Livemint Editorial Analysis 27th December 2017

Livemint Editorial Analysis 27th December 2017 - Daily gk affairs


Why is the Mental Healthcare Act, 2017 important and unique?

  • For the first time in our country, the Act creates a justiciable right to mental healthcare.
  • This is fascinating because physical healthcare is not yet a statutory right &  The right to mental healthcare is the core of the Act.
  • It has also effectively decriminalised suicide attempts by ‘reading down’ the power of section 309 of the Indian Penal Code.
  • The law also requires the government to make provisions for persons with mental illness to live in the community and not be segregated in large institutions.

Provisions for ‘advance directives’ in the act :-

The new Act makes provision for writing an advance directive which people can make when they are well about their treatment. Such Advance Directives would help a person in :-

  • To state their preferences for treatment, including how they would like to be treated for mental illness.
  • The treatments they would not like to take.
  • To nominate a person who could take decisions on their behalf in such situations.

Rights conferred under the act :-

  • The Act provides persons with mental illness protection from cruel, inhuman and degrading treatment.
  • It also provides right to information about their illness and treatment, right to confidentiality of their medical condition and right to access their medical records.

Responsibilities for the government :-

  • Under the act, the government is explicitly made responsible for setting up programmes for the promotion of mental health, prevention of mental illness and suicide prevention programmes.
  • Given the huge shortage of trained mental health professionals in the country, the Act requires the government to meet internationally accepted norms for the number of mental health professionals (within 10 years of passing this law).

Issues that should be taken care of

  • Passing the Mental Healthcare Act, 2017, is a long, arduous implementation process. We should ensure that this Act does not suffer the same fate like other progressive policies which do not get effectively implemented. For that Once again, we need cross-party support for effective implementation so that persons with mental illness and their families benefit fully.


Background of ‘resolution corporation’ in India :-

  • In India, the idea of a resolution corporation was advocated in 2013 by the Financial Sector Legislative Reforms Commission
  • This was followed up in 2014 with a Reserve Bank of India (RBI) working group report on crafting a resolution regime for financial institutions
  • Finally, in 2016, a Union finance ministry committee submitted a draft code on the resolution of financial firms

Working under the the Financial Resolution and Deposit Insurance Bill, 2017

  • The FRDI Bill have focused on the formation of a resolution corporation and its bail-in powers in the event of a financial company going bust
  • The said corporation will monitor financial services companies, in coordination with regulators, and resolve them in case of failure
    Difference between ‘bail-in’ and ‘bail-out’
  • Bail-in implies using the company’s various existing liabilities—different debt categories or deposits not covered by deposit insurance (all deposits over Rs1 lakh)—to resolve impending failure
  • This is different from bailout, which implies external help, such as government using taxpayer money

There may be some merit in constructing a resolution regime but there are other equally larger issues that also need highlighting

FIRST: There is a need to discuss the relevance of an imported idea(present in the FRDI bill) :-

  • The idea of resolution corporation given in the bill is taken from other countries like the USA, Singapore, etc but the Indian government’s willingness to accept a cut-and-paste formula is unusual.
  • We have seen similar decisions in the past which seemed alien to the peculiar complexion of India’s financial services—salary cap for financial sector CEOs  and tightening regulation of “shadow banks”, leading to a squeeze on non-banking financial corporations.
  • In a system where banks (with an overwhelming public sector presence) dominate the financial system and are extensively regulated by RBI. There should be some discussion about whether importing regulatory frameworks makes sense.
  • More importantly whether the bail-in provisions recommended in the Financial Stability Board’s October 2014 guidelines are applicable to India or not.

SECOND: The issue of democracy and fundamental rights :-

  • In its current form, the FRDI Bill disallows the proposed corporation’s resolution process from being challenged in courts (This might be necessary to avoid undue delays in the resolution process and to avoid failure of wobbly financial companies).
  • The overwhelming presence of government representatives on the corporation’s board (including regulators’ representatives) can convert the corporation into a blunt tool of vengeful political action
  • The new regulators may take away the powers of old regulators, such as RBI.

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