Published 21:08 IST, September 6th 2020
Banking & Agriculture: Centre's two most contentious bills in this 18-day Monsoon Session
As Parliament prepares for Monsoon session, the Centre plans to introduce 20 bills in the 18-day parliamentary session from September 14 to October 1.
As Parliament prepares for Monsoon session, the Centre plans to introduce 20 bills in the 18-day parliamentary session from September 14 to October 1. Apart from 20 bills, 11 ordinances will also have to be passed during the session as most of them face an expiry date by the winter session. The Centre has allowed a 30-minute question hour with only unstarred questions to be taken while it scrapped private members' business due to Coronavirus (COVID-19) constraints.
Here are the top bills to be introduced:
- The Companies (Amendment) Bill, 2020
- Major Port Authorities Bill, 2020
- The Medical Termination of Pregnancy (Amendment) Bill, 2020
- The Indian Institutes of Information Technology Laws (Amendment) Bill, 2020
- The Banking Regulation (Amendment) Ordinance, 2020
- Salaries, Allowances and Pension of Members of Parliament (Amendment) Ordinance, 2020
- Essential Commodities (Amendment) Ordinance, 2020
- The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm services ordinance, 2020
- Epidemic Diseases (Amendment) Ordinance 2020
While most bills are aimed at major structural changes amid the COVID-19 pandemic, the most contentious bills are The Banking Regulation (Amendment) Ordinance, 2020 along with the two agriculture-based bills - Essential Commodities (Amendment) Ordinance, 2020 & The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm services ordinance, 2020. Both bills have faced stiff opposition from non-BJP parties like Congress, NCP, AIMIM etc. NCP Supremo Sharad Pawar has strongly opposed amending the Banking Regulation Act stating conversion of urban cooperative banks into private banks to stop misappropriation of funds, while Congress-led Punjab govt has passed a resolution rejecting the agriculture bills.
The Banking Regulation Ordinance
The Banking Regulation Ordinance to be introduced by Finance Minister Nirmala Sitharaman aims in getting all co-operative banks under the purview of the Reserve Bank of India (RBI). The ordinance which has been promulgated on June 26, 2020, aims at tackling the misappropriation of funds amid the PMC Bank scam, PNB Bank scam etc. The Ordinance also excludes primary agricultural credit societies, cooperative societies involved in long term financing for agricultural development from the Act.
Key features of the ordinance (as per PRS)
- The RBI can place a banking company under a moratorium, reconstruct such a bank in the interest of depositors, general public without placing under a moratorium. During the moratorium, no legal action can be initiated or continued against the bank for a period of up to six months and the bank cannot make any payment, grant any loans or make investments during the moratorium.
- RBI may supersede the Board of Directors of a multi-state cooperative bank for up to five years in the public interest
- Co-operative banks will be allowed to issue equity shares, preference shares, or special shares with prior approval of the RBI.
- The Ordinance states that RBI may exempt a cooperative bank or a class of cooperative banks from certain provisions of the Act pertaining to employment, Board of Directors and the appointment of a chairman.
Essential Commodities (Amendment) Ordinance, 2020
Amid the nationwide lockdown, the Centre rolled out its third tranche of economic measures to kickstart the economy which included three governance and administrative reforms in agriculture. Amending the Essential Commodities act, the Centre aimed to enable better price realisation for farmers by attracting investments - making agriculture sector competitive. Agriculture food stuff including cereals, edible oils , oilseeds, pulses, onions and potato to be deregulated while stock limits were to imposed under extreme conditions.
Key features of the ordinance (as per PRS)
- Centre may regulate the supply of foodstuffs like cereals, pulses, potato, onions, edible oilseeds, and oils, only under extraordinary circumstances which include war, famine, extraordinary price rise and natural calamity.
- Stock limits may be imposed only if there is a 100% increase in retail price of horticultural produce and 50% increase in the retail price of non-perishable agricultural food items. But these tock limit will not apply to a processor or value chain participant of agricultural produce
- The provisions of the Ordinance regarding the regulation of food items and the imposition of stock limits will not apply to orders pertaining to the Public Distribution System.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm services ordinance, 2020
This ordinance announced by FM Sitharaman as part of the third tranche of economic measures amid lockdown, provides a framework for the protection and empowerment of farmers with reference to the sale and purchase of farm products overriding all state APMC laws. The ordinance which was promulgated on June 5, 2020, will enable farmers for engaging with processors and aggregators, large retailers, exporters in a transparent way. Most state-based parties are expected to oppose this bill in the Parliament. In the recently released FY 21 - Q1 figures by Centre, Agriculture sector is the only one which grew by 13% due to no lockdowns.
Key features of the ordinance (as per PRS)
- A farming agreement between farmers and sellers which include individuals, partnership firms, companies, limited liability groups and societies prior to the production or rearing of any farm produce. The role and services of any third party, including aggregators, will have to be explicitly mentioned in the agreement. State governments may establish a registration authority to provide for registry of such agreement.
- Terms and conditions for supply, quality, standards and price of farming produce, as well as terms related to supply of farm service, maybe set subject to certification. The farming agreement may be linked with insurance or credit instruments under schemes of central and state governments ensure risk mitigation and credit flow to both. The minimum period of an agreement will be one crop season while maximum period will be 5 years.
- Farming produce under a farming agreement will be exempted from all state Acts aimed at regulating sale and purchase of farming produce and Essential Commodities Act, 1955. The price to be paid for the purchase of farming produce will be mentioned with details like guaranteed price to be paid, any additional amount over and above it including bonus or premium specified.
- The farming agreement must provide for a conciliation board as well as a conciliation process for settlement of disputes. If the dispute remains unresolved by the Board after thirty days, parties may approach the Sub-divisional Magistrate for resolution and Appellate authority if needed. While both magistrate and Appellate board can impose certain penalties on the party contravening the agreement, no action can be taken against the agricultural land of farmer for recovery of any dues.
Updated 21:08 IST, September 6th 2020