ParliamentMore Privatisation on the cards?M R Madhavan,Prachee Mishra- October 22, 2019The core group of secretaries on disinvestment has recentlyapproved the disinvestment of five public sector undertakings (PSUs).  This includes the entire shareholding of the government in four PSUs: Bharat Petroleum Corporation (BPCL), Shipping Corporation of India (SCI), North Eastern Electric Power Corporation (NEEPCO) and THDC (operates and maintains the Tehri Hydro Power Complex), and 30% of the shareholding in Container Corporation of India Limited (Concor).  The government currently holds 54.8% of Concor, so the sale will reduce its stake below 25%.Over the last few years, the government has removed legislative barriers towards privatisation of several other PSUs.  This raises the question whether the government plans to privatise them.What was the Supreme Court’s order on privatisation of PSUs?In 2003, a similar proposal had been raised by the government for the sale of its shareholding in HPCL and BPCL.  This proposal was challenged in the Supreme Court on the grounds that it would violate the provisions of the laws that transferred ownership of certain assets to the government (which later formed these PSUs).  For example, BPCL was formed by nationalising Burmah Shell in India through an Act of Parliament, and merging their refinery and marketing companies.   TheCourt ruledthat the central government cannot proceed with the privatisation of HPCL and BPCL (i.e., reduce its direct or indirect ownership below 51%) without amending the concerned laws.  So the government continues to hold majority stake directly in BPCL, and indirectly in HPCL (through ONGC, another PSU).The five Companies approved for privatisation include BPCL and SCI (into which two nationalised companies, the Jayanti Shipping Company, and the Mogul Line Limited were merged).  The relevant nationalisation Acts have been repealed over the last five years.How did the government remove the legislative barriers for privatisation?Between 2014 and 2019, Parliament passed six Repealing and Amending Acts which repealed around 722 laws.  These included laws that had transferred the ownership of companies to the central government which later formed BPCL, HPCL, and OIL.  These also repealed the laws that had transferred ownership of the companies to the central government which were later merged with the SCI.  This implies that now the government can go ahead with the privatisation of these government companies as the conditions imposed by the Supreme Court’s order have been fulfilled.  These Repealing and Amending Acts also repealed several other nationalisation laws that were later formed into PSUs.  In the Table below, we have listed some of these companies.  Note that theLaw Commission of India(2014) had suggested the repeal of several of these laws (including the Esso Act, the Burmah Shell Act, the Burn Company Act) on the grounds that these laws do not serve any purpose with respect to the nationalised entity.   However, it had suggested that a study of all the nationalisation Acts should be done before repealing these Acts, and if necessary a savings clause should be provided in the repealing Act.Did Parliament scrutinise these Acts before passing them?Many of these repeals were made through the Repealing and Amending Act, 2016.  These include the Acts relating to BPCL, HPCL, OIL, Coal India Limited, SCI, National Textiles Corporation, Hindustan Copper and Burn Standard Company Limited.   The Bill was not referred to a Parliamentary Standing Committee, and was passed after a cursory debate (50 minutes in Lok Sabha and 20 minutes in Rajya Sabha).  Similarly, the two Acts passed in 2017, that enable privatisation of SAIL, PowerGrid, and State Trading Corporation were not examined by a Standing Committee.So what comes next?The repeal of these Acts have cleared the legislative hurdle for privatisation of these companies.   That is, the government does not need prior approval of Parliament to sell its shareholding.  Therefore, it is now up to the government to decide whether it wishes to privatise these entities.A version of thisarticlewas published by the Business Standard on October 20, 2019.Table1: Some Nationalisation Acts repealed since 2014 (list not exhaustive)CompanyAct being repealedRepealing ActShipping Corporation Of India (SCI)The Jayanti Shipping Company (Acquisition of Shares) Act, 1971Repealing and Amending Act, 2016The Mogul Line Limited (Acquisition of Shares) Act, 1984Bharat Petroleum Corporation Limited (BPCL)The Burmah Shell (Acquisition of Undertakings in India) Act, 1976Repealing and Amending Act, 2016Hindustan Petroleum Corporation Limited (HPCL)The Esso (Acquisition of Undertakings in India) Act, 1974Repealing and Amending Act, 2016The Caltex [Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited] Act, 1977The Kosangas Company (Acquisition of Undertaking) Act, 1979Coal India Limited (CIL)The Coking Coal Mines (Emergency Provisions) Act, 1971Repealing and Amending Act, 2016The Coal Mines (Taking Over of Management) Act, 1973The Coking Coal Mines (Nationalisation) Act, 1972.Repealing and Amending (Second) Act, 2017The Coal Mines (Nationalisation) Act, 1973.Steel Authority of India Limited (SAIL)The Bolani Ores Limited (Acquisition of Shares) and Miscellaneous Provisions Act, 1978Repealing and Amending (Second) Act, 2017The Indian Iron and Steel Company (Acquisition of Shares) Act, 1976Power Grid Corporation of India LimitedThe National Thermal Power Corporation Limited, the National Hydroelectric Power Corporation Limited and the North-Eastern Electric Power Corporation Limited (Acquisition and Transfer of Power Transmission Systems) Act, 1993.Repealing and Amending (Second) Act, 2017The Neyveli Lignite Corporation Limited (Acquisition and Transfer of Power Transmission System) Act, 1994.Oil India Limited (OIL)The Burmah Oil Company [Acquisition of Shares of Oil India Limited and of the Undertakings in India of Assam Oil Company Limited and the Burmah Oil Company (India Trading) Limited] Act, 1981Repealing and Amending Act, 2016State Trading Corporation of India Ltd. (STC)The Tea Companies (Acquisition and Transfer of Sick Tea Units) Act, 1985Repealing and Amending Act, 2017National Textile Corporation Limited (NTC)The Sick Textile Undertakings (Taking Over of Management) Act, 1972Repealing and Amending Act, 2016The Textile Undertakings (Taking Over of Management) Act, 1983The Laxmirattan and Atherton West Cotton Mills (Taking Over of Management) Act, 1976Hindustan Copper LimitedThe Indian Copper Corporation (Acquisition of Undertaking) Act, 1972Repealing and Amending Act, 2016Burn Standard Co LtdThe Burn Company and Indian Standard Wagon Company (Nationalisation) Act, 1976Repealing and Amending Act, 2016Indian RailwaysThe Futwah-Islampur Light Railway Line (Nationalisation) Act, 1985Repealing and Amending Act, 2016Braithwaite & Co Limited, Ministry of RailwaysThe Braithwaite and Company (India) Limited (Acquisition and Transfer of Undertakings) Act, 1976.Repealing and Amending (Second) Act, 2017The Gresham and Craven of India (Private) Limited (Acquisition and Transfer of Undertakings) Act, 1977Andrew Yule & Co. Ltd.The Brentford Electric (India) Limited (Acquisition and Transfer of Undertakings) Act, 1987Repealing and Amending (Second) Act, 2017The Transformers and Switchgear Limited (Acquisition and Transfer of Undertakings) Act, 1983Repealing and Amending Act, 2019Alcock Ashdown (Guj) Limited, Government of Gujarat UndertakingThe Alcock Ashdown Company Limited (Acquisition of Undertakings) Act, 1973.Repealing and Amending Act, 2019Bengal Chemicals & Pharmaceuticals Ltd. (BCPL)The Bengal Chemical and Pharmaceutical Works Limited (Acquisition and Transfer of Undertakings) Act, 1980Repealing and Amending (Second) Act, 2017Organisations under Department of PharmaceuticalsThe Smith, Stainstreet and Company Limited (Acquisition and Transfer of Undertakings) Act, 1977Repealing and Amending (Second) Act, 2017The Bengal Immunity Company Limited (Acquisition and Transfer of Undertakings) Act, 1984.Sources: Repealing and Amending Act, 2015; Repealing and Amending (Second) Act, 2015; Repealing and Amending Act, 2016; Repealing and Amending Act, 2017; Repealing and Amending (Second) Act, 2017; Repealing and Amending Act, 2019.Read MoreParliamentFirst no-confidence motion of the 17th Lok Sabha discussed todayNiranjana Menon- August 8, 2023Discussion on the first no-confidence motion of the 17thLok Sabha began today.  No-confidence motions and confidence motions are trust votes, used to test or demonstrate the support of Lok Sabha for the government in power.  Article 75(3) of the Constitution states that the government is collectively responsible to Lok Sabha.  This means that the government must always enjoy the support of a majority of the members of Lok Sabha.  Trust votes are used to examine this support.  The government resigns if a majority of members support a no-confidence motion, or reject a confidence motion.So far, 28 no-confidence motions (including the one being discussed today) and 11 confidence motions have beendiscussed.  Over the years, the number of such motions has reduced.  The mid-1960s and mid-1970s saw more no-confidence motions, whereas the 1990s saw more confidence motions.Figure1: Trust votes in ParliamentNote: *Term shorter than 5 years; **6-year term.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.The no-confidence motion being discussed today wasmovedon July 26, 2023.  A motion of no-confidence is moved with the support of at least 50 members.   The Speaker has the discretion to allot time for discussion of the motion.  TheRules of Procedurestate that the motion must be discussed within 10 days of being introduced.  This year, the no-confidence motion wasdiscussed13 calendar days after introduction.  Since the introduction of the no-confidence motion on July 26, 12 Bills have been introduced and 18 Bills have been passed by Lok Sabha.  In the past, on four occasions, the discussion on no-confidence motions began seven days after their introduction.  On these occasions, Bills and other important issues were debated before the discussion on the no-confidence motion began.Figure2: Members rise in support of the motion of no-confidence in Lok SabhaSource: Sansad TV, Lok Sabha, July 26, 2023; PRS.Figure3: Number of days from introduction to discussion on no-confidence motionsNote: Number of days implies calendar days.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.On average, no-confidence motions (excluding the one being discussed today) have been discussed for 13 hours over three days.  Discussions have lasted longer than 20 hours on four instances, most recently in 2003.  Today’s no-confidence motion was allotted 12 hours discussion time by theBusiness Advisory Committee.Following the discussion, the motion is put to vote.  26 out of 27 no-confidence motions (excluding the one being discussed today) have been voted upon and rejected.  This means that no government has ever had to resign following a vote of no-confidence.   On one occasion, in 1979, the discussion on a no-confidence motion against the Morarji Desai government remained inconclusive.  He resigned before the motion was put to vote.  50% of all no-confidence motions (14 out of 28) were discussed between 1965 and 1975.  Of these, 12 were against governments headed by Indira Gandhi.Figure4: Duration of discussion on no-confidence motionsNote: This graph excludes the no confidence motion moved on July 26, 2023.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.In comparison, confidence motions have a more varied history.  The first motion, brought in 1979 to demonstrate confidence in Charan Singh’s government, was not discussed at all.  The Prime Minister resigned before the discussion could take place.  Since then, 11 confidence motions have been discussed in Lok Sabha, with nine occurring in the 1990s.  During this period, several coalition governments were formed, and Prime Ministers sought to prove their majority throughconfidence motions.   These motions have been discussed, on average, for 12 hours over two days.Figure5: Duration of discussion of confidence motionsSource: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.Of the 11 confidence motions discussed in Lok Sabha, seven were accepted.  On three instances, governments had to resign as they could not prove that they had the support of the majority.  On one instance in 1996, the motion was not put to vote.  Following an eleven-hour discussion on this confidence motion, Prime Minister Atal Bihari Vajpayee announced his intention to resign on the floor of the House.  He resigned 16 days into his term.Vajpayee became Prime Minister again in 1999, and faced another confidence motion.   This time, it was put to vote.   The motion was defeated by a margin of one vote.  This has been the closest result on a trust vote in the history of Lok Sabha.  The next closest result was when a motion of no-confidence against P V Narasimha Rao’s government was defeated by 14 votes in 1993.  In most cases, results have been in favour of the government by a large margin.«12345678910»
ParliamentMore Privatisation on the cards?M R Madhavan,Prachee Mishra- October 22, 2019