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Rules for acquisition of Immovable property by NRIs & OCI cardholders?
Sai Krishna Muthyanolla
March 16, 2021
NRIs & OCI card holders often acquire immovable property in India. But what are the rules guiding such acquisition? What are the restrictions on such transactions? Here is an explainer.
The Supreme Court (SC) recently delivered a judgment declaring that the sale or gift of property by a foreigner without the permission of RBI is illegal.  In this case, the court was dealing with a suit relating to a property gifted by Mrs. F.L. Raitt, widow of Mr. Charles Raitt, who is a foreigner to Vikram Malhotra, without obtaining the permission of the Reserve Bank of India (RBI).  The Supreme Court Bench observed that this was in contravention of Section 31 of the Foreign Exchange Regulation Act, 1973 (FERA, 1973). As per the 1973 act, any person who is not a citizen of India or any company which is not incorporated in the country is required to get permission from RBI to acquire, hold, transfer or dispose of an immovable property in the country.
Although the FERA Act, 1973 is later replaced by Foreign Exchange Management  Act, 1999 (FEMA, 1999), the court gave this judgment by exercising the plenary power under Article 142 of the Constitution of India.
For this, the court relied on the legislative intent and the spirit of enactment of Section 31 of FERA, 1973, as expressed in the statement of the then Finance Minister, while tabling the bill in Lok Sabha. Based on this, the bench stated that there is a requirement to seek the permission of RBI by a foreign national, before making a transaction relating to real estate. Any such transaction which is done without RBI’s permission is forbidden and unenforceable in law.
While the Supreme Court’s judgment is limited to this particular case and any other such pending cases under similar conditions, it has also stated that any other transactions that already been finalised by the decision of the court of competent jurisdiction, need not be opened and disturbed.
Based on the court ruling, it is apparent that the spirit of FERA, 1973 is upheld in relation to the investments (especially in the immovable property i.e., real estate) made by foreigners or foreign-controlled companies requiring RBI’s watch. The judgment will not have any impact on current transactions since the 1973 law is now repealed and replaced by a new law.
In any case, there are specific provisions in the law to facilitate the transaction of immovable properties by Non-Resident Indians (NRI) and Overseas Citizens of India (OCI) residing in other countries.  The FEMA Act,1999 which has replaced FERA,1973 has made specific provisions for acquisition and transfer of property in India through Foreign Exchange Management (Acquisition and Transfer of immovable property in India) Regulations, 2000.
A NRI or OCI can acquire immovable property other than agricultural land
The RBI guidelines relating to FEMA regulations contain provisions for Indian Citizens residing outside India, otherwise known as Non-resident Indians, to acquire and transfer property in India. RBI has made amendments in 2018, which includes similar provisions to OCI (Overseas Citizens of India) as well. Earlier, there were separate guidelines for People of Indian Origin (PIO).
The guidelines place a restriction on acquisition is on any immovable property that is of the nature of agricultural/plantation or a Farmhouse.
The transfer of immovable property can be done to:
There are certain restrictions regarding the funds to be used for such transactions. The transaction can happen only using:
There are also provisions for both NRIs and OCI for acquiring immovable property in the form of a gift or inheritance.
There is further provision for the spouse of an NRI or OCI to acquire one immovable property jointly with the respective NRI/OCI spouse.
Provision of acquisition of Property by Long-term Visa holder
Apart from NRIs and OCI cardholders, the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018, provide for the acquisition of immovable property even by ‘Long Term Visa (LTV)’ holders.
LTVs are granted by the Indian Government to citizens of Afghanistan, Bangladesh, or Pakistan who belong to minority communities in those countries i.e., Hindus, Sikhs, Buddhists, Jains, Parsis & Christians and are residing in India.
They can acquire only one immovable property as a residential property for self-occupation and one immovable property for self-employment.  However, there are certain conditions that need to be adhered to.
Land can be acquired by a person residing outside India for a specific permitted activity
The regulations also provide for a person resident outside India but have established in India a place of business, to acquire any immovable property in India and to carry out the specific purpose of the establishment.
However, this provision is not available for the citizens of – Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Hong Kong, Macau, Nepal, Bhutan, or North Korea. They can only lease a property not exceeding five years and acquire property only with the prior approval of RBI.
Meanwhile, Foreign Embassy/Diplomat/Consulate General can purchase or sell immovable property in India (other than agricultural land/plantation/farm house) after clearance from the Government of India, and the amount for acquisition of immovable property in India is paid out of funds remitted from abroad through banking channels.
Prohibition on acquisition of property by residents outside of India beyond the laid guidelines and exceptions
The latest guidelines categorically state that any acquisition or transfer of immovable property by anyone residing outside of India can only be within the framework of Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018.
Any transaction beyond these regulations is prohibited, except under specific conditions as mentioned below.
Featured Image: Acquisition of Immovable property by NRIs and OCI cardholders


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What are two Agriculture Ordinances issued by the Government recently?
Sai Krishna Muthyanolla
June 12, 2020
As a part of the COVID-19 reform measures, the Government of India announced key reforms in the agriculture sector which have now been operationalized through promulgating two ordinances. What are these ordinances and what about them? Here is an explainer.
The President of India promulgated two ordinances related to Agriculture on 05 June 2020. These were earlier approved by the Union Cabinet on 03 June 2020. The government has highlighted that the aim of these ordinances is to provide a boost to rural India for farmers engaged in Agriculture and allied activities. These are part of the reforms announced under ‘Aatmanirbhar Bharat Abhiyan’.
The two ordinances promulgated are:
These two ordinances follow earlier interventions taken by the government in increasing the efficiency of Agricultural marketing, which were drafted and circulated for adoption by the states.
In its press note, the government of India has highlighted that the two ordnances were promulgated to:
Apart from these two ordinances, the Government of India has also amended the Essential Commodities Act.
In this story, we look at the details of these two ordinances and analyse their prospective impact on agriculture sector.
The Farmers’ Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020
The purpose of this ordinance as per the government is to create an ecosystem where
The provisions of this act include:
Board of Conciliation to be formed for Dispute resolution
The ordinance also provides the framework for resolution of any dispute which may arise between the farmer and the trader.
The penalties are also prescribed in the new ordinance.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020
This ordinance provides for the farmers to get into agreements with others like agri-business firms, processors, wholesalers, exporters, retailers etc. for any of the farm services or future farming produce. A national framework is laid out to safeguard the farmers’ interest and enable them to get into these contracts.
The ordinance lays down the provision for Dispute Settlement
There is no clear consensus on the advantages offered by these ordinances
The government of India has hailed these ordinances as key initiatives towards increasing the revenue of farmers by providing them with more options to market their produce and also to get into agreements on their own.  Speaking to Outlook India, NITI Aayog’s Dr. Ramesh Chand has stated that ‘One Nation, One Market’ would help the farmers to increase their revenues. Further , he also highlighted that the initiatives taken to promote Interstate trade would help in meeting the demands of consumers for farm products produced in other states. He further assured that these reforms would also be beneficial to the small farmers as they can benefit from the competitiveness.
However, this is also an issue being highlighted by many other experts as a disadvantage rather than an advantage to the small farmer. They believe that the small farmers do not have the bargaining power and may lose out in the open market. Furthermore, it is being highlighted that the idea of inter stare trade of produce is beyond the small farmer, as one of the main reasons for failure of APMCs or other Government support initiatives is that the small farmers consider it to be less productive to spend on travel to reach out to the potential markets.
Apart from this, the price differentials and subsidies offered by different state governments encourage the farmers to sell within the state itself. Experts have also pointed out the lack of clarity on the provisions made in these ordinances. For example, there is no provision for compulsory written agreement in ordinance relating to Contract farming.
The responsibility of arbitration not being with the government is also being highlighted as a concern. Both the ordinances explicitly state that no lawsuit or legal proceedings would lie against the Central or State Government or Appellate authority for their involvement.
The overall benefit to the farmers would only be known in due course. Meanwhile experts have called for government safeguards to ensure that the farmers are not at a disadvantage.
Featured Image: New Agriculture Ordinances

source: news-factly

license: Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/

author: Sai Krishna Muthyanolla


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Explainer: What are UGC refund rules for Higher Education Admissions?
Sai Krishna Muthyanolla
July 4, 2020
Because of the uncertainty surrounding higher education entrance examinations, many students are expected to take admission in an institution even before these entrance examinations are conducted. This might also result in quite a refund requests once these exams are conducted and students take admission in a different institution.
COVID-19 has not spared any sector, and education sector is one of the worst hit as has been noted in our earlier stories. In an earlier article, the many factors at play when it comes to re-opening of educational institutions like accessibility, employment, disease preventive measures, etc. was discussed.
While some states conducted the 12 boards with precautions and modifications in the examination pattern, other states have either cancelled or postponed it indefinitely. CBSE and ICSE have cancelled the pending 12 board examinations because of the concern over the safety of students. Marks will be calculated on the basis of their internal performance in the academic year.
COVID-19 has resulted in an uncertain situation for parents and students
For now, exams like JEE Mains, and NEET stand postponed. The HRD Minister tweeted that JEE Main Examination would be held between 01 and 06 September 2020 and JEE advanced on 27 September 2020. The NEET entrance for medicine has been rescheduled for 13 September 2020. Most of the top ranked institutions in the government as well as private sector admit students based on the results in these tests.
Because of the cancellation of board examinations, there is a looming uncertainty over the conduct of various entrance examinations both at the national & state level. Parents & students are concerned about this long uncertainty. This uncertainty is being exploited by certain private institutions as there are instances where parents are pressurized into booking seats by paying token amount under the pretext that entrance exams may be cancelled, and seats may soon get filled up due to large demand. The staff in private institutions are also under the pressure to fill the seats as their salaries are tied to admissions and students paying up.
UGC came up with regulations on fee refund and certificate collection following receipt of many complaints
Suppose a student wishes to change college after taking admission,  they are entitled to refund as per the University Grants Commission (UGC)’s notification released in 2018. The then HRD Minister, Prakash Javadekar stated that students faced several problems during admissions because of coercive and profiteering institutional practices being adopted by some institutions. The UGC came up with the notification for fee refunds and non-retention of original certificates at the time of admission following the receipt of a large number of complaints regarding the same.
Sections 12 (d) and 12 (j) of the UGC Act, 1956 empower the UGC to issue such a  notification. All universities recognized by UGC including deemed to be universities must abide by this notification for all programs- undergraduate, postgraduate, and research programs. These rules also apply to colleges affiliated to various universities. The same is applicable to institutions under AICTE. But what does the UGC notification on refunds say? Here are some details.
Purchase of prospectus must not be mandatory
First and foremost, the purchase of institutional prospectus should not be made mandatory for applicants at any time. It should be left as a personal choice. Institutions should disclose details such as status of institution, affiliation, accreditation, physical assets and amenities, course wise sanctioned intake of students, types of fees payable and total fees for each programme, admission deadlines, faculty details, management member details, and all other information that students and parents require to make a fully informed choice.
Fees for only one semester/year can be charged
The institutions can charge fees in advance only for the semester or year for which student is to take part in academic activities. Collection of fees for the entire programme of study in advance is prohibited.
Students are entitled to refund depending on the point of time of withdrawal notice
If a student wishes to withdraw from the programme in which they had enrolled, the following the refund scheme is to be followed depending on the point of time when they give notice of withdrawal of admission to the institution.
Money collected as caution deposit and security deposit should be fully refunded. The refund should be made to the applicant within 15 days upon receiving the withdrawal application. One can also approach the consumer court if the refund is denied.
Students’ original documents must not be confiscated by colleges
Students must not be compelled to submit their original personal certificates like marksheets, school leaving certificates, etc at the time of admission form submission. Nevertheless, a copy of self-attested copies of the same must be mandatorily collected. Original can be collected for verification of attested copies in the presence of student at the time of admission. But it should be returned. The institutions cannot take the originals into custody.
It is also mandatory that all universities have a Grievance Redressal Mechanism in place. The websites should have an option for the same and the grievance should be redressed within 30 days.
UGC’s grievance redressal portal can be used for registering complaints
If a person finds that the rules are being violated, they have the option to register a complaint in the students online Grievance Redressal Portal of the UGC. UGC has also launched separate portal for the registration of grievances related to COVID-19. In the current situation, UGC has asked fee payment related matters  to be considered sympathetically. Students’ requests must also be considered in this matter.
The next academic session is expected to start from 01 August 2020 with 6 day a week working days to compensate for the lost time. However, this might be delayed further because of the evolving situation.
Punitive action against violations
In case UGC finds any college contravening the above regulations, punitive action will be taken against the university. This includes withholding grants, withdrawal of affiliation, informing general public, withdrawal of university declaration, and more. It can even ask the state governments to take necessary action against the university.
Prospectus of Institutions to have all the details related to refunds
To understand the regulations better, the prospectuses of two colleges recognized by UGC, and available online have been taken into consideration here. St. Francis College for Women in Hyderabad is an autonomous institution (conferred by UGC). Their prospectus for 2020-21 asks applicants to carry both original and photocopies of intermediate certificates. Those who fail to produce the required documents will not be given admissions. The fee refund policy states that fees once paid is not refundable unless if someone leaves due to unavoidable reasons within 15 days from the date of admission, they can get a refund of 50%, as mentioned in the UGC guidelines.
Guru Gobindh Singh Indraprastha University is a UGC recognized university in Delhi. Their 2020-21 admission brochure clearly indicates the UGC’s fee refund policy but mentions the one notified in 2016. Registration charges and counselling participation fees will not be refunded.  Both original and photocopies are to be submitted.
Parents & Students must be aware of these refund rules
However, despite the official notification, there are institutions that continue to confiscate the documents of students in order to ensure that students do not drop out of colleges once they take admission. Colleges also try to compensate for their losses through non refund of hostel fees.
The uncertainty and confusion around higher education admission because of the ongoing pandemic situation may result in many such cases of students taking admission but deciding to opt out later. Parents & Students must take note of the existing rules & guidelines regarding refunds and file a grievance with the UGC if rules are flouted. The UGC on its part should also be proactive to deal with an increased number of such grievances.


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What are the various relief measures announced by State Governments?
Sai Krishna Muthyanolla
April 6, 2020
Following the 21-day nationwide lockdown to tackle the spread of COVID-19, the central & state governments have announced various relief measures. Here is a compilation of the relief measures announced by state governments.
The outbreak of COVID-19 pandemichas created an unprecedented situation. It is already known that the Governmentof India has declared a Nation-wide lockdown for 21 days  that began on 25 March 2020 to contain thespread of the virus.
Few states including Delhi, Bihar, Telangana etc. had announced a state-level lockdown prior to the national lockdown. Any such lockdown has an impact on various sections of people especially those from the marginalised communities who stand to lose work. The plight of migrant labourers leaving the cities after the lockdown and travelling back to their native places was a reflection of the adverse effect of lockdown. However, the impact is not limited to these communities since employees, small businesses and corporates also being adversely affected because of the closedown in economic activity.
Multiple relief measures launched by
Central & State Governments
In this context, Central and State governments have announced relief packages and announced other measures which could help in assuaging the situation. In this story, we look at the various measures taken by the State Governments in the context of COVID-19.
The information is based on thenotifications issued by the respective state governments. Different issues likefood, income, health etc are identified and the relevant measures notified bythe various state governments are highlighted.
More than 15 states have announced Food-related relief measures.
Assurance of food is one of the key measures to assure sustenance of the underprivileged who are affected by the lockdown. Most of the states have announced relief measures which provide food assurance to these communities. Some of these are beyond any measures that the centre has announced.
Most of the states have provided for free ration to BPL cardholders and other marginalized sections. Special provisions to provide food and other support has been initiated by few state governments for the migrant and daily wage workers.  Some of the important announcements made by the states with respect to arranging food and related essentials are given below.
Notifications & Relief Measures relating to Food
State
Announcement
Andhra Pradesh
a.       Free Ration of Rice and 1 KG Red Gram Dal for April.
b.      Doorstep delivery of Essentials.
c.       All BPL families to get Ration along with a KG of Dal Thrice in April.
Chhattisgarh
a.       Distribution of Food packets to the destitute (with NGO & Charitable Organization’s support)
b.      Rice for 2 months to be provided in April for all Ration Card holders. Sugar & Salt for two months – Antodaya & Annapurna Ration card holders.
Delhi
a.      7.5 Kgs free ration for 72 lakh beneficiaries
b.      500 hunger relief centres for free food (Serving Lunch & Dinner)
Haryana
Notification from Finance ministry provisioned for :
a.      Free ration for April to all BPL Families.
b.      Dry ration for children enrolled in schools & Anganwadis
Jharkhand
a.      Community Kitchen centres to be opened in all thanas in Districts until end of May’2020 to serve – migrants, homeless & disabled. Budget of Rs. 3 crores approved.
b.      Dry ration for areas where community kitchens are not accessible. 5000 packets to be distributed in Ranchi and 2000 in rest of districts.
Kerala
As per G.O & CM address :
a.      Community kitchens at Panchayat & Municipality ward level.
b.      Food to be delivered to home to poor , aged & chronically ill.
c.      Free provision to all BPL card holders + additional 35 kgs rice in next month
d.      15 kgs rice free for APL cardholders
e.      Free provision kits to those under quarantine
f.       Launch restaurants  that provide meals for Rs.20
Madhya Pradesh
a.      Providing free of cost food to – people in isolation, homeless & destitute. Door-door facility available.
b.      Free ration for all BPL households for a month
Maharashtra
a.      Home delivery of cooked food – pregnant, lactating women & children ( 7 months – 6 years) in tribal areas: ICDS Maharashtra
b.      Additional  5 kgs of ration per month for three months – under PMGKY for AAY and PHH.
c.      Food along with shelter & healthcare for migrant families
d.      Price of ‘Shiv Bhojan Thali’ reduced to Rs. 5 from Rs.10. Number of Thalis also increased to  1 lakh from 36 thousand.
Odisha
a.      Hot cooked meals & Dry -ready to eat meals ( Rs. 60 per adult & Rs. 45 per child) – for poor , sick & destitute.
b.      Distribution of cooked food by ICDS & Mission Shakti functionaries.
c.      Free cooked meals/packets twice in a day to urban homeless.
d.      Cooked food for sick & destitute in Panchayats across the state.
Rajasthan
a.      Free packets of food items for two months to : Street vendors, daily wage labourers and other needy families ( not under NFSA)
b.      Families under NFSA to receive Free Wheat until May.
Telangana
a.      12 kgs of rice/wheat flour for migrants
b.      12 kgs of rice for all white ration card holders
Tamil Nadu
As per CM’s Announcement:
a.      Free rice, dal , cooking oil & Sugar – Ration card holders
b.      15 kg rice, 1 kg dal, 1 kg cooking oil – construction workers & Auto rikshaw drivers who are members of welfare board.
c.      Doorstep delivery of food to elderly.
Uttar Pradesh
a.      Food grains & other essential items free of cost – labourers, MNREGA card holders, Antodaya Scheme & Daily wage workers.
West Bengal
a.      Free ration to – AAY, SPHH, PHH & RKSY- category ration card holders.
b.      15 kg rice and 9 kg wheat to RSKY -2
c.      Food , lodging & wage payments for stranded migrant workers.
Financial support to Marginalised
sections & Migrant workers
Food security to those who are majorly impacted due tothe lockdown has been the most prioritised aspect by most of the stategovernments. Hence relief was provided in the form of cooked food, food packetsor making provisions for increased rations.
Apart from this, many of the state governments haveextended the support in the form of monetary benefits. This includes cashinitiatives, pensions , advance payments of the financial aid etc. Here is alook at few the major financial support announcements made by the stategovernments.
Notifications & Measures relating to Financial support & relief
State
Announcement
Andhra Pradesh
a.      Rs. 1,000 one-time support to all the ration card holders
(Rs.1330 crores announced)
b.      Pension to be delivered as usual.
Arunachal Pradesh
a.      Constructions workers registered with the board to get Rs.2,000 per month for two months ( April & May’2020).
b.      Rs.1000 one-time aid for 1,77,213 BPL families.
Bihar
a.      Rs.1,000 to Ration card holding families through Direct bank Transfer.
Delhi
a.      Rs. 5,000 cash support to all construction workers & Daily wage labourers.
b.      Double pension in March for widows, differently-abled & elderly
Haryana
Finance Ministry notification :
a.      Beneficiaries under MMPSY to get the balance amount by 31 March 2020. Further Rs.6,000 for each family in April.
b.      Those registered with Haryana Building & Construction Workers Welfare Board to get Rs.4,500 p.m. (paid. Rs.1,000 weekly).
c.      BPL families to get Rs.4,500 p.m.(paid rs.1,000 weekly) through bank transfer.
d.      Street vendors, mazdoors and other poor people can register and avail Rs.1,000 per week.
Himachal Pradesh
a.      One-time payment of Rs.2,000 to 1.5 L construction workers registered with BoCW boards.
b.      Advance payment of 3 months pension (total Rs.3,000) to 5.3 L beneficiaries by first week of April.
Jharkhand
a.      Full Payment to registered daily wage workers during Lockdown period.
Kerala
As per G.O & CM address
a.      Advance payment of pension for month of April.
b.      Rs.2,000 consumer loan for those impacted by Covid-19
c.      Rs.2000 through village employment assurance programme – April & May.
d.      NGREGA payments to complete by March 31Workers not to be asked to come to Panchayat office
e.      Extension for payment of water & electricity bills
f.       Tax relief to auto rikshaws, taxis & buses.
Madhya Pradesh
As per C.M’s announcement :
a.      Rs. 1,000 to registered labourers.
b.      Rs.2,000 for two months to Saharia, Baiga and Bharia families.
c.      Advance two months pension of Rs.1,200 for social security pensioners.
Punjab
a.      Rs.3,000 for each construction worker
Rajasthan
a.      Payment of two months pension (Rs.1,500 total ) for NSAP beneficiaries.
b.      Rs.1,000 one-time payment to construction workers,  registered street vendors, labourers, unaided & needy families, BPL & Antodaya families.
Telangana
a.      Rs.1,500 for all White Ration card holders.
b.      Full wage payment to permanent & contractual workers.
c.      Rs. 500 to migrant workers.
Tamil Nadu
Announcement made by CM:
a.      Rs.1,000 to all ration card holders.
b.      Rs.1,000 to construction workers & auto rikshaw drivers registered with welfare board.
c.      Rs.1,000 to platform vendors registered with government.
Uttar Pradesh
a.      Financial support of Rs.353 crores to 3.53 million daily wage earners.
States extend support to Migrant workers & other
homeless
United Nations’ Human Rights Chief Michelle Bachelethas in a statement expressed distress over the plight of migrants effected by the lockdownin India. She has also acknowledged the huge logistical and implementationchallenge in view of the huge population of India.
In the wake of the reports of this plight of migrants,many state governments have announced measures to encourage the migrants tostay back. These measures include providing food security, financial support,shelter etc.  Few of such measures takenup by the state governments include :
Announcements in respect to Migrant workers
State
Announcement
Arunachal Pradesh
a.      In line with central orders, provision of food & shelter to migrant workers.
Bihar
a.      Rs.100 Crore fund for relief to provide food & shelter to stranded migrants. Helpline is also constituted.
b.      Screening, testing , food & shelter to returning migrant workers.
Jharkhand
a.      Community kitchens to serve food.
Kerala
a.      District Collectors & District Labour Officers to ensure provision of food & shelter to migrant labourers.
Madhya Pradesh
a.      Provision of Financial assistance
b.      Orders relating to home quarantine & reporting to executive magistrate.
Maharashtra
a.      Schools to be used as shelters for migrants.
b.      Rs.45 crores earmarked for food & shelter of migrants.
Telangana
a.      Rs.500 & 12 Kgs of Rice/wheat to migrant workers.
Uttar Pradesh
a.      Creation of Shelter homes for migrants entering into UP.
b.      Returning migrants to be quarantined before being allowed to go to homes.
c.      Transportation arrangements to be made for those who are unable to reach homes due to lockout.
West Bengal
Measures in other areas
Apart from these, respective state governments haveissued notification relating to support measures in various other areas. Theseincludes – Health, Anganwadis & schools, Farmers etc. Few of the importantnotifications include :
These are some of the important notifications issued by the states in view of the COVID-19 lockdown. Consolidated information of the various notifications of the state governments are compiled by various groups and are available on COVID India Measures & GOs and PRS India.
Featured Image: Relief measures by States for COVID-19


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What are the various relief & welfare measures announced since 1990 for the Kashmiri Pandits & other migrants?
Sai Krishna Muthyanolla
March 26, 2022
The ‘Kashmir Files’ movie has once again put the spotlight on the events of 1990 and the plight of Kashmiri Pandits & other migrants. But what are the various relief & welfare measures announced for rehabilitating the migrants? Here is an explainer of all the schemes & packages announced since 1990.
The movie, ‘The Kashmir Files’, which depicts the exodus of Kashmiri Pandits from the Kashmir Valley in 1990 due to militancy and the subsequent violence, has been in the news in the last few weeks. The movie has also been a commercial success. The film also stars actor Anupam Kher, who has always been vocal about the issue of Kashmiri Pandits (KPs). The movie also found mention in the parliament discussions with a member requesting the government to make it tax-free across the country. Already, many states have made the movie tax-free. Since the release of the movie, the plight and rehabilitation of KPs has been a topic of discussion both on & off the internet. In this context, we look at the chronology of rehabilitation & welfare measures by the Government of India after the incidents of 1990 and their current status.
Violence in Kashmir resulted in the exodus of Hindus & other minorities
According to the Ministry of Home Affairs, targeted attacks by the militants against civilians in the initial phases of the terrorist violence in Jammu & Kashmir forced a vast majority of Kashmiri Pandits and a sizeable number of Sikhs and other Hindus and a few Muslims to migrate from the Valley in 1990 and thereafter. They migrated to Jammu, Delhi, and other parts of the country. Old parliamentary reports suggest that thousands of houses of the KPs were burnt down in the valley and their religious places were either burnt or demolished. Following such events, representations were made by various associations of Kashmiri Pandits for according minority status to KPs in the State of Jammu and Kashmir. Organizations and political parties also demanded that the KPs be sent back to their ancestral homes. Their rehabilitation in the valley and the creation of a separate zone for them in the valley were also demanded.
Lakhs of people were displaced from Kashmir Valley
The Norwegian Refugee Council’s Internal Displacement Monitoring Centre reported in 2010 that over 250,000 Kashmiri Pandits were displaced from the Kashmir Valley since 1990. However, the data from the Government of Jammu & Kashmir presented in the Lok Sabha in response to a question on the number of Kashmiri Pandit families who migrated from the valley since 1990 revealed that a total of 44,684 Kashmiri Migrant families were registered with the Office of the Relief and Rehabilitation Commissioner(Migrants), Jammu, comprising of 1,54,712 individuals. This data was provided in February 2022. About 90% of the registered families were Hindu Migrant Families, according to a response in the Rajya Sabha from July 2021. According to another Lok Sabha response from 2020, a total of 64,951 Kashmiri Pandit families, who left the Kashmir Valley in the 1990s were residing in Jammu (43,618), Delhi (19,338) and other states (1,995).
Relief measures to rehabilitate the Kashmiri migrants
Both the Union and State Governments have rolled out relief measures since the exodus in 1990 to support Kashmiri Migrants. The policy of the Union Government in respect of these Kashmiri migrants is aimed at facilitating the return of the migrants to the valley by creating favourable conditions for their return. The list of relief measures in the chronological order of implementation has been discussed below. These measures predominantly focus on providing cash assistance, housing, transit accommodation, and employment.
1990 – Broad Relief measures were announced
1989-90 was the period when the unrest in Kashmir was witnessed, with families being forced to leave their houses. In 1990, the Government of Jammu & Kashmir after registering Kashmiri Migrant Families provided them financial assistance of Rs. 250 per family along with free ration. This cash assistance has been enhanced from time to time. Since June 2018, the cash relief has been enhanced to Rs. 13,000 per family (Rs.3,250 per head). Monthly dry ration of 9 Kg Rice, 2 Kg Atta per head and 1 Kg Sugar per family is also being provided. For those migrants settled in Delhi, the Delhi Government is also providing cash assistance. The monthly cash relief of Rs. 3250 per person out of which the share of Delhi Government is Rs. 1000 per person.
Since 1989-90, the expenditure incurred by the Government of Jammu & Kashmir to support the state’s relief and rehabilitation of the Kashmiri migrants is reimbursed by the Government of India under Security Related Expenditure for Return & Rehabilitation (SRE).
Since March 1990, special concessions such as the option to move the family to a place of choice, mess facilities, payment of monthly pension to Pensioners of Kashmir valley, etc., were provided to the Central Government employees working in the Kashmir Valley as well as to the Kashmiri migrant employees of the Central Government and PSUs. The concessions were extended for another two years starting January 2018.
1996 – Special Package
In 1996, a special package of Rs. 6.60 crore was announced by the Prime Minister for improvement of facilities in camps in Jammu such as for the construction of one-room tenements, Sulabh type toilet complexes, drainage scheme and school buildings.
1997 – Act to prevent distress sale of property by migrants
The Jammu & Kashmir Migrant Immovable Property (Preservation, Protection & Restraint on Distress Sales) Act, 1997 was enacted by the State Government to prevent distress sale of immovable property by the migrants.
The Jammu & Kashmir Migrants (Stay of Proceedings) Act, 1997 was also enacted by the state government to stop undue harassment of migrants through the stay of legal proceedings against the migrants.
2001 – Action Plan for the return of Kashmiri Migrants
The then State Government of Jammu & Kashmir submitted an ‘Action Plan’ for the return of Kashmiri migrants in October 2000 involving a total expenditure of Rs. 2,589.73 crores. In May 2001, the Central Government gave approved the plan which involved-
2003 – Committee to address problems of Kashmiri Pandits
The then Prime Minister announced that a committee would be set up for addressing the problems of Kashmiri Pandits. He also announced the construction of 500 new tenements worth Rs.10 crores. A sanction of Rs. 5 crores for the improvement of the facilities in camps was also announced.
2004 – Prime Minister’s Reconstruction Program (PMRP)
Under Prime Minister’s Reconstruction Program (PMRP), a sanction was given for the construction of 5,248 two-room sets including allied facilities like Community Halls, Higher Secondary Schools, Prime Health Centres, Water Supply, Electric Supply, hospital, Road & Drainage, STP plant, Parks etc. It involved a budget outlay of Rs. 24,000 crores.
According to MHA, a total of 5242 two-room tenements were constructed under the Prime Minister’s Package 2004 in four different locations of Jammu and allotted to the migrants who were living in various one-room tenements, government buildings & temples, etc. 200 flats were constructed in Budgam district and allotted on a sharing basis to the migrants who joined the government service under the employment component of Prime Minister’s package -2008.
2008 – Comprehensive Package
A comprehensive package of Rs 1,618.4 crores was announced in 2008 for the return and rehabilitation of the Kashmiri Migrants for the following:
An Apex Advisory Committee was formed in 2009 under the Chairmanship of the Revenue Minister of the erstwhile state to oversee the effective implementation of the package.
2015 – Another Package
The government of India approved another package in 2015 for providing additional 3,000 state government jobs to the Kashmiri Migrants and for constructing about 6,000 transit accommodations in the Kashmir Valley for State Government Kashmiri Migrant employees. Apart from this, the Government sanctioned Rs. 29 crores for the repair and maintenance of the assets created under the previous packages.
2021 – Launch of portal to address Grievances
The Government of Jammu & Kashmir launched portals (https://kashmirmigrantsip.jk.gov.in/ & http://www.jkmigrantrelief.nic.in/ ) to address the grievances of Kashmiri Migrants and to address the grievances related to Kashmiri migrants’ immovable properties in the Union Territory.
Status of implementation of these schemes
As mentioned earlier, a total of 6000 jobs were approved by the Government. As per a reply in the Lok Sabha from March 2019, out of the 3000 jobs approved in the 2008 package, a total of 2,905 posts were filled as of 22 February 2020. The response also revealed that 849 flats were constructed for accommodating the employees. A response in the Rajya Sabha from February 2022 revealed that the Government of Jammu and Kashmir had appointed 1,739 migrants and selected additional 1,098 migrants for the jobs announced in the 2015 package. It was also stated that the land of 610 applicants (migrants) has been restored since 2017. According to reports, the construction of all transit accommodation units is expected to be complete by 2023. Over the years, successive governments including both the UPA & NDA have announced relief packages for the welfare and to assist the return of the Kashmiri migrants. However, as the numbers show, a lot more needs to be done for a significant number of migrant families to return to the valley.
Featured Image: Rehabilitation of Kashmiri Pandits


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Explainer: What changed for Card Transactions?
Sai Krishna Muthyanolla
January 31, 2020
In the last few years, the RBI issued multiple directions to simplify card transactions and give more control to consumers in terms of setting limits & accessing services. Here is an explainer of all those changes.
Reserve Bank of India (RBI) has been taking a number of initiatives to enhance the efficiency and safety of card-based payment systems. In this regard, various directives have been issued by the RBI, under the Payment and Settlements Systems Act 2007, on enhancing convenience, security and risk mitigation measures involving card transactions. Here is a brief look at the measures undertaken in the recent past.
Customers
to have complete control of Transaction limits & services
According to RBI’s directive issued on 15 January 2020, at the time of issuance/re-issuance of cards, all cards will be enabled only for domestic transactions at contact-based points of usage i.e. ATMs and Point of Sale (PoS). For online, contactless and international transactions, the new card users would have to get these services set up from the issuer and customers with existing cards would have the option to disable these services, depending on their risk perception.
A 24*7 facility to switchon/off and set/modify card transaction limits (within the overall card limit)for all types of transactions – international, domestic, PoS, ATMs, online orcontactless transactions – would be available through multiple channels (mobileapplication, internet banking, ATMs, IVR, branch/offices).
Customer-friendly
NEFT & RTGS transactions
In order to provide impetus to digital fund movement, the RBI waived off all processing charges and time-varying charges levied on banks for RTGS and NEFT system in a circular issued on 11 June 2019. Furthermore, the RBI instructed banks to not levy any charges from their savings bank account holders for online fund transfer done through NEFT system in another circular issued on 16 December  2019.
Around the same time, the RBI issued another circular on  06 December  2019 regarding availability of NEFT on a 24*7 basis (on all days, including holidays). Moreover, the RBI directed the availability of RTGS system to be extended in two circulars dated 21 August 2019 and 28 May 2019. Previously, the RTGS system was available from 8 am to 4:30 pm for customer transactions and 8 am to 7:45 pm for inter-bank transactions. The closing time for customer transactions was extended up to 6 pm and the opening time for both customer and inter-bank transactions was changed to 7 am.
Scrapping
of 2-factor authentication for payments up to Rs. 2000
To foster innovative payment products and to enhance the convenience factor in card transactions, RBI issued instructions for relaxation of Additional Factor of Authentication (AFA) for payments up to Rs. 2000 in case of ‘card present transactions’ using Near Field Communication (NFC) contactless technology on 15 May 2015. The same relaxation was extended to ‘card not present’ transactions on 06 December 2016.
In both the cases, the customer’sconsent is to be taken while making this solution available to them and thebanks/card networks are to bear full responsibility in the event of anysecurity breach in the authorised network.
Notifications
& Alerts
In the interest of customer awareness and protection, the RBI has advised the banks (in various master circulars) to send SMS alert & emails to their customers about international, domestic, PoS, ATMs, online or contactless transactions. Additionally, to also provide necessary URLs and customer care numbers where additional information can be obtained. The banks are also encouraged to use social media to build awareness.
The RBI directives also advisethe banks & card networks to educate the customer about the use and riskassociated with different modes of card transactions, and also mechanisms forgrievance redressal through multiple channels (website, phone banking, SMS,IVR, etc.).

created: January 31, 2020


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What do the Government guidelines say about issuing death certificates with cause as COVID-19?
Sai Krishna Muthyanolla
September 16, 2021
In response to a petition filed in the Supreme Court, the government recently framed guidelines for issuance of death certificates for COVID-19 deaths. The guidelines specify which cases are eligible to be considered for the issue of death certificate with cause as COVID-19. Here is a detailed review which also highlights the gaps in these guidelines.
The unprecedented COVID-19 pandemic has claimed the lives of close to 46.4 lakh persons globally in less than two years since it was first reported in China in late 2019. India has recorded the second-highest number of cases of COVID-19 after the USA with over 3.32 crore cases. India has also recorded the third-highest number of COVID-19 deaths with more than 4.43 lakh deaths due to the pandemic, as of 14 September 2021. It is in this context, the Supreme Court recently heard writ petitions seeking compensation of Rs. 4 lakhs for the families of persons who lost their lives because of the pandemic.
A writ petition was filed seeking ex-gratia compensation for families of COVID-19 victims
On 30 June 2021, a special bench comprising of Justices Ashok Bhushan and M R Shah of the Supreme Court heard a plea seeking compensation to the families of persons who lost their lives due to COVID-19 or due to the post-COVID-19 complications. The petitioners cited Section 12 of the Disaster Management Act (DMA), 2005 that has a provision of minimum standards of relief to be provided to the persons affected by the disaster. The bench held that the National Disaster Management Authority (NDMA) has a statutory obligation to frame guidelines for recommending minimum ex-gratia assistance for the families of persons who died due to COVID-19 as the pandemic is notified as a disaster. The apex court directed the NDMA to issue guidelines for the ex-gratia compensation within six weeks, which was later extended to ten weeks. The government told the Supreme Court that the guidelines for determining the compensation under Section 12 of the DMA will be finalized by 23 September 2021. It is to be noted that the decision on the quantum of compensation by way of ex-gratia assistance to the family members has been left to the NDMA.
Furthermore, the court also observed in this petition that there was a need for simplified procedure for issuance of a death certificate/official document in the case of a COVID-19 related death.  The death certificate is to be issued to the family members of the deceased who died due to COVID-19 stating the cause of death as “Died due to COVID-19”, including if their death must have been due to other complications resulting from COVID-19. The Supreme Court further added that the guidelines should also provide for a grievance redressal mechanism for the families of the deceased if the correct/exact cause of death is not mentioned in the death certificate.
MoHFW & ICMR have issued guidelines for the issuance of death certificates
Following the SC’s orders, on 11 September 2021, the Central Government finally filed a compliance affidavit. As per this affidavit, the Union Ministry for Health and Family Welfare along with the Indian Council for Medical Research (ICMR) have issued relevant guidelines for the issuance of death certificates for COVID-19 deaths.
According to the guidelines, COVID-19 cases are those which are diagnosed through active infections tests such as RT-PCR tests, molecular tests, rapid-antigen tests or clinically determined through investigations at a hospital or in-patient facility by a treating physician, while admitted in the hospital/ in-patient facility.
Deaths outside hospitals within 30 days from the day of testing will be treated as COVID-19 deaths
In the guidelines, COVID-19 deaths have been defined as cases of COVID-19 which did not get resolved and resulted in deaths at home or hospitals, and where a Medical Certificate of Cause of Death (MCCD) in Form 4 & 4A has been issued to the registering authority, as required under Section 10 of the Registration of Birth and Death (RBD) Act, 1969. Those cases where the death takes place outside the hospital/in-patient facility within 30 days from the date of testing or from the date of being clinically determined as a COVID-19 case, will be treated as a death due to COVID-19. The 30 days bracket has been arrived at based on an ICMR study which found that 95% of the deaths take place within 25 days of being tested positive. Further, a COVID-19 case admitted in hospitals and continued as the same admission beyond the 30 days, and eventually succumbed to the virus will also be considered a COVID-19 death.
However, deaths that occur due to poisoning, suicide, homicide, accidents, etc. will not be treated as COVID-19 deaths even if the virus infection is an accompanying condition.
Committee for grievance redressal will be set up
The procedure for grievance redressal has also been listed in the guidelines. States/UTs must set up a committee comprising government officials, medical experts, and a subject expert for issuing the COVID-19 death certificate. If the MCCD is not available or if the deceased’s family is not satisfied with the cause of death mentioned in the death certificate, they can submit a petition to the District Collector for issuing the appropriate official document for COVID-19 death. Applications for issuing the official document and for redressal of grievances should be disposed of within 30 days of submission.
SC has asked the Centre to consider suicide of infected person as COVID-19 death
Upon considering the Central government’s guidelines, the Supreme Court asked the Centre to reconsider its decision to not treat death by suicide of a person infected with COVID-19 as deaths occurring due to the virus infection. Furthermore, the Court raised a few more queries including the manner of implementation of the policy by states, the timeline for constitution of grievances redressal committee, documents to be submitted by families to the committee, and documents to be provided by concerned hospitals. The government is expected to respond on these issues by 23 September 2021, the next date of hearing.
Definition of COVID-19 deaths does not include all, leaving out many from compensation
Through these guidelines, the government has defined what constitutes a COVID-19 case and the circumstances under which the cause of death in the death certificate will be considered as COVID-19. If the compensation scheme is rolled out using the definitions in these guidelines, the eligibility for compensation will in all probability be linked to a valid death certificate with cause as COVID-19. However, not all COVID-19 deaths are taken into consideration for issuance of the death certificate with this cause as per the current guidelines.
Firstly, under-reporting of COVID-19 cases and COVID-19 deaths is a huge concern. There are claims of under-reporting of deaths from multiple sections of the media and by various organizations. According to a study conducted by researchers from India, Canada, and the USA, India’s actual death rate due to COVID-19 could be about 7 to 8 times higher than the officially reported number. The preprint study which is not yet peer-reviewed is based on India’s civil registration system (CRS) data and extrapolated excess mortality in the country between the months of June 2020 and July 2021.
Secondly, the guidelines mandate positive COVID-19 test results or clinical determination by a physician while being admitted to a hospital to be considered a COVID-19 case. Only such valid COVID-19 cases will be eligible for a death certificate with the cause as COVID-19. However, not everyone would have gotten themselves tested due to unwillingness, fear, or even lack of awareness. Also, during the initial months of the outbreak, only symptomatic individuals could avail the test provided they were a healthcare worker, or contacted a positive case, or had history of international travel. So, symptomatic & asymptomatic individuals those who did not qualify the criteria could not get themselves tested even if they were infected with the virus. There could also be cases where individuals may have got negative results because of errors in testing but were actually infected. During the early stages of the outbreak in India, testing & treatment facilities were limited which meant that people in the rural areas could not have got themselves tested even if they wanted to. Many such cases which resulted in death outside medical facilities would not qualify as a death due to COVID-19 as per the current guidelines, meaning they might miss out on any compensation scheme that would be rolled out in the future. It is time the government thinks about such cases and comes up with revised guidelines to include such cases.
Malaysia has announced compensation for victims of COVID-19
In July 2021, the Disaster Management Authority of Malaysia, NADMA, announced that it will be providing one-off cash assistance of RM 5,000 to one heir of any Malaysian citizen who dies from COVID-19. This is approximately Rs. 89,700. The compensation is given to only those COVID-19 related deaths confirmed by the Health Ministry. Also, only Malaysian citizens are eligible and only one heir can avail the compensation. Reports indicate that NADMA prioritizes applications from the children seeking special assistance.
Compensation to families of those deceased because of COVID-19 would be of considerable support especially if the deceased was the sole breadwinner of the house. Moreover, any such compensation scheme may help in assessing the actual death toll due to COVID-19. While the guidelines for the compensation scheme by the Government of India are awaited, the government would do well to prioritize the most vulnerable- women and children.
Featured Image: Guidelines for issuance of death certificates for COVID-19 deaths.

created: September 16, 2021


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Explainer: What does the ‘Draft Mediation Bill’ propose
Sai Krishna Muthyanolla
November 20, 2021
Government of India has released a Draft Mediation Bill 2021 for promotion and strengthening of Alternative Dispute Resolution (ADR) mechanisms in India. In this article, we look at existing landscape of ADR in India and the significance of changes proposed by the Draft Bill.
Mediation is a process where an impartial third party is appointed to facilitate structured negotiation between disputing parties and help them reach a mutually agreeable settlement. It is known as an Alternative Dispute Resolution (ADR) mechanism, in other words, an alternative for litigation in courts. In addition to saving time and reducing litigation costs, mediation helps maintain relationships by promoting an amicable agreement.
In India, the laws on mediation are contained in several enactments. The present Draft Mediation Bill 2021 is an umbrella legislation with the objective to promote, encourage and facilitate mediation especially institutional mediation for resolution of commercial disputes and otherwise. The Bill takes into contemplation the international practice of using the terms ‘conciliation’ and ‘mediation’ interchangeably.
The Draft bill envisions to enforce domestic and international mediation settlement agreements, provide for a body for the registration of mediators, encourage community mediation and make online mediation an acceptable and cost-effective process.
Court-mediation cells, Lok Adalats, & Private ADR systems in India
To adequately execute the ADR mechanism, organizations like the Indian Council of Arbitration (ICA) and the International Center for Alternate Dispute Resolution (ICADR) were established as specialized arbitral body at the national level under the initiatives of the Government of India and apex business organizations like Federation of Indian Chambers of Commerce & Industry (FICCI), etc. The ICA was established in 1965 with the fundamental target to advance the genial and fast settlement of industrial and exchange disputes by arbitration. The ICADR is an autonomous association, working under the aegis of the Ministry of Law and Justice, to advance and create ADR facilities and techniques in India.
To promote the adoption of ADR mechanisms, the Legal Services Authorities Act, 1987 was revised to endorse the use of ADR methods. The Arbitration Act, 1940 was also revoked and the arbitration system was further promoted by the establishment of The Arbitration and Conciliation Act, 1996. In 2002, the Code of Civil Procedure (CPC), 1908 was amended to introduce Section 89.  The amendment was instrumental in promoting alternative dispute resolution (ADR) processes in India, including mediation. Post this amendment, courts can refer disputes which are capable of being settled between parties to alternate dispute resolution (Code of Civil Procedure, Section 89). On several occasions, the Supreme Court has emphasised the importance of mediation, especially in commercial matters, and observed that this type of Alternative Dispute Resolution (ADR) is ideal for parties faced with complex issues that they are willing to resolve through negotiations.
Mediation, conciliation, negotiation, small-scale trial, consumer forums, Lok Adalats and Banking Ombudsman have just been acknowledged and perceived as powerful elective dispute-resolution methodologies.
Initially started in Gujarat in 1982, Lok Adalats have become one of the most popular Alternative Dispute Resolution (ADR) techniques in India, under the Legal Services Authorities Act, 1987.  Lok Adalats have set the conciliation process in motion and have extended all over the country. Lok Adalats are organized with financial assistance from the Government and monitored by the Judiciary. Every award of the Lok Adalat is deemed to be a decree of a civil court. Similar is the condition in cases settled in the mediation cell referred through courts.
The establishment of court-annexed mediation programmes has gradually led the path for the establishment of private mediation institutions throughout the country — such as the Indian Institute of Arbitration and Mediation (IIAM), Centre for Advanced Mediation Practice (CAMP), and Foundation for Comprehensive Dispute Resolution (FCDR).
In recent years, mediation has been given further impetus by the inclusion of a provision in the Companies Act, 2013, which makes it mandatory for the central government to maintain a mediation and conciliation panel, comprising experts for mediating commercial disputes between the parties. Further, tribunals under the Companies Act or the central government may also refer a dispute to mediation where it deems it appropriate. Similarly, the Consumer Protection Bill (Consumer Bill), 2015 provides for mediating disputes at the first instance of admission of a complaint before any consumer disputes redressal agency.
Draft Bill strengthens pre-litigation model by proposing suitable amendments.
The Draft Bill proposes for pre-litigation mediation and at the same time safeguards the interest of the litigants to approach the competent adjudicatory forums/courts in case an urgent relief is sought.
‘Pre-trial mediation’ process is a provision which has been introduced in Section 89 of The Code of Civil Procedure (by Amendment Act of 2002) for pre-trial alternative settlement of disputes by efforts of the Courts before initiation of proceedings before it.
Although the Supreme Court has given some impetus to pre-litigation mediation, and it has taken a special role in matrimonial or family dispute cases, there exists no overarching framework for these services. A report titled ‘Strengthening Mediation in India’ by Vidhi Centre for Legal Policy (2016) highlights that this has resulted in a lack of uniformity across centres, with only some offering pre-litigation mediation services.
The study was focussed on the functioning of three court-connected mediation centres, namely the Bangalore Mediation Centre, the Mediation and Conciliation Centre of the Delhi High Court, and the Allahabad High Court Mediation and Conciliation Centre, between 2011 to 2015. The report recommended that an institutionalised pre-litigation model can supplement the court-connected model and could be explored further. The present Draft Bill strengthens the pre-litigation model by proposing suitable amendments to the Code of Civil Procedure 1908 and the Commercial Courts Act, 2015.
The registration of Mediation Settlement Agreement has also been provided for with State/District/Taluk Legal Authorities within 90 days to ensure maintenance of authenticated records of the settlement so arrived. Moreover, the mediation process protects the confidentiality of the mediation undertaken and provides for immunity in certain cases against its disclosure.
Draft Bill lays down limited grounds to challenge mediation agreements.
The Draft Bill provides that the successful outcome of mediation in the form of Mediation Settlement Agreement (MSA) has been made enforceable by law. Since the Mediation Settlement Agreement is out of the consensual agreement between the parties, the challenge to the same has been permitted on limited grounds.
The Vidhi Legal Centre report highlights that the major problem regarding enforcement of mediated settlements is the ambiguity regarding the grounds for challenging such settlements. Therefore, it recommended that the legislation should stipulate precise grounds for challenging mediated settlements by parties.
The Draft Bill addresses this concern by specifying the grounds on which a Mediation Settlement Agreement (MSA) can be challenged. A mediated settlement agreement can be challenged only on all or any of the following grounds.
Provides for establishment of Mediation Council of India.
Several reports have argued for adequate training standards, recognition, and accreditation for mediators. Apart from training, accreditation of mediators based on educational and professional background, basic and advanced training undergone by mediators, experience as a mediator (including the types of cases mediated), etc., should also be made common practice.
Report of the High-Level Committee to Review the Institutionalisation of Arbitration Mechanism in India (2017) finds that though various arbitral institutions have been set up in India, particularly in the last five years, they have not been preferred by parties, who have leaned in favour of ad hoc arbitration or arbitrations administered by arbitral institutions located abroad.
In identifying the roadblocks to the development of institutional arbitration, the report argues for the accreditation of arbitrators, the creation of a specialist arbitration bar and bench, and the provision of governmental and legislative support for institutional arbitration.
The Draft bill addresses the above concerns and provides for the establishment of Mediation Council of India and empowers the Council to:
Includes community mediation & envisions a comprehensive uniform legislation.
The Draft Bill emphasises that there is a strong need for a comprehensive uniform legislation for mediation in India which will cover the multiple aspects of its practice, encourage mediation including community mediation, and provide the platform of mediation for settling a wide range of disputes including domestic and cross-border commercial disputes, matrimonial, and other personal disputes.
The Draft Bill empowers the Central Government to enact appropriate legislations to give mediation settlements the status of an order, judgment, and decree besides establishing the Mediation Council of India and provide for recognition of mediation service providers, as envisioned in the Bill.
In its ambit, the Draft Bill also provides for community mediation. As per the Bill, any dispute likely to affect peace, harmony and tranquillity amongst the residents or families of any area or locality may be settled through community mediation. The Bill empowers the State Legal Service Authority, District Legal Service Authority or Taluka Legal Service Authority the power to notify a panel of mediators which may be revised from time to time as per need.
The following persons may be included in such a panel.
The Draft specifies that the panel of mediators shall endeavour for resolving disputes through community-based mediation and provide assistance to parties for resolving disputes amicably. In every case where a mediated settlement agreement is arrived, the same may be recorded in writing with signature of the parties and authenticated by the mediators and in other cases, a failure report may be submitted to State/District/Taluka Legal Services Authority/District Magistrate/Sub Divisional Magistrate.
The scholarship on community mediation is contested. While community mediation is a time-tested and traditional mode of dispute resolution in India (village, panchayats), it can also perpetuate further injustice. As argued by the Report of Vidhi Centre for Legal Policy, a suitably reworked framework can present community mediation as a viable mediation option to people in different parts of the country. How the Draft Bill fares in achieving this, remains to be seen.
Featured Image: Draft Mediation Bill

created: November 20, 2021


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Explainer: What does the Government do for Khadi promotion?
Sai Krishna Muthyanolla
October 15, 2019
Khadi was a strong
symbol of the freedom movement. With machine made garments capturing the
market, Khadi lost out. But what does the government do for Khadi promotion or
more specifically what is the role of KVIC?
Khadi, also known as ‘Khadar’, is handwoven cotton cloth with hand spun yarn. Not only does it symbolise India’stextile heritage, Khadi has also been associated with India’s freedom struggleagainst the British. Fearing that Khadi might conquer the textile market inBritain, the colonisers introduced cheap fabrics made with machines in theIndian market. This led to a downfall in the production of Khadi cloth in Indiawhich was the source of livelihood for many. Mahatma Gandhi brought Charkha- atraditional wheel used to spin yarn, into the freedom struggle as a symbol ofself-sufficiency and Swadesh.
Post-Independence, Government of Indiadid stress on developing rural industries. A statutory body, Khadi and Village
Industries Commission (KVIC) was established in 1956 by an Act ofthe Parliament taking over the work of erstwhile All India Khadi and VillageIndustries Board (KVIB). But, what is the role of KVIC? This story focusses onKVIC with focus on Prime Minister’s Employment Generation Programme and itsperformance in the last few years.
KVIC’s
prime objective is to encourage self-employment among the rural population
Established with the objectives ofgenerating employment by promoting the sale of merchandise and by instillingstrong rural community spirit and creating self-reliance among the poor, KVIC is in charge of conductingprograms across rural areas in order to develop Khadi and Village Industries.From sourcing raw materials and equipment required to providing facilities formarketing as well as training artisans and researching in this domain, thesetasks fall under the purview of the commission.
KVIC has implemented programs andschemes such as Prime Minister’s
Employment Generation Programme (PMEGP), KhadiProgramme, Village Industries Programme, Khadi Reform and Development Programme(KRDP), Market Promotion Development Assistance (MPDA) and Scheme of Fund forRegeneration of Traditional Industries (SFURTI) so as to attain its objectives.
Production
and sales of Khadi and Village Industries products are increasing every year
From the above chart, it can beinferred that every year production and
sales of Khadi as well as other products produced inthe Village Industries is increasing. This can also be seen as an increase indemand for Khadi and other traditional village products. The production ofKhadi has increased by 123% in the span of five years while the sales haveincreased by 175% in the same period. Government’s answer in Lok Sabha in July2019 mentioned that Khadi includes Polyvastra &
Solarvastra from 2015-16 onwards. In 2016-17, theproduction and sales of Khadi products shot up by 43% and 42% respectively. Inthe case of other products of
village industries, production has increased by 111% and sales by122% during this 5-year period.
There are reports that the uniforms ofstudents in Kendriya Vidyalaya schools acrossthe country may soon be shifted to Khadi. Even CBSE had written tothe affiliated schools urging them to observe a ‘Khadi-wearing’ day every monthat least.
How many people
are employed in Khadi & Village Industries?
Employment in village industries, whichis one of the prime objectives of KVIC, has witnessed an increasing trend. Thecumulative employment including male and female has been displayed in followingchart. The discrepancy in the number of employees’ in 2016-17 in Khadi industryis because of enabling Aadhaar. Out of the total 18.8 lakh additionalemployment generated in village industries since 2014-15, 33.5% of it was addedin 2018-19. It should be noted that 2018-19 data is provisional and is up to 19June 2019 throughout the story.
PMEGP
was launched in 2008 by MSME after merging the erstwhile schemes
PMEGP is a creditlinked subsidy scheme which encourages people from both rural and urban areasto set up industries to generate employment opportunities in non-farm sector. Theprogramme was launched in 2008 by the Ministry of Micro, Small and Medium Enterprises after merging theformer schemes, the Prime Minister’s Rojgar Yojana (PMRY) and Rural EmploymentGeneration Programme (REGP). Subsidy ranging from 15% to 35% of the projectcost is given based on the category and area to which the beneficiaries belong.Special category consists of Women, SC, ST, Physically Handicapped, minorities,Ex- servicemen and other beneficiaries. The maximum project cost should notexceed Rs. 25 lakhs for manufacturing sector and Rs. 10 lakhs for the servicesector to be eligible to avail the benefits of the scheme.
KVIC is the single nodal agencyresponsible for implementing the programme at the national level. At the statelevel, KVIBs, KVIC Directorates and District Industries Centres are theimplementing agencies. Annually, the funds for implementation of PMEGP arereleased by the Union Government in lump sum to KVIC. No allocation of fund isdone state-wise. Funds allocated for PMEGP forms a large portion of the totalfund allocated to all schemes being implemented by KVIC. In 2018-19, Rs. 1968.8crores had been allocated.
2018-19
data suggests that 5.87 lakh employment opportunities were generated in that
period under PMEGP
Data provided by MSME Ministry onemployment generation and number of projects which have beenundertaken with the aid of PMEGP is represented in the following chart. Ageneral trend is not visible. The year 2018-19 has witnessed exceptionalincrease in employment generation and number of projects as compared to the previousyears. This could be primarily on account of a larger fund release in anelection year. A total of 73,427 units have been set up generating 5.87 lakhsemployment opportunities in 2018-19. It has to be noted that all this data isself-reported by these units and is not cross-verified.
Jammu
and Kashmir had the largest number of units set up in 2018-19
The maximum number of units, set up in2018-19, around 7529 units, were in the then state of Jammu and Kashmirgenerating an estimated employment of 60,232. Following J&K are the statesof Maharashtra (including Dadra and Nagar Haveli), Tamil Nadu and Uttar Pradeshreported more than 5000 units each and employment to more than 40,000 people ineach of these states.
PMEGP
can be clubbed with other schemes such as MUDRA
Subsidy is now paid directly into thebeneficiary’s account through Direct Benefit Transfer (DBT) under PMEGP. Theentire process from application to transfer of subsidy to account has beendigitalised since 01 July 2016. This has helped in making the systemtransparent and reduced the interference of middlemen as per government’sresponse in the Lok Sabha.
PMEGP is different from Pradhan Mantri Mudra Yojana. Under PMMY, nosubsidy is given for the loan unless the loan proposal is linked to anothergovernment scheme such as PMEGP, in which case, the proposal will be eligibleunder both. Mudra scheme extendsrefinance support to banks, micro finance institutions, NBFCs and others whichare involved in lending money for income generating activities in non-farmsector.
Conducting exhibitions, signing MoUswith corporates, introducing ‘Khadi Mark’ on products, supplying Khadi togovernment departments and PSUs, capturing international market and opening newoutlets are some other initiatives taken by KVIC to promote the use of Khadiand boost its market.
This year, which marks the 150 birth anniversary of Mahatma Gandhi, will hopefully continue to spur the growth of Khadi.
Featured Image: Khadi promotion by the government

created: October 15, 2019


text:
Explainer: What happens before, during & after the Census exercise?
Sai Krishna Muthyanolla
December 30, 2019
The Census exercise is not just about the data that is released after the analysis. There is a huge planning exercise that is involved. Here is an explainer about what happens before, during & after the Census exercise.
India’s decennial population census is one of the largestadministrative activity in the world. Collecting socio-economic informationwith various parameters for a population of 130+ crores requires extensiveplanning and execution.  Factly has in an earlier story highlighted the evolution of the census in India over the years and thepremise for upcoming 2021 census. In this explainer, we focus on the processesinvolved in the planning and execution of the census exercise.
Preparatory work forms the most critical and extensive
phase of census activity
The population census activity involves multipleactivities which are carried on in sequential phases as listed in the belowdiagram.
The Preparatory Phase
The first phase of the census activity isthe Preparatory phase where all the planning and groundwork for the ensuingenumeration activity takes place. There are multiple activities involved inthis phase , whose goal is to ensure that everything is in place by the timethe census enumeration activity begins on the ground.
a. Legislation
The census activity is backed bylegislation as per Census of India Act, 1948. The activities are kick-started by thenotification issued by the Central government in accordance section 3 in the Census Act. Government of Indiahas released the notification for Census for 2021, which has set in motion thecensus activity. The law makes it obligatory on the part of citizens toanswer the questions truthfully.
b. Universal Coverage of Area & Identification of House holds
One of the major objectives of anypopulation census exercise is to ensure that every area is covered and alsodoes not overlap. Hence, one the key preparatory activity involves locatingevery local area and to ensure that resources are in place to cover the wholearea for enumeration.
While the focus of a population census isto enumerate every individual, a household is considered as the operationalunit for enumeration. A household is referred to as a group of persons living together. An entire house canbe occupied by a single household or can be shared by multiple households.  A delimitation of the territory would beundertaken to account for every single household.
House -numbering is a critical activity inthe build-up to the census activity. A distinct House-listing activity is takenup prior to the census. This activity would take place during the latter halfof 2020.
c. Determining territorial units
The territorial units for which the primarycensus data needs to be presented is finalised. These territorial units include– villages, towns, blocks, tehsils, talukas, districts etc. Determining theseterritorial blocks would help in developing the census organization and todemarcate the jurisdiction of the hierarchy involved in the census activity.
Any delimitation or changes to theterritories in respect to the creation of new villages, towns or districts etc.are identified in the activity. A circular for this activity for ‘Census 2021’ has already beenissued.
Demarcation of rural and Urban areas, formation of Urban Agglomerations, demarcating villages etc. are part ofthe preparatory activity.  Location codesare identified for each of the villages, talukas, districts and urban areaswhich helps in easy enumeration as well as analysis.
d. Preparing Maps
After the finalization of the territorialunit, maps are prepared to help in demarcating the boundaries including that ofthe country, states, districts, talukas, cities and villages. These maps wouldhelp the census officers to identify their jurisdiction limits. The Mapdivision of ORGI (Office of Registrar General of India) takes up this activity.This activity for 2021 census has  begunwith a circular issued on 10 May , 2019. The territorial boundaries need tobe frozen prior to the initiation of enumeration.
e. Census organization
and personnel
Population census is handled by Office ofRegistrar General & Census Commissioner India, which is under the aegis ofthe Home Ministry. Census Commissioner of India heads the operation. VivekJoshi has been recently appointed as the Census Commissioner. The Census ofIndia Act , 1948 has provisions for the appointment of various officers at different levelsin view of the territorial jurisdiction as well as in line with theresponsibilities. In-charge officers, supervisors and enumerators are alsoappointed specifically for the purpose of census activity.
There are 33 directorates of Census Operation inIndia, which work under the aegis of Office of the Registrar General & Census Commissioner.
Around 33 lakh teachers are expected to take up the responsibilityof enumerators for the activity.
f. Census Schedules
After due consultation with variousdepartments and stakeholders, a questionnaire is developed which is used by theenumerators to seek information from the households. Printing and distributionof the census schedules used to be a major activity in earlier census, which isplanned to be excluded with the implementation of mobile application for thiscensus. While the questionnaire to be used for 2021 census is yet to befinalised, a sample questionnaire was used as part of the pre-test census.
g. Training
Training the enumerators and the officersat different levels is important for the successful conduct of the census activity.There could be personnel who have already participated in the  earlier census activity as well as newpersons , irrespective of which trainings are conducted to make everyone awareof the new questionnaire and new procedures to be followed. With the implementationof digitalization, training presumes greater importance for the upcomingcensus.
h. Publicity
Active participation of the entirepopulation being enumerated play an important role in ensuring that the datacollected is accurate and complete. Publicity campaigns to increase theawareness are undertaken.
Digitalization being introduced for enumeration
All the preparatory work which is being done is to aidthe enumeration activity. As announced by Home Minister earlier, digitizationwould be introduced in 2021 census. The procedures involved in enumeration inview of the new technology being used, are yet to be finalised by Office ofRegistrar General of India.
‘Canvasser’ method has been in practice for enumerationwherein the enumerator visits each household to record the answer in theschedule/App. There is a reference date which is set based on which theenumerator records the information. The reference date for 2021 census is 01 March, 2021.
Each enumerator has the jurisdiction determined. Allthe households allotted for the specific enumerator need to be completed andthe information needs to submitted to the respective supervisor who monitorsthe activity under the respective jurisdiction. The hierarchy continues withthe central directorate supervising the whole enumeration activity.  The digitization of enumeration is expected toease the activity, especially relating to the physical maintenance of thecensus schedules.
Data Processing and analysis of data is done prior to
the release of the census data.
All the efforts put in the preparation for census andthe enumeration would come to nought if the data thus collected is notprocessed and analysed. There are various tables which are prepared as part ofthe census. The enumeration data which is collected is tabulated into thesespecific tables.
Until 2011 Census, physical schedules were used tocollect the information, which was then entered into a digital format for thedata to be analysed and sorted into different tables.
The digital collection of the data is expected toreduce the time taken to process, analyse and publish the census data. For the2011 census, it took nearly 7 years for few of the datasets to be released tothe public.
The Census report is prepared and published highlighting key information along with theirobservation about the various trends in the population.
Data about various types of information – Economic,Socio-cultural, fertility, migration etc. are published as different tables foreasier understanding and analysis.
Mammoth activity that needs planned and coordinated
effort
As highlighted earlier, undertaking the census for130+ crore population in a country as diverse as India with its varied physicaland cultural landscape is a humongous activity. It has to be appreciated thatno decennial census has been missed since the inception , which is a reflectionof the effective planning and execution of the government machinery, especiallywith Office of Registrar General of India, who plan and co-ordinate the wholeeffort.
Even though the enumeration would be digitized andexpected to reduce the effort, the preparation activity involved would still bevery important and becomes more complex as we grow as a nation.

created: December 30, 2019


text:
Explainer: Who is an Overseas Citizen of India? How can one apply?
Sai Krishna Muthyanolla
December 2, 2019
Recently, author & writer Aatish Tasser’s OCI card was cancelled by
the Government on allegations that he concealed that his late father was of
Pakistani origin while submitting the PIO application. But who exactly is an
Overseas Citizen of India (OCI)? How does one apply for the OCI card? Here is
an explainer.
Indiandiaspora is the largest in the world. Migration due to trade, colonial rule, employment etc. at variousintervals of time in the history has led to the spread of India diaspora inmore than 200 +
countries as per the latest data from the Ministry of ExternalAffairs (MEA).
Afterthe formation of India as an Independent Republic, relevant legislation wasmade to define who is eligible to be Indian Citizen. The
Citizenship Act, 1955 lays down the provisionswhich determine a Citizen in India. One of the key aspects about Indiancitizenship is that it does not allow for dual citizenship i.e. an individualholding citizenship of another country cannot be a citizen of India.
Fora long time, there have been calls to review this, especially regarding peopleof Indian origin living elsewhere in the world. It was demanded that thegovernment provide recognition and extend certain privileges to persons ofIndian origin who are citizens of other countries.
Overthe years, the number of Indians working abroad or migrating to other countrieshas increased. In-fact the latest UNO data states that India
has the largest share of International migrantstock.
Efforts
towards recognizing people of Indian origin.
Personsof Indian Origin (PIO Card) came into effect on 30 March 1999. This was meantfor overseas Indians who or whose forefathers have migrated to another countryprior to Indian Independence and was valid for a period of 15 years. After alukewarm response to the scheme, a High-Level committee on Indian Diaspora madecertain recommendations.
Basedon these recommendations, the Government of India launched the ‘OverseasCitizenship of India (OCI) Scheme’ by making amendments to Citizenship Act, 1955 in 2005.
This scheme
was launched during Pravasi Bharatiya Divas, held in Hyderabad in2006.
On 09 January 2015, the Government of Indiadiscontinued the PIO card and merged  it withOCI card. In other words, those who held a PIO card by that time were deemed tohave OCI card.
What
is OCI Card?
OCIcard was introduced as a response to the multiple calls for granting dualcitizenship for overseas Indians. However, since the constitution of India doesnot allow for dual citizenship, OCI card was introduced with certainrestrictions. However, there are many benefits for persons of Indian origin whoare issued an OCI Card.
Governmentof India allows the following categories of foreign nationals to apply for OCICard.
Anyonewho is applying for OCI card should hold a valid Passport of another country.Individuals who do not have citizenship of any other country are not eligibleto gain an OCI status. Furthermore, individuals whose parents or grandparentshold citizenship of Pakistan and Bangladesh are not eligible to apply. This mayextend to other countries as notified by Government of India.
Lifelong
visa with Multiple entry, any length of stay among the benefits for OCI Card
Holders
Theexperience of the Person of Indian Origin (PIO) card scheme provided important learningsfor Government of India in terms of the benefits to that can be extended to theoverseas citizens, which can encourage them to be part of any such scheme.
Keepingthese in mind, multiple benefits have been extended to OCI Card holders likethe following.
AsOCI Card is not citizenship of India, there are certain restrictions placed on OCIcard holders like the following.
Application for OCI card can only be done online
Applying for registration as OCI Cardholder can only be done online viathe dedicated
portal.
The Fresh application requires submission of the following details.
(a) Applicant’s Information
(b) Passport details
( c) Family Details
The applicant can save the application and come back later to continuethe application process. A temporary application ID is provided during theinitial application that can used to retrieve the saved the application.
Thefollowing documents are required to be submitted along with the application.
The application along with the supporting documents needs to besubmitted online. Post the online application, the originals of the supportingdocuments need to be submitted Indian Mission or FRRO for prior verification.
In case the applicant is applying from outside India, the documents areto be submitted at the following places.
If the application is done from India, there are 13 FRROs based on the jurisdiction where these documents have to be submitted physically.
The applicants are required to pay an application fee as described below.However , currently there is no provision for online payment. Applicants can getfurther details on the relevant embassy’s website.
Cancellation of OCI Card
The Government of India can cancel
the registration of OCI card in case any of thefollowing criteria is met.
Author & writer Aatish Tasser’s OCI card was
cancelled recently on allegations that heconcealed that his late father was of Pakistani origin while submitting the PIOapplication.
USA & Malaysia have the highest number of Persons of India Origin
As per the data
provided by Ministry of External Affairs, as ofDecember 2018, there are a total of 3.09 crore (3,09,95,799) overseas Indians.
Of these, 1.31 crores ( 1,31,13,360) are NRIs , while the rest i.e. 1.78crores ( 1,78,82,369) are People of Indian Origin.  Approximately 170 countries across the globehave People of Indian Origin.  USA hasthe highest with 31.8 lakhs, followed by Malaysia who have 27.6 lakh people ofIndian Origin.
As per the data shared by the government in Lok Sabha in August 2018, more than 16 lakh OCI cards were issued in the 4-year period between 2014 & 2017.
Featured Image: OCI Card

created: December 2, 2019


text:
Explainer:What is Consumer Confidence Survey and what does it indicate?
Sai Krishna Muthyanolla
November 1, 2019
The RBI recently published the results of the
September 2019 round of the Consumer Confidence Survey. But, what is the survey
all about? What do the numbers indicate? Here is an explainer.
The Reserve Bank of India, on 04 October 2019, published the results of Consumer Confidence Survey  of the September 2019 round. The survey revealed that consumer confidence had declined further as compared to the previous surveys. As a part of this survey, perceptions of people on economy, employment and other general relatable economic concepts which are confronted by households on a daily basis are recorded. Under the same headings, what respondents are anticipating in the next one year is also recorded.
But, what is the Consumer Confidence Survey?How is it carried out? What is its significance? This story elucidates the purposeof this quarterly survey, methodology involved, and sample used in the study.The recent trend in consumers’ confidence is also examined in this story.
What is the Consumer
Confidence Survey? Why is it significant?
Consumer Confidence Survey is a quarterly survey conducted by the Reserve Bank of India  (RBI) to ascertain how confident people are about the economy. It indicates how people perceive the economy to be and how, according to them, it will be in the following year, giving insight into the country’s economic prospects. The survey also reflects consumption patterns of consumers based on how much they spend. It is apparent that greater confidence amidst the respondents implies consumers are willing to spend more money and this might lead to positive economic growth. In case the consumers exhibit lower confidence, it is an indicator that consumers are not willing to spend and hence may indicate a slowdown in general. This is because consumers are apprehensive and think twice before spending their hard-earned money. Similar surveys are conducted in other countries as well with slight variations.
How is the survey
carried out?
Earlier, only the six metropolitan cities inthe country were given prominence in the survey. Each of these six cities – Bangalore, Chennai, Hyderabad, Kolkata,Mumbai and New Delhi, was divided into three major areas which werefurther subdivided into three sub areas. From each sub area, 100 urbanhouseholds were selected randomly. Thus, we have 900 respondents from each citytotalling to 5400 respondents across the six cities. Those responses which aresuitable for further analysis are used to produce the results. Around 5000records are analysed every three months. The questionnaire used for the survey is also published by theRBI.
Seven more cities are
being covered in the survey since 2018
This survey has been regularly conducted by theRBI since June 2010. Since September 2017, the number of cities has been extendedto thirteen. The new additions to the list are Ahmedabad, Bhopal, Guwahati, Jaipur, Lucknow,Patna and Thiruvananthapuram. The number of households surveyed in each city isproportionate to the number of households recorded in Census 2011. However, thetotal sample size has been maintained at 5400. The number of records analysedstill revolves around 5000.
What are the factors
that are taken into consideration in the survey?
Through the survey, qualitative information iscaptured. The questions covered in the survey are related to the respondent’sopinion on the economic situation, price levels and inflation, employmentprospects, income and spending pattern. Since March 2015, questions pertaining to householdcircumstances such as assets, real estate, gold and motor vehicle were omittedfrom the schedule.
How is the assessment
carried out and How is the index calculated?
The assessment is carried out in two scales- perceptions andexpectations. Perception is how the current situation is as compared to theprevious year and expectation is what they are expecting it to be in the comingyear. Responses are recorded on a three-point scale, whether the financialcondition has/will improve, worsen or remain constant. Under each of thisscale, number of respondents who had similar opinion is expressed as thepercentage of total number respondents. Net responses, also termed as netbalances, is arrived at by subtracting the percentage of respondents whoreported a decrease from the percentage of respondents who reported anincrease. Thus, it can take any value in the range -100 to +100.
Current Situation Index (CSI) and FutureExpectation Index (FEI) are two indices which are calculated in order todetermine consumer confidence. These indices are calculated using the averageof net responses of parameters such as income, spending, economic situation,employment and price level for the current year and the following year,respectively, as the names suggest. The indices can take a value between 0 and200. A value above 100 for the indices suggests that people are optimistic.Since the removal of household circumstances parameter since 2015, theparameter has also been removed from the calculation of the indices.
What is the current
scenario?
The result of the latest round of survey conducted in September 2019 showsthat Consumer Confidence has declined as compared to July 2019. In fact, boththe Current Situation Index (CSI) and Future Expectation Index (FEI) havetouched a 5-year low.
Respondents feel that price levels haveincreased in the last one year and are also expecting it to rise in thefollowing year. In the case of overall economic situation and employment aswell, confidence of respondents, both in the present case scenario as well forfuture, have dropped. Same is the case with income. The sentiment on spendingon essential items has become stronger in contrast to spending on non-essentialitems, which has weakened, may be because of increasing price levels. Majorityof the respondents (74.1%) were of the opinion that their spending hasincreased in the last one year and a higher number (77%) felt that theirspending would only increase next year owing to increase in prices.
Does GDP growth rate
have an impact on confidence of consumers?
Since GDP is influenced by the nation’s demand,there is a tendency to assume that perception of a consumer will also berelated to it. There are multiple factors which influence GDP as well as thesentiments of consumers.
The trend in GDP growth rate and ConsumerConfidence Indices have been represented in graphs for ease of comparison. Databetween March 2016 and June 2019 has been taken.
During this period, the GDP growth rate touchedthe highest in the first quarter of Financial Year (FY) 2017. In the sameperiod, it can be observed that the Current Situation Index (CSI) was also thehighest.  Future Expectation Index (FEI)was the highest in fourth quarter of FY 2019 when the GDP growth was only 5.8%.The CSI was also substantially higher in the fourth quarter of FY 2019 comparedto the same period in FY 2018 despite lower GDP growth rate in FY 2019. Followingthe 5% GDP growth rate in first quarter of FY 2020, which is a 6-year low, the CSIin the second quarter of the same year dropped down to the least in six years.
Are the findings of the survey used for any
policy decisions?
The survey, just like other surveys, has itsown methodological shortcomings. For instance, the sample size is small for ahighly populous country like India. Further, only urban households are consideredin the sample from large cities despite more than 65% of population living inrural areas. However, the Monetary Policy Committee of RBI refers to the survey results toforecast growth and inflation in their half yearly reports.

created: November 1, 2019