90. On the House: Ask any question you want.

Ask any question you want. We will try to answer it for you. The question must not exceed twenty words.


114 thoughts on “90. On the House: Ask any question you want.

  1. Was the Governor General in Council an office or was it a body of members comprising the Governor General himself and his Executive Council?

  2. I understand the terms “head of state”, “monarchy” and “republic”. But what exactly is “constitutional head”?

    1. Constitutional Head means the person designated as the Head of State by the Constitution. In the USA the President is the Constitutional Head . According to the US Constitution he is both the Head of the State as well as the Head of Government. In India the Constitution designates the President of India s the Constitutional Head but it also says that he shall act according to the advice of the Council of Ministers. This means that he is only the Head of State but not the Head of Government. The PM is the Head of Government.

  3. Is the President obliged to adhere to the recommendation of the Prime Minister and his Council of Minister for the appointment of the Governor of States?

    1. Yes. He can ask whether the recommendation has been approved by the Council of Ministers. If he wants he can ask the Council to reconsider the recommendation. But if the Council reconsiders the proposed person’s name and asks the President to appoint him, he has to. He cannot refuse.

  4. what is the meaning of judicially established in “though it was judicially established that the President of India was not a real executive”. what is the difference between judicially established and law established through legislature?

    1. The Judicially established decision is binding. If it is established by the legislature, any person can go to the Court and challenge what the Legislature has passed. Thus is because the Legislature WORKS according to the Constitution while the Judiciary UPHOLDS the Constitution.

      1. Sir,
        What if the Supreme court makes a mistake?
        Judicial Activism in India has reached a new high (Though welcomed by the general public !)
        Recent Court order on interlinking of rivers is a case in point.This decision should have been taken after weighing the engineering,political,social aspects of the project.The court has a lot of skills in the legal subject,but what does it know about water engineering?sociology of rehabilitation?economics of project management?
        We know a lawyer arguing a case will cite precedents from earlier cases.
        So,can the Supreme court retract its own judgement if found to be impractical?
        How far does the power of judiciary reach?
        Can it like,the Pakistani Supreme Court remove from office a democratically elected politician on charges of contempt of court?
        If it can do as such,then isnt it a rule by the judges rather than a democracy?

        1. Reply to Hirak:
          If a Single judge decides in a manner that you feel is wrong, you can request the CJ for a Division Bench and if there is disagreement in the Division Bench , the matter is referred to a Full Bench (composition decided by the CJ). And there can be no further appeal. The decision of the SC is final. Judgements of the Supreme Court constitute the FINAL LAW OF THE LAND.

          Parliament can amend the constitution by the requisite majority learn the process of Amendment: (art 368) but if the Supreme Court thinks it is against the Basic Structure of the Constitution, it can strike down the amendment. (Learn the Basic structure of the Constitution) Note on my Del Desk top.

          The Supreme Court had before it a large number of reports on Interlinking and a Cabinet Decision taken by the Vajpayee Government. The SC does not act just like that. Your point is not well taken.

          Yes’ A Division Bench can quash the judgement of a single Judge and the Full Bench can strike down a judgement of the Division Bench.

          It can send him to jail for Contempt of Court.

          It is not a rule by the Judges. We the People of India have enacted and adopted the Constitution. We have declared in the Constitution that while all authorities have to WORK ACCORDING TO THE CONSTITUTION, the SC has to UPHOLD THE CONSTITUTION.. And the people of India have laid down a definite procedure for amending the Constitution.

          1. And Hirak again: No body except the PEOPLE OF INDIA is supreme. Parliament and the Executive have to work according to the Constitution.
            The Judiciary is not supreme since they have to UPHOLD the Constitution. And if they break it, they can be impeached. We have one of the finest constitutions in the world. Remember Dr. Ambedkar’s words: IF THE CONSTITUTION HAS FAILED, IT IS THE PEOPLE WHO WORK HAVE FAILED.


          2. Sir,

            As Hirak ,has mentioned the decision of the interlinking of the river should have been taken weghing the technical and social aspects. If I am not wrong in your lecture Adminitrative Adjudication you have mentioned that court or jury may not know the technical aspect so these sort of cases must be discussed by the administration. Why this
            case is being dragged to the courts.?

  5. when President doesn’t have any independent executive powers, what is the meaning of President’s pleasure in “the Prime Minister holds office during the pleasure of the President”

    1. Dear Mithun

      The problem arises when the President feels that the PM does not have a majority in the Lok Sabha. In such a case he can ask the PM to prove his majority in the Lok Sabha and the President summons the Lok Sabha for this purpose. If the PM fails to prove his majority, he has to resign. The President thereupon calls any person he thinks has a majority and appoints him PM and asks him to prove his majority in the Lok Sabha.

      1. But the President summoning the Lok Sabha is again subject to the advice of the Council of Ministers and the PM being the first among equals therein, the President can never exercise this power. How can this be resolved?

        1. Such an instance did actually occur during Charan Singh’s tenure. He had support of 64 MPs and he was in office for barely a month and did not face parliament even once.

          1. Dear Pabithra

            Since there can never be a President’s rule in the centre, the President must explore all possibilities. Charan Singh met the President and said that will prove his majority. How could the President refuse him an opportunity?


        2. Dear Aravind

          The President can summon the Lok sabha only when he thinks that the PM does nave the majority. Otherwise he has to go by the advice of the PM.
          I do not understand the part’ ‘the PM being the first among the equals’ etc.,I do not see the frelevance of this sentence in your question.

    2. The President can withdraw his pleasure and dismiss the PM if the latter loses his majority. It is the President who decides which party or coalition of parties has the majority and call upon its leader to form the Government. At any moment, the President can demand the PM to prove his majority on the floor of the Lok Sabha. (Same pattern in the States. Governor Bharadwaj asked Yediyurappa to prove his majority)

  6. Article 77 :
    Orders and other instruments made and executed in the name of the President shall be authenticated in such manner as may be specified in rules to be made by the President, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the President.

    Doesn’t this article override article 74(1)?

    1. As the rules for authentication and procedure to be made by President will also be made according to advice of cabinet so it will not override article 74(1).

  7. Why cannot the Prime Minister be the constitutional head of the state? After all he is directly elected vis-a-vis president and commands the confidence of the majority of the people. In other words, why have a pseudo head of state when the head of the government can be renamed as the head of state?

    1. I think it is because there might be situation that there is no PM in country but as President will always be there (or VP, CJI, senior most judge of SC to take his place if required) so the there will never be constitutional crisis of not having head of govt. to keep running the system on the name of President according to ROL.

      1. Dear Gaurav,

        I suggest that you post questions in the relevant blog.

        Actually there is never an occasion when there is no PM. There can be no PRESIDENT’S RULE in the country. If the President feels that no one is able to form the Government, he can ask the present incumbent to continue and dissolve the Lok Sabha and ask the Election Commission to hold elections to a new Lok Sabha

        Hence the question of VP or CJI or any Judge acting as PM does not arise.

        Dear Gaurav: you have to read the basics of the Constitution carefully. So ask more questions and clear all your doubts


        1. I did not mean that VP or CJI or any Judge can act as acting PM; I meant they can act as acting President in case of resignation or death of current President so that there is always a President.

          Coming back to question, if there can be never President rule and PM is always there then I think it is interesting question that why PM or CJI can be not constitutional head? Is it so as it is the President who appoints PM, CJI and other constitutional appointments?

        2. when a Government looses majority and no alternative party / parties is in a position to form the Government and are forced to go to elections, there will be a vacant space until the new Government is elected. During such a phase there might be situations where important time-bounding decisions need to be made and because there is distrust in Government, somebody should be there to take such decisions. Indian Constitution has given President of India the powers to pass Ordinance, through which constitution will be upheld and Government’s functioning will not be paralyzed.

          Correct me if i am wrong.

    2. Dear Aravind

      Who will then be the ceremonial Head of India; choose who commands the majority in the Lok sabha; dissolve the Lok sabha when Government loses majority etc.,? The President has a number of functions. Also does Mr. Manmohan Singh represent the whole population of India?


    3. Reply to Aravind



  8. Majority of tribes lives in forest and hilly region. In the name of development through mining, are we not exploiting their right to life and liberty? (After destroying forest and hilly region for mining, we are forcing tribes to lead an unnatural and unwilling life. If this continues then tribes may vanish)

  9. Article 111 does not prescribe any time limit for the president to give or deny assent to a bill. But read with article 74(1), isn’t it a conflicting situation? If the Council of ministers ask him to sign it within a prescribed time frame and he does not, will it be considered a violation of the constitution?

    1. Can the council of ministers impose a time limit on the president?
      One of the unwritten rules which is followed by the presidents is this delaying tactics.
      Can this tactic be taken away by the council of ministers?
      Or should there be a law enacted which says “The president has to sign the bill within the stipulated time”?
      In that case,the very purpose of a president,who is a quasi-ombudsman of the govt fails…

      1. I suppose that there will be a communication to the President in the form of a so-called ‘advice’ , which will have to be forcibly assented to. Or else, the existence of the Parliament becomes a farce. No legislation initiated in the Parliament can ever become a law. My question isthat is article 74(1) paramount with regards to the curbing of the powers of the president?

    2. Legislative powers of the President are bound be carried in accordance with Article 74(1), in such a case veto power of President on a bill [Article 111] should be carried out in accordance with 74(1)[following the advice of council of ministers], because it comes under legislative power of the President.

    3. Dear Aravind

      While he can sleep over the Reserved State Bills, he cannot do so in regard to Union Bills. The Union Council of Ministers can demand that he sign the Bill in question. If he still does not, there is a Constitutional Crisis and Parliament can impeach him. But if it is evident that there is no majority for impeachment, the PM can put the President in a spot by resigning. And then the President has to call him back again since he has the majority.

      Please read Dr. Ambedkar’s remark cited in mu reply to Hirak above.

    1. The entire idea of a transferable vote is to ensure that it carries equal weightage, irrespective of the order of preference in which one votes for a list of candidates( In the first past the post system, you have one vote without an order of preference- so you will have to vote for just one candidate). A single transferable vote is useful when you have a proportional representation system. A quota(no of votes) is earmarked for one to be considered to be elected and once the quota is fulfilled, the same vote ( which in the first past the post system would have been appropriated to the same candidate as there is no order of preference) will be appropriated to the candidate who is second in choice .

    1. They are both statutory bodies (like the planning commission) an not constitutional bodies. In fact, the cabinet itself is not a constitutional body.

      1. Aravind again’

        They are NOT Statutory bodies but only adhoc bodies.
        As regards the Cabinet, the Constitution speaks only of the Council of Ministers. The small group of ministers which goes by the name of Cabinet exists according to Convention since the Council of Ministers is too large a body to meet and take decisions.


    2. Dear Gaurav

      They are only Committees appointed by the PM and are entirely subordinate to him. They have no legal stautus. They are described in legal terminology as extra-legal (not illegal)


  10. Is it a matter of convention that if budget or any other bill fails to pass in Lok Sabha then the cabinet resigns or is it a constitutional requirement ?

    1. It is not a convention but more of a constitutional requirement though not worded in the constitution per se. What the constitution does say is that a government can stay in power as long as it enjoys majority in the house of the people. So, it is evident that when you dont, you have to resign. The budget or a bill not getting passed is a clear example of lack of confidence in the PM and his cabinet.

    2. Dear Gaurav

      Your questions are both intelligent and you are sensible enough to ask them. While others are silent and are either afraid to ask or just plain lazy. Remember, Gaurav, that it is students like you that make an Institution successful.

      I only wish that all study this page well. Incidentally , don’t you think that this page is more useful than the class itself?

      And now answer to your question: Before a vote on a Bill or the Budget is taken, the Whips of the various Parties issue three line whip:( You are required to be present at such and such a time when such a Bill is coming up for vote. You shall vote as directed.. If you disobey the whip, please note that under the Representation of the People Act, your action will be taken as Defection and you stand expelled from Parliament). Under these condition, you realize that unless members are prepared for the PM recommending dissolution, they will vote for the Bill. The PM has the power to recommend dissolution if his own party men vote against the Bill.

      Voting against a Government Bill by the Majority Party members is political suicide.


      1. Sir, ideally when any member votes for or against a bill, it essentially means that he is representing the voices of people from his / her constituency, but as we see the reality is every vote is driven by party’s ideology (which is more a political decision than ideology). In such a situation where is the real representation of people happening, which is the fundamental aspect of Democracy, is this not anti-democracy? is this not anti-constitutional (which constitutes the functioning of democracy).

        For example: In Lokpal bill, focus was on whether parties (BJP, Congress etc) are FOR / AGAINST lokpal, where are the voices of individual members?

        Even if a party says that the the choice is made based on majority, it still defies the purpose of Democracy as the voices of the people whose representative is in minority side is not counted and these minorities in several parties combined may be a majority as a whole

        1. What we have here in India is not participative democracy. When a person is elected from a constituency, it just shows that he has the support/mandate of the people. It is taken for granted that his actions as a MP/MLA have the backing of the people. As you have mentioned, this does not fall in line with the true spirit of democracy and it is for the same reason, there is a huge cry for the implementation the right to recall. But at the same time, there is participative democracy( at the least on paper) at the grass root levels- the Panchayati Raj.

  11. Dear Sir, I am not able to understand meaning of this sentence – “decisional science envelopes decisional structure, decisions and their feedback not in an integrated manner but anything other than that.”

  12. Sir, can you shed some light on the Presidential reference that is happening with 2G case and any previous incidents of Presidential Reference.

  13. Sir,

    Article 80(1) states that, In the council of states, 12 members are to be nominated by the President from persons having special knowledge or practical experience of literature, science, art and social service. On what basis is Sachin Tendulkar nominated?

    1. This issue has already been under judicial review of High Court as a PIL has been filed. There is chance that it may be held unconstitutional unless sports can be interpreted as service to society or a form of art. Important aspect is Govt. of India got amendment to give Bharat ratna to sport persons as it has also same provisions then why they haven’t first went for the same process in this case in remain to be seen.

  14. If the candidates, whose state of domicile need not be the same as the place from where they are contesting an election to the Rajya Sabha, can be elected to the Upper House, isn’t the phrase “Council of States” a misnomer? How can Hema Malini be considered a representative of the state of Karnataka?

    1. There is a ruling by High Court of Uttarakhand which specifies that there is no such thing as domicile of a state. In law there is only one domicile and it is domicile of India. The domicile of states in my view is a dangerous issue being brought in recent times in educational institutes and recuritment in jobs. This puts the unity of India in jeopardy.

      Infact Article 5 of the constitution gives only one citizenship and article 16 prohibits discrimination on the grounds place of birth, residence.

      1. Though there is only one domicile, i.e., With reference to point mentioned by Aravind, the objective is to represent a state and its people. A local representative will be doing justice to the job and upholding the spirit of democracy. The domicile of states will be dangerous in scenarios highlighted by you and scenarios like rising demands of territorial division but i think it won’t be dangerous wrt Council of States, in fact it supports its objective.

        1. Dear Mithun

          See my answer to Pabithra. If Mahrashtra is for Marathis only and if Karnataka is for Kannadigas only, why the hell do you want a Federation?

          Actually what Aravind has in mind is since the Rajya Sabha is expected to represent the States, is it not better that a member of the Rs from Karnataka belongs to Karnataka. For this purpose and for this only domicile may be permitted.


        2. Reply to Mithun




      2. The domicile of a state in my view is important and makes sense not only
        in representation in Rajya Sabha but also in educational institutes . Because such a thing makes each state much more responsible for working towards self sufficiency.
        For Ex Bihar The number of students who migrate from Bihar to other parts of the country is huge problem which their state has to address.
        If these students had got proper facilities in their own state they would not have gone anywhere else and this would have helped their own state instead it is a huge problem of Brain drain in that state.

    2. I’ll paraphrase my question: If the Council of states is to be a body representing the interests of the states, isn’t it illogical if a person from J&K represents the state of Tamilnadu?

      1. Yeah I completely agree with Aravind’s conviction that surely it does not make any sense at all that Members of Rajya Sabha ( Which is meant to represent States at Center Level) should be anyone other than from that state. Quite obviously one may figure out that in a current situation where people hailing from a particular state are unable to represent it fairly, it would take a paramount imagination to conceive the fact that those who hail from other state would represent issues of other state at RS. Initially there was a minimum pre-requisite to protect the aspirations of state at national level by clearly defining in People’s Representation Act , which clearly said that people standing for election has to be a resident of that state. But later on, through amendment this provision was done away with to serve political favours to loyal sychophants by offering them RS seat. It is indeed immoral to even stand for a state about whom you know nothing. But not only Hema Malini, Ramjethmalani, Venkaiyah Naydu and many others have also got rewarded through this demeanising mechanism followed by todays’ political party.

      1. Sir,
        I believe domicile qualification is not required even for LS seat.
        How can Azharuddin get elected from Moradabad when he is from Hyderabad.

        Also, some seats are reserved for SC/ST..if there is a better candidate from some other place who can better represent SC/ST should he not be allowed to contest ?

  15. One of the qualification for a Presidential candidate is “He should not hold any office of profit”. What does “office of profit” mean? Some examples…

    1. To put in very simple terms, office of profit is one from which you draw a salary when you are already employed by the government in another office. Examples of office of profit can be understood by the exceptions more than examples themselves- MLA/MP is not an office of profit if you are a minister, although you hold an office of that of a legislator as well as a minister. If you are an auditor in the government and become a minister, the office that you hold as an auditor is an office of profit. So, in other words, to answer your question, the President of India cannot be an IAS officer as well at the same time. The office of an IAS officer will be considered as an office of profit.

      1. Thanks Arvind.
        Let me clarify my understanding here. Any official(CAG, Auditor General, IAS officer,etc) considered as the office of profit and if these officicals want to stand for Presidential election, they should resign first.
        And the elected/selected candidates (MPs, MLAs, MLCs) are not office of profit. How they are not considered as office of profit eventhough they get salaries. But, right thing is they should also risign their posts if they want to stand for Presidential election. Am I right? Why do they have to resign their current posts if they are not considered as office of profit?

    2. There is a lot of controversy. Parliament can declare that a certain office is an office of profit or not an office of profit. It is not necessary that one should draw an allowance from the post. Pranab Mukherjee himself declared in Parliament that ISI of which he was the Chairman was an office of profit. And now he says that it is not since he did not draw any salary. And again he says that he had resigned from it.
      Let us see what the Supreme Court will say about it.


  16. Sir,
    In the asset case of (the elephant rider) Mayawati, The CBI had filed two cases NO. 18 Relating to the taj corridor and case 19 Prevention of corruption act in 2003 as per the instruction of supreme court. CBI had investigated the case and had provided sufficient facts of the 50 fold rise in assets of Mayawati , No actions being taken hitherto. But suddenly after so many years the supreme court declared the investigation as Illegal. We all know what has happened, knowing all this why cant be there is something in the constitution which can keep a check on all this.
    This is the similar example what Hirak has given previously.
    But what is the solution to it? What is the future of India ?

      1. The basis on which SC has rejected the case are also understandable.
        SC says “We didn’t direct roving probe; scope of order limited to money released for Taj project”. Clearly CBI went overboard and tried gathering lot of information, which are correct, but, the purview of the case was only for the “TAJ Corridor issue”. Hence, as the authority/custodian to uphold the fundamental rights of citizens, SC’s verdict wasn’t surprising. A new case/FIR can now be filed on the issue of “misappropriation of assets” , but mayawati says she has got all the money through donations. If wealth through donations were to be questioned, many of present days “saints” and the lockers of all Political parties will come under scanner, hence i believe it will take more than will power of clean Govt to direct CBI to perform such a Probe. If it comes to SC, SC will do its duty in the right context.

  17. Sir,
    If a person holds a 100 rupee note,then the equal amount of surety should be present in the Reserve bank,maybe in gold or such equivalent internationally acceptable item.Question is,if we give that 100 rupee note to RBI,will we get that much value or less from the reserve treasury?
    What is inflation?what is deficit financing?

    1. I did not understand your question. What are you trying to convey here by saying ‘that much value’?

      Well, the actual meaning of inflation is to dilate. In economics, it is a dilation of prices of goods. The definition ‘too much money chasing too little goods’ is a specific case of inflation i,e, demand pull inflation. The other type is cost push inflation which is dependent on other factors such as rise in the prices of raw material, labour,etc.
      So, inflation need not necessarily mean that there is too much money that is circulating in the market. CRR, SLR and other monetary instruments employed by the RBI target demand pull inflation.

      Deficit financing is what Greece did beyond a point of no return and our own central government does regularly on a moderate basis. Deficit financing occurs when the expenditure is more than revenues and hence to compensate for the differential, borrowings are made. I think it is right now at 4.5%.

      1. Lets say the amount of money in circulation is X.The reserve bank has gold reserves in its coffers worth lets say Y.X should be equal to Y.What if,X outnumbers Y greatly?The 100 Rs Note promised by the RBI governer promises to pay the bearer the sum of one hundred rupees.This promise is guaranteed by the central government.Reserve Bank is established as the reserve for the money in circulation.Can this promise to the bearer be kept if the reserves are outnumbered by the circulation?in that case the cotton note we have which says that their value is 100 Rs,has actually the value 100*X/Y.Isnt this right?

        1. No. It is for this very reason why printing of currency notes by anyone except government is illegal. The government should and will take care of the amount of money in circulation, which as you have mentioned is equal to the value of gold reserves. That is why counterfeits pose a great threat to any country. You have given the answer.

    2. Reply to Hirak

      But the Reserve Bank does not seem to function that way. The value of money has depreciated. Defecit financing results when government borrows and spends. It has to repay some time. We do not have the Gold Standard. We depend on the wisdom of the RBI to have sufficient reserves. I shall post an article by next week on my Del desktop on Inflation. I found a PPT and have pasted it. An essay will be posted by next week


  18. My question is regarding the ordinance-making power of President . Can the president promulgate an ordinance when the existing government has failed to show the majority? If yes .

    Then,It is stated that President can only exercise this power on the advice of the councils of minister but as stated above there is no consensus.
    What possible measures can be taken in such situation?

    1. 1. The government falls when it fails to prove majority. Under this case, the president can call upon anyone else to prove his majority or can order fresh elections. The president can promulgate an ordinance when either of the two houses are not in session. REMEMBER THAT THERE CAN BE NO PRESIDENT’S RULE AT THE CENTRE. The existing government continues until a new government if formed, but it cannot pass any laws/ bills owing to the lack of majority.

      2. Advice of council of ministers is valid only as long as they enjoy the confidence of the people i.e. majority. Once they lose majority, they are no more ministers. The ordinance so promulgated will be placed before the new government and will be approved or dismissed. Now, I think the role of the president has become more clear.

    2. Reply to Chetan

      I have pasted a file on the ordinance making power of the President on my Del desk top. So long as government is in power, it means that it has majority. How do you say that he present government has no majority?

      Consensus may not exist. Those who oppose must show that they have the majority and then the government must go or recommend dissolution of the Lok sabha

  19. Sir,

    Can you explain what is a “private member bill” ? Is there any list specifies the subject matters on which a private bill can be introduced ?
    If a “private bill” can be introduced even to make a “constitutional amendment” then why was “Jan Lokpal bill” not introduced as a private bill by “Team Anna” ?

  20. Sir,
    What is meant by “secret sitting of House of Parliament” ?
    What is the requirement for this and who is authorized to call for it ?

    1. There have been no secret sittings of the House so far. Only the PM could request the President who will then summon the House/houses. I do not see in the near future any secret session

      Prof. Rao

  21. Today RBI introduces new category of NBFC’s. What is NBFC ? And How this measure is going to help us ? I am unable to understand. Pl help.

    1. NBFC are those financial institutions which are not allowed to take deposit from public. They find other sources to fund their operations such as wealth management, debt instruments etc. They provide services such as trading in stocks, commercial loans, portfolio management, financial market operations like participating in futures and options etc. The new category of NBFC-Factor is announced by RBI which will deal with “factor” instrument. Factoring means transfering a particular loan rights to some other institution at discounted price by the original lender. This may be beneficial for lenders, banks who can liquidate their loans. It may not bring very visible benefits to general public as such but such services brings better liquidity in the market hence benefiting indirectly public also.

      1. Dear Gaurav

        It is my good fortune that I have secured students like you. This is the object of the blog site: one helping the other. I do not know how I could have managed this massive enterprise without the help of students like you.

        Could you suggest any two topics, you find difficult or intersting in History on which I could conduct discussions?

        Prof. Rao

    2. I would like to add few points to what Mr. Gaurav Gupta has said.
      Factoring is a process where a business sells its accounts receivable (invoice) to a third party (called a factor) at a discount..

      For example, a shoe manufacturing company, say ‘ABC’ has manufactured 100 shoes, it sells 20 shoes to a retail store, ‘DEF’ at a total billing of Rs. 2,000. But the retail store will not pay to the manufacturer at the time of purchase, it pays at some later stage (probably after the goods are sold). Meanwhile, company ‘ABC’ needs some funds to expand its business and it is not in a position to take loans from Banks, one option what company ‘ABC’ has is to sell the invoice of company ‘DEF’ to a third party(factor) – ‘GHI’ which purchases the invoice at a discount price, say Rs.1,500. So now see what has happened, company ABC has got the money it has required and there is also no loan liability, but of course it is similar to getting Rs.1500 with an interest of Rs.500. Now the company ‘ABC’ is not responsible for the factor, ‘GHI’. It is upto ‘GHI’ to recover the money from the retail company, ‘DEF’.

      In the context of the new category, NBFC-Factoring, the NBFC opting for this category will play the role of company GHI in the above example.

      1. Dear Mithun

        I an very happy that discussion takes place among the students and not always with me. I am proud of you. Please continue. You should have understood by now the massive work undertaken by me. I am inspired by the likes of you and I feel happy that I have provided a platform for the likes of you. God bless you for assisting me. I fact since I have closed admissions , it is the blog site that is attracting students.

        Prof. Rao

  22. In the constitution there is no provision of Deputy Prime Minister or Deputy Chief Minister in state. SC has held that it is just descriptive post hence oath also divided in descriptive and official oath of secrecy. But Are there any privileges granted to deputy PM/CM legally or by rules or procedures ? (Like any order has to be vetted or counter signed by deputy)

    1. Dear Gaurav

      There is no provision for Dy PM or DY CM. But in our country sab to chalta hai. There was a talk of Dy PM1 and Dy PM 2 in the Janata regime and to day in Karnataka, we have two Dy CMs. They are just Ministers and nothing more. I fact the Constitution does not even speak of a Cabinet Minister. They are not illegal but they are extra-constitutional. Good question.

      Prof. Rao

  23. Sir,
    1.The amount of reserves held in RBI is a mix of Dollars,Gold and Silver.In what proportion are they maintained?
    2.What is Keynesian Fundamentals?

  24. Sir, What is the concept of “Growth poles” and “growth centers” and what is their role in regional planning?

    1. Gaurav,

      While trying to find the answer of your question, i came across Francois Perroux’s Concept of A Growth Pole.

      [link : http://www.sjsu.edu/faculty/watkins/poles.htm%5D

      growth pole is identified as an industry or probably a group of firms with an industry. Extreme Growth Pole can be a single firm or group of industries. (like Infosys in IT in early 90’s).

      Growth Centers can be linked to formation of “integrated development areas” or “one place providing organised and well built infrastructure facilities”. In Indian context since the fourth five-year plan we started experimenting with it.

      for e.g.: Technology park, SEZ’s in urban sphere.

  25. On Information Technology Act being a toothless tiger :

    Continuing to the discussion on the Assam Violence (leading to bangalore exodus), here are my perspective on how legally and intentionally we lack machinery and will to tackle such issues even in future.

    Currently section 69 (a) of IT act, has allowed govt to block or ban Web links or Handles (300 web pages were banned).
    Before blocking the websites/webpages Govt. issues notification to ISP, Network providers and Licensed internet providers. But for 21st Century blocking is in-effective phenomenon as websites are blocked at gateway level only, proxy can be used to acess the same websites.

    Information technology act (2008) faces dual criticism, while few call it tooth less tiger few call it an infringement into Citizens cyber life.

    Considering the impact of Bangalore, Chennai and Mumbai situation I will take only the “tooth-less tiger perspective” . It is need of the hour to include mobile, social , cyber crimes under the IT ACT. Currently almost all cyber crimes are booked under bailable charges and sections.

    How can we book a case against foreign firms and countries from where the data is originating?

    As per IT act (2000) , sec. 1 and 75 : Law applicable for any person or org, providing services to India based consumer. They can be prosecuted as a co-accused.

    Currently India is missing cyber security as national policy. Few Security analyst feel Cyber Army is call of hour. Imagine the fact that currently broadband penetration < 5%. if the number increases (which will surely increase in future), anti-national activities through virtual space will have much more deeper impact.

    Why is Cyber security policy needed ?
    Unprepared in case of reoccurrence of bangalore like scenario.
    No Stake holders are currently defined.
    roles and responsibilities of organisations needs to be cleared.
    Romour mongering is not taken care in current IT Act (2000 and 2008 Ammendment).
    Sec. 66(a) of Ammended IT act (2008) : any information grossly offensive, abusing, hatred, communal is under it. But, again it is bailable, 3-7 yrs sentence at max. Events where both IT and IPC are complimentary to each other, as combination, for prosecution they provide a more stern Mixture of Legal Framework.

    In event of re-occurrence of bangalore-mumbai like situation we wouldn't be in better condition until we modify our policies swiftly.

    India or to say Indian Govt. itself needs sensitization on the cyber security. Do we know the Chinese company banned in Australia, UK, US working in key areas in India ?

    Innovation on technology, Legal framework and strategy is required by Govt to tackle such situation for the national interest. Indian Govt is also not very keen on booking cases against perpetrator of cyber terrorism, even after bangalore issue no cases have yet been registered nationally or internationally. Govt. also needs to understand that they should act for taking care of the sovereignty of the nation at the same time take Netizens of India in confidence that their Right to free speech is not inhibited.

    Any alternating views or thoughts are welcomed.

  26. This is a goldmine of information.But you have also run into a minefield of difficulties.You are focussing on the legal aspects.That is fine and farsighted approach.But what about Implementation?You have favoured Expansion and making present laws more stringent.But legality is hamstrung by Technology.Lets say,a rumour monger in a foreign country manages to incite a riot here.The person is also clever to cover up the tracks.In this case,how is a expanded and stringent law EFFECTIVE?
    Technology is a two sided coin.The same social media can be used for nefarious purposes as well as reaching out to people.So,should this be banned?
    In todays competitive world,technology is not shared fully.This is how nations differentiate among each other.So,if a country having high technology attacks in cyberspace a country of low technology,can the low technology country trackback if it does not have adequate tools at its disposal,which are denied by technological denial regimes?
    Also,there is another danger of strengthening and expanding these laws.How do you know they can be adopted for future innovative tactics?and how can you ensure they are not misused?If a law can deal with yet unknown future contingency,it can very well be misused for political expediency.
    The human component of this so called exodus has to be taken into account namely emotional integration of NE people and their acceptance and awareness of their culture by the rest of India.
    You have looked at this problem from a knowledgeable but one sided prism of legal framework.A holistic approach has to be taken.For everything,a law/amendment to a law is impractical.

  27. RBI and it’s war against Inflation (or Growth).

    India’s economy has stumbled for second quarter consecutive ( Q4FY12 : 5.3% and Q1FY13 : 5.5%), Manufacturing & Infrastructure have continued to disappoint, IIP figures are also not very positive. Is RBI’s Continuous stand to keep the Key rates high justifiable? Aren’t RBI’s action causing Inflation to grow more and at the same time sacrificing countries growth?

    My perspective is due to lending rates continuing high for a very long time now, the Manufacturing and Mining sectors have been hit badly. Inflation, which currently is primarily due to the supply side constraints stays higher as no or very minimal investments (for upgradation) can be done on the key factors like Roads, Transports, Storage, etc. Which in-turn makes a country with lot of grain production wasting quiet a bit. Well, Indeed Govt. machinery has failed (thanks to corruption!) and many of the Govt’s plan like Universal PDS are still in Limbo. But, doesn’t it make sense to let the money ease in Indian Scenario? We aren’t yet on Hyper-inflation, We have WPI inflation of 7% and CPI of ~10%, and are merely growing @ 5.5 % in a Quarter ( or say ~6% in a year) when our population is growing at ~2%, our per capita income is still very low. Doesn’t a developing nation need investment in both private and public secotrs? But, money is very costly in India owing to the very high lending rates. Sectors like, manufacturing, Infrastructure, mining can help in providing jobs to lots of people, if key rates are eased it may help in effective running of money in Indian market, it may add some fuel to Inflation, but it may add more fuel to the economy which is seeing withdrawal of money from Indian Investors from the market. Few analyst also believe cutting down the lending rates can also help in reducing Inflation by answering the supply side constraints (for e.g., Turky)

    Any Alternating views or thoughts are welcomed.

  28. While a constitutional Amendment also can be termed un-constitutional (if it goes against the basic structure of Constitution). Can the Quota-bill (carrying constitutional Amendment) for SC/ST for Promotions in Govt. job be struck down by SC ?

    The current 117th Constitutional Amendment Bill that was introduced by the UPA government in the Rajya Sabha on Wednesday (5th Sept 2012) seeks to replace Article 16(4A).

  29. Why parliamentary approval is not required for FDI in retail but required in FDI in Pension and Insurence schemes ?

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