The Parliamentary Standing Committee on Law and Justice said the Model Code of Conduct is a voluntary agreement among the parties for regulating the conduct of political parties and its members during elections and should be made part of the RP Act
New Delhi: Noting that the legal status of the Model Code of Conduct is a "grey area", a Parliamentary panel on Monday recommended making it a part of the Representation of People Act (RP Act), reports PTI.
The recommendation comes months after an internal note of the Group of Ministers (GoM) on Corruption asked the Law Ministry to look into aspects where "executive instructions" of the Election Commission were required to be given statutory shape, stirring a political controversy.
The Parliamentary Standing Committee on Law and Justice, in its latest report on Demands for Grants of the Law Ministry, said the Model Code of Conduct is a voluntary agreement among the parties for regulating the conduct of political parties and its members during elections to assemblies and Parliament.
"Its legal status, is a grey area...the committee feels that the Code, which was voluntary in nature at one time has not remained so after insertion of para 16 A in the Election Symbols (Reservation and Allotment) Order, 1968, which authorises the Election Commission to suspend or withdraw the recognition of political parties in case of violation of Code of Conduct. Besides, some paras in the code attract penal provisions in other laws," the report said.
The report said that the power of cancellation of registration of a political party is "substantive in nature", therefore, it should not be regulated or provided for under an "order" of the Commission.
"It should either be a part of the Representation of People Act, 1951 or the rules framed there under," panel recommended.
It also suggested that the scope of Article 324 also needs to be examined as "many of the aspects which should have been covered under the rules framed under RP Act are presently covered under instructions issued under Article 324 of the Constitution by the Commission."
In February this year, a Department of Personnel and Training note for the GoM had suggested that the Legislative Department (of the Law Ministry) may look into the aspects where "executive instructions" of the EC were required to be given statutory shape.
It noted that Finance Minister Pranab Mukherjee, who also heads the GoM, was of the view that Model Code of Conduct was one of the biggest excuses to stall the development projects, and thus agreed with the request of the Law Minister to flag the issue and its inclusion in the agenda papers.
If the Nifty can hold itself above 4,789, it may rise to the level of 5,040
The market, which was in the positive for a major part of the day, pared all its gains to end flat on a steep fall in the rupee. On the lowest volume of 49.27 crore shares on the National Stock Exchange (NSE) in the past 25 trading days (including today), the Nifty made higher high, higher low and ended in the positive. For the gains to continue, the index has to hold itself above 4789, which may take the benchmark to the level of 5,040.
The market opened on a mixed note on concerns about the eroding value of the rupee and European fears. The Nifty started trade down two points at 4,889 and the Sensex resumed trade at 16,188, up 35 points over its Friday's close. The opening figure on the Nifty was its intraday low while the Sensex fell to its lows in the dying minutes of trade with the index touching 16,150.
Meanwhile, the rupee on Monday fell marginally by 5 paise to 54.47 against the US dollar in early trade due to increased demand for the greenback from importers. The rupee had ended higher by 5 paise at 54.42 against the dollar in the previous session after touching 54.91, its fresh all-time low as fund outflows continued amid Eurozone worries.
Buying support from heavyweights like State Bank of India, Maruti Suzuki, Tata Power and Larsen & Toubro pushed the indices higher in early trade.
The rupee dropped by 30 paise to 54.72 against the US dollar late in morning trade, due to on fresh demand for the US dollars from banks and importers despite a weak global trend. The local unit resumed lower at 54.45 a dollar and dropped further to 54.72 per dollar at 1100 hours.
However, the market pared some gains in subsequent trade and was seen moving range-bound till the noon session. An early recovery by the key European markets from their opening lows resulted in the domestic market moving higher in post-noon trade.
The benchmarks hit their mid-session highs just before 2.00 pm with the Nifty touching 4,938 and the Sensex rising to 16,298. The indices pared all their gains in the last half hour as the weakening rupee weighed on the sentiments and ended flat. The Nifty closed 15 points up at 4,906 and the Sensex gained 31 points at 16,183.
The advance-decline ratio on the NSE was 1043:579.
The broader indices outperformed the Sensex today. The BSE Mid-cap index rose 0.41% and the BSE Small-cap index gained 0.99%.
The top sectoral indices were BSE Capital Goods (up 1.96%); BSE Realty (up 1.90%); BSE Power (up 1.27%); BSE Bankex (up 1.08%) and BSE PSU (up 0.64%). The laggards were BSE IT (down 1.19%); BSE Fast Moving Consumer Goods (down1.17%) and BSE TECk (down 1%).
Tata Power (up 4.49%); State Bank of India (up 3.37%); Maruti Suzuki (up 2.99%); BHEL (up 2.51%) and Coal India (up 2.41%) were the top five gainers on the Sensex. The losers were led by Wipro (down 2.21%); Infosys (down 1.71%); ITC (down 1.65%); Sterlite Industries (down1.19%) and Cipla (down 1%).
The Nifty toppers were Tata Power (up4.73%); Bank of Baroda (up 3.92%); Reliance Infrastructure (up 3.37%); SBI (up 3.27%) and BHEL (up 3.14%). The key losers were Wipro (down 2.62%); ITC (down 2.17%); Infosys (down 2.09%); Hindustan Unilever (down 1.50%) and Sterlite Ind (down 1.39%).
Markets in Asia, with the exception of the Hang Seng and the Jakarta Composite, closed in the positive on bargain hunting after the recent lows made stocks cheaper. However, fears still persist despite world leaders urging Greece to remain in the Eurozone.
The Shanghai Composite rose 0.16%; the KLSE Composite gained 0.42%; the Nikkei 225 advanced 0.26%; the Straits Times gained 0.40%; the KOPSI Composite surged 0.94% and the Taiwan Weighted settled 0.57% higher. Bucking the trend, the Hang Seng fell by 0.16% and the Jakarta Composite tanked 1.01%.
At the time of writing, the French CAC 40 and the German DAX were in the positive while the British FTSE was in the negative. At the same time the US stock futures were in the positive.
Back home, foreign institutional investors were net sellers of shares aggregating Rs248.93 crore on Friday while domestic institutional investors were net buyers of equities totalling Rs148.94 crore.
Essar Oil today said it has signed an agreement with engineering and construction company Larsen & Toubro (L&T) for supply of high quality bitumen. As per the agreement, Essar Oil would supply high quality bitumen from its Vadinar oil refinery in Gujarat to roads L&T is building in the state. Essar Oil gained 0.60% to close at Rs50.55 on the NSE.
Godrej Consumer Products has set an ambitious target of growing 10 times over the next 10 years from its current turnover of over Rs4,850 crore through acquisitions as well as normal expansion in both domestic and international markets. The stock declined 0.78% to close at Rs550.50 on the NSE.
The micro irrigation company is facing slowing sales growth, increasing delay in release of government subsidy receivables and consequently high working capital and high interest cost and yet has committed an investment of $375 million in sub-African countries
Jalgaon-based Jain Irrigation Systems has said that it has committed investments and projects of $375 million over next few years in sub-Saharan Africa. However, from where will it get the money, still remains unanswered. This is odd because, the company has huge debt on its balance sheet in India and has not been paying its dues to the banks. Even its receivables for FY11-12 were 343 days, which means the company has yet to receive cash for its sales done almost a year ago.
Especially, when we look at Jain Irrigation’s fourth quarter results, the situation becomes serious. The company had shown a 59% increase in its net profit to Rs173 crore for the quarter to end-March. However, this has come due to lower tax rate, availment of tax holiday and tax benefit write back from earlier years, in addition to a forex gain of Rs15 crore. Its standalone net sales remained muted at Rs1,237 crore during the fourth quarter.
Shares of Jain Irrigation have already been corrected by over 50% in the past one year on account of balance sheet concerns, its move to launch a finance company and worries of slower growth. Even today, its shares are trading at Rs76, somewhat closer to its 52-week low.
During the quarter to end-March, Jain Irrigation's micro irrigation business (MIS) sales growth remained negative due to lower credit period to farmers and the company’s failure to reduce high receivables and increase cash collections, especially from Karnataka and Tamil Nadu. Its other businesses like pipe and agro products have also shown a muted performance during the fourth quarter. This also means that whatever figures the company has shown on its balance sheet, as revenues are yet to be realised and there is no fixed period for its realisation.
As on March 2012, Jain Irrigation’s consolidated and standalone gross debt stood at Rs3,800 crore and Rs2,800 crore from Rs3,700 crore and Rs2,800 crore as on December 2011. During the fourth quarter, receivables in its MIS, its high margin business, stood at 343 days as against 340 days in December 2011 and 355 days in September 2011 and the company is planning to reduce it to 270 days in near future.
The company has witnessed a challenging FY11-12 on account of slowing sales growth, increasing delay in the release of government subsidy receivables and consequently high working capital and high interest cost and depreciating rupee, resulting in mark-to-market notional losses due to long term foreign currency assets.