The Union Budget for the year 2019-20 was passed by Parliament.[1] Key highlights include: The government proposes to spend Rs 27,86,349 crore in 2019-20, which is 13.4% higher than the revised estimate of 2018-19. The receipts (other than net borrowings) are expected to increase by 14.2% to Rs 20,82,589 crore.

The nominal GDP is estimated to grow at 12% in 2019-20. Revenue deficit is targeted at 2.3% of GDP, higher than the revised estimate of 2.2% in 2018-19. Fiscal deficit is targeted at 3.3% of GDP, lower than the revised estimate of 3.4% in 2018-19.

Key policy proposals in the Budget include: Banking and finance: The government plans to partially guarantee Public Sector Banks (against first 10% of loss) for funds provided in a pooled manner to NBFCs. Further, Rs 70,000 crore will be provided for recapitalisation of Public Sector Banks.

Borrowings: Currently, the government’s gross borrowing programme is funded entirely through domestic borrowings. The government plans to raise a part of its borrowings abroad in foreign currency.

Infrastructure: Rs 100 lakh crore will be invested in infrastructure over the next five years. Between 2018 and 2030, Rs 50 lakh crore will be invested in railways through public private partnerships.

The major tax changes announced include: Surcharge on income tax: Earlier, a 15% surcharge on income tax was levied for individuals earning over one crore rupees. The surcharge has been increased to 25% for individuals earning between two crore rupees and five crore rupees, and to 37% for those earning more than five crore rupees.

Corporation tax: Earlier, companies with annual turnover below Rs 250 crore paid tax at the rate of 25%. This threshold has been increased to Rs 400 crore. Road and infrastructure cess: The Road and Infrastructure Cess on petrol and diesel has been increased by one rupee per litre. Excise duty has also been increased by one rupee per litre for these products.

Tax exemptions for electric vehicles: Tax deduction of up to Rs 1.5 lakh will be provided on interest paid on loans taken to purchase electric vehicles. This deduction will be applicable for loans sanctioned between FY 2019-20 and FY 2022-23.

In addition to changes in tax laws, the Finance Bill, 2019 amended several other laws such as the SEBI Act, the RBI Act, and the Payment and Settlement Systems Act.[2] The changes include:

Securities and Exchange Board of India Act, 1992: The Act has been amended to add capital expenditure under expenses to be incurred by the General Fund maintained by SEBI. Further, a Reserve Fund has been constituted which will be credited with 25% of the annual surplus of the General Fund. The remaining surplus will be transferred to the Consolidated Fund of India. Reserve Bank of India Act, 1934: The Act has been amended to enable RBI to take several measures relating to management of NBFCs. These include changing their minimum net worth requirement, framing resolution schemes, supersession of Board of Directors, and removal of directors.

Payment and Settlement Systems Act, 2007: The Act has been amended to prohibit any bank or payments system provider from charging customers for the use of electric modes of payment.

The Consumer Price Index (CPI) inflation (base year 2011-12) increased from 3% in April 2019 to 3.2% in June 2019, year-on-year.[3] Food inflation was at 2.2% in June 2019. The Wholesale Price Index (WPI) inflation (base year 2011-12) decreased from 3.2% in April 2019 to 2% in June 2019, year-on-year.[4]

The Aadhaar and Other Laws (Amendment) Bill, 2019 was passed by Parliament.[5] It replaces an Ordinance promulgated on March 2, 2019.[6] The Bill amends the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, the Indian Telegraph Act, 1885, and the Prevention of Money Laundering Act, 2002. The Aadhaar Act provides targeted delivery of subsidies and benefits to individuals residing in India by assigning them unique identity numbers, called Aadhaar numbers.

Offline verification: Under the Aadhaar Act, an individual’s identity may be verified by Aadhaar ‘authentication’. Authentication involves submitting the Aadhaar number, and their biometric and demographic information to the Central Identities Data Repository for verification. The Bill additionally allows ‘offline verification’ of an individual’s identity, without authentication, through modes specified by the Unique Identification Authority of India (UIDAI) by regulations.

Voluntary use: The Act provides for the use of Aadhaar number as proof of identity of a person, subject to authentication. The Bill replaces this provision to state that an individual may voluntarily use his Aadhaar number to establish his identity, by authentication or offline verification. The Bill states that authentication of an individual’s identity via Aadhaar, for the provision of any service, may be made mandatory only by a law of Parliament.

The Bill amends the Telegraph Act, 1885 and the Prevention of Money Laundering Act, 2002 to state that telecom companies, banks and financial institutions may verify the identity of their clients by: (i) authentication or offline verification of Aadhaar, or (ii) passport, or (iii) any other documents notified by the central government. The person has the choice to use either mode to verify his identity and no person shall be denied any service for not having an Aadhaar number.

UIDAI Fund: Under the Act, all fees and revenue collected by the UIDAI shall be credited to the Consolidated Fund of India. The Bill removes this provision, and creates the Unique Identification Authority of India Fund. All fees, grants, and charges received by the UIDAI shall be credited to this fund. The fund shall be used for expenses of the UIDAI, including salaries and allowances of its employees.

Roshni Sinha ([email protected]) The Right to Information (Amendment) Bill, 2019 was passed by Parliament.[7] It seeks to amend the Right to Information Act, 2005. Key features of the Bill include: Term of Information Commissioners: Under the Act, Chief Information Commissioner (CIC) and Information Commissioners (ICs) are appointed at the national and state level to implement the provisions of the Act. The Act states that the CIC and other ICs (appointed at the central and state level) will hold office for a term of five years. The Bill removes this provision and states that the central government will notify the term of office for the CIC and the ICs.

Determination of salary: The Act states that the salary of the CIC and ICs (at the central level) will be equivalent to the salary paid to the Chief Election Commissioner and Election Commissioners, respectively. Similarly, the salary of the CIC and ICs (at the state level) will be equivalent to the salary paid to the Election Commissioners and the Chief Secretary to the state government, respectively.

The Bill seeks to amend these provisions to state that the salaries, allowances, and other terms and conditions of service of the central and state CIC and ICs will be determined by the central government. For more details on the Bill, see here. To read the PRS blog on the Bill, see here.

The New Delhi International Arbitration Centre Bill, 2019 was passed by Parliament.[8] It seeks to establish an autonomous and independent institution for better management of arbitration in India. The provisions of the Bill will be effective from March 2, 2019. Key features of the Bill include:

New Delhi International Arbitration Centre (NDIAC):The Bill seeks to provide for the establishment of the NDIAC to conduct arbitration, mediation, and conciliation proceedings.

International Centre for Alternative Dispute Resolution (ICADR): The ICADR is a registered society to promote the resolution of disputes through alternative dispute resolution methods (such as arbitration and mediation). The Bill seeks to transfer the existing ICADR to the central government. Upon notification by the central government, all the rights, title, and interest in the ICADR will be transferred to the NDIAC.

Composition: Under the Bill, the NDIAC will consist of seven members including: (i) a Chairperson who may be a Judge of the Supreme Court or a High Court, or an eminent person with special knowledge and experience in the conduct or administration of arbitration; (ii) two eminent persons having substantial knowledge and experience in institutional arbitration; and (iii) three ex-officio members, including a nominee from the Ministry of Finance and a Chief Executive Officer (responsible for the day-to-day administration of the NDIAC).

Objectives and functions: The key objectives of the NDIAC include (i) promoting research, providing training and organising conferences and seminars in alternative dispute resolution matters; (ii) providing facilities and administrative assistance for the conduct of arbitration, mediation, and conciliation proceedings; (iii) maintaining a panel of accredited professionals to conduct arbitration, mediation, and conciliation proceedings.

Key functions include: (i) facilitating conduct of arbitration and conciliation in a professional, timely, and cost-effective manner; and (ii) promoting studies in the field of alternative dispute resolution.

The Muslim Women (Protection of Rights on Marriage) Bill, 2019 was passed by Parliament.[9] It replaces an Ordinance promulgated on February 21, 2019.[10] Key features of the Bill include: The Bill makes all declarations of talaq, including in written or electronic form, to be void (i.e. not enforceable in law) and illegal. It defines talaq as talaq-e-biddat or any other similar form of talaq pronounced by a Muslim man resulting in instant and irrevocable divorce. Talaq-e-biddat refers to the practice under Muslim personal laws where pronouncement of ‘talaq’ thrice in one sitting by a Muslim man to his wife results in an instant and irrevocable divorce.

Offence and penalty: The Bill makes declaration of talaq a cognizable offence, attracting up to three years imprisonment with a fine. (A cognizable offence is one for which a police officer may arrest an accused person without warrant.) The offence will be cognizable only if information relating to the offence is given by: (i) the married woman (against whom talaq has been declared), or (ii) any person related to her by blood or marriage.

The Bill provides that the Magistrate may grant bail to the accused. The bail may be granted only after hearing the woman (against whom talaq has been pronounced), and if the Magistrate is satisfied that there are reasonable grounds for granting bail.

The offence may be compounded by the Magistrate upon the request of the woman (against whom talaq has been declared). Compounding refers to the procedure where the two sides agree to stop legal proceedings, and settle the dispute. The terms and conditions of the compounding will be determined by the Magistrate.

Allowance and custody: A Muslim woman against whom talaq is declared is entitled to seek subsistence allowance from her husband for herself and for her dependent children. She is also entitled to seek custody of her minor children. The amount of allowance and manner of custody will be determined by the Magistrate.

The Arbitration and Conciliation (Amendment) Bill, 2019 was passed by Rajya Sabha.[11] It seeks to amend the Arbitration and Conciliation Act, 1996. The Act contains provisions to deal with domestic and international arbitration, and defines the law for conducting conciliation proceedings. Key features of the Bill are:

Arbitration Council of India: The Bill seeks to establish an independent body called the Arbitration Council of India (ACI) for the promotion of arbitration, mediation, conciliation and other alternative dispute redressal mechanisms. Its functions include: (i) framing policies for grading arbitral institutions and accrediting arbitrators, (ii) making policies for the establishment, operation and maintenance of uniform professional standards for all alternate dispute redressal matters, and (iii) maintaining a depository of arbitral awards (judgments) made in India and abroad.

Appointment of arbitrators: Under the 1996 Act, parties were free to appoint arbitrators. In case of disagreement on an appointment, parties could request the Supreme Court, or the High Court, or any person or institution designated by such Court, to appoint an arbitrator.

Under the Bill, the Supreme Court and High Courts may now designate arbitral institutions, which parties can approach for the appointment of arbitrators. For international commercial arbitration, appointments will be made by the institution designated by the Supreme Court. For domestic arbitration, appointments will be made by the institution designated by the concerned High Court. In case there are no arbitral institutions available, the Chief Justice of the concerned High Court may maintain a panel of arbitrators to perform the functions of the arbitral institutions.

Relaxation of time limits: Under the Act, arbitral tribunals are required to make their award within a period of 12 months for all arbitration proceedings. The Bill seeks to remove this time restriction for international commercial arbitrations. It adds that tribunals must try to dispose of international arbitration matters within 12 months.

The DNA Technology (Use and Application) Regulation Bill, 2019 was introduced in Lok Sabha.[12] The Bill provides for the regulation of use of DNA technology for establishing the identity of certain persons.

Use of DNA Data: Under the Bill, DNA testing is allowed only in respect of matters listed in the Schedule to the Bill. These include offences under the Indian Penal Code, 1860, and for civil matters such as paternity suits. Further, the Schedule includes DNA testing for matters related to establishment of individual identity.

Collection of DNA: While preparing a DNA profile, bodily substances of persons may be collected by the investigating authorities. Authorities are required to obtain consent for collection in certain situations. For arrested persons, authorities are required to obtain written consent if the offence carries a punishment of up to seven years. If the offence carries more than seven years of imprisonment or death, consent is not required. Further, if the person is a victim, or relative of a missing person, or a minor or disabled person, the authorities are required to obtain their written consent.

DNA Data Bank: The Bill provides for the establishment of a National DNA Data Bank and Regional DNA Data Banks, for every state, or two or more states. DNA laboratories are required to share DNA data prepared by them with the National and Regional DNA Data Banks. Every Data Bank will be required to maintain the following indices of DNA data: (i) a crime scene index, (ii) a suspects’ or under trials’ index, (iii) an offenders’ index, (iv) a missing persons’ index, and (v) an unknown deceased persons’ index.

Removal of DNA profiles: The Bill provides for removal of the DNA profiles of the following persons: (i) of a suspect if a police report is filed or court order given, (ii) of an undertrial if a court order is given, and (iii) on written request, for persons who are not a suspect, offender or under trial, from the crime scene or missing persons’ index.

DNA Regulatory Board: The Bill provides for the establishment of a DNA Regulatory Board, which will supervise the DNA Data Banks and DNA laboratories. The functions of the Board include: (i) advising governments on all issues related to establishing DNA laboratories or Data Banks, and (ii) ensuring that all information relating to DNA profiles is kept confidential.

The Transgender Persons (Protection of Rights) Bill, 2019 was introduced in Lok Sabha on July 19, 2019.[13] Key features of the Bill include:

Definition of a transgender person: The Bill defines a transgender person as one whose gender does not match the gender assigned at birth. It includes transmen and trans-women, persons with intersex variations, gender-queers, and persons with socio-cultural identities, such as kinnar and hijra. Intersex variations is defined to mean a person who at birth shows variation in his or her primary sexual characteristics, external genitalia, chromosomes, or hormones from the normative standard of male or female body.

Prohibition against discrimination: The Bill prohibits the discrimination against a transgender person, including denial of service or unfair treatment in relation to: (i) education; (ii) employment; (iii) healthcare; (iv) access to, or enjoyment of goods, facilities, opportunities available to the public; (v) right to movement; (vi) right to reside, rent, or otherwise occupy property; (vii) opportunity to hold public or private office; and (viii) access to a government or private establishment in whose care or custody a transgender person is.

Health care: The government must take steps to provide health facilities to transgender persons including separate HIV surveillance centres, and sex reassignment surgeries. The government shall review medical curriculum to address health issues of transgender persons, and provide comprehensive medical insurance schemes for them.

Certificate of identity: A transgender person may make an application to the District Magistrate for a certificate of identity, indicating the gender as ‘transgender’. A revised certificate may be obtained only if the individual undergoes surgery to change their gender either as a male or a female.

The Consumer Protection Bill, 2019 was passed by Lok Sabha.[14] It replaces the Consumer Protection Act, 1986. Key features of the Bill include: Rights of consumers: Six consumer rights have been defined in the Bill, including the right to: (i) be protected against marketing of goods and services which are hazardous to life and property; (ii) be informed of the quality, quantity, potency, purity, standard and price of goods or services; (iii) be assured of access to goods or services at competitive prices; and (iv) seek redressal against unfair or restrictive trade practices.

Central Consumer Protection Authority: The central government will set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers. It will regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements.

Penalties for misleading advertisement: The CCPA may impose a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false or misleading advertisement. In case of a subsequent offence, the fine may extend to Rs 50 lakh and imprisonment of up to five years.

Consumer Disputes Redressal Commission (CDRCs): CDRCs will be set up at the district, state, and national levels. A consumer can file a complaint with CDRCs in relation to: (i) unfair or restrictive trade practices; (ii) defective goods or services; (iii) overcharging or deceptive charging; and (iv) the offering of goods or services for sale which may be hazardous to life and safety. Complaints against an unfair contract can be filed with only the State and National CDRCs. Appeals from a District CDRC will be heard by the State CDRC, and from State CDRC by the National CDRC. Final appeal will lie before the Supreme Court.

Product liability: Product liability means the liability of a product manufacturer, service provider, or seller to compensate a consumer for any harm or injury caused by a defective good or deficient service. To claim compensation, a consumer has to prove any one of the conditions for defect or deficiency, as given in the Bill.

The Repealing and Amending Bill, 2019 was passed by Lok Sabha.[15] The Bill seeks to repeal 58 Acts in whole and makes minor amendments to two other laws. Key features of the Bill include:

Repealing certain laws in whole: The Bill repeals 58 laws that have been listed in the First Schedule of the Bill. These include 12 Acts which are principal Acts and 46 Acts which are Amendment Acts. The principal Acts which have been repealed include: (i) the Beedi Workers Welfare Fund Act, 1976, and (ii) the Municipal Taxation Act, 1881. Note that the repeal of Amendment Acts does not have a material significance since these Amendment Acts have already been incorporated in the principal Acts.

Amendment of certain laws: The Bill makes minor amendments to two Acts which relate to substitution of certain words. The two Acts are: (i) the Income Tax Act, 1961, and (ii) the India Institutes of Management Act, 2017.

The Union Cabinet approved the signing of the United Nations Convention on International Settlement Agreements Resulting from Mediation.[16] The Convention seeks to provide an international framework on mediation to ensure that a settlement reached through mediation becomes binding and enforceable on the parties.[17] As per the press release, the provisions of the Convention seek to strengthen alternative dispute resolution mechanisms, like arbitration, conciliation and mediation.

Cabinet approves increase in strength of Supreme Court judges from 31 to 34 Roshni Sinha ([email protected]) The Union Cabinet approved an increase in the sanctioned number of judges in Supreme Court from 31 to 34.[18] Note that a copy of the press release is not available in the public domain.

Home Affairs Unlawful Activities (Prevention) Amendment Bill, 2019 passed by Lok Sabha Roshni Sinha ([email protected]) The Unlawful Activities (Prevention) Amendment Bill, 2019 was passed by Lok Sabha.[19] It amends the Unlawful Activities (Prevention) Act, 1967. The Act provides special procedures to deal with terrorist activities, among other things. Key provisions of the Bill include:

Who may commit terrorism: Under the Act, the central government may designate an organisation as a terrorist organisation if it: (i) commits or participates in acts of terrorism, (ii) prepares for terrorism, (iii) promotes terrorism, or (iv) is otherwise involved in terrorism. The Bill empowers the government to designate individuals also as terrorists on the same grounds.

Approval for seizure of property: Under the Act, an investigating officer is required to obtain the prior approval of the Director General of Police to seize properties that may be connected with terrorism. The Bill adds that if the investigation is conducted by an officer of the National Investigation Agency (NIA), the approval of the Director General of NIA would be required for seizure of such property.

Investigation: Under the Act, investigation of cases may be conducted by officers of the rank of Deputy Superintendent or Assistant Commissioner of Police or above. The Bill additionally empowers the officers of the NIA, of the rank of Inspector or above, to investigate cases.

Insertion to schedule of treaties: The Act defines terrorist acts to include acts committed within the scope of any of the treaties listed in a schedule to the Act. The Schedule lists nine treaties, including the Convention for the Suppression of Terrorist Bombings (1997), and the Convention against Taking of Hostages (1979). The Bill adds another treaty to the list. This is the International Convention for Suppression of Acts of Nuclear Terrorism (2005).

The Jammu and Kashmir Reservation (Amendment) Bill, 2019, was passed by Parliament.[20] The Act provides for reservation in appointment and promotions in state government posts, and admission to professional institutions for certain reserved categories. Professional institutions include government medical colleges, dental colleges, and polytechnics. Key features of the Bill include:

Extension of reservation: The Act provides for reservation in appointment and promotions in certain state government posts to persons belonging to socially and educationally backward classes. It defines socially and educationally backward classes to include persons living in areas adjoining the Actual Line of Control. The Bill amends this to include those persons living in areas adjoining the International Border, within the ambit of this reservation.

Further, the Act states that any person who has been appointed on the basis of residence in an area adjoining the Line of Control, must serve in such areas for at least seven years. The Bill extends this condition to persons living in areas adjoining the International Border as well.

Exclusion from reservation: The Act states that any person whose annual income exceeds three lakh rupees or other amount as notified by the state government, would not be included within socially and educationally backward classes.

However, this exclusion does not apply to persons living in areas adjoining the Actual Line of Control. The Bill states that this exclusion will not apply to persons living in areas adjoining the International Border also.

The Protection of Human Rights (Amendment) Bill, 2019 was passed by Parliament.[21] The Bill amends the Protection of Human Rights Act, 1993. The Act provides for a National Human Rights Commission (NHRC), State Human Rights Commissions (SHRC), as well as Human Rights Courts.

Composition of NHRC: Under the Act, the chairperson of the NHRC is a person who has been a Chief Justice of the Supreme Court. The Bill amends this to provide that a person who has been Chief Justice of the Supreme Court, or a Judge of the Supreme Court will be the chairperson of the NHRC.

The Act provides for two persons having knowledge of human rights to be appointed as members of the NHRC. The Bill amends this to allow three members to be appointed, of which at least one will be a woman. Under the Act, chairpersons of various commissions such as the National Commission for Scheduled Castes, and National Commission for Scheduled Tribes, are members of the NHRC. The Bill includes the chairpersons of the National Commission for Backward Classes, the National Commission for the Protection of Child Rights, and the Chief Commissioner for Persons with Disabilities as members of the NHRC.

Chairperson of SHRC: Under the Act, the chairperson of a SHRC is a person who has been a Chief Justice of a High Court. The Bill amends this to provide that a person who has been Chief Justice or Judge of a High Court will be chairperson of a SHRC.

Term of office: The Act states that the chairperson and members of the NHRC and SHRC will hold office for five years or till the age of seventy years, whichever is earlier. The Bill reduces the term of office to three years or till the age of seventy years, whichever is earlier.

Powers of Secretary-General: The Act provides for a Secretary-General of the NHRC and a Secretary of a SHRC, who exercise powers as may be delegated to them. The Bill amends this and allows the Secretary-General and Secretary to exercise all administrative and financial powers (except judicial functions), subject to the respective chairperson’s control.

The National Investigation Agency (Amendment) Bill, 2019 was passed by Parliament.[22] The Bill amends the National Investigation Agency (NIA) Act, 2008. The Act provides for a national-level agency to investigate and prosecute offences listed in a schedule (scheduled offences). Further, the Act allows for creation of Special Courts for the trial of scheduled offences.

Scheduled offences: The schedule to the Act specifies a list of offences which are to be investigated and prosecuted by the NIA. These include offences under Acts such as the Atomic Energy Act, 1962, and the Unlawful Activities Prevention Act, 1967. The Bill seeks to allow the NIA to investigate the following additional offences: (i) human trafficking, (ii) offences related to counterfeit currency or bank notes, (iii) manufacture or sale of prohibited arms, (iv) cyber-terrorism, and (v) offences under the Explosive Substances Act, 1908.

Jurisdiction of the NIA: The Act provides for the creation of the NIA to investigate and prosecute offences specified in the schedule. The officers of the NIA have the same powers as other police officers in relation to investigation of such offences, across India. The Bill states that in addition, officers of the NIA will have the power to investigate scheduled offences committed outside India, subject to international treaties and domestic laws of other countries. The central government may direct the NIA to investigate such cases, as if the offence has been committed in India.

The Special Court in New Delhi will have jurisdiction over these cases. Special Courts: The Act allows the central government to constitute Special Courts for the trial of scheduled offences. The Bill amends this to allow the central and state governments to designate Sessions Courts as Special Courts for such trials.

The High-Level Committee for implementation of clause six of the Assam Accord was appointed.[23] Note that the Committee had been has approved by the Union Cabinet and constituted in January 2019.[24],[25] The Assam Accord was signed on August 15, 1985.25 Clause six of the Accord states that appropriate constitutional, legislative, and administrative safeguards will be provided to protect the cultural, social, and linguistic identity of the Assamese people. The Committee will consist of 13 members and will be chaired by Justice (Retd) Biplap Kumar Sharma, former judge of the Guwahati High Court.

The Terms of Reference of the Committee include: (i) examining the effectiveness of actions taken to implement clause six of the Accord, (ii) assessing the appropriate level of reservation of seats in the Assam Legislative Assembly and local bodies for the Assamese people, and (iii) suggesting measures to protect Assamese and other languages of Assam.

The Committee is required to submit its report within a period of six months. Cabinet approves Jammu and Kashmir Reservation (Second Amendment) Bill Vinayak Krishnan ([email protected]) The Union Cabinet approved the Jammu and Kashmir Reservation (Second Amendment) Bill, 2019.[26] The Bill seeks to extend reservation of ten percent for economically weaker sections in educational institutions and public employment. A copy of the Bill has not been made available in the public domain. Note that ten percent reservation for economically weaker sections was introduced through the 103rd Constitutional Amendment Act.

Health and Family Welfare Gayatri Mann ([email protected]) Indian Medical Council (Amendment) Bill, 2019 passed by Parliament The Indian Medical Council (Amendment) Bill, 2019 was passed by Parliament.[27] The Bill amends the Indian Medical Council Act, 1956 and replaces the Indian Medical Council (Amendment) Second Ordinance, 2019. The 1956 Act sets up the Medical Council of India (MCI), which regulates medical education and practice. Certain provisions of this Bill will be effective from September 26, 2018.

Supersession of the MCI: The 1956 Act provides for supersession of the MCI and its reconstitution within a period of three years from the date of its supersession. In the interim period, the Act requires the central government to constitute a Board of Governors, to exercise the powers of the MCI. The Ordinance amends the Act to reduce the time period for supersession of the MCI from three years to two years.

The Act provides for the Board of Governors to consist of up to seven members including persons of eminence in medical education, appointed by the central government. The Ordinance amends this provision to increase the strength of the Board from seven to 12 members. Further, it allows for persons with proven administrative capacity an experience to be selected in the Board. The Ordinance provides for the Board of Governors to be assisted by a Secretary General appointed by the central government.

The National Medical Commission Bill, 2019 was introduced and passed by Lok Sabha.[28] The Bill seeks to repeal the Indian Medical Council Act, 1956 and provide for a medical education system which ensures: (i) availability of adequate and high quality medical professionals, (ii) adoption of the latest medical research by medical professionals, (iii) periodic assessment of medical institutions, and (iv) an effective grievance redressal mechanism. Key features of the Bill include:

Constitution of the National Medical Commission: The Bill sets up the National Medical Commission (NMC). Within three years of the passage of the Bill, state governments will establish State Medical Councils at the state level. The NMC will consist of 25 members, appointed by the central government.

Members of the NMC will include: (i) the Chairperson (must be a medical practitioner), (ii) Presidents of the Under-Graduate and Post-Graduate Medical Education Boards, (iii) the Director General of Health Services, Directorate General of Health Services, (iv) the Director General, Indian Council of Medical Research, and (v) five members (part-time) to be elected by registered medical practitioners from amongst themselves for two years.

Functions of the National Medical Commission: Functions of the NMC include: (i) framing policies for regulating medical institutions and medical professionals, (ii) assessing the requirements of healthcare related human resources and infrastructure, (iii) ensuring compliance by the State Medical Councils of the regulations made under the Bill, (iv) framing guidelines for determination of fees for up to 50% of the seats in the private medical institutions and deemed universities which are regulated as per the Bill.

Autonomous boards: The Bill sets up four autonomous boards under the supervision of the NMC. Each board will consist of a President and four members, appointed by the central government. These boards include: (i) the Under-Graduate Medical Education Board and the Post-Graduate Medical Education Board, (ii) the Medical Assessment and Rating Board, and (iii) the Ethics and Medical Registration

The Surrogacy (Regulation) Bill, 2019 was introduced in Lok Sabha.[29] The Bill defines surrogacy as a practice where a woman gives birth to a child for an intending couple and agrees to hand over the child to them after the birth. Key features of the Bill include:

Regulation of surrogacy: The Bill prohibits commercial surrogacy, but allows altruistic surrogacy. Altruistic surrogacy involves no monetary compensation to the surrogate mother other than the medical expenses and insurance coverage. Commercial surrogacy includes surrogacy or its related procedures undertaken for a monetary benefit or reward (in cash or kind) exceeding the basic medical expenses and insurance coverage.

Eligibility criteria for intending couple: The intending couple should have a ‘certificate of essentiality’ and a ‘certificate of eligibility’ issued by the appropriate authority. A certificate of essentiality will be issued upon fulfilment of these conditions: (i) a medical certificate of proven infertility of one or both members of the intending couple, (ii) an order of parentage and custody of the surrogate child passed by a Magistrate’s court, and (iii) insurance coverage for a period of 16 months covering postpartum delivery complications for the surrogate.

The certificate of eligibility to the intending couple is issued upon fulfilment of the following conditions: (i) the couple being Indian citizens and married for at least five years; (ii) between 23 to 50 years old (wife) and 26 to 55 years old (husband); (iii) they do not have any surviving child (biological, adopted or surrogate); including a child who is mentally or physically challenged or suffers from life threatening disorder or fatal illness; and (iv) other conditions that may be specified by regulations.

Eligibility criteria for surrogate mother: To obtain a certificate of eligibility, the surrogate mother has to be: (i) a close relative of the intending couple; (ii) a married woman having a child of her own; (iii) 25 to 35 years old; (iv) a surrogate only once in her lifetime; and (v) possess a certificate of medical and psychological fitness for surrogacy. In addition, the surrogate mother cannot provide her own gametes for surrogacy.

The Homoeopathy Central Council (Amendment) Bill, 2019 was passed by Parliament.[30] It amends the Homoeopathy Central Council Act, 1973 and replaces the Homoeopathy Central Council (Amendment) Ordinance, 2019 that was promulgated on March 2, 2019. The Act sets up the Central Council of Homoeopathy which regulates homoeopathic education and practice.

Time period for supersession of the Central Council: The 1973 Act was amended in 2018 to provide for the supersession of the Central Council. The Central Council was required to be reconstituted within one year from the date of its supersession. In the interim period, the central government constituted a Board of Governors, to exercise the powers of the Central Council. The Bill amends the Act to increase the time period for supersession of the Central Council from one to two years.

The Dentists (Amendment) Bill, 2019 was passed by Parliament.[31] The Bill amends the Dentists Act, 1948. The Act regulates the profession of dentistry and constitutes: (i) the Dental Council of India, (ii) State Dental Councils, and (iii) Joint State Dental Councils.

A register of dentists is maintained under the Act in two parts, Part A and Part B. Persons possessing recognised dental qualifications are registered in Part A and persons not possessing such qualifications are registered in Part B. The persons in Part B are Indian citizens who have been practicing as dentists for at least five years prior to a registration date notified by the state government.

Composition of the dental councils: Under the Act, composition of the Dental Council of India, State Dental Councils, and Joint State Dental Councils includes representation from dentists registered in Part B. The Bill seeks to remove the mandatory requirement of the representation of dentists registered in Part B in these Councils.

The Ministry of Health and Family Welfare released the draft Clinical Establishments (Central Government) Third Amendment Rules, 2019.[32] These rules have been prescribed under the Clinical Establishment (Registration and Regulation) Act, 2010. As health is a state subject, this Act is applicable in all states that have adopted it. As of 2018, 17 states and union territories have adopted the Act.[33]

The Act provides for the registration and regulation of clinical establishments and prescribes minimum standards of facilities and services. Clinical establishments include clinics, hospitals, and super specialty departments.

The draft rules propose minimum standards for different categories of clinical establishments offering allopathy and AYUSH treatments. These standards have been set across different parameters such as infrastructure, human resources, equipment, drugs, and support service required. According to the draft rules, health facilities that do not comply with the prescribed standards, will not be granted registration.

Finance The Banning of Unregulated Deposit Schemes Bill, 2019 passed by Parliament Gayatri Mann ([email protected]) The Banning of Unregulated Deposit Schemes Bill, 2019 was passed by Parliament.[34] The Bill provides for a mechanism to ban unregulated deposit schemes and protect the interests of depositors. It also seeks to amend three laws, i.e., the Reserve Bank of India Act, 1934, the Securities and Exchange Board of India Act, 1992 and the Multi-State Cooperative Societies Act, 2002. Key features of the Bill include:

Unregulated deposit scheme: The Bill defines a deposit as an amount of money received through an advance, a loan, or in any other form, with a promise to be returned with or without interest. Such deposit may be returned either in cash or as a service, and the time of return may or may not be specified. Further, the Bill defines certain amounts which shall not be included in the definition of deposits such as amounts received in the form of loans from relatives and contributions towards capital by partners in any partnership firm.

The Bill lists nine regulators including RBI and SEBI, which oversee and regulate various deposit-taking schemes. All deposit-taking schemes are required to be registered with the relevant regulator. A deposit-taking scheme is unregulated if it is taken for a business purpose and is not registered with the regulators that are listed in the Bill.

Offences and penalties: The Bill defines three types of offences, and penalties related to them. These offences are: (i) running (advertising, promoting, operating or accepting money for) unregulated deposit schemes, (ii) fraudulently defaulting on regulated deposit schemes, and (iii) wrongfully inducing depositors to invest in unregulated deposit schemes by willingly falsifying facts. For example, accepting unregulated deposits will be punishable with imprisonment between two and seven years, along with a fine ranging from three to 10 lakh rupees.

The Union Cabinet approved an amendment to the Terms of Reference of the 15th Finance Commission.[35] The Finance Commission is a constitutional body formed every five years to give suggestions on centre-state financial relations. The 15th Finance Commission (Chair: Mr. N. K. Singh) was constituted in November 2017 to give recommendations for the period 2020-21 to 2024-25 on subjects including: (i) sharing of central taxes with states, (ii) principles which govern the distribution of central grants to states, and (iii) measures to improve the financial position of states in order to supplement the resources of panchayats and municipalities.

The approved amendment requires the 15th Finance Commission to examine whether a separate mechanism for funding of defence and internal security should be set up, and if so, how such a mechanism could be operationalised. The Union Cabinet also approved an extension of the term of the 15th Finance Commission by one month. The Commission is required to submit its report by November 30, 2019.

Inter-Ministerial Committee submits report on virtual currencies and proposes draft Bill banning cryptocurrency Anurag Vaishnav ([email protected]) A high-level Inter-Ministerial Committee was constituted in November, 2017 to study the issues related to virtual currencies and propose actions to be taken.[36] The Committee has submitted its report. The mandate of the Committee included examining the policy and legal framework for regulation of virtual currencies. Key observations and recommendations of the Committee include:[37]

Virtual currencies: Virtual currency is a digitally tradable form of value, which can be used as a medium of exchange or as stored value. It does not have the status of a legal tender. Cryptocurrency is a specific type of virtual currency, which is protected by cryptographic encryption techniques. The Committee identified several issues with cryptocurrencies such as fluctuating prices, lack of a centralised authority, high energy and computation requirements, vulnerability to money-laundering and terrorism funding. The Committee recommended that all private cryptocurrencies, except any cryptocurrency issued by the State, be banned in India.

Official digital currency: The Committee observed that an official digital currency can have several advantages over the existing payment mechanisms. These include recording of all transactions, safer and cheaper mode of distribution of currency, and cheaper payment mechanism for cross-border payments. The Committee recommended that an open mind needs to be kept regarding introduction of an official digital currency in India. .

Draft Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019: The Inter-Ministerial Committee has proposed a draft Bill which bans cryptocurrencies, criminalises activities associated with cryptocurrencies in India, and provides for regulation of official digital currency. The Bill prohibits generating, selling, transferring, issuance, disposal or use of cryptocurrency in the country.

It prohibits the use of cryptocurrency as a medium of exchange, a store of value or a unit of account. It provides that cryptocurrency shall not be used as legal tender or currency in India. The Bill provides that the central government may, in consultation with the central board of RBI, approve a digital form of currency to be a legal tender.

The Comptroller and Auditor General (CAG) submitted its report on compliance audit of the Goods and Services Tax (GST) for the year 2017-18.[38] GST has been under implementation since July 1, 2017, when it subsumed various indirect taxes levied on most goods and services by the centre and states. Key observations and recommendations of the CAG include:

Invoice matching: The CAG observed that due to the complex return mechanism and technical glitches, the invoice matching system which matches the GST returns filed by suppliers and recipients was rolled back. The invoice matching system was designed to verify that the input tax credit (ITC) being claimed by a taxpayer has been paid by his supplier. In the absence of such a system, ITC is being claimed by taxpayers on self-assessment basis, without any cross-verification. The CAG observed that the present system is prone to irregular claims of ITC by taxpayers that may go undetected, resulting in frauds. This has necessitated the continuation of a physical interface between assesses and the tax officials. The CAG recommended that compliance should be simplified by introducing invoice matching and simplified returns.

Effect on IGST settlement: The ITC claimed by taxpayers can be used by them to pay their dues on taxes such as central GST, Integrated GST (IGST) and state GST. The CAG observed that in the absence of the invoice matching system, irregular or erroneous claims of ITC by taxpayers could affect the process of settlement of IGST with states. IGST is collected by the central government on inter-state supply of goods and services. The states are provided their share of IGST by the central government during the settlement process.

Issues in IGST settlement: The CAG observed that at the end of the year 2017-18, unsettled balance of Rs 2.1 lakh crore had accumulated in the IGST account after the settlement process. The CAG noted that this accumulation of huge unsettled balance is partly due to issues faced in the settlement process for many transactions. It noted that there are inaccuracies in the settlement algorithm that runs on the GST portal based on the returns filed by taxpayers. Further, it noted that the algorithm was being run on incomplete datasets where the data was not available due to non-implementation of features such as those relating to imports and appeals, and invoice matching system. The CAG recommended that the Ministry of Finance should take a comprehensive review of the IGST settlements done so far, as these have a bearing on the finances of the central and state governments.

GST revenue: The CAG observed that the revenue expected from GST for the year 2018-19 is Rs 5,81,563 crore (as per the provisional figures of the Controller General of Accounts). This is 22% less than the year’s budget estimate of Rs 7,43,900 crore.

RBI relaxes end-use restrictions for external commercial borrowings Anurag Vaishnav ([email protected]) The Reserve Bank of India (RBI), in consultation with the central government, has relaxed the end-use restrictions relating to External Commercial Borrowings (ECBs) for working capital requirements, general corporate purposes and for repayment of rupee loans.[39]

ECBs are loans raised by eligible resident entities from recognised non-resident entities. These borrowings should conform to certain restrictions for their end-use. These end-use restrictions are: (i) real estate activities, (ii) investment in capital market, (iii) equity investment, (iv) working capital purposes, (v) general corporate purposes, (vi) repayment of rupee loans and (vii) on-lending activities for the above.[40]

Currently, ECBs for working capital purposes, general corporate purposes or repayment of rupee loans can only be availed from a foreign equity holder, and for a minimum average maturity period of five years. A foreign equity holder is an entity with 25% direct equity holding or 51% indirect equity holding or a group company with a common foreign parent. The new rules relax these restrictions to permit borrowings from other lenders eligible for ECBs. Under the new rules, the norms for these lenders are the following:

Eligible borrowers can raise ECBs with a minimum average maturity period of 10 years for working capital purposes and general corporate purposes. Eligible borrowers can raise ECBs with a minimum average maturity period of seven years for repayment of rupee loans raised domestically for the purpose of capital expenditure. For any other purpose, the minimum average maturity period of the ECB should be 10 years.

Non-banking financial companies may raise ECBs for the purpose of on-lending, subject to the above conditions on minimum average maturity period. Corporate borrowers can avail ECB for repayment of rupee loans raised for capital expenditure in manufacturing and infrastructure sector and classified as outstanding for over 60 days, under any one-time settlement arrangement with lenders. Further, lenders may also sell these loans to eligible ECB lenders.

RBI constitutes working group to review regulatory framework for Core Investment Companies Anurag Vaishnav ([email protected]) The Reserve Bank of India (RBI) has constituted a Working Group to review the regulatory and supervisory framework for Core Investment Companies (CICs).[41]

CICs are non-banking financial companies carrying on the business of acquisition of shares and securities satisfying the following criteria: (i) 90% (or more) of its net assets are in form of investment in equity shares, bonds, debentures, debt or loans in group companies, (ii) it does not carry other financial activities besides investing in these instruments, granting of loans to group companies or issuing guarantees on behalf of group companies, and (iii) it does not trade its investments, except in block sale for the purpose of dilution or disinvestment.[42]

The Working Group has been constituted with the aim of strengthening the corporate governance framework of CICs. The terms of reference of the Working Group include: (i) examining current regulatory framework for CICs and suggest changes therein, (ii) examining current process of registration of CICs including the practice of multiple CICs being allowed within a group, and suggest changes therein, (iii) suggesting measures to strengthen corporate governance and disclosure requirements for CICs, and (iv) suggesting measures to enhance RBI’s supervision over CICs.

The Working Group is required to submit its report by October 31, 2019. Cabinet approves Chit Funds (Amendment) Bill, 2019 Anurag Vaishnav ([email protected]) The Union Cabinet approved the Chit Funds (Amendment) Bill, 2019.[43] The Bill seeks to amend the Chit Funds Act, 1982. The Act regulates chit funds, and prohibits a fund from being created without the prior sanction of the state government. Note that a copy of the Bill is not available in the public domain.

Ministry of Finance extends term of the task force drafting new direct tax law Suyash Tiwari ([email protected]) The Ministry of Finance has extended the term of the task force set up to draft a new direct tax law by 16 days.[44] The task force was constituted in November 2017 to review the Income Tax Act, 1961 and draft a new direct tax law keeping in view: (i) direct tax system prevalent in various countries, (ii) international best practices, (iii) economic needs of India, and (iv) any other connected matters.

In June 2019, the Ministry broadened the terms of reference of the task force, to include: (i) anonymised verification and scrutiny, (ii) reduction in litigation and expeditious disposal of appeals, (iii) reduction of compliance burden through simplification of procedures, (iv) mechanism for system based cross verification of financial transactions, and (v) sharing of information among departments.[45]

The task force was required to submit its report by July 31, 2019. This has now been extended to August 16, 2019.

The Code on Wages, 2019 was passed by Lok Sabha.[46] It seeks to regulate wage and bonus payments in all employments where any industry, trade, business, or manufacture is carried out. The Code replaces the following four laws: (i) the Payment of Wages Act, 1936, (ii) the Minimum Wages Act, 1948, (iii) the Payment of Bonus Act, 1965, and (iv) the Equal Remuneration Act, 1976.

Coverage: The Code will apply to all employees. The central government will make wage-related decisions for employments such as railways, mines, and oil fields, among others. The state governments will make decisions for all other employments.

Floor wage: According to the Code, the central government will fix a floor wage, taking into account living standards of workers. Further, it may set different floor wages for different geographical areas.

Fixing the minimum wage: The Code prohibits employers from paying wages less than the minimum wages. Minimum wages will be notified by the central or state governments. This will be based on time, or number of pieces produced. The minimum wages will be revised and reviewed by the central or state governments at an interval of not more than five years. While fixing minimum wages, the central or state governments may take into account factors such as: (i) skill of workers, and (ii) difficulty of work.

Advisory boards: The central and state governments will constitute advisory boards. The Boards will advise the respective governments on various issues including: (i) fixation of minimum wages, and (ii) increasing employment opportunities for women.

The Occupational Safety, Health and Working Conditions Code, 2019 was introduced in Lok Sabha.[47] It applies to establishments employing at least 10 workers, and to all mines and docks. The Code replaces 13 labour laws including the Factories Act, 1948, the Mines Act, 1952, and the Contract Labour (Regulation and Abolition) Act, 1970. Key features of the Code include:

Duties of employers: The Code prescribes certain duties of the employer. These include: (i) providing a workplace that is free from hazards that may cause injury or diseases, and (ii) providing free annual health examinations to certain employees.

Working Hours: Work hours for different classes of establishment and employees will be provided as per the rules prescribed by the central or state government. Female workers, with their consent, may work past 7pm and before 6am, if approved by the central or state government.

Leave:No employee may work for more than six days a week. Workers must receive paid annual leave for at least one in 20 days of the period spent on duty. Working conditions and welfare facilities: The employer is required to provide a hygienic work environment with ventilation, sufficient space, and clean drinking water. Welfare facilities include separate bathing places and locker rooms for male, female, and transgender employees and creches.

Advisory Bodies: The central and state governments will set up Occupational Safety and Health Advisory Boards at the national and state level, respectively. These Boards will advise the central and state governments on the standards, rules, and regulations to be framed under the Code.

Offences and penalties: Under the Code, an offence that leads to the death of an employee will be punishable with imprisonment of up to two years, or a fine up to five lakh rupees, or both. Further, courts may direct that at least 50% of such fine be given as compensation to the heirs of the victim. For any other violation where the penalty is not specified, the employer will be penalised with a fine between two and three lakh rupees.