Compulsory voting at elections to local bodies in Gujarat Last week, the Gujarat Local Authorities Laws (Amendment) Act, 2009 received the Governor’s assent.  The Act introduces an ‘obligation to vote’ at the municipal corporation, municipality and Panchayat levels in the state of Gujarat.  To this end, the Act amends three laws related to administration at the local bodies- the Bombay Provincial Municipal Corporation Act, 1949; the Gujarat Municipalities Act, 1963 and; the Gujarat Panchayats Act, 1993. Following the amendments, it shall now be the duty of a qualified voter to cast his vote at elections to each of these bodies.  This includes the right to exercise the NOTA option.  The Act empowers an election officer to serve a voter notice on the grounds that he appears to have failed to vote at the election.  The voter is then required to provide sufficient reasons within a period of one month, failing which he is declared as a “defaulter voter” by an order. The defaulter voter has the option of challenging this order before a designated appellate officer, whose decision will be final. At this stage, it is unclear what the consequences for being a default voter may be, as the penalties for the same are to be prescribed in the Rules.  Typically, any disadvantage or penalty to be suffered by an individual for violating a provision of law is prescribed in the parent act itself, and not left to delegated legislation.  The Act carves out exemptions for certain individuals from voting if (i) he is rendered physically incapable due to illness etc.; (ii) he is not present in the state of Gujarat on the date of election; or (iii) for any other reasons to be laid down in the Rules. The previous Governor had withheld her assent on the Bill for several reasons.  The Governor had stated that compulsory voting violated Article 21 of the Constitution and the principles of individual liberty that permits an individual not to vote.  She had also pointed out that the Bill was silent on the government’s duty to create an enabling environment for the voter to cast his vote.  This included updating of electoral rolls, timely distribution of voter ID cards to all individuals and ensuring easy access to polling stations. Right to vote in India Many democratic governments consider participating in national elections a right of citizenship.  In India, the right to vote is provided by the Constitution and the Representation of People’s Act, 1951, subject to certain disqualifications.  Article 326 of the Constitution guarantees the right to vote to every citizen above the age of 18.  Further, Section 62 of the Representation of Peoples Act (RoPA), 1951 states that every person who is in the electoral roll of that constituency will be entitled to vote.  Thus, the Constitution and the RoPA make it clear that every individual above the age of 18, whose name is in the electoral rolls, and does not attract any of the disqualifications under the Act, may cast his vote.  This is a non discriminatory, voluntary system of voting. In1951, during the discussion on the People’s Representation Bill in Parliament, the idea of including compulsory voting was mooted by a Member.  However, it was rejected by Dr. B.R. Ambedkar on account of practical difficulties.  Over the decades, of the various committees that have discussed electoral reforms, the Dinesh Goswami Committee (1990) briefly examined the issue of compulsory voting.  One of the members of the committee had suggested that the only effective remedy for low voter turn outs was introducing the system of compulsory voting.  This idea was rejected on the grounds that there were practical difficulties involved in its implementation. In July 2004, the Compulsory Voting Bill, 2004 was introduced as a Private Member Bill by Mr. Bachi Singh Rawat, a Member of Parliament in the Lok Sabha.  The Bill proposed to make it compulsory for every eligible voter to vote and provided for exemption only in certain cases, like that of illness etc.  Arguments mooted against the Bill included that of remoteness of polling booths, difficulties faced by certain classes of people like daily wage labourers, nomadic groups, disabled, pregnant women etc. in casting their vote.  The Bill did not receive the support of the House and was not passed. Another Private Member Bill related to Compulsory Voting was introduced by Mr. JP Agarwal, Member of Parliament, in 2009.  Besides making voting mandatory, this Bill also cast the duty upon the state to ensure large number of polling booths at convenient places, and special arrangements for senior citizens, persons with physical disability and pregnant women.  The then Law Minister, Mr. Moily argued that if compulsory voting was introduced, Parliament would reflect, more accurately, the will of the electorate.  However, he also stated that active participation in a democratic set up must be voluntary, and not coerced. Compulsory voting in other countries A number of countries around the world make it mandatory for citizens to vote.  For example, Australia mandates compulsory voting at the national level.  The penalty for violation includes an explanation for not voting and a fine.  It may be noted that the voter turnout in Australia has usually been above 90%, since 1924.  Several countries in South America including Brazil, Argentina and Bolivia also have a provision for compulsory voting.  Certain other countries like The Netherlands in 1970 and Austria more recently, repealed such legal requirements after they had been in force for decades.  Other democracies like the UK, USA, Germany, Italy and France have a system of voluntary voting.  Typically, over the last few elections, Italy has had a voter turnout of over 80%, while the USA has a voter turnout of about 50%. What compulsory voting would mean Those in favour of compulsory voting assert that a high turnout is important for a proper democratic mandate and the functioning of democracy.  They also argue that people who know they will have to vote will take politics more seriously and start to take a more active role.  Further, citizens who live in a democratic state have a duty to vote, which is an essential part of that democracy. However, some others have argued that compulsory voting may be in violation of the fundamental rights of liberty and expression that are guaranteed to citizens in a democratic state.  In this context, it has been stated that every individual should be able to choose whether or not he or she wants to vote.  It is unclear whether the constitutional right to vote may be interpreted to include the right to not vote.  If challenged, it will up to the superior courts to examine whether compulsory voting violates the Constitution. [A version of this post appeared in the Sakal Times on November 16, 2014]

Last month, the Pension Fund Regulatory and Development Authority (PFRDA) issued revised guidelines for the registration of the Pension Fund Managers (PFMs).  These guidelines are for the PFMs to manage the National Pension System (NPS) in the non-governmental and private sector.  See here.  The NPS was implemented in 2004 for all government employees and later extended to the private sector in 2009. The guidelines bring about the following changes in the NPS:

  • No limitation on the number of PFMs – Under the previous system, the number of PFMs was predetermined and bidders would then fill up these slots.  There are seven PFMs in the NPS.
  •  No bidding process – In the earlier system, interested parties had to go through a bidding process to become a PFM.  The lowest bidders would be appointed the PFMs.  However, the new guidelines have done away with the bidding system.  Any player interested in becoming a PFM can now do so by fulfilling certain eligibility criteria laid down by the PFRDA.
  • No uniform fee to be charged by all PFMs – The PFMs earlier had to charge a fixed fee amount, which was uniform for all the PFMs.  The new guidelines states that the PFRDA would lay down an overall ceiling and the PFMs would be at liberty to prescribe their own fee provided it is under this overall ceiling.

Although NPS was made accessible on a voluntary basis to non-government employees and those working in the private sector since 2009, the subscription to the schemes under NPS was lower than expected.  In August 2010, a committee was set up under the chairmanship of Mr. G.N. Bajpai to review the implementation of NPS in the informal sector.  The Committee noted that since NPS was opened to the general public there were only 50,000 private sector subscribers until May 2011.  According to the Committee, the low subscription was due to the low-to-negligible distribution incentive to the PFMs to distribute the different schemes to the subscribers to invest their funds.  The Committee thus recommended that PFRDA should consider revising the structure of the NPS so as to increase subscription.  It suggested making the fee structure dynamic for PFMs.  The Committee had also suggested that there should be some revision in the bidding as well as the selection process for the PFMs to increase competition and thereby incentivise them to distribute the schemes. These changes, as suggested by the Bajpai Committee and now notified by the PFRDA, are different from the original design of the NPS.  The Old Age Social and Income Security (OASIS) Report of 2000, which had initially suggested the establishment of pension system for the unorganised sector in the country, had recommended a low-cost structure for the pension system.  The Report had stated that the choice of PFMs should be based on a bidding process where the lowest bidder should be made a PFM under the NPS.  The rationale for the auction base for the PFMs was that it would provide a system to the subscribers whereby they could make investments for their old age by paying a minimal fee.  A set uniform fee was meant to eliminate the large marketing expenses which would ultimately get passed on to the subscibers.  In addition, the intent behind keeping the fund managers from the distribution and marketing of the schemes was to prevent any mis-selling (misleading an investor about the characteristics of a product) that may happen. Recent newspaper reports have raised doubt if these new rules would help in increasing the penetration of the NPS in the markets.  However, the chairman of PFRDA, Mr. Yogesh Agarwal, in a recent interview explained that it was important to bring about changes in the structure of the NPS.  According to him a scheme which was mandatory for the government sector could not be expected to perform as well in the private sector (where it is voluntary) without any changes made to its structure.  He also stated that the NPS should be able to compete with other financial products such as insurance and mutual funds in the market. See here for the PRS Legislative Brief on the PFRDA Bill, 2011. Notes: The seven PFMs are LIC Pension Fund Ltd., UTI Retirement Solutions Ltd., SBI Pension Funds Pvt. Ltd., IDFC Pension Fund Management Co. Ltd., ICICI Prudential Pension Funds Management Co. Ltd., Kotak Mahindra Pension funds Ltd., and Reliance Capital Pension Fund Ltd..