Governors cannot sit on Bills passed by House: SC

  • November 11, 2023
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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Governors cannot sit on Bills passed by House: SC

Subject : Polity

Section: Federalism

Context:

  • The Supreme Court on Friday laid down that a Governor cannot sit on key Bills passed by  a State Legislature after casting doubts on the validity of the Assembly session in which the proposed laws were passed with overwhelming majority by the elected representatives of the people.

The process of granting assent to Bills:

  • Article 200 of the Constitution covers the options before the Governor when a Bill passed by both Houses of the Legislature is presented to him.
  • The first provision to the Article says the Governor could either:
  • declare his assent to the Bill or
  • withhold the assent (if it is not a Money Bill) or
  • reserve the law for the consideration of the President if he thinks the Bill derogates from or endangers the power of judicial review of the High Court.
  • In case the Governor chooses to withhold assent, he should return the Bill as soon as possible with a message requesting the Legislative Assembly to reconsider the proposed law or any specified provisions or suggest amendments.
  • The Assembly would reconsider and pass the Bill, and this time, the Governor should not withhold his assent.
  • In short, the constitutional head of the State would bow to the considered decision of the elected representatives of the people.

Do Governors have discretion?

  • Governors did have a discretion to return Bills before the first provision in the draft Article 175 (now Article 200).
  • This was amended by the Constituent Assembly in 1949.
  • The first provision to Article 200 is thus a saving clause and retains the discretion over the fate of the Bill solely in the hands of the State Cabinet.
  • Article 163 makes it clear the Governor is not expected to act independently.
  • The Supreme Court in the Shamsher Singh case verdict has held that a Governor exercises all his powers and functions conferred on him by or under the Constitution on the aid and advice of his Council of Ministers save in spheres where the Governor is required by or under the Constitution to exercise his functions in his discretion.
  • The assent or return of the Bill does not involve the discretion of individuals occupying the Governor’s post.

By when should Bills be returned?

  • The first provision of Article 200 says it should be “as soon as possible”.
  • The Constitution is silent on the time duration of the bills to be returned to state legislative assembly by the Governor.
  • The Supreme Court has interpreted “as soon as possible” in the provision to mean “as early as practicable without avoidable delay” in a 1972 judgment.
  • The SC in its 2020 judgment in the Keisham Megha Chandra Singh case, said a ‘reasonable time’ would mean three months.

MSME Economic Activity Index – Sumpoorn

The collaboration between Jocata and SIDBI has resulted in the launch of the MSME Economic Activity Index – Sumpoorn.

This high-frequency indicator is designed specifically for MSMEs (Micro, Small, and Medium Enterprises) and aims to provide insights into India’s economic growth engine.

MSMEs contribute significantly to the country’s Gross Value Added (GVA) and total exports.

Key features of the MSME Economic Activity Index – Sumpoorn:

  1. MSME Focus: This index is tailored to capture the state of India’s MSMEs, which play a crucial role in the economy.
  2. High-Frequency Indicator: The index is a high-frequency indicator, allowing for more timely and frequent insights into the performance of MSMEs.
  3. Data Source: It utilizes consent-led and anonymized monthly sales data from over 50,000 credit-seeking MSMEs, reflected in official GSTN returns.
  4. Relative Amplitude-Adjusted Composite Diffusion Index: The index is described as a relative amplitude-adjusted composite diffusion index, suggesting a comprehensive measure that considers various factors.
  5. Development Team: A team of credit experts, data scientists, and senior economists have been involved in building and tracking the index over the past four years to ensure its accuracy in representing the MSME economy.

The MSME Economic Activity Index – Sumpoorn aims to provide a more accurate and timely reflection of the MSME sector’s performance, capturing the impact of macroeconomic conditions.

Small Industries Development Bank of India (SIDBI):

  • Establishment: SIDBI was established in 1990 as a wholly-owned subsidiary of the Industrial Development Bank of India (IDBI).
  • Statutory Body: It operates as a statutory body under the Department of Financial Services, Ministry of Finance, Government of India.
  • Headquarters: The headquarters of SIDBI is located in Lucknow, Uttar Pradesh, India.
  • Mandate: SIDBI’s primary mandate is to promote and develop Micro, Small, and Medium Enterprises (MSMEs) in India. It plays a crucial role in the growth and development of the MSME sector by providing various financial and support services.
  • Functions:
    • Facilitating the flow of credit to MSMEs.
    • Acting as a principal financial institution for coordinating the functions of institutions engaged in the financing of MSMEs.
    • Implementing various promotional and developmental measures to strengthen the MSME sector.
  • Programs and Initiatives: SIDBI runs several programs and initiatives to support MSMEs, including credit guarantee schemes, refinancing schemes, and venture capital programs.
  • Regulatory Role: SIDBI is involved in the overall licensing and regulation of Micro, Small, and Medium Enterprise finance companies in India.

SIDBI’s efforts are crucial for the inclusive economic development of India by fostering the growth of small and medium-sized enterprises, which play a significant role in employment generation and industrialization.

GDP v/s GVA

Gross Value Added (GVA) and Gross Domestic Product (GDP) are key indicators used to measure the economic performance of a country.

  1. Gross Value Added (GVA):
  • Definition: GVA is the total value of goods and services produced in an economy minus the cost of goods and services used up in production.
  • Calculation: GVA = Gross Output – Intermediate Consumption
  • Purpose:GVA provides a measure of the contribution of individual sectors (agriculture, manufacturing, services, etc.) to the overall economy. It is often used to analyze the performance of specific industries.
  1. Gross Domestic Product (GDP):
  • Definition: GDP is the total value of all goods and services produced in a country within a specific period. It includes the production by both domestic and foreign entities within the country’s borders.
  • Calculation: GDP can be calculated using three approaches:
    • Production Approach: GDP = GVA + Taxes on Products – Subsidies on Products
    • Expenditure Approach: GDP = Consumption + Investment + Government Spending + (Exports – Imports)
    • Income Approach: GDP = Compensation of Employees + Gross Operating Surplus + Gross Mixed Income + Taxes on Production and Imports – Subsidies
  • Purpose:GDP is a comprehensive measure of a country’s economic performance. It reflects the total economic output and is widely used to compare the economic health of different countries.

In summary, while GVA focuses on the value generated by different sectors of the economy, GDP provides a broader measure of the overall economic activity within a country.

Governors cannot sit on Bills passed by House: SC Polity