PRS Capsule December 2019

• 15 Jan 2020

Key Highlights of PRS

• Polity
  • Citizenship (Amendment) Bill, 2019
  • The Arms (Amendment) Bill, 2019
  • Census 2021 and updation of National Population Register
  • The Dadra and Nagar Haveli and Daman and Diu (Merger of Union Territories) Bill, 2019
  • The Personal Data Protection Bill, 2019 introduced in Lok Sabha
• Economy
  • The Taxation Laws (Amendment) Bill, 2019
  • International Financial Services Centres Authority Bill, 2019
  • Ordinance to Amend Insolvency and Bankruptcy Code (IBC)
• Social Welfare
  • Code on Social Security
  • The Constitution (One Hundred and Twenty-Sixth Amendment) Bill, 2019
  • The Maintenance and Welfare of Parents and Senior citizens (Amendment) Bill, 2019
  • The Prohibition of E-Cigarettes Bill, 2019
  • Recycling of Ships Bill, 2019

Polity

Citizenship (Amendment) Bill, 2019

• The Parliament passed the Citizenship (Amendment) Bill 2019 which received the President’s assent to become an Act.
• It amends the Citizenship Act, 1955.
• The Citizenship Act, 1955 provides various ways in which citizenship may be acquired.

Acquisition and Determination of Indian Citizenship

• The Citizenship Act, 1955 provides five ways in which Indian citizenship can be acquired: birth, descent, registration, naturalisation and incorporation of territory.
• By Birth:
  • Every person born in India on or after 26.01.1950 but before 01.07.1987 is an Indian citizen irrespective of the nationality of his/her parents.
  • Every person born in India between 01.07.1987 and 02.12.2004 is a citizen of India given either of his/her parents is a citizen of the country at the time of his/her birth.
  • Every person born in India on or after 3.12.2004 is a citizen of the country given both his/her parents are Indians or at least one parent is a citizen and the other is not an illegal migrant at the time of birth.
• By Registration:
  • A person of Indian origin who has been a resident of India for 7 years before applying for registration.
  • A person of Indian origin who is a resident of any country outside undivided India.
  • A person who is married to an Indian citizen and is ordinarily resident for 7 years before applying for registration.
  • Minor children of persons who are citizens of India.
• By Descent:
  • A person born outside India on or after January 26, 1950, is a citizen of India by descent if his/her father was a citizen of India by birth.
  • A person born outside India on or after December 10, 1992, but before December 3, 2004, if either of his/her parents was a citizen of India by birth.
  • If a person born outside India or after December 3, 2004, has to acquire citizenship, his/her parents have to declare that the minor does not hold a passport of another country and his/her birth is registered at an Indian consulate within one year of birth.
• By Naturalisation:
  • A person can acquire citizenship by naturalisation if he/she is ordinarily resident of India for 12 years (throughout 12 months preceding the date of application and 11 years in the aggregate) and fulfills all qualifications in the third schedule of the Citizenship Act.
• Incorporation of Territory: If a foriegn territory becomes a part of India,then the Government can specify the persons from the territory who will be the citizens of India.

Key Features of the Bill

• Illegal migrants: The Act prohibits illegal migrants from acquiring Indian citizenship. Illegal migrants are those foreigners who do not have valid passport or travel documents.
  
  • The Bill amends the Act to provide that the Hindus, Sikhs, Buddhists, Jains, Parsis and Christians from Afghanistan, Bangladesh and Pakistan, who entered India on or before December 31, 2014, will not be treated as illegal migrants.
  • Citizenship by naturalisation: The Bill reduces the residency requirement from 11 years to 5 years for Hindus, Sikhs, Buddhists, Jains, Parsis, and Christians from Afghanistan, Bangladesh, and Pakistan,
• Tribal Areas and Inner Line Permit: The provisions on citizenship for illegal migrants will not apply to the tribal areas including Karbi Anglong (in Assam), Garo Hills (in Meghalaya), Chakma district (Mizoram) and Tripura Tribal Areas District.
  
  • Further, it will not apply to the “Inner Line” areas notified under the Bengal Eastern Frontier Regulation, 1873.
  • In these areas, visits by Indians are regulated through the Inner Line Permit. Currently, this permit system is applicable to Arunachal Pradesh, Mizoram, and Nagaland.

Inner Line Permit

An Inner Line Permit is a document that allows an Indian citizen to visit or stay in a state that is protected under the ILP system. The ILP is obligatory for all those who reside outside the protected states. It is issued by the concerned state government for travel purposes solely.

• The Inner Line Permit was established by the British government under the Bengal Eastern Frontier Regulation, 1873 to safeguard tribals of the eastern part of Bengal.
• Under Section 2 of the Regulation of 1873, the ILP was only applicable to the three North Eastern States, namely, Mizoram, Arunachal Pradesh, and Nagaland.
• Recently, the President signed the order extending ILP to Manipur, which became the fourth state where the ILP regime is now applicable.

• Cancellation of registration of OCIs: The grounds for the cancellation of the registration of Overseas Citizens of India include:
  
  • if the OCI has registered through fraud, or
  • if, within five years of registration, the OCI has been sentenced to imprisonment for two years or more.
    
    • The Bill adds one more ground for cancellation, that is if the OCI has violated the provisions of the Act or of any other law notified by the government.

The Arms (Amendment) Bill, 2019

• Arms Amendment Bill, 2019 was introduced in Lok Sabha.
• The Bill seeks to amend a section of the Arms Act, 1959.
• It seeks to decrease the number of licensed firearms allowed per person and increase penalties for certain offences under the Act.
• It also introduces new categories of offences.

Key Features of the Bill

• License for acquiring firearms: The Bill reduces the number of permitted firearms from three to two including licenses given on inheritance or heirloom basis.
  
  • The Bill provides a time period of 1 year to deposit excess firearms.
  • It also increases the duration of a firearm license from 3 years to 5 years.
• Increase in penalties: The 1959 Act specifies the punishment for (i) dealing in unlicensed firearms, (ii) shortening or converting a firearm without a license, and (iii) importing or exporting banned firearms.
  
  • The punishment for these offences is between 3-7 years along with a fine.
  • The Bill increases the punishment to between seven years and life imprisonment, along with a fine.
• New offenses include:
  
  • forcefully taking a firearm from police or armed forces, punishable with imprisonment between 10 years and life imprisonment, and a fine, and
  • using firearms in celebratory gunfire which endangers human life or personal safety of others, punishable with imprisonment of up to 2 years or fine of up to one lakh or both.
• Organized crime syndicates: Possession of firearms by a member of a syndicate, in violation of the Act, will be punishable with imprisonment between 10 years and life, along with a fine. Illicit trafficking is punishable with imprisonment between 10 years and life, along with a fine.

Census 2021 and updation of National Population Register

The Union Cabinet has approved proposals to:

• conduct the Census of India 2021 throughout the country, and
• update the National Population Register (NPR) in all parts of the country, except the state of Assam.

Census

• A population Census is a process of collecting, compiling, analyzing and disseminating demographic, social, cultural and economic data relating to all persons in the country, at a particular time in ten years interval.
• The Indian Census is the largest single source of a variety of statistical information on different characteristics of the people of India.
• The responsibility of conducting the decennial Census rests with the Office of the Registrar General and Census Commissioner, India under the Ministry of Home Affairs (MHA).

The Census will be conducted in two phases:

• a house listing and housing census between April and September 2020, and
• population enumeration in February 2021.

National Population Register

• It is a list of “usual residents of the country”.
• A “usual resident of the country” is one who has been residing in a local area for at least the last six months, or intends to stay in a particular location for the next six months.

The Dadra and Nagar Haveli and Daman and Diu (Merger of Union Territories) Bill, 2019

The Parliament passed the Dadra and Nagar Haveli, and Daman and Diu (Merger of UTs) Bill providing for the merger of two Union Territories into a single UT.

• Representation in Lok Sabha: The First Schedule to the Representation of the People Act, 1950 provides one seat in Lok Sabha to each of the two UTs.
  
  • The Bill seeks to amend the Schedule to allocate two Lok Sabha seats to the merged UT.
• Jurisdiction of High Court: The Bill provides that the jurisdiction of the High Court of Bombay will continue to extend to the merged UT.

The Personal Data Protection Bill, 2019 introduced in Lok Sabha

Introduced in Lok Sabha the Personal Data Protection Bill (PDP) seeks to provide for protection of personal data of individuals, and establishes a Data Protection Authority for the same.

Key Features

• Data Fiduciary: The 'data fiduciary' may be a service provider who collects, stores and uses data in the course of providing such goods and services.
  
  • The Bill sets out obligations towards the entity who has access to personal data.
  • It states that the processing of personal data will be subjected to certain purpose, collection and storage limitations.
• Rights of the individual: These include the right to:
  • obtain confirmation from the fiduciary on whether their personal data has been processed,
  • seek correction, erasure, completion or updating of personal data, or
  • restrict continuing disclosure of their personal data, if it is no longer necessary or if consent is withdrawn.
• Data Protection Authority: The Bill sets up a Data Protection Authority which may:
  • take steps to protect interests of individuals,
  • prevent misuse of personal data, and
  • ensure compliance with the Bill. 
    • The Authority will be composed of members with expertise in the field of data protection and information technology. 

• Exemptions: Processing of personal data is exempt from the provisions of the Bill in some cases.
  
  • Example: The central government can exempt any of its agencies from the provisions of the Act in interest of security of state, public order, sovereignty and integrity of India and friendly relations with foreign states.
• The Bill provides that the central government may direct data fiduciaries to provide it with any:
  • non-personal data and
  • anonymised personal data for better targeting of services.

Economy

The Taxation Laws (Amendment) Bill, 2019

The Parliament passed the Taxation Laws (Amendment) Bill, 2019 replacing the Ordinance promulgated in September 2019 to cut Corporate tax rate.

• The Bill amends:
  
  • the Income Tax Act, 1961 (IT Act), and
  • the Finance (No. 2) Act, 2019.
• This Bill provides domestic companies with lower tax rate options if they do not claim certain deductions.

Key Features of the Bill

• Tax Rate of 22%: Currently, domestic companies with an annual turnover of up to Rs 400 crore pay income tax at the rate of 25%. For other domestic companies, the tax rate is 30%.
  
  • The Bill provides domestic companies with an option to pay income tax at the rate of 22% if they do not claim certain deductions under the IT Act.
  • These deductions are provided for:
    
    • newly established units in Special Economic Zones,
    • investment in new plants or machinery in notified backward areas,
    • expenditure on scientific research, the extension of agriculture, and skill development projects,
    • depreciation of new plants or machinery (in certain cases), and
• Tax Rate of 15% for new companies: New domestic manufacturing companies can pay income tax at the rate of 15%, provided they do not claim the deductions specified above.
  
  • They should be set up and registered after September 30, 2019, and should start manufacturing before April 1, 2023.
• Companies can choose to opt for the new tax rates starting the financial year 2019-20 (i.e. the assessment year 2020-21).
  
  • Once an option is chosen, it will apply for all the subsequent years.
  • If companies choosing a new option do not follow certain conditions, they cannot exercise the new option for that year and subsequent years.

International Financial Services Centres Authority Bill, 2019

Passed by the Parliament, the Bill provides for the establishment of an authority to develop and regulate the financial services market in International Financial Services Centres(IFSCs) in India.

Key Features

• Coverage: The Bill will apply to all the IFSCs set up under the Special Economic Zones (SEZs) Act, 2005.

International Financial Service Centre (IFSC)

• An IFSC caters to customers outside the jurisdiction of the domestic economy. Such centres deal with flows of finance, financial products and services across borders.
• In India, IFSC has been defined in the SEZ Act, 2005. As per the Act:
  
  • The Central Government may approve the setting up of an International Financial Service Centre in a Special Economic Zone and may prescribe the requirements for setting up and operation of such centre.
  • The Central Government shall approve only one International Financial Services Centre in a Special Economic Zone.

• Constitution of the IFSCs Authority: The Bill sets up the International Financial Services Centres Authority.
  
  • The Authority will consist of 9 members, including a chairperson, appointed by the central government.
  • Members of the Authority will include representatives from the RBI, SEBI, IRDA, PFRDA, and the Ministry of Finance.
  • Further, two members of the Authority are to be appointed on the recommendation of a Search Committee.
• Functions: Functions of the Authority include:
  
  • Regulating approved financial products (such as securities or deposits), financial services, and financial institutions in an IFSC,
  • Regulating any other financial products, services, or institutions in an IFSC, which may be notified by the central government, and
  • recommending to the central government any other financial services, products, or institutions which may be permitted in an IFSC.
• IFSCA Fund: The bill sets-up IFSC Authority Fund. Grants, fees and charges received by the Authority from various sources will be credited to the Fund.
• Transaction in foreign currency: All transactions of financial services in IFSCs will be in such foreign currency as specified by the Authority, in consultation with the central government.

Ordinance to Amend Insolvency and Bankruptcy Code (IBC)

The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019 was promulgated on December 28, 2019. The Ordinance amends the IBC, 2016.

• The Code provides a time-bound process for resolving insolvency in companies and among individuals.

Insolvency and Bankruptcy Code, 2016

Insolvency and Bankruptcy Code, 2016 provides a time-bound process for resolving insolvency in companies and among individuals.

• The Government implemented the IBC to consolidate all laws related to insolvency and bankruptcy and to tackle Non-Performing Assets (NPAs), a problem that has been pulling the Indian economy down for years.

Salient features

• Covers all individuals, companies, Limited Liability Partnerships (LLPs) and partnership firms.
• Adjudicating authority:
  
  • National Company Law Tribunal (NCLT) for companies and LLPs
  • Debt Recovery Tribunal (DRT) for individuals and partnership firms
• Establishment of an Insolvency and Bankruptcy Board of India to exercise regulatory oversight over insolvency professionals, insolvency professional agencies and information utilities.

Key Points

• Minimum threshold: Under the Code, a financial creditor may file an application before the National Company Law Tribunal (NCLT) for initiating the insolvency resolution process.
  
  • The Ordinance amends this to provide minimum thresholds for certain classes of financial creditors for initiating the insolvency resolution process.
  • In case of real estate projects, if an allottee wants to initiate the resolution process, the application should be filed jointly by at least 100 allottees of the same real estate project, or 10% of the total allottees under that project, whichever is less.
• Liability for prior offences: The resolution plan under the Code may result in change in the management or control of a corporate debtor to other persons.
• Permits, licenses and registrations: The Ordinance states that any existing license, permit, registration, quota, concession, or clearance, given by the government or local authority, will not be suspended or terminated on the grounds of insolvency.
  
  • However, there should be no default in payment of current dues for the use or continuation of such grants.
• Supply of critical goods and services: The Ordinance states that the resolution professional may order that the supply of certain goods and services which are critical for the corporate debtor’s operations cannot be discontinued during the moratorium period.
  
  • Moratorium Period: A Period wherein no judicial proceedings for recovery, enforcement of security interest, sale or transfer of assets, or termination of essential contracts can be instituted or continued against the Corporate Debtor.

Social Welfare

Code on Social Security

The Code on Social Security, 2019 was introduced in Lok Sabha. It replaces nine laws related to social security, including the Employees’ Provident Fund Act, 1952, and the Unorganised Workers’ Social Security Act, 2008.

Key Features

• Social security schemes: Under the Code, the central government may notify various social security schemes for the benefit of workers. These include:
  
  • an Employees’ Provident Fund (EPF) Scheme,
  • an Employees’ State Insurance (ESI) Scheme to provide sickness, maternity, and other benefits, and
  • specific schemes for gig workers, platform workers, and unorganised workers to provide various benefits, such as life and disability cover.

Gig workers: Workers outside of the traditional employer-employee relationship (e.g., freelancers).

Platform workers: Workers who access other organisations or individuals using online platforms and earn money by providing them with specific services.

Unorganised workers: Includes home-based and self-employed workers.

• Coverage and registration: The Code specifies different applicability thresholds for the schemes. For example,
  
  • The EPF Scheme will apply to establishments with 20 or more employees. These thresholds may be amended by the central government.
  • All eligible establishments are required to register under the Code, unless they are already registered under another labour law.
• Contributions: Certain schemes, such as the EPF and ESI Schemes will be financed through a combination of contributions from the employer and employee.
  
  • All contributions towards payment of gratuity, maternity benefit, cess for building workers, and employee compensation will be borne by the employer.
  • Schemes for gig workers, platform workers, and unorganised workers may be financed through a combination of contributions from the employer, employee, and the appropriate government.
• Social security organisations: The Code provides for the establishment of several bodies to administer the social security schemes. These include:
  
  • A Central Board of Trustees to administer the EPF, EPS and EDLI Schemes,
  • An Employees State Insurance Corporation to administer the ESI Scheme, and
  • National and state-level Social Security Boards to administer schemes for unorganised workers.

The Constitution (One Hundred and Twenty-Sixth Amendment) Bill, 2019

The Constitution (One Hundred and Twenty-Sixth Amendment) Bill, 2019 was passed by Parliament. The Bill amends provisions related to reservation of seats for Scheduled Castes (SCs) and Scheduled Tribes (STs) and the removal of reservation for Anglo-Indians in legislative bodies.

• The Constitution provides for reservation of seats for SCs and STs and representation of the Anglo-Indian community by nomination, in Lok Sabha and Legislative Assemblies of states.
• This has been provided for a period of 70 years since the enactment of the Constitution and will expire on January 25, 2020.
• The Bill seeks to extend the reservation for SCs and STs by another 10 years till January 25, 2030.
• The provision of seats by nomination for Anglo-Indians in Lok Sabha and State Assemblies has not been extended.

Anglo-Indians

• Article 366: It defines as a person whose father or any of whose other male progenitors in the male line is or was of European descent but who is domiciled within the territory of India and is or was born within such territory of parents habitually resident therein and not established there for temporary purposes only.
• Article 334(b): The reservation of the Anglo Indian community in the Legislative bodies was extended for 40 years in 1949 through the insertion of this article.

The Maintenance and Welfare of Parents and Senior citizens (Amendment) Bill, 2019

Introduced in Lok Sabha, the Bill amends the Maintenance and Welfare of Parents and Senior Citizens Act, 2007.

• Definitions: In the Act, the term
  
  • ‘Children’ refers to children and grandchildren, excluding minors.
  • The Bill adds step-children, adoptive children, children-in-laws, and the legal guardian of minors to the definition.
  • Parents to include biological, adoptive, and step parents. The Bill expands this definition to include both parents-in-law and grandparents.
  • The Bill expands the definition of:
    
    • Maintenance, to include the provision of healthcare, safety, and security for parents and senior citizens to lead a life of dignity,
    • Welfare, to include the provision of housing, clothing, safety, and other amenities necessary for the well-being of a senior citizen or parent.
• Maintenance orders: Under the Act, state governments constitute maintenance Tribunals which may direct children and relatives to pay a monthly maintenance fee of up to Rs 10,000 to parents and senior citizens.
  
  • The Bill removes the upper limit on the maintenance fee.
• Offences and penalties: The penalty for the abandonment of a senior citizen or parent has been increased to imprisonment between three and six months, and a fine of up to Rs10,000.
  
  • The Bill also provides that failure to comply with the maintenance order by children or relatives may lead to imprisonment up to one month, or until the payment is made.

The Prohibition of E-Cigarettes Bill, 2019

The Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage, and Advertisement) Bill, 2019 was passed by Parliament.

• It replaced an Ordinance promulgated in September 2019.
• The Bill seeks to prohibit the production, trade, storage, and advertisement of electronic cigarettes

Key Features

• Electronic cigarettes: The Bill defines electronic cigarettes (e-cigarettes) as electronic devices that heat a substance, which may contain nicotine and other chemicals, to create vapour for inhalation.
  
  • These e-cigarettes can also contain different flavours and include all forms of electronic nicotine delivery systems, heat-not-burn products, e-hookahs, and other similar devices.
• Ban: The Bill prohibits the production, manufacture, import, export, transport, sale, distribution and advertisement of e-cigarettes in India.
  
  • Any person who contravenes this provision will be punishable with imprisonment of up to 1 year, or a fine of up to one lakh rupees, or both.
  • For any subsequent offence, the person will be punishable with an imprisonment of up to three years, along with a fine of up to five lakh rupees.
• Storage of e-cigarettes: Under the Bill, no person is allowed to use any place for the storage of any stock of e-cigarettes.
  
  • If any person stores any stock of e-cigarettes will be punishable with an imprisonment of up to 6 months, or a fine of up to Rs 50,000 or both.

Recycling of Ships Bill, 2019

The Parliament passed the Recycling of Ships Bill, 2019 which restricts the use of hazardous material on ships and regulates the recycling of ships.

Key Features

• Applicability of the Bill: The Bill will apply to:
  
  • Any new or existing ship which is registered in India,
  • Ships entering a port or terminal in India, or the territorial waters of India,
  • Any warship, or other ship owned and operated by an administration and used on government non-commercial service, and
  • Ship recycling facilities operating in India.
• Ship recycling: The Bill defines ship recycling as the dismantling of a ship at a facility to recover the components and materials for reuse, and taking care of the hazardous material so produced.
• Requirements for ships: Ships should not use prohibited hazardous materials as notified.
  
  • The central government may exempt certain categories of ships from this requirement.
  • The National Authority will carry out periodic surveys to verify the prescribed requirements.
• Recycling facilities: Ships will be recycled only in authorised recycling facilities.
  
  • An application to authorise such a facility must be submitted to the Competent Authority (which will be notified by the central government) along with a ship recycling facility management plan, and prescribed fee.
  • The certificate of authorisation will be valid for a period as specified but not exceeding five years.
  • Contravening these provisions will be punishable with imprisonment of up to one year, or a fine of up to Rs 10 lakh, or both.