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Land has been a controversial subject area and has consistently been regarded as a principal source of inequality. This article from The Pioneer last year sums up the situation- “land (has) become amongst the most commonly violated of Indian liberties”. Problems relating to voluntary vs. forced acquisitions, murky land records, illegal usage of agricultural land and under the table transactions by and large fill this contentious space.

On 13^th December 2012, the LARR Act (Land Acquisition and Rehabilitation and Resettlement Bill, now renamed ‘The Right to Fair Compensation, Resettlement, Rehabilitation and Transparency in Land Acquisition Bill 2012’) was approved by the Union Cabinet (currently in the winter session of parliament). The Act calls for a “humane, participatory, informed consultative and transparent process for land acquisition for industrialisation, development of essential infrastructural facilities and … provide just and fair compensation to the affected families whose land has been acquired or proposed to be acquired or are affected by such acquisition and make adequate provisions for such affected persons for their rehabilitation”¹ . Main features of the Act can be found here on the PRS website. While there have been several reiterations of the Act, in terms of its main goal, it primarily seeks to enhance the land-owners rights through a system via consent, monetary compensation and R&R (Resettlement and Rehabilitation). The revised version of the Bill asks for 80% consent if the land acquisition is for private projects and 70% for PPPs (while no consent is required if the government acquires for ‘public purpose’). Another revised point was that the land, if unused for 10 years, shall be returned to the land bank or be given back to the owners. The R&R will apply to the entire area in which the project is approved.

But how far has the Act been able to address the various issues with respect to land acquisition? Are the processes in place for a more inclusive and transparent procedure for land acquisition? This blog looks at some of the main areas of the discussion that have been addressed either as a debate or a dialogue.

Political patronage, big businesses and land-use

Since the 1894 version of the Land Acquisition Act, there are numerous stories of unlawful taking over of land, unfair compensation and even forceful acquisition. These stories seem to have intensified in the last few years- Bhatta Parsaul, Nandigram, Singur and others point to the delicate nature of the problem – Land grabbing, scams and the complex politico-business nexus have altered the way in which land acquisitions have been conducted but also put enterprises who have political connections and those who have deep pockets substantially ahead of the curve . The POSCO incident a few years ago is a telling example. POSCO was castigated as having evaded the anti-dumping duty and again thereafter for having an agreement with the Orissa state government for the production of 12 million tonnes of steel a year, despite the fact that the Environment Impact Assessment report said the area was only prepared for a third of that amount. All these incidents point to the fact that the final decision and power still remains with the bureaucracy. To what extent can it be made certain that no loopholes are found in the acquisition process once the Bill is implemented?²

Monetary compensation

The revised LARR compensation system includes a sliding scale mechanism in the market price of land – a method in which land within 10 km of the city will be paid for at market rate only, land between 10-20 km will be given 1.4 times the market rate, increasing as you move further away from the city. While the multiplier factor remains at twice the market price, the total compensation paid at the end will be four times the market price for land in the rural areas³. The possibility of these ‘market prices’ being arbitrarily defined is quite high.

An important issue that needs to be addressed is that people may actually be displaced much before the compensation is paid (In the Act, the compensation will be given ‘within 3 months’ of accepting the contract for that piece of land). This may lead to a loss in livelihood. Another aspect of the LARR Act is that in case the land is being used for ‘public purpose’, the former residents are entitled to jobs. To what extent are people going to be trained / how will the government ensure that these jobs remain are questions that still need to be answered.

Questions regarding Resettlement

Following from the above point, when we look into the various layers within the Act, the question of resettlement plays a central role. An article in the Indian Express rightly states that ‘land acquisition is often an occasion for reproducing social distance rather than closing the gap’. A heavily criticised part of the Bill is that in case the government takes over land for a short period of time, the Rehabilitation and Resettlement provisions do not apply – a clause that may lead to heavy misuse.

However, unlike earlier drafts, the current LARR Bill looks more closely into the resettlement problem and seeks to provide project-affected families with dual benefits – a) A package comprising a subsistence grant, resettlement allowance and a transport allowance and; b) Accessibility to transport services, water, public lighting, basic irrigation facilities, etc in the resettlement areas While this certainly adds teeth to the Bill, there are innumerable issues that arise when promising so many things. How will these allowances be settled amongst thousands of families? Would the resettlement areas be worked upon once the project has been approved or would there be a lull period between the approval and the displacement time are questions that still remain to be clear.

Too many oversight bodies

Under this Act, there have been several changes to the number of oversight bodies that have been discussed. The Bill comes under the purview of the Right to Grievance Redressal Bill and in addition, will have Rehabilitation & Resettlement Committees at the project level, a Land Acquisition & Resettlement Authority at the state level and a National Monitoring Committee at the Central level (Section 41, 44 and 45). A cabinet committee on investment (CCI) has been approved to be in charge of projects that will be a one point area to clear large (read: over Rs 1000 cr) infrastructure projects. What would they do? What powers would they possess? All of that (unfortunately) remains unclear. Consequently, there are several other Acts/Bills that deal with a similar issue but have separate authority bodies (eg. Land Ceiling Act, National Bureau of Land Use) – there is very little information on what powers and authority these bodies possess. Will these separate bodies have any say on the viability of certain projects, delay-related problems, or whether the companies are meeting the guidelines for acquisition?

The pro-farmer stance and the reform of the very colonial Land Acquisition Act of 1894 by the government is long overdue. Taking from the long spell of exploitation by private and corrupt public interest, this new Bill seems to be the light at the end of a dark and bungled tunnel. However delays, inefficiencies in the system, violations of the rules continue to haunt countless other Acts and Schemes. To the extent that the ‘Iron Law of Rent-Seeking’⁴ would leak into the system can only be assessed once the impact is seen post-implementation. Till we can gain access to more information, the onus lies with the central and state governments to use their political will to strengthen transparency processes and tools in order to implement this Act.

1^ Text of the Land Acquisition, Rehabilitation and Resettlement Bill, 2011 as introduced in the Lok Sabha

2^ Pratap Bhanu Mehta. ‘Its Land. Stupid’. http://www.indianexpress.com/news/it-s-land-stupid/662223

3^ Interview with Jairam Ramesh. Business Standard, October 2012. http://www.business-standard.com/india/news/no-land-acquisition-for-ppp-townships-jairam-ramesh/488261/

4^ Dennis Mueller, Industrial Economist, postulated the ‘The Iron Law of Rent Seeking – whenever a rent is to be found, a rent seeker will be there trying to get it’

I recently wrote this report for Accountability Initiative. It’s based off some research I did in Madhya Pradesh and Bihar on the implementation of the relatively newly passed right to public service acts in those states. I find the development of these Acts – in over a dozen states in the past couple years – fascinating for several reasons.  First, it’s an example of a state-led legislative movement. There have certainly been proponents of a similar act in the center, such as Anna Hazare/IAC and NCPRI, but it’s the states – usually led by their Chief Ministers – that have gotten this rolling (the center still hasn’t passed anything similar). The implementation and political commitment to these acts certainly varies by state, but it’s something that the states seem to be proudly owning and working to be innovators in. The first movers tended to be NDA states, but now the states that are passing such acts encompass a much broader political spectrum.

Second, these acts seem to be an example of the migration of a legal technology from one setting to another. The state acts almost all incorporate a triggered penalty against a bureaucrat if they do not provide a designated service (such as giving an income or residence certificate) within a set number of days. The inspiration for this triggered penalty seems to have clearly come from the Right to Information Act where the penalty was perceived by many to be critical to the success of that Act. In reality, many Right to Information Act activists have criticized the triggered monetary penalty in the RTI Act for not being that effective, but in the struggle to implement laws, policymakers have come across one tool that they perceived to be successful in one context and are now using it in another context.

Third, despite this borrowing from one context to another, it’s unclear whether the triggered monetary penalty is the right tool for the job. There needs to be much more focus on grievance redress for public services, and citizens should have and should demand much stronger procedural safeguards. Too often there is a sense of impunity amongst bureaucrats, especially when they deal with the poor concerning public services. Yet, I couldn’t find another country that has a similar triggered monetary penalty they use to ensure their bureaucrats perform their jobs correctly. They reprimand/demote/fire officials for not following the law or not performing at a certain standard, but this triggered monetary penalty seems different. That certainly doesn’t mean that a triggered monetary penalty can’t be effective at helping ensure officials implement policy, but it should make us wonder about what other reforms might be necessary. This is especially true because some states that have passed Right to Service Acts have had very poor implementation, while in others the implementation has been reasonably good – or rather, service delivery has been seen to improve when a package of reforms has been brought in (such as in Bihar, and to some extent MP). However, it’s not clear which of the reforms are causing the largest impact in the improvement of service delivery.

These Acts are a clear manifestation of the ever-rising demand for better public service delivery in India. Although many lawyers are already deeply and passionately involved in helping meet this demand, I think there is a need for more lawyers, and in particular legal academics, to play a larger role.  Administrative law clearly plays a central role in these debates, but the little I’ve been exposed to how administrative law is taught in India hasn’t convinced me that it’s preparing students to grapple with these challenges – particularly how administrative law relates to and effects policy implementation. (As an aside, I wrote an op-ed a while back on how rulemaking might be reformed to improve responsiveness to citizens). Service law is another natural area that legal academics could contribute more in improving service delivery. What legislative (and constitutional) framework would allow sufficient protections to government employees – for what, after all, is often a thankless and difficult job – while also properly incentivizing employees to do their jobs?  What are the tradeoffs involved with different laws and institutional design proposals?  It strikes me that the Right to Service Acts are in many ways trying to create an alternative penalization mechanism because current service law has proved inadequate to the task. Yet, in the long-term such a bypass strategy is likely simply delaying larger changes that need to be made, including deploying a far broader array of incentives and disincentives for bureaucrats within existing service and administrative law.

In my last post, I introduced the idea of Financial Inclusion, traced the extent of financial exclusion in the country and had also outlined some of the first (largely unsuccessful) efforts of the Government of India (GOI) in creating equitable access to financial goods and services to its vast, mostly rural populace. This is the second part of my post on Financial Inclusion in India. In this post, I shall talk about some of the more recent initiatives of GOI and attempt to understand how successful these have been.

Over the last decade, Financial Inclusion has come into focus in the global policy and development discourse, given its irrefutable link with upward economic and social mobility. It was former UN Secretary General Kofi Annan’s statement to the General Assembly in 2003 that most notably brought the idea back into the fore of economic policy discussion. Annan stated, “The stark reality is that most poor people in the world still lack access to sustainable financial services, whether it is savings, credit or insurance. The great challenge before us is to address the constraints that exclude people from full participation in the financial sector. Together, we can and must build inclusive financial sectors that help people improve their lives.”¹ Out of the December 29, 2003, statement came four clear goals for financial inclusion. Those goals² include:

1. Access to general banking services such as credit, lease, mortgages, insurance, pensions, and money transfers.
2. Internal and external regulation of financial institutions that would ensure inclusion through policy.
3. Sustained investment in financial institutions in order to enable access to financial services in the future.
4. Encourage competition in the banking arena, so that banks may come up with economically viable products and services intended to foster financial inclusion – in order to provide for those excluded from traditional banking system.

In India, a revival of efforts towards financial inclusion, (post the first slew of reforms including bank nationalisation –that was initiated in the 1960’s) occurred in 2005. The Reserve Bank of India (RBI) in its Mid Term Monetary Policy review paper³ urged all national banks to include Financial Inclusion amongst their prime most objectives. This in turn, was in direct response to the several detailed recommendations proposed by the Report of the Committee on Financial Inclusion⁴, which was released in 2004.

In following with the recommendations, the GOI has since 2005 introduced a host of reforms and initiatives intended to foster financial inclusion. Some of the most important of these are:

1. Financial Inclusion Plan: In 2010, the RBI launched the Financial Inclusion Plan, with an aim to provide access to financial services to at least 50 per cent (50.77 million) excluded rural households by 2012 and the remaining by 2015. These FIPs contained self-set targets in respect of opening of rural brick and mortar branches, deployment of business correspondents (BCs), coverage of unbanked villages through various modes, opening of no-frills accounts, Kisan Credit Cards (KCCs) and General Credit Cards (GCCs) to be issued etc.(Read about the progress of the plan here)
2. Introduction of “No Frills Accounts”: Regional Rural Banks (RRB’s) and State and Central Co-operative Banks were advised in December 2005 to make available a basic banking ‘no-frills’ account either with ‘nil’ or very low minimum balance as well as charges that would make such accounts accessible to vast sections of population. While the 2012 annual report of the RBI does not feature the latest figures, the 2011 Annual Report states that as of March 2011, 74.4 million No Frill accounts have been opened by domestic commercial banks with outstanding balance of Rs. 6,566 crore.⁵
3. Simplification of Know Your Customer (KYC) norms: The RBI has also eased the ‘Know Your Customer’ (KYC) norms as of 2005 to keep the procedural and logistical hassles involved in opening a bank account to a minimum. This is to enable those belonging to low-income groups to open bank accounts without documents of identity and proof of residence.
4. Introduction of General Credit Cards: In December 2005, The RBI has also issued a directive to banks wherein General Credit Cards with a credit limit of Rs. 25,000 shall be issued in all rural and semi rural bank branches, with a view to extend basic credit facilities to the rural populace.
5. Swabhiman Scheme: In order to extend the reach of banking to the rural hinterland, Banks were advised in 2010-11 to provide appropriate banking facilities to habitations having a population in excess of 2000 (as per 2001 census) by March, 2012. The Banks were asked to formulate their road maps for Financial Inclusion through the mechanism of the State Level Bankers Committee – (SLBCs were formed under the RBI’s Lead Bank Scheme in the early 1960’s – they act as an inter institutional forum at State level ensuring co-ordination between government and banks. They facilitate the implementation of financial development programmes in the areas of poverty alleviation, employment, providing banking outlet in un-banked areas, training, financial literacy etc.). Under Swabhiman, approximately 73,000 habitations across the country having a population of over 2000 have been identified for providing banking facilities. These habitations have been allocated to Public Sector Banks, RRBs, Private Sector Banks and Cooperative Banks operating in different parts of the country.
6. National Pension Scheme Lite: Taking heed of suggestions made by the Project Oasis Report⁶ commissioned by the Ministry of Social Justice and Empowerment, the Indian government launched in 2009 the National Pension Scheme Lite, a micro pension program focused exclusively on individuals from the unorganized sector. The scheme has four key features. First, it ensures ultra-low administrative and transactional costs; Second, it is portable across the country and thereby suits the migration pattern of workers. Thirdly, its terms are simple to understand by the average rural individual. In addition to the above, the scheme has a strong incentive component, titled “Swavalamban”, wherein eligible individuals who are successful in creating annual savings, receive an annual co-contribution of Rs. 1000 to their corpus from the central government. The NPS Lite is designed to have a concerted focus on making small scale investments viable⁷.

Despite their many interventions, the RBI has seen mixed results with regard to enlisting the vast rural masses into the formal milieu of financial goods and services. While the Swabhiman scheme has seen resounding success (with over 74,000 habitations been identified and the scheme seeing an extension into several additional areas as of March 2012⁸) this cannot be said for each of the RBI’s interventions. The NPS Lite, for instance has faced challenges in its roll out. Even two years after its initial roll out the Standing Committee on Finance reported in July 2011 that only 51,000 voluntary subscribers from the unorganized sector had enrolled into the scheme. The question that poses itself then is why do these instruments, regardless of their many benefits, fail to capture the imagination of the rural masses? And more importantly, how can they be marketed better?

In 2011, the Report of the Committee to Review Implementation of Informal Sector Pension (CRIISP) suggested that financial products in India are only successful when strong marketing tactics are employed to promote them. In other words, they are essentially marketed by creating a strong, targeted “push” factor in their intended market. In a context where earnings are used to provide for immediate needs, complex financial products such as pensions and insurance don’t feature in the average individual’s common basket of purchases. The challenges with regard to creating equitable access to financial goods and services in the Indian context are complex.

Thus, while it is certainly true that financial inclusion can be substantially enhanced by improving the supply side or the delivery systems, it is also important to note that in order to improve their level of inclusion, demand side efforts need to be undertaken as well. These would include improving human and physical resource endowments and launching strong financial literacy campaigns ⁹( a case in point being the efforts of Invest India Micro Pension Services¹⁰ – that act as an intermediary to demystify, educate and market financial products in a simple and transparent manner to financially excluded populations).

Research contends¹¹ that since people do not choose to purchase financial products – governments could consider making mandatory the subscription to certain financial products (while reforming the regulatory systems governing these products) and continue to simplify the logistical procedures accompanying them. While India has so far stayed clear of making mandatory subscription to financial products, the failures of the many government co-contribution based insurance and pension schemes (NPS Lite – as mentioned earlier) point to a need for more creative ways to get more people to enlist themselves as benefactors of these products.

Financial Inclusion initiatives alone may not effect in the desired upward economic mobility unless accompanying social issues are tackled alongside. The marginalization of women in rural society, for instance could have a direct bearing on the extent to which we succeed in creating inclusion. Known to be better at savings and managing finances¹², women would typically make the ideal customer, but since they are often not allowed to own bank accounts, they are left out of formal banking. While community sensitisation initiatives might help, banks could do their bit by creating products that incentivizes women customers.

Banks have only recently acknowledged¹³ that the rural poor are indeed bankable, and are working towards creating strong business models that while creating financial inclusion amongst the excluded; also make strong business sense to the banks themselves. One can only gauge the extent to which they shall succeed after these plans pan out in communities they are designed to succeed in.

1^ Statement by Kofi Annan on December 23, 2009, post the adoption of 2005 as the International Year of Micro Credit

2^ Building Inclusive Financial Sectors for Development, UNCDF, May 2006, Available online at bluebook.uncdf.org

3^ RBI Mid Term Monetary Review Paper, 2005-06, www.rbi.org.in/Upload/Notification/Pdfs/66901.pdf

4^ Report of the Committee on Financial Inclusion, January 2008, http://www.nabard.org/report_comfinancial.asp

5^ RBI Annual Report 2011-12, Ch 4, Credit Delivery and Financial Inclusion, http://www.rbi.org.in/scripts/AnnualReportPublications.aspx?Id=1001

6^ Project OASIS Report, 2000, Ministry of Social Justice and Empowerment, http://www.iief.com/Consulting/oasisreport.pdf

7^ National Pension Scheme Lite, Pension Fund and Regulatory Development Agency, http://www.pfrda.org.in/indexmain.asp?linkid=185

8^ Response to Lok Sabha unstarred question 4640, 04.05.2012, http://164.100.47.132/LssNew/psearch/QResult15.aspx?qref=122394

9^ Project OASIS Report, Ministry of Social Justice and Empowerment, January 1999, pfrda.org.in/writereaddata/linkimages/oasisreport6305547711.pdf

10^ Invest India Micro Pensions – http://www.micropensions.com/what-we-do/integrated-implementation

11^ Measures for Achieving Financial Inclusion in India, A Thought Paper by Infosys India, Rajesh Jeganathan

12^ Enabling Rural Women’s Economic Empowerment, UN Women, September 2011, www.un.org/womenwatch/…/Hill-BP-1-EGM-RW-Sep-2011_CH.pdf

13^ “Profitable Models for Financial Inclusion, BANCON 2011 iobbancon2011.com/uploads/CEDocuments/Compdm/Article16.pdf

The real estate sector in India has a large impact on its economic growth story, having ‘added over 1 lakh crore of 2.58 lakh crore in 2010-11 to just Delhi’s GDP.¹ According to a 2011 study conducted by KPMG, 50% of the respondents were of the view that the real estate and construction sector are the most corrupt (you can view the study here). The underlying competition in real estate and land has in some ways led to fascinating, and disturbing, state-business relationships. It is not just about the actions of the business elite and their political right hand men or vice-versa, instead, there is now an hazy stratification within this sector – Businesses and the government at the top (with a two way relationship where licenses and large sums of money are), middle level real estate agents in the centre and farmers/small businesses/ordinary citizens at the bottom. These relationships depend on the undeniable value of land as a resource, as private property and as cultural heritage – this value has not only altered over time, but has also presented a curious problem of access and ownership. This blog broadly look at the obscure nature of problems around land as well as land acquisition, and presents some thoughts on a successful land records project and the large gaps in it.

As discussed by Professor RS Deshpande in this article, the problems of land administration has gained momentum in land policy discussions. The emphasis given to more specific, almost logistical, issues within land policy (including tenancy, ownership for the marginalized and minority communities and land records), however, has been intermittent. Post Indian Independence, the main phases of land policy comprise of:

Source: ftp://ftp.fao.org/docrep/fao/006/y5026e/y5026e00.pdf

The acquisition of land as well as transfer/sale of land proposes different policy problems to the rural and urban landscape in India. For example, high land prices have created a skewed dynamic, where realtors are now moving beyond urban centres to buy agricultural land for commercial and non-cultivation purposes. The procedure is easy; you only have to show that you are an ‘agriculturalist’ or a family member of a farmer. Or in some cases, realtors buy ‘uncultivable’ land and after attaining status as a farmer buy large cultivable land for commercial purposes. The complications of transferring land titles, checking to see if farmers have been rehabilitated or checking to see if the transaction was legal are often sidelined. Recent scams show the various methods of infiltrating the loopholes of land and property ownership in urban centres². To give a few examples –  high profile politicians favouring particular businesses in getting land at lower prices (or vice versa), using front companies to invest in projects and lastly, a new age phenomenon of re-routing black money to Indian shores under the FDI bandwagon. The large rural to urban migration has given rise to further problems with respect to land. According to a 2010 study conducted by McKinsey Global Institute, “projections show India’s urban population soaring from 340 million in 2008 to 590 million in 2030”³ . In order to handle the growing urban slums, encroachment of public land and dubious sale of land and Benami transactions, there is now a greater need for pressure on the government to build adequate policy checks and balances.

A revolutionizing step in terms of making transactions relating to the sale, transfer and ownership of land was the Bhoomi Project. Under Rajeev Chawla, the project began as an effort to digitize land records in Karnataka (back in 2001) to bring down corrupt deals and reduce the power of the middleman. It presents a new focus on using e-governance to ensure accountability and was considered a best practice model of e-governance by the World Bank. It aims to homogenize and structure recordings, and till date, the project has computerized around 20 million records of land ownership of 6.7 million farmers in the state- you can see more details on their website here. This project has now become a model for other states (Kerala and Andhra Pradesh have already started implementing the project) in the country. For the digitization process, the farmer also has to create a ‘Pahani’/ RTC (revenue record that contains the owner’s details- area, water rate, soil type, nature of possession, liabilities, tenancy etc). There are 177 Taluk offices (State Public Information Office) where the farmers can put in their ID numbers into the touch screen kiosk and get their information. They can also print out a copy of the record for Rs 15. There is also a fast track procedure for the ‘Mutation’ process (for selling land, transfer of land)

A paper on increasing acceptance of social accountability in public institutions⁴ argues that ICT for e-governance can change citizen empowerment processes and communication. However, there are still some unclear points in terms of the reliability of this type of project

1. Collecting the data– The paper records that the farmers have may not be updated. The onus lies on the Taluka officers to sift through this information. The number of officers may not be able to handle all the information they are receiving – In the old system, each Village Accountant handled 3-4 villages (back in 2006, there were about 9000 VA’s)⁵

2. Segregating the paperwork– The main question after gathering information is whether the Revenue Inspector can validate the information received. Once the records are digitized, the farmers (if illiterate or unaware) are still dependent on the VA’s to act as the middlemen. This can perpetuate unnecessary waiting, and even false information.⁶

3. Ownership– Since this is not just land, but often times, contested land, for both agricultural and urban use⁷, there are now growing stories of threat against smaller land occupiers (both land owners and those on leases) from very powerful agents and land developers.

4. Entering and accessing the data: The level of transparency within the records relies on the honesty of the Taluka heads at the kiosks and Taluk offices. An additional problem is that of the data becoming more expensive for small farmers to access their information (Rs 15 per record).

5. Gaping holes: How can such a program ensure that large businesses and agents do not use political/ money power or muscle power to deter small farmers from selling land under duress, for making sure that information is not falsified during the computerization process? We have been reading continuously about the various land scams that have been taking place across the country (here, here and here). How can we ensure that the farmer at the bottom isn’t being taken advantage of?

The intense nexus between information giving, politics and business, civil society and governance is only partly visible, much to the dismay of social science researchers. Another blog post on the growth of the real estate giants under particular political parties seems likely. Watch this space.

1 http://articles.economictimes.indiatimes.com/2011-09-30/news/30228914_1_agricultural-land-farm-land-land-for-non-agricultural-purposes

2 http://www.firstpost.com/economy/how-the-politician-builder-nexus-really-works-490938.html?utm_source=moneycontrol.com&utm_medium=RHS-Widget

3 http://www.mckinsey.com/insights/mgi/research/urbanization/urban_awakening_in_india. April 2010

4 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2146403 Bhavya Shroff, IIM India

5 http://egovreach.in/uploads/demo/casestudy/Bhoomi.pdf

6 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2146403 Bhavya Shroff, IIM India

7 Bhoomi: ‘E-Governance’, Or, An Anti-Politics Machine Necessary to Globalize Bangalore? 2007.http://casumm.files.wordpress.com/2008/09/bhoomi-e-governance.pdf

Guest Post by Shibani Ghosh, Research Associate, Centre for Policy Research and former Legal Consultant to the CIC

The Supreme Court’s judgment in Namit Sharma v Union of India with respect to the composition of Information Commissions across the country is remarkable, and most unfortunate. In essence it says this: only retired judges can ensure the fair and efficacious administration of justice under the RTI Act. If this assumption were not problematic enough, the Court then effectively appropriates the powers of the legislature and the executive by telling them exactly what they must do.

This piece analyses the judgment from a legal point of view and raises three crucial issues. First, the manner in which the judgment reads the relevant statutory provision relating to eligibility criteria of Information Commissioners is contrary to well-accepted principles of statutory interpretation; second, the Court transgresses the core constitutional principle of separation of powers by performing the role of the legislature and the executive; and third, the analogy drawn between Information Commissions and other tribunals such as the Administrative Tribunals is flawed.

The primary issue before the Court was the constitutionality of the eligibility criteria for Information Commissioners. Currently, Section 12(5) of the RTI Act states that ‘persons of eminence in public life with wide knowledge and experience in law, science and technology, social service, management, journalism, mass media or administration and governance’ are eligible to be Information Commissioners. The Court found this provision to be vague – yet not discriminatory and, importantly, not suffering from any constitutional infirmity. But nevertheless, and strangely, the Court proceeds to rule on how the provision must be read to ensure its constitutionality.

While construing the statutory provision, the Court gives several directions in the judgment. Perhaps the two most significant directions are: first, since Information Commissions possess the essential attributes of a court, and their functions are more judicial than administrative in nature, persons with qualification, experience and knowledge in law should be appointed to the Commissions. As judicial members, they would be able to perform the adjudicatory tasks better. Second, only former or current Supreme Court judges and Chief Justices of High Courts should be appointed Chief Information Commissioners.

This construction of Section 12(5) of the RTI Act is nothing more than a re-writing of the statutory provision. Addition and substitution of words in statutes by Courts is contrary to well-accepted principles of statutory interpretation. This is legally impermissible, more so since the Court finds no constitutional infirmity to begin with. The Court’s detailed directions on the procedure for appointment of judicial and non-judicial members, the criteria for eligibility, and who can be appointed as a Chief Information Commissioner falls squarely within the domain of Parliament.

The judgment violates the core constitutional principle of the separation of powers. Statutes establishing tribunals specifically lay down the qualifications of the Chairman and different categories of members. There are no such provisions in the RTI Act which demonstrates that Parliament did not intend to draw such bright lines. Parliament also did not provide for any special eligibility criterion for the Chief Information Commissioner, perhaps since his adjudicatory powers and functions are precisely the same as the other Commissioners. Even the selection procedure is the same. For the Central Information Commissioners, a committee of the Prime Minister, Leader of the Opposition and a Cabinet Minister make recommendations to the President. Consultation with the Chief Justice of India before appointing one class of Commissioners, i.e. the judicial members, is an additional requirement that the Court has incorporated into the existing provision.

The Court does not stop there, and intrudes even further into the domain of the policy-maker. The direction that the Commission should sit in benches consisting of one judicial and one non-judicial member is a decision about the day-to-day functioning of the Commissions. Such a policy decision ought typically to be taken by the appropriate government, under Sections 27 or 28, after due consideration of various factors including necessity, the pendency of cases and a more general cost-benefit analysis.

The directions pertaining to the appointment of judicial members are legally problematic – the Court’s reasoning for mandatorily requiring judicial members is not above reproach. Part of the reasoning appears to flow from earlier decisions of the Court with respect to the constitutional requirements for the proper constitution of Administrative Tribunals. However, an analogy with those cases may be inapposite. Those tribunals were constituted to hear cases which were earlier heard by High Courts. To ensure that the alternative institutional mechanism was no less efficacious, tribunal members were expected to afford the same judicial treatment to the cases as the High Courts would otherwise have. But in the case of Information Commissions, their adjudicatory role was never previously performed by any Court as the statutory rights under the RTI Act are novel.

The Court’s concerns about the importance of the Information Commission’s functions are not misplaced. The Commissioners are occasionally confronted with complex legal issues, and Commissioners without a legal background may require some assistance initially in appreciating how to conduct a quasi-judicial proceeding, and how to deliver a reasoned decision. But that is hardly an insurmountable problem, nor does it require the drastic overhauling of the RTI Act that the Court seems to deem necessary. The Information Commissioners can be assisted by a well-trained in-house Legal Department. Furthermore, if the Government finds it necessary, it may propose the appointment of one or two Information Commissioners with a legal/judicial background.

As long as the principles of natural justice are observed by the Commissioners, and they perform their functions conscientiously keeping in mind the overarching mandate of the Act, the public has little reason to lose faith in the RTI regime. Unfortunately, the Apex Court has decided otherwise.