The implementation of the Food Safety and Standards Act, 2006 has run into rough weather. The Act consolidates eight laws[1] governing the food sector and establishes the Food Safety and Standards Authority (FSSA) as the regulator. It requires all food business operators (including small businesses and street vendors) to obtain a licence or registration. The Regulations under FSSA related to procedure for obtaining a licence or registration was notified on August 1, 2011. According to the Regulations, all food business operators had to get a licence or registration within one year of the notification. Due to opposition from several food business operators (see here and here), the FSSA has now extended the deadline for getting a licence or registration by another six months (till February 2013). However, some of the key concerns regarding the law have not yet been addressed.
Key issues related to the Bill raised by PRS (for more details see Legislative Brief)
Other issues referred to in the media
[1]. (a) The Prevention of Food Adulteration Act, 1954. (b) The Fruit Products Order, 1955. (c) The Meat Food Products Order, 1973. (d) The Vegetable Oil Products (Control) Order, 1947. (e) The Edible Oils Packaging (Regulation) Order, 1998. (f) The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control) Order, 1967. (g) The Milk and Milk Products Order, 1992. (h) Any other order issued under the Essential Commodities Act, 1955, relating to food.
Reports suggest that a debt restructuring plan is being prepared for power distribution companies (discoms) in seven states - Uttar Pradesh, Punjab, Rajasthan, Haryana, Andhra Pradesh, Tamil Nadu and Madhya Pradesh. According to some estimates, the combined outstanding debt for discoms is Rs 2 lakh crore. Discoms have been facing heavy losses. According to a Planning Commission Report, the cost of supplying electricity increased at a rate of 7.4 per cent annually between 1998-99 and 2009-10. The average tariff has also increased at an annual rate of 7.1 per cent over the same period. However, the report shows that the average tariff per unit of electricity has consistently been much lower than average cost of supply per unit. Between 2007-08 and 2011-12, the gap between average cost and average tariff per unit of electricity was between 20 and 30 per cent of costs.
Average cost and average tariff per unit of electricity (Rs per kWh)
Year |
Unit cost |
Average tariff per unit |
Gap between cost and tariff |
Gap as percentage of unit cost |
2007-08 |
4.04 |
3.06 |
0.98 |
24% |
2008-09 |
4.6 |
3.26 |
1.34 |
29% |
2009-10 |
4.76 |
3.33 |
1.43 |
30% |
2010-11 |
4.84 |
3.57 |
1.27 |
26% |
2011-12 |
4.87 |
3.8 |
1.07 |
22% |
Source: “Annual Report 2011-12 on the Working of State Power Utilities and Electricity Departments”, Planning Commission State discoms have been losing money due to higher costs than revenues, as well as high transmission and distribution (T&D) losses. The commercial losses for discoms in India (after including subsidies) increased from Rs 16,666 crore in 2007-08 to Rs 37,836 crore in 2011-12. Reports suggest that the restructuring plan being prepared will be worth Rs 1.2 lakh crore in short-term liabilities. Half of the proposed amount would be issued as bonds by the discoms, backed by a state government guarantee. Banks and financial institutions would reschedule the remaining Rs 60,000 crore of debt, with a moratorium of three years on payment of the principal amount. State governments that adopt the financial restructuring plan would not recover any loans given to discoms before they start showing profits. Under a proposed transition finance mechanism, the central government would reimburse 25 per cent of the principal amount of bonds to states that fully implement the plan. Also, states that achieve a reduction in T&D losses above a targeted level in three years may be given grants. Newspaper reports also suggest that states will have to prepare plans for eliminating the gap between the average cost and average tariff per unit of electricity.