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When Parliament passed Bills but govt did not give effect to those laws

CONTEXT:

  • Farmers and the Centre: In the ongoing stalemate between protesting farmers and the Centre, the government has repeated its offer of keeping the three contentious farm laws on hold for one to one-and-a-half years, while the farmers have rejected the offer and insisted that the laws be repealed.
  • Precedent: Over the years, Parliament has repealed several laws — and there have also been precedents of the government not bringing a law into force for several years after it has been passed.

BRINGING/REMOVING A LAW:

  • Parliament Power to make Law: Parliament has the power to make a law and to remove it from the statute books (a law can be struck down by the judiciary if it is unconstitutional).
  • Three Steps for Working of Passed Bills: But the passing of a Bill does not mean that it will start working from the next day. There are three more steps for it to become a functioning law.
  1. The first step is the President giving his or her assent to the Bill.
  2. Then the law comes into effect from a particular date.
  3. And finally, the government frames the rules and regulations to make the law operational on the ground.
  • The completion of these steps determines when the law becomes functional.

1. PRESIDENT’S ASSENT TO BILL:

  • FIRST STEP: The first step is the simplest. Article 111 of the Constitution specifies that the President can either sign off on the Bill or withhold his consent.
  • Withholding Power of President: The President rarely withholds their assent to a Bill.
  • Last Incident: In 2006 when President A P J Abdul Kalam refused to sign a Bill protecting MPs from disqualification for holding an office of profit.
  • When Bill sent again to President: If Parliament sends it back to the President, he or he has no choice but to approve it.
  • POCKET VETO: In 1986, President Zail Singh didi not to take any action on the Bill until the end of his term.
    • The Constitution does not specify a time limit for the President to approve a Bill.

2. DATE ON WHICH THE LAW COMES INTO EFFECT:

  • The next step is deciding the date on which the law comes into effect.
  • When power with Government: Parliament delegates to the government the power to determine this date.
  • The Bill states that the law “shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act”.

GIVING EFFECT TO A LAW

  • When Govt not bring Law into Force: There are also instances when the government does not bring a law into force for many years.
    1. National Environment Tribunal Act
    2. Delhi Rent Control Act
  • Parliament passed during Prime Minister P V Narasimha Rao’s tenure. The government never brought these laws into force, which were passed in 1995 and cleared by the President.
  • The National Green Tribunal Act finally repealed the environmental tribunal law in 2010. And a Bill to repeal the Delhi Rent Control Act introduced in 2013 is still pending in Rajya Sabha.
  • Law come into effect: There are also multiple instances where a law specifies when it will come into effect.
    1. The 2013 land acquisition law put an outer limit of three months for the Centre to bring it into force after the President approved it.
    2. A Bill can also specify the exact date on which it will come into effect. Bills replacing ordinances sometimes do that. 

3. RULES & REGULATIONS

  • Outline of a law: A Bill passed by Parliament is the outline of a law. For the law to start working on the ground, individuals need to be recruited or given the power, to administer it.
  • Government’s responsibility: The implementing ministry also needs to finalise forms to gather information and provide benefits or services. These day-to-day operational details are called rules and regulations.
    • And Parliament gives the government the responsibility of making them.
    • These regulations are critical for the functioning of law.
  • When not make rules: If the government does not make rules and regulations, a law or parts of it will not get implemented.
    • The Benami Transactions Act of 1988 is an example of a complete law remaining unimplemented in the absence of regulations.
    • The law gave the government power to confiscate benami properties.
    • For 25 years, such properties were immune from seizure in the absence of framing relevant government rules.
    • The law was finally repealed in 2016 and replaced with a new one.
  • The government not only has the power to make rules but can also suppress rules made by it earlier. In the case of farm laws, the government has made some rules in October 2020.

Source: Indian Express

RBI proposes 4-tier structure for tighter regulation of NBFCs

CONTEXT:

The Reserve Bank of India (RBI) has proposed a tighter regulatory framework for non-banking financial companies (NBFCs) by creating a four-tier structure with a progressive increase in intensity of regulation.

                                 Non Banking Financial Company (NBFCs) - An Overview | LegalRaasta

NEWS IN DETAILS:

  • Four-layered structure: RBI has said the regulatory and supervisory framework of NBFCs should be based on a four-layered structure:
  1. Base Layer,
  2. Middle Layer,
  3. Upper Layer and
  4. Top Layer.
  • Classification of NPAs: Of base layer NBFCs
    • From 180 days
    • To 90 days overdue.
  • Classification of NBFCs:
  1. NBFC-BL: NBFCs in lower layer will be known as NBFC-Base Layer (NBFC-BL).
  2. NBFC-ML: NBFCs in middle layer will be known as NBFC-Middle Layer (NBFC-ML).
  3. NBFC-UL: An NBFC in the Upper Layer will be known as NBFC-Upper Layer (NBFC-UL) and will invite a new regulatory superstructure.
  4. There is also a Top Layer, ideally supposed to be empty.
  • NBFC in the Upper Layer: Once an NBFC is identified as NBFC-UL, it will be subject to enhanced regulatory requirement at least for four years from its last appearance in the category.
    • Even where it does not meet the parametric criteria in the subsequent year.
    • “Hence, if an identified NBFC-UL does not meet the criteria for classification for four consecutive years, it will move out of the enhanced regulatory framework,” it said.

FOUR LAYERS OF NBFCs:

BASE LAYER: It will consist of NBFCs, currently classified as non-systemically important NBFCs (NBFC-ND), NBFCP2P lending platforms, NBFCAA, NOFHC and Type I NBFCs.

MIDDLE LAYER: As one moves up, the next layer can consist of NBFCs currently classified as systemically important NBFCs (NBFC-ND-SI), deposit taking NBFCs (NBFC-D), housing finance companies, IFCs, IDFs, SPDs and core investment companies.

  • The regulatory regime for this layer will be stricter compared to the base layer.
  • Adverse regulatory arbitrage vis-à-vis banks can be addressed for NBFCs falling in this layer in order to reduce systemic risk spill-overs.

UPPER LAYER: NBFCs which are identified as systemically significant among. This layer will be populated by NBFCs which have large potential of systemic spill-over of risks and have the ability to impact financial stability.

  • There is no parallel for this layer at present, as this will be a new layer for regulation.
  • The regulatory framework for NBFCs falling in this layer will be bank-like.

TOP LAYER: It is possible that considered supervisory judgment might push some NBFCs from out of the upper layer of the systemically significant NBFCs for higher regulation/supervision.

  • It will occupy the top of the upper layer as a distinct set.
  • It will remain empty unless supervisors take a view on specific NBFCs.
  • If a Upper layer NBFCs pose extreme risks, they can be put into it.

NBFC SECTOR:

The NBFC sector has seen tremendous growth in recent years. In last five years alone, size of balance sheet of NBFCs (including HFCs) has more than doubled from

  • Rs 20.72 lakh crore (2015)
  • Rs 49.22 lakh crore (2020)

Non-banking Financial Companies (NBFCs):

  • A company registered under the Companies Act, 1956. 
  • They cannot accept demand deposits like commercial banks as they are not a part of clearance and settlement system. 
  • They can be engaged in the business of loans and advances, acquisition of shares/stock/bonds/debentures/ securities issued by government or local authority. 
  • NBFCs- two types- Deposit taking and Non deposit taking. 
  • It is mandatory for a NBFC to get itself registered with the RBI as a deposit taking company. 
  • Regulator- RBI. 
  • No activities in- Agri+ Industry+ Gold+ Construction of properties. 
  • NBFCs not regulated by RBI- Nidhi comp, Chit Fund, Housing financial comp, insurance comp, VCF, Merchant banks etc. 
  • Deposits are not insured in NBFCs. 
  • CAR-15% need to maintain. 

Source: The Indian Express

India to expand research, tourism in Arctic

CONTEXT:

India has unveiled a new draft ‘Arctic’ policy that, among other things, commits to expanding

  • Scientific research,
  • Sustainable tourism and
  • Mineral oil and gas exploration in the Arctic region.

                               Arctic Council: Members, Benefits & Concerns for India - IAS EXPRESS

NEW DRAFT ‘ARCTIC’ POLICY:

Open to public comments: The draft policy is open to public comments until January 26 and has been prepared after deliberations among several ministries.

National Centre for Polar and Ocean Research: India expects the Goa-based National Centre for Polar and Ocean Research to lead scientific research and act as a nodal body to coordinate among various scientific bodies to promote domestic scientific research capacities by expanding in Indian Universities

  • Earth sciences,
  • Biological sciences,
  • Geosciences,
  • Climate change and
  • Space related programmes,
  • Dove-tailed with arctic imperatives.

Other objectives of the policy: It includes programmes for mineral/oil and gas exploration in petroleum research institutes and encouraging tourism and hospitality sectors in building specialised capacities and awareness to engage with Arctic enterprises.”

Impact of Arctic on Climate and Seasons: However, climate change has meant that seasons in the Arctic influence tropical weather.

  • The Arctic influences
    • Atmospheric,
    • Oceanographic and
    • Biogeochemical cycles of the earth’s ecosystem.

Spill over effect of Global Warming/Arctic Melting: The loss of sea ice, ice caps, and warming of the ocean and atmosphere would

  • Lower salinity in the ocean,
  • Increase the temperature differential between land and oceans in the tropical regions, dry subtropical areas and
  • Increase precipitation at higher latitudes.

Use of Arctic Study for India: It will help in study melting rates of the third pole — the Himalayan glaciers, which are endowed with the one of largest freshwater reserves in the world.

INDIA’S SCIENTIFIC EXPEDITION TO THE ARCTIC:

  • It began in 2007 and set up a research station ‘Himadri’ in the international Arctic research base at  Svalbard, Norway.
    • Himadri is manned for about 180 days a year.
  • Two other observatories: in Kongsforden and Gruvebadet.
  • Since its establishment, over 300 Indian researchers have worked in the station. India has sent 13 expeditions to the Arctic since 2007 and runs 23 active projects.

THE ARCTIC:

Five Arctic littoral states — Canada, Denmark (Greenland), Norway, Russia and the USA (Alaska) —

Arctic Council:

  • 8 Members: Five Arctic littoral states and three other Arctic nations — Finland, Sweden and Iceland — form the Arctic Council.
  • 1996 – Ottawa declaration
  • It is an Intergovernmental forum.
  • It is Not a treaty-based international organization but rather an international forum that operates on the basis of consensus.
  • Its mandate explicitly excludes military security.

The Arctic is home to almost four million inhabitants, of which approximately one-tenth are considered as indigenous people.

Source: The Hindu