Finance Bill

Devious route

Print edition : April 28, 2017

Finance Minister Arun Jaitley during a post-Budget interaction with industry associations in New Delhi on February 3. Photo: Ramesh Sharma

This year’s Finance Bill takes an unprecedented turn, vesting the government with almost limitless authority, sabotaging key institutions in the process.

IF the Narendra Modi government’s move to demonetise an overwhelming proportion of the national currency last November came as a rude shock, the manner in which the Finance Bill, which gives legal teeth to the proposals in the Union Budget, was pushed through in March bore the hallmark of a hustler’s rough hand.

In an unprecedented move, which is widely interpreted as a cynical abuse of the legal provisions, the government used the Finance Bill’s quintessential characteristics of a Money Bill to push through a cartload of amendments that had no bearing on either the Budget or its legal instrument, the Finance Bill. While the move was in keeping with the Modi government’s penchant for bypassing the Rajya Sabha, where the National Democratic Alliance is in a minority, the bundling of amendments to legislation that had no relation to the Budget was nothing short of extraordinary. Thus, objections were not confined to the manner in which the amendments were being pushed through but also to the very content of the government’s agenda.

While the opposition parties contested some of the provisions, such as those about relaxing the terms on which corporate entities fund political parties, they took umbrage at the nearly 40 amendments. Finance Minister Arun Jaitley gave Parliament barely two days to consider a dense 30-page list of amendments, suggesting that Parliament was being hustled into pushing through key legislation. These fears were heightened by the manner in which the Speaker waived the normal rules of the conduct of the Lok Sabha in order to push the agenda through in double quick time. That the subjects that were pushed through were unrelated to the Budget presented earlier—a lacklustre one in any case, given that Modi had already stolen the thunder with the announcement of a slew of welfare measures that smacked of rank tokenism—was only the lesser of the problems. More worryingly, the amendments indicated a resolute march towards centralisation of authority in the hands of the political executive, a trend that has been unremitting ever since Modi assumed office in 2014.

Pushing through amendments

The 40 amendments proposed can be broadly classified under two heads. The first class included those that added new elements or made modifications to the provisions of the Budget, which Jaitley had already presented. Among them was the move to lift all curbs on contributions made by corporate entities to political parties. Not only have the contributions been made virtually limitless, but the amendments gave companies the cover of anonymity while making such contributions. In effect, unlike in the United States, for instance, nobody would be able to know which companies favoured which political party, a provision that would reveal the two-way linkages between corporate entities and political parties. If in the case of the U.S. it is possible to know which companies funded the Democrats or the Republicans or any other presidential candidate, in the Indian case the channels of influence peddling would be impossible to detect. The mandatory linkage of Aadhaar to the PAN (permanent account number) identification of taxpayers was made possible by another amendment, which also belongs to this class.

The second class of amendments suggest a massive push towards centralisation of authority. Included in this class of amendments were those that effected changes to 27 laws that by no stretch of the imagination have a connection to the Budget. Among the amendments were those that changed the working of eight tribunals that had come into effect by virtue of separate legal provisions enacted by Parliament earlier. These tribunals, each governing specific subject matters, had come into being as a result of legislation that was guided by the intent of separating them from the judiciary while at the same time preventing executive overreach.

Legal experts point out that the very fact that the amendments have masqueraded as part of a Money Bill implies that the staffing of the tribunals and their terms of employment would be connected to the Consolidated Fund of India (read the Finance Ministry). Needless to say, their independence is likely to be seriously impaired as a result. The range of subjects covered by the tribunals, which adjudicate government conduct under their purview, include industrial disputes, the environment, competition law, airport regulation, copyrights, and information technology. The hasty clubbing together of some of the tribunals, suggestive in laughable typos evident in legislative text submitted to Parliament—including one mention of the non-existent “Information Technology Qualifications Act 2000”—has also bunched subjects that, in terms of the required competence of the tribunals, ought to remain separate.

Thus, the Competition Appellate Tribunal has been amalgamated with the National Company Law Appellate Tribunal, the Airports Economic Regulatory Authority Appellate Tribunal has been brought under the jurisdiction of the Telecom Disputes Settlement and Appellate Tribunal (under the TRAI Act), and the National Highways Tribunal has been brought under the Airport Appellate Tribunal, which is itself covered by the Airports Authority of India Act. The Telecom Disputes Settlement and Appellate Tribunal will have to deal not only with its existing subject matter but also with matters relating to the regulation of airports in addition to those that were earlier under the purview of the Cyber Appellate Tribunal. How a single regulator will have either the competence or the ability to deal with this diverse workload is open to question.

Weakening the tribunals

Apart from the fact that the presentation of these amendments as a Money Bill implicitly presents these as issues that are gravely financial in nature, which they are not, the logically weak amalgamation of several of these tribunals is likely to lessen their effectiveness and dilute the quality of jurisprudence in the specialised subjects that they are supposed to adjudicate. In some cases, like that of the Copyrights Board, which was established after substantial discussion in 2012, the entire process of specialisation that had been built over time is being jettisoned. The Copyrights Board would be trashed and its functions stand transferred to the Intellectual Property Appellate Board. Jaitley’s Budget speech only gave cryptic clues about the intention to amalgamate some of these tribunals. These issues were not deliberated at the Parliamentary Standing Committees of the relevant Ministries.

The more worrying feature of the massive spring cleaning of the regulatory regime is the manner in which the members of the tribunals would be appointed. According to the previous legal arrangement that governed the tribunals, chairpersons were to be judges of a specified rank and members were to be domain experts in the areas germane to the working of the tribunals. All that now goes out of the window as a result of the amendments. The Modi government, by usurping the powers to set terms of not just pay but also who would qualify to become members or chairpersons of the tribunals, has ensured that these institutions now have a demeaned status. The mind boggles to imagine how impartial such tribunals would be in a situation when the citizen is up against the government as a litigant! The power to do all this by merely issuing government notifications robs them of the prestige and stature that was legally protected earlier. All this is, of course, in line with the Modi government’s single-minded focus on centralising authority on a scale not seen since the Emergency between 1975 and 1977.

Jaitley’s last Budget, already devalued by the massive adventure that demonetisation has turned out to be, has been debased even further. The reckless abandon with which cardinal principles of parliamentary conduct have been jettisoned, the haste with which specialised jurisprudence has been sacrificed, and the overarching move to centralise authority and vest it an air of brazenness, cast a dark shadow on the polity at large.