It?s probably the last standing and the most abused vestige of the ?inspector raj? that the UPA government?s common minimum program (CMP) promised to free Indian industry from.
But six months after both the Houses of Parliament cleared amendments aimed at abolishing the monopolistic inspector raj in industries making and using boilers, as enshrined under the Indian Boiler Act 1923, the government is yet to issue a notification that will bring the amended law into force.
The amendments were cleared by Parliament in November 2007 after an unusually long delay ?they were originally tabled in the Rajya Sabha by the Narasimha Rao-led Congress government in 1994. However, the first call for changes to the law came two decades earlier, in 1974, when a high-powered committee undertaking a comprehensive review of laws on boilers and unfired pressure vessels, found the boiler law had outlived its utility.
Being on the concurrent list of subjects as per the Constitution, state governments were consulted before the amendments were tabled in Parliament. After changes mooted by the Parliamentary Standing Committee on Industry were incorporated and approved by the Cabinet in 1995, the Bill perpetually remained in the list of pending business for no ostensible reason.
It was only in April 2007 that the UPA Cabinet took up the matter again and reintroduced the amendments in Rajya Sabha. By the time, Gujarat, which had been waiting for the Central law to change all these years, had given up and formulated its own law on the subject and abolished boiler inspectors? powers last February.
Although it was eventually cleared, the amendments Bill was opposed by members of Parliament across party lines, especially from states with high density of boiler manufacturing operations like Tamil Nadu, Maharashtra and Andhra Pradesh.
The 84-year old law was primarily enacted to ensure safety of boiler users since boilers were only imported into the country at the time. Congress MP and industrialist Navin Jindal says the law came at a time when ?rivetting, not welding? was the prevalent practice. The law confers wide-ranging powers on state government appointed inspectors who monitor and recommend repairs for boilers on an annual basis, during which the plant has to mandatorily shut down.
?The inspector raj must end. The new law would mean a boiler needn?t be stopped every year. This alone should increase power plants? generation by 3-4% and result in Rs 2-3,000 crore annual savings for the power sector – not to mention the impact on the rest of the industry,? Jindal points out.
Inspectors have the discretion to shut down a unit unilaterally as well as stipulate specific agencies to be used for repairs and maintenance, leading to tremendous rent-seeking opportunities. Though responsible for certifying safe boilers, not a single inspector has ever been prosecuted despite several cases of boiler explosions. In order to avoid inspection, several industries resort to using boilers with capacities just below the regulatory limit, but they are highly inefficient in terms of energy consumption and unsafe as well.
Compared to 70,000 registered boilers, there are only 250 inspectors, translating into a very high workload. Globally, boiler inspections are done by internationally recognised private agencies with uniform standards. While Indian manufacturers have to get global agencies? clearance for exporting boilers, to sell in the domestic market, they need clearances from local inspectors.
With the amendments cleared, the Department of Industrial Policy and Promotion (DIPP) is required to issue a notification to set the effective date for the new rules to come into effect and reconstitute the Central Boiler Board (CBB), currently dominated by the inspector lobby, that will then lay down the new regulations for implementing the law. But it seems, heavy lobbying, reminiscent of the Bombay Club in the early nineties, by the old guard in the boiler industry and states? boiler inspectors, is coming in the way.
The Indian Boilers? Manufacturers Association (IBMA) has been pleading with Industries Minister Kamal Nath to at least, allow boiler users and makers the freedom to choose between the international inspection agencies already present in the country or the state inspectors. IBMA has also asked for the Insurance Regulatory Development Authority (IRDA) to be given representation on the CBB as insurers have to pay for the damages from spurious boilers.