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2019

Regulation takes different forms in India. There are ordinances and statutes by the parliament or state legislatures; rules, circulars, orders, and schemes by executive agencies; and orders by the courts. As is commonly known, rule-making in our country is disorganised with new rules added on the fly, without review of existing regulation. The public consultations are rarely transparent. Consideration for costs and benefits, compliance burden, or regulatory coherence is a rare phenomenon. Our latest paper titled ‘How does India fare on Regulatory Hygiene’ is the first in a series of papers that will capture the lack of quality of regulation in India and suggest reforms. In this paper, particularly, we lay out India’s performance on global best practices on rule-making hygiene. Below is a summary of the findings.

Why should India care about regulatory hygiene?

India scored 3.5 out of 5 on the World Bank’s Global Indicators of Regulatory Governance (GIRG). Not surprisingly, a country’s performance on GIRG is closely tied to the Bank’s Doing Business rankings. 43 out of the top 50 countries in the doing business rankings score substantially higher than India on GIRG. These countries mandate rigorous measurement of regulatory costs and benefits, conduct public consultations, and periodic fitness check of rules on the books.

We argue that our aspiration to enter the ranks of top 50 on World Bank’s Doing Business index will only come once we move up on the governance reforms and institutionalise hygiene in our rulemaking process.

How does India fare on Regulatory Hygiene?

We examine how India performs on 5 parameters of regulatory hygiene:

  • Impact Assessment: Government of India and state governments do not measure the potential impact of regulations on entrepreneurs, enterprises or consumers. In the absence of ex-ante impact assessment, the government relies on anecdotes or lobbying, resulting in lopsided or reactive regulatory responses. Despite recommendations by multiple committees and a policy on pre-legislative impact assessment and consultation, government agencies do not conduct impact assessments.
  • Public Consultations: In India, there is no law that binds the government to consult the public before the enactment of a law, publish comments, or report the results of the consultation. As a consequence, the practice of soliciting comments and reporting on the results of public consultation is largely superficial. Only select ministries report on the results of consultation.
  • Language of drafting laws: India has, unfortunately, remained untouched by the plain English movement, initiated in several other parts of the world. The movement emphasises on simplifying language, decreasing complexity of laws, and consequently increasing their accessibility. Aside from a select few instances such as the ‘plain and simple’ technique of Indian Financial Code, most laws remain difficult to understand and out of reach for a majority of the population.
  • Ex-post review: An ex-post review ensures that any rule-set, after enactment, remains fit for purpose, cost-effective, and efficient. The GIRG asks four questions on post-legislative reviews, and India’s response to all is ‘NO’. India has currently over 850 Acts at the central level alone, many of which are redundant or archaic. Over the last five years, the union government has repealed 1,428 central Acts. While these initiative to repeal is a positive development, it is necessary that we put in measures to ensure that every Act, by design, is reviewed at a scheduled interval for its intended and unintended consequences.
  • Oversight on subordinate legislation: Most central and state acts subordinate rulemaking to the executive body, i.e., the state or central government. Through the use of judicial scrutiny, public consultations, and parliamentary reviews, the state ensures that delegated legislation does not exceed the scope of the parent Act. If this scrutiny on delegated powers is compromised, the doctrine of separation of powers between the executive, parliament and legislature that ensures that no one branch holds excessive power, is compromised.

While the Supreme Court of India has argued that the parliament maintains ‘strict vigilance and control’ over delegated legislation, research reveals that parliamentary control of delegated legislation is weak.

As evident from the lack of method in our rule-making apparatus, we are not prepared to cope with the demands of a fast-growing, largely informal and diverse enterprise environment. The political class and bureaucrats continue to favor minor tweaks as opposed to substantive reforms in the rulemaking process.

The convening of the Better Regulation Advisory Group by the Department of Industrial Policy & Promotion in February 2018 offered hope. The group was to report its findings within two weeks. However, one year and 10 months later, the findings of the committee are not published.

The ambitious goal of becoming a $5 trillion economy by 2025 can only be realised if the gaps in the rulemaking process are addressed. The approach of one good law at a time is no longer sufficient. The system should be redesigned such that every rule on the law book meets its objectives in the least harmful manner.

The paper will be published in the forthcoming issue of the West Bengal National University of Juridical Sciences’ Journal of Indian Law and Society.

2019

The report argues that street vendors who are expressly recognised and protected by the Street Vendors Act 2014 continue to be stigmatized as “encroachers” and face the usual official and unofficial consequences including extortion, harassment and evictions. State apparatus has not fully implemented the law in most states. Moreover, by evicting the vendors and creating novending zones before enumeration, state authorities as well as local administrations have been in clear conflict with the law. Unfortunately, the courts have mostly sided with the government and upheld evictions.

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2019

Street vending is typically self-regulated by informal but codified norms of space allocation. Vendors, in most cases, allocate/occupy spots based on the rule of first possession. Kettles (2006) argues self-regulation brings efficiency and reduces conflicts through the identification of “valuable” revenue-generating vending sites. For the administration, such self-regulation reduces the burden to identify and allocate vending spots. More importantly, formalising existing informal practices increases compliance, reducing the need for enforcement.

In this article, we deal with a question central to urban planning: How should the Indian government, in light of Street Vendors Act 2014, formalise and allocate of rights to public spaces?

Recap of Street Vendors Act 2014

The Street Vendors Act 2014 seeks to formalize the existing space allocation to a great extent instead of allocating de novo. It attempts to formalize all existing vendors and prohibits declaring existing natural markets into no-vending zones. The Act necessitates the formation of a local governance body, called the Town Vending Committee (TVC), responsible for the regulation of vendors. The Committee is mandated to survey all vendors and issue Certificates of Vending (CoV) to all identified vendors.

The central problem is ultimately determining a method to the madness around the use of public spaces such that interests of all parties, especially vendors, are met. Put another way, this requires some process to determine and assign user rights to vendors.

Formalising vendors will require formalising usufructuary vending rights

The Act approaches the question of assigning property rights, particularly user rights to a particular spot, to vendors in conflicting terms. On the one hand, Section 29(1) expressly declares that the Act confers no “temporary, permanent or perpetual right of carrying out vending activities in the vending zones allotted to him or in respect of any place on which he carries on such vending activity.”

On the other hand, section 5(1)(c), for example, mentions a condition of non-transferability for issuance of CoV. This condition prohibits the transfer of CoV, rent or even the place specified in the CoV to any other person. It implies, place of vending is ‘specific’ and it is to be specified in the CoV.

Three aspects of implementation require careful attention

First, while the Act protects existing vendors by requiring local governments to accommodate them until the upper limit of 2.5% of the local population is reached, it leaves the determination of holding capacity, applicable to new vendors, to the local authority. The principles the state government lays out in determining the formula for calculating holding capacity will determine how inclusive or accommodative the local government will be of new vendors.

Second, if the demand for CoV from existing vendors and new applicants exceeds the holding capacity, the Act suggests carrying out a draw of lots. While section 4(3) of the Act seems to equate existing and new vendors, we recommend prioritising existing vendors over new applicants. The manner in which state governments balance the demands of existing and new applicants, especially when it exceeds holding capacity and 2.5% of the population, have implications on vendor livelihoods and urban space management.

Third, the Act is ambiguous on whether or not to assign property rights to a specific spot to a vendor. There may be different ways to approach this: allocation of exclusive rights to a site to the vendor, allocation on the time-sharing basis (in a day, month, or season) or allocation of an area without specifying the vending site. Each of these policy choices has pros and cons, and has a bearing on the degree of vendor formalisation.

2019

Editor’s Note: The authors published a much more extensive report on the Street Vendors Act of 2014 titled “Progress Report: Implementing the Street Vendors Act 2014”available on Centre for Civil Society’s website at https://tinyurl.com/y4bywn6o. For more information about Centre for Civil Society, please visit their main website at https://www.ccs.in/.

Street vending is a source of livelihood for many urban poor, and of affordable and essential goods to the public. In India, stories of vendor harassment by the local administration as well as the police are ubiquitous. It appears to be less about vendor rights and more about the power that different actors exercise over public spaces.

One must look at the process whereby a new hawker enters the trade . . . Then starts the bargain with the local policeman, the municipal recovery inspector, the influential (known) hawker-cum-leader and even the local goon for permission to engage in hawking activity at a particular location . . . A similar negotiation takes place for erecting a hut in a slum locality…payment to be made to the slumlord (a volunteer of some political party)…expected to be a part of the vote bank of the concerned political party. Subsequent hafta payments continue unless the hawker becomes politically active, or joins the local mafia . . .(note 1)

There are several issues at the heart of the street vending debate and assigning rights over the use of public space is the most contentious. A vendor’s right to occupation, for example, conflicts with commuters’ rights to move freely. The central policy problem is managing such conflicting and competing interests of vendors, pavement users, local residents, vehicular traffic and urban space managers.

NOTES

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2019

Separation of Powers is one of the foremost principles of good governance, and states that the rule-maker, rule-executor and adjudicator should be distinct from each other. Such a separation installs checks against conflicts of interest and abuse of power by regulatory authorities and increases institutional accountability for outcomes.

We need to separate the functions exercised in governing the school education sector of India, particularly at the state level. A state government's Education Department is responsible for the construction of schools, teacher hiring and management, distribution of funds for school activities and formulation of state-level education policy.

The blueprint identifies three key-problems with the current governance structure:

  • Violation of natural justice;
  • Ineffective performance monitoring and rule compliance; and
  • Differential laws for government and private schools.

To address these three problems, the blueprint proposes separating the functions of service-delivery, assessment of learning outcomes, and adjudication of disputes (from the state departments of education) into three independent bodies.

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2019

Prior to the passage of the Right to Education (RTE) Act 2009, government registration or recognition of private schools was not mandatory in most Indian states. The Act has drawn heavy criticism for its impact on recognised and unrecognised private schools across India. Its uniform input-oriented regulatory approach does not pay attention to the fact that children from all socioeconomic classes attend private schools. Application of uniform principles to all schools, irrespective of the fee charged, ignores the costs of compliance with the mandated input norms, and the implicit penalty imposed on low-income parents. Worst of all, the enforcement of the Act threatens to shut down well-performing schools who may not have the means to comply with input norms.

Nearly 10 years after the passage of the Act, we are yet to have credible estimates from the government on the regulatory impact of RTE, particularly on children attending low-fee private schools.

Against this backdrop, the report provides estimates on the extent of school closures as a result of enforcing private school recognition norms prescribed under RTE.

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2019

The debate on low learning levels has spurred several actions by the state. India has enrolled to participate in the 2021 round of PISA. The NCERT has defined grade level learning outcomes for languages (Hindi, English, Urdu), mathematics, environmental studies, science and social science up to the elementary stage. NITI Aayog is developing an index to `institutionalise the focus on improving education outcomes' including learning, equity and access based on information generated by NAS, the largest national assessment survey in the country. NAS coverage has been expanded to include government-aided schools and the sampling unit is changed from state to district level. The moot question is: Are these reforms sufficient to bring improvement across schools or are we still just tinkering at the edges?

Taking note of the crisis and recent developments, this brief urges the government to use the power of information to strengthen its ability to hold individual schools accountable, parents' ability to choose, and schools' ability to improve.

For more information on the project, to share your feedback or to get involved, get in touch with us at research_feedback@ccs.in.

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2019

An estimated one crore people in India rely on street vending for their livelihoods, supplying affordable and essential goods to the public and contributing directly to economic growth. However, they operate in public spaces over which different stakeholders claim contrasting and competing interests. In addition, a lack of clarity on their rights encourages informal governance and allows local authorities to benefit from flourishing channels of rent-seeking.

The Central Government, in a landmark event, enacted the Street Vendors Act 2014 with the objective of protecting and regulating the street vendors of the country. The Act mandates states to create rules, schemes and local governance structures, in consonance with the spirit of the Central Act, to legitimize the rights of vendors.

This report evaluates the progress made in institutionalizing mechanisms to protect and regulate vending since the past four years. There are three parts to the report: a look at the interpretation of the Act by the Higher Courts, a statistical capture of the progress by states in implementing the Act, and a case study of two urban cities to explore how the new Act is reshaping urban space management.

Through an analysis of 57 court judgements, RTI responses on 11 questions from 30 states, and review of orders and meeting minutes of 2 Town Vending Committees, we found that the Act notwithstanding, vendors continue to be excluded from critical urban space management decisions. Four years after enactment, progress across the board on implementing the mandate of the Act is sluggish.

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2019

The government has the power to write rules, apply standards, recognise schools, withdraw recognition, and resolve disputes. Our paper teases out the discretionary powers conferred to the state governments for the regulation of education. We study the use of discretionary powers at three touchpoints—the government as a licensor, fee regulator and inspector of private schools.

What did we find?

We find evidence of excesses in the exercise of discretionary powers by the executive—the state education department. Below, we have listed a few instances:

Rigid and intrusive rules that some would argue are ultra vires: There are three key regulatory requirements to open a school in Delhi (Figure 1). Rule 44 of Delhi School Education Rules 1973 authorises the state Administrator to decide if the new school is necessary for the area. This objective has taken the form of an Essentiality Certificate. The Essentiality Certificate, however, does not have a statutory basis in Delhi School Education Act 1973, nor in the Right to Free and Compulsory Education Act 2009.


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Figure 1: Three regulatory requirements needed for opening a school in Delhi

Proving that a school is essential in an area does not feature in DSEA 1973 or RTE 2009. It only finds a mention in DSER 1973, a glaring instance of quasi-legislative discretionary excess.

Ad-hoc and arbitrary rule-making: Rule 192 of DSER 1973 states that every inspection should 'be as objective as possible'. A close reading of the proforma that objectivity is a far fetched dream, especially when it comes to academic supervision.

Figure 2 highlights some of the constructs used to evaluate the academic quality of the school.

The first principle of a good questionnaire is to avoid ambiguous/abstract and loaded terms. The question "Were the questions put to the students thought-provoking and well-distributed?" is an example of the former and "Is it (homework) regularly corrected and followed-up?" is an example of the latter.

The absence of objective measures and defined standards for compliance raise many questions: Is evaluation solely dependent on the interpretation of the inspecting officer? If a school gets positive notes on some aspects and negative on others, where does that leave a school? Are reports of different schools comparable?

Poor procedural fidelity and absent transparency on procedures followed: Higher courts in India have in many judgments pronounced an aversion to the commercialisation of education but allowed schools to retain a 'reasonable surplus'. By default, the determination of what would count as a reasonable surplus is left to the administrative machinery.

In 2018, the Directorate of Education in Delhi passed an order instructing all districts to form a Fee Anomaly Committee, as a forum to attend to the complaints of parents. Yet, Fee Anomaly Committees have either not been formed or are defunct.


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Figure 2: Inspection proforma — Constructs evaluated and ways of measurement

Parents report that officials often fail to register complaints or take punitive action against schools who do not comply with orders. Given the lack of any codified procedure for processing complaints and limited transparency, it is often difficult for parents to establish a clear complaint trail and follow up.

The Uttar Pradesh Self-Financed Independent Schools (Fee Regulation) Act 2018 regulates fee for schools that charge an annual fee of over Rs 20,000. We found that the fee regulation committees only make decision summaries of its decisions available rather than the full minutes.

Inconsistent and subjective exercise of punitive measures: Section 24(3) of DSEA 1973 authorises the Director to issue instructions to the school manager 'to rectify any defect or deficiency found at the time of inspection or otherwise in the working of the school'. If the 'manager fails to comply with any direction given', then the Director may take any action including— (a) stoppage of aid, (b) withdrawal of recognition, or (c) except in the case of a minority school, taking over of the school'. From this, two challenges emerge.

First, the Director has a free hand in taking any action as deems fit to her if a school fails to comply with any direction. Further, there is no escalation—one mistake and your recognition may be at risk. Second, implementation is skewed—although the Act gives the power to the Director to act as she wishes, measures higher up on the penalty ladder are rarely used.

Learnings for future

Part of these excesses is borne of the lack of documented guidance on how the department should exercise its functions. Others are violations of the letter of the law, sometimes for the understandable reason of limited state capacity. These necessitate the establishment of norms that constrain the actions of those in positions of authority and determining who should be accountable to whom and for what (Posani and Aiyar 2009).

The administrative architecture needs to distinguish and separate the government's role as regulator, service provider, financier, and assessor. Even if full functional separation is a long term endeavour, an independent grievance redressal mechanism is an immediate need to balance executive discretion (Centre for Civil Society 2019).

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