In today's Opinion piece, in the Indian Express, we discuss how enacting hasty new legislation in response to public events may not be the answer. The recent spot fixing controversy in the Indian Premier League has brought the issue of betting in sports back into the limelight. As a result, public debate around betting, and steps that need to be taken to prevent the recurrence of such events, is gaining traction. The government's response to this incident has been somewhat predictable. The minister of state for sports has reportedly stated that his ministry is committed to putting in place new legislation to deal with the menace of fixing in sports. This approach to law making points towards a growing trend of initiating policy and legislative decisions as a reaction to public events. This is not something new. The Mumbai terror attack in 2008 was the catalyst for the enactment of the National Investigation Agency Act, and the brutal rape and murder of a young girl in Delhi led to the overhaul of India's penal code to ensure stricter penalties for crimes against women. Both these bills were passed without effective scrutiny, as they were not referred to a parliamentary standing committee for examination. Events in the country may, on occasion, highlight gaps in our policy and legislative framework. However, they often point out the ineffectiveness of existing laws and the lack of proper implementation. And that is not always a result of not having enough laws in the country. There are more than a 1,000 Central laws and over 15,000 state laws. The problem lies with our law-making process, which is ad hoc in nature. It is geared towards churning out legislation that is not entirely evidence based and does not take the feedback of different stakeholders into account. In its reports, the National Commission to review the working of the Constitution had observed that "our legislative enactments betray clear marks of hasty drafting and absence of Parliament scrutiny from the point of view of both the implementers and the affected persons and groups". Take, for example, the Gram Nyayalaya Act, which establishes village courts to provide people with easy access to justice and reduce the case law burden on the court system. Structured feedback from villagers, whom this act is trying to empower, prior to introducing the bill in Parliament would have given valuable insights about implementation challenges. A comprehensive study to examine the impact that village courts would have in reducing pendency in the judicial system would have provided hard numbers to substantiate what types of cases should be adjudicated by the village courts. A detailed financial analysis of the cost implications for the Central and the state governments for implementing the law would have helped policymakers decide on the scale and effectiveness of implementation. In the absence of these studies, there is no way to measure whether the law has been effective in giving villagers easy access to justice and in reducing the burden on the judicial system. The importance of stakeholder consultation was recently stressed by the parliamentary committee examining the land acquisition bill. In its report on the bill, the committee recommended that, "before bringing in any bill in future, the government should ensure wider, effective and timely consultations with all relevant and stakeholders so that all related issues are addressed adequately." Rajya Sabha MP N.K. Singh, while testifying before the parliamentary standing committee on the National Food Security Bill, had drawn the attention of the committee towards the need for an accurate financial memorandum accompanying the bill, to "avoid serious consequences in the implementation of the bill." The National Advisory Council has also suggested a process of pre-legislative scrutiny of bills and delegated legislation. In its approach paper, the Financial Sector Legislative Reforms Commission had suggested that delegated legislation should also be published in draft form to elicit feedback and that a cost benefit analysis of the delegated legislation should be appended to the draft. New laws can have a significant impact on the lives of people, so it is important that our law-makers enact "effective laws". For this to happen our law-making process needs to evolve. While there will always be public pressure for new laws, the solution lies in ensuring that the law-making process is robust, consultative and deliberative. The solution to addressing policy opportunities does not always lie in making new laws but in ensuring that whatever law is enacted is well thought out and designed to be effective.
The Minister of Railways, Dinesh Trivedi, presented the Railways Budget 2012 to Parliament on 14th March. While commenting on the financial position of Railways, the Minister said that 'the Indian Railways are passing through a difficult phase'. The Operating Ratio for the closing year is now estimated to equal 95%. This is significantly higher than the 91.1% figure budgeted last year. Operating Ratio is a metric that compares operating expenses to revenues. A higher ratio indicates lower ability to generate surplus. Surplus is used for capital investments such as laying of new lines, deploying more coaches etc. Therefore, a smaller surplus affects the Railway’s capability to make such investments. Budget v/s Revised estimates 2011-12 Budget 2011-12 had estimated the performance of Railways for the financial year. Revised estimates have now been submitted. Taken together, these two figures help in comparing actual performance against targets. Some observations are enumerated below:
Budget estimates 2012-13 In 2012-13, Railways plan to improve Operating Ratio to 84.9% and to increase surplus to Rs 15,557 crore. This is more than 10 times the surplus generated in 2011-12 (Revised Estimates). The effective increase in freight rates is estimated to average 23%. During this time, passenger fares are also estimated to increase by an effective average rate of 19%. [1] Infrastructure Performance during the 11th Plan Under the 11th Five Year Plan, the total plan expenditure for Railways had been approved at Rs 2,33,289 crore. The Outcome Budget shows that the actual expenditure is only likely to be Rs 1,92,291 crore. Thus, expenditure will fall short by Rs 40,998 crore. This gaps exists despite a significant increase in the Gross Budgetary Support approved by Parliament. Plan expenditure during 2007-12 (In Rs Crore)
|
Approved Expenditure |
Actual Expenditure |
|
| Gross Budgetary Support |
63,635 |
75,979 |
| Internal Resources |
90,000 |
67,763 |
| Extra Budgetary Support |
79,654 |
48,549 |
| Total |
2,33,289 |
1,92,291 |
The Standing Committee on Railways, in its 11th report presented in August 2011, had sought an explanation from the Ministry. According to the Ministry, lower mobilization of internal resources and lack of extra budgetary support are the main reasons for the shortfall. Internal resource mobilization has been low because of (i) impact of the 6th Pay Commission; and (ii) slow growth in freight earnings due to the economic slowdown. Extra budgetary resources have been low due to non-materialization of funds through the Public-Private Partnership route. Proposals for the 12th Plan Two recent committees – Kakodkar Committee on Railway Safety and the Pitroda Committee on Railway Modernization – have called for large investments in the next five years. The Kakodkar Committee has recommended an investment of Rs 1,00,000 crore in the next five years to improve safety; the Pitroda Committee has recommended an expenditure of Rs 3,96,000 crore in the next five years on modernization. The Railway sub-group of the 12th Five Year Plan has also estimated a requirement of Rs 4,42,744 crore for various other investments proposed to be undertaken during the Plan period. [2] All three groups have called for significant investments in infrastructure augmentation in the next five years. Budget proposals 2012-13 According to the Minister’s speech, the Annual Plan outlay for the year 2012-13 has been set at Rs 60,100 crore. The plan would be financed through:
What happens now? The Budget is likely to be discussed in the two Houses within the next few days. Post the discussion, the Ministry's proposals will be put to vote. Once passed, the Ministry can put its proposals into action. For more details on the Railway Budget, including the projects proposed this year and the status of proposals made last year, please see our analysis here. To understand some of the challenges faced by the Indian Railways, see our blog post from last year. Notes: [1] The ‘effective average fare’ has been calculated by dividing the total income from the segment (freight/ passenger) by the total traffic (in NTKM/ PKM). This would vary with changes in fares as well as the usage by different categories of users (including the proportion of tickets booked through Tatkal). [2] Source: Report of the Expert Group on Railway Modernization (Chairman: Sam Pitroda)
