skill/behavioral training of Class IV recruits.d) In this arrangement, the apex body, the ATI should have an overall integrative and coordinating role for the entire training/orientation programme running in the State. It should act as the primary resource centre for Regional and District Training Institutes. It should also provide training to those who will work on their faculty. In course of time, the ATI can undertake projects of distance learning and become a virtual academy of training for the entire State.e) The State Administrative Training Institutes (ATIs) should have embedded in them, Centers of Good Governance.5253State and District AdministationState Administration2.5.6 Appointment of Chairman / Members2.5.6.1 Currently, the Chairman / Members of the State Public Service Commission are appointed by the Governor in accordance with provisions described in Article 316 of the Constitution.2.5.6.2 This Article says“316 (1) The Chairman and other members of a Public Service Commission shall be appointed, in the case of the Union Commission or a Joint Commission, by the President, and in the case of a State Commission, by the Governor 1*** of the State:Provided that as nearly as may be one-half of the members of every Public Service Commission shall be persons who at the dates of their respective appointments have held office for at least ten years either under the Government of India or under the Government of a State, and in computing the said period of ten years any period before the commencement of this Constitution during which a person has held office under the Crown in India or under the Government of an Indian State shall being included.”2.5.6.3 The Article provides for two kinds of membership for this body. As far as possible, one half of the strength has to come from government service (serving or retired). But, the qualification needed, for this category has not been explicitly defined. On a plain interpretation of the words, any person who has worked in the government for a period of ten years in any capacity is eligible to be appointed as the Chairman or a Member of the State Commission. Often, junior employees have been appointed on this august body and have been given the onerous task of (a) making direct recruitment to regular Class I / II, posts under the State Government and (b) presiding over the meetings of the departmental promotion committees to clear senior level promotions. Weak on merit and professional ability, such appointees have not been able to do justice to their work.2.5.6.4 With regard to the second category of Members, the situation is even more ambiguous. The Constitution does not stipulate any qualification for them. The appointees could be from any field and with any qualification. In practice, this distorts the entire selection process. Choice, often, is made in favour of persons who do not have the appropriate background, training or experience. Fairplay and good traditions have thus become casualties.2.5.6.5 As a result, there has been considerable erosion in the reputation and credibility of the Public Service Commissions in some States. This issue was also discussed in detail by the first ARC, and it made the following recommendations to improve their working and standards: -1.In making appointment to a State Public Service Commission the Governor shouldconsult the chairman of the Union Public Service Commission and the Chairman of the State Public Service Commission.2.At least one member of the State Public Service Commission should belong to adifferent State.3.The minimum academic qualification for membership of a Commission should bea university degree.4. A member selected from among government officers should have held office under a State Government or the Union Government for at least ten years; and should have occupied the position of a Head of Department or Secretary to Government in a State or a comparable position in an institution of higher education.5.Members selected from non-official should have practiced at least for ten years inany of the recongnised profession like teaching, law, medicine, engineering, science accountancy or administration.2.5.6.6 The Commission is of the view that the intention behind creation of an autonomous Public Service Commission as a Constitutional authority was to create a body of achievers and ex-administrators who could select meritorious candidates for recruitment and promotion to various civil service positions under the State Government with utmost probity and transparency. There is need to take steps to ensure that only persons of high standing, intellectual ability and reputation are selected as Chairman and Members of the Public Service Commission.2.5.7 Strength of the Public Service Commissions2.5.7.1 The Constitution does not prescribe any limit on the strength of the Public Service Commission. By tradition, the size of this Body in the States has remained small. The Union Public Service Commission had a slightly larger strength.5455State and District AdministationState Administration2.5.7.2 The current position in this regard can be seen in the Table below:-Assam1 + 6Chairman – 11 VacantMember – 5Tripura1 + 3Chairman – 11 VacantMember – 2West Bengal1 + 6Chairman – 11 VacantMember – 5Name of the StateSanctioned PostsIn positionVacancy(Chairman & Members)Madhya Pradesh1 + 4Chairman – 11 VacantMembers – 3Karnataka1 + 9Chairman – 12 VacantMembers – 7Uttar Pradesh1 + 7Chairman – 1Manipur1 + 2Chairman – 1Uttarakhand1 + 4Chairman – 12 VacantMember – 2Kerala1 + 17Chairman – 1Rajasthan1 + 5Chairman – 1Bihar1 + 6Chairman – 12 VacantMember – 4Himachal Pradesh1 + 3Chairman – 11 VacantMember – 2Sikkim1 + 2Chairman – 1Table No. 2.2 : Composition of the Public Service CommissionsMembers – 17Members – 5--Members – 7--Member – 2Member – 2----------Chhattisgarh1 + 4Chairman –11 VacantMembers – 3Contd.Name of the StateSanctioned PostsIn positionVacancy(Chairman & Members)Table No. 2.2 : Composition of the Public Service CommissionsTamil Nadu1 + 14Chairman – 1Members – 14--Maharashtra1 + 5Chairman – 1Members – 5--(The UPSC consists of one Chairman and ten Members).Source: Information received from various States2.5.7.3 In recent years, some of the States such as Kerala and Tamil Nadu have increased the strength of their Public Service Commission to disproportionately large numbers. As discussed and recommended in the subsequent paragraphs, this Institution will need to confine itself to the recruitment of candidates only for higher level posts leaving the recruitment at junior levels to the subordinate recruiting bodies. Therefore, the Commission is of the view that there needs be a limit on the strength of the membership of the State Public Service Commission.2.5.7.4 The Commission is of the view that both (a) the matter of appointment of Chairman/ Members and their qualifications and (b) the matter of prescribing a limit for the strength of the Commission, are complex issues. There is need to evolve a national consensus on these two issues among the States through discussions/deliberations at the Inter-State Council.56572.5.8 Recommendations:a)Steps should be taken to ensure that persons of high standing, intellectualability and reputation are selected as Chairman/Members of the State Public Service Commissions. A limit should also be imposed on the strength of its membership.b) There is need to evolve national consensus among States on the issues of (i) appointment of Chairman/Members and (ii) limit on the membership of the Commission, through discussions/deliberations at the Inter-State Council.State and District Administation32.5.9 Functions of the Public Service Commission; its relationship with the junior recruiting bodies.DISTRICT ADMINISTRATION2.5.9.4 Recommendations:a) The Public Service Commission should handle only (i) recruitment of candidates for higher level posts under the State Government (Class I and Class II positions of various State cadres), (ii) advising government on senior level promotions through the DPC and (iii) recruitment and promotions to teaching posts in government Colleges and fully funded units of the Universities.b) With regard to the appointment of junior level functionaries of the State Government, the role of the State Public Service Commission should be to lay down broad norms and standards. The recruiting organisations concerned such as the Subordinate Service Commission, the School Teachers Selection Commission and District Recruitment Boards should follow these norms and standards in their working. The State Public Service Commission would act as a watch dog.582.5.9.1 As mentioned at Para 2.5.2, Article 320 deals with the functions of the Public Service Commission. Article 320(3) describes matters on which Union Public Service Commission or the State Public Service Commission shall be consulted.2.5.9.2 Currently a large chunk of employees in the State Government belong to Group ‘C’ (Class III) and Group ‘D’ (Class IV) categories. The Commission feels that the domain of the State Public Service Commission should be (a) recruitment of candidates for higher level posts (class I and Class II posts of various States Services) and (b) advising the government in senior level promotions through the Departmental Promotion Committee. The Commission should also handle recruitment / promotion to teaching posts in government Colleges and other fully funded units of the Universities. As regards recruitment of junior functionaries, the role of the State Public Service Commission would be to lay down the principles, norms and standards which need to be followed. The State Commission would act as a watch dog organization for public recruiting agencies like the Subordinate Service Commissions, Teachers Selection Commissions, District Recruitment Boards etc.2.5.9.3 Such a reform, while ensuring adoption of public policies like those on reservations, would speed up recruitments, lead to adoption of common norms and procedures ensuring objectivity and encourage local aspirants for district and local level posts.3.1 Introduction3.1.1 Historically the district, in some form or the other has been the most important unit of administration in the Indian sub-continent. The evolution of district administration in Mughal times and those of the East India Company has to be understood in light of the fact that neither had a legislative wing. Executive commands originated from the Emperor or the Governor General, or from the provincial governors, and were executed by the sub-provincial authorities, howsoever designated.3.1.2 The British Paliament was the first legislature in respect of India in modern times and enactments created and gave substance to the district head of administration, known variously as the Collector (in respect of revenue administration), the District Magistrate (in respect of administration of criminal justice) or the Deputy Commissioner (in respect of General Aministration and special functions / powers under local tenancy laws.*3.1.3 Until the 73rd and 74th amendments to the Constitution, the governance structure of India was two-tiered comprising the Union Government and the State Governments. At the district level, apart from discharging the responsibilities cast by specific enactments, the Collectors performed such administrative tasks as were assigned to them by the State governments. After Independence, the single greatest accretion to the responsibilities of the district administrator came through expension of rural development programmes. As the number of activities, institutions and departments involved in rural development increased, the coordinating and synthesizing role of the Collector in the development efforts of the government assumed greater importance.3.1.4 With the constitutionally mandated establishment of Panachayati Raj Institutions and Municipal bodies, it has become necessary to re-examine and re-define the role of the district administration. It is imperative that the devolution of decision making to local levels should face no impediments. It is equally imperative that the unique administrative experience, expertise and credibility of the office of the District Collector built up over a period of two hundred years is properly utilized.*In this report the terms “Collector”, “District Magistrate” and “Deputy Commissioner” will be used interchangeably.59State and District Administation3.1.5 The linkages and relationship between the State government and the District Collector cannot be examined in isolation from the linkages existing between the district offices and local bodies. There is a high degree of complementarity between them. This Chapter, examines their functioning and tries to suggest an environment for a responsive and citizen friendly district administration in line with the principles of decentralization and subsidiarity.3.1.6 The overall administrative structure presently prevailing at the district and sub-district levels in the country consists of the following three components.2(A) Administration of regulatory functions under the leadership of the Collector and District Magistrate, such as law and order, land revenue / reforms, excise, registration, treasury, civil supplies and social welfare. This domain also includes oversight over primary departments of the government e.g. agriculture, animal husbandry, and primary and school education.(B) District / sub-district level offices of the line departments of the State Government and their agencies, such as PWD, irrigation, health, industries etc. which have had stronger accountability relationship with the State headquarters rather than with the District Collector.(C) Local bodies (Panchayati Raj Institutions and Municipal bodies) which, after the 73rd and 74th amendment of the Constitution, have become the third tier of government and are to be empowered to handle subjects pertaining to development of the local areas as illustratively listed in the Eleventh and Twelfth Schedule of the Constitution.3.2 The Institution of District Collector / Deputy Commissioner3.2.1 Till some years ago, in most of the States, the District Collector was the head of the government at the district level, responsible for a diverse portfolio of functions ranging from delivery of essential services, land revenue administration, execution of rural development programmes, disaster management, maintenance of law and order and collection of excise and transport revenue. As such, virtually all the instruments of the State Government that operated at the local levels did so in conjunction with the Collector’s office either formally or informally. In this regard, structurally diverse arrangements were built up over time. The relationships and reporting structures range from the Collectors undertaking broad oversight/supervision of the activities undertaken by line departments- to specific day-to-day management of some services. For many State Government bodies, the Collector had an important role in determining how, where and what quantity of their services were to be delivered. In recent years, however, the departments have tended to function increasinglyDistrict Administrationas vertical silos up to the State level and, as stated above, the gradual empowerment of local governments is changing the role played by the District Collector in matters of local development.3.2.2 Evolution and Change3.2.2.1 Till the 1960s, when programmes of rural development were at a nascent stage, the Collector’s job seemed to be carefully organized with land reforms, revenue collection, law and order, food and civil supplies, welfare and relief/rehabilitation being the principal areas of his responsibility. The needs of the people were limited, their interaction with the government was infrequent and the bureaucratic set up seemed to be dedicated. Under these circumstances, the office of the Collector was a strong and effective institution.3.2.2.2 In the years that followed, a large number of new projects/schemes were initiated by various departments of the Government, with the Collector as the notional head of the District Monitoring Committee. Apart from making a formal review in monthly/ quarterly coordination meetings, the Collector had a somewhat limited role in such matters. Towards the beginning of the 1980s, the development of rural areas got a further thrust and the government initiated a large number of Centrally Sponsored/State sector schemes in agriculture, rural development, primary education and healthcare. Though, separate instruments were created for their execution, the Collector, in most of the cases, was given the overall supervisory charge of the programmes in the districts. The Collector and his administration were expected to be omniscient and omnipotent; capable of providing solutions to all the problems.3.2.2.3 But after the introduction of the Panchayati Raj system in the country (post 1993), most of the development functions have been taken away from the Collector’s domain, although the State Governments feel it convenient to use this institution to exercise control over the PRIs.3.2.3 Need for a Collector in the District3.2.3.1 The post of District Collector has been the most important feature of field administration in India for the last two hundred years. Before Independence, when the economy was primarily agrarian, the Collector as head of the land revenue administration also enjoying wide powers under criminal laws, was considered the ultimate guardian figure - responsible for the well being of residents in his jurisdiction - the representative of the British Empire, capable of doing anything and everything. In the post Independence era, when the economy diversified, and the pace of industrialization and growth of tertiary60612Modernising District Administration Study, CGG, 2005-06 – Study was done in five States viz. Andhra Pradesh, Maharashtra, Uttaranchal, Orissa and Assam.State and District Administationactivities picked up, other functionaries too gained in importance. But, even now, in most parts of the country, excepting metropolitan/mega cities, the Collector is the most recognized face of the administration; he is considered to be the principal representative of the government at the district level, who could be approached to solve virtually all problems ranging from land disputes, to scarcity of essential commodities, to inadequacy of relief in times of crisis, to community disputes and even to issues of family discords. As Rajni Kothari observed3:“the office of the Collector as the Chief Representative of the Government in the District is, in many ways, unique and its supposed stature and authority have engendered a sort of institutionalized charisma that is in some ways unparalleled in modern administrative development. ”3.2.3.2 In this context, the Prime Minister’s Address at the District Magistrate’s Conference on May 20, 2005 is of particular significance:-“The Collector or the District Magistrate remains even today the linchpin of the administrative system in India more than a hundred years after the creation of this Institution by the British...Indeed, revenue collection is the least important of tasks today. You have become agents of change, of good governance and development administration at the very base of our democratic structure. The insights you gain during your tenure at the district level stands you in good stead throughout your career because it gives you a first hand experience in dealing with the hopes and aspirations, the lives and livelihoods of our people. The State and Central Governments benefit immensely from this district level administrative experience very early in the lives of our administrators...In this redefined role of the Government, the cutting edge of a Government’s function is at the district and lower levels. I think someone said India lives in States, I could amplify that to say that India lives in districts. Therefore, the provision of education and health facilities for improving human infrastructure, provision of physical infrastructure, improving economic opportunities for marginalised sections of society, preparing the society at large to face the challenge of disasters – natural disaster as well as manmade disasters - and who can forget the role of terrorism in disturbing all civilised societies in the world that we live in. We have to be prepared to meet all this challenges. And these are all functions which are best performed by localDistrict Administrationbodies and district administrations. As we sit in Delhi and try to design a template for a humane, caring and prosperous India, we are aware of the criticality of your role in this process – your role in ensuring good governance at the grassroots, in promoting innovation, in improving service delivery, in enhancing public private partnerships and in ensuring outlays become outcomes. I believe that unless we reform governance from the village level upwards, there can be no real reform at the National level. And what I heard this morning gives me confidence that we have men and women in this room who can be trusted to be active agents of improving the quality of our governance in the years to come...We have also had a major shift in our administration through the 73rd and 74th Constitutional Amendments, which sought to revitalise local bodies and create elected representatives down the line. Though this was expected to whittle down the powers of the Collector, our historical experience is that the role of the Collector has only been transformed into a more powerful one of coordinator, facilitator and a person who is responsible for inter-sectoral coordination of various activities that characterise the work of our grassroot administration....Many of the challenges that you face in your district, be it the education challenge, the water challenge, the health challenge or the employment challenge, the solution may lie in enabling people to handle change and improving service delivery. A Collector therefore can provide a leadership to this task of nation building...”3.2.3.3 The Commission had examined the issue of whether there is any need to retain the office of the District Collector in its present form in its Report on Local Governance. There is a view that with the empowerment of PRIs/ULBs in the districts, there is need to devise an environment in which the institution of District Collector gradually loses importance and ultimately recedes into a district level land revenue functionary, responsible to the local bodies. This view is based on the belief that the strong traditions linked with this institution and its recognition in the public mind as the prime mover of governance at the district level would tend to impede growth of any other authority at that level.3.2.3.4 The counter view is that the office of the District Collector has risen to this level of importance and utility through many national and local crises and it should not be weakened.3.2.3.5 Though as per the new administrative and development environment, PRIs/ULBs are the third tier of government, they do not totally remove the Collector’s responsibility in matters of local development. The declining significance of land revenue has also not lessened62633Source : Rajni Kothari: ‘Politics in India’ - Orient Longman Publication, New DelhiState and District AdministationDistrict Administration64the importance of the Collector in the management of land records, the maintenance of law and order and general administration and as an effective grievance redressal authority. These have remained and will remain central and core areas of State activities at the district level even when there is full fructification of local self-government. The Collector will thus continue to be responsible for a multiplicity of tasks at the district level such as improving human capabilities, creating physical infrastructure, improving economic opportunities for marginalized sections of society and facing challenges posed by disasters. He will have a new role that is the role of a coordinator, facilitator and a person who is responsible for inter-sectoral coordination of various activities that characterise the work of our grassroots administration. He is the functionary who would provide overall leadership in the district in the task of nation building. Hence, the Collector would remain a key figure in the scheme of administration at the field level.3.2.3.7 The Commission has therefore expressed its view in its Report on “Local Governance” that a representative District Government should be empowered while fully utilizing the institutional strength of the District Collector.3.2.4 Redefining the Collector’s Role: 3.2.4.1 A Wide Mandate3.2.4.1.1 At present the portfolio of the Collector’s office generally includes the following functions and activities (though there may be variations across the States):-?acting as the Head of Land and Revenue Administration, including responsibility for District Finance (expenditure and audit);?acting as the District Head of the Executive Magistracy and overall supervision of law and order and security and some say in the police matters;?as Licensing and Regulatory Authority in respect of the various special laws such as Arms, Explosive and Cinematography Acts etc. in the District;?conduct of elections – for Parliament, State Legislature and Local Bodies;?as the Officer-in-charge of Disaster Management;?as the guardian of public lands with the responsibility to prevent and remove encroachments which are often a source of tension between vested interests and the district administration;?public service delivery, either by facilitating or directly delivering services assigned to the district administration from other departments. (In this respect, the Collector often acts as Chairman of the Board for Parastatals, or as Chairman or Member of various standing and inter-departmental committees);?facilitation of interaction between civil society and the State Government;?handling issues of local cadre management such as recruitment, in-service training and promotion; and?as the Chief Information and Grievance Redressal Officer of the district. 3.2.4.1.2 The details of these functions are given in the Table No.3.1:-Sl. No.2Executive Magistracyand Maintenance of law and order1Revenue AdministrationFunctional AreaTable No. 3.1 : Functions of the District Collector/Deputy CommissionerAs the Magistrate of the District, exercises functions and powers under various provisions of the Cr.PC. Is the Officer in overall charge of Law and Order and internal security in the district.Is the authority to issue custody/detention warrants under special anti-crime/security enactments e.g. NSA.Retains importance in Police matters too e.g. under Bihar Police Act 2007, the Collector is the Chairman of the District Accountability Authority which monitors issues concerning departmental inquiries and complaints of misconduct against junior policemen.The Collector handles all matters connected with land reforms and revenue administration (including custody of government lands). He is assisted by an Additional Collector / Joint Collector.Collector is the officer-in charge of the district under the State Excise Act.Role of District Collector/Deputy Commissioner (DC)Varies from State to State though Cr.P.C. functions are broadly similar.Similar across different StatesVariances acrossSelect States65State and District AdministationSl.Functional AreaRole of District Collector/ Deputy Commissioner (DC)Variances acrossNo.Select States3Similar across different StatesLicensing and Regulatory AuthorityThe Collector is the licensing and regulatory authority under various special laws such as Arms and Cinematography Acts etc. in the district.4Disaster ManagementThe Relief /Disaster Management branch of the Collector’s office deals directly with these functions.Similar across different States5ElectionsThe Collector is the District Election Officer for Parliament, State Legislature and Local Bodies.Similar across different States6Food and Civil SuppliesIn most States, the Collector has a direct role to play in the functioning of the Food and Civil Supplies Department at the district level. He oversees the implementation of the Public Distribution System and has powers to enforce provisions of the Essential Commodities Act and related Rules and Orders.Similar across different States7WelfareThe Collector plays a very critical role in the execution of welfare programmes such as those relating to disability, old age pension etc. either through direct superintendence or through oversight.Varies from State to State depending on the role envisaged in this regard for local bodies.In Maharashtra, Zila Parishad (ZP) has a stronger role in welfare activities unlike in Andhra Pradesh or Rajasthan.8CensusThe Collector is the principal Census Officer.Similar across different States9CoordinationOne of the most important roles of the Collector is to coordinate activities of other agencies/departments at the district levelSimilar across different StatesDistrict AdministrationSl.Functional AreaRole of District Collector/ Deputy Commissioner (DC)Variances acrossNo.Select States10Varies from State to State depending on the role envisaged in this regard for local bodies.In Maharashtra and Himachal Pradesh, the ZP has a stronger role in primary economic development activities unlike that in Andhra Pradesh or Rajasthan.Economic Development (Agriculture, Irrigation, Industry, etc.)Though, many activities/functions of these sectors stand transferred to PRIs and local bodies, the Collector still has some role in many of these programmes. He chairs meetings of various Committees of Agriculture, Animal Husbandry, Veterinary, Sericulture, Handlooms, Textiles, Irrigation and Industries departments. Also reviews their activities in monthly/bimonthly meetings and coordinates among the departments.11Human Resource DevelopmentThough, a major part of this subject (primary education) stands transferred to the PRIs, the District Collector/Deputy Commissioner has been retained as Chairman/Co-Chairman in some of the district level committees.Varies from State to State depending on the role envisaged in this regard for local bodies.In Maharashtra and Himachal Pradesh, powers have been given to PRIs in matters relating to health & primary education.12Rural DevelopmentThough major activities of this department stand transferred to the PRIs/ULBs, in some States, the Collector still continues to be the nodal authority for some programmes. Under the National Rural Employment Guarantee Act, the Collector has been designated as the District Programme Coordinator in some of the States.In Andhra Pradesh, the DC is the Executive Director of District Rural Development Agency. In Maharashtra and Himachal Pradesh, DRDA is under the ZP. In Himachal Pradesh, the ZPs have been empowered to appoint Assistant Engineers in DRDA.13Local Self Government (PRIs / ULBs)The role of the District Collector/ Deputy Commissioner with regard to local self governing institutions varies across different States. Mostly these relate toIn Andhra Pradesh, the DC exercises direct control over the Gram Panchayats; in Orissa,Table No. 3.1 : Functions of the District Collector/Deputy CommissionerContd.Table No. 3.1 : Functions of the District Collector/Deputy CommissionerContd.6667State and District Administation3.2.4.1.3 The District Collector/Magistrate has specific powers entrusted to him under several Union and State enactments. These statutory powers have to be exercised with care and responsibility. aThe Commission noted that some Collectors were not even aware of all the laws under which they are empowered.3.2.4.1.4 The Collector is also the Chairman of a large number of Committees at the district level. A list of the Committees chaired by the District Collector in Anantapur District of Andhra Pradesh was obtained from the Collector and is given below as an illustration (the Collector indicated that the names of some Committees might be missing from the list):-1.Irrigation Development Board (IDB)2. Vigilance & Monitoring Committee on SC/ST Atrocities3.District Forestry Advisory Committee4. AP Water, Land & Tree Act Implementation Committee (APWALTA Act)District Administration5.District Rajak Welfare Committee6.District Naibrambana Welfare Committee7.District Joint Staff Council Committee – Employees Unions/Associations8. AP Employees Welfare Fund District Committee9.Registration of Existing & New Aquaculture Fish Ponds Committee10. District Midday Meals Monitoring Committee (Primary Education)11. District Selection Committee for Recruitment of Teachers12. District BC Service Co-operative Society13. District ST Sub-plan14. District SC Service Co-operative Society Ltd.15. District Task Force Committee of Mines & Geology16. District Hospital Development Society17. District Level Review Committee of Bankers18. District Consultative Committee of Bankers19. District Advisory Committee for Renewable Energy (NEDCAP)20. District Statue Committee21. District Official Language Committee22. District Disaster Management Committee23. District Executive Committee for 108 Emergency Services24. District Level Minimum Wages Committee for Unskilled Labourers25. District Horticulture Mission26. District AIDS Prevention and Control Society27. District Tourism Committee28. District Negotiation Committee for Finalization of Market Value of Landspurchased for acquisition29. District Committee on Regularization of Encroachments30. District Arms Purchase Committee31. District Road Safety CommitteeTable No. 3.1 : Functions of the District Collector/Deputy CommissionerFunctional AreaRole of District Collector/ Deputy Commissioner (DC)the powers of the State Government vis-à-vis the PRIs. (Powers of suspension, resolution, supersession etc.)Select StatesVariances acrossthe DC is the CEO of the ZP; in Maharashtra, the DC has a limited role to play.Preparation of Development PlanThough under Articles 243-ZD and 243 ZE, the planning functions in a district have been given to DPC/MPC, the Collector coordinates with departments/ agencies involved in execution of various works.Similar across different rmation TechnologyThe Collector exercises superintendence over the District NIC Centre.Similar across different States.Sl.No.1415Box No. 3.1 : Role of District Collector in the Health SectorNRHM is a programme which falls under the domain of the Zila Parishad. In Uttarakhand the Collector is the Co-chairman of the District Health Society.Under the scheme of Rogi Kalyan Samiti – the District Magistrate is the Chairman of the Board of Governance for management of the District Hospital – Guidelines of the MOHFW.In West Bengal, the core team at the District (to monitor the working of ASHA) is headed by the District Magistrate.In Orissa, the District Magistrate is the Chairman of the District Health Society.6869State and District Administation32. District RTA Committee (Regional Transport Authority)33. ATMA Committee (Agriculture)34. District Level Committee for TRICOR35. District Selection Committee for Recruitment of Doctors on Contract Basis36. District Level Co-ordination Committee for Women Development and Child Welfare (ICDS)37. District Selection Committee for recruitment of Anganwadi Workers and Anganwadi Helpers. (ICDS)38. District Level Committee for Implementation of Girl Child Protection Scheme (ICDS)39. District Level Committee for Anti Trafficking (ICDS)40. District Level Committee for CM/PM package (Pasukranthi/Kaheera Kranthi)41. Andhra Pradesh Micro Irrigation Project, Anantapur42. District Food Advisory Committee43. Anantapur Society for Employment and Training (ANSET)44. Urban Market Value Anomalies Rectification Committee (Registration Department)45. Management Committee for AP Study Circle for BCs46. District Single Window Clearance Committee (Industries Department)47. District Level Committee for Incentives (Industries Department)48. District Level PMRY Committee (Industries Department)49. District Industries Promotion Committee (DIC)50. District Level Juvenile Welfare Committee3.2.4.1.5 To give another example, as per the findings of a study report prepared by the CGG, Hyderabad for the Department of Administrative Reforms and Public Grievances, Government of India, a Deputy Commissioner in Assam is the Chairman of 43 district level committees. In its interactions with some of the Collectors, the Commission noted that many of them were not fully aware of how many committees they are required to preside over.District Administration3.2.4.1.6 Besides, there may be other important organizations functioning in the district such as the Red Cross Society, a Degree College or Sports Associations which may be also headed by the Collector. Often, the Collector is appointed as the Chairman of a Committee to manage a major trust/endowment located in the district.3.2.4.1.7 Such widespread functions without well defined roles result in lack of clarity and diffusion of the Collector’s responsibilities.aAlso, after the establishment of PRIs / ULBs as the third tier of government, there is no need to assign any role/function to the Collector in respect of activities which are transferred by the State Government to these bodies.aAs such, the Commission is of the view that there is need to redefine the role and responsibilities of the Collector in a clear manner. His job profile should consist of (a) a well defined set of exclusive activities both statutory as well as non-statutory as a functionary of the State Government (b) the general work of coordination with various departments / agencies of the State and the Union Governments at the district level and (c) in the interim period till the time the local elected Institutions mature into District Government – as the Chief Executive Officer of the proposed District Council.3.2.4.1.8 The main functions of the Collector may now include:(i) Land and Revenue administration, land acquisition, custodian of government lands and properties, registration, recovery of public demand(ii) Executive magistracy and maintenance of Law and Order, Internal Security, Prisons, Remand/ Juvenile Homes(iii) Licensing and regulatory functions with respect to various special laws pertaining to Arms, Explosives, Cinemas etc.(iv) Disaster Management(v) Civil supplies, public distribution and social welfare(vi) Excise(vii) Transport(viii) Mining(ix) Labour Laws(x) Elections7071State and District Administation(xi) Legal Affairs(xii) Census(xiii) Protocol, general administration,(xiv) Treasury management / district accounts office related work(xv) Public Relations Department, NIC and other miscellaneous functions assigned by the State Government, coordination with civil society(xvi) Coordination with line departments / other agencies of the State and Union Governments(xvii) In the interim period – till the local institutions obtain adequate maturity – as Chief Officer of the proposed District Government3.2.4.2 Land and Revenue Administration3.2.4.2.1 The land revenue administration in a State operates at four administrative levels – district, sub-division, tehsil/taluka/block and village. The Collector/Deputy Commissioner is the head of the revenue administration at the district level and is the custodian of government land and properties under his jurisdiction. He is assisted by the Additional Collector(s) and other officers of the State Civil Service. The revenue work at the Collectorate is divided into various Sections headed by a Superintendent who in turn, is assisted by ministerial staff.3.2.4.2.2 Each district comprises of revenue sub-divisions. The sub-divisional level revenue offices are supervised by Deputy Collectors/Extra Asst Commissioners who are designated as sub-divisional officers under whom other subordinates such as officials in charge of revenue circles work. Sub-Divisional level officers of various departments such as Food and Civil Supplies, Excise, Social Welfare etc. work as branch officers of their district establishments.3.2.4.2.3 Within each (sub) division, there exist a number of blocks/talukas/tehsils. The tehsil/block level revenue offices are headed by Tehsildars/COs. It is at this level that there is a direct interface of the government with the public and the image of the Revenue Administration largely depends on the efficient and effective functioning of these officials. At the village level, the States usually, have a designated revenue official called Patwari/ Revenue Karamchari. In some States, the Executive Officer of the Gram Panchayat or GP Secretary may double up as the Patwari to handle revenue functions as well.District Administration3.2.4.2.4 The revenue functions performed by the Revenue/Regulatory Department in Andhra Pradesh are given in the Table4 No.3.2 below:Table No. 3.2 : Function of the Revenue Department in Andhra PradeshFunctions relating to Land Use Management?Assignment of Govt. Land for Agriculture?Protection of Govt. Lands, tanks fromand House site purpose.unauthorised encroachments and eviction?Land Acquisition for public purpose.Homestead Act?Disposal of Govt. land by alienation,?A.P. Assigned Lands (POT) Act, 1977.transfer and lease.?Assignment Committee Meetings.?Public Premises Act.?Disposal of ceiling surplus lands.?AP Land Protection Act, 1982.Functions relating to Revenue Collection?Water Tax?Non Agricultural Land Assessment Act, 1963?Miscellaneous arrears?Dues by courts?Road cess?Loans?Irrigation sources Inspection?Joint Azmoish (a survey assessment at the spot)?Land Disputes?Revenue sadassu (administrative meeting of the beneficiary group, officials and farmers) (Kisan Darbar/Sabha)?JamabandiFunctions relating to Land Records?Pahanis / Adangals Maintenance?Inspection and booking of crops?Certified copies of Land Records and Khasra Pahanis?Inspection of survey stones and their maintenance?Maintenance of Government Land RegistersFunctions relating to the Record of Rights?Pattadar Pass Book and Transfer Deeds?Maintenance of Form I-A and I-B Registers?Form 17 Registers?Maintenance and Updation of Land Records?Permanent Settlement Register / Sethwars?FMBs?Village Maps?Village Accounts?Demand Collection & Billing?Sanction of Succession & Transfer of Registry?Amendments?Record of Rights (ROR) Appeals?Disposal of Form X claimsFunctions relating to Land Reforms?Andhra Pradesh Fragmentation and Consolidation of Holdings Act, 1956?Andhra Area Tenancy Act, 1956?Inam Abolition?Atiyat?Agricultural Land Ceiling Act?Urban Land Ceiling Act?A.P Estate Abolition Act?Jagir Abolition Regulation?Land Transfer Regulation72734Strategic Review of Revenue Administration in Andhra Pradesh, CGG, 2004State and District Administation3.2.4.3 Land Title Management System3.2.4.3.1 States have passed their own Land Revenue Acts which govern the land title management system. But the system of maintaining land records remains unchanged from the pre-Independence era. The State Revenue Law has created the ‘Land Revenue’ machinery consisting of functionaries such as the Commissioner, the Collector, Assitant Collector, Tahsildar, Revenue Inspector, Patwari etc. The village is the basic administrative unit and the Patwariais charged with the responsibility of maintaining the land records in the village. The land title management system basically consists of two components – (i) Survey of lands and (ii) Settlement procedure. Survey deals with actual measurement of land and converting them into maps, whereas Settlement deals with issues of ownership and other details. At the State level, the overall guidance and policy direction for land management is provided by the Revenue Department. The responsibility for measuring lands and registering the title holder at that point of time is entrusted to the Survey and Settlement Department, which during the period of these operations has its legally empowered functionaries up to the taluka level. Once, the survey and settlement operations are over, the newly created permanent revenue records are handed over to the Collector’s office. Thereafter maintenance of records and carrying out necessary changes in the rent registers / other revenue documents on the basis of transfer deeds (sale/purchase gift etc.) become the task of the Collector, who discharges this through the ‘tahsildars’, revenue inspectors, and ‘patwaris’.3.2.4.3.2 The system of land records management varies from State to State depending upon their historical evolution and local traditions. Several departments are involved in managing land records in most of the States, and the citizen has to approach more than one agency for complete land records, e.g. Revenue Department for textual records and mutations; Survey & Settlement (or Consolidation) Department for the maps; Registration Department for verification of encumbrances and registration of transfer, mortgage, etc; the Panchayats (in some States) for mutation, and the municipal authorities for urban land records. These departments work in a stand-alone manner, and updating of records by any one of them makes the records of the others outdated. Thus, the records are usually outdated and do not reflect the ground realities. Also, there is no integration of textual and spatial records, making it difficult to give maps-to-scale with the Records of Rights (RoRs). Further, the most important activity for updating the records, i.e., survey has been neglected in most of the States. Original survey for cadastral mapping has not taken place in many parts of the country.53.2.4.3.3. The Commission in its Eleventh Report has made the following recommendations:District AdministrationRecommendations :a. Surveys and measurements need to be carried out in a mission mode utilizing modern technology to arrive at a correct picture of land holdings and land parcels and rectification of outdated maps.b. This needs to be accompanied by an analysis of the existing mechanism for updating land records – which varies from State to Tate – to be supplanted by an improved and strengthened mechanism which ensures that all future transactions in titles are immediately reflected in the land records. Such a system should be able to detect changes in titles through various means – namely, succession, will, partition, gift, survivorship etc. and update records accordingly.c.The dispute resolution mechanism with regard to land titles needs to bestrengthened in order to be compatible with the demands made on it.d. In case of urban areas, a similar exercise needs to be undertaken especially since measurements and surveys have not been done in many of such areas and even record of titles is not available in most cities.3.2.4.3.4 The Commission would like to reiterate these recommendations. The Commission would also like to emphasise that the tasks mentioned above should be one of the primary duties of the District Collector.3.2.4.4. Maintenance of Law and Order, Executive Magistracy, Prisons, Remand/Juvenile Homes, Cinemas, Arms and Explosives, Special Security Enactments3.2.4.4.1 The Collector is the Magistrate of the district and he exercises extensive powers under various Sections of the Cr.P.C. Through powers given to him under Sections 106 to 124 of the Cr.P.C., he and the magistracy of the district can bind the people to maintain peace, security and good behaviour. He also exercises powers for maintenance of public order and tranquility through Sections 129 to 148 of the Cr.P.C. Though the recent amendments in the Police Acts by various States have removed the clause which placed the police of the district under the general control and direction of the District Magistrate, the Collector still continues to be recognized by people as the overall in-charge of law and order in his jurisdiction. Deployment and movement of armed forces in the district in times of emergency and crisis is done under his guidance. He is the authority who issues various kinds of licenses in the district (under Arms, Explosives, Cinematography Acts etc.). In many States, it is the Collector who is the overall supervisory authority responsible for proper management74755ARC’s Report on e-GovernanceState and District AdministationDistrict Administrationof jails and remand/juvenile homes in the district. He is also the authority empowered to issue detention orders / custody warrants under Special Security/Anticrime laws.3.2.4.5 Disaster Management3.2.4.5.1 Disasters both natural as well as man-made such as floods, drought, forest fires, earthquakes, factory fires, major accidents, environmental mishaps and riots etc., pose a big threat to the lives and properties of the people in the districts . Some districts are more prone to specific types of disasters than others and hence they require measures for continuous vigilance monitoring and prevention. The Collector is the Chairman of the District Disaster Management Committee (DDMC), which is responsible for making advance, plans to mitigate the effect of calamities and for providing both immediate as well as long term assistance to the affected people. The assistance may be in terms of rescue, immediate shelter, availability of food and emergent healthcare. The Collector is authorized by the government to grant gratuitous relief to the affected families and to take such measures as are necessary to reduce hardships caused by the disaster.3.2.4.6 Civil supplies, Public distribution and Social Welfare3.2.4.6.1 The Collector oversees the arrangements for provision of essential commodities to citizens through the Public Distribution System (PDS) . The PDS operates through a chain of fair price shops that issue rationed quantities of wheat, rice, sugar, kerosene, etc. at subsidized rates to various categories of less privileged people through ration cards . The District Food and Supply Officer controls and supervises the activities of these shops under overall superintendence of the Collector. This department has the responsibility to ensure that basic commodities such as foodgrains, sugar, oil, coal, etc. remain available to the people at the reasonable prices in the district . It has powers to penalize the hoarders of essential commodities, take steps to deal with adulteration in diesel/petrol/other commodities and to ensure proper usage of weights and measures etc.3.2.4.7 Excise, Transport, Mining, Labour Laws, Elections and Legal Affairs3.2.4.7.1 The Collector provides substantial contribution to the State budget through excise and transport revenue . He is the controlling officers for subordinate formations of these two departments in the district . For excise functions, he is assisted by Assistant/ Deputy Excise Commissioners/Superintendent and Excise Inspectors whereas the District Transport Officer, one or two Motor Vehicle Inspectors and Enforcement Officers help him in collection of transport revenue.3.2.4.7.2 The Collector is the Chief Mining officer of the district and exercises powers to grant prospecting license and mining lease under provisions of the Mines and Minerals (development and regulation) Act, 1957. The Collector has also been vested with powers under some labour laws such as Bonded Labour (Abolition) Act 1976 and Workmen’s Compensation Act, 1923.3.2.4.7.3 For elections, the Collector is the District Election Officer (DEO) and is responsible for (a) preparation / updation of electoral rolls and (b) for holding free and fair elections in his jurisdiction. Under election laws, he is the Returning Officer (RO) for the Parliamentary elections. In other cases, his juniors function as Returning Officers; but he still remains the District Election Officer.3.2.4.7.4 The Collector is the principal officer of the State Law Department at the district level and in this capacity he has a major role in the appointment of Government Counsels for District Courts.3.2.4.8 Census, Protocol, General Administration, Treasury Management / District Accounts Office related Work3.2.4.8.1 The Collector is the overall in-charge of the Treasury in the district and is responsible for sending detailed accounts of financial transactions taking place in the district to the office of the Accountant General. He is also responsible for census, protocol and other related works.3.2.4.9 Exercising Functions and Powers under various Union and State Laws3.2.4.9.1 The Collector exercises several functions and powers under a large number of Union and State Laws on a diverse range of subjects such as those dealing with Land Acquisition, Tenancy of Land, Abolition of Debt Bondage, Money Lending, manufacture and sale of liquor and opium, settlement in Forests, distribution of essential commodities, Arms & Explosives, encroachment on government land, granting license for minor minerals, conduct of Exams, recovery of Public Demands, grant of Homestead, Workmens Compensation and regulation of Sarais and Inns.3.2.4.10 Public Relations Department, NIC, Other miscellaneous functions assigned by the State Government/coordination with civil society7677State and District AdministationDistrict Administration3.2.4.10.1 The Collector is the head of the public relations department of the government at the district level and is responsible for disseminating information on the working of the government to the print and electronic media and the general public.3.2.4.11 Coordination with line departments/other agencies of the State/Union Government3.2.4.11.1 Coordination among various departments of the State Governments is one of the major activities of the District Collector. Most of the State Governments give due regard to the views of the Collector whenever there is need for inter-departmental interaction at the field level. Even other agencies look to him for guidance and support for effective implementation of their programmes and activities.3.2.4.12 As Chief Officer of the Proposed District Government3.2.4.12.1 As per recommendations made earlier, each district would ultimately need to have a District Council comprising of representatives of both rural and urban bodies. The District Collector would function as the Chief Officer of this Council. The District Collector-cum-Chief Officer would have dual responsibility and would be fully accountable to the elected District Government on all local matters, and to the State Government on all regulatory matters not delegated to the District Government.3.2.4.12.2 The Commission believes that the functions described in the above categories are of critical importance to the effective functioning of the government at the field level andathe workload involved in the domain of these activities demands considerable time and attention of the District Collector and his direct subordinates. The State Government should ensure that the responsibility of the District Collector is neither diluted nor diverted from these activities.3.2.4.13 Implementation of Right to Information Act at the District Level3.2.4.13.1 The Right to Information Act, 2005 is a landmark legislation which is increasingly being viewed as an important tool for empowerment of the poor and the weak. Availability of information to the general public and clarity about functioning of governmental institutions are essential components of good governance. This Act promotes transparency, accountability, predictability and participation. A whole set of institutions has been created at the national as well as at the state level to ensure that organizations of the governmentcomply with the provisions of the Act and enhance citizen centricity in governance. It is now more than three years since the law was enacted. There is a common perception that the impact of this legislation has not percolated in a significant way beyond the State capital. The Commission feels that the functioning of the lower level officials of the State and District Administration should be much more responsive and proactive to the needs and concerns of the citizen. There is need to strengthen the compliance machinery at the district level to enforce provisions of the RTI Act and to reduce the element of delay and subjectivity in the functioning of the lower level formations of the government. This could be done by creating a special RTI Cell in the office of the Collector, whose functions could be reviewed by the Collector himself at regular periodicity.3.2.4.14 Experienced Officers as District Collectors3.2.4.14.1 Currently in many States, IAS officers are posted as Collectors/District Magistrates soon after they get their senior scale i.e., on completion of about four years of service. Since the duration of the institutional training for All India Service officers itself is of two years, his entire repertoire of public administration consists of two years of work either in the field as Sub Divisional Magistrate or as an Under Secretary in the State Secretariat, when he, is catapulted to this post of immense responsibility.3.2.4.14.2 A Collector/District Magistrate functions as the representative of the government at the district level and coordinates the activities of officers of other departments of the State Government, many of whom would have put in significantly larger number of years in the government service. Increased political consciousness, high expectations of the public and the complex requirements of modern day administration demand that officers should have, apart from ability, experience both in the field and Secretariat and the maturity to work in this important assignment. In other words the experience of officers posted should be commensurate with the problems and complexities of the district and to that extent there is a strong case for posting officers of sufficient seniority as Collector/District Magistrate particularly in districts with large populations and a history of administrative complexities.3.2.4.14.3 The Commission is, therefore, of the view that while officers could usually, be posted as Collectors/District Magistrates in their early career, in complex and problem-prone districts, an IAS officer should be posted as Collector/District Magistrate only on completion of 10-12 years of service.7879State and District AdministationDistrict Administration3.2.4.15 Recommendations:a) There is need to realign the functions of the Deputy Commissioners/ District Collector so that he concentrates on the core functions such as land and revenue Administration, maintenance of law and order, disaster management, public distribution and civil supplies, excise, elections, transport, census, protocol, general administration, treasury management and Coordination with various agencies/ departments.b) The Commission reiterates its recommendations regarding the Land Title Management System made in its eleventh Report on e-Governance. It should be one of the primary duties of the District Collector to perform the task envisaged in the aforesaid recommendations.c)There is need to strengthen the compliance machinery at the district level to enforce provisions of the RTI Act and to reduce the element of delay and subjectivity in the functioning of the lower level formations of the government. This should be done by creating a special RTI Cell in the office of the Collector, whose functions should be reviewed by the Collector at regular periodicity.d) Officers may be posted as District Magistrates early in their career, but in complex and problem-prone districts an IAS officer should be posted as DM only on completion of 10-12 years of service.e)Steps should be taken to ensure that the Collector plays an effective coordination role in activities and programmes of other departments at the district level.3.2.4.16 Modernizing the Office of the District Collector3.2.4.16.1 The Commission feels that the organizational arrangement of the Collector’s office, currently, is not in tune with the requirements of the job. This office has a large interface with the citizens, and hence needs to be more efficient and citizen friendly. Modernization is a basic requirement.3.2.4.16.2 Some important steps that could help this process are:?Management Information Systems / IT tools /E-GovernanceFor effective monitoring and evaluation of programme/projects which are directly under the charge of the Collector, there needs to be computerized/MIS attached to his office. On the basis of these, the Collector could undertake monthly or quarterly review of performance. This cell could also function as the nodal e-governance cell for other officers located in the district by using its capacity to coordinate, and develop relevant IT solutions.?Grievance & Public Feedback CellGrievance redressal of citizens and implementation of citizen charters should be a integral part of the Collector’s office. This district grievance cell should be linked with the field offices and also with public kiosks located in the farflung areas of the districts. There should be computerized monitoring of complaints received in this cell.?A Vigilance CellCurrently, vigilance is a neglected component of the Collectors functioning. In view of the fact that on an average, there are more than ten thousand employees working in a district under various departments of the State Government, there is case for setting up an exclusive vigilance cell at this level. This cell could work under overall supervision of the district Collector who will maintain appropriate liaison with the office of the State Vigilance Commission/Commissioner.?Tours Inspection Notes and Institutional MemoryIt is largely due to elaborate inspection notes and personal observations of the District Collectors that we have a large collection of valuable District Gazetteers which describe almost all aspects of district administration in pre Independence India. The tradition continued till around 1960. There is need to revive it. This could be done by creating and strengthening a cell for this purpose in the District Collectorate.8081State and District AdministationDistrict Administration?Civil Society & Media CellThe emergence of civil society groups in various sectors of governmental activity, now requires that there should be an appropriate forum where civil society groups could interact with representatives of the government. A specialized cell could take care of this necessity. Simultaneously the increasing role of media in society and governance requires the Collector to handle public issues promptly and effectively. At the same time, the Collector’s office could develop partnerships with them on public education efforts.3.2.4.16.3 Process Re-engineering and use of Information Technology3.2.4.16.3.1 The provision of service delivery at the district and sub-district level provides a fertile ground for innovative use of information technology. There have been a number of experiments in different sectoral areas in this regard such as Jan Seva Kedras in Ahmedabad, e-district model of Tiruvarur in Tamil Nadu, Mahiti Shakti Kendras in Panchmahal, Gujarat, Saukaryam in Vishakapatnam, Lok Mitra in Hamirpur, Himachal Pradesh etc.3.2.4.16.3.2 By and large, e-Governance initiatives at the district and sub-district levels have been individual driven, particularly by the concerned Collector. The scale and quality of replication of successful initiatives has been weak. To create the necessary impetus and enable uniformity/standardisation, the role of the STATE assumes critical importance.3.2.4.16.3.3 The state must provide a holistic approach and broad framework for enabling e-governance at the district level. The recent effort of the Department of Administrative Reforms and Public Grievances to evolve an e-District framework is a step in the right direction. States must use this forum to prepare an e-District Plan for their State. At the same time, a thorough review of current processes involved in different services delivered must be undertaken to streamline the delivery system and reduce the human interface.3.2.4.16.4.4 The following steps are important in this context:?Development of an e-District framework applicable to all districts based on which ICT initiatives may be undertaken by respective districts.?Comprehensive classification of rules, guidelines and procedures is necessary for efficient service delivery and better understanding among both the officers and the general public.?Delegation of adequate powers and responsibilities needs to be done so that unnecessary file movements and resultant delays may be avoided.?Standardization of application forms and categorization of nature of applications and petitions based on priority and frequency.?Codification and classification of common grievances with processing time mentioned and separate records may be maintained department-wise for tracking them.?Introducing a IT based mechanism for feedback and grievance redressal wherein public grievances are attended to within specified timelines in a transparent manner. Every functionary must be made accountable for the effective and timely redressal of public grievances through a systematic monitoring process.?Developing a reliable central district database through which data collection from the grassroot level with the help of local revenue administration machinery can be done. The database must contain block and circle-wise information on population, PHCs, PDS outlets, Police stations, schemes implemented, fund sanctioned, beneficiaries under the scheme etc.?Undertaking computerisation of land records for provision of information and services pertaining to land related matters such as computerized copy of mutations, ROR etc.?Providing e-governance services through the front-end service delivery nodes for rendering important services such as:oPayments of user charges (telephone, electricity, water supply and other bills), fees, taxes etc.oOnline submission and tracking of applications (alongwith the name of officer with whom pending).oOnline invitation of tenders and transparency in the process of selection of suppliers and contractors.oComplaints and grievances sent online to concerned departments, which after a fixed date gets automatically reported to the next higher authorityoScheme related information like list of beneficiaries, criteria of selection, entitlements under schemes etc.8283State and District Administation?Making the National Identity Cards a tool for service delivery and issue of certificates?Networking all branches in the District Collector’s office with district and subdistrict offices would help ensure information sharing and facilitate convergence of services and delivery mechanism3.2.4.16.5.5 Most of the issues having a bearing on the effective and efficient district administration like security of tenure, transparent transfer posting policy, performance management, outcome evaluation, effective citizen centric administration, use of information technology, process re-engineering etc have been extensively dealt by the Commission in its previous Reports summarized in Chapter 1. Reports on Refurbishing Personnel Administration, Ethics in Governance, Citizen Centric Administration and e-Governance are particularly relevant in this regard. The issue of capacity building, training and human resource management has been dealt separately in this Report in the chapter on Personnel Management which also covers the steps required to be taken in this regard at the district level.3.2.4.16.4 Documenting best practices/innovationsBox No. 3.2 : SCORE – eRegistration in BiharA case study of Muzaffarpur Registry officeMuzaffarpur, Bihar has the busiest Registration office in the State with an inflow of about 150-200 documents per day. The project on digitized registration of documents was initiated by the Department of Registration, Government of Bihar for this office in December 2005. The main objective of the project was to make the Registration of documents simple, transparent and hassle free and to deliver the deed to the parties the same day.It was done by adopting the following strategy:?Calculation of the stamp duty and registration charges on computerized valuation of property (based on pre-determined circle rates).?Depositing the above calculated amount in a designated bank which is linked digitally with the Registry office. The payment advice of the bank gets displayed instantly on the computer of the Registrar.?Collecting Rs.20 per page of the document to cover costs.?Hardware taken on hire with a technician in tow. Software developed by the NIC.?An Autonomous District Society formed under the Collector to take care of the day to day management problems.Results achieved:--Unambiguous computation of stamp duty and registration charge; scope of exploitation reduced significantly.-Buying stamps is no longer compulsory; the process has become convenient.-Registered deed made available to the parties the same day. In the past, it used to take six months to a year. Copies of any document available without delay.-Registrar’s powers to withhold registration on minor grounds curtailed.Overall impactRemarkable increase in citizen satisfactionSource: Obtained from Government of BiharDistrict AdministrationOfficers have shown ingenuity and innovativeness. Such initiatives have resulted in better implementational practices and improvement i n the overall tenor of governance at the field level. With appropriate modifications, it is possible to replicate these innovations and practices in other areas too. However, many of these ideas and initiatives are forgotten when the officer is transferred out of his assignment. The Commission feels that there is need to document such innovations and institutionalise such innovations and practices.3.2.4.16.4.1 In many States and districts, officers have taken initiatives which have considerably improved performance of government programmes in the district. Be it the social audit o f NREGA, simplifying procedures for registration of property o r issuing various Certificates,Box No.3.3: Improved Health and Sanitation Practices, District Surguja, ChhattisgarhSurguja is the largest but one of the most backward districts of Chhattisgarh with low rates of literacy and a high incidence of malnutrition and infant mortality. Primitive tribal communities constitute over 50 percent of population. Poor systems of management of water bodies and drinking water facilities, lack of public health and hygiene awareness contributed to the poor health conditions prevailing in the district. The prevailing High Infant Mortality Rate is also largely attributed to poor sanitation. It was in this context that the District Administration, decided to work on Total Sanitation Campaign (TSC).The officers adopted innovative methods of implementing a ‘model of convergence’ where a number of line departments worked together with Panchayats. Using existing resources, they could produce positive changes and worked out points of linkages among various sectors like health, education, panchayats and rural development. This facilitated, within a short period, construction of more than 85,000 individual household toilets and 2,703 sanitation complexes in schools of 256 identified Panchayats. Communities took ownership of the project through monitoring of construction, imposition of fines and management of assets. By providing proper access to handpumps, the problem of drinking water was, to a great extent, also solved. Awareness about personal hygiene increased, and this is visible in the increased use of bathrooms in villages. Panchayat vigil has brought an improvement in teachers’ attendance. Line departments now act in synergy with better results. There has been a marked improvement in the hygiene awareness of the school-going children. The efforts of the officers have resulted in vast improvements in the lives of people of the district.(Source: Department of Administrative Reforms & Public Grievances, Government of India)3.2.4.16.5 Recommendations:a) The Commission reiterates its recommendations on the issues of personnel management, performance and outcome evaluation, effective citizen centric administration, use of information technology, process re-engineering etc. made in its earlier Reports on “Refurbishing of Personnel Administration”, “Ethics in Governance”, “Citizen Centric Administration”, “Public Order”, “Disaster Management”, “Conflict Resolution” and “e-Governance”. These recommendations should be expeditiously implemented where applicable to the district administration.b) The following steps should be taken to modernize the office of the District Collector:-?Management Information System (MIS) should be set-up in the office of the Collector for effective monitoring and evaluation of programmes/ projects under his direct control.8485State and District AdministationDistrict Administration3.3 Functional and Structural Reforms3.3.1 Institutions of Local Governance at the District Level3.3.1.1 After the 73rd and 74th Amendments PRIs have emerged as the third tier of government at the district and sub-district levels. But, in many States, these institutions have grown parallel to the existing administrative machinery of the State Government. Barring Kerala, Karnataka and Maharashtra where field offices of many departments have been placed under the control of Zilla Parishad, other parts of the country still remain department-centric. While Maharashtra and Himachal Pradesh have brought the DRDA under the Zilla Parishad, in Andhra Pradesh this body still functions under the Chairmanship of the Collector.3.3.1.2 At the intermediate level i.e. at the block or taluka level, there is a relatively better integration of departments with the PRIs. The Block Development Officer (BDO), who is formally under the control of the Public Relation department, is the principal officer who coordinates development activities at the block level. The nature of relationship between the BDO and the extension officers of line departments varies from State to State – from direct supervision to coordination. While this administrative arrangement applies to line departments like Agriculture, Panchayati Raj and Rural Development, Education andAnimal Husbandry, etc., many technical departments such as Health Engineering and Industry work independently of the PRIs.3.3.1.3 At the village level, this problem does not exist given that most departments do not extend themselves to this level. There are exceptions, however, such as Kerala where the typical Gram Panchayat has a population of more than 20,000.3.3.1.4 The Commission is of the view that the local bodies (PRIs/ULBs) and ultimately the District Council will have to play a primary role in planning, development and service delivery functions pertaining to the subjects listed in the Eleventh and Twelfth Schedule of the Constitution. Though in many States, the subjects technically stand devolved to the local bodies, the administrative set-up has not been re-aligned appropriately to equip them for becoming effective self-governing institutions.3.3.1.5 The Commission has already recommended in its Report on Local Governance that each district should have a District Council comprising of representatives of both rural and urban bodies. It observed that:-“there must be a single elected District Council with representatives from all rural and urban areas, that will function as a true local government for the entire district. In such a scheme, the District Council will be responsible for all the local functions, including those listed for them in the Eleventh and Twelfth Schedules. The DPC in its present form will be redundant, once a District Council comes into existence as envisaged by the Commission. Planning for the whole district – urban and rural – will become an integral part of the District Council’s responsibility. The role of the District Collector/DM also needs to be reviewed in the context of the District Council and the District Government. There are two broad views that have emerged over the years on this issue. Strong advocates of local governments empowerment argue that the District Collector’s institution is redundant in a democratic milieu with empowered and effective local governments and should, therefore, be dispensed with. Pragmatists argue that the Collector’s institution served the country well for some two centuries and has been the pillar of stability and order in a diverse and turbulent society. Therefore, the institution of District Collector must remain in the current form for some more time. Eventually, the District Council should have its own Chief Officer. Meanwhile, as an interim mechanism, there is merit in utilising the strength of the Collector’s institution to empower local governments. The Commission is of the considered view that a golden mean between these two positions is desirable and the District government must be empowered while fully utilising the institutional strength of the District Collector.?A computerized District Grievance Cell should also be set up in the Collectorate.?An exclusive Vigilance Cell should be set up at the district level under overall supervision of the District Collector. This Cell should also maintain appropriate liaison with the office of the State Vigilance Commission/ Commissioner.?A forum should be established at the district level to interact with civil society groups and media on important public issues.?Immediate steps should be taken to introduce process re-engineering and increased use of information technology. The steps suggested at paragraph 3.2.4.16.3.4 in this regard may be initiated on priority.c)Innovations and best practices initiated by officers should be documentedadequately and institutionalized through changes in rules/laws wherever required.8687State and District AdministationDistrict AdministrationThe Commission believes that these two objectives can be realised, by making the District Collector function as the Chief Officer of the District Council. In such a case, the Collector’s appointment should be in consultation with the District Council. The District Collectorcum-the Chief Officer would have dual responsibility and would be fully accountable to the elected District Government on all local matters, and to the State Government on all regulatory matters not delegated to the District Government.”3.3.1.6 With regard to the existing parastatals, the Commission observed that,“the parastatals should not be allowed to undermine the functions and authority of the PRIs. Some of the existing committees may need to be subsumed in the Panchayats and some of them may be restructured to have an organic relationship with them (Panchayats). The Union and the State Governments should not normally set up special committees outside the PRIs. However, if such specialised committees are required to be set-up because of professional or technical requirements, and if their activities coincide with those listed and devolved, they should function under the overall supervision and guidance of the Panchayats. Similarly, Community level bodies should not be created by decisions taken at higher levels. If considered necessary the initiative for their creation should come from below and they should be accountable to PRIs.”3.3.1.7 The Commission also examined various important issues pertaining to Centrally Sponsored Schemes in depth and observed that,“The role of the Panchayats vis-a-vis the Centrally Sponsored Schemes is not yet in line with the commitment of the 73rd Amendment. The CSSs have to shed their separate vertical identity and be part of the overall development plan of the Panchayati Raj system. The Commission feels that there has to be territorial/jurisdictional/functional convergence in their implementation. The centrality of PRIs in these schemes must be ensured if they are to deal with matters listed in the Eleventh Schedule. The Gram and Ward Sabha at the lowest level and the Panchayat Samiti and Zila Parishad at the higher levels have to be the structures looking after all their activities in terms of implementation, monitoring and social audit. Even while formulating such projects, the Union and State Governments need to include elements of flexibility so that they could be moulded as per local conditions and requirements. The Ministries concerned should only issue guidelines and the implementational flexibility should be left to the local bodies.”3.3.1.8 In addition to the developmental functions, the Commission also recommended devolution of some of the basic regulatory functions to the PRIs. It observed that,“Since Panchayats are an integral part of the government at the local level, their activities cannot be confined solely to development programmes. If public convenience and effective enforcement of a law or regulation warrants decentralization of regulatory functions, it would be most appropriate to devolve such functions to the local bodies. There are many areas where the rationale for devolving regulatory powers to the local governments is very strong. To begin with tasks like issuing birth, death, caste and residence certificates, enforcing building byelaws, issuing of voter identity cards, enforcing regulations pertaining to weights and measures would be better performed by local governments. The Commission in its report on Public Order – para 5.15 – stressed the importance of community policing in creating an environment which enhances community safety and security. The Gram Panchayats can play an effective role in community policing because of their close proximity with the people. In most of the developed countries, policing is a municipal job and there is no reason why it should not be so in India. The process of democratic decentralization cannot be complete without the gradual transfer of the functions and powers of the village police from the State Government officials in the village to the Village Panchayats. In due course, with the implementation of the reforms suggested in this Report, the PRIs would be in a position to efficiently handle many more such functions. Therefore, regulatory functions which can be devolved to the Panchayats should be identified and devolved on a continuous basis.”3.3.1.9 Accordingly, the Commission made comprehensive recommendations on issues like creation of District Councils, position of parastatals, centrality of PRIs in the implementation of the Centrally Sponsored Schemes, role of Panchayats in service delivery and in important sectors such as education, health, water supply and sanitation etc; personnel management capacity building in local institutions, accountability and transparency, modernisation and use of technology in local bodies etc. in its Report on Local Governance. These recommendations have been summarized in Chapter 1 of this Report.3.3.1.10 The Commission reiterates that these recommendations should be implemented in both letter and spirit.3.3.1.11 Implementation of the above recommendations would mean complete restructuring of the existing format of the Collector’s office and line departments of the State Governments. While doing so the following aspects need to be kept in mind:?The need to conform to the Constitutional mandate envisaged for urban and rural local bodies under the 73rd and 74th Amendment and deepen democratic and administrative decentralization8889State and District Administation?Clarity in functional allocation and subjects and mapping them to specific institutions?Streaming multiple accountability lines that exist within and across the Collector’s office, line departments, other parastalals/agencies and local bodies?Need for coordination between various structures and convergence in service delivery functions3.3.1.12 In the light of the above considerations, the Commission again reiterates that there is need to restructure the entire administrative machinery at the district level in the following way:- There should be an integrated command at the district level in the form of the District Council.- The District Collector would have dual responsibility in the new set up:oAs the Chief Officer of the District Council fully accountable to it on all local matters.oAs the representative of the State, he would be reporting to the State Government on all regulatory matters not delegated to district government (District Council).3.3.1.13 Till the time, the institution of the District Council as envisaged by the Commission is given shape, the Zilla Parishad will continue to remain the most important unit of self-government at the district level.District Administration3.3.2 Line Departments of the State Government at the District / Sub-District level3.3.2.1 Apart from the departments / functions which fall directly under the domain of the District Collector, there are many other departments of the State Government which too have their offices at the district/sub-district levels. These offices can be classified into two categories.3.3.2.2 The first category consists of the offices whose activities/functions coincide with the activities and functions assigned to the PRIs/ULBs under 11th/12th Schedule of the Constitution such as the Office of the District Superintendent of Education, the Office of the Executive Engineer (Minor Irrigation, water management and watershed development) DFO (Social forestry and farm forestry) and Office of the District Soil Conservation.3.3.2.3 The main purpose of the 73rd and 74th Constitutional Amendment is to establish and empower the institutions of local governance. Once the activities mentioned in the 11th/12th schedule are transferred by the State Government to them, there would be no justification for the above branch offices to continue their separate existence at the district/sub-district level. The functions, funds and functionaries of these offices need to be transferred immediately to the appropriate local government institutions.3.3.2.4 The second category of offices of the State Government existing at the district/ sub-district levels, belongs to the departments which execute State wide projects. Such departments will have to work in coordination with the Collector. These branch offices will continue to exist at the district level. The Collector will also have to play a coordinating role between these line departments and the District Council to the extent their activities impinge on the functions and responsibilities of the District Council.3.3.1.14 Recommendations:a)There should be an integrated governing structure at the district level in the form of the “District Council” with representation from both urban and rural areas. The Council will act as the “District Government”.b) The District Collector should have a dual role in this government structure. He should work as the Chief Officer of the District Council and should be fully accountable to the District Council on all local matters.c) The District Officer would also be fully accountable to the State Government on all regulatory/other matters not delegated to the District Government.903.3.2.5 With these functional and structural changes, the role of line department and its Head of the Departments (HOD) and their relationship with the proposed District Council would also need to be clarified. The role of the line departments in supporting the District Council will have to be clearly spelt out. While the District Council and local government institutions at the sub-district level are given clearcut roles in planning and implementation of development schemes, the line departments may be in a position to provide valuable technical support in this process. Briefly stated, what is envisaged is that the District Council shall be responsible for administrative approval and implementation in respect of all matters coming within its purview with the technical support and guidance of the concerned technical department of the government. In this scheme of things, the Agency Heads of the line departments will have to devote more attention to technical aspects of their work than they are able to do at present, burdened as they are with an enormous91State and District Administationvolume of administrative work, including work on personnel matters. Each Head of the Department will function as a nodal technical agency advising government on the one hand and monitoring and guiding the work of the District Councils on the other. He will have to assess the trends as they emerge and advise on policies, measures and programmes in time, to counteract negative aspects and encourage the positive ones. He will have to appraise and evaluate the projects and programmes proposed for technical approval as well. Adequate time and attention will need to be devoted to training and orientation programmes for constant upgradation of the skills of the technical personnel of the departments.3.3.2.6 Recommendations:a)District/sub-district offices, whose activities/functions coincide with the activities and functions transferred by the State Government to the PRIs/ ULBs need not exist as separate entities at the district and sub-district levels. Functions funds and functionaries of such offices should be transferred to the appropriate local government institutions.b) Line departments such as the Departments of Water Resources and PWD (Roads) or the Department of Health engaged in execution of State-wide projects need to maintain their separate offices at the district/sub-district level. On important issues, they will need to coordinate with the District Collector. They will also need to coordinate with the District Council to the extent their activities impinge on the powers and functions of the Council.c) The line departments and their Agency Heads should provide technical support and guidance to the District Councils in planning and monitoring implementation.ADMINISTRATION OF THE UNION TERRITORIES44.1. Evolution of States and Union Territories4.1.1 At the time of Independence, India comprised of nine Governors’ provinces (Madras, Bombay, West Bengal, United Provinces, Bihar, East Punjab, Central Provinces; Assam and Orissa) and five Chief Commissioners’ provinces (Delhi, Ajmer-Merwara, Panth Piploda, Coorg and Andaman & Nicobar Islands). In the wake of Partition, the country faced the gigantic problem of consolidation, since nearly two-fifths of the area in British India consisted of 562 principalities and princely States, varying in size from a few square miles to an area as large as Hyderabad with 17 million people. Within a short span the earlier principalities and princely States integrated with the Indian Union.4.1.2 In 1950, when the Constitution was adopted, the country consisted of four types of Provinces/Territories: Part A, B, C and D.Table No. 4.1 : State set-up at the Commencement of the Constitution1. Part APunjabPart B Hyderabad19. Part C29. Part D2. Assam Bihar Bombay10. Jammu & Kashmir20. Ajmer Bhopal Bilaspur Cooch-Behar Coorg DelhiThe Andaman and Nicobar Islands3. Madhya Pradesh Madras11. Madhya Pradesh Mysore21. Himachal Pradesh4. Orissa12. Patiala & East Punjab States Union22. Kutch Manipur Tripura5. The United13. Rajasthan Saurashtra23. 6. Provinces14. Travancore- Cochin24. 7. West Bengal15. Vindhya Pradesh25. 8. 16. 26. 9. 17. 27. 18. 28. 9293State and District AdministationAdministration of the Union Territories4.1.3 There were nine States headed by Governors (Part A States) and nine headed by Raj Pramukhs (Part B States). Ten (Part C States) were administered by the President through Chief Commissioners. Then, there were Part D Territories which were administered by the President through a Chief Commissioner although there was no provision for a legislative body or a Council of Ministers.4.1.4 Soon the demand for a redrawing of the State boundaries on the basis of regional and linguistic identity gathered strength. The State of Andhra was created in 1953. The government also appointed a States Reorganisation Commission in 1953. On the recommendations of this Commission, the Indian Union was divided into 14 States (consisting of Andhra Pradesh, Assam, Bihar, Bombay, Jammu & Kashmir, Kerala, Madhya Pradesh, Madras, Mysore, Orissa, Punjab, Rajasthan, Uttar Pradesh and West Bengal) and 6 Union Territories (consisting of Andaman and Nicobar Islands, Delhi, Himachal Pradesh, Laccadive Minicoy and Amindivi Islands, Manipur and Tripura).4.1.5 During the course of the next 15 years, some more restructuring took place. Bombay was divided into Maharashtra and Gujarat (1960), Nagaland was carved out of Assam as a separate State (1961). Punjab was divided into two new States viz. Punjab and Haryana (1966). Their joint capital Chandigarh was declared a Union Territory under an Administrator, which post is held ex-officio by the Governor of Punjab. The jurisdiction of the Punjab and Haryana High Court extends to all the three entities.4.1.6 In January 1971, Himachal Pradesh which was a Union Territory got the Statehood. In April 1970, a separate Autonomous State of Meghalaya was created within Assam.4.1.7 The process of reorganization continued in the 1970s and 1980s. In 1972, as a result of the North-Eastern Areas Reorganization Act, 1971 which came into force in January 1972, Meghalaya, Manipur and Tripura emerged as three separate States in the northeast. Arunachal Pradesh and Mizoram were made Union Territories. In 1972, the Union Territories were seven in number: Andaman and Nicobar Islands, Delhi, Laccadive Minicoy and Amindivi Islands (in 1973 they were renamed as Lakshadweep), Goa, Daman and Diu, Mizoram, Arunachal Pradesh and Dadra and Nagar Haveli.4.1.8 The territory of Dadra and Nagar Haveli was in Portuguese occupation until its liberation by the people in 1954. From 1954 to 1961 the Territory functioned almost independently by what was known as “Free Dadra and Nagar Haveli Administration”. The territory was merged with the Indian Union in 1961 and since then it is being administered by the Government of India as a Union Territory under the charge of an Administrator.4.1.9 In 1975, Sikkim became the 22nd State of the Indian Union. In 1986, the Constitution 53rd Amendment Act inserted a new article 371G conferring full statehood on Mizoram. The North-East Frontier Agency (NEFA) which was renamed as Arunachal Pradesh and made a Union Territory in 1972 also got a full statehood in December 1986.4.1.10 The territory comprising of Goa, Daman and Diu was since 1510 under the Portuguese continuously for about 450 years (except for a brief period during the later half of the 17th century when Shivaji conquered a few areas in and around Goa). On liberation from the Portuguese in 1961, it was made a composite Union Territory along with Daman and Diu. This continued for 26 years. In 1987, Goa was declared as the 25th State of the Indian Union by an Act of Parliament and Daman and Diu was made a separate Union Teritory. It is governed by an Administrator. The State of Goa and the Union Territories of Dadra and Nagar Haveli and Daman and Diu come under the jurisdiction of the Bombay High Court.4.1.11 Puducherry, Karaikal (located 150 Kms. to the south of Puducherry on the east coast), Mahe (located on the Malabar coast) and Yanam (located close to east Godavari district of Andhra Pradesh) were parts of the French settlement in India for 138 years since 1816. These territories merged with the Indian Union in 1954 and since then have been a Union Territory. Currently, it is governed by a Lt. Governor with the support of a Council of Ministers. The jurisdiction of the Tamil Nadu High Court extends to these territories.4.1.12 Before Independence, Delhi was one of the six Chief Commissioner’s provinces (others provinces were British Baluchistan, Ajmer Mewar, Coorg, Andaman and Nicobar Islands and Panth Piploda). In 1950, when the Constitution came into existence, it was made a Part C State. On reorganization of States in 1956, Delhi became a Union Territory under the direct control of the President through the Chief Commissioner. In 1966, under the Government of Union Territories Act 1966 an Executive Council was created for the Capital. This arrangement continued till the “Government of National Capital Territory Act, 1991” was passed and Delhi got a legislative assembly and a Council of Minsters. The subjects of Public Order, Police, NDMC, DDA and Land Resource Management (Entries 1, 2 and 18 of the State list) were however kept outside the purview of the Assembly and the Chief Minister. The Lt. Governor exercises exclusive powers over these matters.4.1.13 Currently, India has 28 States and 7 Union Territories. Some details relating to the Union Territories are given below:-9495State and District AdministationAdministration of the Union TerritoriesName of the UTNo. of DistrictsForm of political representationHead of the AdministrationJurisdiction of the High CourtMPsML AsLok SabhaRajyaSabhaDelhi97370Lt. GovernorDelhiPuducherry41130Lt. GovernorTamil NaduChandigarh11--AdministratorPunjab and HaryanaAndaman & Nicobar Islands31--Lt. GovernorKolkataDadra & Nagar Haveli11--AdministratorBombayDaman & Diu21--AdministratorBombayLakshadweep11--AdministratorKeralaName of the UTArea Sq KilometersPopulation in 2001LiteracyPopulation DensityInfant Mortality RatePer-capita Income61,676Delhi14831385050781.67934035Puducherry49297434581.2420342852,669Chandigarh11490063581.9479001986,629Andaman & Nicobar Islands824935615281.3432734,853Dadra & Nagar Haveli49122049057.6344942-Daman & Diu11215820478.18141128Lakshadweep326065086.66189522-4.1.14 Administration of the Union Territories4.1.14.1 The administration of the Union Territories is governed by provisions described in Part VIII of the Constitution (Articles 239 to 241). Article 239 (1) reads,“(1) Save as otherwise provided by Parliament by law, every Union territory shall be administered by the President acting, to such extent as he thinks fit, through an administrator to be appointed by him with such designation as he may specify.(2) Notwithstanding anything contained in Part VI, the President may appoint the Governor of a State as the administrator of an adjoining Union territory, and where a Governor is so appointed, he shall exercise his functions as such Administrator independently of his Council of Ministers.”4.1.14.2 Article 239-AA empowers Parliament to create a legislature and a Council of Ministers for the Union territory of Puducherry. Article 239-AA deals with special provision for the National Capital Territory of Delhi (viz. creation of a legislative assembly / Council of Ministers for the National Capital Territory). The legislative assembly has been given powers to make laws with respect to any of the matters enumerated in the State List or in the Concurrent List as applicable to Union Territories except matters with respect to entries 1, 2 and 18 of the State List and Entries 64, 65 and 66 of that List in so far as they relate to the said Entries 1, 2 and 18.4.1.14.3 Article 239-AB deals with the powers of the President in case of failure of the Constitutional machinery in the National Capital Territory (analogous to Article 356). Section 239-B describes the power of administrator to promulgate ordinances during recess of legislature (analogous to the powers of the Governor in a State to promulgate ordinances).4.1.14.4 With regard to the other five Union Territories, the administration is governed by(a) special enactments passed by Parliament, or(b) by regulations made under Article 240 of the Constitution. 4.1.14.5 Article 240 of the Constitution reads as under, “Power of President to make regulations for certain Union territories –(1) The President may make regulations for the peace, progress and good Government of the Union territory of – (a) the Andaman and Nicobar Islands; (b) Lakshadweep;(c) Dadra and Nagar Haveli; (d) Daman and Diu; (e) Puducherry”Table No. 4.2 : Statistical Details regarding the Union TerritoriesTable No. 4.3 : Statistical Details regarding the Union TerritoriesSource: Data Collected from Government Websites.9697State and District AdministationAdministration of the Union Territories4.1.14.6 In recognition of the similarity of location and issues involved, the UTs may be considered under three groups, namely:-Largely urban Union Territories (Delhi & Chandigarh)-Island Territories (Andaman & Nicobar Islands, Lakshadweep)-Territories in the Mainland (Puducherry, Daman & Diu, Dadra & Nagar Haveli)4.1.14.7 However, since, each of the seven Union Territories has some distinct characteristics, issues of governance in each of them has been separately discussed in this Report.4.2 The National Capital Territory of Delhi4.2.1 Due to its strategic location, Delhi has been a seat of power of several empires in its long history; the earliest architectural relies dates back to the Maurya period (300 B.C.) After Independence, a major change came about: Delhi became the seat of the Union Government in a federal polity. The evolution of administration in Delhi has been conditioned by the fact that Delhi remains the seat of both the Union Government and the local government.4.2.2 At the time of Independence, Delhi was a Chief Commissioner’s province and when the Constitution became effective, it became a part C State with its own Legislative Assembly. It became a Union Territory in 1956 and was governed by an Administrator appointed by the President under Article 239 of the Constitution and designated as a Chief Commissioner. A year later, two landmark legislations, the DMC and the DDA Acts were enacted to plan and promote the growth and development of the city. The erstwhile Delhi Transport Undertaking and the Delhi Electric Supply Committee were amalgamated into the newly created Delhi Municipal Corporation. (These two bodies were again separated from the MCD in 1971 and 1976 respectively and the work of water supply and drainage was transferred to an autonomous Board, the Delhi Jal Board, in 1988). The NDMC looking after Lutyens’ Delhi (an area of 43 sq Kms) and the Cantonment Board looking after the Cantonment remained separate entities.4.2.3 Delhi Metropolitan Council (1966-1990)4.2.3.1 In the 1960s public opinion grew for providing a democratic set up for Delhi. In partial fulfilment of this demand, the Delhi Administration Act, 1966 was enacted. The Actprovided for a deliberative body called the Metropolitan Council having recommendatory powers. This was headed by a Lt. Governor as the Administrator to be appointed by the President of India under Article 239 of the Constitution. There was an Executive Council consisting of one Chief Executive Councillor and three Executive Councillors. The Metropolitan Council was a unicameral body consisting of 56 elected members and 5 others nominated by the President.4.2.3.2 Article 239A, which was inserted in the Constitution by the Fourteenth Amendment Act (1962), provided for creation of local legislatures or Council of Ministers or both for some of the then Union Territories (which later became States) viz., Himachal Pradesh, Manipur, Tripura, Goa, Daman and Diu, Mizoram and Arunachal Pradesh and the present Union Territory of Puducherry. However some of the other Union Territories viz., Delhi, Andaman and Nicobar, Lakshadweep, Dadra and Nagar Haveli, Chandigarh were excluded from the purview of this Article.4.2.3.3 The Metropolitan Council - remained the deliberative wing of the Delhi Administration, devised as a compromise between a representative body with full legislative and financial powers and administration by the President through his nominee. The important functionaries of the Metropolitan Council were: the administrator, Presiding Officer, Leader of the House, Leader of the Opposition, Whips, Members, Secretary and Secretariat.4.2.3.4 The Lt. Governor presided over Delhi Administration and its deliberative wing, the Delhi Metropolitan Council. Under Section 11 of the 1996 Act, he was required to summon, from time to time, the Metropolitan Council to meet at such time and place as he thought fit, with the condition that six months should not intervene between its last sitting in one session and the date appointed for its sitting in the next session. He also had powers to prorogue the Metropolitan Council. He could also dissolve the body after obtaining prior approval of the President. Although the power to summon and prorogue the Council vested in the Lt. Governor, he exercised this power on the recommendation of the Executive Council.4.2.3.4.1 Leader of the House: The Chief Executive Councillor, who along with three other Executive Councillors, was appointed by the President of India under section 28(1) of Delhi Administration Act to assist and advise the Lt. Governor in the exercise of several of his functions in relation to matters enumerated in the State List or the Concurrent List of the Seventh Schedule, functioned as Leader of the House in the Metropolitan Council.9899State and District AdministationAdministration of the Union Territories4.2.3.4.2 Leader of the Opposition: The Leader of the largest recognized party in the Opposition having a strength of 15 or more members was recognized as the Leader of the Opposition in the Metropolitan Council although there was no specific provision either in the Delhi Administration Act or in the Rules of the Metropolitan Council in this regard.4.2.3.4.3 Whips: There was no provision either in the Delhi Administration Act or in the Rules of Procedure of the Metropolitan Council with regard to the post of Whips in the House. However, in practice the Chief Whip and Whip of the Ruling party were nominated by the Leader of the House and the Whips of other parties by Leaders of the respective parties in the Council.4.2.3.4.4 Members: The Metropolitan Council consisted of 61 members of whom 56 were elected and five were nominated. As in the case of other Members of Parliament and State Legislatures in India, the term of office of the Members of the Metropolitan Council was five years.4.2.3.5 The Delhi Administration Act, 1966 suffered from several shortcomings. The Council had no legislative powers and had only an advisory role in the governance of the city. There was, therefore, a continuous demand for creation of a full-fledged State Assembly with a Council of Ministers to aid and advise the Lt. Governor. Accordingly, on 24th December, 1987, the Government of India appointed the Balakrishan Committee to go into the various issues connected with the administration of the Union Territory of Delhi and to recommend measures for streamlining the administrative set up. In its Report submitted in 1989, that Committee recommended that Delhi should continue to be a Union Territory but should be provided with a Legislative Assembly and a Council of Ministers with appropriate powers to deal with matters concerning the common man. The Committee also recommended that with a view to ensuring stability and permanence, the arrangements should be incorporated in the Constitution to give the National Capital a special status among the Union Territories.4.2.4 Present Form of the Delhi Assembly4.2.4.1 On the basis of these recommendations, Parliament passed the Constitution (Amendment) Act in 1991, which inserted Articles 239 AA and 239 AB in the Constitution providing, inter alia, for a Legislative Assembly for Delhi. A comprehensive legislation passed by Parliament called “The Government of National Capital Territory of Delhi Act, 1991”, supplemented the Constitutional provisions relating to the Legislative Assembly and the Council of Ministers and matters related thereto. The strength of the Assembly was to be 70 – all chosen by direct election from as many constituencies. At present 13of the seats are reserved for Scheduled Caste candidates. The Constitution also lays down that the strength of the Council of Ministers shall not be more than ten percent of the total number of members in the Assembly i.e seven.4.2.4.2 The Assembly has the power to make laws with respect to all the matters in the State List or in the Concurrent List of the Constitution of India except Entries 1 (Public Order), 2 (Police), and 18 (Land), and entries 64, 65 and 66 relatable to the said entries of the State List.4.2.4.3 The President appoints the Chief Minister and on the advice of the Chief Minister appoints other Ministers. The Ministers hold office during the pleasure of the President. The Chief Minister and the Council of Ministers aid and advise the Lt. Governor in the exercise of his functions in relation to matters with respect to which the Legislative Assembly has power to make laws.4.2.4.4 The Lieutenant Governor has the powers to summon, prorogue or dissolve the Assembly. He can also address the Assembly or send messages to it. The Lt. Governor addresses the first session of the Assembly after each general elections and the first session of each year. Like members of other State Legislatures and Parliament, the members of the Delhi Legislative Assembly too are empowered to vote in the election of the President of India. They are also subject to the Tenth Schedule of the Constitution, which contains provisions regarding disqualification on grounds of defection.4.2.4.5 The Government of National Capital Territory of Delhi Act 1991 provides for special provisions in case of Finance Bills to be considered by the Delhi Legislative Assembly. In terms of these provisions, a Bill or amendment shall not be introduced into, or moved in, the Legislative Assembly except on the recommendation of the Lieutenant Governor, if such Bill or amendment makes provision for any of the following matters, namely:-(a) The imposition, abolition, remission, alteration or regulation of any tax;(b) The amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of the Capital;(c) The appropriation of moneys out of the Consolidated fund of the Capital;(d) The declaring of any expenditure to be expenditure charged on the Consolidated Fund of the Capital or the increasing of the amount of any such expenditure;100101State and District AdministationAdministration of the Union Territories(e) The receipt of money on account of the Consolidated Fund of the Capital or the Public Account of the Capital or the custody or issue of such money or the audit of the accounts of the Capital;4.2.4.6 Similarly, the annual financial statement pertaining to estimated receipts and expenditure of the Capital for a particular year shall not be laid before the Assembly unless the previous sanction of the President has been obtained.4.2.5 Governance Issues and Challenges4.2.5.1 As discussed above, Delhi, due to historical reasons and being the National capital has a unique and complex governance structure,conditioned primarily by the fact that there are two governments functioning concurrently in the same city It is a Union Territory but at the same time it also has a Legislative Assembly consisting of elected members and an Executive consisting of the Chief Minister and the Council of Ministers. As per provision of Article 239AA(3)(a), the legislative powers of the Government of the NCT are restricted. It can legislate on the subjects mentioned in the State List of the Seventh Schedule except those dealing with public order, police and land and the related aspects of Entries at 64, 65 and 66. The Section reads:239AA (3) (a) Subject to the provisions of this Constitution, the Legislative Assembly shall have power to make laws for the whole or any part of the National Capital Territory with respect to any of the matters enumerated in the State List or in the Concurrent List in so far as any such matter is applicable to Union territories except matters with respect to Entries 1, 2 and 18 of the State List and Entries 64, 65 and 66 of that List in so far as they relate to the said Entries 1, 2 and 18.4.2.5.2 These subjects are directly under the control of the Union Government. The Police Act, 1978 which was specifically enacted for the National Capital Territory of Delhi, provides for a Police Commissioner who works directly under the Lt. Governor. The Chief Minister of the NCT and the Council of Ministers thus do not have any powers with respect to public order and functioning of the police in Delhi. Several other important functional powers concerning transferred subjects too, continue to vest in the Union Government or the Lt. Governor. For example Entry 5 of the State List consists of “Local Government, that is to say, the constitution and powers of municipal corporations, improvement trusts, district boards, mining settlement authorities and other local authorities for the purpose of local self-government or village administration.” But in actual practice, the functions pertainingto the Municipal Corporation and Improvement Trusts are being handled by bodies which are exclusively under the control of the Union Government. The municipal functions in the city are being looked after by three agencies namely, the Municipal Corporation of Delhi (MCD), the New Delhi Municipal Council (NDMC) and the Delhi Cantonment Board all under control of the Union Government. There are as many 57 as Sections/ sub-Sections in the DMC Act, 1957 and 67 Sections/Sub-Sections in the NDMC Act, 1994 where the Union Government wields power directly. A major portion of the finances come to the Delhi Municipal Corporation through the budget of the Delhi Government, whereas the NDMC receives funds directly from the Union Government (Ministry of Urban Development). The Delhi Development Authority, a body created under an Act of 1957 to carry out spatial planning of Delhi is also fully under the control of the Union Ministry of Urban Development. Though, the DDA Board has three representatives from the Legislative Assembly of the NCT, the overriding power vests in the Lt. Governor. The NDMC again is a nominated body which has two members of the Delhi Legislature on its board, but again the real powers rest with the Chairman of the Council who is an officer appointed by the Union Government. To sum up, these organisations are either directly under the control of the Union Government or are more accountable to it as compared to the Government of National Capital Territory (NCT) of Delhi.4.2.5.3 The Delhi Jal Board, GENCO and TRANSCO (successors of Delhi Vidyut Board), Delhi Transport Corporation and Delhi Fire Services are some of the major organizations which function directly under the Delhi government.4.2.5.4 This diarchy creates problems for effective governance of Delhi. They could be considered under the following five headings(1) Role of the Government of the NCT in Municipal Affairs; - its relationship with the Municipal Corporation of Delhi(2) Role of the Government of the NCT in spatial planning and land development; - its relationship with the DDA(3) Status of the NDMC(4) Role of the Government of the NCT in public order, security and enforcement of other laws(5) NCR Planning Board102103State and District AdministationAdministration of the Union Territories4.2.6 Role of the Government of NCT in Municipal Affairs – Its Relationship with the Municipal Corporation of Delhi (MCD)4.2.6.1 The MCD is the largest municipal authority within the jurisdiction of the National Capital Territory of Delhi. Out of a total area of 1483 sq.km., an area of approximately 1400 sq.km. fall within the jurisdiction of the MCD with an estimated 97% of the population of Delhi residing in the MCD area. The remaining areas are covered in almost equal proportion between the NDMC and the Delhi Cantonment Board. The MCD created by the Delhi Municipal Corporation Act, 1957 as amended has a strength of a maximum of 134 elected Councilors with a Mayor and a Deputy Mayor elected by these Councilors. In addition the Lt. Governor may nominate 10 persons with special knowledge and experience in municipal administration. Members of the Lok Sabha from Delhi and 1/5th of the Members of the State Legislative Assembly are also Members of the MCD. It is divided into 12 Zones which are further divided into Wards. The MCD discharges its functions through a Standing Committee, a Wards Committee, various other Committees and the Commissioner. The Commissioner, who is the Chief Executive Authority, is appointed by the Union Government and is generally a senior IAS officer.4.2.6.2 The obligatory functions of the MCD inter alia include the following:?registration of births and deaths;?construction and maintenance of drains, drainage works and public latrines;?removal and disposal of garbage;?regulation of places for the disposal of the dead;?reclamation of unhealthy localities;?measures for preventing the spread of dangerous diseases;?establishment and maintenance of dispensaries and maternity and child welfare centres;?maintenance and upgradation of hospitals;?construction of streets and bridges;?public vaccination and inoculation; the maintenance of municipal markets and slaughter houses; and?establishment and maintenance of primary schools. 4.2.6.3 In addition, the MCD also has a vast range of discretionary functions, which inter alia include:?furtherance of education by means other than schools;?establishment and maintenance of libraries and museums;?establishment of stadiums and gymnasiums;?registration of marriages;?survey of buildings and land; and?construction of rest-houses, poor houses, infirmaries, shelters for the destitute and disabled, and asylums.4.2.6.4 The MCD is authorized to impose a variety of taxes, fees and cess which includes property tax, fees for sanctioning and approving building plans, taxes on vehicles, theatres and cinemas and advertisement and hoardings, tax on consumption of electricity etc. The MCD is also authorized to levy education cess, toll tax, duties on the transfer of property, building taxes etc. A proportion of its budget is by way of release of funds by the Government of NCT, Delhi from its plan budget. Also the Delhi Government has to share a part of its tax collection with the MCD as per the recommendations of the Finance Commission appointed by the Delhi government. This is in accordance with the provisions of the Seventy-Fourth Amendment and Article 243Y of the Constitution.243Y. (1) The Finance Commission constituted under Article 243-I shall also review the financial position of the Municipalities and make recommendations to the Governor as to—(a) the principles which should govern—(i)the distribution between the State and the Municipalities of the netproceeds of the taxes, Power to impose taxes, duties, tolls and fees leviable by the State, which may be divided between them under this Part and the allocation between the Municipalities at all levels of their respective shares of such proceeds;(ii) the determination of the taxes, duties, tolls and fees which may be assigned to, or appropriated by, the Municipalities;(iii) the grants-in-aid to the Municipalities from the Consolidated Fund of the State;104105State and District AdministationAdministration of the Union Territories(b) the measures needed to improve the financial position of the Municipalities;(c) any other matter referred to the Finance Commission by the Governor in the interests of sound finance of the Municipalities.,4.2.6.5 There are several provisions in the DMC Act which place this body under the control and superintendence of the Union Government. Section 338A of the Act (general superintendence, etc., of the Union Government), Section 54(appointment of the Commissioner), Section 347D (appeal to the LG against the orders of the appellate tribunal), Section 349A (powers of the Union Government to make bye-laws) and Sections 485, 486, 487, 488, 489 & 490 (powers of the Union Government to require production of documents) are some of the important provisions which places this body under the domain of the Union Government to carry out inspections to issue directions, enforce compliance and power to dissolve the Corporation on default in performance of the duties. In all, there are 57 Sections/sub-Sections in the DMC Act through which the Union Government wields power over this body.4.2.6.6 There is growing realisation that once an elected legislature has been established for this Territory, the Delhi Government should have full responsibility and powers with regard to provision of municipal services in the area. Further reasons are (i) Municipal functions come under Entry 5 of the State List of the Seventh Schedule which is a transferred subject (ii) a substantial part of the MCD funds comes from the plan budget of the GNCT of Delhi (iii) the citizens of Delhi democratically elect legislators for the GNCT and the principle of subsidiarity demands that municipal bodies should be linked to the nearest tier of Government.4.2.6.7 In fact the present government of NCT has been urging the Union Government that the municipal affairs of the Capital (minus the NDMC and Delhi Cantonment area) need to vest in the government of NCT.4.2.6.8 The contrary view is that the National Capital Region of Delhi is an entity distinct from a full fledged State. It is primarily a Union Territory with slightly enlarged powers which find expression through a democratically elected Assembly and a Council of Ministers. Delhi being the seat of the Union Government, the final authority in respect of its overall development, land use planning and development, allocation, provision of basic services, public order, enforcement of other laws, crime control and security needs to vest in the Union Government. The demand for the development of the city as a model metropolis which could take care of the interests of the entire Nation, institutions of National/ International importance, foreign establishments and provide top grade amenities toits citizens, also dictates that the management of the city should remain with the Union Government. The Municipal Corporation being the key urban service provider in the city should be in a position to work in a wider perspective and hence needs to stay with the Union Government.4.2.6.9 During the last two decades, this issue has been examined in detail by four high powered committees;(1) Balakrishnan Committee, 1989(2) Virendra Prakash Committee, 2001(3) Omesh Saigal Committee, 2006 (on restructuring of the MCD)(4) Ashok Pradhan Committee, October 2006 (on multiplicity of institutions in the NCT dealing with urban development and civic amenities)4.2.6.10 The following chart indicates the views of these Committees on some of the major urban governance issues of the NCT.Table No. 4.4 : Recommendations of Various Committees on Governing Issues of the NCT of DelhiBalakrishnan CommitteeVirendra Prakash CommitteeIssue of ControlPradhan CommitteeRecommendation of the Present GNCTSplit MCD into 8 Municipalities. 7 to be co-terminus with the existing districts and 1 for the area covering NDMCSplit the present organization into 4 smaller Municipal Corporations one each for Central Delhi, West Delhi, South Delhi and Shahadra. The Committee also suggested having 2 Municipal Councils, one each for Narela and Nazafgarh.Saigal CommitteeThe thrust of the Pradhan Committee recommendations too is on restructuring of the present MCD. The emphasis is on strengthening of zones (paragraph 8.3.7 of the Pradhan Committee Report).The GNCT should have complete control over transferred subjects and hence over MCD. The MCD should be split up into 3 independent Municipalities.Issue of ControlThe thrust of the Saigal Committee recommendations was on internal restructuring of the MCD, not on its split up (paragraph 7.8.3 of the Report). It recommendedIt recommended empowerment of the existing Zonal Deputy Commissioners further and even upgrading the post to the level of Joint Secretary and simultaneously designate the MCD Commissioner as Principal Commissioner in the grade of(a)Trans Yamuna (East) – 32 Wards(a) To keep intact the present MCD as an umbrella organization; some kind of a holding municipal structure.(b) North Delhi – 48 Wards andAt the second tier create empowered and autonomous Janpad Parishads (11 in number). Each Janpad will have a separate fund and(c) South Delhi – 54 Wards. Does not support the Model of Zonal empowerment.Issue of ControlDid not suggest any change in the existing Constitutional structure. But for better co- ordination it recommended that a senior officer of the NCT government should be designated as the Commissioner of Local Bodies.Did not suggest any change in the existing Constitutional structure. But for better co-ordination it recommended setting up a StateThe MCD/Successor bodies should completely be placed under the direct control supervision and superintendence of the106107State and District AdministationAdministration of the Union Territorieswords, a balance has to be struck between the imperatives flowing from status as the national capital and as the seat of its own elected government. The existing balance is heavily tilted towards the Union Government at the cost of the functional ability of the Government of the NCT. The Commission has sought to restore a more workable balanDelhi’sceon the principle of subsidiarity.elected government was the Union Government and powers that might normally have been exercised by a State Government vested in the Union Government. For example, Section 330 A provides:-Contd.Table No. 4.4 : Recommendations of Various Committees on Governing Issues of the NCT of DelhiBalakrishnan CommitteeVirendra Prakash CommitteeSaigal CommitteePradhan CommitteeRecommendation of the Present GNCTIssue -Level Coordinationall the taxes underAdditional Secretary,GNCT in all respeIntroducing theBoard under thesections 113(1) andGOI. The jurisdictionwithout any stipulMayor-in-CouncilChairmanship of the(2) of the DMC Actof each municipaland reservation.system in theMinister of Urbanshould be collectedzone should be co-All powers beingMCDDevelopment of theand retained byterminus with Policeexercised by the UDid not agreeGNCTthe Janpad. At theand Revenue DistrictsGovernment withIssue - Introducingthird tier will be theand as and when theregard to MCD eithe Mayor inWard Sabhas (134).geographical areadirectly or througlCouncil system inThe Committee didof a Police DistrictHon’ble Lt. Goverthe MCDnot recommendundergoes a change theshould be transferrsplitting of thejurisdiction of MCDto the GNCT.Did not agree, asMCD into smaller and independent Municipalzone should follow suit to maintain geo convergence(paragraphDoes not supportawould create an authority parallel tothe Chief Minister.Corporations8.3.3).(paragraph7.8.3).As a passing reference, itThe GNCT shou have completeAs a passingcommented thatcontrol overreference, it wrote“Many ills besettingtransferred subjec“Eventhe MCD today areand hence overthatif thegovernment decidesits own unmanageableMCD. The MCDto create more thanone corporationssize ...justified to bring about a change in theshould be split upIeach of them should have the above mentioned threeadministrative structure. Ideally, the Corporation should be split intointo 3 indepes.Municipalities.(b) North Delhitier empowered structure”.smaller compact bodies(East)p— 2 Ward (East) — 32 Wardfor specific areas and(Paragraph 10.24.1jurisdiction having–of the Report)separate elected bodies”.Issue of ControlIt also suggests thatIt recommendedpowers of enforcement(c) South Delhi –that except forof building regulationWards. Does notSection 503 (Grantshould be given tosupport the Modof exemptions toRevenue DeputyZonal empowermdiplomatic missions)Commissioners.Issue of control thall other powersSuggests enlarged roleMCD/Successorshould be exercisedfor them (paragraphbodies shouldby the GNCT8.3.2)completely be pla(para 10.18.2 of theThe Commissionerunder the directreport).of MCD should becontrol supervisioAppointment ofappointed by theand superintendethe MunicipalGNCT (para 8.3.8).of the GNCT inCommissionerIssue of controlall respects withoshould be madeThe MCD shouldany stipulationby the GNCTfunction under theand reservation.in consultationwith the UnionGovernment ofAll powers beingGovernmentNational Capitalexercised by theTerritory of Delhi. (paragraph 8.3.10), with the UnionUnion GovernmEwith regard to M'Wards &Mayor-in-councilsystem.ldtsi ntncenut ;nt CDctsationniontheri nor ed4854el of ent.Table No.4.4 :iVirendra SaigalPradhanRecommendationPrakash CommitteeCommitteeof the PresentCommitteeGNCTIssue Government havingeither directly or- Introducingthe Mayor in Councilpowers to issue directionsthroughHon’blesystem in the MCDthrough the Lt.Lt. Governor shouGovernor, Delhi and inbe transferred toDid not agree, asththe event of their non-it would create anGNCT.authority parallel tocompliance to supersedethe Chief Ministerthe body. Also, theDoes not supportIt will aggravate theCentral Government toMayor-in-councilhave overriding powersissue concerningsystem.‘multiplicity ofin respect of buildingsauthorities’.regulations.(para 8.3.1Issue - Introducing theMayor in Council system Recommendations of Various Committees on Governing Issues of the NCT of Delhin the MCDWas silent on this.The MCD shouldconfine its functionsto core activities(asmentioned in 12thSchedule). Should shedits functions relating tomanagement of hospitalsand schools.deBalakrishnan Committee108eContd. 4.2.6.11 The Commission is of the view that since Delhi is the national capital with people from all parts of the country being its residents, some responsibility for its orderly growth and security must lie with the Union Government. At the same time, there is no reason to burden the Union Government with matters of local import which are best addressed by the elected government of the Territory and the elected Municipal Corporation. In other 4.2.6.12 In the scheme of the DMC Act 1957 the Union Government has the powers of general superintendence over the Corporation. When the Act was passed, the only proximate 109State and District AdministationAdministration of the Union Territories“Notwithstanding anything contained in any other provision of this Act, the Commissioner shall exercise his powers and discharge his functions under this Chapter, under the general superintendence, direction and control of the Central Government”.“The Central Government may, by notification in the Official Gazette, direct that any power exercisable by it under this Act shall, subject to such conditions, if any, as may be specified in the notification be exercisable by the Government or any of its officers or by the Commissioner or any other authority”.4.2.6.15 The Commission is of the view that a simple notification issued by the Union Government under Section 490A will bring the MCD within the domain of the GNCT. In order that, the Union Government retains some overarching role over delivery of municipal services in the National Capital Territory, a few provisions of the existing Act will need to remain as they are. For example, Sections 487 to 490 of Chapter XXIV will need to be retained in their present form. Section 54 which deals with the appointment of Commissioner will have to be suitably amended so that the Municipal Commissioner is appointed by the GNCT in consultation with the Union Government. Similarly, some provisions of Chapter XVI dealing with building regulations will need to be kept in the domain of the Union Government (for example Section 347). Section 503 (dealing with exemptions to the diplomatic missions) and Section 508 (special provisions as to the Red Fort area) will also need to lie with the Union Government. The Commission suggests that the Union Government should appoint an Expert Committee which would work out the details of the required legal changes in a time-bound manner.4.2.6.17 Empowerment of the Mayor4.2.6.17.1 The MCD discharges its functions through its general body called the Corporation and through a large number of subsidiary formations such as the Standing Committee, Wards Committees (one for each zone), various other subject specific Committees and the Municipal Commissioner. The Commissioner is the Chief Executive Authority of the Corporation. As per provisions of Section 35 of the DMC Act, at its first meeting each year, the Corporation elects one of its Members to be the Chairperson, known as the Mayor and another as Deputy Mayor. Their tenure is only for one year. By the time the Mayor starts understanding the problems of the city or the functioning of the Corporation, it is time for him to demit office. A short tenure therefore does not allow the position of the Mayor to grow in stature or authority.4.2.6.17.2 The following Table indicates the term and mode of the election of Mayors in various States:-4.2.6.16 Recommendations:a) The Municipal Corporation of Delhi (MCD), including appointment of the Commissioner and other functionaries should lie in the domain of the Government of the National Capital Territory (GNCT). This can be done by way of a notification under Section 490A of the Act, issued by the Union Government. However, the appointment of the Commissioner should be made by the GNCT in consultation with the Union Government.b) In order that, the Union Government retains its overarching role over delivery of municipal services in the National Capital Territory, some provisions of the existing Act should remain unchanged. For example, Sections 487 to 490 of Chapter XXIV will need to be retained in their present form. Provisions dealing with building regulations should be kept intact in the domain of the Union Government (for example Section 347). Section 503(dealing with exemptions to the diplomatic missions) and Section 508 (dealing with special provisions for the Red Fort area) should also vest with the Union Government.c) The Union Government may appoint an Expert Committee which could work out the details of the required legal changes in a time bound manner.Section 349A of the Act deals with the powers of the Union Government to make bye-laws: - “the Central Government may, by notification in the Official Gazette, make bye-laws for carrying out the provisions of this chapter”.4.2.6.13 Provisions contained in Chapter XXIV of the Act deal explicitly with the issue of control of the Union Government over the Municipal Corporation. They endow powers on the Union Government to call for records to inspect, to give directions and ensure their compliance and to dissolve the body. (Sections 485 to 490)4.2.6.14 Section 490A of the Act deals with the delegation of powers by the Union Government. It reads110111State and District AdministationAdministration of the Union TerritoriesSateElection IndirectTermFive yearsAndhra PradeshAssamIndirectOne yearDelhiIndirectOne yearGujaratIndirectTwo-and-half yearsHaryanaIndirectOne yearHimachal PradeshIndirectOne yearKarnatakaIndirectOne yearKeralaIndirectFive yearsMadhya PradeshDirectFive yearsMaharashtraIndirectTwo-and-half yearsOrissaIndirectOne yearRajasthanIndirectFive yearsTamil NaduDirectFive yearsUttar PradeshDirectFive yearsWest BengalIndirectFive years4.2.6.17.3 The Commission is of the view that a longer tenure is one of the factors necessary for empowerment of elected representatives. The tenure of the Mayor should be for 5 years; co-terminous with the election cycle of the Corporation and subject to the condition that he/she enjoys the confidence of the House. Hence, the Mayor of the MCD should be elected once every five years.4.2.6.17.4 The wider issue of empowerment of elected representatives in Urban / Rural Local Bodies has two additional dimensions viz. (a) the mode of election of the Mayor – whether he/she should be directly elected by the citizens or by the Councillors and (b) the way in which the elected representatives exercise powers.4.2.6.17.5 These issues have already been discussed in detail by the Commission in its Report on Local Governance, and it has held the view that the Mayor should be directly elected by popular mandate through a city-wide election. The Mayor should function asTable No. 4.5 : Terms and Mode of Election of Mayors in Various StatesSource: NCRCW, A consultation paper on Decentralisation and Municipalities.both the Chief Executive and the Chairperson of the Council. The Commission further observed that “in smaller towns and cities, the elected Mayor can directly fulfil all executive responsibilities. But as cities grow larger, with vast population and an array of departments and complex functions, the Mayor needs the support and help of a group of persons to exercise executive authority under his overall control and direction. Therefore, some form of cabinet system with functionaries appointed by the Mayor exercising authority on his behalf in various departments of the executive branch is desirable. In systems where the chief executive is directly elected, and separation of powers is practised, the cabinet is often drawn from outside the legislature. But in a city government, the imperatives of separation of powers should be tempered by the need for greater harmony between the elected council and the Mayor. It is therefore desirable to draw the Mayor’s cabinet or committee to discharge executive functions from the elected council. The Commission recommends that a Mayor’s ‘cabinet’, chosen by the elected Mayor from among the councillors, should be constituted in all municipal corporations. The size of this cabinet should not exceed ten per cent of the strength of the council, or fifteen, whichever is higher. Such a cabinet will function directly under the control and supervision of the Mayor, and the final authority on any executive matter shall vest in the Mayor”.4.2.6.17.6 The Commission feels that the above observations and recommendations are of considerable relevance to the Delhi Municipal Corporation. Implementation of these recommendations will strengthen the element of citizen-centricity in the municipal administration of the city.4.2.6.17.7 Recommendations:a) The Mayor of the MCD should be directly elected by popular mandate through a city-wide election. The term should be for five years.b) The functions of chairing the Corporation and exercising executive authority should vest in the same functionary i.e. the Mayor. The Mayor should be the Chief Executive Authority of the MCD.c) The Mayor should appoint a ‘Cabinet’; choosing the members from amongst the elected corporators. The strength of this body should not exceed 10 per cent of the number of the elected Corporators or fifteen, whichever is higher. The “Cabinet” should exercise executive authority on matters entrusted to it by the Mayor, under his/her overall control and direction.112113State and District AdministationAdministration of the Union Territories4.2.6.18 Issue of splitting up the MCD4.2.6.18.1 The size of the Municipal Corporation of Delhi has been the subject of intense debate for last many years. There is a strong view that a large single municipal body providing civic services to more than 157 lakh people (2006) spread over an area of 1400 square kilometers is simply unsustainable and urgent steps must be taken to tackle this issue.4.2.6.18.2 This issue was discussed in detail by both the Balakrishnan Committee and the Virendra Prakash Committee. More recently, the Committees under Shri Omesh Saigal and Shri Ashok Pradhan too went into this issue, but with a different perspective (emphasis on internal administrative restructuring).4.2.6.18.3 Views in support of splitting up the MCD 4.2.6.18.3.1 Balakrishnan Committee4.2.6.18.3.1.1 The Balakrishnan Committee’s recommended the splitting up of the Corporation into eight smaller municipalities. The main thrust of the Committee’s argument was6:-‘The population being serviced by MCD is too enormous to be managed effectively and efficiently by a single monolithic organization. The large population as well as its spread over far flung areas have brought civic services almost to the breaking point. The common man living in far flung areas of Delhi faces great difficulty in approaching the office of the Corporation situated at one place for many of his daily needs and grievances’.‘The retention of the single Corporation in Delhi has created problems for certain sectors of the population of Delhi like East Delhi since the discussions and proceedings in the meetings of the Corporation are, by and large, devoted to the problems of the Corporation as a whole and specific local needs tend to be lost sight of’.‘If there are a number of compact municipalities, apart from the obvious advantages of vicinity, the Councillors concerned will be taking direct and undivided interest in respect of their own areas. It might also be possible to infuse a sense of competitiveness between the various municipalities and such healthy competition among them may go a long way to ensure efficient municipal administration’.‘Hence the demand of the time is that the monolithic Municipal Corporation of Delhi should be abolished and the municipal services entrusted to separate municipalities set up at various centres in Delhi’.Table No. 4.6 : Suggestion of the Balakrishnan CommitteeSl. No.DistrictPopulation (in lakh)1981199120012006201120211. South15.8523.6026.4029.2037.142. South West6.8612.3515.0917.8224.723. West13.1719.4422.8126.1734.994. North West17.5328.7336.6144.4963.825. North9.3511.1012.3413.5817.166. Central6.076.496.797.108.277. East10.5415.3117.2019.0924.408. North East10.4617.2119.8822.5529.69Total62.2089.83134.23157.12180.00240.19Source : Saigal Committee para 7.34.2.6.18.3.1.2 It needs to be noted that when this Committee was deliberating on this issue, it had the census data of 1981 before it; the population of Delhi then was a meagre 62.20 lakhs (1981 census). During the period 1981-1991, the population showed a growth rate of 53 per cent and rose to 94 lakhs in 1991.4.2.6.18.3.2 Virendra Prakash Committee4.2.6.18.3.2.1 The Virendra Prakash Committee too, went by almost the same arguments7:-“The weight of opinion accessed by the Committee is definitely in favour of the proposition that size does matter. Smaller size offers the benefits of (a) bringing governance closer to the governed; (b) reducing the span of control, leading to effective supervision and direction; (c) enhanced political and administrative responsiveness and accountability; (d) stepped up involvement of the people and civil society organizations; (e) diversity and competition in the municipal system enabling adoption of innovative ideas, techniques and technologies: (f) engendering ownership of the municipal body in citizen consciousness”.1141156Source : Saigal Committee Report paragraph 4.4.1 and 4.4.27Source: Saigal Committee Report paragraph 4.4.5State and District AdministationAdministration of the Union Territories4.2.6.18.3.2.2 The Committee recommended setting up four municipal corporations and two municipal councils in place of the present MCD.Sl. No.Corporation / CouncilZone19912001Population(in lakh)202120062011I.Corporations1. Central DelhiCity5.035.495.585.676.31Sadar Paharganj4.003.793.813.824.15Karol Bagh5.366.126.637.138.72Civil Lines6.689.5611.2212.8917.25Total21.0724.9627.2429.5136.432. WestRohini8.0913.8517.7821.7131.31West11.1716.2719.0421.8129.09Total19.2630.1236.8243.5260.403. SouthCentral8.0812.7314.1415.5419.60South8.1410.9112.2913.6817.54Total16.2223.6426.4329.2237.144. ShahadraSouth Shahadra10.5415.3117.2019.0924.40North Shahadra10.4617.2119.8822.5529.69Total21.0032.5237.0841.6454.09II.Councils1. NarelaRural Narela2.745.448.0210.6016.612. NajafgarhRural Najafgarh9.5417.5521.5325.5135.52Total89.83134.23157.12180.00240.194.2.6.18.3.2.3 When this Committee submitted its Report, the population of Delhi was still only 134.2 lakhs (2001 census). As against that it has a population of 157.12 lakhs** in 2006 and a projection of 180 and 240 lakhs in 2011 and 2021 respectively.4.2.6.18.3.3 Stand of the Present Delhi Government4.2.6.18.3.3.1 The Delhi Government has, after due consideration, recommended to the Union Government that the present MCD may be split into three autonomous municipalities – one for the trans-Yamuna area since it has been historically neglected, is distinct from the rest of Delhi and would thus require special focus, and one each for North and South Delhi with large populations of 44.26 lakhs and 57.46 lakhs respectively. The following could be the jurisdiction and structure of the three proposed Corporations:Table No. 4.8 : Proposal of Delhi Government Regarding Splitting up of the MCDCorporationZones to beNo. ofPopulation 2001Area in Sq.includedWards(in Lakh)KmsI. East1. Shahadra- South1617.2167.722. Shahadra- North1615.3067.72Total3232.51135.44II. North3. City85.4919.504. Civil Lines109.5681.005. Sadar Paharganj63.797.026. Rohini1213.8588.467. Narela45.44299.568. Karol Bagh86.1330.65Total4844.26526.19III. South9. South1616.2760.6010. Najafgarh1417.55446.2111. South1210.91147.4212. Central121 2.7381.44Total5457.46735.67Grand Total134134.231397.304.2.6.18.3.3.2 In order to effect this change, the proposal suggests extensive amendment of the Delhi Municipal Corporation Act, 1957.4.2.6.18.4 Views opposing the split up 4.2.6.18.4.1 Saigal Committee 20064.2.6.18.4.1.1 In 2006, the Saigal Committee too went into the issue of reorganization of the MCD. It emphatically said no to the idea of creating multiple independent civic bodies in the Capital (para 7.8.3 and 10.23.2 of its Report). The emphasis of the Report was on internal restructuring. It suggested a three tier structure in which the middle level corresponding to the present day ‘Zone’ was to be empowered significantly both financially and administratively; made into semi autonomous entities, enjoying powers to collectTable No. 4.7 : Suggestion of the Virendra Prakash CommitteeSource : Saigal Committee Report para 7.4116117State and District AdministationAdministration of the Union Territoriesand retain taxes. Named as Janpads, they were to be the effective fulcrums of municipal administration in the National Capital Territory. At the lowest level of the structure were the Ward Sabhas. The MCD at the apex level was intended to operate as some sort of an Umbrella structure – a Holding Entity laying broad policy guidelines and providing technology and HRD support to the Zones and Ward Sabhas whenever necessary.4.2.6.18.4.1.2 As a passing reference, The Saigal Committee commented that whatever be the number of municipalities in the city, there was need to put in place the above empowered three tier structure for effective and citizen friendly delivery of services.4.2.6.18.4.2 Pradban Committee 20064.2.6.18.4.2.1 The Pradhan Committee’s views on this issue too, centred around restructuring of the MCD: “ The other alternative is to empower the existing Zonal Deputy Commissioners further and even consider upgrading the post to the level of Joint Secretary and simultaneously designate the Commissioner as Principal Commissioner in the grade of Additional Secretary, Government of India / Principal Secretary. The jurisdiction of each municipal zone should be co-terminus with Police and Revenue Districts and as and when the geographical area of a Police District undergoes a change the jurisdiction of MCD zone should follow suit to maintain geographical convergence. In this regard the Philippines experience is relevant, Manila, the capital city very much comparable to Delhi has been divided into several zones each with a municipality headed by a Mayor and coordinated by the Manila City Government”.4.2.6.18.4.2.2 The Committee was of the view that with regard to enforcement of building regulations and to ensure better coordination, there was a need to empower the Revenue Deputy Commissioners.4.2.6.18.4.2.3 The Committee also suggested that a separate Department of Local Self-Government headed by a Principal Secretary rank officer should be set up in the GNCT of Delhi to coordinate the affairs of the local bodies.4.2.6.18.4.2.4 The Pradhan Committee too, commented that “Many ills besetting the MCD today are its own unmanageable size ...justified to bring about a change in the administrative structure. Ideally, the Corporation should be split into smaller compact bodies for specific areas and jurisdiction having separate elected bodies”. It did not however suggest any scheme for its split up, rather a considerable part of the recommendations dwelt on how to enhance effectivity at the middle level (zones), through better enforcement of regulations ,and through empowerment of Revenue Deputy Commissioners.4.2.6.18.5 Experience of other cities4.2.6.18.5.1 Municipal Governance in Bengaluru4.2.6.18.5.1.1 Prior to 2006, the municipal services in Bangalore and outlying areas were being provided by a large number of municipal committees. Though, the main city remained under the charge of the Bangalore Mahapalike, (population – 43 lakhs area 226 Sq.Kilometer) due to a sudden expansion of the economy in the last 2 decades, the population of the areas lying on the fringes of the city grew phenomenally. In order to provide basic services to residents of these areas, 8 smaller municipalities (7 city municipal councils and 1 town municipal council) sprang up. The quality of the civic services and infrastructure provided by these small municipal bodies was primitive. The demand for municipal services was growing in a most haphazard manner and in absence of a coordinated plan, no concrete action seemed to be in sight. In order to tackle the dissatisfaction caused by (a) non-uniformity in services, (b) varying tax rates and (c) lack of coordination, a decision was taken by the Karnataka Government in 2006 to integrate these small municipal bodies and 111 villages of 65 gram panchayats lying on the fringes of Bangalore city with the Bangalore Municipal Corporation. As a solution to the infrastructural civic & administrative constraints of the expanding city, Brihut Bengaluru Maha Palike (BBMP) was born, covering a population of 54 lakhs spread over an area of 696 sq.kilometers.4.2.6.18.5.2 Municipal Structure in Kolkata4.2.6.18.5.2.1 Municipal services in Greater Kolkata are being provided by six municipal bodies. They are (i) Kolkata Municipal Corporation, (ii) Howrah Municipal Corporation (iii) New Barrackpore Municipaltiy, (iv) Chandan Nagar Municipal Corporation (v) Kalyani Municipality and (vi) Municipality at Sonarpur – Rajapur. The civic services provided by the later 5 bodies leave much to be desired vis-à-vis those provided by the Kolkata Municipal Corporation.4.2.6.18.5.3 Municipal Structure in London4.2.6.18.5.3.1 Under the London Council Act of 1963, the Municipal Administration in London consisted of 32 Boroughs. These boroughs were created in the metropolis to work as the principal local authorities responsible for running most of the local services in their areas. They functioned under an apex body called the Greater London Council. In 1986, Margaret Thatcher abolished the GLC and transferred its strategic functions to bodies controlled by the Central Government or Joint Boards. For next 13 years, there was no single elected body at the apex level for the whole of London.118119State and District AdministationAdministration of the Union Territories4.2.6.18.5.3.2 The situation was largely reversed when the Greater London Authority (GLA) Act was enacted in 1999. A 23-member Greater London Authority headed by a directly elected Mayor came into existence in the city in the year 2000. Its main activities concern :(i) Transport (ii) Policing (iii) Fire Services (iv) Economic Development (v) Planning (vi) Culture (vii) Environment and (viii) HealthIn 2007, the Act was amended enhancing the powers of the Mayor to include planning functions in relation to local development schemes and some other planning applications of strategic importance.4.2.6.18.5.4 Municipal Structure in the City of New York4.2.6.18.5.4.1 The city of New York is governed by a City Council. The New York City is a 51 Member body headed by a directly elected Mayor. The Mayor appoints several Deputy Mayors who are functional heads and assist the Mayor in his functions. There are 5 Boroughs and 51 City Councils in the territory. The City Councils are local bodies enjoying considerable power and discretion in providing services to the local citizens and can be compared with the boroughs of the Greater London Authority.4.2.6.18.6 The Commission has taken into consideration all the above arguments, examples and experiments. It feels that the analyses made by the Balakrishnan and Virendra Prakash Committees are valid even today. The weaknesses in the functioning of a monolithic organization as pointed out by the Saigal and Pradhan Committees need to be addressed comprehensively. Bringing governance closer to those governed demands effective supervision and control, enhanced political and administrative responsiveness and accountability. Recognition of diversity and the need for having a system which supports equitable growth and development and also encourages competitiveness are essential ingredients of modern day administration. Keeping in mind the phenomenal growth of the NCT’s population and the consequent stress on the infrastructure and municipal services which need to expand rapidly, the Commission is of the view that the present monolithic structure of the Municipal Corporation needs major restructuring. It may be visualized in two ways; (a) By outright splitting of the MCD into eight, six or three, independent municipalities as recounted in the preceding paragraphs or (b) by keeping the main body intact and by adequately strengthening and empowering the lower formations by granting effective functional autonomy to them.4.2.6.18.7 The Commission notes that the multiplicity of organizations is one of the major problems being faced by the citizens of Delhi. Therefore any decision to split the presentMCD into multiple autonomous municipal bodies will introduce further complexities on account of the (a) varying political complexion of the elected representatives of these bodies (b) varying revenue potential (c) different levels of aspirations of the local people(d) difference in the quality/extent of the existing infrastructure. These variations could in turn lead to complications with regard to (a) tax rates (b) inter-corporation movement of goods/services (c) availability of uniform civic amenities (d) issues of capacity building(e) building bye-laws etc. The Commission also recognizes that trying to put in place a mechanism which can enforce effective coordination among multiple bodies consisting of directly elected representatives is a difficult proposition.4.2.6.18.8 Historically the city of Delhi has been a compact geographical and cultural unit; any attempt to divide it into multiple autonomous municipalities will destroy this compactness.4.2.6.18.9 On consideration of the above pros and cons, the Commission is of the view that the municipal services in the NCT need to continue under the jurisdiction of a single municipal body viz. the MCD. However, to make its functioning more efficient, responsive and citizen friendly, it should be re-structured into an effective three tier institution i.e. the apex institution, the corporation, the zones and the wards. There is need to adequately strengthen and empower the middle tier – Zones/Janpads. In tune with the recommendations of the Saigal Committee, the Commission suggests that the zones should be given maximum possible financial and administrative autonomy. Each zone should have a separate fund and all the taxes collected under Sections 113(1) and (2) of the DMC Act should be collected and retained by the zones. Their powers with regard to enforcement of regulations and bye-laws should be enhanced appropriately. These Janpad Parishads will be democratic institutions.(a) They will need to be politically linked with the “umbrella” Corporation(b) The role and area of their operation must be clearly demarcated(c) They should have autonomy in their area of operation(d) They must have adequate powers to fulfill their role(e) Their relationship with the apex body – “the corporation” must be clearly defined and the roles to be performed by each clearly spelt out(f) Officers must have freedom and autonomy to fulfill their roles without day to day interference of the elected functionaries who are subjected to constituency pressures, still should be within the control of the elected people]120121State and District AdministationAdministration of the Union Territoriesby them. Their powers with regard to enforcement of regulations and bye-laws should also be enhanced appropriately. The third tier will consist of Ward Sabhas.(c) The MCD should be at the apex level of the new structure. It will act as a kind of an Umbrella Organization – a Holding Entity, responsible for giving overall policy directions and high level conceptual technical and HRD support to the zones. This Apex body should not delve into the day-to-day functioning of the Zones. It should provide coordination among Zones & make laws/bye-laws for the whole of Delhi. It should take up projects which run across multiple zones. It will be the duty of this apex body to ensure that standards of development and civic amenities remain uniform throughout the city.(d) Substantial changes will need to be introduced in the provisions of the existing DMC Act, 1957 to implement these recommendations. The Expert Committee suggested earlier at paragraph 4.2.6.16(c) may be asked to carry out this task within a period of two months.4.2.7 Distinction between Urban and Rural Areas in the NCT4.2.7.1 The DMC Act, 1957 is applicable to the whole of the NCT except New Delhi and Delhi Cantonment as per the definition of “Delhi” given in Section 2(10). But the Act differentiates between rural areas [Section 2(52)] and Urban Areas [Section 2(61)].4.2.7.2 Section 507 of the Act refers to special provisions applicable to rural areas of the NCT (with regard to lower rates of taxation, fees and other charges).4.2.7.3 Section 507; Notwithstanding anything contained in the foregoing provisions of this Act,-(a) the Corporation with the previous approval of the Government, may, by notification in the Official Gazettee, declare that any portion of the rural areas shall case to be included therein and upon the issue of such notification that portion shall be included in and form part of the urban areas;(b) the Corporation with the previous approval of the Government may, by notification in the Official Gazettee, - (i) exempt the rural areas or any portion thereof from such of the provisions of this Act as it deems fit, (ii) levy taxes,1234.2.6.18.10 Each Zone/Janpad will have a Zonal Council/Janpad Parishad, with all the Councillors elected from Wards that comprise the Janpad as members. The MLAs and the MPs whose constituencies or a substantial part of it fall within the area of the Janpad will also be members. All these elected persons will have equal voting rights. Every Zonal Council/Janpad Parishad will elect a Chairman and a Deputy Chairman from amongst the Councillors. The Zone/Janpad will also have other members without voting rights and these can include the Deputy Commissioners both of revenue and police and 2 or 3 reputed persons in the Zone/Janpad area. Matters concerning their appointment, qualifications etc. can be prescribed by Regulations to be framed by the Nagar Nigam. In all other matters, except for matters that are discussed in the next chapter, their composition, functioning and powers will be analogous to that of the MCD under the present DMC Act, 1957 including the framing of a separate budget.4.2.6.18.11 The third tier would consist of the Ward Sabhas. The MCD will be the apex level which will not delve into day-to-day functioning of the zones. It will act as a kind of a holding entity, responsible for giving overall policy directions, high level conceptual, technical and Human Resource Development (HRD) support to the Zones, whenever necessary. It will provide coordination among Zones and make laws/bye-laws for the whole of Delhi and also take up projects which run across multiple Zones. It will be the duty of this apex body to ensure that standards of development and civic amenities remain uniform throughout the city.4.2.6.18.12 Recommendations:(a) The municipal services in the entire National Capital Territory (NCT) may be under the jurisdiction of a single municipal body viz. the current Municipal Corporation of Delhi (MCD).(b) In order to provide efficient, responsive and citizen friendly services to the citizens, the MCD should be converted into a three tier institution with the Corporation at the apex. The middle tier i.e. the Zones should be adequately strengthened and empowered. The zonal body called Janpad Parishad/Zonal Council will primarily be a representative body consisting of elected Councillors (whose constituency falls majorly within the area of the Zone) and some nominated members. These Janpad Parishads/ Zonal Councils should be given considerable financial and administrative autonomy. Each Zone should have a separate fund and all the taxes under Sections 113(1) and (2) of the DMC Act should be collected and retained122State and District AdministationAdministration of the Union Territories4.2.7.5 Recommendations:a)There is no need to maintain the artificial distinction between urban andrural areas in the National Capital Territory. The entire geographical area falling into the NCT should be declared as “urban” under the meaning of Section 2(61) of the DMC Act.b) The Municipal Corporation should realise the taxes, levies and other charges accordingly from the residents of these areas.4.2.8 New Delhi Municipal Councilrates, fees and other charges in the rural areas or any portion thereof at rates lower than those at which such taxes, rates, fees and other charges are levied in the urban areas or exempt such areas or portion from any such tax, rate, fee or other charge.4.2.7.4 The Commission is of the view that the traditional concept of “rural areas” which used to be characterized by low levels of income obtained through agricultural activities, does not hold good for Delhi. The land prices around NCT have shot up in geometric progression during the last few decades and it has brought unexpected prosperity even to small and marginal farmers living in the “rural areas” of the NCT. In this context, the Commission feels that there is no need to maintain this artificial distinction between “urban” and “rural areas” and the entire geographical area falling within the NCT should be declared as “urban” under the meaning of Section 2(61) of the DMC Act. The Municipal Corporation should realise taxes, levies and other charges accordingly from the residents of these areas.4.2.8.1 The NDMC (an eleven member nominated body) in its present form was created by the New Delhi Municipal Council Act, 1994. It covers an area which includes Rashtrapati Bhawan, Prime Minister’s Office, Embassies of foreign countries, residences of the Ministers and important dignitaries, and the offices of the Union Government. 80% of the buildings in this area are owned by the Government. As such, the NDMC is almost fully under the control of the Union Government. The Chairperson of the NDMC is a senior civil servant appointed by the Union Government in consultation with the Chief Minister of Delhi. The Council includes three Members of the Legislative Assembly, Delhi whose constituencies fall within the NDMC area, five nominated officers by the Union Government and two Members nominated by the Union Government in consultation with the Chief Ministerwho may be professionals, social workers and others representing particular interests. The Member of Parliament representing the New Delhi constituency is a special invitee to the Council meetings, but does not have the right to vote. The functions of the NDMC have been specified in the Act and are similar to those of the MCD. The Balakrishnan Committee on the Reorganisation of Delhi Set-up (1989) recommended the replacement of Punjab Municipal Act, 1911 as applied to the New Delhi Municipal Committee by a fresh enactment creating the New Delhi Municipal Council and the continuance of its special dispensation but on democratic lines.4.2.8.2 The Union Government decided to retain the nominated character of the local body. The NDMC Bill was enacted in 1994. The Statement of Objects and Reasons spelt out that one of the important objects of the said Bill was to harmonise the law with the Constitution (74th Amendment) Act, 1992 with necessary exemptions and modifications under Article 243 ZB of the Constitution, wherever departure had to be made. It was also stated that the New Delhi Municipal Council consists of only 3% of the area and population of NCT of Delhi. Accordingly, it was felt that a different kind of local system had to be structured which took into account the special characteristics of New Delhi Municipal Council area which comprises the territory that has been described as Lutyens’s Delhi and is the seat of the Government of India.4.2.8.3 The Pradhan Committee went into this issue as well and recommended that there was no need to change the status-quo with regard to management of the NDMC (para 8.4.7 of the Report)4.2.8.4 In view of the fact that the Union Government owns 80 per cent of the land and buildings in the NDMC area, many of which are important Union Government offices and residences as well as a concentration of foreign diplomatic missions it would be appropriate that the present structure of NDMC is not disturbed.4.2.9 Delhi Cantonment Board4.2.9.1 Set up under the Cantonment Act, 1924, the Delhi Cantonment Board consists of a Chairman, 7 elected and 7 official members. The Cantonment Board is empowered to exercise powers and perform civic functions such as provision of water supply, electricity,4.2.8.5 Recommendation:a) There is no need to change the present governing structure of the New Delhi Municipal Council.124125State and District AdministationAdministration of the Union Territorieseducation, health etc. within its jurisdiction spread over an area of approximately 43 sq.kms. The responsibility for delivery of basic municipal services such as roads, drainage, sewerage, street lights, etc. within its area is with the Cantonment Board. The Board is also empowered to levy and collect various local taxes such as house tax, water tax, advertisement tax, profession tax, etc. in order to raise their own resources. Though, the overall control of the Cantonment area lies with the Union Government, some coordination between the Board and the Delhi Government is necessary. However, since it covers primarily the military area, the Commission does not wish to go further into this matter and propose any changes in its structure etc.4.2.10 Role of the Government of NCT in Spatial Planning and Land Development ; its Relationship with the Delhi Development Authority4.2.10.1 The Delhi Development Authority was created by an Act of Parliament in 1957 in order to promote and secure planned spatial development of Delhi. Major functions of the DDA include formulation of the master plan for the city. It is authorized to acquire, hold, manage and dispose of land and other property, to carry out building, engineering, mining and other operations, to execute works in connection with the supply of water and electricity, disposal of sewage and other services and amenities. The Union Ministry of Urban Development is the nodal ministry for the DDA. The mandate of the DDA is to acquire land for development of new areas notified as ‘development areas’ and once it is developed, hand it over to the relevant local authority with the DDA remaining as a lease administering authority. The responsibility of the DDA also includes overall planning of traffic and transportation. In the discharge of its functions, it has to coordinate with a large number of agencies, others under the control of the Delhi Government like PWD, some under the Union Governmentlike the Ministry of Road Transport and also some with autonomous organisations such as the Delhi Metro Rail Corporation. In 1974, ‘construction of housing units’ was added to DDA’s mandate.4.210.2 The DDA has till date finalized three perspective plans for systematic growth and planned development of the capital region. The first master plan was Delhi – 1962, the second was the master plan for 2001 and the third master plan is Delhi 2021.4.2.10.3 The performance of the DDA has been the subject of criticism by various bodies. The planning process has been described as inadequate and its implementation tardy, especially with regard to meeting the demand for housing and commercial space in Delhi. The Estimates Committee Report submitted in 1984, M/s. Tata Consultancy Service Report submitted in 1986 and the Report of the Committee on Reorganization of the Delhi set-up in December, 1989 clearly stated that the DDA had, over the years, drifted away from its main objective viz. planning and development of Delhi. The additional activities undertaken by the DDA led to a situation where its organizational structure became bloated, unwieldy and ineffective. Both the Estimates Committee and the Committee on Reorganization of the Delhi set-up had observed that DDA has been burdened with such a variety of functions that it has lost its direction and sense of priority. Consequent to the above recommendations the activities relating to the Inter State Bus Terminus (ISBT) and lotteries were taken away from it. But even now, the DDA continues to deal with a large number of activities in addition to its core function of planning and development.4.2.10.4 There is a view that this organization should be brought under the management and control of the Government of NCT. This demand is based on the argument that since there is an elected legislature for the NCT, the effective control of land and land management should lie with this legislature and not with the Central Government or its representative the Lt. Governor.4.2.10.5 In this context, it is relevant to note that though land is a subject under the State List of the 7th Schedule (Entry 18), under provisions of Article 239AA3(a), this subject has not been transferred to the Delhi Legislature and is still being managed by the Union Government through the Land and Development Office (Ministry of Urban Development) and the DDA.4.2.10.6 Except for sending three Members of the Delhi Legislative Assembly to the DDA Board, the Delhi legislature has no control over its functioning. During interactions of the Commission with the Chief Minister, and senior officials of the GNCT it was urged thatBox No. 4.1 : Present Composition of the DDAAs per the Delhi Development Act, 1957, the DDA shall consist of the following members, namely:(a) a chairman who shall be the 2[Lieutenant Governor] of the [National Capital Territory of Delhi], ex officio;(b) a vice-chairman to be appointed by the Central Government;(c) a finance and accounts member to be appointed by the Central Government;(d) an engineer member to be appointed by the Central Government;(e) as and when the Municipal Corporation of Delhi is established, two representatives of that corporation to be elected by the Councilors and aldermen of the corporation from among themselves;(f) three representatives of the Legislative Assembly of the National Capital Territory of Delhi to be elected by means of a single transferable vote by the members of the Legislative Assembly from among themselves of which two shall be from among the ruling party and one from the party in opposition to the government: PROVIDED that no member of the Council of Ministers for the Government of National Capital Territory of Delhi shall be eligible to be elected to the Authority.Explanation: For the purposes of this clause, “ruling party” and “party in opposition to government” shall mean the ruling party and the party in opposition to the Government recognized as such by the Speaker of the Legislative Assembly of the National Capital Territory of Delhi(g) three other persons to be nominated by the Central Government, of whom one shall be a person with experience of town planning or architecture; and(h) the Commissioner of the Municipal Corporation of Delhi, ex officio.126127State and District AdministationAdministration of the Union Territoriessince the issue of land management is closely linked with the other functions entrusted to the Delhi Government it should have substantial control over this subject. It was also pointed out that the elected government feels severely handicapped due to lack of decision making powers in this respect, as well as due to the multiplicity of agencies existing in Delhi . The Commission is aware of the requirements of governance over the national capital city. It is also recognized that the Union Government must have control over macro-planning of the capital territory with regard to allocation of land and its management. It is felt that an effort must be made to strike a balance between these two divergent requirements so that the purpose of creating an elected Government is also served without substantially diluting control of the Union Government.4.2.10.7 The Ashok Pradhan Committee went into this issue in considerable detail. The Committee recognized that there was lack of integration in the planning process in Delhi. It observed that “whereas DDA is responsible for spatial planning, the socio economic planning is the responsibility of the Delhi Government. As a result not only the planning for the entire city but also its execution suffers.” The Committee pointed out the anomaly in the existing arrangement where the subject “land” under Entry 18 of the State list has been kept outside the purview of the Delhi Legislative Assembly, the agricultural land and gram panchayat land continue to be administered by the Delhi Government. Incidentally, it is the agriculture land which is acquired by the Delhi Government and handed over to the DDA for development and disposal but the Delhi Government does not have a say in the planning and disposal of the land, so developed. While referring to the historical evolution of governance in Delhi, the Committee observed that “it is necessary that this matter should be examined de novo to ascertain whether circumstances, conditions, considerations and rationale for which it was decided in 1956 and again in 1966 to exclude Delhi Government from the control and management of land still exist and whether there is adequate justification today (with elected Assembly and Council of Ministers in position) to exclude land from the purview of the management and control of the Delhi Government and whether the existing arrangements in regard to ‘land’ (Entry 18 of the State list) conforms fully to the provision as contained in Article 239AA of the Constitution. The Union Government may consider confining its control and management of land (and buildings) in its possession through L&DO and leave the rest to the Delhi Government/ Administrator, Delhi.” However, though the Committee makes a reference that “the ideal solution would be to transfer the subject ‘land’ to the Government of NCT of Delhi” it refrains from recommending such transfer. The Committee recommended that “the Chief Minister of Delhi should be the Chairperson of DDA (para 8.2.13 of the Report) which would enable him/her to bring about the desired coordination between the two areas of planning and contribute to the land development and its disposal by the DDA. However, allproposals and decisions of the Authority shall be placed before the Lt. Governor for approval before implementation. The proposed arrangement does not in any way compromise the position that land is and would continue to remain the responsibility of the Central Government and all its existing powers enjoined upon it in the DD Act, 1957 including powers to issue any directions to DDA shall continue to remain with it.”4.2.10.8 The Commission appreciates the complexities of the matter recognized by the Ashok Pradhan Committee, as discussed. The governance structure in Delhi has gradually evolved over a considerable period and has led to the establishment of a democratically elected government. Considering the importance of control over land in the national capital city, the Commission feels that the time has not yet come when this control could be completely handed over to the Delhi Government. At the same time, in order to remove bottlenecks in the governance and coordination between various activities related to land management, the Delhi Government should have a substantial say in this regard. It is felt that the desired objective could be achieved by adopting the recommendations of the Ashok Pradhan Committee. As such, the Commission is of the view that there is need to change the composition of the DDA and make the Chief Minister of Delhi, its Chairperson.4.2.10.9 Section 3(3) of the DDA Act, 1957 indicates the composition of the Delhi Development Authority:“The authority shall consist of the following members, namely:- (a) Chairman who shall be the Lieutenant Governor of the National Capital Territory of Delhi, ex officio;”4.2.10.10 Other provisions 3(b) to (h) deal with other members of the body – details given at in Box No.4.1.4.2.10.11 A simple replacement of the word “Lt. Governor” by the “Chief Minister of the NCT” will serve the purpose.4.2.10.12 At the same time, the Union Government’s control over macro-planning of land and its utilization needs to stay. The Union Government may continue to exercise its control by giving prior approval to any Rules / Notifications required to be framed under the relevant Act. (Section 4 which deals with the power of the Union Government to appoint two suitable persons as the Secretary and the Chief Accounts Officer, Section 9 dealing with submission of plans to the Union Government for approval, Section 12 dealing with the Union Government’s power to declare any area as a development area for the purpose of this Act, Sections 15 and 21 dealing with acquisition / disposal of land, Section 22 dealing with Nazul land, Section 26 dealing with annual report, Sections 41,42, 52, 55128129State and District AdministationAdministration of the Union Territoriesand 56 and 57 with regard to issues of control by the Union Government, returns and inspections, powers to delegate, powers of modification, power to make rules and power to make regulations etc and various other related sections which give powers to the Union Government will remain as they are).4.2.10.13 Apart from changes in the composition and structure of the DDA and the provision with respect to control over its functioning, reform is also needed in the internal governance of the DDA to make it a more efficient, responsive and corruption free organisation. It has not been possible for the Commission to separately look into all such issues; however, it is observed that the Ashok Pradhan Committee has made some important suggestions regarding the functioning of this body which inter-alia includes (a) appointment of a full time member to look exclusively after planning, and (b) nominating experts under Section 3(g) of the DDA Act to bring in expertise from outside the realm of government so that new ideas and touch of professionalism could be bought to the planning process. These and other recommendations need to be considered and implemented urgently. The Commission would like to specifically mention the issue of transfer of developed area by the DDA to the Municipal Corporations. Any delay in this process affects the residents. The DDA and the MCD must ensure that as soon as the development of a particular area is completed, it is handed over to the MCD for performing civic functions.4.2.10.14 With the restructuring of the DDA on the lines stated above; constituting a Metropolitan Planning Committee as per Article 243ZE of the Constitution may not be necessary.4.2.11 Role of the Government of the NCT:- In Police, Law and Order4.2.11.1 As stated earlier, the subject of Police and Law and Order, have not been devolved on the Delhi Government. This is being administered by the Ministry of Home Affairs, Government of India through the Lt. Governor of Delhi. The Delhi Government thus has no say in the Police Administration and maintenance of law and order within the capital city. However, as a democratically elected government they are often held responsible by the citizens for any lapses in this regard. There is no doubt that security is a critical area of governance and the Union Government must retain overall control over the law and order machinery of the country’s capital city. At the same time, the requirement of having a Police force under the control of the Delhi Government to enforce a number of local and special laws lying within its domain cannot be ignored. Therefore, the unbundling of activities related to security such as the traffic management, local policing, enforcement of special laws etc. needs to be explored. During discussions with GNCT it was suggested that “since Delhi has a special status as the National Capital the security aspect can remain with the Home Ministry but traffic and law and order should be brought under the Delhi Government.” In this regard, it would also be useful to draw inspiration from the recommendations made by the Commission on related issues in its Reports on “Public Order” and “Local Governance”.4.2.11.2 In its Fifth Report (dealing with Public Order), the Commission recommended far-reaching reforms in the Police Administration. The Commission recommended separation of crime investigation from other policing functions. Subsequently, it was observed that the investigation agency would only be dealing with specified cases and a large number of cases under the IPC as well as State and special laws would still come under the domain of the law and order police. Interestingly, it was pointed out that out of the 50 lakh crimes registered each year in the States and Union Territories, only one third of these were IPC crimes and the rest were offences under various special and local laws. Accordingly, the Commission recommended setting up a local police service in bigger cities with populations of more than one million to deal with offences under municipal and local laws. As regards special laws, the Commission recommended that their enforcement should be gradually entrusted to the respective department e.g. State Excise, Forest, Transport, Food etc. For management of traffic within the city limits, it was recommended that “the function of traffic control (alongwith traffic police may be transferred to the local government in cities having a population of more than a million).”4.2.10.15 Recommendations:a) The composition of the DDA needs to be changed. The Chief Minister of Delhi should be the Chairperson of this body in place of the Lt. Governor. This should be done by amending Section 3(3) (a) of the DDA Act, 1957.b) As stated in paragraph 4.2.10.12, other powers of the Union Government as mentioned in various sections of the DDA Act should remain.c) Steps should be taken urgently to improve the internal functioning of the DDA on the lines recommended by the Ashok Pradhan Committee.130131State and District AdministationAdministration of the Union Territories4.2.11.3 In addition, the Commission also recommended setting up of the Metropolitan Police Authorities in all cities with a population above one million. This authority should have powers to plan and oversee community policing, improve police citizen interface and suggest ways to improve quality of policing etc. The authorities should have nominees of the State Government, elected Municipal Councillors and non-partisan eminent persons to be appointed by the Government as Members with an elected Member as the Chairperson. This recommendation was also reiterated by the Commission in its Sixth Report on Local Governance.4.2.11.4 The Commission feels that the above recommendations of the previous Reports need to be implemented in all the States and UTs. However, a distinction is required to be made in the case of Delhi due to its unique features. The Union Government may retain control over the broader aspects of security and law and order whereas traffic, local policing and enforcement of the special laws could be handed over to the Delhi Government. This could be done by bringing suitable amendments in the Delhi Police Act. In the long run some of these activities could be transferred to the Municipal Corporations.4.2.11.5 The Virendra Prakash Committee recommended the following with regard to transfer of police functions to the MCD; “A persistent handicap from which urban authorities in Delhi have suffered gravely has been the non-availability of police force on time and in requisite strength for enforcing the will of the law on the law-breakers. Both the DMC and the DDA Act empower their executive authorities to direct police officers to take effective, specified action to abate nuisance; prevent unauthorized construction or illegal colonization, remove persons, materials and equipment involved in such unlawful activities and to maintain a vigil over any place where any development in contravention of the law was being carried out in order to ensure that it was not continued further. There is, however, the crucial proverbial slip between the cup and the lip in so far as availability of police force and the needs of enforcement authorities are concerned”.4.2.11.6 The Saigal Committee too supported the above recommendation of the Virendra Prakash Committee (para 10.20.3 and 10.20.4 of the Saigal Committee Report). It was of the view that there was no problem in appointing a senior police officer (may be of the rank of Special Commissioner) to assist the Principal Commissioner of the MCD for enforcement purposes.4.2.11.7 In the light of these considerations, the Commission is of the view that powers of the Police with regard to traffic, local policing and special laws (such as Delhi Entertainment Tax Act, Cinematography Act etc.) may be handed over to the Delhi Government. As it will involve a major restructuring of the present Delhi Police establishment, it may beadvisable to constitute a Task Force with representation from both the Union and the NCT Government to study the matter in depth and suggest appropriate restructuring including the required legislative changes.4.2.12 The Government of the NCT – Power to Raise Public Debt4.2.12.1 Budget making is an important function of government. Depending on the extent of its financial resources and its plan for development, the government takes recourse to borrowing. The Borrowing is usually on the strength of its consolidated fund (created under the provisions of the Article 263(1) of the Constitution) or some other guarantee. The issue of borrowing either by the Union Government or by the State Government is specifically governed by Articles 292 and 293 of the Constitution which read as:292. The executive power of the Union extends to borrowing upon the security of the Consolidated Fund of India within such limits, if any, as may from time to time be fixed by Parliament by law and to the giving of guarantees within such limits, if any, as may be so fixed.293. (1) Subject to the provisions of this Article, the executive power of a State extends to borrowing within the territory of India upon the security of the Consolidated Fund of the State within such limits, if any, as may from time to time be fixed by the Legislature of such State bylaw and to the giving of guarantees within such limits, if any, as may be so fixed.4.2.11.8 Recommendations:a) The Union Government may retain control over the broader aspects of security and law and order whereas traffic, local policing and enforcement of the special laws could be handed over to the Delhi Government. In the long run some of these functions could be transferred to the Municipal Corporation.b) As this will involve major restructuring of the present Delhi Police establishment, it may be advisable to constitute a Task Force with representatives of both the Union and the Delhi Government to study the matter in depth and suggest appropriate restructuring through legislative and administrative measures.132133State and District AdministationAdministration of the Union Territories(2) The Government of India may, subject to such conditions as may be laid down by or under any law made by Parliament, make loans to any State or, so long as any limits fixed under Article 292 are not exceeded, give guarantees in respect of loans raised by any State, and any sums required for the purpose of making such loans shall be charged on the Consolidated Fund of India.(3) A State may not without the consent of the Government of India raise any loan if there is still outstanding any part of a loan which has been made to the State by the Government of India or by its predecessor Government, or in respect of which a guarantee has been given by the Government of India or by its predecessor Government.(4) A consent under clause (3) may be granted subject to such conditions, if any, as the Government of India may think fit to impose.4.2.12.2 Currently, though the Delhi Government has a Consolidated Fund of its own, it is not permitted to raise public debt as the budget of the GNCT is treated to be a part of the Union Government’s budget. During the course of its meeting with the Chief Minister and officials of the Government of NCT, it emerged that the Government has plans to create top class infrastructural facilities for Delhi, but finance is a big constraint. The budgetary support which comes to it from the Government of India (Home Ministry) for capital expenditure is inadequate. The following Table explains the situation:(NCT’s Share; - Central assistance - 1313.47, Grant in lieu of central taxes -325.00) Total Revenue Receipt in 2008-09 = 15,909.50 crore.4.2.12.3 In such a situation, it is realized that if the Government is permitted recourse to market borrowing, the development of the National Capital Territory could take off at a faster pace.4.2.12.4 The Commission has discussed this issue in the context of PRI finance in its Report on Local Governance (6th Report) and has even recommended such powers to be given to the PRIs. (para 4.3.8.2) “For their infrastructure needs, the Panchayats should be encouraged to borrow from banks/financial institutions. The role of the State Government should remain confined only to fixing the limits of borrowing”.4.2.12.5 Keeping in mind the increasing need for high quality civic services and upgradation of infrastructure in the National Capital Territory, the Commission is of the view that the Government of the NCT needs to have access to greater funding – beyond its own revenues or the grants given to it by the Union Government. The Delhi Government should be allowed to raise public debt by floating loans in the market, (just like the powers available to the States). This could be done by an amendment in Article 293; wherever the word “State” is mentioned, it needs to be replaced by the words “State and UT having a Legislature”. This would be subject to limitations imposed by Articles 293(3) and 293 (4) of the Constitution.4.2.13 National Capital Region Planning Board4.2.13.1 The National Capital Region comprises an area of 33,578 square kilometers in the States of Haryana, Rajasthan, Uttar Pradesh and the National Capital Territory of Delhi. The coverage of the NCR is as follows:1376.39PlanTable No. 4.9 : Demand No.55 – Demand for Grants-Budget 2008-09Transfer to Union Territory Governments with Assemblies(Delhi and Puducherry) in croreNon-Plan464.00Total1840.394.2.12.6 Recommendation:a) The Government of the NCT needs to have access to greater funding; beyond its own revenues or the grants given to it by the Union Government. It should be allowed to have recourse to market borrowings. This could be done by introducing an amendment to Article 293 by replacing the word “State” with the words “State and UTs having a Legislature”. Such borrowings would be subject to limitations imposed by Article 293(3) and 293 (4) of the Constitution.134135State and District AdministationAdministration of the Union Territories136Table No. 4.10 : NCR LimitsNCT Delhi1,482 square kilometersHaryanaEight districts - Gurgaon, Rewari, Faridabad, Sonepat, Rohtak, Panipat andJhajjhar & Mewat, comprising 13,413 square kilometersUttar PradeshFive districts - Ghaziabad, Bulandshahr, Meerut and Baghpat & Gautam Buddha Nagar, comprising 10,853 square kilometersRajasthanAlwar district comprising 7,829 square kilometers4.2.13.2 The NCR Planning Board was created through an Act of Parliament in 1985 with the concurrence of the Legislatures of Haryana, Rajasthan and Uttar Pradesh for preparing a plan for the development of the National Capital Region and for coordinating and monitoring the implementation of such Plan and for evolving harmonized policies for the control of land uses and development of infrastructure in the National Capital Region so as to avoid any haphazard development thereof. Section 8(f) of the NCR Planning Board Act empowers the Board to select, in consultation with the State Governments concerned, any urban area outside NCR having regard to its location, population and potential for growth, which may be developed as a Counter-Magnet Area (CMA) in order to achieve the objectives of the Regional Plan. The NCR Planning Board is a 21 member body with Union Minister of Urban Development as the Chairman. It also has 10 co-opted members.4.2.13.3 The 21 members of the re-constituted Board and the 10 Co-opted members are as follows:-Table No. 4.11 : Composition of the NCR Planning Board1. Union Minister for Urban DevelopmentChairman2. Minister for Power, Government of IndiaMember3. Minister for Communications & IT, Government of IndiaMember4. Minister for Railways, Government of IndiaMember5. Minister for Roads and Highways, Government of IndiaMember6. Chief Minister, HaryanaMember7. Chief Minister of NCT- DelhiMember8. Chief Minister, RajasthanMember9. Chief Minister, Uttar PradeshMember10. Minister of State for Urban Employment and Poverty AlleviationMember11. Lieutenant Governor, National Capital Territory – DelhiMemberTable No. 4.11 : Composition of the NCR Planning BoardContd.12. Minister of Town and Country Planning, Government of HaryanaMember13. Minister of Urban Development, Government of RajasthanMember14. Minister, Urban Development, Government of Uttar PradeshMember15. Secretary, Ministry of Urban Development, Government of IndiaMember16. Chief Secretary, Government of HaryanaMember17. Chief Secretary, Government of RajasthanMember18. Chief Secretary, Government of National Capital Territory - DelhiMember19. Secretary, Housing & Urban Development, Government of Uttar PradeshMember20. Chief Planner, Town & Country Planning Organisation, Govternment of IndiaMember21. Member Secretary, National Capital Region Planning Board SecretaryMember4.2.13.4 One of the functions of the Board as defined in Section 7 (e) of the NCRPB Act is to arrange for and oversee the financing of selected development projects in the National Capital Region. For this purpose a National Capital Region Planning Board Fund has been created under Section 22 of the Act, which inter-alia is required to be utilized for (a) ‘providing financial assistance to the participating States and the Union territory for the implementation of Sub-Regional Plans and Project Plans;’ and (b) ‘providing financial assistance to the State concerned for the development of the Counter Magnet Area subject to such terms and conditions as may be agreed upon between such State and the Board.’Co-opted Members1.Chief Minister, Madhya Pradesh2.Secretary, Ministry of Commerce and Industry, Department of Industrial Policy and Promotion, Government of India3.Secretary, Department of Expenditure, Ministry of Finance, Government of India4.Secretary, Department of Power, Government of India5.Secretary, Ministry of Roads and Highways, Government of India6.Chairman, Railway Board, Government of India7.Secretary, Department of Urban Development and Housing, Govt. of Punjab8.Secretary, Department of Urban Development and Housing, Government of Madhya Pradesh9.Principal Advisor (HUD), Planning Commission, Government of India10.Vice Chairman, Delhi Development Authority.137State and District AdministationAdministration of the Union Territories4.2.13.5 Development projects to be taken up in the National Capital Region and the Counter Magnet Areas (CMAs) would need to be identified by the Board, participating States of NCR, CMA and their implementing agencies. The Board may provide financial assistance to the participating State Governments and their implementing agencies including Local Bodies, Development Authorities, Housing Boards, Industrial Development Corporations or such other agencies of the State Governments as the case may be.4.2.13.6 Depending on the availability of resources, the projects concerning (a) Land acquisition and development for creation of social and physical infrastructure, (b) Upgradation and augmentation of existing infrastructure, (c) Development of centres of art and culture, (d) Infrastructure and other development projects in the Counter Magnet Areas, (e) Pilot projects on rural development and (f) Development of new townships can be taken up by the NCR Board. A loan upto 75% of the project cost may be provided to the State / implementing Agency.4.2.13.7 Assessment of the NCR Board4.2.13.7.1 So far the NCR Board has provided financial assistance of around Rs.1800 crores for various schemes in the Region. However, because of the reluctance of State Governments at times, to allocate adequate funds, coupled with the lukewarm response of their implementing agencies, the outcome has not been satisfactory.4.2.13.7.2 There is a view that in order to make this body more effective, there is need to add teeth to the organization and this should be done by (a) enhancing the funds at the disposal of the NCR Board, (b) allowing it to have a Special Utility Vehicle (SUV) which in times of necessity would be in a position to take up actual execution of sanctioned projects (if the Member State concerned or its implementing agency refuses to take it up), (c) to devise a mechanism which could ensure that the regional and sub regional plans approved by the NCR Board are dovetailed appropriately with the plans of the State Governments / Area Development Authorities, and (d) to ensure compliance with the decisions taken by the Board.4.2.13.7.3 There is also a contrary view that since the Member States have active Area Development Authorities of their own with adequate technical support and infrastructure to implement projects in their jurisdiction, it may not be necessary to create a separate technical / implementational body for the exclusive disposal of the NCR board. In any case, major central agencies like the National Highway Authority of India (NHAI) and Delhi Metro development Corporation (DMRC) would always be available to assist the States in respect of high value/complex infrastructure and related projects. Creation of a support/implementation agency under the NCR Board could also be interpreted as infringement at States powers to implement development plans.4.2.13.8 Composition of the NCR Board4.2.13.8.1 Currently, the NCR Board consists of 21 members as shown in Table No.4.10. The Commission is of the view that in order to have quick and binding decisions, the body needs to be pruned. Only the 6 Union Ministers and 3 Chief Ministers (Uttar Pradesh, Haryana and Rajasthan) need to be on this Board. The Chief Minister of Madhya Pradesh could be invited as a co-opted member whenever issues concerning Gwalior, a counter magnet city, come up.4.2.13.8.2 In order to ensure compliance of the decisions taken in this meeting, the NCR Board could be supported by a Committee under the Chairmanship of the Secretary in-charge of Urban Development in Government of India. Other Members of this Steering Committee could be Secretaries in charge of Commerce and Industry, Industrial Policy & Promotion, Expenditure, Power, Roads and Highways, Chairman, Railway Board (all from the Government of India), Chief Secretaries of Uttar Pradesh, Rajasthan, Haryana, Principal Advisor (HUD), Planning Commission, and Vice Chairman, Delhi Development Authority. Chief Secretaries of Punjab and Madhya Pradesh may be invited to the meeting whenever necessary.4.2.13.9 Recommendations:a) The NCR Planning Board should remain a planning, monitoring and advisory body in charge of preparing the Master Plan for the NCR Region consisting of both regional and sub-regional Plans. It should have adequate financial resources at its disposal so that it could selectively provide financial assistance to a few schemes of importance.b) The composition of the 21 member NCR Planning Board should be modified and only 6 Union Ministers and 3 Chief Ministers (Uttar Pradesh, Haryana and Rajasthan) may be members of the Board.c) There should be an Executive Committee under the chairmanship of Secretary in-charge of Urban Development in Government of India with Secretaries incharge of Commerce and Industry, Industrial Policy and Promotion, Expenditure, Power, Secretary, Road Transport and Highways, Chairman, Railway Board (all from the Government of India), Chief138139State and District AdministationAdministration of the Union TerritoriesSecretaries of the Governments of Uttar Pradesh, Rajasthan, Haryana, Principal Advisor (HUD), Planning Commission, and Vice Chairman, Delhi Development Authority as members.d) Since the Chief Ministers of the three States are members of the Board, the decisions that are agreed to should be binding on the States concerned. The NCR approved regional plans/sub-plans should mandatorily be part of the Plans of State Governments. The NCR Planning Board Act should be amended accordingly.4.3 Chandigarh4.3.1 Originally built as the capital of Punjab, Chandigarh became a Union Territory, the joint capital of Punjab and Haryana, upon creation of Haryana in 1966. It is thus the seat of two governments and the UT Administration. The health and education infrastructure of the UT serves all three as also, to some extent, Himachal and Jammu and Kashmir. There is a composite High Court for the three entities in Chandigarh. The UT has a single district and a single tehsil.4.3.2 The total area of the UT is 114 square kilometers of which 80 kms. are urban and served by a Municipal Corporation, while 34 kms. are rural and served by a three tier Panchayati Raj set up. The decadal growth rate of population in this UT has been 40%.4.3.3 The Capital of Punjab (Development and Regulation) Act 1952 provides the structure for the management of urban governance. Enacted when the construction of Chandigarh was undertaken as a project, it combines State Government and municipal processes in its agencies – principally the Estate Officer and the Chief Administrator. Conceived as a special measure of limited duration until institutions of local self governance were established, it continues to be in force even though the development of Chandigarh is almost complete and a Municipal Corporation has come into existence. As a result both the UT Administration and the Municipal Corporation exercise municipal powers which can obviously lead to administrative confusion. Civic services to 90 per cent of the population of the UT (in urban areas) are provided by the Municipal Corporation while to the remaining 10 per cent (rural) they are provided by the State Government ( UT Administration). A neat trifurcation of governance functions is not possible as the infrastructure (water, electricity, medical services, education) is planned for the UT as a whole. On a reference from the UT Administration, the Municipal Corporation has agreed to take over all 18 villages in the UT in a phased manner.4.3.4 As the city was originally planned, there was to be a sixteen kms. deep green periphery around it. This is mandated by the Punjab New Capital (Periphery) Control Act 1952. However. The townships of Mohali and Panchkula in Punjab and Haryana respectively have both come up within the periphery. Within Chandigarh also the periphery is under pressure because of the need of land for further development.4.3.5 Administrative Set-up4.3.5.1 The Punjab Reorganization Act of 1966 provided, inter-alia, that all laws applicable in Punjab on 1.1.1996 would also continue to apply to the Union Territory. The UT is administered by the Union Government through an Administrator appointed under Article 239 of the Constitution. Since 1984 the Administrator has been the Governor of Punjab. Apart from the four posts of Advisor to the Administrator, Inspector General of Police, Conservator of Forests and Chairman of the Housing Board manned by AGMUT officers, all other posts are filled up either by deputation of officers from the Governments of Punjab and Haryana in the ratio of 60:40, or by direct recruitment by Chandigarh Administration.4.3.5.2 At present the Administrator is advised by an Advisory Council which he nominates. This tends to be large, to accommodate various interests in the city, and at times unwieldy. The meetings also tend to be infrequent. There is no structured political input into decision making by the Administrator and political advice comes primarily through informal channels.4.3.5.3 The Department Related Parliamentary Standing Committee on Home Affairs in the 121st Report on the Administration of Union Territories (2006), had inter alia made the following observation about Chandigarh:4.3.5.3.1 “The Committee is of the view that the Municipal Corporation cannotsolve all the problems of the people and the Advisory Council cannot help things to theextent people want their aspirations to be fulfilled the Committee recommendsthat some kind of arrangement should be put in place in the UT of Chandigarh which should be easily accessible to the public and which could effectively and adequately redress their grievances”.4.3.5.3.2 “The Committee notes that the Metropolitan Planning Committee can go a long way in solving the problems of the people of Chandigarh and fulfilling their aspirations. Even though the Metropolitan Planning Committee is not the ultimate solution to the elected legislative body, it can, to a large extent, address the problems of the masses. The140141State and District AdministationAdministration of the Union Territories142Committee suggests that suitable legislation may be brought in at the earliest so that steps may be initiated for setting up of the Metropolitan Planning Committee.”4.3.5.3.3 “The Committee understands that infrequent meetings of the Advisory Council to Administrator might be causing problems in redressing the grievances of the people. In the absence of a legislative body, at least, other bodies such as the Advisory Council should be given the necessary teeth to address the people’s grievances. The Committee, therefore, suggests that necessary steps may be taken in that direction to ensure that the Council meet more frequently. The Committee also agrees with the view of the Home Secretary that members of the Advisory Council should be adequately empowered. It recommends that the Ministry of Home Affairs should take necessary steps to redefine the powers and functions of the members of the Advisory Council and steps may also be taken to give more powers to the Council as such. As regards the suggestion of Home Secretary that the Council needs to be broad-based, the Committee has not received any concrete proposal from the Ministry. The Committee, however, feels that the issue needs to be deliberated upon and steps taken in this direction too.”4.3.5.3.4 “The Committee understands that the Zila Parishad and the Panchayati Raj Institutions (PRIs) in 18 villages would come to an end should the jurisdiction of Municipal Corporation of Chandigarh be extended to these villages. And in the absence of any demand from the 18 villages for extension of jurisdiction of the MCC into their areas and the orientation of MCC being urban, these villages may lose their rural identity without entailing any benefits and urban taxation of the municipality may add to their woes. The Committee, therefore, recommends that the rural identity of the 18 villages may not be disturbed.”4.3.5.4 Keeping in view the above facts and the recommendations of the Department-related Parliamentary Standing Committee, the Commission is of the view that there is urgent need to revisit the Capital of Punjab (Development and Regulation) Act and the Punjab New Capital (Periphery Control) Act, 1952 and examine if and how they are to be aligned with the changed circumstances. This issue needs to be examined urgently by the Ministry of Home Affairs and the UT Administration.4.3.5.5 The Commission is further of the view that the required legislation for creating the Metropolitan Planning Committee should be attempted without further delay. It would, to a large extent, address the problems of the people.4.3.5.6 As regards the Advisory Council, the Commission feels that a compact and cohesive body comprising of inter alia the Member of Parliament from Chandigarh, one MP eachfrom Punjab and Haryana, the Mayor of Chandigarh and the Advisor to the Administrator would be able to provide the useful inputs to the Administrator and also be able to meet more frequently.4.3.5.7 The Commission is further of the view that since the UT of Chandigarh is substantially urban and the 18 villages resemble urban habitats and are inextricably dependant on the urban infrastructure for their sustenance, the jurisdiction of the Municipal Corporation should extend over the entire Union Territory. The apprehensions of the 18 villages highlighted in the Report of the Parliamentary Standing Committee can be addressed by Ward/Area Sabhas as recommended in the Commission’s Report on Local Governance. Also, till such time that the infrastructure in these villages comes at par with the urban areas of Chandigarh; they may be given necessary (local) tax relief.4.3.6 Delegation of Administrative and Financial Powers4.3.6.1 During the visit of the Commission to the Union Territory, it was pointed out that the proposals forwarded to the Ministry of Home Affairs for approvals often remain pending for long. It was stated that the present system of over-centralisation affects the administrative efficiency of the system because of long delays. Inadequate financial delegation to the Administrator is impeding faster execution of projects and hampers progress. This issue has become all the more important in view of the increasing demand for better infrastructure and facilities for the citizens of Chandigarh. The proposed financial delegation could be as follows:-1.Rule 18 of the DFRExpenditure on Schemes/ Projects (Plan)2. Rule 18 of the DFR Expenditure on Works (Plan)3. Rule 21 of the DFR Expenditure on indents/ PurchasesTable No. 4.12 : Proposed Financial Delegation in respect of ChandigarhSl.No.Items of ExpenditureExisting Financial DelegationProposed Financial Delegation5.00 crore2.40 croreSame as above25.0020.0020.00143State and District AdministationAdministration of the Union Territoriese) The Union Government should suitably enhance the financial powers of the UT administration by notifying the delegation proposed in the Table 4.12. Within such delegated powers, the UT Administration must be given full administrative and functional autonomy. In addition, the UT of Chandigarh should also have powers to create certain categories of posts such as teachers, doctors and para-medical staff which are necessary for delivering vital services used by the people of the region.4.3.6.2 Equally important is the matter of delegation of administrative powers to the UT administration. The Administration does not have the power to create posts. Its powers to frame recruitment rules is also limited to Group B, C and D posts. The Commission has been given to understand that the Chandigarh administration is functioning with diminishing manpower as a certain proportion of posts are abolished each year in accordance with the direction of the Department of Expenditure. Chandigarh is a revenue surplus UT. The Commission feels that the UT Administration should have the competence to create certain categories of posts such as teachers, doctors and para-medical staff which are necessary for delivering vital services used by the people of the Region.4.4 Puducherry4.4.1 The Union Territory of Puducherry comprises four areas namely Puducherry, Karaikal, Mahe and Yanam, which are not geographically contiguous. Puducherry is located in the East Coast, about 162 kms. south of Chennai. This is the largest among the four regions and consists of 12 scattered areas interspersed with enclaves of Villupuram and Cuddalore Districts of Tamil Nadu. Karaikal is about 160 kms. south of Puducherry and is bound by Nagapattinam and Thiruvarur Districts of Tamil Nadu State. Mahe lies almost parallel to Puducherry 653 kms. away on the west coast near Kannur District of Kerala State. Yanam is located about 840 kms. north-east of Puducherry and is located in the East Godhavari District of Andhra Pradesh State. The territory of Puducherry was merged with the Indian Union on 1st November, 1954 in terms of the defacto agreement signed between the Government of India and the Government of France on 21st October, 1954. The dejure transfer of Puducherry took place on 16th August, 1962. The Treaty between India and France for the cession of the French possessions of Puducherry, Karikal, Mahe and Yanam provided, inter alia, that any constitutional change in the special administrative status of the Territory which was in force prior to 1st November, 1954 (the date on which the de facto possession of the Territory was transferred to the Indian Government), would be made after ascertaining the wishes of the people of the territory. The Union Territory of Puducherry is administered under the provisions of the Government of Union Territories Act, 1963.4.4.2 The Union Territory of Puducherry is 479 Sq.Kms. in area and has a population of 9,74,345 according to the 2001 census. The density of population of the Union Territory is 2034 persons/Sq.Km. The rural population is 3,25,726 persons (33.43%) whereas the urban population is 6,48,619 persons which constitutes 66.57% of the total population.4.3.7 Recommendations:a) There is urgent need to revisit the Capital of Punjab (Development and Regulation) Act and the Punjab New Capital (Periphery Control) Act, 1952 and examine if and how they are to be aligned with the changed circumstances. This issue should to be examined urgently by the Ministry of Home Affairs and the UT Administration.b) The Metropolitan Planning Committee should be constituted without further delay for comprehensive planning of the entire area covered under the jurisdiction of the Union Territory of Chandigarh.c)The entire territory under the jurisdiction of the Union Territory of Chandigarh should be declared as urban area. However, in order to protect the interest of present villages in the process of development, Ward/Area Sabhas should be constituted as recommended by the Commission in its Report on Local Governance. Also, till such time that the infrastructure in these villages comes at par with the urban areas of Chandigarh, they may be given necessary (local) tax relief.d) The present Advisory Council to the Administrator should be substituted by a more compact and cohesive body comprising inter-alia of the Member of Parliament from Chandigarh, one MP each from Punjab and Haryana, the Mayor of Chandigarh and the Advisor to the Administrator. Such a compact body would be able to provide the necessary inputs to the Administrator and also be able to meet more frequently.144145State and District AdministationAdministration of the Union Territories4.4.3 As against the national pattern, the percentage of population in urban areas is much higher than the population in rural areas. The entire Mahe and Yanam regions have been classified as urban. 66% of the Union Territory is classified as urban as against the All India level of 25.7%. The Scheduled Caste population is 1,57,771 and accounts for 16.19% of the total population. There are no Scheduled Tribes in the UT of Puducherry (according to the 2001 Census Report). The decadal growth rate of population is 20.62%; the Territory has four districts and ninety eight village panchayats.4.4.4 Administration4.4.4.1 As indicated earlier, Puducherry is administered as a Union Territory within the Constitutional provisions of Article 239, Article 239A and the Government of Union Territories Act. In terms of Article 239A provisions for an elected legislature and Council of Ministers for Puducherry have been made. At present, the Legislative Assembly in Puducherry has 30 elected members with a Chief Minister and Council of Ministers. The legislature has the powers to legislate in respect of the subjects under the State and Concurrent lists of Schedule 7 of the Constitution. However, being a Union Territory, the administration is directly controlled and supervised by the Union Government through the Lt. Governor (Administrator) appointed for this purpose particularly with regard to the administrative and financial matters. In order to discharge the legislative and administrative functions, the Rules of Business of the Government of Puducherry was framed in 1963 under the Government of Union Territories Act, 1963. In terms of Rules 49-58 of the said Rule, the Administrator has the powers to refer any draft Bill to the Union Government, before it is introduced in the legislature of the Union Territory and in that case the advice of the Union Government shall be awaited before the introduction of any such Bill.4.4.4.2 The Administrator shall refer to the Union Government every Bill which –(a) If passed by the Legislative Assembly, is required to be reserved for the consideration of the President under sub-section (2) of Section 21 or, as the case may be, under the second proviso to Section 25, of the Act;(b) Relates to any matter enumerated in the Concurrent List in the Seventh Schedule to the Constitution;(c) Attracts the provisions of Article 304 of the Constitution as applicable to the Union territory; (restriction of trade and commerce among States)(d) Relates to any matter which may ultimately necessitate additional financial assistance from the Central Government through substantive expenditure fromthe Consolidated Fund of the Union territory or abandonment of revenue or lowering of the rate of any tax;(e)Pertains to any matter relating to Universities;(f) Affects or is likely to affect the interests of any minority community, Scheduled Caste or Backward Class.4.4.4.3 Also, subject to the provisions of any instructions which may from time to time be issued by the Union Government, the Administrator shall make a prior reference to the Union Government in the Ministry of Home Affairs or to the appropriate Ministry with a copy to the Ministry of Home Affairs, in respect of the following matters, namely:-(a) All important cases raising questions of policy;(b) Cases affecting the relations of the Central Government with any State Government, the Supreme Court or any High Court or the Court of Judicial Commissioner;(c) proposals for appointment of the Chief Secretary, Development Commissioner, Finance Secretary, Law Secretary, Inspector General of Police and appointments to posts which carry an ultimate salary of Rs. 2,000/- per month or more;(d) Inter-sectional alteration in plan schemes; and(e) Non-delegated financial powers.4.4.4.4 When a matter is referred by the Administrator to the Union Government or any other authority under these Rules, further action thereon shall not be taken except in accordance with the decision of that Government or authority.4.4.4.5 Further, the Government of Union Territories Act ( Section 23) provides that , a Bill or an amendment shall not be introduced into, or moved in the Legislative Assembly except on the recommendation of the Administrator, if such Bill or amendment makes provision for any of the following matters, namely:-(a) Imposition, abolition, remission, alteration or regulation of any tax;(b) Amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of the Capital;146147State and District AdministationAdministration of the Union Territories(c) Appropriation of moneys out of the Consolidated fund of the Capital;(d) Declaring of any expenditure to be expenditure charged on the Consolidated Fund of the Capital or the increasing of the amount of any such expenditure;(e) Receipt of money on account of the Consolidated Fund of the Capital or the Public Account of the Capital or the custody or issue of such money or the audit of the accounts of the Capital.4.4.4.6 Similarly, the annual financial statement pertaining to estimated receipts and expenditure for a particular year shall not be laid before the Assembly unless the previous sanction of the President has been obtained (Section 27).4.4.5 Strengthening, Legislative, Financial and Administrative Power of the UT Administration (Puducherry)4.4.5.1 There has been a consistent demand for granting statehood to Puducherry with special category status. The Legislative Assembly of Puducherry had passed several resolutions to this effect. However, the Government of India has not agreed to this demand mainly on the following grounds:(i)It is not eligible to be considered for a special category status as per the guidelinesof the Planning Commission.(ii) It is not a viable State economically. Out of its total budget of about Rs. 1050 crores in the year 2007-08, the UT had a revenue deficit of over Rs. 439 crores.(iii) It consists of four geographically, culturally and linguistically separate segments. While Puducherry and Karaikal are Tamil speaking, Mahe is Malayalam speaking and Yanam is Telugu speaking.(iv) The per capita income of Puducherry is almost double that of neighbouring Tamil Nadu. Therefore, it cannot be said that development has suffered for want of Statehood.4.4.5.2 While it is not within the purview of the Commission to examine this issue, it strongly recommends that the elected government should have adequate powers andauthority with regard to governance and development of the Union Territory as per the aspirations and requirements of the people.4.4.5.3 To this end, there is need to delegate much more administrative and financial powers to the Union Territory government as indicated in the following paragraphs.4.4.6 Financial and Administrative Delegation4.4.6.1 In terms of the Delegation of Financial Powers Rules (DFR), 1978, Government of India has been delegating financial powers under various categories to the Administrator / Government of Puducherry Administration. Under Rule 13 of the DFR, the Administrator has been given full powers with respect to the contingent and miscellaneous expenditure, whereas in case of sanction of a scheme/ project under Rule 18 of the DFR, he can sanction schemes valued up to Rs.10.0 Crore.4.4.6.2 Currently, the non-plan allocation to the Union Territory stands at Rs.439 crores. For the last several years, the allocation has remained at this level whereas for other States and Union Territories there has usually been an increase of 10% per annum. There is a demand that this amount needs to be suitably enhanced.4.4.6.3 As already stated, the Commission is of the view that the elected government in Puducherry must have unfettered powers with regard to its development and governance as per the needs and aspirations of the local population. The control of the Union Government in the legislative and executive domain of the UT Assembly needs to be reduced. Various requirements of the legislative Bills to be referred to the Union Government and the discretion of the Administrator in this regard needs to be reconsidered and suitably minimized. This would require more delegation of administrative and financial powers to the Government which should be revised once in five years. The Council of Ministers should be free to discharge its functions within such delegation with freedom and discretion.Table No. 4.13 : Proposed Financial Delegation in respect ofPuducherry AdministrationExisting DelegationProposed DelegationRule 18 of the DFR – Sanction of Projects10.00 Cr. 10.00 Cr.25.00 Cr. 20.00 Cr.Rule 18 of the DFR –Expenditure on works148149State and District AdministationAdministration of the Union Territories4.4.7 Panchayats in Puducherry4.4.7.1 In the Union Territory of Puducherry, there are only two tiers of Panchayat namely, Village Panchayats and Commune Panchayats (Middle level Panchayats) and no District Panchayats. There are 10 Commune Panchayats and 98 Village Panchayats and they are governed by the Puducherry Village and Commune Panchayat Acts, 1973. The 73rd Constitutional amendment was implemented in Puducherry by a Notification dated 24th April, 1993 of Ministry of Rural Development, Government of India. In addition, a second notification was issued on 13th April, 1994 by the Ministry of Home Affairs, Government of India stating that Article 243-ZD of the Constitution shall apply to the UT of Puducherry with the modification that the ‘intermediate-level’ shall substitute the word ‘district-level’ in the said Article.4.4.7.2 The Commission has recommended a slew of measures in its Sixth Report on “Local governance” to strengthen and empower local government institutions, which needs to be implemented on priority.4.4.8 Power to Raise Public Debt4.4.8.1 Similar to Delhi, the Puducherry Administration, though having a Legislative Assembly is not permitted to raise public debt which does not seem to be appropriate. This issue has been examined in detail earlier in this Chapter while dealing with GNCT of Delhi. The Commission feels that Puducherry should be treated at par with Delhi and the recommendations made therein should equally apply in the case of Puducherry.4.5 Andaman and Nicobar Islands4.5.1 The territory of the Andaman and Nicobar Islands comprises of a group of 572 islands, islets and rocks lying in the south-eastern part of the Bay of Bengal. It has a total geographical area of 8249 sq. kms. and 38 of its islands are inhabited. There are three districts, namely North and Middle Andamans, South Andamans and Nicobar. The total population of the UT as per the 2001 census is 3,56,152 with a population density of 43 per sq. km. Most of the people are from mainland, particularly the West Bengal, Andhra Pradesh, Tamil Nadu, etc. giving the territory the sobriquet “Little India”. Andamans is also home to indigenous tribes, four of which are Negritos, namely the Great Andamanese, Onge, Jarawa and Sentinalese who live in forests in the Andaman group of islands and two are Mongoloid tribes, namely the Nicobarese and Shompens living in the Nicobar Islands. Some of these tribes are on the verge of extinction and some, particularly the Sentinalese, are still hostile. Their prime mode of livelihood is hunting and fishing.4.5.2 Administration in Andaman & Nicobar Islands4.5.2.1 When the Islands became a Union Territory in 1956 an Advisory Council to the Chief Commissioner (CCSE) with four members nominated by the Union Government was constituted. In 1961, the CCSE was supplanted by the Home Minister’s Advisory Council (HMAC), comprising three ex-officio and three non-official members. The number of non-officials later rose to seven. In 1963, a new advisory committee to the Chief Commissioner (CCAC) was constituted in addition to the HMAC. Originally this body consisted of six members. Later on, the strength was increased to 12 in 1972-73 and 20 in 1977, with direct election of the members. In 1979 a 30 members indirectly elected Pradesh Council was constituted. In 1981, a Pradesh Council presided over by the Administrator with 24 elected Pradhans of Gram Panchayats, the Member of Parliament, the Vice-President of the Port Blair Municipal Board, 3 nominated tribal members and a woman nominee as members was formed. When the three tier panchayat system with 67 Gram Panchayats at the village level, 7 Panchayat samities at the block level and 3 Zila Parishads at the district level came into existence in 1994, the provision for the Pradesh Advisory Council was repealed.4.5.3 Coordination Mechanism at the Union Level4.5.3.1 The Administration of the Union Territory of Andaman and Nicobar Islands is controlled and supervised by the Ministry of Home Affairs, Government of India through the Lt. Governor (Administrator) appointed under Article 239 of the Constitution and in terms of the Government of Union Territories Act, 1963. However, considering the special4.4.9 Recommendations:a) There should be enhanced financial and administrative delegation of powers to the Government of Puducherry. The Council of Ministers should be free to discharge its functions effectively within such delegation.b) The delegation of powers should be made as suggested in Table No. 4.13 and revised once in five years.c) Recommendations made by the Commission in its Report on “Local Governance” (6th Report) may be implemented on priority in order to strengthen and empower the PRIs in Puducherry.d) The Puducherry Administration should be given the powers to raise public debt in order to finance its development projects and plans.150151State and District AdministationAdministration of the Union Territories5.Such matters relating to the Annual Financial Statement of the Union in so far as itconcerns the Territory and such other financial question as be referred to it by the President.6.Any other matter on which it may be considered necessary or desirable by the Ministerof Home Affairs that the Advisory Committee should be consulted.4.5.4.3 Only three meetings of the Committee have been held since its reorganization in 1996, the last being on 20.12.2006.4.5.5 Islands Development Authority4.5.5.1 The Islands Development Authority (IDA) was constituted in August, 1986 under the Chairmanship of the Prime Minister to formulate policies and programmes for an integrated development of Andaman and Nicobar Islands and Lakshadweep with the following terms of reference:1.To decide on policies and programmes for an integrated development of the islands,keeping in view all aspects of environmental protection, as well as the special technical and scientific requirement of the Islands.2.To review progress of implementation and impact of the programmes ofdevelopment.4.5.5.2 The IDA cell in the Planning Commission serves as its Secretariat. A Standing Committee under the Chairmanship of Deputy Chairman, Planning Commission was also constituted in October, 1990 to follow up on the decisions of the IDA. The terms of reference for the Standing Committee inter alia include preparation of perspective plans for both the Islands, identifying appropriate programmes within the special requirements and limitations of the Islands and monitor and review the progress of development activities and plans. It is also required to facilitate interaction with Union Ministries and agencies and provide technical and other support required for the development of these Islands. Since its inception in 1986, only 12 meetings of the IDA have been held.4.5.6 Key Administrative and Development Issues 4.5.6.1 Need for restructuring existing institutions4.5.6.1.1 Due to its geographical location and its unique features, providing good governance to the A & N Islands is a major challenge. Its strategic security concerns, preservation ofnature of these far flung territories, a special body called Islands Development Authority was set up in the Planning Commission for the Andaman and Nicobar Islands and Lakshadweep in 1986. There is also the Home Minister’s Advisory Committee whose task is to advise regarding legal, administrative, financial and other matters relating to the Union Territory.4.5.4 Home Minister’s Advisory Committee4.5.4.1 As per a notification of the Ministry of Home Affairs dated 21.11.1996, the meetings of the Advisory Committee are presided over by the Minister of Home Affairs and in his absence by the Minister of State in that Ministry. The Committee currently consists of the following members:-(a) Lt. Governor, Andaman & Nicobar Islands(b) Member of Lok Sabha representing the UT(c) Five Members from Zila Parishad(d) Chairman of Municipal Council and two other Members of the Council(e) Two members to be nominated by the Minister of Home Affairs on the recommendation of Lt. Governor to represent Nicobar Group of Islands, one of these to be a woman member.(f) One woman member to be nominated by the Minister of Home Affairs on the recommendations of the Lt. Governor from the among the Members of the Zila Parishad if there is no woman in (c) above.(g) Secretary to the Islands Development Authority as a permanent invitee.4.5.4.2 The terms of reference of the Committee are inter alia:1.General questions of Policy relating to the Administration of the Territory.2.All legislative proposals concerning the Territory in regard to matters in theState list.152153State and District AdministationAdministration of the Union Territoriesnatural resources, development, empowerment of local governments, involvement of local people in the administration, protection of the endangered tribes, transport and connectivity are major issues of governance to be reckoned with. There is need to balance the conflicting nature of many of the concerns. The present institutional set-up, both at the UT and the Union levels has not been able to adequately meet these administrative challenges. On the other hand, there continues to be a growing demand for people’s voice and representation in the governance of the Islands which is lacking mainly due to the absence of strong institutions of democratic governance and adequate decentralization of power. There has also been a demand for a Legislative Assembly on the pattern of Delhi and Puducherry.4.5.6.1.2 The Commission during its visit to the Andaman Islands had occasion to discuss some of the key administrative issues with the Lt. Governor (Administrator), officers of the Administration, the Member of Parliament, Panchayat and Zila Parishad members as well as members of the public and the media. While it may not be feasible to have an elected Legislative Assembly in this territory (because of security and other considerations), the Commission feels that it is important to restructure and strengthen the institutional arrangements both at the Union and UT levels in the interests of administrative expediency, efficiency and closer involvement of the inhabitants so that they have a voice in the Island’s administration and governance.4.5.6.1.3 At the UT level, a three-tier Panchayati Raj system is in place and the Commission’s recommendations on Local Self Governance in its sixth Report at paragraphs 4.1.4.4, 4.1.5.4, 4.2.3.10 and 4.4.7 would further strengthen them. But between these PRIs and the Home Minister’s Advisory Committee/ IDA there is a great hiatus and hence there is need for an effective local but high level consultative institution. The Commission feels that this could be in the form of an Administrator’s Advisory Council comprising the Chief Secretary, the local Member of Parliament, Chairpersons of Zila Parishad and Port Blair Municipal Council and senior representatives of the Ministries of Home Affairs, Tribal Affairs, Environment, Forests and Defence and the Planning Commission. With relevant terms of reference and frequent meetings, this Committee should be able to provide an intermediate platform for meaningful consultations and suggestions for the consideration of the Administrator and the Union Government.4.5.6.1.4 Since the issues facing the Islands are multi-faceted and require large financial and special manpower resources, the Union Government will necessarily have to continue to play a leadership role in facilitating the Islands’ future development and ensuring security of this strategic area. Neither the Home Minister’s Advisory Council (because of infrequent meetings) nor the Island Development Authority has been able to fully realizethis mandate. Even though very important directions have emanated from the IDA by the Prime Minister, the fact is that these meetings are burdened with far too many items of somewhat routine nature which do not require the intervention of such a high level body. For example, in the last meeting the agenda items included issues like settling contractors’ bills, fixing prices of aracanut, building houses for old settlers, etc. The Commission, therefore, feels that these two high level Committees may be replaced by more functional bodies. The IDA could be replaced by a multi-disciplinary task force under the Deputy Chairman, Planning Commission which would lay down the road map for the Andaman & Nicobar Islands Administration both for medium term and long term perspective plan and monitoring its implementations. The Home Minister’s Advisory Committee may be replaced by a Committee under the Chairmanship of the Union Home Secretary with officers of suitable seniority from the Ministries of Environment and Forests, Tribal Affairs, Finance, Defence, Shipping and Planning Commission to examine and give prima facie administrative approval to important proposals. Some of the key issues which would need to be kept in mind while preparing any plans or proposals for the Andaman & Nicobar Islands are listed below.4.5.6.2 Security concerns4.5.6.2.1 The security significance of these Islands stems from the fact of its close proximity to other countries and to an important international sea route. Its proximity to the Malacca Straits and growing Chinese presence in the area highlights its importance (Aceh in Indonesia is only 40 nautical miles away from Indira Point, the tip of the Great Nicobar Island). These Islands have a vast coastline (1/4th of the total coast line of the country) and because of isolated and scattered islands and adverse weather conditions, surveillance is inconsistent. The seas around these islands are not adequately patrolled which makes poaching of timber and marine produce and illegal immigration fairly easy. There have been, reports of smuggling weapons meant for Myanmar and the North-East. Even though the South-Eastern Naval Command was created some years ago, the Indian Navy has very few ships stationed in the Islands. In fact the Armed Forces often rely on the shipping services of the UT Administration.4.5.6.3 Carrying capacity of the Islands4.5.6.3.1 Despite the fact that several islands are uninhabited and there are occasional proposals to inhabit some of these in a planned manner, there is also a point of view that the carrying capacity of the islands has perhaps already been exceeded. This issue, therefore, needs to be addressed in the light of the following considerations:154155State and District AdministationAdministration of the Union Territories(a) Over 90 per cent of the Islands is under reserve forest cover and the Supreme Court has issued directives placing severe restrictions on exploitation of the forests in the light of the Forest Conservation Act, 1980. A balanced view between defence requirements, development and preservation of forests needs to be taken. A minimum percentage below which the reserve forest area shall not be reduced may be fixed by law, as applicable to these islands only.(b)Because of the topography and climatic reasons the islands are not self sufficient in any kind of food other than sea food and this situation is not likely to change. There will be an increasing dependence on supplies shipped from the mainland to sustain the population.(c)Power generation is almost entirely diesel based.(d) There are no rivers on the islands, and all water supply is based on stored rain water. This constraint places severe limitations on the kinds of economic activities that can be undertaken and the number of people who can be sustained.(e) Sustaining a supply chain for 38 islands, taxes the shipping infrastructure. There is a significant drop in the quality of supplies away from Port Blair and further increases in density of population will impose heavy costs.(f) The encouragement of tourism also impinges on carrying capacity and needs to be carefully balanced.4.5.6.4 Issues of connectivity4.5.6.4.1 The airport at Port Blair can take only single aisle jet aircraft and because of the topography, these aircrafts can take off only in one direction. In any case, air services cater to only a small segment of the traffic and the bulk of passengers, both to and from the mainland and between the islands, rely on shipping services, which are heavily subsidized.4.5.6.4.2 Affordable passage between the Island and the mainland remains a necessity to prevent a sense of isolation and promoting integration. In the last meeting of the Island Development Authority, one of the important agenda items pertained to need for reforms in the shipping services since they are the lifeline of the Islands. The setting up of a new Corporation by the Ministry of Shipping for managing and maintaining the shippingservices and all related activities for the A&N Islands and Lakshadweep was discussed in detail. Earlier an Expert Committee had gone into this issue but an urgent decision after carefully weighing the pros and cons still needs to be taken.4.5.6.5 Endangered Tribes4.5.6.5.1 The Andaman & Nicobar Islands have about 30,000 tribals and in the past they have suffered as their habitat shrank and land was increasingly appropriated for government use, etc. In the last meeting of the Island Development Authority, the Prime Minister had directed that there is need to evolve a sensitive approach towards tribals especially the primitive tribal groups. There is need to learn from the experience of the implementation of the policy on Jarawa tribes while formulating the policy on other primitive tribal groups. The Ministries of Home Affairs and Tribal Affairs need to work in close coordination in this connection.4.5.6.6 Human Resource Development4.5.6.6.1 Within the Island, opportunities for wage employment are mainly in the government sector and it is not likely that recruitment in this sector can keep pace with the increasing population. Educated youth will, therefore, need to look at the mainland for economic opportunities. As competitive pressures on the mainland are far higher than in the Islands, it would be desirable that adequate number of seats in institutions of learning, particularly higher learning, in the mainland are earmarked for students from the Islands. This would acclimatize them suitably, integrate them emotionally and provide wider opportunities of employment, including in the Islands where a number of technical posts (for example doctors) is not easy to fill up.4.5.6.6.1 The above issues should be addressed and put in the form of a medium and long term perspective plan by the proposed Committee of the Planning Commission in consultation with the Advisory Council of the Lt. Governor.4.5.6.7 Administrative and Financial Delegation4.5.6.7.1 During the visit of the Commission to the Islands, the issue of administrative and financial delegation was strongly raised by the Administrator and the UT Administration officials. It was emphasized that there is a need to give due weight for the development of the islands under the UT apart from the focused attention on security measures, considering the strategic location of these islands. It was felt that presently the long winded156157State and District AdministationAdministration of the Union Territories158channels of decision making and inadequate delegation of financial and administrative powers against quick decision making. Therefore, the islands need more powers to be delegated to the UT Administration for smooth administration in such an isolated area. A case study on raising of Dhanikhari Dam for augmenting supply of drinking water, given in the Box 4.2 sharply illustrates the above concerns.Table No. 4.14 : Proposed Financial Delegation in Respect ofContd.Andaman and Nicobar AdministrationSl. No.Nature of PowersExtent of the PresentThe ProposedDelegation (Rs. in Crores)Enhancement(Rs. in Crores)4.Normal contrat/purchase6.Indent for stores of proprietary nature7.Indent for stores of proprietary nature5.Negotiated/Single tender contract(for power sector only)8.Direct purchase on grounds of emergency3.000.305.001.001.0020.000.505.005.005.004.5.6.7.3 The Commission is of the view that there is urgent need to address this issue and ensure adequate administrative/financial powers to the Andaman & Nicobar Administration, which should be revised once in five years.4.5.7 Recommendations:a) The Union Government should constitute an Advisory Council to the Administrator of Andaman & Nicobar Islands consisting of the local Member of Parliament, the Chief Secretary, Chairpersons of the Zila Parishad and Municipal Concil and senior representatives from the Ministries of Home Affairs, Tribal Affairs, Environment, Forests and Defence and the Planning Commission to advise him on all important matters of administration.b) The Home Minister’s Advisory Committee may be replaced by a Committee under the Chairmanship of the Home Secretary with officers of suitable seniority from the Ministries of Environment and Forests, Tribal Affairs, Finance, Defence, Shipping and Planning Commission to examine and give prima facie administrative approval to important proposals concerning this Territory.c) The IDA may be replaced by a multi-disciplinary task force under the Chairmanship of the Deputy Chairman, Planning Commission. This body should be responsible for laying down guidelines for preparing medium and long term perspective plans for the overall development of the islands and monitoring its implementations.159Box No. 4.2 : RAISING OF DHANIKHARI DAM : Case Study ofa Drinking Water Supply Scheme?The DPR prepared by NHPC was submitted to Secretary Ministry of Water Resources, GOI by Chief Secretary, Andamans on 08.01.2004.?The Director (State Plans) and Deputy Advisor (Water Resources), GOI visited Dhanikhari Dam Site on 31/01.2004 for first stand information of the proposal.?Again the Secretary (PWD) took up the matter with Joint Secretary (UD), Ministry of Urban Development vide letter dated 24/03/2004.?The Director WS & PG Ministry of Urban Development sought some clarification vide letter dated 27/04/2004.?The reply was sent by Commissioner-cum-Secretary (PWD) vide D.O. letter dated 09/06/2004.?Further clarification by Under Secretary MOUD was sought vide letter dated 22/07/2004.?The reply was sent by Secretary (PWD) to Director (WS & PG) vide letter dated 25/08/2004.?The Central Water Commission asked for additional eight volume of DPRvide letter dated 25/05/2005 which was sent vide our letter dated 07/06/2005.?Chief Engineer, APWD informed Joint Secretary (MORWS) regarding submission of all quarries vide fax message dated 06/08/2005.?Further technical clarification was sought by the Director (UT) vide letter dated 06/11/2006.?The reply was sent by Superintending Engineer, PBCC vide letter dated 08/11/2006.?On further request from Ministry the modified cost estimation amounting to Rs.19.43 crores was submitted to Director , Central Water Commission vide Superintending Engineer, PBCC letter dated 09/05/2007.?Technical clearance was conveyed by Ministry of Urban Development vide letter dated 13/07/2007.?Administrative approval was conveyed vide letter dated 08/08/2007 of Director, Water Supply, Ministry of Urban Development.?SFC cleared the Expenditure Sanction vide Minutes dated 24/04/2008.?MoU signed between Administration & NHPC on 25/09/2008.Source: Presentation made by the A&N Administration during the visit of Commission to the Islands.4.5.6.7.2 The Administrator of A&N Islands is vested with financial powers as per the Delegation of Financial Rules, 1978. The Ministry of Home Affairs has from time to time re-delegated powers to the Administrator in those important items as necessary for the smooth functioning of the administration. The powers so delegated and the proposed enhancement could be summarized in the following manner:-Table No. 4.14 : Proposed Financial Delegation in Respect of Andaman and Nicobar AdministrationSl. No.Nature of PowersExtent of the PresentDelegation (Rs. in Crores)The ProposedEnhancement (Rs. in Crores)25.0020.0050.0010.0010.0010.001.Sanction of Projects2.Expenditure on Works3.Procurement of ShipState and District AdministationAdministration of the Union Territories4.6 Lakshadweep4.6.1 The Union Territory of Lakshadweep is a group of 37 Islands with a total land area of 32 sq.km. Considering the lagoon area of 4,200 Sq.kms, 20,000 Sq.kms of territorial waters and about 4 lakhs Sq.kms. of economic zone, Lakshadweep is a fairly large territory. It consists of ten inhabited and 17 uninhabited islands, four newly formed islets and 5 submerged reefs. The inhabited islands are Kavaratti, Agatti, Amini, Kadmat, Kiltan, Chetlat, Bitra, Andrott, Kalpeni and Minicoy, popularly known as Laccadives. Its total population is 60,650 with an urban component of 44.47%. Its literacy rate is 86.7%. It consists of only one district which is a Lok Sabha Constituency too.4.6.2 Administration in Lakshadweep: Need for an Apex Representative Structure for the UT4.6.2.1 Formed as a Union Territory in 1956, it was named Lakshadweep in 1973. It was brought under the direct control of the Ministry of Home Affairs, in order to bring these Islands in the mainstream of development. Since then it is being administered by the Union Government through an Administrator appointed for this purpose. Comprising of a single district, it is the smallest UT in the Indian Union. The area is further divided into 4 tehsils and 5 community development blocks. The Panchayati Raj Institutions started functioning here in 1997 with a 2 tier system comprising of 10 Villages (Dweep) Panchayats and one District Panchayat. There are 79 Village Dweep Panchayat Wards, 22 District Panchayat Wards and one Lok Sabha seat. The Headquarters island of Lakshadweep is Kavaratti. Its distance by sea is 346 kms. from Khozikode, 404 kms. from Kochi and 352 kms. from Mangalore.4.6.2.2 The Island has an Advisory Committee chaired by the Home Minister which has a mandate to review its socio economic development. The Committee consists of the Administrator of Lakshadweep, the local Member of the Parliament and representatives of PRIs. An Island Development Authority constituted in 1986 is responsible for formulating policies and programmes for integrated development of Lakshadweep and the A&N Islands.4.6.2.3 The Commission is of the view that the issues of governance in the Lakshadweep Islands are more or less similar to those of the A&N Islands, though in a smaller measure. There are strategic security concerns, preservation of natural resources, development, empowerment of local governments, involvement of local people in the administration, transport and connectivity. In order to meet the challenges of governance in these Islands, the Commission suggested a new institutional set up in the case of the A&N Islands, in an earlier Chapter. These suggestions would be applicable to Lakshadweep also with suitable modifications. Accordingly, an Advisory Council to the Administrator of Lakshadweep may be constituted consisting of the local Member of Parliament, Chairman of the Zila Parishad and representatives of the Ministries of Home Affairs, Tribal Affairs, Environment, Forests and Defence and the Planning Commission. The Home Minister’s Advisory Committee for Lakshadweep may be replaced by a Committee under the Chairmanship of the Home Secretary with officers of suitable seniority from the Ministries of Environment and Forests, Tribal Affairs, Finance, Defence, Shipping and Planning Commission to examine and give prima facie approval to important proposals concerning the UT administration.4.6.2.4 As suggested in the case of the A&N Islands, the IDA to be replaced by a multidisciplinary task force under the Deputy Chairman of the Planning Commission could also lay down guidelines for preparing and monitoring the medium and long term perspective plans for overall development of the Lakshadweep islands.4.6.3 Local Government4.6.3.1 Consequent to the 73rd Constitutional Amendment, the Lakshadweep Panchayats Regulation, 1994 was promulgated by the President of India on 23rd April, 1994 and the provisions of the Regulation were brought into force on 23rd May, 1995. The first village panchayats were constituted in December 1997 and the District Panchayat in January, 1998. In all, there are ten Village (Dweep) Panchayats falling under the District Panchayat. Sanitation, Public Health, Public Works, Planning and Development and Social Welfare are the major matters which fall within the jurisdiction of Village Panchayat; whereas the District Panchayat has been given 29 matters which cover the subjects listed under the 11th Schedule of the Constitution.d) Recommendations made by the Commission in its Report on Local Governance (Sixth Report) should be examined and implemented to the extent they are relevant to strengthening and empowering local government institutions in the Andaman & Nicobar Islands.e) The Union Government should enhance financial the powers of the UT administration by notifying delegation proposed in the Table No. 4.14. This should be revised once in five years. Within such delegated powers, the UT Administration must be given full administrative and functional autonomy.160161State and District Administation4.6.3.2 As mentioned earlier, the Union Territory of Lakshadweep is administered by the Union Government through a senior officer designated as the Administrator. PRIs are the elected institutions which give voice to the aspirations of local people and which involve them in the developmental process. Considering the unique topography of the UT, therefore, strengthening and empowering institutions of local governance is crucial in providing good governance to the citizens. Although steps have been taken to constitute and activate Panchayati Raj Institutions as per provisions of the Panchayat Regulation discussed above, the Commission during its visit, felt that they need to be further strengthened.4.6.3.3 A closer examination of the Panchayats Regulation, 1994 indicates that major powers regarding control and supervision over the Panchayats lie with the Administrator. The Administrator has been given powers to issue directions, sanction projects, accord previous sanction before acquiring property, disqualify the members, powers to inspect etc. These powers are almost identical with those enjoyed by governments of the larges States in the country (vide State Panchayat Raj Acts of Bihar, U.P., M.P. etc.).4.6.3.4 It is a well accepted principle that in order to make PRIs effective institutions of self governance, devolution of functions will have to be suitably matched by devolution of adequate funds and functionaries. The interactions of the Commission with the representatives of various Panchayats during its visit to Lakshadweep indicated that the actual position in both these respects is not satisfactory. PRIs have not been provided with adequate staff to assist them in discharging various developmental functions entrusted to them.4.6.3.5 As regards funds, PRIs in Lakshadweep are fully dependent on the grants and assistance provided by the UT administration. Though, they have been given powers to collect certain taxes and fees, their own resource generation is very meager. It was observed that the grants given to them by the Administration are not based on any rational criteria. For example, the Administration provides an untied developmental grant of Rs 20 lakhs to the District Panchayat and Rs 5 lakhs each to the Dweep Panchayats every year for the developmental schemes implemented by them. Such blanket and uniform grants without any analysis of the actual requirements of a particular Dweep Panchayat is not fair and needs to be based on some criteria and the needs of each Panchayat.4.6.3.6 The Commission has considered all major issues pertaining to the strengthening and empowerment of PRIs in its Report on “Local Governance” and suggested a number of measures to increase their efficacy. The Ministry of Home Affairs may take immediate steps to implement these recommendations in Lakshadweep.Administration of the Union Territories4.6.4 Financial and Administrative Delegation4.6.4.1 As in the case of other Union Territories, the model financial delegation could be as under:-Table No. 4.15 : Proposed Financial Delegation in Respect ofLakshadweep AdministrationSl. No.Items of ExpenditureExisting Financial DelegationProposed Financial DelegationRule 18 of the DFR Expenditure on Schemes/ Projects (Plan)5.00 Crore1. 10.002. Rule 18 of the DFR2.40 Crore5.00Expenditure on Works (Plan)3. Rule 21 of the DFR Expenditure on indents/ PurchasesSame as above5.004.6.4.2 The delegated powers should be revised once in five years. Within these powers, the UT Administration should be given full administrative and functional autonomy.4.6.5 Recommendations:a) The Union Government should constitute an Advisory Council to the Administrator of Lakshadweep consisting of the local Member of Parliament, Chairman of the Zila Parishad and representatives of the Ministries of Home Affairs, Tribal Affairs, Environment and Forests and Defence and the Planning Commission to advise him on all important matters of administration.b) The Home Minister’s Advisory Committee as existing today may be replaced by a Committee under the Chairmanship of the Home Secretary with officers of suitable seniority from the Ministries of Environment and Forests, Tribal Affairs, Finance, Defence, Shipping and Planning Commission to examine and give prima facie approval to important proposals concerning this territory.162163State and District AdministationAdministration of the Union Territories4.7 Daman and Diu and Dadra & Nagar Haveli4.7.1 Daman & Diu4.7.1.1 Located on the Western Coast Daman & Diu is the second smallest Union Territory of India. Daman is situated near Surat while Diu is located close to Junagadh in the Saurashtra Peninsula of Gujarat. Till 1987, Daman & Diu were parts of the UT of Goa. When Goa became a fullfledged State, they were converted into a separate UT, consisting of 2 districts Daman & Diu. It has an area 112 Sq.Km. with a population of 1,58,204 and literacy rate 78.20%.4.7.2 Dadra & Nagar Haveli4.7.2.1 The UT of Dadra & Nagar Haveli with a population of 2,20,490 and literacy rate of 57.6% consists of two separate enclaves. Dadra is surrounded by the State of Gujarat, whereas Nagar Haveli lies on the borders between Maharashtra and Gujarat. Dadra consists of three villages and Nagar Haveli consists of a town named Silvassa and 68 villages with an area of 491 Sq.Km. The territory is inhabited by a number of ethnic groups, viz. the Varlis, Dublas, Dhodias and Koknans. Agriculture is the main occupation and the area producesrice, pulses and fruits. Dadra & Nagar Haveli came under Portuguese Rule between 1783 and 1785. It became a Union Territory in 1961. Silvassa, its capital is about 14 Kms, from Bhilad and Vapi.4.7.3 Administration of the UT and Local Government 4.7.3.1 Daman & Diu4.7.3.1.1 Prior to the 73rd Constitutional Amendment, the UT of Daman and Diu had Panchayats only at the village level. These Panchayats were regulated under the provisions of the Goa, Daman and Diu Village Panchayat Regulation, 1962. But they are now being governed by the Daman and Diu Village Panchayats (Amended) Regulations 1994, under which a two tier Panchayat consisting of District and Village Panchayats exists in the Territory. There are two District Panchayats, one at Daman and the other at Diu.4.7.3.1.2 Consequent to the 73rd Constitutional Amendment and as provided under Article 243G of the Constitution of India, all 29 matters listed in the Eleventh Schedule of the Constitution have been transferred to District Panchayats through a notification in July 2006. However, the actual activity mapping has been done so far for only 18 subjects. As a result, the Panchayats play only a nominal role in the transferred functions. Unlike in other UTs, the Daman and Diu Village Panchayat (Amendment) Act 1994 provides specifically and statutorily that planning functions should be performed by Village and District Panchayats. Another unique feature of the 1994 Act is the provision for consultations by the Administrator with the president-cum-chief counsellor and the vice president-cumcounsellor who are elected office bearers of the District Panchayat, on any matter specified in its Fourth Schedule relating to Panchayats, training of Panchayat staff, administration and coordination of Panchayat activities, public distribution system, rural electrification, tax proposals and on any other matter on which the administration may like to consult. This provision is an important link between the Administration and the Panchayats.4.7.3.1.3 In 1996, the UT Administration initiated steps to post adequate number of personnel to the District Panchayats, so that they could be enabled to exercise their functions and powers effectively. While the exercise was still underway to devolve activities relating to the 29 matters listed in the Eleventh Schedule, a detailed order was notified in September 2006, transferring the officials concerned from the departments of the government to the Panchayats.c) The multi-disciplinary task force under the Chairmanship of the Deputy Chairman, Planning Commission, recommended to be set up for the Andaman & Nicobar Islands in place of the Island Development Authority should also include the Lakshadweep Islands. This Committee would be responsible for laying down guidelines for preparing medium and long term perspective plans for the over all development of the Islands and for monitoring its implementation.d) Recommendations made by the Commission in its Report on Local Governance (Sixth Report) should be examined and implemented to the extent they are relevant to strengthening and empowering local government institutions in Lakshadweep Islands.e) The Union Government should enhance the financial powers of the UT administration by notifying the delegation proposed in the Table No. 4.15. This could be reviewed once in five years. Within such delegated powers, the UT Administration should be given full administrative and functional autonomy.164165State and District AdministationAdministration of the Union Territories4.7.3.1.4 The Ministry of Panchayati Raj, Government of India has closely examined the status of Panchayati Raj in all the States and Union Territories in its Report on “The State of Panchayats 2007-08: An Independent Assessment”. For Daman and Diu, this paper makes the following important observations:“The Panchayats in Daman and Diu have been formally devolved powers and functions relating to the 29 matters listed in the Eleventh Schedule of the Constitution through incorporation in the PR Act. Activity mapping is claimed to have been carried out for 18 matters. Following the report of the First Finance commission and consequent to the approval of the Ministry of Home Affairs, activities and schemes have been transferred to the Panchayats in respect of these in 2001. An examination of these orders would show that most activities have been devolved to the District Panchayat. However, the District Panchayat has few executive powers and most continue with the Administrator. There are overlaps between the functional domain of the District and the Village Panchayats. Ambiguity in the functional domain has resulted in a lack of role clarity between departments and panchayats thereby enabling line departments to carry out their activities unhindered as before. It therefore appears that the devolution of functions has remained largely on paper and there is a long way to go before Panchayats actually are de facto empowered and elected Panchayat members clearly know the extent of power and responsibilities that have been entrusted to them. The Sarpanch and Village Panchayat members have very little information on the power devolved and they still view Panchayats as a medium to implement development schemes rather than to design and make their own plans for development. Even though functionaries have been devolved on paper to the Panchayats, they continue to function under the supervision and control of the Collector’s office and the Panchayats have no control over them.”4.7.3.1.5 A glance at the scheme of devolution reveals that the execution of only certain schemes has been given to the Panchayats. The responsibilities of the Panchayats remain vague. Even for schemes which stand transferred to the Panchayats, the allocations are woefully inadequate. The Commission feels that departments like education and health which account for the bulk of the functionaries as well as the budget can be transferred to Panchayats without much delay. Civic services such as provision of drinking water, sanitation, and street lighting could also be handed over to the Panchayats.4.7.3.1.6 The delegation of financial powers to Panchayats too, is restricted. A Sarpanch is authorized to spend only Rs.500 in cash on a project. He can purchase materials upto Rs.5000 but only after obtaining prior approval of the Block Development Officer. The income from taxes and fees collected by the Village Panchayat is meager and needs to be increased substantially through better mobilization of tax revenues and supplemented byfinancial assistance from government. More powers need to be given to the Panchayats so that they can utilize their funds for the benefit of their areas. The institutional linkage between the two tiers of Panchayat as well as that between the Panchayats and the government departments are weak.4.7.3.2 Dadra & Nagar Haveli4.7.3.2.1 Panchayats came into existence in this part of the country in 1965 when the Dadra and Nagar Haveli Panchayat Regulation was enacted (1965) to establish local government in this territory. After the 73rd Constitutional Amendment, the Dadra and Nagar Haveli Village Panchayat (Amendment) Regulation, 1994 (amended in 2002) brought a two tier Panchayatiraj structure into existence.4.7.3.2.2 Activity mapping for devolution of functions, functionaries and funds was completed in this Territory in 2004. Out of the 29 subjects mentioned for devolution in the Eleventh Schedule, 20 subjects have been transferred fully and seven subjects partially to Panchayats. All these functions have been transferred formally to the District Panchayat except Libraries which stand transferred to Gram Panchayats.4.7.3.2.3 The functionaries of the 26 subjects listed in the Eleventh Schedule have been placed partially under the control of the Panchayats. But they draw their salary from the respective parent department. These transferred officials work under the administrative control of Panchayats. But major powers such as the power to take disciplinary action still lies with the respective line department. Panchayats also do not have their own staff, though some Village Panchayats have appointed peon and support staff like electricians and computer operators from the fund generated by tax collections.4.7.3.2.4 The Ministry of Panchayati Raj, Government of India has examined the status of Panchayati Raj in the States and Union Territories of the country in its Report as “The State of Panchayats 2007-08: An Independent Assessment”. For the Union Territory of Dadra and Nagar Haveli, this paper makes following important observations:-“Panchayats seem to be working well with devolution of many functions. Their effectiveness can be improved further by completely devolving functionaries and funds to them rather than transferring officials in diverted capacity and providing tied funds. The service rules for Panchayats may be framed for functioning of Panchayats more efficiently. These efforts would require suitable capacity building to achieve successful outcomes.”4.7.3.2.5 The Commission has examined all these issues in its Sixth Report on ‘Local Governance’ and has made a number of important recommendations covering devolution166167State and District AdministationAdministration of the Union Territories168of functions, activity mapping, devolution of fund, resource generation by Panchayats, personnel management, issues of accountability etc. Some of these recommendations have also been summarized in Chapter 1 of this Report. The Commission reiterates that the implementation of these recommendations would go a long way in strengthening local government institutions in these Union Territories.4.7.4 Financial Delegation4.7.4.1 Under the “Delegation of Financial Powers Rules, 1978” the Government of India has been delegating financial powers under various categories to the Administrator of the Union Territories. Under Rule 13 of the DFR, the Administrator has been given full powers with respect to contingent and miscellaneous expenditure. But for sanction of a new scheme/ project (under Rule 18 of the DFR), the Administrator’s power is limited only upto Rs.5 crores whereas, for expenditure on works, the Administrator’s power goes upto Rs.2.4 crores. For speedier decision making and faster implementation of projects, these powers need to be enhanced. The proposed enhancement in the delegation of financial power for both the above Territories could be as under:-Sl. No.Items of ExpenditureExisting Financial DelegationProposed Financial Delegation1. Rule 18 of the DFR, Expenditure on Schemes/ Projects (Plan)5102. Rule 18 of the DFR2.45Expenditure on Works (Plan)3. Rule 21 of the DFR, Expenditure on Indents / PurchasesSame as aboveSame as above4.7.5 Issue of Human Resources4.7.5.1 In its interaction with the Commission, the Administration of Daman & Diu pointed out the difficulties being faced by it in implementing various projects and programmes of the government, due to inadequacy of staff at the operational levels.4.7.5.2 In respect of Daman & Diu, following the creation of a separate Union Territory, the Government of India at different times, sanctioned a number of senior level posts to manthe administration. These include the Chief Secretary-cum-Development Commissionercum-Inspector General of Police, Finance Secretary, Deputy Inspector General of Police and Law Officer and later, the ex-cadre posts of Administrator of Daman & Diu and Managing Director of the Omnibus Industrial Development Corporation. Two posts of Collector and two posts of Supdt. Of Police (for Daman & Diu) were also sanctioned. All these posts were filled up by officers of the All India Services. In addition, the UT also has 10 posts which are staffed by officers of the Daman & Diu and Andaman & Nicobar Civil Services (DANICS cadre) and two posts manned by the DANIPS of Daman & Diu and Andaman & Nicobar Police Service8. This has resulted in an administrative structure which is top heavy.4.7.5.3 Over a period of time, there has been significant increase in the activities of the UT Administration because of rapid growth and establishment of business and industrial activity in the area with a consequent increase in the population.4.7.5.4 This has necessitated strong presence in the departments dealing with commercial taxes, labour, employment and factories. Programmes dealing with primary education and health have also substantially increased. Unfortunately, there has not been a corresponding increase in the operational staff of the concerned departments. This inadequacy of staff has also affected activities relating to promotion of tourism and implementation of centrally Sponsored Schemes. The large coastal area, because of recent activities by terrorist organizations and other clandestine groups, has highlighted the need for much more extensive patrolling for which the police will also need to be appropriately strengthened.4.7.5.5 The Commission feels that in the interests of good governance, there is need to have adequate staff at operational levels in the different departments in both the UTs. Any attempt to fix the number of government employees on the basis of a pre-conceived notion of right sizing will not be fair. There is need to rationalize the size of the governmental machinery by suitably adjusting the strength of the staff on the basis of functional requirements. The operating levels must be adequately manned. At the same time, the government needs to examine the issue of having so many senior level posts in Daman & Diu.4.7.6 Recommendations:a) The recommendations made by the Commission in its Report on ‘Local Governance’ should be implemented on priority by the Union Government in Daman & Diu and Dadra & Nagar Haveli.1698Source: Input received from UT of Daman & Diu Administration(Rupees in crore)Table No. 4.16 : Proposed Financial Delegation in Respect of Daman & Diu and Dadra & Nagar Haveli AdministrationState and District AdministationGOVERNANCE ISSUES IN THE NORTH-EASTERN STATES55.1 Introduction5.1.1 India’s North Eastern Region consisting of Assam, Meghalaya, Tripura, Manipur, Nagaland, Mizoram, Arunachal Pradesh and Sikkim is a rich mosaic of diverse customs, practices, terrain, climate, ethnicity (over 140 major tribes out of 573 in the country), institutions, land systems, languages and cultural norms. The area is geographically divided into discrete plains and regions encompassed within hills, having a number of agro-climatic zones within them. Almost the whole of it is characterized by heavy precipitation (200 mm to 600 mm), rich bio-diversity, fragile hills, high seismicity, and a drainage system marked by extensive lateral valleys in the north and transverse valleys in the south. The terrain is dissected by perennial rivers and raging torrents and the relief varies from less than 50 metres to more than 5000 metres above the mean sea level. Communication in the area is difficult and expensive.5.1.2 The region was in a better economic condition a century ago. The vast river systems and small rivulets were a means of livelihood for a majority of the population in the valleys and the plains. Global trade was conducted through the sea-route, a network of inland waterways, and land transportation through road and railways. In fact, the railway network between Dibrugarh and Chittagong constructed by the British in the late nineteenth century was one of their earliest projects in India. The natural transportation route through East Bengal not only reduced the physical distance but also provided emotional integration among people of this region. The rapid spread of tea plantation in India followed the establishment of the first tea garden in this region in 1835 and the export of the first consignment of tea to London in 1838. The discovery of oil in Makum and establishment of a refinery in Digboi in 1890 laid the foundation for the development of an undivided Assam.b) The Union Government should immediately enhance financial powers of the UT administration by notifying delegation proposed at Table No. 4.16. This should be revised once in five years. Within such delegated powers, the UT Administration must be given full administrative and functional autonomy.c) The Union Government should review the requirement of personnel at different levels in both the UTs. The operating levels should be adequately manned. At the same time, the Government should examine the issue of having so many senior level posts in Daman & Diu, which has resulted in a top-heavy administration.170171State and District AdministationGovernance Issues in the North-Eastern StatesFig. 5.1 : Map of North-Eastern States of India5.1.3 The Partition in 1947 changed the socio-economic landscape of this region. It shared 4500 kms. of frontiers with 5 countries – the People’s Republic of China, Myanmar, Bangladesh (earlier East Pakistan), Bhutan and Tibet, whereas its connection with the Indian mainland was through a slender 22 kms. Siliguri corridor, also called the Gateway to the Northeast. This alteration in the geo-political environment led to severe market disruption and socio-economic distancing for the whole of the North Eastern Region and resulted in economic distortions, which have still not been fully overcome.5.1.4 The quest for ethnic and regional identity, nationalism, and ideological motivations formented a climate of insurgency in several parts of the Region. It has resulted in political fragmentation. This climate has found further support from a large number of factors such as, the slow pace of development, difficult terrain, dense forest cover, open borders with Myanmar and Bangladesh failure to adopt sustained measures of conflict resolution and the approach of ‘one size fits all’.5.1.5 The standard of living of the people in the region, as measured by the per capita Gross State Domestic Product (GSDP), has lagged significantly behind the rest of the country. At Rs. 18,027 in 2004-05, it was less than the all-State average of Rs. 25,968 by 31 per cent. Interestingly, available information shows that at the time of Independence per capita income in the undivided State of Assam was higher than the national average by 4 per cent. Thus, even under the British colonial rule the economic performance of the region was better than in many parts of the mainland and this shows its vast developmental potential. In the post Independence era, the economy of the region went on a path of decline and the growth rate of per capita GSDP started lagging behind the rest of the country and by the late 1960s, the per capita income in the region had dipped substantially. With the introduction of market-based economic reforms, the difference in the growth rates increased still further. During the period 1990-91 to 2004-05, on an average, while the aggregate GSDP of all States at constant prices increased at the rate of 6 per cent per year, the corresponding growth for the region was 4.4 per cent. Similarly, the region’s growth rate of per capita income (2.5 perSource: Annual Report, 2007-08, Ministry for the Development of the North-East Region172173State and District AdministationGovernance Issues in the North-Eastern States174cent) lagged behind the average growth rate of the country (4 per cent) during the period by 1.5 percentage points. Not surprisingly, the difference between the per capita income of the region and the all India coverage has steadily diverged. In 1990-91, the region’s per capita income at current prices was lower than the national average by 20 per cent, a gap that widened to 31 per cent by 2004-05.5.1.6 The aggregate picture presented above, however, hides the differences that exist between the urban and rural areas, between the hills and plains and among the States of the region. Except for Mizoram, Nagaland and Sikkim which recorded marginally higher growth rates than the national average, the per capita income levels in other States were low. Assam, the largest among the North Eastern States had the lowest per capita income at Rs. 15,661 which was lower than the national average by 40 per cent. Even in the three States with per capita income levels higher than the national average, much of the income generated was on account of government spending. In fact, the share of income generated by public administration at 10.6 per cent was significantly higher in the region than in the rest of the country (6.3 per cent). It was as high as 17 per cent in Arunachal Pradesh, Manipur and Sikkim. This underlines the overwhelming dependence of the population on the government for generating income, and a lack of productive economic activities in the primary, secondary and tertiary sectors of the economy.5.1.7 The region lags behind the rest of the country not only in terms of per capita GSDP but in several other development indicators as well. People do not have access to basic services in adequate measure. The standard development indicators such as road length, access to healthcare, and power consumption in the region are below the national average (Table 5.1).229.82002219.3755.4660.9284.4512.11140.91554.1426.5(km/1000sq. km area)Road length133.785.31267.987.2397.7110.4352.270.05144.8113.1411.1Consum-Per capitaElectricityption (kwh)82.29Forest52.0554.5234.45coverage61.5575.7160.0142.3423.57(%) 200321,91916,29915,66118,0322004-05GSDP (Rs)Per capita13.220,7759.515.013.430,357+16.526,129+26,21514.414.115.224,984++13.9#25,944*23.6Povertyon MRP-ption2004-05Consum-Ratio basedrate78.01385752303434666145Infant2005-06(per’000)Mortality88.854.345#68.564.364.870.568.866.662.673.22001rate (%)Literacy89.112.464.285.931.194.534.264.2Tribals as% age oftotalpopulation23.19Table No. 5.1: NER States: Various Development Indicators(lakh5.418.9819.9010.9831.9922.94266.55persons)389.8410,287.37Population2001Area22,32710,48622,42978,43883,74316,5793287240(sq. km)Mizoram22,081Sikkim7,098262179IndiaNagalandMeghalayaTripuraManipurNER StatesAssamArunachal PradeshStateNote : # Simple averages used for NER,? + Refers to estimated per capita GSDP for 2003-04 and 2004- 05,? ++ refer to its estimated value for 2004-05,? *Per capita GDP at factor cost (RE) from RBI, Handbook of Statistics on the Indian Economy, 2005-2006175State and District AdministationGovernance Issues in the North-Eastern StatesBox No. 5.1 : Socio-economic and Cultural Features of the North-Eastern RegionRegional Peculiarities- The hallmark of the eight political units is the diversity on account of terrain, climate, ethnicity, culture, institution, landsystem, language, food habits, and dresses and so on.- These States have evolved in different time and function under different provisions of the Constitution of India.- The regional identity of eight states as NER is a concept based on extreme intra-regional diversity.Physiographic Profile- The total area of NER is 2.62 lakh sq. km (7.98 % of India’s total).- Divided into discrete plains encompassed within hills (>70%).- Hills are generally rugged and vast areas are inaccessible.- Relief varies from less than 50 m to more than 5000 m above mean sea level (amsl) and falls in high seismic zone.- Four physiographic divisions – Active Flood Plains, Flood-Free Plains and Valleys, Low Hill Areas (100 to 1000 m amsl) andHigh Hill Areas (>1000 m amsl).- Soil mostly acidic which adversely affect both animal and crop productivity.- Climate is characterized by heavy precipitation (226mm to 602mm) during the four monsoon months (June to September).- Located in the threshold of sub-tropics and has six agro-climatic zones.Social Composition- Home of over 140 major tribes out of 573 in the country besides nontribal with diverse ethnic origin and cultural diversity(2001 Census).- The ST population (2001 Census) is 12.41% of India’s ST total. It is 26.93% of NER’s total population.- SC population is 1.49% of India’s total. It is 6.40% of NER’s total population.Local Governance System- The modern and traditional system of governance co-exist in the region.- The age old traditional but unrecognized local bodies exist and functions (ex. Kebang among the Adis in Arunachal Pradesh, Mei among the Karbis of Assam, Khullakpa among the Kaboi in Manipur, Durbar Shong among the Khasis and Jaintias in Meghalaya etc.).- PRI functions in Arunachal Pradesh (GP- 1747; PS- 150 and ZP -15) and Sikkim (GP- 159 and ZP -4) as on April, 2005.- Both PRIs and Autonomous Council (AC) function in Assam (GP- 2489; PS- 203 and ZP -20 and AC- 5); Tripura (GP- 537; PS- 23 and ZP -4 TTAADC - 1) in Manipur (GP- 166 and ZP -4 and AC- 4); as on April, 2005.- Autonomous Council functions in entire Meghalaya (AC-3). In Mizoram, both Village Council (702) and AC (3) function while in Nagaland only Village Council (1029); as on April, 2005.Land Tenure System- Two broad types of land tenure systems operate in the region: (i) Revenue administration under government operates in the plains and valleys of Assam, Tripura, Manipur and in the hilly state of Sikkim and (ii) Customary land tenure system under Village level authority operates in the hilly states of Arunachal Pradesh, Meghalaya, Mizoram and Nagaland and in the hilly parts of Assam, Manipur and Tripura.- Cadastral survey is not done in these areas.- Land is held almost by all. Landless people are negligible in number. Marginal (<1 ha) and small farmers (1.0-2.0 ha) are the two dominant categories (78.92 %)- Distribution is largely egalitarian rooted in the principle of community way of living and sharing.- Operational availability of land is a small fraction of total availability in the hills.Demographic Profile- Total population is 388.58 lakh and is 3.79% of India’s total (2001 Census).- Mizoram is highly urbanized (49.63%) followed by Manipur (26.28%) and Sikkim is at the bottom (11.07%)- The population density is 149 per sq. km as against 324 at all India level. The highest is in Assam (340) followed by Tripura (304). All the hill states have dispersed population with lowest density in Arunachal Pradesh (13).- Sex ratio (2001 Census) is higher (937) as against all India level (933). It is highest in Manipur (978) followed by Meghalaya (975), Tripura (950), Mizoram (938) and lower than all India average in Assam (932), Nagaland (909), Araunachal Pradesh (901) with lowest in Sikkim (875).- The potential work force (15-59 years) constitutes 56.97% as against all India figure of 56.93%. It is highest in Manipur (59.45%) followed by Sikkim (59.34%), Mizoram (59.09%) Tripura (58.96%), Nagaland (58.62%) and lower than all India level in Assam (56.63%), Arunachal Pradesh (55.02%) and Meghalaya (52.90%).- Literacy rate is marginally higher (65.83%) compared to all India level (64.80%).- Female literacy is higher in all the states (56.03% in Assam to 86.13% in Mizoram) as against all India level (54.16%) except in Arunachal Pradesh (44.24%).Source: Report on Poverty Eradication / Alleviation in North East India - NIRD5.1.8 The top-down module of development planning has not involved people in designing and implementing the programmes and, not surprisingly, the relationship between public spending and service delivery outcomes has been tenuous. Public projects in the region have not yielded commensurate benefits. Lack of people’s involvement has robbed the system of a sense of belonging and led to inefficient and wasteful resource allocation on the one hand and a lack of social accountability on the other.5.1.9 The situation is further compounded by the weak administrative capacity of the State institutions which have not been able to contain elements indulging in armed insurgency and extortion. The overall environment together with an adverse perception has been a major deterrent to private sector initiatives in economic activities in this part of the country.5.1.10 With an area of 2.62 lacs sq.kms (7.98% of the country’s area) and a population of around 4 crores, the per capita cultivable land availability in the NER is limited. Over the years the land-man ratio has turned uneconomical. Except for the Imphal Valley in Manipur and some pockets in other States, the agricultural yield in the entire region is low, primarily because of soil acidity.5.2 Natural Resources and Constraints9 5.2.1 Hydro Electric Power Potential5.2.1.1 The region has the potential to generate 63257 MW of hydel power (42.54%), against an estimated 148701 MW for the whole country. Arunachal Pradesh alone can generate as much as about 50328 MW - around 80% of the total hydro-power potential of the NER and 34% of the total potential of the country. Despite this recognition, there is much to be done as hydro power generation requires mega investments. The Planning Commission has suggested an approach which has a two-pronged strategy; one is to have a focus on small/localized hydel and thermal stations for local needs and second to have high capacity hydel power units and thermal power projects with associated transmission lines for meeting the overall demands of the region and for selling the excess to the national Grid. Transmission, subtransmission and distribution system improvements have been identified as thrust areas for the Eleventh Plan. It is also envisaged to prepare a composite master plan for power development of the entire region including appropriate funding mechanism.5.2.2 Forest Resources5.2.2.1 The forests of the North Eastern Region face unrelenting pressures from the increasing population and galloping development needs. It has resulted in alarming levels of degradation and deforestation. Over-exploitation due to the shortening cycle of shifting1761779Source: Document of the Planning Commission : Spatial Development and Regional Imbalance (11th Plan document on NER)State and District AdministationGovernance Issues in the North-Eastern Statescultivation is one of the key factors behind it. The biodiversity of the region is in deep peril.5.2.2.2 The statistics of NER forests reveal some contradictory trends. One set of data (forest survey) shows a steady reduction in forest cover at an annual rate of 0.15% during 1991–2001, whereas, the State-level data exhibits a marginal increase in almost all the States during the period 1997–2001. It has led to a perception that the biological potential for carbon finance in the forest sector of the NER is substantial. Planners suggest taking up large scale afforestation and reforestation in the entire region. This again needs huge investment, which the States are unable to meet from their own resources.5.2.3 Natural Calamities5.2.3.1 The entire North-East Region suffers heavily on account of floods and landslides. Damages caused by floods, which assume an alarming proportion, in the Brahamputra and Barak Valleys of Assam, exert considerable strain on the economy not only of Assam but also of other North Eastern States. Besides working on temporary measures such as construction of embankments and spurs, taking long term measures such as erection of multi-purpose storage dams is the need of the hour.5.2.4 Primary Sector Development5.2.4.1 The pattern of agricultural growth has been uneven across the region. The NER is a category of its own kind. With about 8% of the country’s area geographically, its contribution to the country’s foodgrain production is just 1.5%.5.2.4.2 Agriculture, horticulture and related activities could be the prime movers of the region’s economic growth and hence should be the focus of development planning for the whole of this area. The overall thrust of the Eleventh Plan, in the NER is on ensuring availability of critical inputs such as fertilizers, HYV seeds and institutional credit. The implementation of such a region-specific strategy will depend heavily on the performance of the State-level agencies.5.2.5 Road Ahead5.2.5.1 The Vision Document 2020 of the North Eastern Region prepared by the Ministry of DONER and North Eastern Council has identified 9 critical areas which need priority attention for bringing peace and prosperity in the region by the year 2020. These are:a)Catching up with the rest of the country Bringing structural transformation in the economiesd)Poverty alleviatione)Maximising self-governancef)Harnessing resources for the benefit of the peopleg)Building capacity in people and institutionsh)Strengthening infrastructurei)Creating a centre for trade and commercej)Effective governance : establishing peace and harmony5.2.5.2 The strategy would be: (a) empowering people for decentralized governance and participatory development (b) ensuring gender sensitivity in governance (c) accelerating agricultural growth, rural development and expanding non-farm employment (d) developing sectors with comparative advantage (e) capacity building of people and institutions (f) strengthening infrastructure and connectivity and (g) raising resources for development5.2.5.3 An efficient governance system is a sine qua nonfor actualization of such an ambitious strategy5.2.5.4 In the North-East, the ethnic diversity of the region and susceptibility to serious militancy and linguistic and communal violence have given rise to peculiar problems of governance. As such, the Commission deems it a special responsibility to look at the governance issues of this region in greater detail and suggest measures that need to be taken.5.2.5.5 The polity and administration in this region are marked by certain special features and issues. They are:-(a)Ethnic conflicts – in places, manifesting as territorial conflicts and violence.(b) Existence of special Constitutional provisions under the Sixth Schedule of the Indian Constitution applicable to the administration of tribal areas in the StatesBox No. 5.2 : Purpose of VisionStatement – 2020 for the NERThe purpose of this Vision document is to return the North Eastern Region to the position of national economic eminence it held till a few decades ago; to so fashion the development process that growth springs from and spreads out to the grassroots; and to ensure that the Region plays the arrow-head role it must play in the vanguard of the country’s Look East Policy.Source: Vision Statement 2020 for the NER.178179State and District AdministationGovernance Issues in the North-Eastern Statesof Assam, Meghalaya, Tripura and Mizoram which provides for creation of Autonomous Councils.(c) Adhoc transfer of subjects / activities to the Autonomous Councils, leading to differences in devolution and impediments in the implementation of the transferred powers.(d) Predominance of non-elected customary heads / bodies at the village level; issue of Village Self Governance in the Sixth Schedule Areas.(e) Absence of linkage between the Sixth Schedule and the 73rd amendment.(f) Special powers of the Governors with respect to Sixth Schedule areas.(g) Special provisions in the Constitution under Articles 371A, 371B, 371C, 371F, 371G and 371H applicable to North-Eastern States; special responsibility given with respect to law and order to the Governors of Nagaland under Article 371A and Arunachal Pradesh under Article 371H.(h) Creation of Special Autonomous Councils under State enactments in Assam and Manipur.(i) Administration of tribal areas outside the purview of both the Sixth Schedule and the 73rd amendment.(j)Lack of capacity-building in administration and personnel management. These are dealt with in the following sections.5.3 Ethnic Conflicts – in Places, Manifesting as Territorial Conflicts and Violence (Problem of Insurgency and Law and Order)5.3.1 The Vision 2020 document in respect of the North Eastern Region has aptly noted that ‘Insurgency and underdevelopment, especially unemployment, feed on each other. Poor governance, corruption and economic performance sustain conditions for insurgency and alienation.’ It has also come to the conclusion that ‘... insurgency continuously hampers the economic performance of the region, so rapid economic development will not be possible without a proper strategic and security policy by the Central Government’. It has also identified the minima required. ‘... free and unhindered mobility of goods and services (infrastructure) across the region as well as within the region; well-defined property rights; and law and order and security of life...’.5.3.2 The document has further noted that ‘not less than 40 armed groups function in seven States, although only a clutch are dominant and powerful enough to make a substantial impact. The smaller ones function often either as extortionist rings or as part of a network of informers and rent collectors for the bigger ones...’‘Many of the armed groups are widely viewed in the NER as extortionists who have lost public support and have become, in the eyes of many, illegal enterprises which prey on fear and vulnerability and profit from extensive corruption, rent-seeking and poor governance’.5.3.3 A good law and order situation is a necessary condition for a robust economic development. It is also necessary for good governance as insurgents seek to intimidate public servants and interfere in political processes. Public servants have been killed in the line of duty, and assassination attempts made on political figures. The Commission is aware that both, the Union and the State Governments have been taking necessary steps to deal with the situation arising out of insurgency and poor public order in the North East. However, since the situation is still far from satisfactory, several more measures need to be considered. On the basis of discussions held with the State Governments and with people well conversant with the region, the Commission would specifically like to recommend the following:i.Need for continued political dialogue: Political dialogue to address genuine and legitimate concerns will need to continue. The experience of Mizoram, where peace was established through negotiations after years of insurgency is an example of what is possible through sincere, wise and good faith dialogue. Any agreement arrived as a result of such dialogue, however, needs to be adhered to rigorously. At present there is an agreement between the Union Government and one of the major insurgent groups. But it has been brought to the notice of the Commission that these are being constantly flouted by the insurgent groups. For example, the agreement stipulates that insurgents must stay in designated camps and not venture out with arms. Notwithstanding this agreement, armed groups are reported to be active in Manipur and Arunachal Pradesh, thus flouting this important condition of the ceasefire. Laxity in adherence to agreements devalues the process of negotiations and it is, therefore, necessary to ensure that all parties to the agreement abide by their commitments.ii.The police must act to uphold the law. The police is an instrument of the State Government and maintenance of law and order is the responsibility of the State Government. In its earlier Reports on Public Order and Conflict Resolution, the Commission had recommended that law and order problems must be handled by the State Police with the Armed Forces in the background. The180181State and District AdministationGovernance Issues in the North-Eastern States182Commission re-iterates these recommendations and again emphasizes that it would be necessary to upgrade the capacity and capability of the police forces through better training, better arms and, wherever required, more manpower. Since the State Governments lack adequate financial and training resources, the Union Government will need to make special provisions in respect of these States.iii. Diplomatic efforts: Diplomatic efforts aimed at controlling cross border movement of insurgents have yielded good results in the past. For example, the denial of sanctuaries in Bhutan to insurgents in Assam contributed to improvement of law and order in that State. No doubt, similar efforts are ongoing between the Government of India and Governments of neighboring countries like Bangladesh and Myanmar, and these need to be pursued to bring about positive results.5.3.4 Enhanced Role of the Union Government5.3.4.1 The Commission is of the view that while the role of the State Governments in ensuring stability in their respective jurisdiction (region) is critical, in view of the extenuating circumstances which are listed below, the Union Government’s active support and intervention, needs to be further strengthened:(a) Insurgency and cases of extortion have inter-state ramifications and the Ministry of Home Affairs would, therefore, have a special responsibility to ensure necessary coordination pertaining to intelligence, conducting joint operations etc.(b) With the exception of Tripura and Sikkim, all the hill States abut Assam, as they were carved out of Assam. There are a number of boundary disputes which every now and then erupt into confrontation between people and between States. Boundary disputes cannot be left to the States to manage and the Union Government has a significant role in steering agreements. Boundary disputes often distract attention from more fundamental concerns like insurgency and should not be permitted to occupy centre-stage.(c) The Vision 2020 documents have identified various measures that need to be taken for the human resource and economic development of the North Eastern Region. The main challenge, however, is timely implementation. The Commission, therefore, would suggest that the Union Government (Ministryof Home Affairs, Planning Commission and subject matter Ministry) along with State Governments specify specific targets within important parameters (for example infant mortality reduction, increased literacy, productivity in the primary sector, connectivity etc.) that should be set for achieving these in a definite time frame. Five year Plans and Annual Plans should flow from these targets.(d) At present, the work pertaining to the North Eastern Region is primarily allocated to the Ministry of Home Affairs and the Ministry of Development of North Eastern Region. In its seventh Report, the Commission has recommended the winding up of the Ministry of DONER and suggested that the Home Ministry may be the nodal Ministry in respect of this region and that the North Eastern Council should be suitably strengthened and restructured. On further consideration, the Commission would like to suggest some additional measures at the Union Government level to deal with the North Eastern Region, as follows:5.3.5 Ministry of Home Affairsi)At present there is a North East Division in the Ministry of Home Affairs which is headed by a Joint Secretary. The Commission, however, feels that for handling the increased workload (with many issues of a sensitive nature), a separate Wing in the Ministry of Home Affairs under either a Special Secretary or an Additional Secretary familiar with the North East Region and with adequate manpower should be created.ii) A Standing Committee of the National Development Council (NDC) with the responsibility of overseeing the formulation and implementation of the Plans for the region should be constituted. Since law and order and development are inter-related this Committee would also need to have security issues that impinge on development in its purview. The Standing Committee may be headed by a Cabinet Minister selected by the Prime Minister and should report twice a year to the Chairman, NDC.5.3.6 Recommendations:a)In order to address the genuine and legitimate concerns of the local people,there is need to continue political dialogue among various stakeholders. Steps should be taken to upgrade the capacity and capability of the police183State and District AdministationGovernance Issues in the North-Eastern States6. The Garo Hills District Autonomous Council (GHAC) Tripura7. Tripura Tribal Areas District Autonomous Council (TTADC) Mizoram8. The Chakma District Autonomous Council9. The Mara District Autonomous Council10. The Lai District Autonomous Council5.4.2 The philosophy behind the Sixth Schedule of the Constitution is to protect tribes, their population and their interests by constitutionally mandating a special kind of autonomous governance structure. The Schedule endows these Councils with extensive, legislative, judicial, executive and financial powers, the details of which are as follows:-forces of the States so that they are able to uphold the law. In order to control cross border movement of insurgents, in addition to other measures, diplomatic efforts should be stepped up.b) The North-East Division of the Ministry of Home Affairs should be upgraded to a separate wing and put under the charge of an Additional/ Special Secretary to handle the increased and complex workload pertaining to the region.c)To oversee the formulation and implementation of the plans for this region,a Standing Committee of the National Development Council should be constituted and may be headed by a Cabinet Minister. The Committee should report to the Chairman, NDC twice a year to ensure both speedy resolution of any differences and coordinated action regarding development of the region.5.4 Provisions of the Sixth Schedule of the Constitution with respect to Assam, Meghalaya, Tripura and Mizoram5.4.1 One of the most important features of administration in the north-east is the Sixth Schedule of the Constitution which provides for the setting up of Autonomous Regional/ District Councils in the four States of Assam, Tripura, Meghalaya and Mizoram. These provisions have been made in exercise of the enabling provisions given in Article 244(2) and 275(1) of the Constitution. Currently, the following ten Autonomous Councils are functioning in these States.Assam1. The North Cachar Hills District Autonomous Council (NCHAC)2. The Karbi Anglog District Autonomous Council (KAAC)3.Bodoland Territorial Council (BTC)Meghalaya4.Khasi Hills District Autonomous Council (KHAC)5.Jaintia Hills District Autonomous Council (JHAC) 5.4.3 Legislative Powers of District and Regional Councils5.4.3.1 Under Para 3, District and Regional Councils are empowered with the assent of the Governor, to make laws with respect to:(a) The allotment, occupation or use, or the setting apart, of land, other than any land which is a reserved forest for the purposes of agriculture or grazing or for residential or other non-agricultural purposes or for any other purpose likely to promote the interests of the inhabitants of any village or town;(b) The management of any forest not being a reserved forest;(c) The use of any canal or water-course for the purpose of agriculture;(d) The regulation of the practice of jhum or other forms of shifting cultivation;(e) The establishment of village or town committees or councils and their powers;(f) Any other matter relating to village or town administration, including village or town police and public health and sanitation;184185State and District AdministationGovernance Issues in the North-Eastern States(g) The appointment or succession of Chiefs or Headmen;(h) Inheritance of property;(i)Marriage and divorce; and(j)Social customs.5.4.3.2 Under Paragraph 2(7), the District or the Regional Council is empowered to make rules inter alia, regarding formation of subordinate local Councils or Boards and their procedure and the conduct of their business, with the approval of the Governor. In addition, Paragraph 10 empowers District Councils to make regulations for the control of money-lending and trading by non-tribals.5.4.4 Judicial Powers of District and Regional Councils5.4.4.1 Paragraph 4 provides for Regional and District Councils to constitute Village Councils or Courts to the exclusion of any Court in the State for the trial of suits and cases between Scheduled Tribes within such areas, with certain exceptions. The Regional or District Council can appoint members and presiding officers of such Village Councils The Regional and District Council are also empowered to act as, or constitute separate Courts of Appeal.5.4.5 Executive Functions of District Councils5.4.5.1 The range of executive functions of District and Regional Councils vary from Council to Council, based on several amendments made to the Sixth Schedule. The common range of executive functions are laid down in Paragraph 6, under which District and Regional Councils are empowered to establish, construct, or manage primary schools, dispensaries, markets, cattle pounds, ferries, fisheries, roads, road transport and waterways in the district and may make regulations for their regulation and control. It is also specifically empowered to prescribe the language and the manner in which primary education shall be imparted in the primary schools in the district. Functions relating to agriculture, animal husbandry, community projects, co-operative societies, social welfare, village planning or any other matter to which the executive power of the State extends can also be entrusted to Councils.5.4.6 Financial Powers of District and Regional Councils5.4.6.1 Constitution of District and Regional Funds: Para 7 provides for each autonomous district, a District Fund and for each autonomous region, a Regional Fund to which shall be credited all moneys received respectively by the said District and Regional Councils. The accounts of the District and Regional Councils are to be maintained as prescribed by the Comptroller and Auditor-General of India, who is also entrusted with their audit.5.4.6.2 Powers to Collect Taxes and Fees: Para 8 gives powers to Regional and District councils to assess and collect land revenue and to impose taxes within their jurisdictions such as on lands and buildings, on professions, trades, callings and employments, animals, vehicles and boats, on the entry of goods into a market, tolls on passengers and goods carried in ferries and for the maintenance of schools, dispensaries or roads.5.4.6.3 Entitlement to Royalties: Para 9 entitles the District Council to receive a share of the royalties accruing each year from licences or leases for the purpose of prospecting for, or the extraction of, minerals granted by the State Government in respect of any area within an autonomous district as agreed upon with the Government. Disputes in this regard are to be referred to the Governor for settlement.5.4.6.4 Indication of resources to be credited to Councils: Under Paragraph 13, estimated receipts and expenditure pertaining to autonomous districts which are to be credited to, or is to be made from the State Consolidated Fund shall be first placed before the District Council for discussion and then shown separately in the annual financial statement of the State to be laid before the Legislature of the State under Article 202.5.4.7 Need for Redrafting Some Provisions of the Sixth Schedule5.4.7.1 Over the years, the Sixth Schedule has undergone more than ten amendments. The amended provisions have been ‘anchored’ rather disjointedly in the text of the Schedule making their reading and comprehension a rather cumbersome exercise. There is need to bring clarity. The Commission is of the view that an exercise can be undertaken to incorporate provisions which currently occur as footnotes, in the main text of the Schedule. This will make the Schedule more accessible to members of the public.5.4.8 Recommendation:a) The Government may undertake an exercise to incorporate provisions which currently occur as footnotes, in the main text of the Sixth Schedule. Thiswill make the Schedule more accessible to members of the public.187186State and District AdministationGovernance Issues in the North-Eastern States5.5 Adhoc Transfer of Subjects / Activities to the Autonomous Councils5.5.1 Sixth Schedule Councils in Assam, Meghalaya, Tripura and Mizoram have been given legislative powers with respect to the subjects listed in para 3 of the Schedule. In addition, these Councils have also been given powers to legislate on few additional subjects under para 3A and 3B of the Schedule; 3A with respect to NCHAC and KAAC and 3B for BTC. The legislation under 3A and 3B, however, needs prior assent of the President. Alongwith the legislative powers, some explicit executive and regulatory functions have also been entrusted to the Councils. These are;(i)To establish Primary Schools, Dispensaries and similar public utilities;(Paragraph 6)(ii)Power to levy, assess and collect land revenue; professions tax; taxes on animalboat and ferry; market and toll taxes; and taxes for maintenance of schools dispensaries and roads. (Paragraph-8)(iii) Power to control money lending by non tribals and to grant licenses to non tribal money-lenders in Assam and Meghalya, and power to control and regulate money lending by tribals and non tribals alike in Tripura and Mizoram; (Paragraph 10).5.5.2 Due to historical reasons and also on account of lack of proper understanding of the Constitutional scheme, a notion prevails that the role of the Autonomous Councils is confined to passing laws, establishing and administering justice through local courts and generally taking up a few regulatory functions. They are not expected to have any role in development matters. Even though some subjects stand formally transferred to the Councils under the Sixth Schedule, the State Governments have been slow in transferring related executive powers and control over the corresponding departments to them. The State Governments have continued to retain parallel development and administrative apparatus under their own command. This has led to functional overlap and conflicts between the States and the District Councils. The spirit and pattern of the Sixth Schedule clearly imply that the Autonomous Councils should have their own role in matters concerning local development.5.5.3 The Indian Constitution does not specifically prescribe any separate division of executive powers between the States and the Union Government. Article-73 (1) providesthat the executive power of the Union extends “to matters with respect to which Parliament has power to make laws;” Article 162 mutatis mutandis applies the same principle to the States. In other words, the executive powers of the Union and those of the States co-exist with their respective legislative powers. The powers given to Autonomous Councils under Schedule 6 also need to be interpreted in the same light: the legislative powers of the Sixth Schedule Councils in Paragraphs 3, 3A and 3B are to be taken as their executive powers.5.5.4 Hence, the Commission is of the view that there is need to ensure devolution of activities relating to subjects mentioned in Para 3, 3A and 3B of the Schedule to the Autonomous Councils. While devolving activities the functions and responsibilities should be clearly delineated between different levels of administrative structures based on the principal of subsidiarity. In this context, it would be useful to refer to and adopt principles enunciated by the Commission for local bodies in its Report on ‘Local Governance’ (Sixth Report - Para 4.2.3.10). This will necessitate full transfer of field offices and institutions dealing with transferred functions and activities to the control of the Councils. The concerned State Governments may set up a Task Force to complete this work within a time bound manner (one year). A similar excercise will need to be carried out by the Union Government in respect of the Centrally Sponsored Schemes which are being implemented in these areas.5.5.5 Recommendations:a) The power of the Councils to make laws, as permitted by the Schedule, should be respected in its true spirit and draft legislations should not be stalled at the State level for years, while ensuring that they are not inconsistent with the provisions of the Constitution and relevant Union and State Laws.b) The States should undertake comprehensive activity mapping with regard to all the subjects mentioned in Para 3, 3A and 3B of the Sixth Schedule. This mapping should cover all aspects of the subjects viz planning, budgeting and provisioning of finances. This will necessitate full transfer of all government offices and institutions dealing with these activities to the control of the Councils. The State Government should set-up a Task Force to complete this work in a time span of one year.c) The Union Government should also take similar action with regard to Centrally Sponsored Schemes being implemented in these areas.188189State and District AdministationGovernance Issues in the North-Eastern States1905.6 Predominance of non-elected Customary Heads / Bodies at the Village Level; Issue of Village Self Governance in the Sixth Schedule Areas5.6.1 When the Sixth Schedule arrangements were formulated in the North-East, tribal customs reigned supreme in these areas. During the early years of the Constitution, there was no thought of elections at the village or district level and hence there was nothing unusual in the Sixth Schedule not paying attention to the democratic aspect of village self governance. The idea of a two / three tier elected panchayat structure germinated only with the Balwant Rai Mehta Committee Report in 1957. With various rural development schemes and programmes becoming village centric and with Panchayats (in non scheduled areas) increasingly becoming involved in implementation of such programmes, the issue of village governance in scheduled areas came to the fore.5.6.2 The Expert Committee on Planning for the Sixth Schedule Areas recommended that “representative bodies for Village Development in whatever manner named, need to be constituted through legislation enacted by the Councils themselves. The fears and apprehensions that such councils may transgress into the powers of the Traditional Village level bodies are overstated. The system in Assam can be patterned as existent in Nagaland, where the traditional Council and the development body coexist. The communitisation of public services in Nagaland through Village Development Boards in Nagaland can be kept in mind when framing rules for village councils.”5.6.3 The Committee further observed that “the size and extent of such grassroot level bodies can vary depending upon the local terrain and habitation pattern. For instance, in NCHAC areas, clustering of scattered habitations for the formation of village councils could be envisaged. Since the councils would use their own legislative powers to constitute such bodies, their scope and ambit could easily be harmonized with the Traditional village level councils. This way, the apprehension of the traditional Chiefs that Panchayati Raj is being imposed on them, can be allayed. There is a need to highlight success stories of village level peoples’ mobilization through NGO projects such as those operated by the IFAD, to stress the benefits that such arrangements carry for development. Arrangements adopted for village level planning and implementation for NREGA may be adopted for planning and implementation of other programmes also.”5.6.4 The Commission also examined this issue in its Report on Capacity Building for Conflict Resolution (7th Report) while dealing with conflicts in the North East and came to the conclusion that :-a.Measures should be taken to ensure that all the Autonomous Councils pass suitable legislation for establishing of village level bodies with well defined powers and a transparent system of allocation of resources.b.Stipulation may be made in the rules relating to release of grants to the Autonomous Councils to the effect that passage of appropriate legislation for elected village level bodies and its implementation, will entitle the Councils to additional funding.c.It is imperative that in all States where village bodies administer justice under customary laws by virtue of the Sixth Schedule or other laws, such laws are duly codified.5.6.5 The Commission reiterates the above views. As is envisaged the village level Councils will need to be constituted by law to be passed by the respective Autonomous Councils. It may be worth while to briefly enunciate certain general principals that may be followed by the Councils while constituting village level Councils within their jurisdiction. Apart from the elected members, the traditional village functionaries will also need to be included in these Village Councils as ex-officio members. However, it needs to be ensured that the majority of the members are elected. The Village Councils so constituted should be involved and made responsible for implementation of development schemes at the village level including planning, site selection, monitoring of implementation and selection of beneficiaries. Their role could be equated with Village Panchayats in implementation of schemes meant to be implemented through the PRIs. At the same time the Commission feels that the appropriate District Council legislation may, if considered advisable, provide for different arrangements for administration of justice and prevention of crimes.5.6.6 Recommendations:a) Autonomous Councils should be encouraged to pass suitable legislation for establishment of elected bodies at the village level with well defined powers and a transparent system of allocation of resources.b) Suitable stipulations may be made in the procedure for release of grants to the Councils that a certain portion thereof will be disbursed only in the event of a Council passing and implementing the legislation referred at (a) above.191State and District AdministationGovernance Issues in the North-Eastern States5.7.3 Recommendation:a) Autonomous Districts/Councils in Sixth Schedule Areas should also be covered by the State Finance Commission and the State Election Commission.5.8 Special powers of the Governors of Assam, Meghalaya, Tripura and Mizoram with respect to Schedule 6 areas.c) While an Autonomous District Council should be free to lay down a suitable framework for Village Councils under its jurisdiction, this freedom should be subject to certain general principles such as, the number of ex officio members/ traditional village functionaries should not be in a majority and the Village Council should be responsible for implementation of development schemes at the village level (including planning, monitoring and selection of beneficiaries).5.7 Absence of Linkage between the Sixth Schedule and the 73rd Amendment.5.7.1 Article 243M (1) expressly keeps the Sixth Schedule areas out of the purview of Part IX of the Constitution (inserted through the 73rd amendment) as the organizational paradigm in this part is at radical variance with the system prevailing in the rest of the country. Their standalone existence puts them perpetually at the mercy of the State Governments for budgetary support. They find themselves at a distance from Constitutional bodies such as the State Finance Commission or the State Election Commission. There is a view that the ‘supportive provisions’ of Chapter IX, the State Finance Commission and the State Election Commission (Articles 243-I and 245K respectively) could be beneficial to the District/ Regional Councils. Adequate objectivity and transparency would be needed in transfer of resources from the State Government to these bodies. Similarly, there are definite advantages if an independent body oversees preparation and conduct of elections to the Councils/ Village Councils. In Tripura, the State Election Commission has already been involved in conduct of elections for the Tripura Tribal Areas Autonomous District.5.7.2 While examining various characteristics of conflicts in the North East in its Seventh Report, (dealing with Conflict Resolution) the Commission observed that, “another emerging area of conflict is the rising disparity between the autonomous Councils and the local bodies established in pursuance of the Seventy-third Amendment as the latter are being more liberally funded through the State Finance Commissions. This disparity is likely to become particularly important in Assam and Tripura where both categories of local bodies co-exist. Similarly, there is a feeling of discontent in the two older Councils of Assam over what is perceived as preferential treatment to the new autonomous Council viz the Bodoland Territorial Council, in the matter of procedures relating to release of funds as well as the basis of budget allocations etc. While Article 243 M (1) expressly exempts areas under the Sixth Schedule from operation of the Seventy-third Amendment, there is no bar on some of the arrangements introduced by it to be engrafted in that Schedule.” (Para 12.6.3.1.6)5.8.1 The Sixth Schedule has vested the Governor of Assam, Meghalaya, Tripura and Mizoram with considerable special powers for administration of autonomous districts and regional councils. These powers are classified and briefly described below:Table No. 5.2 : Special Powers of Governors in Respect of the Sixth Schedule AreasDescription of the Power Entrusted to the GovernorTo constitute District Councils for each autonomous district as soon as possible and until constitution of District Council, to be the head of the administration of the districtDivide areas of District Council into autonomous regionsIssue notification for inclusion, exclusion, creation, increase, decrease unite or define areas of District Council or alter the name of any District CouncilFrame rules for the first constitution of District Council or Regional CouncilPlace one of the Ministers in charge of the welfare of the autonomous district region.Dissolve a District or Regional Council and assume to himself all or any of the functions or powers of the District or the Regional Council on the recommendation of the Commission appointed under Paragraph 14.Dissolve a District or Regional Council and assume to himself all or any of the functions or powers of the District or Regional Council if satisfied that the administration of the autonomous district or region cannot be carried out in accordance with the provisions of the Six Schedule to the Constitution.Powers to constitute District and Regional CouncilsPowers to dissolve and supersede CouncilsParagraphs2(6)191(2)1(3)14(3)16(1)16(2)Details of the Provision in the Sixth Schedule Brief Content192193State and District AdministationGovernance Issues in the North-Eastern StatesTable No. 5.2 : Special Powers of Governors in Respect of Schedule 6 AreasContd.Details of the Provision in the Sixth Schedule Brief ContentNominate four members in each District Council who hold office at his pleasureFor the purposes of elections to the legislative assembly of the State, declare that any area within an autonomous district shall not form part of any constituency to fill a seat or seats in the Assembly reserved for any such district, but shall form part of a constituency to fill a seat or seats in the Assembly not so reserved to be specified in the orderExtent of jurisdiction of the High Count over suits and cases tried by District Council CourtsConfer power under CPC and CrPC on District Council Courts for trial of specified nature of cases and withdraw or modify the sameEntrust conditionally or unconditionally all or any of the executive powers available to the State to the District Council or its officers with the consent of the District CouncilAnnul or suspend Acts and Resolutions of the District and Regional Council if such Act or resolution is likely to endanger the safety of India or is prejudicial to the public orderAssent to laws made by the District and Regional councils, without which they have no force of lawApprove the rules made by the District and Regional council for composition and delimitation of the Councils, qualification terms of office etc, of its members and generally for all matters regulating the transaction of business pertaining to the administration of the districtTable No. 5.2 : Special Powers of Governors in Respect of Schedule 6 AreasContd.Description of the Power Entrusted to the GovernorGive prior approval for the framing of regulations by the District Council for the regulation and control of primary schools, dispensaries, markets, road transport, waterways, etc.4(4)Approve rules regarding constitution procedure etc ofVillage Council and District Council Courts, made by the District and Regional Councils.7(2)Make rules for the management of district and regionalfund8(4)Give prior assent for regulations framed by Districtand Regional Councils for levy and collection of taxes, without which they do not have the force of law10(3)Give prior assent to regulations framed by the DistrictCouncil for the control of money lending, without which they do not have the force of law.9(2)Give the final decisions in respect of disputes betweenDistrict Council and Regional Council in cases of royalty for extraction of minerals, which shall be referred to the governor for resolutionAppoint a Commission to ensure into the administration of autonomous district regions.Report of Commission appointed under paragraph 14 is required to be laid before the State legislature with the recommendations (except in the case of State of Assam) with respect thereto.Discretionary Powers20BAof the GovernorConstitutionAmendment Act, 199520BB Constitution Amendment Act, 1988Source: “Planning for the Sixth Schedule Area”: Report of the Expert CommitteeDescription of the Power Entrusted to the Governorpowers or review decisionsPowers affecting electoralrepresentation in theCouncil areaPowers to enlarge, diminishof District and Regional CouncilsGive prior assent to laws,rules and regulations of theDistrict and Regional CouncilsParagraphs4(3)2(1)& 2(6A)6(2)3(3)2(7)51715(1)Powers of ArbitrationPowers to appoint a CommissionParagraphs6(1)14(1)14(2)Details of the Provision in the Sixth Schedule Brief ContentExercise of discretionary powers by the Governor in the discharge of his functions, with respect to Assam.Exercise of discretionary powers by the Governor in the discharge of his functions with respect to Mizoram and Tripur.194195State and District AdministationGovernance Issues in the North-Eastern States5.8.2 In addition to the above powers, some additional powers have also been conferred on the Governors of Assam, Tripura and Mizoram as described in the following Table:105.8.3 The empowerment of the Governor in a large number of provisions of the Sixth Schedule emphatically indicates that the role of the Governor is very special in these areas in the context of District and Regional Councils and the welfare of the concerned tribes. There is a need for the Governors to be proactive in order to empower tribal people and promote and facilitate local participative planning in Sixth Schedule areas. The spirit of the Sixth Schedule is that the Governors should function as custodians of tribal autonomy.5.8.4 While Analyzing the Role of the Governor in Sixth Schedule Areas, Two Sets of Provisions of this Schedule are of Particular Importance5.8.4.1 Provisions under paragraphs 12, 12A, 12AA and 12B5.8.4.1.1 These paragraphs deal with the application of Acts of Parliament and of the Legislature of the States of Assam, Meghalaya, Tripura and Mizoram to their autonomous districts and autonomous regions.12. Application of Acts of Parliament and of the Legislature of the State of Assam to autonomous districts and autonomous regions in the State of Assam“(1) Notwithstanding anything in this Constitution:-(a) no Act of the 3[Legislature of the State of Assam] in respect of any of the matters specified in paragraph 3 of this Schedule as matters with respect to which a District Council or a Regional Council may make laws, and no Act of the [Legislature of the State of Assam] prohibiting or restricting the consumption of any non-distilled alcoholic liquor shall apply to any autonomous district or autonomous region [in that State]unless in either case the District Council for such district or having jurisdiction over such region by public notification so directs, and the District Council in giving such direction with respect to any Act may direct that the Act shall in its application to such district or region or any part thereof have effect subject to such exceptions or modifications as it thinks fit;(b) the Governor may, by public notification, direct that any Act of Parliament or of the [Legislature of the State of Assam] to which theprovisions of clause (a) of this sub-paragraph do not apply shall not apply to an autonomous district or an autonomous region [in that State], or shall apply to such district or region or any part thereof subject to such exceptions or modifications as he may specify in the notification.(2) Any direction given under sub-paragraph (1) of this paragraph may be given so as to have retrospective effect.”12A. Application of Acts of Parliament and of the Legislature of the State of Meghalaya to autonomous districts and autonomous regions in the State of Meghalaya“Notwithstanding anything in this Constitution,–(a) if any provision of a law made by a District or Regional Council in the State of Meghalaya with respect to any matter specified in sub paragraph (1) of paragraph 3 of this Schedule or if any provision of any regulation made by a District Council or a Regional Council in that State under paragraph 8 or paragraph 10 of this Schedule, is repugnant to any provision of a law made by the Legislature of the State of Meghalaya with respect to that matter, then, the law or regulation made by the District Council or,AssamStates ConcernedTripura and MizoramTable No. 5.3 : Additional Powers to the Governors of Assam, Tripura and MizoramParagraphs9(3)12(1) (b)12Direct that any Act of the State legislature other than matters specified in paragraph 3 and legislation prohibiting or restricting the consumption of nay non-distilled alcoholic liquor shall not apply to any Autonomous District or an Autonomous Region or shall apply subject to such exceptions or modifications as may be notifiedlegislature other than matters specified in paragraph 3 and legislation prohibiting or restricting the consumption of any non-distilled alcoholic liquor shall not apply to an Autonomous District or an Autonomous Region or shall apply subject to such exceptions and modifications as may be notified.Details of the Provision in the Sixth Schedule Brief ContentPrescribe the period within which the royalty acquiring from grant of lease for extraction of minerals is to be shared between the State Government and the District CouncilDirect that any Act of Parliament or of the State19619710Source: ‘Planning for the Sixth Schedule Areas’; Report of the Expert CommitteeState and District AdministationGovernance Issues in the North-Eastern Statesas the case may be, the Regional Council whether made before or after the law made by the Legislature of the State of Meghalaya, shall, to the extent of repugnancy, be void and the law made by the Legislature of the State of Meghalaya shall prevail;(b) the President may, with respect to any Act of Parliament, by notification, direct that it shall not apply to an autonomous district or an autonomous region in the State of Meghalaya, or shall apply to such district or region or any part thereof subject to such exceptions or modifications as he may specify in the notification and any such direction may be given so as to have retrospective effect.”12AA. Application of Acts of Parliament and of the Legislature of the State of Tripura to the autonomous district and autonomous regions in the State of Tripura“Notwithstanding anything in this Constitution,(a) no Act of the Legislature of the State of Tripura in respect of any of the matters specified in paragraph 3 of this Schedule as matters with respect to which a District Council or a Regional Council may make laws, and no Act of the Legislature of the State of Tripura prohibiting or restricting the consumption of any non-distilled alcoholic liquor shall apply to the autonomous district or autonomous region in that State unless, in either case, the District Council for that district or having jurisdiction over such region by public notification so directs, and the District Council in giving such direction with respect to any Act may direct that the Act shall, in its application to that district or such region or any part thereof, have effect subject to such exceptions or modifications as it thinks fit;(b) the Governor may, by public notification, direct that any Act of the Legislature of the State of Tripura to which the provisions of clause (a) of this sub-paragraph do not apply, shall not apply to the autonomous district or an autonomous region in that State, or shall apply to that district or such region, or any part thereof, subject to such exceptions or modifications, as he may specify in the notification; (c) the President may, with respect to any Act of Parliament, by notification, direct that it shall not apply to the autonomous district or an autonomous region in the State of Tripura, or shall apply to such district or region or any part thereof, subject to such exceptions or modifications as he may specifyin the notification and any such direction may be given so as to have retrospective effect.”12B. Application of Acts of Parliament and of the Legislature of the State of Mizoram to autonomous districts and autonomous regions in the State of Mizoram“Notwithstanding anything in this Constitution,—(a) no Act of the Legislature of the State of Mizoram in respect of any of the matters specified in paragraph 3 of this Schedule as matters with respect to which a District Council or a Regional Council may make laws, and no Act of the Legislature of the State of Mizoram prohibiting or restricting the consumption of any non-distilled alcoholic liquor shall apply to any autonomous district or autonomous region in that State unless, in either case, the District Council for such district or having jurisdiction over such region, by public notification, so directs, and the District Council, in giving such direction with respect to any Act, may direct that the Act shall, in its application to such district or region or any part thereof, have effect subject to such exceptions or modifications as it thinks fit;(b) the Governor may, by public notification, direct that any Act of the Legislature of the State of Mizoram to which the provisions of clause (a) of this sub-paragraph do not apply, shall not apply to an autonomous district or an autonomous region in that State, or shall apply to such district or region, or any part thereof, subject to such exceptions or modifications, as he may specify in the notification;(c) the President may, with respect to any Act of Parliament, by notification, direct that it shall not apply to an autonomous district or an autonomous region in the State of Mizoram, or shall apply to such district or region or any part thereof, subject to such exceptions or modifications as he may specify in the notification and any such direction may be given so as to have retrospective effect.”5.8.4.1.2 The provisions contained in paragraphs 12, 12A, 12AA and 12B provide for different schemes with respect to:a)Laws of the State Legislature on the subjects mentioned in paragraphs 3, 3Aand 3B.198199State and District AdministationGovernance Issues in the North-Eastern Statesb)Laws of the State Legislature on the subjects other than those mentioned in para 3, 3A and 3B.c)Laws of the State Legislature on subjects mentioned in paragraphs 8 and 10d)Laws of the State Legislature prohibiting or restricting the consumption of any non-distilled alcoholic liquor; ande)Laws made by Parliament5.8.4.1.3 The applicability of the aforesaid five categories of laws to tribal areas of the States of Assam, Meghalaya, Tripura and Mizoram can be better understood by the followingTable No. 5.4 : Applicability of Union and State Laws to Tribal Areas of Assam, Meghalaya and MizoramSl. No.Category of lawsAssam (under para 12)Meghalaya (under (para 12A)Tripura (under (para 12AAMizoram (under para 12B)a. Laws of the State Legislature on the subjects mentioned in paras 3, 3A and 3B.Not applicable unless District Council so directs with or without modification.State Legislation prevails and District Council laws to the extent of repugnancy are void.Not applicable unless District Council so directs with or without modification.Not applicable unless District Council so directs with or without modification.b. Laws of theGovernor mayThere is no specialGovernor may directGovernor mayState Legislaturedirect not to applymention meaningnot to apply or maydirect not to applyon the subjectsor may applythereby that theapply with or withoutor may applyother than thosewith or withoutDistrict Council lawsmodification.with or withoutmentioned in paras 3, 3A andmodification.shall prevail.modification.3B.c. Laws of theThere is no specialState LegislationThere is no specialThere is no specialState Legislaturemention meaningprevails and Districtmention meaningmention meaningon the subjectsthereby that theCouncil Regulationsthereby that thethereby that thementioned inDistrict Councilto the extent ofDistrict CouncilDistrict Councilparas 8 and 10.regulations shall prevail.repugnancy are void.regulations shall prevail.regulations shall prevail.d. Laws of theNot applicableThere is no specialNot applicable unlessNot applicableState Legislatureunless Districtmention meaningDistrict Councilunless Districtprohibiting orCouncil so directsthereby that theso directs with orCouncil so directsrestricting thewith or withoutDistrict Councilwithout modification.with or withoutconsumption of any non-distilled alcoholic liquor; andmodification.regulations shall prevail.modification.Contd.Table No. 5.4 : Applicability of Union and State Laws to Tribal Areas of Assam, Meghalaya and MizoramSl.CategoryAssamMeghalayaTripuraMizoramNo.of laws(under(under(under(underpara 12)(para 12A)(para 12AApara 12B)e. Laws made by theGovernor mayPresident may directPresident may directPresident mayParliamentdirect not to applynot to apply or maynot to apply or maydirect not to applyor may applyapply with or withoutapply with or withoutor may applywith or without modification.modification.modification.with or without modification.“During the Commission’s visit to Assam and Meghalaya, representatives of the Councils expressed dissatisfaction about their inter-face with the State Governments concerned – there was a feeling that these autonomous bodies are treated as extensions of the Government. While the various provisions of the Schedule create an impression that the Governor under that Schedule is to act at his discretion, the present position is that in almost all matters the Governor acts on the aid and advice of the Council of Ministers. This is an important issue. There are provisions in the Schedule which envisage a role for the State Government. Paragraph 14(3), for instance, requires that one of the Ministers of the Government be put in charge with the subject of autonomous districts. Sub-paragraph (2) of the same provision requires that the report of Commission for inquiring into the affairs of autonomous Districts and creation of new Districts etc will be laid before the State legislature. Similarly, paragraph 15 dealing with annulment of resolutions and suspension of Councils, and paragraph 16 which enables their dissolution are subject respectively to the powers of revocation and approval of the State legislature. For matters requiring approval or ratification of the Assembly, it is obvious that the Governor would be acting on the ‘aid and advice’ within the meaning of Article 163 (1) of the Constitution and not on his discretion. There are other provisions, however, where there is scope for the Governor to act in his judgment after obtaining inputs from suitable sources including the State Government. Some of these provisions would appear to be conferment of powers on the Councils under the Code of Civil Procedure (CPC) and the CrPC (para 5); powers to approve Council legislations and regulations (paragraphs 3 and 8); resolving disputes about mining licences and leases (para 9) etc. The Commission is of the view that having regard to the spirit of the wide autonomy that underlines the Sixth Schedule, this aspect needs to be examined by the Ministry of Home Affairs.”5.8.4.1.4 The issue of giving more discretionary powers to the Governors in the SixthTable 11 No. 5.3:Schedule areas in general was also taken up by the Commission in its Report on ConflictResolution. The Commission observed that,20020111Source: Justice B.L. Hansaria’s Book on Sixth Schedule to the Constitution.State and District AdministationGovernance Issues in the North-Eastern States5.8.4.1.5 Accordingly, the following recommendation was made:-“Ministry of Home Affairs may, in consultation with the concerned State Governments and the Autonomous Councils, identify powers under the Sixth Schedule that Governors may exercise at their discretion without having to act on the ‘aid and advice’ of the Council of Ministers as envisaged in Article 163 (1) of the Constitution.”5.8.4.1.6 While reiterating, the above recommendation, the Commission would like to go a step further in the present Report and examine the issue of discretionary powers which have been given to the Governor by the provisions of paragraphs 20 BA and BB of the Sixth Schedule.5.8.4.2 Provisions of Paragraph 20 BA and 20 BB5.8.4.2.1 Paragraph 20BA (inserted by the Constitutional Amendment of 1995) - Applicable to Assam - Exercise of discretionary powers by the Governor in the discharge of his functions“The Governor in the discharge of his functions under sub-paragraphs (2) and (3) of paragraph 1, subparagraphs (1), (6), sub-paragraph (6A) excluding the first proviso and sub-paragraph (7) of paragraph 2, sub-paragraph (3) of paragraph 3, sub-paragraph (4) of paragraph 4, paragraph 5, sub-paragraph (1) of paragraph 6, sub-paragraph (2) of paragraph 7, sub-paragraph (4) of paragraph 8, sub-paragraph (3) of paragraph 9, sub-paragraph (3) of paragraph 10, sub-paragraph (1) of paragraph 14, subparagraph (1) of paragraph 15 and sub-paragraphs (1) and (2) of paragraph 16 of this Schedule, shall, after consulting the Council of Ministers and the North Cachar Hills Autonomous Council or the Karbi Anglong Autonomous Council, as the case may be, take such action as he considers necessary in his discretion.”5.8.4.4.2 After Paragraph 20B, the following paragraph has been inserted in its application to the States of Tripura and Mizoram, by the Sixth Schedule to the Constitution (Amendment) Act, 1988 (67 of 1988):-Paragraph 20BB - Applicable to Tripura and Mizoram - Exercise of discretionary powers by the Governor in the discharge of his functions:-“The Governor, in the discharge of his functions under sub-paragraphs (2) and (3) ofparagraph 1, subparagraphs (1) and (7) of paragraph 2, sub-paragraph (3) of paragraph3, sub-paragraph (4) of paragraph 4, paragraph 5, sub-paragraph (1) of paragraph 6,sub-paragraph (2) of paragraph 7, subparagraph (3) of paragraph 9, sub-paragraph (1)of paragraph 14, sub-paragraph (1) of paragraph 15 and sub-paragraphs (1) and (2) of paragraph 16 of this Schedule, shall, after consulting the Council of Ministers, and if he thinks it necessary, the District Council or the Regional Council concerned, take such action as he considers necessary in his discretion.”5.8.4.2.3 On a plain reading of the above provisions a view may be formed that these provisions have been inserted in the Sixth Schedule to give complete discretionary powers to the Governors of Assam, Tripura and Mizoram in the transferred subjects. But no such powers are available to the Governor of Meghalaya. In the exercise of these powers the Governor is only obliged to consult the Council of Ministers and if necessary to consult the District or Regional Council before taking appropriate action.5.8.4.2.4 There have been conflicting views on whether the Governor is entitled to exercise such powers on the basis of his individual discretion or on advice of the Council of Ministers of the State concerned under provisions of Article 163 of the Constitution. One view expressed by Justice Hidayathullah in his Anundoram Barooah Law lecture Guwahati (1978) was that the Governor had historically been directly controlling the administration of these areas12:-“..... it is not compulsory for the Governor to consult the Council of Ministers. He may do so, but he is not bound to do so, nor is he bound to accept their advice. The entire history of these areas, the thought that went into the enactment of the Sixth Schedule as a Constitution independent of the rest of the Constitution clearly establishes this”5.8.4.2.5 He also refers to his dissenting judgement in Edwingson Bareh v. State of Assam, AIR 1966 SC 1120: (1966) 2 SCR 770 and stated that he still felt that he was right. Hidayatullah, CJ in the aforesaid lecture mentioned the following points to arrive at the conclusion:1.Historically the administration of these areas was under the direct control ofthe Governor General of the Council, Chief Commissioner of Assam and the Governor.2.The tribal areas are to be administered as per the provisions of the SixthSchedule only, as stated in Article 244, which is in Part X of the Constitution. So, provisions in the other parts of the Constitution- be it in Part VI or in any other Part can have no connection with the administration of these areas. This aspect was emphasized by stating that both the Fifth and Sixth Schedules can be adequately described as “Constitution, within a Constitution,” or in other words as ‘miniature Constitutions for certain scheduled areas of India”20220312A detailed analysis of this matter has been given in Justice B.L Hansaria’s reference volume ‘Sixth Schedule to the Constitution’.State and District AdministationGovernance Issues in the North-Eastern States3.The Fifth Schedule contemplates not only administration but also controlwhereas the Sixth Schedule refers to administration only.5.8.4.2.6 Justice Hansaria however disagreed with Hidayatullah CJ and expressed his views as follows:“The Governor has to act in his discretion as regards those matters only which specifically require him to do so; in others “seen, thanks” should be enough. Such view would also be in harmony with the ethos which pervades the Constitution which has to be viewed and interpreted as one organic document.”5.8.4.2.7 Justice Hansaria gives the following reasons for arriving at the conclusion that the Governor is required to act on the aid and advice of the Council of Minister except where otherwise specifically provided:?Historically, the Governor was not exercising powers in his discretion for the entire tribal areas in as much as under the scheme of the Government of India Act, 1935, the ‘excluded areas’ were to be administered by the Governor acting in his discretion; and for the ‘partially excluded areas’ he had a special responsibility implying the power to over-ride the advice of the Ministers in his individual judgment, but normally the Governor would act on the advise of his ministers. A reference to the Government of India (Excluded and Partially Excluded Areas) Order, 1936, would show that all the areas covered by the Sixth Schedule were not included in the excluded area.?The provisions of the Sixth Schedule cannot be interpreted by forgetting the texture on which the Constitution has been woven. The Sixth Schedule cannot be completely insulated from the rest of the Constitution and it is as much part of the Constitution as any other Schedule or provision.5.8.4.2.8 This view was taken by Justice Hansaria, on the ground that the debates in the Constituent Assembly when the Sixth Schedule was being passed would indicate that the intention was to depart from the earlier pattern.5.8.4.2.9 In the case of Pu Myllai Hlychho vs State of Assam 2003 (3) GLT 50 (55-56) judgement date 11.1.2005, the Supreme Court passed the following judgement:“Relying on the object and reasons of the Amendment Act, the Counsel for the appellant contended that the Governor had used discretionary powers to nominate the members tothe Council and the facts disclosed that he nominated members with the aid and advice of the Council of Ministers and this was not in accordance with the provisions of Paragraph 20BB and the autonomy envisaged under the provisions of the Sixth Schedule is not given its true and meaningful importance. The contention of the appellants is that by inserting Paragraph20-BB to the Sixth Schedule Governor is given more discretionary powers to protect the autonomy of the tribal areas and if Governor acts on the aid and advice of the Council of Ministers and does not act independently, the purpose of this legislation, is not achieved. Except for the feet that the file for nominating new members initiated from the Council of Ministers, there is nothing on record to show that the Governor failed to exercise the discretionary power vested in him. The Governor exercised his discretion after making proper consultations, as envisaged under Paragraph 20BB of the Sixth Schedule and the nomination of the four members had been validly made. In the result, we hold that the Governor was bound by the aid and advice of the Council of Minsters and the termination of the four members from the MADC by order of the Governor on 5.12.2001 was perfectly in accordance with the Constitutional provisions and the Sixth Schedule to the Constitution. The nomination of the four members to the Council by order dated 6.12.2001 was legal and the Governor acted by virtue of the discretionary power vested in him. The Governor was justified in making consultation wih the Coucil of Ministers and the Governor making such incidental consultation with the Council of Ministers did not in any way affect his discretionary power. No other authority interfered with the independent exercise of the Governor’s discretion in nominating the four members to the MADC and the Notification issued by the Governor on 6.12.2001 was validly made and the decisions of the Division Bench of Gauhati High Court does not call for any interference”.5.8.4.2.10 The Commission is of the view that the spirit of the Constitution and the amending Acts which introduced paragraphs 20BA and 20BB in the Sixth Schedule was to protect the autonomy of the tribal areas and to save them from the decisions of the overwhelming majority. The Governor enjoys these special powers as a custodian of tribal interests and hence he needs to be adequately empowered to do so. Any attempt to impose the views of the State Council of Ministers on the Governor may defeat the very purpose for which these paragraphs were introduced in the Sixth Schedule. As such the Commission feels that to put matters beyond doubt the Governors of Assam, Tripura and Mizoram may be empowered to exercise discretionary powers in respect of the provisions pertaining to Autonomous Councils under the Sixth Schedule in consultation with the Council of Ministers and if necessary, in consultation with these Councils. A Constitutional amendment will be required for this purpose204205State and District AdministationGovernance Issues in the North-Eastern States5.8.5 Constitution of a Commission to submit a report on the administration of autonomous districts and autonomous regions: (Paragraph 14 of the Sixth Schedule)5.8.5.1 This issue has also been dealt with by the Commission in its seventh Report. The observation of the Commission is;5.8.6 Recommendations:a) The Governors of Assam, Tripura and Mizoram should be empowered to exercise discretionary powers in respect of all the provisions pertaining to206“At the commencement of the Constitution and for more than two decades thereafter, all the Autonomous Districts were located within the State of Assam. It was therefore quite in order in that State for the Governor to appoint a Commission to inquire into the state of administration in such districts and to examine other matters mentioned in paragraph 14. With four States now having such districts, this arrangement deserves reconsideration. Besides, in the last two decades this provision has not been invoked at all resulting in lower standards of governance in these sensitive areas. In the opinion of the Commission, there is a case for a common Commission for all Autonomous Districts under the Schedule by the Union Government and for providing appointment of such a Commission at fixed intervals. The Commission also notes that a similar recommendation has been made by the Expert Committee of the Ministry of Panchayati Raj headed by one of its members (Shri V. Ramachandran).”5.8.5.2 It was accordingly recommended that:-“Paragraph 14 of the Sixth Schedule may be suitably amended to enable the Union Government to appoint a common Commission for all autonomous districts for assessing their state of administration and making other recommendations envisaged in that paragraph. A periodicity may also be provided for the Commission.”5. 8.5.3 The Commission would like to reiterate these recommendations.5.8.5.4 Constitution of a High Level Review Committee headed by the Governor5.8.16.4.1 In order to examine the functioning of these bodies, and to assess the problems that arise in their day to day operations in each Sixth Schedule State, the Governor himself should lead a high level review committee consisting of representatives from the State Government as well as the District/Autonomous Councils. This will help him make appropriate suggestions to the Union Government on Sixth Schedule issues.5.9 Special provisions in the Constitution under Articles 371A, 371B, 371C, 371F, 371G & 371H applicable to North-Eastern States5.9.1 Article 371A (a) states that “no Act of Parliament in respect of –i.Religious or social practices of the Nagas,ii.Naga customary law and procedure,iii. Administration of civil and criminal justice involving decisions according to Naga customary law;iv.Ownership and transfer of land and its resources,shall apply to the State of Nagaland unless the Legislative Assembly of Nagaland by a Resolution decides;5.9.2 In terms of Article 371A(b), “the Governor of Nagaland shall have special responsibility with respect to law and order in the State of Nagaland for so long as in his opinion internal disturbances occurring in the Naga-Hills Tuensang Area immediately before the formation of that State continue therein or in any part thereof and in the discharge of his functions in relation thereto the Governor shall, after consulting the Council of Ministers, exercise his individual judgment as to the action to be taken.”the Autonomous Councils under the Sixth Schedule in consultation with the Council of Ministers and if necessary, in consultation with these Councils.A Constitutional amendment will be required for this purpose.b) Paragraph 14 of the Sixth Schedule should be suitably amended to enable the Union Government to appoint a common Commission to review the working of all autonomous districts of the North-East and to make recommendations as envisaged therein. A periodicity may also be provided for the Commission.c) A high-level Review Committee headed by the Governor and consisting of representatives of both the State Government and the District Councils should be formed in each State to review the functioning of these bodies. This Committee should submit its report to the Union Government.207State and District AdministationGovernance Issues in the North-Eastern States5.9.3 Further, the Articles provide that in making his recommendation with respect to any demand for a grant, the Governor of Nagaland shall ensure that any money provided by the Government of India out of the Consolidated Fund of India for any specific service or purpose is included in the demand for a grant relating to that service or purpose and not in any other demand.5.9.4 Article 371B states that “notwithstanding anything in this Constitution, the President may, by order made with respect to the State of Assam, provide for the constitution and functions of a committee of the Legislative Assembly of the State consisting of members of that Assembly elected from the tribal areas specified in [Part I] of the table appended to paragraph 20 of the Sixth Schedule and such number of other members of that Assembly as may be specified in the order and for the modifications to be made in the rules of procedure of that Assembly for the constitution and proper functioning of such committee.”5.9.5 Article 371C states that “(1) “notwithstanding anything in this Constitution, the President may, by order made with respect to the State of Manipur, provide for the constitution and functions of a committee of the Legislative Assembly of the State consisting of members of that Assembly elected from the Hill Areas of that State, for the modifications to be made in the rules of business of the Government and in the rules of procedure of the Legislative Assembly of the State and for any special responsibility of the Governor in order to secure the proper functioning of this committee.(2) The Governor shall annually, or whenever so required by the President, makes a report to the President regarding the administration of the Hill Areas in the State of Manipur and the executive power of the Union shall extend to the giving of directions to the State as to the administration of the said areas.”5.9.6 Article 371 F (g) confers special responsibility on the Governor of Sikkim. It states that, “the Governor of Sikkim shall have special responsibility for peace and for an equitable arrangement for ensuring the social and economic advancement of different sections of the population of Sikkim and in the discharge of his special responsibility under this clause, the Governor of Sikkim shall, subject to such directions as the President may, from time to time, deem fit to issue, act in his discretion.”5.9.7 A special provision in respect of Mizoram has been provided under Article 371 G which reads as, “no Act of Parliament in respect of—(i)religious or social practices of the Mizos,(ii) Mizo customary law and procedure, administration of civil and criminal justice involving decisions according to Mizo customary law,(iii) ownership and transfer of land,shall apply to the State of Mizoram unless the Legislative Assembly of the State of Mizoram by a resolution so decides.”5.9.8 Article 371H contains special provision with respect to the State of Arunanchal Pradesh as follows, “Notwithstanding anything in thisConstitution,–(a) the Governor of Arunachal Pradesh shall have special responsibility with respect to law and order in the State of Arunachal Pradesh and in the discharge of his functions in relation thereto, the Governor shall, after consulting the Council of Ministers, exercise his individual judgment as to the action to be taken.5.9.9 Provided that if any question arises whether any matter is or is not a matter as respects which the Governor is under this clause required to act in the exercise of his individual judgment, the decision of the Governor in his discretion shall be final, and the validity of anything done by the Governor shall not be called in question on the ground that he ought or ought not to have acted in the exercise of his individual judgment.”5.10 Special Autonomous Councils created by State enactments (in Assam and Manipur)5.10.1 In addition to the Autonomous Councils created under the provisions of the Sixth Schedule some tribe specific special Autonomous Councils have also been created through the State enactments in Assam and Manipur. These special Councils have been broadly patterned on the Sixth Schedule Councils but their powers and responsibilities are muchless. Issues concerning these special Councils have been dealt in detail in this chapter at paragraphs 5.15.1 and 5.15.3.5.11 Issues of Tribal Areas lying outside the Sixth Schedule5.11.1 With the States of Arunachal Pradesh and Sikkim being brought under the Seventy-Third Amendment and almost the whole of ‘tribal Assam’ covered by the Sixth Schedule, the areas falling under this classification are the State of Nagaland and the Hill Districts208209State and District AdministationGovernance Issues in the North-Eastern Statesof Manipur.5.11.2 Nagaland has made significant progress in empowering the village community. The village community participates in grass root level development programmes in close association with the traditional village chief. Communitization is an effective instrument to ensure that the institutions and services set up for their benefit operate efficiently and are accountable to the beneficiaries. Care is needed to ensure that communitization and village development boards do not become mutually antithetical. The decision of the State Government to declare each Village authority a ‘local authority’ within the meaning of the Communitization Act is a step in the right direction, It can be said that Nagaland is the only State in the North East where local empowerment has been more impressive at the village than at the higher levels – evidently an offshoot of the State not being covered by the Sixth Schedule (with emphasis on empowerment of autonomous Districts). A scheme of Autonomous Area Councils- tribe specific bodies conforming to the then existing districts was tried in 1970s but it turned out to be a short-lived affair. While it may not be desirable to lay down any formulation for the State from outside, its long term development will be better served if the process of decentralized self governance is carried forward to the supra village level.5.11.3 In Manipur, on the other hand, there are no village level elected bodies. The Village Development Committees are purely nominated bodies, often the nominees of the traditional village leaders. The Hill District Councils are moribund for the last seventeen years, elections having been held as far back as in 1985. The persistent demand for declaration of the Hill Areas in the Sixth Schedule has caused a stalemate. The case against acceptance of this demand appears to be based on apprehensions about ‘integrity of the State’ and ‘exacerbation of existing tensions’. It is not for the Commission to express any view as to the merits of the rival claims, but it has been observed that with the implementation of the Seventy-Third Amendment in the valley districts, there has been a significant improvement in various growth indices such as poverty ratio, literacy percentages and rural connectivity.5.11.4 The Commission believes that for tribal areas which lie outside the Sixth Schedule as well as the Seventy-Third Amendment, the Ministries of Rural Development and Panchayat Raj and the Planning Commission should provide special incentives to the States concerned to devise ways and means of managing their District Rural Development Agencies in such a way that the DRDA function as bodies accountable to District Level Institutions which could be a mix of elected and traditionally selected members. This process could be taken further after assessing its initial impact.5.12 Personnel Management and Capacity Building of Administration5.12.1 After Independence a special administrative service - the Indian Frontier Administrative Service (IFAS) was created to manage the administration of the frontier territories. The Constitution brought in special provisions from the Sixth Schedule to give enhanced attention to the predominantly tribal areas of the North East. One significant feature of this enactment was to introduce the concept of Autonomous Districts as a distinct tier of governance. Areas falling under Naga Hills, Lushai Hills, The United Khasi & Jaintia Hills, Garo Hills, North Cachar Hills and the Mikir Hills Districts of Assam were brought under its purview with elected District Councils exercising executive, judicial and legislative powers as detailed earlier. The remaining tribal areas outside the then ‘Part C’ states of Manipur and Tripura were held to be not yet ready to benefit from the autonomous District approach. These areas (called Part B areas in the Sixth Schedule) were the five ‘frontier’ tracts comprising the North East Frontier Agency (NEFA) including the ‘Naga tribal areas’ which later became the Mon and Teunsang Districts of the State of Nagland. Further, the Governor of Assam was designated as the ‘agent’ of the President to administer the affairs of NEFA. In discharge of these responsibilities the Governor was not responsible to the Government of Assam.5.12.2 The IFAS personnel were initially deployed in Part B areas, for political administration. The Service underwent significant expansion from 1954 onwards, with new entrants being drawn from backgrounds as diverse as academics, agriculture, accountancy, civil service, police and scientific research etc. This diversified cadre – members of service spent long years in the region, was in a position to understand and deal with local and developmental issues of the tribal areas. In 1955 a formal secretariat for NEFA was established at Shillong and the tradition of formal, development oriented governance was laid. The deployment of the IFAS was later5.11.5 Recommendations:a)For tribal areas which lie outside the Sixth Schedule as well as the Seventy Third Constitutional Amendment the State Government should take steps to create specially at the district level bodies which should consist of both elected as well as traditionally selected representatives. The States which show initiative and take a lead in this matter should be given incentives.b) The District Rural Development Authority of the district should work as a body accountable to this District Level Body.210211State and District AdministationGovernance Issues in the North-Eastern Statesextended to the Part C states of Manipur and Tripura (designated as Union Territories in 1960). Exceptions involving a few young educated tribals apart, there was no direct recruitment to the IFAS; most of the ‘inductees’ had previous professional experience.5.12.3 Subject to the pre-eminent authority of the Autonomous District Councils, the general administration of the Sixth Schedule areas remained with the Government of Assam. Posts of Deputy Commissioners and Superintendents of Police were manned by the members of the All India Services. With the formation of the Union Territories Cadre of the Indian Administrative Service in 1962 and of the Indian Police Service a little later, the number of positions available to the members of the IFAS in Manipur and Tripura became limited. With effect from 1.1.1968 all members of that service exercising an option in that behalf were transferred to the Indian Administrative Service and accommodated within the Union Territories cadre. With the formation of the States of Himachal Pradesh, Manipur and Tripura in 1971-72 some of the officers were accommodated in these cadres as well.5.12.4 Sikkim is a sui generis case as its administration descends from a princely protectorate. Due to paucity of resources there were very few organised departments or agencies. But after the merger, the overall administrative structure of the State is on the pattern followed in West Bengal.5.12.5 The Commission has suggested a large number of measures for improvement of personnel management in the North-Eastern States in its Seventh and Tenth Reports. They need to be implemented.5.12.5.1 Training of Government Personnel5.12.5.1.1 Professional competence of personnel is an essential feature of a public administration system. This is particularly true for the States of the North East where the challenges of governance are far more complicated than those in other parts of the country. Except for the induction level training which is given to directly recruited Grade B officials of civil administration, police and forest departments, very few other capacity building measures are visible in the administration of these states.5.12.5.1.2 Leaving aside, the degree-awarding Universities and Technical Institutions located in these States such as NEHU and IIM in Meghalaya and IIT in Assam, there are eight major training institutions which have been established for capacity building of government employees of the North Eastern States. They are –(i) State Institute of Public Administrative & Rural Development (SIPARD), Agartala.(ii) Administrative Training Institute, Shillong(iii) State Academy of Training, Imphal.(iv) Administrative Training Institute, Arunachal Pradesh.(v) Administrative Training Institute, Gangtok.(vi) Assam Administrative Staff College, Guwahati(vii) Administrative Training School, Aizawl(viii) Administrative Training Institute, Kohima5.12.5.1.3 Then there is the North East Police Academy NEPA at Shillong under the Ministry of Home Affairs which runs specialized courses for police officers of this region.5.12.5.1.4 Many of these institutions are not functioning effectively. The main reasons are (i) the issue of capacity building and training of government personnel is not high on the agenda of the State Governments; (ii) inadequate funding of the institutions; and (iii) paucity of faculty.5.12.5.1.5 The Commission is of the view that the training needs of government personnel should be addressed on a priority basis, (i) Every government employee should undergo a long duration induction training when he joins service, (ii) There should be provision for mid career training, and (iii) Officials should be encouraged to acquire higher professional qualifications and skills in their respective branches and also in subjects such as – Public Administration, Policy, Trade laws, project investment, appraisal, management and information technology applications. Recruitment/Promotion Rules for senior officers need to be amended to give adequate importance and weightage to mid career capability acquisitions. The Commission is also of the view that since the States of the region are small, setting up a centre of excellence in each of them does not seem to be a viable proposition; there is need to have a properly equipped central institution catering to the training needs of all the eight States.5.12.5.1.6 While dealing with the ‘Conflicts in the North East” in its seventh Report, the Commission recommended that “Regional training institutions for various branches of administration, including the technical services may be operated by the North Eastern Council.” Taking it further, the Commission feels that the NEC should establish an apex Regional Academy for Human Resource Development, as an autonomous body with academic and executive flexibility. The mandate of the Academy may extend to the entire212213State and District AdministationGovernance Issues in the North-Eastern Statesrange of services under the government. Besides running ‘flagship training programmes’ for all the NE States, the Academy should give emphasis to overall planning and implementation of human resource development, preparation of Regional handbooks and manuals for various sectors and designing applied and action research professional courses in coordination with various Universities and institutions in the country.5.12.5.2 Strengthening pre recruitment facilities5.12.5.2.1 The exact data on the number of candidates selected from the North Eastern States to various All India and Central Services is not available. However, on the basis of the available information, the number of candidates belonging to Scheduled Tribes selected to the All India Services from this region on a decadal basis may be summarized as follows:Table No. 5.5 : Representation of ST Candidates from North-Eastern Region in All India ServicesDecadeIASIPSIFSSTGen1970s350609181980s280710831990s14041239Source: Executive Record Sheets5.12.5.2.2 Even assuming a reduction in the annual intake of candidates for many of these services, the declining trend is significant. The point is brought home more forcefully if the percentage share of members of the Scheduled Tribes from the North East in the overall appointments from that category is analyzed. Collation of information gathered from the relevant civil lists in respect of direct recruitment to the IAS reveals the following;Table No. 5.6 : Percentage Share of ST Candidates from the North-Eastern Region inOverall appointment from ST CategoryDecadeNo. of Appointees (ST)% of Appointees (ST) from NENorth East:All India1970s3573481980s2899271990s1479185.12.5.2.3 The representation of the tribal population of the North East in the civil services shows a downword trend. This issue needs to be addressed on priority. Adequate local representation in the mainstream administration will help in addressing the issue of perceived alienation. The Commission feels that since private sector growth has not occurred in the region adequately, there is little scope for employment of qualified personnel in this area. Steps are necessary to improve their chances of selection into civil services and other competitive examinations including recruitment to the Armed Forces etc. Measure taken in this direction by the Ministries of Social Justice and Empowerment and Tribal Affairs have not yielded the desired results. Therefore, efforts are needed to involve educational institutions, particularly the Universities of the region in running Orientation and Coaching programmes. The NEC can coordinate these efforts.5.13 Issues of Recruitment in the Sixth Schedule Areas5.13.1 Autonomous Councils have frequently pleaded for separation of cadres of ‘Line Departments’ whose functions figure in the list of responsibilities assigned to these bodies under Paragraph 3, or 3A (the two older Assam Councils) or 3B (the BTC). Such proposals have varied from having a ‘composite cadre’ for the Scheduled Districts to District specific outfits. In Assam, the recruitment of medical officers in the BTC areas was delegated to the Bodo Tribal Council. This approach is likely to cause problems in retaining qualified training personnel. The prospect of spending an entire career in a Scheduled District or in the Sixth Schedule areas deters them from joining the service. The Commission feels that there is need to adopt a procedure which would lead to retention of technical and professional expertise in these areas. Thus, in these areas while steps are necessary to ensure that technical and other personnel remain in position in Sixth Schedule and other tribal areas, creating separate cadres for overall administration does not appear to be a viable proposition. While it is advisable to constitute District cadres for Group C and D posts, recruitments to the higher levels should be left to the State Governments. The State Government and the Councils should jointly devise a way so that the requirement of tribal areas gets precedence over that of the other areas. Officers should have a fixed tenure in the tribal areas (unless they voluntarily5.12.6 Recommendation:a) The North Eastern Council, in consultation with the Universities and other educational institutions of the region, should draw up programmes for coaching students for the Civil Services, and other competitive tests such as the Combined Defence Services Examination and the Engineering/ Medical Examinations.214215State and District AdministationGovernance Issues in the North-Eastern StatesBox No. 5.3 : An Illustrative list of Regional Institutions inthe North-Eastern Region1. North Eastern Regional Institute of Science & Technology, Naharlagon, Arunachal Pradesh.2. ICAR, N.E. Regional Hills Complex, Shillong, Meghalaya.3. North Eastern Regional Insititute for Water & Land Management, Tezpur, Assam.4. Cane & Bamboo Technology Centre, Guwahati, Assam.5. North Eastern Development Finance Corporation, Guwahati6. North Eastern Industrial & Technical Consultancy Organization, Guwahati, Assam.7. North Eastern Institute of Science & Technology (formerly RRL), Jorhat, Assam.8. Regional Medical College, Imphal, Manipur.9. Regional Nursing College, Guwahati, Assam.10. Regional Institute of Enterprenureship (Regional Unit), Guwahati, Assam.11. Regional Dental College, Guwahati, Assam.12. B. Barooah Regional Cancer Institute, Jorhat, Assam.13. Regional Para-Medical Institute, Aizawl, Mizoram.14. North Eastern Institute of Bank Management, Guwahati, Assam.15. North Eastern Regional Agriculture Marketing Corporation, Guwahati, Assam.16. NEGRIM, Shillong.17. IIT, Guwahati.18. IIM, Shillong.19. NIRD, Guwahati.20. NEEPCO, Guwahati.desire to continue) and thereafter as far as possible they should get a posting of their choice. Other incentives such as deputation to training programmes both within the country and abroad and some weightage in departmental promotions could be considered. These steps may however need State specific adaptation and modifications.5.14 Regional Institutes5.14.1 In pursuance of a planned strategy for the regional development of the North Eastern States, over the years, a large number of regional Institutes were set up in various fields including science and technology, water and land management, agriculture, health/medical, education, power, cane and bamboo technology, training institutes for police, etc. Many of these Institutes were initially set up under the auspices of the North-Eastern Council and later transferred to Union Ministries; for example, the North Eastern Police Academy which is now with the Home Ministsry and the North-Eastern Energy and Power Corporation, now with the Ministry of Power. Others were directly set up by the concerned Ministries and continue to be with them; for example, North Eastern Indira Gandhi Regional Instituteof Medical Sciences, Shillong under the Ministry of Health, North-Eastern Institute of Bank Management with the Ministry of Finance etc.5.14.2 During its visit to the North-Eastern States the Commission was informed that the effective performance of the Institutes greatly varied with some of them functioning well and playing a major role in the regional development in their areas of expertise. However, a number of other Institutes became ineffective either because of lack of funds and technical resources, non-availability of competent professionals to head the Institutes, etc. Since a great deal of effort, resources, planning and expectations were involved in setting up these Institutes it would be essential to review their working, identify the shortcomings and take necessary action within a stipulated time frame to make them functionally effective institutions of excellence in the Region. Keeping in view the fact that the North-Eastern Council is the strategic planning body for the region and the nodal agency for its socio- economic development it should be given the responsibility to undertake a review of these Institutes and come up with suitable recommendations for their improvement wherever required. One of the Members of the NEC could head this Committee with representatives from the region as well as from the Government of India. In addition, it would be useful if the Secretary/Member(s) of the NEC is represented on the governing body of those Institutes which are no longer under its administrative supervision/ control. Permanent arrangements for monitoring the evaluation of these Institutes would also be necessary which could be based within the NEC. The Commission in its Seventh Report has recommended suitable strengthening of the NEC (Para 12.6.4.3). Once this is done it should be possible for the NEC to undertake these additional and important responsibilities.5.14.3 The Commission is of the view that the North Eastern Hill University (NEHU) could provide the academic foundation for policy research on issues impinging on the entire region and which need to be addressed by State action.5.13.2 Recommendations:a)Immediate steps should be taken to constitute District cadres for all Groups ‘C’ and ‘D’ posts (Classes III and IV) for performance of all ‘transferred functions’ wherever such action has not been taken.b) Recruitment to Groups ‘A’ and ‘B’ posts (Classes I and II) by the Autonomous District Councils or analogous bodies particularly to positions requiring technical/professional qualifications should ordinarily be left to the State level.c) State Governments and the Autonomous District Councils should jointly draw up norms for arriving at the number of technical and professional posts required in the tribal areas. Personnel for such posts should be made available on priority basis.d) Postings to the tribal areas should be for a fixed tenure and must be followed by, as far as practicable, to a posting at a place of the officer’s choice.e)On satisfactory completion of tenure in such areas the incumbent should be entitled to benefits like deputation for higher professional qualifications, training abroad and higher weightage in Departmental promotions.216217State and District AdministationGovernance Issues in the North-Eastern States5.15 State Specific IssuesApart from the common issues dealt with above, the States of the NE Region also have some State specific problems which need attention. These are being discussed in the subsequent sections of this Report.5.15.1 Assam5.15.1.1 Assam accounts for around 30% of the area and 68% population of the North East (including Sikkim). At the commencement of the Constitution (1950) ‘area domination’ of the State was of the order of 53% as the present states of Meghalya, Mizoram and Nagaland formed its four Districts. The reduction in area of the State has had important geo-political implications. Even demographically, Assam displays certain anomalies- its population more than doubled in the first half of the last century largely due to migrations. Factors such as availability of large tracts of fallow land, demand for labour in plantations and overpopulation in adjoining Districts of Bengal with consequent landlessness have all been implicated for this phenomenon. These factors, have also contributed to frequent conflicts and unrest within the State with deleterious effects within the region. The dependence of the State on agriculture and allied sectors is evident from the fact that despite its relative proximity to the rest of the country, Assam has the lowest share of urban population at 12.90% as against 15.66% for the North East as a whole.5.15.1.2 Assam also has the lowest share of Scheduled Tribe population in the region (13%). Yet, with six districts in the Sixth Schedule and the whole or parts of another twelve being under Tribe specific Autonomous Councils, there is a great deal of complexity in the administration of the State. The clash of interests between one tribal group and the other and that between a tribal group and non-tribals creates enormous challenges for governance in the State. The situation is further compounded by a significant presence of religious and linguistic minorities, approximately 18% and 30% respectively. It is interesting to note that a large section of population qualifies, concurrently for both the categories. In short, the State of Assam faces problems which emerge out of conflicts as well as the development needs of the people.5.15.1.3 Sixth Schedule District Councils5.15.1.3.1 The Constitution provides a framework for participatory district level government for the major tribal communities of the State in the form of the Sixth Schedule autonomous District Councils. For reasons too well known to recount, these arrangements were primarily intended to meet the political aspirations of the then Naga Hills District. But the strong reservations of the Nagas did not allow it. Five Autonomous Councils were established for other major tribes. Following the reorganization of the North Eastern Region in 1972, three of the Council Districts ceased to be part of Assam and the State was left with two such Councils. Following the Bodoland Accord in 2003, another Sixth Schedule Council- the multi-District Bodoland Territorial Council- was also established. At present, therefore, there are three such Councils in Assam- two in existence since the introduction of the Schedule and the third established in 2003.They are:-5.14.4 Recommendations:a) For improving delivery systems and development processes, emphasis ought to be given to capacity building of personnel and it should be a priority activity of the government.b) There should be comprehensive training programmes for all government employees working in the North-Eastern States. The programmes should consist of (i) a long duration induction module when he joins service, (ii) mid career training opportunities and (iii) officials should be encouraged to acquire higher professional qualifications/skill sets in their respective branches and also in subjects such as Public Administration, Trade laws, project investment/ appraisal/ management and information technology applications.c) The North Eastern Council (NEC) should establish an apex Regional Academy for Human Resource Development as an autonomous body with academic and executive flexibility. The mandate of the Academy may extend to the entire range of services under the government.d) The North-Eastern Council should be given the responsibility to undertake a review of various regional institutes under the Union Government/ Ministries and come up with suitable recommendations for bringing improvements in their functioning whenever required. An officer/ member of the NEC should be placed on the governing body of these institutions.e) The NEC should take up monitoring and evaluation of these Institutes. The Commission in its Seventh Report has already recommended that the NEC should be suitably strengthened. Once this is done, it should be possible for the NEC to undertake these additional and important responsibilities.f) The North Eastern Hill University (NEHU) could provide the academic foundation for policy research on issues impinging on the entire region and which need to be addressed by State action.218219State and District AdministationGovernance Issues in the North-Eastern States(i) Karbi Anglong Autonomous Council (KAAC)(ii) North Cachar Hills Autonomous Council (NHAC)(iii) Bodoland Territorial Areas District / Bodoland Territorial Council (BTC)5.15.1.3.2 The basic facts relating to the Councils could be summarised in the Table No. 5.7:Table No. 5.7: Basic Facts relating to Sixth Schedule Councils in AssamSl.Name of theRevenueRural PopulationUrban PopulationTotal PopulationRemarksNo. AutonomousDistrictsDistrict CouncilCovered1Karbi AnglongKarbi Anglong72138191930813311Revenue District are co-terminus with an Autonomous CouncilAutonomous Council2North CacharNorth Cachar12811058079186189HillsAutnonmous Council3BodolandBaksha7176420717642The Council Cover covers more than one district.Territorial Areas DistrictDistricts comprising BTC areas have been carved out of existing districtsKakrajhar84182363941905764Chirang3436260343626Udalguri6710300671030Total342361221395036375625.15.1.3.3 While the Karbi Anglong and North Cachar Councils have identical roles in terms of Paragraphs 3 and 3A of the Schedule- they exercise similar judicial and limited executive powers involving a limited range of subjects in List-II of the Seventh Schedule- the Bodoland Council differs in certain respects from the other Councils. The brief account of these Councils and their legislative and executive powers are given in Tables 5.8 and 5.9 below.13Table No. 5.8: Brief Accounts of KAAC and NHACSl. FeaturesKarbi Anglong AutonomousNorth Cachar Hills AutonomousNo.CouncilCouncil (NHAC)1 Date of ConstitutionJune 19522 Transfer of some3 June, 1970development Departments by the State Government3 More autonomy granted andApril 1995Distt. Council renamed as Autonomous Council through an amendment to the Sixth Schedule to the Constitution4 Number of Members30 Members (26 elected +27 Members (23 Elected + 44 nominated)Nominated)5 Composition of the ExecutiveChief Executive Member (CEM) + Chief Executive Member + 9Committee10 MembersMembers6 Administrative StructurePrincipal Secretary/Chairman,Two Principal Secretaries with staffDRDA headssupportAutonomous Council Secretariat.Officials posted by State governmentAssisted by one Secretary, three Deputy Secretaries and clerical staffTable No. 5.9: Powers and Functions of KAAC and NHAC1.Sl. No.Powers and FunctionsItemJudicial powersLegislative powersExecutive PowersFinancial PowersPowers to constitute courts, with appellate powers with the Council. Appeals from Council courts lies with High CourtPowers to constitute Village Councils (VC) and appoint VC MembersEstablish and manage primary schools, dispensaries, markets cattle ponds, fisheries, road and waterwaysKarbi Anglong Autonomous NC Hills AutonomousCouncil-DiphuLegislative powers, with Governor’s assentPrepare & pass budget / assess and collect revenue / impose taxes / trades / markets / tolls / license & lease / share in royalties collected by the State Government.Appointment and succession of Chiefs/ HeadmanRural Development, PWD, Transport, Forests (excluding R.F.)Council (NCHAC)22022113“Planning for the Sixth Schedule Areas” – Report of the Expert Committee.State and District AdministationGovernance Issues in the North-Eastern StatesTable No. 5.9: Powers and Functions of KAAC and NHACContd.State Government releases Plan and non-Plan funds in two instalments per annum (April & October)Share of CSS goes directly to Autonomous CouncilCommissioner, Hill Areas makes sectoral allocation Distt. Planning Board with CEM as Chairman and Principal Secretary as Member Secretary prepares Annual Plan 10% earmarked for Border Area Development and 7.5% for administrative costAnnual Plan prepared is approved by Council and submitted to State Government.Quarterly utilization report submitted to Commissioner, Hill Areas5.15.1.3.4 NCHAC and KAAC were given additional powers to make laws with respect to the following subjects vide paragraph 3A of the Sixth Schedule inserted by the Constitutional (Amendment) Act, 1995:1.Industries2. Communications3.Alienation of land4.Flood control5. Agriculture6.Fisheries7. Animal husbandry8.Minor irrigation9.Social security and social insurance Theatre and dramatic performances10. Primary and secondary education11. Entertainments and amusements12. Public health and sanitation13. Hospitals and dispensaries14. Water15. Sports16. Libraries17. Museums18. Ancient and historical monuments19. Trade and commerce in, and the production supply and distribution of, food stuffs, cattle fodder, raw cotton and raw jute5.15.1.3.5 In order to exercise executive functions with respect to the subjects mentioned in Paragraph 3 and 3A of the Schedule, the following departments are to be ‘transferred’ to the KAAC and NCHAC:1. Industry2. Animal Husbandry & Veterinary3.Forest4. Agriculture5.Public Works Department6.Sericulture7. Education8.Cultural Affairs9.Soil Conservation10. Co-operation11. Fisheries12. Panchayat and Rural Development including DRDA13. Handloom and textilesKarbi Anglong Autonomous Council-DiphuNC Hills Autonomous Council (NCHAC)Constituency Development Committees (CDCs) with Chairman, President and Members + Village level subcommittees for preparation of village development plans.ItemOther detailsSl. No.2.222223State and District AdministationGovernance Issues in the North-Eastern States14. Health & Family Welfare15. Public Health Engineering16. Irrigation17. Social Welfare18. Flood Control19. Sports and youth welfare20. Weights and Measures21. Food and Civil supplies22. Town and Country Planning23. College Education24. Land Reforms25. Publicity and Public Relations26. Printing & Stationery27. Tourism28. Transport29. Excise30. Finance including sales tax etc5.15.1.3.6 All residents of the relevant ‘Council area’ above 25 years of age are eligible to contest elections. Elections are conducted by the State Government and not by the State Election Commission. The State Government also exercises all the supervisory powers nominally given to the Governor except the power to arbitrate in a dispute between the Council and the Government over Royalty of minerals; in such cases the Governor acts in his discretion. The powers of the State Government also extend to approving the legislations passed by the Councils. As grants are released to the Councils from the consolidated fund of the State, the Councils are amenable to the jurisdiction of the Committees of the State legislature. The Councils are responsible for implementation of rural development and poverty alleviation programmes as they come within the ambit of “transferred subjects”. The related field offices of the “Line Departments” and the DRDA are also controlled by these bodies. Traditional village level institutions mostly consisting of heriditory pradhans survive in the rural areas. By virtue of Article 243M (1) of the Constitution, the provisions of Seventy-third Amendment do not apply to the areas under the jurisdiction of these Councils.5.15.1.4 Bodoland Territorial Council (BTC) - Distinctive Features5.15.1.4.1 BTC was initially established in 1993 as a “Tribe Specific” Council under a State legislation. Following the Bodoland Accord of 2003 it was raised to the status of an Autonomous Council under the Sixth Schedule. It enjoys powers which far exceed those given to the earlier two autonomous Councils (KAAC and NHAC). It has been entrusted with a majority of List-II (State) and List-III (Concurrent) functions.5.13.1.4.2 In order to enable it to carry out executive functions, more than 40 departments have been attached to the BTC as shown below:1. Industry2. Co-operation3.Forest4. Agriculture5.Fisheries6.Sericulture7. Education8.Irrigation9.Soil Conservation10. Animal Husbandry & Veterinary11. Public Works Department12. Public Health Engineering13. Handloom and textiles14. Health & Family Welfare15. Social Welfare16. Cultural Affairs17. Library services18. Tribal research Institute19. College Education20. Weights and Measures224225State and District AdministationGovernance Issues in the North-Eastern States21. Lotteries, Theatres, Dramatic performance and Cinemas22. Municipal Corporation. Improvement trust, district boards and other localauthorities23. Urban development Town and country planning24. Panchayat and Rural Development including DRDA25. Land revenue26. Publicity and Public Relations27. Printing & Stationery28. Markets and fairs29. Food and Civil supplies30. Town and Country Planning31. Sports and youth welfare32. Planning and development33. Tourism34. Flood Control35. Statistics36. Transport37. Intoxicating liquors, opium and derivatives38. Welfare of plain tribes and backward classes39. Relief and Rehabilitation40. Registration of Births and Deaths41. Land Reforms42. Museum & Archaeology43. Labour and employment44. Food and Civil supplies5.15.1.4.3 Funds and Budget of the Council5.15.1.4.3.1 The State Government provides funds to the BTC on the basis of its population. This is in addition to the Government of India’s grant of Rs 500 crores. The allocation isreleased by the State Government in two equal half yearly installments; first in April / May and the second in September / October of the year. This fund is totally untied. Thereafter the BTC makes district wise allocations.?It is the only Council with a few seats exclusively reserved for non-tribals.?Again, with its jurisdiction extending over four districts, the “Divisional Cadres” of line departments have also been transferred to the Council.?But, the BTC is the only ‘Sixth Schedule Council’ which does not have judicial powers. The judiciary as existent in other parts of the country was fully functional in these areas by the time the BTC was born.?Compared to other two Sixth Schedule Councils of Assam, the size of fund at the disposal of the BTC is much larger.5.15.1.4.3.2 It is obvious that the BTC has been given greater administrative and financial powers and is treated on a different footing as compared to the Karbi Anglong Autonomous Council (KAAC) and the North Cachar Hills Autonomous Council (NHAC). This disparity has been a cause of resentment among the people of the latter two Councils. There is a growing demand that there should be full parity among the three Councils in terms of legislative and executive powers and functions. The Commission is of the view that in order to avoid conflicts, priority steps are needed in this direction.5.15.1.4.3.3 The Councils can exercise executive powers under Paragraph- 3 (Paragraphs 3A and 3B in case of the KAAC & NHAC and the BTC respectively) on all subjects on which they have power to legislate. So far the Councils have generally exercised very limited exeuctive powers mainly due to paucity of resources. There is need to normatively assess their financial requirements (with reference to factors such as minimum standards of services, local resource mobilization potential and the ambit of prescribed responsibility). It goes without saying that this approach would entail considerably larger subventions from the State Governments. But the net additional burden on the State on this account is, however, liable to be taken care of by the Central Finance Commission in due course. The Commission feels that in order to enable the Autonomous Councils to discharge their responsibilities satisfactorily, it is imperative that the requirement of funds by these bodies is worked out normatively with reference to the minimum standards of service to be provided and assessed capacity to raise local resources. Such exercise could be undertaken by the State Finance Commission.226227State and District AdministationGovernance Issues in the North-Eastern States5.15.1.4.3.4 Apart from making adequate resources available, it is equally important to ensure smooth and timely flow of funds to the Councils. As per the existing arrangements, the funds are to be transferred to the Councils in two equal installments. This needs to be strictly adhered to by the State Government. In the case of BTC, the funds are released by various departments of the Assam Government in favour of the BTC Department. The BTC Department of the State Government then acts as a single window for release of funds to the BTC. There are some exceptions; the Union Ministry of Tribal Affairs routes its allocation through the State Tribal Welfare Department.5.15.1.4.3.5 The advantage of a single window system is that the Council is broadly aware of the likely size of the funds they would be getting from each department. This system needs to be further fine tuned to make it more effective and hassle free. Such a hassle free system needs to be adopted for the other two Councils of this State (KAAC and NCHAC) also with adequate delegation of financial powers.5.15.1.6 Tribe Specific Councils (created under State enactment)5.15.1.6.1 Assam has a significant tribal population living outside the Sixth Schedule areas. These tribes too have been demanding special powers and budgetary allocations on the pattern of those given to Sixth Schedule Autonomous Councils. During a period of ten years from 1995-2005, the Government of Assam entered into a Memorandum of Understanding with a large number of such tribes to establish exclusive Autonomous Councils for them. The Government legislated to create six ‘Tribe Specific’ AutonomousCouncils (with Village Councils under them) in different parts of the States. But these Councils are not compact geographical territories. Since members of a specific tribe may be residing in pockets located in more than one district, the jurisdiction of a Council often extends to several districts. Some idea of the peculiar nature of such Councils can be had from the Table No. 5.10:Table No. 5.10: Summary Information of Tribe Specific Autonomous Councils in AssamCouncilPopulation (lakhs)DistrictsCore areas areasSatelliteExpenditure (Rs. in Crores) (b)TotalST (a)Rabha Hasing5.533.29South Kamrup & Goalpara779--12.34Autonomous Council(1.84)Sonowal Kachari58.478.0Dibrugarh,Tinsukhia, Dhemaji,451--4.50Autonomous Council(1.94)Lakhimpur, Sibasagar &JorhatMising Autonomous74.2310.47Dhemaji, Sonitpur, Lakhimpur,124536622.06Council(5.30)Dibrugarh, Tinsukhia, Sibsagar, Jorhat & GolaghatLalung (Tiwa)56.134.60 (1.63)Morigaon, Nagaon & Kamrup2621536.23Autonomous CouncilDeori Autonomous48.4716.76Lakhimpur, Dhemaji, Dibrugarh,133--4.50Council(3.44)Tinsukhia and SibsagarThengal Kachari50.715.55 (d)Jorhat, Sibsagar, Dibrugarh &----2.50Autonomous CouncilLakhimpura.Figures in ‘brackets’ indicate the population of the ‘relevant tribe’ within the overall ST population as per 1991 census (Tribe specific figures are not yet available for 2001 census).b.“Clubbed figures” indicating “plan” and “non plan” as per BE 2006-07.c.For Sonowal Kachari and Deori Autonomous Councils villages have not so far been segregated in “Core” and “satellite” areas.d.Thengal Kachari tribe was not separately enumerated in 1991 census.e.Villages are yet to be notified for the Thengal Kachari Autonomous Council.f.Dhemaji, Tinsukhia, Dibrugarh, Sibsagar, Lakhimpur and Jorhat are the Districtswhich fall within the jurisdiction of multiple Tribe Specific Councils.5.15.1.6.2 The Tribal Council may have a smaller Council under it consisting of pockets which are dispersed over a large area and cover a block of several revenue villages. The population of such a ‘block’ varies with the tribe e.g. it is 6000-8000 in case of Rabha5.15.1.5 Recommendations:a) All the three Sixth Schedule Autonomous Councils of Assam should be given parity with regard to legislative and executive powers.b) Adequate resources should be provided to the Autonomous Councils so that they are able to carry out their assigned responsibilities effectively. The allocation of funds to these bodies should be based on pre-settled norms (with reference to the minimum standards of service to be provided and their capacity to raise local resources). This exercise could be undertaken by the State Finance Commission.c) The system of release of funds to the BTC through a single window system should be further fine tuned to make it more effective and hassle free. Such a hassle free system of fund release should be adopted for the other two Councils also with adequate delegation of financial powers.228229State and District AdministationGovernance Issues in the North-Eastern StatesHasing and Mising and Tiwa Councils; 3000-5000 in Deori and Thengal Kahari Councils. These smaller Councils (often called a village Council) work under the overall control and supervision of the concerned autonomous tribal council.5.15.1.6.3 In order to cover the largest possible numbers of the relevant tribe, a further ‘innovation’ has been made to identify satellite areas i.e. isolated pockets with significant population of the target group. Such areas are kept within the purview of the Council despite the fact that they are cut off from the core areas i.e. geographically contiguous areas predominated by the tribe concerned. In short, such Councils also contain isolated pockets at sporadic locations over a number of Districts. The complexity is confounded by the fact that the Districts concerned are under the purview of the 73rd Constitutional amendment with the regular Panchayat institutions operating in such areas. Each Tribe specific Council exists along with several Zila Parishads while tribal Village Councils and Village Panchayats also co-exist though their jurisdictions are not co-terminus.5.15.1.6.4 In view of the lack of spatial cohesion of these bodies- interspersed as the tribe specific Councils are over scattered pockets with concentration of the tribe concerned over a number of Districts- their programmes in spheres like rural roads, minor irrigation, control of soil erosion and village and cottage industries are difficult to implement over ‘disjointed’ areas. In fact, the funding of these bodies is exclusively dependant on allocations from the tribal sub-plan and the outlays available from this source are by no means adequate to meet the requirements sought to be met by the Councils. The Commission appreciates that compelling socio-political reasons had weighed with the State Government in establishing these bodies. Aspirations of tribes not dominating a geographically discrete area could arguably be made perfect only through imperfect solutions. The arrangement, however, gives cause for concern as to its potential for conflict and viability as also to meet the aspirations in an effective manner.5.15.1.6.5 It is clear that efforts must be made to ensure that as far as possible the role to be performed by tribe-specific bodies does not overlap with Panchayati institutions. It must be borne in mind that in areas of mixed ethnic composition existence of bodies with overlapping jurisdiction should not be allowed to exacerbate communal conflicts and tensions. It would appear that such objectives can best be achieved if the functional responsibilities of the two streams are kept as distinct as possible. This is particularly so in a situation where successful and effective implementation of the programmes implemented through the Panchayati institutions will benefit tribals and non tribals alike.5.15.1.6.6 The Expert Committee on Planning for the Sixth Schedule Areas formed by the Ministry of Panchayati Raj under the Chairmanship of Shri V. Ramachandran made the following important observations in this regard:-“An examination of the functioning of these councils shows a picture of confusion. The Panchayati Raj system continues to exist in these areas, as there is no constitutional basis for their removal. These areas are not exempt from Panchayati Raj in the same manner as other areas such as Nagaland and hill areas of Manipur have been exempted. The problems of institutional overlap in such areas are thus further compounded by the formation of these councils. There are three authorities operating in parallel in these areas, namely, the Council, the State departmental system and the Panchayati Raj system. These issues must be urgently solved so that there is only one single authority. The Committee is of the view that the Constitutional pattern will need to be respected and Panchayati Raj be strengthened in these areas, rather than to create councils on the basis of ethnic identity alone, without any geographical jurisdiction. Such bodies are inherently incapable of functioning as local self governments and at best, can function as group focused development authorities, say, in the same manner as SC and Tribal and OBC Development Corporations.”5.15.1.6.7 The Commission also examined this issue in its Report on Capacity Building for Conflict Resolution (seventh Report paragraph 12.6.3.4.3). It again reiterates its earlier recommendations.5.15.1.6.8 Recommendations:a) The Government of Assam should apportion functions between the tribe specific Councils/Village Councils and the Panchayati Raj Institutions in a manner that schemes involving individual tribal beneficiaries may be assigned to the ‘Tribe Specific Councils’ while area development schemes are assigned to the latter.b) The State Government should initiate a system of meeting at least the establishment costs of the ‘Tribe Specific Councils’ from sources outside the tribal sub plan and build in these requirements in their projections to the next Finance Commission.c)The State Government should take steps to identify innovative initiatives which could be entrusted to the Tribe Specific Councils for the benefit of the concerned tribes without affecting area development and local government concerns.d) Suitable guidelines may be drafted for preparation of District and sub-District plans in the relevant areas through joint efforts of the Tribe Specific Councils and the Panchayati Raj Institutions.230231State and District AdministationGovernance Issues in the North-Eastern States5.15.1.7 Areas under Panchayati Raj Institutions formed under the provisions of the Seventy-Third Amendment5.15.1.7.1 Out of 27 districts in the State, 6 have ‘Sixth Schedule Councils’. The remaining 21 are covered under the Seventy-Third Amendment. As noted above, however, 12 districts in this group also play host to 6 tribe specific Inter-District Councils. The situation of rural local self governance, therefore, shows a degree of variety not encountered elsewhere in the country.5.15.1.7.2 In pursuance of the Seventy-Third Amendment, the Assam Panchayat Raj Act-1994 has been enacted. The Act establishes a three tier Panchayati Raj structure viz (a) ten Member elected Gaon Panchayat (GP) with a directly elected President , (b) Block Level Anchalik Pnachayat consisting of an elected Member from each GP area and the GP Presidents (ex officio) with a directly elected President and (c) Zila Parishad with members directly elected (from four ‘ZP’ constituencies from each Assembly Constituency) and Presidents of Anchalik Panchayats (ex officio) with a directly elected President. Members of the House of the People and Legislative Assembly covering the jurisdiction of (b) and (c) are also ex officio members of these bodies.5.15.1.7.3 With the inclusion of the Bodo areas in the Sixth Schedule very few areas of the State remain under the Fifth Schedule. For them a special legislation, the Panchayats (Extension of the Scheduled Areas) Act 1996 has been enacted which in essence provides that while the provisions of the Assam Panchayat Raj Act would apply to these areas, its application will be subject to local customs. In such areas the traditional tribal habitations rather than Revenue Villages constitute Gram Sabhas.5.15.1.7.4 The recommendations made for effective functioning of Panchayati Raj Institutions in the Commission’s report on “Local Governance” need to be implemented in letter and spirit for these areas of Assam.5.15.2 Arunanchal Pradesh5.15.2.1 Arunachal Pradesh embraces the erstwhile North Eastern Frontier Agency (NEFA) which before the commencement of the Constitution was loosely administered through a Political Officer by the Political Department of the Government of India. This was based on the arrangements made for administering the NWFP of British India which bordered Afghanistan. The Constitution treated the ‘North Eastern frontier tracts’ as a deemed Union Territory administered by the Governor of Assam in his discretion as the ‘agent’ ofthe President of India. Initially, the traditions of ‘loose administration’ were maintained. The ‘frontier tracts’ were kept in ‘Part B’ of the 6th Schedule i.e. areas which could be provided with autonomous District Councils only at a future date. While none of these ‘tracts’ were ever brought under ‘Part A’ of the Schedule, from the 1950s onwards, the area began receiving greater attention. In practice, the NEFA administration was carried out from Shillong- the capital of undivided Assam- by the Adviser to the Governor who enjoyed extensive powers over this territory. During the period 1953 to 1964 the Adviser worked closely with an Officer-on Special Duty (OSD) for Tribal Affair- a post held by the legendary anthropologist, Verrier Elwin.5.15.2.2 A part of NEFA was transferred to the ‘Naga Hills- Teunsang Administrative Area established in 1957- an area that was upgraded as the State of Nagaland in 1963. Affairs of this area were handled by the Union Government through the Ministry of External Affairs (MEA) - the post independence successor of the Political Department. After the Chinese aggression, the administration was brought more in line with that of other Union Territories. A nominated advisory body was established and the Ministry of Home Affairs replaced the Ministry of External Affairs as the nodal Ministry for its administration in 1965. The post of Adviser was upgraded to that of Lieutenant Governor and the Governor of Assam was relieved of his special responsibilities. In 1972, NEFA was given the status of a Union Territory’ with an elected legislative Assembly and was renamed, “Arunachal Pradesh”. In 1986 a separate Act (the State of Arunachal Pradesh Act 1986) was enacted and the State of Arunachal Pradesh came into existence in the year 1987.5.15.2.3 The State is multi-ethnic and multi-lingual being home to over 30 tribes, practicing a number of religions including Buddhism and various indigenous faiths native to the region. Given this diversity, it is not surprising that Hindi has emerged as the lingua franca of the region.5.15.2.4 Status of Local Decentralization5.15.2.4.1 Verrier Elwin, the celebrated anthropologist, and the author of Pandit Jawaharlal Nehru’s tribal policy in the North East in his last work “Democracy in NEFA” has drawn attention to the traditions of ‘indigenous democracy’ through institutions like Kebang (Tribal Council) of the Adi tribe and brought home the crucial role of communal consensus in tribal life.5.15.2.4.2 It is also noteworthy that an area which, at the commencement of the Constitution, was considered not ripe to have the benefit of decentralized governance under the Sixth Schedule is now within the purview of the 73rd amendment. (Article-243D which provides for reservation of seats for the Scheduled castes is not applicable here).232233State and District AdministationGovernance Issues in the North-Eastern States5.15.2.4.3 Under the Arunachal Panchayat Raj Act 1997 a three tier Panchayati structure has been brought into existence. While these bodies have been constituted, effective transfer of functions/activities as envisaged under the Panchayat legislation has not yet taken place- a single member (Otem Dai) Committee was constituted to work out the modalities of implementing the scheme of delegation. The State Government has agreed in principle that the Gaon Panchayat will be the exclusive agency for selecting beneficiaries under various schemes and programme. It has also been decided to place the Zila Parishad in charge of the DRDAs. The Comission has already made a large number of recommendations for effective functioning of Panchayati Raj Institutions created under provisions of the 73rd Consititutional amendement in its Report on ‘Local Governance’ (the sixth Report). All those recommendations need to be implemented in letter and spirit.5.15.2.5 Other Issues5.15.2.5.1 Although Arunachal Pradesh has not witnessed home-grown insurgency, some of its districts are presently affected by insurgency from neighbouring Nagaland as well as the demand for NAGALIM from some insurgent groups. This has disrupted the historical tranquility and development in these districts. The priority, therefore, needs to be on the restoration of peace, lest the virus spread.5.15.2.5.2 The tribal societies in Arunachal Pradesh are egalitarian. However, during the last 50 years inequalities have emerged initially because of the uneven spread of education and unemployment. These inequalities were held in check by the system of community ownership of land. However, there are now signs of the weakening of this tradition particularly because community owned land is not bankable collateral. The Usha Thorat Committee constituted by the Reserve Bank of India on Financial Sector Plan for NER observed that, “for larger value of loans the banks are availing sufficient deposit receipt/grantee from the third party. The transfer of properties Act is not applicabvle in the State and as a result equitable mortgage can not be created. The banks are facing problem for financing high value proposals for want of security.” This needs to be carefully handled in association with banks and all stake holders in the land.5.15.2.5.3 The traditional system of dispute settlement both for civil and criminal cases known as the ‘Kebang system’ has weakened with the introduction of the Panchayati Raj System and the gradual expansion of the formal judicial system. Replacement of this system based on a negotiated system of disputes, focusing on satisfaction to the victims, by a system of adjudicated settlement of disputes is inevitable. However, the co- existence of the two systems during the period of transition requires careful consideration and decision. The Ministry of Home Affairs would need to examine Regulation 1 of 1945.5.15.2.5.4 On its constitution, Arunachal Pradesh had five districts. It now has 15 districts. Reportedly some staff from Circle Offices in remote areas has been adjusted in the district headquarters consequently weakening the administrative set up in the Circle Offices. In view of Arunachal Pradesh’s border with Tibet and a history of Chinese incursions, it is imperative that the focus on adequate administrative presence in remote border areas is not weakened.5.15.3 Manipur5.15.3.1 Manipur was a princely State that merged with the Indian Union in 1948 after some initial reluctance on the part of the then Maharaja. A peculiar feature of the State is that out of its total geographical area only 25% is in the valleys, which is home to around 70% of the total population (overwhelmingly non-tribal) while the hill areas are inhabited by various tribal communities belonging to Naga, Mizo and Kuki-Chin groups. The outbreak of insurgency in the Naga Hills in the 1950s affected Naga inhabited Northern, Eastern and Western Hills of5.15.2.5.5 Recommendations:a) The recommendations made in its Report on “Local Governance” for strengthening and empowering PRIs need to be implemented on priority.b) Some districts of Arunachal Pradesh are presently affected by insurgency from neighboring States. Firm steps should be taken by both the Union and the State Government to restore peace in the affected areas.c) Traditionally, land in Arunachal Pradesh is owned by the community. However, this system has gradually weakened primarily because community owned land is not a bankable collateral. This issue needs to be resolved in consultation with the Reserve Bank of India, banks and stake-holders in the land.d) Because of the gradual expansion of the formal judicial system in place of the traditional ‘Kebang system’, it would be necessary for the Ministry of Home Affairs to examine the Assam Frontier (Administration of Justice) Regulation Act 1945 in the State, to ensure a smooth transition to the formal judicial system.234235State and District AdministationGovernance Issues in the North-Eastern Statesthe State too. Similarly, eruption of violence in Mizo Hills in the 1960s caused disturbances in the Southern hills dominated by kindred tribes. The Valley inhabited largely by the Meitei community, too, has been the scene of insurgency caused by local armed groups from the 1970s. “Integrity” of the State has been a major issue as there is a demand from certain Naga groups for merger of areas dominated by them in the Greater Nagaland. In short, the State has remained in the midst of conflict and violence for long.5.15.3.2 Article- 371 C of the Constitution makes some special provisions for safeguarding the interests of tribal minorities of the State, which reads as under:-“(1) Notwithstanding anything in this Constitution, the President may, by order made with respect to the State of Manipur, provide for the constitution and functions of a committee of the Legislative Assembly of the State consisting of members of that Assembly elected from the Hill Areas of that State, for the modifications to be made in the rules of business of the Government and in the rules of procedure of the Legislative Assembly of the State and for any special responsibility of the Governor in order to secure the proper functioning of such committee”.5.15.3.3 In terms of Regulations framed under this provision, members of the State legislature elected from the hill areas have been given powers to deliberate on legislative proposals concerning matters affecting land, water, forests and tribal customs in such areas- subjects which essentially form part of Paragraph 3 of the Sixth Schedule. Such legislations require approvals of the legislators as above. Budget and plan provisions for such areas also require clearance of this Committee.5.15.3.4 Status of Local Decentralization5.13.3.4.1 Manipur has had strong democratic traditions. When still a princely State in 1947, elections were held to the Legislative Assembly on the basis of universal adult suffrage for the first time anywhere on the Indian soil. The voter turn-out in successive elections has been one of the highest in the country. At the grass-roots level there are differential arrangements in the tribal dominated hills and the central valley.5.15.3.5 Hill District Councils5.15.3.5.1 Like Tripura, Manipur also has some areas which are covered under Part IX of the Constitution. They are the valley areas of the State. However, unlike Tripura, the hill areas of the State are not governed by the Sixth Schedule of the Constitution, but by a special State legislation, the Manipur Hill Areas District Councils Act, 1971. This Act has provisions similar to those contained in the Sixth Schedule and has established sixAutonomous Hill District Councils in Manipur, covering 5 districts. The activities of the Councils are confined to agriculture, horticulture, primary and adult education and tribal welfare. No power to levy taxes is given to these bodies and they depend entirely on grants from the Government. The provisions of the Fifth Schedule are applicable to them. The details of these districts are as follows:Table No. 5.11: Hill District Councils of ManipurSl. No.Name of the Hill DistrictName of Autonomous District Council1.Senapati (Manipur North)1. Senapati ADC2. Sadar Hills ADC2.Churachandpur (Manipur South)3.Churachandpur ADC3.Ukhrul (Manipur East)4.Ukhrul ADC4.Tamenglong (Manipur West)5.Tamenglong ADC5.Chandel (Manipur South East)6.Chandel ADC5.15.3.5.2 The responsibility of holding elections to these bodies vests with the State Government and not with the State Election Commission.5.15.3.5.3 These Hill Councils have, however, remained defunct since 1990 when the term of the Councils elected in 1985 came to an end. The major impediment in holding elections to the Councils is the demand in the hill areas for bringing them under the Sixth Schedule. This demand is stoutly resisted by the majority of inhabitants of the Manipur valley who regard it as imperiling the ‘territorial integrity’ of the State and a prelude to the “dismemberment of Manipur”. Attempts in the past to hold elections under the existing framework were resisted. The situation currently is one of a continuing impasse.5.15.3.5.4 Villages in the Hill Areas do not have truly representative institutions. Much of village level governance is carried out by Village chiefs/headmen called Khulakpa and Gaon Burha. These functionaries hold hereditary positions in most of the non Naga communities while in Naga populated areas, they hold life-long elected positions based on a system of indirect election wherein the more powerful personality of the village is chosen by consensus. An old enactment - the Village Authority Act 1956 - gives the village headman the responsibility to control petty crime, assist in maintaining order and report on epidemics and sanitary conditions etc. In most of the Naga villages there is an informal system of electing one male representative from each clan; such elected representatives in turn form the Village Council which is headed by a Village chief. These bodies are now being used as Village Development Committees for overseeing development programmes.236237State and District AdministationGovernance Issues in the North-Eastern States5.15.3.6 PRIs in the Valley Areas5.15.3.6.1 In the valley areas, Panchayati Raj institutions have been constituted as envisaged by the 73rd Constitutional amendments. Elections are being held regularly by the State Election Commission. PRIs have been involved in the implementation of poverty alleviation programmes. However, they have not been given control over the DRDAs.5.15.3.6.2 Issues1. Constitution of Elected District Councils in the Hill areasAs mentioned earlier, the Hill Councils constituted under the State enactment of 1971, are defunct since 1990. This is mainly on account of the conflict between the hill and the valley areas over the issue of inclusion of hill areas of Manipur in the Sixth Schedule and creation of Autonomous Councils thereunder. The non-existence of elected bodies at the local level is hampering the process of development and works against the interests of the tribal communities. The Expert Committee on ‘Planning in Sixth Schedule Areas’ observed that, “there is need to immediately constitute elected district councils, whatever the future course of action on the matter of inclusion of these areas under the Sixth Schedule might be. Since the elections to the district councils were stopped on the basis of a resolution of the Hill Areas Council, this matter ought to be reconsidered by them. Detailed discussions need to be held with the concerned groups to explain and drive home the adverse results of the status quo. There might be a fear that constituting of elected district councils might dilute the demand for Sixth Schedule status. In this regard, the Committee emphasizes that the demand for Sixth Schedule Status can be examined independently of the priority to immediately constitute elected District Councils in terms of the existing State laws.” So far the funds given to the local Councils have been meager and almost entirely consist of grants from the State Government. During 2006-07, the State Plan assistance to the Councils consisted of Rs.970.00 lakhs, inclusive of Rs.300 lakhs as Special Plan Assistance.2. Devolution of Subjects / Functions to the CouncilsThe range of activities to be performed by the Hill Councils though a State enactment formed under the Fifth Schedule of the Constitution is limited as compared to that of the Autonomous Councils formed under the Sixth Schedule. Though there is plenty of scope for undertaking projects in sectors such as Health, Agriculture, Forests etc. in the absence of any participating mechanisms, the pace of development has suffered in these areas. Hence, steps need to be taken immediately to constitute the elected Hill Areas Development Councils. Thereafter, it will be imperative to devolve developmental activities along withthe transfer of the concerned offices/departments and the parallel bodies to these Councils. These steps will need to be followed by adequate devolution of funds to them on a normative and transparent basis.3. Constitution of a representative body at the village levelThe majority of the non-Tribal population lives in the valley, which comprises of about 25% of the total land area of the State. They account for 70 percent of the population of the State. The valley shows a high degree of urbanization, with nearly 40 percent of the people living in urban areas. In contrast, the hill areas of the State, comprising nearly 75 percent of its area are entirely rural, scattered in groups of isolated communities. The tribal population mainly consists of two Tribal ethnic groups, the Nagas and the Kukis, both of which have their distinctive traditional system of village governance.5.15.3.6.3 Under the Manipur Hill Village Authority Act 1956 separate village councils have been established in the Hill Areas. This Act provides for the village councils to be democratically elected. It also provides reservations for women representatives, much in the manner of the Panchyati Raj legislation. However, there is strong opposition to these Councils more from the Kuki traditional chiefs, who perceive them to be competitors and rivals of the traditional Village Councils. Currently, limited financial powers have been assigned to these elected Village Councils. The State Government is considering to empower them on the model adopted in Nagaland.5.15.3.6.4 The constitution of elected village level bodies is a must in order to accelerate the process of development. At the same time there is need to establish harmony between the traditional councils and the elected village level bodies. The local level conflicts in this regard need to be addressed by way of persuasive efforts for bringing a consensus between the divergent views. The Ramachandran Committee has suggested two ways in which theseBox No. 5.3: Naga and Kuki Traditional System in ManipurThe Naga Traditional SystemThere is a village authority, the Khulakpa, which is headed by the Traditional chief. Only men can be appointed to this council. The traditional chief’s position is hereditary. Land is owned by the community and decisions on its apportionment are taken by the authority at large. While some of these lands have been surveyed through cadastral surveys and ‘settled’, that is to say that they have been assigned individual title, the majority of the land continues to be community owned. The traditional chief is supported by a village council.The Kuki Traditional SystemA Kuki village is much smaller than a Naga village in size and could comprise of as few as 20 families. These villages are also more shifting in nature. The traditional form of Governance of the Kukis is much more ‘chief’ oriented than that of the Nagas. The Chief of the village, whose position is hereditary, is the owner of all land in the village and is the repository of all powers of administration in the village. Apart from the Haosa (Chieftain) of the village and the custodian of village land, there is the Semang (The Village Administrator), the Pachong (In charge of defence, of social organization and relief), the Lhangsam (in charge if information) and Thuching (the secretary and record keeper). None of the lands in Kuki villages have been ‘settled’, through surveys and assignments of title. The Chief allots land to the village people for cultivation and establishing homesteads. Such lands cannot be sold. If a family migrates to another village, the land automatically vests back in the Chief.Source: Planning for the Sixth Schedule Areas, Report of the Expert Committee238239State and District AdministationGovernance Issues in the North-Eastern Statesvillage level bodies could be established - first, to operationalise the provisions of the Hill Village Authority Act 1956, after discussions with the Traditional tribal chiefs and second, in case these discussions make no headway, to put in place an interim arrangement by adopting the village level planning and implementation mechanism for implementation of NREGA. The Committee also suggested that it may not be out of place to give the leadership of the village development bodies to the traditional leaders, to maintain continuity.5.15.3.6.5 The Commission also considered the issue of District and Village level Councils in Manipur while examining modes of conflicts in the North East and observed that;“In Manipur, the situation in the hill areas is a cause for concern. While the valley districts are covered under the Seventy-third Amendment, hill areas are in the exempted category. Six statutory autonomous Hill District Councils consisting of elected members with a right of participation by the legislators from the district functioned till 1990 when the next elections were due. Elections since then have not been possible as there has been a demand from a significant section of tribal population for bringing these areas under the Sixth Schedule. The demand is strongly opposed by the valley areas on the ground that it would lead to dismemberment of the State. In the absence of these Councils, grassroots level services like primary education, veterinary care and local arts and crafts have been adversely affected and a forum for ventilating local problems has also been dispensed with. It appears that after hardening of attitudes on both sides, not much efforts have been made to break the stalemate. Manipur continues to be the only State where elected village councils have not so far been set up while the village authorities involved with regulation of village affairs are largely a body of traditional village principals. In the absence of representative grassroots level bodies, selection of beneficiaries and monitoring of poverty alleviation schemes and similar interventions has suffered considerably. While much greater efforts are required to build consensus on the issue of District Councils in the State, urgent action is needed to bring in suitable legislation to introduce elected village self-governance in the hill areas of the State”.5.15.3.6.6 The Commission recommended:-“While continuous and vigorous measures are needed to bring about a consensus between various sections of society in Manipur about revival of the Hill Districts Councils, steps may be urgently taken to bring in suitable legislation to introduce elected village level bodies in the hill areas of that State.”5.15.3.6.7 The Commission once again reiterates this view. It believes the stalemate with regard to the non functional District Councils is clearly prejudicial to the development ofhill districts of Manipur. While sincere, proactive measures are necessary to bring about a consensus among the various sections of society about the revival of these long defunct bodies, there is no reason why a beginning to introduce elements of accountable village level self governance should be delayed. Suitable incentives could be provided to the State for initiating legislative measures to usher in a system of village level democratization having regard to the local circumstances. Once the District Councils are revived, it will be imperative to devolve a major domain of developmental activities to them along with transfer of funds and functionaries. The local functionaries of the field offices of the State governments and the parallel bodies which are currently handling these activities at the district level will also need to be placed at the disposal of the District Councils.5.15.3.6.8 As regards strengthening and empowering the PRIs, the Commission would like to reiterate its recommendations made in its Report on “Local Governance” (sixth Report).5.15.3.8 Issues of Personnel Management in Manipur5.15.3.8.1 The Commission during its visit to Manipur was apprised of the large scale demoralization prevailing among the government staff at all levels. It was because of threats of extortion and insurgency which had created an extremely troubled law and order situation5.15.3.7 Recommendations:a)Sincere, proactive measures should be taken to revive and activate the HillDistrict Councils in Manipur. It will be imperative to devolve a major domain of developmental activities to them. It will have to be done along with transfer of funds and functionaries. The local functionaries of the field offices/departments of the State Governments and the parallel bodies which are currently handing these activities at the district level will also need to be placed at the disposal of the District Councils.b) All steps should be taken to put in place elected Village Councils in rural areas. Suitable incentives should be provided to the State for initiating proactive legislative measures in this direction having due regard to the local circumstances.c) As regards the PRIs the Commission has already made a number of recommendations for their strengthening and empowerment in its Report on “Local Governance” (sixth Report) which needs to be implemented on priority.240241State and District AdministationGovernance Issues in the North-Eastern Statesthroughout the State. As a result, staff posted in remote hill districts do not join their place of postings resulting in serious dislocation of public services. Schools were without teachers and health care centres without para-medical staff. This situation has also led to administrative aberrations like deployment of employees in urban centres far in excess of sanctioned posts. For example, in the Office of the Deputy Commissioner Imphal, there were 78 LDCs working against 15 sanctioned posts. Artificial shortages have often been cited as justification for adhoc/substitute recruitment. It has resulted in high incidence of irregular employment and payment of salary to “ghost” staff. In a bid to redress, the situation, Government of Manipur took a number of innovative steps. These included:-(1) Computerisation of a Personnel Information Systems (CPIS) under which a data base was created of:?All sanctioned posts in each office?All regular government employees in each office(2) It also generated a Unique Employee Identification Number (EIN) and it was ensured that salary would be paid to only those staff who had an EIN.(3) The CPIS was regularly up-dated in respect of each promotion, transfer, retirement and recruitment.The impact of this important measure included:-i.Detection of 6311 ghost / fake employees (i.e. 10% of State’s total man power)ii.Rs 80 crores saved per year in salary paymentsiii. It stopped back-door/unauthorized appointmentsiv.Re-deployment of staff in outlying/remote hill officesv.Clear information to each HOD about man power deploymentvi.Strong public appreciation5.15.3.8.2 Another effective and noteworthy initiative on the part of the Manipur Government was the passing of the Manipur Public Servant Liability (MPSPL) Act in support of the CPIS and to check corruption. It provided “for personal liability of the public servants of Manipur for creation of unauthorized liability through irregular actions in form of appointment or engagement of persons, award of works, supply orders, paymentof bills, signing and execution of contracts, providing grants, benefits, compensation, and such other acts in the name of Government or its agencies and recovery of such amounts from the personal incomes including salary and other entitlements of the Public Servants responsible for creation of such liabilities” .5.15.3.8.3 A High Powered Committee under the Chief Secretary was set up to fix responsibility and order recoveries, through summary procedures.5.15.3.8.4 The initial resistance to these initiatives was overcome because of extensive meetings and interactions at the Chief Secretary level with officers and explaining to them how these could be effectively used for improving governance and to check corruption. Prima-facie, as per reports, there has been perceptible improvements both in the presence of staff in remote locations as well as in governance in general because of these steps. But, the challenge is to ensure that they are sustained.5.15.3.9 Special powers to the Governor of Manipur under Article 3715.15.3.9.1 Currently Manipur is the most severly affected State in the region in terms of increase in the number of cases of extortion and insurgency, etc. There have been instances when the elected governments failed to take decisive action at critical moments, often leading to complete breakdown of law and order and large scale disturbances in the State. Also, the process of political reconciliation to resolve complex situations has considerably weakened. Under these circumstances, there is need for the Union Government to consider giving special responsibilities to the Governor of Manipur to deal adequately and effectively with such situations. The Governors of Nagaland (Article 371A) and Arunahal Pradesh (Article 371H) have been given special responsibility under the Constitution for maintenance of law and order in these States because of the strategic location and the long history of insurgency and extremism in this region. In view of the problems of Manipur as stated above, the Commission is of the view that similar powers may also be given to the Governor of Manipur. Presently, under the provisions of Article 371C, the Governor of Manipur is entrusted only with the responsibility of submitting an annual report to the President on the administration of hill areas of the State. He should also be assigned special responsibility with regard to maintenance of law and order on the pattern of Article 371A5.15.3.8.5 Recommendation:a) Initiatives of the Manipur Government in human resource management need to be sustained. Similar initiatives may also be considered by other States of the region.242243State and District AdministationGovernance Issues in the North-Eastern States2445.15.3.9.3 Recommendation:a) In view of the circumstances prevailing in Manipur, the Governor of Manipur should be given special powers/responsibility with respect to law and order on the lines of the powers vested in the Governors of Nagaland and Arunachal Pradesh under Articles 371A and 371H of the Constitution respectively. This could be done by inserting a suitable paragraph in Article 371C.and 371H. This could be done by appropriate redrafting of the existing Article 371C. The amended Article could read as follows:“The Governor of Manipur shall have special responsibilities with respect to law and order in the State of Manipur and in the discharge of his functions in relation thereto, the Governor shall after consulting the Council of Ministers, exercise his individual judgement as to the action to be taken:Provided that if any question arises whether any matter is or is not a matter as respects which the Governor is under this clause required to act in the exercise of his individual judgement, the decision of the Governor in his discretion shall be final, and the validity of anything done by the Governor shall not be called in question on the ground that he ought or ought not to have acted in the exercise of his individual judgement.Provided further that if the President on receipt of a report from the Governor or otherwise is satisfied that it is no longer necessary for the Governor to have special responsibility with respect to law and order in the State of Manipur, he may be order direct that the Governor shall cease to have such responsibility with effect from such date as may be specified in the order.”5.15.3.9.2 The Commission feels that by incorporating this provision in the Constitution, the Governor of Manipur will be in a position to play a more proactive role in case of breakdown of law and order and large scale disturbances in the State when there is reluctance or failure on the part of the elected government to take timely measures to deal with such situations.5.15.4 Meghalaya5.15.4.1 At the commencement of the Constitution, the present State of Meghalaya consisted of three Districts of Assam. Under the Sixth Schedule these Districts were provided two Councils – a joint or united Council for the Jaintia and Khasi Hills District, and aseparate Council for the Garo Hills. In 1969 through the twenty-second amendment of the Constitution, a new provision, Article-244A was added enabling the Parliament to form an ‘autonomous State’ within the Constitution. Pursuant to this amendment, Parliament established an ‘autonomous State’ called Meghalaya. Later under the North-Eastern Areas (Reorganisation) Act 1971, this autonomous State was given the status of a full fledged State in 1972.5.15.4.2 With 7281 mm of annual rainfall, Meghalaya is not only the ‘wettest’ State in the country; it is among the regions with highest precipitation anywhere in the world. It is multi ethnic in character with three tribes, Khasi, Garo and Jaintiya accounting for more than 95% of the tribal population of the State. (the Schedule Tribes constitute 86% of the total population of the State).5.15.4.3 Status of Local Decentralization5.15.4.3.1 Meghalaya is the only State in the North-East Region where the Sixth Schedule provisions cover the entire territory except the so called “European Wards” of Shillong city. Three Autonomous Councils representing the most prominent tribal communities of the State cover seven districts as detailed below.Table No. 5.12 : Statistics Related to the Autonomous Councils of MeghalayaSl. DistrictPopulationRevenue RemarksNo. NameRuralUrbanTotalDistrictscoveredSource: “Planning for the Sixth Schedule Area”: Report of the Expert Committee2.Garo Hills45941258978518390West GaroAutonomous DistrictHills DistrictCouncil (GHADC)3.Jaintia Hills ADC923378643100980South GaroHills District1.Khasi Hills383175277748660923East KhasiHADCs coverAutonomous DistrictHills District more than oneCouncil (KHADC)revenue district26145134598296049West KhasiHills District21467535907250582East GaroHills District27405125057299108Jaintia HillsThe Council isDistrictco-terminus withone revenue district17961013180192790Ri-bhoiDistrict245State and District AdministationGovernance Issues in the North-Eastern States5.15.4.4 Organisational arrangements in the Autonomous Councils:5.15.4.4.1 The organisational arrangements in respect of the HADCs are largely similar. The Sixth Schedule lays down the details of their power and functions. Each Council consists of upto twenty six to thirty elected (and nominated) members which form the Legislature and which has powers to enact and frame Laws, Rules and Regulations on the subjects listed in the Sixth Schedule. From amongst them is elected the Chief Executive Member. Two Executive Members are appointed by the Governor. Each Executive Member is assigned a functional portfolio, much in the manner of a Minister of the State Government. The Executive is responsible for administration of the Council, realization of revenue, taxation on certain subjects, development works etc. The Judiciary consists of the village courts which try petty cases, subordinate and Districts Courts which have original and appellate jurisdiction. Appeals lie with the High Court. These Councils appear to be miniature governments replicating all their paraphernalia. The details of these Councils are given below:15Table No. 5.13 : Brief Account of the Autonomous Councils of MeghalayaSl. No.ItemDetails1. Date of ConstitutionKHADC1952 JHADCGHADC195219642. Details of the Council30 Members30 Members19 Members(29 elected +(26 elected +(16 elected +1 nominated)4 nominated)3 nominated)Only tribals & non-tribals who are permanent residents (12 years +) eligible to vote.Chairman and Deputy Chairman elected by Council5 years tenure3. Details of the Executive Committee (EC)Six (6) Executive MembersCouncil elects CEMOther EC Members appointed on CEM’s advice Performs all executive functions4. Administrative StructureA secretariat headed by a Chief Executive Officer and staff, including for line departments5. Village CouncilsElected Village Councils do not exist as the legislation for the same has not yet been brought into forceTable No. 5.14: Powers and Functions of the Autonomous Councils of MeghalayaSl. No. 1.ItemDetailsLegislative powers with Governor’s assentPowers and FunctionsLegislative PowersJudicial powersPowers to constitute Village courts, with appellate powers with the Council.Appeals from Council courts lies with High CourtVillage Chiefs/Headmen appointed Chairman of Village CourtsSubordinate/Addl. Distt. Courts – EC appoints with Governor’s approvalDistt. Council Courts – One or more judicial officers designated as Judges are appointed by the EC, with Governor’s approval.In Garo Hills, Village Courts consist of the Lasker of Village + two members elected by Village Council (VC).In Jaintia Hills, Village Courts are headed by the traditionally elected Village Chief/Headman and consist of between two & six Members.Executive PowersAppointment & Succession of Chiefs/HeadmanEstablish & manage primaryPrimary education, markets,schools, dispensaries,RD, PWD, Transport, Forestsmarkets cattle ponds,(excluding R.F.)fisheries, road & waterwaysFinancial powersPrepare & pass budget/ assess & collect revenue/ impose taxes/ trades/ markets/ tolls/ license & lease/ share in royalties collected by State Govt.5.15.4.4.2 The powers of the Hill Area Autonomous Councils cover the following areas:1. Appointment/ succession of Chiefs/ Headmen2.Construct/ manage primary schools (withdrawn by the State Government)3. Management of land & forest4.Control of money lending & trading by non-tribals5.Marriage & Divorce6.Inheritance of property246247State and District AdministationGovernance Issues in the North-Eastern States7. Ponds8.Ferries9. Road Transport & Waterways10. Markets11. Social Customs12. Levy & Collection of Taxes5.15.4.4.3 Considering the fact that the geographical jurisdiction of the Councils taken together and that of the State Government is co-terminus, it is not surprising that the additional powers conferred on the Autonomous Councils in other States under the Schedule have not been extended to the Councils in Meghalaya which exercise the ‘pristine’ powers of Paragraph 3 and 4 of the Schedule viz. jurisdiction over land, water and customs and administration of justice. There is growing discomfort between the State Government and the Councils in this regard, as these Councils are amongst the oldest in the Region and were recognized when the Constitution was framed.5.15.4.4.4 Like other Sixth Schedule areas, there are no representative bodies at the village level in Meghalaya. The traditional system of village chiefs/headmen has been retained. They are:1.Syiem, Sardar and Lyngdoh in Khasi Hills.2.Dolloi, and Sardar in Jaintia Hills.3.Nokma, and Lashkar in Garo Hills.5.15.4.4.5 At present affairs of the village are managed by these traditional functionaries with support of male village elders. It is more or less the same as the system prevalent in Manipur.5.15.4.5 Issues Concerning Autonomous District Councils5.15.4.5.1 The Autonomous District Councils in Meghalaya have not been able to function effectively for many reasons. It has been a common finding of several Commissions and Committees which have examined the functioning of Autonomous Councils that there is considerable disaffection between the State Government and the Councils. While the Councils believe that they have a pre-eminent position in local governance, both on account of tradition and the fact that they draw their strength from the Sixth Schedule, the MeghalayaGovernment’s attitude seems to be that these Councils should stick to their traditional role, which is to protect tribal culture, land and identity from being overwhelmed by the culture of the plains. The State Government feels the Councils do not have much of a role to play in developmental activities. At the district level, the only connection between the development administration and the District Council exists through the Chief Executive Member (CEM) who happens to be a member of the DRDA governing body.The Ramachandran Committee observed that “there is thus a crying need for reform on both sides, namely, for the State to understand that the District Councils could play an effective role in local development and for the District Councils to usefully use their autonomy to undertake reforms, in particular reorganize themselves to carry out effectively their statutory functions, and reorient themselves towards development. Moreover, within the district, the apparent contradiction between traditional institutions and a modern political system (as represented by the District Council) will have to be sorted out. This calls for a well structured and integrated system within the district from the District Council to village level institutions. In this regard, the Committee identified the following points of action that ought to be addressed on priority:(i)Maximise participation of village people(ii) Ensure gender sensitivity and empower women(iii) Ensure transparency in its transaction(iv) Ensure participation of the marginalized.”5.15.4.5.2 Other important observations of the Expert Committee are as under:-(a) At the village level, the approach adopted in the IFAD project areas had indeed touched a responsive chord among the people, particularly women. Dovetailed into the NREGA planning process, this provided a powerful and well tested model for triggering local planning and execution of programmes at the village level. Therefore scaling up of this approach is required to cover all villages in Meghalaya.(b) At the district level, the District Councils will have to reorient them towards development. There is need to strengthen and professionalise their activities. The first step in this regard would be to provide for women to be represented in the Hill Councils.248249State and District AdministationGovernance Issues in the North-Eastern States5.15.4.5.3 The Commission is of the view that as in the case of Panchayati Raj, there is a need for separation between the State Government and District Councils through a process of activity mapping. There should be clear demarcation of jurisdiction between the State Government and the District Councils. The links between the District Councils and the State Government should be effectively maintained. The State Government should hand over all subjects and departments that pertain to the domain of District Councils to them. The Union Government would also need to take similar action with regard to Centrally Sponsored Schemes being implemented in these areas. As regards financial resources, from the interaction that the Commission had with the Councils of Meghalaya, it believes that the grants received from the State Government and their own revenues together are insufficient to do full justice to their financial needs. Therefore, the allocation of funds to the District Councils should be based on normative and transparent considerations. Also the fiscal transfer system operating between the State Government and the District Councils needs to be systematized. Funds for the District Councils should be budgeted for in detail and allocations should be handed over to the District Councils in two instalments. At the same time the Councils should take immediate action for improving their own revenues. It is equally important to improve internal administration and financial management capabilities of these Autonomous Councils in order to convert them into effective self-governance institutions.5.15.4.6 Elected Village Councils5.15.4.6.1 There is growing concern in the State about the need to involve rural communities in development programmes. A beginning has been made through ‘pilot- testing’ of an innovative approach in the National Rural Employment Guarantee Scheme in West and South Garo Hill Districts. This innovation is based on the model used for implementing the IFAD (International Fund for Agriculture and Development) sponsored project, “North Eastern Region Community Resource Management Project for Upland Areas (NERCORMP). This project seeks to improve the livelihood of vulnerable groups through improved management of the local resource base in selected areas. The project has a hierarchy of groups like the village level Natural Resource Management Groups (NaRMG) which function like the Gram Sabhas. A given number of such groups form a ‘cluster’; the ‘clusters’ in a District constitute the Community Resource Management Society. The ‘cluster’ and ‘community’ level bodies consist of elected representatives of village level bodies, representatives of NGOs and Government officials.5.15.4.6.2 The adaptations made by the State Government in the above model involve setting up a Village Employment Committee (VEC). The VEC has three members- two of them elected, one male and one female. The third member is the traditional villagechief. The electorate consists of one adult male and female from each household. One of the elected member acts as the Secretary. The VEC is responsible for preparing schemes to be undertaken and monitors the implementation. Above the VEC there is Area Executive Committee (AEC). ‘Area’ comprises villages within a radius of 3.5 KMs. AEC consists of the village head and another member of the VEC subject to the condition that at least thirty percent members are to be females. The AEC issues Employment Cards under the NREGS. The AEC is to be headed by a local chief.5.15.4.6.3 This experiment has the merit of bringing in an element of participation, including gender representation while retaining the traditional source of authority. The arrangement will, however, become meaningful only when the number of members of the VEC is raised (say to ten) and the AEC is provided a linkage with the Block and District level Committees. It will need some modification in its application to Khasi areas as the institution of “Darbar” in such areas may require some adjustment in the concept of VEC- “Darbars” do not necessarily coincide with village boundaries.5.15.4.6.4 In its Seventh Report, it was recommended by the Commission that,“Government of Meghalaya may take steps for extension of the experiment of elected village committees in the Garo Hills for implementation of the National Employment Guarantee Act throughout the State for implementation of all rural development programmes”.5.15.4.6.5 The Commission reiterates the above recommendations. Further, in line with its thinking with regard to constitution of representative bodies at the village level in the Sixth Schedule Areas of Assam, and the hill areas of Manipur, the Commission is of the view that in the long run, directly elected village level representative bodies will need to be constituted and properly empowered in the Autonomous Hill Council areas of Meghalaya as well.5.15.4.7 Recommendations:a) The fact of Autonomous District Councils should be accepted and the State should undertake comprehensive activity mapping with regard to all the matters mentioned in para 3 of the Sixth Schedule. This process should cover all aspects of the subjects viz planning, budgeting and provisioning of finances. This will necessitate full transfer of local functionaries of the field offices/departments and bodies relating to these activities at the district level to the control of the Councils. The State Government should set-up a task force to complete this work in a time bound manner.250251State and District AdministationGovernance Issues in the North-Eastern Statesthe Sixth schedule, namely, the Chakma Autonomous District Council (CADC), the Mara Autonomous District Council (MADC) and the Lai Autonomous District Council (LADC). These District Councils cover two administrative districts, namely, Lawngthlai and Saiha districts. The details of these Councils are summarized in Table 5.5 below:Table No. 5.15: Brief Account of the Autonomous Councils of Mizoram5.15.5 Mizoram5.15.5.1 At the commencement of the Constitution, Mizoram was a District in Assam, known as Lushai Hills and was included in the Sixth Schedule. Renamed as Mizo Hills in 1954, the area experienced severe famines in the late 1950s and early 1960s which led to serious turmoil and insurgency spearheaded by the Mizo National Front (MNF). The District was separated from Assam and raised first to the status of a Union Territory in 1972 and then to full Statehood in 1987. Following an accord with the MNF in 1986 peace and tranquility has been restored in Mizoram. The State has made rapid strides and has emerged with the highest literacy in the country. Despite its small population and limited territory, it has considerable ethnic diversity. With the conferment of the status of Union Territory the Mizo Hill District Council was dissolved and now the State has three autonomous district councils catering to three non Mizo minority tribes- Mara, Lai and Chakma.5.15.5.2 Status of Local Decentralization: Autonomous District Councils5.15.5.2.1 In terms of Article 244(2) of the Constitution, the provisions of the Sixth Schedule apply to the administration of Tribal Areas in Mizoram. Three Autonomous District Councils have been accordingly constituted in accordance with Paragraph 20 ofSl. No.Name of the CouncilPopulationRevenue Districts CoveredNo. of Elected MembersNo. of Nominated Members1Lai Council40,076Lawngtlai district and Sangau block of Saiha district2342Chakma Council39,521Lawngtlai district, Chawngte block1333Mara Council65,994Saiha district, Tuipang block19 45.15.5.2.2 These Councils exercise legislative and executive powers over land, water, non reserved forests and tribal laws and customs along with limited judicial powers. The Chakma Council has in particular codified the relevant tribal laws. The Councils occupy parts of single districts and elections are conducted by the Deputy Commissioners concerned. Powers over development programmes have not been entrusted to these bodies; responsibilities in that behalf are with the State Government. DRDAs also function independent of the Councils.5.15.5.2.3 Under paragraph 6(1) of the Sixth Schedule, District Councils have powers to establish, construct and manage primary schools, dispensaries, markets, cattle ponds, ferries, fisheries, roads, road transport and water ways. The Councils also have the power to assess, levy and collect revenue in respect of land and buildings, taxes on professions, trades callings and employments, animals, vehicles and boats, tolls on passengers and goods carried in ferries, and taxes on the maintenance of schools, dispensaries, or roads as listed in paragraph 8 of the Sixth Schedule.5.15.5.2.4 The executive functions have been further clarified and elaborated through a detailed notification dated 22nd September, 1993, which modified the earlier notification dated 20-8-86. Under this order the following subjects have been entrusted to the Autonomous District Councils, with effect from 1994-95 :b) Allocation of funds to the District Councils should be based on normative and transparent considerations. These allocations should be budgeted in detail and released in agreed instalments during the financial year.c) The Union Government would also need to take similar action with regard to Centrally Sponsored Schemes being implemented in these areas.d) Appropriate measures may be taken for capacity building in Autonomous Councils so that they are able to utilize the funds in a better way.e) Government of Meghalaya may take steps for extension of the experiment of elected village committees in the Garo Hills for implementing the National Employment Guarantee Act and for implementation of other rural development programmes as well.f)In the long run, directly elected village level representative bodies will needto be constituted and adequately empowered in autonomous Hill Councils areas of Meghalaya.252253State and District AdministationGovernance Issues in the North-Eastern StatesTable14 No. 5.16: Activities Entrusted to the Autonomous Councils of MizoramSl.No. DepartmentActivities2.FisheriesGrant-in-Aid to individual fish farmers for fish pond development3.Public Health EngineeringRural sanitationSpring source development4.IndustryHandloom and handicraftTable 5.16: Activities Entrusted to the Autonomous Councils of MizoramContd.Sl.No. DepartmentActivities7. Local AdministrationUrban development, Construction of steps, culverts, retaining walls etc.8. ForestOngoing projects of the forest department are handed over to the District Council, along with assets and liabilities9. TransportSeparate Transport Department to be created in each District Council from 1994-95 onwards. State Transport Department would set aside the cost of one Bus for each District Council including maintenance charges10. Sports and Youth ServicesDistrict Council to create sport and youth services department. Funds will be provided by the State Sport and Youth Department11. Co-operation DepartmentDistrict Council to create cooperative department12. Relief and RehabilitationRs.1 lakh to be provided by the council for 1994-95 undernon-plan, with finance department earmarking funds for this purpose.13. DRDA & ICDSState Government to seek clarification from Central Governmentwhether these agencies can be handed over the District Council14. Water ways and inland waterState Government to provide funds to District Councilstransportfor this purpose from 1994-951.Agriculture and HorticultureAgriculture linked roadDistribution of Planning materials and certified seedsProcurement of machineries implements and water pumping machinery at 50% subsidyLand DevelopmentMinor irrigation and construction of field channels6. Animal Husbandry and Veterinary Subsidy scheme for Cattle developmentSubsidy scheme for Piggery AH Dispensaries7. Arts and CultureGrant-in-Aid for promotion of arts and cultureDistrict Library District museum Assistance for publication8.Social WelfareOld age pension (Plan and non-plan)Assistance to voluntary organizations Pre-schoolsWelfare of handicapped persons Welfare of poor and destitute people9.Soil ConservationImplementation of terracingPlantation subsidy scheme Village grassingGrant-in-Aid to individuals for supply of tools and implementsSelection of beneficiaries for loans5.SericultureGrant-in-Aid for silkworm rearingMarketing of cocoon to State Government25410. Public Works DepartmentDistrict Councils to create Public Works Department andstrengthen their technical capacity in accordance with PWD norms, to take up the following works:Inter-village approach roads and links with PWD roads.Maintenance and improvement of satellite towns and village roads.11. EducationPrimary Schools transferred with effect from 1994-95 onwards,along with the budget, which will be transferred from the State education department budget and reflected in the district council budget.Adult Education12. Rural DevelopmentRural communicationsConstruction of community halls Rural housingMiddle schools agreed to be transferred to District Councils, with board examination to continue to vest with the examination board.25514IbidState and District AdministationGovernance Issues in the North-Eastern States5.15.5.3 Status of Village Councils5.15.5.3.1 The State Government has constituted elected Village Councils all over the State i.e. over both the Council and other areas. These elected Councils have replaced the hereditary institutions of Chiefship and are involved in village governance, and development and in collecting local rates and taxes. Village Councils even cover urban areas including the State Capital Aizawl which is covered by several Village Councils. An examination of the relevant laws shows that Village Councils are quite representative, with one third of the members being elected and another one third being nominated. The powers of these Councils include mobilizing local funds and effort for community works. The Village Council (Chakma Autonomous Council) Act, 2002 contains detailed provisions regarding the scope of the powers of the Council. In a measure designed to curb infiltration from across the border, all Village Councils in Chakma areas are mandated to maintain Village Council population registers and immediately report any instances of infiltration from across the border to the Chakma District Council. The Lakher Autonomous District Village Council Act, 1971 which continues to be in force in the Mara District Council District similarly contains detailed provisions regarding the Village Council. The powers of the Village Council include civil functions and also compelling people to undertake ‘Tlarai’ or ‘Vatlarai’, namely, work done collectively by villagers for the common good. Village councils are empowered to levy fines on individuals who refuse to undertake community works. Village Councils also implement several CSSs, as agents of the DRDAs. For example, IAY beneficiaries are selected by the Village Council. However, in doing so, they do not report to the District Councils and are not accountable to them.5.15.5.4 Issues5.15.5.4.1 Overlapping and competing jurisdiction of the State administration and the District Councils5.15.5.4.1.1 A closer look at the present administrative arrangements in Mizoram reveals that there are two parallel administrative hierarchies functioning within the district, one headed by the Council, which has potentially wide executive and development functions and the other headed and coordinated by the Deputy Commissioner, who operates through separate agencies such as the DRDA and State level line department officers posted in the district. While Councils existed even prior to the Constitutional amendment, unlike Panchayats in other parts of the country, their position and status has weakened and their powers diffused over time. The Ramachandran Committee observed that “in Mizoram, these councils at firstglance are over-structured, over-staffed and with patchy empowerment - while they have unbridled unaccountable freedom in one area, they have none in others. The problems of the Councils are also compounded by the fact that they covered very small populations of ethnic groups, thereby reducing the scope and scale of their operations.”5.15.5.4.1.2 The Committee also noted that “the problem was not only one of development but is also political. There are strong ethnic feelings, between tribal communities in the State, which undermines the spirit of collaboration and cooperation required between different levels of government for effective functioning. The Mizoram Assembly has passed resolutions for abolition of Councils and on the other hand the Councils have been demanding separate UT status and direct funding. There is a need for both the Government and the Councils to realize that to accelerate development; they will need to work as partners, as part of a seamless web and not as rivals. Many individuals within either system undertake good work and no institution can be condemned wholesale for the mistakes of some within it. The methods of working need to be so rearranged so that everybody can work together and achieve something.”5.15.5.4.1.3 In order to resolve the conflicts explained above, the following steps could be useful:-i.Effective devolution of powers to the District Councilsii.Internal reforms and capacity building within the District Councilsiii. Merger of DRDA with the District Council5.15.5.4.1.4 The above issues have been considered by the Commission earlier in this Chapter as common issues relevant to all the Sixth Schedule States of the North East and separately in case of Assam and Meghalaya. As recommended therein, the State must undertake comprehensive activity mapping with regard to the matters which can be transferred to the autonomouc councils. This process should cover all aspects of the subjects viz planning, budgeting and provisioning of finances. This will necessitate full transfer of all departments and bodies relating to these activities to the control of the Councils and merger of parallel institutions [such as the District Rural Development Agency DRDA] related to these transferred matters and departments The State Government should set-up a task force to complete this work within one year. The Union Government will also need to take similar action with regard to Centrally Sponsored Schemes being implemented in these areas.256257State and District AdministationGovernance Issues in the North-Eastern States5.15.5.5 Recommendations:a) The State should undertake comprehensive activity mapping with regard to all the matters mentioned in para 3 of the Sixth Schedule. This process should cover all aspects of the subjects viz planning, budgeting and provisioning of finances. This will necessitate full transfer of functionaries of the field offices/departments/bodies relating to these activities to the control of the Councils. The State Government should set-up a Task Force to complete this work in a time bound manner.b) The Union Government will also need to take similar action with regard to Centrally Sponsored Schemes being implemented in these areas.5.15.5.4.1.5 The Commission would further like to suggest that a coordinating committee, either within the State Planning Board, or under the Chief Secretary, be constituted to monitor the reforms, and settle any issues that might arise in the process. The CEMs of all the three Councils and the Deputy Commissioners of the District concerned may be made members of this Coordination Committee. Representation may also be given to NGOs, associations of Women and the youth and selected Chairpersons of Village Councils, in the Committee.5.15.6 Nagaland5.15.6.1 Nagas are a group of tribes with their own languages, social customs, folklore and territories who were clubbed together for administrative purposes by the ruling powers at different points of the history of the region. Many Naga areas were grouped in a single Naga Hills District in 1866 to bring these areas under direct British rule to safeguard tea plantations. The district did not, however, include many areas like the Northern and Eastern parts of Manipur and tracts, once known as “Naga tribal areas”- one of the ‘agencies’ of NEFA. The Sixth Schedule of the Constitution was initially conceived as an arrangement to meet the political aspirations of the people of this District – an arrangement that could not be implemented as it fel far short of the Naga demand for self rule. Violent insurgency had broken out in the early 1950s for an ‘independent Nagaland’ not only in the Naga Hills District but also in areas dominated by the Nagas in Manipur and NEFA. The District was initially upgraded as the “Naga-Tuensang Administrative Area” in 1957 with the merger of Tuensang frontier tract of NEFA and with an “Area Council”- a nominated body consistingof traditional opinion leaders of the constituent tribes. Disturbances, however, continued unabated even after the emergence of the State. It is now widely recognized that recourse to violence by various ethnic groups in the North East at different points of time was largely an ‘inspiration’ from Naga insurgency.5.15.6.2 Hopes of lasting peace raised by the Shillong Accord with the Naga groups in 1975 proved short-lived as elements opposed to the Accord regrouped as the National Socialist Council of Nagaland (NSCN) and the cycle of violence continued. In the last few years, however, there has been an improvement in the situation with a ‘cease fire’ between major elements within the NSCN and the Union Government.5.15.6.3 Status of Local Decentralization5.15.6.3.1 The Sixth Schedule does not extend to Nagaland. It is interesting to recall that the founding fathers of the Constitution had envisaged the ‘Sixth Schedule arrangement’ for the tribal areas of Assam mainly to respond to the dissatisfaction among the Naga tribes about their status in the emerging Indian Union. The arrangements were, however, not acceptable to the Naga groups which continued to press for Independence for a long time and the dispensation devised primarily for the Nagas was applied to other tribal groups.5.15.6.3.2 Naga society is essentially democratic with an element of election of headmen albeit within families traditionally ‘supplying’ such leaders. The State has, therefore, opted for a system of Village Councils and Village Development Boards as the key elements of local self governance. There is a Council for each village under the Village Councils Act- 1990. It combines traditional village functionaries and elected members who elect a chairman among themselves. The Councils are responsible for village administration to exercise general control over the activities of Village Development Boards (VADBs).5.15.6.4 Village Councils in Nagaland5.15.6.4.1 Under the Nagaland Village Councils Act 1990, every recognised village, established according to the usage and customary practices of the population of the area is required to have a Village Council (VC), with a five year term. This Council consists of members, chosen by villagers in accordance with the prevailing customary practices and usages as approved by the State Government. The Act provides that hereditary village chiefs shall be ex-officio members of such Councils, with voting rights. The Act also recognized that traditional village institutions such as the “Putu Menden” in Ao Areas, which is recognized258259State and District AdministationGovernance Issues in the North-Eastern Statesas a village council, shall continue to function according to their custom and usage. The Village Council chooses a Member as Chairman and can select and appoint a Secretary who may or may not be a member of the Council. If the Secretary is not a member of the Council he does not have voting rights. The Village Council is required to meet at least once every three months. It is the job of the village council to formulate village development schemes, to supervise proper maintenance of water supply, roads, forest, education and other welfare activities to help Government agencies in carrying out development works in the village and to take up development works on its own initiative or on request by the Government. The Village Council also has the power to borrow money from various sources such as the Government, Banks or financial institutions, to apply for and receive grants-in-aid, donations, subsidies from the Government or any agencies and to raise funds for utility services within the village by passing a resolution subject to the approval by the State Government. However, all monetary transactions are required to be conducted through a scheduled bank or the Nagaland State Cooperative Bank. The Village Council also has the power to administer justice within the village limits in accordance with the customary law and usages and has full powers to deal with the internal administration of the village. The Village Council is subject to the central superintendence of the State Government/ Deputy Commissioner / Additional Deputy Commissioner or Sub-Divisional Officer (Civil) in-charge of the Sub-Division, Extra Assistant Commissioner or Circle Officer.5.15.6.5 The Village Development Board5.15.6.5.1 The concept of the Village Development Board (VDB) began to take shape during the Seventh Plan period, when it was realized that there is a need to reconcile the traditional Tribal institution of the Village Council, which basically comprises of male members of each family in the village and is headed by a traditional Tribal Chief with the demands of modern inclusive development. The concept of having a separate Village Board, without displacing the traditional Village Council was first experimented and adopted in Phek District, in 1976. The initiative for the formation of VCFC and keeping of funds in banks came from the innovative initiatives of Shri A.M. Gokhale, the then Deputy Commissioner, Phek. This concept was taken further for the formation of VDBs in all existing 918 recognized villages in 1980-81.5.15.6.5.2 In 1978, Nagaland enacted the Nagaland Village and Area Council Act, which enjoined that each Village Council should constitute a Village Development Board for the village concerned. These Village Development Boards are to exercise certain of the powers, functions and duties of the Village Councils, subject to the prior approval of the Chairmanof the village council. The powers of these Village Councils were laid out in clauses 4,6,7,8,9 of Section 12 of the Act and included powers to formulate schemes, programmes of action for the development and progress of the village as a whole or groups of individuals or for individuals in the village, either using the village community or other funds. VDBs are responsible for preparation of Annual Plans, its implementation and proper utilization of funds. A unique power given to the VDB was to arrange for loans for community members and to even stand guarantee for these loans. Village Development Boards Model Rules 1980 were framed under the Village and Area Councils Act 1978 and these were revised in 1989. It is reported that so far, the cumulative expenditure since inception, through the VDBs has been Rs. 254 Crore, of which Rs. 63 Crore was spent on programmes for women and Rs. 50.83 Crore for the youth.5.15.6.6 Composition of the Village Development Board5.15.6.6.1 All permanent residents of the village are members of the Village Development Board and form the general body of the VDBs, with equal rights in all aspects of activity including the demanding of social audit. The Management Committee of VDBs is entrusted with the management of the Village Development Board and Funds of the VDBs. The members of the Management Committee are chosen by the Village Council for a tenure of 3 years unless decided otherwise by the VC by a resolution.. The members may include both members and non- members of the village council. The number of members of the Management Committee can vary from five to twenty five. One-fourth of the total number of members of the Management Committee must consist of women members. The members may include members of the VC or persons who are not members of the VC particularly those who are ineligible to be chosen as members of the VC by virtue of their age, or by virtue of tradition or custom. At least one woman shall be a member of the Management Committee. An innovation is that Government servants can be chosen as members of the Management Committee, with the permission of the government.5.15.6.6.2 A member of the Management Committee may be replaced by a resolution of the VC, for reasons to be recorded in the Resolution. The Management Committee selects a Secretary from among themselves who gets a remuneration between Rs. 1000-3000/-. The Management Committee is expected to meet every month. The meetings are open to the public. Another unique feature of the Nagaland system is that the Deputy Commissioner or the Additional Deputy Commissioner of the District is to be the ex officio Chairman of each VDB in the District.260261State and District AdministationGovernance Issues in the North-Eastern States2625.15.6.7 Basic Facts and Statistics of Village Councils and VDBs in Nagaland: 5.15.6.7.1 The district-wise data of VDBs as per the 2001 census are as follows:Table No. 5.17: Village Development Boards in NagalandSl.Name of DistrictNo. ofNo. of VDBsHouseholdPopulationNo.Blocks1.Kohima48324,1961,33,5572.Mokokchung67523,1262,26,3383.Tuensang89920,9341,32,4294.Mon69426,1202,21,1625.Wokha511114,31213,71,926.Zunheboto616718,8331,12,5787.Phek58920,9351,06,5618.Dimapur418928,76280,1689.Kiphire37413,16587,57310.Longleng22612,66597,89411.Peren37613,47579,391Total521,0932,16,51415,15,4435.15.6.7.2 The Board is in the nature of Gram Sabha as its general body consists of the entire adult population of the village which elects an Executive Committee with at least 25% female members. The Village Council verifies the completion of development work by the Executive Committee and generally certifies completion of development work. The Board prepares and implements village development plans and for the purpose receives ‘development grants’ from the government at the rate of Rs 800 per households per year subject to a minimum of Rs 50000. For the State as a whole the grants are currently of the order of Rs 22 Crores. The Boards are also engaged in implementation of programmes like the SSGY, SGRY and the IAY etc.5.15.6.7.3 There are also moves to create a corpus fund for each Council with participation of Union and State Government and NABARD against which loans can be raised by the Boards and individuals on the security of the Board.5.15.6.8 The Communitization Experiment5.15.6.8.1 In order to decentralize governance, the Nagaland Government has made innovative use of the “social capital” prevailing amongst its people. It has enacted the Nagaland Communitization of Public Services and Institutions Act 2002 commonly called the ‘Communitization Act’. The intention is to improve the quality of various services being provided by the Government to the citizens by involving the community and by transferring control over the schemes/services to the actual beneficiaries. The legislation provides for the State Government to delegate its functions, including control over the personnel, involved with the ‘delegated services’ to such authorities.Village Authorities can be invested with the functions of local authorities under the Act. This step has made a very positive impact on the functioning of many of the developmentprogrammes and brought an overall improvement in the quality and speed of services andeven more important, in making the communities realize that they can make a positive contribution to their own development. An important result of the communitisationexperiment is that the benefits of this initiative have spread to the urban areas where the traditional patterns of tribe specific community organization are not very significant. It may be noted that the model is analogous to the scheme envisaged in Article 243G (read with the Eleventh Schedule) of the Constitution which calls for a state legislation to transfer functions to the PRIs.5.15.6.8.2 The Communitization Experiment has brought allround improvement in a large number of projects/schemens which deal with education, water supply, roads, forests, powers, health and sanitation and welfare schemes in the entire state. It has empowered people and increased efficacy and transparency in governance.5.15.6.9 Recommendation:a) The Commission would like to reiterate the following recommendation in this regard made in its Seventh Report:-263Box No. 5.4 : Communitization of Primary Education;importance of Social AuditThe experiment in communitization of education basically rests on the strong social ties which exist within villages of Nagaland. The village community owns and is authorized to develop public elementary schools within its area. A Village Education Committee (VEC) is setup in each village which acts as the validly empowered local authority for managing primary schools. The VEC has the authority to monitor attendance of teachers (and take punitive action such as docking salaries for prolonged absences), and make major financial decisions (such as expenditure on textbooks, school furniture, building repairs) through access to public funds. It can arrange for inter-school utilization of teachers and recommend substitute teachers to full long-term vacancies.The system of continuous monitoring by the VEC has led to a significant improvement in teachers’ attendance in village schools. Enrolment and academic performance have improved and parents are demonstrating an increased confidence in the public school system.State and District AdministationGovernance Issues in the North-Eastern Statescurrently very low with imports exceeding exports by a significant degree- unlike in the past when the Indo-Tibetan trade was heavily in favour of India.5.15.7.4 Status of Local Decentralization2645.15.7 Sikkim5.15.7.1 At the commencement of the Constitution, Sikkim was regarded as a princely state which, unlike similar other States was a ‘protectorate’. Sikkim’s governance as a protectorate was based on a treaty whereby a measure of internal autonomy under its Maharaja (Chogyal) subject to the overarching responsibility of the Government of India to safeguard the protectorate and conduct its foreign relations. Increasing public aspirations for a legal framework permitting peoples’ participation in governance led to a popular uprising which culminated in introduction of a measure of democracy at the instance of the Government of India. The newly elected Assembly and the Chogyal could not come to a consensus on a popular government gave rise to further agitation demanding formal merger of the ‘protectorate’ as a State of the Indian Union. This resulted in the thirty-sixth Constitutional amendment in 1975 which introduced Article- 371F in the Constitution. This Article, apart from declaring Sikkim as a part of the Indian Union makes some special provisions including vesting of discretionary powers on the Governor (subject to any orders of the President) to facilitate “ peace and for an equitable arrangement for ensuring the social and economic advancement of different sections of the population”. Since its merger with the Indian Union, Sikkim has made very strong progress on all fronts.5.15.7.2 Through an amendment of the North Eastern Council Act 2002, Sikkim has become a member of the Council, though does not have a common boundary with any of the North Eastern States. As NEC is meant primarily as a regional planning and development body, a proviso was also added to section 4 of the Act authorizing the Council “to formulate specific projects and schemes” for Sikkim.5.15.7.3 A recent development of potential long-term importance for the State is the initiation of Trans-border trade between India and the Tibetan autonomous region of Peoples’ Republic of China after a gap of almost half a century. The volume of trade is5.15.7.4.1 Sikkim has a long history of Panchayati Raj institutions. Even prior to its merger, a law was enacted by the Chogyal in 1965 to provide for elected, but non partisan, village Panchayats primarily for local disputes resolution. The seventy-third amendment applies to the State; soon after its coming into force, the Sikkim Panchayati Raj Act 1993 was enacted which provides for elected Gram Panchayats (GPs) and Zila Panchayats (ZPs). Gram Sabhas in the State are referred as Panchayat wards- six to eight wards constitute a GP. Sikkim is one of the first States to have transferred Primary and Secondary Education to Panchayati bodies. A number of steps have recently been initiated to further strengthen the role of Panchayats. Some of the more important of these are;?Establishment of ‘Gram Planning Forum’ for each Panchayat to make the ‘GP’ the unit of local planning.?Setting up District Technical Support Committee to assist Zila Panchayats in drawing up District Plans.?Initiation of a system of specifically reflecting earmarking of funds for schemes to be taken up by Panchayats in the State budget.5.15.7.4.2 The State does not have any Municipal body – a Municipal Corporation was established for the city of Gangtok in 1975, the legislation was, however, repealed in 1985 and urban governance is now directly looked after by the governments.5.15.7.5 Personnel position5.15.7.5.1 Sikkim is the smallest State of the country with a population of 5,40,493 (2001 census ) and an area of 7096 sq.km. The State has four districts with headquarters at Gangtok, Mangan, Namchi and Gyalshing. The cadre strength of various All India Services in the State is shown in the Table No. 5.18:Name of the CadreStrengthIn StateIAS4134IPS3230Table No. 5.18: Cadre strength of the All India Services in SikkimIFS—24Nagaland has made commendable efforts to usher in a paradigm of decentralised village self-governance through effective use of “Social Capital”. The State has communitised a large number of service delivery schemes. The Ministry of Rural Development should formally recognise this arrangement for implementation of various development and poverty alleviation initiatives in this State.Its replication by other States should be pursued.265State and District AdministationGovernance Issues in the North-Eastern States5.15.7.6 Recommendations:a) The Commission has made a number of recommendations for strengthening and empowering PRIs in its Report on “Local Governance” which needs to be implemented on priority.b) There is need to rationalize the large cadre strength of various All India Services in the State, in accordance with actual requirements.5.15.7.5.2 A comparison of the cadre strengths of various services in this State with those in Uttarakhand, Nagaland, Manipur, Tripura is worthwhile.5.15.7.5.3 Uttarakhand with a population of 84.89 Lakhs, area of 53484Sq.Km. and 13 districts has a cadre strength of 83 for IAS and 42 for IPS. Nagaland with a population of 19.88 Lakhs, area of 16579 Sq.Km. and 08 districts has a cadre strength of 52 for IAS and 42 for IPS, Manipur – Tripura with a combined population of 56.92 Lakhs, Area of 32818 Sq.Km. and 13 districts has a cadre strength of 165 for the IAS and 80 for the IPS.5.15.7.5.4 Considering the population and area of Sikkim, its cadre strength for all the three All India Service officers seems to be on high. The Commission is of the view that there is need for its rationalization, in the interest of both good governance and the morale of the officers in accordance with actual requirements, including its operational requirements.5.15.8 Tripura5.15.8.1 Before Independence, Tripura was a princely State ruled by Maharajas of the Manikya dynasty. The Regent Maharani of Tripura signed an instrument of merger with the Indian Union on September 9, 1947. Tripura became a Union Territory without legislature with effect from November 1, 1956. However, a legislature was installed in July 1, 1963. Tripura attained Statehood on January 21, 1972.5.15.8.2 Tripura, after Assam is the most populous State in the North East. While it accounts for barely 0.8% of the total area of the Region, it is home to more than 8% of itspopulation with the highest population density in the region. Its adverse land-man ratio is aggravated by the fact that in the last 55 years the ethnic profile of the State has been drastically altered. Thus while currently the tribals, the indigenous inhabitants of the place, constitute around 31% of the population, this ratio was just the reverse in 1947 when geopolitical factors resulted in a massive influx from the adjoining Districts of the then East Bengal. The resultant socio-economic consequences caused much conflict and strife. In order to allay the apprehensions, areas with tribal concentration were brought under the Sixth Schedule in 1985.5.15.8.3 A geographical factor of relevance to its development is the fact that the State has an international border of 839 Km with Bangladesh (surrounded by Sylhet in the North, Comilla in the West and Noakhali and Chittagong on the North East). Tripura’s boundary with Assam and Mizoram is only 50 Kms. An idea of the imposed inaccessibility of the State can be formed by the fact that while the travel time to Kolkata via Bangladesh is hardly 12 hours, the same destination takes more than 48 hours through Assam and West Bengal.5.15.8.4 The State has generally done well in areas like primary health care, poverty reduction and improvement of agricultural production. There are, however, indications that growth has been more pronounced outside tribal areas.5.15.8.5 Status of Local Decentralization5.15.8.5.1 Alienation of land belonging to tribals emerged as a major problem with independence and the merger of princely Tripura with the Indian Union. The Tripura Tribal Areas Autonomous District Council (TTAADC) was established as an independent council administering the tribal areas within the State through the TTAADC Act 1979 passed by the Indian parliament after a series of democratic movements launched by the tribal people of Tripura. The Council was set up on 18, January, 1982. Following the 49th amendment of the Constitution of India, the TTAADC was brought under the provisions of the Sixth Schedule of the Constitution with effect from 1 April, 1985. The principal objective of setting up the TTAADC is to empower the tribal people to govern themselves, bring all round development to them and protect and preserve their culture, customs and traditions.The basic structure of the TTAADC is given in Table No. 5.18:266267State and District AdministationGovernance Issues in the North-Eastern StatesTable15 No. 5.19: Structure of TTADCDetails3 Administrative StructureThe Chief Executive Officer is the Principal ChiefExecutive Officer of the District Council. All other Council’s Officers and servants are subordinate to him under the provision of TTAADC (Constitution Election and Conduct of Business) rule 1985.4 Village CouncilsThere are 527 elected Village Committees, which derivetheir power and responsibilities from the provisions of TTAADC (Establishment of Village Committee) Act 1994 and discharge their function according to the provision of TTAADC Village (Administration) Rules 2005.5.15.8.5.2 The Autonomous Council operates in areas spread over 527 villages in all the four districts in identified pockets of tribal concentration. The Council has 30 members- 28 elected and 2 nominated. The powers of the Council are restricted to the original ‘paragraph 3 subjects’ viz land, water, non reserved forests and tribal customs and limited powers for administration of justice. Elections are expected to be conducted by the District Council in the manner it desires. The conduct of the last elections (2006) was entrusted by the Council to the State Election Commission.5.15.8.5.3 Prior to the establishment of the District Council- initially by a State legislation under the Fifth Schedule- villages included in its jurisdiction had Panchayats like the rest of the State. Following the establishment of the Council, Tripura Panchayat Raj Act ceased to operate in that area and there was no village level body- elected or otherwise. In 2006, the State Government decided to hold elections to the Village Councils by treating them on par with village Panchayats in other parts of the State taking the view that nothing in Sixth Schedule precludes such a course of action. The Autonomous Council is, however,yet to transfer any functions to these newly established Councils. This step has important policy implications.The rest of the State has a very robust three tier Panchayati structure as provided under the seventy-third amendment. Elections to these bodies are conducted by the State Election Commission. These bodies are responsible for implementation of development programmes.5.15.8.6 Structure of TTAADC5.15.8.6.1 The TTAADC is unique as its jurisdiction is not contiguous with Revenue district boundaries. It straddles four revenue districts. There are thirty five Rural Development Blocks in the State. Nineteen RD Blocks are within the Sixth Schedule area and eighteen mixed R. D. Blocks are within jurisdiction of both Sixth Schedule & PRI areas. The TTAADC area is divided into four Zones, each coterminous with the Sixth Schedule area of Revenue Districts. (Please see the TTAADC map placed below). Each Zone is further sub-divided into thirty two Sub-Zones, which are, except for a few, conterminous with the boundaries of R.D. Blocks.5.15.8.6.2 The TTAADC has also constituted “TTAADC Blocks’ in those Blocks that are fully within the TTAADC. Each TTAADC block has a Block Development Officer posted to it. Committees chaired by the MDCs/MLAs or chairpersons of the Village Committees (where there is no MDC / MLA in the area) have been constituted at the Block level. In those Development Blocks where only part of the area comes within the TTAADC jurisdiction, the District Council has constituted Sub-Zonal Development Committee, with the same composition of members as in Sixth Schedule Areas. In all 35 blocks that fall fully or partially within the TTAADC, the State Government has also constituted Block Advisory Committees (BAC) comprising of Chairpersons of all elected Village Committees in 35 RD Blocks for implementation of programmes of the State Government in Sixth Schedule Areas, chaired by MLAs or MDCs. The District Council has constituted 527 ADC Villages in the Sixth Schedule Area, co-terminus with Revenue villages.5.15.8.6.3 Grassroots empowerment – TTAADC Village Committees5.15.8.6.3.1 Elections to these Village Committees were conducted in February 2006 as per Tripura Tribal Areas Act 1994. There are 4165 elected members in all for 527 of Village Committees, of which one third are women members. Reservations are made for Schedule Tribe and Schedule Castes in proportion to the percentage of their population. Chairpersons and Vice Chairpersons are elected by the Members of Village Committee.Chairman & Deputy Chairman elected by Council. Chairman presides over the Council5 years tenure2 Details of the Executive CommitteeExecutive committee, consisting of 9 members.Council elects CEMOther EC Members appointed on CEM’s advice Performs all executive functions1 Details of the Council28 elected and 2 nominated members. 26 of the electedmember seats are reserved for schedule tribes.26826915IbidState and District AdministationGovernance Issues in the North-Eastern States5.15.8.7 Issues and Recommendations1. Decentralised PlanningTripura has an established system of decentralised planning in the form of the Gramodaya and Nagrodaya initiatives. The State plan is prepared through consolidation of the local plans prepared with the help of these initiatives. The district plan is formed by consolidating and amalgamating the village and block level plans pertaining to both the Sixth Schedule Areas and the areas covered under PRIs. However, the District Planning Committees (DPCs) have not been formed under the provisions of Article 243ZD of the Constitution. The Commission is of the view that there is need to constitute the DPCs with representation from both the TTADC and the District Administration as all the districts in Tripura comprise of both TTADC and Part IX areas. The TTADC should also be involved in the planning process at the State level.2. Role clarity between various levels of GovernanceAs suggested in case of other States, there is need for unambiguous activity mapping in the State assigning functions to various levels operating within the system such as the District Council, Block level formations and Village Councils. The Expert Committee on Decentralised Planning in the Sixth Schedule Areas observed that “the system of dividing the TTAADC into Zones and sub-Zones, overlaps with the Blocks, Tehsils and the Block Advisory Committees. In fact, having the Block Advisory Commttees chaired by MLAs and the Zone and sub-Zone advisory bodies headed by elected representatives of the TTAADC is a recipe for conflict and lack of role clarity.5.15.8. 7.1 While endorsing the observation of the Expert Committee, the Commission is of the view that in order to avoid conflict and overlapping jurisdictions, it may be ensured that there is only one intermediate structure between the village and the district bodies of the TTAADC. In the meantime, the State Government should try to evolve a mechanism for coordination between the block level committees and zones/sub-zones.b) Immediate steps should be taken to ensure that there is only one intermediate structure between the village and the district bodies of the TTAADC.c) The State Government should take steps to evolve a mechanism which could coordinate block level committees chaired by MLAs and zones and sub-zones which are headed by elected representatives of TTAADC.d) The State may also undertake comprehensive activity mapping exercise to delineate functions among various levels operating within the system such as the District Council, the Block committee and the Village Council.5.15.8.8 Recommendations:a)DPCs may be constituted in all the districts of Tripura with representationfrom both the TTADC and the District Administration as all the districts in Tripura comprise of both TTADC and part IX areas. The TTADC shouldalso be involved in the planning process at the State level.270271Managing State Finances6MANAGING STATE FINANCES6.1 An effective financial management system is the cornerstone of good public administration. In our federal system, where the Constitution empowers the States to collect revenue and spend on public programmes, a prudent and effective financial management system in the States is a matter of vital concern for the country’s polity and economy. The extent to which the overall economic development of the nation is dependent on the management of state finances is further borne out from the fact that on an average, the States combined together get about 62-64% of the combined revenue receipts of the Union and States. The following table gives the year-wise position of State Finances since the VII Finance Commission (1980 onward). In terms of combined revenue expenditures, the figure stands in the range of 56 to 58%.Table No.: 6.1 : Share of States in Combined Revenue Receipts and ExpendituresAverage*Revenue Receipts Before and After TransfersRevenueBeforeAfterExpenditures**VII FC35.361.458.0VIII FC34.662.055.7IX FC37.564.756.9X FC38.663.056.82000-0138.663.956.02001-0239.363.958.0XI FC (Avg. 2 years)39.063.957.1Source (Basic Data): Indian Public Finance Statistics *Average for years under recommendation period ** Net of inter-governmental transfers6.2 Apart from implementing the programmes and schemes undertaken through its own budget, a State plays a key role in implementing various Centrally Sponsored and Central Sector Schemes.6.3 Appropriate selection of programmes and projects, prudent financial planning, normative expenditure methodology and concurrent and post expenditure scrutiny are the vital processes which decide how the finances of the Government are being utilized and managed.6.4 The core principles that should form the foundation of a sound Public Finance Management System such as adopting prudent economic assumptions, aligning annual budgets with the medium term plan, relaxing central input controls, adoption of top-down budgeting principles, focusing on value for money and introducing transparency and simplicity in various procedures have already been referred to in Chapter 1 of this Report.6.5 Within these broad outlines, the following issues are of importance in sustainable financial administration of the State Governments.1.Financial Delegation and Operational Flexibility2. Avoiding Fiscal Profligacy3. Expenditure Management(a) need to review relevance and utility of continuing programmes and schemes(b) ensuring expenditure uniformity over the year4. Prudent Budget formulation–Realistic estimates and assumptions for budget preparation–Avoiding inaccurate and incomplete disclosure of financial situation–Public consultation in budget formulation–Issue of supplementary demands272273State and District AdministationManaging State Finances6.5.1.3 Recommendation:a) Based on the experience of the Union Government with regard to the IFA, States should take steps to introduce / strengthen the IFA system in the State administration.274–Off budget and contingent liabilities–Multi-year budgeting5. Revenue forecast and need for a tax research unit6. Mechanism for internal control7. External audit6.5.1 Financial Delegation and Operational Flexibility – the IFA system6.5.1.1 The organization of the Finance Department (FD) in terms of the number of Secretaries, divisions/ sections, etc. has evolved depending upon each individual State’s history and circumstances. Although there is a lot that is common, details and numbers vary from State to State. In Maharashtra the “Administrative Reforms Committee (2002)” comprehensively reviewed the organization of the State Finance Department along with the rest of the State machinery. The point that emerged was that it was not so much the organization as the role and responsibilities of the Finance Department that were a matter of major concern. In most States there is concentration of powers in the Finance Department particularly those relating to expenditure control which greatly constrains the line departments in meeting the programme objectives in a time bound frame.6.5.1.2 In order to ensure, financial delegation and operational flexibility in the functioning of various Ministries/Departments, the Union Government introduced the scheme of posting senior officers as Integrated Financial Advisers in Ministries/Departments in 1975. In consultation with the Secretary of the concerned department, the IFA is empowered to take budgetary and financial decisions of considerable financial value. The system has been of considerable use to the Union Ministries/Departments in planning, programming and budgeting. The scheme has worked well in the Government of India. The Commission is of the view that the experience of the Union Government with regard to IFA should motivate the States to introduce/strengthen a similar system of the IFA in the State administration.6.5.2 Avoiding Fiscal Profligacy6.5.2.1 Selection of programmes and projects is an important component of the State planning. It has to be a considered exercise based on both the medium term planning commitment as well as the State’s annual budget.6.5.2.2 In spite of detailed instructions and guidelines in budget manuals, projects and schemes continue being announced on an ad-hoc basis, often before elections or during visits of high-level functionaries. Such announcements involving huge funds seriously distort plan allocations and disturb the faithful implementation of schemes already approved under the budget. Often such announcements are not followed by formal approvals thereby resulting in discontent among people and financial indiscipline. On the other hand, there have been cases where schemes were framed without due diligence and got funded. Such ab-initio unsustainable schemes have led to waste of public money. The Commission is of the view that the selection of programmes and projects should be solely on considerations of objectivity and sustainability. The State Governments need to take steps to ensure that projects are included in the budget only after well considered deliberations and processes. The practice of announcing projects and schemes on an ad-hoc basis needs to be abandoned.6.5.3 Expenditure Management6.5.3.1 In most of the States, the expenditure pattern is highly skewed. Though the plan / budgetary indications for a particular financial year are indicated to the departments of the State Government in the preceding year, the process of getting actual sanction, in practice, is time consuming. The first two quarters of the financial year are mostly spent in preparing detailed project reports and in getting sanctions. The result is that the bulk of expenditure takes place in the later part of the year, particularly in the last quarter. There is considerable rush in the month of March to draw money and to park it somewhere or to spend it hastily. The Government of India has tried to overcome this problem by introducing the Monthly Expenditure Plan (MEP). Some of the States too have taken similar steps. The Commission is of the view that all the States should take positive measures to improve their expenditure profile; (a) Detailed project reports of schemes should be finalized in the preceding year and6.5.2.3 Recommendation:a) The State Governments need to take steps to ensure that projects and programmes are included in the budget only after well considered deliberations and processes. The practice of announcing projects and schemes on an ad-hoc basis needs to be done away with.275State and District AdministationManaging State Finances(b) the financial sanctions should be given to the departments during the first two months of the current financial year. This would ensure that the actual execution of the project/ scheme starts latest by the beginning of the third quarter.6.5.3.2 Need to review relevance and utility of continuing programmes/schemes6.5.3.2.1 Often, the Government programmes and schemes once taken up, seem to continue forever. Some schemes, though conceived appropriately may lose value as a result of natural changes or due to change of technology. In the Government, there is practically little attempt to review their utility and relevance and take appropriate mid-term corrective steps.6.5.3.2.2 The Commission is of the view that there is need for a zero-based review of programmes and schemes which are more than five years old and which involve large sums of public money. (Say over 50 crores)6.5.4 Prudent Budget formulation6.5.4.1 Realistic estimates and assumptions for budget preparation6.5.4.1.1 Budget making is the most vital component of any financial management system. Having realistic estimates and proper assumptions are the two most important requirements for it.6.5.4.1.2 There is need to have economic assumptions which are prudent and realistic in order to formulate budget estimates which are accurate and not overly optimistic. At the end of every financial year, the gap between the estimates and the actuals should be analysed so that the underlying economic assumptions could be suitably calibrated for the future.6.5.4.2 Public Consultation6.5.4.2.1 Till some years ago, Budget making was a secret process. In the absence of appropriate feed back, the budget makers often worked in isolation. Though the Union Government initiated a system of having pre-budget consultations with industry associations and stakeholders think tanks etc. some years ago, most of the State Governments have not yet taken steps to open up on this issue. Andhra Pradesh was the first State to take initiative in this direction. It released the annual fiscal framework 2002-03 about four weeks ahead of the budget presentation date. It organised workshops and discussions at both State and the district levels and obtained suggestions from different sources. The Commission is of the view that such interactive processes between the State Government and the people would lift the veil of secrecy from “Budget Making”. It will be a major step towards transparency and objectivity in budget formulation. It also needs to be emphasized that such consultations would be effective and meaningful only when (a) citizens have access to information and (b) effective steps are taken to educate citizens and leaders of society on budget making and its implications.6.5.4.3 Multi-year Budgeting6.5.4.3.1 As per the prevailing budget norms in the State Governments, all unspent allocations lapse at the end of the financial year (even if the allotment of money was made in the last quarter of the financial year). It leads to (a) hasty expenditure and/or (b) attempt to draw the money and park it in commercial banks/ other financial institutions for subsequent use. Both these actions are against financial norms and interests of the Government. This problem could be partially solved if the implementing agencies are allowed to use the current allocation in the next financial year with certain conditionalities.6.5.4.3.2 The Commission is of the view that the State Governments should shift to multiyear budgeting and give the estimates of revenue and expenditure for a period of four years in addition to the year which the budget pertains. This should be done on a roll-on basis. This will enable better estimation of the fund requirements of on-going schemes, programmes and projects. It will also ensure realistic budgeting.6.5.4.4 Medium Term Fiscal Plan6.5.4.4.1 In this context, preparation of a Medium Term Fiscal Plan (MTFP) will be of relevance. MTFP is a statement of the government’s, medium-term fiscal objectives which provides projection of key financial variables for the current fiscal together with a block of6.5.3.3 Recommendations:(a) The States should take priority steps to improve their expenditure profile by (a) finalizing the detailed project reports of schemes in the preceding year and (b) ensuring that the financial sanctions are given to the departments in the first two months of the current financial year.(b) The States should conduct a zero-base review of programmes and schemes which are more than five years old and which involve large sums of public money. (Say over 50 crores)276277State and District AdministationManaging State Financesnext three to four years. Each MTFP also reports performance against targets. The MTFP serves two purposes. First, it helps to put annual budget formulation within the medium-term context. Second, it serves as a communication channel to the people, of government’s fiscal intentions and strategy. The Commission believes that the States should follow the practice of preparation and implementation of the MTFP.6.5.4.5 Off-Budget and contingent liabilities6.5.4.5.1 The budget and the financial statements of the State Government often do not reflect the complete picture. For example, government’s contingent liabilities owing to the guarantees furnished by it against the borrowings by various parastatals are not captured in the budget or the financial statements. In many States till some years ago, the government executed capital works programmes through Special Purpose Vehicles (SPV) which were financed through bonds guaranteed unconditionally and irrevocably by the government. Since the SPVs did not have a tangible revenue stream of their own, the implicit arrangement was that the repayments were committed to be made out of the budget. These effectively become borrowings of the government.6.5.4.5.2 Since payment of such liabilities devolve on the State Government much later, in the annual financial statements of subsequent years, in a way taking recourse to these offbudget guarantees goes against the spirit and intent of article 202 of the Constitution. This practice hurts the State’s credibility and adversely influences its credit rating. A cap on such guarantees would improve the confidence of investors in the States.6.5.4.5.3 The Commission agrees with the above view that offbudget borrowings are bound to have an adverse impact on State finances in the long run. Every State Government must set a limit upto which it can expose itself to the guarantees. The Commission realizes that in some situations, such guarantees may be inevitable. But, the State Governments need to adopt caution and diligence with regard to viability of such projects. They need to be assessed and evaluated comprehensively.6.5.4.6 Maintenance of Assets6.5.4.6.1 The studies conducted by the Commission on this subject in various States led to two important conclusions: a) there is excessive emphasis / importance given to plan schemes in creation of new capital assets; maintenance of assets created in the past (also called non-plan expenditure) gets neglected, b) even in the plans, there is a tendency to include new projects instead of according priority to complete the on-going ones, particularly in the irrigation sector.6.5.4.6.2 Very often, not only do projects remain incomplete due to lack of funds, even when they are completed, their maintenance and utilization suffers due to poor provisioning of funds. It would be stating the obvious to say that whole idea of creating an asset is to use it productively. This often, does not happen in practice because of either lack of maintenance or some associated facility such as an operator or place has not been provided. This is due to the belief that non-plan expenditure is essentially unproductive. While funds are generally available for a plan scheme any non-plan expenditure is viewed with suspicion. It is felt that one way of overcoming this inbuilt prejudice against non-plan expenditure is to provide for maintenance of the asset in the capital value of the asset and ensure its maintenance at least for five years after it is acquired. For example, the government can sign an annual maintenance contract (AMC) with the vendor at the time of purchase itself so as to avoid seeking funds for its maintenance in subsequent years under non-plan expenditure.Box No. 6.1: Contingent Liability in MaharashtraGuarantees followed by pensions are the most significant contingent liabilities in Maharashtra. Dr Godbole in his Report on Making Budget Transparent and User-friendly (September 2000) estimated the contingent liabilities of Maharashtra as being close to Rs. 240,000 crores as against the State’s annual receipts of Rs.27,941 crores. Dwelling on this issue the Maharashtra Administrative Reforms Committee recommended that a) the government should disclose in the budget documents the extent of its contingent liabilities and provide for them based on a reasonable assessment of the risks involved; and b) the government should subject itself to the discipline of limiting both debt and guarantees preferably in absolute monetary terms rather than in relation to its receipts or as a percentage of the gross state domestic product.Source: Report of the Maharasthra Administrative Reforms Committee, 20026.5.4.6.3 This action needs to go hand in hand with recovery of adequate user charges.6.5.4.7 Recommendations:a) There should be prudent and realistic economic assumptions in formulation of budget estimates. At the end of every financial year, the gap between the estimates and the actuals should be analysed so that the underlying economic assumptions could be suitably calibrated for the future.b) There should be interaction between the State Government and stakeholders including industry associations, think tanks etc. in budget formulation. In order to make such consultations effective and meaningful, steps should be taken to (a) provide information-access to citizens and (b) educate citizens and leaders of society on budget making and its implications.c) State Governments should shift to multi-year budgeting and give the estimates of revenue and expenditure for a period of four years in addition278279State and District AdministationManaging State Financesto the year which the budget pertains. This should be done on a roll-on basis.constitution of audit committees in respect of Government of India. The same could be considered by the State Governments too.d) The States should follow the practice of preparation and implementation of the MTFP.6.5.6.2 Recommendation:6.5.5.1 Estimates of revenue in the budget are based more on optimism and hope (and sometimes as balancing entries to reduce the gap in resources) than on any systematic attempt at assessing the likely revenue. There are two issue involved when it comes to estimating revenues - a) whether the tax potential of revenue is being fully exploited and b) if the revenues are not of the expected level whether there are any leakages. Moreover, a wide variance between the estimated and actual revenue adversely affects expenditure management. From all counts it is important that revenue forecasting is taken up seriously. Some States (for instance, Karnataka) have a research cell assisting the Finance Department in revenue forecast, while most States resort to marking up previous year’s revenue collection on adhoc basis. Therefore, the Commission is of the view that there should be a dedicated cell within the Finance Department in every State to provide input on the revenue forecast with the reasons thereof. This would add value to budget formulation exercise.6.5.5 Revenue Forecast and Need for a Tax Research Unite)In order to remove prejudice against non-plan expenditure, the State shouldtake steps to provide for maintenance of the asset in the project cost itself and ensure its maintenance for at least five years after it is acquired. This action should go hand in hand with recovery of adequate user charges.6.5.7.1 The Public Accounts Committees in some States have a practice of examining all paragraphs and performance audit reports included in the CAG’s Audit Reports, while others have adopted the selective approach. In the former case, due to the volume of work involved, the Reports of the CAG are sometimes not discussed for years together, often upto 10-15 years and the arrears keep mounting.6.5.7.2 To overcome the situation, the Legislative Committees may consider adopting a time frame within which they would complete examination of audit reports and submit their reports to the Legislature. The State Governments may, therefore, specify a time frame for the Departments for necessary follow up action on the recommendations of Audit and forwarding of the ATN after incorporating such action to Audit for vetting before their final submission to the State PAC/ COPU. It is also necessary to ensure that all Departments adhere to the prescribed time limits.6.5.7.3 Recommendation:6.5.7 External Audita) The State Governments should take steps to set up internal audit committees in each of its departments.6.5.5.2 Recommendation:a) The State Governments should initiate steps to set up dedicated cell within its Finance Department to provide input on the revenue forecast with the reasons thereof.a) The State Governments should specify a time frame for the Departments for necessary follow up action on the recommendations of Audit and forwarding of the ATN after incorporating such action to Audit for vetting before their final submission to the State PAC/ COPU. All Departments should adhere to the prescribed time limits.6.5.6 Mechanism for Internal Control6.5.6.1 It is necessary to develop a strategic view of internal audit to move beyond the financial regularity and compliance audit to exert a wider role. In the light of this strategic view, the scope and role of internal audit needs to be redefined. Their should be proper staffing and capacity building of internal audit units. The Commission has suggested6.5.8 Projectisation and Appraisal6.5.8.1 A common practice in the State Governments is to understate the magnitude of a project so as to get it somehow included in the plan basket. Then, as the years go by, the true financial implications emerge. As a result projects are not able to get fully funded, implementation slips and there are both cost and time overruns. In some cases, it may also be because of poor project formulation and appraisal capacity of the concerned department.280281State and District AdministationComprehensive project configuration, costing and realistic financial commitment are necessary for proper planning of capital outlays.6.5.8.2 The Commission believes that in many cases, it is possible for the Government to deploy public funds as a sound business proposition, with inbuilt financial closure. Various departments of the States need to develop/enhance their project formulation and appraisal capacity.6.5.9 In addition to the above, there are important policy and functional issues such as; Transfer of Resources from the Union Government, Revenue Expenditure, Sectoral Emphasis in Plan Funding, Special Area Programmes, Utilization of External Aid, issue of subsidy etc. which significantly impact the Financial Administration in the States. Since, many of these issues are being examined separately by the 13th Finance Commission, they are not being covered in this Report.CONCLUSIONIn its previous reports the Commission has examined a whole gamut of administrative issues, many of which pertain to State Governments; the Commission’s recommendations are reiterated in this Report. The organization of the Union Government has also been examined and the recommendations of the Commission in respect of the Union Government apply, mutatis mutandis, to the State Governments as well. Briefly stated, governments need to be more compact than they are at present, need to delegate more responsibilities, powers and resources to local bodies and need to put in place or strengthen (as the case may be) structures of transparency and accountability.District Administration is evolving in response to the establishment of the third tier of governance by the 73rd and 74th Amendment to the Constitution. The Commission has envisaged a dual role for the existing set-up. First, it will provide the Secretariat for the proposed District Council, and be responsible to the Council. Secondly, in respect of powers conferred on it by different statutes or those delegated by the State Government, it will be responsible to the State Government.Each of the Union Territories has its unique history, and a unique set of problems. The Commission’s recommendations in respect of Union Territories have been guided by the principle that decision making should be as close as possible to those who are affected by the decisions. Substantial devolution and delegation of powers have been suggested.6.5.8.3 Recommendation:a)In order to deploy public funds prudentially, with inbuilt financial closure,the States should take steps to strengthen their project formulation and appraisal capacity.282So far as the North East is concerned the Commission’s recommendations focus on improving and strengthening the administrative structure, processes, security set-up and personnel management in the region. State specific suggestions have also been made. The Union and State Governments in this region will need to work closely in this regard.The Commission has made detailed and considered recommendations. The Commission believes that the States will make sincere efforts to derive maximum benefits from them. They cover a wide range of issues concerning both the Secretariat and the field formations of the State government. When implemented, these measures would secure responsiveness in public services and add substantially to public satisfaction.Undertaking and implementing such wide spectrum initiatives in complex administrative systems is a challenging task. Long term vision and commitment to change are the sine qua non for the success of such efforts.283Summary of RecommendationsSUMMARY OF RECOMMENDATIONSiv) The role of Secretaries to be redefined; to be divested of non-essential responsibilities and executive work and larger delegation of power to the executive departments/agencies; andv) Need for streamlining the decision making process. 3. (Para 2.3.5.5) Executive Agencies1. (Para 2.3.2.12) Size of the Council of Ministersa) The size of the Council of Ministers in the States needs to be reduced further considering the needs of an efficient government. For this purpose the maximum size of the Council of Ministers may be fixed in a range between 10% to 15% of the strength of their Legislative Assemblies. In the larger States (where membership of the Assembly is more than 200) such maximum percentage should be 10% where as in the medium (where the strength of the Assembly is between 80 and 200) and the smaller States (where the strength of the Assembly is below 80) it may be 12% and 15% respectively. This stipulation should however be subject to appropriate proviso to remove anomalies. It may be ensured that the maximum number of Ministers permissible for the medium sized States should not exceed the number prescribed for a large sized State having 200 legislators and similarly, the maximum number of Ministers permissible for the smaller States should not exceed the number prescribed for a medium sized State having 80 Legislators. There may not be any prescribed minimum.b) There is need to arrive at a national consensus on this issue through deliberations/discussions with the States at the Inter-State Council.2. (Para 2.3.3.11) Rationalising the Number of Secretarial Departmentsa) The number of Secretariat Departments in the States should be further rationalized on the following basis:i)The existing departments covering inter-related subjects, activitiesand functions should be merged;ii) Need for synergy between the activities of various departments;iii) Devolution of a large number of functions to the PRIs/ULBs; The State Governments should scrutinize the functions/activities of each department to confirm whether these activities/ functions are critical to the mission of the department and can only be carried out by government agencies.d) Only those functions/ activities that have to be carried out by the government based on the principle enunciated in paragraph 2.3.4.6 should be carried out directly by the departments. Other functions/ activities should be carried out by Executive Agencies of the department.e) Each Executive Agency, whether a new body or an existing departmental undertaking/ agency/ board/ special purpose body, etc. that is converted into an Executive Agency, must be semi-autonomous and professionally managed under a mandate. Such executive agencies could be structured as a department, board, commission, company, society, etc.f) There is need for a right balance between autonomy and accountability while designing the institutional framework of executive agencies. This could be achieved through well designed performance agreements, Memorandum of Understanding (MoU), contracts, etc. However, preparing and enforcing such performance contracts requires considerable upgradation of capacity in the concerned governmental departments.g) Agencies dealing with subjects where major functions and activities have devolved on local governments would need to concentrate on monitoring and supervision, ensuring of standards and quality, providing guidance to local governments on technical matters, training of personnel, giving feedback to the government on implementation and performance and advising on changes that are needed in plans and programmes – as stated in paragraph 2.3.5.4.3028431285State and District AdministationSummary of Recommendations4. (Para 2.4.1.4) Civil Services Lawa) The Commission reiterates that the recommendations in its Tenth Report pertaining to the Civil Services Law and Civil Services Authority should be implemented by the State Governments both in letter and spirit.b) In order to provide appropriate legislative backing to these reforms, each State Government should enact a Civil Services Law for all the personnel holding civil posts in the State (on the lines of the proposed Union Law). However, in order to evolve a national consensus and ensure a measure of uniformity among States, the matter may be taken up for deliberations at the Inter-State Council.5. (Para 2.4.2.6) Appointment and Security of Tenure at the Senior Levels in the State Governmenta) After enactment of the State Civil Services Law on the lines of the proposed Union enactment, the proposed State Civil Service Authority should deal with matters concerning appointment and tenure of senior officers of all ranks in the State Governments (including the Chief Secretary, Principal Secretaries, Engineer-in-Chiefs, other Agency Heads and Principal Chief Conservator of Forests).b) Till the time that such an Authority is constituted, the following mechanism may be adopted for appointment of the Chief Secretary and Principal Conservator of Forests in the States:-?There should be a collegium to recommend a panel of names to the Chief Minister/Cabinet for these two posts. For the post of Chief Secretary, this collegium may consist of (a) a Minister nominated by the Chief Minister, (b) the Leader of the Opposition in the State Legislative Assembly and (c) the incumbent Chief Secretary. For the selection to the post of Principal Chief Conservator of Forests the collegiums may consist of (a) The Minister In-charge of Forests, (b) the leader of Opposition in the State Legislative Assembly and (c) the Chief Secretary.?There should be a fixed tenure of atleast two years for both these posts.?The selection for the post of Chief Secretary and Principal Chief Conservator of Forests should be widened to include all officers above a specified seniority (e.g. 30 years). All officers with a seniority higher than a prescribed limit should be eligible to be a part of the panel.c) As regards the appointment and tenure of the Director General of Police, the recommendations made by the Commission in its Report on “Public Order” at para 5.2.3.7 should be implemented.6. (Para 2.4.3.9) Regional Level Administrationa)In view of the emergence of District as the key unit of field administration -as the third tier of government - and with rapid advancement in physical and electronic connectivity between the State Headquarters and the Districts, there is no need to have an intermediate level of administration between the two units of government.b) In order to take care of cadre management issues arising out of this step, suitable posts should be identified by respective departments, in the major districts and at the Headquarters to be manned by senior officers who are presently eligible to head the regional offices.7. (Para 2.4.5.2) Vigilance Commssion/Vigilance Commissioner in the Statea) The recommendations made by the Commission in its Fourth Report (on Ethics in Governance) and its Sixth Report (on Local Governance) for action by State Governments should be implemented expeditiously.b) The organization of the Vigilance Commission/ Commissioner in the State should be structured on the patterns of the Central Vigilance Commission. In larger States, the State Vigilance Commission should be a three Member Body with Members who have been experts in their respective fields. In smaller States, it may continue to be a single Member Body.c) The laws regarding the Lokayukta would need to be amended to incorporate the changes suggested in the Report on ‘Ethics in Governance’.3028631287State and District AdministationSummary of Recommendations8. (Para 2.4.6.16) Human Resource Development, Capacity Building and Traininga) The Commission reiterates its recommendations pertaining to capacity building and training made in the Report on “Refurbishing of Personnel Administration” (Tenth Report).b) Every State should formulate a comprehensive Human Resource Development Policy with training as an important component on the lines of the National Training Policy, 1996. Simultaneously, a suitable monitoring mechanism to supervise the implementation of such policy may also be setup.c)In addition to the apex level training body called the Administrative TrainingInstitute (ATI), adequate numbers of Regional Training Institutes should also be established at different places across the State. The Apex Institute should take care of the training needs of the Class I/Class II officers of the State services, whereas the Regional Training Institutes should deal with the mid-career training needs of Class II officers and induction training of Class III employees. Steps should also be taken to set-up district level training organizations which could take care of the mid-career training needs of Class III employees. The district centre should also have proper facilities for skill/behavioral training of Class IV recruits.d) In this arrangement, the apex body, the ATI should have an overall integrative and coordinating role for the entire training/orientation programme running in the State. It should act as the primary resource centre for Regional and District Training Institutes. It should also provide training to those who will work on their faculty. In course of time, the ATI can undertake projects of distance learning and become a virtual academy of training for the entire State.e) The State Administrative Training Institutes (ATIs) should have embedded in them, Centers of Good Governance.9. (Para 2.5.8) State Public Service Commissionsa)Steps should be taken to ensure that persons of high standing, intellectualability and reputation are selected as Chairman/Members of the State Public Service Commissions. A limit should also be imposed on the strength of its membership.b) There is need to evolve national consensus among States on the issues of (i) appointment of Chairman/Members and (ii) limit on the membership of the Commission, through discussions/deliberations at the Inter-State Council.10. (Para 2.5.9.4) Functions of the Public Service Commission; its Relationship with the Junior Recruiting Bodiesa) The Public Service Commission should handle only (i) recruitment of candidates for higher level posts under the State Government (Class I and Class II positions of various State cadres), (ii) advising government on senior level promotions through the DPC and (iii) recruitment and promotions to teaching posts in government Colleges and fully funded units of the Universities.b) With regard to the appointment of junior level functionaries of the State Government, the role of the State Public Service Commission should be to lay down broad norms and standards. The recruiting organisations concerned such as the Subordinate Service Commission, the School Teachers Selection Commission and District Recruitment Boards should follow these norms and standards in their working. The State Public Service Commission would act as a watch dog.11. (Para 3.2.4.15) Redefining the Collector’s Rolea) There is need to realign the functions of the Deputy Commissioners/ District Collector so that he concentrates on the core functions such as land and revenue Administration, maintenance of law and order, disaster management, public distribution and civil supplies, excise, elections, transport, census, protocol, general administration, treasury management and Coordination with various agencies/ departments.b) The Commission reiterates its recommendations regarding the Land Title Management System made in its eleventh Report on e-Governance. It should be one of the primary duties of the District Collector to perform the task envisaged in the aforesaid recommendations.c)There is need to strengthen the compliance machinery at the district levelto enforce provisions of the RTI Act and to reduce the element of delay and subjectivity in the functioning of the lower level formations of the3028831289State and District AdministationSummary of Recommendationsgovernment. This should be done by creating a special RTI Cell in the office of the Collector, whose functions should be reviewed by the Collector at regular periodicity.d) Officers may be posted as District Magistrates early in their career, but in complex and problem-prone districts an IAS officer should be posted as DM only on completion of 10-12 years of service.e)Steps should be taken to ensure that the Collector plays an effectivecoordination role in activities and programmes of other departments at the district level.12. (Para 3.2.4.16.5) Modernising the Office of the District Collectora) The Commission reiterates its recommendations on the issues of personnel management, performance and outcome evaluation, effective citizen centric administration, use of information technology, process re-engineering etc. made in its earlier Reports on “Refurbishing of Personnel Administration”, “Ethics in Governance”, “Citizen Centric Administration”, “Public Order”, “Disaster Management”, “Conflict Resolution” and “e-Governance”. These recommendations should be expeditiously implemented where applicable to the district administration.b) The following steps should be taken to modernize the office of the District Collector:-?Management Information System (MIS) should be set-up in the office of the Collector for effective monitoring and evaluation of programmes/ projects under his direct control.?A computerized District Grievance Cell should also be set up in the Collectorate.?An exclusive Vigilance Cell should be set up at the district level under overall supervision of the District Collector. This Cell should also maintain appropriate liaison with the office of the State Vigilance Commission/ Commissioner.?A forum should be established at the district level to interact with civil society groups and media on important public issues.?Immediate steps should be taken to introduce process re-engineering and increased use of information technology. The steps suggested at paragraph 3.2.4.16.3.4 in this regard may be initiated on priority.c)Innovations and best practices initiated by officers should be documentedadequately and institutionalized through changes in rules/laws wherever required.13. (Para 3.3.1.14) District Administration; Functional and Structural Reformsa)There should be an integrated governing structure at the district level inthe form of the “District Council” with representation from both urban and rural areas. The Council will act as the “District Government”.b) The District Collector should have a dual role in this government structure. He should work as the Chief Officer of the District Council and should be fully accountable to the District Council on all local matters.c) The District Officer would also be fully accountable to the State Government on all regulatory/other matters not delegated to the District Government.14. (Para 3.3.2.6) Line Departments of the State Government at the District/SubDistrict Levela)District/sub-district offices, whose activities/functions coincide with theactivities and functions transferred by the State Government to the PRIs/ ULBs need not exist as separate entities at the district and sub-district levels. Functions funds and functionaries of such offices should be transferred to the appropriate local government institutions.b) Line departments such as the Departments of Water Resources and PWD (Roads) or the Department of Health engaged in execution of State-wide projects need to maintain their separate offices at the district/sub-district level. On important issues, they will need to coordinate with the District Collector. They will also need to coordinate with the District Council to the extent their activities impinge on the powers and functions of the Council.32903291State and District AdministationSummary of Recommendationsc) The line departments and their Agency Heads should provide technical support and guidance to the District Councils in planning and monitoring implementation.15. (Para 4.2.6.16) Role of the Government of NCT in Municipal Affairs - its Relationship with the Municipal Corporation of Delhi (MCD)a) The Municipal Corporation of Delhi (MCD), including appointment of the Commissioner and other functionaries should lie in the domain of the Government of the National Capital Territory (GNCT). This can be done by way of a notification under Section 490A of the Act, issued by the Union Government. However, the appointment of the Commissioner should be made by the GNCT in consultation with the Union Government.b) In order that, the Union Government retains its overarching role over delivery of municipal services in the National Capital Territory, some provisions of the existing Act should remain unchanged. For example, Sections 487 to 490 of Chapter XXIV will need to be retained in their present form. Provisions dealing with building regulations should be kept intact in the domain of the Union Government (for example Section 347). Section 503(dealing with exemptions to the diplomatic missions) and Section 508 (dealing with special provisions for the Red Fort area) should also vest with the Union Government.c) The Union Government may appoint an Expert Committee which could work out the details of the required legal changes in a time bound manner.16. (Para 4.2.6.17.7) Empowerment of the Mayora) The Mayor of the MCD should be directly elected by popular mandate through a city-wide election. The term should be for five years.b) The functions of chairing the Corporation and exercising executive authority should vest in the same functionary i.e. the Mayor. The Mayor should be the Chief Executive Authority of the MCD.c) The Mayor should appoint a ‘Cabinet’; choosing the members from amongst the elected corporators. The strength of this body should not exceed 10 per cent of the number of the elected Corporators or fifteen,whichever is higher. The “Cabinet” should exercise executive authority on matters entrusted to it by the Mayor, under his/her overall control and direction.17. (Para 4.2.6.18.12) Issue of Splitting up the MCD(a) The municipal services in the entire National Capital Territory (NCT) may be under the jurisdiction of a single municipal body viz. the current Municipal Corporation of Delhi (MCD).(b) In order to provide efficient, responsive and citizen friendly services to the citizens, the MCD should be converted into a three tier institution with the Corporation at the apex. The middle tier i.e. the Zones should be adequately strengthened and empowered. The zonal body called Janpad Parishad/Zonal Council will primarily be a representative body consisting of elected Councillors (whose constituency falls majorly within the area of the Zone) and some nominated members. These Janpad Parishads/ Zonal Councils should be given considerable financial and administrative autonomy. Each Zone should have a separate fund and all the taxes under Sections 113(1) and (2) of the DMC Act should be collected and retained by them. Their powers with regard to enforcement of regulations and bye-laws should also be enhanced appropriately. The third tier will consist of Ward Sabhas.(c) The MCD should be at the apex level of the new structure. It will act as a kind of an Umbrella Organization – a Holding Entity, responsible for giving overall policy directions and high level conceptual technical and HRD support to the zones. This Apex body should not delve into the day-to-day functioning of the Zones. It should provide coordination among Zones & make laws/bye-laws for the whole of Delhi. It should take up projects which run across multiple zones. It will be the duty of this apex body to ensure that standards of development and civic amenities remain uniform throughout the city.(d) Substantial changes will need to be introduced in the provisions of the existing DMC Act, 1957 to implement these recommendations. The Expert Committee suggested earlier at paragraph 4.2.6.16(c) may be asked to carry out this task within a period of two months.3029231293State and District AdministationSummary of Recommendations18. (Para 4.2.7.5) Distinction between Urban and Rural Areas in the NCTa)There is no need to maintain the artificial distinction between urban andrural areas in the National Capital Territory. The entire geographical area falling into the NCT should be declared as “urban” under the meaning of Section 2(61) of the DMC Act.b) The Municipal Corporation should realise the taxes, levies and other charges accordingly from the residents of these areas.19. (Para 4.2.8.5) New Delhi Municipal Councila) There is no need to change the present governing structure of the New Delhi Municipal Council.20. (Para 4.2.10.15) Role of the Government of NCT in Spatial Planning and Land Development; Its Relationship with the Delhi Development Authoritya) The composition of the DDA needs to be changed. The Chief Minister of Delhi should be the Chairperson of this body in place of the Lt. Governor. This should be done by amending Section 3(3) (a) of the DDA Act, 1957.b) As stated in paragraph 4.2.10.12, other powers of the Union Government as mentioned in various sections of the DDA Act should remain.c) Steps should be taken urgently to improve the internal functioning of the DDA on the lines recommended by the Ashok Pradhan Committee.21. (Para 4.2.11.8) Role of the Government of NCT - In Police, Law and Ordera) The Union Government may retain control over the broader aspects of security and law and order whereas traffic, local policing and enforcement of the special laws could be handed over to the Delhi Government. In the long run some of these functions could be transferred to the Municipal Corporation.b) As this will involve major restructuring of the present Delhi Police establishment, it may be advisable to constitute a Task Force with representatives of both the Union and the Delhi Government to study thematter in depth and suggest appropriate restructuring through legislative and administrative measures.22. (Para 4.2.12.6) The Government of the NCT - Power to Raise Public Debta) The Government of the NCT needs to have access to greater funding; beyond its own revenues or the grants given to it by the Union Government. It should be allowed to have recourse to market borrowings. This could be done by introducing an amendment to Article 293 by replacing the word “State” with the words “State and UTs having a Legislature”. Such borrowings would be subject to limitations imposed by Article 293(3) and 293 (4) of the Constitution.23. (Para 4.2.13.9) National Capital Region Planning Boarda) The NCR Planning Board should remain a planning, monitoring and advisory body in charge of preparing the Master Plan for the NCR Region consisting of both regional and sub-regional Plans. It should have adequate financial resources at its disposal so that it could selectively provide financial assistance to a few schemes of importance.b) The composition of the 21 member NCR Planning Board should be modified and only 6 Union Ministers and 3 Chief Ministers (Uttar Pradesh, Haryana and Rajasthan) may be members of the Board.c) There should be an Executive Committee under the chairmanship of Secretary in-charge of Urban Development in Government of India with Secretaries incharge of Commerce and Industry, Industrial Policy and Promotion, Expenditure, Power, Secretary, Road Transport and Highways, Chairman, Railway Board (all from the Government of India), Chief Secretaries of the Governments of Uttar Pradesh, Rajasthan, Haryana, Principal Advisor (HUD), Planning Commission, and Vice Chairman, Delhi Development Authority as members.d) Since the Chief Ministers of the three States are members of the Board, the decisions that are agreed to should be binding on the States concerned. The NCR approved regional plans/sub-plans should mandatorily be part of the Plans of State Governments. The NCR Planning Board Act should be amended accordingly.3029431295State and District AdministationSummary of Recommendations24. (Para 4.3.7) Chandigarha) There is urgent need to revisit the Capital of Punjab (Development and Regulation) Act and the Punjab New Capital (Periphery Control) Act, 1952 and examine if and how they are to be aligned with the changed circumstances. This issue should to be examined urgently by the Ministry of Home Affairs and the UT Administration.b) The Metropolitan Planning Committee should be constituted without further delay for comprehensive planning of the entire area covered under the jurisdiction of the Union Territory of Chandigarh.c)The entire territory under the jurisdiction of the Union Territory ofChandigarh should be declared as urban area. However, in order to protect the interest of present villages in the process of development, Ward/Area Sabhas should be constituted as recommended by the Commission in its Report on Local Governance. Also, till such time that the infrastructure in these villages comes at par with the urban areas of Chandigarh, they may be given necessary (local) tax relief.d) The present Advisory Council to the Administrator should be substituted by a more compact and cohesive body comprising inter-alia of the Member of Parliament from Chandigarh, one MP each from Punjab and Haryana, the Mayor of Chandigarh and the Advisor to the Administrator. Such a compact body would be able to provide the necessary inputs to the Administrator and also be able to meet more frequently.e) The Union Government should suitably enhance the financial powers of the UT administration by notifying the delegation proposed in the Table 4.12. Within such delegated powers, the UT Administration must be given full administrative and functional autonomy. In addition, the UT of Chandigarh should also have powers to create certain categories of posts such as teachers, doctors and para-medical staff which are necessary for delivering vital services used by the people of the region.25. (Para 4.4.9) Puducherrya) There should be enhanced financial and administrative delegation of powers to the Government of Puducherry. The Council of Ministers should be free to discharge its functions effectively within such delegation.b) The delegation of powers should be made as suggested in Table No. 4.13 and revised once in five years.c) Recommendations made by the Commission in its Report on “Local Governance” (6th Report) may be implemented on priority in order to strengthen and empower the PRIs in Puducherry.d) The Puducherry Administration should be given the powers to raise public debt in order to finance its development projects and plans.26. (Para 4.5.7) Andaman and Nicobar Islandsa) The Union Government should constitute an Advisory Council to the Administrator of Andaman & Nicobar Islands consisting of the local Member of Parliament, the Chief Secretary, Chairpersons of the Zila Parishad and Municipal Concil and senior representatives from the Ministries of Home Affairs, Tribal Affairs, Environment, Forests and Defence and the Planning Commission to advise him on all important matters of administration.b) The Home Minister’s Advisory Committee may be replaced by a Committee under the Chairmanship of the Home Secretary with officers of suitable seniority from the Ministries of Environment and Forests, Tribal Affairs, Finance, Defence, Shipping and Planning Commission to examine and give prima facie administrative approval to important proposals concerning this Territory.c) The IDA may be replaced by a multi-disciplinary task force under the Chairmanship of the Deputy Chairman, Planning Commission. This body should be responsible for laying down guidelines for preparing medium and long term perspective plans for the overall development of the islands and monitoring its implementations.d) Recommendations made by the Commission in its Report on Local Governance (Sixth Report) should be examined and implemented to the extent they are relevant to strengthening and empowering local government institutions in the Andaman & Nicobar Islands.e) The Union Government should enhance financial the powers of the UT administration by notifying delegation proposed in the Table No. 4.14.3029631297State and District AdministationSummary of RecommendationsThis should be revised once in five years. Within such delegated powers, the UT Administration must be given full administrative and functional autonomy.27. (Para 4.6.5) Lakshadweepa) The Union Government should constitute an Advisory Council to the Administrator of Lakshadweep consisting of the local Member of Parliament, Chairman of the Zila Parishad and representatives of the Ministries of Home Affairs, Tribal Affairs, Environment and Forests and Defence and the Planning Commission to advise him on all important matters of administration.b) The Home Minister’s Advisory Committee as existing today may be replaced by a Committee under the Chairmanship of the Home Secretary with officers of suitable seniority from the Ministries of Environment and Forests, Tribal Affairs, Finance, Defence, Shipping and Planning Commission to examine and give prima facie approval to important proposals concerning this territory.c) The multi-disciplinary task force under the Chairmanship of the Deputy Chairman, Planning Commission, recommended to be set up for the Andaman & Nicobar Islands in place of the Island Development Authority should also include the Lakshadweep Islands. This Committee would be responsible for laying down guidelines for preparing medium and long term perspective plans for the over all development of the Islands and for monitoring its implementation.d) Recommendations made by the Commission in its Report on Local Governance (Sixth Report) should be examined and implemented to the extent they are relevant to strengthening and empowering local government institutions in Lakshadweep Islands.e) The Union Government should enhance the financial powers of the UT administration by notifying the delegation proposed in the Table No. 4.15. This could be reviewed once in five years. Within such delegated powers, the UT Administration should be given full administrative and functional autonomy.28. (Para 4.7.6) Daman and Diu and Dadra & Nagar Havelia) The recommendations made by the Commission in its Report on ‘Local Governance’ should be implemented on priority by the Union Government in Daman & Diu and Dadra & Nagar Haveli.b) The Union Government should immediately enhance financial powers of the UT administration by notifying delegation proposed at Table No. 4.16. This should be revised once in five years. Within such delegated powers, the UT Administration must be given full administrative and functional autonomy.c) The Union Government should review the requirement of personnel at different levels in both the UTs. The operating levels should be adequately manned. At the same time, the Government should examine the issue of having so many senior level posts in Daman & Diu, which has resulted in a top-heavy administration.29. (Para 5.3.6) North Eastern Region: Ethnic Conflicts - in Places, Manifesting as Territorial Conflicts and Violence (Problem of Insurgency and Law and Order)a)In order to address the genuine and legitimate concerns of the local people,there is need to continue political dialogue among various stakeholders. Steps should be taken to upgrade the capacity and capability of the police forces of the States so that they are able to uphold the law. In order to control cross border movement of insurgents, in addition to other measures, diplomatic efforts should be stepped up.b) The North-East Division of the Ministry of Home Affairs should be upgraded to a separate wing and put under the charge of an Additional/ Special Secretary to handle the increased and complex workload pertaining to the region.c)To oversee the formulation and implementation of the plans for this region,a Standing Committee of the National Development Council should be constituted and may be headed by a Cabinet Minister. The Committee should report to the Chairman, NDC twice a year to ensure both speedy resolution of any differences and coordinated action regarding development of the region.3029831299State and District AdministationSummary of Recommendations30. (Para 5.4.8) Provisions of the Sixth Schedule of Constitutions with Respect to Assam, Meghalaya, Tripura and Mizorama) The Government may undertake an exercise to incorporate provisions which currently occur as footnotes, in the main text of the Sixth Schedule. This will make the Schedule more accessible to members of the public.31. (Para 5.5.5) Adhoc Transfer of Subjects/Activities to Autonomous Councilsa) The power of the Councils to make laws, as permitted by the Schedule, should be respected in its true spirit and draft legislations should not be stalled at the State level for years, while ensuring that they are not inconsistent with the provisions of the Constitution and relevant Union and State Laws.b) The States should undertake comprehensive activity mapping with regard to all the subjects mentioned in Para 3, 3A and 3B of the Sixth Schedule. This mapping should cover all aspects of the subjects viz planning, budgeting and provisioning of finances. This will necessitate full transfer of all government offices and institutions dealing with these activities to the control of the Councils. The State Government should set-up a Task Force to complete this work in a time span of one year.c) The Union Government should also take similar action with regard to Centrally Sponsored Schemes being implemented in these areas.32. (Para 5.6.6) Predominance of non-elected Customary Heads/Bodies at the Village Level; Issue of Village Self Governance in the Sixth Schedule Areasa) Autonomous Councils should be encouraged to pass suitable legislation for establishment of elected bodies at the village level with well defined powers and a transparent system of allocation of resources.b) Suitable stipulations may be made in the procedure for release of grants to the Councils that a certain portion thereof will be disbursed only in the event of a Council passing and implementing the legislation referred at (a) above.c) While an Autonomous District Council should be free to lay down a suitable framework for Village Councils under its jurisdiction, this freedomshould be subject to certain general principles such as, the number of ex officio members/ traditional village functionaries should not be in a majority and the Village Council should be responsible for implementation of development schemes at the village level (including planning, monitoring and selection of beneficiaries).33. (Para 5.7.3) Absence of Linkage between the Sixth Schedule and the 73rd Amendmenta) Autonomous Districts/Councils in Sixth Schedule Areas should also be covered by the State Finance Commission and the State Election Commission.34. (Para 5.8.6) Special Powers of the Governors of Assam, Meghalaya, Tripura and Mizoram with respect to Schedule 6 Areasa) The Governors of Assam, Tripura and Mizoram should be empowered to exercise discretionary powers in respect of all the provisions pertaining to the Autonomous Councils under the Sixth Schedule in consultation with the Council of Ministers and if necessary, in consultation with these Councils. A Constitutional amendment will be required for this purpose.b) Paragraph 14 of the Sixth Schedule should be suitably amended to enable the Union Government to appoint a common Commission to review the working of all autonomous districts of the North-East and to make recommendations as envisaged therein. A periodicity may also be provided for the Commission.c) A high-level Review Committee headed by the Governor and consisting of representatives of both the State Government and the District Councils should be formed in each State to review the functioning of these bodies. This Committee should submit its report to the Union Government.35. (Para 5.11.5) Issue of Tribal Areas Lying outside the Sixth Schedulea)For tribal areas which lie outside the Sixth Schedule as well as the SeventyThird Constitutional Amendment the State Government should take steps to create specially at the district level bodies which should consist of both elected as well as traditionally selected representatives. The States which show initiative and take a lead in this matter should be given incentives.2330023301State and District AdministationSummary of Recommendationsb) The District Rural Development Authority of the district should work as a body accountable to this District Level Body.36. (Para 5.12.6) Personnel Management and Capacity Building of Administrationa) The North Eastern Council, in consultation with the Universities and other educational institutions of the region, should draw up programmes for coaching students for the Civil Services, and other competitive tests such as the Combined Defence Services Examination and the Engineering/ Medical Examinations.37. (Para 5.13.2) Issues of Recruitment in the Sixth Schedule Areasa)Immediate steps should be taken to constitute District cadres for all Groups‘C’ and ‘D’ posts (Classes III and IV) for performance of all ‘transferred functions’ wherever such action has not been taken.b) Recruitment to Groups ‘A’ and ‘B’ posts (Classes I and II) by the Autonomous District Councils or analogous bodies particularly to positions requiring technical/professional qualifications should ordinarily be left to the State level.c) State Governments and the Autonomous District Councils should jointly draw up norms for arriving at the number of technical and professional posts required in the tribal areas. Personnel for such posts should be made available on priority basis.d) Postings to the tribal areas should be for a fixed tenure and must be followed by, as far as practicable, to a posting at a place of the officer’s choice.e)On satisfactory completion of tenure in such areas the incumbent shouldbe entitled to benefits like deputation for higher professional qualifications, training abroad and higher weightage in Departmental promotions.38. (Para 5.14.4) Regional Institutesa) For improving delivery systems and development processes, emphasis ought to be given to capacity building of personnel and it should be a priority activity of the government.b) There should be comprehensive training programmes for all government employees working in the North-Eastern States. The programmes shouldconsist of (i) a long duration induction module when he joins service, (ii) mid career training opportunities and (iii) officials should be encouraged to acquire higher professional qualifications/skill sets in their respective branches and also in subjects such as Public Administration, Trade laws, project investment/ appraisal/ management and information technology applications.c) The North Eastern Council (NEC) should establish an apex Regional Academy for Human Resource Development as an autonomous body with academic and executive flexibility. The mandate of the Academy may extend to the entire range of services under the government.d) The North-Eastern Council should be given the responsibility to undertake a review of various regional institutes under the Union Government/ Ministries and come up with suitable recommendations for bringing improvements in their functioning whenever required. An officer/member of the NEC should be placed on the governing body of these institutions.e) The NEC should take up monitoring and evaluation of these Institutes. The Commission in its Seventh Report has already recommended that the NEC should be suitably strengthened. Once this is done, it should be possible for the NEC to undertake these additional and important responsibilities.f) The North Eastern Hill University (NEHU) could provide the academic foundation for policy research on issues impinging on the entire region and which need to be addressed by State action.39. (Para 5.15.1.5) Assama) All the three Sixth Schedule Autonomous Councils of Assam should be given parity with regard to legislative and executive powers.b) Adequate resources should be provided to the Autonomous Councils so that they are able to carry out their assigned responsibilities effectively. The allocation of funds to these bodies should be based on pre-settled norms (with reference to the minimum standards of service to be provided and their capacity to raise local resources). This exercise could be undertaken by the State Finance Commission.c) The system of release of funds to the BTC through a single window system230302231303State and District AdministationSummary of Recommendationsshould be further fine tuned to make it more effective and hassle free. Such a hassle free system of fund release should be adopted for the other two Councils also with adequate delegation of financial powers.40. (Para 5.15.1.6.8) Tribe Specific Councils (Created under State Enactment) in Assama) The Government of Assam should apportion functions between the tribe specific Councils/Village Councils and the Panchayati Raj Institutions in a manner that schemes involving individual tribal beneficiaries may be assigned to the ‘Tribe Specific Councils’ while area development schemes are assigned to the latter.b) The State Government should initiate a system of meeting at least the establishment costs of the ‘Tribe Specific Councils’ from sources outside the tribal sub plan and build in these requirements in their projections to the next Finance Commission.c)The State Government should take steps to identify innovative initiativeswhich could be entrusted to the Tribe Specific Councils for the benefit of the concerned tribes without affecting area development and local government concerns.d) Suitable guidelines may be drafted for preparation of District and sub-District plans in the relevant areas through joint efforts of the Tribe Specific Councils and the Panchayati Raj Institutions.41. (Para 5.15.2.5.5) Arunachal Pradesha) The recommendations made in its Report on “Local Governance” for strengthening and empowering PRIs need to be implemented on priority.b) Some districts of Arunachal Pradesh are presently affected by insurgency from neighboring States. Firm steps should be taken by both the Union and the State Government to restore peace in the affected areas.c) Traditionally, land in Arunachal Pradesh is owned by the community. However, this system has gradually weakened primarily because community owned land is not a bankable collateral. This issue needs to be resolved inconsultation with the Reserve Bank of India, banks and stake-holders in the land.d) Because of the gradual expansion of the formal judicial system in place of the traditional ‘Kebang system’, it would be necessary for the Ministry of Home Affairs to examine the Assam Frontier (Administration of Justice) Regulation Act 1945 in the State, to ensure a smooth transition to the formal judicial system.42. (Para 5.15.3.7) Manipura)Sincere, proactive measures should be taken to revive and activate the HillDistrict Councils in Manipur. It will be imperative to devolve a major domain of developmental activities to them. It will have to be done along with transfer of funds and functionaries. The local functionaries of the field offices/departments of the State Governments and the parallel bodies which are currently handing these activities at the district level will also need to be placed at the disposal of the District Councils.b) All steps should be taken to put in place elected Village Councils in rural areas. Suitable incentives should be provided to the State for initiating proactive legislative measures in this direction having due regard to the local circumstances.c) As regards the PRIs the Commission has already made a number of recommendations for their strengthening and empowerment in its Report on “Local Governance” (sixth Report) which needs to be implemented on priority.43. (Para 5.15.3.8.5) Issues of Personnel Management in Manipura) Initiatives of the Manipur Government in human resource management need to be sustained. Similar initiatives may also be considered by other States of the region.44. (Para 5.15.3.9.3) Special Powers to the Governor of Manipur under Article 371a) In view of the circumstances prevailing in Manipur, the Governor of Manipur should be given special powers/responsibility with respect to law and order on the lines of the powers vested in the Governors of Nagaland230304231305State and District AdministationSummary of Recommendationsand Arunachal Pradesh under Articles 371A and 371H of the Constitution respectively. This could be done by inserting a suitable paragraph in Article 371C.45. (Para 5.15.4.7) Meghalayaa) The fact of Autonomous District Councils should be accepted and the State should undertake comprehensive activity mapping with regard to all the matters mentioned in para 3 of the Sixth Schedule. This process should cover all aspects of the subjects viz planning, budgeting and provisioning of finances. This will necessitate full transfer of local functionaries of the field offices/departments and bodies relating to these activities at the district level to the control of the Councils. The State Government should set-up a task force to complete this work in a time bound manner.b) Allocation of funds to the District Councils should be based on normative and transparent considerations. These allocations should be budgeted in detail and released in agreed instalments during the financial year.c) The Union Government would also need to take similar action with regard to Centrally Sponsored Schemes being implemented in these areas.d) Appropriate measures may be taken for capacity building in Autonomous Councils so that they are able to utilize the funds in a better way.e) Government of Meghalaya may take steps for extension of the experiment of elected village committees in the Garo Hills for implementing the National Employment Guarantee Act and for implementation of other rural development programmes as well.f)In the long run, directly elected village level representative bodies will needto be constituted and adequately empowered in autonomous Hill Councils areas of Meghalaya.46. (Para 5.15.5.5) Mizorama) The State should undertake comprehensive activity mapping with regard to all the matters mentioned in para 3 of the Sixth Schedule. This process should cover all aspects of the subjects viz planning, budgeting and provisioning of finances. This will necessitate full transfer of functionariesof the field offices/departments/bodies relating to these activities to the control of the Councils. The State Government should set-up a Task Force to complete this work in a time bound manner.b) The Union Government will also need to take similar action with regard to Centrally Sponsored Schemes being implemented in these areas.47. (Para 5.15.6.9) Nagalanda) The Commission would like to reiterate the following recommendation in this regard made in its Seventh Report:-Nagaland has made commendable efforts to usher in a paradigm of decentralised village self-governance through effective use of “Social Capital”. The State has communitised a large number of service delivery schemes. The Ministry of Rural Development should formally recognise this arrangement for implementation of various development and poverty alleviation initiatives in this State.Its replication by other States should be pursued.48. (Para 5.15.7.6) Sikkima) The Commission has made a number of recommendations for strengthening and empowering PRIs in its Report on “Local Governance” which needs to be implemented on priority.b) There is need to rationalize the large cadre strength of various All India Services in the State, in accordance with actual requirements.49. (Para 5.15.8.8) Tripuraa) DPCs may be constituted in all the districts of Tripura with representation from both the TTADC and the District Administration as all the districts in Tripura comprise of both TTADC and part IX areas. The TTADC should also be involved in the planning process at the State level.b) Immediate steps should be taken to ensure that there is only one intermediate structure between the village and the district bodies of the TTAADC.230306231307State and District AdministationSummary of Recommendationsc) The State Government should take steps to evolve a mechanism which could coordinate block level committees chaired by MLAs and zones and sub-zones which are headed by elected representatives of TTAADC.d) The State may also undertake comprehensive activity mapping exercise to delineate functions among various levels operating within the system such as the District Council, the Block committee and the Village Council.50. (Para 6.5.1.3) Financial Delegation and Operational Flexibility – the IFA systema) Based on the experience of the Union Government with regard to the IFA, States should take steps to introduce / strengthen the IFA system in the State administration.51. (Para 6.5.2.3) Avoiding Fiscal Profligacya) The State Governments need to take steps to ensure that projects and programmes are included in the budget only after well considered deliberations and processes. The practice of announcing projects and schemes on an ad-hoc basis needs to be done away with.52. (Para 6.5.3.3) Expenditure Management(a) The States should take priority steps to improve their expenditure profile by (a) finalizing the detailed project reports of schemes in the preceding year and (b) ensuring that the financial sanctions are given to the departments in the first two months of the current financial year.(b) The States should conduct a zero-base review of programmes and schemes which are more than five years old and which involve large sums of public money. (Say over 50 crores)53. (Para 6.5.4.7) Prudent Budget formulationa) There should be prudent and realistic economic assumptions in formulation of budget estimates. At the end of every financial year, the gap between the estimates and the actuals should be analysed so that the underlying economic assumptions could be suitably calibrated for the future.b) There should be interaction between the State Government and stakeholders including industry associations, think tanks etc. in budget formulation. Inorder to make such consultations effective and meaningful, steps should be taken to (a) provide information-access to citizens and (b) educate citizensand leaders of society on budget making and its implications.c) State Governments should shift to multi-year budgeting and give the estimates of revenue and expenditure for a period of four years in addition to the year which the budget pertains. This should be done on a roll-on basis.d) The States should follow the practice of preparation and implementation of the MTFP.e)In order to remove prejudice against non-plan expenditure, the State shouldtake steps to provide for maintenance of the asset in the project cost itself and ensure its maintenance for at least five years after it is acquired. This action should go hand in hand with recovery of adequate user charges.54. (Para 6.5.5.2) Revenue Forecast and Need for a Tax Research Unita) The State Governments should initiate steps to set up dedicated cell within its Finance Department to provide input on the revenue forecast with the reasons thereof.55. (Para 6.5.6.2) Mechanism for Internal Controla) The State Governments should take steps to set up internal audit committees in each of its departments.56. (Para 6.5.7.3) External Audita) The State Governments should specify a time frame for the Departments for necessary follow up action on the recommendations of Audit and forwarding of the ATN after incorporating such action to Audit for vetting before their final submission to the State PAC/ COPU. All Departments should adhere to the prescribed time limits.57. (Para 6.5.8.3) Projectisation and Appraisala)In order to deploy public funds prudentially, with inbuilt financial closure,the States should take steps to strengthen their project formulation and appraisal capacity.230308231309State and District AdministationList of Reports Submitted by theSecond Administrative Reforms Commission up to February 20091. First Report: Second Report:Right to Information: Master Key to Good Governance2. Unlocking Human Capital: Entitlements and Governance – A Case Study3. Third Report:Crisis Management: From Despair to Hope4. Fourth Report:Ethics in Governance5. Fifth Report:Public Order – Justice for All . . . Peace for All6. Sixth Report:Local Governance – An Inspiring Journey into the Future7. Seventh Report:Capacity Building for Conflict Resolution – Friction to Fusion8. Eighth Report:Combatting Terrorism – Protecting by Righteousness9. Ninth Report:Social Capital – A Shared Destiny10. Tenth Report:Refurbishing of Personnel Administration – Scaling New Heights11. Eleventh Report:Promoting e-Governance – The SMART Way Forward12. Twelfth Report:Citizen Centric Administration – The Heart of Governance13. Thirteenth Report:Organisational Structure of Government of India14. Fourteenth Report:Strengthening Financial Management Systems2331310285 ................
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