There are two aspects to the news- knowing the headline and understanding the intricacies of it. We at The Connectere focus on both. While The First Forum edition gives a brief about the headlines, The Weekly Analysis Edition is meant to educate the reader on what do various news mean and what are their intricacies. This initiative is meant to educate the reader on how to understand the important news. In the Fifty First Edition we are covering the following news:
- NCT Bill revives power tussle in Delhi
- Development Finance Institute approved
- Democrats vow to vote on gun bills; Biden says ‘we have to act’
- Ready to discuss bringing petrol, diesel under GST at next Council meet
Recently, the central government introduced the Government of National Capital Territory of Delhi (Amendment) Bill, 2021 to amend the previous act of 1991, to better define the role of the Council of Ministers and the Lieutenant-Governor (LG) in Delhi. The Bill will most likely revive the tussle between the Centre and the Delhi government. The Constitution of India granted special status to Delhi among Union Territories (UTs) in the year 1991 through the 69th constitutional amendment which provided a governor and a council of ministers with appropriate powers. That’s when Delhi was named as the National Capital Territory (NCT) of Delhi.
But now the amendment in the bill will give discretionary powers to the LG of Delhi even in matters where the Legislative Assembly of Delhi is empowered to make laws. And the state government will require to obtain the opinion of the LG on their decisions before executive action is taken on those decisions. Thus, the elected government cannot take any action unless it obtains the LG opinion.
A government is often called upon to take urgent decisions and actions on issues concerning people’s welfare. The effect of this amendment will be that the government will not be able to act quickly on matters which it considers important. There can be no more effective way than this to hobble an elected government and make it ineffective. Moreover, the LG opinion is not time bounded which can lead to delay in executing the action. Specifically, this amendment nullifies the decision of the Supreme Court which has held that the elected government of Delhi can take all decisions within its jurisdiction and execute them without obtaining the concurrence of the LG. In case of a difference of opinion on a matter between the LG and the government, the former should make all efforts to resolve it and only in extreme cases should s/he refer the matter to the president for a decision. It is very surprising that after a constitution bench of the Supreme Court in 2018 settled the constitutional issues relating to the relationship between the Delhi government and the Union government in matters of governance, parliament has been called upon to amend the act to unsettle this relationship.
The AAP government has criticised the bill and has called it a move to curtail the powers of the state government because if amendments are passed, elections and the elected government in Delhi will become meaningless. Opposition parties have come in favour of the AAP government over the NCT Bill calling it to be ‘unconstitutional’. West Bengal Chief Minister extended support to the ‘struggle’ against the introduction of the Government of National Capital Territory of Delhi (Amendment) Bill, 2021 in Lok Sabha and called the move as “surgical strike on federal structure”.
Whenever the government has put a greater thrust on building infrastructure and promoting investment in the country, the idea of setting up a development bank has played a key role. India’s first development bank was probably set up in 1949 with the name Industrial Finance Corporation of India (IFCI). Its main aim was to finance industrial investments in the country. Then in 1995, the World Bank promoted the Industrial Credit and Investment Corporation of India (ICICI) to finance modern and relatively large private corporate enterprises. In 1964, IDBI was set up as an apex body of all development institutions. But these banks were ultimately disbanded due to mounting problems of NPAs and lack of efficiency.
Now, the Union cabinet has once again started working on this idea and has cleared the setting up of a Development Finance Institution (DFI) for financing long term infrastructure and development projects of the country. During Budget 2021, it was mentioned that a national bank will be set up to fund infrastructure and developmental activities. This is now being implemented on ground by the government. The FM stressed on the fact that past attempts to have such institutions have not been very successful and we have ended up with no bank which could take up long-term risk and fund development. This has led to steep fall in long-term credit from a tenure of 10-15 to just 5 years. Hence, in order to promote investments on a larger scale in the country, the government has come up with effective measures in the structure of DFI so that the problems faced by past banks can be confronted. Earlier banks had started piling up huge NPAs allegedly caused by politically motivated lending and inadequate professionalism. These banks were converted into commercial banks after Narasimham Committee reports in 1991. The proposed DFI will have a professional board with persons of eminence. Moreover, DFI will have 50% non-official directors. It will also have certain tax benefits for a period of about 10 years.
To finance this bank, the government will undertake a capital infusion of about Rs 20,000 crore this year and an initial grant of Rs 5000 crore. Additional increments of grant will be made within the limit of Rs 5000 crore. The central government is also planning to issue some securities to DFI through which cost of funds can be brought down. This can help DFI leverage initial capital and draw funds from various sources. DFI will start with 100% government ownership and it will be gradually brought down to 26%.
The DFI will focus on providing long-term credit for the industrial growth of the country at comparatively lower rates. It will provide financial assistance for both public and private sector industries. The main objectives will be promotion of industrial growth, development of backward areas, generation of employment opportunities, raising exports and substituting imports, modernisation and improvement in technology and reduction in regional imbalance.
Democrats said they are pushing toward a vote on expanded gun control measures as the nation reels from its second mass shooting in a week. President Joe Biden said “we have to act,” but prospects for any major changes were dim, for now, in the closely divided Congress. Senate Majority Leader Chuck Schumer vowed to bring to the Senate floor legislation passed by the House that would require background checks for most gun sales and transfers. He said the Senate “must confront a devastating truth” after a lack of congressional action on the issue for almost three decades.
The Senate Judiciary Committee held a hearing Tuesday on proposals for gun control. It is unclear whether any of the bills up for consideration, most of them involving more restrictive background checks would have made a difference in the Colorado case. A 21-year-old man charged with killing eight people in the Atlanta area last week had purchased a 9 mm handgun hours before the murders, prompting advocates to push for longer waiting periods for purchases. The gun debate also highlights a larger difficulty for Senate Democrats as they try to move forward on gun legislation and other policy priorities of the Biden White House. With the filibuster in place, forcing a 60-vote threshold for most legislation, House-passed bills on issues like gun control and voting rights are effectively nonstarters unless Democrats secure significant GOP support.
Democrats say they feel the environment around gun legislation has evolved, especially since that last major push in 2013. They point to troubles at the National Rifle Association, the long-powerful advocacy group that poured tens of millions of dollars into electing Donald Trump in 2016. The organization has been weakened by infighting as well as legal tangles over its finances. “This is the moment to make our stand. NOW,” tweeted Murphy as details of the Colorado shooting emerged Monday evening. “Today, our movement is stronger than the gun lobby. They are weak. We are potent. Finally, a President and a Congress that supports gun reform.” Democrats are hoping there is a gradual political shift among voters as well. A Pew Research Center poll in September 2019 showed a wide majority of Americans, 88%, supported making private gun sales and sales at gun shows subject to background checks, which is what the House-passed bill would do. Ninety-three percent of Democrats and 82% of Republicans were in favor of the policy.
Amidst outcry over high taxes on motor fuel, Finance Minister Nirmala Sitharaman said she would be “glad” to discuss the suggestion of bringing petrol and diesel under the ambit of the Goods and Services Tax at the next meeting of the GST Council. State levies and central excise duty account for more than half of the retail selling prices of petrol and diesel. For instance, taxes make up for 60 per cent of the present retail price of petrol of Rs 91.17 a litre in Delhi. Excise duty constitutes 36 per cent of the retail price. Over 53 per cent of the retail selling price of Rs 81.47 a litre for diesel in Delhi is made up of taxes. As much as 39 per cent of the retail price comprises central excise. Sitharaman said both the centre as well as state governments levy taxes on petrol and diesel.
However, the Centre shares its collection on the fuel with states. The GST Council, headed by Union Finance Minister and comprising state finance ministers, is the highest decision-making body regarding GST. Earlier in the day, members from the Opposition benches said high prices of diesel, petrol and LPG were hurting the common man across the country and asked the government to reduce their rates. Petrol and diesel prices are hovering at historic highs following a relentless increase in rates over the past nine months.
There have been calls by Opposition parties as well as sections of society to reduce excise duty to ease consumer pain. Supriya Sule (NCP) said the excise component in the prices of petrol is close to Rs 38 per litre while state value-added tax (VAT) is about Rs 19 per litre in Delhi. The government should consider slashing this high excise duty, she said. She urged the government to bring down prices of petrol, diesel and LPG cylinder. Ritesh Pandey (BSP) and Nama Nageswara Rao (TRS) too raised the issue of high prices of petrol and diesel. It is expected that this could reduce the price of petrol in the next GST meet but at the same time, it is a fall in government revenue and an increase in the deficit of the government so such a measure must only be taken after a thorough discussion and in no case should it be politicized to their advantage by any party to ensure a fair ruling in this matter.