Citizens' Issues
All government committee reports must be displayed suo moto: CIC

CIC orders the environment ministry to publish all reports within 30 days of submission

In what can be considered a big ‘green’ step, the Central Information Commission (CIC) has come down heavily on the environment ministry and ordered it to publish expert committee reports before making any decision on the same.

The CIC has ruled that all expert committee/panel reports that are set up by the government and are funded by the public must be disclosed suo-motu by the department or ministry concerned. The commission has also said that the disclosure should come within 30 days from the date of receiving the report. “Such reports are instrumental in influencing policy decisions and it is only reasonable that citizens have a say in it,” ruled the CIC.

This important verdict was issued on 9th April, 2012, while hearing an appeal by G Krishnan, a resident of Kerala who had sought a summary of a report by Western Ghats Ecology Expert Panel (WGEEP), submitted to the ministry of environment and forests. Overruling the CPIO’s reason for refusal of disclosure, the commission ruled, “All reports of Panels, Experts, Committees, and Commissions which are set up by Government by spending public funds must be displayed suo moto as per the mandate of Section 4 (1) (c ) & (d) read with 4 (2). If parts of such reports are exempt as per the RTI Act, this should be stated and the exempt parts could be severed, after providing the reasons for such severance.”

The CIC has said that the summary be made available to the appellant by 5th May and the complete report be placed on the ministry’s website before 10th May 2012.

The verdict comes at a time when agitations by environmentalists and affected citizens are sweeping the nation while the government is doing its best to downplay their concerns and force infrastructure, power and mining projects in ecologically sensitive zones.

Mr Krishnan had asked for the information on November 2011, which the PIO had promptly denied, saying that the report is still being consulted upon by the authorities and hence is not to be disclosed. Mr Krishnan went for an appeal, again to be refused. Finally, the matter came up in the CIC. Shailesh Gandhi, Central Information Commissioner, observed that the PIO had not given any reason initially for claiming exemption to the disclosure. The PIO then said that the report contains proposals on demarcation of eco-sensitive zones in the Western Ghats and disclosing the same before an executive decision is taken might ‘prejudicially’ affect “scientific or economic interests of the state”.

Mr Gandhi ruled that there is no provision in the RTI Act which exempts from disclosure a report that has not been finalized or accepted by a public authority. He also said that while citizens have the right to know, the government is bound to answer their questions in case it deviates from the recommendations of an expert committee report.

“Implementation of proposals for demarcation of eco-sensitive zones, whether before or after finalisation of the WGEEP report is an executive decision. Mere apprehension of proposals being put forth by citizens and civil society who are furthering the cause of environment protection cannot be said to prejudicially affect the scientific and economic interests of the country. Disclosing a report or information does not mean that the government has to follow it. It may perhaps have to explain the reasons to the public for disagreeing with a report based on logic and coherent reasons. This cannot be considered as prejudicially affecting the scientific and economic interests of the state,” he ruled.

He also thrashed the PIO for his refusal to disclose vital information that affects the country. “The PIO appears to suggest that a slowdown in economic activity on account of environmental concerns is not desirable. If an economic activity causes substantial loss to the environment, then it is necessary that such an activity is not carried out. The ministry of environment and forests’ (MOEF) unwillingness to be transparent is likely to give citizens an impression that most decisions are taken in furtherance of corruption resulting in a serious trust deficit. This hampers the health of our democracy,” said Mr Gandhi.


Star Union Dai-ichi’s Life Insurance achieves 36.3% premium growth

SUD Life has emerged as a bancassurance-specialist company and has been successful in activating 92% of the bank branch network that the company has been provided by its distribution partners

Star Union Dai-ichi Life Insurance Co. Ltd. (SUD Life) has achieved Rs1271.95 crore of total premium during FY2011-12.  The company has achieved an impressive growth rate of 36.3% in total premium and 27% in new business premium for the financial year just concluded on 31 March 2012.  

During the last financial year, most life insurance companies suffered degrowth; however, SUD Life has been achieving growth month after month.  The company has emerged as a bancassurance-specialist company and has been successful in activating 92% of the bank branch network that the company has been provided by its distribution partners the Bank of India, Union Bank of India, and the 7 Regional Rural Banks.  Under the bancassurance-distribution model, the biggest challenge is to ensure consistency of production (month after month) from as many branch outlets as possible. SUD Life has been highly successful in this respect as well and the company has achieved average monthly activation ratio of 46% during the year 2011-12.  As a result, the company has achieved 54% growth in number of policies sold and it has achieved nearly 75% of its premium income through retail business only. In the individual business segment, the company has achieved a growth of 22.18%.  

During the year, the company has collected Rs307.18 crore as renewal premium and has been continuously improving its persistency ratio, which is helping the company retain its position as the most cost-efficient company within the bancassurance category.

The company has provided life insurance protection to 5,76,890 lives through its various group insurance schemes and it has comfortably exceeded the mandatory requirement of 10,000 number of lives to be covered under the socially disadvantaged segment.  The company has also succeeded in garnering more than 20% of its premium from the rural areas against IRDA’s stipulated requirement of 12%.

SUD Life has been successful in settling 96.4% of total claims intimated up to 31 March 2012 and it is expected to maintain the first position in this regard among private life insurers.  Last year also, the company’s claim settlement ratio was next best to LIC of India.  The company puts a lot of emphasis on customer-service and claim settlement in its endeavour to achieve greater acceptability in the market.

In the last quarter of the financial year, the company had launched a traditional single premium endowment policy – Dhan Suraksha Platinum, to enable the customers to secure high insurance cover through single premium for a period of 10 years with guaranteed return.  The product proved to be very popular among the banks’ customers, through whom the company collected Rs119.84 crore first premium. The product was available till 31 March 2012 only.

The company utilizes state-of-the-art IT systems and applications to support its business operations. It offers a multifunctional customer portal to its customers. The company operates in a highly networked environment with automated processes on IT savvy platforms.


Economy & Nation Exclusive
Another retrospective move by the government has put gas companies on the back-foot

A directive from the Petrol and Natural Gas Regulatory Board has ordered Indraprastha Gas to refund the excess charges which might erode its net-worth completely

A directive from the Petrol and Natural Gas Regulatory Board (PNGRB) to Indraprastha Gas (IGL) has ordered the company to refund the network tariff and compression charge, with retrospective effect from 1 April 2008. This draconian order has sent the company’s stock price crashing. The stock which opened at Rs372 yesterday (9th April) had crashed 7%, and is currently Rs229.80, down 33.66%. In a first of its kind, this move has prompted fears that the regulator will impose a similar sort of charge or regulation on other gas utilities. Gujarat State Petronet has fallen from yesterday’s opening price of Rs78 to Rs70.90, down 9.10%. Similarly, Petronet LNG has fallen from Rs172 to Rs159.95, a 7% fall.

The tariff order said “Accordingly, the Network Tariff and the Compression Charge for CNG in respect of the Delhi CGD Network of IGL shall be Rs38.58 per mmBtu (million metric British thermal units) and Rs2.75 per kg, respectively, with effect from 1 April 2008.” This is drastically lower than the one proposed by IGL. Earlier, IGL had quoted network tariff of Rs104.05 per mmBtu and compression charge of Rs6.66 per kg.

The order further said, “IGL shall recover the Network Tariff and Compression Charge for CNG separately through an invoice without any premium or discount on a non-discriminatory basis. Further, in conformity with the decision conveyed vide letter dated 23.5.2011 mentioned in para 2.3 above, the difference between the Network Tariff and Compression Charge for CNG submitted by IGL and that determined by the board as given in the table above would be reflected through appropriate reduction in the selling prices from the date of issuance of this Order.” A 62.92% cut in Network Tariff and a 58.71% slash in compression charge would mean cheaper gas for consumers in the capital. According to an Edelweiss research note, consumers will pay Rs3.53 per scm (standard cubic metres) as opposed to Rs8.95 per scm.

“In case the PNGRB order is followed by cutting consumer prices by Rs5.42 per scm, IGL will report a loss. Assuming that consumers are refunded excess charges at Rs5 per scm, IGL’s FY12E net worth of Rs1200 crore stands wiped out”, according to a 9 April 2012 report by Edelweiss. Similarly, according to a HSBC research note dated 10th April, the tariff refund might cost the company as much as Rs1,600 crore. The PNGRB move has instilled fears that more such moves could be in the offing, especially towards other gas utilities. In a country that has an acute gas shortage and a huge fuel and gas subsidy, this move has only added more pressure on gas companies, particularly IGL, to deliver and function, to a point that they may not be economically viable to function at all.

In a similar move, the PNGRB had earlier ordered Gas Authority of India (GAIL) to cut tariffs for the Vizag-Secunderabad LPG pipeline, retroactively from 27 December 2010. A total of 21 tariffs were cut and imposed on GAIL, with effect from 2 April 2012. The order said, “As per proviso to Regulation 4 of the PNGRB Regulations, 2010 the petroleum and petroleum products pipeline shall be applicable as a transitional measure for a period of two years or such earlier time as the board may decide for valid reasons to be given in writing. Accordingly, the pipeline transportation tariff as given above would remain frozen and shall not be revised during the transition period unless advised by the board”. So far, at time of writing this piece, GAIL has fallen from Rs376 to Rs352, a 6.38% decline.  

The government earlier had amended its Income Tax laws with retrospective effect, which will have an adverse effect on foreign investments in India (Retrospective amendment to taxation: Will foreign investors be scared off?). It has also very strangely taxed software and satellite channels at a period when both were hardly exported (Taxing software & satellite channel income of the years when there was no satellite and hardly any software exported!).

If such trends adopted by the government are to be believed, then we can expect many more such retrospective orders in the future which will have an adverse effect on the economy.


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