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Insights Daily Current Events, 28 January 2015

Insights Daily Current Events, 28 January 2015

Wage code to replace all related laws

The government is planning to introduce a “wage code.”

  • It will replace Central laws pertaining to wage related matters and cover both the organised and the unorganised sectors.
  • The new “wage code” once finalised will subsume key laws, including the Minimum Wages Act 1948 and the proposed Minimum Wages (Amendment) Bill, 2013.

Aim of the wage code: To reduce the number of laws employers have to comply with.

The wage code will set basic provisions related to payment of wages and bonuses. Once this is finalised, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976, will no longer be in place.

Previous attempts and present situation:

  • The United Progressive Alliance (UPA) in 2012 as well as the NDA government last year had proposed a statutory National Floor Level Minimum Wage (NFLMW) which will make it binding for all State governments to pay the minimum wages specified for various economic activities.
    The NFLMW was based on the 1991 recommendations of the National Commission on Rural Labour.
    NFLMW is a non-statutory measure.
  • The National Minimum Wages Act, 1948, lays down minimum wages for 45 listed economic activities. But since labour is a subject in the concurrent list, States can decide minimum wages for more than 1,600 economic activities. Wages paid to workers is frequently less than the specified rates. The Equal Remuneration Act, 1976 provides for equal wages for women and men workers for the same work.
  • As per the existing provisions of Minimum Wages Act, minimum wages are revised quinquennially in the Central Sphere. In order to protect the minimum wages against inflation, the Central Government introduced the idea of Variable Dearness Allowance (VDA) since 1989. The appropriate Governments are required to increase the minimum rates of wages from time to time by adding VDA, twice a year or annually, taking into account the rise in the Consumer Price Indices for the Industrial Workers.

Sources: The Hindu, PIB.


EC warns Kejriwal of ‘stern action’

A notice has been issued to Aam Aadmi Party (AAP) leader Arvind Kejriwal by the Election Commission of India (ECI) for violating the Model Code of Conduct (MCC).

What is MCC?

These are the guidelines issued by the Election Commission of India for conduct of political parties and candidates during elections mainly with respect to speeches, polling day, polling booths, election manifestos, processions and general conduct.

Aim: To ensure free and fair elections.

When it comes into force?

The Model Code of Conduct comes into force immediately on announcement of the election schedule by the commission.
The Code remains in force till the end of the electoral process.


  • The need for such code is in the interest of free and fair elections. However, the code does not have any specific statutory basis. It has only a persuasive effect.
  • It contains what is known as “rules of electoral morality”. But this lack of statutory backing does not prevent the Commission from enforcing it.


  • The Commission issued the code for the first time in 1971 (5th Election) and revised it from time to time.
  • This set of norms has been evolved with the consensus of political parties who have consented to abide by the principles embodied in the said code and also binds them to respect and observe it in its letter and spirit.

The salient features of the Model Code of Conduct lay down how political parties, contesting candidates and party(s) in power should conduct themselves during the process of elections i.e. on their general conduct during electioneering, holding meetings and processions, poll day activities and functioning of the party in power etc.

Sources: The Hindu, ECI, Wiki.


India appeals to DSB over import of U.S. farm products

India has appealed to the Dispute Settlement Board of the World Trade Organization (WTO) for a panel decision on its issues with the U.S. over agricultural imports.


  • India had in 2012 imposed some prohibitions with regard to importation of various agricultural products from the U.S. because of concerns related to Avian Influenza.
  • This import prohibition is maintained through India’s Avian Influenza (AI) measures, mainly, the Indian Livestock Importation Act, 1898.
  • The U.S. contended that India’s AI measures amounted to an import prohibition that was not based on the relevant international standard or on a scientific risk assessment.

Panel’s view:

The dispute settlement panel (DSP) had ruled that India’s AI measures were inconsistent with the Sanitary and Phytosanitary (SPS) agreement because they were not based on the relevant international standards. India claimed that the panel committed several legal errors in its interpretation and application of numerous articles of the SPS agreement.

Sanitary and Phytosanitary Agreement:

The Agreement on the Application of Sanitary and Phytosanitary Measures, also known as the SPS Agreement, is an international treaty of the World Trade Organization. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO at the beginning of 1995.

  • Under the SPS agreement, the WTO sets constraints on member-states’ policies relating to food safety (bacterial contaminants, pesticides, inspection and labelling) as well as animal and plant health (phytosanitation) with respect to imported pests and diseases.
  • The SPS agreement is closely linked to the Agreement on Technical Barriers to Trade, which was signed in the same year and has similar goals.
  • The SPS agreement gives the WTO the power to override a country’s use of the precautionary principle – a principle which allows them to act on the side of caution if there is no scientific certainty about potential threats to human health and the environment. Under SPS rules, the burden of proof is on countries to demonstrate scientifically that something is dangerous before it can be regulated.

Sources: The Hindu, PIB, WTO.


Fog hangs over nuclear “breakthrough”

U.S. nuclear suppliers have neither been informed of the details of the “breakthrough understanding” achieved in the India-U.S. civil nuclear agreement nor has a date been set to brief them on how the publicly funded insurance pool will satisfy the vendors on their concerns over Section 46 of the Indian Civil Liability for Nuclear Damage Act.

  • The breakthrough achieved during the discussions could operate through a memorandum of law within the Indian system.
  • The breakthrough was a necessary step to give U.S. nuclear suppliers confidence that the insurance pool would help them meet the obligations, implied by Section 17(b) in the event of a nuclear accident.
  • Ambiguity on this matter stems from the fact that typically it is only the Indian Parliament that enacts statutes and it is either Parliament or courts that are empowered to interpret them.
    Questions are also being raised on how a memorandum of law could supersede the statute.

Section 17 (b) says the operator (NPCIL) has the right to recourse against suppliers in case of a nuclear accident, clause 46 says suppliers can be sued under other Indian laws as well.

Nuclear Liability Act:

Aim: The Act aims to provide a civil liability for nuclear damage and prompt compensation to the victims of a nuclear incident through a nofault liability to the operator, appointment of Claims Commissioner, establishment of Nuclear Damage Claims Commission and for matters connected therewith or incidental thereto.

  • After this Act was passed, India became a member of the international convention on liability in the civil nuclear arena.
  • The Act effectively caps the maximum amount of liability in case of each nuclear accident at 5 billion to be paid by the operator of the nuclear plant, and if the cost of the damages exceeds this amount, special drawing rights up to 300 million will be paid by the Central Government.
  • The Act made amendments in the Atomic Energy Act 1962 allowing private investment in the Indian nuclear power program.
  • Motive of the Act is to legally and financially bind the operator and the government to provide relief to the affected population in the case of a nuclear accident.

Sources: The Hindu, Wiki, PIB.